The Department of Justice has released the results of its ongoing efforts to identify and extinguish the practices of fraudulent tax return preparers and tax scheme promotors. In the press release, the DOJ describes its most recent activities in stopping violations of federal tax laws by professionals along with an update on injunctions obtained against hundreds of tax-return preparers.Click here to read the results from the Department of Justice.
Almost 40 million tax refunds worth nearly $125 billion have been issued as of Feb. 20, according to Internal Revenue Service statistics released today. The average refund is $3,120.
On March 11, 2015, the IRS reported that it has refunds totaling $1 Billion due to taxpayers who did not file a 2011 federal income tax return. California leads the nation with the most refunds due, with over 103,000 taxpayers failing to file their 2011 return.
"Self-employed" individuals include sole proprietors and independent contractors. The Self-employment income can include income you received for part-time work. This is in addition to income from your regular job. According to the IRS, there are a few things to keep in mind in reporting income. (http://www.irs.gov/uac/Are-You-Self-Employed-Check-Out-These-IRS-Tax-Tips)
There are two forms used to report self-employment income in addition to your 1040, the Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business. Schedule C-EZ may be used if you had expenses less than $5,000 and meet other conditions. Individuals may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, and file with your income taxes.
Each year, the Internal Revenue Service ("IRS") compiles an annual list of the common scams taxpayers may come across. Such scams tend to peak during filing season as taxpayers are preparing their own returns or hiring someone to prepare it for them. This year, in order to raise consumer awareness, the IRS is released one Dirty Dozen scam per day. Here are the final six scams about which the IRS is warning taxpayers:
More than one million people earned money in 2013 but did not file a California State Income Tax Return and they will be hearing from the Franchise Tax Board (FTB).
Each year, the Internal Revenue Service ("IRS") compiles an annual list of the common scams taxpayers may come across. Such scams tend to peak during filing season as taxpayers are preparing their own returns or hiring someone to prepare it for them. This year, in order to raise consumer awareness, the IRS is releasing one Dirty Dozen scam per day. Here are the first six scams about which the IRS is warning taxpayers:
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.
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.
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.