Do You Want To Have The IRS Prepare Your Tax Return?

As if the IRS does not have enough responsibilities. On April 13, Senator Elizabeth Warren (D-MA) introduced the “Tax Filing Simplification Act of 2016,” which would require IRS to establish a free online tax preparation and filing service, i.e. the IRS would prepare the tax return for the taxpayer, as well as programs that would allow taxpayers to access third-party provided tax return information.

Those who could elect to have their income tax returns prepared by IRS would be single individuals (not surviving spouses or heads of households) who do not claim and deductions for adjusted gross income, claim the standard deduction, does not file a schedule C and has no income except for wages, interest, and dividends.

The cosponsors of the bill include Senators Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Tom Udall (D-NM), Jeanne Shaheen (D-NH), Al Franklen (D-MN), Tammy Baldwin (D-WI), and Edward J. Markey (D-MA).

 

Ex-U.S. Tax Court Judge, Husband Indicted in Tax Evasion Case

 

As reported by the Associates Press, NBC and other news organizations a former U.S. Tax Court judge and her husband have been indicted on charges in Minnesota that they conspired to evade at least $400,000 in federal taxes, the U.S. Attorney's office said Monday.

Diane Kroupa, 60, and her 62-year-old husband, Robert Fackler, are charged with conspiracy to defraud the United States, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit, U.S. Attorney Andrew Luger announced.

Kroupa was appointed to a 15-year term as a tax court judge by then-President George W. Bush in 2003 and retired in 2014. According to the charges, between 2004 and 2010, the Minnetonka couple understated their taxable income by about $1 million and the amount they owed in taxes by at least $400,000.

Federal prosecutors accuse Kroupa and Fackler of fraudulently deducting at least $500,000 of personal expenses they listed as expenses at Fackler's consulting firm, and another $450,000 in purported business costs for which clients had reimbursed Fackler.

The charges allege expenses labeled as business costs for Fackler's Grassroots Consulting instead went toward Pilates classes, wine club fees, Chinese tutoring and airline flights. Kroupa also failed to report about $44,520 that she received from a 2010 land sale in South Dakota, instead claiming it was part of an unrelated inheritance, court documents allege.

Richard Weber, chief of IRS Criminal Investigation, said the allegations were "particularly troubling" because as a tax court judge, Kroupa dealt regularly with tax cheats.

"Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position," Weber said in the statement.

IRS List of Foreign Financial Institutions or Facilitators Increases Offshore Penalty

Last year the IRS Increased the offshore penalty percentage (from 27.5% to 50%) if, before the taxpayer’s OVDP pre-clearance request is submitted, it becomes public that a financial institution where the taxpayer holds an account or another party facilitating the taxpayer’s offshore arrangement is under investigation by the IRS or Department of Justice.

As of February here is the list of “Bad Banks.”

1.     UBS AG

2.     Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.

3.     Wegelin & Co.

4.     Liechtensteinische Landesbank AG

5.     Zurcher Kantonalbank

6.     swisspartners Investment Network AG, swisspartners Wealth Management AG, swisspartners Insurance Company SPC Ltd., and swisspartners Versicherung AG

7.     CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates

8.     Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.

9.     The Hong Kong and Shanghai Banking Corporation Limited in India (HSBC India)

10. The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield), its predecessors, subsidiaries, and affiliates

11. Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14)

12. Bank Leumi le-Israel B.M., The Bank Leumi le-Israel Trust Company Ltd, Bank Leumi (Luxembourg) S.A., Leumi Private Bank S.A., and Bank Leumi USA (effective 12/22/14)

13. BSI SA (effective 3/30/15)

14. Vadian Bank AG (effective 5/8/15)

15. Finter Bank Zurich AG (effective 5/15/15)  

16. Societe Generale Private Banking (Lugano-Svizzera) SA (effective 5/28/15)

17. MediBank AG (effective 5/28/15)

18. LBBW (Schweiz) AG (effective 5/28/15)

19. Scobag Privatbank AG (effective 5/28/15)  

20. Rothschild Bank AG (effective 6/3/15)

21. Banca Credinvest SA (effective 6/3/15)

22. Societe Generale Private Banking (Suisse) SA (effective 6/9/15)

23. Berner Kantonalbank AG (effective 6/9/15)

24. Bank Linth LLB AG (effective 6/19/15)

25. Bank Sparhafen Zurich AG (effective 6/19/15)

26. Ersparniskasse Schaffhausen AG (effective 6/26/15)

27. Privatbank Von Graffenried AG (effective 7/2/15)

28. Banque Pasche SA (effective 7/9/15)

29. ARVEST Privatbank AG (effective 7/9/15)

30. Mercantil Bank (Schweiz) AG (effective 7/16/15)

31. Banque Cantonale Neuchateloise (effective 7/16/15)

32. Nidwaldner Kantonalbank (effective 7/16/15)

33. SB Saanen Bank AG (effective 7/23/15)

34. Privatbank Bellerive AG (effective 7/23/15)

35. PKB Privatbank AG (effective 7/30/15)

36. Falcon Private Bank AG (effective 7/30/15)

37. Credito Privato Commerciale in liquidazione SA (effective 7/30/15)

38. Bank EKI Genossenschaft (effective 8/3/15)

39. Privatbank Reichmuth & Co. (effective 8/6/15)

40. Banque Cantonale du Jura SA (effective 8/6/15)

41. Banca Intermobiliare di Investimenti e Gestioni (Suisse) SA (effective 8/6/15)  

42. bank zweiplus ag (effective 8/20/15)

43. Banca dello Stato del Cantone Ticino (effective 8/20/15)

44. Hypothekarbank Lenzburg AG (effective 8/27/15)

45. Schroder & Co. Bank AG (effective 9/3/15)

46. Valiant Bank AG (effective 9/10/15)

47. Bank La Roche & Co AG (effective 9/15/15)

48. Belize Bank International Limited, Belize Bank Limited, Belize Corporate Services Limited, their predecessors, subsidiaries, and affiliates (effective 9/16/15)

49. St. Galler Kantonalbank AG (effective 9/17/15)

50. E. Gutzwiller & Cie, Banquiers (effective 9/17/15)

51. Migros Bank AG (effective 9/25/15)

52. Graubundner Katonalbank (effective 9/25/15)

53. BHF-Bank (Schweiz) AG (effective 10/1/15)

54. Finacor SA (effective 10/6/15)

55. Schaffhauser Kantonalbank (effective 10/8/15)

56. BBVA Suiza S.A. (effective 10/16/15)

57. Piguet Galland & Cie SA (effective 10/23/15)

58. Luzerner Kantonalbank AG (effective 10/29/15)

59. Habib Bank AG Zurich (effective 10/29/15)

60. Banque Heritage SA (effective 10/29/15)

61. Hyposwiss Private Bank Genève S.A. (effective 10/29/15)

62. Banque Bonhôte & Cie SA (effective 11/3/15)

63. Banque Internationale a Luxembourg (Suisse) SA (effective 11/12/15)

64. Zuger Kantonalbank (effective 11/12/15)

65. Standard Chartered Bank (Switzerland) SA, en liquidation (effective 11/13/15)

66. Maerki Baumann & Co. AG (effective 11/17/15)

67. BNP Paribas (Suisse) SA (effective 11/19/15)

68. KBL (Switzerland) Ltd. (effective 11/19/15)

69. Bank CIC (Switzerland) Ltd. (effective 11/19/15)

70. Privatbank IHAG Zürich AG (effective 11/24/15)

71. Deutsche Bank (Suisse) SA (effective 11/24/15)

72. EFG Bank AG (effective 12/3/15)

73. EFG Bank European Financial Group SA, Geneva (effective 12/3/15)

74. Aargauische Kantonalbank (effective 12/8/15)

75. Cornèr Banca SA (effective 12/10/15)

76. Bank Coop AG (effective 12/10/15)

77. Crédit Agricole (Suisse) SA (effective 12/15/15)

78. Dreyfus Sons & Co Ltd, Banquiers (effective 12/15/15)

79. Baumann & Cie, Banquiers (effective 12/15/15)

80. Bordier & Cie Switzerland (effective 12/17/15)

81. PBZ Verwaltungs AG (effective 12/17/15)

82. PostFinance AG (effective 12/17/15)

83. Edmond de Rothschild (Suisse) SA (effective 12/18/15)

84. Edmond de Rothschild (Lugano) SA (effective 12/18/15)

85. Bank J. Safra Sarasin AG (effective 12/23/15)

86. Coutts & Co Ltd (effective 12/23/15)

87. Gonet & Cie (effective 12/23/15)

88. Banque Cantonal du Valais (effective 12/23/15)

89. Banque Cantonale Vaudoise (effective 12/23/15)

90. Bank Lombard Odier & Co Ltd (effective 12/31/15)

91. DZ Privatbank (Schweiz) AG (effective 12/31/15)

92. Union Bancaire Privée , USP SA (effective 1/6/16)

93. PHZ Privat - und Handelsbank Zürich AG reorganized as Leodan Privatbank AG (effective 1/25/16)

94. Hyposwiss Privatbank AG reorganized as HSZH Verwaltungs AG (effective 1/27/16)

95. Bank Julius Baer & Co., Ltd (effective 2/4/16)

 

 

Trustee Liable for Trust's Taxes After Rendering it Insolvent

In United States v. Read, 2016 WL 310721 (D. Conn. Jan. 26, 2016) (slip copy), a U.S. district court held that a trustee was personally liable for unpaid income taxes owed by the trust, under 31 USC 3713.

The statute provides as follows:

1. A claim of the United States Government shall be paid first when…
    
   (B) the estate of a deceased debtor, in the custody of the executor or administrator, is not enough to pay all debts of the debtor.
    
   (b) A representative of a person or an estate (except a trustee acting under title 11) paying any part of a debt of the person or estate before paying a claim of the Government is liable to the extent of the payment for unpaid claims of the Government.
   Here, the trustee distributed assets of the trust while the trust was insolvent and he knew or had "notice of facts that would lead a reasonably prudent person to inquire as to the existence of the debt" owed to the United States, and so is liable to the IRS for the unpaid taxes.

The Right of Taxpayers to be Informed

Recently the IRS published FS-2016-7

In 2014, the Internal Revenue Service adopted a Taxpayer Bill of Rights (TBOR) that has become a cornerstone document to provide the nation's taxpayers a better understanding of their fundamental rights when dealing with the agency.

Not only has the IRS highlighted these 10 rights for taxpayers, they have also been shared extensively on a continuing basis with IRS employees since then. The TBOR adopted by the IRS in 2014 includes the same 10 fundamental rights that were placed by Congress in the Internal Revenue Code (IRC) in late 2015. IRC section 7803(a)(3) now requires the IRS Commissioner to ensure that IRS employees are familiar with and act in accordance with the 10 fundamental rights that make up the TBOR.

The TBOR takes the multiple existing rights embedded in the tax code and groups them into 10 categories, making them easier to find, understand and use. A list of your rights as a taxpayer and IRS obligations to protect them can be found in IRS Publication 1, Your Rights as a Taxpayer.

It includes -The Right to Be Informed.

Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

What you can expect:

• Certain notices must include the amount (if any) of the tax, interest, and certain penalties you owe and must explain why you owe these amounts.
• When the IRS fully or partially disallows your claim for refund, it must explain the specific reasons why.
• Help with Understanding Your IRS Notice or Letter is available online at IRS.gov.
• If the IRS proposes to assess tax against you, it must provide you in its initial letter, which allows for review by an independent Office of Appeals, an explanation of the entire process from examination (audit) through collection, and explain that the Taxpayer Advocate Service may be able to assist you.
• If you enter into a payment plan, known as an installment agreement, the IRS must send you an annual statement that provides how much you owe at the beginning of the year, how much you paid during the year, and how much you still owe at the end of the year.
• You can access current and prior year IRS forms and publications at IRS.gov or have hard copies mailed by calling toll-free 800-829-3676.

In addition to the Taxpayers Bill of Rights, the IRS is committed to ensuring that your civil rights are also protected. Taxpayers are not subjected to discrimination based on race, color, national origin, reprisal, disability, age, sex (including sexual orientation and pregnancy discrimination), religion, or parental status in programs or services conducted by the IRS or on its behalf. If a taxpayer believes he or she has been discriminated against, a written complaint can be emailed to edi.civil.rights.division@irs.gov or mailed to the IRS Civil Rights Division.

The ten taxpayer rights are as follows:

1. The right to be informed

2. The right to quality service

3. The right to pay no more than the correct amount of tax

4. The right to challenge the IRS's position and be heard

5. The right to appeal an IRS decision in an independent form

6. The right to finality

7. The right to privacy

8. The right to confidentiality

9. The right to retain representation

10. The right to a fair and just tax system.

 

 

 

NEW FORM 8971- INFORMATION REGARDING BENEFICIARIES ACQUIRING PROPERTY FROM A DECENDENT.

Section 1014(f) provides rules requiring that the basis of certain property acquired from a decedent, as determined under section 1014, may not exceed the value of that property as finally determined for federal estate tax purposes, or if not finally determined, the value of that property as reported on a statement made under section 6035.

Section 6035 imposes new reporting requirements with regard to the value of property included in a decedent's gross estate for federal estate tax purposes.

Section 6035(a)(1) provides that the executor of any estate required to file a return under section 6018(a) must furnish, both to the Secretary and the person acquiring any interest in property included in the decedent's gross estate for federal estate tax purposes, a statement identifying the value of each interest in such property as reported on such return and such other information with respect to such interest as the Secretary may prescribe.

Section 6035(a)(2) provides that each person required to file a return under section 6018(b) must furnish, both to the Secretary and each other person who holds a legal or beneficial interest in the property to which such return relates, a statement identifying the information described in section 6035(a)(1).

Section 6035(a)(3)(A) provides that each statement required to be furnished under section 6035(a)(1) or (a)(2) shall be furnished at such time as the Secretary may prescribe, but in no case at a time later than the earlier of (i) the date which is 30 days after the date on which the return under ection 6018 was required to be filed (including extensions, if any) or (ii) the date which is 30 days after the date such return is filed.

Section 6035(b) authorizes the Secretary to prescribe such regulations as necessary to carry out section 6035. Section 7805(a) provides generally that the Secretary shall prescribe all needful rules and regulations for the enforcement of this title, including all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue. Section 7805(b)(2) provides that regulations may apply retroactively if they are issued within 18 months of the date of the enactment of the statutory provision to which they relate.

Section 6081(a) provides that the Secretary may grant a reasonable extension of time for filing any return, declaration, statement, or other document required by this title or by regulations. Except in the case of taxpayers who are abroad, no such extension shall be for more than 6 months.

For statements required under sections 6035(a)(1) and (a)(2) to be filed with the IRS or furnished to a beneficiary before February 29, 2016, the due date under section 6035(a)(3) is delayed to February 29, 2016

 

New Jersey's tax Burden

New Jersey Debt

The state of New Jersey now has the highest debt burden per taxpayer in the U.S., according to Truth in Accounting research cited by a NJ 101.5 report. The data collected in the report showed that New Jersey also has the highest property taxes in the nation on average. All told, the report stated that New Jersey has $28.6 billion in assets, with more than $185 billion in liabilities. In turn, according to a MyCentralJersey.com report, the state expects to have its local property taxes increase to $540 million by the end of the year, which will break down to approximately $52,300 per taxpayer.

 

The New Jersey debt burden per individual increased from $36,000 in 2014. Bramnick stated that part of the reason for this increase was due to the staggering liability as a result of the state's unfunded public employee pensions. Bramnick commented that of the $186 billion the state owes, $140 billion is for retirement benefits plans.

Without sufficient assets to cover the mounting debt, New Jersey is facing stiffer tax burdens in the near future, particularly for the high net worth community.

 

Your can read the rest of the article at: http://taxtrustestatenews.com/new-jersey-debt-highest-per-capita-in-u-s/