Rockville Tax Law Blog

Recent Tax Law Updates: September 2019

Repeated Bankruptcies Extend Length Of Non-Dischargability. A bankruptcy court in Oklahoma found that the three-year look-back period during which tax debts are not dischargeable extended for the times a taxpayer filed previous bankruptcies. (Nachimson, (Bktcy Ct OK 8/23/2019) 124 AFTR 2d ¶2019-5171)

IRC 6320: Prior Opportunity To Dispute Liabilities Prevents Ability To Raise Later In CDPH. Tax Court was found to have properly upheld IRS's administrative determination to proceed with a lien filing where the IRS Settlement Officer met all Code Sec. 6330(c) requirements and the taxpayer had been given a deficiency notice - and actually litigated those liabilities in an earlier case. (Hom v. Comm., CA 9, 124 AFTR 2d ¶2019-5181)

Recent Tax Law Updates: August 2019

IRS Enforces Stock-Based Compensation Rule. The Large Business and International Division formally withdrew its Cost-Sharing Arrangement Stock-Based Compensation Directive dated January 12, 2018 and provided new instructions for examiners on transfer pricing issue selection related to SBC in CSAs.

Draft 2019 Form 706 & Instructions Now Available to be used for decedents who passed after December 31, 2018. Please note that Schedule R-1, Generation-Skipping Transfer Tax is now a separate form.

Reminder: Maryland Sales Tax Holiday Is Sunday, August 11 - Saturday, August 17

Maryland's sales tax holiday for back-to-school items this year is from Sunday, August 11 through Saturday, August 17. Any single qualifying article of clothing or footwear priced $100 or less will be exempt from Maryland sales tax, regardless of how many items are purchased at the same time. The first $40 of any backpack or bookbag purchase is also tax-free. 

Recent Tax Law Updates: July 2019

New IRS Commissioner Promises Increased Enforcement

There is a new sheriff in town, and at the American Institute of CPAs June 10 conference in Las Vegas, Commissioner Charles Rettig announced that there will be a much greater emphasis on enforcement. He also made it a point to remind everyone that the IRS Criminal Investigation Division is alive and well. (United States Tax Reporter ¶ 76,054)

Tax considerations for business partnerships

A great deal of responsibilities lay on the shoulders of individual business owners operating in partnerships, including tax liability. Their professional decisions can have major personal financial impacts, and therefore, must be chosen carefully. Business owners operating in partnerships should consider the following three tax tips.

Taxpayers may receive leniency on mistakes this year

Changes to tax laws have left many Americans unsure about their own tax liability. Taxpayers with complex assets typically face a more complicated filing process, but this year’s filing season may be even more confusing with new rules in place. Without help from experienced professionals, it is possible that many people will make mistakes on their tax returns. Fortunately, confused taxpayers are getting a break this year.

The Treasury Department has said that it will not penalize taxpayers who accidentally underpay their 2018 taxes – up to a certain amount. If you miscalculate your tax liability, then you will not be hit with penalties as long as you paid 85 percent of what you owe through withholding or estimated quarterly payments.

How likely are you to be audited?

You often hear of people being audited, but how likely are you to actually receive an audit notice from the Internal Revenue Service (IRS)? According to a recent report, your chances are around one in 160.

After the recent 35-day government shutdown, the IRS is facing budget and audit staff cuts. As a result, IRS audits are at an “all-time low.” However, there are still certain groups of individuals who remain at a higher risk of an audit this year.

Does a government shutdown affect your tax filing?

After 35 days, the longest-ever government shutdown in the United States is over. However, there could still be significant effects on the 2019 tax season, especially as the possibility of another government shutdown looms.

Over the past month, the Internal Revenue Service (IRS) had around 35 thousand fewer employees working than normal. While a government shutdown does not explicitly affect your tax filing, short staffing of IRS employees likely could. According to a recent article, the biggest effects from a government shutdown can come from customer support wait times and the amount of time it takes to receive a refund.

What are the penalties for filing a late tax return?

The deadline to file taxes this year is Monday, April 15, 2019, but Maryland residents receive an extra two days to file. While this might seem like plenty of time to get your tax documents in order, thousands of people across the United States will miss the deadline.

Luckily, there is no penalty for filing your taxes late if you are expecting a refund because penalties are dependent on the money you owe. However, there can be severe financial penalties for Americans who file a late return and fail to make a payment on the taxes they owe.

The end of the OVDP: What it means for taxpayers going forward

The IRS brought the Offshore Voluntary Disclosure Program (OVDP) to a close on September 28th, 2018. This program allowed U.S. taxpayers to bring foreign assets into U.S. tax compliance, pay for civil tax and penalties while avoiding harsh criminal referrals. This caused uncertainty for taxpayers with offshore assets, including savings accounts, businesses, trusts and estates who missed the deadline.

Fortunately, the window has not been closed for voluntary disclosures, but the rules have changed. The IRS released the new procedures for voluntary disclosures received after September 28th, 2018. Some changes to guidelines include increased penalties and a shortened disclosure period from eight years down to six. Most importantly, taxpayers who come forward voluntarily may still be able to avoid criminal prosecution.

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