Update on IRS Denial or Revocation of Passports... [ read ]
In a prior blog post we discussed IRC Section 7345 which allows the IRS to take actions to either revoke or deny a passport to a taxpayer with a seriously delinquent tax debt. On April 5, IRS Chief Counsel issued Notice CC-2018-005 which provides guidance for Chief Counsel attorneys regarding how to handle a lawsuit brought by a taxpayer in U.S. Tax Court pursuant to Section 7345(e). This notice was issued on the heels of IRS Deputy Chief Counsel Drita Tunuzi stating at a recent ABA Tax Section meeting that the IRS would probably start issuing the notices of passport revocation or denial by the end of February.
Methods of Proof in a Criminal Tax Investigation... [ read ]
In a criminal tax investigation, the IRS generally must prove a taxpayer either underreported his income or overstated his deductions. To do so the IRS uses a number of methods of proof that fall under one of two categories: Direct (Specific Items) Method of Proof or Indirect Methods of Proof.
Identifying a Taxpayer's Trades or Businesses for Purposes of §199A... [ read ]
At the heart of the new §199A deduction is a series of tentative deductions separately determined for each trade or business in which the taxpayer owns an interest based on 20% of qualified business income ("QBI").
What Is A Kovel Accountant?... [ read ]
An attorney who represents a client in a criminal tax investigation will typically retain a forensic accountant to review and analyze the client's financial records and tax returns mirroring the work of the IRS criminal investigators. The accountant is generally referred to as a "Kovel Accountant" and is hired by the attorney, not the client, so that the accountant's work is protected by the attorney-client privilege.
IRS Nixes Popular Offshore Voluntary Disclosure Program... [ read ]
On March 13, 2018, the Internal Revenue Service (IRS) announced that it will terminate its 2014 Offshore Voluntary Disclosure Program (OVDP), effective September 28, 2018. Since its launch in 2009, over 56,000 taxpayers have taken advantage of the program and its potential shield from criminal tax liability for the willful failure to report and pay tax on foreign accounts
Marinello v. United States - Supreme Court Opinion... [ read ]
The U.S. Supreme Court reversed a taxpayer's conviction today under 26 U.S.C. § 7212(a), also known as the Omnibus Clause, which forbids "corruptly or by force or threats of force . . . obstruct[ing] or imped[ing], or endeavor[ing] to obstruct or impede, the due administration of [the Internal Revenue Code]."
Update On The IRS Attack on Conservation Easements... [ read ]
In prior blog posts, we discussed IRS efforts to combat what it considers to be abusive conservation easements deductions. In Notice 2017-10, the IRS warned that certain conservation easement deductions could be designed to avoid tax and had to be disclosed to the IRS. The notice said that some promoters "are syndicating conservation easement transactions that purport to give investors the opportunity to claim charitable contribution deductions in amounts that significantly exceed the amount invested."
Time for a Withholding Tax Checkup: Treasury Releases New Withholding Calculator... [ read ]
In December 2017, Congress enacted sweeping changes to the federal tax laws. There has been a great deal of discussion as to whether American workers would see significantly greater take-home pay as a result of the new tax laws. In January, the IRS released new withholding tables to help employers determine how much to withhold from their workers' paychecks. Employers were supposed to implement the new withholding changes by February 15th. Now the Treasury Department has released a withholding calculator for American workers to determine if employers are withholding the correct amount.
IRS Is Contacting Taxpayers Who Were Denied Access To or Withdrew From the Offshore Voluntary Disclosure Program... [ read ]
Since the beginning of the year taxpayers who either were denied access to or withdrew from the IRS Offshore Voluntary Disclosure Program (OVDP) have been receiving Letter 5935 from the IRS notifying them that they need to come into compliance with U.S. reporting requirements relating to foreign income, foreign entities, and/or foreign financial accounts. The letter is part of the IRS Large Business & International (LB&I) campaign announced late last year called "OVDP Declines-Withdrawals Campaign".
Coinbase Turning Over Information To the IRS Regarding Customers' Investments in Bitcoins... [ read ]
In previous blog posts, we have discussed the IRS and Department of Justice focus on virtual currencies and the IRS John Doe Summons that was served on Coinbase, the largest Bitcoin exchange in the United States. Late last year, Coinbase was ordered to comply with the IRS John Doe Summons for customer information. The summons to Coinbase was based in part on information obtained by the IRS in an audit of one or more taxpayers who admitted they had been using Bitcoin to underreport their taxable income.
