Tax compliance can be one of the most confusing areas of law. As the tax rules have grown increasingly complex, following state and local tax codes can become a burdensome, time-consuming affair. In an increasingly globalized marketplace, many individuals and companies also work and do business in foreign countries. As an attorney with years of experience in taxation law, Steve Thienel understands the complexity of the tax code and will work tirelessly to ensure that you are both in full compliance with all regulations and that your tax liability has been minimized to the extent allowable by the law.
Because of the complexities of the Internal Revenue Code and the unique circumstances of each taxpaying person or business, tax preparation software cannot take the place of a knowledgeable professional. At Thienel Law, you are sure to benefit from special expertise in tax compliance.
With the ever-present threat of litigation, many individuals and businesses are understandably choosing to outsource their tax compliance. As a full-service tax law firm, Thienel Law can ensure that you and your businesses are in full compliance with all state, federal, and international tax obligations.
While specific compliance requirements vary depending on the person or business, Thienel Law focuses on proactively helping clients to both minimize risk and minimize his or her tax liability.
Domestic Tax Compliance
Steve Thienel is an experienced professional, knowledgeable in the tax regulations promulgated by the Internal Revenue Service and local and state governments. Here are a few of the most common issues when dealing with domestic tax compliance:
1. Individual Tax Compliance
The complexity of the federal tax code combined with the morass of overlapping domestic taxes can create a headache for any person or business. Tax attorney Steve Thienel works hard to ensure that you are always in full compliance with all tax codes and regulations. However, the work does not stop there. Thienel Law also ensures that individuals or businesses have utilized the tax code to minimize tax liability.
2. Multi-State Tax Compliance
Complying with the federal, state and local tax regulations can be difficult enough. For individuals and businesses that earn income or have investments in other states, compliance can become even more tricky. If not handled appropriately, an individual or business could end up with a much higher tax liability than necessary. Even worse, the individual or business could be liable for penalties or criminal prosecution depending on the severity of the violation.
Common issues of compliance relating to individuals and businesses that earn income in multiple states include:
- Sales tax. Sales taxes are collected by almost all states, but can sometimes be deducted depending on the purpose, the state, and corporate entity.
- Special fees and taxes. Some states impose fees and taxes on individuals and corporations if they derive any income in the state. Popular special fees and taxes can include environmental taxes, diesel fuel taxes, and excise taxes.
- Multi-state corporations. Generally, a multistate corporation is required to file multiple tax returns in different states – depending on where they are incorporated, where the company’s headquarters is located, and the states where the business operates.
3. Voluntary Compliance for Delinquent Taxes
For individuals that have failed to report taxable income to the Internal Revenue Service, the federal agency has a program that may help him or her come into compliance with the tax code through their Voluntary Disclosure Program.
The Voluntary Disclosure Program is widely available, and any U.S. resident, business or foreign person with unreported income, assets, or earnings derived in the United States may be available to take advantage of the program. While the program may still impose penalties on the person or business, it is unlikely to result in their criminal prosecution – a possible result if the tax evasion were not voluntarily reported, and instead discovered through an IRS investigation.
For individuals that cannot or will not partake in the Internal Revenue Code’s voluntary compliance program, he or she may be able to amend their prior tax returns.
International Tax Compliance
International or Offshore Tax Compliance, or complying with the income and assets earned in a foreign country, has become an increasingly necessary tool for Americans and businesses in the globalized marketplace.
In recent years, the IRS has started to more aggressively enforce the regulations pertaining to assets and income held by people and businesses in other countries. The federal government has been particularly aggressive in cracking down on tax evasion and criminal activity.
As part of this effort, the tax code and its reporting requirements have been ratcheted up even further. The United States Department of Treasury has created complex reporting requirements that affect almost every financial transaction that occurs outside of the country, including any foreign income or assets, any bank account held by an American overseas, and any trust or inheritance earned by an American overseas.
The Department of Treasury is not the only government entity that has increased enforcement for tax violations in recent years. The Internal Revenue Service’s Criminal Investigation Division now has a presence in eleven foreign countries. The agency has prosecuted hundreds of individuals and businesses in recent years.
With the increased obligations to businesses, the Internal Revenue Service has also taken advantage of new agreements and treaties with foreign banks. Currently, more than 100 countries and tens of thousands of financial institutions have “intergovernmental agreements” with the United States that mandate reporting of all financial transactions with United States citizens.
Thienel Law has significant experience in international tax compliance issues, including:
Individual International Income Tax
Thienel Law routinely handles cases involving international income tax and its effect on the domestic tax regulations promulgated by federal and local governments. This expertise also extends to common international tax situations, such as:
- If a client were seeking legal advice about the possible tax implications of expatriating or otherwise renouncing his or her American citizenship – for tax reasons, or other purposes.
- If a client were a green card holder and sought advice about tax compliance issues surrounding his or her citizenship and residency status in both their home country and America.
- If an American citizen or Green Card holder owned foreign real estate or any other foreign investment and sought advice about the tax implications of their ownership, as well as any potential profits or accrued value to the investment.
- If a foreign national were seeking to move to the United States and needed advice about the tax implications of their move – whether they are seeking temporary residency, permanent residency, or citizenship.
Offshore Voluntary Disclosure
The Offshore Voluntary Disclosure Program is an IRS program designed to help individuals and businesses who have willfully failed to report foreign income or foreign assets. This IRS program allows for those individuals or entities who have failed to report their foreign income or taxes to resolve their tax liability while, at the same time, being protected from any criminal charges that would otherwise be imposed on the person or business.
Importantly, this is a voluntary program which means that once the IRS has begun their investigation or filed charges, the option to take part in this program is no longer available.
Streamlined Offshore Compliance Procedures
In 2014, the IRS enacted new offshore compliance procedures aimed at taxpayers who had inadvertently omitted income on their tax returns. The two main programs that came out of the new IRS procedures are the Streamlined Foreign Offshore Procedures (“SFOP”) and the Streamlined Domestic Offshore Procedures (“SDOP”).
In SFOP, a U.S. Citizen or Green Card holder who has lived outside of the United States for at least one of the last three years can amend up to three years of their tax returns. All penalties and fees for late payment will be waived.
In SDOP, a U.S. Citizen or Green Card holder who has not lived outside of the United States for at least one of the last three years will also be able to amend up their tax returns for the last three years. Notably, for this group that did not live outside of the United States, there is a 5 percent penalty assessed for any undeclared foreign assets or income.
Experience You Can Trust
With the increasingly complex federal tax code and its overlap between state, local, and foreign regulations, ensuring that your business or personal taxes are complying with all regulations has become an almost impossible task. Experienced tax compliance attorney Steve Thienel is prepared to ensure that you are paying the minimal amount of taxes allowable by law. By reducing your tax burden and ensuring compliance, you can focus on earning and spending the money that you earn, or, if you are a business, growing your profits.