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National Tax Resolution Blog

Final rules on substantiation of charitable contributions

The IRS issued final rules pertaining to charitable deduction substantiation. With a few exceptions, these regulations will impact charitable contributions made after July 30, 2018.

The new regulations concern cash contributions to charities. These also clarify substantiation requirements pertaining to donations of property. There are also sections pertaining qualified appraisals, and defining what is a qualified appraiser.

Tax scams vs. legitimate IRS inquires

Tax scams will likely continue and possibly even increase. One possible reason there are so many tax scams that exist is because of taxpayer confusion regarding the new tax laws. When a scammer claims a taxpayer is not in compliance with the law and asks for additional information, many taxpayers believe the request is from the IRS.

There are a number of ways for taxpayers to protect themselves from scams, however. A firm understanding of how the IRS operates can provide protection. For example, the IRS is not going to first inform you of an investigation by contacting you by telephone.

When an offer in compromise is the right option

An offer of compromise can allow taxpayers to pay less than the IRS alleges they owe. It is extremely common to resolve tax debt matters in this manner. But an offer in compromise is only one particular manner for the discharging of tax debt.

There are certain situations where making an offer in compromise to the IRS makes total sense. Sometimes taxpayers are facing financial hardship that makes paying off taxes owed difficult. This can mean that accounts are in what’s called Currently Not Collectible status. There may also be certain circumstances where there is doubt as to the taxpayer being liable for the debt.

The new 1040 form may not make tax filing easier

Despite promises to simplify the filing of taxes, reporting your income to the IRS may now be even more complex. With the passing of the Tax Cut and Jobs Act, there are also a number of other complexities that accompany the filing of taxes.

While the Form 1040 is now shorter, it requires greater use of schedules. One tax preparer notes that there are now “six additional schedules” accompanying this form. This does not include additional schedules required for reporting self-employment income and for other sorts of filing.

5 Strange IRS Asset Seizures

The IRS uses property seizure as a last resort when attempting to resolve tax debt. While the notion of having a car, house or bank account seized can be terrifying for many individuals and families, the IRS employs various rules, regulations and procedures to ensure that tax-payers are protected and are given every opportunity possible to resolve the tax debt either through litigation or offers in compromise. However, even with strict controls in place, the seizing of assets can run afoul of common sense. 

Extradition is possible for dealing with FATCA violations

While the Foreign Account Tax Compliance Act (FATCA) has been around for close to a decade, new developments continue to arise. For example, a federal court brought a conviction against a naturalized citizen of St. Vincent for failing to comply with the act.

What’s significant about this case is that it involves an executive of a foreign financial institution found guilty of defrauding the U.S. by failing to comply with FATCA. The U.S. took the steps of extradition to bring this individual to the U.S. to face trial. Discovery of his infractions came about due to the investigation of an undercover agent. He now faces a possible prison sentence of five years.

The OVDP and offshore reporting requirements

It's already understood that the failure to disclose foreign accounts can result in significant penalties. Yet while offshore enforcement concerning foreign accounts was significantly stepped up in 2009, many individuals failed to participate in the IRS Offshore Voluntary Disclosure Program (OVDP).

In prior posts, we discussed the tools the IRS has at its disposal make it easier for them to discover these undisclosed accounts. Under the Foreign Account Tax Compliance Act (FATCA), a whole host of foreign financial institutions are under obligation to report on U.S. citizens with offshore financial accounts. The network continues to grow with each successive year.

Report points to improper seizures by the IRS

Besides making mistakes that place taxpayers in a bind, the IRS also sometimes conduct seizures that prove to be illegal. Perhaps as many as 30 percent of such seizures violate the law in some manner.

There have already been instances of alleged wrongdoing on the part of the agency. Many conservative groups claim the IRS targeted them to excessive scrutiny. The IRS also faced accusations for seeking excessive reimbursement of various expenses.

An extension in time to challenge wrongful levies by the IRS

A common complaint concerning the IRS is the little time they give taxpayers to challenge certain determinations. Yet the IRS recently announced businesses and individuals will have additional time to bring claims concerning levies and seizures of property.

Under the recent Tax Cuts and Jobs Act of 2017, there has been an extension from nine months to two years to bring an administrative claim or file a lawsuit for wrongful levy. Also, for administrative claims within this two-year period, there is an additional extension of 12 months from the filing of the claim or for six months from when there is a disallowance of the claim for bringing a lawsuit – whichever happens to be shorter.

Are There Assets The IRS Cannot Seize?

The Internal Revenue Service has broad authority when it comes to their collection efforts. When seeking the repayment of tax debt, the IRS will often turn to asset seizure. In these situations, however, there are certain procedures that must be followed and numerous rules that must be adhered to.

In general, the seizing of assets is one of the most powerful collection tools the IRS has at its disposal. Whether the seizure is centered on cash assets such as a bank account or property such as a car that can be sold toward debt recovery, the IRS must follow a strict path before taking this collection action.

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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