by Robert Sherman
8886 Form Expert Preparer
The bill reducing fines for improperly or not filing under "6707A passed. That sigh of relief you heard last week might have
come from people participating in the plans named above, or
anything seeking tax relief that is similar to them – what the IRS
calls a listed transaction People think that Congress bailed them out of
trouble for participation in such transactions, and that the excessive
fines that were being imposed are now a thing of the past. While the
situation is certainly better than it was for some people, and
while I do not want to rain on anyone’s parade, you are still in
Disasterville, and the next to last bus out just left.
Consider this: The new legislation buried in the Jobs Act of 2010 calls for MINIMUM penalties of $5,000 per person per year, and $10,000 for a business. That is $15,000 per year if you are incorporated. So, if you have been in a plan since, say, 2003, you are looking at fines in excess of $100,000 before you even start to talk about how much of a tax benefit there has been.
Further fines would be seventy-five percent of the tax benefit derived from participation in the transaction. These are also applied each year. The point is that you are looking at fines, in all likelihood, to some degree in the six-figure range.
You can possibly still avoid all this by properly filing "form 8886" IMMEDIATELY with the IRS. Time is especially of the essence now. You MUST file before you are assessed the penalty. For months the Service has been holding off on actually collecting from people that they assessed because they did not know what Congress was going to come up with. But now they do know, so they are going to move aggressively to collection with people they have already
assessed. There is no reason not to now. This is especially true because the new legislation still does not provide for a right of appeal or judicial review. The Service is still judge, jury, and executioner. Its word is absolute as far as determining what is a listed transaction.
So you have to file form "8886" FAST; like NOW. But you also have to file it RIGHT. The Service treats forms that are incorrectly filed as if they were never filed. You get this fine for filing incorrectly or for not filing at all. The Statute of Limitations does not begin unless you properly file.
That means IRS can come back to get you any time in the future unless you file properly.
You must take care as to WHO prepares the form. Most accountants have no idea how to file these forms late. They will simply follow the filing instructions, which presume a timely filing. If you did not file in a timely manner, you need someone who knows how to file the forms late without incurring the penalty. This is an art. We have on board probably the only two people who have filed dozens of forms late, or more, without anyone being penalized. They learned how to
do it by dozens of conversations with IRS personnel.
I am sure by this point in the article that you agree that you may still be in trouble. If you thought that you were not, I am sorry if I brought you bad news. The good news is better because you can still get out of it. All you have to do is call 516 935-7346 NOW!
LANCEWALLACHEXPERTWITNESS.COM
Consider this: The new legislation buried in the Jobs Act of 2010 calls for MINIMUM penalties of $5,000 per person per year, and $10,000 for a business. That is $15,000 per year if you are incorporated. So, if you have been in a plan since, say, 2003, you are looking at fines in excess of $100,000 before you even start to talk about how much of a tax benefit there has been.
Further fines would be seventy-five percent of the tax benefit derived from participation in the transaction. These are also applied each year. The point is that you are looking at fines, in all likelihood, to some degree in the six-figure range.
You can possibly still avoid all this by properly filing "form 8886" IMMEDIATELY with the IRS. Time is especially of the essence now. You MUST file before you are assessed the penalty. For months the Service has been holding off on actually collecting from people that they assessed because they did not know what Congress was going to come up with. But now they do know, so they are going to move aggressively to collection with people they have already
assessed. There is no reason not to now. This is especially true because the new legislation still does not provide for a right of appeal or judicial review. The Service is still judge, jury, and executioner. Its word is absolute as far as determining what is a listed transaction.
So you have to file form "8886" FAST; like NOW. But you also have to file it RIGHT. The Service treats forms that are incorrectly filed as if they were never filed. You get this fine for filing incorrectly or for not filing at all. The Statute of Limitations does not begin unless you properly file.
That means IRS can come back to get you any time in the future unless you file properly.
You must take care as to WHO prepares the form. Most accountants have no idea how to file these forms late. They will simply follow the filing instructions, which presume a timely filing. If you did not file in a timely manner, you need someone who knows how to file the forms late without incurring the penalty. This is an art. We have on board probably the only two people who have filed dozens of forms late, or more, without anyone being penalized. They learned how to
do it by dozens of conversations with IRS personnel.
I am sure by this point in the article that you agree that you may still be in trouble. If you thought that you were not, I am sorry if I brought you bad news. The good news is better because you can still get out of it. All you have to do is call 516 935-7346 NOW!
LANCEWALLACHEXPERTWITNESS.COM
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