IRS Enforcement Actions
 The new administration is serious about enforcing existing laws and closing the tax gap as this is seen as being much more doable politically than raising taxes.
On May 7th, the administration unveiled a budget that would provide the IRS with $12.126 BILLION !
This includes $4.904 billion for enforcement actions, while $890 million is designated for "enhanced enforcement activities". Don't you have to wonder what that means? (and the IRS isn't saying!)
Specifically targeted will be a crackdown on offshore bank accounts. Individuals that wish to stop flying under the radar will be allowed to go through a voluntary disclosure program called the Offshore Income Reporting Initiative up until September 23rd of this year to come clean and not be subject to criminal and civil fraud penalties. This means any money you have in any account outside of the USA; it doesn't just mean tax havens the likes of Switzerland or the Bahamas.
The Initiative requires that taxpayers:
- File 6 years of back tax returns reflecting unreported foreign source income
- Calculate interest each year on unpaid tax
- Apply a 20% accuracy-related penalty under Code Sec. 6662 or a 25% delinquency penalty under Code Sec. 6651
- Apply a 20% penalty based upon the highest balance of the account in the past six years.
In return, IRS has agreed to not pursue:
- Charges of criminal tax evasion; and
- Other fraud and filing penalties including IRC Sec. 6663 fraud penalties (75% of the unpaid tax) and failure to file a TD F 90-22.1, Report of Foreign Bank and Financial Accounts Report, (FBAR) (the greater of $100,000 or 50% of the foreign account balance).
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Cutting Health-Care Costs
This means that there are tremendous financial savings to be had if we make healthy lifestyle choices and very significant tax savings if we make the tax savy choices in the type of health insurance plan we use to protect our family.
For both businesses and self-employed individuals, there are Health Savings Accounts (HSAs). HSAs are cheaper for employers to offer and cheaper for employees to purchase. In fact, there was an increase of more than 46% in the number of HSAs from January 2008 to January 2009, while HSA assets grew more than 62%, as reported by Celent , a research and consulting firm.
If this is of interest to you, we should discuss how you may stand to benefit from the tax and financial choices that may be available for you and your business.
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