Patel Law Offices Blog

Start or review an “Accountable Plan”

09 Sep 19

Accountable Plans, established under IRS Reg. Section 1.62-2(c)(4), are important tools to help a business optimally classify expenses paid to employees without fear of the payments being treated as taxable compensation. The 2017 law known as the Tax Cuts and

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

12 Aug 19

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 offshore bank accounts, as a result, they suggested the campaign.

New IRS Enforcement Letters Warn of Cryptocurrency Non-Compliance

04 Aug 19

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 or did not report their transactions properly. “Taxpayers should take

The IRS is Hiring: Expect New Enforcement

01 Jul 19

I recently returned from the American Bar Association’s Taxation conference in Washington, D.C., which is the largest gathering of tax lawyers in the country. At the conference, I attended a speech given by the new IRS Commissioner Chuck Rettig where he

The New IRS Voluntary Disclosure Practice: Not a Good Deal for Noncompliant Taxpayers

28 Jun 19

For all voluntary disclosures received after September 28, 2018, the IRS has a new program called the Voluntary Disclosure Practice (VDP), which is for both domestic and international noncompliance. Unlike the old Offshore Voluntary Disclosure Program (OVDP), taxpayers do not receive

US Court finds non-willful FBAR penalty not limited to $10,000 per year

20 May 19

Earlier this month, the U.S. District Court for the Central District of California ruled in U.S. v. Jane Boyd (No. 2:18-cv-00803) that the non-willful penalty for failing to file foreign bank account reports (FBARs) is not limited to $10,000 per year, and

IRS Announces Increased Enforcement on Form 5471

03 May 19

On April 16, 2019, the Large Business and International (LB&I) Division of the Internal Revenue Service (IRS) announced a new compliance campaign to focus on the separate detach filing of Forms 5471 by US shareholders of controlled foreign corporations (CFCs)

Welcomed Tax Relief to U.S. Individuals Owning Stock in “Controlled Foreign Corporation”

11 Mar 19

The US Department of the Treasury last week clarified that US individual shareholders will be eligible for 50 percent relief from the new global intangible low-taxed income (GILTI) tax. GILTI was introduced by the Tax Cuts and Jobs Act 2017

Consider a tax legal opinion to confirm clients’ 199A Specified Service Trades or Businesses (SSTB) status

28 Feb 19

On Aug. 8, 2018, the IRS released proposed regulations around the centerpiece provision of the Tax Cuts and Jobs Act. The new Section 199A tax deduction provides owners of sole proprietorships, partnerships, trusts and S corporations a significant 20 percent deduction

Traveling? Resolve Tax Debt Before Getting Your Passport

27 Feb 19

IR-2019-23, February 27, 2019 WASHINGTON ― The Internal Revenue Service today reiterated its warning that taxpayers may not be able to renew a current passport or obtain a new passport if they owe federal taxes. To avoid delays in travel plans, taxpayers

Make Sure You have Filed FATCA Compliance Certifications

25 Jan 19

We have recently published the below article in Money Life, a weekly online finance magazine. https://www.moneylife.in/article/make-sure-you-have-filed-fatca-compliance-certifications/56190.html Many Indian banks and financial institutions have in recent years been requesting customers to complete a “FATCA Compliance Certificate”.  The reason for the request

Should I aggregate different businesses for wage and qualified property calculation purposes, or consider them to be separate on to maximize my 20% Section 199A deduction?

25 Jan 19

Internal Revenue Code Section 199A was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), and slightly modified in 2018. This provision provides a tax deduction of up to 20% of the net income that a taxpayer receives

Should my business pay more wages or have qualified property to have a full 20% of profits Section 199A deduction, if you are a high earner taxpayer?

23 Jan 19

Internal Revenue Code Section 199A was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), and slightly modified in 2018. This provision provides a tax deduction of up to 20% of the net income that a taxpayer receives

Is my trade or business a “Specified Service Trade or Business” and is my taxable income more than the amount that permits me to have a full 20% Section 199A deduction?

22 Jan 19

Internal Revenue Code Section 199A was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), and slightly modified in 2018. This provision provides a tax deduction of up to 20% of the net income that a taxpayer receives

If you are a landlord, what changes need to be made to assure that you can be considered to be an active trade or business to qualify for the Section 199A deduction if you have net income from the rentals?

21 Jan 19

Internal Revenue Code Section 199A was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), and slightly modified in 2018. This provision provides a tax deduction of up to 20% of the net income that a taxpayer receives

Significant FBAR Penalties Upheld by Court

08 Jan 19

Taxpayers have lost and the US Internal Revenue Service has scored a victory over the taxpayer in Kimble v USA, a court case concerning the reporting of foreign bank accounts. The taxpayer, Alice Kimble, held Swiss accounts at both HSBC and UBS in

Analysis: IRS New Disclosure Program

04 Jan 19

On November 29, 2018, the IRS released a memorandum that addressed the process for all voluntary disclosures following the end of the Offshore Voluntary Disclosure Program (“OVDP”) on September 28, 2018. The new voluntary disclosure procedure provides uniformity to offshore

IRS Updated Voluntary Disclosure Practice is a Game-Changer

04 Dec 18

Last week the IRS released a memorandum with new procedures for  an “Updated Voluntary Disclosure Practice” impacting all voluntary disclosures. The new updated voluntary disclosure practice (VDP) is a game-changer for offshore voluntary disclosures for US persons with unreported foreign assets. The

New Jersey Tax Amnesty program

15 Nov 18

Today the New Jersey Division of Taxation announced the launch of their Tax Amnesty program. The program is intended to provide individuals and businesses with the opportunity to pay back taxes or file past returns with no penalties and reduced

The IRS can revoke your passport

06 Sep 18

If you do not pay your taxes, the IRS may revoke your passport. As the National Taxpayer Advocate (NTA) Nina E. Olson has recently pointed out in her blog, when a taxpayer is notified of such pending revocation, that the taxpayer, nor

New Jersey Enacts Tax Amnesty Bill

03 Jul 18

Enacted legislation requires the New Jersey Division of Taxation to establish a 90-day state tax amnesty period that ends no later than January 15, 2019. The Legislature had previously passed a bill requiring a six-month amnesty period that had to

The TCJA and the Future of American Taxpayers

19 Jun 18

Our article on the new tax law was published today by the American Bar Association below… https://www.americanbar.org/groups/gpsolo/publications/gpsolo_ereport/2018/june-2018/tcja-future-american-taxpayers.html The TCJA and the Future of American Taxpayers Vol. 7, No. 11 Parag Patel and Anannya Tripathy Parag Patel, Esq., is a tax attorney in

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