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Boston Tax Law Blog

IRS wage garnishment: A continuous levy

Debt is not all created the same. Certain creditors - the IRS for example - have additional powers to collect past due balances. Failing to deal with a tax problem could mean the agency seizes your wages or even Social Security benefits.

What is the process to levy wages? How much can the IRS take each pay period? When does wage garnishment stop? Do you have any rights? We’ll answer these basic questions in this post

Bitcoin: Latest target of IRS John Doe Summons

Why does the IRS use a John Doe Summons to get tax-related information? This type of request is used by the Service when it does not know the identity of a taxpayer.

The IRS successfully used a John Doe Summons against UBS to obtain the names of account holders. In that case, collections topped $10 billion in taxes and fines against those who had not disclosed their offshore bank accounts.

Self-employment tax and S corporations

Make a mistake with the choice of entity or contract terms when starting up a company and it could have serious consequences down the road. A warning comes in the form of a tax court case decision at the end of December.

Forbes reported on the facts of the case. The outcome was that a licensed financial consultant was hit with a significant self-employment tax liability after income was assigned to him rather than his S corporation. 

The streamlined offshore reporting processes and willfulness

The concept of willfulness in the context of non-compliance with tax reporting and payment regulations concerning offshore accounts has been a popular topic in legal circles lately. So much so that the American Bar Association recently held a conference dealing specifically with important issues in that arena.

Much of the ABA's National Institute on Criminal Tax Fraud and Institute on Tax Controversy dealt with the distinctions between the streamlined IRS process for becoming compliant with FBAR and FATCA reporting mandates and the more in-depth Offshore Voluntary Disclosure Program (better known as the OVDP). The streamlined process, known as Streamlined Foreign Offshore Procedures (for non-U.S. residents) or the Streamlined Domestic Offshore Procedures (for U.S. residents) isn't appropriate for everyone, and those who fear that willful conduct could potentially subject them to criminal consequences should definitely consider the OVDP first.

How willfulness increases FBAR penalties

The Offshore Voluntary Disclosure Program (OVDP) is not a given. You must apply to take part and then be accepted into the program.

The FBAR – electronically filed with the BSA on FinCen Form 114 – must be submitted for each year that overseas account assets total more than $10,000 in the aggregate. Penalties for failing to file are substantial, but increase for willful failures. What exactly constitutes willful behavior? A recent case provides some examples.

End-of-year tax tips

With the year end quickly approaching, you generally have until December 31 to take actions to impact your 2016 tax return. If you missed the April and extended October tax return filing deadlines for tax year 2015, now is also a good time to finally clear up lingering issues.

What steps might you want to take in these last weeks if planning ahead? In this post, we will examine a couple that could make a difference.

Avoiding a Massachusetts Department of Revenue sales tax audit

Owning a restaurant or pizza place in Massachusetts requires good record keeping. The Massachusetts Department of Revenue takes sales tax compliance seriously. Fail to report sales, collect the proper tax or pay the DOR in a timely manner and the penalties can be substantial.

Initial attention needs to be devoted to understanding what is subject to the 6.25 percent meals tax. In addition, many cities and towns including Boston and Framingham have adopted the .75 cent local meals tax. In this post, we provide some tips for avoiding a visit from the state DOR. If questions arise or a tax audit is initiated, a skilled tax attorney can help you resolve the situation.

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.

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