How Your Wealth Compares with Wealth around the World - from CNBC and Bloomberg

Yesterday statistics for 2018 came out that indicated the one percent wealthy
in the USA are paying taxes at a percentage lower rate than the middle class. None
of recent tax cuts are trickling down to the middle class or  poor.

Yesterday the IRS admitted the mostly audit the lower middle class and poor
because it is easier to collect money than auditing the wealthy. They claimed
that they do not have a staff sophisticated enough to audit the wealthy and stand
up to the high priced tax lawyers and CPAs hired by the wealthy.

Write US if you want assistance with your taxes and to find every break that 
is available fo regular taxpayers.  We are attorney  and CPAs specializing in 
US expatriate, US nonresident and US international tax law. CLICK HERE

CRIMINAL PENALTIES FOR TAX FRAUD FOR EXPATRIATES AND NONRESIDENTS

A taxpayer that willfully attempts to evade paying income taxes is subject to criminal and civil penalties. The type of fraud will determine the applicable penalty. The following are some examples of possible punishments for specific types of tax fraud. Remember a delinquent taxpayer expat or nonresident, can never be certain if the IRS will not view their actions as beyond negligent but intentional fraud. Therefore, file your past due returns before the IRS finds you first.  Filing yourself before being caught is viewed as indicative of no criminal intent.

• Attempt to evade or defeat paying taxes: Upon conviction, the taxpayer is guilty of a felony and is subject to other penalties allowed by law, in addition to (1) imprisonment for no more than 5 years, (2) a fine of not more than $250,000 for individuals or $500,000 for corporations, or (3) both penalties, plus the cost of prosecution.

• Fraud and false statements: Upon conviction, the taxpayer is guilty of a felony and is subject to (1) imprisonment for no more than 3 years, (2) a fine of not more than $250,000 for individuals or $500,000 for corporations, or (3) both penalties, plus the cost of prosecution .

• Willful failure to file a return, supply information, or pay tax at the time or times required by law. This includes the failure to pay estimated tax or a final tax, and the failure to make a return, keep records, or supply information. Upon conviction, the taxpayer is guilty of a misdemeanor and is subject to other penalties allowed by law, in addition to (1) imprisonment for no more than 1 year, (2) a fine of not more than $100,000 for individuals or $200,000 for corporations, or (3) both penalties, plus the cost of prosecution .

Get Legal Help with Your Income Tax Problems avoid these criminal consequences.  We are CPAs and attorneys with over 30 years experience with US international, expatriate and nonresident taxation. We can solve your tax  problems before it becomes necessary to hire a criminal attorney.  Email us at ddnelson@gmail.com .com and visit our website at www.taxmeless.com. 

IRS VIRTUAL CURRENCY REPORTING ENFORCEMENT ACTIONS

The IRS has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.

"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS Commissioner Chuck Rettig. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

The IRS started sending the educational letters to taxpayers last week. By the end of August, more than 10,000 taxpayers will receive these letters. The names of these taxpayers were obtained through various ongoing IRS compliance efforts.

For taxpayers receiving an educational letter, there are three variations: Letter 6173, Letter 6174 or Letter 6174-A, all three versions strive to help taxpayers understand their tax and filing obligations and how to correct past errors.

Taxpayers are pointed to appropriate information on www.irs.gov, including which forms and schedules to use and where to send them.

Last year the IRS announced a Virtual Currency Compliance campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. The IRS will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

Virtual currency is an ongoing focus area for IRS Criminal Investigation.

IRS Notice 2014-21 states that virtual currency is property for federal tax purposes and provides guidance on how general federal tax principles apply to virtual currency transactions. Compliance efforts follow these general tax principles. The IRS will continue to consider and solicit taxpayer and practitioner feedback in education efforts and future guidance.

The IRS anticipates issuing additional legal guidance in this area in the near future. Taxpayers who do not properly report the income tax consequences of virtual currency transactions are, when appropriate, liable for tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

Article from the TaxBook

Need legal or tax assistance with your vitural currency matters. Email us here.  Visit our website at www.taxmeless.com  We are attorneys and CPAs who specialize in International, Expatriate and Nonresident US taxation.

OUR US TAX INTERNATIONAL, EXPATRIATE AND NONRESIDENT CONSULTING SERVICES

Many clients and potential clients have asked us what other services do we provide other than tax US tax return preparation.  A list of some of those services are included below: 

• Phone and internet  mini -consultations with individual taxpayers  in connection with expatriate, nonresident and international tax planning and questions.
• Phone and internet consultations with CPAs and Enrolled Agents that require advice or consultation on International, Nonresident and Expatriate US tax forms, rules and regulations.
• Assist taxpayers preparing their own tax returns with questions and the preparation of international, nonresident and expatriate tax forms
• Review of your self prepared returns that contain international, expatriate and nonresident tax issues and forms.
• Formation on US corporations, LLCs and Partnerships for expatriates and nonresidents....in most states.
• IRS and State Tax Agency defense against audits and assessments.

Almost no firms offer the combined expertise of CPAs and Attorneys at reasonable fees. Contact with your questions, and for information.  CONTACT US HERE BY EMAIL.  We have been doing nonresident, expatriate and international taxes for over 25 years.  Call us in the US at 949-480-1235.

Are Virtual Currencies such as Bitcoin reportable on FBAR forms (form 114)? - the answer is sometimes yes.

The IRS does not consider virtual currencies such as BItcoin to be the same as cash or money. They consider it to be an asset to be treated for tax purposes much like stock, when purchased, sold or held as an investment.

There are certain situations however when virtual currency is reportable the same as a foreign bank account on the FBAR form 114 which is used to report foreign bank and financial accounts.  Failure to file this form each year can result in penalties of $10,000 or more. There are many reported court cases where the penalties for failing to file this form have resulted in penalties to one taxpayer of many hundreds of dollars or more.

Read more about the rules for reporting your virtual currency  - when to do it and when not -to the IRS HERE.

If you have not been filing this form and think you may be required to do so, and want to avoid the high penalties, need assistance or have questions CONTACT US.  We are CPAs and attorneys that have combined experience of over 60 years with US International Taxation.

What to Look for - US IRS Tax Scams and Con Men

Tax scams with calls, letters, emails, etc. allegedly from the IRS are out of control.  We even get the phone calls and emails here in our offices at Kauffman Nelson LLC.  Many sound authentic but all have the sole intent of cheating you out of your money.  Often the message includes immediate threats of prosecution, etc.  These scam attempts occur not only in the US but wherever Americans live abroad.

Do not give anyone on the phone who claims to be the IRS any financial information, your social security number or any other information that could be used to steal your identity or financial assets.


The IRS will only contact you by mail. If you have any suspicions of about contacts involving your taxes do not respond but contact the IRS directly at the phone numbers listed on the internet or go to their offices.

READ MORE ABOUT THE MANY TAX SCAMS GOING ON HERE

If you need help contact us at taxmeless@gmail.com. We are attorneys and CPAs and know the real IRS when we see it.

Reducing or Eliminating 951a GILTI Tax on Conrolled Foreign Corporations

Many clients want to reduce or eliminate the new tax for 2018 and beyond on the undistributed earnings of their controlled foreign corporations (over 50% ownership in the hands of US taxpayers). This replaces the old regime where profits left in foreign corporations (except in certain specific types of situations) are not taxed until distributed as dividends or wages.

The new  IRS Section 951a is complex and often hits  US owners of small foreign corporations. The tax on the earnings which are deemed distributed actually is assessed on the 1040 (or other US tax form) of the owner of the corporation though a deemed distribution (Subpart F) which is included with the shareholders other income.  READ MORE ABOUT HOW TO AVOID  OR REDUCE THE GILTI 951A TAX HERE

If you own a controlled  foreign corporation we can provide you with guidance and help you eliminate or reduce this new tax on deemed distributions of its profits.  Email us at taxmeless@gmail.com with your questions or for help.   Don Nelson, Tax Attorney