tag:blogger.com,1999:blog-1519969502186924526.post7198565282111590141..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: More on the Warner Sentencing Appeal (9/15/14)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger69125tag:blogger.com,1999:blog-1519969502186924526.post-64899831686917757022014-10-21T10:49:35.735-05:002014-10-21T10:49:35.735-05:00Thanks ANON5percent, I am heading in that directio...Thanks ANON5percent, I am heading in that direction.Blackseal1234noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-7847050527298843292014-10-21T05:39:28.630-05:002014-10-21T05:39:28.630-05:00I got refunds of all taxes, interest and penalties...I got refunds of all taxes, interest and penalties of about USD 40k when I opted out. Most of it was not a problem to get refunded, although about 10% of it was delayed for several months for reasons that no one could explain. The Taxpayer Advocate Service helped me resolve that refund issue.anon5percentnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-78415472831625166992014-10-20T03:52:01.910-05:002014-10-20T03:52:01.910-05:00Your case is a mess on so many levels. After 2.5 y...Your case is a mess on so many levels. After 2.5 years and $150K of fees she (I hope it is not C.C.) starts suddenly worrying about your LCUs and costs. Wow, but that is lawyer logic at its best. It seems to me that by offering this "deal" to you her earlier "you will win in the end" statement or prediction is no longer valid and in her view you seem not to have a credible NW case.Badgernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-35495592427770964112014-10-19T08:06:51.434-05:002014-10-19T08:06:51.434-05:00Thanks Jack. I followed your advice from a much ea...Thanks Jack. I followed your advice from a much earlier blog about filing protective orders for the refund of taxes, interest and penalties I paid in the OVDP for years that were closed. It was good advice to all readers, and something my lawyer would have missed if I did not bring it to her attention. The protective orders were filed a week before the 2 year expiry of all my payments with amended returns under the OVDP. The IRS has acknowledged receipt, but they are awaiting my action . I told them I would proceed only if my case could not be resolved within the OVDP. My OVDP agent is not aware of the protective orders because they go to a different area of the iRS . If had to opt out I would be pursuing the refund for all closed years. The amount is significant about $150,000, so it might be worth pursuing as a refund.My lawyer has said she has been trying for more than 1 year to get refunds for other clients, and that the IRS is just not responsive and they are not likely to give any refunds unless ordered by the court to do so. Is this your experience or have you had your request for refunds of taxes paid on closed years simply recognized as tax law and returned to the taxpayer without the need of litigation.? I ask because I am not sure I have the stomach for a long drawn out battle with the IRS, for money that I have already paid into the OVDP. There is no fraud involved which would allow the IRS to keep things open. Additionally the IRS has made no assessment of tax for the closed years, I simply did the calculations and paid in the amount with qualified amended returns. I imagine a lot of opt outs will be interested in the process, time and success of protective orders.Blackseal1234noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-44222057906742761282014-10-19T07:23:43.976-05:002014-10-19T07:23:43.976-05:00Blackseal1234,
I have not encountered the situati...Blackseal1234,<br /><br />I have not encountered the situation where the maximum income tax and FBAR penalties would be less than the inside OVDP penalty. Your phenomenon is driven by the home in relation to the financial account(s). I just haven't seen that.<br /><br />But, I can see the attorney's logic is arguing that the case should be closed without further ado if the taxpayer pays the maximum income tax (with civil fraud penalty) and maximum FBAR penalty for the open years (8 for income tax and 6 or 8 for FBAR). (I say 8 for FBAR because if you submitted the waiver you may have waived the 2 earlier years statute of limitations defense.) <br /><br />At any rate, I don't understand why you would get hammered more on opt out than you are willing to offer them to resolve it without opting out. Presumably, I suppose, for income tax purposes, the IRS could get years beyond the 8 year period in OVDP, but I would suspect that it is not likely to do so on opt out. So, from a practical perspective, it is likely that what you are offering them to close in OVDP penalty structure is the maximum they could get on opt out.<br /><br />So, why not just opt out without any admission and see what happens. That is not without risk, but the risk can only be assessed in the context of all of your facts. Your lawyer should be situated to help you with that risk assessment.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-24666715149660833512014-10-18T21:07:42.284-05:002014-10-18T21:07:42.284-05:00I have heard an interesting fact from my lawyer re...I have heard an interesting fact from my lawyer regarding the acceptance of penalties different than the 27.5% penalty while not having to opt out. One the FAQs says that the IRS will not fine you more inside the OVDP, than the maximum you would get fined outside the OVDP. In my case I had a 5 million dollar home in the Cayman Islands that was driving my 27.5% penalty through the ceiling. I know if I opt out that amount cannot have FBAR penalties assessed against it. However I don't want to opt out if I don't have to. My lawyer says she has been successful using the FAQ and offering the IRS the maximum amount they would get outside the OVDP. She says that in 50% of the offers the IRS has accepted it and closed the case within the OVDP. To do this my lawyer has said I have to accept the 75% tax fraud penalty for 8 years of returns and the maximum willful FBAR penalty for every open FBAR years. The FBAR penalty alone would be 400,000, but that is lot better than 27.5% of 5 million dollar home or $1,375,000. I have already paid the 20% accuracy on my back taxes, so adding the fraud penalty is adding another 55%, because they can't stack fraud and accuracy.<br /><br /><br />My question to Jack or any other person is have they seen the IRS do this. My first impression was that there was no negotiation of any kind within the OVDP. Take it or leave it. First I am nervous about offering to pay the max willful FBAR and fraud penalty, because if they turn down my offer they may take this as an admission, and hammer me when I have to opt out. Secondly why should I attempt this when very few people ,if any ,get hit with the fraud penalty when they opt out, and very few people pay the FBAR penalty for multiple years. My lawyer says I will eat more money up fighting the IRS in opt out and it could take another year or more of my life away from me. Also if I opt out I have a protective order filed so I have claim on the taxes , interest and accuracy penalty I paid for years that were closed when I entered the OVDP. My lawyer says it has been her experience that the IRS will not return the money and I would have to take them to tax court which could take years to resolve and a lot of legal expense.Blackseal1234noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-85654029223753271712014-10-12T10:19:00.689-05:002014-10-12T10:19:00.689-05:00Agree with Jack. When considering various options...Agree with Jack. When considering various options, including quiet disclosure, keep in mind that those of us who joined OVDI with the best intentions and expected to be able to opt out are getting punished way out of proportion. This is not advice on what to do. Just be careful of lawyers who say OVDI is for all.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-58760482691434259022014-10-09T14:01:07.337-05:002014-10-09T14:01:07.337-05:00liiggi,
You need to visit with a professional sep...liiggi,<br /><br />You need to visit with a professional separately. The issue and importance is larger than can be handled here on the limited input you give.<br /><br />You might check out the attorneys I mention at the top right of the blog and give one or more a call to discuss your situation.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-29041738162206137572014-10-08T18:19:55.468-05:002014-10-08T18:19:55.468-05:00Jack
I was just told from my German bank that I ...Jack <br /><br />I was just told from my German bank that I have to file my dividends and interest in the US.<br />My husband and I have filed jointly and timely for 20 years. We lived in Germany until 2011, and I am a legal resident of the US since 2011. We are also required to file a W9. My bank told me that they need that form to not flag my account. Is this correct?<br /><br /><br />I have a savings and a brokerage account in Germany. In the brokerage account I hold two stock and one bond. One stock preforms very good. I pay a 15% tax at source to US for this stock and also a little german tax. The other stock is not taxable in Germany because I had it for a long time. The third one is a bond. I receive little from those to two. My savings account earned about $ 130 - 180 in interest a year. I did not to have pay taxes on that because I had a exemption order for capital gain in Germany. I am struggling to find the right procedure we fall into. All procedure the IRA seem to offer have a high penalty, which I think are in our case exorbitant. I want to initiate the right steps and pay all applicable taxes and late fee, but not be punished overly. Could you or someone else guide me in the right direction?ligginoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-49968024661352682272014-10-07T13:28:02.593-05:002014-10-07T13:28:02.593-05:00I've had a CPA prepare my amended returns and ...I've had a CPA prepare my amended returns and in addition to including interest in the payment, he typed "Interest $XXX" in the margin of the form near where the total tax was shown. This is a nice extra but not necessary. As Jack said, the overpayment will be applied to interest due.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-49828481782537105212014-10-07T11:47:32.157-05:002014-10-07T11:47:32.157-05:00RajNIL,
I do not prepare returns and do not know ...RajNIL,<br /><br />I do not prepare returns and do not know the answer to the question. But, I suspect that the solution would be to just send in a payment including the amount you calculate and, when the Service Center makes the assessment, it will have the payment to apply against it.<br /><br />Still, I hope someone else will respond who has dealt with the issue successfully before.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-40523184340709147752014-10-07T09:31:02.626-05:002014-10-07T09:31:02.626-05:00Jack/Others,
I had done an extension for 2013 back...Jack/Others,<br />I had done an extension for 2013 back in April. I under paid and now additionally owe $1750. Interest and late payment on that works out to approximately 30 + 55, $85. (assuming Oct 15 payoff date) <br /><br />Where exactly in 1040 should I include this additional amount? Line 77 doesn't seem appropriate. The tax software didn't do it for me.<br /><br />Or can I just wait for them to bill me? If they do send me a bill, is that considered an audit in anyway? Just want to steer clear of any audit however trivial...RajNILnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-56138628850400086202014-10-05T11:52:35.959-05:002014-10-05T11:52:35.959-05:00I am not aware of any more recent release.
Jack ...I am not aware of any more recent release. <br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-48893288137911965172014-10-03T20:03:33.368-05:002014-10-03T20:03:33.368-05:00Jack,
Circling back to subject of this post - the ...Jack,<br />Circling back to subject of this post - the IRS internal guideline. It was interim (dated Aug 13) and had stuff redacted etc giving indication that it was draft. Have had a change to check more to see if anything more "final" has been released? I am wondering if you and other practitioners have greater access to check into / receive updates on such documents. Thanks!RajNILnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-30469428533552966752014-09-29T20:41:50.524-05:002014-09-29T20:41:50.524-05:00Carter,
Sorry for the late reply. Jack has answe...Carter,<br /><br />Sorry for the late reply. Jack has answered your question, but I'll tell you what I did. For both 2011 and 2012, I filed my taxes on 4/15. Assuming that my payment reaches the IRS no later than 10/15/14, I used a compound interest calculator (just Google it), made sure the interest is compounded daily (365 times/year), and got the calculator to tell me the interest I owed for 1.5 years (from 4/15/13) and 2.5 years (from 4/15/12).<br /><br />svtrsvtrnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-68301524510977764382014-09-27T13:34:09.632-05:002014-09-27T13:34:09.632-05:00You can do a ballpark figure pretty quickly. Sinc...You can do a ballpark figure pretty quickly. Since the IRS will calculate the exact number all you really need/want is to come in close so the interest stops running. Example: Payment for year 2010 due 4/15/2011. As of Oct. 15, 2014 it will be 3.5 years. 3.5 times 3% annual interest is 10.5%. The interest rate varies, but was recently 3%.<br />For the payment due 4/15/2012 it would be 2.5 years at 3% or 7.5% and so on. <br /><br />Bottom line, on $1,000 tax over 3 years, send'em $100 extra for interest and you'll get a refund.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-29162008176836280132014-09-26T20:20:25.913-05:002014-09-26T20:20:25.913-05:00The key to calculating interest is to have an assu...The key to calculating interest is to have an assumed payment date. If I have that, I can give you a factor as to the interest (i.e., assumed a due tax for the tax of 4/15/10 for the U.S. return and tax payment due date3 and a payment date of, say, 10/15/14, I can provide you a factor (multiply the tax due times the factor to get the interest to 10/15/14). But, again, it will not be a perfect calculation, but the IRS will true it up (send bill if interest is underpaid or refund if interest is overpaid (I recommend a slight overpayment)).<br /><br />So, if you will give me the years involved and the assumed due date, I will put the information into my handy-dandy interest calculated (TaxInterest) and give you the factors.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-6359947438244292272014-09-26T10:36:59.894-05:002014-09-26T10:36:59.894-05:00svtr - Can you please share with us how you are ca...svtr - Can you please share with us how you are calculating the interest?<br /><br /><br />say I owe total tax due of $1000 for (2013 + 2012 + 2011), approximately how much would be the Interest for 3 years combined?Carternoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-86168831974486788682014-09-25T09:52:21.892-05:002014-09-25T09:52:21.892-05:00I agree, I'll just pay a bit more and then the...I agree, I'll just pay a bit more and then the IRS can refund. Thanks for the clarification!svtrnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-84052995629137103852014-09-25T08:16:27.580-05:002014-09-25T08:16:27.580-05:00svfr,
You say you filed your 2011 and 2012 return...svfr,<br /><br />You say you filed your 2011 and 2012 returns, I presume timely. So, when you file amended return, there will be no failure to pay penalty in this case. The only penalty could be the accuracy related or civil fraud penalty. The accuracy related penalty is waived in SDOP. The civil fraud penalty does not apply if you were not willful. So you will owe the additional tax and interest on the additional tax.<br /><br />I agree that the IRS should have a calculator. The practitioners I know have a commercially provided calculator, called TaxInterest, it gets to the right number (or pretty close) in most cases.<br /><br />Keep in mind that, even with a calculator, the calculation is probably not going to be exact. The IRS will make the calculation and true up the matter (i.e., refund any overpaid interest or bill for any underpaid interest). <br /><br />If you are concerned, you might do a rough and ready calculation and pay a bit more so that you will have overpaid and the IRS can refund.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-15914004171910919532014-09-24T21:04:21.092-05:002014-09-24T21:04:21.092-05:00Jack,
I owe the IRS about $600 in taxes for 2012 ...Jack,<br /><br />I owe the IRS about $600 in taxes for 2012 and a similar amount for 2011, as part of SDOP, and have a quick question. Would I owe the IRS interest + a failure to pay penalty (on the $600 due), when I submit the SDOP amended returns for 2012 and 2011? Of course, I did pay whatever taxes I owed (excluding those on overseas income), when I filed my 2012 and 2011 taxes. <br /><br />I am surprised that for people who owe tax, the IRS does not have an official calculator that tells you the interest and penalty that is due.<br /><br />Thanks, svtrsvtrnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-33677224442417786282014-09-24T15:29:26.936-05:002014-09-24T15:29:26.936-05:00Thanks Jack for giving hope.. hopefully it would w...Thanks Jack for giving hope.. hopefully it would work out for folks like me and IRS would deal with us fairly and overlook our small faults.. everyone wants to get into compliance and its also guaranteed future income for IRSCarternoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-73568060372815264452014-09-24T15:02:28.674-05:002014-09-24T15:02:28.674-05:00I would expect that SDOP certification would be de...I would expect that SDOP certification would be denied only after an audit of some sort. Then, of course, one would get the audit result which depends upon all the facts. Conceivably, the audit result in the right case could be better than the certification, but I would think that the IRS would not deny certification if that were the case.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-21328639048496776072014-09-24T13:54:46.933-05:002014-09-24T13:54:46.933-05:00Thank you Jack.
What happens if SDOP Certificati...Thank you Jack.<br /><br /><br />What happens if SDOP Certification is denied based on some borderline issues for a minnow < 200K . tax deficiency around 5K over last 10 years? how worse can it get than OVDI?Carternoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-56843684838423165602014-09-24T13:18:28.133-05:002014-09-24T13:18:28.133-05:001. Don't know how many SDOPs are expected and ...1. Don't know how many SDOPs are expected and really don't have a guess that would be anything other than speculation.<br /><br />2. If you feel that you qualify for SDOP, it is a rather cost effective way to be reasonably sure the past is behind you. Not that you are curing a culpability problem, because if you are culpable you do not qualify for SDOP. But, if you are not culpable, joining SDOP may be a better alternative than QD and GF with all it their uncertainties going into the future.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.com