Friday, October 18, 2019

IRS to Start Passport Revocation for Seriously Delinquent Taxpayers

The IRS published on its website, Update on Passport Certifications and Taxpayer Advocate Service, that it is stopping its temporary program under which it wasn't certifying taxpayers for passport revocation etc., if the taxpayer had delinquent tax debt but also had an open Taxpayer Advocate Service (TAS) case.

On September 9, 2019 we posted, IRS to Temporarily Stop Passport Revocations for Taxpayer With Cases at the TAS, where we discussed that in a memorandum to Tax Advocate Service (TAS) employees, the TAS has stated that the IRS will temporarily decertify taxpayers with open TAS cases. Decertification means that taxpayers with seriously delinquent tax debts will, temporarily, not be at risk of having their passports revoked by the State Department merely because of those seriously delinquent tax debts.
Now The IRS Has Found That Excluding Cases From Certification Solely On The Basis That The Taxpayer Is Seeking Assistance From TAS Could Allow A "Won't Pay" Taxpayer To Circumvent The Intent Of The Legislation
To Obtain Or Renew A Passport.
Following the review of relevant considerations regarding these procedures, the IRS has determined that a blanket, systemic exception for anyone with an open TAS case is overly broad and could undermine the effectiveness of Code Sec. 7345 to collect a seriously delinquent tax debt.
The IRS will not certify a taxpayer as owing a seriously delinquent tax debt to the State Department or will reverse a certification for a taxpayer:
  • Who is in bankruptcy,
  • Who is identified by the IRS as a victim of tax-related identity theft,
  • Whose account the IRS has determined is currently not collectible due to hardship,
  • Who is located within a federally declared disaster area,
  • Who has a request pending with the IRS for a good faith installment agreement,
  • Who has a pending good faith offer-in-compromise with the IRS, or
  • Who has an IRS accepted adjustment that will satisfy the debt in full.
    If You Have Seriously Delinquent Tax Debts,
    You Should Consult with Experienced Tax Attorneys!
There Are Several Ways Taxpayers Can Avoid Having the IRS Request That the State Department Revoke Your Passport.  
Contact the Tax Lawyers at 
Marini & Associates, P.A.
for a FREE Tax Consultation Contact us at:
Toll Free at 888-8TaxAid (888)882-9243.

Tuesday, October 15, 2019

Jointly Owned Property By Siblings Subject To IRS Lien

A federal district court has held in Dase, (DC AL 9/23/19), that property subject to an IRS lien was jointly owned by a tax debtor and his sister. Therefore, the IRS’s lien only encumbered the tax debtor’s interest in the property.
In 2004, the taxpayer, Scott Dase, entered into a lease-to-own agreement with his parents Walter and Anita to purchase property X, which Walter and Anita owned jointly with a right of survivorship. Under the agreement, Scott was to make monthly payments to his parents until he paid them $63,703, and once Scott paid that amount in full, his parents would convey X to him. 
Before Scott made all the payments under the agreement, first Anita and then Walter died intestate while living in Alabama. After their deaths, Scott continued to make the monthly payments required by the agreement but made them directly to the mortgagee. Scott paid off the $63,703 in 2012, and the mortgage in 2018. 
In 2017, the IRS obtained a default judgment against Scott for unpaid taxes and filed a lien against X. Then, the IRS filed suit seeking to foreclose the lien and sell the property.
The parties also agreed that Scott had an interest in X, but disagreed on the extent of Scott’s interest. The IRS contended that only Scott had an interest in X because he entered into a lease-to-own agreement with his parents before their deaths and fully performed all the obligations under that contract after their deaths; therefore, under Wadsworth, Scott was the sole equitable owner of X, and no interest in the property passed to Ms. K under the Alabama intestacy statute. 
Scott and Ms. K argued that because their parents died intestate before Scott had made all the payments under his lease-to-own agreement with their parents, Scott's only interest in X derived from the Alabama intestacy statute. Therefore, they argued, Scott and Ms. K each owned a one-half interest in X as tenants in common pursuant to that statute. 
The district court held that Scott and Ms. K each acquired a one-half interest in X under Alabama’s intestacy statute because Walter still owned the property when he died as Scott had not fully paid the purchase price under the lease to own agreement. Therefore, the IRS's lien only attached to Scott’s one-half interest in X. 
Have A Tax Problem?

 Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for a FREE Tax HELP Contact Us at:
orToll Free at 888-8TaxAid (888) 882-9243


IRS Grants Relief and Safe Harbors for Certain Foreign Stock Ownership!

On October 2, 2019 we posted, IRS Grants Relief for Certain Foreign Stock Ownership! where we discussed new regulations from the Internal Revenue Service provide relief to some U.S. taxpayers who own stock in certain foreign corporations. Rev. Proc. 2019-40 and the proposed regulations limit the inquiries required by U.S. taxpayers to determine whether certain foreign businesses are controlled foreign corporations.

The Revenue Procedure limits the inquiries required by U.S. persons to determine whether certain foreign corporations are controlled foreign corporations (“CFCs”). The Revenue Procedure also allows certain unrelated minority U.S. shareholders to rely on specified financial statement information to calculate their subpart F and GILTI inclusions and satisfy reporting requirements with respect to certain CFCs if more detailed tax information is not available. It also provides penalty relief to taxpayers in the specified circumstances. 
Now according to Law360, this recent guidance from the Internal Revenue Service creates safe harbors for U.S. companies that unexpectedly owned foreign affiliates after Congress passed its tax overhaul, but regulatory authority is still limited in compensating for anti-abuse legislation that seemingly went too far.

The newly issued revenue procedure essentially provides breathing room for companies that found themselves with a CFC solely due to the repeal of Section 958(b)(4), limiting the information they’re required to obtain when filing tax returns. Specialists said the U.S. Department of the Treasury was stuck between its desire to help companies with unexpected CFCs and the need to acknowledge the law, but there’s disagreement over whether the middle ground where the guidance landed is fair.

Treasury’s approach wouldn’t allow companies to ignore the law, but it also wouldn’t saddle them with the full impact of the legislative change, according to Pat Brown, an international tax policy leader at PwC.

The legislative history of the Section 958(b)(4) repeal suggests Congress had only intended to target the perceived abuse of current tax rules. For example, a December 2018 report from the Joint Committee on Taxation cited situations where a foreign company parent takes at least 50% of a CFC’s stock to “decontrol” the entity and convert it to a non-CFC.

Steven Hadjilogiou, a tax partner at McDermott Will & Emery LLP, had no doubt the repeal went too far.
He said the Kind of Abuse Outlined in the JCT Report Mostly Related to Planning Techniques that Closely Held Companies used to Avoid CFC Status in Specific Scenarios.

But without an actual change to the law, Treasury had to work within its authority to provide relief to U.S. shareholders, which can include people, partnerships and companies, that found themselves with unexpected CFCs.

The proposed regulations aren’t undoing the Section 958(b)(4) repeal, but turning off regulations that cross-reference it in some cases, according to Seth Green, principal and co-leader of the international tax group in KPMG LLP's national tax practice.

The revenue procedure also attempts to provide relief by creating safe harbors for determining whether an offshore company is a CFC due to the repeal, a task that can be challenging for those dealing with opaque foreign affiliates.

Specifically, the guidance “limits inquiries” required by U.S. shareholders to determine whether certain foreign corporations are CFCs, according to the IRS.

The revenue procedure also said the IRS will accept a determination that such a company isn’t a CFC if the shareholder lacks “actual knowledge, statements received and/or reliable publicly available information” that’s enough to determine if ownership requirements are met.

Have a International Tax Problem?
 Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for a FREE Tax HELP Contact Us at:
orToll Free at 888-8TaxAid (888) 882-9243


Now that Oct. 15th Deadline is Here - What Can You Do Amount Payment of Taxes?

For Taxpayers who requested the six-month filing extension should complete their tax returns and file on or before the Oct. 15 deadline.

About 15 million taxpayers filed for an extension this year. Although Oct. 15 is the last day for most people to file, some may have more time. They include:
  • Members of the military and others serving in a combat zone. They typically have 180 days after they leave the combat zone to file returns and pay any taxes due.
  • Taxpayers in federally-declared disaster areas who already had valid extensions. For details, see the disaster relief page on

Extension filers can file when they are ready and don’t have to wait until Oct. 15 to file. Taxpayers who did not request an extension and have yet to file a 2018 tax return can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed.

Payment options
Direct Pay offers taxpayers a fast way to pay what they owe. Direct Pay is free and allows individuals to securely pay their tax bills or make quarterly estimated tax payments online directly from checking or savings accounts without any fees or pre-registration.

Taxpayers can also pay by debit or credit card. While the IRS does not charge a fee for this service, the payment processer does. Other payment options include the Electronic Federal Tax Payment System (enrollment is required) and electronic funds withdrawal which is available when e-filing. Taxpayers can also pay what they owe using the IRS2Go mobile app. Those choosing to pay by check or money order should make the payment out to the “United States Treasury.”

Eligible taxpayers can set up an online payment agreement in a matter of minutes to pay tax, interest and penalties they may owe. There is no application fee to setup payment plans lasting 120 days or less. In 2019, over 1 million agreements were set up by taxpayers online.

Individual taxpayers can go to and login to view their balance, payment history, pay their taxes and access tax records through Get Transcript. Before setting up an account, taxpayers should review Secure Access: How to Register for Certain Online Self-Help Tools to make sure they have the information needed to verify their identities.

Need an IRS Payment Plan
for 60 or 72 Months?

Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for a FREE Tax HELP Contact Us at:
orToll Free at 888-8TaxAid (888) 882-9243