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Fort Worth Tax Law Blog

Any taxpayer can face tax problems with the IRS, even a tax judge

This past week, news hit the airwaves about a former U.S. Tax Court judge who pleaded guilty to violation of federal tax law. This dramatic story speaks to every taxpayer with the message that anyone of any stature or with any level of education can potentially face criminal tax charges.

It also illustrates the importance of anyone who faces the IRS in a criminal or civil charge of not complying with tax laws getting experienced and aggressive legal representation as early as possible. A criminal defense lawyer specifically with tax experience can negotiate with the IRS and federal prosecutors for resolution of the dispute outside of court if possible. Such matters can often be settled well short of a criminal trial, but if necessary, an attorney can launch a vigorous defense of the taxpayer in court.

Offshore account "safe harbor" programs by the numbers

While it's not against the law to own a foreign bank account, the tax code requires that you disclose it and pay tax on income. Since 2009, the IRS has devoted significant resources to offshore account compliance.

A couple years ago, we wrote an article with an update on the results from the first (2009) and second (2011) voluntary disclosures programs. A third round had opened in 2012 and is currently ongoing.

The Offshore Voluntary Disclosure Program was designed to allow you to mitigate consequences (i.e. avoid criminal charges and limit civil penalties) while coming into compliance. More recent Streamlined Filing Compliance Procedures have been offered for non-willful omissions.

Midco transactions: when is one party liable for another's taxes?

Yesterday news broke about the merger of AT & T and Time Warner. The deal is worth a reported $85 billion, so understandably there's a lot of buzz.

There are all sorts of deals, however, involving little media attention but important tax issues. In this post, we will discuss a fairly common scenario known as a "midco transaction."  This is a transaction in which a third party serves as an intermediary between buyer and seller when a business is sold.

Can companies use these midco entities to keep tax liabilities of the first entity from being transferred to the entity that acquires it?

Using private contractors to collect tax debt: IRS announces choices

The wheels of government don't always grind quickly. But when there is enough momentum and legal direction behind an initiative, they do grind.

To be sure, it has taken most of this year for the IRS to organize a program to implement a directive from Congress that private contractors be used for tax debt. In late September, however, the IRS announced the names of the private firms it has chosen to participate in the program.

In this post, we will use a Q & A format update you on that development.

New rules rely on inter-agency cooperation to collect taxes

Like any large organization, federal government agencies often operate in silos. Communication between them is rarely seamless. New tax collections rules show a focus on inter-agency coordination.

But how well will these rules really work? Back in an April post, we discussed a rule that would allow the Department of Justice in coordination with the IRS to revoke passports for those who owe more than $50,000 in tax debt. It is now October, and passports have yet to be taken.

Another new rule has the potential to bar those with tax debts from contracting with the federal government. We'll discuss the proposed rule in this post.

Streamlined installment agreements just got more flexible

How can you catch up on back taxes? An announcement from the IRS last week could help.

If you had too little withheld from your wages or took an early disbursement from a retirement account, you might have a significant tax obligation. Very few have liquid assets sitting around to pay the bill when it is in the tens of thousands. The IRS understands this fact and offers installment agreements that spread payments out over a number of years.

In this post, we explain how the IRS streamlined installment agreement program is changing.

Generations, part 2: Millennials and tax compliance resources

In the first part of this two-part post, we began discussing a few of the ways in which the different approach that the Millennial generation tends to take to tax compliance compared to other generational cohorts.

We noted, for example, that Millennials tend to have a lot of concerns about taxes. More than 4 out of every 5 Millennials in a survey conducted by NerdWallet, a personal finance website, reported being worried about some aspect of their taxes.

In this part of the post, let's look at some strategies that Millennials can use to get beyond tax worries and stay in compliance with the law without undue effort.

3 defenses to criminal charges involving tax evasion

Avoiding paying taxes that the IRS requires is one of the most common tax crimes in the United States. It's called tax evasion, and it's a type of tax fraud that the IRS prosecutes seriously. Of course, there are ways people legally do not pay taxes on certain money, like pre-tax money that goes into a retirement savings account like a 401(k), or money that is not taxed for qualifying expenses like medical expenses and childcare expenses.

However, if the IRS determines you misrepresented your income or had offshore accounts that you didn't report in order to avoid paying taxes on the money, you could be accused of tax evasion and be criminally charged.

San Antonio doctor facing prison for payroll tax nonpayment

A San Antonio physician and surgeon is facing 41 months in federal prison after conviction on a complicated scheme to defraud the Internal Revenue Service (IRS) of quarterly payroll tax payments. The financial maneuvers employed by Dr. Anthony Sertich spanned several years, and involved, among other things, numerous personal and business bankruptcy filings (on behalf of his two offices, Advanced Artistic Facial Plastic Surgery of Texas and South Texas Otorhinolaryngology) to take advantage of automatic stays to prevent tax collection.

Criminal court filings reveal that Sertich failed to pay almost $300,000 in collected payroll taxes on behalf of employees between 2002 and 2010, instead using that money for his own personal expenses, including the mortgage on his home and alimony payments to a former wife. The withheld taxes that he failed to pass along to the IRS have since accrued more than $2.6 million in penalties and interest; as part of his sentence, Sertich is required to pay nearly $3 million in restitution to the IRS.

Disclosing your foreign income

The IRS is very diligent when it comes to enforcing tax laws. It is particularly concerned that all earnings are reported, and that federal income taxes be paid on all earnings - even money earned outside of the United States. Failing to report international income can result in fines and penalties, as well as criminal charges.

International business owners face increased risks

Many U.S. citizens and residents are originally from foreign countries, or have relatives in foreign countries, and own and operate businesses in their home countries. It may seem that foreign-earned money should only be taxable in the country where it was earned; however, that is not the case.

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