As published in the Winter Park/Maitland Observer, Thursday Jan. 3, 2012 Edition Offers... Read More »
Articles in category 'IRS Penalties'
IRS Commish Wants Simpler Tax Code
IRS Commissioner Doug Shulman has come out for tax simplification: Most taxpayers want simplicity. They want to pay what they owe, understand what tax benefits they are entitled to, and not get tripped up by the system. However, today’s Tax Code is anything but simple. It is so complex that it makes it hard for…
Read Full Article Categorized in: IRS Penalties, IRS Procedure, News, Regulation of Tax PreparersAnother IRS Amnesty Program: The Voluntary Classification Settlement Program
The IRS is apparently so happy with the results of it’s offshore voluntary disclosure program that it has established a similar program in the area of worker classification. Michael Cohn of AccountingToday writes that the IRS has introduced a new voluntary compliance program Wednesday to convince employers to resolve their past issues with classifying employees as independent…
Read Full Article Categorized in: Announcements, IRS Audits, IRS Penalties, News, Payroll Taxes, Voluntary disclosureIRS Amnesty Deadline Extended to September 9, 2011 Due to Irene
The IRS has just announced that is extending the deadline for taxpayers to participate in the Offshore Voluntary Disclosure Initiative. The original deadline was August 31, 2011. This means there is still plenty of time for taxpayers with offshore bank accounts and unreported income to file for pre-clearance into the program and begin the process…
Read Full Article Categorized in: Announcements, International Taxation, IRS Penalties, News, Tax CrimesIRS Says Brain Injury Not Reasonable Cause for Failure to File, Tax Court Disagrees
IRS penalties are supposed to be assessed against a taxpayer only when his non-compliance is due to willful neglect rather than reasonable cause. Serious, debilitating health problems are almost always considered to be reasonable cause. Joe Kristan found a recent Tax Court decision overruling the IRS’s finding that a taxpayer’s brain injury was not sufficient to excuse the late filing of her tax returns:…
Read Full Article Categorized in: Court Cases, IRS PenaltiesOffshore Amnesty Reminder: Deadline August 31, 2011
It’s a crime not to report your foreign earnings on your federal income tax returns. It is likewise illegal not to report your foreign bank account holdings to the Treasury Deparment. But there is good news: If you amend your tax returns and file your past due Foreign Bank Account Returns (FBARs) by August 31, 2011, the IRS will:…
Read Full Article Categorized in: International Taxation, IRS Penalties, Tax CrimesOmitted Income, Accuracy Related Penalty and Reasonable Cause
Russ Fox over at Taxable Talk says that the Tax Court upheld an accuracy related penalty against a taxpayer even though the deficiency arose because his tax preparer failed to report a 1099 on his tax return: Everyone is human. Sometimes we forget that 1099 on the tax return. Today, the Tax Court looked at a case where a…
Read Full Article Categorized in: Court Cases, IRS PenaltiesIRS Audits: Why You Shouldn’t Represent Yourself
The IRS has the legal right to audit any tax return it so chooses for any reason it chooses. The threat of an audit is what makes most taxpayers take seriously their obligation to comply with the letter of the law. The odds of being audited are generally very low, therefore, if you get an…
Read Full Article Categorized in: IRS Audits, IRS Penalties, IRS ProcedureIRS is Auditing More Taxpayers; Hire a Reputable Preparer
The Associated Press reports that the IRS is intensifying and expanding its tax return audit program: The IRS is making it a bit riskier to cheat on your taxes. The tax agency increased the number of returns it audited by nearly 11 percent this year, statistics released Wednesday show. Wealthy taxpayers and big businesses were most likely to…
Read Full Article Categorized in: Individual Taxation, IRS Audits, IRS Penalties, IRS Procedure, Tax CrimesFBAR Penalties Absurd, Unfair
Joe Kristan has a nice little post about the absurd FBAR penalties: Another inspiring tale of international tax enforcement from Phil Hodgen: I’m 33 and single, I’ve been living in France for 13 years, am naturalized French (and born American). I had NO idea about these reports until I started searching on tax information for stock…
Read Full Article Categorized in: International Taxation, IRS PenaltiesTax Preparers as IRS Auditors: It’s Coming Folks
“Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” – Thirteenth Amendment to the United States Constitution – CPA Kip Dillinger writing for Tax Notes says that a war is brewing between…
Read Full Article Categorized in: IRS Penalties, IRS Procedure, Regulation of Tax PreparersTax Return Standard: Substantial Authority v. More Likely Than Not
From Paul Caron: Bret Wells (Houston) has posted Adopting the More Likely Than Not Standard for Tax Returns, 127 Tax Notes 451 (April 26, 2010), on SSRN. Here is part of the abstract: Under current law, a taxpayer may generally take a tax return position without penalty or disclosure if there is substantial authority that…
Read Full Article Categorized in: IRS Audits, IRS Penalties, Regulation of Tax PreparersTax Professionals Upset about Tax Court’s Decision in Canal v. Commissioner
According to Sam Young of Tax Analysts several tax professionals have expressed concern over the Tax Court’s recent decision in Canal Corporation v. Commissioner: In an e-mail to Tax Analysts, Blake D. Rubin, Andrea M. Whiteway, and Jon Finkelstein of McDermott Will & Emery LLP argued that the court misconstrued section 6662 in upholding the accuracy-related…
Read Full Article Categorized in: Court Cases, IRS PenaltiesTax Court Says Price Waterhouse Sold it’s Professional Tax Opinion for $800,000
In Canal Corp. v. Commissioner, 135 T.C. No. 9 (Aug. 5, 2010), the Tax Court found a corporation liable for a $37 million accuracy-related penalty under §6662(a) even though it had obtained a tax opinion from Price Waterhouse Coopers (PWC). Judge Diane Kroupa issued a scathing rebuke of PWC which should be viewed as a shot across the bow of…
Read Full Article Categorized in: Court Cases, Ethics, IRS PenaltiesNewsflash to TIGTA: Revenue Raising is not a Proper Goal of IRS Penalty Regime
Paul Caron reported last week that the Treasury Inspector General for Tax Administration (TIGTA) has released Accuracy-Related Penalties Are Seldom Considered Properly During Correspondence Audits (2010-30-059) in which it states (emphasis is mine): The IRS must take additional steps to ensure that accuracy-related penalties are appropriately considered when assessing correspondence audits…. A TIGTA review of 229 correspondence audits…
Read Full Article Categorized in: IRS PenaltiesGeithner Tax Defense Doesn’t Work for the Small People
Everyone knows about the sweetheart deal the IRS gave it’s current boss, Secretary of Treasury Timothy Geithner. Before he became Secretary of Treasury, Geithner, a financial wunderkind, failed to comply with federal tax laws and was assessed additional taxes, interest and penalties. Geithner was later relieved of the penalties based, at least in part, on his contention that his…
Read Full Article Categorized in: Court Cases, IRS Penalties