Individual and business taxpayers need to be careful to completely and accurately disclose their taxable income on their annual returns. Inaccuracies and inconsistencies – both intentional and unintentional – can lead to Internal Revenue Service (IRS) scrutiny, and this scrutiny can, in turn, lead to fines, interest and other penalties. Here, Virginia tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, discusses some particular filing mistakes that are likely to trigger IRS audits in 2021:

When the Internal Revenue Service (IRS) extended the federal income tax filing deadline to May 17 for 2021, this extension did not apply to the obligation to file a Report of Foreign Bank and Financial Accounts (FBAR) with the Financial Crimes Enforcement Network (FinCEN). So, if you did not file your FBAR by April 15, what do you need to do? Virginia international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains:

If you own foreign financial assets, you may have an obligation to disclose these assets to the IRS. Under the Foreign Account Tax Compliance Act (FATCA), U.S. taxpayers must report foreign financial assets that have an aggregate maximum value (AMV) of $50,000 or more at any point during the relevant tax year (this is in addition to the FBAR requirement for offshore accounts with an AMV of $10,000 or more). If you are subject to FATCA, what are your voluntary disclosure options in 2021? Virginia offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains:

If you owned cryptocurrency in 2021, you have an obligation to report all related gains and losses on your 2021 federal return. When preparing your return, however, you need to be extremely careful to avoid mistakes that could garner unwanted attention from the IRS. In this article, Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, discusses five common mistakes that have the potential to lead to IRS audits and investigations.

Under relevant provisions of the Internal Revenue Code (IRC), U.S. taxpayers who own real estate of historical significance can receive tax breaks for agreeing to preserve their property in its current condition. In the words of the Internal Revenue Service (IRS), “In recognition of our need to preserve our heritage, [the IRC allows] an income tax deduction for owners of significant property who give up certain rights of ownership to preserve their land or buildings for future generations.”