The United States Tax Court is a federal trial court established by Congress under Article I of the U.S. Constitution, section 8. The Tax Court specializes in adjudicating disputes over federal income tax, generally prior to the time at which formal tax assessments are made by the Internal Revenue Service. The U.S. Tax Court is not an agency of, and is independent of, the executive branch. The U.S. Tax Court is the only forum in which taxpayers may file a case without having first paid the disputed tax in full. Tax Court judges are appointed for a term of 15 years, subject to presidential removal for actions related to neglect, inefficiency, or malfeasance.
Top Tax Cases Of 2015: Bhutta v. IRS – Treaties And How They Affect Income Of Foreign Nationals
Legal System.
Issue
How can treaties between the United States and other countries affect the income of foreign nationals in the United States?
Facts
Bhutta, a citizen of Pakistan and a foreign medical school graduate, entered the United States in 2009 to participate in an internal medicine residency training program. During the three-year residency training program, for which he received an annual salary, Bhutta treated patients, with supervision; conducted and presented research; and supervised and trained third- and fourth-year medical students. His supervising and training of medical students consisted of having the medical students observe him during “rounds”, preparing the students for monthly examinations, and evaluating the students monthly.
Negligence or Tax Fraud? What is “Negligent” and What Is “Willful” Conduct to the IRS?
What does the IRS consider to be negligent or non-wilful conduct when it comes to tax-related activity like filing income tax returns and making deductions? What does it consider wilful conduct? When is such activity tax fraud?
Tax fraud is a general term which is defined as taxpayer’s intent to defraud the government by not paying taxes that the taxpayer knows are lawfully due. Tax fraud can be punishable either civilly, criminally, or both. Under federal law, civil violations are primarily located in Title 26 and criminal violations mainly in Title 18, respectively, of the United States Code (“U.S.C.”).
For Americans abroad, surviving in the world of FATCA and FBAR
In March, 2010, FATCA , or The Foreign Account Tax Compliance Act, was enacted by Congress to remedy a perceived growing problem with foreign banks facilitating and encouraging U.S. taxpayers to conceal assets in their financial institutions. Seventy-nine countries have since signed FATCA agreements with the IRS, which require the financial firms within each of the participating countries to report account data for accounts owned by U.S. taxpayers or face severe penalties.
Also, the IRS is now automatically exchanging digital financial account information with tax authorities in other countries.
WHAT IS AN OFFER-IN-COMPROMISE?
Taxpayers that are unable to pay their tax bill have several options. All is not lost. Taxpayers who can’t pay their tax liability or who create a financial hardship by paying this liability may take advantage of a federal tax program in which they utilize a mechanism known as an “Offer In Compromise” to resolve and settle these tax problems with finality. The Offer in Compromise (or “OIC” in IRS and legal jargon) program is not for everyone and the IRS advises that taxpayers explore all other payment options before submitting an OIC. An experienced tax professional is absolutely essential in all steps of the process of formulating, making, and awaiting the IRS to accept, an OIC.
PAYROLL TAX: THE TRUST FUND RECOVERY PENALTY
Employers must deduct taxes from
their employees’ wages. Employers must make tax deposits and payments on time or they are subject to a Trust Fund Recovery Penalty (“TFRP”). To avoid the TFRP, employers must make sure that all employment taxes are collected, accounted for, and paid to the IRS when required . There are three parts or types of payroll or employment taxes withheld from the employee and reported on form 941, filed quarterly:
SOCIAL SECURITY TAXES DEDUCTIONS
Is There A Right To A Refund Of, Or A Deduction For, Social Security Taxes Paid Based On The Fact That A Taxpayer Has Waived The Right To Receive Social Security Benefits Or Has Donated Social Security Taxes Or Benefits To The Government?
As long as they are taxes, there will be taxpayers that consider any and all arguments, schemes, and angles to avoid paying them. The 21st century has seen a rise in situations where some taxpayers are filing claims for refund of their Social Security taxes using meritless arguments which have consistently failed in the past and which will consistently fail in the future.
I HAVENT FILED A RETURN IN LAST 6 YEARS. HOW CAN I CATCH UP?
It is estimated that 7 million taxpayers fail to file their tax returns each year, which is approximately 5% of all filers. The Internal Revenue Service released results of a study that indicated that the federal government loses $28 billion annually. Unfortunately (for the IRS, perhaps not for the non-filers), the IRS has never had the resources to adequately track and keep record of these non-filings.
YOU HAVE A FOREIGN ACCOUNT? MEET THE FBAR
If you have a financial interest in or signature authority over a foreign financial account, the Bank Secrecy Act may require you to report the account yearly. The Act requires that each qualifying taxpayer file a FBAR or Report of Foreign Bank and Financial Accounts. The types of foreign financial accounts to which the Bank Secrecy Act applies this requirement includes a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds.
SOCIAL SECURITY TAXES DEDUCTIONS
As long as they are taxes, there will be taxpayers that consider any and all arguments, schemes, and angles to avoid paying them. The 21st century has seen a rise in situations where some taxpayers are filing claims for refund of their Social Security taxes using meritless arguments which have consistently failed in the past and which will consistently fail in the future.