Monthly Archives: October 2019

According to DoJ, a grand jury in Detroit, Michigan, returned an indictment on October 10, 2019, charging Carl L. Collins III, a Michigan attorney, with tax evasion, filing two false tax returns and seven counts of willfully failing to file individual and corporate tax returns.

According to the indictment, Collins was a personal injury attorney with offices in Southfield, Michigan. Collins also allegedly owned two medical companies, MedCity Rehabilitation Services LLC and Alpha Living LLC, as well as a real estate company called First Third LLC.

The indictment charges that Collins filed a tax return for 2012 with the Internal Revenue Service (IRS), which failed to report approximately $550,000 in income.

Collins allegedly deposited most of this unreported income into an attorney trust account, which he failed to disclose to the Michigan State Bar Foundation and his tax return preparer.

• The indictment further alleges that Collins evaded personal income taxes for 2015 by depositing approximately $580,000 of income into his undisclosed attorney trust account and using much of the money to purchase real estate.
• The indictment also charges that, in 2017, Collins filed a false delinquent tax return for 2015.
• The indictment further alleges that Collins willfully failed to timely file tax returns for several years for both himself and his corporations.

Specifically, Collins failed to timely file his individual tax returns for 2013 through 2015, corporate income tax returns for Alpha Living LLC for 2013 through 2015, and corporate income tax returns for MedCity Rehabilitation Services LLC for 2013.

If convicted, Collins faces a maximum sentence of five (5) years in prison for the tax evasion count, three (3) years for each of the false return counts (6 yrs), and one (1 ) year for each of the failure to file counts (7yrs).

Totaling 18 years of Jail Time!

 

He also faces a period of supervised release, restitution, and monetary penalties.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

  
Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax HELP Contact Us at:

www.TaxAid.com or www.OVDPLaw.com 

orToll Free at 888-8TaxAid (888) 882-9243

On June 20, 2019 we posted Millions of ITINs Are Set to Expire in 2019 where we discussed that in  IR-2019-118 the IRS stated that nearly 2 million Individual Taxpayer Identification Numbers (ITINs) are set to expire at the end of 2019 as the Internal Revenue Service continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year.

  Taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) can get their ITINs renewed more quickly and avoid refund delays next year by submitting their renewal application soon, the Internal Revenue Service said on October 10, 2019.

An ITIN is a tax ID number used by taxpayers who don’t qualify to get a Social Security number. Any ITIN with middle digits 83, 84, 85, 86 or 87 will expire at the end of this year.

In addition, any ITIN not used on a tax return in the past three years will expire.

As a reminder, ITINs with middle digits 70 through 82 that expired in 2016, 2017 or 2018 can also be renewed.

The IRS urges anyone affected to file a complete renewal application, Form W-7, Application for IRS Individual Taxpayer Identification Number, as soon as possible.

Be sure to include all required ID and residency documents. Failure to do so will delay processing until the IRS receives these documents.

With nearly 2 million taxpayer households impacted, applying now will help avoid the rush as well as refund and processing delays in 2020.

 

Have a IRS Tax Problem?

 

  
Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

for a FREE Tax HELP Contact Us at:

www.TaxAid.com or www.OVDPLaw.com 

orToll Free at 888-8TaxAid (888) 882-9243

 

Now according to Law360, The Internal Revenue Service proposed regulations on October 1, 2019 to provide some relief and restore continuity after a change under the 2017 federal tax overhaul that broadened the scope of offshore subsidiaries treated as controlled foreign corporations.

The proposed regulations are generally intended to ensure that the operation of certain rules is consistent with their application before the Tax Cuts and Jobs Act  repealed Internal Revenue Code Section 958(b)(4) . Before it was removed, the measure had prevented the so-called downward attribution of stock ownership of overseas corporations from foreign parent companies to U.S. affiliates.

Under Section 958(b)(4), a foreign parent company's ownership of an offshore subsidiary wasn't attributed to the parent company's U.S. affiliate. With Section 958(b)(4) gone, however, the offshore subsidiary is treated as a controlled foreign corporation, or CFC, under the U.S. branch.

The Unexpected Switch To a CFC Designation.

 

“Unanticipated increases in costs can be detrimental to normal business operations and can put affected groups at a disadvantage relative to competitors who did not experience such changes,” the IRS said, adding the rules are “designed to maintain continuity of normal business operations.”

In certain cases, the proposed regulations will prevent the unintended disruption in business activity by determining CFC status as if Section 958(b)(4) hadn’t been repealed. For example, the IRS cited foreign-parented groups in the space, ocean and international communications industries that have U.S. subsidiaries.

In the absence of the proposed rules, these corporate groups' foreign subsidiaries could potentially have been designated as CFCs, which would result in all or part of the foreign subsidiaries' earnings,  depending on the industry, being treated as U.S. source income.

“Comments received suggested that such treatment would render companies’ business models untenable,” the IRS said.

Accordingly, The Agency Noted That In Such Cases,

The Determination Of Whether A Foreign Corporation
 Is A CFC Is Made Without Regard

To Downward Attribution From A Foreign Person.

The proposed rules also address Internal Revenue Code Section 267(a)(2) , which covers the timing of deductions on payments between related parties. Following the repeal of Section 958(b)(4), a foreign corporation that wasn’t a CFC under prior law could become one as early as Jan. 1, 2017, even though the TCJA was enacted in December of that year, according to the IRS.

This timing affects companies using an accrual accounting method, which involves reporting income for the year in which it is earned and deducting expenses for the year in which they are incurred.

Accordingly, the proposed rule “removes inconsistent annual treatment of deductions” for certain payments in the year the amounts are accrued in cases in which the payments are owed to related foreign corporations that have no direct or indirect U.S. shareholders.

The IRS also issued a revenue procedure on October 1, 2019, limiting the inquiries required by those in the U.S. to determine whether certain foreign corporations are CFCs. In addition, the agency noted that if unrelated minority U.S. shareholders lack detailed tax information with respect to certain CFCs, they can rely on specified financial statement information instead.

Such information can be used to calculate inclusions under Subpart F and the TCJA’s measure on global intangible low-taxed income, the IRS said.

The revenue procedure will also limit filing requirements of U.S. shareholders who only constructively own stock of the CFC because of downward attribution from another person, according to the agency.

 

Have an International Tax Problem?

 

 Contact the Tax Lawyers at

Marini & Associates, P.A. 

 

 for a FREE Tax Consultation Contact us at:

www.TaxAid.com or www.OVDPLaw.com

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