IRS Appeals Reverts Back to Face to Face Appeals Conferences

On September 20, 2016, we posted No More Face to Face Meetings at IRS Appeals Division? where we discussed that the IRS announced that effective Oct. 1, 2016, it will rarely conduct Appeals Conferences in person.

More specifically, Internal Revenue Manual (IRM) 8.6.1.4, blandly entitled “Conference Practices,” provides that ALL conferences will be held by telephone except under certain specific enumerated circumstances.

The mission of the IRS Appeals Division is to “resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service.” We then stated: "Unfortunately, This New Policy Will Not Further That Mission, and Indeed Will Impede It."

Now the IRS agrees with us and even though the IRS is still cash-strapped, the decision to reduce the number of in-person meetings it grants taxpayers during appeals may defeat the agency's goal to save resources if it is forced into litigation as a result of less effective communication by mail, telephone or videoconferencing.

Web-Based Virtual Conferences

On July 24, 2017 The Internal Revenue Service Office of Appeals issued IR 2017-122 
where they stated that the IRS will pilot a new web-based virtual conference option for taxpayers and their representatives. This virtual face-to-face option will provide an additional option for taxpayer conferences. The IRS expects it to be especially useful for taxpayers located far from an IRS Appeals office.

While a phone call works well for most taxpayers, others prefer face-to-face interaction. Appeals’ pilot program will use a secure, web-based screen-sharing platform to connect with taxpayers face-to-face from anywhere they have internet access.

Appeals started the pilot on August 1, 2017 and will assess the results, including taxpayer satisfaction with the technology.  

Optional Requested Face to Face Conferences  Now according to BNA IRS Appeals will revert to accommodating taxpayers who want in-person conferences rather than phone conferences, an IRS official said.

1. “Step one is going to be for field cases to turn the decision back over to taxpayers,” Andy Keyso, acting deputy chief at the Internal Revenue Service Office of Appeals, said at the American Bar Association tax section meeting in Austin, Texas. “Do you want an in-person conference? If so, you’ll get it.”
2. Step two is to include campus cases. Currently, Appeals is unable to offer in-person conferences for smaller cases that are worked out of the IRS campuses, Keyso said.

Field cases include audits by a field revenue agent or office examiner, while campus cases include correspondence exam cases, according to Keyso.  The campus buildings however, don’t have conference facilities.

“For campus cases, we have some adjustments to make internally before we can do that...” Keyso said

Long term IRS Appeals has to realign its workforce, “which is difficult to do right now.”

The IRS will issue guidance to employees about the agency’s rollback of the in-person conference issue, Keyso said. The guidance will include information on what IRS employees need to be prepared for taxpayers in field cases who want in-person conferences as well as issues with campus cases.

Still, Appeals isn’t working well for small business and individual taxpayers, Nina E. Olson, IRS national taxpayer advocate, said during the panel.

About 75 percent to 80 percent of individual taxpayer appeals are conducted by correspondence, Olson said, and no employee is assigned to any correspondence examination. Individual taxpayers should be able to get the opportunity to speak with someone from the IRS, Olson said, to understand the agency’s side of a tax dispute.   

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or Toll Free at 888-8TaxAid (888 882-9243).

 

 

 

 

 

 

 

 

 

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IRS Provides Leave-Based Donation Relief to Victims or Hurricane Irma

The Internal Revenue Service announced on September 14, 2017 special relief designed to support leave-based donation programs to aid victims of Hurricane and Tropical Storm Irma. This parallels relief granted to Hurricane and Tropical Storm Harvey victims.

Under these programs, employees may forgo their vacation, sick or personal leave in exchange for cash payments the employer makes, before Jan. 1, 2019, to charitable organizations providing relief for the victims of this disaster.

Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the cash payments as business expenses.

This relief is similar to that provided following Hurricane Katrina in 2005, Hurricane Sandy in 2012, the Ebola outbreak in West Africa in 2014, and last year following Hurricane Matthew and severe flooding in Louisiana.

• Details of this relief are in Notice 2017-52, posted today on IRS.gov.
• Information on other tax relief available to victims of Hurricane Irma can be found at www.irs.gov/hurricaneirma.
• For information on government-wide relief efforts, visit www.USA.gov/hurricane-Irma

We here at Marini & Associates, PA, are grateful for the fact that our attorneys, staff, and their families are safely accounted for. As always, their well-being and that of our clients are our top priorities.

Our thoughts are with those still affected!

 

 

As the focus now turns to recovery, Marini & Associates, PA is prepared and ready to serve both the interests of our clients and the needs of our community. Our Office is Open & Fully Operational! 

 

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243). 



 

 

 

 

 

Marini & Associates, PA Survives Hurricane Irma!

Here in South Florida, Hurricane Irma has flooded parts of our region and left many without power.

However, at Marini & Associates, PA, we are grateful for the fact that our attorneys, staff, and their families are safely accounted for. As always, their well-being and that of our clients are our top priorities. Our thoughts are with those still affected!

As the focus now turns to recovery, Marini & Associates, PA is prepared and ready to serve both the interests of our clients and the needs of our community.

Our Office is Open & Fully Operational! 

Marini & Associates, PA continues to be a leader in providing Tax Advice and Tax Defense Representation to clients throughout the United States and around the world.

Based in Miami, Florida our focus is the practice of Tax Law, with an emphasis on Zealously Representing & Defending Taxpayers before the IRS and various Other Tax Authorities.

If you have been contacted by the IRS or Other Tax Authority, regarding you or your tax liability, contact Marini & Associates, PA immediately for HELP in representing and defending you from further Governmental Actions!

Our Team of Tax Attorneys:

• Have > 100 years of combined experience,
• Are highly effective,
• Solution-oriented tax attorneys,
• Who care about the clients we represent.

We have successfully represented numerous taxpayers before the IRS and we are included in Martindale–Hubbell's Bar Registry of "Preeminent Lawyers" and we are also listed in "Lawyers of Distinction".

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243). 



 

 

How Will the IRS Know About My Foreign Account?

Taxpayers who have financial assets outside the United States often ask the question "How will they (IRS) know about my Foreign Account?;" when they are considering how (or whether) to come clean and inform the IRS about their previously undisclosed foreign financial accounts.

For years, there was little public knowledge of the U.S. government’s foreign financial reporting requirements, and enforcement of those rules was not always very strict.

However, since 2008,  a string of scandals involving foreign banks and investigations by the U.S. government into various non-U.S. financial institutions has garnered international media attention and changed the way governments around the world deal with offshore financial accounts.

 

1. FATCA. In 2010, the U.S. Congress supplemented its existing international tax treaties and information exchange agreements by passing the Foreign Account Tax Compliance Act (“FATCA”).

• The main goal of FATCA was to make it more difficult for U.S. taxpayers to hide assets in offshore accounts and entities and therefore to increase U.S. tax revenue by ensuring income from those accounts is reported in the U.S. Government officials have estimated that the U.S. loses between $40 billion and $70 billion a year in unpaid taxes on offshore assets.
• FATCA requires worldwide financial institutions to report to the IRS certain information about accounts that are owned by U.S. persons (whom they identify through a variety of methods, including the request of Forms W-9).
• While FATCA has drawn intense criticism from around the world (and in the U.S.), it now appears that the law is here to stay, and other governments have made similar strides in increasing the scope of their international tax information exchange.

2. Swiss Bank Program. The U.S. government recently ended their "Swiss Bank Program" a disclosure program that forced Swiss banks to reveal the ways in which they helped U.S. taxpayers evade taxes.

 

• Over the three year program, the U.S. gathered information from 80 Swiss banks and collected over $1 billion in penalties from those banks.
• The program also provided information to the IRS about other jurisdictions that may commonly hide U.S.-owned assets.

3. Data Mining. The IRS also continues to "Data Mine" to gather information provided by the more than 54,000 taxpayers who have filed under the IRS’ Offshore Voluntary Disclosure Program since 2009.

• The U.S. will use this information to assess what other jurisdictions, foreign banks, and facilitators may be assisting U.S. clients in evading their tax obligations and to assist in future prosecutions.

4. Panama Papers. In April 2016 over 11.5 million financial and legal records from Panamanian law firm Mossack Fonseca where leak to the press, which underscores the risk of public disclosure of financial records related to undisclosed foreign financial accounts.

• An anonymous source provided the information in the “Panama Papers” leak to various global news organizations that have since been reviewing the files in detail.
•  The leak created a scandal for many high-profile politicians around the world and forced some to resign.
• It was revealed that the firm had created over 2,800 companies in offshore havens for over 2,400 U.S. clients as well.
• While many of these transactions are legal, U.S. taxpayers must fulfill various foreign information reporting requirements with the IRS related to non-U.S. financial accounts and entities, or they face substantial penalties for noncompliance.
• In response to the Panama Papers, the U.S. government has also proposed and enacted new rules making it harder to conceal the identities of the true owners of companies.
• The release of the Panama Papers is just the latest example in the ongoing movement around the world to make it harder for taxpayers to hide their assets offshore and evade taxes.
• Nowhere has this movement been more pronounced than in the U.S., where government officials have repeatedly made clear that continuing to hide financial assets will get more and more dangerous and difficult, and that taxpayers should come forward as soon as possible to come into compliance with their U.S. tax and reporting obligations.

Marini & Associates, PA has assisted several hundred clients with coming into U.S. tax compliance and avoiding the draconian penalties that the IRS may impose on U.S. persons with undisclosed accounts.

Do You Have Undeclared Foreign Income?

 

  

 Want to Know if Which OVDP Program is Right for You?

 

Contact the Tax Lawyers at 

Marini& Associates, P.A.  

 

 

for a FREE Tax Consultation

at: www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

IRS Audits - How Are Tax Returns Selected for Audit?

In order to determine how to respond to an IRS Tax Audit, it is helpful to understand how tax returns are selected for examination. The IRS selects returns for examinations in several ways, some based upon objective criteria coded into a carefully protected computer program and others based upon old fashioned investigation work. 

Selection for an IRS Audit does not always suggest there’s a problem. The IRS uses several different methods:

1. Random Selection and Computer Screening?  Sometimes returns are selected based solely on a statistical formula. The IRS compares your tax return against “norms” for similar returns. The IRS develop these “norms” from audits of a statistically valid random sample of returns, as part of the National Research Program the IRS conducts. The IRS uses this program to update return selection information.

Many returns are selected through the use of a computer program called the Discriminant Function System (DIF). This program scores each return that is filed for potential error based upon past IRS audit experience. The returns receiving high scores are made available for examination. IRM 4.1.3.2 (10-24-06). The DIF formulas are listed in the Law Enforcement Manual, which is not publicly available.

1. The Discriminate Function (DIF) score is the product of a mathematical formula for identifying and selecting returns for examination.
2. The program scores tax returns using a formula based on historic information obtained from specific examination programs. A high DIF score indicates a high potential for adjustment.
3. The Service periodically conducts compliance studies to update and reformulate its basis for audit selection formulas. 
4. Different types of taxpayers and returns are subject to different DIF formulas. While the specifics of the program are not public, certain items appear to cause a return to be selected for examination, such as:

                                                               i.      Participation in a Tax Shelter,

                                                              ii.      A large Charitable Contributions,

                                                            iii.      A Home Office Deductions

                                                            iv.      A Large Travel & Entertainment Expense (e.g. Sky Box. etc.) or

                                                             v.      A Large Automobile Expense.

Returns selected under the DIF program are then manually screened, so that attachments to the return and other data that a computer cannot detect can be properly considered.

Other returns are selected at random under current national or regional studies, such as the National Research Program (NRP), the successor to the Taxpayer Compliance Measurement Program (TCMP). The results of these examinations are used to measure and evaluate taxpayer compliance and to revise the DIF program. NRP and TCMP audits.

Alternatively, the IRS may receive information from other federal agencies. (See IRM 4.6.2 (8-1-02)) and they may also receive information through federal-state programs (See IRM 4.1.4.2.4 (10-24-06)). 

2. Related examinations – The IRS may select your returns when they involve issues or transactions with other taxpayers, such as Business Partners or Investors, whose returns were selected for audit. This is affectionately referred to as an “Audit by Infection.”
3. Review After Selection by IRS - After selection, an experienced auditor reviews the return. They may accept it; or if the auditor notes something questionable, they will identify the items noted and forward the return for assignment to an examining group.

a.       Filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may itself be selected for audit.

b.      A refund is not necessarily a trigger for an audit, but it could trigger an examination.

4.      Information Provided by 3^rd Parties – The Service also relies on information provided by third parties, such as banks, brokers and employers. Much of this information is required to be reported by payers of certain types of income on Forms W-2 or 1099.

 

5.     Referrals by IRS Agents - Referrals may also be made by other examining agents. For example, the return of a party related to another taxpayer being audited, such as the partners of a partnership being audited may also be selected for audit. The Service also may investigate tips regarding potential noncompliance, and select those returns for audit as a result.
 

6.     Other IRS Audit Triggers - Examinations may also be triggered a variety of other ways, such as, by mathematical errors or missing information. Also, a claim for refund can potentially trigger an examination.

The IRS has broad authority to examine tax returns. An understanding of the rights and responsibilities of both taxpayers and the examining agent can help reduce the scope of a tax audit or examination and can lead to a more favorable disposition.

 

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243). 



 

How Will the IRS Know About My Foreign Account?

Taxpayers who have financial assets outside the United States often ask the question "How will they (IRS) know about my Foreign Account?;" when they are considering how (or whether) to come clean and inform the IRS about their previously undisclosed foreign financial accounts.

For years, there was little public knowledge of the U.S. government’s foreign financial reporting requirements, and enforcement of those rules was not always very strict.

However, since 2008,  a string of scandals involving foreign banks and investigations by the U.S. government into various non-U.S. financial institutions has garnered international media attention and changed the way governments around the world deal with offshore financial accounts.

 

1. FATCA. In 2010, the U.S. Congress supplemented its existing international tax treaties and information exchange agreements by passing the Foreign Account Tax Compliance Act (“FATCA”).

• The main goal of FATCA was to make it more difficult for U.S. taxpayers to hide assets in offshore accounts and entities and therefore to increase U.S. tax revenue by ensuring income from those accounts is reported in the U.S. Government officials have estimated that the U.S. loses between $40 billion and $70 billion a year in unpaid taxes on offshore assets.
• FATCA requires worldwide financial institutions to report to the IRS certain information about accounts that are owned by U.S. persons (whom they identify through a variety of methods, including the request of Forms W-9).
• While FATCA has drawn intense criticism from around the world (and in the U.S.), it now appears that the law is here to stay, and other governments have made similar strides in increasing the scope of their international tax information exchange.

2. Swiss Bank Program. The U.S. government recently ended their "Swiss Bank Program" a disclosure program that forced Swiss banks to reveal the ways in which they helped U.S. taxpayers evade taxes.

 

• Over the three year program, the U.S. gathered information from 80 Swiss banks and collected over $1 billion in penalties from those banks.
• The program also provided information to the IRS about other jurisdictions that may commonly hide U.S.-owned assets.

3. Data Mining. The IRS also continues to "Data Mine" to gather information provided by the more than 54,000 taxpayers who have filed under the IRS’ Offshore Voluntary Disclosure Program since 2009.

• The U.S. will use this information to assess what other jurisdictions, foreign banks, and facilitators may be assisting U.S. clients in evading their tax obligations and to assist in future prosecutions.

4. Panama Papers. In April 2016 over 11.5 million financial and legal records from Panamanian law firm Mossack Fonseca where leak to the press, which underscores the risk of public disclosure of financial records related to undisclosed foreign financial accounts.

• An anonymous source provided the information in the “Panama Papers” leak to various global news organizations that have since been reviewing the files in detail.
•  The leak created a scandal for many high-profile politicians around the world and forced some to resign.
• It was revealed that the firm had created over 2,800 companies in offshore havens for over 2,400 U.S. clients as well.
• While many of these transactions are legal, U.S. taxpayers must fulfill various foreign information reporting requirements with the IRS related to non-U.S. financial accounts and entities, or they face substantial penalties for noncompliance.
• In response to the Panama Papers, the U.S. government has also proposed and enacted new rules making it harder to conceal the identities of the true owners of companies.
• The release of the Panama Papers is just the latest example in the ongoing movement around the world to make it harder for taxpayers to hide their assets offshore and evade taxes.
• Nowhere has this movement been more pronounced than in the U.S., where government officials have repeatedly made clear that continuing to hide financial assets will get more and more dangerous and difficult, and that taxpayers should come forward as soon as possible to come into compliance with their U.S. tax and reporting obligations.

Marini & Associates, PA has assisted several hundred clients with coming into U.S. tax compliance and avoiding the draconian penalties that the IRS may impose on U.S. persons with undisclosed accounts.

Do You Have Undeclared Foreign Income?

 

  

 Want to Know if Which OVDP Program is Right for You?

 

Contact the Tax Lawyers at 

Marini& Associates, P.A.  

 

 

for a FREE Tax Consultation

at: www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243