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Bank Leumi to Pay the U.S. $270 Million

After helping taxpayers hide assets in offshore bank accounts for more than 10 years, Bank Leumi entered into an agreement with the Department of Justice in which it will pay the United States $270 million as a penalty and will make a full and complete disclosure of its U.S. Taxpayer-held accounts. As recently as 2011, Bank Leumi admits to taking affirmative and extensive steps to assist U.S. Clients in concealing assets offshore including secretly meeting with U.S. Clients in hotels, parks and coffee shops, using nominee corporate entities in Belize and other foreign tax jurisdictions, hiding the true account owner identities, providing mail hold services to make account detection more difficult, and assisting clients who had accounts at UBS and other financial institutions undergoing criminal investigation by the Department of Justice in moving funds to other secret accounts.For more information, click here

The Good, the Bad, and the Inevitable with IRS Budget Cuts

IRS Commissioner John Koskinen recently announced the extent and effect of the significant budget cuts facing the IRS in 2015. Noting that the IRS will now be required to operate on the lowest budget since 1998 (after adjustments for inflation were made), the IRS will be significantly limited regarding some of its work due to necessary cutbacks. In addition to a reduction in staff due to a continued hiring freeze and attrition, taxpayers can expect longer wait times for the closure of tax audits, longer hold times on telephone calls to the IRS, and even a longer wait time for refunds to be processed. However, there may also be a bright side to some taxpayers if the reduction in personnel will also mean that fewer audits can be initiated or fully investigated by IRS personnel. As a last resort, Commissioner Koskinen states the IRS may even have to close for a few days in order to meet its budget.  

IRS Taxpayer Advocate Issues Annual Report

In her annual report to Congress, Taxpayer Advocate Nina Olsen anticipates that taxpayers will receive the worst level of service since 2001. Citing budget problems of the past five years, Ms. Olson notes the erosion of taxpayer service to individuals coupled with a lack of effective administration and the failure to pass taxpayer rights legislation for a very dim future. The solution, according to the Taxpayer Advocate can be found if Congress makes an investment in the IRS and holds the IRS accountable for the application of the investment.

Ohio District Court rejects estate's reasonable cause argument for its late-filed estate tax return

Ohio District Court rejects estate's reasonable cause argument for its late-filed estate tax return

Last week the United States District Court for the Southern District of Ohio issued an opinion finding an estate liable for additions to tax due to the estate's failure to timely file its estate tax return and its failure to timely pay the tax. Specht v. United States, No. 1:13-cv-708, 2015 U.S. Dist. LEXIS 800 (Jan. 6, 2015).

In Specht, the estate's executor hired an attorney to represent the estate and to prepare and file its estate tax return (Form 706). The attorney informed the executor that the estate's return had to be filed within nine months following the decedent's death, which in this case was September 30, 2009. The return was not filed by this due date, and when the executor asked the attorney why she had missed the deadline, the attorney told the executor that she had an extension to file the return. However, this was not true, and no extension had been filed.

Tenth Circuit holds that late-filed tax returns are not "returns" for purposes of dischargeability in bankruptcy

Earlier this week the Tenth Circuit Court of Appeals issued an opinion in Mallo v. IRS, holding that certain income tax liabilities were not discharged in bankruptcy because the taxpayers filed late returns after the IRS had already assessed the taxes. Mallo v. IRS, No. 13-1464 (10th Cir. 2014). The issue in that case was whether or not those late tax returns should count as "returns" for dischargeability purposes.

Becoming an Independent Contractor

If you have ever thought of becoming an independent contractor, the following are some considerations to make before starting on what is essentially your own business:

· Independent contractors can generally choose how often and when they work.

· Independent contractors can make themselves available to hire bidders, increasing their profitability.

· Independent contractors can take advantage of applicable business income tax deductions and credits.

· Independent contractors should establish a bona fide business presence for several reasons:

o In order to take legitimate business tax deductions and credits.

o In order to advertise, thus increasing clientele and profitability.

o In order to establish a trusted presence in a professional field. Because of employment tax exposure, some businesses may only work with contractors who have separately-established businesses. In fact, if you are not properly established as a bona fide contractor, you could end up costing the business(es) you contract with significant cost in taxes and penalties for "misclassification." (For more information on worker classification:, and )

$20 Million Refunds Issued but not Delivered

The FTB issued over $20 million in refunds to nearly 47,500 taxpayers that were returned to the FTB as undeliverable. The refunds ranged from $1 to $50,000. To see if you are due a refund, following the instructions provided by the FTB.  For more information, visit the FTB's website.

Credit Suisse Pays $2.6 Billion to the DOJ, IRS and New York State in Fines and Restitution

After years of investigation by U.S. law enforcement authorities, and a plea of guilty for conspiracy, Credit Suisse AG was sentenced on November 21, 2014 for conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS. Credit Suisse admitted to operating an illegal cross-border banking businesses purposefully assisting thousands of U.S. clients in opening and maintaining undeclared accounts and in concealing offshore assets and income from the IRS. Credit Suisse acknowledged doing this for decades prior to and through 2009. Credit Suisse will now provide a complete disclosure of its cross-border activities, including account information regarding clients and other banks with which it operated to maintain secrecy for clients from the United States.

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Law Office of Williams & Associates, P.C.
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Sacramento, CA 95864

Toll Free: 800-684-7147
Phone: 916-488-8501
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