Tax Law FAQ

Welcome to Tax Law FAQ

Below is a list of Frequently Asked Questions related to civil and criminal tax controversy and litigation.  Select the appropriate FAQ to view the questions and answers. We hope that you find this information both useful and informative.  

Please remember that the information contained herein is general in nature and is not intended, and should not be construed, as legal advice or as an opinion by the law firm. The material may not be applicable to, or suitable for, your specific circumstances or needs, and may require considerations of non-tax and other factors if any action is to be contemplated.  You should contact tax counsel prior to taking any action based on this information. We are here to help you, and so please feel free to contact the Firm about your specific case.

What are the IRS reporting obligations for an individual who receives a foreign gift or inheritance?

In general, a foreign gift is money or other property received by a U.S. person from a foreign person that the recipient treats as a gift or bequest and excludes from gross income. A “foreign person” is a nonresident alien individual or foreign corporation, partnership, or estate…

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What is an IRS voluntary disclosure and to what extent does it protect me against a criminal investigation?

It is currently the practice of the IRS that a voluntary disclosure will be considered along with all other factors in the investigation in determining whether criminal prosecution will be recommended. This voluntary disclosure practice creates no substantive or procedural rights for taxpayers, but rather is a matter of internal IRS practice, provided solely for guidance to IRS personnel…

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What happens if an individual fails to report a foreign bank account?

Federal law requires individuals to report annually to the Internal Revenue Service any financial interests they have in any bank, securities, or other financial accounts in a foreign country…

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What happens if a U.S. citizen renounces citizenship?

The Internal Revenue Code imposes a special alternative tax regime on U.S. citizens who renounce their citizenship…

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What is tax fraud?

Fraud is deception by misrepresentation of material facts, or silence when good faith requires expression, which results in material damage to one who relies on it and has the right to rely on it…

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What are the options if an individual or business owes money to the Internal Revenue Service or California Franchise Tax Board?

Both the IRS and FTB have the authority to collect a balance due through various enforcement actions including levies on wages, salary, and other income…

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Is my tax case criminal?

Many taxpayers understandably want to know whether their cases will be investigated by CI. The answer is never clear cut…

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What are the gift tax rules for U.S. citizens, residents, and nonresidents?

U.S. citizens and residents are subject to a maximum rate of 40% with exemption of $5 million indexed for inflation. Nonresidents are subject to the same tax rates…

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Am I an innocent spouse?

Perhaps you are going through a divorce and are concerned about being held responsible for your spouse’s tax liabilities, which you did not know about…

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Can a taxpayer refuse an IRS summons?

During an IRS investigation, the IRS has the authority to issue an administrative summons seeking records and testimony (Sec. 7602). The IRS may summon records, whether they are in the taxpayer’s or a third party’s possession…

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What are the options for resolving a case after an audit?

If the taxpayer agrees with the proposed changes, the taxpayer signs an agreement and pays any additional tax, interest and penalties that may be due. If the taxpayer does not agree…

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What happens in U.S. Tax Court?

If the taxpayer fails to respond to the 30-day letter and/or if no agreement is reached with the Appeals Officer, the IRS will issue a statutory notice of deficiency (also known as a 90-day letter or a “ticket to Tax Court”)…

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What are the options for an individual or business facing an audit by the California Franchise Tax Board?

An important strategic move is to present new evidence or legal argument and not simply re-hash the information already provided to the FTB auditor…
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What happens if an IRS Special Agent knocks on your door?

The first contact in an IRS administrative investigation (as opposed to a grand jury investigation) is when two IRS Special Agents travel to the taxpayer’s home and knock on the front door…

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How does the U.S. tax law impact green card holders?

Lawful permanent residents of the United States, also known as “green card holders”, have tax filing obligations with the Internal Revenue Service, even if they are living abroad…

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Do I qualify for penalty abatement?

Ordinary business care and prudence includes making provisions for business obligations to be met when reasonably foreseeable events occur…

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When can a transfer of legal title to real property trigger a tax reassessment in California?

Individuals who are considering changing ownership to real property should contact competent tax counsel, who can evaluate the case, explain the options, and provide legal advice…

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When is a trust subject to California income tax?

A trust can be subject to substantial penalties for failing to comply with its California tax obligations including failure to file and failure to pay penalties…

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