IRS Position on Burden of Proving Penalty on Failure to Pay Estimated Tax

The IRS has issued a notice that describes procedures that should be followed in Tax Court cases in which the addition to the tax for failure to pay estimated tax under Section 6654 has been determined and the IRS has the burden of production under Section 7491(c). See IRS notice at this link.

IRS Frequently Asked Questions on Offshore Accounts

The IRS has published a list of frequently asked questions on voluntary disclosure concerning offshore accounts. See the questions at this link.

Beware of Form 4180

When companies get in a financial bind, the last debt they pay in some cases is employment taxes to the IRS. Many owners and officers of these companies do not know they can be personally liable for the trust fund portion of these taxes that are not paid to the IRS. Under Section 6672 a person can be personally liable for trust fund taxes if they can sign checks and pay other creditors while knowing the taxes are not being paid.

When the IRS does their investigation they require those they interview to complete Form 4180. This form is used to gather information from potentially responsible persons. In most cases a revenue officer will interview the potentially responsible person and complete the form and then ask that it be signed without allowing it to be read by the potentially responsible person.

We are seeing more and more cases where the potentially responsible person is afraid or not allowed to read the form. This form is basically a confession and a taxpayer should never, never sign one without reading it carefully and making any changes that are necessary.

The best way to handle this form is for the taxpayer's representative to help the taxpayer complete the form and give it to the IRS.

IRS Releases 2006 Corporate Tax Data

The IRS report on 2006 corporate tax data report contains data by industry on assets, liabilities, receipts, deductions, net income, income subject to tax, tax, and credits. Data is also classified by size of total assets, by size of business receipts, and by size of income tax after credits. Other classifications include returns with net income, return types and other selected subjects. See the full report.

IRS Strategic Plan Released

The IRS has released its strategic plan for 2009 to 2013. Click here to see the plan.

Is it So? Is the IRS Working with Taxpayers Who Owe?

We have previously posted that Commissioner Shulman of the IRS stated that the IRS will work with taxpayers who cannot pay their taxes. Shulman said: "If they can't pay, they should attach a note" to the tax return, and either contact the IRS or wait for the agency to call." Click here to see full story.

In practice we are not seeing this. We are seeing the IRS serving levies and refusing to release them even though they are causing a hardship.

E-mail us with your thoughts and views about the IRS. Send you comments to larry@tjtaxlaw.com.

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IRS Stepping Up International Enforcement

The IRS says it will improve tax administration to deal more effectively with the increase of globalization of individual and business taxpayers. This will be accomplished through Service wide cross-functional cooperation in addressing emerging international issues. The priority will be to improve voluntary compliance with the international tax provisions and to reduce the tax gap attributable to international transactions. See the Approach of the IRS.

2008 IRS Enforcement Statistics

Interesting statistics on IRS enforcement activities in 2008. See the statistics.

Statistical Portrayal of CI Released

The Treasury Inspector for Tax Administration has issued the Statistical Portrayal of the Criminal Investigation Division’s Enforcement Activities for Fiscal Years 2000 Through 2008. This report presents the results of the Inspector's review of statistical information that reflects activities of the Criminal Investigation Division. The overall objective of this review was to provide statistical information and trend analyses for the Division’s enforcement activities for Fiscal Years (FY) 2000 through 2008.