Search Results for: soft letters
Beware IRS Letter 6291
…U.S. taxpayers owning foreign accounts. These soft letters indicate the IRS’ renewed focus on taxpayers’ foreign activities. We expect increased audit activity for clients with noncompliant foreign activities. U.S. persons…
The Dreaded IRS Letter 6185: “We received information that you have a foreign account”
…foreign financial accounts, foreign entities, or foreign financial assets.” This letter is an IRS “soft letter” (i.e., a warning letter) to U.S. taxpayers owning foreign accounts. These soft letters indicate…
IRS announces two new intriguing targeted enforcement campaigns
…reveal the IRS’ renewed coordinated focus on taxpayers’ foreign activities. The IRS has stated that they will initially address tax noncompliance (i.e., notify taxpayers) through audit examination and soft letters….
IRS Warning Letter Warns Foreign Business Owners About Section 965 Transition Tax Enforcement
The IRS has recently begun sending “soft letters” (warning letters) to U.S. taxpayers owning foreign companies about IRC Section 965 transition tax compliance. In July 2020, The IRS Large Business…
30-DAY LETTERS VS. 90-DAY LETTERS IN TAX AUDITS
In a tax audit situations, the IRS only has a 3 year statute of limitations to assess additional taxes. If the IRS takes too long to initiate an audit, or…
ERC Disallowance Letters 105C Sent to Taxpayers
…disallowing incorrect credits before they enter the audit process. The IRS plans to send additional letters beyond the disallowance letters. It’s also finalizing plans for a special voluntary disclosure program…
Watch Out for Letters From Your Foreign Bank Requesting Information On Your U.S. Residency
Numerous foreign banks are sending letters to their customers demanding personal information to ascertain whether the customer is a U.S. citizen or a U.S. resident. The foreign banks typically state…
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…
The IRS Large Business and International division (LB&I) has announced a new Post OVDP Compliance enforcement campaign
…streams. Soft letters are IRS correspondence to targeted taxpayers identifying tax noncompliance and passively seeking compliance. Failure to respond to such letters may result in audit or penalties and possible…
The IRS Large Business and International division (LB&I) has announced a new Offshore Private Banking enforcement campaign
…soft letter treatment streams. Soft letters are IRS correspondence to targeted taxpayers identifying tax noncompliance and passively seeking compliance. Failure to respond to such letters may result in audit or…
Beware of FATCA Letters
FATCA letters (sometime called Self Certification letters) are going out from banks around the world to millions of US expats in readiness for reporting their financial information to the Internal…
More Swiss Banks Agree to Disclose US Customers Accounts: Expect More Customer Letters to be Sent
…of letters are being sent to US customers with Swiss accounts held over the past 5 years. Valiant Holding, Berner Kantonalbank, and Vontobel Holding AG are the first Swiss banks…
Expect new aggressive IRS targeted enforcement next year.
…money can be efficiently and quickly discovered. For example, over the past few years, the IRS has effectively deployed “soft letters” (which most people interpret as scary warning letters) to…
IRS starting to audit employee retention credit (ERC)
…letters included Form 4564 (Information Document Request), asking the taxpayer to answer 13 multipart questions and provide the IRS with supporting documentation. The letters state that the IRS will not…
IRS Letters and Notices Offering an Appeal Opportunity
There are many missed opportunities to solve tax problems with the IRS through the IRS Appeals office. Below is a list of the most common IRS letters and notices affording…
Letters of Instruction, or Ethical Wills
Most people are aware of the importance of establishing a will, but a legal document like that does not necessarily allow you to convey an array of important details and…
New Form 3520 Penalties
…a penalty right away, taxpayers could instead get a warning or soft notice the first time they do not timely file. This soft notice would advise delinquent taxpayers of their…
U.S. Taxpayers at New Risk of Audit from OVDP Declines and Withdrawals Campaign
…pre-clearance applications and Offshore Voluntary Disclosure Letters. Foreign Account Tax Compliance Act (FATCA) reporting is not expected to be a source of identification at this time. According to the Service,…
FATCA Noncompliant Accounts may be Frozen or Blocked
Many of our clients with foreign accounts have received FATCA letters. The letters seek personal information regarding the account holder in order to comply with the US FATCA law. In…
Received a FATCA Letter from Your Foreign Bank?
…2014, those holding accounts in foreign banks throughout the world have received Foreign Account Tax Compliance Act (FATCA) letters from their financial institutions. These letters are sent to account holders…
Automatic Form 5471 and 5472 Penalties in Spotlight by 2020 National Taxpayer Advocate Report
…could send soft notices to taxpayers upon discovery of late-filed international information returns to enhance compliance and minimizing the number of penalties being asserted. Further, the IRS should establish a…
IRS Offshore Voluntary Disclosure Programs Continue to Burden “Benign Actors” and Damage IRS Credibility
…IRS has reportedly revoked pre-clearance letters authorizing taxpayers to participate in the OVDP, even though some had already made disclosures, filed returns, and paid taxes and penalties in reliance on…
US Department of Justice Encourages Swiss banks to Disclose Information
Last week the Tax Division of the Department of Justice strongly encouraged Swiss banks that want to seek non-prosecution agreements to resolve past cross-border criminal tax violations to submit letters…
New Report: Delinquent Taxpayers Could be Identified at US Border Crossings
…assets. In addition, there are over 78,000 global financial institutions that have entered into direct information exchange agreements with the IRS. These institutions will be issuing FATCA letters to U.S….
What Client Tax Advisors Should Do About the New Corporate Transparency Act
…services in engagement letters is essential for firms offering CTA services. This includes disclaimers stating firms bear no responsibility for advising on CTA compliance unless explicitly engaged for that purpose….
American Citizens Abroad (ACA) writes letter to IRS Commissioner regarding unfair offshore asset treatment
…firm expects the letter to fall on deaf ears. Last year, other organizations wrote similar letters with no impact (other than ceremonial meetings with government officials). We expect unabated aggressive…
National Taxpayer Advocate Identifies OVDP Program as a Serious Problem
…(including U .S . residents); send “soft” notices to educate persons with foreign accounts about the reporting requirements; consolidate and simplify conflicting guidance; and revise Forms 8938 and TD F…
FATCA Enforcement Softens
Realizing the large administrative burden of FATCA, the IRS has announced a “soft opening” of FATCA and enforcement at the IRS’ discretion for an initial transitional period. FATCA, which was…
AICPA Makes Useful Recommendations For International Forms 3520/3520
The American Institute of CPAs (AICPA) submitted comment letters to the IRS requesting improvements be made to two international tax returns pertaining to foreign trusts. The AICPA requested that the…
Avoiding and Defining Willfulness
…letters or W-9 forms) or close their accounts. IRS Disclosure Programs Most taxpayers and their representatives now are aware of the various programs allowing taxpayers to correct foreign reporting delinquencies….