Archive for tbeecher

Do You Have the Most Recent Offer-In-Compromise Form?

When submitting your client’s Offer in Compromise, use the January 2014 versions of Form 656-B, Offer in Compromise Booklet, and Form 656, Offer in Compromise.

The OIC user fee has increased from $150 to $186 in January. IRS will return applications submitted on older versions of the form with the old user fee.

On Monday, August 5, 2013, we posted Eight Tips for Taxpayers Who Owe Taxes, which discussed that while most taxpayers get a refund from the IRS when they file their taxes, some do not. The IRS offers several Payment Options for those who owe taxes and we provided eight tips for those who owe federal taxes.

Tip #6 discussed an Offer in Compromise. The IRS Offer-in-Compromise program allows Read More

Written by | Posted in Audit • IRS

Chile Becomes The 1st South American Country To Sign FATCA

On March 5 , 2014, Chile signed a FATCA Agreement with the United States. They signed a type-2 intergovernmental agreement (IGA).

Under the agreement there is no automatic exchange of information but each financial institution must provide to the IRS the information about financial accounts held by United States taxpayers.

This provision of information must be authorized by the relevant account holder, which is consistent with Chilean legislation. Where there is no consent from the account holder, the financial institution may provide only aggregated information about US taxpayers investing in Chile and, in case the IRS requires more information, it must request it under Read More

Written by | Posted in FATCA

Canada Limits Model I FATCA Agreement

On Monday, February 10, 2014, we posted US Signed 22 FATCA Agreements – Unimpeded By Republicans!, where we discussed that the Treasury Department announced February 5, 2014 Canada and Hungary to implement the Foreign Account Tax Compliance Act, or FATCA, in an effort to discourage offshore tax evasion.

The agreement is of the Model I type under which Canadian banks will report the affairs of their American clients to the Canada Revenue Agency (CRA). The CRA will then forward the information annually to the United States Internal Revenue Service.

This arrangement is similar to that adopted by the five main European countries early in 2012. It also includes reciprocal information exchange provisions under which United Read More

Written by | Posted in FATCA

The Intergovernmental FATCA Schema Version 1.1 User Guide is Now Available on the FATCA Website

On Thursday, December 19, 2013, we posted FATCA FFI List Resources and FFI List FAQs are Now Available where we discussed that what taxpayers representatives should be paying attention to in these FATCA discussions, among other things, is that the form of the FATCA submissions entitled “Schema” is a uniform computer readable report. This is the same language/requirement which is being utilized in discussions regarding intergovernmental agreements.

So effectively, in the not-too-distant future, we may be seeing foreign banks submitting their “Schema” to their government to be shared with the United States and other foreign governments; which can then be used by the IRS or the other home country to match up the information in the “Schema” against that depositors local tax report! Read More

Written by | Posted in FATCA

2015 Fiscal Year Budget Request Released To Congress

President Barack Obama released his fiscal year 2015 budget request to Congress on Tuesday March 4, 2014 and lawmakers will promptly ignore it.

But the annual ritual highlights his policy priorities for the coming year and serves as a Democratic Party manifesto as Democrats seek to draw a contrast with Republicans ahead of congressional elections in November which include Overseas Tax Proposals.

The administration wants new limits on overseas tax avoidance by corporations by seeking to prevent them from playing one country’s tax rules against anothers.

At the moment, big corporations must pay the top 35 percent corporate tax rate on foreign profits, but not until those profits are brought into the country. Read More

Written by | Posted in Corporate • Expatriate • International • Tax Policy

Statute of Limitations Remains Open Forever For Any Return Which Fails to File An Associated Information Report!

Taxpayer spend some of their time monitoring when the statute of limitations expires for certain tax return exposure items. This means watching the calendar until you are clear of audit. Unless you skip filing taxes entirely, you might assume your risk of audit eventually passes.

Taxpayers with a unreported income from a foreign bank account find that this situation is tough to resolve. The safest approach is going into the IRS Offshore Voluntary Disclosure Program, although some clients opt for more aggressive approaches.

Failure to file any one of the various foreign information reporting forms (e.g. 5471, 3520, 8838, etc.) leaves the statute of limitations open for every item in the associated federal Read More

Written by | Posted in Audit • Individual • OVDP

Delinquent FBARs – Form TDF 90.22.1 Is Replaced By Form 114!

On September 30, 2013, FinCEN posted on their internet site, a notice announcing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form). FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website.

On July 29, 2013, FinCEN posted a notice on their internet site that introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf. The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request. Read More

Written by | Posted in FBAR

Report to Congress: Credit Suisse Helps US Taxpayers Hide Billions in Offshore Accounts!

Permanent Subcommittee on Investigations (PSI) of the United States Senate held a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, in Room G-50 of the Dirksen Senate Office Building.

The PSI hearing on February 26 is for the stated purpose of continuing the PSI’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses include representatives from Credit Suisse and the U.S. Department of Justice. Read More

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

IRS Criminal Investigation Issues Annual Report

On Tuesday, February 25, 2014, the Internal Revenue Service announced the release of its IRS Criminal Investigation (CI) Annual Report for fiscal year 2013, reflecting significant increases in enforcement actions against tax criminals and a robust rise in convictions, including identity theft.

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law.

High points of fiscal year 2013 include:

• a 12.5 percent increase in investigations initiated compared to the prior year. Read More

Written by | Posted in IRS

Additional FATCA Guidance Submitted For Publication

Regulations revising and further clarifying the final FATCA (Foreign Account Tax Compliance Act) regulations under Chapter 4 have been submitted to the Office of the Federal Register for publication.

Regulations to coordinate the FATCA regulations under Chapter 4 with the withholding and information reporting rules under Chapters 3 and 61, and Section 3406 have also been submitted to the Office of the Federal Register for publication.

DISCLAIMER: This guidance has been submitted to the Office of the Federal Register (OFR) for publication and is currently pending placement on public display at the OFR and publication in the Federal Register. The version of the regulations released today Read More

Written by | Posted in FATCA

The United States Knows Where Offshore Tax Evaders Live And Bank!

The United States is tracking down hidden offshore accounts, and the latest news is a report that shows which states have the most taxpayers disclosing such accounts (California is No. 1), and where they are located (Switzerland is tops).

Taxpayers in at least 45 states and the District of Columbia reported accounts in 68 countries and territories.

The new U.S. Government Accountability Office report: “IRS’s Offshore Voluntary Disclosure Program (OVDP): 2009 Participation by State and Location of Foreign Bank Accounts,” is a supplement to its March 2013 report, “Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion.” Read More

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

“Dirty Dozen” Tax Scams 2014 – List Released By IRS

The IRS issued its annual “DirtyDozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the Internal Revenue Service each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

“Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves Read More

Written by | Posted in IRS • North America • Tax Fraud/Evasion/Crimes • Tax Tips
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