Owner of Iberia Restaurants in Newark Found Guilty of Tax Crimes

The failure to file and pay payroll taxes has been a major focus of IRS investigations in the past few years. Sometimes the cases are civilly examined, but occasionally the government criminally prosecutes more willfull taxpayers. A New Jersey man

IRS Has Ended Unannounced Visits to Collect

The IRS is drastically cutting back on its decades-long practice of surprising taxpayers at their homes or businesses because of concerns about the safety of employees and confusion caused by scam artists who also knock on doors. The duties of

The Unknown Tax: New Jersey Inheritance Tax

While the New Jersey Estate Tax was abolished 5 years ago and the Federal Estate Tax applies to taxpayers with estates over $12 million, the NJ Inheritance tax is relatively unknown and impacts thousands of modest taxpayers every year. The

Parag Patel Esq. speaks at NJCPA Tax Seminar: “Under the IRS Microscope: International Tax Reporting Update” and “What Tax Professionals Should Know About Trusts and Estates”

Parag Patel Esq. will be a featured speaker at a virtual New Jersey Society of Certified Public Accountants (NJCPA) Webinar panel entitled “Under the IRS Microscope: International Tax Reporting Update” and “What Tax Professionals Should Know About Trusts and Estates”.

Watch Out: IRS Audits of ERC Claims Expected

The IRS has begun to audit ERC refund claims filed for 2020 and 2021. While the audit process is just starting, it is expected to increase over time as the IRS has indicated it is interested in auditing ERC claims.

New Mandatory E-filing Form 8300 for Reporting of Large Cash Currency Transactions

The IRS announced yesterday that certain businesses that receive payments of over $10,000 in cash must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, electronically starting in 2024, the IRS said in a news release (IR-2023-157).

IRS Uses New Funding to Target US Persons with Malta Accounts

The US Treasury and US Internal Revenue Service are to leverage more resources to detect Americans using Malta personal pension accounts to claim tax exempt income, it said in a statement last week. The additional resources to investigate the Malta

NJ Contractor Charged with Criminal Tax Evasion for Unreported Checks

A Union County NJ contractor was arrested last week for tax evasion for not reporting cashed check income. Joel Konopka, 45, of Elizabeth, New Jersey, is charged by indictment with four counts of corporate tax evasion, two counts of filing

Beware the New 2023 Form 1099-K

Beginning in 2023, third-party payment networks must file Form 1099-K with the IRS and provide a copy to the taxpayer when the gross payment amount exceeds $600. However, not all payments from third parties are taxable. Taxpayers can take steps to prevent non-taxable items

IRS FBAR Penalties Are Now Unmitigated

The Internal Revenue Service will no longer reduce the penalty for taxpayers who non willfully fail to file Reports of Foreign Bank and Financial Accounts (FBAR or FinCen 114), according to recent Internal Revenue Service (IRS) internal guidance. The IRS

IRS Targets Puerto Rican Residency Transactions

In a July 14, 2023, release, the IRS stated that “[t]hanks to Inflation Reduction Act resources,” it has begun a criminal crackdown on Act 20/22/60 participants engaging in a ”[h]igh-dollar scheme in Puerto Rico.”  The IRS has “identified about 100

IRS Aggressively Starts New Criminal Investigations

The IRS announced last week in a press release that it is taking “swift and aggressive action” to strengthen enforcement efforts against high-income individuals as it uses the new budget funding it recently received. Recent enforcement efforts include closing about

Malta Pension Plan Being Investigated by IRS Criminal Investigation Division

The Malta Pension Plan is a tax-favorable pension plan that has been used by U.S. taxpayers in Malta. The plan allows for significant tax savings, as gains on assets contributed to the plan are not subject to tax in Malta

National Taxpayer Advocate Fights for FTA Penalty Relief from the IRS

National Taxpayer Advocate Erin M. Collins today released her statutorily mandated midyear report to Congress. The report says the tax-return filing season generally ran smoothly this year, urges the Internal Revenue Service to prioritize a broad array of technology upgrades, and

How to Avoid Employee Retention Credit (ERC) Scams

A small industry of specialist firms has sprung up to help business owners claim the Employee Retention Credit (ERC), a governmental tax incentive intended for companies stressed by the pandemic. But businesses need to be careful not to get scammed. Promoters

Watch Out: Malta Pension Plans Become Listed Transaction

Last week, in a government notice of proposed rulemaking (REG-106227-22), US Treasury and the IRS issued proposed regulations that identify any transaction that is similar to a Malta personal retirement scheme as a “listed transaction.”  A listed transaction is a

Beware Expected Employee Retention Credit (ERC) Audits

The IRS recently issued its seventh warning against questionable ERC activity.  The IRS, with its new funding, is expected to ramp up its Employee Retention Credit (ERC) audit enforcement. The IRS ERC audit process is complex and can be daunting

Parag Patel Esq. Speaks at Annual Convention of New Jersey Society of Certified Public Accountants

Parag Patel Esq. will be a featured speaker next week at the annual state convention of the New Jersey Society of Certified Public Accountants (NJCPA) in Atlantic City, NJ. The seminar is entitled “ Hot Topics in Tax Controversy.” Mr.

Parag Patel Esq. Speaks to New Jersey Society of Certified Public Accountants (NJCPA) Nonprofit Interest Group

Parag Patel Esq. was the featured speaker last month at a New Jersey Society of Certified Public Accountants (NJCPA) Nonprofit Interest Group. The Group is a resource for NJCPAs for accounting and auditing issues affecting Not-for-Profit organizations providing interpretations of

What is a Mark-to-Market (MTM) election for a Passive Foreign Investment Company (PFIC)?

Several clients have recently asked us about the Mark-to-Market (MTM) election for a Passive Foreign Investment Company (PFIC). A MTM election for a Passive Foreign Investment Company (PFIC) is an option that allows a taxpayer to treat their investment in

Comments on IRS Form 3520 to Report Foreign Gifts

The Florida Bar Tax Section recently made some excellent comments in response to the Internal Revenue Service’s request for comments concerning Forms 3520 and 3520-A. The comments were intended to enhance the quality, utility, and clarity of the information to


Join us for a Complimentary CPE Presentation on Reporting Foreign Assets & Activities: Requirements and Challenges Penalty structure Best practices in reporting IRS penalty avoidance programs Latest Supreme Court case impacting FBAR penalties Summary of most common international tax reporting forms

Tax Court Rules IRS Cannot Assess or Collect Form 5471 Penalties

Last week the US Tax Court issued its opinion in Farhy v. Commissioner, ruling that the Internal Revenue Service (IRS) could not assess or collect penalties under Internal Revenue Code (Code) Section 6038(b) for a late-filed Form 5471 against Alon Farhy. This is a big

Foreign Gift Received: Form 3520 Penalties Eliminated in New Court Case

The US DOJ Tax Division recently conceded penalties assessed against a police officer for failing to file informational returns on for a foreign gift. Krzysztof Wrzesinski, a Polish-American citizen, had failed to file Form 3520, or the “Annual Return to

Rare Supreme Court Ruling Favors Taxpayers!

The US Supreme Court rarely hears tax cases, but this week ruled on a case in favor of taxpayers. The case was originally heard because lower courts issued conflicting opinions. This week, the Supreme Court scaled back the federal penalties

Demystifying IRS Agents

The IRS is planning to hire thousands of new agents in the next few years.  Some politicians and the media have portrayed the new hires as a harassing threats to taxpayers. In my decades of experience as a tax attorney

New Rules: New Jersey Finally Follow Federal S Elections

On December 22, 2022, New Jersey Governor Murphy signed into law a new rule that eliminates the need to make separate New Jersey S elections. The law primarily conforms New Jersey’s laws regarding the making of S elections to federal law.

Top 5 tax fraud recoveries in 2022

Tax fraud can take many different forms. Below are the top federal tax fraud cases last year. Crypto Seizures: more than $7 billion. In February, 2022, it was announced that IRS Criminal Investigations Cyber Crime Unit led the seizure and recovery

Sales Tax for Home Improvements

Since New Jersey sales tax rules differ based on the type of work performed, it is important to understand the classifications to avoid paying too much or too little in taxes. What work is exempt from sales tax? For owners

New FATCA / CRS reporting penalties in India

The new 2023 Tax Budget in India has many new proposals. However, the most important proposal for investors, especially non-resident Indians, is a new penalty for providing inaccurate information for KYC (Know Your Customer) including information provided in FATCA and