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Fort Worth Tax Law Blog

Taxes and the Affordable Care Act, part 1: showing compliance

The IRS didn't ask for the role of compliance monitor for the Affordable Care Act (ACA or Obamacare). In practice, however, that is what Congress has asked the IRS to do.

It's a role that comes with many responsibilities. In this two-part post, we will explore some of them. Let's start with the requirement that individuals indicate on their tax returns whether they have health insurance coverage that meets ACA standards.

Auditing back taxes: Congress overrules IRS on overstatement of basis issue

David Bowie's recent death has revived interest in his work, including the classic song "Changes."

"Ch-ch-ch-ch-changes / (Turn and face the strange)," the Thin White Duke crooned in 1971. He wasn't singing about tax law, but U.S. taxpayers certainly face plenty of tax law changes every year.

Filing season forms roundup, part 2: 1099s

In the first part of this post, we noted the function of the W-2 form for reporting income from wages. With tax filing season now underway, now is the time to look for this form from your employer, if you have employee status.

If you do not have employee status, however, the form you will be looking for is a 1099, not a W-2. Indeed, you may be looking for multiple 1099s, from multiple jobs or from other sources of income.

Filing season forms roundup, part 1: the W-2

Filing season for federal taxes began this week. The IRS expects to receive more than 150 million returns by the April 18 filing deadline.

Some early birds have already filed. But if you are still waiting for your W-2 or a 1099 (or multiple 1099s), you are not alone. In this two-part post, we will update you on some of the basics of those key forms.

Reporting illegal income: compliance can help avoid tax evasion charges

Do you really have to report illegal income to the IRS? Yes, it's counter-intuitive. But the answer is yes.

Of course, compliance with this requirement is not common. But some taxpayers do choose to report income from illegal activities. As we will explain in this post, one reason for doing so is to avoid facing federal tax evasion charges.

DOJ Suspends Asset Forfeiture Program

Following budget cuts in the recent spending bill approved by Congress, the Department of Justice has suspended its controversial asset forfeiture "equitable sharing" program. The program has made headlines in recent years due to accusations that law enforcement is motivated more by profit than by an actual desire to impede crime, as well as concerns about a lack of due process.

Civil forfeiture is a contentious legal process that allows law enforcement to seize assets from persons suspected of involvement in criminal activity, without requiring that the individuals even be charged with a crime. In these civil proceedings, the government is the plaintiff, and the seized property is the defendant. For example, a hypothetical case might be styled United States of America v. $100,000 in U.S. Currency. Since the proceedings are civil, rather than criminal, the government has a much lower burden of proof. Many times, the owners of the property do not have access to the funds necessary to mount a legal defense of the property. 

New Law Could Revoke Passports for Americans Who Owe Taxes

If you owe taxes to the IRS, you may want to hold off on planning your next international trip. A new law just took effect that will revoke passports for Americans who owe $50,000 or more to the IRS.

The most vocal critics of the law are American expatriates living abroad. Such Americans need their passports for ordinary activities, such as using a bank account, registering a child for school, or maintaining residency permits. Such individuals may not be receiving their mail from the IRS and may not even be aware that they owe taxes. 

Buying equipment for your business? Depreciation change may help

Depreciation is a term of art in tax law. It doesn't refer directly to something losing value. It refers rather to tax deductions for businesses to reflect the cost of wear and tear on their equipment.

Since 2003, these deductions have become increasingly complex. Legislation enacted during the first administration of George W. Bush tried to give businesses an incentive to invest by allowing for accelerated depreciation. But the complexity and lack of permanence of the rules posed many difficulties for business owners.

Underreported income, part 2: What are the tax penalties?

In the first part of this post, we began discussing the issue of underreported income. We noted that the IRS has a program that automatically sends out notices to taxpayers when information from other sources indicates that income may be underreported on a tax return.

In this part of the post, we will summarize the findings of a recent report by the Treasury Insepctor General for Tax Administration (TIGTA) on the Automated Underreporter Program (AUP). We will also address this question: What are the tax penalties for underreporting income?

Underreported income issues, part 1: the automated program

We live in a society that tries hard to find technological solutions to problems. This attempt is not always successful, but it has deep roots in the culture.

In tax compliance, one way in which the search for a technical solution is present is the Automated Underreporter Program (AUP). The AUP is an effort by the IRS to use computerized tools to detect underreporting of income on tax returns.

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