The IRS stopped processing paper returns at the end of March to comply with coronavirus-related social distancing and stay-at-home guidelines; Rich Edson reports.<\/p>\n
The IRS is launching a campaign this fall to audit U.S. companies that have overseas earnings and have not paid the taxes owed on that money.<\/p>\n
A new compliance initiative announced by the IRSs Large Business and International Division earlier this month pertains to section 965 of the Revenue Code added by the 2017 tax reform law which requires U.S. shareholders to pay a transition tax on untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.<\/p>\n
The IRS stated on its website that it is working to alert potentially impacted taxpayers about the obligations and an official from the agency said on Wednesday that it expects to send thousands of letters starting in October.<\/p>\n
IRS SPENT MILLIONS ON AUDITS THAT RETURNED NO REVENUE, REPORT FINDS<\/p>\n
Shareholders can include individuals, S corporations, partnerships, estate, trusts, cooperatives and tax-exempt organizations. Accumulated post-1986 deferred foreign income may be subject to the tax.<\/p>\n
CORONAVIRUS COULD CAUSE NEW YORK TO RAMP UP AUDITS OF WEALTHY TAXPAYERS<\/p>\n
Prior to the law, individuals could defer taxes on income through investment in a foreign company.<\/p>\n
According to the tax agency, there is a related deduction that lowers the effective tax rate to between 8 percent and 15.5 percent.<\/p>\n
Taxpayers can choose to pay the one-time transition tax in a lump sum or over an eight-year period. For many, 2020 marks the third installment of payments.<\/p>\n
Failure to comply with the law could result in interest and penalties.<\/p>\n
CLICK HERE TO READ MORE ON FOX BUSINESS<\/p>\n
As tax compliance among large businesses, in particular, has proven to be challenging for the IRS.<\/p>\n
Of the 10,755 returns that were analyzed and closed by the LBI division during fiscal years 2015 through 2018, a report by theTreasury Inspector General for Tax Administrationfound that 47.2 percent were closed with no change to the return. The agency estimated that accounting for the costs of examining the returns about $22.7 million was spent on these returns, which generated no additional revenue for thegovernment.<\/p>\n
GET FOX BUSINESS ON THE GO BY CLICKING HERE<\/p>\n
<\/p>\n
Read the original: <\/p>\n
IRS gears up to target people, companies with taxes due on offshore earnings - Fox Business<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The IRS stopped processing paper returns at the end of March to comply with coronavirus-related social distancing and stay-at-home guidelines; Rich Edson reports. Continue reading