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Fort Worth Tax Law Blog

FAQs about IRS taking away passports

The Internal Revenue Service (IRS) recently reminded taxpayers with outstanding tax debt what is at risk. More specifically: their passports. A failure to pay off tax debt can result in the loss of the taxpayer’s passport.

How can the IRS take away a taxpayer’s passport? The federal agency was granted this power through a law passed by Congress in 2015. Essentially, the IRS sends a list of names of taxpayers with qualifying debt to the State Department. The State Department will then deny new or renewed passport applications for these individuals.

IRS accuses four of tax crime based on FATCA violation

The Foreign Account Tax Compliance Act (FATCA) is a tool the government uses to help better ensure United States citizens comply with tax obligations. This law requires foreign financial institutions to report information about United States customers to the U.S. government. Under this law, a foreign bank must report any account containing assets at or above $50,000.

The government recently used the violation of this law as a means to charge four individuals with tax crimes.

Everything’s bigger in TX, including the property tax bill

Texan’s are proud people, and rightfully so. The Lone Star State offers everything from world-class rough and tumble football and rodeos to delicate bluebonnets and everything in between. These are just a few of the reasons the state is known for an “everything’s bigger in Texas” mentality.

Although generally a good thing, residents will soon be able to claim that everything really is bigger in TX — even the tax bill.

Three things to avoid if you get a letter from the IRS

If the Internal Revenue Service (IRS) is going to contact you, odds are high it will be in the form of a letter. The IRS may contact you for a number of reasons, but some of the more common include a tax balance that remains unpaid, a change to a refund amount, a question about a return or a change to a tax return.

If you get a letter from the IRS, do not do the following:

Texas man fights IRS over offshore tax penalty — and wins.

It is not every day a taxpayer can claim a major victory in a fight against the Internal Revenue Service (IRS). A man from Texas can make such a claim. The man took on the government in a battle over foreign accounts. The government has come down hard on those who fail to comply with complex reporting requirement for foreign accounts. In this case, they demanded the man pay a fine of 50 percent of the account total on each account for every year the account was in violation of reporting requirements.

Three examples of those who need to report foreign assets

The Internal Revenue Service (IRS) recently announced the impending end of the Offshore Voluntary Disclosure Program), scheduled to end September 28, 2018. Generally, the type of people that need to report these assets can be categorized into one of three groups:

  • Unimpacted. The Internal Revenue Service (IRS) has reporting requirements, including a minimum value for reportable assets. Those who have an interest in foreign assets with little value likely belong to this first group. As such, they may have gotten away with a failure to disclose the assets, but they would not likely owe a tax or penalty.
  • Disclosure violators. These individuals likely violated the disclosure requirements unaware and have, thus far, avoided meeting their tax obligation and paying any fine for the violation.

IRS reminds of upcoming filing deadline for those living abroad

The Internal Revenue Service (IRS) recently published a tax filing reminder to United States citizens and resident aliens living abroad. Although the tax filing was originally due on April 18, the IRS allows an extension through June 15 in one of two situations. The first applies for those who have their residence outside of the United States. The second, for those serving in the military. The tax payer must indicate which situation applies in a statement attached to their return in order to receive this extension.

It is important to note the government generally requires an income tax return filing for those living abroad, even if their tax obligation is minimal or eliminated due to tax benefits. Benefits that could reduce these obligations include the Foreign Earned Income exclusion or Foreign Tax credit.

Tax preparers: Avoid these top two offenses

Tax preparation professionals must keep their clients happy while staying within the bounds of the law. This is not always an easy balance. However, a failure to manage this balance can result in allegations of criminal wrongdoing. Two specific allegations a tax preparer must avoid are those of enabling the commission of a tax evasion crime and failing to prevent such a crime.

Tax preparation professional faces off with the IRS, and wins.

The Department of Justice recently charged a tax preparer of 30 counts of tax fraud. Of these allegations, 21 survived the initial stages of the process and made it to court.

What were the allegations against the tax preparer? A press release from The United States Attorney’s Office explains that the man was accused of obtaining individual tax identification numbers for undocumented immigrants so he could file tax returns on their behalf.

Tax preparer faces 3 years prison time for fraudulent tax claims

The Internal Revenue Service (IRS) accused an owner and operator of a tax return preparation business of filing fraudulent tax returns.

What are the charges against the tax preparation business owner? The agency alleged the business owner increased unreimbursed job expenses, medical expenses, dental expenses and even created “wholly fictitious” side businesses to increase her clients’ overall refund.

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