7 Deadly Tax Sins
When it comes to the IRS, some bad acts are worse than others. We have compiled below the top ones to avoid at all costs. However, if you should find yourself in the middle of one, you should certainly call tax attorneys to get you out of the bad situation (yes, it is a bad situation).
In an effort to combat offshore tax evasion, the United States and Singapore have pledged to negotiate and sign by the end of 2016 a tax information exchange agreement (TIEA) and a FATCA intergovernmental agreement (IGA) that provides for the reciprocal automatic exchange of financial account tax information.
The U.S. and Singapore governments issued a joint statement promising cooperation on tax issues affecting both nations. The intergovernmental agreement would provide for the reciprocal automatic exchange of information with respect to certain financial accounts under the Foreign Account Tax Compliance Act (FATCA). The two countries are to complete negotiations and sign the agreements by the end of 2017.
People typically think that the amount of their income is the biggest red flag that attracts an IRS auditor, and they would probably be right. But what are some of the other items on a tax return that may attract their attention? Some say that simple, plain returns are fairly safe and likely to avoid extended scrutiny by IRS auditors. According to the IRS, there are multiple ways a return may end up audited, here are some examples:
What does the IRS consider to be negligent or non-wilful conduct when it comes to tax-related activity like filing income tax returns and making deductions? What does it consider wilful conduct? When is such activity tax fraud?
Tax fraud is a general term which is defined as taxpayer’s intent to defraud the government by not paying taxes that the taxpayer knows are lawfully due. Tax fraud can be punishable either civilly, criminally, or both. Under federal law, civil violations are primarily located in Title 26 and criminal violations mainly in Title 18, respectively, of the United States Code (“U.S.C.”).
Americans love to gamble. Humans love to gamble for that matter. Whether you bet on football, play poker or bet on the horses, your winnings are taxable and you must report them on your tax return. The rules apply even to casual gamblers. Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.
This past fall, IRS Commissioner John Koskinen admitted to the Finance Committee of the United States Senate that the IRS is tracking cell-phones. Apparently the IRS is using “stingrays”, also known as IMSI catchers or cell-site simulators, to sweep up the cell-phone signals of unsuspecting taxpayers. Recently, the IRS spent $71,000 to upgrade their cell-phone tracking equipment. Senators Charles Grassley of Iowa and Patrick Leahy of Connecticut demanded an explanation for the use of such equipment expressing their privacy concerns with such surveillance in a letter to Treasury Secretary, Jacob Lew. “The devices indiscriminately gather information about the cell phones of innocent people who are simply in the vicinity of the device,” the letter stated.
Taxpayers must always be vigilant regarding the legality of an action related to the filing of their taxes. This includes whether they are filing an IRS form, calculating income, claiming a deduction, characterizing assets, preparing a tax return, or communicating with a third party claiming to be a tax advisor or employee or agent of the IRS. Taxpayers must not knowingly or unknowingly participate in any scams that involve the calculation, filing, and payment of their taxes or the results may be devastating. Here are some new and old tax scams of which all taxpayers must be aware:
SURGEON WHO HID MONEY FROM WIFE AND IRS IN DIVORCE ACTION MAY GET PRISON TIME OF UP TO 95 YEARS FOR TAX FRAUD AND EVASION
Tax evasion is a serious crime. It is an enormous task and undertaking that rarely succeeds unless exorbitant monetary penalties and prison time are the ultimate goal. Taxpayers risk everything when they attempt to conceal any part of their financial portfolio, including any amount of their assets, from the IRS.