IRS promises more review of Partial Payment Installment Agreement Requirements

Internal Audit reveals IRS not following procedure on follow up; agency vows to improve

There is no doubt the an IRS partial payment installment agreement (PPIA) can be  an awesome IRS tax debt settlement tool. For the taxpayer, they can pay to the IRS what they can afford each month after reasonable living expenses. Meanwhile, the each month, the IRS tax debt gets close to extinction, thanks to the statute of limitations on IRS tax debt.

If you are in the an IRS partial payment installment agreement, expect the IRS to want to take a peek inside your financial affairs.
Photo credit: stock.xcng

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IRS Crackdown on Quiet/Soft Disclosures, promising audits and big penalties

Tens of thousands of taxpayers, and tax professionals decided to ignore warnings by the IRS and created a reporting scheme often called soft or quiet disclosure, something done by amending his past tax returns and filing delinquent tax FBARs without participating in the Offshore Voluntary Disclosure Program (OVDP). These crafty taxpayers looked at the FBAR-equivalent penalties (5-27.5%o f highest account value)  and thought they were too high and ignored IRS warnings. They hoped when they put all their foreign account information on an IRS form, they could cross their fingers and the IRS might leave them alone.

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June 2013 IRS FBAR News & Updates

With all the FBAR news coming out, I thought it would be a good idea to do a quick video to go over some of the bigger FBAR?OVDP news developments.

In this two-part video series, I :

(1) give a quick overview the FBAR form and its filing requirements
(2) describe the IRS crackdown on so-called soft or quiet disclosures
(3) report on news that the IRS has made no efforts to educate expatriate or recent immigrants, dual citizen, resident aliens, and VISA holders,
(4) mention FBAR education resources for tax payers, tax professionals and estate planning attorneys, and
(5) explain why many CPAs and attorneys have stopped dabbling in OVDI cases, and (6)  advise those who filed under the 2009 that they have a limited amount of time to claim a penalty reduction.

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Here is a letter form Jackie Bugnion, director of American Citizens Abroad:

To the Editor:

In his article, “The IRS Is in Big Trouble,” Tax Notes (no link, paywall), May 20, 2013, p. 951 , Christopher Bergin stated that the scandal surrounding the treatment of Tea Party applicants for section 501(c)(4) status may be the canary in the coal mine. I would like to highlight one other scandal which was signaled by National Taxpayer Advocate Nina Olson, but was ignored by former IRS Commissioner Douglas Shulman — the “bait and switch” tactics of the IRS under the overseas voluntary disclosure program (OVDP).

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Another whistleblower gives IRS information on potential tax evasion

Switzerland’s bank secrecy laws have protected clients’ names and accounts for years, in effect allowing such clients to squirrel their finances away to avoid their own country’s tax laws. In 2009 the UBS case shed light on how one of Switzerland’s premier banks would knowingly assist its clients in schemes to avoid taxes. Even after the resolution of the UBS case the Swiss banking regime steadfastly retained its bank secrecy laws; laws which, when broken, carried potentially serious consequences for the breaching party. Most recently the Swiss government requested that Spain extradite one Herve Falciani, to face trial in Spain for his breach of bank secrecy laws, but Spain refused to grant the request because the Spanish court considered Switzerland’s secrecy laws, at least in Falciani’s circumstances, to run contrary to important EU public policy considerations.

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Bitcoin is under attack, but why? What’s in it for the government? Billions.

BY: THOMAS S. GROTH, ESQ (@tsgESQ)

It’s no secret that those of us over here @IRSMedic World HQ like to talk about things like bitcoin.  We’ve written about how users of the digital currency might be required to report their bitcoin holdings to the IRS, and we’ve also discussed the complexities that might arise if, say, this attorney was paid in bitcoin.  (By the way, Robert Woods over at Forbes discusses additional issues with being paid in bitcoin here.  I’ll forgive him for being a month late on this one, because his analysis is rock-solid).  So, we like to read/write/talk about bitcoin.  But it’s hard to keep up these days, and it’s hard to know if bitcoin itself is under attack, or if bitcoin is always going to be involved when the government goes after cash-like transactions on the world wide web.    I’d say it’s the former.

To frame the issue, let’s start with some commentary from another Forbes writer, Peter Cohan.

IRS has identified 10,000 Soft Disclosures, will begin prosecuting

In Attorney Holbrook’s blog article yesterday, she wrote about the United States Government Accountability Office (GAO) OVDP report,  she discussed the strange fact that the IRS has done little to educate American citizens who may work or have worked overseas and maintain open bank accounts, brokerage accounts, or insurance accounts. 

The other shoe that dropped is the fact the yes, the IRS used the precise methodology we predicted over a year ago to detect those who filed so-called “soft” or “quiet” disclosures.

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What to do if you are one of the 24,000 HSBC bank account holders who has not disclosed foreign accounts

In unsettling news for US persons who have not disclosed the existence of foreign accounts to the IRS, Herve Falciani, an IT worker at HSBC’s Geneva branch, stole the names of 24,000 HSBC customers with private accounts and in 2008 he gave that data to Christine Lagarde, the former Finance Minister of France, and current head of the International Monetary Fund. Lagarde shared that list – often referred to as the “Lagarde List” – with the IRS and several EU authorities. As a result of the revelation, many HSBC account holders now face the threat of prosecution for tax evasion by the IRS and have a limited amount of time to come clean or risk detection.

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UPDATE: May 23, 2013 5:25 PM

An IRS Source confirms that Lois Lerner has been placed on administrative leave.

 UPDATE: MAY 21, 2013, 5:30 PM

Washington Post reports that IRS official Lois Lerner will plead the fifth.

UPDATE: MAY 16,2013, 3:30 PM

Washington Post reports that President Obama has appointed Daniel Werfel to serve as acting Director of the IRS, following the resignation of Steven Miller yesterday.

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100 years of failure

COMMENTARY BY ANTHONY E. PARENT, ESQ.

Both privacy and income, property rights if you will, have been unconstitutionally attacked since passage the 16th Amendment, which was ratified in 1913.

“But the 16th Amendment is constitutional,” you say. “The courts said so,” you say.

Yes, but that is only that matter was decided by federal judges. Judges who — by the way — exempted themselves from the tax code.  That’s right, the federal judges who ruled the IRS can tax your income, felt that their own income should be off limits. Does this sound like a entity that has is impartial enough to decide the constitutionally of any income taxing structure?

(the Federal courts eventually did relent and agreed to be subject to income tax, but only after a few decades of humiliation) . 

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