The Internal Revenue Service has updated its voluntary disclosure procedures for taxpayers with previously undisclosed funds, instituting tougher procedures.
IRS deputy commissioner for services and enforcement Kirsten Wielobob issued a memorandum last week that the IRS posted publicly Thursday, outlining the process for all voluntary disclosures following the closing of the IRS’s Offshore Voluntary Disclosure Program on Sept. 28, 2018. She noted in the memo that the 2014 OVDP began as a modified version of the OVDP that launched in 2012 after earlier programs in 2009 and 2011. “These programs were designed for taxpayers with exposure to potential criminal liability or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets,” she wrote. “They provided taxpayers with such exposure potential protection from criminal liability and terms for resolving their civil tax and penalty obligations.”
The new procedures are effective for all disclosures after Sept. 28, 2018. The penalties have grown steadily stiffer for taxpayers who continue to hide their funds in foreign bank accounts, and the latest version of the program may give taxpayers and tax practitioners pause.
“Under the new procedures, taxpayers will find that the cost of making a disclosure has increased,” commented Barbara Kaplan, a tax attorney and shareholder at the law firm Greenberg Traurig, in an email from the firm. “A number of things have changed: the number of years for the program, the application of penalties, a right to go to Appeals to contest the IRS findings after examination, the making of the offshore and domestic programs the same and the requirement to include an explanatory narrative. It also appears that the examination phase is more like a true IRS audit than just a compliance review.”
A fraud penalty, and a willful FBAR penalty for offshore cases where taxpayers intentionally failed to file a foreign bank account report, will now be applied to one of the six years of the disclosure period, or less if the noncompliance occurred over a shorter period of time, she noted.
“Additional civil penalties can be expected,” Kaplan wrote in an email. “CI [IRS Criminal Investigation] will continue to screen all disclosures to determine if a taxpayer is eligible to make the disclosure. Once pre-clearance is granted, the taxpayer will have to disclose the nature of the non-compliance, including a narrative providing facts and circumstances, assets, entities and any related parties or professional advisors involved in the noncompliance.”
That could have an impact on tax professionals who have advised taxpayers who have been hiding their funds. But taxpayers and their representatives will have to weigh the pros and cons of the new procedures.
“The amended or delinquent returns will be examined and, at the end of the process, it is expected that an agreement will be reached,” said Kaplan. “Cooperation with the civil examination is required and, if not given, could lead to revocation of preliminary acceptance into the program. At the end of the day, taxpayers who afford themselves of this process will be relieved of criminal exposure but not the civil ramifications. For those who do not have criminal exposure, this program should not be used.”
Showing posts with label bookkeeping. Show all posts
Showing posts with label bookkeeping. Show all posts
Friday, November 30, 2018
Monday, November 26, 2018
140,300 new accounting and auditing jobs predicted by 2026
Approximately
140,300 new jobs for accountants and auditors are expected to be created by the
year 2026, according to a new forecast.
The
Knowledge Academy, a training and qualification provider, analyzed the findings
from a Glassdoor report, “What’s Ahead for Jobs? Five Disruptions to Watch in
2018,” and estimated the number of jobs expected to grow the most by 2026. It
found that the U.S. will see large growth in tech-related roles in non-tech
industries such as finance, consulting and retail. However, many traditional
jobs will also increase through the ranks as technology continues to develop.
The
expected job gains come despite fears that artificial intelligence and
automation will eliminate jobs in many sectors. AI is already helping the
accounting, auditing and financial sectors, as well as many others. A recent
study by the Pew Research Centre found that 48 percent of Americans are
somewhat worried their job could be taken over by a robot and 25 percent are
very worried at this prospect. Despite those fears, the unemployment rate is at
its lowest point since 1969. According to the U.S Bureau of Labor Statistics,
the unemployment rate in October was 3.7 percent, with the number of unemployed
people in the U.S. around 6.1 million.
Besides
accounting and auditing, other sectors are expected to gain an even greater
number of jobs by 2026, according to The Knowledge Academy. They include home
health and professional care aides (1.1 million new jobs), waiters, food
service and cooks (907,700 new jobs), registered nurses (437,000 new jobs),
software developers (253,400 new jobs), janitors and cleaners (233,000 new
jobs), operations managers (205,900 new jobs), medical assistants (184,600 new
jobs), nursing assistants (164,000 new jobs), and construction laborers
(153,300 new jobs).
Saturday, July 21, 2018
Senate panel advances IRS commissioner and introduces IRS reform bill
A closely divided Senate Finance Committee advanced the nominee for the next Internal Revenue Service commissioner, Charles Rettig, by a vote of 14 to 13, but he awaits a vote by the full Senate.
Rettig is a tax attorney at the Beverly Hills law firm Hochman, Salkin, Rettig, Toscher & Perez, P.C. who has spent most of his career representing clients before the IRS. If he is confirmed by the full Senate, he would succeed acting commissioner David Kautter, who is also the Assistant Secretary of the Treasury for Tax Policy. Kautter has been acting commissioner since the end of John Koskinen’s term last November. Rettig would be coming in at a time when the IRS is dealing with the massive tax cuts law that Congress passed last December.
“For the IRS to implement the biggest tax overhaul in a generation, it is essential that the agency is fully staffed and led by a strong, capable commissioner,” said Senate Finance Committee chairman Orrin Hatch, R-Utah, in a statement. “The job of commissioner is further complicated by years of mistrust and scandals at the agency. Chuck Rettig is the right pick to both implement tax reform and restore trust in the IRS. I am pleased that the committee advanced his nomination, and I look forward to the Senate acting quickly on his nomination so he can get started on the hefty tasks he will be charged with as the agency’s leader.”
However, Democrats on the committee voted against confirming Rettig, in part as a protest against the IRS and the Treasury Department’s decision this week to let 501(c)4 tax-exempt organizations, such as political action groups, avoid listing the names of their donors (see Many political tax-exempts no longer required to report donors).
“The Trump administration has taken a qualified nominee and dumped him right in the middle of a dark-money political firestorm of their own creation,” said Sen. Ron Wyden, D-Ore., the ranking Democrat on the committee. “And a radical change in tax law regarding transparency and disclosure has dragged the IRS and Treasury into a swirling set of questions about the president’s foreign financial ties and motivations. As a result, this nomination is no longer an isolated debate that can begin without context.”
Despite their differences, Hatch and Wyden agreed to introduce bipartisan legislation Thursday aimed at reforming some of the IRS’s administrative practices, echoing legislation that already passed the House in April.
The Taxpayer First Act is also based on two 114th Congress bills (S. 3156 and S. 3157) that passed the Finance Committee unanimously in 2016. It aims to increase taxpayer protections and electronic filing; enhance whistleblower protections; reform policies concerning IRS employees; increase scrutiny of IRS audit criteria; and support prevention of identity theft and tax refund fraud.
“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority – especially with the largest rewrite of the tax code in more than three decades on the books,” Hatch said in a statement. “We’ve been working hand in glove with the administration to ensure a proper and seamless implementation of new policies and are confident this bill will streamline the agency in a way that protects taxpayers from fraud and abuse, increases electronic filing and supports IRS employees.”
“With every passing day there’s a new headline about hackers and crooks stealing taxpayer dollars and personal data,” Wyden stated. “Congress must do more to protect American taxpayers from fraud and financial abuse. This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators.”
Rettig is a tax attorney at the Beverly Hills law firm Hochman, Salkin, Rettig, Toscher & Perez, P.C. who has spent most of his career representing clients before the IRS. If he is confirmed by the full Senate, he would succeed acting commissioner David Kautter, who is also the Assistant Secretary of the Treasury for Tax Policy. Kautter has been acting commissioner since the end of John Koskinen’s term last November. Rettig would be coming in at a time when the IRS is dealing with the massive tax cuts law that Congress passed last December.
“For the IRS to implement the biggest tax overhaul in a generation, it is essential that the agency is fully staffed and led by a strong, capable commissioner,” said Senate Finance Committee chairman Orrin Hatch, R-Utah, in a statement. “The job of commissioner is further complicated by years of mistrust and scandals at the agency. Chuck Rettig is the right pick to both implement tax reform and restore trust in the IRS. I am pleased that the committee advanced his nomination, and I look forward to the Senate acting quickly on his nomination so he can get started on the hefty tasks he will be charged with as the agency’s leader.”
However, Democrats on the committee voted against confirming Rettig, in part as a protest against the IRS and the Treasury Department’s decision this week to let 501(c)4 tax-exempt organizations, such as political action groups, avoid listing the names of their donors (see Many political tax-exempts no longer required to report donors).
“The Trump administration has taken a qualified nominee and dumped him right in the middle of a dark-money political firestorm of their own creation,” said Sen. Ron Wyden, D-Ore., the ranking Democrat on the committee. “And a radical change in tax law regarding transparency and disclosure has dragged the IRS and Treasury into a swirling set of questions about the president’s foreign financial ties and motivations. As a result, this nomination is no longer an isolated debate that can begin without context.”
Despite their differences, Hatch and Wyden agreed to introduce bipartisan legislation Thursday aimed at reforming some of the IRS’s administrative practices, echoing legislation that already passed the House in April.
The Taxpayer First Act is also based on two 114th Congress bills (S. 3156 and S. 3157) that passed the Finance Committee unanimously in 2016. It aims to increase taxpayer protections and electronic filing; enhance whistleblower protections; reform policies concerning IRS employees; increase scrutiny of IRS audit criteria; and support prevention of identity theft and tax refund fraud.
“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority – especially with the largest rewrite of the tax code in more than three decades on the books,” Hatch said in a statement. “We’ve been working hand in glove with the administration to ensure a proper and seamless implementation of new policies and are confident this bill will streamline the agency in a way that protects taxpayers from fraud and abuse, increases electronic filing and supports IRS employees.”
“With every passing day there’s a new headline about hackers and crooks stealing taxpayer dollars and personal data,” Wyden stated. “Congress must do more to protect American taxpayers from fraud and financial abuse. This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators.”
Tuesday, June 5, 2018
GDPR can have an impact on U.S. accountants
The
European Union’s General Data Protection Regulation takes effect Friday, and it
could affect accountants and auditors, along with their clients, in the U.S.
Under
the GDPR, any company that gathers, monitors or manages the personal
information of EU residents will need to make drastic changes in how it gets
and stores the data. Companies in both Europe and the U.S. have been blitzing
consumers in recent weeks with emails about new user agreements and privacy
policies, while some U.S. businesses have announced they will need to exit the
European market.
“There’s
a lot of U.S. companies that are selling goods and services to individuals in
the EU, and there are many dotcom companies and ecommerce companies that have a
global footprint and are selling to people all over the world, even if their
employees and infrastructure are all in the United States,” said Jeffrey
Sanchez, security and privacy managing director at the global consulting firm
Protiviti. “Certainly GDPR applies to those organizations. GDPR also applies to
other brick and mortar companies that are selling goods and services, whether
it’s airplane parts, construction equipment, or a variety of finished products
in Europe, where GDPR is going to apply. The reach of GDPR is very broad. One
of the biggest changes between the previous privacy legislation and GDPR is
that GDPR applies to any company, regardless of where they’re physically
located if they’re selling goods and services to people inside the EU.”
Even
though the deadline for complying with the new rules is supposed to be Friday,
May 25, 2018, many businesses in the U.S. are only now hearing about the new
rules, and their accountants can help them get up to speed and audit their
compliance.
“Accountants
play lots of different roles,” said Sanchez. “If you talk about accountants
that play an internal audit role or advisory role, we see in many companies
internal audit playing a key role of assisting the organization with their
implementation of GDPR. For example, one of the requirements of GDPR is to
develop an inventory of all the processing activities. It’s called a Record of
Processing Activities, or a ROPA. Internal audit and the accounting people who
generally make up an internal audit function are uniquely positioned to be able
to assist the organization with developing that because internal auditors
generally have a very broad understanding of the organization. They’re very
process oriented and they have the skill sets and tools to do data flow maps. I
think internal audit in particular is very well suited to helping an
organization to go through this process.”
He
also sees a role for internal audit in evaluating whether a company is
complying with GDPR. “It’s not unlike auditing other regulations, going through
and assessing is the company following its policies and procedures,” said
Sanchez. “I think those are all activities that internal audit or accountants
working in a business consulting advisory type of model are very well suited
for assisting organizations.”
Accountants
might even be able to help with all those emails that have been hitting inboxes
recently. GDPR requires a lawful basis for processing of personal data by
companies, and in many cases companies have been updating their privacy
agreements while notifying customers about the changes.
“Organizations
that are subject to GDPR, those that are offering goods and services into
Europe, are going through and revamping their privacy policies,” said Sanchez.
“That’s why you see all these companies releasing new privacy statements and
privacy policies in the last couple of weeks. One of the requirements of GDPR
is that organizations have to have a legal basis for processing. That means that
there has to be a legitimate reason why the organization is allowed to use and
process the personal data on the European data subjects, so we also see a lot
of activity with organizations going through and updating consent language, or
documenting other legal bases of processing if they’re not using consent as the
basis of processing. I think that’s something accountants can help
organizations update their legal basis of processing and assist with the
documentation associated with that activity.”
Some
of the main requirements of GDPR include the right to access, which gives
people the right to obtain their data and to know how it’s being handled; the
right to rectification, allowing citizens to amend and correct their personal
data; and the right to erasure, also known as the right to be forgotten,
permitting subjects to request deletion of their related personal data.
Ready
or not, the GDPR takes effect Friday, so companies are scrambling now to comply
as best they can.
“The
European privacy authorities have all said there’s not going to be an
extension,” said Sanchez. “One of the privacy authorities stated that companies
have had two years to implement this. That was their two-year grace period, and
there’s not going to be any additional grace period, but I think what we’re
seeing in reality is many companies are not going to be 100 percent compliant
by the deadline, so this exercise of obtaining compliance is going to be an
ongoing activity.”
Many
businesses in the U.S. have never heard of GDPR or only heard about it
recently, so it’s not surprising the level of preparedness is low in this
country.
“My
experiences with companies in the United States is the awareness started
ramping up in late 2017,” Sanchez said Thursday. “Starting in early 2018, we saw
the acceleration of awareness, and companies are trying to rush through this.
But still a lot of organizations aren’t going to be compliant by tomorrow, and
we’re expecting to see the activity of organizations that are getting to
compliance continuing for many more months.”
Businesses
not only have to worry about their own compliance with the new data privacy
rules, but how well their business partners are complying as third parties who
handle their customers’ data.
“The
data controller is the organization that receives the data from the individual,
but all of the data processors, which could be vendors to the data controller,
all have to comply as well,” said Sanchez. “One of the things we’re seeing now
as well is every company is sending letters to every one of their vendors
asking them about their compliance with GDPR, asking them to sign privacy
addendums. You can imagine all of the different companies and all of the
different vendors — we’re talking about millions of these requests going around
right now — asking organizations to describe their controls or commit to comply
with GDPR. That effort alone is going to take a lot of time to evaluate all
those vendor relationships. That’s definitely one I’m seeing go past the
deadline for many companies.”
However,
companies that decide to ignore the new requirement could find themselves
facing heavy penalties. “The fines are enormous,” said Sanchez. “The European
authorities have the ability to fine up to 4 percent of global revenue. The
maximum fine is the greater of 20 million euros or 4 percent of global revenue.
That gets people’s attention. That can be a big number, and we do expect to see
the European authorities open investigations and actively enforce compliance.
That’s one of the things where there’s a little bit of wait and see as to what
happens starting tomorrow. The European authorities have hinted that they’re
intending to actively enforce GDPR.”
GDPR
Misconceptions
Robert
Cattanach, a partner at the international law firm Dorsey & Whitney and a
former trial attorney at the Justice Department, has been closely watching
developments with the GDPR and believes there are many misconceptions with it.
“Some
common misperceptions being heard around the U.S. and Canada include:
"If
I don’t have operations in Europe, it doesn’t apply. Wrong. Any U.S. company
offering goods or service to EU residents — i.e., anyone with a website — is
likely required to comply," Cattanach said in a statement.
“If
I am covered by the GDPR I have to appoint a Data Protection Officer (DPO) in
the EU. Wrong. A U.S. company’s obligation to appoint a DPO, or even a
designated representative, is a complex and highly fact-depedent analysis,”
Cattanach said.
"If
I am not covered by GDPR I don’t have to update my Privacy Policy. Wrong. A lot
has happened in the U.S. since companies started adopting boilerplate Privacy
Policies without really understanding what they were committing to do, and not
to do," Cattanach said. "Regardless of whether you are covered by
GDPR, basic principles of good information governance mandate a careful look at
your privacy policy and terms of use on your website. The biggest risk:
overstating who you share your data with. Virtually all websites employ
third-party data analytic services, which often open the door to opaque
gathering,mining, and trading of a person’s data in ways the website owner may
not understand at all — and often conflicts with commitments made to customers
and website visitors.”
"If
I’m a small to medium-sized U.S. company, there’s virtually zero chance of any
enforcement action against me so i can just wait until we understand better how
it’s all going to work. Maybe — maybe — right. EU regulators will likely target
the larger companies, especially U.S. tech companies, at first but GDPR allows
private citizens to lodge complaints, and even bring class actions,"
Cattanach said. "All it will take is one disgruntled customer or employee
whistle blower to spotlight someone who thought they could fly below the radar
for a few years. If your appetite for risk is voracious, you might avoid
detection for a while. But if you completely ignore GDPR and get caught, the
financial exposure to penalties and long-term scrutiny could be breathtaking.”
Sunday, May 27, 2018
Cómo Miami se convirtió en la capital de la clase media de América Latina
Mientras muchos inmigrantes llegan a Estados Unidos a
pie por la frontera con México, otros, con más recursos se instalan en la
ciudad más hispana del país en busca de seguridad y prosperidad.
Desde hace años, Miami es un paraíso de
sol, playa, fiesta y compras. Pero la capital más latina de Estados Unidos no
sólo atrae a turistas, sino también a latinos profesionales y pudientes que
buscan proteger sus inversiones y una vida tranquila.
Mientras miles de inmigrantes pobres
tratan de cruzar a Estados Unidos por la frontera sur de México, otros, mucho
más pudientes, llegan a Miami sin atraer tanta atención mediática y sin tanta
polémica.
Armados con permisos de trabajo,
con mayor formación que los latinos que llegan a pie por la frontera,
con altas expectativas y deseos de avanzar, muchos de ellos llegan a Miami
y compran casas con piscina, jardín y acceso a buenas escuelas.
Mientras el candidato republicano a la
presidencia Donald Trump promete construir un muro a lo largo de la frontera
con México, apenas se habla de los migrantes que llegan a Miami, una
metrópolis de 2,5 millones de habitantes, en la que casi el 70% de la población
es hispana.
El español se habla en casi todas las
partes y la mayoría lo asume sin verlo como un problema.
Puente
entre culturas
Juan Pablo Restrepo es de Colombia. Vive
con su mujer y su hijo cerca a la playa. Trabaja de curador musical en Mood
Media, una compañía que suministra música que se escucha en los comercios en
todo el país.
"Miami es muy atractivo para los
latinoamericanos. Pueden estar en Estados Unidos, con todas su ventajas,
pero al mismo tiempo mantener su raíces culturales", dice Restrepo a BBC
Mundo.
"También es un puente entre
ambas culturas, la anglo y la hispana. Si vas a otros lugares en el país,
sientes mucho más las tensiones raciales y culturales".
Restrepo es parte de la diáspora latina
que ha convertido Miami en la ciudad de Estados Unidos con el mayor porcentaje
de residentes nacidos fuera del país, cerca de un 51% de la
población, según Guillermo Grenier, profesor de Sociología de Florida
International University.
"Los cubanos comenzaron a llegar
(después de la Revolución) en 1959 y después de eso fueron llegando latinos
desde diferentes países", dice Grenier.
En los últimos años han seguido a los
cubanos cerca de 100.000 latinoamericanos de ingresos medios desde
Colombia, Argentina, Venezuela y Brasil, entre otros, dice el sociólogo a
BBC Mundo.
"Si eres un empresario de América
Latina puedes venir a Miami, porque tienes una audiencia, un mercado. Puedes
hacer cinco llamadas en español y establecer la infraestructura para tu
negocio", añade, y subraya que cerca del 25% de los negocios en el estado
de Florida son de propiedad de inmigrantes latinoamericanos.
IRS provides info on tax reform changes to moving, mileage and travel expenses
The
Internal Revenue Service offered information Friday about changes from the Tax
Cuts and Jobs Act on the rules for moving expenses, vehicle expenses and
unreimbursed employee expenses, along with higher depreciation limits for some
vehicles.
The
TCJA, the tax overhaul that Congress passed last December, suspends the
deduction for moving expenses for tax years beginning after Dec. 31, 2017,
until Jan. 1, 2026. During that suspension period, the IRS won’t allow deductions
for use of an automobile as part of a move using the mileage rate listed in
Notice 2018-03. However, the suspension doesn’t apply to members of the armed
forces on active duty who move because of a military order related to a
permanent change of station.
Unreimbursed
employee expense deduction
The
new tax law also suspends all miscellaneous itemized deductions subject to the
2 percent of adjusted gross income floor. The change has an impact on expenses
such as uniforms, union dues and the deduction for business-related meals,
travel and entertainment that the employer isn’t reimbursing.
That
means the business standard mileage rate listed in Notice 2018-03, which was
issued before the tax overhaul passed, can’t be used to claim an itemized
deduction for unreimbursed employee travel expenses in taxable years starting
after Dec. 31, 2017, and before Jan. 1, 2026. The IRS issued revised guidance
on the matter Friday in Notice 2018-42. It supersedes the earlier notice and
includes info about the update to the standard mileage rates, along with details
about the suspension of the deduction for operating a vehicle for moving
purposes.
2018
standard mileage rates
In
Notice 2018-03, which the IRS issued earlier this year, the standard mileage
rates for use of a car, van, pickup or panel truck for 2018 remain:
- 54.5 cents for every mile of business
travel driven, a 1 cent increase from 2017.
- 18 cents per mile driven for medical
purposes, a 1 cent increase from 2017.
- 14 cents per mile driven in service of
charitable organizations, which is set by statute and remains unchanged.
The
standard mileage rate for business comes from a yearly study of fixed and
variable costs of operating an automobile, while the rate for medical purposes
depends on variable costs.
Taxpayers
can opt to calculate the actual costs of using their vehicle instead of using
the standard mileage rates.
A
taxpayer can’t use the business standard mileage rate for a vehicle after using
any depreciation method under the Modified Accelerated Cost Recovery System or
after claiming a Section 179 deduction for that vehicle, however. On top of
that, the business standard mileage rate can’t be used for more than four
vehicles simultaneously.
Increased
depreciation limits
The
new tax law ups the depreciation limitations for passenger automobiles that
have been placed in service after Dec. 31, 2017, for purposes of calculating
the allowance under a fixed and variable rate plan. The maximum standard
automobile cost can’t exceed $50,000 for passenger automobiles, trucks and vans
that have been placed in service after Dec. 31, 2017. Prior to the change, the
maximum standard automobile cost was $27,300 for passenger automobiles and
$31,000 for trucks and vans.
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