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Monthly Archives: October 2015

6 Techniques to Consider When You Receive an IRS Notice!

October 27, 2015

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.
  • You are due a larger or smaller refund.
  • They have a question about your tax return.
  • They need to verify your identity.
  • They need additional information.
  • They changed your return.
  • They are notifying you of delays in processing your return.

2. Read the Entire Notice or Letter Carefully.

Typically, the IRS only needs a response if you don’t agree with the information, the IRS needs additional information, or you have a balance due. If the IRS changed your tax return, compare the information the IRS provided in the Notice or Letter with the information in your original return. If the IRS receives a return that they suspect is identity theft, the IRS will ask you to verify your identity using the web address provided in the letter.

When you get a notice in the mail from the IRS, it will have a file/case/claim or other reference
number on the document. You’ll also notice the document likely arrived days (or weeks) later
than the date on the letter/notice.

3. Contact the IRS if You Have Questions or Disagree With the Notice.

The IRS provides their contact phone number on the top right-hand corner of their correspondence.

Call the that phone number as soon as possible upon receipt of the notice to make certain the IRS is aware you are “pending action.” Be sure you have your tax return and any related documentation available when you call. Alternatively, you can write to the IRS at the address in the correspondence to explain why you disagree. If you write, allow at least 30 days for their response.

4. Respond Within the Required Time Frame.

 
If the IRS ask for a response within a specific time frame, you must respond on time to minimize additional interest and penalty charges or to preserve your appeal rights if you don’t agree.

5. Document all communications with the IRS
If you mail communications to the IRS, send them as certified mail to guarantee arrival and receipt. If you communicate with the IRS by telephone, the responding agent will give you his/her name and ID
number. Be certain to write it down along with the date/time/subject of your call and any
answers or information the agent provides. If you do not get a name and ID number, be sure to
ask and/or confirm before the end of your call. That way if there are any disputes, there is a
record of your communications.


6. Turn Over the Right Paperwork

Inexperienced taxpayers often think that the more paperwork they turn over, the better. The IRS
may even encourage this by stating that they can help you resolve your tax problem. While this may be true, IRS Revenue Agents can and often do make additional adjustments based upon the information and paper work which you supply. Only provide the information that is needed to resolve the problem at hand, not that which may open up a whole new set of problems.

6. Contacting an Experience Tax Attorney Can Help

When you respond quickly to notices and requests for information, you’re likely to find that the
situation can be resolved successfully on your own. But when audits or multiple issues arise, it is advisable to have an Experienced Tax Attorney on your side. 

When you have IRS tax problems, it is very important to handle them very carefully. IRS tax matters are very technical and sensitive; therefore a slight mistake in the process can cost you dearly in the form of loss of money, loss of time and general frustration. The tax laws and procedures involved in settling  your IRS taxes can be very complex and you may not completely understand it.

Dealing with IRS involves navigating the complicated maze of U.S. tax law. A Tax Attorney has the knowledge of tax law and expertise needed to negotiate with the IRS on your behalf to reduce Tax debt & IRS Problems.

The Internal Revenue Service has an army of employees and tax attorneys representing them

and as a taxpayer, you should have the same benefits which result from hiring an Experienced Tax Attorney to represent You, your Business & your Family.

Have a Tax Problem?
 



Contact the Tax Lawyers at
Marini & Associates, P.A.


 for a FREE Tax Consultation Contact US at 
www.TaxAid.us or www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

Read more at: Tax Times blog

US Supreme Court Asked to Consider Whether the 5th Amendment Trumps the Required Records Doctrine?

October 27, 2015

On July 21, 2015 we posted "Required Records Doctrine Trumps 5th Amendment Defense For Overseas Accounts!" were we discussed the Third Circuit ruling that a married couple must turn over their foreign bank account records to the Internal Revenue Service, saying the couple can’t shield themselves by asserting their Fifth Amendment right against self-incrimination.
 
This comes after our post "Fifth Amendment Does Not Apply to Offshore Banking Records," where we discuss that under the Required Records Doctrine, and a taxpayer who is the subject of a grand jury investigation into his use of offshore bank accounts cannot invoke the privilege to resist compliance with a subpoena seeking records kept pursuant to the Bank Secrecy Act, the U.S. Court of Appeals for the Seventh Circuit ruled Aug. 27 (In re Special February 2011-1 Grand Jury Subpoena DatedSeptember 12, 2011, 7th Cir., No. 11-3799, 8/27/12). 
 

In 2010, French authorities tipped off the IRS to several U.S. citizens holding undisclosed accounts with HSBC. One of the accounts belonged to Pelsa Business Inc., an entity where Eli Chabot was the beneficial owner, the IRS was told.

The agency responded in 2012 by issuing summonses to the Chabots to testify and produce documentation on their foreign bank accounts, but the couple held to their Fifth Amendment rights and declined. The IRS later revised the summonses to limit their scope only to records that holders of foreign bank accounts are required to keep under the Bank Secrecy Act of 1970, but the Chabots again refused to comply.

On appeal, the Chabots argued:

(1) allowing the government to rely on the required records exception to enforce the summonses in this case will lead to general governmental abrogation of the Fifth Amendment privilege for any “failure to report” crime; 

 (2) the information that would be gleaned from compliance with the summonses is almost identical to what the government needs to charge the Chabots with the felony of willful failure to report an overseas account in the Report of Foreign Bank and Financial Accounts, thus requiring the Chabots to incriminate themselves; and

(3) the records that 31 C.F.R. § 1010.420 requires accountholders to keep do not satisfy the three-pronged test for applying the required records exception to the Fifth Amendment privilege.

The government’s response to these arguments is that the Chabots’ records fall within the required records exception to the Fifth Amendment privilege. Therefore, the questions before the panel are whether the Chabots’ account records fall within the required records exception to the Fifth Amendment privilege and, if so, whether the Chabots’ policy concerns are insurmountable barriers to our application of this exception.

Unpersuaded by the overriding effect of the stated concerns, appeals court concluded that the Chabots’ account records fall squarely within the required records exception to the Fifth Amendment privilege.

Therefore, they affirmed the District Court’s grant of the IRS’s petition. The case is U.S.A. v. Chabot et al., case number 14-4465, in the U.S. Court of Appeals for the Third Circuit.

Now according to Law360 appealed in a petition filed earlier this month, Eli and Renee Chabot asked the Supreme Court to consider this U.S. Court of Appeals for the Third Circuit decision, which cited an exception to the Fifth Amendment privilege for records that are required to be maintained by law.

In their petition to the Supreme Court, the Chabots argued that the application of the required records exception in their case went beyond the usual scope of the doctrine. They say that as a result of the 1976 USA v. Fisher case, the Supreme Court has determined that the doctrine obligated witnesses to turn over “testimonial communications,”  communications that simply prove whether documents exist and whether they are authentic.

“The production of these documents, as distinct from the contents of these documents, did little to incriminate the witness,” the couple explained

They said the documents sought in their case, their Foreign Bank Account Reports, would be far more damning, because these filings were obligatory only when certain underlying conditions existed. The couple said that by producing these documents, they could be implicitly acknowledging that their accounts were subject to certain federal statutes.

“Such an admission, combined with the fact that the government knows whether an FBAR was in fact filed by petitioners, forces them to admit facts the government would otherwise have to prove to establish the felony of failure to file an FBAR or to retain the required information,” the couple said.

Do You Have Undeclared Income from an Offshore Bank?

 

Want to Know if the OVDP Program is Right for You?
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
for a FREE Tax Consultation
at: www.TaxAid.us or www.TaxLaw.ms or
Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

Offshore Compliance Programs Generate $8 Billion and IRS Urges People to Take Advantage of Voluntary Disclosure Programs… You Think?

October 16, 2015

The IRS released IR-2015-116 on Oct. 16, 2015, to remind U.S. taxpayers with undisclosed offshore accounts, that with more than 54,000 taxpayers coming in to participate in offshore disclosure programs since 2009, they should strongly consider existing paths established to come into full compliance with their federal tax obligations.

Both the Offshore Voluntary Disclosure Program (OVDP) and the streamlined procedures enable taxpayers to correct prior omissions and meet their federal tax obligations while mitigating the potential penalties of continued non-compliance. There are also separate procedures for those who have paid their income taxes but omitted certain other information returns.

“The groundbreaking effort around Automatic Reporting of Foreign Accounts has given us a Much Stronger Hand in Fighting Tax Evasion,” said IRS Commissioner John Koskinen.
“People with Undisclosed Foreign Accounts should carefully consider their Options and use Available Avenues, including the Offshore Program and Streamlined Procedures, to come back into full compliance with their tax obligations.”

Under the Foreign Account Tax Compliance Act (FATCA) and the network of intergovernmental agreements (IGAs) between the U.S. and partner jurisdictions, automatic third-party account reporting began this year, making it less likely that offshore financial accounts will go unnoticed by the IRS. We previously posted FATCA - U.S. Began Reciprocal Automatic Exchange of Tax Information On Sept. 30, 2015!, where we discussed that the Internal Revenue Service announced the exchange of financial account information with certain foreign tax administrations, meeting a key Sept. 30 milestone related to FATCA, the Foreign Account Tax Compliance Act.

 
To achieve this, the IRS successfully and timely developed the information system infrastructure, procedures, and data use and confidentiality safeguards to protect taxpayer data while facilitating reciprocal automatic exchange of tax information with certain foreign jurisdiction tax administrators as specified under the intergovernmental agreements (IGAs) implementing FATCA.

"Meeting the Sept. 30 deadline is a Major Milestone
in IRS Efforts to Combat Offshore Tax Evasion through FATCA and the Intergovernmental Agreements," 
said IRS Commissioner John Koskinen. 

In addition to FATCA and reporting through IGAs, the Department of Justice’s Swiss Bank Program

continues to reach non-prosecutionagreements with Swiss financial institutions that facilitated past non-compliance. As part of these agreements, banks provide information on potential non-compliance by U.S. taxpayers. Potential civil penalties increase substantially if U.S. taxpayers associated with participating banks wait to apply to OVDP to resolve their tax obligations.  

OVDP offers taxpayers with undisclosed income from offshore accounts an opportunity to get current with their tax returns and information reporting obligations. The program encourages taxpayers to voluntarily disclose foreign accounts now rather than risk detection by the IRS at a later date and face more severe penalties and possible criminal prosecution. 

Since OVDP began in 2009, 
there have been more than 54,000 disclosures. 


The IRS has collected more than
$8 billion from this initiative.  
 

The streamlined procedures, initiated in 2012, were developed to accommodate a wider group of U.S. taxpayers who have unreported foreign financial accounts but whose circumstances substantially differed from those taxpayers for whom the OVDP requirements were designed. More than 30,000 taxpayers have used streamlined procedures to come back into compliance with U.S. tax laws. Two-thirds of these have used the procedures since the IRS expanded the eligibility criteria in June 2014.
 
Separately, based on information obtained from investigations and under the terms of settlements with foreign financial institutions, the IRS has conducted thousands of offshore-related civil audits that have produced tens of millions of dollars. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitution.
 
The IRS remains committed to stopping offshore tax evasion wherever it occurs.  Even though the IRS has faced several years of budget reductions, the agency continues to pursue cases in all parts of the world.

Do You Have Undeclared Income from A Foreign Banks 
Which is Delivering Names to the IRS?

Do You Value Your Freedom?

Want to Know if the OVDP Program is Right for You?

Contact the Tax Lawyers at 
Marini & Associates, P.A.  
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

Bank Leumi Executives to Repay Bonuses as a Result of U.S. Tax Deal.

October 13, 2015

We previously posted "Bank Leumi to Face $300 Million Settlement Option to Close an Investigation Regarding Their Aiding Americans to Evade Taxes:" now we know that Bank Leumi's non-prosecution deal with the US Department of Justice requires it to also disclose the identities of 1,500 American account holders to the Internal Revenue Service. US citizens with undisclosed accounts at the Israeli bank may now be at risk of civil penalties, prosecution and disqualification from the US' offshore voluntary disclosure program.  
 
Leumi reported that it is the first Israeli bank to reach a settlement with U.S. authorities. The agreement with the DoJ requires the Bank Leumi Group to pay a fine of $270 million. The agreement with the DFS requires the Bank Leumi Group to pay a fine of $130 million. As part of the DoJ agreement, the Bank Leumi Group has provided to the Internal Revenue Service (IRS) the names of more than 1,500 U.S. account holders.

 
Now three former senior executives at Bank Leumi will return part of the bonuses they received after Israel's second largest bank agreed a $400 million settlement with U.S. tax authorities. An independent committee set up to examine the conduct of the bank's board and senior management recommended the three executives return 11 percent of the bonuses they received for the 2002-2010 period, a total of 5.1 million shekels ($1.3 million).
In addition, the committee recommended that the bank recoup $92 million from insurance policies covering board actions. Leumi said its board has decided to accept all of the committee's recommendations and have submitted them to Tel Aviv District Court for approval.
 
“The insurance settlement payment will reduce the damage to Leumi from the fines paid and will positively impact its financial results,” Meir Slater, head of research at Bank of Jerusalem Ltd. in Tel Aviv, said by phone. “The panel’s message is that just that as executives get compensated for their good work, they have to take responsibility for the negative results of their actions.”
 
The three people are:
 
  1. Former chief executive Galia Maor,
  2. Former chairman Eitan Raff and
  3. Former head of its international private banking division Zvi Itskovich.
 
Maor will pay back the largest amount, 2.6 million shekels. The three former executives have informed the committee they agree to repay the amount requested in order to bring the matter to a close.
 
U.S. persons with undisclosed accounts at Bank Leumi (and others) face potentially stiff financial consequences and, in some cases, the risk of prison. 

There are many unknowns in this new environment (e.g., which individuals are among the 1,500 disclosed accounts, who will be exposed to criminal prosecution, what the civil penalties will be in the civil examinations, will the streamlined programs be available, etc.). However, one thing is apparent: The U.S. government will likely be relentless in its pursuit of U.S. persons with undisclosed accounts, and those who defer disclosure may face ever-increasing adverse consequences. 

Have Un-Reported Income From
a Bank Leumi Offshore Bank Account?
 
Protect Yourself from 325% Fines and Possible Jail Time. 

Contact Our Experienced Tax Attorneys to Find out
if the OVDP Program or Streamline Program is Right for You?


Contact the Tax Lawyers at
Marini & Associates, P.A.
for a FREE Tax Consultation Contact US at
www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243)

Source:
 
 
 
 
 
 




 

Read more at: Tax Times blog

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