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Fort Lauderdale Tax Law Blog

A 1099 from overseas?

With the deadline for filing your 2014 income tax return now little more than a month and a half away, you need to be certain you have all of the necessary documents to complete your return. And this year, due to the Foreign Account Tax Compliance Act, (FATCA) you may find a Form 1099 arriving from an unusual location. If you have any overseas accounts, those institutions may send you a 1099 for the first time.

If you have had these overseas accounts for any length of time, you could mistakenly believe that all you need to do file is your taxes and account for the amounts on the 1099. This could be problematic, as the FATCA disclosure requirements have been in place since 2010, and simply acknowledging the accounts today could generate considerable compliance issues.

Is the Fresh Start initiative too generous?

Difficult as it may be to believe, the Internal Revenue Service (IRS) does have some programs that help taxpayers who are having problems paying their tax bills. While the IRS can be aggressive in going after delinquent taxpayer, they do understand that many fail to pay their taxes because of economic misfortune.

The IRS created its "Fresh Start" initiative to help these taxpayers. The initiative provides streamlined procedures for taxpayers to obtain installment agreements, offers in compromise and Notices of Federal Tax Lien (NFTL). 

The tax complexities of overseas accounts and work

The world of tax compliance is becoming a very complex place for Americans who live abroad. Not only because of the Foreign Account Tax Compliance Act (FATCA), which created significant disclosure requirements for offshore accounts of U.S. citizens, and can lead to Foreign Bank and Financial Accounts (FBAR) penalties, which can be considerable.

At one time, many could escape these disclosures by inadvertence or design, and because of bank secrecy laws and the difficulty of locating and identify these accounts. No longer, as the FATCA brings more foreign banking institutions into disclosure agreements with the Internal Revenue Service (IRS), if you fail to disclose foreign accounts, it is becoming more likely that your financial institution will do it for you.

The name gives it away

The Internal Revenue Service's (IRS) view of certain types of tax shelters is easy to ascertain merely by the title it uses to describe them; abusive tax shelters. While a taxpayer is entitled to pay no more tax than they are obligated by law to pay, the IRS sometimes has a difference of opinion regarding the concept contained in the word "obligated."

Taxpayers are can reduce their tax burden by such strategies as giving gifts to recognized charities or placing income into tax-advantaged investment vehicles. But sometimes the temptation becomes one of aggressively shifting income and earnings. And when sophisticated schemes involve a structure only exists only to avoid taxes, it is likely to garner the attention of the Service's Criminal Investigation (CI) division.

Offshore accounts part of the IRS "Dirty Dozen" again

For anyone who thought that issues involving offshore bank accounts and the Internal Revenue Service's (IRS) interest in collecting taxes related to those accounts was diminishing in light of the Service's funding and credibility problems, one of their latest releases should put any doubts to rest.

IRS Commissioner John Koskinen calls attempts to hide income and money in offshore accounts a "bad bet." And the IRS again includes efforts to hid income overseas to avoid taxes as one of their "dirty dozen" tax scams for 2015. 

Are you ready to be audited by the IRS?

Few items are lower down on most people's wish list than a tax audit. The notice from the Internal Revenue Service (IRS) of an audit of their tax return is something that can cause fear and loathing among most taxpayers.

Because few people actually have their returns audited in a given year, about 8.5 million in 2010, much speculation and concern accompanies what goes on in an audit, but in most cases, it you should be able to survive the ordeal.

Taxpayer Advocates reports IRS inadequately funded

No matter what tax issue you may have, for federal taxes, you have to deal with the Internal Revenue Service (IRS). Whatever your views on taxes may be, at the end of the day, the quality of your experience with the IRS is likely to decline next year, according to a report from the National Taxpayer Advocate (TA).

Her report details that service from the IRS is falling due to a 17 percent cut in the inflation- adjusted budget for the agency in the last five years, combined with an increase in the demands placed on the agency. 

And then there were none? FATCA compliance grows

The Vatican is known as the seat of the Pope, the spiritual leader of the Catholic Church. It is also known for its priceless collection of art and architecture, including the Sistine Chapel and St. Peters.

And now it may be known for Form 8938 and the need for Americans and U.S. green card holders with bank accounts with the Vatican Bank to disclose those accounts to the Internal Revenue Service (IRS), if they fall within the requirements of the U.S Financial Accounting Tax Compliance Act (FATCA).

"John Doe" summons issued in overseas tax investigation

For U.S. citizens with overseas financial accounts, the net the Internal Revenue Service (IRS) uses just became wider. Last week, the Department of Justice (DOJ) received approval from a federal judge for the use of "John Doe" summons for numerous entities, including FedEx, UPS and The Federal Reserve Bank of New York that may have been used by a Panamanian firm to transfer funds to its clients.

A "John Doe" summons is a powerful investigatory tool that law enforcement, the government and the IRS use when they suspect illegal activity in connection with an entity, but do not know the precise identity of potential suspects.

FBAR and the audit potential

A tax audit by the Internal Revenue Service (IRS) of your income taxes is one of the least welcome events in the life of most taxpayers. The prospect of an audit, which can range from a simple paper audit done via the mail, to an audit that brings IRS special agents into your home or business can be extremely unnerving.

Even you are certain that your tax filings have been scrupulously correct, the byzantine-hall-of-mirrors that can be the Internal Revenue Code and its accompanying thousands of pages of interpretations and enforcing regulations, can lead anyone to second-guess their own returns.

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