tag:blogger.com,1999:blog-1519969502186924526.post8691051505709945058..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: More on Willfulness (12/1/14)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-1519969502186924526.post-38537667002105431212014-12-27T13:04:25.640-06:002014-12-27T13:04:25.640-06:00The answer is, it depends on your state. Many sta...The answer is, it depends on your state. Many states require you to amend the State return when you amend the Federal, and for the same years. My state also requires interest at a hefty 13% per year. Since most states dont' have OVDP protection from prosecution, I think it would be smart to amend the return and pay before the state contacts you so they will find that you have amended the return and paid the taxes.<br />I think NY does have a program similar to OVDP for state taxes, but I'm not sure, and there may be a couple of other states.stwnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-29460168367157201952014-12-22T05:57:54.792-06:002014-12-22T05:57:54.792-06:00To: needurgenthelp. The IRS is going to inform you...To: needurgenthelp. The IRS is going to inform your state about your amended federal tax returns at some point. It may be 6 months or a year from now, but they will notify them. When they do your state is going to look for amended state returns, when they can't find any they may start an audit. If you owed a lot of extra federal tax, the clock will have been ticking and you could get hit with penalties and interest charges at the state level. The only problem with filing amended state returns now is that the IRS may determine that your amended federal returns are not correct, in which case your amended state returns would also not be correct. If you trust that your federal returns are audit proof I would file your amended state returns to stop the interest clock and penalty clock from ticking. On the other hand if your state has SOLs it might be better to hold off and let the clock work to your advantage. I paid my state taxes immediately by filing 8 years of amended returns, because the interest clock was too painful if I waited for the IRS to finish my OVDP. Just double check with a CPA about SOL in your state.Blackseal1234noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-85448773624747332232014-12-21T11:16:37.511-06:002014-12-21T11:16:37.511-06:00I need an answer from some one who has filed SDOP....I need an answer from some one who has filed SDOP. Do we need to file state tax returns for last tree year after filing SDOP ?. or it is separate program we need not to worry about state returns. There is no specific mention about state tax return in SDOP explantation. Would be great if somebody can share their experiences.NeedUrgentHelpnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-83936823890336506752014-12-19T11:36:40.843-06:002014-12-19T11:36:40.843-06:00Outside the streamlined prog (with go forward or j...Outside the streamlined prog (with go forward or just amnding the past returns quietky and going forward on FBARS) my guess (and it's a guess only) is a couple thousand dollars as a worst case scenario. Best scenario especially on go forward is that they would not even bother to do anything, i.e. if all of a sudden you file fbar for 2014 and report $500 foreign interest on the 2014 return, it may not catch their attention. And even if they audit you you ight get no penalty, jur a warning letter (Letter 3800.)<br />I agree that any penalty in your case would be excessive BUT I am not the IRS. My guess is: Streamlined, 99% chance of $1000 cost (and 1% chance of streamlined not being approved and a pnslty of a couple thousand. <br />My guess of go-forward 90% of paying zero, 5% chance of beibg audited paying couple thousand, 5% chance that if audited you pay nothing and only get a warning letter.<br />These are all guesses. Nobody can give you any certainty.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-46696015377967030962014-12-18T14:49:07.768-06:002014-12-18T14:49:07.768-06:00Look I have been in this program for 3 years and s...Look I have been in this program for 3 years and spent over $170,000 in legal and accounting fees which I could have totally avoided if I waited for the new domestic streamlined program. I opted out and I am looking at 2 more years before things get settled. I expect another $50,000 in legal fees just addressing all the assine IRS questions in the audit. The IRS has thrown you a gift, which will only cost you about $1000. Don't look a gift horse in the mouth. The alternatives will cost you much more and may not provide you with any security. I know everything is relative and that a $1000 is a big deal for you. But that is only 2 hours of a good tax lawyers time. Don't be pennywise pound foolish . Run into the Domestic streamlined and count your self lucky to get off with only $1000.Blackseal1234noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-32578537715636922592014-12-16T15:36:56.647-06:002014-12-16T15:36:56.647-06:00Thanks, @Guest! If $1000 wasn't such a huge su...Thanks, @Guest! If $1000 wasn't such a huge sum for us we wouldn't even hesitate. But it feels so harsh given that it was an honest oversight on the very first time my husband filed u.s. taxes after moving over. And it's not like we can take the money from his foreign account because it's a special house savings for youth that has fantastic tax benefits and from which you can only make a one-time withdrawal for a house purchase. So we are trying to figure out what the penalty might be outside of the streamlined program. You think a couple grand; that is helpful. Has anyone ever tried the FBAR helpline? I wonder if they could give answers...Bathshebanoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-58008384932105625782014-12-15T20:02:16.450-06:002014-12-15T20:02:16.450-06:00Thanks @Blackseal1234. Is that the prevailing opin...Thanks @Blackseal1234. Is that the prevailing opinion here?? $1000 is a good deal given my situation?Bathshebanoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-17980273978057401582014-12-15T13:35:43.271-06:002014-12-15T13:35:43.271-06:00Only you can decide of course.
First option: str...Only you can decide of course. <br />First option: streamlined domestic, with amended returns and delinquent FBARS. Cost $1,000 and I would expect that the IRS would accept it and that would be the end of it. Cost:$1,000 plus your time.<br />Second option: quiet disclosure. Given the numbers I doubt they would bother assessing penalty, but then again, it might be a couple of thousand dollars (just guessing) but that would be a big chunk of $18k.<br />Third option: o forward option"do nothing about the past and just start filing the 2014 FBAR before 6/30/2015 and report the interest for 2014 on your 2014 return. This is the go-forward strategy. Its legal because you found about about fbar and tax on foreign interest AFTER the 4/15/2014 tax deadline and 6/30/2014 tax deadline (this now being December 2014.) Here too again the IRS might do nothing but in the unlikely case they assessed a nonwillfulpenalty I am (again guessing) that it wuld only be a couple thousand dollars.<br />Again, I cant tell you what to do since if you end up paying more than $1,000 Im not going to reimburse you. Nor, if you decide on go-forward an the IRS doesnt penalize you, am I going to expect a cut of the savings.<br />Also Im not a lawyer so I cant advise you. And getting advice from a lawyer would cost you way more than $1,000.<br />If I were in your shoes I would probably choose domestic streamlined, apy the $1,000 and hope the IRS approves the request. Note that when you go directly into streamline you do not get a from 906 as confirmation that your requet was approved. In other words, no news is good news. <br />What I would stay away from is OVDP. Many nonwillful have gone into this, and paid a ton of money in accounting and legal fees, spent countless hours, and had to fight tooth and nail in the few optouts. Those who did not opt out of course paid up to 27.5% plus back taxes, penalty, interest, fees etc.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-60889678472073807232014-12-15T07:12:16.705-06:002014-12-15T07:12:16.705-06:00Dear Bathsheba,
quiet filings will probably draw m...Dear Bathsheba,<br />quiet filings will probably draw more attention in a possible audit, given your situation. I don't think you need any professional help. Just enter the domestic streamlined. Which when you enter will take care of all your filing obligations, taxes due via amended returns, and delinquent FBARS. To walk away with just over a $1000 liability, when others that could not use the Streamlined before the recent changes paid much dearly is a gift. I think given the small amount involved the IRS will accept a non-willful certification and let you pass on by.Blackseal1234noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-3056372014401741322014-12-14T18:40:41.196-06:002014-12-14T18:40:41.196-06:00I recently read a reference to the FBAR on an expa...I recently read a reference to the FBAR on an expat tax forum while looking for information helping us to decide whether to open a Roth IRA for my husband. Had never heard of this before. After doing some reading online, I not only realized that he had been required to file said FBAR the last two years but also that we could be assessed serious penalties for not doing so.<br /><br />I've since done a lot of research and am trying to find information on whether quiet compliance or OVDP opt-out is too risky for us, as the (streamlined?) OVDP penalty seems pretty harsh for our situation.<br /><br />The facts:<br />Husband was granted green card in July of 2012 and moved here at that time, did not get a job until June of 2013. For 2012 tax year, I filed married filing separately; he did not file as he had no income while a resident alien. For 2013 tax year, I filed married filing jointly using TurboTax. I answered YES to foreign accounts question (true, good thing), but NO to over $10,000 question (false, bad thing). Don't remember any reference to FBAR in TurboTax questions.<br /><br />However, I've since discovered that the amount in his account was about $18,000. I did not think he had this much as the account is barely used (he has never made a withdrawal and makes a maximum of one deposit a year), and I didn't realize the seriousness of not making sure of my assumption. None of this would be a big problem if I hadn't failed to report the interest income on this account on our 2013 tax return. It honestly didn't even occur to me that I would have to come up with numbers other than those listed on the different 1099s, w2s, and other forms I had gathered. You have to keep in mind this was the very first time I've filed taxes with my foreign spouse. I didn't even realize this account earned interest, but we looked into it and it apparently has great interest rates, and earned like $500-$600 last year, such that we probably owe close to (but not over) $100 in taxes for the 2013 tax year.<br /><br />I would like to just file the 2012 and 2013 FBARs late with an explanation as to why we did not know we were required to file, and then file an amended 2013 return and pay the taxes owed and interest, as this would obviously cost less than the OVDP penalty. It just seems like OVDP is a tax amnesty program not for people like us but rather for repeat offenders who have willfully been hiding large amounts of assets abroad to escape taxation. And it's hard to believe the IRS would penalize us so harshly. I think under the streamlined program (if we qualify), we would owe 5% of $18000, so about $900. Plus the back taxes. However, if we don't go through the program, we apparently risk the maximum $10,000 late filing fee, in the worst case scenario.<br /><br />Main question is: what is the risk of quiet compliance by backfiling 2 FBARs and amending most recent tax return (our #1 choice), v. OVDP opt-out (#2 choice) v. straight-up OVDP? All choices are legal as far as we can tell, so we are mostly talking about risk in terms of likelihood and amount we'll have to pay. Assuming OVDP is the recommendation, do we qualify for the streamlined 5% penalty rate?Bathshebanoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-10158449213831852602014-12-07T00:18:24.285-06:002014-12-07T00:18:24.285-06:00How To LEGALLY Avoid Paying Sales Tax State Income...<a href="http://biggerfatterpolitics.blogspot.com/2014/12/if-people-were-corporations.html" rel="nofollow">How To LEGALLY Avoid Paying Sales Tax State Income Tax and Most Federal Taxes CLICK HERE for FREE advice</a><br /><br />This is a parody article but the advice is real.BiggerFatterPoliticshttp://www.biggerfatterpolitics.blogspot.comnoreply@blogger.com