The Who, What, When and Where of IRS Form 8938, Statement of Specified Foreign Financial Assets... [ read ]
IRC Section 6038D requires any taxpayer who has an interest in a "specified foreign financial asset" to disclose that asset to the IRS on a Form 8938 attached to the taxpayer's annual tax return. The penalty for failure to file Form 8938 is $10,000. If failure continues for more than 90 days after notification by the IRS, an additional penalty of $10,000 will apply for each 30-day period during which the failure continues. The maximum penalty for a continuing failure to file a Form 8938 is $50,000.
The Who, What, When and Where of FBAR/FINCEN Form 114... [ read ]
What is an FBAR? Every year taxpayers must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts. Taxpayers report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.
Taxpayers With Undisclosed Foreign Accounts and Activities Beware: The IRS and Other Taxing Authorities Are Coordinating Efforts to Tackle International Tax Evasion... [ read ]
On January 23rd the Joint Chiefs of Global Tax Enforcement (J5) released the following statement regarding its "day of action" conducted on January 22nd.
PLR Update: IRS Issues its "No Ruling" List for 2020 as well as Extends a Surprising Invitation for PLR Requests in a Hot Button Area... [ read ]
In a previous blog post, I outlined the IRS private letter ruling process, including the mechanics of making a request and tips for presenting your ruling request to the IRS. In this blog post, I touch on the IRS' "no ruling" lists issued this month as well as discuss a strange invitation by the IRS for taxpayers to use the private letter ruling process to seek guidance on …. wait for it….. cryptocurrency taxation.
Another Arrow in the Taxpayer's Quiver against Trust Fund Penalties: Supervisory Approval... [ read ]
We all know that the IRS is quick to pull the trigger on penalties, especially trust fund penalties, which the IRS rightfully views as Uncle Sam's money. But the Tax Court's January 21st decision in Chadwick vs. Commissioner makes clear that even trust fund penalties must be approved by a supervisor when proposed; otherwise, the penalties are invalid.
Update on IRS Civil Enforcement Priorities... [ read ]
Last week, I participated in a conference call with IRS officials from Examination and Collection who were discussing the IRS' 2020 enforcement priorities. Here are the take-aways from the call.
Surprise, Surprise, An Estate Has Reasonable Cause For Filing A Tax Return Late... [ read ]
In prior blog posts we have discussed the uphill battle an estate faces when it requests abatement of a late filing penalty when the Form 706, United States Estate Tax Return, is not timely filed. Although there are cases where an estate has prevailed on a reasonable cause/reliance defense, they are few and far between. In the typical case, the court cites United States v. Boyle in holding that a taxpayer can rely on a tax professional for tax advice, but not regarding the "ministerial act" of filing a tax return on time.
IRS Coming After Tax-Delinquent Wealthy People in 2020... [ read ]
At recent tax programs, IRS officials referenced a new program called "Hi-Def" which will be targeting wealthy people who have not filed tax returns. The program is intended to address the perception that the IRS does not pursue delinquent wealthy people.
Fifteen Things You Should Know About Selling Your Business... [ read ]
1. Company Records. When you first begin contemplating a sale, you need to make sure the business's records are in order and up to date. You want your business's records in good shape to produce to a potential buyer at the due diligence stage. Keep a minute book with annual minutes or annual unanimous written consents as well as consents (or minutes of special meetings) approving major transactions, such as loans, etc. Retain copies of all of the business's fully executed contracts (loan documents, customer agreements, vendor agreements). This way, there is no question whether the company is obligated under a contract for which you have only kept a partially executed copy.
Inflation-Adjusted 2020 Unified Estate and Gift Tax Exclusion Amounts... [ read ]
It just keeps getting better for wealthy individuals! The Internal Revenue Service recently announced the inflation-adjusted estate and gift tax exclusion amount for 2020.