Category Archives: criminal tax law

In the IRS executive column CL-2020-08, the IRS explains how it continues to focus on ensuring integrity and fairness in our nation’s voluntary tax system despite the challenges  of COVID-19. 

“Taxpayers who exercise their best efforts to file their tax returns and pay their taxes, or enter into agreements to pay their taxes, deserve to know that the IRS is pursuing others who have failed to satisfy their filing and payment obligations,” explains Eric Hylton, Commissioner, Small Business 

Even in a challenging year like this, when the IRS has provided assistance and help for those affected by COVID-19 through Economic Impact Payments and various tax relief efforts, people should understand we haven’t lost focus on identifying and pursuing high income non-filers who live here in the United States and abroad.

The IRS has always considered high income non-filers a priority, but earlier in 2020 we shifted a considerable amount of resources, especially in our collection activities, to address the problem more aggressively. We identified and contacted taxpayers who made more than $100,000 and had not filed a tax return before 2019 to ensure they understood their obligation to file and pay income taxes. Most of those taxpayers responded and have either filed or paid their tax obligations. Others are working with us by using the many resources available for those who can’t pay their bill entirely.

For those non-filers who didn’t respond, we have an ambitious strategy to bring them into compliance with our nation’s tax laws and help address the tax gap. Specifically, in my Small Business/Self Employed organization, we hired more revenue officers — our civil enforcement officers — and prioritized the most egregious non-filer cases so they can reach out to non-responsive taxpayers directly.

Initially, our expectation was to have compliance officers do more face-to-face visits with taxpayers who failed to respond to the IRS notices, but COVID-19 delayed these in-person visits. Despite this, we continued to focus on priority cases, identifying about 1,500 of the most serious ones, many with millions of dollars of suspected unclaimed incomes. The revenue officers worked hundreds of these cases within the first 60 days of the higher-income enforcement effort, starting in February 2020.

Some of the high income non-filer cases from this year’s focused effort — and others that taxpayers didn’t resolve — are being handled by our new Office of Fraud Enforcement. Created earlier this year, the office sits in our SBSE organization and acts a bit like a computer’s Central Processing Unit, or CPU. It connects the dots across all IRS divisions, and sometimes across federal agencies, to confront emerging threats and bring offenders to justice with both civil and criminal penalties. The office is also reviewing high income non-filer cases that will be referred to the IRS Criminal Investigation Division to potentially be pursued criminally for offenses, including failure to file, tax evasion and tax fraud.

Blatant tax offenders can face large penalties, including interest and back taxes, and even serve prison time, like this Alabama salesman sentenced for tax evasion last month. As court documents note, he stopped filing taxes, thinking he could hide his income overseas and used other tactics to avoid paying taxes. He’s now paying back more than $1 million owed and was sentenced to two years in prison.  

Here’s a common misperception among non-filers. Simply not filing won’t keep them from being on our radar. Even if they don’t file, we still have ways to know how much income they should be reporting. We have a robust system to collect information from many sources to identify possible tax issues, including multiple third-party sources, taxpayers’ previous filing histories and their addresses. We also have other legal avenues that provide potential information for cases including:

• Information provided to the IRS whistleblower program
• Information received from United States Attorney offices across the country
• Ongoing investigations by other law enforcement agencies
• Tips from colleagues, neighbors and friends
• Tax treaty and information exchange per case investigation requests

Examination  within our operating divisions is also on the frontlines of our increased focus on high income non-filers through audit efforts as well as ensuring audit rates significantly increase as income rises. Our IRS Deputy Commissioner for Services and Enforcement, Sunita Lough, wrote about this earlier.

So as the SBSE Commissioner, I have an important message for high income non-filers: It’s always better to work with us as soon as there’s an issue. These situations only get worse with time. And rest assured, we will continue to identify and contact non-compliant taxpayers, offer payment options and hold those who refuse to comply accountable.

 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

The Treasury Inspector General for Tax Administration (TIGTA) today released the Audit Report High-Income Taxpayers Who Owe Delinquent Taxes Could Be More Effectively Prioritized, which discusses that it identified 685,555 taxpayers who had a balance due as of May 14, 2019.

Because the IRS prioritizes high balance due cases for collection, many of these high-income taxpayers would be included in high-priority work. However, balance dues are not prioritized by incomes earned and some improvements could be made to prioritize high-income taxpayers more effectively. 

When selecting cases to assign to a private collection agency, the IRS randomly selects cases that meet the Private Debt Collection criteria without regard to taxpayers’ ability to pay. TIGTA identified 3,185 high-income taxpayers whose accounts were not sent to a private collection agency at any point since the program started in Fiscal Year 2017 and who owed $110 million on modules that were shelved in an inactive inventory as of May 14, 2019. 

TIGTA also found that revenue officer staffing does not always align with locations where the greatest number of high-income cases are located. While TIGTA recognizes that resources are limited, hiring or reallocating resources to work high-income cases in these areas could lead to higher collection potential and increased revenue. 

TIGTA made seven recommendations to help the IRS improve the collection of taxpayer delinquent accounts of high-income taxpayers. IRS management agreed with two of the seven recommendations. The IRS plans to evaluate the recovery predictive models to consider additional income factors to improve the ability to predict recovery and plans to consider conducting ROCS that focus on high-income taxpayer TDA cases in locations where high-income taxpayer cases far outweigh the number of revenue officers assigned to those areas.

 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

On the IRS Operations During COVID-19: Mission-critical functions continue (rev. 3/15/2021), the IRS has said that it is resuming programming for notifying the State Department of taxpayers certified as owing seriously delinquent tax debt following the temporary suspension of certain collection activities with the March 25, 2020, People First Initiative announcement in response to COVID-19. 

Beginning The Week Of March 14, Affected Taxpayers Will Receive Notices And Are Encouraged To Pay What They Owe Or Enter Into A Payment Agreement With The IRS
To Avoid Putting Their Passports In Jeopardy.

Affected taxpayers generally owe the IRS more than $54,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired, or the IRS has issued a levy. As of December 2020, taxpayers previously certified owe on average more than $200,000 in outstanding tax debt, often extending back more than 6 years. The great majority of these are pre-pandemic liabilities and are considered a priority for the IRS due to the amount owed and length of time the taxpayers have been delinquent without working with the IRS to resolve their debts. Per the law, the State Department generally will not renew their passport or issue a new passport after receiving this certification from the IRS, and in some cases may revoke the passport. 

IRS offers a number of programs to help taxpayers meet their tax obligations including payment agreements, Offers in Compromise, and, if the IRS determines a taxpayer cannot pay any of their tax debt, a temporary delay of the collection process. When the tax liability is paid in full, the taxpayer has been found to be currently not collectible, or the taxpayer has entered into an installment agreement or has a pending Offer in Compromise, the tax debt is no longer considered to be seriously delinquent and the certification to the State Department is reversed. 

Taxpayers Who Have Already Taken Significant Steps
To Resolve Their Debt



Can Still Resolve Their Passport Issues By Contacting
 TAS, Who Can Request Manual Decertification.

Then IRM 13.1.24.8.5.3, Decertify the Debt with the Department of State, is superseded and replaced with the following: 

1. Once the taxpayer meets a criterion for decertification under IRM 5.19.1.5.19.9, Reversal of Certification, review IRM 13.1.24.8.8 to determine if the account will require manual decertification. If so, send an OAR to the SB/SE Passport Office seeking manual decertification.
2. If the taxpayer has an imminent need for a passport as defined in IRM 5.19.1.5.19.9.1, Expedited Decertification, gather the supporting documentation described. If the IRS function that resolved the debt did not complete and sign page one of Form 14794, Expedited Passport Decertification, prepare the form for LTA signature on page one.
3. Send an expedited OAR to *SBSE Passport Group mailbox, requesting that the taxpayer be decertified within one business day. Include the signed Form 14794 and the required documentation. If the OAR is not complied with timely, or if you disagree with the response, immediately elevate the case to your LTA for issuance of a TAO.

 

If You Face This Problem, You Should Consult with Experienced Tax Attorneys, As There Are Several Ways Taxpayers Can Avoid Having the IRS Request That the State Department Revoke Your Passport. 

  Want To Keep Your US Passport?
 

 

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

Here's news that my accountant friends will be happy to hear: according to Bloomberg the Internal Revenue Service is planning to delay the April 15 tax filing deadline by about one month, giving taxpayers additional time to file returns and pay any outstanding levies, according to three people familiar with the discussions.

The IRS is still figuring out what the final deadline will be. The agency is considering setting the filing deadline either on May 15 or May 17, according to two of the people, who were not authorized to speak publicly because the decision had not been finalized. May 15 is a Saturday and the IRS typically delays filing deadlines that fall on a weekend or holiday to the next business day.

The filing extension would give taxpayers additional breathing room to meet their tax obligations in what is becoming one of the most complicated tax seasons in decades. The change would come after calls from accountants and leaders in Congress to delay the due date as new legislation and pandemic-related work changes disrupt taxpayer plans.

Among the changes this tax season are last-minute amendments to the $1.9 trillion stimulus bill signed into law earlier this month that give filers a new tax exemption on up to $10,200 of jobless benefits. The individual tax return, Form 1040, is also the mechanism for people to claim any missing $1,200 or $600 stimulus payments from last year.

Besides the disruptions from the pandemic, the changes in tax law will mean some filers will have to wait for updated forms, resubmit their returns, and some will need to consult a tax adviser on how to proceed if they’ve already filed.

The tax extension also comes as the IRS has been handed another big task: processing a third round of direct payments to households, this time for $1,400 each. The IRS said it has so far sent about 90 million payments totaling $242 billion.

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

Read more at: Tax Times blog