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IRS has announced that beginning March 1, husbands and wives who filed joint tax returns cannot use the old POA form 2848 (which allowed both taxpayers to sign a single POA). Instead, they must separately sign the new POA form 2848 which was revised in October. This is important for any tax lawyer, CPA, or enrolled agent (or the new classification "registered tax return preparer") representing clients before the Internal Revenue Service. The new POA also requires the representatives provide their PTINS.    
New client inherited cash from his father. It was buried for many years and the bills are old, musty and mildewy. Based on the facts as I was told them, I think the funds are not taxable to my client. However, that doesn't mean he wants to invite an audit, know what I mean? So he's asking about the CTR (cash transaction reporting) requirements b/c if he takes $300k cash to the bank, wouldn't that invite an audit? Any suggestions? Nothing illegal or unethical, please. Just practical input for your average guy who digs up his inheritance and (litterally) needs to launder the cash.
New IRS procedures allow for the taxpayer to file an Application for a Withdrawal of a Federal Tax Lien (form 12277) after it is paid in full. The advantage of a Withdrawal, rather than merely the Release which is always filed when the tax is paid, is that from a credit standpoint, the Withdrawal acts as if the FTL was never filed in the first place. That's better by far! If you file this on behalf of your client, cite as the reason "in the taxpayer's and government's best interest" (the last box of question 11) but I also cite the new IRS pronouncement as further reason why it should be granted (IR-2011-20). If you would like our assistance, please contact Larry@TaxProblemSolver.com or call 407-629-5923 or 727-894-2099. Thank you!
On November 21, 2011, the President signed into law H.R. 674, the “3% Withholding Repeal and Job Creation Act” (the Act). The Act repeals Code Sec. 3402(t)'s controversial 3% withholding requirement on government contractor payments.
Offers in Compromise and Dissipated Assets By Andres Molgora, CPA and Christian J. Burgos, Esq., LL.M.
December 2011
Under IRC Sec. 7122(a), taxpayers may request an offer in compromise (OIC) with the IRS to settle outstanding tax liabilities for less than the full amount owed. To qualify, taxpayers must prove that their outstanding tax liabilities exceed the amount of income and assets available to satisfy those liabilities during the time remaining in the collection period, generally, the statute of limitation. This is known as establishing the taxpayer’s reasonable collection potential (RCP).
Larry Heinkel, IRS Tax Lawyer, shares how to avoid IRS and Department of Revenue DOR tax liens Here's a typical problem: a dying corporaton has $100k of assets to sell but they are subject to an IRS or Department of Revenue DOR tax lien. There are significant IRS trust fund taxes or state sales tax owed. The responsible persons would like to sell the assets and have the funds applied to the IRS trust fund portion (or sales tax portion) of the tax debt. But with the tax lien, IRS (or DOR in the case of unpaid sales taxes) will apply the proceeds to the government's best interest (ever notice the government's best interest is never the same as ours?). What to do?
Peter J. Reilly of Forbes magazine, recently penned a short article about how IRS' Criminal Investigaton Division ("CED") has increased its enforcement actions which all of us, as taxpayers, are probably happy to hear about. And as someone working in that field, whose business is helped by such increased activities, I'm VERY glad to hear this. In FY 2010, CID completed 4,325 investigations (its goal was 3,900), but the average time to investigate was REDUCED to 365 days. Wow! Recently, I had a young woman in my office who was concerned about possible criminal problems because her soon-to-be ex-husband didn't report $10k in one year. While there are no guarantees, generally IRS looks for 3 years of under-reported income before it will refer a case for criminal prosecution. Put simply, it wants to find a "pattern" - a single year ommission, while prosecutable, could easily be dismissed as "a mistake", or "an honest error", while ommissions over 3 or more years usually means there was provable fraud. Further, it helps if you are someone of "high visibility" (doctor, lawyers, politicians get in the news, single mothers don't). Regardless, I always tell people, just like in the television shows, anything you say can be used against you. I had a client years ago who came to me AFTER he had been interviewed by CID on his front steps (no Miranda warning because he wasn't in custody). He said, "We didn't talk long, just until dark." It was July - darkness comes about 9pm - he talked about 5 hours (and was later convicted!!). Any other war stories out there? Larry
Lack of Funds Not a Defense to Criminal Tax Fraud Charges Although IRS rarely makes criminal cases for failure to pay payroll taxes, recently a man was sentenced to 22 months in prison (and 36 months of supervised release with an order for restitution), after being convicted of fifteen counts of Failure to Account for and Pay Over Withholding and FICA Taxes, in violation of 26 U.S.C. § 7202, and three counts of Making and Causing the Making of a False Claim for a Tax Refund, in violation of 18 U.S.C. § 287. The defendant had failed to pay the taxes for approximately 6 years despite withholding taxes from his employees.
The defendant claimed that because he was financially unable to pay the withheld employment tax, the government could not convict him. The 6th Circuit Court of Appeals affirmed his conviction, stating that his defense was "B.S." (maybe in more legal terms than that, but you get the point). The appellate court found every individual must conduct his financial affairs in such a way that he is able to pay his tax liability when it becomes due.
So, while these criminal cases are rare, "let's be careful out there.' (Can anyone name the '80's television show that line is from?)
Larry
The due date for corporations, partnerships, trust is Thursday, September 15. UNLESS, you (the preparer) are located in an area under an evacuation order or "severe weather warning" because of Hurricane Irene (even if the preparer is located outside of the federally declared disaster areas). So says IRS in an announcement issued on Sept. 1, 2011. The new deadline is Sept. 22, 2011. There is additional relief for taxpayers actually living in the diaster areas.
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Disclaimer: The purpose of this site is to present options available for resolving outstanding debt issues, not to provide legal or professional advice. Each person's case is fact dependent. You should not assume that any particular option discussed herein would apply in your case or be beneficial to you. You should consult with an experienced and licensed attorney to review the options that may be applicable to your fact pattern. Sending us an email or requesting information does not create an attorney-client relationship.
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