The IRS received a budget increase from President Obama and congress to help with tax compliance earlier this year. The IRS is using those funds wisely.

Doug Shulman, the IRS Commissioner made a speech at a Conference recently announcing a few changes or increased efforts regarding offshore accounts including a new “Global High Wealth Industry” group which will “centralize and focus IRS compliance expertise involving high-wealth individuals and their related entities.” The IRS is basically looking at how other countries have setup and effectively tracked high net-worth individuals. Right now the definition of a high net-worth individual hasn’t been defined, but Schulman suggested those individuals with “tens of millions” of dollars.

The IRS is set to hire hundreds of employees who have experience working with wealthy individuals. It has already begun hiring agents, flow-through specialists, and international examiners, who will be “conducting” reviews of rich US taxpayers. Moreover, the IRS also will be setting up new Criminal Investigation offices in Panama City, Beijing, and Sydney.

For those taxpayers who are staying under the radar, it is better to report foreign earnings and get into compliance now before the matters get worse. It is in your best interests as a taxpayer to amend tax returns or file unfiled taxes before the IRS finds you as IRS penalties and interest will continue to accumulate. As Mr. Schulman states, “for individuals with overseas income and assets, it’s straightforward. If you are a U.S.individual holding overseas assets, you must report and pay your taxes or we will be increasingly focused on finding you.”

Related posts:

1. IRS Gives Tax Evaders Till October 15th To Fess Up
2. Obama Seeks More Funds For Tax Compliance
3. Federal Employees Owe Over 3 Billion In IRS Back Taxes

The Oregon State legislature approved SB 880, on 6/29/09 that provides tax amnesty for state taxpayers and businesses with back taxes stemming from 2007 or later.  Taxpayers who need to file or amend a tax return may complete and send in the application before the November 19th deadline (it started October 1st, 2009)  in order to abate or remove penalties. Moreover, those who come forward will also benefit because the total interest amount due will be cut in half.  The Oregon State Department of Revenue (ODR) states as well that unfiled tax returns or tax returns that need to be amended must be filed before 1/19/2010.

The amnesty applies to personal income taxes, Transit district taxes on self-employment, excise and corporate income taxes as well as trust and estate taxes.  If you received a bill  or notice of deficiency already from the ODR already for a certain year, you cannot apply amnesty benefits to those taxes from that year.

Oregon state, like many other states, passed this one time measure in order to increase tax revenues that are declining in this economic downturn. If you owe taxes, this is your chance to lower your tax liabilities inexpensively because interest will be cut by 50% and penalties are completely waived.

In order to apply for this amnesty go to the Oregon Amnesty website, and complete the application in the top left column for the years applicable to you. They even have a nice interest calculator so you can figure what you owe in interest under the amnesty program. Next, fill or amend your tax return by January 19, 2010 (write the word Amnesty at the top of each return) and pay the taxes owed plus interest.

If you have any questions regarding the Amnesty program you can contact the Oregon Dept of Revenue toll-free at 1-800-356-4222 or you can reach out to us.

Related posts:

1. Philadelphia Tax Amnesty Ends June 25th – Act Now!
2. Massachusetts Tax Amnesty: Waive MA Tax Penalties 4/1/10 to 6/30/10
3. Florida Introduces Amnesty Program to Provide Back Tax Relief

In reporting your winnings or withholding, you will need to follow a few steps:

1) A payer must provide you with form W-2G
2) You need to put your winnings on Form 1040, line 21.
3) If you are itemizing deductions you can use the Schedule A, Form 1040 to report losses only up to the amount you won
4) To be eligible to deduct loses you need to show a receipt, or documentation of some kind to show both winnings and losses

If you have made a mistake and forgot to report  your winnings or losses you can correct this situation and amend a tax return. Back taxes, penalties, and interest can quickly accumulate.

Related posts:

1. What If I Have a Tax Lien on My Credit Report? How Do I Remove?
2. Amending A Tax Return – What To Know & Do