by Fresh Start Tax | Sep 25, 2012 | FBAR, Uncategorized
Each year the IRS puts out a set of guidelines as to the compliance programs it sets out for FBAR.
As the word of FBAR Reporting hits the streets, IRS will not be so generous with its positions in dealing with offshore and overseas financial and tax issues especially FBAR Reporting.
The IRS has just been budgeted $500 Million to up grade tax compliance and because of the success of FBAR. The IRS will be assigning many new agents ( training has already started ) for the FBAR Program.
FBAR Reporting accounted for an additional $5 billion in revenue into the feds rich bank account over the past 3 years.With a potential goldmine out there, the IRS knows where to hunt. The fear of criminal prosecution gives shark like teeth to this FBAR Reporting Program to the IRS.
If you are looking for true tax professionals to help you through this problem whether it be civil or criminal, call us today to find out more about your situation. 1-866-700-1040.
True FBAR amnesty means amnesty from is from criminal prosecution thru voluntary disclosure.
You do not get a pass on fines or filing, basically you will avoid prison time. For those of you trying to hedge your bet that you will not get caught think again, many banks and financial institution are actually helping the IRS in fear of retaliation from the US government.
Find the IRS before they find you.
Quite Disclosures
Some taxpayers have made quite disclosures by filing amended returns, 1040x.
The question begs to be asked, will the IRS audit these taxpayers?
If so, will they be eligible for the 25 percent offshore penalty?
Is the IRS really going to prosecute someone who filed an amended return and correctly reported all their income?
Answers to these questions:
The IRS is reviewing amended returns and could select any amended return for examination. The IRS has identified, and will continue to identify, amended tax returns reporting increases in income. The IRS will closely review these returns to determine whether enforcement action is appropriate. If a return is selected for examination, the 25 percent offshore penalty would not be available.
When criminal behavior is evident and the disclosure does not meet the requirements of a voluntary disclosure under IRM 9.5.11.9, the IRS may recommend criminal prosecution to the Department of Justice.Willfulness and Intent are the true key factors to determine criminal elements.
Noteworthy Facts:
World Wide Income must be reported on your U.S. tax return if you are US resident.
IRS definition of US resident includes any one who stays here for more then 183 days and are filing 1040 Return. These does include H1, L1, Green Card holders, Citizen, Dual citizens.
If you have an interest in a foreign bank or financial account you must check “yes” (on Schedule B). This is true even if you live outside the U.S. or pay foreign taxes on your foreign income.
FBAR Reporting.
All U.S. persons with foreign bank accounts exceeding $10,000 at any time during the year must file an FBAR by each June 30. These includes following kinds of assets including but not limited to:
a. Bank Account
b. Stocks/Demat Accounts
c. Mutual Fund
d. Life Insurance Policy
e. Join Accounts with Parents, Siblings or any one.
f. Rental Property Value or any other income producing Asset.
Call us today for a free consultation with a FBAR Tax experts.1-866-700-1040
FBAR Amnesty, FBAR Representation, Civil, Criminal Help, STOP the WORRY TODAY
We are comprised of Tax Attorneys, Tax Lawyers and Former IRS Agents.
by Fresh Start Tax | Sep 25, 2012 | Abatements, FBAR
FBAR – How to get Rid of FBAR Penalties – Fresh Start Tax L.L.C – FBAR Penalties & Representation
There is fear when FBAR is mentioned. Disclosure, criminal, money and penalties are words attached with FBAR.
Many taxpayers are stuck as to whether to file or not.
My rule of thumb as a former IRS Agent, I recommend you find the IRS before they find you.
FBAR is here to stay and FBAR is becoming the beast of the IRS.
So much so that FBAR generated over $5.5 billion in Revenue to the Feds over the past couple years.
Not only is the Fed collecting the taxes but the IRS penalties will choke a horse. Part of the fear with taxpayers coming forward is the fear of not only paying the tax but also paying the penalties as well and having the money to do so.
It is not easy to get FBAR Penalties removed or abated because the IRS has set a tone and a theme of “just deny the claim.” The IRS will tell the IRS Auditing Revenue Agents to just disallow all penalty abatement claims unless the taxpayers fight for the abatement. A taxpayer must fight to have FBAR penalties abated.
What is the FBAR Filing Criteria
In order to determine whether or not the FBAR is required, all of the following must apply:
1. The filer is a U.S. person;
2. The U.S. person has a financial account(s);
3. The financial account is in a foreign country;
The U.S. person has a financial interest in the account or signature or other authority over the foreign financial account; and,
a. The aggregate amount(s) in the account(s) valued in dollars exceed $10,000 at any time during the calendar year.
The IRS code as it relates to FBAR Penalties – Its the Examiner Discretion
- The IRS tax examiner may determine that the facts and circumstances of a particular case do not justify asserting a penalty. There is tremendous discretion the examiner has on these case.
- If there was an FBAR violation but the examiner determines that a penalty is not appropriate, the examiner should issue the FBAR warning letter, Letter 3800.
- When a tax penalty is appropriate or justified , the IRS has established penalty mitigation guidelines to aid the examiner in applying penalties in a uniform manner.
- The IRS tax examiner may determine that a penalty under these guidelines is not appropriate or that a lesser penalty amount than the guidelines would otherwise provide is appropriate or that the penalty should be increased (up to the statutory maximum). The examiner must make such a determination with the written approval of the examiner’s manager and document the decision in the work papers.
- Factors to consider when applying examiner discretion may include, but are not limited to, the following:
- Whether tax compliance objectives would be achieved by issuance of a warning letter;
- Whether the person who committed the violation had been previously issued a warning letter or has been assessed the FBAR penalty;
- The nature of the violation and the amounts involved; and,
- The cooperation of the taxpayer during the examination.
- Given the magnitude of the maximum penalties permitted for each violation, the assertion of multiple penalties and the assertion of separate penalties for multiple violations with respect to a single FBAR form, should be considered only in the most egregious cases.
Did you know that the the FBAR penalty is calculated not on your account earnings, but rather, on your account value?
As an example, if you have an account that is worth $1,000,000, the IRS, for one year, can assess a $500,000 FBAR penalty.
For two years, the FBAR penalty could be equal to the amount of the account. You see, the IRS is not limited to just two years, the IRS could potentially assess the FBAR for 6 or more years.
This is the very reason taxpayers need professional representation for both the reporting , filing and for the abatement of penalties and interest.
So you can see the FBAR penalty can be particularly devastating. So you need great professional tax advice on how to best deal with your unique and personal tax situation.You should seek the counsel of a tax attorney.
If you call Fresh Start tax LLC 1-866-700-1040 and speak directly to our FBAR tax excerpts you can get the best counsel available. All initial consultations are free of charge.
You only pay us if we begin work.
Go to our home page, on the left side you will find Penalty Abatement’s, open that box and you will find a very comprehensive list of reasons IRS will accept as reason cause.
Call us today for a free tax consult. 1-866-700-1040
by Fresh Start Tax | Sep 24, 2012 | IRS Tax Audit
As Former IRS Agents we have worked thousands of cases since 1982. After 60 years of combined experienced we can tell by looking at a tax return whether or not that tax return will be pulled for a tax audit.
We can actually audit proof your tax return. 1-866-700-1040.
While this is not a comprehensive guide you will find some indicators of what the IRS will look for in pulling your tax return for audit.
It is always helpful to file and honest and accurate tax return, if you do, you have absolutely nothing to worry about.
General Information – How to Avoid an IRS Tax Audit of your tax return.
How your tax return is processed thru the IRS audit system.
You should know all tax returns are input into the IRS CADE 2 computer system. This is the beast of IRS responsible for the fall of many. We all serve the BEAST.
1. Each line item of your tax return is punched into this system, line item by line item. A boring but necessary job!
2. Each line item is keyed into the gross income and net income to find ratios and percentages.
3. A statical relationship between income and expenses or deductions is formed and indexed into a DIF score. Each and every tax return get a DIF score.
4. From there, each tax return is indexed and given a DIF number. The DIF number becomes a key component to a IRS tax audit. Your DIF score is placed on a label permanently attached to your tax return. ( DIF Discriminatory Index Function )
5. A IRS Agent then manually reviews each tax return pulled by the computer DIF score and decides whether to pull the tax return for a IRS audit.
6. The IRS then selects the highest graded DIF scores region by region. IRS can determine how many tax returns gets audited based on region, sections in the country and available budgets and agents to conduct tax audits.
IRS Flags for Tax Audits
IRS conduct TCMP audits. A TCMP is a random selected tax audit. The process works like this, IRS pulls every 10,000th tax return for a random audit. From these random tax audits IRS can determine areas of tax abuse. These audits are a true pain in the ass. Each item on the tax return must have documentation, bills and receipts. IRS goes so far to ask for birth certificates. Tax practitioners call these tax audit, the audits from hell.
IRS Matching Program.
IRS matches all W-2’s and 1099s up with tax returns. If you have failed to claim a W-2 or 1099, IRS will pull your tax return for audit. These audits usually take place 1 to 2 years after the filing of the tax return. IRS audits 1.4 million tax returns per year via the matching program. Many of these are conducted through the mail.
Market Specialization
IRS has a market specialization program in which specially trained agents are experts in fields. These IRS experts have studied and have incredible market expertise in these particular areas of business. These Market Specialization audits cover all major areas of business, industries and professional markets. These are usually long and extensive tax audits.
High Income – Personal and business
As your income goes up, so does the likelihood that you’ll be audited. If you make more than a million dollars, your chances of being audited are over seven times higher than if you make less than $200,000.
Self-Employment
If you own a business or work for yourself, there are lots of expenses you can deduct, like work-related entertainment, travel, and equipment. Because the line between business and personal use can be crossed so easily, self-employed taxpayers are targeted more frequently for an audit.
If you claim complex or unusual expenses on your return, it’s wise to provide an explanation before the IRS has to ring you up and ask for one. Submit a note with your return explaining why you have an unusual situation or are missing a particular tax form, for instance.
Cash Businesses.
Just a quick note here, if you have a cash business, IRS has formulas worked out to discern if you are claim enough cash. Call us for more details.
FBAR Cases
FBAR tax audits are on the rise.
After 3 years of the IRS demanding FBAR filings, the IRS collected 5 Billion Dollars through FBAR filing and FBAR audits.
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions.
The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.
If you have a FBAR tax audit, hire a tax attorney, no exceptions.
To avoid a IRS tax audit, file accurate tax returns.
Call us today 1-866-700-1040.
by Fresh Start Tax | Sep 24, 2012 | Back Taxes, IRS Tax Problem
The IRS Financial Statement, the 433-A and 433-F ” is ” the most important factor in determining your financial future with the IRS.
IRS will determine the resolution of your case based completely on the forms and the documentation that goes along with the form.
If your case is assigned to the ASC Unit, that is the 1-800 groups, the IRS will require a 433F. The information the IRS requests is not as detailed. You will be faxing the information to a agent that can be located anywhere in the country. The IRS uses 1-800 switching centers to get your call to the first available agent. Calls can be taken up to 8:00 pm EST.
The 433A on the other hand is used exclusively by the local IRS offices and are used by local Revenue Officers. The local IRS agent will go into extensive detail in reviewing your 433A. Professional help is a must at this point.
Both forms, the 433A, and the 433F require complete documentation on any number that is placed on the form with the exception of food, clothing…….. IRS will follow the National Standards Test. For a comprehensive explanation of the National Standards call us directly.
The following is a list of tax tips to apply to the turning in of a IRS financial statement.
1. Without question, it is best to have a tax professional prepare and explain your financial statement to the IRS. Unless you have a very simply case I would not recommend you the taxpayer represent yourself when this form is required.
As a former IRS agent I would love it when the taxpayers were unrepresented. Taxpayers will believe anything the IRS agents says. Taxpayers are unaware that they have the right to Appeal the findings of the Agent working on there case. Many times taxpayers are hustled into situations. Taxpayers sign agreements in the pure fear of the IRS.
2. Be completely truthful. The normal IRS Agent is skilled to detect deception so whatever you do, tell nothing but the truth. IRS will match your bank statements, cost of living and your tax return to get a feel to make sure your financial statement is correct and accurate.
3. If any expenses are high you want to have a explanation of why expenses are out of the ordinary or normal range. Have documentation to support your expenses. Many times taxpayers can and will have excessive medical falling out of the National Standards.
Have detailed documentation available to prove your case. You want to have the bill and the receipt showing, PAID.
4. Understand that IRS will use the National Standards Tests. IRS has a National Standards Tests in every area of the country to apply towards expenses claimed on the 433A or 433F. The National Standards can be found on our site.
5. When the IRS asks for values for your assets use distrait values as if you had to sell the assets in an emergency situation.
Whatever you do, do not inflate the value of your assets.
6. IRS is only interested in two things, your assets and your expenses. Your other debt is of little interest to the IRS.Most of the time, IRS will not allow credit card debt, college tuition, taking care of grandma as a necessary expense.
7. Your financial statement MUST MAKE SENSE. Many times taxpayers expenses exceed their income. If this is your case you must supply documentation as to how you are paying your bills without have income to cover the expenses.
8. Make sure all your tax returns are filed. IRS will conduct a full compliance check and will not close your case until all tax returns are filed.
9. Make sure your withholding is up to date. Make sure to change your withholding or ES payments to make sure you will not owe tax in the current year.
10. Have a plan of resolution. Tell the IRS what you want and what you can afford. Do not be bullied by the IRS, you have right and can fight back.
Do not be afraid to be bold, there is an appeal process, however your request must be reasonable. To find out more appeal process call us today, 1-866-700-1040.
by Fresh Start Tax | Sep 23, 2012 | Back Taxes
Do not let the IRS get away with filing your late, unfiled or past due tax return.
Simply do not be bullied by them.
IRS can and will file your back individual or payroll tax returns for you at there discretion.
You can let Former IRS agents who know the system fight back and win!
IRS has the right to file back tax returns under 6020B of the IRS Code however you can stop or undo that process today. 1-866-700-1040.
If you have not filed your back tax returns whether it be personal or business the IRS prepares thousands and thousands of back tax returns under 6020B each year.
Both the local offices as well as the Ogden Utah Campus of the IRS will prepare your back return and make sure you pay the highest amount possible. IRS will dig for the highest amount possible and send you a tax assessment.
If you do not follow up on the IRS notice or bill the IRS will follow that up with the Filing of a Federal Tax Lien or a IRS Federal Tax Levy.
I know this because I was a former IRS agent and know the process well. We know the exact process to reverse the IRS assessment and get you immediate tax relief.
The IRS letter that IRS sends the taxpayer goes exactly like this:
IRS to the taxpayers or business: Actual Letter
Dear Taxpayer:
We have reviewed your tax records and found no record of you filing the tax returns identified above.
We believe you are liable and have prepared a tax return for the tax period/s in question. If you agree that the tax liability shown is correct, please sign each form and return it to us. If you do not agree with our findings, you have 45 days (90 days if this letter is addressed outside the United States) to do one of the following:
1. Prepare and sign tax returns which you believe show your correct tax liability and return them to us (if you choose to file a Form 940 claiming a reduced rate of assessment you must attach a copy of the state certification showing the amount of contributions paid or the return may be processed at the standard unemployment tax rate of 6.2%); or
2. Mail us any additional information you would like us to consider; or
3. Request a conference.
WHAT WILL HAPPEN IF YOU DO NOT RESPOND TO THIS LETTER?
The Internal Revenue Code Section 6020(b) gives us the authority to prepare and file tax returns on your behalf. Therefore, if we do not hear from you within 45 days from the date of this letter (90 days if this letter is addressed to you outside the United States), we will process the enclosed tax returns that we have prepared for you.
You will then be billed for the amount of tax due, plus any additional penalties and interest. You need to check your records to ensure that all tax returns you are liable for have been filed.
Call us today and stop the IRS. We have the knowledge and expertise to get you the results you need. Do not be bullied by the IRS.
