IRS Most Common Tax Notices and What They Mean

- By : Parag Patel

The IRS has redesigned its correspondence notices to be more “user friendly.” This is supposed to make their notices easier to understand and therefore allow responses to occur in a…

IRS examines jewelry, precious stones and metals businesses for compliance

- By : Parag Patel

…what can the IRS do in these investigations? The IRS is conducting Anti-Money Laundering examinations with experienced Bank Secrecy Act Fraud investigators. The investigations include specific IRS Information Document Requests…

Is the IRS Finally Receiving Increased Funding?

- By : Parag Patel

…Act would spend nearly $80 billion on the IRS and would give the IRS authority to hire 87,000 additional IRS agents to ramp up audits on small businesses and taxpayers….

The IRS’s 2022 Dirty Dozen tax scams

- By : Parag Patel

…tax avoidance strategies. The IRS warned taxpayers to watch out for promoters peddling these schemes. As part of its mission, the IRS is focused on high-income taxpayers who engage in…

The IRS’s First-Time Abatement (FTA) Penalty Waiver

- By : Parag Patel

…call the IRS Practitioner Priority Service (PPS) line or use the IRS e-services Electronic Account Resolution (EAR) function. IRS Accounts Management representatives have authority to grant FTAs. There is an…

IRS announces new Streamlined Filing Compliance Procedures

- By : Parag Patel

…New IRS Changes This alert discusses only some of the many changes made by the IRS. It is important to note that the IRS has the authority to change the…

IRS Listens, and Postpones Increased Form 1099 Reporting for PayPal and Venmo

- By : Parag Patel

…of the new reporting requirements of Forms 1099-K. Good news: The IRS listened, and last week on December 23, the IRS issued Notice 2023-10 delaying the requirement for electronic payment…

IRS Summons to a Third Party: Duties and Rights

- By : Parag Patel

…an administrative summons for a third party to appear before an IRS representative to produce documents or electronic data or give testimony under oath. The IRS must comply with strict…

Watch Out: IRS Audits of ERC Claims Expected

- By : Parag Patel

…even want to get ahead of the issue and review your eligibility position now to be prepared should the IRS choose to audit your claim. Problems in an IRS ERC…

The IRS Large Business and International division (LB&I) has announced a new Post OVDP Compliance enforcement campaign

- By : Parag Patel

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…

IRS Announces New Statistics Regarding Voluntary Disclosures

- By : Parag Patel

…subject to IRS audit automatically, the IRS points out that: “[t]hey may be selected for audit under existing audit selection processes applicable to any U.S. tax return and may also…

IRS Notice CP 503: IRS Second Notice of Balance Due: What to Do

- By : Parag Patel

An IRS CP 503 notice is a letter that the IRS sends out to individuals as a reminder and a means to collect on a tax debt balance. This letter…

COURT AUTHORIZES SERVICE OF JOHN DOE SUMMONS SEEKING THE IDENTITIES OF U.S. TAXPAYERS WITH OFFSHORE ACCOUNTS AT CIBC FIRSTCARIBBEAN INTERNATIONAL BANK

- By : Parag Patel

…Henderson. The IRS summons seeks records of FCIB’s United States correspondent account at Wells Fargo N.A., which will allow the IRS to identify U.S. taxpayers who hold or held interests…

Employee or Contractor?: The IRS’s New Voluntary Classification Settlement Program (VCSP)

- By : Parag Patel

When the IRS says “voluntary” it can sound scary. The IRS is unlikely to use this word unless the potential liability is serious. The IRS would much rather have you…

Automatic Form 5471 and 5472 Penalties in Spotlight by 2020 National Taxpayer Advocate Report

- By : Parag Patel

…unavailability of the requisite information, and IRS error. The report recommends manual penalty assessment and automatic abatement of penalties. We applaud the IRS for noticing these unfair penalties. Unfortunately, the…

IRS announces an update to its Voluntary Disclosure Practice Preclearance Request and Application

- By : Parag Patel

Last month, the IRS announced revisions to Form 14457 and its accompanying instructions. Specifically, the IRS updated Form 14457, Voluntary Disclosure Practice Preclearance Request and Application, to reflect a shift…

For the First Time IRS Issues Information on 2011 Offshore Voluntary Disclosure Initiative (OVDI) in Hindi Language

- By : Parag Patel

In an effort to reach all taxpayers, including those ensnared in the pending HSBC subpoena to disclose customer names of non-resident indian customers with offshore accounts, the IRS has published…

Run to the Door: IRS Terminates Offshore Voluntary Disclosure Program (OVDP) effective September 28, 2018

- By : Parag Patel

IRS Issue Number: IR-2018-52 IRS to end offshore voluntary disclosure program; Taxpayers with undisclosed foreign assets urged to come forward now WASHINGTON – The Internal Revenue Service today announced it…

New IRS Subpoenae and IRS Data Mining Expected

- By : Parag Patel

…The IRS uses John Doe summonses to obtain information when it searches for tax fraud by individuals whose identities are unknown. This is a expansive order, allowing the IRS to…

IRS Notices for OVDI Program

- By : Parag Patel

When the IRS receives payment with amended tax returns for taxes, interest and penalties, the IRS may misapply the payment. This results in IRS notices. Reminiscent of the mistakes of…

Reasons to Opt Out of the 2011 OVDI Program

- By : Parag Patel

…opt out is unacceptable, then you can appeal to the Appeals Branch of the IRS. If your penalty post Appeal is unacceptable, then you can appeal to the Tax Court….

National Taxpayer Advocate Delivers Annual Report to Congress that Criticizes Offshore Voluntary Disclosure Programs

- By : Parag Patel

…cause.” The IRS’s one-sided interpretations of its OVD FAQs, which were not explained, appealable, or published, eroded confidence that the IRS would be reasonable in a post-opt-out examination. The IRS

30-DAY LETTERS VS. 90-DAY LETTERS IN TAX AUDITS

- By : Parag Patel

…agree to the IRS’ findings. The taxpayer can either agree, go over the examiner’s head and take the issue up with the IRS Appeals Office, or do nothing (in which…

IRS Announces New 2012 Offshore Voluntary Disclosure Program (OVDP)

- By : Parag Patel

IRS said the new program’s terms and penalties could change at any time, and the IRS may opt to end the program at any time. “As we’ve said all along,…

IRS Collects $10 Billion From Voluntary Disclosures of Foreign Assets

- By : Parag Patel

…taxpayers to come forward, the IRS said last Friday in a public statement. The latest figures indicate 55,800 taxpayers have entered the IRS’s Offshore Voluntary Disclosure Program to resolve their…

IRS Releases New IRS 2022 FBAR Fact Sheet

- By : Parag Patel

The IRS released its new 2022 FBAR Fact Sheet last month, which comprehensively provides all information related to the FinCEN FBAR Form 114. Interestingly, it fails to include the Delinquent…

IRS Announces Key Milestone in FATCA Implementation; U.S. Begins Reciprocal Automatic Exchange of Tax Information under Intergovernmental Agreements

- By : Parag Patel

…is a major milestone in IRS efforts to combat offshore tax evasion through FATCA and the intergovernmental agreements,” said IRS Commissioner John Koskinen. “FATCA is an important tool against offshore…

IRS Official Provides Insights for the new IRS Streamlined Compliance Procedures

- By : Parag Patel

…audit and criminal liability protection offered by the OVDP, according to Jennifer Best, senior adviser to the IRS deputy commissioner (International). The IRS June 18 announced it was expanding its…

Correcting Common FBAR Errors

- By : Parag Patel

…being filed pursuant to the “IRS’s Delinquent FBAR Submission Procedures.” 3. File Pursuant to the IRS’s Streamlined Filing Compliance Procedures The IRS’s Streamlined Filing Compliance Procedures (commonly referred to as…

IRS issues new information document request (IDR) directives

- By : Parag Patel

…of goals before they meet IRS agents in their opening conference and engage in interim reviews with the IRS during the quality examination process. Typically an IRS agent has an…