In most cases, the IRS has three years to audit a tax return. This is true when a taxpayer in Georgia or anywhere else doesn't understate their income by 25 percent or more. If that does occur, the government now has six years from when a return is filed to examine that return. In the event that a taxpayer fails to file a return, there is no limit to the amount of time the government can pursue taxes owed.
Georgia residents may be aware that banks file what are known as Currency Transaction Reports with the Financial Crimes Enforcement Network when they receive deposits of more than $10,000. This requirement was put into place by the 1970 Currency and Foreign Transactions Reporting Act, which is also known as the Bank Secrecy Act, but a report from the Treasury Inspector General for Tax Administration suggests that the Internal Revenue Service is not making much use of CTRs in their efforts to identify taxpayers who are hiding or underreporting their income.
There may be as many as 9 million Americans who are living abroad. Those who have overseas bank accounts of $10,000 or more need to declare them to the IRS. This could also be the case for those living in Georgia or elsewhere in America who have money in overseas accounts. Those who believe that they have run afoul of reporting guidelines may participate in a voluntary disclosure program.
The Tax Cuts and Jobs Act (TCJA) will have an impact on those who are retired as well as those who are still working. Retirees in Georgia who receive pension or annuity checks must generally pay income taxes on those earnings. While many choose to have taxes withheld on their behalf, others decide to receive the full amount of each check. This means making quarterly tax payments directly to the IRS.
Georgia residents and others who owe a significant tax debt could be in danger of losing their passport. If the IRS determines that a person is trying to evade paying taxes or leave the country to avoid paying taxes, it will notify the State Department. At that point, the State Department will then either not issue a passport or decline to renew one that a debtor already has.
Georgia residents and others who are making student loan payments may struggle to contribute to a 401(k) plan. However, one company recently received permission from the IRS to make contributions on an employee's behalf. It is believed that the company that offers this benefit is a health care company called Abbot. To qualify, an employee must make student loan payments equal to 2 percent or more of his or her yearly salary.
S corporations have in recent years seen increasing popularity as the choice by many Atlanta, Georgia small business owners for the type of corporation they will establish for federal tax purposes. Although both the traditional C corporation and the S corp establish a separate entity and provide limitations on liability, the primary difference between the two is in how they are taxed.
When the Internal Revenue Service issues a summons to a taxpayer in Georgia or third-party performing services for taxpayers, the document represents a serious request for information. Failure to comply with a summons for information could prompt the federal government to file a lawsuit against the person or organization. Although a party might have a good reason to resist disclosing information, the chances of gaining a favorable ruling in court against the IRS are low.
Revamped rules governing small business taxes may result in tax breaks for Georgia business owners. The Internal Revenue Service has proposed regulations that shed light on the qualified business income deduction, including which company owners might be able to claim the deduction. According to the rules, many small business owners can take a deduction of 20 percent of qualified business income.
For roughly 50 years, the Johnson amendment has prohibited nonprofit organizations in Georgia and throughout the country from engaging in political campaigns. However, the House of Representatives voted to prevent the IRS from taking away the tax-exempt status of any church that supports a political candidate. The head of the National Council of Nonprofits was critical of the rule and said that it could erode the trust people have in nonprofit entities.