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  Federal and State Tax Amnesty Programs
 
 
   
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The D.C. Office of Tax and Revenue announced an amnesty program to run from August 2, 2010, to September 30, 2010.  During the amnesty taxpayers can resolve their unpaid D.C. tax liabilities with no civil penalties, and without the fear of criminal prosecution.  In cases in which penalties have already been assessed, these penalties will be abated upon payment of the tax and the related interest.  Most kinds of D.C. tax are eligible, including income tax, sales tax, payroll tax and personal property tax.  Taxes for tax year 2009 are not eligible, but taxes for all prior years are eligible, and can be settled under the program at a substantial savings.
   
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The Maryland and Virginia tax agencies implemented brief amnesty programs last fall, and both are now over.  Indeed, Virginia is adding a 5% penalty to all taxes that could have been settled under the amnesty and were not.  And so collection action on all delinquent state taxes has resumed, with Virginia being particularly aggressive in seeking to collect taxes from many years in the past.  (We complained about this policy, which unfairly targets taxpayers for taxes so old that no one could be expected to still have records.  Read Mr. Haynes’ letter to the Chairman of the Virginia Senate Finance Committee [link], and the response from the Virginia Department of Taxation [link].  Maryland has not added any new penalties, but its interest rate continues to be a whopping 13%.  Both Virginia and Maryland have offer in compromise programs, and with the conclusion of the amnesty programs, this is often the best means to reduce or eliminate penalties.  If you owe back taxes to Maryland or Virginia, please contact us for assistance.
   
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The IRS’s recent initiative aimed at “encouraging” the disclosure of previously hidden offshore accounts is also over.  The settlement program was due to expire on September 23, 2009, but was extended to October 15, 2009.  The IRS is now struggling to work through the backlog of cases submitted during the amnesty program, and in many cases is unfairly changing the rules after taxpayers made their submissions in reliance on the program as the IRS explained it in its previous pronouncements.  The IRS has vowed to actively pursue criminal charges in new offshore cases, including many that would have been covered by the IRS’s decades old voluntary disclosure policy, and even if information about the taxpayer has not already been provided to the IRS by banks that are now cooperating with the IRS, such as UBS and other previously secretive Swiss financial institutions. 
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Be Careful Who You Hire
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August 23, 2010:  California Attorney General Files Fraud Complaint Against Roni Lynn Deutch.
In the category of “be careful who you hire,” the California Attorney General’s Office has filed a $34,000,000 fraud complaint against TV infomercial “tax resolution” promoter Roni Deutch, in what the complaint calls a “heartless scheme” to swindle thousands of dollars from people with tax collection problems.  The complaint alleges that Deutch misleads consumers by promising to reduce their debts to the IRS.  Instead, she takes large, up-front payments from them but provides little or no help in reducing their tax bills.  Deutch allegedly spends $3 million a year on advertising, much of it on late-night TV, using false testimonials from clients who claim her firm saved them thousands of dollars in tax debts.  In her “boiler room,” callers seeking help are subjected to high-pressure sales tactics and misleading information, including claims that the firm has a 99 percent success rate in dealing with IRS.  Through her scheme, Deutch escalates costs for clients by placing them in an endless loop of requests for duplicate documents that increases her fees, and increases penalties and interest her clients owe to IRS, according to the Attorney General.  The complaint and request for preliminary injunction are available at http://ag.ca.gov/cms_attachments/press/pdfs/n1978_complaint.pdf and http://ag.ca.gov/cms_attachments/press/pdfs/n1978_pi_brief.pdf.
   
 

 
 
 
 
 

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BJ Haynes is a tax and IRS lawyer who assists clients with tax problems, IRS problems, tax liens, tax audits, tax returns, tax evasion, tax fraud, tax court, IRS audits, IRS levies, IRS criminal investigations. The law office of Burton J. Haynes, PC practices in all states including Virginia, Maryland, and Washington DC with both civil and criminal tax problems.

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