Form 8938: Who Must File The Frankenstein Son of FBAR

In an earlier article, I discussed in general that the IRS imposed a new tax reporting requirement on individual taxpayers who hold specified foreign financial assets with an aggregate value exceeding a relevant threshold. Such taxpayers will need to report those assets on the new IRS Form 8938, which must be attached to the taxpayer’s [...]

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Differences between 501(c)(3) and 501(c)(6) Organizations

Are you thinking of creating a tax-exempt organization under federal income tax law? Tax-exempt organizations can provide extraordinary benefits to their members and society, but forming such organizations may entail significant knowledge of the law, as well as the ability to pay expensive application fees. In this article I will briefly explain the basic differences [...]

IRS Tax Gaps Estimates Show Taxpayers owe $385 Billion in 2006 Taxes

The Internal Revenue Service recently released new “tax gap” estimates for tax year 2006, showing that taxpayers owe $385 Billion (an increase of about 1/3 over the tax gap from tax year 2001).  The tax gap is defined as the amount of tax liability owed by taxpayers that is not timely paid. The tax gap [...]

IRS Declares New 2012 Offshore Voluntary Disclosure Program

On January 9, 2012, the Internal Revenue Service announced that it opens another offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs. The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following [...]

Social Security Wage Base Increase in Tax Year 2012

In November of 2011, the Social Security Administration announced that the wage base (also known as “contribution and benefit base”) used for computing the social security tax is increased to $110,100 in the tax year 2012.  The wage base is used to compute the maximum amount of income subject to the Social Security taxes. This [...]

IRS Extends the 2011 Tax Return Filing Deadline to April 17, 2012

On January 4, 2012, the Internal Revenue Service announced that the taxpayers will have until  April 17, 2012 (Tuesday) to file their 2011 tax returns and pay any tax due.  This is because April 15, 2012, falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls this year on [...]

Limitations to the Non-Recognition Rules for Asset Transfers to Foreign Corporations

Are you thinking of transferring appreciated property to a foreign corporation in order to utilize the corporate “non-recognition” rules, and to possibly avoid further US taxes? You should be aware that while in certain circumstances it is feasible to transfer such property in order to properly run a business, there are many limitations placed upon [...]

Current Basic Estate and Gift Tax Rules

With the new year upon us, it’s a good time to review the federal estate and gift tax rules in order to utilize them to their maximum effect. Taxpayers should also be aware that certain beneficial gift and estate tax laws may expire at the end of this year and revert back to the pre-Economic [...]