The Treasury Inspector General for Tax Administration (TIGTA) released an audit report on May 19, 2016 in which it claims that "billions of dollars in potentially improper payments will continue to go unaddressed unless the Internal Revenue Service (IRS) is allowed expanded error correction authority," referring to the Earned Income Tax Credit (EITC) Program. The Office of Management and Budget (OMB) considers the EITC the IRS' only high-risk revenue program. According to the TIGTA report, "The IRS estimates that 23.8 percent ($15.6 billion) of EITC payments were issued improperly in Fiscal Year 2015."
The Internal Revenue Service is presenting "Overseas Filing for US Taxpayers" in webinar format on May 25, 2016 from 1:00pm-3:00pm EDT. You must register to attend this webinar. The session will be recorded. To register, click here.
Are you submitting an Offer in Compromise (OIC) application to the Internal Revenue Service? Make sure all your tax returns have been filed! Effective immediately, the IRS will be returning any newly filed OIC applications if the taxpayer involved has not yet come current on filing tax returns.
The US Department of the Treasury Financial Crimes Enforcement Network (FinCen) announced on May 11, 2016, that it is issuing final rules under the Bank Secrecy Act to "clarify and strengthen customer due diligence (CDD) requirements for: Banks; brokers or dealers in securities; mutual funds; and futures commission merchants and introducing brokers in commodities." The final rules, which have been four years in the making, will be effective July 11, 2016. Covered financial institutions must come into compliance by May 11, 2018.
The Panama Papers leak has led President Obama to urge Congress to take action now against corruption and illegal financial activity. This recent, large-scale information leak has made it impossible for the government to ignore the less positive aspect of shell companies, which in theory protect the market from speculative price gouging when companies prepare to make big moves on the market, but which also have been used to hide the illegal activities of less honest beneficiaries.
On the heels of the most recent development in the Uber worker classification dispute, the Internal Revenue Service has put together a free webinar about the differences between Employee and Independent Contractor worker classifications. Join the agency on May 12, 2016 at 2:00 pm EST (11:00 am PST) to learn about control factors, voluntary compliance, and IRS Form SS-8. Register here: https://www.webcaster4.com/Webcast/Page/925/14635
The Internal Revenue Service announced in its most recent e-newsletter that it will begin accepting applications for between 600 and 700 new revenue agents, revenue officers, tax compliance officers, and tax examiners starting Monday, May 9, 2016. Most positions will be entry-level.
If you have offshore assets that are not yet properly disclosed, you should consider contacting an attorney immediately for assistance, before a civil or criminal investigation begins. On April 3, 2016, the International Consortium of Investigative Journalists (ICIJ), with the help of German newspaper Süddeutsche Zeitung, revealed approximately 11.5 million documents on 214,000 shell companies that operated between the 1970s and 2016, causing extreme embarrassment and panic for many of the world's leading figures. Although shell companies are not illegal to own, using them to avoid paying your taxes is.
The US Supreme Court issued its decision in Franchise Tax Bd. of California v. Hyatt on April 19, 2016, affirming the jurisdiction of the Nevada courts but limiting the damages it could award against the California tax agency. This decision lays to rest a case in which taxpayer Gilbert Hyatt sued the FTB in Nevada for abusive audit and investigation practices. The original award was for nearly $500 million. However, because Nevada limits damages that can be awarded against its own state agencies, the taxpayer may only be granted up to Nevada's $50,000 limit.
Not surprisingly, a recent declaratory action has challenged South Dakota's bold move to require many out-of-state sellers to register with the state and begin collecting sales tax (previously discussed here). American Catalog Mailers Associations and NetChoice v. Gerlach questions the constitutionality of the economic nexus legislation based upon the physical presence rule from Quill Corp. v. North Dakota.