Purpose of Form Form 5471 is used to satisfy the reporting requirements of Internal Revenue Code (“IRC”) §§ 6038 (information reporting with respect to certain foreign corporations and partnerships) and 6046 (returns as to organization or reorganization of foreign corporations and as to acquisitions of their stock). Likewise, Form 5471 is used to r...
Overview Depending on the amount of taxes, penalties, and interest owed to the IRS, you may be considering an Offer in Compromise (“OIC”). However, to pay “pennies on the dollar,” the Internal Revenue Service (“IRS”) will not accept an OIC unless the amount offered is equal to or greater than your Reasonable Collection Potential (“RCP”). What is Re...
What is the Trust Fund Recovery Penalty? Under Internal Revenue Code (“IRC” or the “Code”) § 6672, any person required to collect and pay over any tax imposed by the Code who fails to collect such tax or pay over such tax will be liable for a penalty equal to the total amount of the tax not collected or paid over. Several persons may be held jointl...
“Tax Fraud” Defined and How the IRS Proves It In continuing with the Tax Crimes series, we began by examining introducing you to the criminal tax investigation process and how referrals to the Internal Revenue Service’s (“IRS”) Criminal Investigation Division (“CID”) begin. Now, we will dive into the IRS’s definition of fraud, the “badges” of fraud...
Overview The purpose of the Streamlined Filing Compliance Procedures (“Streamlined Procedures”) is to bring U.S. taxpayers into offshore filing compliance. The Streamlined Procedures are available to taxpayers that did not willfully fail to report foreign financial assets and pay any tax due in respect of those assets. In particular, the Streamline...
Overview The purpose of the Streamlined Foreign Offshore Procedures (“SFOP”) is to bring foreign or non-U.S. resident taxpayers into compliance for reporting foreign financial assets. In other words, SFOP provides taxpayers, who comply with the eligibility criteria outlined below, with amnesty from penalties such as failure-to-file and failure-to-p...
Overview The Texas Voluntary Disclosure Program (VDP), administered by the Texas Comptroller of Public Accounts, allows businesses and individuals to report and pay previously unpaid or underpaid taxes voluntarily. This program incentivizes compliance by offering significant benefits, such as penalty waivers and, in most cases, interest waivers, fo...
Everything to Know about Texas Sales and Use Tax Audits Facing a Texas sales and use tax audit can be daunting, but understanding the process can help your business prepare and navigate it with confidence. At The Wilson Firm, we specialize in guiding businesses through tax audits to ensure compliance and minimize risks. The Texas Comptroller of Pub...
Everything to Know About Tax Permits in Texas If you're launching a new business in Texas or expanding your existing operations, understanding how to apply for a Texas sales tax permit is a critical step toward ensuring legal compliance and seamless business operations. A sales tax permit is not just a regulatory requirement; it’s a cornerstone of ...
What is reasonable cause? The IRS imposes penalties for various infractions, including late filing, late payment, and accuracy-related penalties. Generally, taxpayers must demonstrate that their error or omission was due to reasonable cause for the IRS to grant a penalty abatement. Part 20 of the Internal Revenue Manual (IRM) provides a definition ...
The Risks of Fraudulent Employee Retention Credit Claims A wise man once said, “Fool me once, shame on you; fool me twice, shame on me.” Whoever this so-called wise man was, he had never encountered the IRS. If he had, the corrected quote would be something like this: “Fool the IRS once, go straight to jail.” When it comes to trying to defraud the ...
Everything to Know About Service Sales Tax in Texas Navigating Texas sales tax on services is vital for businesses to stay compliant and avoid penalties. The Wilson Firm specializes in guiding clients through Texas tax regulations. Texas collects approximately $47 billion in sales tax annually, with services accounting for about 20% of taxable reve...
Everything to Know About the VDP If you've ever worried about unreported income, offshore accounts, or other tax issues that might lead to serious consequences, the Voluntary Disclosure Program (VDP) could be a lifeline. As a federal tax program administered by the Internal Revenue Service (IRS), the VDP allows taxpayers to come forward voluntarily...
Learn Everything About Tax Treatise Navigating the world of tax law can feel overwhelming, with its intricate codes, regulations, and constant updates. Whether you're a business owner, an individual taxpayer, or a professional seeking clarity, having reliable resources is crucial. At The Wilson Firm, we understand the importance of accessible, auth...
Overview of the Voluntary Disclosure Program The IRS Voluntary Disclosure Program (“VDP”) provides taxpayers who have willfully failed to report income, assets, or other tax-related information an avenue to resolve their noncompliance with the IRS. In order to be eligible, taxpayers must have willfully violated the tax law and must make a disclosur...
How Unpaid Taxes Could Lead to Passport Revocation and Travel Restrictions The Woodlands, Texas - Last month, a few tax-related measures were slipped into H.R. 22, known as the "Fixing America's Surface Transportation Act." These provisions could add some significant teeth to the IRS' ability to collect past-due tax debts at a time when budget shor...
Understanding IRS Debt and Community Property Laws in Texas Are you engaged to someone with significant IRS debt? Learn how community property laws in Texas might affect your earnings and property, and explore options to protect your financial interests. When Your Fiancé/Fiancée Owes Money to the IRS. Assume that A is engaged to marry B. They live ...
Choosing the Best IRS Payment Plan for Your Tax Debt Two of the most common payment options for delinquent tax debts are installment agreements and offers in compromise. Let’s discuss theses options below, along with the key considerations for choosing which route might be best in a taxpayer’s particular case. If you owe the IRS, and are considerin...
Understanding the IRS Collection Statute Expiration Date (CSED) and Your Rights The Collection Statute Expiration Date, often referred to as the “CSED”, is the maximum time period the IRS will look back to collect unpaid taxes. Similar to a statute of limitation, where anything beyond that date is off-limits, the CSED is 10 years from the date the ...
How Innocent Spouse Relief Can Protect You from Tax Liability When filing a joint tax return, married taxpayers are often privy to certain tax benefits. Generally, married taxpayers take advantage of a higher standard deduction and a lower tax rate when filing their taxes together. However, as a result of a joint filing, both taxpayers are equally ...
