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February 2015 Archives

Taxpayer Bill of Rights Includes the Right to Contest the IRS

Nearly 240 years ago, the United States was founded on the premise that government power must not go unchecked. To this day, in high school civics classes, students have it drilled into them that ours is a system of checks and balances.

Penalty abatement, part 2: what is the first-time penalty waiver?

A few weeks ago, we began a two-part post about tax penalty abatement. As we noted in our January 23 post, the IRS may allow a reduction or discharge of a penalty when you can show reasonable cause – such as financial hardship – for your lack of tax compliance.

Consortium of journalists adds to offshore account scrutiny

Taxpayers with offshore accounts are already under stepped-up scrutiny from government agencies. U.S. authorities have increased their enforcement efforts in recent years on disclosure requirements for foreign accounts that meet certain thresholds. And the Foreign Account Tax Compliance Act (FATCA) has forced many foreign banks and other financial institutions to share more and more information with tax authorities about their account holders.

Number of audits still declining, along with IRS budget

"Penny wise, pound foolish." This old phrase clearly harkens back to Britain, with its reference to a pound rather than a dollar. But the meaning is clear enough in an American context: some decisions may save money in the short term but cost much more in the long term.