Tag Archive for Tax Attorney

Federal Estate Tax Returns: IRS Says No Closing Letters!

Tax Advisor - Ron Marini

The IRS is the federal agency which has the most direct contacts with Americans. Dealing with the IRS is never easy when addressing federal estate tax returns. The starting point is 75,000 pages (in fine print) of the Internal Revenue Code and Regulations which Americans must somehow master to file accurate tax returns including estate taxes.

To make life even more difficult, irrespective of the IRC and Regulations, the IRS creates a number of procedural requirements necessary to complete various tasks involving the IRS’ contacts with taxpayers. One such situation involving the filing of Federal Estate Tax Returns (forms 706 and 706-NA) has been the automatic issuance of closing letters (IRS Letter 627, catalogue # 40285J) when the IRS has completed reviewing these forms. Under Section 6324 of the IRC, the IRS has a 10 year lien on all property which appears on an estate tax return. In order to avoid personal liability, the executor of the estate and anyone else who had contact with either the assets or proceeds of the estate (see Section 2203) can be held liable for any unpaid tax unless one receives a form 5173, Federal Transfer Certificate which frees everyone from this potential liability.  Form 5173 was always issued in tandem with with the automatic issuance of the federal closing letter. Read more

The Unknown Tax Comic – Part 22

The Unknown Tax Comic 11-20-15

A little humor with some tax jokes on TaxConnections Tax Blogs.

♦ A tax attorney defended a case of tax evasion for an affluent client. He devoted over a year to the case, familiarizing himself with every loophole and angle of current legislation, and made a brilliant argument before the court. His client was called out of town when the jury returned with its verdict, a sweeping victory for his client on every count. Flushed with victory, the lawyer exuberantly sent an email to his client, “Justice has triumphed!” The client immediately emailed back, “Appeal at once!”

♦ “Ignore them and they’ll go away” is great advice for some of life’s annoyances. Unfortunately, it doesn’t apply to taxes. – Martha C. White

♦ I’ll tell you some tax jokes because I think you’d depreciate them! Read more

7 Tips To Consider When You Receive An IRS Notice

Ronald Marini picture33

The IRS sends many, many, many, letters and correspondence before they levy or garnished any Taxpayer’s wages, bank accounts, or other assets. Many taxpayers take the ostrich approach and ignore the problem, in hopes that it will go away.

If you’re facing an IRS Problem, appropriate action can go a long way towards resolving it!

1. Respond Quickly to All Inquiries and Notices

The IRS will send a notice or letter if:

• You have a balance due. Read more

Whistleblower Reports Vanguard For $35B Transfer Pricing Violation!

Ronald Marini picture6

Vanguard faces a whistle-blower lawsuit filed by its former in-house tax attorney, who claims that the company’s unique structure and intercompany management fees violate tax code Section 482, as well as New York Tax Law Section 211(5). A report submitted to federal authorities in support of a whistleblower claims Vanguard Group Inc. owes $34.6 billion in taxes because it undercharges its affiliated mutual funds for investment advisory services, resulting in a reduced federal tax liability.

Under federal tax rules, services must be priced at arm’s length, or as if between unrelated companies, unless they are subject to an exception, which Vanguard is not.

“Vanguard has no legal justification for its transfer pricing practice of operating its U.S. Read more

How IRS Seizures Work

TaxConnections Picture - IRS Man At Desk 5 - square

If you or your child has ever played the game “Sims”, then you know what happens when you fail to pay your bills on time. The Repo man comes and zaps your couch into nonexistence with a laser gun! It’s a traumatic moment for your Sims, but one that can be rectified with time and a few more Simoleons (Sim currency). IRS seizures, or liens, don’t work quite the same way of course, but the end result is similar: They will take what they are owed. How can you stop a tax seizure? First, let’s look at the pre-seizure process.

The IRS has a three-step process to ensure that you are adequately notified that they intend to seize your property and/or pay. This is intended to allow you to appeal or contest the tax levy. You’ll receive a “Notice of Demand for Payment,” a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” and then if you don’t respond, the IRS can Read more

Eggshell Audit – What You Need To Know

3d person watching a word "aduit" with a magnifying glass
What is an Eggshell Audit?

An eggshell audit is one in which the taxpayer has filed a fraudulent return in a prior year and the auditor is not aware of potential evidence of civil tax fraud or a criminal tax violation. A tax return is fraudulent if an additional tax is owed due to (i) a deliberate intent to evade tax or (ii) there is a willful and material submission of false statements/documents in connection with the return. It is considered an “eggshell” audit because of the care one must take – i.e. walk on eggshells – to guide the examination and prevent suspicion by the auditor.

What are the Risks of an Eggshell Audit?

Read more

UK Crown Dependencies Pushed To Accept FATCA

Beneficial Ownership Registries and Automatic Exchange of Information

We first posted UK mini-FATCA Agreements Spells The End for UK Tax Haven Territories!, on Monday, November 26, 2012, where we discussed that the UK government is about to reveal legislation imposing automatic client disclosure provisions on financial institutions in the Crown Dependencies and British Overseas Territories.

The draft, described as a UK version of the US Foreign Account Tax Compliance Act (FATCA), is said to mandate the automatic reporting of financial and beneficial ownership information for each account of each offshore financial institution to the UK’s HM Revenue and Customs.

The draft agreement requires the automatic exchange of information for each reportable account of each reporting financial institution. That will include full details of all beneficial owners of the account, including those whose identities might otherwise be hidden by trusts or companies.  It will also requires the account number, name and identifying number of the reporting financial institution as provided when registering with the IRS for FATCA purposes, and the account balance or value as of the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure. Read more