Tag Archive for Tax Blog

Placing a Velvet Glove on the Wrecking Ball – IRS Due Process Collections

According to Black’s Law Dictionary, due process is “a course of legal proceedings … which have been established … for the enforcement and protection of private rights.” Anyone facing an IRS federal tax lien or levy has already experienced the preliminary due process following the IRS determination that more taxes are owed.

Said due process involves a series of written or telephone notifications, and it’s all laid out in the tax code and the IRS letters the taxpayer receives in the mail that should definitely not be ignored.

Before the IRS wrecking ball goes into motion, the taxpayer has 30 days after receiving the IRS collection notice to preserve the right to go to Court. The taxpayer must compete IRS Read More

Written by | Posted in IRS

Retirement

Let’s face it, we all know this country is facing a retirement crisis. The first of the Baby Boomers turned 65 and started retiring in 2011. The number of Boomers retiring each year will rise rapidly over the next decade or more. Before the end of this decade, Boomers will be turning age 65 at the rate of 8,000 per day.

This massive retirement of Baby Boomers will stretch our health care and health delivery systems to the max and beyond. Our public safety net – entitlements – has long been poorly managed, ill-thought-out and threadbare. Imagine what will happen as tens of millions of Boomers retire.

Yet the worst part of all is that so few people or families have saved anywhere near enough Read More

Written by | Posted in Retirement

IRS Reminds Those with Foreign Assets of U.S. Tax Obligations

The IRS reminds United States citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2013, that they may have a U.S. tax liability and a filing requirement in 2014.

The filing deadline is Monday, June 16, 2014, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Eligible taxpayers get one additional day because the normal June 15 extended due date falls on Sunday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for details. Read More

Written by | Posted in Expatriate • FBAR • IRS

“Foreign” Online Gambling Accounts – IRS Says FBAR Filing Is Required

Given all the press surrounding “Report of Foreign Bank and Financial Accounts” or so-called FBARs, by now we all know about what should be reported on an FBAR, right? Well, given the Internal Revenue Service’s latest assertion in United States, v. John C. Hom, maybe we had better start studying once again.

Online Gambling Accounts

In the Hom case, the taxpayer was an avid and professional internet gambler with online gambling accounts maintained with overseas entities: FirePay.com (based in London), PokerStars.com (based in Isle of Man), and Partypoker.com (based in Gibraltar). Overseas gambling accounts were necessary because of US laws that prohibit the interstate operation of betting businesses in the United States, making online gambling technically illegal. The Read More

Written by | Posted in Expatriate • FBAR • Individual • IRS • Tax Fraud/Evasion/Crimes

Bond Premium Carryforward

In TD. 9653, the IRS issued final regs on the tax treatment of bond premium carryforwards in the final accrual period. The final regs adopt ,without substantiative change, the proposed regs [Reg. 140437-12, January 2013] and withdrew the temporary reg-T.D. 9609.

The temporary reg was issued to answer a holder’s question concerning the treatment of a taxable zero-coupon debt instrument, including a Treasury bill, acquired at a premium but having a negative yield. Under prior regs, a holder who elected to amortize the bond premium, would have a capital loss if the security was retired or sold.

The IRS said this situation arose as a result of market conditions and was not contemplated when the prior regs were issued in 1997. The new regs deal with this issue by adding a Read More

Written by | Posted in IRS • Treasury Regulations

NOW Swiss Bank Information Can Be Disclosed To Foreign Tax Authorities WITHOUT Notice!

We previously posted “Your Swiss Bank Info Is Being Transferred To The US Government As We Speak!… This Is Not An April Fools Joke!” on Wednesday, April 2, 2014, where we discussed that The United States Justice Department has received 106 requests from Swiss entities to participate in a settlement program aimed at ending a long-running probe of tax-dodging by Americans using Swiss bank accounts according to a senior US official.

These banks will have to disclose a great deal of information about their American clients, even including some of their names by April 30, 2014!

To make matters worse for US tax dodgers… if that is even possible… Swiss Parliament has approved a legal amendment that tax evaders will not always have to be told if Switzerland Read More

Written by | Posted in FATCA • OVDP • Tax Fraud/Evasion/Crimes

Internet Enables Thieves To Steal $4 Billion In Tax Refunds

Criminals are utilizing their Internet connection to file false tax returns that help them steal refunds from the innocent. In 2013, fraudulent returns saw almost $4 billion sent into the hands of scam artists. Making things worse is the fact that the Internal Revenue Service is having a hard time stopping the fraud from happening in the first place.

The United States Attorney General, Eric Holder, says that 880 people have been charged to date, but also says that the scale and scope of the tax fraud schemes has grown substantially. Holder has been a victim of tax fraud himself. Two Georgia men recently plead guilty to charges stemming from their attempt to get a refund by using Holder’s name, Social Security number and date of birth on returns. Read More

Written by | Posted in Individual • IRS • Tax Fraud/Evasion/Crimes

The IRS Is Calling About Late Expat Taxes… Now What?

If you have fallen behind on your US expat taxes, you are not alone! There are approximately six million Americans living abroad and only about half actually filed their US taxes, which is a US tax law requirement. So if the IRS has contacted you about delinquent tax returns, what should you do? First off, don’t panic! Here are a few tips on what to do next.

Tip #1 – Respond!

The worst thing you can do is ignore the notice. If you don’t think that you will be able to gather the proper documentation and file the return(s) by the deadline they provide, call them right away. Explain that you are aware of the delinquency and you are doing your best to resolve it. Often they will give you a few extra weeks if you are honestly trying to resolve the situation. If you do nothing at all, the IRS can file a return on your behalf and assess a Read More

Written by | Posted in Expatriate • FBAR • IRS • Tax Fraud/Evasion/Crimes

Offshore Financial Centers and Deregulation

Syndications and Participation Concepts

One of the core benefits to be derived by virtue of Offshore Financial Centers relate to issues of regulation. The emergence of global capital markets has fostered cutting edge competitive financial environments. In efforts to avert cumbersome regulatory costs, participants in the global economy have sought Offshore Financial Centers to achieve a less burdensome regulatory regime.

Many Offshore Financial Centers have developed legislation to induce foreign financial market participants to avail themselves of a more cost efficient operation. Similarly, international bankers have sought an escape from reserve requirements, deposit insurance Read More

Written by | Posted in International

A Collection… The Humorous Side of Tax… (13)

♦ The end of March brings up the beginning of April – Tax time. America has the highest standard of living in the world. Unfortunately, we can no longer afford it. Cindy Adams, NY Post, 3-29-09

♦ An accountant was attending a tax seminar in Las Vegas. The lawyer sitting next to him was obviously bored with the presenter, Bob McKenzie, and suggested the two of them slip out to the lobby for a cigar. The accountant replied, “Well, thank you for the invite, but I tried smoking cigars once, and I did not like them… I will have to pass”.

A few minutes passed, and the lawyer asked, “This is a very tiresome presentation… how about we slip down to the bar and have a cocktail?” The accountant replied, “Oh, I tried Read More

Written by | Posted in Tax Humor

Australian Tax Office Targets Online Merchants

The Australian Tax Office (ATO) has announced that it will gather information from eBay Australia & New Zealand Pty Ltd about online sales transactions totaling $10,000 or more during the 2011-2012 and 2012-2013 tax years.

This data will be compared with the tax returns lodged by online traders as part of a new “online selling data matching program”. ATO Commissioner Chris Jordan says: “Our online selling data matching program helps us keep a level playing field for honest businesses. ”

Taxpayers whose returns do not reflect the income from their online trading may face penalty tax and interest charges. The harvesting of data is likely to be extended to other online auction and sales sites for 2013-2014 and later years. Read More

Written by | Posted in Audit • Australia/Oceania • Income Tax • Sales/Use Tax

Little Known Facts About Amending Tax Returns With The IRS

What happens when you realize you made an error on your tax return? Most people think they should file an amended tax return, and in most cases that would be correct; however, sometimes it is unnecessary. According to the Internal Revenue Service, if you made a math error, the IRS will correct it for you; an amended return is not normally required. Or, if you forgot to attach a tax form such as a W-2, you do not need to amend your tax return; the IRS will contact you and request missing forms if necessary. If you are due a refund based on your return as originally filed, the IRS recommends waiting to receive the refund before filing an amended return to claim an additional refund. If you are amending multiple years, you should mail them in separate envelopes, and finally, you should always amend your return if you made an error regarding your filing status, income, deductions or credits on your Read More

Written by | Posted in Individual • IRS • Tax Provision/Tax Reporting • Tax Tips
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