Due Dates and Penalties Flashcards
What is the General Filing Deadline?
Postmarked 4/15
How does a TP file for an extension?
Send in Form 4868 or pay amount due with credit card
What group receives an automatic extension for TWO months?
TP living outside the US or Puerto Rico on the due date because it’s:
- his main business or post of duty
- on-duty military service
When are Non-Resident Alien tax returns due?
- Non-Resident Alien with wages subject to withholdings are due 4/15
- Non-Resident aliens not subject to wage withholdings 6/15
When are returns for regular tax payers who filed form 4868 due?
- return is due on the 10/15
2. money was due on the 4/15
What is the due date for a decedent’s final return?
4/15
What types of penalties are incurred if a taxpayer does not file his return?
- Failure to file penalty: 5%/mth up to 25% of taxes owed
- Failure to pay penalty: .5% of tax not paid up to 25% of tax owed (can offset failure to file penalty)
- interest starting on original due date
How can a taxpayer avoid interest and penalties?
- file an extension on time: No failure to file penalty
- 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
What is an EIN?
Employer Identification Number
What is the penalty for an employer that does not deposit their taxes on time? (must be willful)
- 2% of deposit for 1-5 days late
- 5% of deposit for 6-15 days late
- 10% of deposit for 16+ days late
What is an IP PIN? Why is it issued?
Identity Protection Personal Identification Number - issued when the taxpayer has had/wants to prevent identity theft issues
What happens if a return is filed with the IRS without the IP PIN?
The return will be rejected
How long do individual TPs need to keep records?
Until the statute of limitations runs out on a return.
How long do employers need to keep records on employment taxes?
4 years after the due date of the return or payment
What is the statute of limitations on a tax return if all income was reported and there was no fraud?
3 years
Why do TPs use itemized deductions instead of standard deduction?
The itemized deduction amount is greater and will lower the tax liability more than the standard deduction would
Can a TP amend a return in order to change between the standard deduction and itemized deductions?
Yes - file Form 1040x
What types of returns are due on the 4/15?
- general returns
- NR aliens if wages are subject to withholdings
- military - will receive auto extension if out of US/PR
Why would a TP file a return if he does not meet the filing requirement?
- To prevent someone else from filing under the TP’s name
2. start the statute of limitations count down
What is the statute of limitations on a tax return where fraud has occurred?
no limit
What is the statute of limitations when a TP has failed to file a tax return?
no limit
How are US Citizen and Resident Alien returns different?
No Difference:
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2. Rules for filing income, estate, and gift tax returns are the same whether the citizen is in the US or abroad
How are US Citizen and Nonresident Alien returns different?
- Non-resident Aliens are only taxed on US source income
- Exception: Non-Resident Alien chooses to file a return with a US citizen or Resident Alien then all worldwide income is reported
What does voluntary disclosure mean? What is the voluntary disclosure period?
Voluntarily disclose potential criminal liability or civil penalties due to “willful” failure to report foreign/domestic assets
Period: most recent 6 years
What penalties may be applied related to voluntary disclosure?
- civil fraud penalty
- Will FBAR penalty
- Accuracy-related penalty
- Failing to file information return
- Special penalties ( excise tax, employment tax, estate and gift tax,etc.)
Do TPs that follow voluntary disclosure of potential criminal or civil liability have the right to appeal?
yes
What is a Publicly Traded Partnership (PTP)?
Any PS where an interest is traded on a established securities market regardless of the number of parnters
Why does a Publicly Traded Partnership file form 1042?
to report withholdings on any distribution of income make to foreign partners.
Can net income from a PTP be used to offset net losses form a PTP or other passive activity?
no
How is a disallowed loss from a PTP handled?
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
