Patel Law Offices Blog
New Court Ruling: FBAR penalties applied per form and not per account
The FBAR rules require the filing of a FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR) to report for accounts of U.S. persons aggregating $10,000 or more. For a non-willful failure to disclose, the maximum penalty imposed
How to Avoid Jail and Clean Up Tax Problems
If you have willfully failed to report income or claimed excessive deductions or failed to file your tax returns and pay the tax owed, you may be liable for civil penalties and possible jail time for criminal tax evasion. Few
Tax Changes Due to the Election
Estate Tax Changes Expected At the time of this writing, Joe Biden has a double-digit lead in the polls. A number of Senate seats may turn blue as well, and this could give the Democrats a majority in Congress. If
The IRS has woken up.
Due to the coronavirus, the IRS paused all collection and enforcement activities until July 15, 2020. But recently we have started to receive some tax enforcement actions against some of our clients. The IRS has woken up and is getting
How to Fix an Erroneous Filed Tax Return without Penalties
But what if you discover an error or omission on a return already filed with the IRS that needs to be corrected and it is still before the extended due date? The advantage of fixing the return now, before the
IRS’ New “Dirty Dozen” list of tax scams
The Internal Revenue Service announced on July 16, 2020, its annual “Dirty Dozen” list of tax scams. This year, the Dirty Dozen focused on scams that target taxpayers, and emphasized aggressive and evolving schemes related to coronavirus tax relief, including
What Happens to Your Digital Accounts In Case of Death
We have completed over 1,000 estate plans for clients over the years. Recently, however, we have unfortunately probated a disproportionate number of clients’ wills after death. Through estate planning, many of our clients have planned well for their families in
Expect Coronavirus Bankruptcies
With the downturn in the economy and massive job losses, bankruptcy filings will skyrocket this year. Unpaid tax liabilities will likely be a large part of clients’ debts. There is a common misconception that income taxes are never dischargeable in
No Springing in Spring
You may have heard of a “springing” powers of attorney (POA), which is a POA that “springs” into effect when you become incapacitated. This type of POA literally “springs” to life when it’s needed. Many people like the idea of
After You Wash Your Hands Take Back Control
In recent weeks, our office has received calls from people we have not heard from in 15 years. People are worried. One recent call was from a relatively healthy 83-year-old longtime client, who said he wanted to make sure his
Allow Us To Prepare Your Estate Planning Documents Remotely
In these uncertain times, you should have, at a very minimum, the four following documents in place: Power of Attorney: This document allows you to appoint an agent to handle your assets and to make financial decisions on your behalf.
Tax-free Disaster Relief Payment Program
In response to the ongoing pandemic, on March 13, 2020, President Trump declared the coronavirus or COVID-19 as a national disaster. This declaration activates a little-known existing provision of the tax law: Section 139 of the Internal Revenue Code. Section 139 allows
Required Minimum Distributions Suspended For Retirement Plans and IRAs For 2020
The bipartisan COVID-19 stimulus bill just signed by President Trump includes welcome tax relief for retirees: The required minimum distribution rules for Individual Retirement Accounts and 401(k)s are waived for 2020. That means that instead of taking money out this year, retirees
Quarantine Tips for Tax Savings
There have been many important favorable legal and tax changes over the past 2 weeks. The new laws are the most expensive (the government) tax laws ever passed by the government. In these trying times, we have compiled our top
Changes to Legal Documents in light of the Coronavirus pandemic
In light of the Coronavirus pandemic, all clients should immediately review their healthcare-related documents including living will, healthcare proxy, and HIPAA release. Most client advisors are familiar with the need to have a current document that reflects the client’s
US FATCA Enforcement Softens due to Coronavirus
The Internal Revenue Service is giving foreign banks and financial institutions more time to file their forms about U.S. taxpayers with overseas bank accounts and other holdings in compliance with the Foreign Account Tax Compliance Act, or FATCA, because of
Planning in the Time of Coronavirus
The coronavirus is an illness that we cannot ignore. Older adults are especially vulnerable and those who have an underlying issue such as diabetes, heart disease, and respiratory conditions. Many such individuals are in a position of responsibility and wealth.
IRS Reduces Administrative Burden (for the first time) of Filing Some Forms 3520 and/or Forms 3520-A
A Revenue Procedure just released by the U.S. Internal Revenue Service (IRS) provides U.S. persons an exemption from the information reporting requirements for certain tax-favored foreign retirement and non-retirement savings trusts. Taxpayers who would otherwise be required to file Form
Planning for Dependent (or not Independent) Family Members
One in four Americans has some form of disability. In our law firm’s client base, it is very common to have a family member that is not entirely able to live independently. Even worse, adults with disabilities are living far
The IRS is Assessing Form 3520 Foreign Information Reporting Penalties
The IRS is aggressively sending out IRS Notice CP15 “Notice of Penalty Charge” for the late filing of Form 3520 to report the receipt of a foreign gift or foreign inheritance. The Notice states that a civil penalty has been
2020 New Year’s Tax Planning Resolutions: Resolve To Plan Better
While we all resolve to go to the gym every day and lose weight, we have compiled a list of 2020 New Year’s tax planning resolutions. Beware of 2020 election-year tax uncertainties. It is important to review tax plans and
The InSECURITY of the SECURE Act
At the end of 2019, Congress passed the “Setting Every Community Up for Retirement Enhancement” (SECURE) Act of 2019. The new law, which represents a major overhaul of the rules for retirement plans and IRAs, is effective on January 1,
Are You Ready For New FATCA Enforcement in 2020?
Banks and certain other financial institutions located outside the United States that have U.S. account holders are scrambling to meet a looming IRS deadline. These institutions, known as foreign financial institutions, or FFIs, must achieve full compliance with the U.S.
No Clawbacks for Gifts if Estate Tax Exemption Changes
Lifetime gift giving can be an effective estate planning strategy for high net-worth clients. Although the estate tax is imposed on the aggregate of the taxable estate and lifetime taxable gifts, gifting removes the appreciation and cash flow of the
IRS announces two new intriguing targeted enforcement campaigns
Every so often the Internal Revenue Service announces a new “campaign” to increase tax compliance. A campaign usually means additional IRS focus and resources are allocated to the areas where the IRS is trying to improve compliance. The IRS recently
President Trump Revamps the IRS through his 2019 Taxpayer First Act
President Trump recently signed the Taxpayer First Act (TFA) of 2019, which for the first time in decades, will dramatically restructure, modernize and (hopefully) improve the Internal Revenue Service. There are several ways the new taxpayer-friendly law will reform the
The IRS Large Business and International division (LB&I) has announced a new Post OVDP Compliance enforcement campaign
The new Post OVDP Compliance enforcement campaign was recently identified through LB&I data analysis and suggestions from IRS employees. IRS employees likely saw that many taxpayers were not properly reporting offshore bank accounts, as a result, they suggested the campaign.
New IRS Enforcement Letters Warn of Cryptocurrency Non-Compliance
Last week, the Internal Revenue Service began sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly. “Taxpayers should take
The IRS Large Business and International division (LB&I) has announced a new Loose Filed Forms 5471 compliance enforcement campaign
The new Loose Filed Forms 5471 targeted enforcement campaign was identified through LB&I data analysis and suggestions from IRS employees. IRS employees likely received many Loose Filed Forms 5471 that were not properly filed, as a result, the suggested the
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Recent Posts
- New Court Ruling: FBAR penalties applied per form and not per account August 7, 2020
- How to Avoid Jail and Clean Up Tax Problems August 6, 2020
- Tax Changes Due to the Election August 1, 2020
- The IRS has woken up. July 24, 2020
- How to Fix an Erroneous Filed Tax Return without Penalties July 23, 2020
- IRS’ New “Dirty Dozen” list of tax scams July 19, 2020
- What Happens to Your Digital Accounts In Case of Death June 26, 2020
- Expect Coronavirus Bankruptcies May 3, 2020
- No Springing in Spring May 2, 2020
- After You Wash Your Hands Take Back Control May 1, 2020
- Allow Us To Prepare Your Estate Planning Documents Remotely April 15, 2020
- Tax-free Disaster Relief Payment Program April 10, 2020