Posted by: Taxlitigator | February 26, 2016

If You Want to Recover Costs in Fighting the IRS, Ask on Time By Robert S. Horwitz

Internal Revenue Code sec. 7430, a taxpayer can recover administrative and litigation costs, including attorney fees, if the taxpayer is the prevailing party and the IRS’s position was not substantially justified. There is one hitch: you have to ask for costs and fees before it’s too late.  This is what the taxpayers learned in Foote v. Commissioner, Case No. 14-70668 (9th Cir. 12/23/2014) aff’g T.C. Memo. 2013-276.

The facts are ones which you would think cry out for an award of costs and attorney fees. The IRS audited the taxpayers and their companies.  The IRS issued two 30 day letters.  The first proposed additional tax of $27 million, plus penalties and interest.  The second proposed additional tax of $55 million, plus penalties and interest.  The taxpayers went to the IRS Appeals Office.  Appeals determined that most of the proposed tax was wrong.  It issued a notice of deficiency for $4 million tax and $1.5 million in penalties.  It also issued a partnership adjustment notice determining that the partnership had $13.2 million in additional income.

The taxpayers and their partnership went to Tax Court. After further negotiations, the IRS agreed that the taxpayers only owed $310,000 tax plus $64,000 in late filing penalties and that the partnership return was correct as filed.  The Tax Court entered stipulated decisions reflecting the agreement.

So the IRS starts by claiming the taxpayers owe $55 million and ultimately agree they only owe $310,000 in tax and its position was not unreasonable? No, the taxpayers did not ask in time.  The taxpayers never claimed to be entitled to administrative and litigation fees and costs during the administrative phase or in any pleadings filed with the Tax Court prior to entry of the decision.  In fact, they waited until more than a year after the decisions were entered and became final to seek fees and costs.  The Tax Court held that they didn’t ask for fees and costs in time.  The Ninth Circuit affirmed.  As the Ninth Circuit stated in its memorandum opinion “As the Footes did not properly petition the tax court for administrative and litigation costs before the stipulated decisions became final, their current action for costs is barred by res judicata.”

The moral is that if you believe the IRS’s position is unreasonable, ask for fees and costs before it is too late.

ROBERT S. HORWITZ – For more information please contact Robert S. Horwitz – horwitz@taxlitigator.com or 310.281.3200   Mr. Horwitz is a principal at Hochman, Salkin, Rettig, Toscher & Perez, P.C., a former AUSA of the Tax Division of the Office of the U.S. Attorney (C.D. Cal) and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. Additional information is available at http://www.taxlitigator.com

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Posted by: Taxlitigator | February 22, 2016

IRS Employment Tax Notices Must be Sent to the “Last Known Address” of the Taxpayer, by ROBERT S. HORWITZ

The IRS has recently enhanced their focus on employment tax enforcement throughout the country. An employment tax return filed by April 15 of the year following that in which the applicable quarter falls is “deemed filed” on April 15 of the following year. Where no return is filed, the three-year assessment period does not begin to run and the IRS can make the assessment at any time.

A recent district court case, United States v. Wallis, 117 AFTR 2d 2016-583 (WD VA 2/1/2016), discusses the applicable statute of limitations for assessing trust fund recovery penalties under Code Section 6672 and the notice provisions that are required before the IRS can assess the penalty.

Wallis owned two corporations, United and Boss, and was a co-owner of a third corporation, Pizza Planet. United did not file employment tax returns for any of the four quarters of 2000.  Pizza Planet failed to file employment tax returns for the first quarter of 2000.  The IRS made “substitute for return” assessments for employment taxes against United and Planet Pizza.

Boss filed its employment tax return for the second quarter of 2002 on July 31, 2003, for the third quarter of 2002 on October 31, 2002, and for the fourth quarter of 2002 on January 31, 2003. Wallis was in bankruptcy from January 31 to May 21, 2002.

On April 12, 2006, the IRS sent Wallis a Letter 1153, informing him that it had determined that he was a responsible person liable for the failure of the companies to pay employment taxes. Wallis did not protest the proposed determinations and the Government assessed the tax.

The Government sued Wallis to collect the trust fund penalty assessments and to also collect income taxes that Wallis owed. The Government moved for summary judgment.  The Court granted the motion as to all liabilities, except for those relating to Planet Pizza because there were issues of fact that were in dispute.

What interests us is the period of limitations on assessment and the notice provisions relating to the trust fund recovery penalty.

THE PERIOD OF LIMITATIONS ON ASSESSING TRUST FUND PENALITES. The IRS can assess a trust fund recovery penalty within three years of the latter of a) the date the Form 941 employment tax return is deemed filed or b) the date when the Form 941 is actually filed. An employment tax return filed by April 15 of the year following that in which the quarter falls is “deemed filed” on April 15 of the following year.  Where no return is filed, the three-year assessment period does not begin to run and the IRS can make the assessment at any time.

In addition, certain events toll the statute of limitations on assessment. The assessment period is tolled while a taxpayer’s bankruptcy case is pending plus an additional 60 days. A notice the IRS has determined that the taxpayer may be liable for the trust fund penalty tolls the period of limitation for 90 days.

After discussing these rules, the district court applied them to Wallis’ case. Since no returns had been filed for quarters in question for Planet Pizza or United, the IRS could assess the penalty at any time.  For United, since the returns for the third and fourth quarters of 2002 were filed on time, they were deemed filed on April 15, 2003.  Since the IRS sent the notice of determination to Wallis on April 12, and Wallis had an intervening bankruptcy, the court held that the IRS “had until well after July 6, 2006 to make its section 6672 assessment against Wallis, which it successfully accomplished.”

THE TRUST FUND RECOVERY PENALTY NOTICE PROVISIONS. Internal Revenue Code §6672(b)(1) requires the IRS to give a responsible person notice that he may be subject to a trust fund penalty assessment. The IRS provides notice by either hand delivery or by mailing a Letter 1153 to the taxpayer’s last known address as determined under Internal Revenue Code §6212.   According to the court:

The Service meets its duties by sending notice to the taxpayer’s “last known address,” a term of art defined in Treasury Regulation section 301.6212-2(a) as: the address that appears on the taxpayer’s most recently filed and properly processed Federal tax return, unless the Internal Revenue Service (IRS) is given clear and concise notification of a different address. See e.g., Bullard v. United States, 486 F. Supp. 2d 512, 516 (D. Md. 2007); Mason, 132 T.C. at 318. Further information on what constitutes clear and concise notification of a different address and a properly processed Federal tax return can be found in Rev. Proc. 90-18 (1990-1 C.B. 491) or in procedures subsequently prescribed by the Commissioner. Treas. Reg. section 301.6212-2(a).

CHANGING THE LAST KNOWN ADDRESS. Under Rev. Proc. 2001-18, taxpayers could change their address using a written notifications or by giving the Service “clear and concise oral notification.” For either notification, the Service had a “45-day processing period” to update its records.

Wallis claimed he was not given proper notice sent to his last known address. The court rejected this argument, because the notice was sent to was the address listed on his most recently filed tax returns that were filed prior to the date of the Letter 1153 and it was the same address used on his dealings with banks and everyone he paid by check.  Wallis never gave the IRS “clear and concise notice” of a different address. Therefore, the IRS gave proper notice.

The Wallis case is a reminder that, when dealing with the IRS, it is important to give timely notice of any change of address.  Failure to give proper notice can deprive a taxpayer of valuable rights to challenge a proposed liability pre-assessment, either through an appeal to the IRS Appeals Office or, in the case of notices of deficiency for income, estate and gift taxes, by petitioning the Tax Court.

NOTE: For many types of returns, a taxpayer can change their address by submitting IRS Form 8322. For more information, see https://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/IRS-Procedures/Address-Changes/Address-Changes

ROBERT S. HORWITZ – For more information please contact Robert S. Horwitz – horwitz@taxlitigator.com Mr. Horwitz is a principal at Hochman, Salkin, Rettig, Toscher & Perez, P.C., a former AUSA of the Tax Division of the Office of the U.S. Attorney (C.D. Cal) and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. Additional information is available at http://www.taxlitigator.com

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Posted by: AGOSTINO ASSOCIATES | February 19, 2016

“GOTCHA” — UNANTICIPATED AUDIT ISSUES AFTER QUIET DISCLOSURES By Frank Agostino and Lawrence A. Sannicandro

ANOTHER GREAT ARTICLE FROM AGOSTINO & ASSOCIATES!!  – To download a great article prepared by our very close friends at the Law Firm of Agostino & Associates in Hackensack, NJ (www.agostinolaw.com), see the Agostino & Associates February Newsletter – http://files.ctctcdn.com/f7d16a55201/5f66c5a0-157c-4050-bbdd-81087e8b2275.pdf

“GOTCHA” — UNANTICIPATED AUDIT ISSUES AFTER QUIET DISCLOSURES By Frank Agostino, Esq. and Lawrence A. Sannicandro, Esq.-

Practitioners worry about audits of returns submitted as quiet disclosures for good reason. The Service has been far less draconian in submissions under a traditional Offshore Voluntary Disclosure Program or the Streamlined Program, but revenue agents have taken a hard line in disallowing otherwise deductions and credits with respect to quiet disclosures. In this regard, the Service is granted broad authority to deny legitimate deductions, credits, and income exclusions, and to recast transactions to not only prevent the avoidance of U.S. tax but to impute income to U.S. donees and legatees. Practitioners should consider these issues when advising taxpayers to submit returns as quiet disclosures, pursuant to the Streamlined Program, or under the traditional Offshore Voluntary Disclosure Program. Finally, it is important for practitioners to reevaluate whether the quiet disclosure was in fact a more cost-effective alternative than the traditional Offshore Voluntary Disclosure Program before being contacted by the Service.

Which taxpayers who are most likely to be negatively affected by each type of adjustments for taxpayers with international activities? Learn about common audit adjustments that can apply including: the disallowance of deductions and credits for U.S. citizens, resident aliens, and nonresident aliens; the disallowance of the foreign earned income exclusion for U.S. citizens and resident aliens; and the Internal Revenue Service’s ability to recharacterize as ordinary income purported gifts and bequests from a partnership or a foreign corporation under Treas. Reg. § 1.672(f)-4. Finally, learn how to transition the taxpayer from a quiet disclosure into a traditional Offshore Voluntary Disclosure Program.

FOR THE FULL ARTICLE SEE http://files.ctctcdn.com/f7d16a55201/5f66c5a0-157c-4050-bbdd-81087e8b2275.pdf

AGOSTINO & ASSOCIATES, with a national practice based in Hackensack, NJ, specializes in tax and tax controversies (civil and criminal), offers in compromise, voluntary disclosures, tax lien discharges, innocent spouse determinations, forfeitures, estate planning and probate, contract and contract litigation. A firm comprised truly great, caring people who want the best for their clients !

For further information or to sign up for their invaluable Newsletter, contact FRANK AGOSTINO AND LAWRENCE A. SANNICANDRO – directly at (201) 488-5400 or visit http://www.agostinolaw.com

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Posted by: Taxlitigator | February 16, 2016

IRS Transaction Codes Pocket Guide – Helpful if You Need it ! by Robert Horwitz

The IRS transaction codes are typically listed on an taxpayers transcript of account. The transaction guide identifies many of the most often used codes.

“This document is an abbreviated version of the Transaction Codes listed in Document 6209 for quick reference. The transaction codes consist of three digits. They are used to identify a transaction being processed and to maintain a history of actions posted to a taxpayer’s account on the Master File. Every transaction processed by the Automatic Data Processing (ADP) must contain a Transaction Code to maintain Accounting Controls of debit and credits, to cause the computer at MCC/TCC to post the transaction on the Master File, to permit compilation of reports, and to identify the transaction when a transcript is extracted from the Master File.

The abbreviations used under the heading “File” are as follows: Individual Master File (IMF) “I”, Business Master File (BMF) “B”, Employee Plan Master File (EPMF) “E”, Individual Retirement Account File (IRAF) “A “, Payer Master File (PMF) “P”. ”

The IRS Transaction Codes are available online at:

https://www.irs.gov/pub/irs-utl/transaction_codes_pocket_guide.pdf

Robert S. Horwitz – For more information please contact Robert S. Horwitz – horwitz@taxlitigator.com Mr. Horwitz is a principal at Hochman, Salkin, Rettig, Toscher & Perez, P.C., a former AUSA of the Tax Division of the Office of the U.S. Attorney (C.D. Cal)  and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. Additional information is available at http://www.taxlitigator.com

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Posted by: Lacey Strachan | February 10, 2016

IRS’ Breach of a Closing Agreement – 9th Circuit Sends Al Davis Home by Lacey Strachan

In the recent decision Davis v. United States, No. 13-16458 (9th Cir. 1/25/2016), the Ninth Circuit reversed a district court decision that had invalidated certain IRS assessments against Al Davis and his wife, relating to a TEFRA partnership proceeding involving the Oakland Raiders, a California limited partnership of which Al Davis had the largest interest.

The Davises had brought a refund suit for the amounts paid pursuant to the partner-level assessments the IRS made stemming from the terms of a settlement reached between the IRS and the partnership in the TEFRA case, which was documented in a closing agreement and a corresponding decision entered by the Tax Court. The closing agreement, which was signed by Al Davis as president of the Tax Matters Partner, contained a provision that provided that prior to assessing any amounts against the partners of the partnership pursuant to the settlement, the IRS must provide each partner of the partnership 90 days to review its proposed computational adjustments that implement the terms of the settlement, and 60 days to review any revised computational adjustments.  However, because the statute of limitations for assessment was about to expire, the IRS ultimately made an assessment against the partners without giving the partners the required 60-day period to review its revised computations, in breach of the terms of the settlement agreement.

The Davises brought the refund suit on the grounds that the assessments were invalid, making two arguments in support: (1) the assessments were invalid because they were not made in accordance with the terms of the closing agreement; and (2) the assessments were made after the statute of limitations had run. The district court granted summary judgment in the Davises’ favor, finding that the IRS’ breach of the closing agreement caused the assessments to be invalid.  On appeal, the Ninth Circuit reversed, holding that the district court erred in invalidating the assessments.

Closing Agreements. Section 7121 of the Internal Revenue Code allows the IRS to enter into closing agreements with taxpayers, which are final and conclusive agreements relating to the tax liability of a taxpayer, binding both the IRS and the taxpayer to the terms of the agreement.  Section 7121(b) provides that when a closing agreement is properly entered into, (1) the matters agreed upon cannot be later reopened or modified by the Government, and (2) any determination, assessment, payment, refund, etc. made in accordance with the closing agreement cannot be modified or set aside.

In Davis, the Ninth Circuit explained that closing agreements are contracts governed by federal common law that for “most purposes…are just like other contracts.” [i]   The Ninth Circuit cites two cases that involved the interpretation of terms in a closing agreement, which held that contract law principles should be applied in resolving the dispute.[ii]

Other cases, though, have acknowledged differences between closing agreements and contracts governed by state law, with one difference being that closing agreements do not require any consideration to be binding on both parties. In Perry v. Page, 67 F.2d 635 (1st Cir. 1933), the First Circuit held that consideration is not a requirement for a valid closing agreement unlike under contract law, explaining: “If entered into between the taxpayer and the Commissioner voluntarily, and approved by the Secretary of the Treasury or Undersecretary, [a closing agreement’s] effect is regulated by statute and takes on legal consequences by virtue of the statute, and not under the law of contracts….”[iii]

Remedy for Breach of a Closing Agreement. The Ninth Circuit was presented in Davis with the question of whether the remedy for the IRS’ admitted breach of the closing agreement should be the invalidation of the assessments that were made notwithstanding the fact that the IRS had not complied with its agreement to provide the taxpayers with a second opportunity to review the computations prior to assessment.

Section 7121 does not directly address what happens when an assessment is made contrary to the terms of the closing agreement. In Davis, the Ninth Circuit held that the taxpayers would be limited to the contractual remedy of damages for the IRS’ breach, reasoning that “damages are always the default remedy for breach of contract.”[iv]

The taxpayers cited in support of their position a Third Circuit case, Philadelphia & Reading Corp. v. United States, 944 F.2d 1063 (3d Cir. 1991), which held certain assessments to be invalid where they were made prematurely under the terms of a settlement agreement.  The settlement in that case provided that the taxpayers would waive their statutory right to a notice of deficiency, conditioned on the IRS delaying the assessments until after the IRS had approved a schedule of offsetting overpayments.  The Ninth  Circuit distinguished Philadelphia & Reading Corp. on the basis that the reason the assessments were invalid in that case was because the statutory notice of deficiency requirement had not been complied with as a result of the breached settlement agreement, whereas in Davis, the Ninth Circuit held that the IRS had complied with all statutory requirements to be able to make the assessments.[v]

The court’s holding turned on its conclusion that the IRS “violated no law in making the assessments.”[vi]  The Ninth Circuit explained that “the problem with Davis’s argument is that his obligation to pay taxes validly and accurately assessed comes from the Internal Revenue Code, not the Closing Agreement, which only specified the treatment of certain Partnership income as inputs to the calculation of his taxes.”[vii]  Because this was a TEFRA case, the taxpayers were not parties to the Closing Agreement—the closing agreement was between the IRS and the partnership and was signed by the attorney for the partnership’s Tax Matters Partner.  The Ninth Circuit further explained: “The IRS’s failure to perform its contract with the Partnership cannot relieve Davis of his statutory obligation to pay taxes; nothing in the Closing Agreement provided that any taxes assessed on the partners pursuant to statute would be rendered invalid if the government failed to perform.”[viii]

Rejecting the notion that a small breach should entitle the taxpayer to total relief from his “pre-existing obligation to pay taxes,”[ix] the Ninth Circuit suggested that the Davises’ remedy would be to file a refund claim to dispute the assessments if they believed the computations to be incorrect, and to seek damages for the additional costs involved in correcting the amount of the assessments.[x]

Statute of Limitations in TEFRA Cases. The taxpayers alternatively argued that regardless of the IRS’ breach of the closing agreement, the assessments were invalid because they were made after the statute of limitations had run.

While the TEFRA provisions provide that partnership tax disputes are to be resolved at the partnership level, the IRS may enter into settlement agreements with individual partners, which causes the individual’s partnership items to convert to nonpartnership items and the partner is dismissed from the partnership-level proceeding.[xi]  Generally, the statute of limitations for assessing the flow-through adjustments in a TEFRA case at the partner level is one year from when the Tax Court decision becomes final.[xii]  However, if the IRS enters into a settlement agreement with an individual partner, because the partner is then no longer a party to the TEFRA proceeding, the one-year statute of limitations begins to run from the date the settlement agreement is made final, instead of running from the date the Tax Court decision becomes final.

Davis argued that the closing agreement was “a settlement agreement with the partner,” causing the statute of limitations to begin running from the date the closing agreement was finalized and approved by the court instead of from when the Tax Court decision became final, which would cause the assessments to be untimely. The Ninth Circuit rejected this argument, holding that although individual partners are parties to and bound by the Tax Court TEFRA proceeding, it was the partnership, not Davis, who entered into the settlement agreement with the IRS and, therefore, the one-year statute of limitations ran from the date the Tax Court decision became final.

LACEY STRACHAN – For more information please contact Lacey Strachan at Strachan@taxlitigator.com. Ms. Strachan is a senior tax attorney at Hochman, Salkin, Rettig, Toscher & Perez, P.C. and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. She routinely represents and advises U.S. taxpayers in foreign and domestic voluntary disclosures, sensitive issue domestic civil tax examinations where substantial civil penalty issues or possible assertions of fraudulent conduct may arise, and in defending criminal tax fraud investigations and prosecutions. She has considerable expertise in handling matters arising from the U.S. government’s ongoing civil and criminal tax enforcement efforts, including various methods of participating in a timely voluntary disclosure to minimize potential exposure to civil tax penalties and avoiding a criminal tax prosecution referral. Additional information is available at http://www.taxlitigator.com.

 

[i] Davis v. United States,  No. 13-16458 at *8 (9th Cir. 1/25/2016) (9th Cir. 1/25/2016) (citing States S.S. Co. v. Comm’r, 683 F.2d 1282, 1284 (9th Cir. 1982) and United States v. Nat’l Steel Corp., 75 F.3d 1146, 1150 (7th Cir. 1996)).

[ii] States S.S. Co. v. Comm’r, 683 F.2d 1282, 1284 (9th Cir. 1982); United States v. Nat’l Steel Corp., 75 F.3d 1146, 1150 (7th Cir. 1996)).

[iii] Perry v. Page, 67 F.2d 635, 636 (1st Cir. 1933).

[iv] Id. (citing the Supreme Court case United States v. Winstar Corp., 518 U.S. 839, 885 (1996) (plurality opinion), which cited the Restatement (Second) of Contracts § 346, cmt. a (Am. Law. Inst. 1981)).

[v] Id. at *9-*10.

[vi] Id.

[vii] Id.

[viii] Id.

[ix] Id. at *9.

[x] Id. at *10-*11.

[xi] IRC § 6231(b)(1).

[xii] IRC § 6229(d).

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Posted by: Taxlitigator | February 4, 2016

IRS Revises Streamlined FBAR Reporting Procedures Non-Resident Certification Form 14653

The Streamlined Filing Compliance Procedures represent an IRS effort to find a viable method of encouraging U.S. taxpayers to come into compliance with their reporting and filing requirements associated with varying interests in foreign financial accounts and assets.[i] The Streamlined Procedures require the filing of original or amended tax returns and FBARs as well as a Certification of Non-Willful conduct on IRS Form 14653.[ii]

For eligible U.S. taxpayers residing outside the United States, all penalties are waived under the streamlined procedures. For eligible U.S. taxpayers residing in the United States, the only penalty under the streamlined procedures will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue (all income tax related penalties associated with the non-U.S. source income will be waived). All relevant facts and circumstances must be carefully analyzed before making a determination regarding the submission of a “non-willful” certification requesting participation in the Streamlined Procedures.

Douglas H. Shulman, Commissioner of Internal Revenue, Washington, D.C. , October 26, 2009 “If you are a US individual holding overseas assets, you must report and pay your taxes or we will be increasingly focused on finding you.”

DoJ Letter Re Investigation of Undeclared Foreign Financial Accounts. A few years back, various taxpayers received an unexpected warning letter from the Tax Division of the U.S. Department of Justice stating “The Department of Justice is conducting an investigation of U.S. taxpayers who may have violated federal criminal laws by failing to report they had a financial interest in, or signature authority over, a financial account located in a foreign country. We have reason to believe that you had an interest in a financial account in India that was not reported to the IRS on either a tax return or FBAR, Department of Treasury Form TD F 90-22.1, report of Foreign Bank and Financial Account. You are advised that the destruction or alteration of any document that may relate to this investigation constitutes a serious violation of federal law, including but not limited to obstruction of justice . . . You are further advised that you are a subject of a criminal investigation being conducted by the Tax Division [of the Department of Justice].”

Current Options for U.S. Taxpayers with Undisclosed Foreign Financial Assets

￭ 2014+ Offshore Voluntary Disclosure Program (OVDP) [iii]

￭ Streamlined Filing Compliance Procedures[iv]

￭ Delinquent FBAR Submission Procedures[v]

￭ Delinquent International Information Return Submission Procedures[vi]

Revisions to IRS Form 14653 – Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures. Form 14653 was revised in January 2016. The previous Form 14653 was issued in January 2015 and contained the following note (in red): “Note: You must provide specific facts on this form or on a signed attachment explaining your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Any submission that does not contain a narrative statement of facts will be considered incomplete and will not qualify for the streamlined penalty relief.” Form 14653 (Rev. 1-2016) retains the foregoing language but is no longer highlighted in red.

Form 14653 (Rev. 1-2016) now includes the following revisions:

(1). There is now a detailed request for information regarding presence outside the U.S. during the Streamlined Procedures submission period: “Note: Both spouses filing a joint certification must meet the non-residency requirements. Complete one of the following (two) sections regarding your residency status:

(a).       “If you are a U.S. citizen or lawful permanent resident (i.e., “green card holder”), complete this section: For the covered tax period, indicate whether you were physically outside the United States for each  year. You must have been physically outside the U.S. for at least 330 full days in any one or more of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, and you must not have had a U.S. abode. For more information on the meaning of “abode” see IRS Publication 54.I was physically outside the United States for at least 330 full days (answer Yes or No for each year) [with a chart containing “Yes/No” blocks to be completed for each of the 3-year Streamlined Procedures submission period]. Both spouses filing a joint certification must meet the non-residency requirement. If the number of days physically outside of the U.S. differs for each spouse, disclose that on the chart above or in an attachment to this certification.

(b).       If you are not a U.S. citizen or lawful permanent resident, complete this section: If you are not a U.S. citizen or a lawful permanent resident, please attach to this certification your computation showing that you did not meet the substantial presence test under I.R.C. sec. 7701(b)(3). Your computation must disclose the number of days you were present in the U.S. for the three years included in your Streamlined Foreign Offshore Procedures submission and the previous two years. If you do not attach a complete computation showing that you did not meet the substantial presence test, your submission will be considered incomplete and your submission will not qualify for the Streamlined Foreign Offshore Procedures.

(2).       Form 14653 (Rev. 1-2015) stated: “Provide specific reasons for your failure to report all income, pay all tax, and submit all required information returns, including FBARs. If you relied on a professional advisor, provide the name, address, and telephone number of the advisor and a summary of the advice. If married taxpayers submitting a joint certification have different reasons, provide the individual reasons for each spouse separately in the statement of facts. The field below will automatically expand to accommodate your statement of facts.” 

Form 14653 (Rev. 1-2016) now includes an expanded request for a factual explanation (similar to the recently issued FAQs[vii]), in bold: “Provide specific reasons for your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Include the whole story including favorable and unfavorable facts. Specific reasons, whether favorable or unfavorable to you, should include your personal background, financial background, and anything else you believe is relevant to your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Additionally, explain the source of funds in all of your foreign financial accounts/assets. For example, explain whether you inherited the account/asset, whether you opened it while residing in a foreign country, or whether you had a business reason to open or use it. And explain your contacts with the account/asset including withdrawals, deposits, and investment/ management decisions. Provide a complete story about your foreign financial account/asset. If you relied on a professional advisor, provide the name, address, and telephone number of the advisor and a summary of the advice. If married taxpayers submitting a joint certification have different reasons, provide the individual reasons for each spouse separately in the statement of facts. The field below will automatically expand to accommodate your statement of facts. Both spouses filing a joint certification must meet the non-residency requirement. If the number of days inside the U.S. differs for each spouse, disclose that on the chart above or in an attachment to this certification.

(3).       An additional signature line has been added for “For Paid Preparer Use Only (the signature of taxpayer(s) or fiduciary is required even if this form is signed by a paid preparer)” as well as an authorization for the IRS “allow another person to discuss this form with the IRS.”

Am I “Non-Willful”? Taxpayers pursuing resolution of a foreign account issue within the Streamlined Procedures are required to certify under penalties of perjury that their conduct was “non-willful.” For purposes of the streamlined procedures, non-willful conduct is defined as “conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.”[viii] The relatively more culpable standards of “willfulness” or “willful blindness” are not referenced in the Streamlined Procedures.

The streamlined certification process poses unique challenges to taxpayers and their representatives. The required certification Form 14653 (Rev. 1-2016) requires that the taxpayer “provide specific reasons” for the prior non-compliance can be troubling for those who simply did not know and/or were not advised of the requisite filing and reporting requirements. Beyond “I didn’t know,” it has often been difficult to get more specific.

The IRS is to be commended for now providing guidance within Form 14653 (Rev. 1-2016) suggesting that the taxpayer provide information “whether favorable or unfavorable to you, should include your personal background, financial background, and anything else you believe is relevant to your failure to report all income, pay all tax, and submit all required information re returns, including FBARs. Additionally, explain the source of funds in all of your foreign financial accounts/assets. For example, explain whether you inherited the account/asset, whether you opened it while residing in a foreign country, or whether you had a business reason to open or use it. And explain your contacts with the account/asset including withdrawals, deposits, and investment/ management decisions. Provide a complete story about your foreign financial account/asset.”

While experienced tax professionals may be familiar with case law and secondary source materials as to what factors bear relevance in these matters, the foregoing IRS guidance is intended to assist, to the extent possible, those taxpayers who choose to complete the forms without access to professionals. Moreover, expressly indicating that both “favorable or unfavorable” factors should be provided within Form 14653 (Rev. 1-2016) will remind potential participants that few, if any, streamlined cases involve only beneficial facts, and that individuals with a mixed bag of facts remain appropriate candidates for the expanded Streamlined Procedures.

Caution Required. Returns submitted under the Streamlined Procedures may be subject to IRS examination resulting in additional tax and penalties with respect to any audit related adjustments. Also, the Streamlined Procedures do not provide protection from a possible criminal prosecution referral to the U.S. Department of Justice. However, if a taxpayer satisfies the “non-willful” requirement for participation in the Streamlined Procedures, they should not be a candidate for a criminal prosecution in any event.

Further, the IRS Voluntary Disclosure Practice set forth in IRS Internal Revenue Manual (IRM) 9.5.11.9 would seem to provide a pass from a criminal referral if the appropriate “bells and whistles” set forth in IRM 9.5.11.9 are followed (a “truthful, timely, complete” disclosure, “willingness to cooperate”, “taxpayer makes good faith arrangements with the IRS to pay in full, the tax, interest, and any penalties determined by the IRS to be applicable,” etc.). If the taxpayer’s conduct is somehow deemed “willful,” they would not be a viable candidate for the Streamlined Procedures and should consider coming into compliance through the current IRS Offshore Voluntary Disclosure Program (OVDP).

The Streamlined Procedures do not limit the civil penalties otherwise associated with the reporting of U.S. (domestic) source income. IRS OVDP Frequently Asked Question 7.1 provides “The offshore penalty structure only resolves liabilities and penalties related to offshore noncompliance. Domestic portions of a voluntary disclosure are subject to examination.” The original OVDP was created in 2009 around the theory that those who failed to report any interest in a foreign financial account did so with the intent to evade a U.S. tax obligation. This theory obviously ignored the realities of life for most residing outside the U. S. as well as for many recent immigrants.

What to Anticipate from the IRS Regarding the “Non-Willful” Certification? The IRS has indicated it will review each certification of non-willful status seeking participation in the Streamlined Procedures. The source of funds held in the foreign account may be an important factor. If the source of funds in the account was from unreported income, the situation can become somewhat problematic. However, having inherited funds in a foreign financial account, without more, might not be considered deserving of non-willful status by the IRS. The IRS has expressed an intention to treat taxpayers consistently and numerous individuals having inherited funds in an undeclared foreign account have been subjected to the stated OVDP penalty.

Deposits and withdrawals to the foreign account can reveal intentions and knowledge of various individuals involved. In reviewing the “non-willful” certification, the government can be expected to inquire about the manner in which deposits and/or withdrawals were made to/from the foreign account(s); the mechanics of how deposits/withdrawals were made; the form in which deposits/withdrawals occurred (i.e. cash, check, wire, travelers’ check, etc.); amounts of each withdrawal/deposit; when such deposits/withdrawals occurred; where such deposits/withdrawals occurred; whether there were there limitations on the amounts that could be deposited/withdrawn; and documents received when a deposit/withdrawal occurred (i.e. receipt, credit memo, debit memo, etc.)?

Additional considerations regarding someone being “non-willful” often include whether the existence of the account was disclosed to the return preparer or others; whether the account was at some point moved to another foreign financial institution; whether the taxpayer’s advisors had some degree of knowledge about the account; the perceived degree of financial and business sophistication and education of the taxpayer; whether foreign entities were involved as accountholders; documents provided to open the account [i.e. U.S. or foreign passport(s), identification card, etc. – note that it might not be a good fact for a taxpayer having dual passports to open an account with their non-U.S. passport]; communications, if any, with others that occurred regarding bank secrecy, taxation, and/or disclosure of any foreign accounts; failure to seek independent legal advice about how to properly handle the foreign bank account and instructions or advice received regarding holding or receiving mail from the bank, etc. Further questions often lay within the responses to each of the foregoing questions.

Lastly, in reviewing the non-willful certification under the Streamlined Procedures, resident taxpayers should anticipate the government inquiring as to whether the foreign accounts remain open and if not, where the funds were transferred when the account(s) were closed. Some resident taxpayers closed accounts and transferred the funds directly to a domestic account. Others closed accounts and transferred the funds through various means to other foreign accounts. Further questions often lay within the responses to each of the foregoing questions. An interview by an IRS agent (in person or by phone) should be anticipated and is more likely with respect to resident taxpayers.

How Does the Preparer Impact the Determination? The IRM defines the test “willfulness” in the FBAR context as a determination of whether there was “a voluntary, intentional violation of a known legal duty.”[ix] The burden of establishing willfulness is on the IRS and may be demonstrated by the person’s knowledge of the reporting requirements and the person’s conscious choice not to comply with the requirements.[x] In the FBAR situation, the only thing that a person need know is that he has a reporting requirement.[xi] If a person has that knowledge, the only intent needed to constitute a willful violation of the requirement may a conscious choice not to file the FBAR.[xii]

Should the taxpayer have inquired of their return preparer about the need to report an interest in a foreign financial account? Should the preparer have gone beyond providing a tax organizer that recites the Schedule B reference relating to an interest in a foreign financial account and perhaps explained what types of foreign interests are reportable?[xiii] Will a return preparer actually step up and confirm they knew of the existence of a reportable interest in a foreign financial account and to some degree advised the taxpayer the FBAR was not required? Will the IRS punish the preparer who steps up and gave the wrong advice . . . or no advice when faced with an objective duty to inquire about the possible existence of a foreign financial account?

Was the definition of “non-willful” conduct set forth in the Streamlined Procedures intended to be significantly more user friendly than the historic definitions of “willfulness” and “willful blindness” in the FBAR context? Can taxpayers rely upon the Streamlined Procedures if their return preparer declines to confirm a lack of inquiry about the existence of an interest in a foreign financial account? Can taxpayers rely upon the Streamlined Procedures if they simply failed to advise their return preparer of the existence of an interest in a foreign financial account? The IRS Internal Revenue Manual affirmatively concludes that “The mere fact that a person checked the wrong box, or no box, on a Schedule B is not sufficient, by itself, to establish that the FBAR violation was attributable to willful blindness.”[xiv] Does a common sense definition of “non-willful” conduct apply . . . or not? Feel lucky?

Civil vs. Criminal Resolution? If there are material, possibly intentional, misstatements set forth in the non-willful certification, the taxpayer might anticipate exposure to the extensive criminal enforcement powers of the U.S. government. The certification Form 14653 (Rev. 1-2016) required to be signed by the taxpayer under the Streamlined Procedures provides “I recognize that if the Internal Revenue Service receives of discovers evidence of willfulness, fraud, or criminal conduct, it may open an examination or investigation that could lead to civil fraud penalties, FBAR penalties, information return penalties, or even referral to [IRS] Criminal Investigation.” If there are any uncertainties or potentially difficult factual scenarios involved, consult with experienced counsel.

The government may already have or might subsequently receive information that does not support non-willful conduct asserted in a completed Form 14653 (Rev. 1-2016). All relevant facts and circumstances must be carefully analyzed before making a determination regarding the submission of a “non-willful” certification requesting participation in the streamlined procedures.

What to do? Taxpayers not currently participating in an OVDP who meet the eligibility requirements for the Streamlined Procedures should consider requesting streamlined treatment if they are comfortable and have sufficient factual basis to certify their “non-willful” status.

Non-resident taxpayers might be better positioned to achieve their goal of a non-willful, no penalty resolution under the streamlined procedures. Their “foreign” account is actually in their own neighborhood; it is only “foreign” in the sense that it is located outside the territorial boundaries of the United States. The existence of the account does not, by itself, somehow represent an acknowledgment of tax non-compliance by the non-resident taxpayer. The Streamlined Procedures seem to represent a significant attempt by the government to acknowledge that at some point, non-resident taxpayers become residents of their home state, emotionally even if perhaps not technically.

Those directly involved in creating and maintaining the foreign account and assets are the only ones capable of determining whether determining non-willful status. If such status is not supported by sufficient objective facts, consider other methods of coming into compliance, including the OVDP.

Taxpayers (and their return preparers) will sleep better if they get it right, somehow get into compliance and move on in life . . .

 

[i] IRS Makes Changes to Offshore Programs; Revisions Ease Burden and Help More Taxpayers Come into Compliance, IR-2014-73, June 18, 2014

[ii] Forms FinCEN Form 114- Report of Foreign Bank and Financial Accounts (formerly Forms-TD F 90.22.1–Report of Foreign Bank and Financial Accounts)

[iii] https://www.irs.gov/uac/2012-Offshore-Voluntary-Disclosure-Program

[iv] https://www.irs.gov/Individuals/International-Taxpayers/Streamlined-Filing-Compliance-Procedures

[v] https://www.irs.gov/Individuals/International-Taxpayers/Delinquent-FBAR-Submission-Procedures

[vi] https://www.irs.gov/Individuals/International-Taxpayers/Delinquent-International-Information-Return-Submission-Procedures

[vii] https://www.irs.gov/Individuals/International-Taxpayers/Streamlined-Filing-Compliance-Procedures-for-U-S–Taxpayers-Residing-Outside-the-United-States-Frequently-Asked-Questions-and-Answers

[viii] Id.

[ix] FBAR Willfulness Penalty – Willfulness IRM4.26.16.4.5.3  (07-01-2008)

[x] Id.

[xi] Id.

[xii] Id.

[xiii] For 2013, Schedule B, Line 7a states “At any time during 2013, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? See instructions. . . . If ‘Yes,’ are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), formerly TD F 90-22.1, to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements.”  Further, Schedule B, Line 7b states “If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial account is located.”

[xiv] FBAR Willfulness Penalty – Willfulness IRM4.26.16.4.5.3  (07-01-2008)

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Posted by: Taxlitigator | February 2, 2016

Even If You Pay Your Taxes on Time You Can Still Be Penalized by Robert S. Horwitz

Justice Oliver Wendell Holmes once wrote, “Men must turn square corners when they deal with the Government.” When you deal with the IRS, deviation from the requirements of the Internal Revenue Code and regulations can be costly, as a bank learned the hard way in Commerce Bank & Trust Co. v. United States, 2016 TNT 21-27 (W.D. Ky. 1/29/2016).  Under Treasury Regulations, a taxpayer who pays more than $200,000 in tax is required to make deposits using the Electronic Federal Tax Payment System (EFTPS).  Commerce Bank routinely paid more than $200,000 in income withholding tax annually.  Following the departure of a bank officer, between 2004 and 2010 the Bank made deposits using paper deposit coupons, rather than electronically.  The IRS assessed failure to deposit penalties against the bank totaling $252,842.87 under Internal Revenue Code Sec. 6656.  That section requires parties to make deposits of tax “as required by this title or regulations.”  The Bank paid the total amount assessed plus interest for all periods (except 2009) and filed a refund claim.  After the claim was denied, the Bank filed a lawsuit in district court.  The Court ruled against the taxpayer, holding that in not depositing tax electronically the bank acted with willful neglect and not reasonable cause.  The court pointed out that the regulations are not complex, the bank was sophisticated and that the departure of an officer did not excuse its failure to follow the regulations.

In 2014, a Colorado marijuana dispensary, Allgreens, LLC, filed a petition with the Tax Court challenging a failure to deposit penalty where it paid by cash, since it was unable to open a bank account and could thus not electronically deposit taxes. The IRS ultimately abated the penalty and issued a directive, SBSE 04-0615-0045, that allows taxpayers who do not have bank accounts who timely make their tax deposits to avoid failure to deposit penalties if they can establish that they attempted to obtain a bank account but were unable to do so.

These cases teach a simple lesson: paying taxes on time may not always be enough to avoid penalties. You have to make sure you use the proper forms or payment methods.

Robert S. Horwitz – For more information please contact Robert S. Horwitz – horwitz@taxlitigator.com Mr. Horwitz is a principal at Hochman, Salkin, Rettig, Toscher & Perez, P.C., a former AUSA of the Tax Division of the Office of the U.S. Attorney (C.D. Cal) and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. Additional information is available at http://www.taxlitigator.com

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Posted by: khartwell85 | February 1, 2016

9100 Relief for Late Portability Elections by Krista Hartwell

Treasury recently updated the section 2010 Regulations to permit the IRS to grant 9100 relief for late portability elections.

On January 2, 2013, President Obama signed into law the American Tax Relief Act of 2012 (ATRA), which made permanent portability between spouses of the estate tax annual exclusion amount. Portability allows the second to die spouse to use any unused estate tax exclusion amount remaining from the first to die spouse.

Portability must be elected on a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.  An estate tax return is not required unless the value of the decedent’s estate exceeds the annual exclusion amount. [1]  If the value of the first to die spouse’s estate is significantly below the annual exclusion amount ($5.45 million for 2016), the estate of the first to die spouse may not file an estate tax return, thereby foregoing portability for the second to die spouse. The second to die spouse may need portability due to the acquisition of more assets or the significant growth in existing assets at the time of the second to die spouse’s death or significant gifting during the second to die spouse’s life.

Treasury Regulation section 301.9100-3 gives the IRS discretion to grant extensions of regulatory, but not statutory due dates (9100 relief). The Preamble to the final regulations on portability (Reg. § 20.2010-2(a)(1)), which were issued in June of 2015, notes that commenters on the proposed regulations requested that the final regulations address the availability of 9100 relief to extend the time to file an estate tax return to elect portability. The Preamble states 9100 relief is not available for estates that were required to file a timely estate tax return because such deadline is prescribed by statute. However, 9100 relief is available to estates that were not required to file an estate tax return because the due date to elect portability is prescribed by regulation, not statute. The Preamble to the final regulations cites Revenue Procedure 2014-18 in concluding that an extension of time to elect portability may be granted under regulation section 301.9100-3 to estates with a gross estate value below the threshold amount and not otherwise required to file an estate tax return.

The IRS issued Revenue Procedure 2014-18 on January 27, 2014, which authorized 9100 relief for late portability elections for estates that did not file estate tax returns. The Revenue Procedure noted the IRS had issued several private letter rulings granting extensions of time to elect portability. Relief under Revenue Procedure 2014-18 was permitted only for estate tax returns filed on or before December 31, 2014.  The final regulation permitting the IRS to grant 9100 relief to make late portability elections where an estate tax return was not required and was not previously filed is regulation section 20.2010-2(a)(1). Accordingly, the IRS may grant extensions (via 9100 relief) of the due date to file a Form 706 electing portability for estate’s that were not required to timely file a Form 706.

KRISTA HARTWELL – For more information please contact Krista Hartwell at Hartwell@taxlitigator.com or 310.281.3200. Ms. Hartwell is a tax lawyer at Hochman, Salkin, Rettig, Toscher & Perez, P.C. and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. Additional information is available at http://www.taxlitigator.com.

[1] 26 U.S.C. § 6018.

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Posted by: Steven Toscher | January 26, 2016

Uncle Sam Collects Danish Taxes-The World is Becoming a Smaller Place By Steven Toscher and Robert Horwitz

A recent opinion by the U.S. District Court in the Northern District of Georgia in Dileng v. Commissioner, 1:15-CV-1777-WSD (ND GA) (January 15, 2016), suggests a new era in international tax enforcement.  The opinion discusses the Internal Revenue Service’s (“IRS”) effort to collect Danish taxes pursuant to the Convention for the Avoidance of Double Taxation between the United States and Denmark (the “Treaty”).

While most tax treaties contain provisions for resolving issues of double taxation and for sharing of information by the respective treaty partners, only a few tax treaties contain provisions that provide for the collection of taxes by the treaty partners. These tax collection provisions are more likely to be found in newer tax treaties—such as the U.S.-Danish treaty, which was ratified in 1999. But even where there are tax collection provisions in the treaties, it’s been relatively unheard of for one treaty partner to seek to collect the taxes of the other treaty partner.  Dileng may suggest more tax collection cooperation with our treaty partners in the future.

Historically, the United States has been unwilling to collect taxes owed to a  foreign sovereign.  This is based in part on the common law rule referred to the  “revenue rule.”  The revenue rule “generally barred courts from enforcing the tax laws of a foreign soverign.”   Pasquantino v. United States, 544 U.S. 349 (2005).  It arose from “a line of cases prohibiting the enforcement of tax liabilities of one sovereign in the courts of another sovereign, such as a suit to enforce a tax judgment.” Id.  The revenue rule is an exception to the general rule that “judgments from a foreign country are recognized by the courts of this country when the general principles of comity are satisfied.” Her Majesty the Queen v. Gilbertson, 597 F.2nd 1161, 1163 (9th Cir. 1979).  It appears that the long-standing revenue rule can be over ridden by a treaty provision which has the force of law.

The taxpayer in Dileng is a Danish national who has lived with his family for a number of years in the United States.  He alleged that the Danish Ministry of Taxation (SKAT) had recently informed him that it had assessed a significant tax liability against him and that he was challenging that assessment in the Danish courts, in accordance with Danish law.  He further alleged that SKAT had requested the assistance of the IRS to collect the assessment, in contravention of the US-Denmark tax treaty, which provides in pertinent part that a party to the treaty could apply for assistance in collection of a tax that “has been finally determined.”  Under the treaty, a tax was “finally determined” after “all administrative and judicial rights of the taxpayer to restrain collection in the applicant State have lapsed or been exhausted.”  The taxpayer alleged that IRS’s seeking to collect the Danish tax violated the treaty, was contrary to the revenue rule and was an unconstitutional deprivation of property.  He sought declaratory and injunctive relief.  The IRS moved to dismiss on the grounds that the suit was barred by the Anti-Injunction Act and the Declaratory Judgment Act for Taxes.

The Court’s opinion deals with the taxpayer’s claim that his suit fell within an exception to the Anti-Injunction Act and the Declaratory Judgment Act for Taxes.  The Court found the taxpayer’s arguments unpersuasive and granted the IRS’s motion to dismiss.  The case presents very interesting jurisdictional issues, but the real take away from the opinion and a reminder to practitioners is that the world is changing.  If there is a Treaty between the U.S. and another country and that Treaty provides for the collection of taxes similar to that under the Danish Treaty, we may be see IRS collection efforts on behalf of a foreign jurisdiction.  Equally important, these foreign jurisdictions will be asked for and will be taking collection action on behalf of the IRS.

The Opinion raises an interesting issue as to why the taxpayer was not accorded collection due process (“CDP”) rights.  The complaint alleges that the IRS was seeking to collect the Danish tax through administrative levy and that the taxpayer had filed a Collection Appeal Request, which was verbally denied.  The complaint does not allege that the IRS issued a CDP notice.  According to the Opinion, under the terms of the Treaty, the IRS was required to treat the Danish tax as an IRS assessment and to collect them as if they were a tax owed to the U.S.  It would seem that the taxpayer should be accorded the same rights if the IRS was using the administrative assessment procedure. Nowhere in the Opinion or the pleadings is there any mention of whether the taxpayer was afforded CDP rights.

For years it was the conventional wisdom that assets beyond our borders were beyond the reach of IRS collection efforts—with very limited exceptions—such as the use of the writ ne exeat republica.  The Dileng opinion shows that the world has become a much smaller place.  Stay tuned.

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Posted by: Taxlitigator | January 21, 2016

AGOSTINO & ASSOCIATES NEWSLETTER – EVALUATING COLLECTION ALTERNATIVES

AGOSTINO & ASSOCIATES –To download a great article prepared by our very close friends at the Law Firm of Agostino & Associates in Hackensack, NJ ( http://www.agostinolaw.com ), see the Agostino & Associates January Newsletter – http://files.ctctcdn.com/f7d16a55201/11d1f7e4-92e8-45c9-bcf0-a1c696aa823a.pdf

EVALUATING COLLECTION ALTERNATIVES: WHETHER TO FILE FOR BANKRUPTCY OR REQUEST AN OFFER IN COMPROMISE by By Frank Agostino, Esq. and Patrick Binakis, Esq. – Debt-saddled taxpayers frequently ask their tax advisors whether a Chapter 7 or Chapter 13 bankruptcy or an offer in compromise (“OIC”) is the best option for resolving tax debts. The short answer is, not surprisingly, that “it depends,” because one size does not fit all. Evaluating the alternative that best suits a client’s needs requires familiarity with bankruptcy law, tax procedure, and evolving case law involving the overlap of the two. This article explores the considerations that inform the choice between seeking a bankruptcy or an OIC as a means of resolving tax debts. GREAT ARTICLE!!

FOR THE FULL ARTICLE SEE http://files.ctctcdn.com/f7d16a55201/11d1f7e4-92e8-45c9-bcf0-a1c696aa823a.pdf

AGOSTINO & ASSOCIATES, with a national practice based in Hackensack, NJ, specializes in tax and tax controversies (civil and criminal), offers in compromise, voluntary disclosures, tax lien discharges,  innocent spouse determinations, forfeitures, estate planning and probate, contract and contract litigation.  A firm comprised truly great, caring people who want the best for their clients !

For further information, contact Frank Agostino or Patrick Binakis directly at (201) 488-5400 or visit http://www.agostinolaw.com

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