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FEATURE t he r ig ht q ue s t ion s du r i ng you r interview to uncover any ofshore or foreign accounts they may ow n or have authority over. If you do know your clients have reportable accounts, complete the FINcen form for them while you are doing their taxes, or set up a special appointment for those who go on extension. Keep in mind, this form is due June 30, 2016, for the tax year 2015 with no extensions, and it is not part of the 1040 fling. Te due date for the form for 2016 tax year will be April 15, 2017, and a new six-month extension will be available. Payroll Tax Penalties T here are numerous pena lties for business owners who fail to follow the employment tax rules, but the most s e r iou s of a l l i s t he Tr u s t F u nd R ecover y Pena lt y. You r busi ness ow ner cl ients who fa i l to col lec t, account for and pay over payroll (i.e., Trust Fund) taxes are considered to be violating a known legal duty and are subject to criminal charges. Dis- regarding the requirements can result in serious punishments, including up to f ive years of jail time when the failure is determined to be willful. Te monetar y penalt y is $10,000, plus 100% of the amount of the unpaid payroll tax deposits. One of the important points your clients should understand is that the penalty applies to the person or group of people who are responsible for and have the power to collect, account for, and pay the taxes, and that an indi- vidual person can be held liable and/ or charged with a crime. Be sure to check in with any clients who have responsibility for paying employees to ma ke su re t hey a re k e e pi n g up w it h t h i s i mp or t a nt responsibility. Individual Shared Responsibility Payment Te Individual Shared Responsibility Payment is the lesser of a fat dollar amount or the average annual pre- mium amount for a bronze level plan. Tat fat dollar amount is the greater of a monthly fat rate penalty amount, or 2% of income above a threshold amount. For 2015, the penalty amount is $325 per adult, $162.50 per child up to $975 — 2% of household income. Te 2016 fat rate penalties are more than double these amounts, and the income percentage goes up to 2.5%. Te penalty for not having health insurance coverage is assessed for any month that your client or a member of your client's family who is on the tax return goes without coverage for more t ha n t h ree mont h s a nd does not qualify for an exception. It also applies to family members who qualif y as dependents but who are not listed on the tax return. You can help your clients under- stand their coverage options, eligi- bility for the Premium Tax Credit or for an exception to the penalty. Some may need your assistance in com- pleting the various forms, or perhaps with understanding how the process works between insurance companies and the Marketplace. Te common theme in all of this is regular communication and educa- tion. It is important for us to keep in mind that tax responsibilities are not the first thing our busy clients are think ing about, and in many cases t hey a re not on t hei r rada r at a l l. Simple check-ins and reminders can go a long way towards keeping your clients not only compliant but penalty- free. Dave Du Val, EA, is vice president of customer advocacy at TaxAudit.com, the largest and fastest-growing IRS audit defense service for individuals and small businesses. CONTINUED FROM PAGE 25