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Monthly Archives: June 2022

IRS To Hire 4000 Nationwide!


In IR-2022-114, issued June 1, 2022, the IRS announced that it intends
to boost its workforce and better help taxpayers and businesses and it's looking to hire over 4,000 contact representative positions at several IRS offices nationwide this summer.

A contact representative provides administrative and technical assistance to individuals and businesses primarily over the phone, through written correspondence or in person. These full-time positions fall under a special hiring condition called direct-hire authority  Full-time, bilingual (Spanish) positions are also available. No prior tax experience is required.

"The IRS continues to increase its workforce in 2022 to improve the taxpayer experience," said IRS Taxpayer Experience Officer and Wage and Investment Commissioner Ken Corbin. 

"We Have A Variety Of Jobs Available All Over The Country.

Contact Representatives, Among Other Things, Deal Directly With Taxpayers By Helping Them With Their Tax Obligations."

The IRS offers competitive pay and benefits, on-the-job training, and opportunities for advancement. The pay range for these positions begin at a GS-05 level. So for Miami that would mean a starting salary of $38,481 a year. Shift availabilities vary by location but there are openings for day shift, (hours between 6 a.m. – 6 p.m.) mid shift (10 a.m. – 10 p.m.) and swing shift (2 p.m. – 1:30 a.m.) in 22 cities nationwide, including Puerto Rico.

Virtual information-sharing events

The agency is hosting virtual information sharing events in June where the IRS will explain the required qualifications and job duties for the contact representative position and provide tips for navigating the application process. Participants will also hear from employees who will provide insights about the work they do day-to-day.

In-person events

In-person events will be held mostly in June, are open to the public and will be held in the following cities: Andover, Mass.; Atlanta, Ga.; Philadelphia, Pa.; Fresno and Oakland, Calif.; Brookhaven, N.Y.; Cincinnati, Ohio; Memphis, Tenn.; and Caguas, Puerto Rico. Registration for these and more can be found on the IRS careers page.

Interested job seekers are encouraged to bring their resumé and two forms of identification (i.e., state driver's license and/or state identification card, birth certificate, U.S. passport, military ID or Social Security card). 

Qualified Applicants Will Receive Tentative 
Job Offers At The In-Person Events.

Preregistration is recommended and social-distancing is required to attend the in-person job fairs. Per Centers for Disease Control and Prevention (CDC) guidelines, mask wear is optional for these job fair sites. For complete details on the virtual events and to register to attend one of the in-person events, visit: jobs.irs.gov/events.

The IRS is an equal opportunity employer. All employees must be U.S. citizens, pass an FBI fingerprint check and tax compliance verification, and meet the mandatory education, training, and experience qualification requirements.


Have an 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
or 
Toll Free at 888 8TAXAID (888-882-9243)


Read more at: Tax Times blog

IRS Data Book Reveals Civil Penalties Assessed & Abated in 2021

The IRS released its Data Book which presents information on collections and penalties resulting from individuals’ or entities’ failure to comply with the tax code. Failure to comply with filing, reporting and payment requirements may result in civil penalties or, in some cases, criminal investigation. 

IRS’s Collection function collects Federal taxes that have been reported or assessed but not paid and secures tax returns that have not been filed. 

Additionally, this section presents data on the IRS Independent Office of Appeals workload. The mission of Appeals is to resolve tax controversies without litigation, on a basis that is fair and impartial to both the taxpayer and the Federal Government.

Graphic shows the amount of civil penalties assessed by the IRS in fiscal year 2021, a total of more than $37.3 billion. More than $17.1 billion was assessed on individual and estate and trust income tax returns; $4.5 billion was assessed on businesses.

In Table 26 the IRS Presents Civil Penalties Assessed & Abated:


Highlights of the Data
  • In Fiscal Year (FY) 2021, the IRS collected more than $92.6 billion in unpaid assessments on returns filed with additional tax due, netting $59.5 billion after credit transfers (Table 25XLSX).
  • The IRS assessed $37.3 billion in civil penalties in FY 2021. Of this, $17.1 billion was assessed in civil penalties on individual and estate and trust income tax returns (Table 26XLSX).
  • During FY 2021, the IRS Appeals Office closed 66,522 cases, including those received in a prior fiscal year (Table 27XLSX).

Have an 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
or 
Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

Maltese Pension Arrangements Makes 2022 IRS “Dirty Dozen” List

WASHINGTON – The Internal Revenue Service today began its "Dirty Dozen" list for 2022, which includes potentially abusive arrangements that taxpayers should avoid.

 

The potentially abusive arrangements in this series focus on four transactions that are wrongfully promoted and will likely attract additional agency compliance efforts in the future. Those four abusive transactions involve charitable remainder annuity trusts, Maltese individual retirement arrangements, foreign captive insurance, and monetized installment sales.

 

"Taxpayers should stop and think twice before including these questionable arrangements on their tax returns," said IRS Commissioner Chuck Rettig. 


"Taxpayers Are Legally Responsible For What's On
Their Return, Not A Promoter Making Promises
And Charging High Fees. 

Taxpayers Can Help Stop These Arrangements By Relying On Reputable Tax Professionals They Know They Can Trust."

 

The IRS reminds taxpayers to watch out for and avoid advertised schemes, many of which are now promoted online, that promise tax savings that are too good to be true and will likely cause taxpayers to legally compromise themselves.

 

Taxpayers, tax professionals and financial institutions must be especially vigilant and watch out for all sorts of scams from simple emails and calls to highly questionable but enticing online advertisements.

 

The first four on the “Dirty Dozen” list are described in more details as follows: 

  1. Maltese (or Other Foreign) Pension Arrangements Misusing Treaty. In these transactions, U.S. citizens or U.S. residents attempt to avoid U.S. tax by making contributions to certain foreign individual retirement arrangements in Malta (or possibly other foreign countries). In these transactions, the individual typically lacks a local connection, and local law allows contributions in a form other than cash or does not limit the amount of contributions by reference to income earned from employment or self-employment activities. By improperly asserting the foreign arrangement is a “pension fund” for U.S. tax treaty purposes, the U.S. taxpayer misconstrues the relevant treaty to improperly claim an exemption from U.S. income tax on earnings in, and distributions from, the foreign arrangement.
  2.  Puerto Rican and Other Foreign Captive Insurance. In these transactions, U.S owners of closely held entities participate in a purported insurance arrangement with a Puerto Rican or other foreign corporation with cell arrangements or segregated asset plans in which the U.S. owner has a financial interest. The U.S. based individual or entity claims deductions for the cost of “insurance coverage” provided by a fronting carrier, which reinsures the “coverage” with the foreign corporation. The characteristics of the purported insurance arrangements typically will include one or more of the following: implausible risks covered, non-arm’s-length pricing, and lack of business purpose for entering into the arrangement.

  3.  Use of Charitable Remainder Annuity Trust (CRAT) to Eliminate Taxable Gain. In this transaction, appreciated property is transferred to a CRAT. Taxpayers improperly claim the transfer of the appreciated assets to the CRAT in and of itself gives those assets a step-up in basis to fair market value as if they had been sold to the trust. The CRAT then sells the property but does not recognize gain due to the claimed step-up in basis. The CRAT then uses the proceeds to purchase a single premium immediate annuity (SPIA). The beneficiary reports, as income, only a small portion of the annuity received from the SPIA. Through a misapplication of the law relating to CRATs, the beneficiary treats the remaining payment as an excluded portion representing a return of investment for which no tax is due. Taxpayers seek to achieve this inaccurate result by misapplying the rules under sections 72 and 664.

  4.  Monetized Installment Sales. These transactions involve the inappropriate use of the installment sale rules under section 453 by a seller who, in the year of a sale of property, effectively receives the sales proceeds through purported loans. In a typical transaction, the seller enters into a contract to sell appreciated property to a buyer for cash and then purports to sell the same property to an intermediary in return for an installment note. The intermediary then purports to sell the property to the buyer and receives the cash purchase price. Through a series of related steps, the seller receives an amount equivalent to the sales price, less various transactional fees, in the form of a purported loan that is nonrecourse and unsecured. 

Taxpayers Who Have Engaged In Any Of These Transactions
 Or Who Are Contemplating Engaging In Them Should Carefully Review The Underlying Legal Requirements 
And Consult Independent, Competent Advisors

Before Claiming Any Purported Tax Benefits.


Taxpayers who have already claimed the purported tax benefits of one of these four transactions on a tax return should consider taking corrective steps, such as filing an amended return and seeking independent advice. 


Where appropriate, the IRS will challenge the purported tax benefits from the transactions on this list, and the IRS may assert accuracy-related penalties ranging from 20% to 40%, or a civil fraud penalty of 75% of any underpayment of tax.

 

While this list is not an exclusive list of transactions the IRS is scrutinizing, it represents some of the more common trends and transactions that may peak during filing season as returns are prepared and filed. Taxpayers and practitioners should always be wary of participating in transactions that seem “too good to be true.” 

The IRS remains committed to having a strong, visible, robust tax enforcement presence to support voluntary compliance. To combat the evolving variety of these potentially abusive transactions, the IRS created the Office of Promoter Investigations (OPI) to coordinate service-wide enforcement activities and focus on participants and the promoters of abusive tax avoidance transactions. 

The IRS has a variety of means to find potentially abusive transactions, including examinations, promoter investigations, whistleblower claims, data analytics and reviewing marketing materials.

Have an 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
or 
Toll Free at 888 8TAXAID (888-882-9243)


 


Read more at: Tax Times blog

FBAR Case Investigations Remain a Priority Despite Drop In 2020 Investigations

According Law360Although Internal Revenue Service investigations into people failing to file foreign bank and financial account reports fell sharply during the COVID-19 pandemic, enforcement remains a priority because it's an easy source of revenue, government and private practitioners told Law360.


IRS Statistics For The 2020 Calendar Year Showed
FBAR Investigations Declined Nearly 35%
From 2019, From 5,670 To 3,707.


The number of such examinations closed also declined, from 2,652 to 1,495, while penalties collected dropped from $77.5 million to $46.6 million. The statistics were published in the agency's annual progress report on FBAR cases, required under the USA Patriot Act of 2001. 


The IRS press office said the declines are a direct result of the coronavirus pandemic. The agency's People First Initiative, conducted from April 1 to July 15, 2020, suspended all in-person contacts and some compliance actions, and even after the initiative expired the IRS did not resume its rate of investigations, the agency said.

Two years into the pandemic, the IRS says it expects investigations to rise. As a goal, it will prioritize FBAR awareness to help filers and practitioners comply with FBAR recordkeeping requirements, it said. While the agency did not specify the steps it would take or set specific goals, it told Law360 it would rely on traditional, web-based and social media communications.

COVID Basically Sidelined IRS Enforcement Efforts Across The 
Board," David W. Klasing, A Solo Practitioner, Told Law360. 
"A lot of IRS officers were marginally effective people to start with," he said. "When you pull them out of the office and put them at home, ineffectiveness went to nonperformance."

While the IRS may be conducting fewer investigations, it appears to be hoping for a big payoff from the ones it is pursuing.

The IRS will go after FBAR cases where it thinks there are potential willful violations, and also has started pursuing criminal investigations against people making false, nonwillful statements, he said.

The IRS still investigates taxpayers for failing to file, but the agency has prioritized other areas of tax evasion such as cryptocurrencies, said Andrew Gordon, president of the Gordon Law Group.

The IRS annual report showed examination rates varied widely from 2012 to 2019, from a high of 8,420 in 2014 to a low of 2,807 in 2018. Civil FBAR examinations, penalties levied and penalties collected also rose and fell during the same period. Despite the ups and downs, the number of FBAR filings rose steadily each year from 807,040 in 2012 to 1.4 million in 2020.

The IRS' emphasis on the need to file FBARs, particularly after 2010, is one reason filings increased, Crouch said.

"I give the IRS a lot of credit for improving communication," he said.

Still, a significant number of taxpayers remain unaware of the filing requirement and there is much progress that the agency still needs to make to increase the number of FBAR filings, said Holland & Knight LLP partner Chad Vanderhoef.

"The unfortunate reality is that many taxpayers facing FBAR penalties did not know of the filing requirement," he said. "And the fact that many return preparers similarly lacked awareness exacerbated the problem."


But FBAR Enforcement Remains A Strong Priority

For The IRS, Practitioners Said.


The government continues to collect data through enhanced information sharing efforts and other methods, such as John Doe summonses and cooperation from parties entering into nonprosecution agreements, Vanderhoef told Law360. The information will trigger investigations into offshore accounts, he said.


Do You Have Undeclared Offshore Income?

 
Want to Know if the OVDP Program is Right for You? 
Contact the Tax Lawyers at 
Marini & Associates, P.A.   
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Read more at: Tax Times blog

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