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Tax Audits

IRS to Pursue High-Income Tax Non-Filers Following TIGTA Report

Most people probably assume that wealthy individuals are priority number one on the IRS’s radar. There is some truth to this characterization, as audit rates for high-income filers are much greater than the audit rates experienced by the general population. However, the Treasury Inspector General (TIGTA) — a government watchdog responsible for identifying and eliminating waste, fraud, or corruption in…

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After FATCA & Offshore Account Crackdown, IRS Turns Its Focus to Bitcoin and Coinbase Users

For taxpayers holding significant investments and offshore accounts, it is no secret that the IRS and U.S. government have used significant resources towards identifying and prosecuting those who commit tax evasion and other tax crimes. Starting around 2008, federal prosecutors began enforcing the longstanding obligation to file FBAR (Report of Foreign Bank Accounts). In 2010, FATCA (Foreign Account Tax Compliance Act) was…

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What California Tax Agencies Can Audit a Taxpayer and Their Business?

Most taxpayers are highly aware that an audit launched by the IRS can begin a painful process where your finances and tax compliance are placed under the microscope. Even if your audit is launched “randomly” or if you simply fall within the top percentage of annual income, huge mistakes and noncompliance can be uncovered during the audit. These errors can result in significant…

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Considering Going It Alone for an IRS Audit in California? The IRS Can Impose Additional Penalties for “Frivolous Tax Arguments”

Taxpayers who receive a letter from the IRS are often distressed and anxious about the possibility of having to pay additional taxes, interest, and penalties on that unreported or unpaid tax. Thus, as most people in today’s world frequently do when they are seeking information, the taxpayer may decide to Google the issue identified by the IRS. Providing the right…

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California Franchise Tax Board’s New Data Gathering Technologies Means Risk of Fraud Detection Is Greater Than Ever

In California, the state income tax obligation is administered by the California Franchise Tax Board (FTB). Essentially, the California FTB is the state-based counterpart to the IRS. While the IRS handles your federal income tax and other tax obligations, the California FTB handles similar responsibilities at the state level. The failure to satisfy either state or federal tax obligations can…

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Cancelled or Forgiven Debt in California? The IRS May Consider It Income and You May Owe Taxes

If you’ve fallen significantly behind on your debts, you may engage in negotiation with creditors to reduce or eliminate certain parts of your debt burden. In certain situations, the potential for bankruptcy and the possibility of an overworked creditor may encourage them to forgive a certain portion of the debt. Other times the creditor may simply realize that the collection costs will…

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If I Face an IRS Audit in California, for How Many Years Can I Be Held Responsible?

For many Americans, filing taxes is both a matter of duty and a function of fearing the consequences of what will happen should he or she fail to file. The fact of the matter is that most Americans have a duty to file taxes because the income threshold that triggers a filing obligation is rather modest. In any case, for the people who…

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Willfulness in the Context of Failing to File an FBAR

Failing to file an FBAR carries a steep penalty—$10,000 per account per year in most instances, or the greater of $100,000 or 50% of the account balance for violations that are deemed willful. A willful failure to file an FBAR may also result in criminal prosecution, which carries a penalty of up to $250,000 and five years in prison. Do you…

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