Yearly Archives: 2019

The Internal Revenue Service tends to impose relatively few accuracy-related penalties during audits of large businesses, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, noted accuracy-related penalties are generally 20 percent of the underpayment of taxes due, and in certain cases, the penalty can be as high as 40 percent. TIGTA reviewed IRS databases for closed business return examinations conducted by the IRS’s Large Business and International (LB&I) Division from fiscal years 2015 through 2017 and identified 519 examinations in which LB&I examiners proposed accuracy-related penalties totaling $1.8 billion.

The IRS’s Office of Appeals worked on and closed 195 of the appealed examinations. They totaled $773 million in proposed penalties, but ultimately the appeals resulted in the elimination or reduction of the proposed penalties for 183 of the 195 returns, totaling $765 million, or the lion’s share of the $773 million in proposed penalties.

IRS systems also identified 4,600 LB&I business return examinations that resulted in additional tax assessments greater than $10,000, for a total of $14 billion of additional tax due. But of these 4,600 returns, only 295 returns (or just about 6 percent) had accuracy-related penalties assessed.

Examiners are supposed to document their reasons for proposing or not proposing penalties and involve their supervisors. But TIGTA’s review of a sampling of 50 business tax returns examined by the LB&I Division with an additional tax assessment of over $10,000 and no accuracy-related penalties showed that in 10 of the cases (that is, 20 percent), the examiners didn’t consider imposing an accuracy-related penalty. In another 10 cases (20 percent), the examiners didn’t justify their decisions not to propose the penalty, while in 13 cases (26 percent), there was no indication that the supervisor approved the decision not to propose the penalty, and in 13 cases (26 percent) with substantial understatements of income tax, there was no indication of supervisory involvement in penalty development.

TIGTA also reviewed a sample of 50 business tax returns examined by LB&I examiners with accuracy‑related penalties assessed. In four of those cases (that is, 8 percent), there was no indication the supervisor approved the decision to propose the penalty, and in three cases (6 percent), there wasn’t any indication that supervisors were actively involved in developing the TIGTA made several recommendations to the IRS on ways to improve the examiners’ accuracy-related penalty decisions. The IRS agreed with four of the five recommendations, and partially agreed with one recommendation.

However, an IRS official objected to some of TIGTA’ s conclusions. “While we agree there are improvements to be made in this area, we disagree with some of the conclusions of the audit,” wrote Douglas W. O’Donnell, commissioner of the IRS’s Large Business and International Division, in response to the report. “Due to the methodology and approach of this audit, we do not believe that some of the overall conclusions are supported. Each examination and the facts and circumstances of an individual case stand on their own.”

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

 





 

The Senate passed the Taxpayer First  Act (H.R. 3151) on Thursday, June 13 by a voice vote. The bill includes provisions to improve customer service, protect personal data, preserve tax-preparation services and curb private debt collectors. The measure now goes to the President who is expected to sign. 
 
On June 6, House Ways and Means Committee member John Lewis (D-GA) introduced a revised Taxpayer First Act (HR 3151), which removes a section that would have required IRS to continue the Free File program in collaboration with private companies such as H&R Block and Turbo Tax, commonly referred to as the Free File Alliance.
 
An earlier version of the bill would have codified language potentially preventing IRS from creating its own Free File program for low-income households.
 
Aside from the Free File language, the bill preserves the IRS Oversight Board, establishes an independent Office of Appeals, and permanently authorizes the volunteer income tax assistance program for low-income filers.

The bill also limits the ability of private debt collectors to pursue unpaid taxes from low-income taxpayers and codifies an exclusion from upfront fees and initial payments in the offer in compromise program for taxpayers with incomes below 250% of the federal poverty level.

The bill would:

• Change the management and oversight of the Internal Revenue Service (IRS) with the aim of improving customer service and the process for assisting taxpayers with appeals; restrict certain IRS enforcement activities, including the use of private debt collectors in certain cases; and modify the agency’s organization.
• Aim to combat identity theft and tax refund fraud, create an automated system to verify taxpayer information for authorized users, modernize information technology systems within the IRS, and expand the use of electronic information systems within the IRS.
• Change several provisions in the laws that govern the IRS.
• Increase the penalty for tax returns filed more than 60 days after the due date.

Estimated budgetary effects would primarily stem from

• A restriction on the use of private debt collectors for certain taxpayers.
• An increase in the penalty for tax returns filed 60 days after the due date.
• A modification to electronic filing requirements for certain preparers.
• CBO has not completed an estimate of the bill’s costs that are subject to annual appropriation.

  
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for a FREE Tax HELP Contact Us at:

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The Treasury Department and the Internal Revenue Service issuedfinal and proposed regulations on June 14, 2019 concerning global intangible low-taxed income under section 951A the would expand an exception the GILTI tax, the foreign tax credit, the treatment of domestic partnerships for purposes of determining the subpart F income of a partner, and the treatment of income of a controlled foreign corporation subject to a high rate of foreign tax under section 951A. 

Commonly referred to as GILTI, the Treasury Department and the IRS issued final regulations that provide guidance to determine the amount of global intangible low-taxed income included in the gross income of certain U.S. shareholders of foreign corporations, including U.S. shareholders who are members of a consolidated group.

The final regulations retain, with certain modifications, the anti-abuse provisions that were included in the proposed regulations and revise the domestic partnership provisions to adopt an aggregate approach for purposes of determining the amount of global intangible low-taxed income included in the gross income of a partnership’s partners under section 951A with respect to controlled foreign corporations owned by the partnership. 

The Treasury Department and the IRS request comments on these proposed rules.

Have an International Tax Problem?   

 

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Marini & Associates, P.A. 

 for a FREE Tax Consultation Contact US at

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

 



 

 
What types of misconduct should you be on the lookout for?  

The CFTC has sued companies and individuals for fraudulently soliciting investments in virtual currencies. Conduct like that in the CabbageTech and My Big Coin cases is always of concern to the CFTC. Other concerns include:

• Price manipulation (like pump-and-dump schemes) involving virtual currencies and other virtual assets.
• Pre-arranged or wash trading of virtual currencies, or swaps or futures contracts based on virtual currencies.
• Virtual currency futures or option contracts or swaps traded on an unregistered domestic platform or facility.
• Certain schemes involving virtual currencies marketed to retail customers by unregistered persons, such as off-exchange leveraged, margined, or financed commodity transactions with persons, even without direct evidence of fraud or manipulation.
• Supervision failures or fraudulent conduct (e.g., creating or reporting fictitious trading) by virtual currency exchanges. 

About the CFTC We are the U.S. regulator charged with ensuring the integrity of the futures & swaps markets.
About the Whistleblower Program We will pay monetary awards to persons who voluntarily provide us with original information on a Form TCR about violations of the CEA or its rules, if that information leads to a successful CFTC enforcement action resulting in more than $1 million in monetary sanctions. The program also affords confidentiality and anti-retaliation protections.

_____________________________

 

Want a Reward of Between 15- 30% of

Underpaid IRS Tax Liabilities

or Currency Manipulation ? 
________________________________________

 

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Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax Consultation at:

www.TaxAid.com or www.OVDPLaw.com

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

Manipulation capitalist Manipulation