Non-Traditional Uses of Offers in Compromise During Tax Controversies, by Frank Agostino, Esq. and Valerie Vlasenko, Esq.

In 2017, taxpayers proposed 62,000 offers in compromise to settle existing tax liabilities for less than the amount allegedly owed. The Internal Revenue Service (“IRS”) accepted 25,000 offers, amounting to almost $256 million.2 The offer in compromise program not only provides an efficient means of collecting outstanding liabilities, but also brings taxpayers into compliance for at least five years after their offers have been accepted. For taxpayers, the program provides a path towards paying off their tax debt and getting a fresh start. …

United States Tax & The Accidental Americans, by Frank Agostino, Esq. and Joseph A. Stackhouse, Jr.

Many tax professionals receive calls from offshore taxpayers identifying themselves as “accidental Americans”. These taxpayers ask whether they must reply to correspondence from the Internal Revenue Service (“IRS”), comply with the Foreign Account Tax Compliance Act (“FATCA”), or pay income taxes to the United States (“US”). This article discusses the tax obligations “accidental Americans” face and options available to address their status as US taxpayers. …

Reporting Transfers from U.S. Taxpayers to Foreign Corporations—IRS Form 926, by Frank Agostino, Esq. and Victor M. Nazario, III

Driven by international trade and investment, and connected by family and technology, New York and New Jersey small businesses are expanding their businesses offshore. Entrepreneurs transfer property, cash, and other assets overseas or to foreign holding corporations to conduct everyday business transactions. Most tax professionals have taken continuing education courses on the Form 5471, Information Return of U.S. Persons With respect To Certain Foreign Corporations. However, the audits of entrepreneurs have revealed a filing requirement being overlooked – when a U.S. Person transfers property to a foreign corporation, he or she may need to file Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation. This Article explains the basics of Form 926. …

TAC Tip: Section 72(t)(1): tax or penalty subject to Section 6751(B), by Frank Agostino, Esq. and Malinda Sederquist

Section 6751(b) provides: “No penalty under [the I.R.C.] shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate.” In December 2017, the Tax Court held that the Internal Revenue Service (“IRS”) must comply with Section 6751(b)(1) before asserting a penalty. It is common knowledge that early withdrawals from a retirement plan are subject to a ten percent penalty. What is not common knowledge is that the IRS claims, based on the statutory language of 72(t), this “penalty” is a “tax”. That distinction may be critical for purposes of whether Section 6751(b) applies.

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