Category Archives: criminal tax law

The Tax Court in Ruhaak, (11/16/2021) 157 TC No. 9 has found that a taxpayer that timely requested a collection due process hearing could not also request an equivalent hearing.

The IRS sent taxpayer a Notice of Intent to Levy and Notice of Your Right to a Hearing (levy notice). The taxpayer requested a hearing regarding the proposed levy by submitting to the IRS Office of Appeals (Appeals) a Form 12153, Request for a Collection Due Process or Equivalent Hearing. The taxpayer mailed and Appeals received the Form 12153 before the expiration of the 30-day period following the mailing date of the levy notice, during which the taxpayer had a statutory right to request a collection due process (CDP) hearing. (Code Sec. 6330(a)(2) and Code Sec. 6330(a)(3).

The taxpayer had checked a box on the Form 12153 to request an equivalent hearing in the event that his request for a CDP hearing was untimely. Under the applicable regs, a taxpayer who fails to make a timely request for a CDP hearing may request an equivalent hearing instead, provided that the request for an equivalent hearing is made in writing within the one-year period commencing on the day after the date of the levy notice. (Reg §301.6330-1(i)(1) and Reg §301.6330-1(i)(2), Q&A I7)

Appeals Determined That The Taxpayer Timely
Requested A CDP Hearing And, Thus,
Was Not Entitled To An Equivalent Hearing.

Following the CDP hearing, Appeals issued to the taxpayer a notice of determination that sustained the proposed levy.

The taxpayer argued, however, that Appeals should have granted him an equivalent hearing because his Form 12153 constituted a written request for an equivalent hearing made within the one-year period provided for requesting an equivalent hearing.

The Tax Court Held That The Taxpayer's Request For A
Hearing Made Before The Expiration Of The 30-Day Period Following The Mailing Date Of The Levy Notice Necessarily Triggered A CDP Hearing And Not An Equivalent Hearing.

The Court looked to Reg §301.6330-1(i)(1), which provides in relevant part: "A taxpayer who fails to make a timely request for a CDP hearing is not entitled to a CDP hearing. Such a taxpayer may nevertheless request an administrative hearing with Appeals, which is referred to * * * as an 'equivalent hearing.'"

The phrase "[s]uch a taxpayer," the Court found, limits the class of taxpayers who may request an equivalent hearing to those described in the immediately preceding sentence, that is, those who "fail[] to make a timely request for a CDP hearing". In other words, the Court concluded, only those taxpayers who fail to timely request a CDP hearing are eligible to request an equivalent hearing.

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Read more at: Tax Times blog

On  April 26, 2022, we posted Should I Stay or Should I Go? - Expatriations Are Up In 1st Quarter of 2022, where we discussed that the number of people who expatriated from the U.S. rose during the first quarter of 2022 compared with the previous quarter, the Internal Revenue Service said in a notice released on July 25, 2022.

Now the number of people expatriated from the U.S. more than doubled during the second quarter of 2022 compared to the previous quarter, the Internal Revenue Service said in a notice released Wednesday.

From 571 In The First Quarter Of 2022, The IRS
Said In A List Of Those Choosing To Expatriate.

The list includes those losing U.S. citizenship under Internal Revenue Code Section 877(a)  and Section 877A , the notice said.

It also includes long-term residents who are treated as losing citizenship under IRC Section 877(e)(2), the agency said.

According to CNBC the top reason why Americans abroad want to dump their U.S. citizenship include:

• Nearly 1 in 4 American expatriates say they are “seriously considering” or “planning” to ditch their U.S. citizenship, a survey from Greenback Expat Tax Services finds.  
• About 9 million U.S. citizens are living abroad, the U.S. Department of State estimates.
• More than 4 in 10 who would renounce citizenship say it’s due to the burden of filing U.S. taxes, the Greenback poll shows.

Should I Stay or Should I Go?

Need Advise on Expatriation?

 

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

According to Law360, Sen. Joe Manchin said on Wednesday, July 27, 2002, that he had reached an agreement with Majority Leader Chuck Schumer on legislation that would impose a 15% corporate minimum tax as part of a larger package to address tax, energy and health care costs.

Manchin, a Democrat from West Virginia, and Schumer, a Democrat from New York, announced the agreement to add the package, known as the Inflation Reduction Act of 2022, to the fiscal year 2022 budget reconciliation bill, which could be passed with a simple majority. The package includes key parts of President Joe Biden's stalled domestic agenda such as investing in renewable energy and lowering the cost of health insurance and prescription drugs.

The measure would bring in roughly $739 billion in new revenues, including: 

• $313 billion from establishing a corporate minimum tax, 
• $124 billion from increased tax enforcement efforts by the Internal Revenue Service, 
• $14 billion from changing the tax treatment of carried interest and 
• $288 billion from reducing the cost the federal government pays for prescription drugs, according to a summary provided by Schumer's office.

Corporations would generally be eligible to claim net operating losses and tax credits against the AMT, and would be eligible to claim a tax credit against the regular corporate tax for AMT paid in prior years, to the extent the regular tax liability in any year exceeds 15% of the corporation's adjusted financial statement income.

The funding also would lower health care premiums by $64 billion and provide the IRS with an additional $80 billion to pay for the enforcement efforts. Approximately $15 million of the IRS funding would be used to study the creation of a free electronic filing program for low- and moderate-income taxpayers.     

Manchin and Schumer said the text of the legislation would be submitted for Senate parliamentarian review Wednesday and that the Senate would consider it next week. Manchin's support is vital since Democrats will need all 50 of their members in the Senate to pass the bill if no Republicans support it.

"It is common sense that a domestic corporate minimum tax of 15% be applied only to billion-dollar companies or larger, ensuring that America's largest businesses are no longer able to operate for free in our economy," he said.

Roy Blunt, R-Mo., chair of the Senate Republican Policy Committee, said he probably wouldn't support the Manchin-Schumer legislation, which he hadn't seen yet.

"I don't think raising taxes is the right thing to do right now or putting more money into the economy," Blunt told Law360.

The agreement with Schumer follows comments Manchin made during a West Virginia radio interview July 15 that he wouldn't support the tax proposals in Biden's economic plan and that a significant increase in inflation led to his decision. Manchin said his support for a slimmed-down version of the Build Back Better Act, the budget reconciliation bill the House passed in November, had depended on a consumer price index report that showed a 9.1% increase in June over the prior year.

Manchin has featured prominently in the debate on the Build Back Better Act. In December, he opposed the measure. Manchin said he was concerned about its effect on inflation and the national debt, said he couldn't support the proposal, and pointed to other concerns like the pandemic as issues Congress should focus on.

Read more at: Tax Times blog

Case in point is U.S. v. George Gaynor Jr., case number 2:21-cv-00382, in the U.S. District Court for the Middle District of Florida, where Lavern Gaynor, whose grandfather was a founder of Texaco Inc., now a subsidiary of Chevron Corp., filed amended tax returns and foreign bank account forms in 2012 and 2013 to disclose her overseas assets, she did so in a so-called quiet disclosure, according to the government's complaint. 

Lavern Gaynor died April 12, 2021, according to the complaint and the FBAR penalties were initially assessed for 2009, 2010 and 2011 by the IRS in May 2019. 

The Amount At Issue As Of The Beginning Of June
Had Increased To $20.9 Million As Result Of
Accrued Interest, According To The Current Filing.

The government sued the estate in May 2021, contending that Gaynor moved her assets from one Swiss bank to another in order to avoid her tax reporting obligations. She also didn't tell her accountant about the bank accounts and attempted to quietly disclose the accounts later without alerting the IRS to her noncompliance, the government said.

The estate filed a counterclaim in July 2021, arguing that the FBAR penalties assessed against Gaynor for 2009, 2010 and 2011 should have been abated upon her death in April 2021 under federal common law. Furthermore, the initial $18.4 million penalty and interest constitutes an excessive fine under the Eighth Amendment, according to the estate's filing.

Moreover, the estate is entitled to a $3,000 refund for amounts it paid against the FBAR liabilities because Gaynor never owed the penalties, the estate argued.

Now U.S. government counsel got the green light from a Florida federal court Monday to negotiate and recommend a settlement in a case seeking more than $20.9 million in foreign bank account penalties and interest from a Texaco heiress' estate.

Bottom line is fix your pre-undeclared foreign income matters while you're still alive, so your heirs won't be stuck with this problem!

The IRS provides many alternative avenues to address your previously undisclosed foreign income. Don't wait until it's too late!

 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

Read more at: Tax Times blog