howard richardson: Revocation or Denial of Passport Dollar Limit Increased for IRS Taxes - 12/05/21 02:49 PM
Currently the threshold for revocation or denial of passports is set at $54,000. When a taxpayer accumulates this dollar amount of unpaid IRS taxes, the IRS can certify the tax debt to the US State Department. The US State Department will revoke, deny or limit passport rights of a taxpayer in this scenario.
For calendar year 2022, the threshold for seriously delinquent tax debt has increased to $55,000. This value is adjusted annually for inflation. It could be good news for taxpayers that are close to the line and might be able to avoid passport restrictions due to the extra $1,000 limit.
Taxpayers … (0 comments)

howard richardson: The Benefits of Separate IRS Accounts for Married, Separated and Divorced Taxpayers - 11/07/21 02:48 PM
Separate IRS Accounts can be created when one or both spouses/ex-spouses are fully or partially liable for a joint tax liability.  The joint liability of each spouse is duplicated on each separate tax account. 
This can occur due to a variety of reasons:
Innocent Spouse Relief Bankruptcy Installment Agreement (Payment Plan) Offer in Compromise (OIC) Taxpayer Advocate Service (TAS)  Audits Appeals There are situations where married taxpayers with a joint tax liability can benefit by requesting separate accounts. This can occur under various scenarios. An example is an installment agreement setup by the married couple where they could end up paying less … (1 comments)

howard richardson: Do IRS Tax Levies Impact Independent Contractors and Wage Earners Differently? - 11/06/21 05:31 PM
IRS tax levies may impact independent contractors and wage earners differently. In other cases they are affected the same. When it comes to a tax levy on a taxpayer's wages and salary, it is called a continuous tax levy. The tax levy will be issued once and repeated every pay period until the levy is released. The IRS defined wages and salaries in a way that is more broad than the common usage. They include fees, bonuses and commissions. 
Independent contractors such as real estate and insurance salespeople do not generally receive a wage or salary. Instead they receive commissions at irregular … (0 comments)

howard richardson: Can the IRS Issue a Tax Levy on Retirement Account Assets to Collect Unpaid Taxes? - 10/31/21 02:36 PM
Can the IRS Issue a tax levy on retirement account assets to collect unpaid taxes?
The short answer is generally, yes.
Retirement account assets that qualify under the Employee Retirement Income Security Act (ERISA) such as pension plans, 401(k) and others can be subject to an IRS tax levy. Non-qualifed retirement account assets such as an Individual Retirement Account (IRA) are also subject to IRS tax levies. This may contrast with the laws regarding private creditors and civil lawsuits. Ultimately, the IRS is the government and a superior creditor. Taxpayers cannot avoid paying their taxes and use retirement account laws to shield … (1 comments)

howard richardson: Chief Financial Officer for Oklahoma Business Found Guilty of Federal Employment Tax Fraud - 10/30/21 04:12 PM
Department of Justice
Office of Public Affairs
 
Chief Financial Officer for Oklahoma Business Found Guilty of Employment Tax Fraud
 
A federal jury convicted a North Carolina woman on Oct. 22 of employment tax fraud.
 
According to court documents and evidence presented at trial, Christina Rochelle Anglin, aka Christy Anglin, of Burnsville, was the Controller and Chief Financial Officer for Atmospheric Technology Services Company (ATSC) located in Norman, Oklahoma. In that role, Anglin was responsible for withholding from employee wages and paying to the IRS payroll taxes, which included Social Security and Medicare taxes and federal income taxes. From the first quarter through the third quarter … (0 comments)

howard richardson: Florida Businessman Sentenced to Prison for Tax Evasion Related to Gambling - 10/24/21 12:13 PM
 FOR IMMEDIATE RELEASE
Thursday, October 14, 2021
Former Owner of Florida Produce Business Sentenced to Prison for Tax Evasion
A Florida man was sentenced yesterday to 18 months in prison for tax evasion, at a proceeding in federal district court in Miami. 
According to court documents, Alejandro Gomez, of Broward County, operated Fleischmann’s Produce, a company that imported fresh herbs for wholesale distribution. In March 2015, Gomez filed a 2014 corporate tax return for Fleischmann’s, which falsely reported $896,951 in personal gambling expenditures as cost of goods sold, thereby overstating total business expenditures. The next year, Gomez caused a 2015 corporate tax return to be … (1 comments)

howard richardson: Zappers Widely Used in California Restaurants to Evade Taxes - 10/10/21 01:30 PM
According to a recent article by Bloomberg Tax, Zappers, also known as an automated sales suppression device or phantom ware are widely used in California restaurants. Results from a limited pilot program in the state determined approximately 20% of the businesses the California Department of Tax and Fee Administration (CDTFA) audited were caught using Zappers.
 
https://news.bloombergtax.com/daily-tax-report-state/tax-zappers-found-in-one-fifth-of-california-restaurants
 
They are used to remove sales from the electronic records of a business. By reducing gross receipts, their purpose is to reduce taxable income and ultimately, taxes payable. 
 
Some examples of the taxes Zappers evade at the federal, state and local level include:
 
Internal Revenue Service (IRS):
Federal income … (3 comments)

howard richardson: New York Businessman Pleads Guilty to Tax Evasion and Employment Tax Fraud - 09/30/21 12:45 PM
Employment tax fraud and unfiled tax return prosecutions continue to be a top priority for the Internal Revenue Service (IRS) and the US Department of Justice (DOJ). 
 
https://www.justice.gov/opa/pr/queens-business-owner-pleads-guilty-tax-fraud
 
Department of JusticeOffice of Public AffairsQueens Business Owner Pleads Guilty to Tax FraudCaused a Tax Loss to the IRS of More Than $1.5 Million A New York man pleaded guilty today to tax evasion and employment tax fraud.
According to court documents, Rocco Manzione, of Queens, New York, owned and operated a series of concrete companies. From 2014 to 2017, Manzione withheld federal employment taxes from his employees’ wages, but did not timely file his … (0 comments)

howard richardson: Indictments for US Tax Evasion Scheme Involving Swiss and Asian Banks - 09/29/21 11:23 AM
 
https://www.justice.gov/opa/pr/indictment-unsealed-against-six-individuals-and-foreign-financial-service-firm-tax-evasion
 
 
Department of JusticeOffice of Public Affairs 
Tuesday, September 28, 2021
Indictment Unsealed Against Six Individuals and Foreign Financial Service Firm for Tax Evasion ConspiracyDefendants Allegedly Used ‘Singapore Solution’ to Enable U.S. Clients to Evade Taxes on Over $60 Million Hidden Offshore An indictment was unsealed today in New York, New York, that charges  offshore financial service executives and a Swiss financial services company with conspiracy to defraud the IRS by helping three large-value U.S. taxpayer-clients conceal more than $60 million in income and assets held in undeclared, offshore bank accounts and to evade U.S. income taxes.
According to the indictment, from 2009 to … (1 comments)

howard richardson: State Tax Relief for Californians Affected by Wildfires - 09/19/21 05:14 PM
The California Franchise Tax Board has posted a great resource for those affected by wildfires. Filing extensions for individuals and businesses related to tax returns and estimated payments are included.
 
There are instructions about penalty abatements and disaster loss tax deductions as well. Anyone impacted by wildfires should take a look.
 
https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2021-08-tax-relief-for-californians-affected-by-wildfires.html
 
Photo by Pixabay from Pexels
 
 
(1 comments)

howard richardson: Individual Tax Returns on Extension Due Next Month - 09/05/21 12:30 PM
Individual taxpayers that filed an extension have until next month to submit their tax return to the IRS. Anyone that has not filed should get their documentation ready and start the tax preparation process ASAP to avoid missing the deadline and incurring penalties and interest.
 
Try not to leave it until the last minute because that will only increase the chances of a rushed tax return with inaccuracies. Common examples include income left off of the return that have had information returns filed with the IRS. The IRS knows about this income. This can lead to an automated underreporter notice or a … (1 comments)

howard richardson: New York Construction Owner Sentenced to Prison for Payroll Tax Fraud - 09/01/21 07:45 AM
The US Department of Justice (DOJ) Tax Division announced the sentencing today of a former construction business owner to prison for payroll tax fraud. This is a textbook case of payroll tax evasion. The closing of one business with delinquent payroll tax liabilities followed by the opening of another business with a new officer is something the DOJ pursues vigorously. This was also a high dollar value case that often leads to criminal prosecution and imprisonment.
 
Photo by Nicolas J Leclercq on Unsplash 
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https://www.justice.gov/opa/pr/former-long-island-construction-business-owner-sentenced-prison-employment-tax-fraud
Department of JusticeOffice of Public AffairsWednesday, September 1, 2021
Former Long Island Construction Business Owner Sentenced to Prison for Employment Tax … (0 comments)

howard richardson: Disputing IRS Penalties in Today's Environment - 08/22/21 09:47 AM
It is important for taxpayers to exercise their rights and dispute IRS penalties when they are unjustified. Currently, the IRS is way behind on processing tax returns and other documents sent by taxpayers. To a certain degree this is normal for the IRS, but it has been exacerbated by the pandemic. There are far more taxpayers with problems and less staff at IRS facilities. Many IRS staff are still working from home. Taxpayers are being mailed notices assessing penalties and interest and a demand for payment.
 
Many of these notices lack merit, but individuals and businesses often do not know what … (0 comments)

howard richardson: IRS to Begin Seizing Bank Accounts and Wages and filing Tax Liens Today - 08/15/21 10:52 AM
IRS Automated Collections Enforcement is scheduled to begin today. Tax Levies and Tax Liens may be filed against taxpayers that have received IRS balance due notices for unpaid taxes and have failed to respond to the IRS to resolve the matter. This balance due could be from the filing of a tax return with a balance due or from a tax audit that led to an assessment of additional taxes.
 
Tax levies allows the IRS to seize bank accounts, wages, commissions and other forms of income and assets of a taxpayer.
 
The filing of a Notice of Federal Tax Lien (NFTL) informs the … (0 comments)

howard richardson: Avoid Automated IRS Tax Levies and Tax Liens in the Next 10 Days - 08/05/21 06:33 PM
The IRS has announced that they will be reinstating their automated IRS Tax Levies and Tax Liens on August 15, 2021. Taxpayers have 10 days to follow up on IRS notices warning about unpaid tax debts.
 
Failure to respond to IRS notices will lead to wages and commissions being garnished and bank accounts being seized. The IRS can file a Notice of Federal Tax Lien (NFTL) that will attach to any existing and future property. This includes residential and commercial real estate.
 
While former IRS notices that have been mailed to taxpayers during the pandemic have not been followed by IRS collection enforcement, … (1 comments)

howard richardson: Pros and Cons of an Equivalency Hearing during IRS Collection Appeals - 07/29/21 01:13 PM
There are definite pros and cons of an Equivalency Hearing (EH) as opposed to a Collection Due Process (CDP) hearing with IRS Appeals. These appeals rights come into play after the IRS issues a tax lien. The other situations arise before or after the IRS issues a tax levy. Taxpayers will be mailed a notice informing them of their right to appeal the underlying tax or to propose an alternative to full payment of the tax liability.
 
I wrote about Collection Due Process (CDP) hearings yesterday and you can read about it here:
The Importance of Appeals Rights at an IRS Collection Due … (0 comments)

howard richardson: The Importance of Appeals Rights at an IRS Collection Due Process Hearing - 07/27/21 05:02 PM
Appeals rights at an IRS Collection Due Process (CDP) hearing are important now that the IRS has reinstated their tax collection function. There was a long freeze in most IRS tax collection efforts due to the pandemic. The IRS did not want to unfairly burden the public during the economic contraction when many were struggling financially. 
 
When the IRS issues a final notice of threat to levy, or has filed a Notice of Federal Tax Lien (NFTL) or already issued a levy, the taxpayer will receive an IRS notice (Letter 11, Letter 1058 or CP 90) informing them of their right to … (1 comments)

howard richardson: IRS Criminal Investigation Voluntary Disclosure Practice and Unfiled Tax Returns - 07/12/21 03:34 PM
IRS Criminal Investigation Voluntary Disclosure Practice is a great option for those with potential criminal tax liability. Taxpayers must determine whether their conduct was willful or not willful. If it was willful, Voluntary Disclosure Practice may be an appropriate solution to avoiding criminal prosecution. On the other hand, if one's conduct was not willful, alternatives to the Voluntary Disclosure Practice are appropriate.
 
Nonfilers should consider Voluntary Disclosure Practice as a potential solution to willful non-compliance for failing to file tax returns. 
 
On the other hand, taxpayers that are not willful can instead file amended tax returns that have misstatements. Nonfilers can simply file their past due … (2 comments)

howard richardson: IRS Collection Inventory Drops - Delinquent Taxpayers - 07/11/21 03:45 PM
 
 
The number of taxpayers in the IRS Collection Inventory surprisingly dropped from 2019-2020. I am including three categories in this calculation:
Taxpayers with Unpaid Tax Debts, Ending Inventory. Taxpayer Delinquency Investigations, Ending Inventory. This category is also known as Nonfilers, those who do not file their tax returns for one or more years. It consists only of taxpayers that the IRS has actually identified. Private Debt Collection Program. This is carried out by non-IRS debt collection organizations. It should be used in calculating the total amount of cases in the IRS Collection Inventory even though the work is being performed by … (1 comments)

howard richardson: Current Trends in IRS Tax Audits - 07/10/21 01:16 PM
There are striking trends in the data for recent IRS tax audits.
 
 
 
The final individual income bracket is for $10,000,000 and over. This is obviously an extremely high income level. The number of Americans falling into this category is very small. The number of taxpayers failing to respond to IRS tax audit notices is currently around 1%. It is almost guaranteed that these taxpayers will have a tax professional representing them before the IRS and thus the high response rate. The dollar value in dispute will likely be much higher contributing to the better response rate.
 
The number of Correspondence Audits is … (0 comments)

 
Howard Richardson, Tax Problems, IRS and State Tax Representation (Richardson Accounting and Tax)

Howard Richardson

Tax Problems, IRS and State Tax Representation

Torrance, CA

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Richardson Accounting and Tax

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