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STRATEGIC TAX LAWYERS:  TAX BLOG

IRS Data Breach Linked to Russia

Friday, July 3, 2015
The latest cyber breach by the IRS may be linked to Russia.  The attack which was discovered last week revealed that cyber criminals stole the tax returns of over 100,000 taxpayers.   The IRS is reiterating that his is a major issue regardless of where the attack originated.  The main issue is that taxpayer’s information was compromised from an IRS platform. Yes, it is even worse that it came from Russia’s hand.  The crime is believed to have occurred in Russia after the realization that the same Russian hackers breached systems in both the White House and State Department.

The cyber criminals used taxpayer’s personal information to obtained access their tax information on an IRS Get Transcript site between February and May of this year.  The attempted to access more than 200,000 taxpayer’s accounts, but only half of those were successful.  The IRS will take action by notifying everyone that the cyber criminals had Social Security numbers and other personal information for.  To attempt to rectify the situation, those taxpayers who had tax information actually accessed will be offered free credit monitoring.

They cyber criminals used this information to file fake tax refunds to the IRS in the amount of $50 million.  The IRS system was not hacked per se.  Because the cyber criminals used taxpayer’s personal data that they stole through other means, they basically used the IRS Get Transcript website to log in using the stolen identities of taxpayers.

The FBI, IRS, the Treasury Inspector General and the Department of Homeland Security are investigating the breach.  No further information from the IRS was given.  The federal government wants answers though.  Senate Finance Committee Chairs want to know who is to blame for this breach and how it could have been avoided altogether.

Over the years, the IRS has made the security of taxpayer data a priority.  At times, however, it has been a major source of headaches at the IRS.  Since the use of computers and online interactions, computer security has been on the IRS’ agenda as problems to be alert of and to take action on.  The federal government needs to act quickly when it fails at protecting taxpayer’s confidential and personal identifying information.  

We are the Strategic Tax Lawyers, LLP and we can assist you with your tax problems.  We are professional business tax lawyers with years of experience in tax-related and IRS issues.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Affordable Care Act and How it Affects Employers

Friday, July 3, 2015
If you are an employer with over 50 employees, then you should listen up. There are requirements of the Affordable Care Act (ACA) that will affect how larger employers, with 50 or more full-time employees, will need to report about the type of health insurance they offered in 2015 to their full-time employees.  The ACA is meant to provide access to individuals who lack health insurance coverage by providing insurance that is affordable and adequate.

We are the Strategic Tax Lawyers, professional business tax lawyers who want to inform employers about these ACA provisions.   By law, all employers that provide their employees with health insurance coverage need to file an annual tax return that includes information about the employees they cover. These returns will be due in 2016 for tax year 2015.  For employers with over 100 full-time equivalent employees will have what’s called an employer shared responsibility condition in which they may need to make a shared responsibility payment.  However, this will only apply to those employers that offer inadequate or unaffordable health coverage.

We suggest calculating how many employees you employee throughout the year, as the number may fluctuate.  The best way to determine the number of employees is to take an average of the total number of full-time employees for each month and divide that total number by 12.  This will give a clearer picture of how many employees this provision will affect.

If an employer has over 50 employees, they will not be able to purchase health insurance through the Marketplace for Small Business Health Options Program (SHOP).  Good news for employers with 50 employees or less.  They are able to purchase health insurance coverage using the SHOP Marketplace.
The Strategic Tax Lawyers, LLP are professional business tax lawyers with years of experience in tax-related and IRS issues.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters


IRS Tax Evasion Claims

Thursday, July 2, 2015
The IRS is serious about tax evasion, so if you are hiding or have hidden income from Uncle Sam, you are probably going to get their attention. We are the Strategic Tax Lawyers, made up of Encino Tax Lawyers, Offshore Taxes lawyers, and BOE Tax Attorneys.  Our firm has a number of successful years of experience dealing with tax evasion cases.  We are here to provide you with information about the tax code.
 
In general, the IRS can ask you to prove your income, deductions, expenses, etc. for up to three years after you file a tax return.  This is known as the statute of limitations.   So, if you do not report over 25% of your income, then the IRS can take up to six years to audit you.  However, there are loopholes that allow the statutes to be extended if they need additional time to audit the case.  The Strategic Tax Lawyers are able to advise you about your case.

If a taxpayer files a tax return that underreports total income or if they fail to file altogether, then the IRS has much longer to audit.  The stakes will unfortunately go up, and could include criminal charges or a prison sentence.  Tax law states that the IRS has six years to audit after a tax return has been filed or theoretically speaking, from the time you should have filed.

A taxpayer who is caught and charged with criminal tax evasion within six years most likely has not had the statute run its course.   We have seen some instances where the statute will be “tolled” which stops the statute time clock. This is true if a taxpayer is outside U.S.

A taxpayer may not necessarily be in the clear if the six years run out.  There may be issues that can keep the statute open.  In fact, there have been instances when the statute won’t begin until the last act of tax evasion. Because the six years will start after the last act of tax evasion, there would still be a chance of indictment, prosecution or conviction.

Another important fact is that the statute of limitations will not run out on fraud.

The Strategic Tax Lawyers, LLP are a firm made up of Encino Tax Lawyers, Offshore Taxes lawyers, and BOE Tax Attorneys.  We, at the Strategic Tax Lawyers Firm, are experts in tax code with years of experience dealing with tax evasion.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Certain Tax-Exempt Organizations Will Need to File with the IRS

Thursday, July 2, 2015
The IRS may require certain tax-exempt organizations to file Form 990 the month of May.  However, the IRS is cautioning these organizations to omit personal identifying information, such as Social Security numbers (SSNs) on their 990 Form.  Also, the IRS advises organizations to use electronic filing for ease and speed of submissions. 

We are the Strategic Tax Lawyers, a firm made up of a California Tax attorney, a Payroll Tax attorney and an Intent to Levy attorney.  Our firm has a number of successful years of experience dealing with IRS- and tax-related cases.  We are here to provide you with important information about the tax law.  

In general, the IRS expects organizations to return Form 990 and the 990-series documents by May 15th post their tax year. Some organizations use May 15th as their deadline for them to file tax returns.

We have seen organizations lose tax-exempt status because of this IRS guideline.  Legally, any organization that fails to file their taxes for three consecutive years will have their exemptions revoked if they don’t file Form 990 with the IRS. This law has been in effect since 2007.  The law also imposes a new filing requirement on small businesses, but churches and faith-based organizations do not need to file. 

Please remember not to provide social security numbers on these forms, as is stated in the instructions. However, the tax-exempt organizations will need to disclose other documents, such as schedules and attachments.  Identity theft is one of the main concerns about revealing social security numbers. Also, the IRS would like to see organizations file all forms electronically, which also decreases any risk associated with personal information and social security number cyber scams.

For smaller tax-exempt organizations with earnings of up to$50,000 should file Form 990-N electronically. This form provides the IRS with basic information. Tax-exempt organizations earning over $50,000 will need to file a Form 990 or 990-EZ, which depends on their assets and receipts and assets. 

If additional time is needed to file any of the 990-series Forms, they can request an extension. There is no extension for Form 990-N.

The Strategic Tax Lawyers, LLP are a firm of a California Tax attorney, a Payroll Tax attorney and an Intent to Levy attorney..  We, at the Strategic Tax Lawyers Firm, are experts in tax code with years of experience dealing with the IRS.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Tax Professionals Get Raided by the IRS

Tuesday, June 23, 2015
Recently, the Internal Revenue Service targeted and raided four tax preparer’s offices in North Carolina.   The offices prepared a large amount of suspected fraudulent tax refunds that were prepared for taxpayers for the 2011 tax year. The amount in tax refunds exceeded $3 million.  The tax preparers are guilty of excessively inflating their client’s incomes, as well as their number of dependents.  This was done illegally done to maximize the amounts that the customers received back from the IRS. The tax preparers charge their clients an extra fee for the inflated amount of money that they would receive from the IRS.

We are the Strategic Tax Lawyers, a firm with an IRS Bank Levy Attorney, a Payroll Tax Lawyer, and an IRS bank levy attorney.  Collectively, we have years of experience with tax law and documented successful cases dealing with tax-related issues. We want to notify you about this possible form of tax fraud done by tax preparers. 

Some of the tax preparer’s customers received thousands of dollars from their tax refund, without even working one day the previous year.  The four offices of the tax preparers in North Carolina, Georgia and Virginia were locked and vacated.  The IRS raided all of the tax preparer offices and they seized documents, computers, and cellphones. 
 
We want to inform you that this is illegal, even though the tax preparers pose it as a legit business.  However, if the IRS shuts down your business operations, there is still a tax liability.  It is important to realize that you can’t escape your tax liability with the federal government.  The best advice we have is to contact the Strategic Tax Lawyers in order to create a plan to settle the tax concern.  Otherwise, the IRS will begin its tax collection efforts sooner than you realize.  By contact a good and experienced tax attorney, such as the Strategic Tax Lawyers, you will be able to gain a strategy that will settle the tax debt.  If the debt will not be taken care of, it will pose a problem for you until it gets resolved.

The Strategic Tax Lawyers, LLP are a firm of an IRS Bank Levy Attorney, a Payroll Tax Lawyer, and an IRS bank levy attorney.  We, at the Strategic Tax Lawyers Firm, are experts in tax code with years of experience dealing with the IRS.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Best Ways to Loan Money to Family without Triggering the IRS

Tuesday, June 23, 2015
Are you in a position where you need to loan money to a family member? We are the Strategic Tax Lawyers, a firm of Tax Lawyers, IRS Bank Levy Attorneys, and IRS Leniency Program Lawyers, who are experts in tax code.  Collectively, we have years of experience dealing with the IRS.  We want to advise you about loan money the tax-smart way.

We recommend charging the individual an IRS-approved interest rate.  This is because if you loan money to a family member and don’t charge any interest, then you could face future tax rules that are complicated and will not work in your favor.  If you charge an interest rate that is equivalent to the IRS-approved applicable federal rate (AFR), which are for term loans, then you won’t have complications down the road.  In fact, the AFR is currently at a low rate, which will not make a significant dent in the amount you are letting the family member borrow.

The rates are based on short-term loans for three years and less (0.43%), loans for three to nine years (1.53%), and longer term loans for over nine years (2.3%).  These rates are low and affordable and will save yourself a headache with the IRS.  The AFRs are usually updated each month and are based on bond market conditions.
You should also plan on family loan strategies that are tax smart. For example, if parents want to loan a child $50,000 to buy a first home, then you can create a nine-year term loan and charge 1.53% with the agreement of a balloon repayment when the term ends. Or you can opt to loan the money over 20 years instead by charging 2.3% for long-term AFR.
However, on your tax return you will need to include the interest as income and your child can deduct the interest as home mortgage interest. Just remember to make a term loan versus a demand loan in which repayment is demanded at any time.  With a demand loan, the AFR is not fixed so you would need to charge a floating AFR.  This will not be as advantageous if the interest rate will increase in the upcoming months.  
We believe that interest-free loans to family members are not the best idea because below-market interest rules could apply causing complicated rules to calculate what the interest payment should have been. You may have to pay income taxes on what the so-called interest would be, even if you didn’t collect any interest.  This could also take away any estate tax exemptions you could qualify for.
We advise to just avoid all the IRS tax issues by simply charging an AFR on family loans.  This also keeps the agreement business-like which can save unnecessary grief.
Contact the Strategic Tax Lawyers, a firm of Tax Lawyers, LLP, a firm of IRS Bank Levy Attorneys, and IRS Leniency Program Lawyers, who are experts in tax code.  Collectively, we have years of experience dealing with the IRS.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Celebrities with Tax Troubles (Part 2)

Tuesday, June 23, 2015
Last blog we let you know about celebrities with IRS troubles.  It doesn’t end with that list.  We have another list of celebrities, mostly actors, who have for some reason owe the IRS millions in taxes.  And guess what, they all get caught.  Non one is exempt from paying Uncle Sam.  As tax attorneys in California, at our firm the Strategic Tax Lawyers, we want to make it known that the IRS is serious about the tax law, so pay your taxes or you will be penalized.  After all, it is the law.

The following is a list of celebrities who did not follow the law and no matter how famous they are, the IRS penalized them.   

In 2012, Nicolas Cage paid the IRS approximately half ($6 million) of the taxes he owed the IRS (approximately $14 million). The IRS issued him tax liens in 2008 and 2011 and the actor did not pay taxes between 2004 and 2009.  

Everyone knows about Wesley Snipes who was sentenced to a Pennsylvania federal prison for three years for tax evasion based on failing to file income tax returns for three years (1999, 2000 and 2001).  During the peak of his career he earned approximately $38 million

Actor Stephen Baldwin is still paying off his tax debt of over $400,000. He also owes New York State an undisclosed amount for personal income tax.

Actress Lindsay Lohan repeatedly has had issues with the IRS for not paying her taxes which totaled $56,717.90 (State of California) and $233,904.87 (federal taxes).

Martha Stewart failed to pay her taxes ($220,000) to the State of New York.  Also model Christie Brinkley owed the IRS $531,000 in back taxes and was issued a tax lien.  Actress Christina Ricci was also issued a tax lien since she didn’t pay approximately $180,000 in taxes in 2010.

Mike Tyson was lucky with the IRS, which excused approximately $2 million off the millions that he owed since Tyson declared bankruptcy. OJ Simpson is guilty of tax evasion and owes the State of California nearly $1.4 million.

The Strategic Tax Lawyers, LLP are a firm of California Tax Attorneys, IRS lawyers, and IRS Fresh Start lawyers.  We, at the Strategic Tax Lawyers Firm, are experts in tax code with years of experience dealing with the IRS.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Celebrities with Tax Troubles

Tuesday, June 16, 2015
Celebrities are just as likely as the average taxpayer to have the IRS on their backs.  It actually makes sense because celebrities who make the big bucks, want to keep their money and often they feel they won’t get caught.  But as tax attorneys in Los Angeles, at our firm the Strategic Tax Lawyers, we have seen the IRS make examples of these celebrities making no one exempt to the tax law.

Some of the following examples are famous singers who aren’t very favored by the IRS.  We can assume that if the IRS were fans of these celebrities before, they are not now.

Take Lauryn Hill for example.  Lauryn Hill, a singer for the Fugees spent about three months in a Connecticut prison in 2013 because she failed to pay federal taxes on nearly $2 million that she earned between 2005 and 2007. After she served her sentence, Hill was served with seven more outstanding liens that totaled over $860,000.

In 2013, singer Mary J. Blige was issued a tax lien for neglecting to pay taxes on over $3.4 million in income over three years. In addition, she owed the State of New Jersey taxes in the amount of $900,000.

Other singers, like Dionne Warwick filed for bankruptcy two years ago due to financial mismanagement which included over $10 million that she owed for both state and federal income taxes from the 1990s. Although her accountants attempted to negotiate payment plans they claim that the plans were not accepted, which caused for astounding interest and penalties.

Two more female singers, Toni Braxton and Lil Kim, have also been in the spotlight for financial woes. Twice Toni Braxton filed for bankruptcy and she in 2010 she owed the IRS $400,000.  Lil Kim also owed the IRS over $1 million in 2012 due to an unpaid tax bill from the mid-2000s.  Tax attorneys helped Lil Kim resolve this IRS matter.

Some of the better known make singer/celebrities with IRS struggles include Lionel Richie.  In 2012, Lionel Richie was informed that as a result of unpaid income taxes in 2010, he owed over $1 million to the IRS.  Apparently he handled that situation immediately before it escalated.  

Rappers Lil Wayne, Flavor Flav and Bow Wow also had IRS problems.  Lil Wayne owes the IRS over $12 million in taxes. Flavor Flav did not file taxes in the mid-2000s and owes the IRS approximately $1 million.  Bow Wow did not pay his taxes over three years and owes the IRS over $125,000.

The Strategic Tax Lawyers, LLP are a firm of Santa Monica Tax Attorneys, IRS tax attorneys, and tax relief lawyers.  We, at the Strategic Tax Lawyers Firm, are experts in tax code with years of experience dealing with the IRS.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.



Information about Taxable Gifts

Tuesday, June 16, 2015
Do you need to determine if you charitable gift is taxable?

Have you given a gift to someone, such as money or property and you are wondering it qualifies as a federal gift tax?  In actuality, there are several rules to understand if gifts are subject to the gift tax.  We are the Strategic Tax Lawyers, IRS Tax Attorneys who assist with IRS Bank Levy help and IRS seizure of assets help.  We are experts in the IRS tax code and want to provide you with tips about gifts and the gift tax.

First of all, any gift is considered a taxable gift. But, as you know there are always exceptions to the rule. Non-taxable gifts can include tuition and medical expenses that are paid directly for another individual; gifts to your spouse or partner, if married by law; gifts for political parties; gifts to charities.  Also a significant amount of gifts are not subject to the gift tax. The annual exclusion for a gift tax is $14,000.  In general, the individual you give a gift to will not need to pay a gift tax nor will they need to pay income tax for that gift.  In addition, if you give a gift it does not necessarily your federal income tax.  It is not allowable to deduct the worth of gifts you make.  An exception is for charitable contributions that are deductible.

Taxpayers need to file IRS Form 709 if you gifted to more than one person, besides your spouse, if the amount was more than the annual exclusion for the year; if you split a gift with your spouse; if you gifted someone, besides your spouse a gift that they are not able to enjoy possess, or if they will receive a future income from.

If you need assistance with an IRS-related matter, the Strategic Tax Lawyers We are the Strategic Tax Lawyers, IRS Tax Attorneys who assist with IRS Bank Levy help, IRS seizure of assets help and all other IRS-related tax matters.  Our firm has years of success in IRS dealings.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.


IRS Interested in the Mayweather Fight?

Tuesday, June 16, 2015
For all the boxing fans out there, the big Floyd Mayweather vs. Manny Pacquiao fight was on May 2nd in Las Vegas. 
One of the world’s highest paid athletes, who collect a combined $100 million.  The IRS will too.  This is because it is a big ticket item pay-per-view will be collecting approximately $300 million from viewers, ticket sales will raise just over $70 million and over $30 million from broadcasting internationally.  In addition, there is sponsorship and endorsement monies as well as sales from merchandise.  This is the big show, folks.

The winner received considerable revenue.   he will earn $10.2 million and the loser will receive $9.8 million.  Not too shabby, eh?
Pacquiao, from Macau which is a low-tax territory, will face the IRS in the ring whether he wins or loses.  He receives millions in endorsements from companies like Sony, Nestle, Hewlett-Packard, Monster Energy, Nike, Foot Locker and Wonderful Pistachio.  His earnings are well over $300 million. Mayweather doesn’t have as many endorsements, but has earned over $25 million for his last ten fights.
What’s the point you ask? Well the IRS will be wanting its share of taxes. 

Pacquiao is not a resident of the U.S. so he doesn’t pay the IRS for his earnings outside the U.S. As he is from the Philippines, their tax authorities also want their share.  A two-country treaty protects Pacquaio’s money from being taxed twice.  Also, Pac    quaio has a past tax evasion case which keeps the tax authorities interested in his earnings.  The IRS has issued a tax lien to Pacquaio in the amount of $18.3 million for unpaid taxes.  This tax lien will put a hold on his real estate, income, assets, personal property, etc.

The best athletes in the world have to follow the rules of the game too, just like everyone else. The IRS will take the share they are due.  The IRS will not put up with tax evasion and they will take action.
If you or someone you know received an official Notice of a Federal Tax Lien, you need a qualified IRS tax attorney in Los Angeles on your side.  Contact the reliable Los Angeles IRS tax attorneys at the Strategic Tax Lawyers, LLP for a free consultation to assist you with your tax-related issues. Call the Strategic Tax Lawyers at (800) 669-4775.