IRS Enforcement Action Against Offshore Depositors (a/k/a “Cheaters”) Continues with a Vengeance

The IRS says people involved in offshore tax avoidance should come in voluntarily and face the music. (IR-2019-43) Hiding money or assets in unreported offshore accounts remains on the Internal Revenue Service’s “Dirty Dozen” list of tax scams for 2019, the agency said today. Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime, including offshore schemes. Many of these peak during filing season as people prepare their tax returns or seek help with their taxes.Taxpayers should remain wary of offshore avoidance schemes. Following the IRS intensifying efforts on offshore issues in recent years, many taxpayers have already voluntarily disclosed their participation in these schemes. The IRS conducted thousands of offshore-related civil audits that resulted in the payment of tens of millions of dollars in unpaid taxes. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitution.“Offshore evasion remains a primary focal point of overall IRS enforcement efforts,” said IRS Commissioner Chuck Rettig. “Our Criminal Investigation and civil enforcement teams work closely with the Justice Department in the international arena to ensure our nation’s tax laws are followed. Taxpayers considering hiding funds or assets offshore should think twice; the civil penalties and criminal sanctions can be severe.” Illegal scams like these can lead to significant penalties as well as interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

Hiding income offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by attempting to hide income in offshore banks, brokerage accounts or nominee entities. They then access the funds using debit cards, credit cards or wire transfers. Others have used foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose. The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as bankers and others suspected of helping clients hide their assets overseas. While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting requirements are breaking the law and risk significant fines, as well as the possibility of criminal prosecution. The IRS reminds taxpayers who have failed to properly report their offshore investments or pay tax on these investments’ income, to come forward.  Since the circumstances of taxpayers vary widely, the IRS offers several options for addressing the noncompliance.

Third-party reporting  

Under the Foreign Account Tax Compliance Act (FATCA) and the network of intergovernmental agreements between the U.S. and partner jurisdictions, automatic third-party account reporting continues. The IRS receives more information regarding potential non-compliance by U.S. persons because of the Department of Justice’s Swiss Bank Program. This information makes it less likely that offshore financial accounts will go unnoticed by the IRS. Penalties for failure to properly report offshore transactions can be severe. A summary of these potential penalties as well as a comparison of what must be reported on Form 8938, Statement of Specified Foreign Financial Assets, and the Report of Foreign Bank and Financial Accounts (FBAR) can be found on IRS.gov.

Selig & Associates We are a boutique Tax Representation and Insurance Advocacy Firm in New York City. Our offices are conveniently located and easily accessible by subway, car or train. Same day and emergency appointments are available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. To schedule a legally privileged consultation with a Federal Tax Practitioner, CPCU, Claims Adjuster and Attorney call (212) 974-3435 or contact us online. Your initial consultation is absolutely Free.

Tax Representation Our Tax Advocates are experienced, effective and results driven. Representing individuals and businesses before the IRS and State. We successfully resolve most Civil and Criminal tax problems including suspended Passports and Drivers Licenses. We specialize in unpaid income, sales and payroll taxes and provide practical solutions to difficult tax problems. For example, we negotiate affordable payment plans, and if you have missing or unfiled tax returns, we can have them prepared and filed for you within 48 hours, guaranteed. For immediate assistance call (212) 974-3435 now. 

Insurance Claims Is your Insurance Company treating you unfairly?  Have they offered you substantially less than your claim is worth? If the answer is yes, then call us directly. We successfully settle most first-party insurance claims without ever having to go to court. Commercial and residential insurance representation includes: Environmental Damage, Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage. To consult with a CPCU, Claims Adjuster and Attorney call (212) 974-3435 or contact us online. 

About Selig & Associates Our primary skillset is the ability to determine and achieve the desired outcome through transactional negotiations. We take a practical approach to problem solving and continuously evaluate the likelihood of success, the potential consequences, and the costs associated with taking, or failing to take a particular action. For additional information about our services call (212) 974-3435. 

This Day in History: Pro Bono Attorney Prevails (Tax Crimes, Restitution & Repayment) SELIG Saves the Day

UPDATE: Last week, we reported on a confounding case that could have tested the patience of Job. Thankfully, commonsense prevailed and justice was [eventually] served. In the instant matter, the State erroneously assessed a tax liability on an Attorney’s Escrow Account. Unfortunately, the Tax Agent assigned to this debacle didn’t know (and didn’t want to know) what an escrow account is. Rather, he insisted that the taxpayer was obligated to pay taxes on every dime deposited. Moreover, they were going to suspend our client’s drivers’ license if he didn’t start paying. Finally out of desperation we contacted the Taxpayers Advocates Office and after presenting all of the material facts and circumstances, which included supporting documentation and affidavits, the Advocates Office interceded on our behalf and this morning at 11:37am the [erroneous debt] was discharged in plenary.

                     If  you’re  in Trouble with the IRS or State - call Selig & Associates today.

Tax Crime? Tidbit of the Day

Like it or not, criminal restitution and civil tax liability are separate and distinct. And to the paying-party, this unpleasant little distinction is a pricy proposition. If you’re in trouble with the IRS or State, you probably want to just “get on with your life” Well Sunshine, here’s a word to the wise - you’d better look before you leap. 

IRC Section 6201(a)(4)(A) expounds upon this  “distinction” viz. requiring the Secretary to collect the amount of restitution ordered pursuant to 18 U.S.C. § 3556 in the same manner "as if such amount were such tax."

The distinction between criminal restitution and tax liability frequently becomes an issue when a Tax Return Preparer is convicted of preparing false returns (in violation of 26 U.S.C. § 7206(2) and is ordered to pay restitution determined by the tax owed by his clients. Nota bene, the Tax Return Preparer will never (try as some may) become civilly liable for the taxes attributable to someone else, a/k/a the coconspirator or so-called self-proclaimed  aggrieved party .

Restitution is determined under the Mandatory Victim Restitution Act of 1996, Pub. L. No.1 04-132, § 204(a), 111 Stat. 1227 (1996) (codified as amended at 18 U.S.C. § 3663(A)), This applies to certain tax cases and directs that the amount of restitution is generally the amount of property taken from the victim (an actual loss to the government in a tax case) under 18 U.S.C. § 3663A(b)(1)(A) and (B), whereas restitution ordered pursuant to a plea agreement may be "to the extent agreed to by the parties in a plea agreement" for any amount greater or less than the loss attributable to the criminal offense. 18 U.S.C. § 3663(a)(3).

Definition of a 'Tax Cheat'

An individual (or group) who, through fraud, dishonesty or avoidance, does not pay the amount of tax that would be obligated if tax rules were properly followed. A tax cheat may improperly use tax shelters or purposefully miscategorize earnings and expenses under the pretense that the government will not miss the lost revenue because of the obligation's size relative to all taxes collected. Those found to be cheating on their taxes may be subject to fines, penalties or imprisonment.

If  you’re  in Trouble with the IRS or State - call Selig & Associates today.

Slam Dunk the Funk – IRS seizes Passports – Martial Law to Follow

WASHINGTON — The Internal Revenue Service today strongly encouraged taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy.

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt.  A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy.

There are several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt. They include the following:

• Paying the tax debt in full
• Paying the tax debt timely under an approved installment agreement,
• Paying the tax debt timely under an accepted offer in compromise,
• Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,
• Having requested or have a pending collection due process appeal with a levy, or
• Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

A passport won’t be at risk under this program for any taxpayer: 

• Who is in bankruptcy
• Who is identified by the IRS as a victim of tax-related identity theft
• Whose account the IRS has determined is currently not collectible due to hardship
• Who is located within a federally declared disaster area
• Who has a request pending with the IRS for an installment agreement
• Who has a pending offer in compromise with the IRS
• Who has an IRS accepted adjustment that will satisfy the debt in full

For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department and the individual’s passport is not subject to denial during this time.

• In general, taxpayers behind on their tax obligations should come forward and pay what they owe or enter into a payment plan with the IRS. Frequently, taxpayers qualify for one of several relief programs, including the following:
• Taxpayers can request a payment agreement with the IRS by filing Form 9465. Taxpayers can download this form from IRS.gov and mail it along with a tax return, bill or notice. Some taxpayers can use the online payment agreement to set up a monthly payment agreement for up to 72 months.

Honest Tax Advocates To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Successful Tax Representation We practice before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”). *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435 

Proven Results  We successfully resolve: Tax Crimes; Tax Evasion; Failure to File a Tax Return and Criminal Non-Filing; Filing False Tax Returns; Installment Agreements; Partial Payment Agreements; IRS Audits; Sales Tax Audits; Sales Tax Controversies; Wage Garnishments; Bank Levies; Seizure of Real Property; Innocent Spouse Relief; Trust Fund Recovery Penalty; Payroll Taxes; Workers Compensation Insurance Audits ("Workers Comp"); Statute of Limitations; Offer in Compromise ("OIC"); Administrative Appeals; Collection Due Process Hearings ("CDP") and most other tax matters. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435

Professional Service Guaranteed We meet with our clients personally. We return telephone calls promptly, answer emails and provide regular updates and status reports. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435

We Settle Commercial & Residential Property Damage Claims for Top Dollar David Selig PA and Attorney Dorin successfully settle residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. *For a free consultation call David Selig directly (212) 974-3435

Will a False Sexual Harassment Claim Destroy Your Business in 2018? We provide legal, insurance and other asset protection strategies for Business-Owners and Medical Service Providers. *To schedule a consultation or a comprehensive evaluation of your existing plan call Selig & Associates directly (212) 974-3435 

OUR HARD WORK FINALLY PAID OFF! Selig & Associates, Tax Advocates for Change

We’ve been fighting for this for a very long time, said David Selig of Selig & Associates. Admittedly, the Treasury’s proposal isn’t everything we fought for, but it’s a hell of a start. Federal Tax Practitioner David Selig and Attorney Bradley Dorin vigorously opposed the Government’s use of outside Counsel for what is colloquially called  “eggshell audits” (and other IRS interviews). These hired gun attorneys make confusion a crime, said Bradley Dorin. The deck is stacked against the taxpayer already, said Selig. The taxpayer has the burden of proof and the burden of persuasion. In other words, you’re guilty until proven innocent, or to a lesser extent, until you're proven "not guilty" agreed Dorin. And remember, the IRS isn’t obligated to inform taxpayers that the information they provide during an audit may be used against them in a criminal proceeding. And yet, the IRS is not supposed to trick and deceive a taxpayer into believing that a criminal investigation is not occurring concurrently, even though it may very well be. United States v. Tweel held that simultaneous criminal and civil audits are 100% permissible. For more information, contact David Selig and Bradley Dorin directly at (212) 974-3435

Final Regulations under IRC Section 7602 on the Participation of a Person Described in IRC Section 6103(n) in a Summons Interview. Under the proposed changes to the above referenced regulation, attorneys who are private contractors, viz. outside counsel,  will be prohibited from assisting IRS Agents who audit of taxpayers. Nota bene, this proposal includes in the interview process.

Criminal Defense Attorney Sentenced for Tax Evasion (he should have hired SELIG & Associates)

On April 19, 2017, in Baton Rouge, Louisiana, Michael Thiel, of Baton Rouge, was sentenced to 30 months in prison for tax evasion, two years of supervised release and ordered to pay $998,352 in restitution to the IRS. Thiel operated a criminal defense practice in Hammond and, from 2003 through 2013, did not file income or employment tax returns and didn’t pay taxes he owed. Thiel concealed his income and assets creating three trust and nominees. Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property.

Emergency, Evening and Early Morning Appointments Available 

For a Personal and Legally Privileged Consultation in our New York City Offices call (212) 974-3435 Payroll Taxes, Trust Fund Recovery Cases, Income and Sales Tax Controversies. We negotiate Payment Plans, compromise Tax Debts, and resolve all Civil and Criminal tax issues, including Innocent Spouse Relief and Separation of Liability. Selig & Associates provides the most aggressive Tax Representation allowed by law. 

Tax Tips for Closing a Business

There are typical actions that are taken when closing a business. You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.

The annual tax return for a partnership, corporation, S corporation, limited liability company or trust includes check boxes near the top front page just below the entity information. For the tax year in which your business ceases to exist, check the box that indicates this tax return is a final return. If there are Schedule K-1s, repeat the same procedure on the Schedule K-1.

You will also need to file returns to report disposing of business property, reporting the exchange of like-kind property, and/or changing the form of your business. If you do not have a pre-printed envelope in which to send your taxes, refer to the Where To File page for a list of addresses. Below is a list of typical actions to take when closing a business, depending on your type of business structure:

Checklist

• Make final federal tax deposits
• Electronic Federal Tax Paying System (EFTPS)
• File final quarterly or annual employment tax form.
• Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return(PDF)
• Form 941, Employer's Quarterly Federal Tax Return (PDF)
• Form 943, Employer's Annual Tax Return for Agricultural Employees (PDF)
• Form 943-A, Agricultural Employer's Record of Federal Tax Liability (PDF)
• Issue final wage and withholding information to employees
• Form W-2, Wage and Tax Statement (PDF)
• Report information from W-2s issued.
• Form W-3, Transmittal of Income and Tax Statements (PDF)
• File final tip income and allocated tips information return.
• Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips (PDF)
• Report capital gains or losses.
• Form 1040, U.S. Individual Income Tax Return (PDF)
• Form 1065, U.S. Partnership Return of Income (PDF)
• Form 1120 (Schedule D), Capital Gains and Losses (PDF)
• Report partner's/shareholder's shares.
• Form 1065 (Schedule K-1), Partner's Share of Income, Credits, Deductions, etc. (PDF)
• Form 1120S (Schedule K-1), Shareholder's Share of Income, Credits, Deductions, etc. (PDF)
• File final employee pension/benefit plan.
• Form 5500, Annual Return/Report of Employee Benefit Plan
• Issue payment information to sub-contractors.
• Form 1099-MISC, Miscellaneous Income (PDF)
• Report information from 1099s issued.
• Form 1096, Annual Summary and Transmittal of U.S. Information Returns(PDF)
• Report corporate dissolution or liquidation.
• Form 966, Corporate Dissolution or Liquidation (PDF)
• Consider allowing S corporation election to terminate.
• Form 1120S, Instructions (PDF)
• Report business asset sales.
• Form 8594, Asset Acquisition Statement (PDF)
• Report the sale or exchange of property used in your trade or business.
• Form 4797, Sales of Business Property (PDF)

Emergency, Evening and Early Morning Appointments Available

·        

For a Personal and Legally Privileged Consultation in our New York City Offices call (212) 974-3435 Payroll Taxes, Trust Fund Recovery Cases, Income and Sales Tax Controversies. We negotiate Payment Plans, compromise Tax Debts, and resolve all Civil and Criminal tax issues, including Innocent Spouse Relief and Separation of Liability. Selig & Associates provides the most aggressive Tax Representation allowed by law.