Boston taxpayers are required to report all of their income, which includes any virtual currency owned. The problem is that it is easy to forget about it and that could draw the attention of the IRS. In fact, the federal taxing authority recently announced that it has begun contacting certain owners of this type of currency via mail.
After spending a lifetime working and preparing for retirement, people over the age of 65 -- here in Massachusetts and elsewhere -- often end up living on fixed incomes and others continue to work well after this birthday. Even so, many of them must still pay taxes on the income they do receive. The IRS recognizes their need to retain as much of their income as possible, so for the 2019 tax year, people within this age bracket can use a new tax form.
The Internal Revenue Service (IRS) has an array of tools it can use to force taxpayers to pay their taxes. One tool: the IRS can suspend your passport. Taxpayers who face such a suspension will receive a Notice CP508C from the IRS.
When the IRS comes knocking and asking questions about your income and the returns you filed, you probably experience a myriad of emotions ranging from shock to anxiety and everything in between just like other Massachusetts residents in your position. One of your primary concerns could be that you will owe so much more in taxes that you will not recover financially. However, that does not have to be the case. Tax audits do not have to result in financial setbacks.
About a decade ago, the IRS implemented an amnesty program that allowed taxpayers to pay back taxes, penalties and interests resulting from income earned through foreign accounts without fear of criminal persecution. In the decade that followed, about 56,000 Americans came forward to resolve more than $11 billion in tax revenue owed to the U.S. government.
Most Massachusetts taxpayers fill out their yearly tax forms, and they make sure they include every dollar of income in order to avoid any adverse repercussions for not doing so. Perhaps it's because they know, or at least suspect, that when it comes to collection taxes, the IRS has many tools at its disposal. One of those tools is the Information Returns Processing System.
When it comes to settling the bill with the IRS, the first thing that pops into most people's heads is personal and business income. While that is the case, the agency does collect other taxes as well. A Massachusetts small business owner who has employees needs to remember that the nation's taxing authority expects to receive the payroll taxes owed. If those are not paid, employers could find themselves facing charges of tax evasion.