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The House Sues Treasury For Trump’s Tax Returns

July 2, 2019

According to Law360, The House’s tax committee sued the U.S. Department of the Treasury in federal court for President Donald Trump’s tax return information on Tuesday, setting in motion a legal battle that will likely end at the U.S. Supreme Court.

Ways and Means Chairman Rep. Richard Neal, D-Mass., made the request for Trump's tax information under Section 6103 of the Internal Revenue Code, which states that the Treasury secretary “shall furnish” the tax records of any individual to the chairs of the Ways and Means Committee, Senate Finance Committee or the Joint Committee on Taxation upon their request.

 
"Defendants Have Now, For What The Committee Believes Is The First Time Ever, Denied A Section 6103(F) Request In Order To Shield President Trump’s Tax Return Information From Congressional Scrutiny,"

the complaint said. "In refusing to comply with the statute, defendants have mounted an extraordinary attack on the authority of Congress to obtain information needed to conduct oversight of Treasury, the IRS, and the tax laws on behalf of the American people who participate in the nation’s voluntary tax system."

Neal and Mnuchin had previously said that they expected the request for Trump’s tax returns to land in court. The dispute will likely be decided by the Supreme Court, given that either side would appeal an unfavorable ruling.

In his suit, Neal averred that Congress’ broad oversight authority easily surpasses the legal bar for obtaining the documents. In his original request, Neal said that the committee had an interest in reviewing the IRS’ auditing practices as they relate to the president’s tax return information.

Neal Wrote To Rettig And Mnuchin On June 28 That He Had "Serious Concerns" About The Briefing, According To The Complaint. That Episode Underscored The Committee's Need To Review The Actual Return Information As Part Of Its "Oversight Duties," He Said In The Letter.

 

Mnuchin had previously invited committee members to consult with officials at Treasury regarding their concerns about the presidential auditing program.

Mnuchin has previously said that he would not comply with Neal’s request because it lacked a “legitimate legislative purpose” and was politically motivated. In a legal memorandum released in June, the U.S. Department of Justice said Mnuchin should not comply with the request because House Democratic lawmakers intend to publicly disclose Trump's tax information.

Ways and Means Committee ranking member Rep. Kevin Brady, R-Texas, criticized the complaint on the grounds that neither the committee nor the full chamber voted to authorize it.  Brady pledged to introduce a resolution “to preserve the integrity of the people’s house from the attacks of the elite few and restore the voice of every American.”

Now That The Battle Over Trump’s Tax Returns Has Hit The Court System, The Process Could Drag Out Beyond The November 2020 Elections.
 The committee petitioned the court to move swiftly in addressing the committee’s complaint.
“If this court does not redress defendants’ noncompliance quickly, the committee will be unable to fulfill its essential role of overseeing the executive branch or to carry out its constitutional obligation to legislate on issues of paramount national importance before the current Congress ends,” the complaint said.
The current congressional session ends Jan. 3, 2021. After that date, the entire process for attempting to procure the tax returns would have to restart.
The case is Committee on Ways and Means v. U.S. Department of the Treasury et al., case number 1:19-cv-01974, in the U.S. District Court for the District of Columbia.
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Read more at: Tax Times blog

IRS Revamp Legislation Signed Into Law by President Trump

July 2, 2019

According to Law360, President Donald Trump signed a bill on July 1, 2019 that in part will prevent private debt collectors from pursuing low-income individuals who owe money to the Internal Revenue Service.
 
Trump signed into law H.R. 3151, the Taxpayer First Act, which will also make a host of administrative changes to the IRS to improve customer service and technology and overhaul the agency's appeals process.

“New protections for low-income taxpayers, practical enforcement reforms, and upgraded assistance for taxpayers and small businesses will all now go into place,” House Ways and Means Committee Chairman Richard Neal, D-Mass., said in a statement after the signing.

The original version of the bill, H.R. 1957, sailed through the House by voice vote in April. But the legislation later hit a snag in the Senate when lawmakers and outside groups expressed concerns that codifying the Free File Alliance would prevent the Internal Revenue Service from developing its own cost-free filing portal.

Eventually, both the House and the Senate passed a version that excluded the free file provision. Both chambers approved the legislation by voice vote, which is a procedure reserved for noncontroversial items.
"I’m Proud That After Three Years Of Thoughtful Bipartisan Work, Our Bold Package Of Reforms To The Internal Revenue Service Are The Law Of The Land," He Said.

 According to updated estimates that the Joint Committee on Taxation released last month, the revised bill would raise $36 million over a decade.

 
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 Contact the Tax Lawyers at 
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Read more at: Tax Times blog

How to Report Foreign Income on Your US Tax Return?

June 26, 2019

You must express the amounts you report on your U.S. tax return in U.S. dollars. If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars.

How you do this depends on your functional currency. Your functional currency generally is the U.S. dollar unless you are required to use the currency of a foreign country.

Note: Payments of U.S. tax must be remitted to the U.S. Internal Revenue Service (IRS) in U.S. dollars.

You must make all federal income tax determinations in your functional currency. The U.S. dollar is the functional currency for all taxpayers except some qualified business units (QBUs). A QBU is a separate and clearly identified unit of a trade or business that maintains separate books and records.

Even if you have a QBU, your functional currency is the dollar if any of the following apply.

  • You conduct the business in dollars.
  • The principal place of business is located in the United States.
  • You choose to or are required to use the dollar as your functional currency.
  • The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted.

Make all income tax determinations in your functional currency. If your functional currency is the U.S. dollar, you must immediately translate into dollars all items of income, expense, etc. (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax.

Use the exchange rate prevailing when you receive, pay, or accrue the item. If there is more than one exchange rate, use the one that most properly reflects your income. You can generally get exchange rates from banks and U.S. Embassies.

If your functional currency is not the U.S. dollar, make all income tax determinations in your functional currency. At the end of the year, translate the results, such as income or loss, into U.S. dollars to report on your income tax return.

What Currency Exchange Rate Do I Use When Preparing my Tax Return?
Where you are a US expat, green card holder or a US resident who received income or paid any expenses in a foreign currency, you must translate the foreign currency into US dollars when preparing your tax return. The only exception relates to some qualified business units (QBUs) which are generally allowed to use the currency of a foreign country.

Allowable Currency Exchange Rates
What is important to remember is that the Internal Revenue Service has no official exchange rate. The IRS will normally accept any posted exchange rate that is used consistently. When preparing your Form 1040, Form 2555, Form 1116 or any other necessary tax form use the rate that applies to your specific facts and circumstances.

What exchange rate do I use if I received income such as interest or dividends in a single transaction in a foreign currency? If you have a single transaction such as interest income, dividend income or the sale of a business that occurred on a single day, use the exchange rate for that day.

What exchange rate do I use if I earned income or paid expenses in a foreign currency evenly throughout the year? You can translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year.

Yearly average currency exchange rates
The table published on the IRS website at http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates includes yearly average exchange rates for prior years. For additional exchange rates, refer to Foreign Currency and Currency Exchange Rates.

How do I use the table? To convert from foreign currency to U.S. dollars, divide the foreign currency amount by the applicable yearly average exchange rate in the table. To convert from U.S. dollars to foreign currency, multiply the U.S. dollar amount by the applicable yearly average exchange rate in the table.

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 (888) 882-9243

 

Read more at: Tax Times blog

IRS is Hiring!

June 26, 2019

Officials at the Internal Revenue Service are looking to hire more employees to handle tax enforcement, compliance and administration of the tax code, even as more of the IRS’s older workers retire and leave the agency, particularly after the month-long government shutdown last December and January.

A Series Of Top IRS Officials Made A Pitch To Tax Practitioners That They Should Consider Joining The Agency At New York University’s Tax Controversy Forum Last Week.

“For those of you who have always wondered what it might be like to work at the Internal Revenue Service if you’ve not been there, come on board,” said IRS Commissioner Chuck Rettig.

“We're Hiring Across the Board.”
 

He noted that the IRS Chief Counsel’s office is hiring, the Large Business and International division is hiring, as are the Small Business/Self-Employed, Criminal Investigation and information technology units.

“It can be a tremendous experience,” Rettig added. “It can be an experience that you find tremendously rewarding, and I think it's an experience that you should reach out for.”

IRS Chief Counsel Michael Desmond acknowledged that recruitment of staff is one of his highest priorities. “I think one of the biggest challenges, and this isn’t unique to Chief Counsel, it’s shared on the commissioner’s side as well, is legacy planning, both at the leadership level and also for just bringing in younger attorneys,” he said.

"We’ve Had A Pause In Hiring For 5 Or 10 Years Now,
And That’s Created A Number Of Problems,
Particularly In The Leadership Pipeline.
 
 

We’ve got some excellent young lawyers who have come in, particularly in the last year under the TCJA [Tax Cuts and Jobs Act], and we’ve been able to do a little bit of hiring for the last five or 10 years, but it’s by no means filling the attrition that we’ve had.”

One of the other major priorities is helping develop guidance for the Tax Cuts and Jobs Act. Desmond said there has been a steep learning curve, though, in developing guidance for brand new provisions such as FDII (foreign derived intangible income) and GILTI (global intangible low-taxed income).

Douglas O’Donnell, commissioner of the IRS’s Large Business and International division, said the LB&I group is hiring hundreds more people, while also losing hundreds to retirement.

"From 2010 Or So, We’re Down About 40 Percent,
From 7,100 To 4,300," He Said.

We did get authority this year to hire 500-plus people new to the division, but we’re not growing by 500. We’re hiring 550, but we’ve been losing about 7 percent of our workforce a year to retirement, so the net increase in the division is roughly 200 to 250.

We’re Going To End The Year With More People Than We Began With For The First Time Since 2011.

Among the new hires are revenue agents, appraisers and computer engineers, he noted. The LB&I division has been leveraging technology such as data analytics to make up for shortfalls in personnel and now has the ability to look across an entire filing population with its new enforcement and examination campaigns.

 
Mary Beth Murphy, Commissioner Of The IRS’s Small Business/Self-Employed Division, Said Her Group Is Hiring Thousands More Employees.
 
 
"We Are Hiring About 3,200 People, Not All For The Field.
We’re Going To Hire About 950 Exam Folks, Revenue Agents And Tax Compliance Officers,
And About 500 Revenue Officers.

Our first class started June 10 for the revenue officers. We start to train the first wave of revenue agents in July, so we’re extremely excited about that. We still have our jobs open on USAJobs, so if you have any friends or family, we are a great organization.”

We’re hopefully going to bring in somewhere in the range of 500 or 600 revenue officers this year, but again we’re churning out a lot. We’re churning out about 250, so that attrition rate is a little bit higher for us.

However, the IRS is hiring more agents for the Criminal Investigation unit this year and next year. “By the time this fiscal year is over, we will have hired probably about 150 agents,” said Fort. Next year, we’ve got tentative approval for about 10 classes, which means anywhere from about 200 to 250 agents, so we’ll finally start to see an increase. That’s great news.”

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 (888) 882-9243

Sources:

TaxProtoday

 

Read more at: Tax Times blog

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