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September 2019 Archives

IRS mails settlement offers to participants in tax scheme

In the past, individuals who participated in micro-insurance transactions were likely audited by the IRS. The tax agency has listed the scheme as one of its "Dirty Dozen" tax scams, and it has been talking about the practice for many years now. It says that there are about 500 cases involving micro-insurance transactions currently being contested in court. However, the IRS has never lost such a challenge from taxpayers in Georgia or anywhere else.

IRS provides tax relief for some expatriates

The Internal Revenue Service usually likes to get its hands on as much money as possible. Even individuals who live outside the United States may have a tax obligation they must meet. Still, for those who have renounced their U.S. citizenship, some tax relief may be possible. 

IRS tax audits can be daunting

While it's true that most Georgia residents do not look forward to the yearly ritual of filing and paying taxes, at least there's some satisfaction, and perhaps a degree of relief, when it's over and done for the year. However, for those who receive the dreaded audit letter, the real problems may just be starting. Not every audit, however, is cause for alarm. The best way to be prepared is to understand the basics of what an audit is and the best manner in which it can be addressed.

Penalties for willful tax violations can be steep

The IRS does make a distinction between tax errors that were willful and not willful in nature. Generally speaking, taxpayers in Georgia and elsewhere will escape harsh punishment for errors deemed to be not willful. In some cases, it may be possible to avoid penalties altogether for an honest mistake. However, if the government believes that a person engaged in willful tax evasion, the penalties can be steep. For example, failing to report an offshore account could result in a fine of $100,000.

IRS issues extension for closed defined-benefit plans

Sponsors of closed defined benefits plans in Georgia may be interested to learn that a fifth extension was granted for temporary nondiscrimination relief for these plans. Under federal benefits law, employers that offer benefits must offer equal benefits to all employees. However, a number of companies shifted from offering traditional defined benefits or pension plans to offering defined contribution plans, including 401(k)s. The defined benefits plans continue in place, but are "closed," because they only include employees who worked at the company as of the date of the plan's closure. Since 2014, the IRS has issued temporary relief for these plans, allowing them to continue so long as they remain "closed" to only those employees enrolled at a certain date.

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