The IRS Audit Blog

Posts Tagged ‘houston’

The drop dead date to apply to the IRS Voluntary Disclosure Program was October 15th, however U.S. taxpayers still can file a voluntary disclosure under the IRS normal procedures.

In 2009, the IRS and U.S. Department of Justice commenced its highly publicized investigation into Swiss bank UBS AG and U.S. accountholders who failed to inform them of these assets. However, the investigation did not end with UBS. The IRS has made it very public that offshore tax evasion remains a top enforcement priority. The Department of Justice has gone after taxpayers regardless of the amount even taxpayers with assets of $20,000 or less in offshore accounts.

U.S. taxpayers with offshore assets and accounts are required to disclose these interests to the U.S. government on their Form 1040, U.S. Individual Tax Returns, and file a corresponding Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). If IRS agents find out that a taxpayer has not disclosed an interest in an offshore account or income accruing on such accounts during the course of an audit, the IRS may impose harsh penalties including the greater of $100,000 or 50% of the offshore account balance for willful failure to file an FBAR for each account. These penalties, compounded with interest and fraud penalties, can essentially wipe out the taxpayers foreign assets. To make matters worse, taxpayers could be exposed to criminal prosecution and jail time for tax evasion.

In March 2009, to prod taxpayers to come forward and disclose previously undisclosed offshore accounts in exchange for minimal penalties and the promise not to refer the case for criminal prosecution, the IRS announced the creation of the IRS Voluntary Disclosure Program. As a result of pressure on UBS and other offshore institutions, thousands of U.S. taxpayers with previously undisclosed offshore accounts took advantage of the Voluntary Disclosure Program and joined before the October 15, 2009 deadline.

Despite the fact that it is too late to enter the IRS Voluntary Disclosure Program, the option to file a voluntary disclosure under the IRS normal procedures is still available. There are a plenty of advantages to filing a voluntary disclosure as it is far better to disclose to the IRS than to have the IRS discover you. As is with the Voluntary Disclosure Program, a traditional voluntary disclosure can provide taxpayers with previously undisclosed foreign accounts with a way out possibly avoiding the most severe of civil fines and criminal prosecution.

In addition, those U.S. taxpayers with undisclosed offshore bank accounts should be made very aware that the voluntary disclosure process is a comprehensive and delicate one as with all dealings involving the IRS. Extreme care must be taken in deciding on whether to file a voluntary disclosure or not. U.S. taxpayers are highly encouraged to get in touch with a tax attorney experienced in resolving disputes with the IRS as soon as possible.

For example, if a taxpayer has already been investigated and contacted by the IRS, it may be too late to file a disclosure. Therefore, time definitely plays a significant factor as the IRS continues its pursuit of undisclosed offshore account holders. The window of opportunity is closing on those who do not come forward and file to take advantage of possible reduced penalties and potential prison time. Again,it is advised that U.S. Taxpayers with undisclosed offshore accounts seek the advice of and direction of legal counsel on the matter.

If you’re audited, let the pros handle it

By Edward J. Loughrey The representative must have a Form 2848, Power of Attorney (POA) document, signed by the client that he/she will submit to the auditor. This will enable him/her to discuss all matters pertaining to the tax audit. This POA is limited to only to the tax issues at hand.

Ultimate Tax Deduction Solution to our Exploding Deficit

Question: How’s this for a stimulus package..?

What if the IRS were to audit all politicians and then made them pay all their unpaid taxes, plus interest and fines. Wow, just think how much money this would create.
The money that funds most government services comes directly from taxes. If these services are funded properly then yes it does create money and jobs.
The government also has over a trillion in debt to repay. Now they want to create more debt this will mean raising your taxes.

Answer: yes!!!

if only they would do that…

Filing tax return early may not be best move

Investopedia: It’s often possible to file your tax return as early as February. But this is one situation where the early bird doesn’t always get the worm.

Tax Settlement Help

Question: I have a tax question?

OK, last year, I had over $1,000 in church tithes. I gave it to the woman who did my taxes for last year, and she said the amount had to be $5,000 or more to be counted. My question is, can I count that money from last year toward this year’s taxes, if I do them myself over the Internet?

I don’t want to get audited or get arrested over this, I’d just like to know. Thank you.
I realize I made a mistake when clarifying what “it” was. I didn’t give the tax preparer the money, I gave her the papers to prepare.

Answer: No, it has to be for that year only. If you’re itemizing which i assume you are, the deductions have to me more than your standard deduction in order to be able to file that way. For example lets say the standard deduction is $5000 then you would have to have more than the $5000 in deductions in order to file that way.

Charleston gets clean financial audit

CHARLESTON, W.Va. — Except for a couple questions about internal controls, the city of Charlestons financial statements got a clean bill of health in their annual audit.State Auditor Glen Gainer III issued unqualified a “clean” opinion after his…

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Question: irs is auditing me, how i can estimate penalties and interest?

i want to know if there is a table where i can see the percentage of interest and penalties that they will charge me, is a fix amount or what?
vp and other guys thanks for u answers, but still isn very clare, u said 20 of penalty plus interes of 6 plus aditional penalty of 6 percent annually? would ya explain a little bit more? thanks
i do appreciate your answers my friend i get an idea, somebody told me worst things like that have a nice day

Answer: Failure to file penalty: 4.5% per month or fraction, up to a total to 22.5%

Failure to pay penalty: 0.5% per month or fraction, up to a total of 25%

Interest: currently at 4% per year, no limit.

If you are a business, you could also get a failure to deposit penalty, which is 2%, 5%, 10% or 15%, depending on how late your deposit is.

Don’t Get Scammed on Your Tax Refund

Itching to get your due from Uncle Sam? There are plenty of folks — legit and otherwise — who will happily promise to help you get a faster or bigger refund.

IRS Penalties, Audits, Benefit Plans 419e 412i

Question: Will money deposited into a collage 529 savings plan be questioned in a IRS audit?

I opened a collage 529 savings plan for my child. Several reletives have contributed money to the account. I am worried that the IRS will ask me how a got the money.

Answer: Well, anything can be questioned although usually the paperwork they send in the beginning says what areas they’re looking at, and unless something looks suspicious they probably won’t go beyond that.

Relatives are allowed to give you money, and unless the amount is huge, there’s no gift tax they have to pay. Gifts are non-taxable to you. So if they gave it to you to put into the 529, should be no problem. Or if they put it in directly – they’re allowed to do that, so shouldn’t be a problem.

TaxWatch: A guide to five top online tax-prep sites

You’re better off filing your tax return electronically rather than on paper in almost all instances. You’ll make fewer math and input errors, your taxpayer identification numbers are verified, and refunds come faster. The trick is to find the right software or online service to prepare your tax return.

Audit the Federal Reserve. We need your help! (HR 1207, S 604)