On January 11, 2012 National Taxpayer Advocate Nina E. Olson released her annual report to Congress, identifying the combination of the IRS’s expanding workload and declining resources as the most serious problem facing taxpayers. The result, the report says, is inadequate taxpayer service, erosion of taxpayer rights, and reduced tax compliance. The Advocate expressed her continuing concern that the IRS’s expanding use of automated processes to adjust tax liabilities is causing harm to taxpayers and recommended that Congress enact a comprehensive Taxpayer Bill of Rights.
Tax season is upon us, and Arnstein & Lehr’s Chicago partner Robert McKenzie helps shed some light on new rules for offshore foreign account filing. The Foreign Account Tax Compliance Act’s (FATCA) was passed in 2010 after Congress discovered the large number of Americans hiding their money in offshore accounts. The law states that every year, all foreign banks, worldwide, must send an information document on all Americans to the IRS. If a bank does not comply, the IRS can require American banks to withhold 30% of transactions between them. Listen to Bob McKenzie’s audio commentary here.