Posted on January 03, 2014 in Taxation Law

National Taxpayer Advocate Nina E Olson has released her annual report to Congress for 2013. In the report, Olson calls for the Internal Revenue Service to establish and implement a Taxpayer Bill of Rights.

According to the Report, a Bill of Rights like this would help establish In General Revenue Service goals, and performance measures, and help provide guidance for federal employees when they deal with taxpayers. More importantly, the Bill of Rights would provide information to American taxpayers that will help them while dealing with an Internal Revenue Service employee. Currently, most taxpayer rights are contained in the Internal Revenue Code, but these are not compiled in a comprehensive and coherent manner, and therefore, California tax lawyers find that most American taxpayers remain unaware of their rights.

This is not the first time that Olson has recommended such guidelines. Earlier too, she had called for the adoption of a Taxpayer Bill Of Rights, because when taxpayers are treated better, rather than being treated in an arbitrary manner, they learn to trust the system, and also become more likely to comply with tax laws.

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 Posted on December 26, 2013 in Taxation Law

A trust that is specifically designed to take advantage of a federal tax loophole created in 1990, is helping many billionaire families avoid paying taxes, and in a perfectly legal manner. The trust is called the Grantor Retained Annuity Trust, or GRAT, and it is helping many wealthy billionaires to avoid paying taxes legally. In fact, according to a recent piece that was published in Bloomberg Politics, some of the richest Americans have been able to avoid taxes to the tune of $100 billion merely using GRAT.

How it works is like this. Under the current tax laws, individuals and couples who are worth more than $ 5.25 million, and individuals and couples who are worth more than $10.5 million, will have the federal estate tax applied to them. However, when it comes to inheritance, the value of the estates above these exemptions are liable to be taxed a gift tax at the rate of 40%. If families want to pass on their assets to their children during their lifetimes, they are only allowed to give a maximum of $ 28,000 a year to one person without having the gift tax levied on them.

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 Posted on November 02, 2013 in IRS Scams

The Internal Revenue Service is warning about a sophisticated telephone tax scam that is being reported from around the country. The scammer is specifically targeting taxpayers, especially persons who have recently immigrated into the country. Under the scam, people are being informed that they owe money to the Internal Revenue Service, and that the money must be paid promptly via a wire transfer or a preloaded debit card. If the taxpayer refuses to pay, then the caller threatens the person with arrest, deportation or suspension of his license.According to the Internal Revenue Service, taxpayers around the country must be warned about the scam, because these persons are currently operating in all corners of the country. These incidences are being reported from all states, and the Internal Revenue Service wants to inform all taxpayers that it has not designated any persons to make such calls. If you receive a call from someone who claims to represent the Internal Revenue Service, you must know that any person who represents the federal tax agency will never ask you for your credit card number over the phone. He will also never ask you for a prepaid debit card or wire transfer of money. Any such action should alert you to the possibility that the person you are speaking to is trying to defraud you.If you get a call from someone who claims to be from the Internal Revenue Service, asks you money, and threatens to get you arrested, deported, or get your business or driver's license revoked if you don't pay the money immediately, you must know that it is not the IRS you are speaking to at all.The Internal Revenue Service is asking all people who receive such phone calls to call the IRS at 408-866-1810.

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 Posted on October 22, 2013 in Taxation Law

The results of a new poll that was conducted recently confirmed what every California tax lawyer already knows-Americans have a very negative view of the Internal Revenue Service. The federal agency for tax matters was ranked at the bottom of the pile in popularity.The survey was conducted byPew Research, and found that overall, public trust in federal government agencies is at all-time record lows. However, overall, the poll also found that Americans have a favorable view of most government agencies and departments, and also have an overall positive view of federal workers. However, when it comes to the Internal Revenue Service, feelings seem to be not- so- positive.The respondents in the survey were asked to rate 13 federal agencies and institutions. Out of these, nine institutions were regarded favorably by 60% or more of the respondents. However, the IRS was the only federal agency which was rated more unfavorably than favorably by the public. Approximately 51% of the public expressed a negative view about the tax agency, while approximately 41% had a favorable opinion about the IRS. However, when it came to the other federal agencies that were included in the survey, most of the respondents had favorable opinions to express. For Instance, the Centers for Disease Control and Prevention received a 75% favorable rating in the survey, while the Veterans Administration got a 68% favorable rating. The Department Of Homeland Security was rated favorably by 66% of the respondents.Republicans seemed to have the worst opinion of the Internal Revenue Service, with just 23% having a favorable opinion of the agency. Approximately 65% of Democrats and 40% of independents expressed a favorable opinion of the Internal Revenue Service.

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 Posted on September 27, 2013 in Tax Audits

The Internal Revenue Service has, for weeks now, been embroiled in a controversy that alleged that some of its top officials were involved in unfair scrutiny of Tea Party groups in tax matters. Lori Lerner, the official who was the subject of an investigation into the matter by Congress, recently retired.

The Internal Revenue Service recently released a statement, saying that Lerner has retired, effective immediately. Lerner served as the agency's former director of exempt organizations.

Since May, she had been placed on administration leave. An internal agency board was soon due to begin the process of firing her, based on breach of duties and mismanagement.

Lerner was in charge of that wing of the agency that is responsible for reviewing applications from groups claiming tax exemption. In 2010, however the office under Lerner began targeting some groups for further scrutiny in tax-related matters, based on whether they had the words "Tea Party" as part of their names.

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 Posted on August 21, 2013 in Taxation Law

There has been a significant increase in the number of American citizens living abroad who have decided to give up their passports. That significant increase is being linked to a change in tax laws that is forcing many persons living abroad to wonder whether it is really worth holding onto their US citizenship any longer.

The United States currently is the only country to continue taxing citizens no matter where they live around the world. Now, a new tax hike looms and the hike will employ stricter assets disclosure laws under the Foreign Accounts Tax Compliance Act. Many Americans currently living abroad will feel the impact of these laws.

According to estimates, in the three months through June of this year, as many as 1,131 American citizens living abroad renounced their citizenships, and turned over their passports at embassies around the world. During the same period of time in 2012, there had been just 189 people who renounced citizenship. During the first six months of 2013, as many as 1,810 American expatriates decided to hand over their passports. That was a six-fold increase, and those numbers definitely merit attention.

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