Posted on July 18, 2018 in Taxation Law

Over the last few years, more and more people have begun to invest in virtual currencies such as Bitcoin, use them to pay for goods and services, and exchange them with others. However, even though the use of cryptocurrencies has increased, many people have not been properly reporting these virtual currencies on their taxes. In fact, out of the 132 million electronically filed tax returns in 2016, only 802 reported virtual currency income. This activity has not escaped the notice of the IRS, and the agency is looking to enforce tax laws on virtual currencies.

IRS Compliance for Cryptocurrencies

The IRS’s Large Business & International (LB&I) division recently identified virtual currencies as one of five new compliance campaigns it will be conducting. The LB&I division will begin using outreach to educate taxpayers about their requirements for reporting income from virtual currencies, as well as examinations (audits) of taxpayers who do not correctly report income.

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 Posted on July 10, 2018 in Taxation Law

The Large Business & International (LB&I) division of the IRS has announced several new compliance campaigns that signal where the IRS will allocate its audit resources. If you are a business owner concerned about the ramifications of a tax audit, it is advisable that you contact a qualified business tax attorney who can give you customized legal support. 

What is an IRS Compliance Campaign? 

The LB&I division of the IRS creates compliance campaigns in an effort to keep taxpayer examinations centered on issues. These campaigns, which are rolled out periodically, are meant to zero in on areas that present the greatest risk of non-compliance.

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 Posted on June 22, 2018 in Employment Taxes

While no one enjoys doing so, everyone has to pay taxes. For many people, taxes are automatically withheld from their paychecks by their employer, and their primary concern is filing their annual tax return. However, paying taxes can become more complicated for small business owners and those who are self-employed. These individuals should be sure to understand the best way to meet their tax obligations in a way that allows them to maintain financial security.

Concerns for Self-Employed Taxpayers

A person is considered self-employed if he or she is the owner of a sole proprietorship, if he or she works as an independent contractor, or if he or she otherwise operates his or her own business. People who are self-employed will not only need to file an annual tax return if they earn a net income of at least $400 in a year, but they must also make estimated tax payments on a quarterly basis.

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 Posted on June 12, 2018 in Taxation Law

Tax fraud is common in the United States; however, this type of activity often goes unreported or undiscovered. Tax fraud not only affects the government’s ability to obtain funds used to provide essential services to citizens, but fraud can also take the form of tax scams that seriously harm many individuals. If you suspect that a person, business, or organization is committing tax fraud, you should understand the steps you can take to report this fraud to the IRS.

Reporting Tax Fraud

Depending on the type of fraud, there are different methods of reporting information to the IRS:

• To report an individual or business that fails to pay taxes, improperly withholds taxes, claims false deductions or exemptions, does not report income, or files false tax returns, use Form 3949-A (Information Referral). As much relevant information as possible should be included, such as the name and address of the offender, his or her Social Security number or tax identification number, and a description of the violation that includes the time period during which it occurred and the amount of income that was not reported or taxed correctly. While you are not required to identify yourself, the IRS encourages you to do so, and you may be asked to serve as a witness if the tax evasion case goes to trial.

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 Posted on June 05, 2018 in Taxation Law

U.S. taxpayers who own assets held in foreign countries are required to report the assets to the Internal Revenue Service (IRS) and pay taxes on income from the assets. For taxpayers who have not met their reporting requirements, the IRS has provided a variety of methods for compliance, including the Offshore Voluntary Disclosure Program (OVDP). However, the IRS has announced that the OVDP will end September 28, 2018.

Offshore Tax Compliance Options

The current version of the OVDP, which was instituted in 2014, allows taxpayers with undisclosed foreign assets to become compliant with IRS requirements, thus minimizing the civil penalties they are required to pay and avoiding the possibility of criminal prosecution for tax evasion. This program is meant to allow those who have willfully failed to report foreign assets to achieve compliance and pay any taxes that are owed, as well as applicable penalties. 

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 Posted on May 26, 2018 in Tax Appeals

People and organizations can violate tax laws in the United States in a variety of ways, thus leading to disputes with the Internal Revenue Service (IRS) regarding tax assessments, collections, or other issues. After the IRS makes a decision following an audit or sends a notice of a collection action, taxpayers may be able to contest the decision through the IRS Office of Appeals. One method to begin the tax appeal process is by filing a written protest.

Requirements for a Written Protest

When the IRS makes a decision about the taxes a person owes or the methods of collecting payments, it will send a notice to the taxpayer. The taxpayer can then file a formal written protest that should include the following information:

• The taxpayer’s name and address, and a phone number indicating where he or she can be reached during the daytime;

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 Posted on May 18, 2018 in IRS Scams

Every person must pay taxes. No matter one’s job, income level, or the amount of assets owned, most people are unhappy with the amount that the government takes. But while there are many ways to legally minimize the amount of taxes a person is obligated to pay, some people take additional, illegal steps to evade paying taxes. 

Tax fraud is a crime that can result in serious consequences; however, many people also fall prey to tax scams that promise to substantially reduce or completely eliminate the taxes a person must pay. In order to avoid criminal prosecution for tax evasion, it is important to recognize and avoid these abusive tax schemes. 

Types of Abusive Tax Schemes

The IRS defines an abusive tax scheme as a violation of the Internal Revenue Code that uses multiple flow-through entities to evade taxes. Common types of abusive tax schemes include the following:

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 Posted on May 09, 2018 in Taxation Law

In today’s economy, millions of people across the United States act as freelance workers, either as a primary job or as a way to supplement income. The digital tools available to companies and workers in the gig economy allow many people to earn an income by transporting passengers, renting property to travelers, or performing a variety of other tasks. 

While many people and companies have benefited from the sharing economy, the increased prevalence of this type of labor has raised a variety of legal issues as employees seek to receive fair compensation and government entities ensure that taxes are applied correctly.

A recent ruling by the California Supreme Court will have a significant impact on gig economy workers and employers, affecting issues such as employee classification and taxes.

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 Posted on April 27, 2018 in Taxation Law

It is often said that death and taxes are the only two things that people are certain to experience. However, one’s tax obligations do not end with one’s death. When someone dies, income taxes may still be owed on his or her estate. Moreover, estate taxes or inheritance taxes may also apply. In order to ensure that taxes are filed correctly, it is important to have a strong knowledge of tax law.

Filing Taxes for a Deceased Person

After a person dies, the administrator of his or her estate must file a tax return and report all income he or she earned prior to the date of his or her death. Typically, the administrator will file Form 1040, and he or she may also be required to file tax returns for any previous years in which the deceased person failed to file a return. If necessary, the estate administrator can obtain documents related to the deceased person’s income and taxes by filing IRS Form 4506-T (Request for Transcript of Tax Return).

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 Posted on April 19, 2018 in Taxation Law

As tax season draws to an end, many taxpayers have scrambled to compile financial information and file their tax returns prior to this year’s extended deadline of April 18. During this time, many people worked with accountants or tax preparers to ensure they were able to obtain the largest possible tax refund. In many cases, however, the assistance of an experienced tax attorney can be essential when preparing your tax return, addressing complex legal issues, and avoiding potential tax penalties.

Benefits Provided By a Skilled Tax Lawyer

While a certified public accountant (CPA) will have knowledge of financial matters related to taxes, such as allowable deductions and tax credits, an experienced taxation law attorney will have a deep understanding of the legal issues related to tax audits and IRS collection. A tax attorney can help with the following:

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