New Portability Election Extension Prevents Lost Estate Tax Exemption

Thanks to the Internal Revenue Service’s release of Rev. Proc. 2022-32, married couples who are not otherwise required to file an estate tax return at the death of the first spouse now have substantially more time to make a portability

What I learned at the 2022 National Institute on Criminal Tax Fraud and Tax Controversy in Las Vegas

I just returned from the American Bar Association Section of Taxation’s annual National Institute on Criminal Tax Fraud and Tax Controversy in Las Vegas, which is the largest gathering of criminal tax fraud and tax controversy attorneys in the nation.

Parag Patel Esq. was a featured speaker at the National Association of Enrolled Agents (NAEA) International Tax Certificate Program

Parag Patel Esq. was a featured speaker at the National Association of Enrolled Agents (NAEA) International Tax Certificate Program event from December 12-16, 2022. The five-day educational event focused on international taxation for tax professionals. Mr. Patel discussed the tax

New IRS FBAR Practice Unit

The IRS LB&I recently issued its Practice Unit on FBARs.  Practice Units are “job aids” and training materials intended to describe for IRS agents helpful practices about tax concepts in general and specific types of tax reporting forms. The FBAR

Do Inherited Foreign Assets Receive a Step-up in Cost Basis for U.S. Tax Purposes?

A common question asked by clients when receiving an inheritance from outside the United States is about the U.S. cost basis and receiving a step-up in basis on foreign assets owned by a non-U.S. person. Understanding the U.S. cost basis

Forms 5471, 5472, 3520 Partial Penalty Relief Still Available for 2019 and 2020 Returns

IRS Notice 2022-36 provided relief for certain taxpayers from certain failure to file penalties and certain international information return penalties with respect to tax returns for tax years 2019 and 2020 that are filed on or before September 30, 2022.

Parag Patel Esq. speaks at New Jersey Society of Certified Public Accountants (NJCPA) Annual Tax Seminar: “A New Foreign Frontier: Foreign Income & Asset Reporting Update”.

Parag Patel Esq. will be a featured speaker at a New Jersey Society of Certified Public Accountants (NJCPA) Seminar entitled “ A New Foreign Frontier: Foreign Income & Asset Reporting Update ” on November 18, 2022. Seminar Summary: The IRS

IRS Announces Increased 2023 Gift Tax Annual Exclusion, Gift, and Estate Tax Exemptions

The Internal Revenue Service recently released the annual inflation adjustments for tax year 2023, which include welcome increases for wealth transfer tax planning. The gift tax annual exclusion will increase for the second year in a row, rising to $17,000

Parag Patel Esq. speaks at New Jersey Society of Certified Public Accountants (NJCPA) Annual Tax Seminar: “2022 Federal Tax Update and Latest Tax Controversy Hot Topics”.

Parag Patel Esq. will be a featured speaker at a New Jersey Society of Certified Public Accountants (NJCPA) Seminar entitled “2022 Federal Tax Update and Latest Tax Controversy Hot Topics” on November 18, 2022. Seminar Summary: With the pandemic fading

Wash Sale Benefits for Cryto Investors

Crypto investors have a reputation for hanging on to their coins through the ups and downs of the market’s dramatic gyrations. The wash sale may help crypto investors with tax loss benefits. WHAT IS A WASH SALE? The wash sale

What is the U.S. tax on Inheritances from a Non-U.S. Person to U.S. Person?

We get this question a lot… It is important to stress that there are no U.S. taxes owed by a U.S. citizen or green card holder directly on receiving any inheritance (whether received from a U.S. or non-U.S. person). However,

What Do Tax Lawyers Do?

Tax attorneys are knowledgeable about tax laws, regulations, and policies at several levels—federal, state, and municipal. In addition to preparing some tax returns, tax attorneys can: Represent clients in disputes with tax authorities. Advise clients about the tax implications of

From Hong Kong With Love…

We had many US clients this year with family in Hong Kong requesting legal assistance with recent transfers received from Hong Kong due to the local political instability. Typically, the transfers received from Hong Kong due to the local political

Form 3520 Penalty Relief

We have recently posted about the IRS’s broad relief for late filing penalties for 2019 and 2020 tax returns. During the height of the pandemic, taxpayers experienced many obstacles to the timely filing of their 2019 and 2020 tax returns.

Two-day educational event focused on Trusts and Estate taxation

Parag Patel Esq. was a featured speaker at the National Association of Enrolled Agents (NAEA) LEARN event in Pittsburgh, PA from September 25–27, 2022. The two-day educational event focused on Trusts and Estate taxation. Mr. Patel discussed the tax laws

Recent Court Decision Shows Risks of IRS Streamlined Filing Compliance Procedures

A recent court decision from the United States Court of Federal Claims shows the impact of a poorly advised Streamlined Filing Compliance Procedures (Streamlined Program or SFCP) submission.  See Flint v. U.S., No. 21-1202T (Fed. Cl. Aug. 23, 2022).  In

Forms 3520, 5471 and 5472 Penalty Relief

In IRS Notice 2022-36, the IRS granted relief from certain failure-to-file penalties and certain international information return penalties for most individual and business taxpayers who did not file tax returns for tax years 2019 and 2020, provided the returns are filed

IRS gives widespread penalty relief: ACTION REQUIRED

Last week, in IRS Notice 2022-36, the IRS granted relief from certain failure-to-file penalties and certain international information return penalties for most individual and business taxpayers who did not file tax returns for tax years 2019 and 2020, provided the returns

Foreign pension accounts reporting on the FBAR

Several clients have asked us in recent weeks whether foreign pension accounts are reported on the FinCen114 (FBAR). Most employer foreign pension plans fall under one of two types: defined benefit plan or defined contribution plan. A defined benefit plan

US Reporting of Foreign Retirement Accounts

Many clients contact our office regarding the failure to report their foreign retirement account. Such accounts need to be fully reported on an FinCen 114 (FBAR) and IRS Form 8938. Besides the need to disclose a foreign retirement plan on

Is the IRS Finally Receiving Increased Funding?

After months of back and forth, it appears that additional funding is on its way to the Internal Revenue Service (IRS) with the Inflation Reduction Act of 2022 (Act). The Act would spend nearly $80 billion on the IRS and

IRS Extends Late Portability Election Automatic Relief from 2 to 5 Years

On July, 8, 2022, the Internal Revenue Service released Revenue Procedure 2022-32, which provides a simplified method for certain estates to make a late portability election to allow the surviving spouse of the decedent to use the decedent’s unused unified

IRS Summons to a Third Party: Duties and Rights

One of the most common evidence-gathering tactics used by the Criminal Investigative Division is the issuance of summonses. The IRS has very broad discretion to use summonses, which are authorized by statute to allow special agents to assess “correctness of

Maryland Retail Store Owner Guilty of Tax Fraud and Tax Evasion

Sunil Chawla (“Chawla”), age 66, of Berlin, Maryland, pleaded guilty this week to tax fraud.  As part of his plea agreement, Chawla will be required to pay $70,000 in restitution.    According to his guilty plea, Chawla owned and operated “India

Specific Steps for Applying to the IRS Streamlined Foreign Offshore Procedures

If you are a US Person and not compliant for not properly reporting foreign accounts, assets, investments, and income to the IRS, you may have learned about Streamlined Procedures. If you live outside the US and are eligible to use

US Supreme Court to Rule on FBAR Penalties Case

The debate over FBAR penalties for non-willful failure to disclose all of an individual’s or business’ foreign bank accounts has reached the Supreme Court. The issue is whether the maximum $10,000 Foreign Bank Account Reporting (FBAR) penalty should apply on

Welcome news from IRS for late Form 3520 penalties

On its website, the IRS has announced that it has retired its Form 3520/3520A compliance campaign. In welcome relief for taxpayers, the IRS also indicates in updated IRM procedures that it will assert only one penalty — rather than the two

The IRS’s 2022 Dirty Dozen tax scams

The Internal Revenue Service today wrapped up its annual “Dirty Dozen” scams list for the 2022 filing season, with a warning to taxpayers to avoid being misled into using bogus tax avoidance strategies. The IRS warned taxpayers to watch out

Tax preparer sentenced to prison for fraudulent deductions on federal income tax returns

Nearly $3.5 million estimated tax loss over four years A tax preparer was recently sentenced in U.S. District Court in Seattle, to a year and a day in prison for 14 counts of aiding and abetting the filing of false

New Webinar: An Introduction to the Taxation of Passive Foreign Investment Companies

Event Details May 9, 2022 3:00 pm to 4:00 pm Many investors unknowingly invest in Passive Foreign Investment Companies (PFICs) and as a result must file IRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or