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Orange County Tax Law Blog

IRS clarifies transition tax for untaxed foreign earnings

The Tax Cuts and Jobs Act (TCJA) led to major tax reform that likely impacted every taxpayer. Provisions throughout the law change everything from the basic to the complex. One of the more complex matters changed by this law: taxation of foreign assets.

The Internal Revenue Service (IRS) has acknowledged that the changes are difficult to navigate. In an attempt to provide some clarification, the IRS recently released a publication with information about the transition tax for untaxed foreign earnings.

Why it is important to carefully characterize income

While writing can be a good source of money, it requires a lot more than simply putting creative ideas onto paper. In the case of K Slaughter v. Commissioner, it provides an important tax lesson.

An author of multiple book series challenged deficiencies related to self-employment tax. The author could be considered a brand author. Brand authors are publishing house authors that help bring in reliable profits as well as prestige to a publishing house.

Changes coming for the IRS

The United States government tasks the Internal Revenue Service (IRS) with managing the country’s tax obligations. This agency helps those who pay their taxes and works to hold those who attempt to avoid these obligations accountable. The numbers of agents who work with this agency to achieve this goal has decreased over the last ten years, leaving this agency short staffed.

According to officials with the agency, this is about to change. The IRS is recruiting tax professionals and hoping to grow its numbers in coming years.

IRS reminds taxpayers: Report foreign assets or face consequences

The Internal Revenue Service (IRS) recently sent a representative to a meeting of legal professionals from throughout the country. At the meeting, held by the tax section of the American Bar Association, the agency’s representative stated the IRS will continue to review taxpayers’ foreign accounts and would continue to look for evidence of United States taxpayers’ holding and failing to report such accounts.

The representative was clearly reminding tax professionals the IRS continues to prioritize its search for those who are attempting to avoid tax obligations through the use of foreign accounts.

What happens if you inherit an undisclosed foreign account?

The United States government takes attempts to avoid tax obligations very seriously. The Internal Revenue Service (IRS) ramped up its efforts to hold those who evade tax obligations through the use of foreign accounts over a decade ago after a Senate report found taxpayers avoid an estimated $100 billion in tax obligations every year by utilizing secret foreign accounts.

Those who set up accounts prior to this study and these increased efforts may not have had time to come into compliance with tax obligations. This may have resulted in leaving beneficiaries with more than just a large inheritance, they may have also left behind a sticky legal situation.

Survey delves into taxpayers’ thoughts about the IRS

The Internal Revenue Service (IRS) recently conducted a survey of taxpayers. The survey, tilted the Comprehensive Taxpayer Attitude Survey (CTAS), focused on taxpayer’s feelings regarding their tax obligations and included a review of 2,008 responses from the general public.

Some interesting findings include a strong attitude against attempts to cheat the IRS and concerns about government oversite.

Treasury Department denies states’ SALT workaround attempts

Residents in high tax states like California, Connecticut and New York have voiced frustration over some provisions included within the new tax law. One specific provision in the Tax Cuts and Jobs Act (TJCA) that hit taxpayers who reside within these states hard was the state and local tax (SALT) limitation.

Tips for taxpayers who get a bill from the IRS this summer

Taxpayers who owed but failed to pay the Internal Revenue Service (IRS) for their 2018 tax filings will likely get a bill from the agency in June or July. Although filing on time likely saved these taxpayers penalty fees, they may still find themselves on the hook for late fees. As a result, it is wise to pay off your debt with the IRS as soon as possible.