Page 3 – Tax, Estate Planning & Probate Law Center

National Taxpayer Advocate Fights for FTA Penalty Relief from the IRS

28 Jun 23

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

21 Jun 23

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

12 Jun 23

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

09 Jun 23

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

05 Jun 23

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

01 Jun 23

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)?

11 May 23

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

01 May 23

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

REPORTING FOREIGN ASSETS & ACTIVITIES: REQUIREMENTS AND CHALLENGES: Complimentary CPE Presentation

09 Apr 23

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

06 Apr 23

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

03 Apr 23

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!

01 Mar 23

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

18 Feb 23

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

16 Feb 23

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

11 Feb 23

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

05 Feb 23

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

03 Feb 23

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

65 Day Election on March 6, 2023

21 Jan 23

Trustees and executors have the ability to make certain elections on, or before, March 6, 2023 that could affect 2022 tax returns of the trusts and estates for which they are fiduciaries, as well as the returns of the beneficiaries

High Penalties for failure to file an FBAR: Not Really Enforced (yet)?

19 Jan 23

U.S. persons, including U.S. citizens, residents, corporations and estates, must report certain foreign financial accounts, including bank accounts, brokerage accounts and saving accounts to the U.S. Treasury department each year. If the aggregate value of the foreign financial accounts exceeded

IRS Audits of Millionaires Remain Very Low

15 Jan 23

The Internal Revenue Service still rarely audits millionaires, according to a new report published by Syracuse University’s Transactional Records Access Clearinghouse. Despite calls to ramp up scrutiny of high-net-worth individuals’ tax returns and wealthy tax evaders and a legislative push

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

30 Dec 22

As a result of taxpayer confusion, lack of guidance, concerns about the existing backlog, and impact on the upcoming filing season, tax professionals urged the IRS to postpone the implementation of the new reporting requirements of Forms 1099-K. Good news:

Accountant-Client vs Attorney-Client Confidentiality

28 Dec 22

Both Accountant-Client vs Attorney-Client Confidentiality are designed to protect the privacy of the client and to ensure that the client can trust their lawyer or accountant to handle sensitive information with care. However, there are some major differences between the

Estate Planning: List of To-Do Items

23 Dec 22

The idea of a visit to an attorney for your estate planning can be unsettling and daunting for many people. As a result, people often procrastinate. To help facilitate the process below is a list of to-do items or at

How Long is the Tax Fraud Statute of Limitations?

19 Dec 22

The question of how much time the government has to pursue tax fraud (also known as the statute of limitations) is often misunderstood. It is important to note that the indefinite or unlimited fraud statute refers to civil tax fraud,

The Taxpaper Roadmap (seriously?)

18 Dec 22

The Taxpaper Roadmap was recently created by The Taxpayer Advocate Service, an independent organization within the IRS. This map illustrates, at a very high level, the stages of a taxpayer’s journey, from getting answers to tax law questions, all the

New Portability Election Extension Prevents Lost Estate Tax Exemption

17 Dec 22

Thanks to the Internal Revenue Service’s release of Rev. Proc. 2022-32, married couples who are not otherwise required to file an estate tax return at the death of the first spouse now have substantially more time to make a portability

What I learned at the 2022 National Institute on Criminal Tax Fraud and Tax Controversy in Las Vegas

14 Dec 22

I just returned from the American Bar Association Section of Taxation’s annual National Institute on Criminal Tax Fraud and Tax Controversy in Las Vegas, which is the largest gathering of criminal tax fraud and tax controversy attorneys in the nation.

Parag Patel Esq. was a featured speaker at the National Association of Enrolled Agents (NAEA) International Tax Certificate Program

12 Dec 22

Parag Patel Esq. was a featured speaker at the National Association of Enrolled Agents (NAEA) International Tax Certificate Program event from December 12-16, 2022. The five-day educational event focused on international taxation for tax professionals. Mr. Patel discussed the tax

New IRS FBAR Practice Unit

01 Dec 22

The IRS LB&I recently issued its Practice Unit on FBARs. Practice Units are “job aids” and training materials intended to describe for IRS agents helpful practices about tax concepts in general and specific types of tax reporting forms. The FBAR

Do Inherited Foreign Assets Receive a Step-up in Cost Basis for U.S. Tax Purposes?

15 Nov 22

A common question asked by clients when receiving an inheritance from outside the United States is about the U.S. cost basis and receiving a step-up in basis on foreign assets owned by a non-U.S. person. Understanding the U.S. cost basis

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