by Fresh Start Tax | Mar 25, 2014 | Tax Help
What you Need to Know
We will be taxed to death do us part.
IRS Virtual Currency Guidance: Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply
In some environments, virtual currency operates like “real” currency i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance but it does not have legal tender status in any jurisdiction.
Virtual currency is treated as property for U.S. federal tax purposes.
General tax principles that apply to property transactions apply to transactions using virtual currency.
Among other things, this means that:
- Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
- Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
- The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
- A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
by Fresh Start Tax | Mar 25, 2014 | Tax Help
Representation by Tax Attorneys, Tax Lawyers, CPA’s and Former IRS agents. Tax Defense, International Representation. 1-866-700-1040
Big brother is extending his arms all over the world.
Soon there will be no place to hide.
The governments of the world are making sure that everyone comes clean. They have done that by initiating an international data exchange.
What are the bottom line? It is all about the money, nothing more, tax revenue.
Country after country are lining up to sign treaties, some because of political pressure and others, well they just want share or portion of the pie.
The International Data Exchange – Through SCHEMA
Intergovernmental FATCA XML Schema:
The IRS has finalized the format for automatically exchanging FATCA data with IGA jurisdictions.
The Intergovernmental FATCA XML Schema (version 1.1):
- Is a standard format developed in close cooperation with the OECD
- Captures required information for reporting of FATCA data from both Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs)
- Will be used for automatic exchange with all FATCA jurisdictions
- Uses elements from existing reporting schemas used by the OECD and the European Union to reduce burden on reporting entities
- Uses XML to allow for easier modifications down the road in the event of legislative or regulatory changes in reporting rules
- Will facilitate safe and secure electronic data transmission using the International Data Exchange Service
International Data Exchange Service:
The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States.
The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.
The International Data Exchange Service:
- Is based on business requirements collected by a multilateral working group
- Serves as a single point of FATCA information delivery for both FIs and HCTAs
- May be used for automatic exchange with all FATCA jurisdictions
- Is based on readily-available mature technology
- Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
- Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.
We would urge all individuals or financial institutions to make sure they comply with the worldwide standards that will now be practiced by almost all countries.
If you have any questions and would like to speak directly to a tax attorney or tax lawyer under attorney-client privilege. please feel free to call us today.
When calling , ask to speak directly to one of our attorneys who have expertise in the matters mentioned above.
Skype is available to all.
SCHEMA *FATCA/FBAR – International Date Exchange * Attorneys, Lawyers – International Representation
by Fresh Start Tax | Mar 25, 2014 | Tax Help
Tax Preparation Tips – Fresh Start Tax LLC
1. Gather your records.
Collect all tax records you need to file your taxes. This includes receipts, canceled checks and records that support income, deductions or tax credits that you claim on your tax return. Review all your credit card receipts just in case you forgot something.
2. Report all your income.
You will need to report your income from all of your Forms W-2, Wage and Tax Statements, and Form 1099 income statements when you file your tax return.
Remember, IRS gets all 1099 and W-2 information from 3 parties.
3. Get answers.
Use the Interactive Tax Assistant tool on the IRS website to get answers to many of your questions about tax credits, deductions and many more topics.
4. Use direct deposit.
Combining e-file with direct deposit is the fastest and safest way to get your tax refund.
5. Visit the IRS website 24/7.Great source of info.
IRS.gov is a great place to get everything you need to file your tax return. Visit ‘1040 Central’ for online tools, filing tips, answers to frequently asked questions and IRS forms and publications. Get them all anytime, day or night.
6. Check out number 17.
IRS Publication 17, Your Federal Income Tax, is a complete tax resource. It contains helpful information such as whether you need to file a tax return and how to choose your filing status.
7. Review your tax return.
Mistakes slow down the receipt of your tax refund. Be sure to check all Social Security numbers and math calculations on your return, as these are the most common errors.
8.Store them in a safe place.
We recommend you keep all your tax records photocopied along with receipts and bank statements and any deductions you’ve had in store them in a safe cloud environment.
In case of any act of God you always have your tax records stored in the clouds.
Tax Preparation Tips – Fresh Start Tax LLC, Former IRS Agents
by Fresh Start Tax | Mar 25, 2014 | Tax Help
We are a Florida Tax Firm that specializes in IRS Tax relief. Since 1982.
Our former IRS agents have over 60 years of working directly for the IRS in the local Florida IRS offices.
If you are being bothered by the Internal Revenue Service and only makes sense to hire former IRS agents and managers who know the systems, the protocols, and the fastest and quickest way to solve any IRS problem.
From a simple tax notice or letter all the way to tax court we handle all IRS problems.
We have been in private practice since 1982 and we are A+ rated by the Better Business Bureau.
You can call us today for a free initial tax consultation and speak directly to a certified tax expert.
How we Settle and Negotiate your case with the Internal Revenue Service:
1. We immediately send a power of attorney to the IRS letting them know we are now your tax representative. You will never have to speak to the IRS.
2. We will make sure all your tax returns are filed and current. If your tax returns are not up to date, the IRS will refuse to work your case. This is leverage that they use to get you compliant. We can pull tax transcripts, file and prepare your tax returns within days, even if you have lost your tax records.
3. The IRS requires a current financial statement. We will secure a required 433-A (IRS financial statement), verify the income and expenses and work out a settlement agreement. The IRS will require a closing settlement method for each case.
4. We review with our clients how they want to settle their case. We get them an agreement based on their current financial needs.
IRS Tax Settlement Agreements can be in different forms:
a. Hardship Settlements.
Cases usually go into a 3 year suspended status because of an inability to pay. This is also called currently noncollectable. Your case will go into a hardship status because you do not have the income coming in to meet your current expenses. The IRS will use the National Standards Program to assess hardship.
b. Payment Agreements.
Cases can be closed with agreed upon monthly installment payments to the IRS. We will review the different programs the IRS uses for the lowest possible amount required.
c. IRS Offer in Compromise.
There are three types of OICs:
The IRS may accept an Offer in Compromise based on three grounds:
1. Doubt as to Collectibility – Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.
2. Doubt as to Liability – A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include:
(1) the examiner made a mistake interpreting the law,
(2) the examiner failed to consider the taxpayer’s evidence or
(3) the taxpayer has new evidence.
3. Effective Tax Administration / Exceptional Circumstances.
There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC.
Tax Audits
If you’re undergoing an IRS tax audit simply fax over any letters you receive from the Internal Revenue Service we will review the IRS audit correspondence and set up your best tax defense.
Tax Levy Releases
If you have received an IRS tax Levy you will be required to fill out a form 433F with complete documentation before IRS can close your case off the IRS collection enforcement computer.
IRS will then close your case and send the Levy release to your bank or employer once they reviewed all your financial documentation.
We can work on effective tax settlement for you and your case will either result in a
- current file that’s uncollectible,
- ends up with a payment agreement, or
- file for a tax settlement called an offer in compromise.
Call us today for more details and speak directly to a former IRS agent who can handle your needs.
Tax Levy Help, IRS Settlement, IRS Back Tax Filing, Tax Audit *AFFORDABLE* Forrest City, Lockhart, Goldenrod, Casselberry, Fern Park
by Fresh Start Tax | Mar 25, 2014 | Tax Help
Being a former IRS agent many taxpayers and clients will ask, ‘If I move how will IRS find me especially if I don’t tell them”.
They will, best be assured, there are a variety of ways to find taxpayers but here is the most common.
Using Credit Bureau Information to Locate Taxpayers
Tax Examiners will use of credit bureau reports. There are two types of reports:
1.Full consumer credit report – This report contains all of the information in the short report plus loan, employment, financial and payment information.
2. Short credit report – the short report contains consumer’s name, address, former address, and places of present and former employment.
You should know that an Examination is prohibited by the Fair Credit Reporting Act (F.C.R.A.) from using full credit reports, if the reports were originally obtained for collection of a balance due.
Therefore, examiners cannot request a full credit report through Collection.
If examination needs a full credit report, a third party summons must be issued to the credit reporting agency.
IRS Examination employees can use their asset locator service to access information that is currently available in the short credit report.
IRS Will Use Your Credit Report to Find You
by Fresh Start Tax | Mar 25, 2014 | Tax Help
We are tax firm comprised of tax attorneys, tax lawyers, certified public accountants, and former IRS agents and managers and tax instructors.
We have over 206 years of professional tax experience.
Call for a free initial tax consult. 1-866-700-1040
Report of Foreign Bank and Financial Accounts (FBAR).
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, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). See the ‘Who Must File an FBAR’ section below for additional criteria.
Current FBAR Guidance FinCEN introduces new forms
On September 30, 2013, FinCEN posted, on their internet site, a notice announcing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form). FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website.
The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Form 114. It also offers an option to “explain a late filing,” or to select “Other” to enter up to 750-characters within a text box where the filer can provide a further explanation of the late filing or indicate whether the filing is made in conjunction with an IRS compliance program.
On July 29, 2013, FinCEN posted a notice on their internet site that introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf.
The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request.
The IRS is aware that some taxpayers who are dual citizens of the United States and a foreign country may have failed to timely file United States federal income tax returns or Reports of Foreign Bank and Financial Accounts despite being required to do so.
Some of those taxpayers through the media and other sources are now aware of their filing obligations and seek to come into full compliance with the law.
This fact sheet summarizes information about federal income tax return and FBAR filing requirements, how to file a federal income tax return or FBAR, and potential penalties.Financial Accounts.
Penalty Note
Note that penalties will not be imposed in all cases.
As discussed in more detail below, taxpayers who owe no U.S. tax (e.g., due to the application of the foreign earned income exclusion or foreign tax credits) will owe no failure to file or failure to pay penalties.
In addition, no FBAR penalty applies in the case of a violation that the IRS determines was due to reasonable cause. This is big news!
This fact sheet is provided for information purposes only, and the topics discussed may or may not apply to a particular taxpayer’s situation.
The IRS continues to consider the topics discussed in this fact sheet and will provide additional information as it becomes available.
- 1. U.S. income tax return filing requirement
As a United States citizen, you must file a federal income tax return for any tax year in which your gross income is equal to or greater than the applicable exemption amount and standard deduction.
You are required to report your worldwide income on your federal income tax return.
This means that you should report all income, regardless of which country is the source of the income. Generally, you only need to file returns going back six years.
- 2. Penalties imposed for failure to file income tax returns or to pay tax
If you are required to file a federal income tax return and fail to do so, or you fail to pay the amount of tax shown on your federal income tax return, you may be subject to a penalty under Internal Revenue Code (IRC) section 6651, unless you show that the failure is due to reasonable cause and not due to willful neglect.
The penalty is 5 percent of the amount of tax required to be shown on the return. If the failure continues for more than one month, an additional 5 percent penalty may be imposed for each month or fraction thereof during which the failure continues.
The total failure to file penalty cannot exceed 25 percent.
Note that there is no penalty if no tax is due.
If you fail to pay the amount of tax shown on your federal income tax return, you may be subject to a penalty for failing to pay under IRC section 6651(a)(2), unless you show that the failure is due to reasonable cause and not due to willful neglect.
The tax penalty begins running on the due date of the return (determined without regard to any extension of time for filing the return) and is 1/2 percent of the amount of tax shown on the return.
If the failure continues for more than one month, an additional 1/2 percent penalty may be imposed for each additional month or fraction thereof that the amount remains unpaid. The total failure to pay penalty cannot exceed 25 percent.
Note that there is no penalty if no tax is due.
Under IRC section 6651(c)(1), the failure to file penalty is reduced by the amount of the failure to pay penalty for any month in which both apply.
Whether a failure to file or failure to pay is due to reasonable cause is based on a consideration of the facts and circumstances.
Reasonable cause relief is generally granted by the IRS when you demonstrate that you exercised ordinary business care and prudence in meeting your tax obligations but nevertheless failed to meet them.
In determining whether you exercised ordinary business care and prudence, the IRS will consider all available information, including:
1. The reasons given for not meeting your tax obligations;
2. Your compliance history;
3. The length of time between your failure to meet your tax obligations and your subsequent compliance; and
4. Circumstances beyond your control.
Reasonable Cause
Reasonable cause may be established if you show that you were not aware of specific obligations to file returns or pay taxes, depending on the facts and circumstances.
Among the facts and circumstances that will be considered are:
a. Your education;
b. Whether you have previously been subject to the tax;
c. Whether you have been penalized before;
d. Whether there were recent changes in the tax forms or law that you could not reasonably be expected to know; and
e.The level of complexity of a tax or compliance issue.
You may have reasonable cause for noncompliance due to ignorance of the law if a reasonable and good faith effort was made to comply with the law or you were unaware of the requirement and could not reasonably be expected to know of the requirement.
- 3. Possible additional penalties that may apply in particular cases
In addition to the failure to file and failure to pay penalties, in some situations, you could be subject to other civil penalties, including the accuracy-related penalty, fraud penalty, and certain information reporting penalties.
Help with Tax Issues for Dual Citizens & FBAR Filing – Attorneys, Lawyers, CPAs – Affordable Experts
