Individuals who cheat on their income tax reporting have more to worry about these days. First, the IRS offers a take to whistleblowers on the taxes collected from anyone reported as a cheater. Larger collections cause increased rewards. In addition, a report by the Treasury Inspector General for Tax Administration states that the IRS criminal division is more efficient in both prosecution and conviction.
Both actions create new enrolled agent job opportunities to help taxpayers. In many situations, taxpayers need to simply understand tax reporting errors that are potentially criminal.
In fiscal year 2010, the IRS criminal division reduced its time to complete a case to 365 days from 401 days in the prior year. The division initiated 4,700 cases and completed 4,300 in fiscal year 2010. Most significantly, a greater number of cases addressed only tax matters as the legal source. In the past, more tax cases were add-on charges to drug running or money laundering trials.
Tax cheating situations can continue for long periods without taxpayers realizing the implications. Some situations are unintentional. For example, enrolled agent study guides address unusual matters where implied rental income exists. This can occur when a tenant pays no direct rent but pays the property owner’s mortgage payments. These amounts are reportable as rent income by enrolled agent work for such property owners.
Informing taxpayers about the IRS whistleblower program is a technique enrolled agents use to convey the importance of revealing all scenarios that might encompass taxable events. These possibilities can entail gift tax as well as income tax issues.
Fortunately, enrolled agent training includes gift tax situations so that EAs can help on accurate reporting in these matters. Examples occur when individuals give property to their relatives and forget that a gift tax return is due. This is …Continue reading