US Supreme Court Will Favor Taxpayer Challenges to the IRS

The US Supreme Court’s recent reversal of the Chevron doctrine in the Loper Bright Enterprises v. Raimondo case has significant implications for disputed tax matters. Here are some of the key potential impacts: Overall, the reversal of the Chevron doctrine

Comments on Proposed Regulations on Transactions with Foreign Trusts and Reporting Large Foreign Gifts

I was a principal author on behalf of the American Bar Association in preparing 60+ pages of comments submitted to the Internal Revenue Service (IRS) on proposed regulations concerning foreign trust transactions and recipients of significant gifts from foreign individuals.

IRS Form 8621 Frequently Misunderstood

IRS Form 8621, “Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund,” is a tax form for U.S. taxpayers holding shares in Passive Foreign Investment Companies (PFICs). PFICs include foreign corporations, meeting specific income

IRS Criminal Investigations: A Serious Threat With Warning Signs

Criminal investigations are the most potent (and severe) tool in the IRS’s enforcement toolkit. While they are used in only a small fraction of cases, their consequences are very serious, potentially leading to personal, social, and financial ruin, professional license

Handling an Unexpected Visit from IRS Criminal Investigation: Guidance for Taxpayers and Advisors

Over the years, many people have come to our firm after being visited by the Criminal Investigation Division of the Internal Revenue Service (IRS-CI). In the event that agents from the Criminal Investigation Division of the Internal Revenue Service (IRS-CI)

US Supreme Court Upholds Constitutionality of Repatriation Tax: Key Takeaways for Foreign Corporations

The U.S. Supreme Court’s recent decision in Moore v. United States has definitively upheld the constitutionality of the repatriation tax, a one-time tax on accumulated foreign earnings of U.S. companies under the 2017 Tax Cuts and Jobs Act (TCJA). This

New NJ Law Makes it Easier to Transfer Motor Vehicle Ownership Upon Death

New Jersey motor vehicle owners can now simplify the transfer of their vehicle upon their death by designating a transfer on death (TOD) beneficiary. This new law change allows vehicles to bypass the often lengthy and complex probate process for

How to Respond or Contest an IRS Criminal Investigation Division (CID) Summons

To contest an IRS Criminal Investigation Division (CID) summons, you generally have a few options: While the most formal way to contest an IRS CID summons is through the court system, there might be a few non-court options to explore,

IRS Criminal Investigation Division Summonses: A Key Tool in Tax Crime Investigations

The IRS Criminal Investigation Division (CID) frequently uses summonses to gather evidence in tax crime investigations. These summonses, authorized by law, grant special agents broad authority to examine tax returns, assess liabilities, and investigate any offenses related to tax administration

Form 3520: A Comprehensive Guide to Navigating the Complexities of Foreign Gift Reporting Under the Latest 2024 Proposed Regulations

Receiving a gift from a foreign person or entity can be a joyous occasion, but it also carries significant tax implications that necessitate meticulous attention. In the United States, Form 3520 plays a crucial role in ensuring the proper reporting

Detailed Technical Comments and Recommendations to the IRS on Proposed Regulations for Form 3520 and Code Section 6039F (REG-108066-22)

The Internal Revenue Service’s (IRS) proposed regulations regarding Form 3520 and Code Section 6039F, as outlined in REG-108066-22, significantly change the reporting requirements for receiving foreign gifts. While the intent behind these regulations is laudable, several aspects warrant closer examination

Top Six Criminal Tax Questions Asked

We get many questions from clients (and their advisors) about criminal tax. So I have compiled the six questions that come up the most frequently. Frequently Asked Questions: Addressing IRS Criminal Investigations Q: What course of action is recommended if

IRS Issues New Proposed Regs on Information Reporting on Foreign Gifts

The reporting of foreign gifts and inheritances is a very complex part of international tax law.  Many of our clients have been hit with large penalties for late filing Forms 3520 to report foreign gifts. Although many of these laws

Form 5471 Penalties Upheld in Latest Court Ruling

The D.C. Circuit handed the IRS a big win last week, holding that the IRS could assess international information return penalties for the failure to file Forms 5471, “Information Return of U.S. Persons With Respect to Certain Foreign Corporations.” The

NJCPA Seminar “The Corporate Transparency Act: What You Need To Know”

Parag Patel Esq. is a speaker this week at a New Jersey Society of Certified Public Accountants (NJCPA) Seminar entitled “The Corporate Transparency Act: What You Need To Know”. You may email our office to receive the seminar materials. Seminar

IRS Guidance Targets Cash Reporting in the Cannabis Industry

The IRS closely monitors cash transactions to ensure businesses across all industries comply with tax laws. Cannabis businesses, often reliant on cash, face particular scrutiny. A recent IRS memo provides important insights into how the IRS expects cannabis businesses to

IRS International Fines Not Excessive: Form 3520 Penalties Upheld, Form 5471 Penalties Again Unassessable

International tax reporting requirements are complex, and the penalties for non-compliance can be severe.  In Mukhi v. Commissioner of Internal Revenue, the U.S. Tax Court considered a case involving a taxpayer who faced both criminal charges and significant civil penalties

IRS starting to audit employee retention credit (ERC)

Some businesses that claimed the employee retention credit (ERC) have begun receiving IRS letters telling them their claims are on hold because they are under audit and must provide additional information to the agency. Several law firms and media outlets

Questionable ERC could mean trouble for CPAs

The Internal Revenue Service announced in March that its compliance efforts related to the Employee Retention Credit had exceeded $1 billion. The agency specified that “more than 12,000 entities filed over 22,000 claims that were improper and resulted in $572

Employers Must Re-examine Employee Retention Credit (ERC) Claims

The Employee Retention Credit (ERC) offered financial relief to businesses struggling due to COVID-19. However, many ineligible applicants filed claims, or requested excessive amounts, often misled by aggressive marketing tactics. IRS Crackdown The IRS is now aggressively focusing on these

IRS Enforcement Campaign Targets High-Income Non-Filers

Recent funding increases through the Inflation Reduction Act (IRA) have revitalized the IRS’s enforcement capabilities.  A new campaign signals this shift, targeting high-income taxpayers who failed to file federal income tax returns.  This initiative represents a strategic pivot for the

Understanding the IRS Emphasis on BSA Filings in Tax Crime Investigations

The Internal Revenue Service (IRS) places significant emphasis on the role of Bank Secrecy Act (BSA) filings in supporting the work of its Criminal Investigations (CI) division. Their recent report indicates that an impressive 88% of investigations initiated in FY2023

Are Trusts Required to Report under the Corporate Transparency Act (CTA)?

Generally, the answer is no. Starting January 1, 2024, the Corporate Transparency Act (CTA) will require most U.S. corporations, LLCs, and other legal entities formed through state filings or foreign entities registered to do business in the U.S. (“Reporting Company”)

Is First-Time Abatement Applicable In International Penalty Cases?

The Internal Revenue Service (IRS) issued a memorandum from John E. Hinding, the Director of Specialized Examination Programs & Referrals, regarding penalty abatements for Forms 5471 and 5472. The memo was addressed to IRS Independent Office of Appeals employees focusing

National Taxpayer Advocate calls IRS Penalties Draconian and Inefficient

National Taxpayer Advocate Erin Collins recently issued her 2023 Annual Report to Congress. By law, the Advocate’s report is required to identify the 10 most serious problems taxpayers are experiencing in their dealings with the IRS and to make administrative and

Crypto is not = Cash currency for IRS reporting

The IRS released Announcement 2024-4, providing transitional guidance under section 6050I with respect to reporting transactions involving the receipt of digital currency. Generally, when receiving more than $10,000, IRS reporting is required. The announcement clarifies that, at this time, digital assets are

Interesting 2023 Foreign Account Cases

Foreign Account/FBAR confusion: In Kurotaki v. United States, 132 AFTR2d 2023-6138, a Hawaii federal district court determined that a U.S. green card holder who lived in Japan and spoke no English did not willfully fail to file FBAR reports as

Fantastic Recommendations for Form 3520

The American Institute of CPAs (AICPA) recently sent excellent recommendations to the Internal Revenue Service (IRS) against the IRS’ systemic assessment of penalties for late-filed Forms 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign

The New IRS ERC Voluntary Disclosure Program

The IRS ERC Voluntary Disclosure Program provides a special resolution opportunity for employers with erroneous or excessive ERC claims. The IRS recognizes that many erroneous or excessive ERC claims are partly due to aggressive marketing around ERC and promotors who

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 IRS update, add to, and clarify Form 3520 and Form