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Fraudulent Failure to File Tax Returns – 75% of the Tax Due!

Failing to file returns is not a reasonable response to the inability to pay the tax liability associated with the returns. If in doubt, file the returns and work out a payment arrangement with the IRS. Also, know that the civil “failure to file” penalty accrues at 5.0%/month (up to 25% of the tax deficiency). … Continue reading Fraudulent Failure to File Tax Returns – 75% of the Tax Due!

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PERENNIAL NOL QUESTION (WITH ANSWER) by EDWARD M. ROBBINS, JR.

I get this question from practitioners and taxpayers several times a year . . . Question: We are under examination for our corporation in an open loss year, and now the IRS wants to go back and look at a closed year where we took part of the loss as a carryback.  How can they … Continue reading PERENNIAL NOL QUESTION (WITH ANSWER) by EDWARD M. ROBBINS, JR.

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FILE LATE AT YOUR PERIL by AVRAM SALKIN

In its recent opinion in Mallo v. United States of America,[1] the Tenth Circuit Court of Appeals included broad language indicating that a late filed tax return is not a tax return for purposes of determining a discharge of tax liabilities in bankruptcy. The underlying district court denied a discharge on the grounds that the return … Continue reading FILE LATE AT YOUR PERIL by AVRAM SALKIN

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Application of TEFRA to Employment Tax Examinations By Krista Hartwell

On December 12, 2014 the Office of IRS Chief Counsel published Legal Advice Issued by Field Attorneys (LAFA) 20145001F, concluding that the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), as codified in Sections 6221 through 6324, “does not apply to employment tax examinations or worker classification proceedings for entities that are otherwise subject … Continue reading Application of TEFRA to Employment Tax Examinations By Krista Hartwell

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SECTION 6901’s TWO-PRONG INQUIRY by LACEY STRACHAN

Although shareholders are generally not liable for debts of a corporation, shareholders may be liable for a corporation’s tax liability if they are considered transferees under a state’s fraudulent conveyance laws.  Where such liability exists, § 6901 of the Internal Revenue Code (“IRC”) allows the IRS to assess and collect the tax liability from the … Continue reading SECTION 6901’s TWO-PRONG INQUIRY by LACEY STRACHAN

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The Effect of Latent Tax Liabilities on Stock Values by Avram Salkin

The IRS has consistently taken the position that potential tax liabilities of C corporations, S Corporations, and individuals should not be considered when valuing stock or other assets.  For example, should the stock of an S Corporation’s stock be reduced if the corporation holds assets that are worth far more than their tax basis?  If … Continue reading The Effect of Latent Tax Liabilities on Stock Values by Avram Salkin

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How Long Should I Keep Tax Records?

Many taxpayers hoard records such that they can be appropriately prepared “if and when” an IRS examination occurs. Others often inquire as to which records should be maintained and for how long. Some routinely destroy relevant documents on the mistaken belief that an examination result will somehow be enhanced if certain documents simply don’t exist. … Continue reading How Long Should I Keep Tax Records?

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Random Thoughts re IRS Examination Representation

It is extremely important to have a working knowledge and appreciation for the administrative process in which tax returns are fi led, reviewed and examined. This knowledge allows the practitioner an opportunity to provide an efficient, invaluable service to his clients and to the system of tax administration. The administrative process should not be abused … Continue reading Random Thoughts re IRS Examination Representation

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AGOSTINO & ASSOCIATES NEWSLETTER – The Taxpayer Advocate Service: Guarantors of the Taxpayer Bill of Rights

AGOSTINO & ASSOCIATES –To download a great article prepared by our very close friends at the Law Firm of Agostino & Associates in Hackensack, NJ ( www.agostinolaw.com ), see the Agostino & Associates November Newsletter https://drive.google.com/file/d/0B719qAMBEjGQUjlDb3VJTDVkZDA/view?pli=1 The Taxpayer Advocate Service – Guarantors of the Taxpayer Bill of Rights By Frank Agostino & Matthew Turtoro –  The Taxpayer Advocate Service … Continue reading AGOSTINO & ASSOCIATES NEWSLETTER – The Taxpayer Advocate Service: Guarantors of the Taxpayer Bill of Rights

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Voluntary Disclosures by Non-Filers

Practitioners often struggle with the issue of whether a taxpayer can avoid a criminal tax investigation by making a disclosure to the IRS. A “voluntary disclosure” generally involves the process of contacting the IRS in some manner and voluntarily reporting previously undisclosed income (or false deductions) through an amended return or the filing of a … Continue reading Voluntary Disclosures by Non-Filers

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Warning Signs of an IRS Criminal Tax Prosecution Referral

Every IRS examination potentially involving tax fraud requires a thorough examination of not only what transpired but, almost more importantly, why something did or did not transpire. Tax practitioners must understand the process by which a civil tax case winds its way through the system. Identifying the decision-makers and the factors they consider important may … Continue reading Warning Signs of an IRS Criminal Tax Prosecution Referral

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IRS: Common Badges of Tax Fraud

Section 6663(a) provides that, if any part of an underpayment is due to fraud, there shall be added to the tax an amount equal to 75% of the portion of the underpayment which is attributable to fraud. The IRS bears the burden of proving by clear and convincing evidence that: (1) An underpayment of tax … Continue reading IRS: Common Badges of Tax Fraud

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