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Sacramento Tax Law Blog

Chief of Staff May Serve Prison Time for Failure to Pay Income Taxes

What happens when the chief of staff to a Congressman (and former Democratic staff director for the Homeland Security Committee) fails to file or pay income tax for six or more years in a row? It appears, not much.

Due Dates for Some Federal and California Tax Returns Will Change in 2017

Next year, the due dates for various federal tax returns will change based upon the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (P.L. 114-41). California Assembly Bill 1775 was passed to conform the due dates of related state tax returns to the federal dates. In 2017, the following changes will take place:

Tax Obligations in the Sharing Economy

If you use the internet to provide customers with services, such as household chores and handyman services, or the use of assets, like a car or room for rent, you may be part of the newest workforce known as the "Sharing Economy" or "Gig Economy." The Internal Revenue Service (IRS) is keeping with the times by acknowledging this quickly evolving category of businesses and assisting business owners with regard to their gig-source tax obligations by creating an Internet-based Sharing Economy Resource Center.

TIGTA Recommends Changes To Offshore Account Disclosure Programs

The Internal Revenue Service (IRS) may begin ramping up its investigation of offshore account compliance soon, based on recommendations from the Treasury Inspector General for Tax Administration (TIGTA). TIGTA recently released its final report on the IRS' offshore voluntary disclosure programs (OVDPs) after analyzing a stratified random sample of 100 taxpayers from a population of 3,182 requests to participate in the OVDP that were ultimately denied or withdrawn. Twenty-nine of these should likely have been subject to FBAR penalties, but the IRS did not pursue compliance actions. TIGTA projected a potential $21.6 million in delinquent FBAR penalties that the IRS could have assessed and collected.

IRS Warns of Surge in Summertime Scams

The Internal Revenue Service (IRS) issued a new warning for taxpayers about this year's unprecedented increase in attempted tax fraud. This summer has seen an increase in "robo-calls," where scammers leave threatening voicemail messages. When taxpayers call back, they are threatened with arrest, deportation, or revocation of their driver's license for non-payment.

Watch Your Offshore Assets! Tax Court Increases Incentive for Whistleblowers

Be careful who you share your offshore account information with---whistleblowing just got more lucrative.  On August 3, 2016, the US Tax Court issued an opinion in a whistleblower claim case finding that the whistleblowers were entitled to an award based upon a percentage of $74,131,694 in tax restitution, a criminal fine, and civil forfeitures paid to the government. 147 T.C. No. 4. The targeted taxpayer pleaded guilty to conspiring to defraud the IRS and was ordered to pay $20,000,001 in tax restitution, a $22,050,000 criminal fine, and $15,821,000 civil forfeiture.

FTB Releases Report on 2016 Filing Season

The California Franchise Tax Board recently compiled statistics regarding the 2016 tax filing season.  It released data regarding individual and business returns, refunds, and taxpayer services.  Highlights included:

IRS Announces Nationwide Tax Forum Dates and Locations

Registration for the 2016 Internal Revenue Service Nationwide Tax Forums is now open. The forums offer three days of seminars in the fields of tax law, compliance and ethics at multiple locations around the US, including San Diego, California. For more information, click here: https://www.irs.gov/tax-professionals/irs-nationwide-tax-forum-information

California Tax Agency Interest Rates Scheduled to Increase in 2017

The California Franchise Tax Board recently announced that it will be increasing the interest rate for personal, corporate, and franchise taxes from three to four percent beginning January 1, 2017. The rate for corporation tax overpayments will remain zero percent. The interest rate has not changed since July 1, 2012.

California Counties Targeted to Identify High-End Cash Purchasers of Real Estate

The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) announced a new program that will require U.S. title insurance companies to identify the people hiding behind shell companies who use those companies to pay cash in expensive real estate transactions. Following Geographic Targeting Orders (GTOs), title insurance companies in the counties of Los Angeles, San Francisco, Santa Clara, San Mateo, and San Diego will provide details of all-cash luxury purchases of residential properties by a legal entity, such as an LLC, to FinCEN for six months beginning August 28, 2016. Earlier this year FinCEN issued similar GTOs in Manhattan and Miami-Dade County. By expanding into California and other parts of New York, Florida, and Texas, FinCEN hopes to continue to identify and thwart the abuse of these transactions for money laundering purposes.

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