Category Archives: criminal tax law

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

An IRS official speaking at a Federal Bar Association virtual meeting on March 3, 2021 said that three of the IRS’s service centers are facing new mail backlogs due to winter storms and quarterly return filings. The official, De Lon Harris, deputy commissioner for examinations, Small Business/Self-Employed Division, couldn’t estimate how long it would take the IRS to process its incoming mail. 

According to Harris, the IRS is processing payments received immediately. The IRS’s top priority for submissions to process are 2020 tax returns claiming refunds, he said.

However, Harris also said that the IRS’s Austin, TX, Kansas City, MO, and Ogden, UT service centers are a couple of weeks behind in opening mail due to a combination of closures due to the winter storms (Austin) and taxpayers filing quarterly business returns that were due at the end of January (Kansas City and Ogden). The fourth service center, in Fresno, CA, is opening mail the same day it’s received, Harris said.  

When asked about the processing of net operating loss (NOL) carryback claims, which are supposed to be processed within 90 days, Harris noted that the COVID-19 pandemic is continuing to cause processing delays, “but we no longer have these semi-truck trailers sitting at the campuses full of mail like we did several months ago.”

The IRS likely received more NOL carryback claims than usual in 2020 because the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PL 116-136; March 27, 2020) allows business with NOLs incurred in 2018, 2019 or 2020, to carry back those NOLs five years so they can get a refund of previously paid taxes.

                                                                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) 

Source  

Thomson Reuters

Read more at: Tax Times blog

According to Law360, A married couple lost their attempt to reverse a $511,000 OVDP settlement agreement they made with the IRS that had settled their failure to report their Swiss bank account holdings when a D.C. federal judge ruled they had entered into it voluntarily.

Robert Harrison and Julianne Sprinkle could not show that they signed their agreement under duress, the court said Thursday, dismissing the case. If they thought their case required judicial review, they should have paid the penalty and pursued the administrative process of seeking a refund, according to the court.

Harrison and Sprinkle took advantage of the Internal Revenue Service's Offshore Voluntary Disclosure Program in 2018 to resolve their failure to file Report of Foreign Bank and Financial Accounts for an unreported Swiss bank account worth up to $1.2 million, the judge said. The OVDP program involves a 27.5% penalty on the highest balance in an undeclared foreign account in exchange for lower civil penalties and possible amnesty from criminal prosecution.

The couple tried to switch to another amnesty program, Streamlined Domestic Procedures, which has a 5% penalty. but the IRS rejected their petition. The couple thus had to choose between the OVDP or going to court and risking a higher penalty. They chose the OVDP and paid $511,000 in penalties and interest in 2018. As part of their settlement, they waived the right to pursue an administrative remedy with the IRS, according to the opinion.

Two years later, the pair tried to nullify the settlement. They claimed they took the OVDP offer under duress, given their fear of a potential penalty should they go to court. 

They also argued the IRS violated the Administrative Procedure Act and due process by failing to provide guidance on the criteria used to switch to the streamlined program.

The court rejected the couple's arguments. Suing under the APA is proper only when there are no forms of adequate remedy, the court said. Harrison and Sprinkle had an opportunity to pursue their damages by paying their penalty and pursing a tax refund suit against the IRS. They did not, the court pointed out.

The government afforded the couple an opportunity for judicial due process, but they chose to settle their dispute through the OVDP, which included an agreement not to take that route, the court added.

The couple's duress claim fails as well, according to the court. The IRS did not threaten them with a particular action, and the steep penalty they might have faced in losing a court action resulted from an act of Congress, not the IRS, the ruling said.

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

In a memo to all IRS employees, the IRS says it is implementing a temporary deviation from its regular procedures that will allow electronic or digital signatures on various forms that currently require handwritten signatures, i.e., that are not e-fileable. The decision was made due to taxpayer representatives' concerns about securing handwritten signatures during the coronavirus pandemic.

The memo notes that electronic and digital signatures may be created by many different technologies. No specific technology is required for this purpose during this temporary deviation.

The memo is effective for the forms listed below, that are signed and postmarked from January 1, 2021, through June 30, 2021.

The forms are:

• Form 3115, Application for Change in Accounting Method;
• Form 8832, Entity Classification Election;
• Form 8802, Application for U.S. Residency Certification;
• Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit;
• Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
• Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
• Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return;
• Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons;
• Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies;
• Form 1120-C, U.S. Income Tax Return for Cooperative Associations;
• Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts;
• Form 1120-L, U.S. Life Insurance Company Income Tax Return;
• Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return;
• Form 1128, Application to Adopt, Change or Retain a Tax Year;
• Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts;
• Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner;
• Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms; and
• Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues; Form 8038-G, Information Return for Tax-Exempt Governmental Obligations; and Form 8038-GC, Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales.

This is effective for the forms listed above, that is in them postmarked from January 1, 2021 through June 30, 2021.

The IRS previously allowed electronic or digital signatures for a smaller group of forms through December 31, 2020. 

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