by Fresh Start Tax | May 28, 2013 | Tax Help
Need Affordable IRS Help 954-492-0088
If you need affordable IRS help, contact us today and speak directly to former IRS agents and managers who worked out of the local South Florida offices for a combined 60 years of total IRS work experience.
We have worked in the local South Florida IRS offices as IRS agents, managers, supervisors, revenue officers, revenue agents, IRS audit supervisors and IRS appellate agents.
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We are one of the most qualified tax firms in South Florida for resolving any IRS problem and issue that you may have.
We have been practicing in South Florida since 1982 and have an A+ rating by the Better Business Bureau.
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by Fresh Start Tax | May 28, 2013 | FBAR
FBAR Filing Due June 30, 2013
Those with Foreign Assets of U.S. Tax Obligations
Fresh Start Tax LLC reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2012, that they may have a U.S. tax liability and a filing requirement in 2013.
The filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return.
Eligible taxpayers get two additional days because the normal June 15 extended due date falls on Saturday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies.
Nonresident aliens who received income from U.S. sources in 2012 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 17 depending on sources of income.
Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to fill out and attach Schedule B to their tax return.
Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets.
Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.
Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. Instructions for Form 8938 explain the thresholds for reporting, what constitutes a specified foreign financial asset, how to determine the total value of relevant assets, what assets are exempted and what information must be provided.
Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Treasury Department Form TD F 90-22.1. This is not a tax form and is due to the Treasury Department by June 30, 2013.
For details, see Publication 4261: Do You Have a Foreign Financial Account?
Though this form can be filed on paper, Treasury encourages taxpayers to file it electronically.
Taxpayers abroad can now use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $57,000 or less can use brand-name software to prepare their returns and then e-file them for free.
Taxpayers with an AGI greater than $57,000 who don’t qualify for Free File can still choose the accuracy, speed and convenience of electronic filing. Check out the e-file link on IRS.gov for details on using the Free File Fillable Forms or e-file by purchasing commercial software.
A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best, get help choosing a software provider. Both e-file and Free File are available until Oct. 15, 2013, for anyone filing a 2012 return.
Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map to get answers.
An International Tax Topic Index page was added recently. The IRS Tax Map assembles or groups IRS forms, publications and web pages by subject and provides users with a single entry point to find tax information.
FBAR FILING DEADLINE JUNE 17, 2013 – FILE FBAR – ACCOUNTANTS, CPA’S, ATTORNEYS
by Fresh Start Tax | May 21, 2013 | FBAR
FBAR – Australia, United Kingdom – FBAR Filing, Reporting, Representation – Attorneys, Lawyers, CPA’s 1-866-700-1040
If you are looking for FBAR help or advice contact our firm today and learn more about FBAR filing, FBAR reporting, or FBAR representation from tax attorneys, tax lawyers and certified public accountants.
All initial consultations are free of charge.
We have over 206 years professional tax experience in over 60 years of working directly for the Internal Revenue Service.
We have been in private practice since 1982 and have an A+ rating by the Better Business Bureau.
The US government is very serious on those individuals who need to file Fbar.
This crackdown started about three years ago due to the volumes of money the IRS collected through their new approach of extracting money from thousands and thousands of individuals who have unreported international accounts.
The Internal Revenue Service found that 33,000 taxpayers or entities had come forward to file Fbar and the Internal Revenue Service collected just north of $5.5 billion. Some recent studies have indicated and anticipate that there is another hundred and $150- $400 billion yet to be collected through F bar.
With that type of money on the line do not expect the feds to back down anytime soon. If you need to file for F bar and you need effective tax representation contact us today for free initial consultation and let us guide you through the process
Australia, United Kingdom
For those of you who are contemplating whether to file or not please remember this, find IRS before they find you.
See below some news regarding F bar for those in Australia and the United Kingdom
The tax administrations from the United States, Australia and the United Kingdom announced today a plan to share tax information involving a multitude of trusts and companies holding assets on behalf of residents in jurisdictions throughout the world.
The three nations have each acquired a substantial amount of data revealing extensive use of such entities organized in a number of jurisdictions including Singapore, the British Virgin Islands, Cayman Islands and the Cook Islands.
The data contains both the identities of the individual owners of these entities, as well as the advisors who assisted in establishing the entity structure.
The IRS, Australian Tax Office and HM Revenue & Customs have been working together to analyze this data and have uncovered information that may be relevant to tax administrations of other jurisdictions.
Thus, they have developed a plan for sharing the data, as well as their preliminary analysis, if requested by those other tax administrations.
“This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion,” said IRS Acting Commissioner Steven T. Miller. “Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes.”
There is nothing illegal about holding assets through offshore entities; however, such offshore arrangements are often used to avoid or evade tax liabilities on income represented by the principal or on the income generated by the underlying assets.
In addition, advisors may be subject to civil penalties or criminal prosecution for promoting such arrangements as a means to avoid or evade tax liability or circumvent information reporting requirements.
It is expected that this multilateral cooperation and coordinated effort will allow many countries to efficiently process this information and effectively enforce any laws that may have been broken. Increasingly, tax administrations are working together in this way to assist one another in identifying non-compliance with the tax laws.
U.S. taxpayers holding assets through offshore entities are encouraged to review their tax obligations with respect to these holdings, seek professional advice if necessary, and to participate in the IRS Offshore Voluntary Disclosure Program where appropriate.
Failure to do so may result in significant penalties and possibly criminal prosecution.
FBAR – Australia, United Kingdom – FBAR Filing, Reporting, Representation – Attorneys, Lawyers, CPA’s
by Fresh Start Tax | May 17, 2013 | IRS Tax Audit
South Floridians have always wondered how and why they were selected for an IRS Tax Audit. The IRS audits over 1.4 million tax returns annually and taxpayers are fearful of being audited. The answer may seem overly simple, but most people do not have knowledge of the audit process.
Each tax return is issued a DIF Score (Discriminatory Index Function). According to the IRS, a DIF Score “is a mathematical technique used to score income tax returns for examination potential.” This technique establishes the National Average Guidelines. Generally, if a DIF score is above the national average, then the risk of an audit escalates.
The highest scoring tax returns are then forwarded to an IRS Examiner for further review.
So what triggers a high DIF Score? Falling out of the National Average Guidelines in the areas of :
- Charitable Contributions,
- Casualty Losses,
- Home Office,
- and Travel & Entertainment will affect the tax return’s DIF Score.
- High DIF scores
Other audit triggers are unfiled tax returns and failure to file the FBAR (Foreign Bank and Financial Account) Form.
How DIF Actually Works
To arrive at the DIF score for each tax return, the IRS computer identifies returns by assigning weights and certain basic tax return characteristics. These weights are added together to obtain a systemic composite score for all tax returns. That score is used to rank all returns into numerical sequence.
The highest scores are then manually reviewed by IRS Agents at the Service Centers to determine the merit and worthiness of a Tax Audit.
Since each return is manually reviewed, if you have an unusually high deduction, attach a copy of the bill, receipt and an explanation to the return. Those extra steps will probably prevent that tax return from the dreaded IRS Tax Audit.
The number of audits performed annually is also determined by the IRS Annual Budget and Agent availability, region by region.
According to the 2013 Proposed Budget, the IRS has increased appropriations again to increase resources for the Enforcement Division. This includes investigations, examinations and collections.
Other Reasons why IRS selected your tax return for an IRS audit
1. High income.
If your income is $200,000.00 and over; the audit rate will be one-in-twenty seven of being audited. If your income is $1,000,000.00 or more, the audit rate will be one-in-eight of being audited. This is just a fact of life.
2. Failing to report all of your taxable income.
The IRS receives copies of all 1099′s, W-2′s, W-2G’s and K-1′s that you receive. If the income from the 1099′s, W-2′s, W2G’s and K-1′s are not shown on the tax return, the tax return will be audited.
3. Deducting the home office deduction.
The space used in your home must be used “exclusively and regularly” as your principal place of business. “Exclusive use” means that a specific area of the home is used only for trade or business. If you can prove the home office deduction, then take it. If you can’t prove it, don’t take it.
4. Deducting large charitable contributions.
If your charitable deductions are large compared with your income, the return will be audited. The IRS is aware of what the average charitable donation is for a given income level. If you have donated and deducted a conservation easement to a charity, chances are good that you will be audited.
5. Deducting rental losses.
Normally, the passive loss rules prevent rental losses from being deducted. There are two exceptions, if you actively participate in the renting of your property, you can deduct up to $25,000.00 of the loss against your other income; but this $25,000.00 limitation phases out as adjusted gross income exceeds $100,000.00. The second exception applies to real estate professionals who spend more that 50% of their working hours and 750 or more hours each year materially participating in reals as a developer, broker, landlord or the like. The IRS will be requesting that you prove the required hours, especially if are a full time employee.
6. Deducting business meals, travel and entertainment.
The IRS has specific record keeping requirements for these type of deductions. The IRS is aware that many taxpayers overstate these type of deductions.
7. Deducting losses from a hobby activity.
If you treat your favorite hobby as a business on your tax return with a net loss, you have a good chance of being audited. If you are audited, you will need to prove that your activity is a profit making activity and not a costly hobby. So make sure that you run your activity in a businesslike manner and can substantiate your expenses with supporting documents.
8. Running a cash business.
If you are in a cash-intensive business, like taxis, car washes, bars , hair salons, restaurants, you will be audited. The IRS is aware that individuals who primarily receive cash, don’t report all of their taxable income. The IRS has various audit techniques to determine unreported cash income.
9. Failing to report a foreign bank account.
If you fail to report a foreign bank, you will be assessed large penalties. If you have any signature authority over a foreign bank account, you will need to consult with a tax professional to determine the correct reporting requirements for that account.
10. Engaging in currency transactions.
If you are engaged in cash transactions in excess of $10,000.00, the IRS will receive reports of these transactions from the financial institutions. Further, if you engage in suspicious cash activities, the IRS will receive a “suspicious-activity report” from the various financial institutions.
These transactions usually indicate that the the taxpayer is trying to hide income from the IRS. Try to avoid these type of transactions.
We are a local South Florida tax firm comprised of tax attorneys, certified public accountants, enrolled agents and former IRS agents, managers and tax instructors who have over 60 years of combined work experience at the Internal Revenue Service in the local South Florida offices.
We have worked as IRS audit agents, revenue agents, IRS audit managers and supervisors and lastly IRS appellate agents.
We know every aspect of IRS tax audits and we are true local experts that can handle tax audits of any kind.
We have been in private practice since 1982 right here in South Florida and have an A+ rating by the Better Business Bureau. We are available for free tax consultations and we can fully review your case and give you the various options and methods of resolution. We truly are IRS tax audit experts.
by Fresh Start Tax | May 17, 2013 | IRS Tax Audit
IRS Individual, Business, Corporate Tax Audits – Affordable Tax Audit Experts – Miami, Ft.Lauderdale, Palm Beaches 954-492-0088
Trust your audit experience to former IRS agents, managers, and tax instructors who taught tax law at the Internal Revenue Service in the local South Florida IRS offices.
If you have received an IRS tax audit notice on individual, business or corporate tax return contact us today and speak directly to affordable IRS tax audit experts.
We have over 206 years of professional tax experience in over 60 years working directly for the Internal Revenue Service in the local South Florida the district, regional tax offices of the Internal Revenue Service.
We have worked in South Florida since 1982 and have an A+ rating by the Better Business Bureau. We offer free initial tax consultations. Come and visit us so we can explain how we can help you during your individual, business, corporate IRS tax audit. We are the affordable tax audit experts.
We have worked as former IRS agents who audited tax returns and worked in the Appellate Division’s. We know every aspect of IRS tax audits.
We know why you are audited and how to avoid audits in the future. We are a wealth of information for clients.
As a result of our years of IRS Audit experience we know all the tax formulas, tax statistics, tax policies, and the IRS individual, business, and corporate tax strategies when the IRS audits tax returns.
Let our years of IRS audit experience work for you. We will assure that you pay the lowest amount allowed by law.
IRS Audit Selection for individual, business and corporate tax audits
Selecting a tax return for a IRS audit does not always suggest that an error has been made.
Returns are selected using a variety of methods, including:
- Random selection and computer screening – sometimes returns are selected based solely on a statistical formula.
- Document matching – when payor records, such as Forms W-2 or Form 1099, don’t match the information reported.
- Related examinations – returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.
IRS Tax Audit Methods
An audit may be conducted by mail or through an in-person interview and review of the taxpayer’s records. The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit).
The IRS will tell you what records are needed. Audits can result in no changes.
Keep in mind if you do not like the results of your IRS tax audit for your individual, business or corporate tax return you can always file an IRS appeal.
What Can Appeals Do for You?
Many of the different departments within IRS are responsible for making decisions concerning the application of tax law to various taxpayer issues.
In some cases, agreement on these decisions, or determinations, cannot be reached. In other words, the taxpayer does not agree with the determination.
This is where Appeals comes in. Appeals is independent of any other IRS office and serves as an informal administrative forum for any taxpayer who disagrees with an IRS determination.
Appeals provides a venue where disagreements concerning the application of tax law can be resolved on a fair and impartial basis for both the taxpayer and the government.
The mission of Appeals is to settle tax disagreements without having to go to the Courts and a formal trial.
The IRS news on IRS tax audits and other matters
The Internal Revenue Service delivered a strong year for taxpayers during FY 2012, maintaining key service and enforcement priorities despite a number of challenges.
In the enforcement area, audits of individuals topped 1 million for the sixth year in a row, with a 1.03% coverage rate out of all tax returns filed.
IRS Tax Audits in the upper income ranges remained substantially higher than other categories.
The IRS increased examinations across all categories of business returns by more than 12% in FY 2012, with the largest increases coming in audits of flow-through entities, which include partnerships and Sub-chapter S corporations.
Rates exceeded 20% for the largest corporations.
The IRS collected more than $50 billion in enforcement revenue in FY 2012, the third year in a row topping that figure. The 2012 numbers were lower than 2010 and 2011, which were unusual years with enforcement dollars helped by large numbers of offshore tax cases coming in.
More than 38,000 disclosures of offshore accounts have been made to date through the IRS’ offshore voluntary disclosure programs.
In addition, the economic slowdown contributed to lower enforcement figures, as most enforcement dollars collected resulted from audits of returns for years during the slowdown.
Another factor behind the FY 2012 numbers reflected changes in agency staffing and budget resources. After a nearly flat budget in FY 2011, the IRS’ FY 2012 budget was reduced by $305 million.
This reduction affected the level of staffing available to deliver service and enforcement programs.
Overall full-time staffing has declined by more than 8% over the last two years, and staffing for key enforcement occupations fell nearly 6% in the past year.
Also in FY 2012, the IRS continued to confront the challenge of refund fraud caused by identity theft. The IRS more than doubled the number of staff dedicated to preventing refund fraud and assisting taxpayers victimized by identity theft, with more than 3,000 employees working in this area.
As a result of these increased efforts, the IRS in FY 2012 was able to prevent the issuance of more than 3 million fraudulent refunds worth more than $20 billion, an increase from approximately 1.8 million refunds worth about $14 billion the previous year.
On the service side, the IRS saw continued strong growth in electronic filing by individuals, as the e-filing rate in FY 2012 exceeded 80% for the first time.
Taxpayer interest in online interactions continued to increase as well, with web page visits on IRS.gov up nearly 17% to 372 million.
IRS Individual, Business, Corporate Tax Audits – Affordable Tax audit Experts – Miami, Ft.Lauderdale, Palm Beaches
