Individuals may correct erroneous tax returns

Article Abstract:

Individual taxpayers can amend their tax returns to rectify any overpayment or underpayment by filing a Form 1040X with the IRS. The amended return becomes part of the original return, but if the amendment is filed after the due date of the original return, additional tax liability will be a deficiency subject to interest and penalties. Claims for refund should be filed within three years of the original return due date or two years of the payment of tax, whichever is later. Form 1040X can also be used to change filing status or dependent exemptions.

Personal Income Tax Administratn, Tax administration, Personal income tax, Tax refunds

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High income nonfilers can preclude criminal prosecution through voluntary disclosure

Article Abstract:

High-income taxpayers who do not file the proper tax returns may be able to avoid criminal prosecution by voluntarily disclosing previous crimes to the Internal Revenue Service. These nonfilers should file all of their delinquent tax returns immediately. The factors that tax practitioners should consider when counseling their clients include the IRS' investigation process, the government's policies and the nature of the criminal acts. There is no guarantee that taxpayers who disclose previous tax crimes will not be prosecuted.

Investigations, Tax evasion, Disclosure (Taxation), United States. Internal Revenue Service

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Modifications of debt instruments as taxable exchanges

Article Abstract:

The final IRS regulations under IRC section 1001 will increase the scope of modifications to debt instruments that will be treated as taxable exchanges. The regulations have been revised in light of the Supreme Court's decision in Cottage Savings Ass'n v. Commissioner. Alterations to debt instruments will be taxable if they constitute significant modifications. The regulations identify five specific types of modifications as well as a general rule for other modifications.

Tax Law, Taxation, Bonds, Bonds (Securities), Income tax, Recognition of gain or loss (Taxation), Recognized gain or loss (Taxation)

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