Paladini Law Blog

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Many people invest in digital currencies like Bitcoin, LiteCoin, and Etherium but they don’t always reveal their gains at tax time. According to Fortune, only a tiny percentage of cryptocurrency owners have been reporting profits and losses on their yearly returns. After examining the 2013 to 2015 tax returns of Bitcoin buyers, the IRS found that only 802 people did so although the digital currency exchange Coinbase had 2.9 million users. In December 2016,…
People fail to file their personal or business tax returns on time for a variety of reasons. You may not have the money when your return comes due, or you could be struggling with a prolonged and debilitating health condition that leaves you unable to cope with daily life, let alone your tax obligations. Whatever the reason, you’re probably wondering what to do about your delinquent returns. Should you still file them, even if the…
Do you have a foreign bank account? If so, you’ve probably received correspondence from your bank advising you that they will be providing your financial information to the IRS. When foreign governments sign the Foreign Account Tax Compliance Act (FATCA) agreements with the United States, these notices always follow to U.S. bank account holders. The Foreign Account Tax Compliance Act (FATCA) is a U.S. law that requires U.S. taxpayers to file yearly reports on certain…
Substance over form is both a principle and a doctrine. As an accounting principle, it is designed to ensure that an entity’s financial statements provide an accurate and complete overview of its events and transactions. These statements measure and report the economic impact of a transaction instead of its legal form, which could conceivably mislead people on its true intent. The substance over form doctrine allows the IRS to ignore an arrangement’s legal form and…
Few people have the time, experience, or inclination to navigate the often-complicated federal and state tax forms. Instead, they rely on professional tax preparer misconduct to complete and submit their personal and business returns. Unfortunately, there are tax preparers who abuse the trust placed in them. They attempt to secure a higher refund for you by putting false information on your income tax returns. Examples include: False deductions False dependent’s information Inflated business or…
Has the IRS audited one of your tax returns and determined that your tax liability is bigger than you presented? Or did it create a return for you after you filed to file and present you with a large tax bill? In either case, you can challenge the result by requesting an IRS audit reconsideration. The audit reconsideration process allows U.S. taxpayers to re-examine the results of an audit where a tax credit was…
When people joke about the IRS breathing down their throat, they’re usually talking about an enforced collection action. When it comes to claiming overdue taxes, the IRS has a wide repertoire of collection tools, the most dreaded of which are liens and levies that garnish your wages, seize the contents of your bank account, and force the sale of assets to satisfy your tax debt. Fortunately, the IRS does not generally use these forceful measures…
You know that the IRS can audit a person or a business for any number of reasons. What you may not be aware of is that you don’t have to accept the government’s conclusions as to the final say on whether or not you owe back taxes. You can appeal an IRS audit in the same manner that you appeal a lesser court decision. Appealing your case also postpones your tax bill’s due date for…
Each year, the Internal Revenue Service (IRS) releases its list of the “dirty dozen,” which it bills as the worst of the worst tax scams. While many of these scams relate to taxpayers attempting to defraud the federal government by abusing tax law or failing to report income, others involve an increasing problem in the United States: attempts by criminals to steal the money or identity of others through tax scams. The IRS…
If you run a business that handles larger cash transactions, you probably know that federal law requires you to report cash payments of more than $10,000 by completing a Form 8300, which is jointly issued by the IRS and the Financial Crimes Enforcement Network. This form, which requires the payor’s name, address, and tax identification number (among other things), must be completed and filed within 15 days after receiving the cash. Failure to do…