Los Angeles California Tax Attorney Blog

IRS Tax Audit - No Good Deed Goes Unpunished: California Tax Attorney

2010-05-05T01:54:45Z

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service to challenge the taxpayer’s right to deduct donations to a Catholic Church. The case involves a married couple who got audited by the Internal Revenue Service concerning donations they deducted on their Internal Revenue Service Form 1040 tax return.

Anonymous U.S. Tax Petitioners v. COMMISSIONER OF Internal Revenue Service
Docket No. 6851-08. Filed May 2010.

Tax Problem
Can an American taxpayer deduct as charitable contributions of $25,050 in wire transfers to his wife’s relative who distributed the money for the benefit of the Catholic Church of a foreign country on their Internal Revenue Service Form 1040?

Can a taxpayer deduct the airfare expense incurred while rendering services for a Catholic church in a foreign country on their Internal Revenue Service Form 1040?

APPLICABLE TAX CODE SECTION

Internal Revenue Code §170 allows taxpayers to claim a deduction for a charitable contribution if the contribution is made to or for the use of a qualified organization.

Internal Revenue Code §170 (c)(2) identifies an eligible recipient of a charitable deduction as “a corporation, trust, or community chest, fund, or foundation created or organized in the United States or under the law of the United States”.

CAN YOU DEDUCT DONATIONS MADE TO CHARITABLE ORGANIZATIONS IN A FOREIGN COUNTRY?

Taxpayers claimed the charitable contribution deductions on their joint IRS Form 1040 Income Tax Return. Taxpayers also claimed a charitable contribution deduction for the airplane ticket taxpayer wife purchased to travel to her native country and provide services to Catholic churches of that foreign country. The IRS issued a notice of deficiency disallowing certain charitable contribution deductions. Most of the disallowed deductions originated from taxpayer wife’s donations and charity work for the benefit of Catholic churches in a foreign country. Taxpayers filed a tax court petition appealing the report issued by the IRS Audit with the US Tax Court .

Taxpayer’s wife was born in a foreign country. Her parents were devout Catholics. Her father served as an officer in that country’s army during the conflict with the guerilla forces. Taxpayer wife was a young girl when the guerrilla forces initiated a military campaign. Taxpayer wife’s uncle was a Catholic priest in her hometown. When the guerrilla forces seized her hometown, taxpayer wife witnessed over 400 of her fellow Catholics, including her uncle and other citizens of her hometown, being buried alive. The guerrilla forces destroyed much of her hometown, including the Catholic Church. The foreign country’s government eventually fell. Taxpayer wife and her family later escaped from their country to the United States. Taxpayer wife later married U.S. taxpayer. She is a member of a church that belongs to the local Catholic diocese near her home in Texas.

Taxpayer’s wife completed her college education and was hired as an engineer at an international corporation. After completing college she returned to her native country and witnessed extreme poverty. Her experience motivated her to contribute money and services to help rebuild Catholic churches in that country. These Catholic churches provide food, education, and shelter to the poor. During one of her trips to her native country, the local police detained and interrogated taxpayer’s wife about her activities in her hometown.. The police also informed taxpayer’s wife that they had been monitoring her whereabouts in the country and were aware of her family’s support for the former government.

Fearing for her life, taxpayer’s wife devised a plan to disguise her contributions to Catholic churches in her native country. She would wire the money to the personal bank account of her mother’s cousin (cousin) who lived in taxpayer wife’s original hometown. The cousin then transferred the money to selected Catholic churches in that country.

UNITED STATES TAX COURT DID NOT ALLOW TAXPAYERS TO DEDUCT DONATIONS TO A FOREIGN CHARITABLE ORGANIZATION
Taxpayers argue that the ultimate beneficiary of the wire transfers was the Roman Catholic Church, a qualified donee under Internal Revenue Code §170(c)(2), and that taxpayer wife thus made the wire transfers to or for the use of a qualified organization.

Taxpayers claim that the Catholic Church is a universal organization, and therefore Catholic churches in taxpayer wife’s native country are qualified as donees under Internal Revenue Code §170. The Tax Court found no basis as to if the Catholic churches in that foreign country to which taxpayer wife’s wire transfers were distributed were created or organized in the United States or under the laws of the United States in compliance with Internal Revenue Code . The language of Internal Revenue Code §170(c)(2) is explicit, and the Tax Court must follow such plain language.

Regarding the airfare expense deducted on the IRS Form 1040 Income Tax Return for Individuals , taxpayers assert that the unreimbursed expenditure incident to taxpayer wife’s services should be deductible under Internal Revenue Code §170 because petitioner wife worked on behalf of several qualified organizations.

Nonetheless, taxpayers have failed to show that any of the Catholic churches in the foreign country to which taxpayer wife’s rendered services is a qualified organization within the meaning of Internal Revenue Code § 170(c)(2). Taxpayer wife did not render services in the foreign country under the direction of, or to or for the use of her local church or the local diocese. The record shows only that her priest at her local church had some awareness of her work in her native country. Nor is there any evidence that petitioner wife provided those services.

US Tax Court found taxpayer wife’s testimony to be sincere. However, taxpayers have failed to prove that they contributed to a qualified organization under Internal Revenue Code §170 . Tax Court has held in favor of the Internal Revenue Service .

Tax Problem: Didn't Pay Your Taxes? Neither Did Pamela Anderson - California Franchise Tax Board(FTB) Releases List of Taxpayers Who Owe Taxes - Los Angeles California Tax Attorney

2010-04-18T00:48:15Z

Los Angeles Tax Attorney:

California Income Tax - Franchise Tax Board FTB released

its annual list of top 250 California taxayers who haven't paid their taxes.

Tax Debt - Top 250 Honor Roll List

Highest Unpaid Tax Debt: $13,120,479
Lowest Unpaid Tax Debt: $ 290,964

Notable Celebrity:
Pamela Anderson (Website:http://pamelaanderson.com/)
Woodland Hills, CA 91367
Income tax due - $ 493,144.68 - 04/07/2009

According to the Franchise Tax Board FTB ,

Vast majority of individual and business taxpayers file their return and pay their lawful tax liability. Those who fail to pay the taxes they lawfully owe contribute to the tax gap. The tax gap is the difference between what taxpayers owe and what they voluntarily pay. As a result, an increased tax burden is passed on to those who pay what they owe. Closing the tax gap is in the best interest of all Californians.

FTB tries to collect taxes through tax liens, tax levy and wage garnishment. As part of the collection process, FTB annually publish the Delinquent Taxpayers list on their website Franchise Tax Board FTB to "encourage" tax payment compliance.

The FTB list shows the top 250 individual and business taxpayers with state income tax liens where the total balance owed is greater than $100,000. In most instances, taxpayers who owe to the FTB also owe even larger tax debt to Internal Revenue Service (IRS) Many of these taxpayers could benefit from either a Tax Bankruptcy or Offer in Compromise to resolve their tax situation.

IRS Charges Penalties for Improper Deduction on Tax Return - IRS Tax Attorney

2010-04-14T02:18:51Z

Los Angeles Tax Attorney:

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service to challenge the taxpayer’s right to deduct tax losses from a “S” Corporation. The tax case involves an attorney who claimed a loss from his incorporated law practice on his individual IRS Form 1040 tax return. IRS charged taxpayer with penalties and interests based on improper tax deduction.

R.WEISBERG et al v. COMMISSIONER OF Internal Revenue Service

Tax Problem
Is a taxpayer entitled to deduct a loss from his S corporation as a shareholder?

APPLICABLE TAX CODE SECTION

Internal Revenue Code §1363(a). A qualifying small business corporation that makes the proper election is generally not subject to income tax. Rather, its items of income, deductions, credits, and losses pass through to its shareholders, Internal Revenue Code §1366(a)(1), who then claim those items on their own income tax returns.

Internal Revenue Code §1366(d)(1). However, an S corporation shareholder may not claim a loss deduction greater than his basis in the S corporation, with “basis” in this context consisting essentially of his investment in the corporation. A taxpayer who claims a loss from a S corporation must establish his basis in the S corporation.

Internal Revenue Code §61 (a) includes in gross income “all income from whatever source derived” unless excluded by a specific provision of the Code.

CAN YOU DEDUCT LOSSES FROM YOUR CORPORATION?

Taxpayer, who is an attorney, owned shares in an S corporation and in 2000 personally guaranteed a line of credit to the corporation. The S corporation incurred losses in 2003, and taxpayer deducted part of those losses on his 2003 IRS Form 1040 Income Tax return. In March 2004 taxpayer took out a loan and paid off the corporation’s line of credit in the amount. The IRS disallowed the 2003 loss on the grounds that taxpayer had insufficient basis in the S corporation and determined a tax deficiency, a late-filing addition to tax, and an accuracy-related penalty.

TAXPAYER NEEDS TO ESTABLISH TAX BASIS IN THE CORPORATION BEFORE ANY DEDUCTIONS FOR TAX LOSSES ON IRS INDIVIDUAL TAX RETURN

The US Tax Court and tax audit records contained no information concerning taxpayer’s basis in his S corporation before 2000. In that year he personally guaranteed a line of credit for the firm. Under certain conditions, debt can contribute to a shareholder’s basis in an S corporation, but those conditions are not satisfied in this tax court case. US Tax Court has held that mere shareholder guaranties of S corporation indebtedness generally fail to satisfy the requirements of section Internal Revenue Code §1366(d)(1).

No form of indirect borrowing, including a guaranty, gives rise to indebtedness from the corporation to the shareholders for such purpose until and unless the shareholders pay part or the entire obligation. US Tax Court also held that the mere guaranty of a loan does not involve any economic outlay. Until the guarantor pays the obligation, the guarantor does not have an actual investment.

Taxpayer’s guaranty of the line of credit did not, by itself, increase his basis in the S corporation. Consequently, US Tax Court had no evidence that in 2003 he had a basis in any amount. In 2004 taxpayer incurred his own personal loan and used it to pay off the firm’s line of credit. It may assumed that by doing that act taxpayer did increase his basis in the S corporation per Internal Revenue Code §1366(d)(1). However, the year in issue here is 2003, and that act in 2004 did not increase his basis in 2003. Consequently, taxpayer has not shown that he is entitled to claim any portion of the loss in 2003. Overall, taxpayer’s guaranty of the S corporation’s line of credit did not increase his basis in the S corporation per Internal Revenue Code §1366(d)(1) during the year in issue. Taxpayer was not allowed to deduct the losses from his corporation on his individual tax return in 2003. The decision was entered for the Internal Revenue Service .

Tax Lien Release - California Gov Schwarzenegger Terminates IRS Tax Lien

2010-02-05T18:36:43Z

Los Angeles Tax Attorney:

Last year IRS filed tax lien against California Governator. The IRS tax lien against Schwarzenegger sought $79,000 for taxes or penalties related to informational tax returns pursuant to IRC 6721.

Almost a year later, Schwarznegger got his IRS tax lien released. According to TMZ, tax lien filed against the Governor was released last week.

It’s not clear whether Maria and Arnold paid the taxes or if these taxes and penalties were satisfied through the tax penalty abatement procedure. Regardless, Governor won’t have to worry about IRS seizing his cars or issuing tax levy on his bank accounts this Valentine.

Alleged IRS Tax Code violation fixed.

Now, if his wife stops violating California vehicle code...we’ll all be little safer.

Tax Attorney - IRS Releases Tax Audit and Tax Collection Results for 2009

2010-02-05T14:22:15Z

Los Angeles Tax Attorney:

Internal Revenue Service IRS
released information on its tax audit and tax collection activity results from 2009. Tax Audit, Tax Collection and Tax Audit Category base on income can be found here .

Interesting points to note:

1) IRS Collected through tax levies and tax liens $48.9 Billion Dollars last year. However that was about $7 Billion less than in 2008.

2) IRS audited 1,099,639 tax returns last year which shows an increasing trend over the last 10 years. It is expected that IRS will increase its tax audit by 3.5% in 2010.

3) If you make less than $200,000, your chances of getting audited is about 1%.

4) If you make between $200,000 and million dollars, your chances of getting audited is about 3%.

5) If you make more than $1,000,000, your chances of getting audited is about 6.5%.

UBS Client Pleads Guilty to IRS Tax Case FBAR - Did Not File Voluntary Disclosure or FBAR

2010-02-04T18:54:28Z

California Tax Attorney:

Internal Revenue Service IRS catches another tax evader.

Another UBS client pleaded guilty today in a criminal IRS tax case concerning FBAR and Offshore Bank Accounts. According to the Wall Street Journal, US Taxpayer Barouh operated a watch business since 1976 and hid some of his unreported income in various UBS offshore accounts.

A Florida man pleaded guilty to filing a false tax return by failing to report income on money held in UBS AG (UBS) Swiss bank accounts.

In addition to any jail sentence, Barouh has agreed to pay some $5 million, half the estimated amount he owned or controlled offshore, as well as any additional taxes, interest and penalties.

In all likelihood, this taxpayer probably could not have participated in the preferred voluntary disclosure program which ended last year. Before any criminal tax case comes to an indictment or reaches guilty plea stage, there would have been an ongoing tax investigation into this taxpayer before the tax amnesty program became available.

Based on the IRS FBAR-Voluntary Disclosure program, any taxpayer(s) under any tax investigation would not have qualified for the tax amnesty program which existed last year.

If you did not disclose your foreign bank account(s) to the IRS yet, there are several options that are availabe to avoid criminal exposure so you can avoid sleepless nights.

Foreign Banks Worried About IRS - All Foreign Banks Will Disclose US Taxpayers - Voluntary Disclosure Attorney

2010-02-04T09:22:40Z

California Tax Attorney:

Last year Democrats Proposed 30% Tax on Foreign Banks that refuse to disclose US Taxpayers as part of continuing efforts by the IRS to quash offshore asset protection and tax evasion strategies conjured up by various financial planners. US Taxpayers with offshore or foreign bank account are required to disclose this information by filing IRS Foreign Bank Account Report.

The Baucus-Rangel bill proposed to impose a thirty percent (30%) withholding tax on income from U.S. financial assets held by a foreign financial institution unless the offshore bank agrees to disclose the identity of any U.S. taxpayers with an account at the foreign bank with additional condition to annually report on the foreign account balance including payments and withdrawals from the foreign bank account.

However, the FBAR game has suddenly changed with this new development from Germany. According to Tax Section of Businessweek , Germany has decided to buy stolen bank data from a former employee of an unidentified Swiss bank. The data contains names of German citizens who hold undisclosed foreign bank accounts.

Swiss government issued a statement expressing its concern over Germany’s decision to buy stolen information but IRS may make similar decision in light of the billions of dollars which the IRS may realize from its recent FBAR Voluntary Disclosure program.

Any offshore or foreign banks with complex operation will eventually realize that in the digital age, it would be nearly impossible to maintain banking secrecy as it existed in previous generations. The source for the stolen Swiss Bank data is from a computer specialist at the Swiss bank.

Los Angeles Tax Attorney - Tax Court Rules that Late Filed Document Not Taxpayer's Fault - May Apply to Late Filed FBAR Voluntary Disclosure

2010-02-02T20:22:40Z

Los Angeles Tax Attorney:

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service . The ruling on this case may apply to other documents filed with the tax court or the IRS including late filed FBAR Voluntary Disclosure Program.

Tax Court Petitioners MADDOX v.
COMMISSIONER OF Internal Revenue Service

TAX PROBLEM:

This case seems to reflect the current trend by IRS Attorneys when dealing with tax court petitions that they receive 90 days after issuance of Notice of Determination arising from IRS Tax Audit or Collection Due Process hearing.

IRS TAX CODE

Internal Revenue Code §6213(a) provides that a petition for redetermination of a deficiency determined by the Commissioner is timely filed if it is filed within 90 days after a notice of deficiency is mailed. Internal Revenue Code §7502 - If a petition is received by the Court after the 90-day period, then the postmark date can be deemed the date of delivery.

IRS MAY CHALLENGE TAX COURT PETITION IF RECEIVED 90 DAYS AFTER MAILING NOTICE OF DEFICIENCY

The IRS moved to dismiss this case on the ground that the petition was not filed within 90 days of the mailing of the notice of deficiency. Taxpayers state the petition was timely mailed even though not received by the Court within the 90-day period. IRS mailed on October 7, 2008, a notice of deficiency to taxpayers. A petition signed by taxpayers’ attorney, dated December 17, 2008, was received and filed by the Court on January 23, 2009, which was 108 days after the mailing of the notice of deficiency. The U.S. Postal Service (USPS) cancellation stamps appeared on the envelope, but the exact date of cancellation was illegible. January 5, 2009, was the 90th day after the mailing of the notice of deficiency. On March 11, 2009, the IRS filed a motion to dismiss for lack of IRS tax court jurisdiction.

TAXPAYER'S TESTIMONY MAY BE SUFFICIENT TO SHOW THAT TAX COURT PETITION WAS MAILED

Taxpayers’ attorney mailed the petition by placing it in the mailroom in his office building before 4 p.m. on Friday, January 2, 2009. The mailroom was locked, and only building tenants and the USPS had access. The outgoing mail was placed in a USPS basket.

Usually, the postmark placed on the envelope in which the petition has been mailed is accepted as evidence of timely mailing and timely filing. In this case, however, the postmark is illegible. Because taxpayer’s petition was received and filed outside the prescribed period, bearing an illegible USPS postmark, it will be considered timely filed only if petitioners can show the date that the postmark was made and that the date was within the 90-day period.

Taxpayers have shown that the envelope was postage prepaid and had a USPS cancellation. Taxpayers also testified that the petition was timely placed in the USPS mail before the expiration of the 90-day period and timely postmarked (illegibly). The envelope was received by the Court and the petition was filed.

The decision was entered against the Internal Revenue Service . The tax court denied the IRS' motion to dismiss tax court case and concluded that the tax court petition was timely postmarked, timely mailed and timely filed.

Note that some documents filed with the IRS may be deemed filed upon receipt while others are deemed filed upon mailing of the document. Check with your tax attorney on the filing variations.

Late FBAR Filing- Penalties for Late Filed FBAR & Not Filing FBAR- Tax Amnesty

2009-10-31T18:54:12Z

Foreign Bank Account Tax Amnesty Attorney:

Failure to file FBAR can have devastating consequences to a taxpayer. We attached a summary of potential penalties and criminal tax exposure related to an unfiled FBAR- FBAR Tax Penalty Summary.

We've been receiving calls from stressed taxpayers regarding their unfiled FBAR- IRS Form TDF 90-22.1. We can't offer psychiatric help but you can reach me this weekend on my cell (310) 968 9820 if you have few questions which may help ease your mind.

FBAR Penalties- IRS TargetsTaxpayers with Foreign Bank Accounts in South Korea, Hong Kong and Singapore

2009-10-31T09:49:58Z

FBAR Tax Attorney:

Internal Revenue Service IRS issued a statement this week stating that they will be pursuing foreign bank accounts held by US taxpayers in other countries including South Korea, Hong Kong, Singapore and several European countries.

US Senate also introduced a new tax and banking legislation which will further frustrate US taxpayers seeking tax shelters through foreign bank accounts.

The bill requires 30% withholding on payments to foreign financial institutions and other entities unless they acknowledge the accounts’ existence to the IRS and disclose relevant information including account ownership, balances and amounts moving in and out of the accounts.

Individuals and entities would be required to report offshore accounts with values of $50,000 or more on their tax returns. The statute of limitations will be extended to six years when offshore accounts are unreported or misreported.

Advisors who help to set up offshore accounts would be required to disclose their activities or pay a penalty.

FBAR-How to file Foreign Bank Account Report- Tax Amnesty IRS Voluntary Disclosure

2009-10-30T19:31:38Z

Foreign Bank Account Tax Attorney:

If you are participating in the IRS Voluntary Disclosure program, you will be contacted by the IRS to review your case and conduct an interview so that the IRS may determine whether you qualify for the Voluntary Disclosure Program. In the upcoming posts, we'll go through some of the issues and strategies which may be of help in your case.

Make sure that you also have a copy of IRS Foreign Bank Account Report which you will need to submit to the IRS as part of the Voluntary Discloure Program. If you haven't already filed the FBAR, we'll file a post with the FAQ regarding the FBAR.

Can You Still File FBAR-IRS Voluntary Disclosure of Foreign Bank Accounts? Tax Attorney

2009-10-30T19:17:05Z

FBAR- IRS Voluntary Disclosure Attorneys

Even if the taxpayer has missed the October 15, 2009, deadline, IRS voluntary disclosure program may still be available to those with delinquent FBAR, unreported income or undisclosed foreign bank accounts. However, taxpayers need to proceed with caution if they are considering filing their voluntary disclosure post October 15, 2009. We recommend that you seek a competent FBAR- IRS Voluntary Disclosure Attorneys to navigate through these proceedings. A thorough risk analysis with your tax attorney must be performed before implementing any FBAR Voluntary Disclosure after 10/15/09.

Voluntary disclosure allows IRS taxpayers to resolve their tax debt or compliance issues with the IRS and reduce the probability of IRS criminal prosecution. Foreign Bank Account Report or FBAR which many US taxpayers have failed to file falls in the ambit of the Voluntary Disclosure program. Whether the foreign bank account is located at UBS or any other banks, the failure to file FBAR may result in criminal prosecution by the IRS.

Internal Revenue Service IRS Voluntary Disclosure is a program implemented by IRS Criminal Investigation Division which involves taking timely, accurate, and complete voluntary disclosures by IRS taxpayer in deciding whether to recommend to the Department of Justice that a taxpayer be criminally prosecuted.

IRS may not collect taxes on short sales or foreclosure sales - IRS tax attorney

2009-10-30T01:36:46Z

Los Angeles Tax Attorney:

If you are looking for information on the IRS voluntary disclosure or the IRS FBAR program you can visit here FBAR - Why file IRS Voluntary Disclosure or here IRS Voluntary Disclosure for FBAR

If you owe a debt to a bank or any other creditor and they agree to forgive or reduce the balance of the debt, the canceled amount of the debt may be taxed by the Internal Revenue Service.

The Mortgage Debt Relief Act of 2007 generally allows IRS taxpayers to exclude income from the reduced debt on their principal place of residence. IRS taxpayers who were able to reduce debt owed their home through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may not be taxed on the amount of the canceled debt.

Up to $2 million of forgiven debt is eligible for this IRS income tax exclusion ($1 million if married filing separately). The tax exclusion does not apply if the debt forgiveness is due to services performed, trades or offsets with the lender or any other reason which is not directly related to a decline in real estate value of the taxpayer's home or their changed financial circumstance.

If you have any questions regarding the Internal Revenue Service Rules or Procedures (IRS) you may contact us here.

IRS Income Tax Credit - IRS Tax Court Case Review - Los Angeles Tax Attorney

2009-10-21T14:58:37Z

Long Beach Tax Attorney:

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service to challenge whether a minor's relative may claim a tax credit.

HENRY LEE SCOTT v.
COMMISSIONER OF Internal Revenue Service

Tax Problem:

The issue for decision is whether taxpayer’s nephew and niece were his qualifying children for purposes of the earned income tax credit (EITC) provided by section 32.

Applicable Internal Revenue Code:

Internal Revenue Code §32(a)(1) allows an eligible individual an earned income credit against the individual’s income tax liability. The credit is increased if the taxpayer has any qualifying children

Internal Revenue Code §32(c)(3)(A). §152(c)(1)(B) sets forth the requirement that a qualifying child have “the same principal place of abode as the taxpayer for more than one-half” of the taxable year.

Principal Place of Residence Determines the Tax Credit

During 2004, 2005, and 2006, petitioner’s sister, Tameka Henderson, and her five children under the age of 19 resided in rented dwellings pursuant to written leases governed by the regulations of the Tennessee Low Income Housing Tax Credit Division. The leases each required that the premises be occupied only by the identified members of the household, which were Henderson and her five children. The leases covered property on Patton Street in Memphis in 2004 and 2005, and Walker Avenue in Memphis in 2006 to 2007. Taxpayer began living with Henderson when he was a teenager, after their mother died. In 2004, taxpayer was 31 years old. He lived with his sister and her children during at least part of 2004 and 2006, even though his name was never listed on the leases. The father of the children died in January 2004. Taxpayer contributed toward support of the children and was available as an emergency contact on records of the children’s schools. On his Federal income tax returns for 2004 and 2006, taxpayer listed one nephew and one niece as dependents and as qualifying children for purposes of the Earned Income Tax Credit. His return for 2004 used the Patton Street address as his address. His return for 2006 used an address on South Fourth in Memphis as his address. The petitions filed in these cases used Walker Avenue as taxpayer’s address. As of October 2007, taxpayer no longer used the Walker Avenue address.

US TAX COURT RULING
It is not improbable that taxpayer lived with Henderson and her children contrary to the terms of the leases. It is likely that after the death of the children’s father in January 2004, taxpayer assumed a paternal role toward his nephews and his niece as well as making payments toward their support. For 2004, therefore, we conclude that taxpayer and the children had the same place of abode for most of the year, that he cared for them as his own, and that they are qualifying children for purposes of the EITC. For 2006, however, there is other evidence suggesting that taxpayer maintained an address separate from Henderson’s. Because neither taxpayer nor Henderson adequately explained when he or they lived at the South Fourth address, we cannot conclude that taxpayer and the children shared the same abode for more than half of that year. Taxpayer’s nephew and niece are not qualifying children for 2006.

FBAR - IRS Voluntary Discloure: Why should I file IRS Voluntary Disclosure - California State and IRS Tax Attorney

2009-10-21T01:11:00Z

Los Angeles Tax Attorney:

Based on the numerous last minute IRS Voluntary Disclosures most tax attorneys expect a surge of US TAX COURT filings against the Internal Revenue Service to challenge the IRS tax and penalty assessments which may be proposed in the next several months. We'll update you with any new procedures or news concerning IRS audits which may be initiated through the IRS Voluntary Disclosure application submission.

Internal Revenue Service IRS Voluntary Disclosure Program

One of the most common questions we received from taxpayers regarding the IRS voluntary disclosure program was: "why should I make IRS voluntary disclosure?"

IRS Taxpayers with unreported offshore or foreign bank accounts or entities should make a voluntary disclosure because it allows them to become compliant, avoid large IRS civil penalties and generally reduce or eliminate the risk of IRS criminal prosecution.

Making a IRS voluntary disclosure also provides the opportunity to resolve all offshore tax issues at a reasonable settlement amount.

Taxpayers who do not submit an IRS voluntary disclosure may face IRS assessment of substantial penalties, including the fraud penalty and foreign information return penalties, and high risk of IRS criminal prosecution.