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National Tax Resolution Blog

Appealing of tax audits

Michigan taxpayers can request an appeal when there are disagreements regarding the result of an audit. The appeal involves filing a written protest. Generally, you will only have 30 days to appeal the determination once receiving a letter from the IRS.

The IRS provides instructions on the filing of the written protest. The protest will need to include personal information, facts of the case, the laws and facts supporting your case, and a listing of your disagreements. However, you will need to stick to the facts as you can face perjury charges over any false statement in the protest.

Be wary of claims concerning identity theft

Sometimes, identity theft is unavoidable. While it is good to be cautious, not every piece of advice advertisers provide is going to prevent identify theft from occurring.

The IRS provides a number of updates and announcements regarding the topic of identity theft. It is in their best interests to prevent identity theft from occurring as well because they do not wish to be in the middle of any controversy.

Does the IRS target immigrant business owners for audits?

Does the IRS target immigrant business owners for audits? The answer should be no, but for foreigners and green card holders there could be more intense scrutiny. While common in states such as Texas and California where many business owners are immigrants, it can also occur in Michigan where an immigrant owns a gas station.

The legislative calls to expand the authority of the IRS to take on some roles of US Immigration and Customs Enforcement (ICE) have largely gone nowhere. Added penalties for employers who hire undocumented workers, however, remain talking points on Capitol Hill. And an IRS audit that turns up employment verification issues could involve other federal agencies. Underreporting cash transaction is another problem that could lead to a lengthy audit process and hefty penalties.

Voluntary disclosure programs and offshore assets

The IRS may be expanding amnesty programs for taxpayers facing penalties due to reporting issues regarding their offshore accounts. This possibly is because the IRS views such programs as a success. The aim is to recover even more money owed.

The aggressive efforts by the treasury department to locate undeclared offshore assets began in 2009. Eventually, it then offered a number of programs to allow taxpayers to make voluntary disclosures. In return, taxpayers would only have to face certain fixed penalties and receive assurances that they would not face criminal penalties.

When cancelation of debt becomes income

Michigan taxpayers heavily in debt often have only a limited number of options. If they fail to make a house payment, they can face foreclosure. On the other hand, if they negotiate with creditors to reduce the amount of debt they owe, they may then have to pay additional taxes. This is especially common with forgiveness of credit card debt.

Lenders are required to issue a 1099-C concerning the forgiveness or cancellation of debt. The 1099-C will specifically list the amount of debt that will go unpaid. This amount in turn the taxpayer must report as income.

Tax law changes and Detroit's blue-collar workers

Recently named "America's Comeback City," Detroit has a lot to be proud of. As the economy evolves, Michigan's largest city is thriving. The poverty rate is lower than the national average, its unemployment rate continues to drop and revitalization efforts are infusing new blood into neighborhoods.

More than one million blue-collar workers make up nearly 40 percent of the entire workforce in Detroit. The auto industry established the city as a hub for blue-collar workers. Automobile manufacturing companies are still the largest employers in the city with the healthcare industry employers in second place.

Tax debt and your passport status

The IRS obviously wants taxpayers to pay any back taxes they may owe. For this reason, the agency is encouraging individuals to enter into payment agreements to resolve this issue.

The IRS has the ability to entice individuals into entering such agreements. For example, the Fixing America’s Surface Transportation (FAST) Act requires the State Department to deny passport applications or reject renewal of passports when notified by the IRS that an individual is seriously delinquent in paying their taxes.

The IRS and statutes of limitation

Courts continue hearing cases concerning filings of the Report of Foreign Bank and Financial Account (FBAR). There are significant penalties that accompany the failure to file an FBAR. This can include significant fines and even prison time.

The IRS does not have unlimited powers, however. As with the violations of other tax laws, there are restrictions as to how far the IRS can look back when it comes to investigations. A recent tax court decision looked at whether the IRS could retroactively go beyond the usual three-year statute of limitations regarding a failure to file an FBAR because of later changes to the law.

When a startup's shoddy accounting causes W-2 problems

It is the season to collect tax documents. Payroll tax problems that may have been too small to catch on a pay period basis may show up as you review your W-2.

You place a lot of trust in an employer to withhold and pay over taxes to federal and state agencies. For many startups, the focus might be on developing an idea - for example, synchronization and file backup services that rival competitors - instead of payroll practices. Transition is ownership or venture capital acquisitions can exacerbate problems. What happens if your tech startup has never invested in proper accounting protocols and screws up your W-2?

The impact of FATCA remains strong

According to Swiss international financial advisors, the Foreign Account Tax Compliance Act (FATCA) continues to impact dealings when it comes to international accounts and investments. This is true even though we hear talk of phasing FATCA out.

FATCA went into effect in 2010. It requires foreign banks and institutions to report information concerning U.S. citizens with more than $10,000 in accounts. By requiring such information, the IRS can learn the identities of individuals who have not reported offshore financial assets. The penalties for failing to report on such assets are severe. These penalties include bank levees, seized assets, wage garnishments, and even jail time.

When you hire us, we can help: you:

  • Obtain emergency relief from IRS actions
  • Stop the IRS from garnishing your wages
  • Prevent levees from being placed on your bank accounts
  • Keep tax payments and penalties from spiraling out of control

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