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.
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.