IRVINE, Calif., March 26, 2020 Treasury Secretary Steven Mnuchin indicated that the IRS would be ramping up enforcement efforts on high-earning individuals. If you have failed to file a tax return, have inflated deduction or credit utilization for expenses or activities that you did not incur or perform, unreported cryptocurrency income, or have foreign bank accounts that have not been declared annually, it is in your best interest to consult with an experienced tax attorney to discuss your potential exposure.
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IRS Historically Targeted Lower-Income Taxpayers Due to Complexity Issues, With New Funding Will Go After High-Earners
During the meeting with the House Ways and Means Committee on March 3rd, Mnuchin shared that he had recently directed the IRS Commissioner to free up resources to allow for the auditing of returns of high net-worth individuals. In addition to informing committee members of the IRS plan to audit those who have higher incomes, Mnuchin also reiterated the need for Congress to provide the additional funding for the IRS that was requested by the White House earlier this year.
Failure to File a Tax Return
Some of the lowest hanging fruit for the IRS involves going after taxpayers who have not filed a federal income tax return annually. Between Form 1099, K-1, Cash Reporting (especially cash moving or returning from offshore), Suspicious Activity Reporting, Know Your Customer Reporting and W-2 filings that are sent to the IRS by a payor or a bank or brokerage or other financial institution, and data analytics processes used by the IRS to determine why certain individuals have not filed income tax returns, it is easy for the Service to detect filing noncompliance. The willful failure to file a tax return can result in criminal prosecution and a defendant can be sentenced to up to a year in prison for each year a tax return was not filed. If the elements of Spies Evasion are present, felony convictions can carry 3 to 5 years in jail per count. With a six-year criminal statue, 30 years in jail is possible.
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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]
SOURCE Tax Law Offices of David W. Klasing, PC