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By on March 30, 2017
On March 20th the U.S. Court of Appeals for the Second Circuit issued an opinion in Chai v. Commissioner that could impact every taxpayer who is disputing IRS penalties. Taxpayers with penalty cases pending in Tax Court should review the Chai decision as soon as possible and determine its application to their case.
TIGTA Recommends That The IRS Pursue More Criminal Employment Tax Cases
By on March 27, 2017
On March 21, 2017, the Treasury Inspector General for Tax Administration (TIGTA) issued a report entitled "A More Focused Strategy is Needed to Effectively Address Egregious Employment Tax Crimes". The report presents the results of TIGTA's evaluation of the IRS civil and criminal enforcement actions regarding payroll tax noncompliance. The report calls employment tax noncompliance a "serious crime" and recommends that the IRS, including Criminal Investigation (CI), "consider a focused strategy to enhance the effectiveness of the IRS's efforts to address egregious employment tax cases". "Egregious employment tax cases" are defined as employers who have 20 or more quarters of delinquent employment taxes. The number of employers with egregious employment tax noncompliance has more than tripled in recent years. As of December 2015, 1.4 million employers owed approximately $45.6 billion in unpaid employment taxes, interest and penalties.
By on March 22, 2107
The IRS Small Business/Self-Employed Division issued a memorandum to all examination and collection personnel setting forth procedures that apply when a taxpayer alleges return preparer misconduct. The memorandum narrates a cautionary tale for unscrupulous preparers and serves as an important reminder to conscientious preparers to better communicate with clients so as to avoid misunderstandings.
Address IRS Tax Debts Now, Before a Passport is Revoked
By on March 15, 2017
Section 7345 entitled "Revocation or denial of passport in case of certain tax delinquencies" was added to the Internal Revenue Code in late 2015. The IRS has announced that it will begin sending tax debt certifications to the State Department in early 2017 for revocation or denial of passports. Denying or revoking a person's freedom to travel can have devastating effects including disrupting business, impeding or eliminating an individual's ability to generate income and potentially separating families. Therefore, it is imperative that any person with an IRS tax debt who regularly travels internationally or plans to do so, understand when they may become subject to Section 7345, what type of debts can be excluded from Section 7345 and their options if they receive notice of a tax debt certification.
By on March 13, 2017
After navigating the turbulent waters of a divorce, many clients have had enough of lawyers and accountants to last a lifetime. Nevertheless, there are many legal and financial matters that should be attended to in order to protect you and your family from unintended consequences, or frankly, an outright mutiny among your family in the event of your death or incapacity.
By on March 1, 2017
For a multitude of reasons, the late-filing penalty has remained a priority of the IRS. First, the late-filing penalty is easy for the IRS to police through the use of modern computer systems which automatically identity and impose the penalty after a return has been filed late. Second, the amount of the penalty, or 25% of the net tax due after only five months, represents an easy windfall of revenue to the Government. Third, imposition of the late-filing penalty naturally deters taxpayers from filing their returns late and promotes compliance with the tax system. Fourth, attempts by taxpayers to have the penalty waived or abated—termed "reasonable cause" in tax parlance—require an affirmative showing of relief upon which the taxpayer bears the burden of proof.
