Archive for Voluntary Disclosure

The Rahman Case Is A Cautionary Tale Of What Can Go Wrong Under The IRS Streamlined Filing Compliance Procedures

The Rahman Case Is A Cautionary Tale Of What Can Go Wrong Under The IRS Streamlined Filing Compliance Procedures

Introduction

The IRS recognizes that many taxpayers fail to timely and properly file income tax returns, information returns, and/or FBARs.  Sometimes these failures are honest mistakes; but, other times such failures may be due to willful conduct.

The distinction between willful and non-willful conduct is an important one for purposes of certain programs the IRS offers to non-compliant taxpayers, i.e., the Voluntary Disclosure Program and the Streamlined Filing Compliance Procedures (“Streamlined Procedures”).  Taxpayers who have engaged in willful conduct are not permitted into the Streamlined Procedures.  This is significant because the lookback period for prior years’ unpaid income tax and the amount of the penalty is generally lower under the Streamlined Procedures.[1]

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Written by | Posted in Freeman Law • IRS Streamlined Filing • Voluntary Disclosure

State And Local Voluntary Disclosure

State And Local Voluntary Disclosure

This article is the second of a three-part series regarding the State and Local Tax consequences of doing business in multiple states. This article will discuss Voluntary Disclosure, Part 1 discussed Nexus and Part 3 will discuss the Audit Process.

The Wayfair decision changed the landscape for nexus in the sales and use tax area. It lowered the bar to establish nexus with a state, which gives a state the right to require the collection and remittance of sales and use taxes. The Supreme Court’s decision changed the nexus focus from the existence of a physical presence to an economic presence—which generally may be based on sales into the state themselves. As a result, many taxpayers may have triggered the nexus threshold, especially if a state imposes a factor presence standard for income, franchise or gross receipts taxes.

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Written by | Posted in State And Local Tax • Voluntary Disclosure