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Boston Tax Law Blog

Filing deadline changes coming in 2017

The IRS officially announced that tax season will begin on January 23rd when it starts accepting returns. You will have a few extra days to get your returned filed with a due date of Tuesday, April 17 in 2017.

But for those with offshore accounts and those who file a partnership return there are notable deadline changes. In this post, we explain the changes so you can avoid late filing penalties.

3 Tips to survive an IRS field audit

While most IRS audits are completed via written correspondence, the agency still utilizes in person audits. When an IRS agent requests to come to your home or business, the situation is serious.

Generally, experienced agents are assigned these cases and they can seek orders to compel disclosure. Here are three tips for surviving one of these IRS tax audits.

IRS still pushing hard on offshore account enforcement

For the length of nearly two full presidential terms, the IRS has been pushing hard on enforcement of foreign account disclosure requirements.

Tens of thousands of taxpayers have chosen to enter voluntary disclosure programs, seeking to minimize their liability exposure. These programs have brought in a staggering amount in back taxes, penalties and interest. The total collected is already in the neighborhood of $10 billion.

Could a soda tax be coming to Massachusetts?

This summer the city council in Philadelphia passed a measure approving a 1.5 cent per ounce tax increase on beverages with added sweeteners. Last week, voters passed ballot measures in three California communities adding a penny per ounce by overwhelming majorities. Boulder had the closest contest, but instead will raise the levy by two cents per ounce.

Then at end the week, the Cook County Board President ensured a penny-an-ounce soda tax will go into effect in Chicago. Governor Deval Patrick was an early proponent, but he was unable to pass a Massachusetts state tax law increasing the levy on soda or candy.

Why is the Department of Revenue auditing your tax return?

The Massachusetts Department of Revenue works closely with the IRS. The information sharing between federal and state or within state agencies is frequently a trigger. This means what seemed like a problem related to the classification of workers could be something much larger when the state and federal tax implications are layered on.

Another reason that your return may have been selected for audit is random chance. The state agency reviews a random selection of tax returns to determine if patterns emerge that must be addressed. Regardless of the reason your return was selected for an audit, the process can take time.

Could Pease limitations affect your itemized deductions?

Almost all higher-income taxpayers itemize deductions on their tax returns. The Massachusetts Department of Revenue reports each year on the number of million-dollar earners in the state.

The Boston Globe reported on the most recent data from the 2014 tax year. There were 15,422 of these households in the state, a 22 percent increase over the 2013. Of course, it does not take a million-plus income to hit certain phase-outs (referred to as Pease limitations) for deductions.

Bruins still await Tax Court ruling on team-meal deductions

The Bruins are off to a 4-4 start this season. This puts them in the middle of the pack in the standings in a tough Atlantic Division led by the undefeated Montreal Canadiens.

But it isn't only NHL hockey rinks where the Bruins are in action. They are also competing in the U.S. Tax Court. Their lawsuit against the IRS, seeking to fully deduct the expense of pregame team meals for players on the road, remains ongoing.

Timing and discharge of tax debts in bankruptcy

Of all the debts that can be discharged in bankruptcy, past due federal taxes might be subject to the most complicated timing rules. There are generally no exceptions, so get a date wrong and you might not receive a discharge.

We’ll discuss one case that highlights what can go wrong. Bringing in the assistance of an attorney who understands both bankruptcy and tax law can avoid any timing problems.

Nelly’s tax troubles may soon include seized ticket sales

We don’t often write about celebrity tax problems in this blog. And while you may not owe $2.5 million in back taxes, this story does illustrate the tools the IRS has at its disposal to collect.

In August, the IRS filed a $2.4 million tax lien against the rap artist’s property. Now the Service is seeking some of the income he is scheduled to earn from five concert tour dates. A request to seize a portion of the proceeds from ticket sales has been sent to Ticketmaster. Could your wages be taken if you have past due tax debt?

Expanded streamlined processing for installment agreements

Installment agreements are available in most cases when you owe taxes to the IRS. This can allow you to make manageable monthly payments and avoid collection actions like wage garnishment or a levy of your bank account.

The IRS announced last week that it will be testing expanded criteria now through September 17, 2017. Depending on the results the changes may become permanent.

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