Every once in a while, the Internal Revenue Service (IRS) will issue campaigns. These campaigns are certain areas of tax compliance the agency intends to focus on in coming years. This year, the agency has publicly announced over 50 campaigns. Three specific efforts to watch include:
- Foreign account tax compliance. The IRS’ focus on reporting assets held abroad is not a surprise. The agency has repeatedly stated that it would put additional resources into finding and holding those accountable who attempt to hide their assets in foreign locations. Although the focus is not new, the strategy announced in this campaign is a bit different. The agency has stated it will review those who partook in previous amnesty programs like the Offshore Voluntary Disclosure Program (OVDP) to ensure continued compliance.
- High income earners. The agency is more likely to audit taxpayers who report a high income. The new campaign expands this focus to include a closer review of those who likely receive a high income from business dealings in other countries but have failed to report these assets. This includes earnings that do not result in tax forms like a W-2 or the like.
- Expatriation. Taxpayers may wrongly think they have officially left the United States and its tax requirements. In many cases, those who left the country on or after June 17 of 2008 may still have filing requirements.
Taxpayers in violation of tax laws may receive a mailing from the IRS informing them of their error. It is wise to take these communications seriously. If you have questions, an attorney experienced in tax law can review the letter and explain your obligations.