Under the Foreign Account Tax Compliance Act (“FATCA”), foreign banks, insurers and investment funds must send the Internal Revenue Service information about Americans’ and U.S. permanent residents’ offshore accounts worth more than $50,000. Institutions that fail to comply could effectively be frozen out of U.S. markets. The U.S. has entered into intergovernmental Agreements (“IGA’s”) with […]
Most States recognize an accountant-client privilege where if you tell your accountant something the accountant should not be compelled to reveal what was discussed to the government or third parties. A major exception where this privilege does not apply is where the discussion involves potential criminal actions or criminal issues. In the tax field this […]
When it comes to taxes, you can never be too careful or too organized. Though, if you run a small business, you’re likely going to need help along the way to ensure you’re being careful and organized enough. Businesses may turn to either a professional accountant or tax attorney for help. Despite what you may […]
A simple mistake, oversight, or your accountant’s malpractice may trigger an IRS criminal investigation. Specifically, unreported income, a false statement, the use of an impermissible accounting or banking service, or declaring too many deductions are things that could initiate an audit, which could then rise to the level of an IRS criminal investigation. The tax […]
In most tax audits the IRS is only interested in collecting the taxes owed, plus interest along with a few penalties. Perhaps the IRS might impose a negligence penalty or a late filing penalty. However, if during the tax audit the IRS suspects that you have committed tax fraud they can impose a civil tax […]
A new client once came to me saying she had made an error in preparing her tax return and inadvertently took a deduction to which she was not entitled. “Will I go to jail if I’m audited?” The answer of course, is no. If that were the case, you might as well surround the country […]
IRS auditors are trained to spot common types of deception and attempts to defraud the Federal government. Any of these acts are called “Badges Of Fraud”. Now the IRS in an audit expects to find a few errors on a tax return and I would agree that a little bit of fudging here or there […]
It is usually impossible to get the inside scoop of how the IRS is looking at taxpayers but sometimes a retired IRS agent will provide me with some valuable insight. Before I go into this, let’s cover some of the basics about the structure of the IRS. Generally, there are four classes of employees at […]
Filing taxes is punishment enough without the vague threat of an IRS audit looming over our heads. For understandable reasons, the IRS insists on keeping the ins and outs of its auditing process on the murky side. After all how will the IRS catch the bad guys if you give them the rule book first? […]
You can’t have it both ways. More than one small business owner has either underreported his income or overstated his business expenses in order to save on income taxes. But that can come back to haunt them when they go to sell the business. While not universally true, most buyers base their offer on the […]
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