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IRS Methods of Indirectly Determining Taxable Income

There are various audit and investigative techniques available to corroborate or refute a taxpayer’s claim about their business operations or nature of doing business. IRS audit or investigative techniques for a cash intensive business might include an examiner determining that a large understatement of income could exist based on return information and other sources of … Continue reading IRS Methods of Indirectly Determining Taxable Income

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FIRST TIME ABATE of IRS Penalties

The Internal Revenue Manual (IRM) contains a Penalty Handbook intended to serve as the foundation for addressing the administration of penalties by the IRS. It is the “one source of authority for the administration of penalties. . .”[1] and provides a “fair, consistent, and comprehensive approach to penalty administration.” As such, the IRM is often … Continue reading FIRST TIME ABATE of IRS Penalties

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OVDP & Streamlined Procedures: Expect the Unexpected!

The IRS recently announced Streamlined Filing Compliance Procedures in an effort to encourage U.S. taxpayers to come into compliance with their reporting and filing requirements associated with varying interests in foreign financial accounts and assets. The streamlined procedures require the filing of original (for non-residents) or amended (for residents) tax returns. Such tax returns must not … Continue reading OVDP & Streamlined Procedures: Expect the Unexpected!

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Critical Links – 2014 OVDP & Streamlined Filing Compliance Procedures

The IRS recently announced an expansion of the streamlined filing compliance procedures announced in 2012 and important modifications to the 2012 Offshore Voluntary Disclosure Program (OVDP). For eligible taxpayers residing outside the U.S., the revised Streamlined Filing Compliance Procedures provide that all penalties will be waived. For eligible taxpayers residing in the U.S., the revised … Continue reading Critical Links – 2014 OVDP & Streamlined Filing Compliance Procedures

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IRS OVDP OPT OUT vs. TRANSITION TO THE NEW STREAMLINED PROCEDURES?

The Internal Revenue Service recently announced significant changes in IR-2014-73[i] regarding their offshore voluntary compliance programs, providing new options to help both resident and non-resident U.S. taxpayers whose failure to disclose their offshore financial accounts was non-willful. The expanded 2014 streamlined procedures are available to a wider population of U.S. taxpayers living outside the country and, … Continue reading IRS OVDP OPT OUT vs. TRANSITION TO THE NEW STREAMLINED PROCEDURES?

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IRS Changes Streamlined OVDP Reducing FBAR Penalty Exposure!

U.S. taxpayers with previously undisclosed interests in foreign financial accounts and assets continue to analyze and seek advice regarding the most appropriate methods of coming into compliance with their U.S. filing and reporting obligations. Many are pursuing participation in the IRS offshore voluntary disclosure program (the OVDP, which began in 2012 – modeled after similar … Continue reading IRS Changes Streamlined OVDP Reducing FBAR Penalty Exposure!

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IRS Makes Major Changes to Offshore Voluntary Disclosure Program !

The Internal Revenue Service announced major changes in IR-2014-73 regarding their offshore voluntary compliance programs, providing new options to help both taxpayers residing overseas and those residing in the United States. The changes are anticipated to provide thousands of people a new avenue to come into compliance with their U.S. tax obligations. The changes include … Continue reading IRS Makes Major Changes to Offshore Voluntary Disclosure Program !

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Reminder: 2013 FBAR Filing Due by June 30, 2014

U.S. persons having a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account may be required by the Bank Secrecy Act to report their interest in the account to the IRS by electronically filing by June 30, … Continue reading Reminder: 2013 FBAR Filing Due by June 30, 2014

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Zwerner: Jury Determines 150% FBAR Penalty Applies – Excessive Fines Clause to the Rescue??

U.S. taxpayers with previously undisclosed interests in foreign financial accounts and assets continue to analyze and seek advice regarding the most appropriate methods of coming into compliance with their U.S. filing and reporting obligations. Many are pursuing participation in the current IRS offshore voluntary disclosure program (the OVDP which began in 2012), modeled after similar … Continue reading Zwerner: Jury Determines 150% FBAR Penalty Applies – Excessive Fines Clause to the Rescue??

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PROTECTING PRIVILEGES DURING AN IRS EXAMINATION

A better-equipped IRS has been able to ferret out potentially sensitive issues in a manner often compromising the relationship between a taxpayer and his own tax representative. If there are potentially sensitive issues, the taxpayer should be interviewed by counsel to determine whether there is a need to fully preserve potentially privileged information. In turn, … Continue reading PROTECTING PRIVILEGES DURING AN IRS EXAMINATION

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IRS PROTECTIVE CLAIMS FOR REFUND by EDWARD M. ROBBINS, Jr.

If the resolution of a tax refund claim is contingent on future events and may not be determinable until after the time period for filing a claim for refund expires, practitioners can file a protective claim for refund on behalf of the taxpayer. A protective claim can be either a formal claim or an amended … Continue reading IRS PROTECTIVE CLAIMS FOR REFUND by EDWARD M. ROBBINS, Jr.

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ERRONEOUS REFUNDS AND CREDITS by Edward M. Robbins, Jr.

If the Internal Revenue Service makes an error in issuing a refund, it can recover the amount incorrectly refunded by filing a suit for erroneous refund. Section 7405[1] provides the Service with the ability to recover erroneous refunds within two years of payment. The two-year period can be extended to five years if any part … Continue reading ERRONEOUS REFUNDS AND CREDITS by Edward M. Robbins, Jr.

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