IRS audit Archives | SF Tax Counsel

09Oct 2020 by Pat Geddie

U.S. Real Property Interest Non-Recognition Transfers- Can the IRS Assess Interest When No Tax is Due?

By Anthony Diosdi When a U.S. income tax nonresident alien (“NRA”) or a foreign corporation (hereinafter referred to as a “Foreign Taxpayer”) disposes of a U.S. real property interest (“USRPI”), the Foreign Taxpayer is subject to the Foreign Investment in the U.S. Real Property Tax Act of 1980 (“FIRPTA”). Pursuant to FIRPTA, a Foreign Taxpayer is subject to tax on the gain or loss from the disposition of a USRPI as if the Foreign Taxpayer were engaged in a U.S. trade or business during the taxable year, and as if such gain or loss were effectively connected with such trade or business. According to FIRPTA and presuming an exception to the general rule does not otherwise apply, if a Foreign Taxpayer disposes of a USRPI, the transferee of the USRPI…

28Aug 2020 by Pat Geddie

The Most Costly Mistakes of CFC Shareholders that Catch the Attention of the IRS. Part Five- Failure to Charge Arm’s-Length Rate of Interest on Intercompany Loans or Advances

Tax Law

By Anthony Diosdi Introduction For those who are or will be involved in international business and investment transactions, it is important to have some basic understanding of the relevant tax laws. These series of articles are intended to warn individual shareholders of controlled foreign corporations (“CFCs”) (whether individual or corporate) of mistakes that will likely catch the attention of the Internal Revenue Service (“IRS”) and trigger a potential costly audit. This is the first of a series of articles designed to educate CFC shareholders of mistakes that can catch the attention of the IRS. We will begin this series with the rules governing intercompany loans and advances.As a result of the pandemic, IRS examinations of tax returns have significantly declined. With that said, even before the pandemic, the number of…

20Aug 2020 by Pat Geddie

How IRS Criminal Investigations Work

Tax Law

Many people who have unpaid taxes worry about how much they will owe the IRS, though they do not consider that the agency might launch a criminal investigation into possible tax evasion or tax fraud. If you believe that you might be under investigation by the IRS, it is essential that you contact a tax lawyer in San Francisco as soon as possible to protect your rights and your future. The IRS investigates many issues, including: Fraud of tax return preparersAbusive tax schemesCorporate tax fraudFinancial institution fraudIllegal gaming operationsIdentity theftFraudulent returns or refundsEvasion of tax liability The process begins when a tax auditor refers a case to the IRS Criminal Investigations unit due to suspicions of criminal conduct. Special IRS investigators then conduct a preliminary analysis to determine whether to…

29Jan 2020 by Pat Geddie

Your Chance of an IRS Audit is Way Down. But That’s Not Good News if You Have to File an IRS Form 3520 and/or IRS Form 3520-A

Tax Law

By Anthony Diosdi The Internal Revenue Service (“IRS”) has been asked to do more with less by Congress. As a result far fewer American’s are having their tax returns audited by the IRS. For reasons that will be discussed in this article, that may not be a good thing. This is particularly true if you have an obligation to file IRS Form 3520 and/or IRS Form 3520-A. The International Penalties Associated with Not Timely Filing an IRS Form 3520 and IRS Form 3520-ARecently, U.S. persons with business interests outside of the United States have become subject to an expanding universe of reporting requirements. U.S. persons are required to disclose foreign assets and transactions not only on FinCen 114 (“FBAR”) but in many cases foreign assets and transactions must be disclosed…

30Dec 2019 by Pat Geddie

Top Four Ways to be Audited by the IRS in 2020

Tax Law

By Anthony Diosdi It’s no secret, the Internal Revenue Service (“IRS”) is auditing fewer tax returns these days, mostly due to federal budget cuts that have affected the IRS’ staff size. Even though IRS has been auditing much fewer tax returns, there are certain things that individual taxpayers can do that will likely certainly result in a costly IRS audit. Below, please find our list of the top four ways to get audited by the IRS in 2020.1. Invested in a Syndicated Conservative Easement Over the years, charitable contributions of conservation easements have allowed taxpayers to obtain a federal tax deduction for the purpose of conserving land for public use, public enjoyment, or to preserve historic building structures. For tax purposes, a conservation easement creates a discounted value for the…

24Sep 2019 by Pat Geddie

Disagree with an IRS Audit- Here Are Your Options

Tax Law

By Anthony Diosdi The Internal Revenue Service (“IRS”) audits thousands of tax returns every year and often proposes to assess significant additional tax liabilities against hardworking taxpayers. If you have been assessed an additional tax liability through an audit, you should understand that the IRS auditor is not always correct and you have options. First, you can administratively appeal (within the IRS) the determination of the auditor. If an appeal of the audit is not successful or you simply do not wish to deal with the IRS anymore, if your facts and circumstances warrant, you can take the IRS to court and ask the court to reverse the auditor’s determination. Litigating a tax controversy in court will present a number of important decisions prior to going to court. One of…