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Fort Lauderdale Tax Law Blog

Passport Revocation Gives the IRS More Leverage Against Taxpayers

The IRS already has many tools at its disposal to force taxpayers to pay delinquent tax debts. Recently, the IRS added another weapon to its arsenal. Now, taxpayers with significant tax deficiencies could be barred from traveling internationally, as the IRS is revoking or denying passport applications and renewals for taxpayers with significant tax liabilities. This raises potential complication for domestic travel as well. For taxpayers living in states whose driver's licenses and identification cards do not meet certain standards (as part of the REAL ID Act) their passports will no longer be available as a valid ID alternative for use with TSA while traveling by air within the United States.

The Internal Revenue Code §7345(e) in conjunction with the "FAST Act" (see Fixing America' s Surface Transportation Act, Pub. L. No. 114-94, § 32101), enacted on December 4, 2015, authorizes the IRS to send notice to the State Department to deny, revoke, or limit a taxpayer's passport if the taxpayer has a "seriously delinquent tax debt" and other collection procedures, including filing a lien or placing a levy, have been exhausted.

What cash buyers of high-end residential real estate need to know

The U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) has substantial resources and goes to great lengths to investigate and identify individuals and businesses suspected of money laundering, tax fraud, and other white-collar crimes. As part of this effort, it recently renewed a Geographic Targeting Order (GTO) requiring title companies to divulge the names of individuals making large cash-only purchases of residential real estate.

What is the rationale for the Geographic Targeting Order?

In short, many purchasers of residential real estate are using LLCs and other corporate entities during these transactions. Under the GTO, title companies must provide the identities of the individuals using the LLCs. In previous GTOs, FinCEN has stated that nearly one-third, or 30 percent, of the transactions involve a buyer who has been named in a "suspicious activity report."

Audits are decreasing, but audits on the wealthy could be on the rise

The IRS' resources have diminished over the past five years. Due to budget cuts, the number of IRS enforcement officers has decreased from a high of nearly 23,000 agents in 2010 to approximately 16,000 agents presently. For this reason, audits are at historic lows with only one out of every 143 taxpayers subject to tax examination.

Obviously, the decline in IRS resources and decreased number of audits will not cause most taxpayers to lose any sleep, even with the knowledge that audits are necessary for our tax system to function properly. While most taxpayers have a lesser chance of facing an audit, there will be an increase of focus by the IRS on one particular group of taxpayers, the wealthy.

Employment tax compliance: why the stakes are so high

Employment taxes pose multiple challenges for businesses.

One of these challenges is that decisions about how to classify workers -- as employees or as independent contractors -- create dilemmas for businesses. Another is that failure to pay employment taxes can lead to civil fines and even criminal prosecution. In this post, we will take note of both of these aspects of employment tax compliance for businesses.

Dividends or interest from foreign sources: Should you take the foreign tax credit?

Avoiding double taxation of your foreign income requires careful tax planning. There are many factors involved, from the source of the income to your overall tax compliance strategy.

Given these factors, when does it make sense to take the foreign tax credit? In this post, we will discuss that question as it applies to interest or dividend income.

Foreign asset filing requirements: June deadlines

For U.S. taxpayers with foreign assets, the reporting that is now required to remain in compliance with U.S. tax law requires several different steps.

In this post, we will outline these steps and remind you of upcoming filing deadlines. Keep in mind that foreign account reporting is a complex subject that is best addressed with the counsel of a skilled tax attorney.

Making an offer in compromise: eligibility criteria and acceptance trends

An offer in compromise (OIC) is a way to potentially resolve your tax debt with the IRS for less than the full amount owed. It is a potential resolution, not a certain one, because the IRS is not obligated to accept the offer.

In this post, we will inform you about the upward trend in OIC acceptance rates and the role that an experienced tax attorney can play in using an OIC effectively.

Offshore Voluntary Disclosure Program Changes

The Offshore Voluntary Disclosure Program (OVDP) has been recently updated. Our Fort Lauderdale and Miami tax attorneys can assist you during your disclosure process and advise you on the best course of action for you situation. Not to mention that FATCA goes into effect July 1, 2014. In light of the Modified 2012 Offshore Voluntary Disclosure Program (2014 OVDP) and the Financial Account Tax Compliance Act (FATCA) deadlines, it is clear the IRS is cracking down on offshore tax evasion. One major change to the program is the increase in the Miscellaneous Title 26 offshore penalty from 27.5% of the total account assets to 50% of the total account assets.

IRS Commissioner's Remarks at Conference Hint at OVDP Changes

Koskinen.jpgSpeaking at an International Tax conference recently, the commissioner of the Internal Revenue Service implied that changes might be in the works for the agency's offshore voluntary disclosure program (OVDP). The changes, if created, would be an important breakthrough for certain expats, who have been living (and banking) overseas for years, or even decades, since the changes potentially would allow them to come into compliance without facing the same sort of punitive penalties imposed on US citizens whose non-compliance was willful.

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