Internal Revenue Service (IRS) audits can be a highly stressful experience for taxpayers due to the invasive nature of the process and the potential for financial & potential criminal tax repercussions. The scrutiny of personal and financial information can lead to a significant disruption in one’s life and result in sleepless nights and strain on a marriage. Additionally, the uncertainty and anxiety that is ordinarily associated with the audit process contributes to a negative perception, making it an undesirable, stressful and challenging ordeal for individuals, especially those that own businesses.
Strategies to avoid an IRS audit involve filing accurate and timely tax returns, leveraging tax preparation software, or better yet, utilizing a reputable preparer and recognizing and avoiding known audit triggers, know in the industry as “red flags” like excessive deductions or a pattern of losses exceedingly historically reported income. Vigilance is particularly crucial when dealing with offshore income generating business and investment activities, especially involving cryptocurrency holdings. Furthermore, taxpayers must be weary of potential audit triggers like early withdrawals from retirement accounts and a pattern of underreported taxable income.
If you are concerned that you may be audited by the IRS, seek guidance from our Dual-Licensed Tax Lawyers & CPAs at the Tax Law Offices of David W. Klasing by calling (800) 681-1295 or clicking here to book a reduced rate initial consultation.
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
Strategic Approaches to Avoiding IRS Audits
As mentioned, IRS audits can be extremely disruptive to taxpayers’ lives. Fortunately, our Dual-Licensed Tax Lawyers & CPAs can help you understand the triggers that lead to audits and employ potential tax filing tactics to avoid them.
Ensuring Accuracy and Honesty
Achieving accuracy and honesty in tax filings remains paramount to sidestep IRS tax audits. Timely submission of returns with precise and well-documented information on income sources, tax credits, and deductions is a fundamental strategy. Leveraging tax preparation software, or utilizing a reputable tax preparer, can mitigate mathematical errors, particularly when e-filing, which significantly reduces the risk of errors compared to paper returns.
The Influence of FATCA
In the current landscape, it is prudent to assume that the IRS possesses comprehensive information on offshore financial accounts thanks to the global impact of the Foreign Account Tax Compliance Act (FATCA). The IRS’s enhanced data processing systems, bolstered by artificial intelligence applications, facilitate seamless matching of U.S. Taxpayers with information acquired from diverse sources globally, such as financial institutions and sovereign tax authorities. Offshore businesses, investments and income generating real estate can lead to income tax and information reporting obligations that are heavily penalized and potentially criminally prosecuted if willfully admitted. Utilities the services of a dual licensed International Tax Attorney and CPA can make all the difference to getting into compliance and staying in compliance in this area.
Identifying Known Audit Triggers
Understanding and steering clear of known audit triggers, often termed “red flags,” form a robust strategy. These red flags include unusually high itemized or business deductions and business or investment losses exceeding industry income range averages.
In any event if you do get audited, surviving an audit, even where everything was reported correctly, largely depends on if you have the proper substantiation, accounting, and evidence to support what was reported on your tax return. For instance, claiming 100% business use for a personally owned vehicle is sure to raise IRS scrutiny, which may necessitate a thorough verification via an audit.
Navigating Business Expenses and Losses
Business owners, especially those reporting losses on Schedule C exceeding $250,000, should exercise extreme caution. Rigorous documentation is imperative, particularly for claims related to passive real estate activities or activities that could be categorized as a “hobby” rather than a legitimate business. Additionally, meticulous attention to details such as home office allocations and reasonable owner’s salaries in S Corporations is crucial.
Addressing Offshore Activities and Cryptocurrency Holdings
Given the increased scrutiny and reporting obligations, offshore financial activities demand sophisticated strategies to evade tax audits. Failure to disclose offshore income and assets can result in significant civil penalties & criminal tax and offshore information reporting criminal prosecution. Similarly, the IRS considers cryptocurrency and Non-Fungible Tokens (NFTs) primary tax audit targets, emphasizing the importance of accurate reporting and adherence to tax reporting obligations in the rapidly evolving digital asset landscape.
Other IRS Audit Targets
Various other triggers include unreported early withdrawals from retirement accounts, non-filers, and individuals under-reporting income by more than 25% which can open up a 6-year statute of limitations leading to up to 6 tax returns going under audit simultaneously. The IRS is particularly vigilant regarding unreported income exceeding $10,000, regardless of whether acquired domestically or abroad. Seeking professional advice for early withdrawals from retirement accounts and ensuring compliance with reporting requirements are crucial steps in avoiding IRS scrutiny.
Civil and Criminal Penalties for Tax Evasion Charges
There are several potential civil and criminal penalties that may accompany tax evasion charges. For instance, the accused may face any of the following:
Tax evasion, a serious offense, can lead to substantial civil penalties. These penalties are primarily monetary and are assessed at 75% percentage of the underpaid taxes determined via audit. The scary part here is that if the government has sufficient evidence to assess a fraud penalty, they also have sufficient evidence to criminally prosecute. The severity of the civil / criminal tax penalties depends, in part, on the extent of evasion and whether there is sufficient evidence that the act was intentional or potentially due to negligence.
Tax evasion can result in criminal tax charges in more severe cases, leading to significant legal consequences. Conviction may lead to fines & restitution, which can escalate based on the amount of evaded taxes. Additionally, individuals found guilty of tax evasion may face imprisonment, with the duration determined by the severity of the offense and the existence of any prior convictions.
Other Consequences of Tax Evasion Charges
In addition to facing criminal penalties and civil penalties, those convicted of tax evasion may face several additional consequences. For example, any of the following may result from a tax evasion charge:
Damage to Reputation and Career
Tax evasion charges can potentially tarnish an individual’s reputation and jeopardize their career. Employers may view tax evasion convictions as a breach of trust, leading to termination or difficulty in securing future employment opportunities.
Professional Licensing Impact
Tax evasion charges can affect individuals holding professional licenses, such as lawyers, accountants, or financial advisors. Regulatory bodies may impose restrictions or revoke licenses, hindering the individual’s ability to practice in their respective fields.
Loss of Government Benefits
Convictions for tax evasion may result in the loss of various government benefits. This includes eligibility for federal assistance programs, social security benefits, and other financial support systems. The economic impact can be profound, affecting the individual and their dependents.
Visa and Residency Issues
For individuals who are not U.S. citizens, (Green Card and Visa Holders) tax evasion charges can have severe immigration consequences. It may impact visa status or residency, potentially leading to deportatiDuon proceedings. Adverse immigration outcomes further underscore the multifaceted and far-reaching implications of tax evasion charges.
Social Stigma and Isolation
Beyond legal and financial repercussions, tax evasion charges can lead to social consequences. Individuals facing charges may experience social stigma and isolation within their communities. The negative perception surrounding tax evasion can impact personal relationships and community standing.
Call Our Attorneys Today for Help with Your Tax Problems
Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.
In addition to our fully staffed main office in downtown Irvine California, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) California based satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad, Sacramento. We also have unstaffed (conference room only) satellite offices in Las Vegas Nevada, Salt Lake City Utah, Phoenix Arizona & Albuquerque New Mexico, Austin Texas, Washington DC, Miami Florida and New York New York that solely handle Federal & California Tax issues.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We also now offer a convenient scheduling option, where you can secure David W. Klasing, Esq M.S.-Tax CPA’s undivided attention for a 4-hour consultation at any of his satellite offices.
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SOURCE Tax Law Offices of David W. Klasing, PC
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Klarna says its AI assistant does the work of 700 people after it laid off 700 people
The Swedish fintech, which was criticized for its handling of a dramatic staff reduction in 2022, is touting new efficiencies powered by OpenAI.
Klarna is bullish on bots.
One month after taking its OpenAI-powered virtual assistant global, the Swedish buy-now, pay-later company has released new data touting its ability to handle customer communications, make shoppers happier, and even drive better financial results.
The app-based AI chatbot already handles two-thirds of all customer service chats, the company said Tuesday—some 2.3 million conversations so far—with the virtual assistant earning customer satisfaction ratings at the same level as human agents. Klarna, which is expected to go public this year and will need all the hype it can get at a time when investors have been generally frosty toward IPOs, estimates that the chatbot could help improve its profits by $40 million in 2024.
Announcing a partnership with OpenAI early last year, Klarna said it was one of the first companies to integrate the firm’s groundbreaking ChatGPT technology into a plug-in for shopping. The natural-language interface initially helped customers choose items and make other shopping-related decisions based on personalized queries, a feature Klarna described as “smooth shopping.”
The company has continued to build out its AI offerings since then. Its app-based assistants are now available to customers worldwide and handle a variety of tasks including refunds, cancellations, and even disputes.
Klarna boasted in its announcement on Tuesday that the AI assistant “is doing the equivalent work of 700 full-time agents.”
That statement may raise eyebrows for anyone who remembers the middle of 2022, when the company laid off roughly the same number of employees, then about 10% of its staff. At the time, CEO Sebastian Siemiatkowski cited economic uncertainty, inflation, and the likelihood of a recession as reasons for the cuts. He was criticized for his handling of the staff reduction after he shared a public spreadsheet on LinkedIn that contained the names of many of the laid-off workers.
Fast Company asked Klarna how the company arrived at its calculation for its AI assistant’s human-equivalent productivity. The company said the number of equivalent jobs the AI could perform wasn’t related to the layoffs. In a statement, a spokesperson said the company’s customer service is supported by four to five large third-parties that collectively have over 650,000 employees, and that it offers customers the option to speak with human agents if that’s what they prefer.
“This is in no way connected to the workforce reductions in May 2022, and making that conclusion would be incorrect,” the statement read. “We chose to share the figure of 700 to indicate the more long-term consequences of AI technology, where we believe it is important to be transparent in order to create an understanding in society. We think [it’s] important to proactively address these issues and encourage a thoughtful discussion around how society can meet and navigate this transformation.”
Companies have used chatbots for years to handle low-level customer queries and other interactions, although these tools are expected to become more versatile in the wake of advancements in artificial intellegence.
Source: Fast Company
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ASTRI fully supports Budget to invest in the future
The Hong Kong Applied Science and Technology Research Institute (ASTRI) welcomes the Financial Secretary’s robust and actionable initiatives outlined in the latest Budget, reinforcing Hong Kong’s status as a leading international hub for innovation and technology (I&T). These strategic moves are designed to enhance the city’s appeal for investment and talent, catalysing the growth of I&T ecosystem with a focus on fostering a green future and advancing digitalisation, injecting fresh impetus into Hong Kong’s high-quality development.
ASTRI is at the forefront with a cache of mature innovative technologies, ranging from AI, Blockchain, Cybersecurity, Digital Twins, Eco-Tech, FinTech and Micro-electronics, that are ready for commercialisation and adoption. These technologies are poised to expedite the green and digital transformation of local businesses, and support Hong Kong to develop as an international green financial centre and establish a highly efficient data ecosystem.
Realise I&T commercialisation
Ir Sunny Lee, Chairman, ASTRI, expressed gratitude for HKSAR Government’s unwavering support towards innovation and technology, bringing new partners and investments for the sector. ASTRI is committed to collaborating with the government, and developing more applied technologies that positively impact the business and society, with a focus on commercialisation and industrialisation for the greater good.
He added that the I&T sector is actively engaged in the national development plan, seizing “Greater Bay Area” (GBA) and “Belt and Road” (B&R) opportunities, and promoting high-quality development with a focus on technological advancement and green sector. “With ASTRI’s newly-opened office in Shenzhen Futian District, we will further promote GBA companies to adopt Hong Kong-invented innovative technologies to upgrade and transform. With the advanced Hong Kong platform, we aim at helping technologies developed in the region to go global, tapping into B&R countries and beyond.”
Focus on Fintech and Green Tech
Dr Denis Yip, Chief Executive Officer, ASTRI said he is pleased that more resources will be allocated on supporting I&T sector, building I&T ecosystem and strengthening collaboration among government, industry, academia and research institutes, investing the future together. “Technology and finance are the twin engines for the city’s economic development. ASTRI-develop fintech and green tech would revolutionalise traditional industries, and promote the development of new sector such as digital assets, bringing new opportunities for I&T companies and new areas of growth.”
Dr Yip stressed that apart from promoting green finance and digitisation, ASTRI is also committed to the development of the whole I&T ecosystem. He added that three alliances have been set up in the past year, namely, Microelectronics Technology Consortium, Smart Mobility Technology (C-V2X) Alliance and Fintech and ESG Alliance. The fourth one on ConTech and PropTech is on the way, facilitating knowledge transfer and technology innovation. ASTRI will also facilitate industrial transformation and economic growth through I&T. Looking ahead, ASTRI will continue incubating new blood through various talent programmes, expanding the I&T talent pool in the city.
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Natural Personal Care Ingredients Market worth $7.9 billion by 2028 – Exclusive Report by MarketsandMarkets™
The report “Natural Personal Care Ingredients Market by Type (Emollients, Surfactnats, Rheology Modifiers, Preservatives, Active Ingredients), Application (Skin Care, Hair Care, Make-up, Oral Care), and Region – Global Forecast to 2028″, Natural Personal Care Ingredients Market size was USD 5.3 billion in 2022 and is projected to reach USD 7.9 billion by 2028, at a CAGR of 8.3%, between 2023 and 2028.
The market is projected to grow because of the evolving lifestyle across globe. These natural Ingredients play a crucial role in various skin care, hair care, oral care, make-up, and other applications such as foundations, serums, shampoos, bath soaps, shower gels, creams, face masks, sun care products, lip balms, lipsticks, color cosmetics and others. In addition, due to the increasing population, increasing demand for natural ingredients, technological advancements and changing consumer preferences the demand for natural personal care ingredients can increase due to various applications.
Browse in-depth TOC on “Natural Cosmetics Ingredients Market”
198 – Tables
68 – Figures
Download PDF Brochure: https://www.marketsandmarkets.com/pdfdownloadNew.asp?id=181363323
“Surfactants are projected to register the highest CAGR, in terms of value, of the global natural personal care ingredients market during the forecast period.”
Surfactants are expected to grow rapidly in the natural personal care ingredients market due to increased demand for sustainable products in cosmetics and personal care, as well as their use in pharmaceuticals. They function as surface-active agents, meaning they help reduce surface tension between different substances, allowing them to mix more effectively. Therefore, surfactants are crucial in skincare, haircare, and cosmetics like creams and lotions. Also, the rising awareness of natural ingredients in personal care boosts the demand for natural surfactants. Thus, surfactants are widely used in applications such as skin care, hair care, make-up, oral care, and others, which will increase demand for them in the future.
“The hair care is estimated to be the second-largest application of natural personal care ingredients market, in terms of value, during the forecast period.”
As individuals tackle with a different hair-related issues, ranging from hair loss and thinning to dryness and damage, the demand for effective solutions continues to rise. Combined by the diverse array of hair types, each with its unique needs, such as curly, straight, fine, or coarse, the market for tailored hair care products grows rapidly. Moreover, escalating levels of pollution, characterized by airborne toxins and particulate matter, further exacerbate hair woes, triggering issues like scalp irritation, dullness, and accelerated hair aging. Consequently, the hair care application within the natural personal care ingredients market stands composed for sustained growth, driven by the imperative for complete solutions that address these multifaceted challenges while prioritizing natural and sustainable ingredients.
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“Europe is estimated to be the largest market for the natural personal care ingredients market, in terms of value, during the forecast period.”
The adoption of natural personal care ingredients in this region has increased due to changing environment, concerns about increasing health hazards linked to synthetic ingredients, and shift in lifestyle preferences towards eco-conscious and sustainable products. Moreover, The European region is estimated to be the second-fastest growing regions in the world, with rising disposable incomes. This is creating a favourable environment for the growth of the natural personal care ingredients market. Accordingly, Europe will be the largest market for natural personal care ingredients market during the forecast period.
The key players profiled in the report include BASF SE (Germany), Croda International Plc (UK), Ashland Inc. (US), The Lubrizol Corporation (US), Evonik Industries AG (Germany), Dow Inc. (US), Symrise AG (Germany), and others.
Browse Adjacent Market: Specialty Chemicals Market Research Reports & Consulting
Green Preservatives Market – GLOBAL FORECAST TO 2028
Biosurfactants Market – GLOBAL FORECAST TO 2028
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