How IRS Finds “Mismatches” via its Automated Compliance Programs
The IRS uses the information it collects to detect, prevent, and reduce noncompliance and fraud. The US Government accountability Office (GAO) produced a Tax Administration Report on December 2020 (Better Coordination Could Improve IRS’s Use of Third-Party Information Reporting to Help Reduce the Tax Gap). IRS research (via GAO) discloses that when third-party reporting exits, […]
How is your Organization’s Performance with Respect to Fraud?
US Regulations including the Foreign Corrupt Practices Act (FCPA), Sarbanes-Oxley Act and Anti-Bribery legislation require that Management in a business have a zero tolerance for fraud and have an Audit Committee in place that will establish the procedures for receipt of complaints and anonymous employee tips with respect to irregularities in accounting methods, internal controls, […]
IRS Global High Wealth Group is a Tool to Reduce the Tax Gap
In its April 28, 2021 Press Release (the “Release”) “Investing in the IRS and Improving Tax Compliance”, the US Department of the Treasury addresses available enforcement activities relating to reducing the U.S. Tax Gap; estimated to reach approximately $7 Trillion over the next ten years. The Release states that providing the IRS with the resources […]
High-Income Individuals and Corporate Tax Returns are Targets of IRS Additional Funding Program
The 2022 discretionary funding request (request) made by the Biden Administration will invest in a “fair and robust” tax system that includes tax compliance enforcement directed at High Income and High Net Worth Individuals and Corporations. The funding program request states that the tax reforms are targeted to ensure that “the wealthy and well-connected pay […]
IRS Examination Functions Have Shifted
The commentary in A Closer Look: Impacting the Tax Gap by IRS Commissioner Chuck Rettig discusses how the IRS has shifted its examination focus to tax returns that include high income taxpayers, pass-through entities, multinational taxpayers involving international tax issues, large pension plans, private foundations, virtual currencies and Non-filers. The commentary sheds a lot of […]
IRS is on a Mission is to Reduce the Tax Gap
The difference between the amount of tax owed by Taxpayers for a given year and the amount that is actually paid timely for that same year is known as the “Gross Tax Gap”. The IRS looks at this number as an estimate of the annual amount of noncompliance with the US tax laws. In the […]
Out of Compliance Taxpayers Beware of The J5
In 2017, following the Panama Papers and Paradise Papers data leaks, the Organization for Economic Co-operation and Development (OECD) issued a “call to action” for countries to do more to tackle enablers of tax crimes. The result of this “call to action” was the 2018 establishment of an operational alliance known as the “Joint Chiefs […]
Agencies Request Information to Assist with BSA/AML Laws and Regulations Compliance
On April 9, 2021, the federal banking regulatory agencies (the Federal Reserve, FDIC and OCC) together with FinCEN and the National Credit Union Administration issued a joint statement addressing how risk management principles described in the Supervisory Guidance on Model Risk Management (Guidance) relate to systems or models used by banks to assist in complying […]
Many Taxpayers Realize That This is the Right Time to Think About Financial Planning
Professional service providers including CPAs, Attorneys, Life Insurance Agents, Bankers, Brokers, Investment Advisors and Certified Financial Planners often are viewed a Taxpayer’s financial planning “trusted advisors”. Effective Financial Planning ought to embrace all the “financial” aspects of an Individual’s life such as taxes, estate planning, retirement, investing and borrowing. Asking the right questions is necessary […]
Did you Engage in Virtual Currency Transactions in 2020?
Taxpayers who engaged virtual currency transactions in 2020 must answer a Yes or No Question on page 1 of Form 1040 or Form 1040-SR. The question is: “At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency? Failing to answer will prevent electronic filing […]
Operation Hidden Treasure is NOT a Treasure for Crypto Holders
On March 6, 2021, Forbes reported that Damon Rowe, Director, Fraud Enforcement Office, Internal Revenue Service, Washington, DC, remarked that the IRS “added some crown jewels,” including a dedicated team of IRS Criminal Investigation professionals who are working on “Operation Hidden Treasure.” The Director’s remarks occurred at the Federal Bar Association presentation of March 5th […]
The Federal Reserve expects the Board of Directors of Financial Institutions to be Effective
On February 26, 2021, the Federal Reserve issued Supervisory Guidance (SG) for the Board of Directors (BOD) of Domestic Bank and Savings and Loan Holding Companies requiring effective BOD oversight. The Guidance maintains that the BOD serves a critical role in maintaining a Financial Institution’s safety and soundness, compliance with laws and regulations, and […]
