|
Posted by TaxPayer on February 3, 2007, 2:14 am
Please log in for more thread options >>> What are the consequences of backup withholding on offshore
>>> accounts?
>> Anyone got an answer for this? Essentially I have foreign
>> based accounts and I am wondering if the IRS can touch these
>> accounts?
> I'm still not quite sure what you're asking. I assume that
> if there's a treaty provision the offshore institution would
> honor a backup withholding request or IRS levy. Without
> such a treaty provision it would depend solely on the laws
> of the country in question. As you probably know, none of
> this affects the taxability of your income from these
> accounts.
I simply have some accounts (UK and UK Channel Islands)
which I know do not submit 1099s. I declare the interest
(and also file TDF 90-22.1 forms) so the IRS knows of these
accounts. If they don't file 1099s it seems unlikely to me
they would undertake backup withholding, but who knows what
any treaties might say.
>> I also have a follow-up question. I filed my 2004 tax return
>> late but filed the return and received a refund before
>> Christmas 2006. Subsequently I received a CP-541 notice
>> dated Jan 1st 2007 for the 2044 tax period. I called the IRS
>> and was told I could disregard the letter and that the
>> account was "satisfied". Later of course I received letters
>> from bank telling me backup withholding was in place, what I
>> should have disregarded was being told to disregard the IRS
>> notice! I called them again but they are refusing to do
>> anything, on the grounds that the 2005 return is also late
>> (although I have received no other communication about this
>> return).
>>
>> Do I have an argument for rescinding the backup withholding
>> because the notice very specifically refers to 2004 (and
>> should not have even been sent out), and is there some IRS
>> termininology I can use to make this argument?
> Sorry, the backup withholding rules are incredibly complex
> (you can thank the banking industry), and I don't know the
> answer to your question.
Thanks for the reply anyway.
> I do know that you can make all the arguments you want, but
> the easier course of action would be to start filing your
> returns on time. The backup withholding order will be
> rescinded after you've been compliant for a period of time
> that escapes me.
I would like to file the missing return but it is going to
be quicker and easier to write a letter now than file the
return anytime soon. Apart from being complex, I recently
found that most of my 2005 income might be recharacterized
as a capital return and this will not be resolved soon.
That's a subject is probably best left for another post.
I was trying to find out if there was any IRS terminology I
could use to make the point that the 2005 return was not
relevant to the reason the backup withholding was
implemented (or maybe it is relevant?).
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap