For millions of workers around the country, the game has changed. Old-style jobs with benefits are very hard to come by. Even before the Great Recession, this was increasingly the case.
The partial shutdown of the U.S. government has furloughed nearly 90 percent of IRS workers. And so, in the run-up to yesterday’s October 15 filing deadline for those who requested a six-month extension, the IRS had no one available to respond to taxpayers’ questions.
Last week we wrote about the changed tax-compliance climate for offshore accounts. This week, with the partial shutdown of the federal government, we find ourselves exploring a different type of change: the effect of the shutdown on IRS activities.
In part one of this post, we likened the dramatically different offshore account compliance regime to climate change. To pick up where we left off: what is the role of the Foreign Account Tax Compliance Act (FATCA) in bringing that about?
The phrase “global warming” is an oversimplified misnomer. Most experts agree that what we are really experiencing is the much broader phenomenon of climate change. That change means not only generally warmer weather; it means more extremes, such as drought, torrential rain, and unpredictable swings in temperature.
For months we’ve followed the story of how the U.S. tax authorities have sought to crack down on what they claim to be tax evasion through offshore accounts. Quite naturally, much of the focus has been on compliance issues and choices for individual taxpayers.
In part one of this post, we reported efforts by the IRS to tighten scrutiny of income reporting by small businesses. The IRS has already sent out about 20,000 letters to businesses that contain this sentence: "Your gross receipts may be have underreported."
Actions often have unintended consequences. It happens so often that it's almost like one of the laws of physics. And we may be seeing an example of it now in the U.S. crackdown on offshore account tax compliance.
The concerns of small business owners are a frequent focus of this blog. That focus is with good reason. Businesses with fewer than 50 employees face a host of tax issues that affect their operation, from payroll and sales tax compliance to their employees' health insurance options.
Edward Kleinbard likely feels some pride in being credited several years back with authorship of the term “stateless income,” especially now that the Internal Revenue Service is beginning to use it in terms that are undoubtedly garnering the attention of multinational companies with offshore profits.