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IRS Form 5471 – Information Return of U.S. Persons With Respect to Certain Foreign Corporations

In International Tax by Jason FreemanLeave a Comment

Form 5471 is used by U.S. persons involved in foreign corporations to satisfy federal reporting requirements under Internal Revenue Code (IRC) sections 6038 and 6046. The IRS has delineated five categories of persons required to file Form 5471. A person that could be classified in multiple categories with respect to her involvement in a single foreign corporation is not required …

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The IRS Whistleblower Program

In Whistleblower by Matthew RobertsLeave a Comment

A. Background.   The IRS whistleblower program is nothing new.  More than a century ago, Congress authorized the federal government to pay whistleblowers for information regarding violations of the federal tax laws.  However, prior to 2007, awards were discretionary, often limited to $10 million, and generally not subject to judicial review under the doctrine of sovereign immunity.       …

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“Hot Assets” and the Sale or Exchange of Partnership Interests

In Partnership Tax by Jason FreemanLeave a Comment

When a partner enters into a sale or exchange of their partnership interest, there are often lurking tax surprises—such as unexpected phantom income triggers.  Sales of partnership interests are notoriously fraught with potential tax traps for the unwary.  It is, in fact, even possible to trigger more tax on a sale than one receives in exchange for the interest in …

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International Reporting Penalties

In FBAR, Fines, International Tax, Penalties, Uncategorized by Ryan DeanLeave a Comment

Taxpayers with interests in foreign financial assets, financial accounts, and/or foreign trusts may have certain tax reporting obligations with the IRS.  For example, taxpayers with a financial interest in or signature authority over foreign financial accounts with an aggregate value of over $10,000 at any time during the calendar year must file a Report of Foreign Bank and Financial Account …

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IRS Increasing Enforcement of Syndicated Conservation Easements

In Penalties by Jason FreemanLeave a Comment

A recent IRS press release announced a significant increase in enforcement actions focused on syndicated conservation easement transactions. The IRS announced that these transactions are a “priority compliance area for the agency.” The enforcement actions are directed as “coordinated examinations” across various divisions of the IRS.   The Criminal Investigation Division has initiated separate investigations as well. All told, the …

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Where Is the Limit on Penalties for Willful FBAR Violations?

In Bank Fraud, Evasion, FBAR, Fines, Fraud, International Tax, Uncategorized by Ryan DeanLeave a Comment

A recent decision of the United States Court of Appeals, Federal Circuit holds that the pre-2004 regulation limiting willful FBAR penalties to a maximum of $100,000 is notapplicable.  As many tax practitioners know, 31 U.S.C. § 5314(a) requires taxpayers who have accounts with foreign financial institutions, specifically any person with a financial interest in or signature authority over foreign financial …