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IRS Hiring Agents in Abusive Transactions Group

  FAST PITCH NETWORKING - Posted: Dec.10 - By Lance Wallach


Here it is. Here is your proof of my predictions. Perhaps you didn’t believe me when I told you the IRS was coming after what it has deemed “abusive transactions,” but here it is, right from the IRS’s own job posting. If you were involved with a 419e, 412i, listed transaction, abusive tax shelter, Section 79, or captive, and you haven’t yet approached an expert for help with your situation, you had better do it now, before the notices start piling up on your desk.

A portion of the exact announcement from the Department of the Treasury:


Job Title: INTERNAL REVENUE AGENT (ABUSIVE TRANSACTIONS GROUP)
Agency: Internal Revenue Service
Open Period: Monday, October 18, 2010 to Monday, November 01, 2010
Sub Agency: Internal Revenue Service
Job Announcement Number: 11PH1-SBB0058-0512-12/13
Who May Be Considered:

  • IRS employees on Career or Career Conditional Appointments in the competitive service
  • Treasury Office of Chief Counsel employees on Career or Career Conditional Appointments or with prior competitive status
  • IRS employees on Term Appointments with potential conversion to a Career or Career Conditional Appointment in the same line of work


According to the job description, the agents of the Abusive Transactions Group will be conducting examinations of individuals, sole proprietorships, small corporations, partnerships and fiduciaries. They will be examining tax returns and will “determine the correct tax liability, and identify situations with potential for understated taxes.”
These agents will work in the Small Business/Self Employed Business Division (SB/SE) which provides examinations for about 7 million small businesses and upwards of 33 million self-employed and supplemental income taxpayers. This group specifically goes after taxpayers who generally have higher incomes than most taxpayers, need to file more tax forms, and generally need to rely more on paid tax preparers.” Their examinations can contain “special audit features or anticipated accounting, tax law, or investigative issues,” and look to make sure that, for example, specialty returns are filed properly.
The fines are severe. Under IRC 6707A, fines are up to $200,000 annually for not properly disclosing participation in a listed transaction. There was a moratorium on those fines until June 2010, pending new legislation to reduce them, but the new law virtually guarantees you will be fined. The fines had been $200,000 per year on the corporate level and $100,000 per year on the personal level. You got the fine even if you made no contributions for the year. All you had to do was to be in the plan and fail to properly disclose your participation.
You can possibly still avoid all this by properly filing form 8886 IMMEDIATELY with the IRS. Time is especially of the essence now. You MUST file before you are assessed the penalty. For months the Service has been holding off on actually collecting from people that they assessed because they did not know what Congress was going to do. But now they do know, so they are going to move aggressively to collection with people they have already assessed. There is no reason not to now. This is especially true because the new legislation still does not provide for a right of appeal or judicial review. The Service is still judge, jury, and executioner. Its word is absolute as far as determining what is a listed transaction.
So you have to file form 8886 fast, but you also have to file it properly. The Service treats forms that are incorrectly filed as if they were never filed. You get fined for filing incorrectly, or for not filing at all. The Statute of Limitations does not begin unless you properly file. That means IRS can come back to get you any time in the future unless you file properly.
If you don’t want these new IRS Agents, or any other IRS agents for that matter, to be earning their paychecks by coming after you, make sure you have done all you can to ensure that you have filed properly by reaching out for expert help today.

Don't let them take you in hand cuffs!

Seeking Shelter In Tax Shelters?

You might think you could spot a tax shelter a mile away.  Sometimes even experienced tax professionals have difficulty.  For Lance Wallach, spotting them is no trouble at all.     

Tax shelters are defined by the tax code to include any plan or arrangement having a significant purpose of avoiding or evading federal income tax. That sounds incredibly broad, for a huge number of transactions have tax ramifications as a significant purpose!  The key is whether the tax ramifications are the reason the person is entering into the transaction. 

IRS Issues Final Sec. 6707A Regulations

On September 2, 2011, the IRS issued final regulations concerning the section 6707A penalty.  Such a penalty is imposed on taxpayers who fail to include any information regarding a reportable transaction which was required to be disclosed. The final regulations follow the statutory language of section 6707A as amended by the Small Business Jobs Act of 2010, but do not give further guidance regarding the Service’s computation of the penalty. It is anticipated that such penalty computation guidance will be issued at a later date. Nonetheless, the final regulations do provide additional guidance concerning rescission of the penalty.

All of our consulting attorneys, CPAs & ex IRS Agents has over 25 years of professional experience!

CAUTION
IRS is attacking 419 plans, 419, 412i, 412(e)(3), Section 79, Captive Insurance, other benefit plans, and plans having life insurance

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