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Monthly Archives: June 2013

IRS To Review Partial Payment Installment Agreement

It is not a secret that the two-year financial reviews the IRS is supposed to conduct on taxpayers who
are in an partial payment agreement (PPIA) haven't been happening.

Well, the Treasury Inspector General learned about this and has brought it to the attention of the IRS. The IRS vows it will now be investigating PPIA debtors more vigorously.

So for taxpayers in a PPIA, this means more two-year reviews, and a more thorough review of financials and the greater chance that the IRS will attempt to collect more from taxpayers who owe money to the IRS.

This should have an impact on the tax resolution industry and bankruptcy attorneys, as enhanced IRS investigations should drive taxpayers to seek protection.

There is no doubt the an IRS partial payment installment agreement (PPIA) can be an awesome IRS tax debt settlement tool. For the taxpayer, they can pay to the IRS what they can afford each month after reasonable living expenses. Meanwhile, the each month, the IRS tax debt gets close to extinction, thanks to the statute of limitations on IRS tax debt.


If you have a PPIA that was agreed to years ago, no may be a good time to review your other IRS tax debt settlement options. In particular:
  • Enough time may have elapsed on any personal tax debts to discharge with a Chapter 7 bankruptcy. Chapter 7 bankruptcy can completed wipe out your debt. Be sure to talk to a local tax bankruptcy expert in your area.
  • Or, it may be time to consider an Offer in Compromise. It is our experience that the Offer in Compromise units have been accepting Offers they would not have back in 2009. Our suspected reason: We don’t think the IRS even believes the economy will rebound any time soon. The IRS is agreeing to settle for less because of practical concerns. The deal you may offer could be more than they expect to ever collect from you. 

 
Need To Reconsider Your Partial Payment Installment Agreement?


Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax Consultation Contact US at
www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).
 
 
 

Source:

Anthony E. Parent, Esq

Read more at: Tax Times blog

IRS To Be Closed This Friday June 14, 2013


The Internal Revenue Service today reminded taxpayers that, due to the current budget situation including the sequester, the agency will be shut down on Friday, June 14.

As was the case on May 24, the first furlough day, all IRS operations will again be closed on June 14. This means that all IRS offices, including all toll-free hotlines, the Taxpayer Advocate Service and the agency’s nearly 400 taxpayer assistance centers nationwide, will be closed.


IRS employees will be furloughed without pay. No tax returns will be processed and no compliance-related activities will take place. In addition, the online preparer tax identification number PTINsystem for tax professionals will also be shut down.

The IRS noted that taxpayers should continue to file their returns and pay any taxes due as usual. This includes the June 17 deadline for those making a second-quarter estimated tax payment. It also includes the June 17 filing deadline for taxpayers abroad and the June 30 deadline for filing foreign financial account reports FBARTaxpayers needing to contact the IRS about these or other upcoming returns or payments should be sure to take this Friday’s closure into account.

Because none of the furlough days are considered federal holidays, the shutdown will have no impact

on any tax-filing or tax-payment deadlines. The IRS will be unable to accept or acknowledge receipt of electronically-filed returns on any day the agency is shut down.

The only tax-payment deadlines coinciding with any of the furlough days relate to employment and excise tax deposits made by business taxpayers. These deposits must be made through the Treasury Department’s Electronic Federal Tax Payment System (EFTPS), which will operate as usual.

On the other hand, the agency will give taxpayers extra time to comply with a request to provide documents to the IRS. This includes administrative summonses, requests for records in connection with a return examination, review or compliance check, or document requests related to a collection matter. No additional time is given to respond to other agencies or the courts.

Where the last day for responding to an IRS request falls on June 14, the taxpayer will have until Monday, June 17--the next business day.

Some web-based online tools and phone-based automated services will continue to function this Friday, while others will be shut down. Available services include Withholding Calculator, Order A Transcript, EITC Assistant, Interactive Tax Assistant, Tele-Tax and the Online Look-up Tool for those needing to repay the first-time homebuyer credit. Services not available this Friday include Where’s My Refund? and the Online Payment Agreement. Visit online toolson IRS.gov to learn more about these tools.

The remaining scheduled furlough days are July 5, July 22 and Aug. 30, 2013. If necessary, the IRS may announce one or two additional furlough days.

Having Trouble Contacting the IRS?
Contact the Tax Lawyers at
Marini & Associates, P.A.

for a FREE Tax Consultation Contact US at
www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).

Read more at: Tax Times blog

UK Crown Dependencies Pushed to Accept FATCA, Beneficial Ownership Registries & Automaic Exchange of Information.

We first posted UK mini-FATCA Agreements Spells The End for UK Tax Haven Territories!, on Monday, November 26, 2012, where we discussed that the UK government is about to reveal legislation imposing automatic client disclosure provisions on financial institutions in the Crown Dependencies and British Overseas Territories.

The draft, described as a UK version of the US Foreign Account Tax Compliance Act (FATCA), is said to mandate the automatic reporting of financial and beneficial ownership information for each account of each offshore financial institution to the UK's HM Revenue and Customs.

The draft agreement requires the automatic exchange of information for each reportable account of each reporting financial institution. That will include full details of all beneficial owners of the account, including those whose identities might otherwise be hidden by trusts or companies

It will also requires the account number, name and identifying number of the reporting financial institution as provided when registering with the IRS for FATCA purposes, and the account balance or value as of the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure.

Subsequently, the UK Prime Minister David Cameron has written an open letter to leaders of the Crown Dependencies and British Overseas Territories, urging them to ‘work in partnership with the UK’ on stringent measures to establish beneficial ownership of companies.

The letter was sent to the heads of government of Jersey, Guernsey, the Isle of Man, Gibraltar, Bermuda, the British Virgin Islands, the Cayman Islands, the Turks and Caicos Islands, Anguilla and Montserrat. It asks them to set up 'fully resourced and properly managed' centralized registries that will allow law enforcement and tax collectors to obtain 'full and accurate details' of ownership and control of all companies.
 
Cameron's letter sets the offshore jurisdictions a nominal deadline of 17 June, the date of the next G8 leaders' summit to be hosted by the UK. High on the UK’s agenda will be a drive to 'knock down the walls of company secrecy,' he says.

The chief ministers of Jersey, Guernsey, the Isle of Man and Gibraltar have written to the UK Prime Minister David Cameron offering to join the OECD's Multilateral Convention on Mutual Assistance in Tax Matters.

They also agreed to attend a meeting in London at which the UK will press its dependencies to agree to full automatic exchange of tax information. The UK government is currently pressing its dependencies to agree to fully automatic exchange of tax information. It is hosting a meeting in London on 15 June to discuss the terms, and the chief ministers of the four jurisdictions have agreed to attend.

Their offer to sign the less stringent OECD convention may be intended to show their commitment to tax transparency, while stopping short of accepting the automatic reporting of banking transactions to HM Revenue and Customs.

Letters from the jurisdictions' chief ministers to David Cameron stressed the importance of ‘a global standard of tax transparency to provide a level playing field for countries across the world’. All are anxious that Britain's Crown Dependencies and Overseas Territories are not singled out for especially stringent treatment.

The four ministers also offered to cooperate with proposals for stricter identification of corporate beneficial ownership, although they say they have adequate measures in place.
 
 Secret Foreign Accounts Keeping You Awake at Night?

Want to get right with the IRS?
Contact the Tax Lawyers at
Marini & Associates, P.A.

for a FREE Tax Consultation Contact US at

www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).

 
 

Sources

 

Read more at: Tax Times blog

IRS Cracks Down on “Quiet Disclosures”

The IRS is cracking down on so-called soft or "Quiet Disclosures." According to a recent the U.S. Government Accountability Office (GAO) report, more than 10,000 taxpayers showed signs of having avoided offshore penalties by making “Quiet Disclosures” of foreign bank accounts for tax years 2003 through 2008,, a period for which the IRS has detected several hundred quiet disclosures.

Filing data also suggest many more taxpayers may have begun reporting previously reportable foreign accounts on a recent current-year return without entering the government’s offshore voluntary disclosure program (OVDP) or making a quiet disclosure for prior open years, the GAO said. While these taxpayers may have come into voluntary compliance going forward, they also thereby may have avoided all penalties and past due taxes and interest on the accounts and income generated by them.

In the report, Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May Be Missing Continued Evasion (GAO-13-318), released April 26, the GAO gave results of its study of the effectiveness of the IRS’s 2009 OVDP, which was the IRS’s second OVDP and the most recent one with enough closed cases for analysis. The IRS also conducted OVDPs in 2003 and 2011 and has had one currently ongoing since 2012. In each, taxpayers have been allowed to apply to the IRS and, if they qualify, disclose their foreign accounts and pay taxes, interest, and tax-related penalties due for open years. In exchange, the IRS waives any criminal prosecution and limits the penalty for failing to disclose the accounts (“offshore penalty”) to, in the 2009 OVDP, 20% of the highest aggregate value of the unreported accounts between 2003 and 2008 (the years covered by the 2009 OVDP).

The GAO identified 19,337 participants in the 2009 OVDP in 10,439 closed cases. The average offshore penalty assessed was about $376,000. Almost half the participants had accounts in Switzerland (a “John Doe” summons in 2008 for the names of U.S. account holders in Swiss bank UBS was a major factor driving participation in the 2009 OVDP). About half of the $4.1 billion in total revenues collected (as of the end of 2012) was from 378 cases. All the OVDP programs together have resulted in more than 39,000 disclosures and more than $5.5 billion in revenues as of December 2012.

  • Quiet disclosures

To detect potential quiet disclosures for years covered by the 2009 OVDP, the GAO identified filed amended or late returns and Forms TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for one or more of those years and then excluded OVDP participants from this group. Under these criteria, it determined that there were 10,595 taxpayers who made quiet disclosures. Of those, 3,386 taxpayers made late or amended filings for multiple tax years—94 of them for all six years.
taxpayers that had

The IRS had arrived at its “several hundred” estimate (the report did not give a more specific number) of quiet disclosures, by similarly looking at amended returns for the period and screening out those with adjustments unrelated to offshore accounts. It also looked at amended returns with increased tax assessments over a certain threshold. The IRS also looked at FBARs filed or amended with amended returns, but only for those processed in 2009 and for the limited purpose of detecting movement of taxpayer assets from “non-secrecy” jurisdictions to those with financial secrecy laws.

  • New disclosures

To estimate potential numbers of taxpayers newly reporting existing foreign financial accounts without making any disclosure concerning or amending prior returns, the GAO also looked at the overall increase between tax years 2003 and 2011 in FBAR filings and from fiscal 2003 to 2010 in returns that reported “yes” to the question on Schedule B, Interest and Ordinary Dividends, about whether the taxpayer owned or controlled a foreign financial account. The latter more than doubled in that period to 515,635. As a percentage of all taxpayers filing Schedule B, they rose from approximately 1% in 2003 through 2007 to more than 2.5% in 2010.

Similarly, the number of FBARs filed more than tripled to 618,134 from fiscal 2003 to 2011, and more doubled between 2009 and 2010. Legitimate reasons for the increase could include taxpayers who had complied with income reporting requirements previously and who without previously realizing the need to also answer the question on Schedule B affirmatively and file an FBAR, began doing so.

“However,” the GAO added, “such a sharp increase … amidst the global economic recession and the publicity surrounding IRS’s offshore programs raises the question whether some of these taxpayers may have attempted to circumvent some of the taxes, interest, and penalties that would otherwise be owed.”

The IRS agreed with the GAO’s recommendations that it use similar methods to more effectively detect and pursue quiet disclosures and previously unreported foreign financial accounts and to use offshore data to educate taxpayers about compliance.

Did You Make a "Quiet Disclosure" of Undeclared Foreign Income ?
Secret Foreign Accounts Keeping You Awake at Night?

Want to get right with the IRS?
Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax Consultation Contact US at

www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).

Sources:
AICPA

Read more at: Tax Times blog