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Tag Archive for Schedule B

The Risks of Certifying NonWillfulness

Recently, “Tax Notes Today” published an article by Andrew Velarde entitled, Streamlined Program Non-Willful Certification Can Be Hazardous, 2014 TNT 143-4 (7/25/14). The article summarizes comments made by three tax practitioners on a Bloomberg-sponsored webcast relating to the certification of non-willfulness. The practitioners were Robert F. Katzberg, of Kaplan & Katzberg; Alan Granwell of Sharp Partners; and Bill Sharp of Sharp Partners.

If there was a recurring theme to the article it was that certification of non-willfulness is risky business and not for the “do-it-yourselfer.” Very simply, false certifications can lead to steeper penalties (even greater than the onerous OVDP penalty), not to mention criminal prosecution for perjury. Read more

Clearing Up Common Myths About Life Insurance Proceeds

“The foundation of life insurance is the recognition of the value of a human life & the possibility of indemnification for the loss of that value.” In translation, it means someone pays a premium to an insurance company for someone else to receive a a sum of money on his/her death. The contract can also include a terminal or critical illness. Some life insurance contracts are only for a specified term.

Many people know that having life insurance is important, however are not so sure about the proceeds that are distributed and the tax consequences of such distribution. This post seeks to clear up some of those common myths.

The question, “Are life insurance proceeds taxable?”, elicits the favorite answer of Read more

“Quiet Disclosures” – Is the Jig Up?

iStock_tax evasionXSmallCertain findings and recommendations by the Government Accountability Office (GAO) about offshore tax evasion and the IRS efforts to combat it have many taxpayers worried. The GAO is an independent, nonpartisan agency that works for Congress and is often referred to as the “congressional watchdog.” It investigates how the federal government spends taxpayer dollars and makes recommendations as to how a governmental agency can be more efficient and effective.

Recently issued GAO report, Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion, provides key information about the IRS’ offshore voluntary disclosure initiatives. More importantly, however, GAO indicates its review of IRS data shows that the IRS is missing what appear to be rampant “quiet disclosure” and “new account” filings.

“Quiet Disclosures” / “New Account” Filings

With a “quiet disclosure”, taxpayers quietly amend past tax returns and FBARs reporting previously unreported income and accounts. With “new account” filings, taxpayers report the existence of any offshore accounts as well as income from the accounts on the current year tax return, without amending any prior years’ returns. They often also disclose the existence of the accounts by filing FBARs for the current calendar year making it appear as if the account was just newly opened.

GAO takes the IRS to task for not finding enough “quiet disclosures” and “new account” filings which lose billions of Read more

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