Tuesday, May 23, 2017

How To Get The IRS To Accept Your Offer In Compromise?


Do you owe a substantial amount of taxes to the IRS?
If so, you've likely looked into establishing a payment plan.

What if you are simply unable to pay your tax balance? 
In this case, you might consider requesting an offer in compromise, which is a last-resort option that allows you to settle your account for literally pennies on the dollar. The key to getting approved for an offer in compromise is understanding reasonable collection potential which the IRS uses to decide if your account qualifies for this option.

A Definition of Reasonable Collection Potential
A reasonable collection potential refers to the maximum amount that the IRS believes it can collect from you over time. Generally, the agency uses a simple formula to calculate this amount, which you can easily figure on your own. However, if you want your request for an offer in compromise to be approved, you should offer the IRS at least the same amount as your reasonable collection potential and preferably a little more. If the agency believes it can collect more from you than you are currently offering it has no reason to approve your request.

How to Calculate Your Reasonable Collection Potential
Reasonable collection potential includes two factors: the liquidation value of your assets and your extra monthly income over the next four or five years. To figure your assets' liquidation value, add up the total cash you have on hand and in bank accounts as well as the current value of any investments. You'll also have to include the current value of your real assets, including cars, homes and property. You can calculate this by multiplying the fair market value by 80 percent and then subtracting any outstanding loans against the value.

The final figure is your additional monthly income after your necessary living expenses are paid. Simply deduct your essential expenses from your income and then multiply the money that is left by either 12 or 24 to figure your disposable income.. Add up your total disposable income, your current cash and investments and the liquidation value of your assets to arrive at your reasonable collection potential.

If you've been considering requesting an offer in compromise from the IRS, you need to understand how to figure your reasonable collection potential. Calculating this number can help you decide how much to offer the IRS as a lump sum which increases the chances that your request will be granted.

Downside to Submitting an OIC
Completing the forms is just the beginning. The IRS will ask you for rafts of financial documentation: pay stubs, bank records, vehicle registrations, and myriad other items. This is an exhaustive, time-consuming process. Some taxpayers wind up submitting boxloads of documents to the IRS to support their OIC request.
 
Have Tax Problems?
 

 Want to Know if you Qualify for an Offer?
 
 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at 
or Toll Free at 888-8TaxAid (888 882-9243).
 
 

OECD Guidance for CRS Automatic Exchange in Tax Matters


On May 23, 2017 we posted May 31st Is Deadline For CRS Reporting where we discussed that two weeks before the first OECD Common Reporting Standard (CRS) reporting deadline of  May 31, there are 47 Reportable Jurisdictions for the 2017 reporting year, in respect of 2016 reportable accounts.
On April 6, 2017 the OECD released on  new guidance for Automatic Exchange of Financial Account Information in Tax Matters. To further support the consistent implementation of the Common Reporting Standard (CRS), the OECD released:

For further information on the Standard for Automatic Exchange of Financial Account Information in Tax Matters, please visit: www.oecd.org/tax/automatic-exchange/common-reporting-standard. 
 Still Have Undeclared Income from Offshore Banks or 
Companies Located in One of These Reportable Jurisdictions?
 
 
 
Want to Know if the OVDP Program is Right for You?
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243
  

 
 
Sources: 


 

May 31st Is Deadline For CRS Reporting

Two weeks before the first OECD Common Reporting Standard (CRS) reporting deadline of  May 31, Barbados, Curacao, and Niue and Trinidad and Tobago have been withdrawn from the OECD list of reportable jurisdictions for 2017, and have been moved to the list of reportable jurisdictions for 2018.

The following are now the Reportable Jurisdictions for the 2017 reporting year, in respect of 2016 reportable accounts:
  1. Austria,
  2. Argentina,
  3. Belgium,
  4. Bulgaria,
  5. Colombia,
  6. Croatia,
  7. Cyprus,
  8. Czech Republic,
  9. Denmark,
  10. Estonia,
  11. Faroe Islands,
  12. Finland,
  13. France,
  14. Germany,
  15. Gibraltar,
  16. Greece,
  17. Greenland,
  18. Guernsey,
  19. Hungary,
  20. Iceland,
  21. India,
  22. Ireland,
  23. Isle of Man,
  24. Italy,
  25. Jersey,
  26. Korea,
  27. Latvia,
  28. Liechtenstein,
  29. Lithuania,
  30. Luxembourg,
  31. Malta,
  32. Mexico,
  33. Montserrat,
  34. Netherlands,
  35. Norway,
  36. Poland,
  37. Portugal,
  38. Romania,
  39. San Marino,
  40. Seychelles,
  41. Slovakia,
  42. Slovenia,
  43. South Africa,
  44. Spain,
  45. Sweden, and
  46. the UK.
The UK tax authority is advising financial institutions that have already compiled their files to submit them anyway if they are unable to remove data on financial accounts for the four jurisdictions that have been withdrawn from the 2017 OECD list, until 2018.

Do You Still Have Undeclared Income from Banks
 or Companies Located in One of These Countries?
 
 
 
Want to Know if the OVDP Program is Right for You?
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243



 



 


Sources

Multinational Big Business Lobby For 3.5% Offshore Repatriation Tax

According to various news reports, US multinationals are "pushing" the US government to further reduce the tax rate on offshore profits. Major U.S. multinationals are pushing the Trump administration to deepen the tax break it has already tentatively proposed on $2.6 trillion in corporate profits being held offshore by more than 500 U.S. companies.
 
Nearly a third of that is held by 10 companies, including Apple, Microsoft Corp, Pfizer Inc and General Electric Co, the firm said.



These companies and hundreds of others could bring their foreign profits into the United States at any time, but they do not in order to avoid paying the 35-percent tax due.
 
President Trump's tax reform proposed to reduce the tax rate on the repatriation of offshore profits to 10 percent from 35 percent. However, lobbyists are making an aggressive case that cutting the tax rate on offshore profits to 10, as the administration has indicated it may favor, is not enough.
 
They propose a bifurcated rate of 3.5 percent on earnings already invested abroad in illiquid assets, and 8.75 percent on cash and liquid assets.  Lobbyists are telling the White House and Treasury Department that if companies are forced to bring home, or repatriate, foreign earnings, they want a sharply reduced tax rate".
 
The deferral rule has incentivized multinationals to park profits offshore and about $2.6 trillion in earnings is being held overseas by more than 500 U.S. companies, according to Audit Analytics, a corporate research firm.
 
Nearly a third of that is held by 10 companies, including Apple, Microsoft Corp, Pfizer Inc. and General Electric Co. All four of those companies declined to comment. These companies and hundreds of others could bring their foreign profits into the United States at any time, but they do not in order to avoid paying the current 35-percent tax due.
                                 
If the $2.6 trillion overseas were repatriated at once, two things would happen. First, Washington would get a big jolt of tax revenue. Second, repatriated profits not collected by the Internal Revenue Service could be put to use in the economy.

The repatriation tax break now being discussed differs from Bush's: repatriation would not be voluntary, but mandatory, so foreign profits would have to be brought home.

In addition, lobbyists said they have talked to the administration about ending deferral and exempting foreign profits from taxation. The administration has floated this as an option. Lobbyists said there has been discussion about limiting that exemption to 95 percent of repatriated foreign earnings. 


Need Tax Advice?
 
 
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243



 









Sources:


Reuters
CNBC

President Trump (Contract with the American Voter, PDF)

Tax Reform Dead -Tax Cuts Possible and GOP Has No Plan B Without Border Tax

On May 11, 2017 we posted Which of President Trumps Tax Proposals Will Become Law? where we discussed the that the most realistic baseline scenario regarding tax legislation is that
there is a repeal of the ACA and associated taxes. While at this time, it is unclear what a replacement bill may look like.
 
For individuals, expect:  
  1. The elimination of the alternative minimum tax,
  2. The elimination of the estate and gift taxes
  3. An individual tax cut and a collapsing of the current seven tax brackets into three tax brackets as contained in the Ryan blueprint introduced last year. (House GOP. (2016). “A Better Way.” 
  4. Reduced capital gains and dividend tax rates
For Corporations: 
  1. Lowering the top corporate rate to 30 percent from the current 35 percent, 
  2. Capping the top rate on pass-through entities at 25 percent and
  3. A permanent reduction in the tax rate for profits from overseas to 8.75 percent for cash and cash-equivalent profits and 3.5 percent on other profits.
Wall Street and corporate America also view President Donald Trump’s bold agenda for a sweeping tax overhaul as largely dead for the year.

Executives, lobbyists and Wall Street analysts increasingly believe the administration, distracted by repeated crises while facing a short and crowded legislative calendar, will be unable to deliver on Trump’s promise to slash corporate and individual tax rates this year and ignite significantly faster economic growth.

“It is just completely unrealistic to think they can get a big tax reform bill done this year,” said Greg Valliere, chief global strategist at Horizon Investments. “They haven’t even agreed whether they are doing tax cuts or tax reform. They haven’t decided if it needs to be paid for or not and I don’t think they appreciate just how big a fight the debt limit is going to be.”

To make matters worse according to Law360,  the GOP Has No Tax Plan B Without a Border Adjustment Tax.


“There’s not a plan B,” Rep. Peter Roskam, R-Ill. said when asked if the House GOP has a backup tax proposal, without border adjustment, in the event the controversial plan proves too toxic to pass.

“2017 is the year,” Roskam said, arguing that if tax reform isn’t passed this year the momentum could be lost. 
 
Need Tax Advice?
 
 
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243



 


 
 










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Friday, May 12, 2017

Are You Hiding Assets in the BVI? NOT Anymore Your NOT!

The British Virgin Islands’ Government has signed new legislation regarding Beneficial Ownership & Technical Protocol with the UK which will come into force in June 2017, which is hoped to improve the exchange of beneficial ownership information between the UK & BVI law enforcement for taxation rulings.

As per the agreement, the UK Government will treat the BVI’s Corporate Service Provider Model as a legitimate equivalent to the UK’s public registry of beneficial ownership. BVI’s model will also incorporate an online platform called BOSSs (Beneficial Ownership Secure Search System) in an attempt to modernize and innovate the current systems and processes.
The launch of the platform is scheduled for June 2017 and will allow all beneficial ownership information to be shared with the UK within a 24 hour period and is thereby available to the US upon respect specific request. It will also provide BVI authorities immediate access to verified beneficial ownership information on any company registered in the British Virgin Islands.
Information to be submitted on the BOSS platform will include:

  • Company name.
  • Incorporation number.
  • Registered Office Address.
  • Incorporation date.
Beneficial Owner details will include the following:
  • Beneficial Owner name.
  • Beneficial Owner date of birth.
  • Beneficial Owner Particulars such as passport number.
  • Status of Entity (whether active or inactive etc.).
  • Date Liquidation commenced & completed (where applicable).
  • Reasons as to why any information is incomplete or not provided.
Each agent registered with the system will have their own user profile and secured space to store the required information (as listed above).


Do You Still Have Undeclared Income from
Offshore Banks or BVI Companies?
 
 
 
Want to Know if the OVDP Program is Right for You?
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243



 


 
 
 
 

 

Thursday, May 11, 2017

Which of President Trumps Tax Proposals Will Become Law?

As it relates to potential tax changes as a result of the Trump administration, we posted:
  1. Trump Also Proposes 15% Tax Rate For Pass-Through Entities, One Time Repatriation Tax & Switch To a Territorial Tax System
  2. Border Tariff or Border Adjustment Tax or US VAT?
  3. Ryan’s Border Tax Shaky as Trump Ponders Overhaul Plan
  4. Trump Presidency Could Be Death Knell For Estate Taxes!
  5. President-Elect Donald Trump Is Less Than Ideal for Tax Advisers?

Now according to a recent Wells Fargo Monthly Economic Outlook, they have incorporated a set of fiscal policy assumptions based on what we think is the most likely outcome based on policy proposals from President Trump and senior congressional leaders.
 
While they recognize the challenges of forecasting policy outcomes in the current environment, they believe the following assumptions provide the most realistic baseline scenario that we will tweak in the months ahead as new developments unfold. 

First, they are assuming that there is a repeal of the ACA and associated taxes and that there is also a general framework for a replacement bill. At this time, it is unclear what a replacement bill may look like. However, for the purposes of our analysis, we assume that the ACA is replaced with a similar-sized plan resulting in little if any additional changes in the size of the federal budget deficit over their forecast horizon, the end of 2018. 
 
On the individual tax policy front, they expect the elimination of the alternative minimum tax, along with estate and gift taxes. In addition, they expect an individual tax cut roughly the same size as the fiscal and economic effect of collapsing the current seven tax brackets into three tax brackets as contained in the Ryan blueprint introduced last year. (House GOP. (2016). “A Better Way.” http://abetterway.speaker.gov/_assets/pdf/ABetterWay-Tax-PolicyPaper.pdf).  

They are also assuming that the capital gains and dividend tax rates are reduced, resulting in roughly the same fiscal and economic effect contained in the Ryan plan.
 
"They see Tax Cuts, rather than any
Major Tax Reforms as the path forward."
 
They are also assuming that corporate tax cuts are enacted in the following way: 
  • lowering the top corporate rate to 30 percent from the current 35 percent and
  • capping the top rate on pass-through entities at 25 percent.  
Wells Fargo also expects a permanent reduction in the tax rate for profits from overseas to 8.75 percent for cash and cash-equivalent profits and 3.5 percent on other profits.
 
At this time, they do not believe there is a path for the passage of a border-adjustability tax or any changes to the deductibility of interest expenses in the corporate tax code, which, in our view, limits the magnitude of the corporate tax cut to a top rate of 30 percent.
 
Like the individual tax policy changes, Wells Fargo expects only corporate tax cuts and no reforms such as boarder adjustability or removing interest deductions. Their view is that these reforms face major political opposition, and they find it difficult to believe such policies will be enacted, at least in the near term.  

Wells Fargo currently does not have any trade policy changes, such as tariffs, incorporated into their forecast at this time but fully recognize that there is a decent probability of such policies becoming unilaterally enacted by President Trump, at least on a one-off basis.

Need Tax Advice?
 
 
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243