Tax Season is here. Tax Preparers have different levels of skills, education and expertise and Taxpayers ought to take a closer look at what constitutes a “Qualified” Tax Preparer. ...more
Many Taxpayers with international entanglements seek the assistance of tax return preparers without U.S. international tax reporting experience. Because US International tax reporting is complicated and often overwhelming...more
On December 17, 2020, the IRS published a document entitled “Closer Look”. It explains the IRS aspiration for balancing the Taxpayer burden with the potential benefit of its compliance effort when deciding which compliance...more
El 3 de diciembre del 2020, el IRS publicó “Cómo el IRS prioriza el trabajo de cumplimiento en los no declarantes de altos ingresos a través de esfuerzos nacionales e internacionales” en el Estudio titulado “Closer Look”. El...more
The IRS has tools inside of its Internal Revenue Manual (“IRM”) available to its agents for determining a Taxpayer’s taxable income as well as documenting its adjustments and corrections through what it calls “Methods of...more
On November 5, 2020, the IRS removed the Delinquent Information Submission Procedure Program from its Offshore Compliance Options Menu. Before the removal of this program, a US Taxpayer could file a “delinquent”...more
Voluntary compliance is the foundation of the US tax system. Although the majority of US Taxpayers voluntarily comply with their obligations, some fail to do so.
...more
On December 3, 2020, the IRS published “How the IRS prioritizes compliance work on high income non-filers through national and international efforts” in the Closer Look. ...more
Participation in FATCA is not an option, it is here to stay, and it is part of a global initiative. FATCA is complicated, and for the bankers, it has implied learning new terminology and understanding thousands of pages of a...more
On July 14, 2020, the US Treasury Department and the IRS released a proposed redesigned partnership form for tax year 2021 (filing season 2022). The two proposed forms SCHEDULE K-2 (Form 1065) and Schedule K-3 (Form 1065) are...more
Understanding how the IRS identifies cases that have audit potential can be learned from the CONGRESS OF THE UNITED STATES (CONGRESSIONAL BUDGET OFFICE) Report released on July, 2020: Trends in the Internal Revenue Service’s...more
According to the IRS Manual, reasonable cause for abating penalties is based on all the facts and circumstances of a Taxpayer’s situation. IRS will consider reasons which establish that a Taxpayer used all ordinary care and...more
The IRS Mission Statement states that: “the taxpayer’s role is to understand and meet his or her tax obligations”. Taxpayers fill out their own returns under a “self-assessment voluntary reporting system” because the...more
Under Internal Revenue Code, Section 6620, if a Taxpayer does not timely file a U.S. tax return, the IRS is authorized to prepare and file a U.S. tax return for that Taxpayer based on the knowledge that it has on hand. ...more
According to the Internal Revenue Code, Taxpayers have three obligations: (1) to file timely returns; (2) to file accurate returns; and (3) to pay the required tax voluntarily and timely. ...more
6/17/2020
/ 1099s ,
Failure-to-File ,
FATCA ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
K-1 ,
Tax Liability ,
Tax Planning ,
Tax Returns ,
W-2
On February 12,2020, the U.S. Government Accountability Office (GAO) published a Report on Virtual Currencies which discusses whether Taxpayers who use Virtual Currency (VC) are fully meeting their tax obligations. ...more
6/9/2020
/ Bitcoin ,
Cryptocurrency ,
Digital Currency ,
FATCA ,
FBAR ,
Filing Requirements ,
Financial Transactions ,
IRS ,
Tax Liability ,
Tax Planning ,
Tax Returns ,
Virtual Currency
In 2019, taxpayers who engaged in a transaction involving virtual currency will need to file Schedule 1, Additional Income and Adjustments to Income. Schedule 1 of the 2019 1040 Form presents the question to Taxpayers...more
The IRS continues to process electronic tax returns, issue direct deposit refunds and accept electronic payments while simultaneously granting additional, broad tax filing and payment deadline relief to all Taxpayers that...more
When a Tax Professional files an electronic Return on behalf of a Taxpayer, the Tax Professional obtains Forms 8878 and 8879 as declaration documents required by the IRS on behalf of a Taxpayer. Forms 8878 and 8879 are...more
IRS wants to be part of the solution to improve the lives of all people in the US. On March 25, 2020, IRS released the “IRS People First Initiative” providing immediate relief to help people facing uncertainty over taxes....more
IRC Section 965 (Treatment of Deferred Foreign Income Upon Transition to Participation Exemption System of Taxation) was part of the TCJA enacted on December 22, 2017. ...more
2/7/2020
/ Double Taxation ,
Foreign Corporations ,
Foreign Earned Income ,
Internal Revenue Code (IRC) ,
International Tax Issues ,
IRS ,
Reporting Requirements ,
Tax Cuts and Jobs Act ,
Tax Liability ,
Tax Planning ,
Tax Returns ,
Transition Tax
U.S. Taxpayers (includes a citizen, permanent resident, corporation, partnership, limited liability company, trust and estate) are required to file a Report of Foreign Bank and Financial Accounts (FBAR) if they have...more
2/7/2020
/ FBAR ,
FinCEN ,
Foreign Bank Accounts ,
Income Taxes ,
IRS ,
Offshore Banks ,
Offshore Funds ,
Reporting Requirements ,
Tax Court ,
Tax Evasion ,
Tax Liability ,
Tax Penalties ,
Tax Planning ,
Tax Returns
On July 2, 2018, the IRS introduced a Compliance Campaign directed at Section 965 (Transition Tax) of the Internal Revenue Code (IRC). In its original launch, the Section 965 Campaign stated that U.S. shareholder are...more
During the month of October 2019, IRS issued Revenue Ruling 2019-24, FAQ’s on Virtual Currency Transactions and a DRAFT Form of Schedule 1, which, for the first time presents the question: “At any time during 2019, did you...more
11/15/2019
/ Bitcoin ,
Capital Gains ,
Cryptocurrency ,
Digital Currency ,
Filing Requirements ,
Financial Transactions ,
Income Taxes ,
Investment ,
IRS ,
Popular ,
Reporting Requirements ,
Tax Liability ,
Tax Planning ,
Tax Returns ,
Virtual Currency
IRS Form 5471 is used by certain U.S. persons who are officers, directors, or shareholders in certain foreign corporations and must be attached to a covered Taxpayer’s Tax Return. On April 16, 2019, IRS announced the...more
9/6/2019
/ Controlled Foreign Corporations ,
Cooperative Compliance Regime ,
Corporate Officers ,
Directors ,
Filing Requirements ,
Foreign Corporations ,
Income Taxes ,
IRS ,
Shareholders ,
Stock Ownership ,
Tax Planning ,
Tax Returns