Tax Alert-
A January 10, 2023 notice granting relief to victims of severe winter storms, flooding and mudslides that began on January 8, 2023, in parts of California was updated by the IRS on February 23, 2023, to clarify language in the fourth paragraph of the notice. The IRS clarified that the October 16, 2023, deadline also applies to the quarterly estimated tax payments, normally due on January 17, April 18, June 15 and September 15, 2023. The notice was updated on 1/11/23, 2/23,23 and recently on 4/26/23. Affected taxpayers who are contacted by the IRS on a collection or examination matter should contact a tax professional who can explain how the disaster impacts the taxpayer so that the IRS can provide appropriate consideration to their case.
Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Newport Beach and Yorba Linda, California
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)
California Disaster IRS Tax Relief Notice Updated
2018 Is Benchmark Year For Upcoming IRS Audit Rates
The Internal Revenue Service will use 2018 as the benchmark year for determining audit rates as it plans to increase enforcement for those individuals and businesses making more than $400,000 per year.
The agency is "going to be focused completely on … closing the gap," IRS Commissioner Daniel said April 27, 2023, during a hearing of the House Ways and Means Committee. "What that means is the audit rate, the most recent audit rate, we have that’s complete and final is 2018. That is the rate that I want to share with the American people. The audit rate will not go above that rate for years to come because for the next several years, at least, we’re going to be focused on work that we’re doing with the highest income filers."
Werfel added that even if the IRS were to expand its audit footprint a few years from now, "you’re still not going to get anywhere near that historical average for quite some time. So, I think there can be assurances to the American people that if you earn under $400,000, there’s no new wave of audits coming. The probability of you being audited before the Inflation Reduction Act and after the Inflation Reduction Act are not changed at all."
He also noted that many of the new hires that will be brought in to handle enforcement will focus on the wealthiest individuals and businesses. Werfel said that there currently are only 2,600 employees that cover filings of the wealthiest 390,000 filers and that is where many of the enforcement hires will be used.
"We have to up our game if we’re going to effectively assess whether these organizations are paying what they owe," he testified. "So, it’s about hiring. It’s about training. And it’s not just hiring auditors, it’s about hiring economists, scientists, engineers. And when I [say] scientists, I mean data scientists to truly help us strategically figure out where the gaps are so we can close those gaps."
Werfel did sidestep a question about the potential need for actually increasing the number of audits for those making under $400,000. When asked about a Joint Committee on Taxation report that found that more than 90 percent of unreported income actually came from taxpayers earning less than $400,000, he responded that "there is a lot of mounting evidence that there is significant underreporting or tax gap in the highest income filers. For example, there’s a study that was done by the U.S. Treasury Department that looked at the top one percent of Americans and found that as much as $163 billion of tax dodging, roughly."
And while answering the questions on the need for more personnel to handle the audits of the wealthy, he did acknowledge that "a big driver" of needing such a large workforce to handle the filings of wealthy taxpayers is due to the complexity of the tax code, in addition to a growing population, a growing economy, and an increasing number of wealthy taxpayers.
As we continue to see an uptick in audits for high income earners, having well-qualified tax professionals as representatives becomes even more essential. Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Newport Beach and Yorba Linda, California
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)
FTB Extends filing deadline to 10/16/23 Due to Storms
- Individuals whose tax returns and payments are due on April 18, 2023.
- Quarterly estimated tax payments due January 17, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
- Business entities whose tax returns are normally due on March 15 and April 18.
- Pass-through Elective (PTE) Tax payments due on June 15, 2023.
The following counties are eligible for this extended tax relief, per the IRS January 10 announcement and IRS January 24 announcement:
Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, and Yuba counties who have been affected by severe winter storms, flooding, landslides, and mudslides are eligible for tax relief.
Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Newport Beach and Yorba Linda, California
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)
FTB extends filing deadline for taxpayers impacted by 2022-23 winter storms to Oct. 16, 2023
Sacramento CA
Repost
Tax Relief
The IRS announced tax relief for Californians affected by the recent winter storms. Taxpayers affected by these storms may qualify for an extension to October 16, 2023, to file an individual extension and business tax to claim 
tax payments.
This includes:
• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• Pass-through Elective (PTE) Tax payments due on June 15, 2023.
The following counties are eligible for this extended tax relief, per the IRS January 10 announcement and IRS January 24 announcement:
Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, and Yuba counties who have been affected by severe winter storms, flooding, landslides, and mudslides are eligible for tax relief.
For further information, or to arrange a consultation please contact Wilson Tax Law group, APLC. We will be more than happy to assist. As a former IRS trial lawyers a former Assistance US Attorneys in the Tax Division we are happy to share show up at the mall.
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Newport Beach and Yorba Linda, California
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)
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IRS Routinely Violates the Collection Statute of Limitations
Press Release
FOR IMMEDIATE RELEASE
TIGTA Report Number: 2022-10-043
Newport Beach, California
A recent August 19, 2022 Treasury Inspector General For Tax Administration ("TIGTA") report held the inspector continued to identify errors related to the suspension of the collection Statute Expiration Date ("CSED") on taxpayer accounts. TIGTA found that 18 (20 percent) of the 91 cases reviewed had an incorrect CSED. In TIGTA's prior year review, it identified 19 percent of cases had CSED errors (15 taxpayer accounts from a sample of 81). The CSED is the expiration of the time period established by law to collect taxes. The CSED is normally 10 years from the date of the tax assessment. Once a liability is assessed, the statute of limitations for collection begins to run. The expiration of the collection statute ends the Federal Government’s right to pursue collection of a liability. When a request for a CDP hearing is timely received, the IRS suspends the CSED from the receipt date of the CDP hearing request until the date the Appeals determination is made final or the date the IRS receives the taxpayer’s withdrawal request. For this review, TIGTA identified:
• 10 CDP cases had the CSED incorrectly extended. As a result, the IRS has more time to collect delinquent taxes than it was authorized. Additional collection activity creates an unnecessary burden on the taxpayer. Based on our sample results, TIGRA estimates that the IRS may have improperly extended the CSED for 3,233 of 28,667 CDP cases closed in FY 2021;
• 8 CDP cases had the CSED incorrectly shortened. As a result, the IRS has less time to collect any outstanding balance due from the taxpayer than it was authorized. Based on TIGTA's sample results, it estimates that the IRS may have inadvertently shortened the CSED for 2,586 of 28,667 CDP cases closed in FY 2021.
Calling this almost a wash would be inappropriate considering this means the IRS violated the collection the statute in an estimated 5,819 cases. Appeals management agreed with all of the errors TIGTA identified and stated that the CSED errors were a result of human error. Hopefully the IRS improves training on this to allow the statute to be correctly applied. It also means anytime a taxpayer owes taxes it is extremely important that the collection statute expiration date be examined. If the statute has expired it is legally impermissible for the IRS to collect the debt owed and it should release the tax liens.
Wilson Tax Law Group, APLC is an Orange County law firm specializing in Federal and State tax audits, internal compliance, FBAR, offshore bank account disclosures, and criminal tax, including appeals, trials, and collections. The Los Angeles and San Francisco Daily Journals have named Wilson Tax Law Group, APLC as one of the “Top 20 Boutique Firms in California”.
Newport Beach Main Office
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Newport Beach, CA 92660
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Yorba Linda, CA 92886
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Fareedeh Wilson
Press Relations
Wilson Tax Law Group, APLC
Newport Beach, California
949-397-2292