The Internal Revenue Service (IRS) has taken the failure to disclose foreign assets very seriously. Taxpayers that neglect to disclose this information can face serious fines and potential criminal charges.
Who needs to file and FBAR? The United States government requires taxpayers with ownership or signature authority over a foreign asset that was valued above $10,000 at any point during the tax year file the Report of Foreign Bank and Financial Accounts (FBAR). This form is due June 30.
Homeowners can view property ownership as an investment strategy. A homeowner can justify this investment a number of different ways. In the past, one of the motivating arguments in favor of owning property was the tax break. But is that still the case?
The Tax Cuts and Jobs Acct (TCJA) made a lot of changes to the tax law. This includes some changes to portions of the tax code that impact the taxation of property. Here are three examples:
There have been many stories recently about how the Internal Revenue Service is losing resources to conduct audits and prosecute tax crimes. While it is true that the IRS may be running lean today, they still have the ability to enforce tax laws. With their resources dwindling, they continue to focus on high-profile criminal cases that will recoup large amounts of money and give the agency news coverage.
Many people think that the IRS won’t catch mistakes or misinformation left on tax documents, but hundreds of people, including many who earn millions of dollars, are still charged with tax crimes every year. One such person caught up in the IRS’ prosecution is New York rapper DMX, who was recently sentenced to one year in prison for tax fraud.
According to the Tax Foundation, the Tax Cuts and Jobs Act of 2017 (TCJA) will result in approximately one trillion dollars worth of federal revenue and economic growth. As a business owner, the potential for growth provides the incentive to maximize your company’s earning potential within the new tax law. However, companies that want to take advantage of the new tax law are finding it difficult to estimate its impact because they are not prepared for the changes.
Tax planning is a regular part of owning a business. You might delay taking income, pay off expenses quickly or donate to generously charity to reduce your tax burden, but the TCJA could radically shift the strategies your business uses – potentially for the better.
The thought of getting a notification that your tax filings are under review by the Internal Revenue Service (IRS) may cause you to break out into a cold sweat. But how common are these reviews? How worried should you be?
Overall, the IRS only audits approximately 1 percent of all tax returns. At first glance, that may seem like pretty good odds that your returns are in the clear, but keep in mind 1 percent of all tax returns translates to over 900,000 taxes that are audited every single year.
A failure to file tax returns with the Internal Revenue Service (IRS) does not always lead to criminal charges, but when it does the IRS is a fierce adversary. The agency can interrupt or even shut down a business to conduct an investigation. The IRS can take possession of the subject of the investigation's assets through a process known as civil forfeiture.
A recent case provides an example.
The new tax law has had a big impact on taxpayers throughout the country. This is particularly true for high-income earners in high tax states. These individuals are hit hard by a higher personal income tax bill.
As a result, high tax states like New York could lose out on some of their top taxpayers.
The end of tax season brings relief to tax professionals and filers alike, but it can be just the beginning of dread for one million more. According to Accounting Today, the Internal Revenue Service will audit more than one million Americans this year. Many people are fearful of an audit if they have a unique tax situation. Are you at risk for an audit in 2018? How will you respond?
Although the number of people audited tends to drop annually, that doesn't diminish the urgency required in response to it. Here are some of the factors that can make it more likely to trigger an audit.
The Supreme Court of the United States (SCOTUS) has tackled a case that questions online state sales taxes. More specifically, the court will answer when an online business is required to apply a state sales to tax to an online transaction.
How have state sales taxes applied to online transactions thus far? In the past, the answer was rooted in previous case law. In the precedent case, Quill Corporation v. North Dakota, SCOTUS found the Constitution barred the ability of a state to apply a sales tax on a business that did not have a “substantial connection” to that state.
Article after article on the Internet states that the odds of a federal audit by the Internal Revenue Service (IRS) are extremely low. Unfortunately, these stories overestimate the rate of audits conducted by the IRS.
The stories often quote the follow statistic: only “one out of 143 tax returns are audited every year.” If true, this translates to an audit rate of approximately 0.7 percent. Or, as noted in a recent piece by Accounting Today, a 1:23 chance of getting audited.
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