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Starting January 1, 2024, many business entities will be required to report information to the U.S.
government about who ultimately owns or controls them, including the business’ owners and officers. This new beneficial ownership information (BOI) reporting requirement is part of the Corporate Transparency Act (CTA), which aims to help law enforcement combat financial crime and protect the U.S. financial system from bad actors.

The CTA is part of the Bank Secrecy Act, a set of federal laws that govern financial transactions. As the CTA is not part of the tax code, BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), an agency of the Department of Treasury.

Which entities are required to comply?

Entities organized in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Companies required to report under the CTA (a “Reporting Company”) include but are not limited to corporations, limited liability companies (LLCs), and other U.S.-registered entities, including many small and medium-sized businesses. Foreign companies required to report may include corporations, limited companies or similar entities formed under the laws of a foreign country and registered to do business in any U.S. state or tribal jurisdiction. However, there are several categories of exemptions under the Act (see the links below for more information).

What information needs to be reported?

Companies must report the full name of the Reporting Company, any trade name or doing business as name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number. Additionally, information on the entity’s Beneficial Owners and for new entities, the company applicants, is required.

A “Beneficial Owner” is any individual who, directly or indirectly, either: a) Exercises “substantial control” over a reporting company, or b) owns or controls at least 25 percent of the ownership interests of a reporting company.

A “Company Applicant” refers to the individual who filed the document that created or registered the company. The Company Applicant must only be disclosed for reporting companies created or registered on or after January 1, 2024.

When is the deadline to comply?

A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report. A reporting company created or registered on or after January 1, 2024 and before January 1, 2025 will have 90 days to file.

What are the penalties for non-compliance?

Penalties for non-compliance can be significant, resulting in criminal or civil fines and/or imprisonment. Not filing reports timely can result in a $500 per day penalty, up to $10,000, and imprisonment of up to two years.

Where can I learn more?

For more information, visit the beneficial ownership information (BOI) and Frequently Asked Questions.on the U.S. Department of the Treasury’s Financial Crimes Enforcement Network's (FinCEN) webpage. 

Need Help Filing a BOI Report?

     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

An accountant blamed by federal prosecutors for pioneering the use of conservation easements as illegal tax shelters was sentenced to 25 years in prison January 9, 2024 following his conviction on all counts of a $1.3 billion tax fraud scheme that drew the first criminal prosecution of its kind.

Jack Fisher, a 71-year-old certified public accountant who once worked for the Internal Revenue Service and PwC, would be 96 by the time he is released under the sentence announced by the U.S. Department of Justice. Fisher's co-conspirator, attorney James Sinnott, 52, was also sentenced Tuesday and will serve 23 years in prison, the DOJ said.

The sentencing judge, U.S. District Judge Timothy C. Batten Sr., gave each man five years less than federal prosecutors asked for, but far more than Fisher and Sinnott requested. Fisher who told the court that his health was so poor any sentence meant life in prison said he deserved no more than five years behind bars.

Fisher Illegally Sheltered $450 Million In Taxes
While Eluding Numerous IRS Civil Audits And A Senate
Finance Committee Investigation Into So-Called
Syndicated Conservation Easement Tax Schemes.

"He was the face of these tax shelters and spearheaded the growth of an industry saturated with fraud," prosecutors said Friday in their sentencing memo for Fisher.

For more than a decade starting in 2007, Fisher used his training as a CPA to create and sell tax deductions for conservation easement donations, netting wealthy clients $4 in deductions for every $1 they invested in partnerships he created to donate the easements, mostly to environmental charities, prosecutors said.

He aggressively marketed the shelters and hand-picked real estate appraisers who inflated values to drive up the amount of the deductions, prosecutors said. 

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

According to Law360, the U.S. government told a Pennsylvania federal court on January 8, 2024, that it should be allowed to collect on $903,000 in unpaid tax liabilities of the "Empire" television show actor Terrence Howard. 

Howard has yet to formally respond to a December 2022 complaint, the U.S. government argued in a motion for default judgment, with his lone attempt being leaving a voicemail for government counsel.

According to the complaint, Howard owes more than $550,000 in unpaid income taxes alone after failing to fulfill his liabilities for the 2010, 2011, 2016, 2017 and 2019 tax years, plus applicable penalties and interest.

Initial attempts to serve the complaint were unsuccessful until it was personally received by Howard's spouse at his California residence in July after multiple extensions, according to court records. 

Howard was again served in October, but failed to respond by the court-imposed deadline. Default was ultimately entered against the actor in December.

Have An IRS Tax Problem?

Marini & Associates, P.A. 

Read more at: Tax Times blog

According to Law360, the U.S. Supreme Court declined on January 8, 2024 to review the Internal Revenue Service's rejection of a partnership's $35.5 million tax loss, letting stand a Ninth Circuit ruling that the partnership never properly filed its delinquent tax return at a service center.

The justices denied an August petition by Seaview Trading LLC to review the circuit court's 10-1 finding that Seaview never filed a return for 2001 because the partnership didn't file it at an IRS service center.

Seaview argued in its petition that the Ninth Circuit's March ruling incorrectly allowed the IRS to bypass a three-year statute of limitations and reject Seaview's loss in 2010. The government has only three years to issue a partnership adjustment, but the clock doesn't start ticking until a return is considered filed, a designation the Ninth Circuit misconstrued, Seaview said, when it ruled that Seaview's repeated submissions directly to IRS agents starting in 2004 didn't count.

If the Ninth Circuit's decision were allowed to stand, Seaview told the justices, the ruling "would produce Kafkaesque madness throughout the tax system" by allowing the IRS to pursue taxpayers "no matter how many times taxpayers hand their returns to IRS agents at the IRS' direction."

Seaview Gave Copies Of Its Partnership Return For 2001 To
An IRS Agent In 2005 And An IRS Lawyer In 2007 Does Not Constitute "Filing" A Return, The Government Argued.

Those transmissions failed to comply with the regulation specifying that partnership returns must be filed at an IRS service center, Treasury Regulation Section 1.6031(1)-1(a)(1), the government said.

The government also rejected Seaview's claim that the appellate ruling bucked years of IRS advice to taxpayers that delinquent returns should be filed with the IRS agent who requests the return. The IRS has never endorsed the view that partnerships are not required to file their taxes at service centers, even if they are filed late, the government said. Seaview based its argument for Supreme Court review on a misreading of agency guidance documents, the government said.

Even the top of the IRS' webpage on late-filed returns instructs filers to "file your past due return the same way and to the same location where you would file an on-time return," the government said.

PRACTICE TIP: When representing a taxpayer who is being audited for an unfiled tax year, file the late return with the service center first and then provide the Revenue Agent with a copy of the same.

Have An IRS Tax Problem?

Marini & Associates, P.A. 

Read more at: Tax Times blog