Aug 5, 2008

Lichtenstein first....Switzerland next.....

On July 1st, 2008, a Federal Judge in Miami, Florida, approved an IRS summons for banking information to request information from Zurich, Switzerland-based UBS (a bank) about U.S. taxpayers who may be using Swiss bank accounts to evade federal income taxes.

The Lichtenstein incident was an accident--this one is no accident. The IRS is intentionally going after violations of disclosing foreign bank accounts.

The basis for this summons is a statement submitted to the court by former UBS banker Bradley Birkenfeld who has stated that UBS employees assisted wealthy U.S. clients in concealing their ownership of assets held offshore by creating sham entities and then filing IRS forms falsely claiming that the entities were the owners of the accounts. According to Birkenfeld’s court statement, UBS had approximately $20 billion of assets under management in “undeclared” accounts for U.S. taxpayers.

Bank secrecy in the 21st Century will soon be history. The annual disclosure requirement and the ramifications for non-compliance has all but made any lack of disclosure illegal.

Stay to the blog for future updates on this story..

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Aug 1, 2008

Your Tax Debt- The Right Question- The Right Option..

I have blogged in pieces on this in the past. There are many solutions or a combination of solutions to your tax debt problem. The key in resolving them is knowing about each of the options and which avenues you should pursue. This blog has spoken about the popular options and their misconceptions (Offer in Compromise, Currently not collectible)- but, I have put what I believe is a good summary of all of the options (they can be summarized into 5 major headings)- so here they are:

Tax Abatement programs
1. Offer-in-Compromise: Doubt as to Liability
2. Offer-in-Compromise: Doubt as to Collectibility
3. Offer-in Compromise: Effective Tax Administration
4. The Partial Pay Installment Agreement (this was an OIC in the past)
5. Innocent or Injured Spouse Relief
6. Amended tax returns to reduce liability
7. Audit Response/Taxpayer Advocate Response
8. Civil Trust Fund Penalty Negotiation
9. Collection Appeals Program
10. Collection Due Process Appeal
11. Audit Reconsideration

Affordable payment plans
12. 60 month payment terms
13. Ability to pay payment terms
14. Use of net realizable equity to pay-down liability- lien subordination, etc.

Deferral programs
15. Currently Not collectible Status (CNC-Status 53)
16. Negotiated 30 to 120 day extension to full pay
17. Negotiated 12 month payment plan for the lifestyle adjustment, conditional IAs

Penalty Abatement programs
18. Penalty Abatement request for reasonable cause
19. Penalty Abatement request for IRS error

Tax Expiration Programs
20. Statute of Limitations
21. Defunct Business

All do not always apply, but you should consider them if they are applicable. All of them need to consider the time at which the IRS has to collect (i.e. the collection statute of limitations or "CSED").

These are technical areas. You will need to consult or research in depth to know if they apply and if there is an opportunity there. You will need to know the right questions to be asking to know what the possible outcomes are...

Feedback on these options is always welcome.

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