Patel Law Offices Blog

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,

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

Reasonable Cause Defense Denied: FBAR Penalties Assessed by Court

  In the recent 2019 case U.S. v. Ram Agrawal, a US District Court rejected a taxpayer’s reasonable cause defense against foreign bank account reports (FBARs) penalties. It ruled in favor of the government to collect FBAR penalties for 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 is Hiring: Expect New Enforcement

I recently returned from the American Bar Association’s Taxation conference in Washington, D.C., which is the largest gathering of tax lawyers in the country. At the conference, I attended a speech given by the new IRS Commissioner Chuck Rettig where he

The New IRS Voluntary Disclosure Practice: Not a Good Deal for Noncompliant Taxpayers

For all voluntary disclosures received after September 28, 2018, the IRS has a new program called the Voluntary Disclosure Practice (VDP), which is for both domestic and international noncompliance. Unlike the old Offshore Voluntary Disclosure Program (OVDP), taxpayers do not receive

US Court finds non-willful FBAR penalty not limited to $10,000 per year

Earlier this month, the U.S. District Court for the Central District of California ruled in U.S. v. Jane Boyd (No. 2:18-cv-00803) that the non-willful penalty for failing to file foreign bank account reports (FBARs) is not limited to $10,000 per year, and

IRS Announces Increased Enforcement on Form 5471

On April 16, 2019, the Large Business and International (LB&I) Division of the Internal Revenue Service (IRS) announced a new compliance campaign to focus on the separate detach filing of Forms 5471 by US shareholders of controlled foreign corporations (CFCs)

Welcomed Tax Relief to U.S. Individuals Owning Stock in “Controlled Foreign Corporation”

The US Department of the Treasury last week clarified that US individual shareholders will be eligible for 50 percent relief from the new global intangible low-taxed income (GILTI) tax. GILTI was introduced by the Tax Cuts and Jobs Act 2017

Consider a tax legal opinion to confirm clients’ 199A Specified Service Trades or Businesses (SSTB) status

On Aug. 8, 2018, the IRS released proposed regulations around the centerpiece provision of the Tax Cuts and Jobs Act. The new Section 199A tax deduction provides owners of sole proprietorships, partnerships, trusts and S corporations a significant 20 percent deduction

Traveling? Resolve Tax Debt Before Getting Your Passport

IR-2019-23, February 27, 2019 WASHINGTON ― The Internal Revenue Service today reiterated its warning that taxpayers may not be able to renew a current passport or obtain a new passport if they owe federal taxes. To avoid delays in travel plans, taxpayers

Make Sure You have Filed FATCA Compliance Certifications

We have recently published the below article in Money Life, a weekly online finance magazine. https://www.moneylife.in/article/make-sure-you-have-filed-fatca-compliance-certifications/56190.html Many Indian banks and financial institutions have in recent years been requesting customers to complete a “FATCA Compliance Certificate”.  The reason for the request