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STRATEGIC TAX LAWYERS:  TAX BLOG

Don’t Make These Tax Errors

Tuesday, March 31, 2015

As tax season is coming to an end, you may be struggling to figure out how to get a bigger tax return or lower your tax liability.  We are the Strategic Tax Lawyers, a firm of payroll tax attorneys, state bank levy attorneys, and audit tax attorneys who want to give you some advice before you file your taxes.  The information you send to the IRS will determine how long you will need to look over your shoulder if you do anything questionable.  The Internal Revenue Service will typically have three years to audit you after you file your federal tax return.  Legally, this time frame can be doubled to six years if your tax return is missing over 25% of your income, which is considered by the tax authorities as a substantial understatement your income.  Also if you neglect to report over $5,000 of your foreign income the IRS will have six years from the date you filed to conduct an audit.  Other regulations for foreign returns allows the IRS three years from the date you filed the forms to audit you.

You may wonder about reducing the time for an audit by filing your taxes early.  This won’t work because legally the IRS will go by your actual tax filing date or the due date, which is April 15th of the respective year.  So filing early won’t buy you any time.  The most disturbing part is that if you never filed a tax return, then the IRS does not have a time limit to audit you.  That’s because it is fraud or a criminal violation to not pay taxes.  The IRS needs it’s time to assess the case to audit.  In general, the time limit for an audit is six years.

There are cases that the IRS can go back over ten years to audit if there are missing tax forms.  We, as payroll tax attorneys, state bank levy attorneys, and audit tax attorneys at the Strategic Tax Lawyers warn our clients about the seriousness of audits and the duration of audit exposure.  You will need to pay attention to the calendar until the time runs out and you are clear of the audit time frame, which is three years or six years.  

Sometimes though, the statute of limitations will never run out.  Make sure that you sign your return, because if you don’t, it is not considered a valid return so your audit clock will not start until it is signed.  Also, you should not change any language at the bottom of the return before you sign since the IRS will not accept it.  Even if you are missing a form, it can end up in audit torture.  So if you have any foreign bank accounts and you make an error, forget pertinent information, or just neglect to report income, then the IRS has the ability to audit you endlessly.

If a taxpayer owns part of a foreign corporation and there is a failure to file important forms, or if they are inaccurate, it can lead to penalties of $10,000 per form.  These are harsh rules imposed by the IRS and the case will remain exposed for a tax audit indeterminately and the statute of limitations will not expire.

If you don’t want the IRS to conduct an audit that is endless, then don’t neglect any detail on your tax return. There are serious civil penalties and/or criminal violations associated with your tax return. So we advise you to think twice before you file.The Strategic Tax Lawyers, LLP are a firm of payroll tax attorneys, state bank levy attorneys, and audit tax attorneys who specialize in the tax code 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.



Tax Refund Update

Friday, March 27, 2015

We are the Strategic Tax Lawyers, IRS tax lawyer in Los Angeles, who specialize in the IRS tax code.  We are here to provide you information about IRS-related matters.  Most recently, according to the IRS, since February 20, 2015, the IRS has issued approximately 40 million tax refunds estimated at $125 billion.  The average amount for each refund is approximately $3,100.  In the same time period, the Internal Revenue Service processed approximately 50 million federal income tax returns, which is 33% of the of tax returns that the IRS is expecting.  Of those, an average of 83% will receive a tax refunds.  Over 90% of tax refunds are direct deposit which is a safer and more secure way to receive your refund.

Also, the IRS advises for taxpayers to use the free online tools if they have not filed their tax returns yet. Many of these are available online on the IRS website.  This time is typically busy for the tax agency, meaning that it will be a long wait for help from the IRS call center.  To save your time and get answers faster, use IRS.gov as an alternative.

Do you want to know about your tax refund?

  The IRS will issue over 90% of tax refunds in less than 21 days and the IRS won’t provide taxpayers with information about your tax refund before then.  But, you can look up your information on the IRS website using the “Where’s My Refund” option.

Are you missing your W-2 Form?

By law, your employer needs to send you a W-2 Form by the end of January. If you don’t receive yours by February 28th, you are encouraged to contact your employer to make sure they have your correct address.  If you still haven’t received your W-2 after confirming that all your information is correct, you should contact the IRS who will send a letter to your employer to request the W-2.

Do you have tax law questions?

Do you have legal concerns about your taxes, such as your filing status means or about your dependents? Or do you have a legal question about whether to file at all?    We are IRS tax lawyers in Los Angeles who are here to answer your questions.  As another option, you can use the IRS’ online Interactive Tax Assistant that could help you with your question.    Do you have tax law questions? Do you need to hire a qualified IRS tax lawyer in Los Angeles?  You should consider hiring the successful Strategic Tax Lawyers, LLP who have documented tax-related experience and positive outcomes.  The Strategic Tax Lawyers can provide a free consultation to assist you with your tax-related issues.  Call (800) 669-4775 today.



Tax attorney in Los Angeles - Big Mistakes to Avoid

Friday, March 27, 2015

We are the Strategic Tax Lawyers and as tax attorney in Los Angeles and we specialize in federal tax code.  We want to inform you about mistakes you should pay attention to and stop making on your tax return.   The notorious two page document, Form 1040, is an audit trigger for many taxpayers.  Many of the errors made on this form could be eliminated, but instead mistakes are made that either require you to send in an amended return or you may red flag the Internal Revenue Service to audit you.

We all know that U.S. taxpayers dread tax season and we all spend our time filling out tax documents each year, Form 1040 being one of them.  This form has taxpayers work and sweating over the two pages for approximately five hours, based on IRS statistics.  In general, the IRS has estimated that the overall time it takes to complete Form 1040 is 16 hours.  This estimate also includes the time for tax planning and record keeping.

  What makes it complex is that the form comes with an instruction manual that is over 100 pages which details how to fill out two measly pages.  Yet these two pages are enough to give the IRS every bit of information about itemizing, home business, schedules, etc.  So you better make sure that these 2 pages have correct information because the IRS will be scrutinizing these forms.

  The IRS says that Form 1041 is not the only issue. Most taxpayers are not well informed about income tax basics.  Most taxpayers don’t understand the tax implications of IRAs, what expenses qualify as deductions and how not filing is the worst tax mistake you can make.

  Also, if you are depending on tax preparation software, don’t think that you won’t trigger the IRS.  The information you report is what the IRS will receive.  So you may eliminate mathematical mistakes, but if you enter incorrect information, the results will be wrong.

  It is important for taxpayers to reduce errors by double-checking what they are reporting on their form or inputting into the software.  We, as tax lawyers in Los Angeles want taxpayers to invest time to report actual numbers versus entering estimates.  If you estimate the wrong amount, there is a good chance that you are over- or under-reporting.  So, it is as simple as rechecking the amounts you enter before submitting to the IRS.  Also, a simple mistake is entering an amount on the wrong line.  And reversing numbers is also a common occurrence.  You can easily switch an amount by entering $5,100 instead of $1,500.  That’s a big difference and could cost you a lot.

  Also, make sure to check if you are missing any forms or documents.  You can easily compare what you submitted to last year’s returns.  Chances are, if you submitted the form last year, you will need to again this year.    Do you need to hire as tax lawyers in Los Angeles?  Consider hiring the successful Strategic Tax Lawyers, LLP who have documented tax-related experience and positive outcomes.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related issues.

 


Declining Audit Rates

Tuesday, March 24, 2015

Believe it or not, the IRS audit rates are dropping and are at one of the lowest level since 2005.  The good news is that audit rates are expected to continue to decline, based on data from the Internal Revenue Service.   The even better news is that your chances of getting audited by the IRS are much, much lower than in previous.  But as IRS tax attorneys who deal with the IRS on a daily basis, this does not mean that you should start cheating on your tax returns.  

The IRS reports that the audits declined in all the categories and also across income levels.  The decline was evident even with the increasing number of filed tax returns.  This means that statistically, taxpayers are filing more tax returns and are abiding by the IRS guidelines triggering less IRS audits then in years with not as many tax returns.  We can deduce that either the taxpayers are reporting accurately and not lying about their income, tax credits or deductions.  

However, the declines of IRS audits happen to correspond with the recent decline in IRS funding.  The decrease in funding has caused a constant layoff off of IRS agents.  This also coincides with the IRS request for approval from Congress for an increase budget for fiscal year 2016 to finance much needed staffing time and resources that are lacking due to previous budget cuts.  The IRS is warning that the declining audit rate could scar the faith U.S. taxpayers have in our federal tax system.  The IRS is making the case that reinstating IRS agents will produce over $1 billion in additional revenue as new staff get trained in the next few years. The IRS also doesn’t want to see any taxpayers not comply with or challenge the IRS.  Right now, taxpayers are paying what they owe and the IRS wants to keep it that way.  The IRS does not want taxpayers to start feeling that other taxpayers are getting away with not paying their fair share.  Regardless of the staffing dilemmas of the IRS, we have seen clients receive notifications of tax audits.  So it does not mean you can take advantage of the bleak situation with the IRS.  If you commit tax fraud, you will get caught. We have seen it happen.

The Strategic Tax Lawyers, LLP are IRS tax attorneys with years of experience settling cases with the IRS.  Contact the offices of the Strategic Tax Lawyers at (800) 669-4775 to speak with IRS tax attorneys and receive a free consultation.



All About Tax Cheats

Friday, March 20, 2015
It turns out that wealthy people know how to dodge paying taxes, but it is getting more difficult to get away with it.  Lately, there have been financial documents that were leaked to a group of news outlets that has identified who has gotten caught and the amount of money that was scammed.  We, are business tax lawyers who have seen how these tax scams work.  

We have seen tax scams operate like this: open an offshore account at a banking institution in a foreign country that does not report accounting information to the tax authorities in the account holder’s home country.  So, if that individual opened a foreign bank account, they did not report the offshore account on their tax return.  This is what we business tax lawyers deem tax fraud and it is cheating the government out of tax money that is due.

It is true, that no one enjoys paying taxes; however, laws are laws. You can always find yourself a good accountant who is aware of the legal loopholes in the tax code.  But if you do lie about your income, credits, and/or deductions by neglecting to report in order to reduce your tax liability, then that is tax evasion, which is illegal.

Tax havens at Swiss banks and the British Virgin Islands have been popular with rich people.  The leaked financial documents have information about tax haven accounts with over $100 billion held by at least 100,000 people from 200 countries.  As a side note, some of the accounts were legal.  However, there were plenty of records that indicated foreign banker’s advice for their clients to evade taxes by not declaring the income to their tax authorities.

From another standpoint are U.S. corporations who avoid paying taxes on billions upon billions of dollars by keeping the business assets in entities outside the U.S., which is incredibly legal.

So who pays for the millions, billions or trillions in taxes that the tax evaders are not responsible for? You guessed… yes, us honest tax payers make up that lost revenue.  The latest statistics show that the government has been cheated out of approximately $100 billion.

The U.S. is working on cracking down on these tax cheats.  U.S. tax authorities have worked to bring down Credit Suisse, which last year, pleaded guilty to assisting U.S. taxpayers file fake tax returns.  Credit Suisse had to pay the U.S. government over $2.5 billion in penalties.  The U.S. government is asking foreign account holders to come clean and to voluntarily disclose their financials.  By complying with the U.S. tax system, they will receive incentives to settle their tax obligations.

Do you need a reliable business tax attorney? Then contact us, the Strategic Tax Lawyers, LLP at (800) 669-4775for a free consultation to assist you with your tax-related issues.



IRS tax attorneys - Taxpayers Rights

Friday, March 20, 2015

The Internal Revenue Service can be intimating, but you need to be aware that your legal rights are protected by the federal government when dealing with the tax code.  If you have been issued a notification for an audit or have a legal matter pending with the IRS, you may not want to attempt to battle the IRS alone.  It is your right to have legal representation, such as a tax attorney or other tax professional.  The Strategic Tax Lawyers are professional IRS tax attorneys who specialize in the tax code and have been legal advocates for their clients.  We, as professional IRS tax attorneys, want our clients, and all taxpayers, to understand the Taxpayer Bill of Rights that each and every taxpayer has.  This is an important document that many times gets overlooked, but we are here to remind you that you have constitutional and civil rights and privileges when dealing with the tax code.

The IRS has released the Taxpayer Bill of Rights, which are a set of taxpayer rights that every U.S. taxpayer is entitled to.  With these rights, taxpayers are provided with protection and civil liberties when dealing with the IRS.  The Taxpayer Bill of Rights incorporate ten sets of rights or provisions that aims to ultimately respect taxpayer’s rights in a clear and understandable manner.   

The ten provisions of the Taxpayer Bill of Rights, include the rights to appeal a decision that was made by the IRS.  However, to do so, we advise taxpayers to be aware of their rights.  We, as professional IRS attorneys, tell our clients that there is always an opportunity to appeal the decision made by the IRS.  Nothing is set in stone.   We encourage everyone to become familiar with the Taxpayer Bill of Rights since they are made specifically for the taxpayer.  This can be critically important when corresponding directly with the IRS.

Some of the key rights that we feel are important include: (1) the right to pay only the amount of tax that is correct; (2) the right to appeal a decision made by the IRS and take the case to court; (3) the right to be informed and receive clear information and instructions; (4) the right to receive both courteous and quality service from the IRS; (5) the right that personal information will remain confidential; (6) the right to obtain legal representation; (7) the right to a moral, just and impartial correspondence; etc.

The newly revised Taxpayer Bill of Rights is a document that is currently available in six languages.  You can find this posted on the IRS website.  The languages include English, Spanish, Russian, Korean, Chinese, and Vietnamese and the document can help make any taxpayer of diverse cultures aware of their legal rights under the tax law.

The Strategic Tax Lawyers have IRS tax attorneys that know your Taxpayer Bill of Rights and they can fight for your rights.  Contact the IRS tax attorneys at the Strategic Tax Lawyers, LLP for a free consultation at (800) 669-4775.



Estate planing attorneys - The IRS Is Serious About Fake Charities

Monday, March 16, 2015

We are here to tell you about another scam the Internal Revenue Service is warning everyone about.  We all know that the IRS urges us to make gifts to charity, and there is a benefit to us for doing so, yet there are scams about fake charities that our we want you to be aware of.  We are the Strategic Tax Lawyers, estate planning attorneys, who want to tell you about groups that pose as a charitable organization in order to solicit donations from innocent taxpayers.  This has become one of many scams for this year’s tax filing season.


We, as estate planning attorneys, advise our clients to make donation, but be cautious to make sure that your money and generosity is going to charities that are legitimate and eligible. We recommend carefully examining if the charity is tax-deductible to receive donations.  The IRS has an online tool for you to help evaluate if the organization is legitimate.  These type of Illegal scams will lead to penalties and the possibility of criminal prosecution for the scam artists.

Some things to look out for:  (1) Be cautious of charities that have names similar to widely known organizations since fake charities will use mimic other popular organizations in order to get your money. (2) As always, we advise to keep your personal financial information confidential, which includes your Social Security number. This is because scammers will use your identifying information in order to steal your identity and steal money from your accounts right under your nose, and you won’t even feel it.  If you use your credit card for a donation, be cautious with who you are giving your number to.  Make sure you call the legitimate organization and no one calls you.(3) We advise to forgo sending or giving cash donations because it is hard to document for tax record purposes. Legally, it is important to have records of all donations, including clothing, property, furniture, or anything else to keep as documentation for your yearly taxes. This should include the charity’s name, the donation date, as well as a description of what you donated valuing the donation amount.   It is best to donate using a personal or business check, or credit card like we mentioned above.

The Strategic Tax Lawyers are estate planning attorneys who can assist you with your tax-related estate needs which could include charity and annual giving. If you are looking for reliable estate planning attorneys call the Strategic Tax Lawyers, LLP for a free consultation at (800) 669-4775.



Advice about Health Care Law

Monday, March 16, 2015
We, the Strategic Tax Lawyers, want to let you know about new changes to the tax code.  We are tax law professionals in and are experts in all areas of the tax code and IRS related matters.  

 

This year, our tax returns contains new provisions of the Affordable Care Act (ACA) which will most likely affect your tax return.  If you are like the majority, the only thing you will need to do as a taxpayer will be to put a checkmark in a box which will indicate that you have health coverage for you and everyone you claim on your federal tax return for the year.   Some taxpayers will also have to notify if they will be able to claim an exemption for not having health coverage.  Other taxpayers may have to assess and calculate what their payment is and include it with the tax return.

 

Recently, we have had clients complain about ACA insurance that begins after a birth.  This has resulted in pregnant women who are uninsured having to pay medical bills for prenatal care and delivery of thousands of dollars.  Because of this, some pregnant women went without health coverage.  Attorneys and advocacy groups have made a request to the ACA administration to allow women to get covered for health insurance as soon as they become pregnant.  As tax law professionals, we have seen glitches in the system, and not all taxpayers are covered.  Those without a health care plan or access will not get the medical attention they should get as they forgo care since they are unable to afford it.  Unfortunately, health insurance companies do not want to allow women of reproductive-age to enroll in health coverage at any time since it would give them an incentive to delay getting health insurance.  We want all taxpayers to remember that there is a tax penalty for individuals who do not have health care coverage.

 

We, as tax law professionals, want to inform you that the Internal Revenue Service could have different options to assist you with filing your tax return as the tax filing season is in action.  We always advise for taxpayers to file their taxes electronically, which is easy and accurate.

 

Do you have questions about how the health care law will affect your tax return? Or are you concerned about the legal matters regarding health law that is associated with your tax return?  Are you looking to hire a tax law professional?  Contact the Strategic Tax Lawyers, LLP who have years of tax-related experience and results that are successful.  For a free consultation call the Strategic Tax Lawyers at (800) 669-4775.

 



Tax Issues for Gay Couples

Thursday, March 12, 2015
This year, many gay and lesbian married couples are battling hours doing their taxes.  One case of a gay married couple residing in Georgia, which doesn’t recognize gay marriage, has spent over 30 hours doing their taxes and they still have not finished. This year, same sex couples who live in states that do not recognize gay marriage may have issues since it will be the first time they are filing their tax returns together.

Since 2014, there have been 20 additional states that have made same-sex marriage legal.  However, in Georgia, Ohio, Michigan, and a few other states, same-sex couples will not receive the tax benefits of filing together as a married couple. This will require them to complete extra paperwork, pay more in paid tax preparer fees, and answer tax questions that make no sense.  Eventually, tax analysts and business tax attorneys expect a ruling by the U.S. Supreme Court to allow gays and lesbians the right to marriage.  Unfortunately, this year’s tax season will not be affected for those waiting for the ruling.

This year, the same-sex couple living in Georgia are required to prepare five tax returns.  They will need to file a joint, official federal return which will be filed with the Internal Revenue Service.  They will also have to both fill out, not file, a tax return showing a single individual status to file their state tax returns in Georgia.  The federal joint return tax return to the IRS is not the problem.  The difficulty lies in dividing the same-sex couple’s shared finances into tax returns for both state and federal purposes.  The couple feels as if they are working to untangle a mess.  For example, a charitable deduction will need to be divided even between the couple if it was issued via their joint bank account; however if it was paid using a credit card, then only one of them will be able to claim it.  To complicate matters, if the couple has children then the deductions for children and credits for child-care need to be properly distributed for both parents.  There are different rules for each state and tax professionals need to pay special attention to these tax returns.  It has taken hours of trying to get answers from state employees to determine if the couple should each file their status as “head of household” or “single”.

The emotional factor is also an issue for same-sex couples who are filing legal documents that asks them to identify as single when they are not.  Tax attorneys who in gay client rights, have clients that actually wrote in red ink on their state returns that “Taxpayer is Married, NOT Single and these taxes are filed under protest.”

It will take a ruling from the Supreme Court for same-sex couples to have a marriage rights in the contiguous states for these tax issues to resolve. As an option, same-sex married couples can request an extension until October 15th to file their taxes.  Perhaps by then things will be clearer.  Business tax attorneys advise for payment to be made by April 15th to not accrue a penalty.

Are you concerned about the legal matters associated with a joint federal or state tax return?  Are you looking to hire business tax attorney?  Contact the Strategic Tax Lawyers, LLP who have years of tax-related experience and successful outcomes.  For a free consultation to assist you with your tax-related issues contact the Strategic Tax Lawyers at (800) 669-4775.



Professional Tax Attorneys Say Be Alert For Fake IRS Emails and Phone Calls

Thursday, March 12, 2015
In the last few months we have been informing our clients and other taxpayers of the tax scams that have been taking place during this tax season.  We find it important to raise awareness since the repercussions of tax scams are critical.  The latest tax scams are bogus emails and phone calls from scammers who pretend to be IRS agents. We have seen the kind of work that these scammers are capable of, and they are just like the professionals and it’s hard to tell that you are being scammed.  These scammers use the name and logo of the IRS in their correspondence and they have set up a bogus IRS website that look very real in order to cheat you out of your money.  The scammers will use falsified tax refunds and tax bills, or they may threaten the victim with an audit.  Basically, their goal is to do whatever they can to lure you to provide the information they are looking for so they can get rich on your dime.  During this scheme they could also attempt to steal your identity as well.  We want you to be aware so that you won’t be a victim of any tax scams.

Remember, the Internal Revenue Service will initially contact you via mail.  That’s the clue. The IRS will correspond with you first by mailing you a bill or notification.  You will never receive correspondence from the IRS via the telephone, email, or text for any information about yourself or your financial information.  There will never be an IRS agent who will call you and expect you to make an immediate payment.  Also, the IRS will not threaten anyone with arrest or deportation.  That is not the way the IRS works, so be aware and alert.  So far, millions and millions of dollars have been scammed from the government in this manner.  

The Internal Revenue Service will also never compel you to you pay your taxes in a specific manner.  Many of the scams require payment to be made with a prepaid debit card.  So be on alert if you receive phone call from an IRS agent who is demanding payment immediately.  The chances are high that this is a scam.

You do have options to report the scam.  The IRS asks that victims report the incident to the Treasury Inspector General for Tax Administration.  You should also report the incident to the Federal Trade Commission.

Be aware of the red flags if you receive a call from someone from the IRS.  We are professional tax attorneys who want you to remember these facts.  If you have been a victim of identity theft or tax fraud, we are here to help.  We are the Strategic Tax Lawyers, LLP, a team of professional tax attorneys with years of experience in tax-related and IRS issues.  Call us today for a free consultation to assist you with your tax-related issues.