The IRS generally attempts to collect additional tax revenue without involving IRS employees first, so as to save money. This automatic systems is called the Automated Under Reporter Program. Recently, the IRS reported that it closed over 4.7 million cases using its Automated Under Reporter Program.  Of those cases, the IRS reported that it was able to assess over $6.4 billion in tax revenue.

As a taxpayer, if you receive a CP-2000, you are one of the individuals who receives one of these automated reports.  These reports are sent out because the IRS computer system notices something that may be incorrect.  To be clear, this is not a bill.  This amount may be challenged by the taxpayer.  However, because the most prominent line on the letter reads, Proposed Balance Due, many taxpayers are not aware that they may challenge it.  If this letter goes unchallenged, then the IRS is able to attempt to collect on that amount.

If you receive a CP-2000 this year, do not hesitate to call Private Tax Relief to schedule a FREE consultation to determine whether or not you may challenge this potential additional liability.

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If you’ve been reading this blog recently, you have seen a number of articles dealing with the requirements for disclosing foreign accounts and possible penalties if such funds are not disclosed.  But the reader may be thinking that the government will never find their account, so they do not want to go through the hassle of filing the required disclosures.

This may have been the case until recently.  Now, the IRS is actively seeking to discover these types of accounts.  The IRS is conducting an investigation of records in an attempt to mine information that it receives about offshore assets, including foreign bank information.

“We have fundamentally changed the risk calculus of taxpayers who are thinking about hiding their money overseas, and we are well on our way to deterring the next generation of taxpayers from using hidden bank accounts to cheat on their taxes,” the IRS Commissioner stated.

The IRS has collected more than $4.4 billion through its Offshore Voluntary Disclosure Initiative (OVDI).  This program allows taxpayers to report their foreign accounts that they have not disclosed in the past.  This Initiative will be discussed next week.

If you are looking to file under the OVDI or your FBAR, please contact us to help you.

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Correspondence Audits Raise Taxpayer’s Rights Concerns

May 28, 2016

The National Tax Advocate (the government agent who serves as an agent for the taxpayers to the IRS and Congress) has raised concerns about the impact of IRS correspondence examinations on taxpayers’ rights, including the failure to provide taxpayers with the specific name and contact information of the auditors examining their returns. The IRS uses […]

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Tax Fraud Scheme To Claim False Refund

April 14, 2016

The IRS has recently warned taxpayers of a fraud currently being committed that is targeting senior citizens, church-goers, and working families.  The tax fraud scheme promises large refunds to taxpayers who had little or no income and would not be required to file a tax return.  These individuals promise these taxpayers can claim a large […]

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Real Story: FBAR Non-compliance

March 11, 2016

Lately, we have been discussing the requirements for reporting foreign accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR).   Last week, we discussed what penalties may apply against a taxpayer that fails to file such a report.  Recently, we can see that penalties play out in real life. In a complaint filed […]

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How to Solve Taxpayer Dissatisfaction

February 17, 2016

We recently discussed the frustration of taxpayers over the IRS’ audit process.  The IRS held a hearing recently to discuss how the IRS could better serve the country.  At this hearing, one panelist stated that the IRS may want to consider private call centers to help taxpayers. Bernie McKay, a chairman of the Council for […]

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Stopping an IRS Summons

January 29, 2016

Last week we discussed one way the IRS attempts to collect information — by issuing a summons.  If a taxpayer does not respond to the summons, the IRS may go to court in an attempt to enforce it. The taxpayer does have the ability to challenge the IRS in enforcing a summons at the enforcement […]

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Bankrupt TaxMasters to Settle its Own Debts for “Pennies on the Dollar”

January 22, 2016

TaxMasters, the Houston-based tax marketing firm, announced on Sunday that it will file for bankruptcy. Forbes reports that TaxMasters had less than $50,000 in assets and over 5000 creditors. TaxMasters is widely known for its late night commercials featuring owner Patrick Cox advertising to settle back taxes for pennies on the dollar. TaxMasters was sued […]

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Fresh Start Penalty Relief

January 4, 2016

Recently, the IRS announced a new program to help struggling taxpayers.  Called the Fresh Start Penalty Relief Initiative, it provides eligible taxpayers with a six-month extension of time to fully pay 2011 taxes.  Interest will run on the 2011 taxes from April 15, 2012, until the tax is paid but no failure-to-pay penalties will be […]

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Notice for a Third-Party Summons

October 27, 2015

The IRS may compel a taxpayer or third party to produce records or to testify under oath at a hearing. This power is deemed necessary for the IRS to enforce the tax laws. If you receive a summons, you would be aware of it and be able to challenge the validity of handing over information […]

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