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.
Owning a business is a dream of many Massachusetts residents, but doing so comes with certain financial responsibilities. Most people fulfill these obligations, which include paying personal and business taxes. Every so often, the IRS alleges that certain business owners commit tax crimes by falsifying returns and failing to pay amounts the agency believes are due.
It is tax time again. Numerous Massachusetts residents may anticipate refunds while others expect to pay. In either case, filings need to be made, and many people turn to others for help in maximizing refunds and minimizing payments. The problem is innocent people could end up paying for taxes filed incorrectly because they unknowingly became the victims of scammers.
The old adage “just because you are charged with a crime does not mean you are guilty” is more than just a cliché used by criminal defense attorneys to procure business. Many times there is a real life application.
In prior posts, we highlighted the difference between an honest mistake that results in the incorrect amount of taxes paid, and outright fraud where a taxpayer affirmatively tries to avoid paying taxes. Indeed, it is easy to point out the difference between fraud and mistakes in the abstract, but what defenses are actually available when the IRS thinks that you cheated on your taxes?
For most people, dealing with the IRS may not be at the forefront of their plans in January, especially when they have not received their w-2's or corporate bonuses from the past year. Nevertheless, what you do between now and the federal income tax filing deadline (April 17) could subject you to civil or criminal penalties depending on how it is viewed by tax authorities.
For some people, this week’s snow storm will be a unique opportunity to hunker down and complete their federal income tax returns. For some people, it may take only an hour or two. For others, it may be a project that takes the entire week and then some.
In a prior post, we highlighted the question of how broad the term “obstruction of justice” could be construed in the context of bringing criminal charges for continuing failures to file federal tax returns. We noted that the owner of a freight service company was indicted on nine counts of tax related offenses, including a violation of Section 7212(a) of the Tax Code, which calls for criminal sanctions upon anyone who “corruptly…obstructs or impedes or endeavors to obstruct or impede the due administration of the Internal Revenue Code.”
If you have paid any attention to national political news over the last few months, the term "obstruction of justice" has been mentioned a number of times. To the uninitiated, federal law is broadly defined to punish conduct that affects the "due administration of justice." This largely means that conduct that would adversely affect a pending judicial proceeding or law enforcement investigation may be considered a crime punishable under federal law.
FBAR and FATCA violations are either willful or non-willful in nature. The penalties for inadvertent or non-willful violations are understandably lesser than those for willful non-compliance. The IRS punishes those who non-willfully violate FBAR filing mandates with penalties of up to $10,000 per non-complying tax year.