Tuesday, January 31, 2017

Gambling, Drug Dealing & Embezzlement




  1. Money from gambling, drug dealing, embezzlement, etc. is 100% taxable.  
  1. The IRS can examine your bank accounts, deposits, withdrawals, ATM activity and credit card purchases without your knowledge and/or consent. 
  1. The IRS can summons your records, speak to your neighbors and interview your coworkers. 
  1. The IRS is especially interested in people who are self-employed and own small businesses. 
  1. If the IRS thinks you’re a crook, they’ll challenge every receipt, statement and expenditure.  

Tuesday, January 24, 2017

What the Hell is an IRS Technical Advice Memorandum




Technical Advice Memorandums, colloquially called TAMs, are similar to PLRs but rear their ugly heads during the course of a proceeding before the IRS (including audits or before the IRS appeals division).  A TAM may be requested by an IRS employee responsible for examining a taxpayer’s return (or a taxpayer may request that a particular issue be referred to the Chief Counsel’s Office for technical advice, which is an extremely powerful tool).  A TAM may not be requested for hypothetical transactions.  Additionally and like a PLR, TAMs cannot be cited for precedence.

What the Hell is an IRS Private Letter Ruling?




Private Letter Rulings (colloquially called “PLRs”) are written statements from attorneys at the IRS Chief Counsel’s Office. In a nutshell PLRs are requested by taxpayers prior to undertaking a specific transaction, when the law is unclear (indeed).

PLRs are granted only with respect to proposed transactions or completed transactions for which a return has not yet been filed. 

Mucho más importante, PLRs can only be relied upon by the party that requested the ruling.





Monday, January 23, 2017

IRS Collection Due Process "The Ugly Truth"



IRS Collection Due Process 




Q. I just got a Notice Number CP504. It says – “Urgent!! They intend to levy Certain Assets.” I don’t agree that I owe this amount. How can I appeal? Will that stop the levy action?
A. The IRS cannot levy with just this notice. We must first issue a formal Notice of Intent to Levy, which is the next step after this notice. Call the number on the notice to discuss this situation and your payment options.
Your case is closed as far as any determination about how much you owe, so there is nothing for you to appeal at this point. However, you do have three options to have your case re-opened so the IRS can consider whether you owe any additional amounts:
  • Pay the amount due in full and file a claim for refund. If the IRS disallows your claim, you will have the right to appeal at that time.
  • Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
  • Follow the instructions in Form 656-B and file an Offer in Compromise, Doubt as to Liability.
Q. The IRS Collection function says they are going to file a lien or levy my assets. What can I do?
A. Contact the Collection function to discuss your situation and your payment options. Refer to Publication 1660Collection Appeal Rights to review your appeal rights. Some Collection actions qualify for appeal under the Collection Appeals Program (CAP) and some qualify under the Collection Due Process (CDP) appeal. These two programs offer different advantages depending on the facts of your case. Publication 1660 will help you decide which is best for you.
Q. I just received a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, Letter 3172. I don’t believe I owe this amount. What can I do?
A. Refer to Publication 1660. Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing to discuss the lien filing. You should request a CDP hearing if you feel the lien is inappropriate.
However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances. If Appeals cannot consider the underlying liability, you have three options to re-open that issue:
  • Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to Appeal at that time.
  • Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
  • Follow the instruction in Form 656 and file an Offer in Compromise, Doubt as to Liability.
Q. I just received a Letter L-1058 or LT11 FINAL NOTICE OF INTENT TO LEVY AND NOTICE OF YOUR RIGHT TO A HEARING. I don’t believe I owe this amount. What can I do?
A. Refer to Publication 1660. Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing. You should request a CDP hearing if you feel the levy is inappropriate.
However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances. If Appeals cannot consider the underlying liability, you have three options to re-open that issue:
  • Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to Appeals at that time.
  • Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
  • Follow the instructions in Form 656-B and file an Offer in Compromise, Doubt as to Liability.

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Streamlined IRS Installment Agreements




The IRS is testing expanded criteria for streamlined processing of taxpayer requests for installment agreements. The test is scheduled to run through September 30, 2017.
During this test, more taxpayers will qualify to have their installment agreement request processed in a streamlined manner. Based on test results, the expanded criteria for streamlined processing of installment agreement requests may be made permanent.
During the test, expanded criteria for streamlined processing will be applied to installment agreement requests submitted to SB/SE Campus Collection Operations, this includes the Automated Collection System (ACS). Expanded criteria will not be applied to installment agreement requests submitted to W&I Accounts Management, SB/SE Field Collection or through the Online Payment Agreement application.
One expanded criterion being tested immediately is this: Individual taxpayers with an assessed balance of tax, penalty and interest between $50,000 and $100,000 may experience accelerated processing of their installment agreement request. This will occur if the taxpayers' proposed monthly payment is the greater of their total assessed balance divided by 84 – or – the amount necessary to fully satisfy the liability by the Collection Statute Expiration Date.
More information on the expanded test criteria will be made available in the coming weeks. In the interim, IRS employees in Campus Collection/ACS can assist with any installment agreement requests.
Please note: Under existing criteria, approximately 90 percent of individual taxpayers with a balance due qualify to use the IRS’s Online Payment Agreement application. IRS encourages individual taxpayers to use the online application and increase their convenience by electing the direct debit method of payment.

Fact Sheet

IRS is testing new installment agreement processing criteria through September 2017.
The majority of taxpayers with a balance due of less than $25,000 already meet criteria for streamlined processing of their installment agreement request.  In general, IRS assistors can establish an installment agreement without the completion of a Collection Information Statement or a determination to file a Notice of Federal Tax Lien.
The IRS is currently testing whether the expansion of streamlined processing criteria to taxpayer installment agreement requests will improve customer service, reduce taxpayer burden and increase agency efficiency.
Test criteria will be applied to installment agreement requests submitted through SB/SE Campus Collection Operations, including the Automated Collection System (ACS), Automated Collection System Support (ACSS) and Compliance Services Collection Operations (CSCO).  This test will not be applied to accounts worked by Field Collection revenue officers or Taxpayer Assistance Center employees. 
SB/SE Collection will test new streamlined processing criteria as follows:
For individual taxpayers who have filed all required returns and have an assessed balance of tax, penalties and interest of $50,000 or less,
CURRENT Streamlined CRITERIA
TEST CRITERIA
Payment TermsUp to 72 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is lessPayment TermsNone. This criteria is unchanged.
Collection Information StatementVerification of ability to pay required in event of an earlier default for assessed balances of $25,001 to $50,000Collection Information StatementNot required.
Payment MethodDirect debit payments or payroll deduction required for assessed balances of $25,001 to $50,000Payment MethodDirect debit payments or payroll deduction is preferred, but not required.
Notice of Federal Tax LienDetermination not required for assessed balances up to $25,000.
Determination is not required for assessed balances of $25,001 - $50,000 with mandatory use of direct debit or payroll deduction agreement.
Note: If taxpayer does not agree to direct debit or payroll deduction, then they do not qualify for Streamlined IA over $25,000.
Notice of Federal Tax LienNo change in criteria for assessed balances up to $25,000. 
Determination is not required for assessed balances of $25,001 - $50,000 with the use of direct debit or payroll deduction agreement.
Note: If taxpayer does not agree to direct debit or payroll deduction, then they do qualify for Streamlined IA over $25,000, but a Notice of Federal Tax Lien determination will be made.
The test criteria discussed above also applies to all out of business debts up to $25,000 and all out of business sole-proprietorship debts up to $50,000. For in-business taxpayers, test criteria apply to income tax only debts up to $25,000.
For individual taxpayers who have filed all required returns and have an assessed balance of tax, penalties and interest between $50,001 and $100,000,
CURRENT CRITERIA
TEST CRITERIA CHANGES
None - Streamlined processing criteria currently does not apply to assessed balances of tax between $50,001 and $100,000

Payment Terms
Up to 84 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less

Collection Information Statement
Not required if the taxpayer agrees to make payment by direct debit or payroll deduction

Payment Method
Direct debit payments or payroll deduction is not required; however, if one of these methods is not used, then a Collection Information Statement is required.

Notice of Federal Tax Lien
Determination is required.
The test criteria discussed above also applies to all out of business sole-proprietorship debts between $50,001 and  $100,000.
For operating businesses with a trust fund tax liability, criteria for streamlined processing of installment agreement requests has not changed, see Internal Revenue Manual Part 5, section 5.14.5
Tax practitioners may continue to contact IRS using the Practitioner Priority Service phone number.  If the priority service assistor cannot establish a streamlined installment agreement, they will transfer the call to Campus Collection ACS or practitioners may request to be transferred to ACS with priority service.
During the test period, IRS will solicit Practitioner feedback, evaluate the results and determine if any permanent changes are appropriate. 
The majority of individual taxpayers with a balance due of up to $50,000 already meet the criteria to use the Online Payment Agreement. The criteria for using this application will not change during the test.  IRS encourages those that qualify to use the Online Payment Agreement application.  It saves time and is a cost effective alternative to calling or mailing in a request for an installment agreement.

Tax Preparer Sentenced To 2 Years In Prison For Fraudulent Scheme To Steal Over $1 Million From His Clients

Selig & Associates Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that TOM SHIN wa...