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Yearly Archives: 2020

IRS Defers Tax Payments Until July 15th!

March 17, 2020

In a press briefing Tuesday morning, March 17, 2020, Treasury Secretary Steven Mnuchin said that individual taxpayers who owe up to a million dollars in federal taxes can defer paying until July 15, while corporations can defer up to $10 million.
“The Reason We’re Doing A Million Dollars Is Because
It Covers A Lot Of Pass-Through And Small Businesses,”
He Noted.

“All you have to do is file your taxes, you’ll automatically not get charged interest and penalties,” he said. “We encourage those Americans who can file their taxes to continue to file on April 15, because for many, you will get tax refunds, and we don’t want you to lose out on those refunds.”

Mnuchin made a point of saying that taxpayers could still file for extension, which would allow them to defer filing and payment until October 15. “We’re not taking that right away,” he said.

No Specific Mention Was Made Of Changing
The Filing Deadline.

“This is disappointing,” said Neil Fishman, president of the National Conference of CPA Practitioners. “From everything that was coming out, we expected they were going to grant a filing extension. But they’re not granting a filing extension, they’re granting a payment extension.”

“This is not helping people with their tax returns,” he continued. “I’ve got clients in a senior facility, and they’re all on lockdown, I was going to go see them this week, but they’re not letting anybody in, not even family. If the person is quarantined, they can’t sign an authorization form. If they owe money, they can’t sign a check.” The promise to waive “all penalties and interest” raised some questions for some tax experts.

“If I don’t file for an extension but pay within next 90-day period, the question is, will they waive the failure to file penalty?” asked Roger Harris, president of Padgett Business Services and a past chair of the IRS Advisory Council.
“They’re waiving all penalties for not paying, but what about for not filing? Some in media are saying he waived both, but that’s not what I heard him say. Does this waiver also apply to the estimated tax payment due on April 15 by some taxpayers.”

Harris said that he believes the reason the government is only talking about extending payments is that it doesn’t put pressure on the states to change their filing dates.

“By Just Extending The Payment Date, It Doesn’t Force States To Consider Changing Their Filing Date,” He Explained.

“They just have to decide if they want to defer payment, penalty and interest free, or not.”

Delaying payment requirements will give businesses and individuals nearly three more months to meet their IRS obligations, potentially lessening cash-flow issues that some businesses are facing as many people stay home and spend less money on dining out, entertainment and transportation.

“This is a commonsense step to afford individual Americans and businesses access to financial resources they need during this time of economic and social disruption,” Senate Finance Committee Chairman Chuck Grassley said in a statement.
Wealthier individuals, ranging from the upper-middle class to the top 1%, could benefit the most from this move because they are more likely to owe the government money and be able to wait until the filing deadline to submit their returns, said John Koskinen, a former IRS commissioner.
Nearly 68 million individuals had already filed their tax returns as of March 6, according to the most recent statistics from the IRS. That’s about 45% of the returns the agency expects to receive this year.
“For a lot of people it makes sense to stick to the original schedule,” said Meredith Tucker, a principal at accounting firm Kaufman Rossin. “Don’t just kick the can down the road if there is no benefit.”

Can't Pay Your Taxes?


Contact the Tax Lawyers at
Marini & Associates, P.A.  
for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid

Read more at: Tax Times blog

Foreign Trust Form 3520-A Filing Date Reminder & Tips To Avoid Penalties

March 16, 2020

The due date for the foreign trust’s information reporting return, the Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner (Under section 6048(b)), is the fifteenth day of the third month following the end of the foreign trust’s taxable year or March 15th for calendar year taxpayers.

An extension of time to file Form 3520-A may be requested by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. 

 
How To Avoid Penalties:
 
1. Form 3520-A

  • File by the fifteenth day of the third month after the end of the trust’s tax year, the due date may be extended by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.

  • Form 7004 must be filed with an Employer Identification Number (EIN) for the foreign trust. Forms 7004 for a foreign trust cannot be processed under an individual’s Social Security Number (SSN). Please obtain an EIN for the foreign trust. 

  • If the foreign trust does not file a Form 3520-A, the U.S. owner of the foreign trust must file a substitute Form 3520-A by completing a Form 3520-A to the best of their ability and attaching it to a timely filed Form 3520, including extensions (see Form 3520 Instructions for more information on filing a substitute Form 3520-A). Do not separately file a duplicate Form 3520-A if you are filing a substitute 3520-A attached to your timely filed Form 3520, with extensions.
 
    2. Form 3520:

  • When completing Form 3520, be sure to check Box 1K on page 1, and enter the form number of the income tax return if an extension was filed.

    If the foreign trust fails to timely file a complete and accurate Form 3520-A, and its U.S. owner also fails to file a complete and accurate substitute Form 3520-A (by attaching a Form 3520-A to its timely filed 3520, including extensions), the U.S. owner is subject to a separate penalty, equal to the greater of $10,000 or 5 percent of the gross value of the portion of the foreign trust's assets treated as owned by the U.S. owner under the grantor trust rules at the close of the taxable year.

  • This penalty is in addition to any applicable penalty of the same amount for the U.S. owner’s failure to timely file a complete and accurate Part II of Form 3520.  See IRC section 6677(a) through (c) and the Instructions for Form 3520 and Form 3520-A.
Need To Contest and IRS Penalty?

 
 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
 

Read more at: Tax Times blog

IRS Creates Webpage for Coronavirus Information And Tax Relief

March 16, 2020

The IRS has established a special web page to help taxpayers, businesses and others affected by the coronavirus. The web page will be updated as new information becomes available.

For health information about the COVID-19 virus, visit the Centers for Disease Control and Prevention (https://www.coronavirus.gov). Other information about actions being taken by the U.S. government is available at https://www.usa.gov/coronavirus and in Spanish at https://gobierno.usa.gov/coronavirus.

Additionally, the IRS this week advised that high-deductible health plans (HDHPs) can be used to pay for 2019 Novel Coronavirus (COVID-19)-related testing and treatment, without jeopardizing their status.

This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).

As stated in Notice 2020-15, health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing or treatment of COVID-19 before plan deductibles have been met.

As in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.

Have a Health Problem? -Call the CDC

Have a 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
or Toll Free at 888-8TaxAid
 
 


Read more at: Tax Times blog

The IRS is Now Criminally Prosecuting Employers For Payroll Taxes & So. Flo. Employer Get 24 Months in Prison!

March 11, 2020

On October 29, 2019 we posted The IRS is Now Criminally Prosecuting Employers For FailureTo Pay Withheld Payroll Taxes!, now the DoJ is reporting that one of the men mentioned in our blog Post, who pleaded guilty to failing to pay over employment taxes, was sentenced to 24 months in Prison for not paying Employment Tax Withholdings.

According to court documents, between 2002 and 2017, Ricardo Betancourt owned and operated multiple parcel delivery businesses in the South Florida area. Betancourt’s businesses earned gross revenues of more than $100 million.

Through his businesses, Betancourt employed hundreds of employees and was responsible for collecting and paying over to the Internal Revenue Service (IRS) the taxes withheld from employees’ paychecks. Betancourt withheld payroll taxes from his employees, but he deliberately failed to pay over those withholdings and other associated taxes to the IRS, despite his obligation to do so.
In 2013 And 2014, Betancourt Did Not Pay Over Approximately 97 Percent Of The Federal Employment Taxes He Withheld From His Employees.
In 2015 and 2016, Betancourt did not pay over any of the federal employment taxes he withheld from his employees. For the quarter ending December 2016, Betancourt admitted that he failed to truthfully account for and pay over payroll taxes of approximately $727,478.

In addition to the term of imprisonment, U.S. District Judge Marcia G. Cooke ordered Betancourt to serve three years of supervised release and to pay approximately $9,033,318 in restitution to the United States.

Have Payroll Tax Problems?
 
 
 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
 
 
 




 

Read more at: Tax Times blog

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