The Internal Revenue Service reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes. The overall penalty structure for the new program is the same for 2011, except for taxpayers in the highest penalty category.  For the new program, the penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011.

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The Government needs money. On  February 11, 2011, the IRS announced a new off-shore account tax amnesty initiative. This program would be focused on encouraging any American taxpayer  with hidden/undisclosed offshore bank accounts to come forward, declare their account value and/or money in the account and pay taxes owed.  The new voluntary disclosure initiative will be available through Aug. 31, 2011.

The IRS decision to open a second special disclosure initiative follows continuing interest from taxpayers with foreign accounts.  The new initiative announced today – called the 2011 Offshore Voluntary Disclosure Initiative (OVDI) -- includes several changes from the 2009 Offshore Voluntary Disclosure Program (OVDP). The overall penalty structure for 2011 is higher, meaning that people who did not come in through the 2009 voluntary disclosure program will not be rewarded for waiting. However, the 2011 initiative does add new features.

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The economy is bleak, tax revenues are down, the deficit is expanding faster than Joey Chestnut's stomach after downing 68 Nathan's hotdogs. So what's the government to do? The answer is simple, unleash the IRS on preselected businesses, and have them audit four(4) areas ripe for generation of  additional taxes, penalties and interest. These four areas are; (i) employee v. independent contractor a/k/a how do you classify your workers?; (ii) expense reimbursement ; (iii) fringe benefits; and (iv) owner/officer compensation.

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Florida needs your money. As an incentive to induce taxpayers to come forward, the Florida Department of Revenue has instituted a Tax Amnesty program from July 1 until September 30, 2010. All taxes administered by the Department of revenue qualify except for unemployment taxes.

Amnesty It is the taxpayer’s opportunity to voluntarily pay unpaid taxes without being penalized and at a reduced interest rate.

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Why You Should Have an Estate Plan

The 2008 Presidential election is now over. It would appear that a "Change is coming" philosophy, may "CHANGE" the estate tax rates(increased) and such change may affect your current estate plan.

This "changed" enviroment should cause you to re-examine your present estate plan to take advantage of current tax laws and adjust for the future. In addition to taxes there are other non tax reasons to re-examine your estate planning and update your plan. You should re-examine your estate plan periodically and if any items listed on the following checklist impact you or a family member, you should consider changing your plan:

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The independent contractor “Hire”, is  an area that is getting increased scrutiny in Florida by the State because Florida needs money.  So, you must be aware and proactive in how you document worker status. Please keep in mind that a re-classification by the State will most likely lead to a Federal audit a few months later(they exchange information). So what steps you take now before an audit commences is crucial to your companies financial survival. From strictly a Florida law standpoint the following factors are crucial in determing independent contractor status:

• The worker maintains a separate business with his or her own work facility, truck, materials equipment, materials or similar accommodations
• The worker and/or his company  has an occupational license and has or applied for a federal employer identification number (unless the independent contractor is a sole proprietor who isn’t required to have a federal employer ID number)

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IRS and the State of Florida has announced a new audit program to ensure that workers are being classified properly as employees rather than independent contractors. In these times of economic peril, Employers seeking to reduce their overhead may attempt to reclassify or mis classify workers as independent contractors rather than employees. This reclassification if contested and overturned by the Internal Revenue Service will be a tax tsunami for the Employer. The taxes before penalties and interest an Employer maybe required to pay equal approximately 41.5% of compensation paid to the misclassified workers. In addition, if the Employer maintains any type of qualified retirement plan, the retirement plan maybe disqualified triggering more taxes, penalties and interest.

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As you probably know by now, as a result of end of 2010 political dealings: for the next two years, the Estate, Gift and Generation Skipping taxes are unified and you individually, can gift five million dollars in assets without tax penalty. This is a limited time opportunity that expires Dec. 31, 2012. On January 13, 2013, the estate and the gift amount will revert to one million dollars.

The 2010 tax law reinstated set the rate for the generation skipping transfer tax, estate and gift tax for 2011 and 2012 at 35% for amounts over five million dollars. This is the lowest rate of taxation in the last thirty years. The rate will increase to fifty five percent in 2013, unless the law changes again.

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