tag:blogger.com,1999:blog-1519969502186924526.post7592658251990432715..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Taxpayer Advocate Criticizes IRS Implementation of OVDP on Bait and Switch (6/30/11)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger38125tag:blogger.com,1999:blog-1519969502186924526.post-25668074989325353232011-08-13T23:33:10.699-05:002011-08-13T23:33:10.699-05:00The TAS has been very helpful with my request for ...The TAS has been very helpful with my request for FAQ 35 consideration. Without their intercession, I was refused that consideration, so that is something positive. Still waiting the outcome from the correspondence back and forth between the TAS and the auditor, so no final results yet to report. I am somewhat hopeful, but you never know. I may still be forced to Opt Out and/or just bend over and take it. I don't know how seriously the IRS takes the TAOs it receives. This IRS desire to collect revenues seems to trump everything. Hopefully the recent letter from the NY State Bar to Commissioner Shulman will have some impact and give better clarity on how the IRS handles the Minnows. Would encourage you to contact the TAS also. The more small fry failures they hear from the better the possibilities the IRS will listen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-19201263580983820182011-08-12T23:27:17.422-05:002011-08-12T23:27:17.422-05:00Does anyone have any further update on this? Any I...Does anyone have any further update on this? Any IRS response to the TAS letter? Outcome of aby TAOs? The posts above mention TAS is sympathetic and listening to folks' cases. Based on number of requests for help, are they doing anything towards making OVDP/OVDI fairer for the smaller fish?<br />On a separate note, does anyone know if there has been any litigation yet by a "small fish"?<br /> Like someone mentioned in a previous post, I can't believe this cannot be corrected.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-4429790211690460522011-07-28T10:30:46.130-05:002011-07-28T10:30:46.130-05:00To Anonymous July 26, 2011 10:39 PM:
Thank you, t...To Anonymous July 26, 2011 10:39 PM:<br /><br />Thank you, this was helpful indeed. I'm looking fwd to your thoughts/insights once you receive a (hopefully positive) determination from TAS.ASMnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-74213307091478541622011-07-26T22:39:34.811-05:002011-07-26T22:39:34.811-05:00ASM,
I didn't just read it. It happened to me...ASM,<br /><br />I didn't just read it. It happened to me. <br /><br />I appealed to the TAS, after I had received the 906, and letter 4728 (Opt Out Status letter). <br /><br />I was within a few days exhausting the letters 20 day count down to Opt Out, pay up, or be removed.<br /><br />The TAS worked with the local and Regional office to get a 30 day extension while they reviewed my case. <br /><br />I have a very professional Case Officer assigned to me. My case is still under review and they are working with the auditor that did my OVDP. I don't know the outcome yet, but it appears hopeful, as all are trying to find a more reasonable penalty solution. It appears some discretion is being applied. Of course, everything depends on the facts of the situation, so can't speak to this in general terms or provide any certainties. Each case is different. All I can say to you, is at least give it a try. I think you will find a sympathetic ear, and an honest assessment of whether or not they can be of assistance. <br /><br />Hope this helps...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-28252415513663387242011-07-26T11:09:16.960-05:002011-07-26T11:09:16.960-05:00To Anonymous @ July 11, 2011 3:33 PM:
Can you (or...To Anonymous @ July 11, 2011 3:33 PM:<br /><br />Can you (or any other reader) please tell me where you read/saw that "TAS has been able [] to get an extension from the 906 decision"? Thanks indeed.ASMnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-57967071243774966822011-07-25T21:53:33.361-05:002011-07-25T21:53:33.361-05:00Asher
Thanks for responding regarding my issue wi...Asher <br />Thanks for responding regarding my issue with FAQ 35 isssue on 2009 OVDI and your comments in the bombshell and other article. According to my reading of the 2011 OVDI it is clear that the IRS presents OVDI as an opportunity to come clean with a penalty of 25 % which includes FBAR penalties(willful or not is not mentioned). If you dont take the opportunity than you take the risk of the 100,000 per instance of FBAR outside of OVDI depending on the willful or not determination.<br />Is my reading of the OVDI 2011 correct ??<br /><br />Thanks and I appreciate your insights on your website articles.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-18010504153504517522011-07-25T16:14:01.060-05:002011-07-25T16:14:01.060-05:00Asher,
I agree that they would not be responsive ...Asher,<br /><br />I agree that they would not be responsive to a FOIA request in the short term, but it gets their attention, and does provide discovery for later if you are disputing or appealing their handling of the OVDP penalty.<br /><br />Given the IRS attempt to close these OVDPs out, participants may have no choice left, as you point out. However, maybe, just maybe, it would make them more flexible in rethinking how to apply some discretion in their penalty application. Maybe be not. It might just be wishful thinking on my part, but I do know, that the TAS is frustrated with the OVDP policy makers that they had a written finding, and have kept it out of public view. <br /><br />BTW, ACA... American Citizens Abroad has been very interested in your writing. I have directed them to it. Good work. Really appreciate it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-32228251082725815622011-07-25T14:26:59.181-05:002011-07-25T14:26:59.181-05:00To Anonymous, July 25th at 2:03am:
I have not see...To Anonymous, July 25th at 2:03am:<br /><br />I have not seen any "secret" FAQ 35 memo. From my discussion with Internal Revenue Agents, the rescission of FAQ 35 was made by IRS policy makers and notice was distributed to IRS field agents via e-mail. Field agents will not release the email to the public nor to tax practitioners. <br /><br />A FOIA (Freedom of Information Act) application is interesting. However, one issue is that I don't anticipate the IRS providing the responsive documents, if at all, in the short term. In the interim, OVDP participants have a narrow window to either pay or opt out and challenge the penalty, and a pending FOIA request would do very little to keep the window open longer. If a client wanted to challenge the IRS via the TAS, then a FOIA request might be helpful.<br /><br />Thank you for reading my article and commenting.Asher Rubinsteinhttp://www.assetlawyer.comnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-34607307951383453612011-07-25T14:14:52.033-05:002011-07-25T14:14:52.033-05:00To Anonymous, July 24th at 1:16pm
You are correct...To Anonymous, July 24th at 1:16pm<br /><br />You are correct that my articles about FAQ 35 are in the context of the 2009 OVDP and not the 2011 OVDI. You are also correct that FAQ 35 is not available under the 2011 OVDI. My discussion concerns how the IRS offered FAQ 35 as one of the terms of the 2009 OVDP and then rescinded FAQ 35 for 2009 OVDP participants. <br /><br />There are many OVDP cases still open, and Jack and others on this Blog have been discussing the 2009 OVDP still, which makes the FAQ 35 issue still timely, even though, as noted, there is no FAQ 35 under the 2011 OVDI.<br /><br />Thank you for reading my articles and commenting.Asher Rubinsteinhttp://www.assetlawyer.comnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-3671704070271033632011-07-25T02:03:56.553-05:002011-07-25T02:03:56.553-05:00Asher,
I just read your post...
http://www.asse...Asher,<br /><br />I just read your post... <br />http://www.assetlawyer.com/wordpress/?p=1041<br /><br />Really appreciate your advocacy in this regard and your communication with the TAS. I have encouraged folks who feel they have been unfairly handled in the OVDP, to appeal to them, as they have been very helpful. <br /><br />If you are still reading this blog,I have a question. <br /><br />I have heard, from a TAS source, that there is a "secret or unpublished memo" regarding FAQ35, that the IRS refuses to make public even to its agents. This might shed light on their thinking and why they made the change. Everything I have heard about the FAQ35 withdrawl, as been verbally transmitted to me, but agents have been unable to produce anything in writing. Maybe there is something, and you have seen it, and I have not, so correct me if I am wrong or misinformed. <br /><br />Have you or any other practitioner thought of a FOI request to obtain this memo, and all notes, emails, letters and conversations surrounding the change in application of FAQ35 for the OVDP. I doubt they would like that very much, but the TAS would,I bet. I thought we were supposed to have transparency in government these days, and this retraction and the memo changing it certainly is just the opposite... <br /><br />Just a thought.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-74459417193608535642011-07-24T13:16:09.298-05:002011-07-24T13:16:09.298-05:00I have read that article by Asher along with the b...I have read that article by Asher along with the bombshell one he wrote earlier.. however that is all in reference to 2009 OVDI FAQ 35. I dont think there is anything like that in OVDI 2011. The only thing it says is that the penalty of 25% includes all FBRAR. Only if you dont come under the amnesty than the penalty can be 100k+.<br />Again I still do not see Asher's point with reference to the 2011 ovdi. <br />Now if the IRS violates its terms under FAQ 7 and its numerical example than the taxpayer is ripped and betrayed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-78225057528657680402011-07-22T08:07:01.548-05:002011-07-22T08:07:01.548-05:00Good write up by Asher on this matter here:
http:...Good write up by Asher on this matter here:<br /><br />http://www.assetlawyer.com/wordpress/?p=1041<br /><br />Anon123Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-63960333148447892042011-07-18T15:02:24.503-05:002011-07-18T15:02:24.503-05:00The FAQ 35 2009 ovdi language is absent in 2011 ov...The FAQ 35 2009 ovdi language is absent in 2011 ovdi. FAQ 7 OVDI 2011 clearly mentions "In lie of all other penalties including FBAR" in one of the bullets as well as in the numerical example for the penalty. So where do you get the $10,000 and $100,000 FBAR penalties. They are mentioned for someone not falling under OVDI. <br />So ... I am failing to understand the discussion or I am missing the point.<br />Can someone help explain. ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-75418515899933412922011-07-11T17:31:25.062-05:002011-07-11T17:31:25.062-05:00With or without a FAQ 35 in the OVDI, I do think t...With or without a FAQ 35 in the OVDI, I do think the penalty structure can be grim, and very disproportionate for some types of failures, even with all the new little exceptions they have built into the rules. Great deal for the Whales, but can still be killer for the smaller fish if you exceed some arbitrary threshold by $1. <br /><br />The inability for some built in review or adjustment before issuing a 906, with the only recourse being irrevocable 'opt out" with all the uncertainty that can create given the Maximal IRS FBAR penalty mindset, is just plainly wrong. <br /><br />This might still be something the TAS is interested in looking at, as it speaks to a systemic issue.<br /><br />The IRS has seemed to forget that penalty discretion outside the OVDI means there is no floor or how low the penalty can be. They don't have to exercise just the maximum, but you don't know that they won't do that outside the program now. They just seem focused in the maximum direction. They just are looking at the ceiling these days instead of the floor, and stumbling/tripping along in a non constructive way if compliance, and not just collections, is really a part of the OVDI objective. <br /><br />This might interest the TAS. Ask them, and find out.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-58119451234779313142011-07-11T16:36:28.866-05:002011-07-11T16:36:28.866-05:00But then, at Congress's (or some members')...But then, at Congress's (or some members') prodding, the IRS did back off its 501(c)(4) initiative targeting the rich donors. See http://taxprof.typepad.com/taxprof_blog/2011/07/irs-calls-.html<br /><br />Oh, what could I be thinking? That's the rich and they are entitled not to be bothered by the IRS (or pay taxes at all). Now, the IRS has its OVDI program because there is a lot of little fish to fry and, if some of the really wealthy get caught up in it, well, certainly that is not intended and is at most collateral damage to getting the small fish (and they may get off relatively lightly anyway (think Olenicoff)).<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-76131388087602771852011-07-11T16:28:11.727-05:002011-07-11T16:28:11.727-05:00But since there is no FAQ #35 for OVDI 2011, I dou...But since there is no FAQ #35 for OVDI 2011, I doubt the TAS will be able to help much there. Excluding the unlikely possibility that Congress will take a hand.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-42525846028103668442011-07-11T15:33:48.261-05:002011-07-11T15:33:48.261-05:00Actually, the TAS has been able proactively to get...Actually, the TAS has been able proactively to get an extension from the 906 decision while they review the case. This slows things up a bit so you can breathe and don't feel totally railroaded into the either/or decision. "Pay up, Opt out, or get Kicked Out." <br /><br />Given your choices, I do think the TAS is a good option to consider, even if the IRS appeal process eventually rules against the TAO, (which is likely) they have to report to Congress why they ruled that way, and that gets more visibility of how the IRS is treating relatively minor offenders who voluntarily joined the OVDP and are now facing some pretty bleak choices. <br /><br />I hope more folks reach out to the TAS for assistance, if they truly think the OVDP or OVDI process is disproportionately grievous for their offence, and the Opt out with its threats of Maximum penalty outcomes is not appropriate for their failure. <br /><br />Like I said, no harm, and the TAS is more sympathetic to your story than a typical IRS auditor or the OVDP which has no appeal process. They are friendly, and structurally aligned to be on your side, although if you are really grievously in the wrong, don't expect miracles. <br /><br />Give it a try. What can it hurt? The most they can say, is we can't help you, but before they do that, they will at least review your case. Right now, you are NOT getting any review as the OVDP/OVDI programs are just a penalty-by-the-technical-numbers program regardless how ridiculous the penalty outcome for the failure. <br /><br />Let's face it, if you had failed to report some Capital gains, or social security taxes, and now were voluntarily disclosing it, you would not be facing these types of Penalties. The FBAR is just the hook that allows some pretty draconian penalty application / confiscation scheme. Without it, you are just another tax failure, now voluntarily disclosed, and like Geithner, you might not even be subject to any penalties at all.<br />July 11, 2011 3:28 PMAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-63458365280300017952011-07-11T15:07:29.218-05:002011-07-11T15:07:29.218-05:00Maybe 15000 TAO's will be in the pipeline.Maybe 15000 TAO's will be in the pipeline.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-24180037016943444812011-07-07T18:49:13.052-05:002011-07-07T18:49:13.052-05:00This development gives taxpayers in the 2009 OVDP ...This development gives taxpayers in the 2009 OVDP a third option with respect to penalties. The prior options were to pay the penalty and close the matter or opt-out and be subject to full audit and potentially higher penalties. Now taxpayers might pay the penalty, then file for a taxpayer assistance order (TAO) and if successful pursue a refund of penalties.Asher Rubinsteinhttp://www.assetlawyer.comnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-76485854648173390842011-07-05T20:03:33.670-05:002011-07-05T20:03:33.670-05:00To Anonymous @ 11:00 am:
My interaction with the T...To Anonymous @ 11:00 am:<br />My interaction with the TAS has been positive, and they have taken an active interest. It might not work to my benefit in the end, but what have I to lose? I think my concerns are genuine, my penalty extreme for the failure, and least they have been attentive. They listen and you get a hearing. If nothing else it makes you feel better. <br /><br />I would recommend contacting them either via the form that Jack mentioned, or call on the phone. They will direct you to the proper way and assist you on opening a TAO. <br /><br />I can understand Jack's point that having an attorney assist you could be beneficial, and avoid pitfalls. In my case, I really feel I can't afford to spend any more money as it will be hard enough to raise the current penalty, so am doing it alone. I am aware that this might be ill advised. <br /> <br />You have to do your home work and become as knowledgeable with the arcane technical and legal rules they live by, but I keep hoping that reason will prevail somewhere. <br /><br />Realistically, I know is is probably misplaced hope. But the OVDP was created by man, and not handed down from Mount Siana to Moses in granite tablet form. Creating rules with no discretion or forcing you into irrevocable Opt Outs weren’t mandates from God. Man created them and man can adjust them. Right now, they may not be in the mood or have any desire to change anything. They apparently are in the confiscation game to cover revenue shortfalls from huge deficits rather than just trying to increase compliance. That is a discouraging thought, but you have to try something outside the OVDP process, so I recommend contacting them. No harm.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-78503338804669805242011-07-05T19:55:00.698-05:002011-07-05T19:55:00.698-05:00Jonf,
What if IRS/OVDI rules against back file...Jonf,<br /> <br /> What if IRS/OVDI rules against back file election on f8891 ? The OVDI penalty is highly linked how IRS treats taxpayers' missing filing ? No tax due, no OVDI base penalty... so the issue is how IRS treats people with RRSP problem inside OVDI.<br /><br /> Can I count on TAS to help me out in case I get OVDI penalty on RRSP ?ijhttp://www.irs.govnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-64809305504035418752011-07-05T12:46:02.517-05:002011-07-05T12:46:02.517-05:00Jack
Purely a technical issue, but does the TAS h...Jack<br /><br />Purely a technical issue, but does the TAS have authority to issue relief on FBAR cases since these are technically Title 31 penalties, not tax penalties ? I would assume so, since the TAS has authority over IRS procedures in general, not just tax penalties. And in the OVDP, the penalty is a misc penalty, not a FBAR penalty.Jonfnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-52986685633939014452011-07-05T12:09:32.911-05:002011-07-05T12:09:32.911-05:00This time around at least, there should be no misu...This time around at least, there should be no misunderstanding on the terms of the plan. Anyone who gets in should have a good idea of what they're letting themselves in for if they join and if they don't. <br /><br />In an odd, perverse way, whatever the intention of FAQ 35, it might have benefited those who came in, since it seems clear that the IRS/DoJ are serious and intend to get tougher and tougher on offshore accounts. <br /><br />Its pretty clear that (to use Mr. Michel's descriptive phrase) the velvet glove for offshore matters was put away sometime at the end of 2008/2009 as the IRS/DoJ figured out how to break open offshore banking secrecy. And the mailed fist is getting tougher and tougher.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-81348661301446612762011-07-05T11:31:31.593-05:002011-07-05T11:31:31.593-05:00To Anonymous @ 11:00 am:
Taxpayer Advocate assist...To Anonymous @ 11:00 am:<br /><br />Taxpayer Advocate assistance is sought by filing Form 911 (here: http://www.irs.gov/pub/irs-pdf/f911.pdf). I don't recall that I have ever filed one.<br /><br />As with most dealings with the IRS, an attorney is not required. The presence of a qualified attorney, however, often makes the processing easier and avoid needless footfaults.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-33096033593430912822011-07-05T11:26:08.161-05:002011-07-05T11:26:08.161-05:00To Anonymous @ 8:40 am:
There was such a suit. I...To Anonymous @ 8:40 am:<br /><br />There was such a suit. I am trying to get the documents on it now and will probably report on it when I do. I do understand, however, that the plaintiff dismissed the suit. But I should know more later today.<br /><br />Jack Townsend<br /><br />JackJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.com