IRS gives widespread penalty relief: ACTION REQUIRED

- By : Parag Patel

…the following tax returns if they were not timely filed: Individual income tax returns: Form 1040 series (1040, 1040-C, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SR and 1040-SS) Estate and trust income…

Forms 3520, 5471 and 5472 Penalty Relief

- By : Parag Patel

…receives a gift from a foreign individual or estate the recipient may be required to file Part IV of Form 3520. Form 3520 is the Annual Return to Report Transactions…

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?

- By : Parag Patel

…up to 20% of the net income that a taxpayer receives from an active trade or business, which may include rental real estate and professional practice income other than wages….

Recent Court Decision Shows Risks of IRS Streamlined Filing Compliance Procedures

- By : Parag Patel

estate (Taxpayer) attempted to become compliant through the IRS’s Streamlined Domestic Offshore Procedures (“SDOP”). The IRS flagged the submission and assessed the maximum willful FBAR penalties against the Taxpayer because…

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?

- By : Parag Patel

…up to 20% of the net income that a taxpayer receives from an active trade or business, which may include rental real estate and professional practice income other than wages….

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?

- By : Parag Patel

…up to 20% of the net income that a taxpayer receives from an active trade or business, which may include rental real estate and professional practice income other than wages….

Audit Beware: IRS’ Global High Wealth Industry Group

- By : Parag Patel

…a high wage earner and operate a hedge fund, make extensive use of trusts, have a privately held company, utilize flow-through entities or have offshore real estate holdings, be prepared…

Beware the New 2023 Form 1099-K

- By : Parag Patel

…platform; real estate marketplace; ticket exchange or resale site; crowdfunding platform; or freelance marketplace. Zelle says the new IRS 1099-K reporting rules for third-party payment processors do not apply to…

How to Benefit from Tax Treaties

- By : Parag Patel

…FDAP income, if the beneficial owner is an individual or governmental entity; If a partnership, trust, or estate has disclosed a treaty position that the partner or beneficiary would otherwise…

Post-Covid: Re-explore the Home Office deduction

- By : Parag Patel

…business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs. In general, a taxpayer may not deduct expenses for the parts of their…

New FBAR Deadline applies to 2016 Tax Year Onwards

- By : Parag Patel

…citizen or resident, and a U.S. entity, including a trust or estate formed under the laws of the United States) with a financial interest in one or more non-U.S. bank…

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

- By : Parag Patel

…penalty structure for employment tax and estate and gift issues. A check-box for inability to pay in full. The updates reflect input from practitioners and stakeholders and take into account…

New Trust Law Enacted in New Jersey

- By : Parag Patel

…many trusts drafted by our law firm have already addressed many of the benefits provided by the NJUTC. The new law may necessitate a review of an old estate plan….

IRS Announces New Clarifying FAQs for Streamlined Offshore Compliance Program

- By : Parag Patel

…either FBAR or Form 8938, not rental real estate. In FAQ #4, the IRS made clear that the 5% penalty applies to a foreign business with assets including financial accounts….

Penalties for Not Filing Form 3520

- By : Parag Patel

The IRS requires a U.S. person receiving a gift from a foreign individual, corporation, partnership, or estate to report by filing Part IV Form 3520. Failure to file or late,…

The InSECURITY of the SECURE Act

- By : Parag Patel

…accounts whose owners die after 2019. As a result, the new insecurity of some beneficiaries being unable to receive lifetime distributions will require estate plan revisions for some people. The…

How to Stretch Your IRA Into a Family Fortune

- By : Parag Patel

…the stretch The beneficiary who takes a stretch IRA must be a named person, not your estate. Be sure the custodial agreement with your IRA trustee provides for allowing a…

President-elect Obama’s tax plan

- By : Parag Patel

…on oil companies to offset high energy costs. AMT Maintain current exemption and index to inflation. ESTATE TAX Set exclusion at $3.5 million per person ($7 million per couple); keep…

Beware of Overlooked Common Overseas Tax Forms

- By : Parag Patel

…which is often required by banks and brokerage firms to release funds to the estate; Form 5472 for certain U.S. corporations with 25% foreign ownership and certain foreign corporations engaged…

Another HSBC Customer Likely Going to Jail

- By : Parag Patel

…and insurance clients, court records show. He used a Swiss charitable trust and a Cayman Islands corporation to hide the proceeds of real estate transactions in India, according to his…

New Court Case Limits the Reasonable cause exception to FBAR penalties

- By : Parag Patel

…handle all his Canadian tax preparation. Linda is a real estate broker and property owner in Oklahoma. She relied heavily on her bookkeeper, Misty Fairchild. Every year, Fairchild would turn…

Keeping Tax Papers

- By : Parag Patel

…purchases of real estate, stocks and other investments for at least three years after you sell the asset. If you are audited, you must be able to show your taxable…

PRESIDENT BUSH SIGNS THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 WITH TAX BENEFITS AND TRAPS FOR THE UNWARY

- By : Parag Patel

Today President Bush signed the Housing and Economic Recovery Act of 2008. The eagerly anticipated housing-rescue law is intended to calm the mortgage market, the real estate market, homeowners on…

IRS Notices for OVDI Program

- By : Parag Patel

…to whatever type of liability he chooses.” Salazar v. CIR, T.C. Memo 2008-28, *34 (February 25, 2008); Estate of Wilson v. CIR, T.C. Memo 199-221, *14 (July 6, 1999); Muntwyler…

IRS’ first-time penalty abatement administrative waiver (FTA)

- By : Parag Patel

…an FTA for failure-to-file and failure-to-pay penalties. Estate and gift tax returns do not qualify for FTA waivers. Business and payroll taxpayers can request an FTA for failure-to-file, failure-to-pay, and/or…

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

- By : Parag Patel

…automatically imposed, and examiner discretion will take into account the application of other penalties and resolve the examination by agreement; Penalties relating to excise taxes, employment taxes, estate and gift…

Life insurance for disabled or special needs children

- By : Parag Patel

…have a significant taxable estate, they should probably be the owners of the policy. However, in the event that a parent predeceases the child, there should be a contingent owner….