Archive | IRS Tax Audits

IRS Wealth Tax Squad – Update

May 17, 2017  |   Posted by :   |   High Net Worth Investor,IRS Tax Audits   |   0 Comments

The IRS released audit stats on their audits of high-wealth taxpayers (over $10 income or assets) by their recently formed special IRS tax unit, The Wealth Squad. For Tax year 2015, 450 IRS Wealth Squad audits were initiated. These IRS audits are expensive, and time consuming starting with an expansive IRS document request, which will […]

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Tax Planning and Legal Authority

April 10, 2017  |   Posted by :   |   IRS Tax Audits,Tax Evasion   |   0 Comments

The US Supreme Court has a long history of supporting legal tax planning while disavowing illegal tax evasion (which has both civil and criminal consequences). Please see the authorities cited below. In 1864, in the case of US v. Isham 84 US 496 (1864) the US Supreme Court considered the Stamp Duty (Tax) and stated […]

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IRS Tax Audits – Criminal Tax (2017)

March 16, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

The IRS reported that in fiscal year 2016 they initiated 3,395 federal criminal tax cases thru the IRS/Criminal Investigation Division (which is the only federal law enforcement agency with jurisdiction over federal tax crimes). The focus of these cases included: money laundering, public corruption, cyber-crimes. For FY 2016, the IRS/CI conviction rate was 92%. The […]

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New IRS Tax Rules (2017)

March 15, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

In IR-2016-139 (10/25/16) for tax year 2017 the following new IRS tax rules apply: 1) Standard Deduction: Singles: $6,350 (2016: $6,300) Married: $12,700 (2016: $12,600) 2) Personal Exemption Singles: $4050 (2016: same) This exemption is subject to a phase out and is reduced by 2% for each $2500 of Adjusted Gross Income over threshold AGI […]

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IRS Tax Audit Rates (2017)

February 08, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

In a groundbreaking study the released a study of IRS tax audits for the 2015 Fiscal Year (thru 9/30/15, the most recent tax year for which IRS tax audit statistics have been released), which revealed the following: 1. The overall IRS audit rate has dropped from 1.1% (2010), 1 in 90 taxpayers to .8% […]

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IRS Tax Audit Risks – 2016

January 19, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

On 12/19/16 Fox Business News published “9 Tax Audit Red Flags for the IRS” by Sean Williams. As a background, the Tax Foundation found that the US Tax Code is now 10.1m words. The instructions to complete a basic Form 1040 are more than 100 pages long. Although historically the IRS only audits about 1% […]

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IRS Tax Audits: The Wealth Squad

November 09, 2016  |   Posted by :   |   IRS Tax Audits   |   0 Comments

For wealthy taxpayers with over $10m in income, the IRS has a special tax audit division, the Global High Wealth Industry Group (the “Wealth Squad”). The IRS Wealth Squad falls under the IRS Large Business and International Division (formerly Large and Midsize Business Division). The Wealth Squad was formed in 2010 to audit “high wealth […]

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IRS Tax Audits: Assessment of Tax and Collection

October 09, 2016  |   Posted by :   |   IRS Tax Audits   |   0 Comments

Under IRC 6501(a), the amount of tax imposed shall be assessed within 3 years after the tax return was filed (or 3 years after the date on which any part of such tax was paid). Effectively, the IRS has 3 years to audit a filed tax return (tax paid) “assess” additional tax due, and seek […]

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The IRS & Offshore Tax Evasion:  Risks of Gold Bullion 

September 15, 2016  |   Posted by :   |   IRS Tax Audits,Tax Evasion   |   0 Comments

Gold bullion as a hedge against stock market/currency risk is an investment of choice for many wealthy Americans. If the gold bullion is held offshore it may trigger information reporting requirements under the FBAR rules (Report of Foreign Bank and Financial Account, FinCen Form 114 due June 30 each year to report an interest in […]

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The IRS and The Estate of Michael Jackson

May 24, 2016  |   Posted by :   |   IRS Tax Audits   |   0 Comments

In the ongoing dispute of the Estate of Michael Jackson, in a previously unreported court filing the IRS has increased their original claim for tax and penalty from $702m to $731m. The IRS now values the Estate (and Lifetime Taxable Gifts) at $1.178B compared to the Estate Form 706 Valuation of $7m, a valuation difference […]

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