Due Dates and Penalties

Question 1

What is the General Filing Deadline?

Answer 1

Postmarked 4/15

Question 2

How does a TP file for an extension?

Answer 2

Send in Form 4868 or pay amount due with credit card

Question 3

What group receives an automatic extension for TWO months?

Answer 3

TP living outside the US or Puerto Rico on the due date because it’s:

1. his main business or post of duty
2. on-duty military service

Question 4

When are Non-Resident Alien tax returns due?

Answer 4

1. Non-Resident Alien with wages subject to withholdings are due 4/15
2. Non-Resident aliens not subject to wage withholdings 6/15

Question 5

When are returns for regular tax payers who filed form 4868 due?

Answer 5

1. return is due on the 10/15

2. money was due on the 4/15

Question 6

What is the due date for a decedent’s final return?

Answer 6

4/15

Question 7

What types of penalties are incurred if a taxpayer does not file his return?

Answer 7

1. Failure to file penalty: 5%/mth up to 25% of taxes owed
2. Failure to pay penalty: .5% of tax not paid up to 25% of tax owed (can offset failure to file penalty)
3. interest starting on original due date

Question 8

How can a taxpayer avoid interest and penalties?

Answer 8

1. file an extension on time: No failure to file penalty
2. If you send an estimated payment with extension that is no less than 90% of amount owed then there will be not failure to pay penalty

Question 9

What is an EIN?

Answer 9

Employer Identification Number

Question 10

What is the penalty for an employer that does not deposit their taxes on time? (must be willful)

Answer 10

1. 2% of deposit for 1-5 days late
2. 5% of deposit for 6-15 days late
3. 10% of deposit for 16+ days late

Question 11

What is an IP PIN? Why is it issued?

Answer 11

Identity Protection Personal Identification Number - issued when the taxpayer has had/wants to prevent identity theft issues

Question 12

What happens if a return is filed with the IRS without the IP PIN?

Answer 12

The return will be rejected

Question 13

How long do individual TPs need to keep records?

Answer 13

Until the statute of limitations runs out on a return.

Question 14

How long do employers need to keep records on employment taxes?

Answer 14

4 years after the due date of the return or payment

Question 15

What is the statute of limitations on a tax return if all income was reported and there was no fraud?

Answer 15

3 years

Question 16

Why do TPs use itemized deductions instead of standard deduction?

Answer 16

The itemized deduction amount is greater and will lower the tax liability more than the standard deduction would

Question 17

Can a TP amend a return in order to change between the standard deduction and itemized deductions?

Answer 17

Yes - file Form 1040x

Question 18

What types of returns are due on the 4/15?

Answer 18

1. general returns
2. NR aliens if wages are subject to withholdings
3. military - will receive auto extension if out of US/PR

Question 19

Why would a TP file a return if he does not meet the filing requirement?

Answer 19

1. To prevent someone else from filing under the TP’s name

2. start the statute of limitations count down

Question 20

What is the statute of limitations on a tax return where fraud has occurred?

Answer 20

no limit

Question 21

What is the statute of limitations when a TP has failed to file a tax return?

Answer 21

no limit

Question 22

How are US Citizen and Resident Alien returns different?

Answer 22

No Difference:

gft1. Both taxed on worldwide incomeT%$R”??????????????
2. Rules for filing income, estate, and gift tax returns are the same whether the citizen is in the US or abroad

Question 23

How are US Citizen and Nonresident Alien returns different?

Answer 23

1. Non-resident Aliens are only taxed on US source income
2. Exception: Non-Resident Alien chooses to file a return with a US citizen or Resident Alien then all worldwide income is reported

Question 24

What does voluntary disclosure mean? What is the voluntary disclosure period?

Answer 24

Voluntarily disclose potential criminal liability or civil penalties due to “willful” failure to report foreign/domestic assets
Period: most recent 6 years

Question 25

What penalties may be applied related to voluntary disclosure?

Answer 25

1. civil fraud penalty
2. Will FBAR penalty
3. Accuracy-related penalty
4. Failing to file information return
5. Special penalties ( excise tax, employment tax, estate and gift tax,etc.)

Question 26

Do TPs that follow voluntary disclosure of potential criminal or civil liability have the right to appeal?

Answer 26

yes

Question 27

What is a Publicly Traded Partnership (PTP)?

Answer 27

Any PS where an interest is traded on a established securities market regardless of the number of parnters

Question 28

Why does a Publicly Traded Partnership file form 1042?

Answer 28

to report withholdings on any distribution of income make to foreign partners.

Question 29

Can net income from a PTP be used to offset net losses form a PTP or other passive activity?

Answer 29

no

Question 30

How is a disallowed loss from a PTP handled?

Answer 30

A deduction can be taken in a year were there is net income
OR
A deduction in the year when TP disposes of his entire interest in PS