2024 Recap: Key Compliance Insights for High-Income U.S. Taxpayers
Each year, we publish dozens of articles with insights for high-income and high-wealth U.S. taxpayers on our blog. This past year was no exception. Here is a look back at some of the key compliance insights Texas IRS dispute lawyer Lawrence Brown shared in 2024:
Resolving Offshore Account Disclosure Violations
In our experience, many high-income and high-wealth U.S. taxpayers do not have a comprehensive understanding of their offshore account disclosure obligations under federal law. This lack of understanding can lead to substantial penalties—especially when the IRS uncovers disclosure violations before taxpayers take corrective action on their own.
With this in mind, if you have offshore accounts that you have not disclosed to the IRS, you will want to take action promptly. To learn how, you can read: Resolving Offshore Account Disclosure Violations: Key Insights for Taxpayers in the U.S. and Abroad.
Understanding the Consequences of Offshore Account Disclosure Violations
What if you don’t correct an offshore account disclosure violation before the IRS uncovers it? Depending on the circumstances involved, the IRS may open an audit or investigation—and this could present risks for civil or criminal penalties. To learn more about the risks involved, you can read: FATCA and BSA Compliance: What Happens If You Don’t Report Your Offshore Assets to the U.S. Government?
Managing Federal Cryptocurrency Tax Compliance
Along with offshore account disclosure compliance, cryptocurrency tax compliance is becoming increasingly important for many high-income and high-wealth U.S. taxpayers as well. As cryptocurrency continues to gain mainstream acceptance, the IRS is continuing to devote additional resources to ensuring that cryptocurrency investors, miners and others pay what they owe.
Given that this is the case, high-income and high-wealth taxpayers who have (or have had) cryptocurrency holdings need to make compliance a priority. Learn how in: Federal Cryptocurrency Tax Compliance: What Investors, Miners and Others Need to Know.
Avoiding (and Withstanding) IRS Scrutiny for Pandemic-Era Fraud
While 2024 was the first full post-pandemic calendar year, the IRS has continued to aggressively target all forms of pandemic-era fraud. This includes fraud under the Employee Retention Credit (ERC) program, Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, among others. Due to the scope of the IRS’s ongoing enforcement efforts in this area and the substantial risks involved, we published several articles with key insights for high-income and high-wealth taxpayers throughout the year. If you have concerns about the possibility of facing scrutiny from the IRS related to pandemic-era benefits in 2025, we encourage you to read:
Tax Planning Strategies vs. Abusive Tax Shelters
While high-income and high-wealth taxpayers can often achieve substantial savings through strategic tax planning, these taxpayers must also be very careful to avoid deploying strategies that the IRS classifies as abusive tax shelters. Even if a tax planning strategy is legitimate, the appearance of impropriety can lead to a costly and invasive audit—and the IRS could uncover other issues that warrant enforcement during the audit process.
With this risk in mind, we also published several articles in 2024 discussing the distinctions between lawful tax avoidance and unlawful tax evasion. For some key insights, you can read:
Pass-Through Entity Compliance and Enforcement
Along with abusive tax shelters, the IRS also prioritized pass-through entity compliance in 2024—and this is also likely to remain a priority in 2025. The IRS has been targeting both pass-through entities and their high-net-worth owners, pursuing both civil and criminal enforcement as warranted. If you are a partner, member or shareholder of a pass-through entity, you will want to read: IRS Launches New Pass-Through Compliance Efforts Targeting Partnerships and Other High-Net-Worth Entities.
Proactively Resolving High-Risk Tax Law Violations
For high-income and high-wealth taxpayers who are at risk of facing IRS scrutiny, a proactive approach is generally best. But, proactively resolving high-risk tax law violations requires caution, as disclosing violations to the IRS can invite scrutiny without the right tactics. If you need to address a tax law violation before it triggers an audit or investigation, you may be looking at submitting either a streamlined filing or a voluntary disclosure. To learn more about each of these options, you can read:
When It’s Too Late to Take a Proactive Approach
While a proactive approach is generally best, sometimes this simply isn’t an option. If you have concerns about compliance and you have received an audit letter from the IRS, what should you do?
As with most high-risk legal situations, the answer to this question depends on the specific circumstances at hand. A tailored approach is essential, and targeted high-income and high-wealth taxpayers will need to work closely with an experienced Texas IRS dispute lawyer who can deal with the IRS effectively on their behalf. If you need to know more, we encourage you to read: Preparing for an IRS Audit When You Have Concerns About Tax Code Compliance.
Request a Confidential Consultation with Texas IRS Dispute Lawyer Lawrence Brown
Texas IRS dispute lawyer Lawrence Brown relies on decades of relevant experience to represent high-income and high-wealth taxpayers in sensitive IRS matters. To request a confidential consultation, please call 888-870-0025 or tell us how we can reach you online today.