Newsletter issue Summer 2014 www.smolevlaw.com 516-931-9500

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!Taxpayer Bill of Rights!WASHINGTON ― The Internal Revenue Service announced the adoption of a "Taxpayer Bill of Rights" that will become a cornerstone document to provide the nation's taxpayers with a better understanding of their rights.

The Taxpayer Bill of Rights takes the multiple existing rights embedded in the tax code and groups them into 10 broad categories, making them more visible and easier for taxpayers to find on IRS.gov.

Publication 1, "Your Rights as a Taxpayer," has been updated with the 10 rights and will be sent to millions of taxpayers this year when they receive IRS notices on issues ranging from audits to collection. The rights will also be publicly visible in all IRS facilities for taxpayers and employees to see.

"The Taxpayer Bill of Rights contains fundamental information to help taxpayers," said IRS Commissioner John A. Koskinen. "These are core concepts about which taxpayers should be aware. Respecting taxpayer rights continues to be a top priority for IRS employees, and the new Taxpayer Bill of Rights

summarizes these important protections in a clearer, more understandable format than ever before."

The IRS released the Taxpayer Bill of Rights following extensive discussions with the Taxpayer Advocate Service, an independent office inside the IRS that represents the interests of U.S. taxpayers. Since 2007, adopting a Taxpayer Bill of Rights has been a goal of National Taxpayer Advocate Nina E. Olson, and it was listed as the Advocate’s top priority in her most recent Annual Report to Congress.

"Congress has passed multiple pieces of legislation with the title of 'Taxpayer Bill of Rights,'" Olson said. "However, taxpayer surveys conducted by my office have found that most taxpayers do not believe they have rights before the IRS and even fewer can name their rights. I believe the list of core taxpayer rights the IRS is announcing today will help taxpayers better understand their rights in dealing with the tax system."

The tax code includes numerous taxpayer rights, but

they are scattered throughout the code, making it difficult for people to track and understand. Similar to the U.S. Constitution’s Bill of Rights, the Taxpayer Bill of Rights contains 10 provisions. They are:

1.The Right to Be Informed

2.The Right to Quality Service

3.The Right to Pay No More than the Correct Amount of Tax

4.The Right to Challenge the IRS’s Position and Be Heard

5.The Right to Appeal an IRS Decision in an Independent Forum

6.The Right to Finality

7.The Right to Privacy

A selection of informative art icles from the Smolev Law blog

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8.The Right to Confidentiality

9.The Right to Retain Representation

10.The Right to a Fair and Just Tax System

The rights have been incorporated into a redesigned version of Publication 1, a document that is routinely included in IRS correspondence with taxpayers. Millions of these mailings go out each year. The new version has been added to IRS.gov, and print copies will start being included in IRS correspondence in the near future.

The timing of the updated Publication 1 with the Taxpayer Bill of Rights is critical because the IRS is in the peak of its correspondence mailing season as taxpayers start to receive follow-up correspondence from the 2014 filing season. The publication initially will be available in English and Spanish, and updated versions will soon be available in Chinese, Korean, Russian and Vietnamese.

The IRS has also created a special section of IRS.gov to highlight the 10 rights. The web site will continue to be updated with information as it becomes available, and taxpayers will be able to easily find the Bill of Rights from the front page. The IRS internal web site for employees is adding a special section so people inside the IRS have easy access as well.

As part of this effort, the IRS will add posters and signs in coming months to its public offices so taxpayers visiting the IRS can easily see and read the information.

"This information is critically important for taxpayers to read and understand," Koskinen said. "We encourage people to take a moment to read the Taxpayer Bill of Rights, especially when they are interacting with the IRS. While these rights have always been there for taxpayers, we think

the time is right to highlight and showcase these rights for people to plainly see."

"I also want to emphasize that the concept of taxpayer rights is not a new one for IRS employees; they embrace it in their work every day," Koskinen added. "But our establishment of the Taxpayer

Bill of Rights is also a clear reminder that all of the IRS takes seriously our responsibility to treat taxpayers fairly.

Koskinen added, "The Taxpayer Bill of Rights will serve as an important education tool, and we plan to highlight it in many different forums and venues."

Offshore ComplianceWASHINGTON — The Internal Revenue Service announced major changes in its offshore voluntary compliance programs, providing new options to help both taxpayers residing overseas and those residing in the United States. The changes are anticipated to provide thousands of people a new avenue to come into compliance with their U.S. tax obligations. The changes include an expansion of the streamlined filing compliance procedures announced in 2012 and important modifications to the 2012 Offshore Voluntary Disclosure Program (OVDP). The expanded streamlined procedures are intended for U.S. taxpayers whose failure to disclose their offshore assets was non-willful. “This opens a new pathway for people with offshore assets to come into tax compliance,” said IRS Commissioner John Koskinen. “The new versions of our offshore programs reflect a carefully balanced approach to ensure everyone pays their fair share of taxes owed. Through the changes

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we are announcing today, we provide additional flexibility in key respects while maintaining the central components of our voluntary programs.” Balanced against the modified programs is the government’s ongoing effort to combat the misuse of offshore assets. The IRS, working closely with the U.S. Department of Justice, continues to investigate foreign financial institutions that may have assisted U.S. taxpayers in avoiding their tax filing and payment obligations. In addition, on July 1, the new information reporting regime resulting from the Foreign Account Tax Compliance Act (FATCA) will go into effect. Thousands of foreign financial institutions will begin to report to the IRS the foreign accounts held by U.S. persons. The current Offshore Voluntary Disclosure Program was launched in 2012 and is the successor to prior voluntary programs offered in 2011 and 2009. Since the launch of the first program, more than 45,000 taxpayers have come into compliance voluntarily, paying about $6.5 billion in taxes, interest and penalties. The expansion of the streamlined procedures and modifications to OVDP reflect the thoughtful input of the tax community given the growing awareness among U.S. taxpayers of their offshore tax obligations. “Through our enforcement efforts and implementation of FATCA, taxpayers are more aware of their obligations, and we believe want to come into compliance,” Koskinen said. “In this rapidly changing

environment, we listened to feedback from the tax community as well as the National Taxpayer Advocate about our voluntary programs. We have made important adjustments to provide opportunities for all U.S. taxpayers to come in, including those who are not willfully hiding assets.” Streamlined Procedures Expanded The changes announced today make key expansions in the streamlined procedures to accommodate a wider group of U.S. taxpayers who have unreported foreign financial accounts. The original streamlined procedures announced in 2012 were available only to non-resident, non-filers. Taxpayer submissions were subject to different degrees of review based on the amount of the tax due and the taxpayer’s response to a “risk” questionnaire. The expanded streamlined procedures are available to a wider population of U.S. taxpayers living outside the country and, for the first time, to certain U.S. taxpayers residing in the United States. The changes include:•Eliminating a requirement that the taxpayer have $1,500 or less of unpaid tax per year;

•Eliminating the required risk questionnaire;•Requiring the taxpayer to certify that previous failures to comply were due to non-willful conduct. For eligible U.S. taxpayers residing outside the United States, all penalties will be waived. For eligible U.S. taxpayers residing in the United States, the only penalty will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue. Offshore Voluntary Disclosure Program (OVDP) Modified The changes announced today also make important modifications to the OVDP. The changes include:•Requiring additional information from taxpayers applying to the program;•Eliminating the existing reduced penalty percentage for certain non-willful taxpayers in light of the expansion of the streamlined procedures;

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•Requiring taxpayers to submit all account statements and pay the offshore penalty at the time of the OVDP application;•Enabling taxpayers to submit voluminous records electronically rather than on paper;•Increasing the offshore penalty percentage (from 27.5% to 50%) if, before the taxpayer’s OVDP pre-clearance request is submitted, it becomes public that a financial institution where the taxpayer holds an account or another party facilitating the taxpayer’s offshore arrangement is under investigation by the IRS or Department of Justice.!

Staying SafeProvided by The Alzheimer’s Foundation of America (AFA)!Dear Friend,

Each year, the AFA receives thousands of calls and emails from people all over the country who are suddenly finding themselves or people they love displaying symptoms of dementia -- and they are uncertain what to do.  Most often, the first emotion is alarm. 

•"My wife left the burners on and almost burned the house down." 

•"My grandfather is repeatedly being scammed by telemarketers." 

•"I keep getting lost when I drive to the store."  

Although everyone's story is unique, there is really one fundamental question being asked:  How can I stay safe?  How can I keep my loved one safe?  

Feeling safe is fundamental to well-being.  This is true for both the loved one in need of care and the caregiver. 

Now is a good time to remind you that the Alzheimer's Foundation of America (AFA) is here to help.   Call us at 866-232-8484 or email us at info@alzfdn.org.   We will help you feel safe again.

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Free Safety Tips

AFA's Website has many educational resources that can help you maintain your loved one's safety.

Tips for Safe-Proofing -

What you'll need to consider when getting started on safe-proofing your loved one's home. 

Home Safety Checklist - A list of practical changes to promote safety.

Preventing Falls - What to do to prevent falls, a leading cause of injury and hospitalization for individuals with Alzheimer's disease.

Hospitalization - A comprehensive discussion of how to reduce the risk of hospitalization and how best to cope with an unavoidable hospital stay. 

Driving - A list of successful interventions when driving is no longer safe.  If you need help assessing your loved one's driving fitness, find more information here.  

Supervision -  Easing into 24/7 supervision of your loved one is a process with several steps in between.  In the end, each caregiver must judge when it is time to make a change.  Most of all, never leave someone alone -- even for a minute -- if they cannot respond to an emergency situation. 

 If you need more information about safety and dementia call Alzheimer's Foundation of America at 866-232-8484. Tell them Terry Smolev suggested you call.

The law f irm of Terence E. Smolev practices in al l aspects of tax law, estate and trust law, corporate law, real estate and education law.

Terence E. Smolev is a long t ime member of the American Bar Association, the New York State Bar Association and the Nassau County Bar Association. He has served on various committees of those Bar Associations. For more than forty years he has been a member of the New York State Association of School Attorneys serving that organization in al l capacit ies, including President in 1984.

I f you have a legal issue cal l us for a consultation.

516-931-9500