Most, if not all, Payroll Protection Program (PPP) borrowers are focused on the question of whether they will be able to have their PPP loan forgiven. Many questions have arisen, and some but not all, have been answered by the Loan Forgiveness Application and instructions released by the SBA on Friday,…
Due to the ongoing COVID-19 Pandemic, the IRS has provided relief to taxpayers by extending filing and other deadlines. Now, in an internal memorandum from Fred Schindler the Director of Headquarters Collection (SBSE), the IRS continues to provide relief to taxpayers with tax debt by suspending most tax collection activities.…
In a 2019 U.S. Tax Court case, Palmolive Building Investors, LLC v. Commissioner, 152 T.C. No. 4, (2019) (Palmolive II), the Tax Court held that both penalties determined by the Revenue Agent in a tax audit and additional penalties later determined by an Appeals Officer in the IRS Independent Office…
Civil tax fraud penalties are 75% of the underpayment of tax attributable to tax fraud. Whenever the IRS believes that a taxpayer has intentionally violated a known legal duty, these penalties can be assessed, in addition to possible criminal prosecution. The IRS or the California Franchise Tax Board (FTB) need…
Payroll tax disputes often arise when a worker is paid as an independent contractor, but the IRS or California Employment Development Department (EDD) believes that the worker is an employee. There are some differences between federal and state requirements, but a business will often have to deal with both the…
If you owe tax and fail to file a return on time, the IRS can assess both civil and criminal tax penalties. The penalty for failure to file is separate from the penalty for failure to pay taxes, and both civil and criminal penalties can be assessed for the same…
The IRS Offshore Voluntary Disclosure Program (OVDP) offers taxpayers with unreported income from foreign financial accounts a chance to come into compliance with the law. The program benefits taxpayers by offering lower penalties and eliminating the threat of criminal prosecution for failing to file Foreign Bank Account Reports (FBARs). Failure…
The IRS expanded its streamlined filing compliance procedures in 2014 to allow more taxpayers with offshore bank accounts to take advantage of the program. The procedures are now available to some taxpayers living in the United States, as well as many U.S. taxpayers living outside the country. Benefits of Streamlined…
An abusive tax shelter is an investment scheme that attempts to reduce income tax without serving any other economic purpose. The value of income or assets is not changed, so the sole purpose of an abusive tax shelter is to avoid tax. The IRS attempts to deter participations in abusive…
Many taxpayers are unaware that they may be eligible for relief from tax penalties under the IRS First Time Penalty Abatement policy. The penalty abatement is available for penalties due to a failure to file, failure to pay taxes, or a failure to deposit taxes. Requirements for First Time Penalty…