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Posts tagged "IRS"

US signs pacts with 6 countries to eliminate tax evasion

Massachusetts residents might have heard that six more countries have signed a pact that is intended to stop Americans from dodging the Internal Revenue Service by keeping their money overseas. The agreements are hoped to help cut down tax evasion by individuals who have bank accounts in Bermuda, the Netherlands, Malta and three UK Crown Dependencies, which include Guernsey, Jersey and the Isle of Man, according to U.S. Treasury officials. With these latest agreements, the U.S. has 18 foreign countries or dependencies on board with 11 more looking ready to sign.

IRS contract workers delinquent on taxes

People who work for the Internal Revenue Service in Massachusetts and at its other locations around the country are required to pay income taxes like everyone else. Unlike other federal agencies, the IRS requires its all of its workers to be in full compliance by timely filing their returns and either paying in full all amounts owed or entering into approved installment arrangements. However, a report recently released by the agency's inspector general showed that nearly 700 contract workers owe a combined total of $5.4 million in taxes. Over half of those are supposedly ineligible to work for the IRS because they have not enrolled in an installment plan to get them caught up.

New IRS laws to impact restaurants

Restaurants in Massachusetts will be having to deal with new rules regarding the way that the Internal Revenue Service handles some tips for waiters. The IRS will now classify a number of waiters' tips as taxable income to the restaurant instead of considering them to be self-reported tips. Under this new policy, according to a recent article in the Wall Street Journal, tips that are automatically included by restaurants in the bill for large tables will now be considered taxable service charges.

Powerball winners share a $448M jackpot with the IRS

Three lottery players have hit the Powerball jackpot and will share a $448 million prize. All three of the winners purchased tickets and picked five numbers between 1 and 59, as well as a Powerball number from 1 to 35. The jackpot, which was expected to be $425 million during the final days, grew by $23 million in the final hours.

A proactive stance can help when short on money for taxes

Not having enough money to pay your taxes can be intimidating, but ignoring the matter should be even more so. Unfortunately, some Massachusetts residents have the mistaken notion that if they do not have the money to pay their taxes, they should not file a return. Nothing could be further from the truth. Failing to file a return along with failure to pay taxes when due can result in a myriad of consequences beyond the usual penalty fees and interest. Bank levies and asset seizure are a couple of examples of what can happen when taxes that are due and payable are not reported or paid in a timely fashion.

Carefully choose a tax preparer to avoid problems

The IRS is aware of several tactics that unethical tax preparers use, and it is trying to warn the general public this tax season. Tax preparers may file false income tax returns by claiming more personal expenses or business expenses, claiming deductions or credits that they do not qualify for and using exemptions in an excessive manner. The IRS has also seen tax preparers who may change income figures on the tax returns to try to get more credits for the client. However, Boston taxpayers are the ones who are ultimately held responsible when fraudulent income tax returns are submitted. Typically, they are required to pay any additional taxes, interest and penalties that are incurred due to a false income tax return. They may also be held criminally liable in some cases.

Former Quincy resident convicted for tax evasion

A 70-year-old man formerly of Quincy was convicted for five counts of tax evasion as well as stealing funds from a federal housing assistance program. The man was also convicted of two counts of conspiracy and two counts of making false statements. The tax evasion convictions and related charges involved two elaborate schemes: one involving a false-invoice scheme and the other Section 8 housing fraud.The crime began after he was hired as a salesman by Xcel Fire Protection, an indoor sprinkler company. The man told Xcel's general manager that he owned several businesses, including a trucking company, moving and real estate business and a business equipment company. According to authorities, the man sent false invoices in the names of the companies that he owned to Xcel for goods or services that these businesses had never provided. The general manager authorized the company to pay the invoices by check. In exchange, the man gave the general manager 90 percent of the value of the checks while keeping 10 percent for himself. The man and the general manager did not pay the correct amount of income taxes toward the $490,000 that they received through these transactions.

IRS orders information about foreign bank accounts

Massachusetts residents who possess offshore accounts would do well to follow an ongoing case in which a U.S. District Court judge most recently instructed five unidentified individuals to reveal confidential information about their finances. The judge ordered these taxpayers to divulge information about their foreign bank accounts to a grand jury to potentially use in a federal case against them.While some may argue that the judge had no authority to deprive individuals of their right to avoid self-incrimination, the judge said that individuals do not have the right to refuse disclosure of their bank records to the grand jury. The judge also argued that taxpayers cannot avoid being accountable because they used offshore accounts to try to hide assets. District courts in three other jurisdictions have also ruled that information related to a foreign bank account is not protected by the assertion of a Fifth Amendment right against self-discrimination. Furthermore, these courts have held that information pertaining to foreign bank accounts is governed by the federal government's "Required Records Doctrine."

Don't plan on getting to talk to the IRS this tax season

While the IRS is typically difficult to reach immediately after Presidents' Day because many Massachusetts residents have either filed their taxes by this time or they may be peppering the agency with questions regarding tax returns, the late start of the 2013 tax season may make this feat nearly impossible. Over the years, the IRS has become increasingly difficult to reach during tax season. According to the Taxpayer Advocate Service, more than 100 million people contacted the IRS in 2012. Out of this number of people, more than 30 percent of them were never able to reach a customer service representative. For those consumers who were able to reach an actual agent, the average wait time was 17 minutes in 2012, a nearly 50 percent increase over the average 12-minute wait in 2011. Further, the wait time in 2012 was more than three times the average wait time that consumers experienced in 2007.

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