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2012 IRS Offshore Voluntary Disclosure Program Begins
The IRS has announced the 2012 Offshore Voluntary Disclosure Program for Foreign Accounts, Foreign Bank Accounts and FBAR filings. The 2012 follows the pattern set by the 2009 IRS Offshore Voluntary Disclosure Program and the 2011 Foreign Bank Account Voluntary Disclosure Programs. The voluntary disclosure programs include reduction of penalties related to foreign accounts and assets but each new program has featured less of a reduction. The 2012 OVDP uniquely does not have a deadline, but the IRS has reserved the right to increase penalties and change any other terms of the program at any time. Since 2009 the trend has been for terms to become less favorable. The penalties have increased with each new offshore disclosure program, though they remain far less than what a taxpayer would face without the program. Therefore it behooves the taxpayer to enter the program as quickly as possible so that they receive the most favorable terms.
For more information on the 2012 Offshore Voluntary Disclosure Program or for more tax related legal concerns, contact Horowitz & Weinstein.
The What’s Next For Internet Sales, Internet Sales Taxes and Internet Affiliate Marketing?
It’s Called the Marketplace Fairness Act
Illinois Senator Dick Durbin is one of the Senators who introduced Internet Sales Tax Reform through the Marketplace Fairness Act which, according to the Act is designed to “restore States’ sovereign rights to enforce State and local sales and use tax laws, and for other purposes.”
The Act establishes a basis and methodology for States to charge sales tax when a Seller makes a sale to a customer in another State. Intriguing though, is the Small Seller Exemption which in effect allows businesses with less than $500,000.00 in previous annual sales to continue to make sales without charging sales tax if they can do so under present rules. This could give small businesses an advantage over “big box stores” and other large sellers.
In Illinois, collections of Illinois Sales Tax, Retailers Occupation Tax (ROT), Use Tax (UT), Motor Fuels Tax, Service Use Tax (SUT) and Service Occupation Tax (SOT) are enforced by the Illinois Department of Revenue through Sales Tax Audits and Illinois Department of Revenue Collection Acts which could include Levy of bank accounts, levies on other property, revoke suspend, or hold a business certificate, and revoke a sales tax business certificate.
For more information on online sales tax, the Illinois Department of Revenue, or other civil or criminal tax law concerns, contact Horowitz & Weinsein.
Foreign Trusts and Gifts
For quite a few taxpayers, filing their yearly tax returns doesn’t go much beyond the trusty old Form 1040. There are of course many other forms for reporting to the IRS and one that is especially worth noting is Form 3520, a return for reporting transactions with foreign trusts and the receipt of foreign gifts.
For 2010, foreign trust and gift reporting was changed primarily by the HIRE Act. Specifically a number of penalties for failure to report foreign trusts and gifts have been modified and new penalties have been introduced. In addition, the scope of individuals who are required to file Form 3520 has been expanded. The penalties for failing to file can be severe, in general amounting to $10,000 or a percentage of the assets in questions (usually 35%), whichever is greater.
The specific requirements and nuances of foreign gift and trust reporting and compliance are complex and of course the best course of action is to consult a tax professional. Here are the basics.
You have to file Form 3520 for a tax year if you received a gift from a foreign (meaning non-US) source of $100,000 or more from an individual or $14,165 or more from a corporation or partnership. You must file if you are a U.S. person who received a distribution from a foreign trust. You must also under certain conditions file if you are the owner or part owner of certain foreign assets.
For more information on foreign gift reporting, foreign trust compliance, or for help with other tax related legal concerns, contact Horowitz & Weinstein.
State Cracks Down on Gas Station Sales Tax Evasion
Within the last 18 months the Illinois grand juries have indicted 14 gas station operators, charging they withheld a portion of the sales tax they owed to the state. Attorney General Lisa Madigan has said more than one-fourth of Illinois gas station operators have underreported their fuel taxes. Along with the Illinois Department of Revenue, Madigan is now investigating the state’s gas stations as well as tax preparers involved in the cases.
Last year’s tax amnesty program saw many gas station operators coming forward. With the program now over, those who could have participated but did not will now face doubled fines and interest.
In addition to the owed taxes, those the state has indicted face penalties for tax evasion and interest on their unpaid taxes.
For more information on sales tax audits, tax evasion cases, or other tax law concerns, contact the Chicago tax lawyers at Horowitz & Weinstein.
Obama’s Jobs Bill
Last week President Obama presented The American Jobs Act to a joint session of Congress. The Act includes a number of measures, all billed at helping the still reeling economy and in particular the job market. In addition to allocating money to schools, for projects to improve infrastructure and modifications to unemployment insurance, the Act contains a number of tax provisions.
The Act calls for payroll taxes to be cut in half on the first $5 million in payroll. The White House says this will cover 98% of businesses in the country. The Act also calls for an elimination of the payroll tax for firms that increase their payroll by adding staff. This measure is currently capped at $50 million in payroll increases.
The 100% expensing measure passed as part of the extension of the Bush Tax Cuts last winter would be extended through 2012. The Act also contains a number of additional reforms and regulatory reductions to help entrepreneurs and small businesses.
For workers, the Act will cut payroll taxes in half for 160 million workers in 2012, extending the payroll tax cut passed last winter.
As with any legislation, the American Jobs Act is likely to change before (and if) it becomes law.
For more information on the American Jobs Act, payroll taxes, or other tax related legal concerns, contact the Chicago tax lawyers at Horowitz & Weinstein.