Disclaimer: The
materials contained herein below, are for informational purposes only, not
intended to and may not be construed as rendering legal, tax or accounting
advice. Your e-mails or phone calls to our firm seeking such advice do not
create a CPA-client relationship, unless you have retained our firm in
writing. For specific advice, please consult your adviser, or contact us.
posted Sep 7, 2019, 5:12 PM by Zaher Fallahi
Source:
IRS Number IR-2019-141 ( modified by Zaher Fallahi, Esq., CPA)
The
IRS has urged taxpayers to resolve their significant tax debts to avoid putting
their passports in jeopardy. They should contact the IRS now to avoid delays in
their travel plans later. Under the Fixing America’s Surface Transportation
(FAST) Act, the IRS notifies the State Department (State) of taxpayers
certified as owing a seriously delinquent tax debt (SDTD), currently $52,000 or
more. The law then requires State to deny their passport application or renewal.
If a taxpayer currently has a valid passport, State may revoke the passport or
limit a taxpayer’s ability to travel outside the United States.
When the IRS certifies a taxpayer to State as owing
a SDTD, the taxpayer receives a Notice CP508C from the IRS. The notice explains
what steps the taxpayer needs to take to resolve the debt. IRS telephone
assistors can help taxpayers resolve the debt. For example, they can help
taxpayers set up a payment plan or make them aware of other payment options.
Taxpayers should not delay because some resolutions take longer than others.
Don’t
Delay!
It’s
especially important for taxpayers with imminent travel plans who have had
their passport applications denied by State to call the IRS promptly.
For expedited treatment, taxpayers must provide the
following documents to the IRS:
1- Proof of travel. This can be a flight itinerary,
hotel reservation, cruise ticket, international car insurance or other document
showing location and approximate date of travel or time-sensitive need for a
passport.
2- Copy of letter from State denying their passport
application or revoking their passport. State has sole authority to issue,
limit, deny or revoke a passport.
Before contacting State about revoking a taxpayer’s
passport, the IRS will send Letter 6152, Notice of Intent to Request U.S.
Department of State Revoke Your Passport, to the taxpayer to let them know what
the IRS intends to do and give them another opportunity to resolve their debts
. Taxpayers must call the IRS within 30 days from the date of the letter.
Generally, the IRS will not recommend revoking a taxpayer’s passport if the
taxpayer is making a good-faith attempt to resolve their tax debts.
Ways
to Resolve Tax Issues
There are several ways taxpayers can avoid having the IRS notify State of their
seriously delinquent tax debt. They include the following:
1- Paying the tax debt in full,
2- Paying the tax debt timely under an approved
installment agreement,
3- Paying the tax debt timely under an accepted
offer in compromise,
4- Paying the tax debt timely under the terms of a
settlement agreement with the Department of Justice,
5- Having a pending collection due process appeal with
a levy, or
6-Having collection suspended because a taxpayer has
made an innocent spouse election or requested innocent spouse relief.
Relief programs for unpaid taxes
frequently, taxpayers qualify for one of several relief programs including the
following:
1- Payment agreement. Taxpayers can ask for a
payment plan with the IRS by filing Form 9465. Taxpayers can download this
form from IRS.gov and mail it along with a tax return, bill or notice.
Taxpayers who are eligible can use the Online Payment Agreement system to set
up a monthly payment agreement. Using the IRS online payments plan system is
cheaper and can save time.
2- Offer in compromise. Some taxpayers may qualify
for an offer in compromise, an agreement between a taxpayer and the IRS that
settles the tax liability for less than the full amount owed. The IRS looks at
the taxpayer’s income and assets to determine the taxpayer’s ability to pay.
Taxpayers can use the Offer-In-Compromise tool to help them determine whether
they’re eligible for an offer in compromise. For more on denying, revoking passports because of tax debt visit
IRS.gov
Note, Emphasis added by Zaher Fallahi, Esq., CPA
Zaher Fallahi,
Tax Defense Attorney, CPA, licensed in California and Washington D. C., Tax Defense Attorney assists taxpayers with delinquent tax debts, foreign
gifts, and tax problem resolutions nationwide. Tel.: (310) 719-1040, (714)
546-4272 and (877) 687-7558 toll free nationwide, E-mail taxattorney@zfcpa.com |
posted Aug 25, 2019, 5:29 PM by Zaher Fallahi
Security Summit warns of new IRS
impersonation email scam; reminds taxpayers the IRS does not send unsolicited
emails
Source: Issue
Number: IR-2019-145, August 22, 2019
WASHINGTON — The IRS and its Security Summit
partners today warned taxpayers and tax professionals about a new IRS
impersonation scam campaign spreading nationally on email. Remember: the IRS does
not send unsolicited emails and never emails taxpayers about the status of
refunds.
The IRS this week detected this new scam as
taxpayers began notifying phishing@irs.gov about unsolicited emails from IRS imposters.
The email subject line may vary, but recent examples use the phrase “Automatic
Income Tax Reminder” or “Electronic Tax Return Reminder.”
The emails have links that show an IRS.gov-like
website with details pretending to be about the taxpayer’s refund,
electronic return or tax account. The emails contain a "temporary
password" or "one-time password" to "access" the files
to submit the refund. But when taxpayers try to access these, it turns out
to be a malicious file.
“The IRS does not send emails about your tax refund
or sensitive financial information,” said IRS Commissioner Chuck Rettig. “This
latest scheme is yet another reminder that tax scams are a year-round business
for thieves. We urge you to be on-guard at all times.” (Emphasis added by Zaher
Fallahi, CPA, Esq.)
This new scam uses dozens of compromised websites
and web addresses that pose as IRS.gov, making it a challenge to shut down. By
infecting computers with malware, these imposters may gain control of the
taxpayer’s computer or secretly download software that tracks every keystroke,
eventually giving them passwords to sensitive accounts, such as financial
accounts.
The IRS, state tax agencies and the tax industry,
which work together in the Security Summit effort, have made progress in their
efforts to fight stolen identity refund fraud. But people remain vulnerable to
scams by IRS imposters sending fake emails or harassing phone calls.
The IRS doesn't initiate contact with taxpayers by
email, text messages or social media channels to request personal or financial
information. This includes requests for PIN numbers, passwords or similar
access information for credit cards, banks or other financial accounts. (Emphasis
added by Zaher Fallahi, CPA, Esq.)
The IRS also doesn’t call to demand immediate
payment using a specific payment method such as a prepaid debit card, gift card
or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who
owes taxes. See Report Phishing and Online Scams for more
details. (Emphasis added by Zaher Fallahi, CPA, Esq.)
Zaher Fallahi, CPA,
Tax Defense Attorney, licensed in California and Washington D. C., Tax Defense Attorney assists taxpayers with tax problems and foreign
gifts issues nationwide. Tel.: (310) 719-1040, (714) 546-4272
and (877) 687-7558 toll free nationwide, E-mail taxattorney@zfcpa.com |
posted Aug 16, 2019, 10:09 PM by Zaher Fallahi
IR-2019-144,
August 14, 2019
WASHINGTON
— The Internal Revenue Service (“IRS”) is automatically waiving the 2018 estimated
tax penalty for the more than 400,000 eligible taxpayers who already filed their
federal income tax returns but did not claim the waiver.
The
IRS will apply this waiver to tax accounts of all eligible taxpayers, so there
is no need to contact the IRS to apply for or request the waiver.
Earlier
this year, the IRS lowered the usual 90% penalty threshold to 80% to help
taxpayers whose withholding and estimated tax payments fell short of their
total 2018 tax liability. The agency also removed the requirement that
estimated tax payments be made in four equal installments, as long as they were
all made by January 15, 2019. The 90% threshold was initially lowered to 85% on
January 16 and further lowered to 80% on March 22.
The
automatic waiver applies to any individual taxpayer who paid at least 80% of
their total tax liability through federal income tax withholding
or quarterly estimated tax payments but did not claim the special waiver
available to them when they filed their 2018 return earlier this year.
"The
IRS is taking this step to help affected taxpayers," said IRS Commissioner
Chuck Rettig. "This waiver is designed to provide relief to any person who
filed too early to take advantage of the waiver or was unaware of it when they
filed."
Refunds
planned for eligible taxpayers who paid penalty
Over
the next few months, the IRS will mail copies of notices CP 21 granting this
relief to affected taxpayers. Any eligible taxpayer who already paid the
penalty will also receive a refund check about three weeks after their CP21
notice regardless if they requested Penalty relief. The agency emphasized that
eligible taxpayers who have already filed a 2018 return do not need to request
penalty relief, contact the IRS or take any other action to receive this relief.
For
those yet to file, the IRS urges every eligible taxpayer to claim the waiver on
their return. This includes those with tax-filing extensions due to run out on
Oct. 15, 2019. The quickest and easiest way is to file electronically and take
advantage of the waiver computation built into their tax software package.
Those who choose to file on paper can fill out Form 2210 and attach it to
their 2018 return. See the instructions to Form 2210 for details.
Because
the U.S. tax system is pay-as-you-go, taxpayers are required by law to pay most
of their tax obligation during the year, rather than at the end of the year.
This can be done by having tax withheld from paychecks, pension payments or
Social Security benefits, making estimated tax payments or a combination of
these methods.
Like
last year, the IRS urges everyone to do a "Paycheck Checkup" and
review their withholding for 2019. This is especially important for anyone who
faced an unexpected tax bill or a penalty when they filed this year. It's also
an important step for those who made withholding adjustments in 2018 or had a
major life change. Those most at risk of having too little tax withheld include
those who itemized in the past but now take the increased standard deduction,
as well as two wage earner households, employees with nonwage sources of income
and those with complex tax situations.
Zaher Fallahi,
Tax Defense Attorney, CPA, licensed in California and Washington D. C., Tax Defense
Attorney assists taxpayers with foreign gifts and tax problems nationwide.
Tel.: (310) 719-1040, (714) 546-4272 and (877) 687-7558 toll free
nationwide, E-mail taxattorney@zfcpa.com |
posted Aug 11, 2019, 8:54 PM by Zaher Fallahi
Source:
IRS: Tax Reform Tax Tip 2019-102
The
IRS encourages everyone to use the Tax Withholding Estimator to perform a quick
“paycheck checkup.” This is even more important following the recent
changes to the tax law for 2018 and beyond.
The
Estimator helps you identify your tax withholding to make sure you have the
right amount of tax withheld from your paycheck at work. There are several
reasons to check your withholding:
1-
Checking your withholding can help protect against having too little tax
withheld and facing an unexpected tax bill or penalty at tax time next
year.
2-
At the same time, with the average refund topping $2,800, you may prefer to
have less tax withheld up front and receive more in your paychecks.
If
you are an employee, the Tax Withholding Estimator helps you determine whether
you need to give your employer a new Form W-4,
Employee's Withholding Allowance Certificate (PDF). You can use your
results from the Estimator to help fill out the form and adjust your income tax
withholding. If you receive pension income, you can use the results from
the estimator to complete a Form
W-4P (PDF) and give it to your payer.
Zaher
Fallahi, CPA, Tax Attorney, advises taxpayers in resolving their tax problems, Offshore
Accounts, FBAR, FATCA, OVDP, Streamlined Procedures and Foreign Gifts.
Tel: (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), Toll
Free Nationwide 877-687-7558 e-mail taxattorney@zfcpa.com |
posted Aug 3, 2019, 7:01 PM by Zaher Fallahi
Source, IRS: Tax
Reform Tax Tip 2019-102
Summer is a season when people have fun, yet get
things done. From buying a new house to cleaning their old one, taxpayers who
itemize their deductions may be doing things this summer that will affect the
tax returns they file 2019 taxes.
The higher standard deduction under the new tax law means
fewer taxpayers are itemizing their deductions. However, taxpayers who still
plan to itemize next year should keep the following tips in mind:
1.
Deducting state and local income, sales and property taxes
The deduction that taxpayers can claim for state and
local income, sales and property taxes is limited. These deductions are limited
to a combined, total deduction of $10,000 and it is $5,000 if married filing
separately. Any state and local taxes paid above this amount can’t be deducted.
2.
Refinancing a home. The deduction for mortgage interest is also limited
It is limited
to interest paid on a loan secured by the taxpayer’s primary residence or second
home. For homeowners who choose to refinance, they must use the loan to buy,
build, or substantially improve their main home or second home, and the
mortgage interest they may deduct is subject to the limits described in item 3
below; “buying a home.”
3.
Buying a home.
Taxpayers who buy a new home this year can only
deduct mortgage interest they pay on a total of $750,000 in qualifying debt for
a first and second home. It is $375,000 if married filing separately. For
existing mortgages, if the loan originated on or before December 15, 2017,
taxpayers continue to deduct interest on a total of $1 million in qualifying
debt secured by first and second homes.
4.
Donating items and deducting money.
Many taxpayers do a good summer clean-out in summer.
They often find unused items in good condition they can donate to a qualified
charitable organization. These donations may qualify for a tax deduction.
Taxpayers must itemize deductions to deduct and must have proof of all
donations. Taxpayers can use the Interactive Tax Assistant to help determine
whether they can deduct their charitable donation.
5.
Deducting mileage for charity
Driving a personal car while donating services on a
trip sponsored by a charity could qualify for a tax break. Itemizers can deduct
14 cents per mile for charitable mileage driven in 2019.
6.
Reporting gambling winnings and claiming gambling losses
Taxpayers who itemize can deduct gambling losses up
to the amount of gambling winnings. They can use the Interactive Tax Assistant to find out more
about reporting gambling winnings and losses next year.
Zaher
Fallahi, CPA, Tax Attorney, advises taxpayers including Americans Living Abroad,
in resolving their tax problems and undisclosed foreign bank accounts; FBAR,
FATCA and Offshore Voluntary Disclosure Program (OVDP).
Telephones: (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), Toll
Free Nationwide 877-687-7558 e-mail taxattorney@zfcpa.com |
posted Jun 6, 2019, 9:30 PM by Zaher Fallahi
Source: IRS Issue Number: IR-2019-44
Each and every
taxpayer has a set of fundamental rights they should be aware of when dealing
with the IRS. Explore your rights and our obligations to protect them.
1-The Right to Be Informed
Taxpayers have the right to know what they need to do to
comply with the tax laws. They are entitled to clear explanations of the laws
and IRS procedures in all tax forms, instructions, publications, notices, and
correspondence. They have the right to be informed of IRS decisions about their
tax accounts and to receive clear explanations of the outcomes.
2-The Right to Quality Service
Taxpayers have the right to receive prompt, courteous, and
professional assistance in their dealings with the IRS, to be spoken to in a
way they can easily understand, to receive clear and easily understandable
communications from the IRS, and to speak to a supervisor about inadequate
service.
3-The Right to Pay No More than the Correct Amount of
Tax
Taxpayers have the right to pay only the amount of tax
legally due, including interest and penalties, and to have the IRS apply all
tax payments properly.
4-The Right to Challenge the IRS’s Position and Be
Heard
Taxpayers have the right to raise objections and provide
additional documentation in response to formal IRS actions or proposed actions,
to expect that the IRS will consider their timely objections and documentation
promptly and fairly, and to receive a response if the IRS does not agree with
their position.
5-The Right to Appeal an IRS Decision in an
Independent Forum
Taxpayers are entitled to a fair and impartial
administrative appeal of most IRS decisions, including many penalties, and have
the right to receive a written response regarding the Office of Appeals’
decision. Taxpayers generally have the right to take their cases to court.
6-The Right to Finality
Taxpayers have the right to know the maximum amount of time
they have to challenge the IRS’s position as well as the maximum amount of time
the IRS has to audit a particular tax year or collect a tax debt. Taxpayers
have the right to know when the IRS has finished an audit.
7-The Right to Privacy
Taxpayers have the right to expect that any IRS inquiry,
examination, or enforcement action will comply with the law and be no more
intrusive than necessary, and will respect all due process rights, including
search and seizure protections and will provide, where applicable, a collection
due process hearing.
8-The Right to Confidentiality
Taxpayers have the right to expect that any information they
provide to the IRS will not be disclosed unless authorized by the taxpayer or
by law. Taxpayers have the right to expect appropriate action will be taken
against employees, return preparers, and others who wrongfully use or disclose
taxpayer return information.
9-The Right to Retain Representation
Taxpayers have the right to retain an authorized
representative of their choice to represent them in their dealings with the
IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer
Clinic if they cannot afford representation.
10-The Right to a Fair and Just Tax System
Taxpayers have the right to expect the tax system to
consider facts and circumstances that might affect their underlying
liabilities, ability to pay, or ability to provide information timely.
Taxpayers have the right to receive assistance from the
Taxpayer Advocate Service if they are experiencing financial difficulty or if
the IRS has not resolved their tax issues properly and timely through its
normal channels.
Zaher Fallahi Certified Public Accountant (CPA), Esq.,
is licensed in California and Washington D. C., and assists taxpayers with their
Tax Audit Representation and Tax Return
Preparation nationwide. For an Attorney-Client Privileged
consultation please call:
(310) 719-1040 (Los Angeles)
(714) 546-4272 (Orange County)
(877) 687-7558
E-mail taxattorney@zfcpa.com Zaher
Fallahi Tax Attorney |
posted May 18, 2019, 11:02 PM by Zaher Fallahi
Costa Mesa small
CPA firm needs a part-time bookkeeper. CPA firm experience and working knowledge
of QuickBooks is a must. Resume and compensation history and requirement to zfallahi@zfcpa.com |
posted Apr 6, 2019, 11:24 PM by Zaher Fallahi
[
updated Apr 6, 2019, 11:38 PM
]
IRS
reminds those with foreign assets of annual April 15 FBAR deadline
Source: Issue
Number: IR-2019-63
WASHINGTON — The Internal Revenue Service today
reminded U.S. citizens and resident aliens, including those with dual
citizenship, that if they have a foreign bank or financial account, April 15,
2019, is the deadline to file their annual Report of Foreign Bank and Financial
Accounts (FBAR). They should also check to see if they have a U.S. tax
liability and a federal tax return filing requirement.
Here
is a rundown of key points to keep in mind:
Deadline
for reporting foreign accounts
The deadline for filing the FBAR is the same as for a federal income tax
return. This means that the 2018 FBAR, Form 114, must be filed electronically
with the Financial Crimes Enforcement Network (FinCEN) by April 15, 2019.
FinCEN grants filers missing the April 15 deadline an automatic extension until
Oct. 15, 2019, to file the FBAR. Taxpayers don’t file the FBAR with individual,
business, trust or estate tax returns. Taxpayers who want to paper-file their
FBAR must call the Financial Crimes Enforcement Network’s Regulatory Helpline
to request an exemption from e-filing.
In general, the filing requirement applies to anyone
who had an interest in, or signature or other authority, over foreign financial
accounts whose aggregate value exceeded $10,000 at any time during 2018.
Because of this threshold, the IRS encourages taxpayers with foreign assets, even
relatively small ones, to check if this filing requirement applies to them. The
form is only available through the BSA E-Filing System website.
IRS
ends Offshore Voluntary Disclosure Program (OVDP)
The IRS will continue to use tools besides voluntary disclosure to combat
offshore tax avoidance, including taxpayer education, whistleblower leads,
civil examination and criminal prosecution. The IRS continues to use
streamlined filing compliance procedures that will remain in place and be
available to eligible taxpayers. But, as with OVDP, the IRS said it may end the
streamlined filing compliance procedures at some point.
Most
people abroad need to file
An income tax filing requirement generally applies even if a taxpayer qualifies
for tax benefits, such as the Foreign Earned Income exclusion or the Foreign
Tax credit, which substantially reduce or eliminate U.S. tax liability. These
tax benefits are only available if an eligible taxpayer files a U.S. income tax
return.
A special extended filing and payment deadline
applies to U.S. citizens and resident aliens who live and work abroad. For U.S.
citizens and resident aliens whose tax home and abode are outside the United
States and Puerto Rico, the income tax filing and payment deadline is June 17,
2019. Taxpayers have two extra days because the normal extended deadline—June
15—falls on a Saturday this year. The same applies for those serving in
the military outside the U.S. and Puerto Rico on the regular due date of their
tax return.
Interest, currently at the rate of 6 percent per
year, compounded daily, will apply to any payment received after the regular
April 15 deadline.
Nonresident aliens who received income from U.S.
sources in 2018 also must determine whether they have a U.S. tax obligation.
The filing deadline for nonresident aliens is April 15.
Special income tax return reporting for foreign
accounts and assets
In addition to the annual Report of Foreign Bank and Financial Accounts (FBAR)
requirements outlined above, federal law requires U.S. citizens and resident
aliens to report any worldwide income, including income from foreign trusts and
foreign bank and securities accounts. In most cases, affected taxpayers need to
complete and attach Schedule B to their tax return. Part III of Schedule B asks
about the existence of foreign accounts, such as bank and securities accounts,
and usually requires U.S. citizens to report these items for the country in
which each account is located.
Also, separate from the foreign accounts reporting requirements
above, certain taxpayers may also have to complete and attach to their return
Form 8938, Statement of Specified Foreign Financial Assets. Generally, U.S.
citizens, resident aliens and certain nonresident aliens must report specified
foreign financial assets on this form if the aggregate value of those assets
exceeds certain thresholds. See the instructions for this form for details.
Specified
domestic entity reporting
Certain
domestic corporations, partnerships and trusts that are considered formed for
the purpose of holding (directly or indirectly) specified foreign financial
assets must file Form 8938 if the total value of those assets exceeds $50,000
on the last day of the tax year or $75,000 at any time during the tax year.
Report
in U.S. dollars
Any income received, or deductible expenses paid in foreign currency must be
reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must
be made in U.S. dollars.
Both FinCen Form 114 and IRS Form 8938 require the
use of a December 31 exchange rate for all transactions, regardless of the
actual exchange rate on the date of the transaction. Generally, the IRS accepts
any posted exchange rate that is used consistently. For more information on
exchange rates, see Foreign Currency and Currency Exchange Rates.
Expatriate
reporting
Taxpayers
who relinquished their U.S. citizenship or ceased to be lawful permanent
residents of the United States during 2018 must file a dual-status alien tax
return, attaching Form 8854, Initial and Annual
Expatriation Statement. A copy of the Form 8854 must also be filed with
Internal Revenue Service, Philadelphia, PA 19255-0049, by the due date of the
tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for
Expatriates Under Section 877A, for further details.
Choose
Free File or e-file
U.S.
citizens and resident aliens living abroad can use IRS Free File to prepare and
electronically file their tax returns for free. This means both U.S. citizens
and resident aliens living abroad with adjusted gross incomes (AGI) of $66,000
or less can use brand-name software to prepare their returns and then e-file
them for free. A limited number of companies provide software that can
accommodate foreign addresses.
A second option, Free File Fillable Forms, the
electronic version of IRS paper forms, has no income limit and is best suited
to people who are comfortable preparing their own tax return. Both the e-file
and Free File electronic filing options are available until Oct. 15, 2019, for
anyone filing a 2018 tax return. Check out the e-file link on IRS.gov for
details on the various electronic filing options. Free File is not available to
nonresident aliens required to file a Form 1040NR.
End of IRS Reminder
Zaher Fallahi, Top
Tax Attorney, CPA, licensed in Washington D. C. and California, advises taxpayers
nationwide, including Americans Living Abroad, with Tax Returns, Offshore
Voluntary Disclosure Program, Streamlined Procedures, FBAR and Late FBAR, Foreign
Gifts and Late Foreign Gifts, and International Information Filing. For
an Attorney-Client Privileged Consultation, Call:
(877) 687-7558
Nationwide Toll Free
(310) 719-1040
(Los Angeles)
(714) 546-4272
(Orange County)
E-mail taxattorney@zfcpa.com |
posted Mar 17, 2019, 12:07 AM by Zaher Fallahi
IRS: Failure to report offshore funds remains a crime; IRS
includes topic on its 2019 ‘Dirty Dozen’ scams list
WASHINGTON — Hiding money or assets in unreported offshore
accounts remains on the Internal Revenue Service’s “Dirty Dozen” list of tax
scams for 2019, the agency said today.
Compiled annually, the “Dirty Dozen” lists a variety of
common scams that taxpayers may encounter anytime, including offshore schemes.
Many of these peak during filing season as people prepare their tax returns or
seek help with their taxes.
Taxpayers should remain wary of offshore avoidance schemes.
Following the IRS intensifying efforts on offshore issues in recent years, many
taxpayers have already voluntarily disclosed their participation in these
schemes. The IRS conducted thousands of offshore-related civil audits that
resulted in the payment of tens of millions of dollars in unpaid taxes. The IRS
has also pursued criminal charges leading to billions of dollars in criminal
fines and restitution.
“Offshore evasion remains a primary focal point of overall
IRS enforcement efforts,” said IRS Commissioner Chuck Rettig. “Our Criminal
Investigation and civil enforcement teams work closely with the Justice
Department in the international arena to ensure our nation’s tax laws are
followed. Taxpayers considering hiding funds or assets offshore should think
twice; the civil penalties and criminal sanctions can be severe.”
Illegal scams like these can lead to significant penalties
as well as interest and possible criminal prosecution. The IRS Criminal
Investigation Division works closely with the Department of Justice to shut
down scams and prosecute the criminals behind them.
Hiding income offshore
Over the years, numerous individuals have been identified as
evading U.S. taxes by attempting to hide income in offshore banks, brokerage
accounts or nominee entities. They then access the funds using debit cards,
credit cards or wire transfers. Others have used foreign trusts,
employee-leasing schemes, private annuities or insurance plans for the same
purpose.
The IRS uses information gained from its investigations to
pursue taxpayers with undeclared accounts, as well as bankers and others
suspected of helping clients hide their assets overseas.
While there are legitimate reasons for maintaining financial
accounts abroad, there are reporting requirements that need to be fulfilled.
U.S. taxpayers who maintain such accounts and who do not comply with reporting
requirements are breaking the law and risk significant fines, as well as the
possibility of criminal prosecution.
The IRS reminds taxpayers who have failed to properly report
their offshore investments or pay tax on these investments’ income, to come
forward. Since the circumstances of taxpayers vary widely, the IRS offers
several options for addressing the noncompliance.
Third-party reporting
Under the Foreign Account Tax Compliance Act (FATCA) and
the network of intergovernmental agreements between the U.S. and partner
jurisdictions, automatic third-party account reporting continues. The IRS
receives more information regarding potential non-compliance by U.S. persons
because of the Department of Justice’s Swiss Bank Program. This information
makes it less likely that offshore financial accounts will go unnoticed by the
IRS.
Penalties for failure to properly report offshore
transactions can be severe. A summary of these penalties as well as a
comparison of what must be reported on Form 8938, Statement of Specified
Foreign Financial Assets, and the Report of Foreign Bank and Financial Accounts
(FBAR) can be found on IRS.gov.
Zaher Fallahi, CPA, Tax
Attorney, nationwide representation with Offshore Accounts (OVDP), Streamlined Procedures, Foerign Bank Account Report (FBAR), Foreign Account Tax Compliance Act (FATCA), Taxation of Americans Living Abroad and Foreign Gifts. For an Attorney-Client
Privileged Consultation, Call:
(877) 687-7558
Nationwide Toll Free
(310) 719-1040 (Los
Angeles)
(714) 546-4272
(Orange County)
E-mail taxattorney@zfcpa.com |
posted Mar 15, 2019, 10:31 PM by Zaher Fallahi
Source: IRS Issue Number: IR-2019-44
Each and every
taxpayer has a set of fundamental rights they should be aware of when dealing
with the IRS. Explore your rights and our obligations to protect them.
1-The Right to Be Informed
Taxpayers have the right to know what they need to do to
comply with the tax laws. They are entitled to clear explanations of the laws
and IRS procedures in all tax forms, instructions, publications, notices, and
correspondence. They have the right to be informed of IRS decisions about their
tax accounts and to receive clear explanations of the outcomes.
2-The Right to Quality Service
Taxpayers have the right to receive prompt, courteous, and
professional assistance in their dealings with the IRS, to be spoken to in a
way they can easily understand, to receive clear and easily understandable
communications from the IRS, and to speak to a supervisor about inadequate
service.
3-The Right to Pay No More than the Correct Amount of
Tax
Taxpayers have the right to pay only the amount of tax
legally due, including interest and penalties, and to have the IRS apply all
tax payments properly.
4-The Right to Challenge the IRS’s Position and Be
Heard
Taxpayers have the right to raise objections and provide
additional documentation in response to formal IRS actions or proposed actions,
to expect that the IRS will consider their timely objections and documentation
promptly and fairly, and to receive a response if the IRS does not agree with
their position.
5-The Right to Appeal an IRS Decision in an
Independent Forum
Taxpayers are entitled to a fair and impartial
administrative appeal of most IRS decisions, including many penalties, and have
the right to receive a written response regarding the Office of Appeals’
decision. Taxpayers generally have the right to take their cases to court.
6-The Right to Finality
Taxpayers have the right to know the maximum amount of time
they have to challenge the IRS’s position as well as the maximum amount of time
the IRS has to audit a particular tax year or collect a tax debt. Taxpayers
have the right to know when the IRS has finished an audit.
7-The Right to Privacy
Taxpayers have the right to expect that any IRS inquiry,
examination, or enforcement action will comply with the law and be no more
intrusive than necessary, and will respect all due process rights, including
search and seizure protections and will provide, where applicable, a collection
due process hearing.
8-The Right to Confidentiality
Taxpayers have the right to expect that any information they
provide to the IRS will not be disclosed unless authorized by the taxpayer or
by law. Taxpayers have the right to expect appropriate action will be taken
against employees, return preparers, and others who wrongfully use or disclose
taxpayer return information.
9-The Right to Retain Representation
Taxpayers have the right to retain an authorized
representative of their choice to represent them in their dealings with the
IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer
Clinic if they cannot afford representation.
10-The Right to a Fair and Just Tax System
Taxpayers have the right to expect the tax system to
consider facts and circumstances that might affect their underlying
liabilities, ability to pay, or ability to provide information timely.
Taxpayers have the right to receive assistance from the Taxpayer Advocate
Service if they are experiencing financial difficulty or if the IRS has not
resolved their tax issues properly and timely through its normal channels.
Zaher Fallahi Certified Public Accountant (CPA), Esq.,
is licensed in California and Washington D. C., and assists taxpayers with their
Tax Audit Representation and Tax Return
Preparation nationwide. For an Attorney-Client Privileged
consultation please call:
(310) 719-1040 (Los Angeles)
(714) 546-4272 (Orange County)
(877) 687-7558
E-mail taxattorney@zfcpa.com |
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