Boston Tax Law Blog

The timeframe for appeal of a denied offer in compromise

On behalf of Levins Tax Law posted in Internal Revenue Service on Friday, November 23, 2018.

In a previous post, we discussed a denied offer in compromise filed by actor Wesley Snipes. He tried appealing, first to the IRS Office of Appeals and then to the Tax Court, but lost his appeals due to specific fact circumstances unique to his case. In this post, we’ll discuss the time frames for general appeals of denied offers in compromise.

Denied offers in compromise are appealable directly to the IRS Office of Appeals without having to go to the Tax Court. Appeals can take a long time, though, with many appeals taking a year or more to decide. The first question that springs to mind is usually this: why does it take so long?

Social media: A new tool in proving tax fraud

On behalf of Levins Tax Law on Tuesday, November 13, 2018.

How do these topics go together? The French Minister of Action and Public Accounts, Gerald Darmanin, announced that its IRS-equivalent tax enforcement agency will start searching social media as it cracks down on tax fraud. Here in the U.S., the Criminal Investigation division of the IRS (IRS-CI) also reviews social media when building tax fraud cases.

Darmanin warned, “If you have numerous pictures of yourself with a luxury car while you don’t have the means to own one, then maybe your cousin or girlfriend has lent it to you … or maybe not. (emphasis added)” To review public posts, the IRS and other law enforcement organizations do not generally need subpoenas.

Tax Court sustains rejection of high-profile offer in compromise

On behalf of Levins Tax Law posted in Tax Evasion on Tuesday, November 13, 2018.

The IRS scored much more than a glancing blow to former action movie powerhouse actor Wesley Snipes this week, with the Tax Court sustaining the Service’s rejection of a lowball offer in compromise settlement. Snipes owes more than $23.5 million in back taxes to the government, dating back to between 1999 and 2006, a period during which he made approximately $40 million but paid no taxes (he also didn’t file tax returns during that time).

Snipes was convicted of three misdemeanor counts of failing to file tax returns back in 2008, and eventually served three years in federal prison between 2010 and 2013. After his release, the IRS once again assessed past due taxes, this time totaling roughly $23.5 million after accounting for original tax amounts, penalties and interest. Snipes, in seeing that massive tax bill, proffered an offer in compromise of less than $843,000, which represents only four percent of the assessed taxes due.

Tips to lower your 2018 taxes

On behalf of Levins Tax Law posted in Internal Revenue Service on Monday, November 5, 2018.

The 2017 Tax Cuts and Jobs Act dramatically changed the way Americans handle taxes. In addition to doubling the standard deduction and lowering the deductability of state and local taxes (SALT) funds, other changes exist as well, all of which might affect you come tax time.

These helpful tips might allow you to lower your 2018 tax bill, but you need to act fast in order to take advantage of them.

How are election workers treated for tax purposes?

On behalf of Levins Tax Law posted in Internal Revenue Service on Wednesday, October 31, 2018.

With the midterm elections right around the corner, there is an uptick in the number of election workers on the books for local, state and federal-level elections. Many of these workers are volunteers, but some of them receive payment for their time.

If workers earn compensation, then their income might be subject to withholding and inclusion as income for tax purposes. This post will provide more insight into how election workers fare under federal tax regulations.

How will MA DOR respond to the mandatory repatriation tax?

On behalf of Levins Tax Law on Monday, October 29, 2018.

State tax obligations may change in response to the passage of the Tax Cuts and Jobs Act (TCJA). State tax law generally responds to changes in the federal tax code in one of four ways: it will change state tax laws through rolling conformity, annual conformity, fixed conformity or selective conformity.

Pass-through businesses and deductions

On behalf of Levins Tax Law posted in Internal Revenue Service on Wednesday, October 24, 2018.

If you are a small business owner, the Tax Cuts and Jobs Act likely created some tax-related questions for you. You may be wondering, for example, how to determine your business income deductions under Section 199A.

What is the qualified business income deduction?

Business deductions set to change because of the TCJA

On behalf of Levins Tax Law posted in Internal Revenue Service on Wednesday, October 17, 2018.

Are you a business owner? Have you grown accustomed to expensing – and deducting – business meals, entertainment, recreation and similar costs? If so, then you should definitely read this post.

The IRS recently issued guidance regarding the types of allowable deductions for business-related entertainment and meal expenditures. The changes are the result of amendments to existing IRS regulations brought about by the passage of the Tax Cuts and Jobs Act back in 2017.

IRS finalizes rules regarding charitable contributions

On behalf of Levins Tax Law posted in Internal Revenue Service on Friday, October 12, 2018.

Recently the IRS issued final rules regarding the reporting and record-keeping requirements for deductible non-cash charitable contributions. There are different categories of mandatory documentation required for various amounts of contributions. Regardless of the value of the contribution, though, proof of its value is necessary, whether in the form of a hand-written note, a receipt or a qualified appraisal.

Following these documentation requirements can help you avoid having the IRS come asking questions, and they might even prevent you from being audited.

Neglecting FATCA reporting risks noncompliance for banks

On behalf of Levins Tax Law posted in Internal Revenue Service on Monday, October 8, 2018.

Foreign financial institutions (FFIs) without an adequate reporting strategy could risk noncompliance with IRS regulations regarding offshore accounts. Non-domestic accounts subject to the Foreign Account Tax Compliance Act (FATCA) must be reported by financial institutions as well as by the account holders themselves under the tax code. Not adequately informing the IRS – either directly or indirectly – about the presence of foreign assets held by U.S. taxpayers could lead to steep penalties, both for the account holder and the FFI itself. In particular, the FFI could face a punitive withholding tax that may far outweigh the cost of any single foreign account.

Evolution is key