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Fort Worth Tax Law Blog

Why there may be fewer audits of large companies

In the past, being selected for an audit used to be a death knell for a business. Given the pervasive power of the IRS to investigate and review records, and then to institute penalties and interest that could cripple a business.

To make things worse, businesses can’t always predict when they will be audited. But there is a silver lining to this; the number of audits in total has declined in recent years. Essentially, the IRS has taken a different approach towards businesses with $250 million or more in assets. 

Sales and use taxes, part 2: Problems that businesses can face

In the first part of this post, we discussed some of the common questions that businesses often have about sales and use tax compliance.

As we noted, such taxes do not only apply to sales. They can also apply to leases and rentals, and to some types of services as well. Such taxes are especially important in Texas due to the absence of a state income tax.

In this part of the post, let’s look at some of the issues that can arise for businesses and how a lawyer can help resolve them.

Sales and use taxes, part 1: an FAQ for businesses

Sales and use taxes are a big deal in Texas. It could scarcely be otherwise, given that Texas leads the nation in the percentage of state revenue coming from sales taxes.

The percentage is nearly 83 percent, according to the U.S. Census Bureau. Small wonder, then, that the issue of sales tax deductibility is important to Texas taxpayers. 

In this two-part post, we will discuss some of the issues that can arise for businesses in complying with sales and use tax requirements in Texas.

Offshore trusts: Wyly defense rejected by bankruptcy judge

Two years ago, former billionaire Sam Wyly lost a fraud trial in New York that exposed a web of offshore entities that were used to shelter millions of dollars. After the 2014 verdict, the IRS entered the fray seeking $1.4 billion in back taxes. Penalties and interest accounted for 80 percent of this amount.

The 2014 verdict prompted Wyly and his sister-in-law to file for bankruptcy (his brother and business partner had died in a car crash). If he had hoped for a better outcome in a Texas bankruptcy case, he was disappointed last week.

During the two-week bankruptcy trial, the Wylys tried to prove they had not defrauded the IRS.

How can you obtain tax penalty relief?

Are you a resident of Houston? Because of historic flooding that started on April 17, the IRS is giving you until September 1, 2016 to file your tax return and pay your taxes. 

This announcement followed a Federal Emergency Management Agency disaster declaration. Affected taxpayers in Fayette, Grimes, Harris and Parker counties automatically qualify for this relief.

Tax refund offsets, part 2: TIGTA calls for change in procedures

Let's continue our discussion of tax refund offsets. There are various scenarios in which the IRS can hold on to a refund or subtract part of it to satisfy some other obligation.

Having federal tax debt is one such scenario. As we noted in the first part of this post there are also several others.

Recently a report from the Treasury Inspector General for Tax Administration (TIGTA) questioned the IRS's procedures for handling refund offsets. In this part of the post, we will look at what TIGTA found and what changes the IRS may make in response.

Limits on FBAR penalties

Have you recently moved from China or India to the United States for a new career opportunity? Are you an American living abroad? You need to report all foreign bank accounts, if at any point in the 2015 the aggregate value of your accounts exceeded $10,000.

Failing to report overseas accounts electronically on a "Report of Foreign Bank and Financial Accounts" (FBAR) can lead to hefty penalties. Last summer, the IRS issued interim guidance limiting these penalties. In this post, we will discuss what these are for willful and non-willful violations.

Offshore holdings: Legitimate uses and reporting requirements

The global media has about exhausted the number of angles they can report on the so-called "Panama Papers." The leak has become synonymous with using offshore accounts and companies to avoid tax obligations.

Offshore accounts have been in and out of the news. The prosecution of Swiss bank giant UBS was a starting point. More recently, implementation of the Foreign Account Tax Compliance Act in the U.S. and progress on a Common Reporting Structure by the OECD have received coverage. Information is flowing more freely between countries making it much more difficult to hide offshore assets.

IRS notices: common questions on how to respond

Figuratively, to say that something is “legion” means it’s a very large number. Literally, the term refers back to ancient Rome, where a Roman legion contained thousands of soldiers, arranged into several smaller groups known as cohorts.

In the figurative sense, it would be far to say that IRS notices are legion – in the sense that there many types. In this post, we will address some common questions about responding to them.

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