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Update On Offshore Accounts Update on Offshore Accounts Recently, the ABA committee on Civil and Criminal Tax Penalties put on an excellent teleconference on the prosecution and defense of off-shore accounts. This is a brief summary of some of the high points:
Update on Mediation in Mortgage Foreclosures On December 29, 2009 the Florida Supreme Court adopted the Residential Mortgage Foreclosure Mediation Program. The order set forth very specific procedures, which apply to all residential mortgage foreclosure actions in which the note and mortgage were subject to the provisions of the Federal Truth and Lending Act. Any newly filed foreclosure actions must be referred to this program unless the parties agree otherwise. The Parties must go to mediation prior to entry of a final judgment. The original summons issued in the case must have attached to it a notice regarding this mediation for homestead residences.(continue)
The Offshore Voluntary Disclosure Program 2009 The Offshore Voluntary Disclosure Program 2009 As many of you may already be aware the IRS has instituted a 6 month special voluntary disclosure program for individuals who have offshore / foreign accounts, or entities, including trusts and corporations. The IRS has recently issued "frequently asked questions" discussing how they will deal with various issues in this disclosure. As noted above, there is a very short window for participating in this program. Anyone having further questions concerning this program should contact me at the website intake form or by calling me at (407) 696-1040.
Can't Get Your Lender To Talk to You? - How About a Mediation? Two recent articles, one in the Orlando Sentinel and the other in the Florida Bar News, indicate that judicial remedies may be on the way to resolve one of the most common complaints of those whom are being foreclosed upon. That complaint is "I can't get the lender to talk to me, or respond to me!"
Recent Statistics on Tax Convictions Recent Statistics on Tax Convictions A recent article generated by Trac Reports Inc. in its "Tax Notes" dated April 7, 2008 reports on a number of interesting statistics about criminal tax convictions in 2007 and previous years.
Foreclosures, Short Sales, And Mortgage Restructuring: Out Of The Frying Pan, Into The Fire? You Are Creating A Tax Problem For Yourself. Foreclosures, Short Sales, And Mortgage Restructuring: Out Of The Frying Pan, Into The Fire? You Are Creating A Tax Problem For Yourself. A little known provision of the Internal Revenue Code, section 108, provides that, whenever there is a discharge of indebtedness, a Taxpayer may have to recognize income. When a Taxpayer borrows money, he does not report the sums received as income in that taxable year. As long as he repays the debt, there is never an income tax liability assessed upon the proceeds of the loan. However, if a Taxpayer fails to repay the full amount of the debt, he may suffer a number of tax consequences ranging from reduction of basis on the real property to actual tax liabilities.
Do I Need An Attorney To Handle My Tax Problem? Often times, people wonder whether they really need an attorney or whether an accountant can help them with their tax problems. Unfortunately, most people, including many accountants, fail to understand that, depending on the nature of the tax problem, the taxpayer's activities may subject them, at worst, to criminal liability and, at best, to potential disputes with the IRS. When Congress adopted the Federal Rules of Evidence, they could not reach agreement on legal privleges. Accordingly, Congress agreed that whatever privileges were in effect at common law at the time of the adoption of the Federal Rules of Evidence, those privileges would continue. However, at common law there was no accountant / client privilege. Accordingly, everything a taxpayer tells his accountant can be compelled to be disclosed in proceedings with the IRS, whether civil or criminal. While Congress did create a very limited tax practitioner's privilege, it does not apply if the accountant prepared the return or if the proceeding is criminal or has criminal potential. (Please see my article under the Articles Section of my web page ( http://www.DeLancettlaw.com/Articles.shtml)). However, case law, starting with a case called Kovel, has recognized a work product privilege when an accountant is retained by an attorney to assist the attorney in advising his client as to a proper course of action. Not surprisingly, the accountants who are retained by attorneys to assist them in these matters are referred to as Kovel accountants. In order for the privilege to attach, the client must retain an attorney and then the attorney retains the accountant as a consulting expert witness. Unfortunately, if the client has already met with the accountant or worked with the accountant in the past, it may be difficult to establish the privilege because it may be difficult to determine whether the accountant became aware of the information prior to or after the creation of the attorney / client relationship. Only those communications divulged to the attorney and the accountant after creation of the relationship are deemed privileged. They are deemed prvileged under the attorney / client privilege and under the attorney / work product privilege.Therefore, it is always best to consult with an attorney first. If the attorney deems your matter such that there is a low likelihood of litigation, either civil or criminal, then it may be safe to proceed with an accountant. However, you need to be sure that the accountant is knowledgeable and experienced in the areas of civil tax procedure and evidence. Also, you need to consider whether, if the efforts of the accountant are unsuccessful, you intend to pursue judicial remedies. In that case, it may well be in your best interests to retain legal counsel at the beginning of your matter. Finally, if you have any concern whatsoever as to criminal exposure, the only way to protect yourself is to consult with legal counsel.
Whistle Blower Pursuant to legislation passed in late 2006, the IRS has recently set up a new Whistle-Blower Office. The IRS is offering to give an award of 15% to 30% of the total proceeds that the IRS collects as a result of the reporting by employees who spot tax problems in their work place or individuals who encounter what they believe to be tax fraud or tax evasion in their day to day business or elsewhere. The IRShas issued a new form 3449-A, which asks for, among other things, the name, address, social security number and employer I.D. number of the suspected tax evader, the type of violation of income tax, whether or not books and records are available, whether or not the whistle blower considers the taxpayer to be dangerous, the banks and financial institutions used by the taxpayer, etc. The form is then forwarded to the Internal Revenue Service, Fresno, California, 93888.
Exclusive v. Non-Exclusive Contract A couple of years ago I had a case in which the Plaintiff contended that the contract was exclusive. The contract contained no statement to that effect. It was my belief, as was the belief of every attorney with whom I have discussed this issue, that, unless the contract specifically states that it is exclusive, it is a non-exclusive contract. However, in what, in my opinion is a poor decision (my impression was that the trial judge in my case thought so as well), the Fifth District Court of Appeal in Danforth Orthopedics v. Florida Healthcare Plan, 750 So. 2d 774 (2000), ruled that, in order for a contract to be an exclusive agreement to purchase or sell, it is not necessary that such terms be expressly stated in the contract. In other words, the absence of such language in the contract does not render it non-exclusive, but, instead, renders it ambiguous on that issue which permits evidence of the parties course of dealing and other oral testimony to be admissible in evidence on the issue. Accordingly, a case that, in my opinion, could have been resolved by summary judgment was forced to go through a 5 day jury trial in which we ultimately prevailed with the jury. However, my strong recommendation is that, unless you intend the contract to be an exclusive agreement with the other party, that you specifically state in the contract that it is non-exclusive.
I'm Liable for What? Many bookeepers and CFO's find themselves being pursued by the IRS for the trust fund taxes that have not been paid by their employer's company. Recently, I gave a seminar on this subject. While this topic is far too long for an in depth discussion on a blog, please see my outline entitled "I'm Liable for What?" in my Articles Section ( http://www.delancettlaw.com/Articles.shtml ) relating to this subject. Anyone who is aware that their employer has failed to pay payroll taxes and who is involved in the financial decisions of the business, is on the checking account of the business, is a book keeper or a chief financial officer, or treasurer of a corporation needs to be aware of these rules and the very real risk that they may be held personally liable for these taxes.
Arbitration Agreements and Satutes of Limitation There is an excellent article in the October Florida Bar Journal, by David Weintraub, concerning the fact that the absence of a statute of limitations clause in an arbitration agreement could result in a ruling that statutes of limitations do not apply to the parties' dispute. The author notes that Florida has no statute expressly providing that statutes of limitations apply to arbitration agreements. The author discusses the case of Martin Daytona Corporation v. Strickland Construction Services, 941 So. 2d 1220 (Fla.5th DCA 2006), which apparently held that the phrase "actions", contained in the Florida Rules of Civil Procedure, also applies to arbitration proceedings. Mr. Weintraub disagrees with this ruling. He strongly recommends a contractual provision be contained in all arbitration agreements to avoid potential difficulties.
Tax Calendar for 1st Quarter 2009 Tax Calendar for 1st Quarter 2009
Jan. 15 - Individual Taxpayers - last 2008 estimated tax installment is due, unless form 1040 is filed by Jan. 2nd. Send final 1040-ES with payment.
Feb. 2 - Employers a) Distribute copies of form W-2's to employees for 2008 b) File form 91 - Employer's Quarterly Federal Tax Return, and make quarterly deposit for 4th Quarter 2008. c) File form 940 - Employer's Federal Unemployment Tax Return for 2008. d) File for 945 - Annual Return of Withheld Federal Income Tax to report income tax withheld in 2008 on all non payroll items, suck as backup withholding, pensions, annuities, etc.
Feb. 10 - Employers, this is the deferred due date of forms 940 and 941 if timely deposits were made.
Feb. 17 - Give annual information forms 1099-B, 1099-S, and 1099-Miscellaneous to recipients of certain payments you made during 2008.
Mar. 2 - Send the government their copy of form 1099 returns with appropriate transmittal form. If these forms are to be filed electronically, the due date is March 31. Employers - File form W-2 series with appropriate transmittal form if not previously sent to the IRS. If they are to be filed electronically, the due date is March 31.
Mar. 16 - Forms 1120, 1120-A, and 1120-S are due for calendar year corporations for tax year 2008, along with any tax due and owing. File form 7004 and the estimated tax to obtain an automatic extension. This is also the last day for calendar year corporations to make 2008 contributions to pension and profit sharing plans. |
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