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STRATEGIC TAX LAWYERS:  TAX BLOG

IRS Tax Attorneys Want You To Know These Important Tips

Wednesday, February 18, 2015
This is the time of year when the IRS is on everyone’s mind.  Taxpayers, tax professionals, tax attorneys, etc. all need to be reminded about taxes, which includes income from all sources, not just your paychecks.  The IRS tax attorneys at the Strategic Tax Lawyers want to remind everyone that income means income and as taxpayers are getting organized for tax time, there are some income sources that you will need to report.  If you forget, you may trigger a red flag.

The following is a list of important and strange income sources that the Internal Revenue Service will look out for.
•    You definitely should include any income you make from selling your car, furniture, clothing, or any other items you own. This source of income would definitely be taxed.  Your tax would be based on the profit you make.  If you can’t verify what your tax basis is, then the IRS will assume all the money you earned is the income.  Also, it is a capital gain from selling a home, it is considered reportable income that will be taxed.  
•    Let’s say you are paid for a trade service that earns you cash, such as dog sitting, house sitting, or taking someone to the airport, it should be considered taxable income.  How many people actually report may be low, but income is income.
•    What if you swap or sell (scalp) tickets for a higher value?  If you earn cash, guess what? It is income that is taxable.  Plus as IRS tax attorneys, we should remind you that ticket scalping is illegal.  Don’t forget that tax evasion is illegal also.
•    Winner! Winner!  What if you won the jackpot in Las Vegas or the California State lottery?  You got it, gambling winnings are considered income that should be taxed.  People who gamble and win have the option of taking a lump-sum (big tax bill) or annual payments (yearly taxes).  Let’s say if you win an automobile.  In that case, the value of the auto is taxed and the individual will need to come up with the cash to pay for the tax.
•    What about employer fringes or benefits?  Many people don’t know this, but some of these are taxed if the benefits are extreme.  The IRS is always looking for added income to tax you on.
•    If you have a cancellation of debt (COD) after having a lender forgive your debt, then you will need to pay a tax.  This is because the debt you owed in the past was canceled which eliminated your debt.  The IRS sees this as cash income to you and the IRS wants what it is owed.
•    We should know about this one very well, since we are IRS tax attorneys.  We have seen lawsuit recoveries get taxed, even though it seems like damages are being recovered.  So if you do win your case in court, you will be liable to pay the IRS.  This is on top of attorney’s fees

If you have a tax-related issue, you can contact the Strategic Tax Lawyers, LLP for assistance.  Call (800) 669-4775 for a free case consultation.



Tips from Taxation Attorneys about Offer in Compromise

Wednesday, February 18, 2015
The Strategic Tax Lawyers are taxation attorneys and IRS tax code specialists who want to give taxpayers tips about Offer in Compromise (OIC) process.  OIC is a program that the Internal Revenue Service (IRS) offers taxpayers to appeal the mediation process and is an avenue for taxpayers with a substantial tax debt to settle their tax debt.  The Offer in Compromise process is a great program that will assist financially distressed taxpayers with a solution or compromise to pay off their tax debt, usually for less money than the amount that is owed to the IRS.   The taxation attorneys provide OIC services as an option to assist taxpayers who cannot afford to pay a large sum of money due to financial hardship or other financial issues. 

The taxation attorneys say at that about 25% of businesses use the OIC process to negotiate a deal with the IRS to settle their tax debt.  This is usually for a lot less money than what was initially owed to the IRS.  Using a taxation attorney is a good idea because OIC is a long, formal process with a lot of documentation.  The business or individual is required to fill out forms which includes extremely detailed financial information.  There is a request posed to the IRS in which the tax agency can accept or deny the offer made.  The taxation attorneys say that the IRS will generally accept the offer in compromise that you offer since the IRS rarely collects more money later. The IRS will take what they can get now.

To qualify for an Offer in Compromise, say the taxation attorneys, a taxpayer needs to offer an amount based on their finances and income.  The IRS then needs to decide if what is offered is amount to cover the tax debt.  In some cases, the IRS will deny an OIC if a taxpayer can pay more than what he offered.  When the IRS approves an OIC, they will provide various payment plan options.  To find out if you are eligible for an OIC, use the online OIC Pre-Qualifier tool on the IRS website.

The taxation attorneys also have helped clients with dire financial circumstances request from the IRS to be temporarily placed on an "uncollectible" list.  With this status change, the Internal Revenue Service will not bother the taxpayer for a certain period of time; however the taxpayer is still responsible for the amount due, including interest and penalties.  During this time the IRS won’t officially try to collect any money while the “uncollectible” status is official.  The taxation attorneys have also helped clients file for bankruptcy in order to reduce or eliminate tax debts. This requires the assistance of a tax attorney since the rules are complicated
If you have a tax debt that needs to be resolved, you can request an Offer in Compromise. Contact the Strategic Tax Lawyers, LLP for assistance with an Offer in Compromise.  Call (800) 669-4775 for a free case consultation.


Tax Evasion Strikes Again With HSBC Swiss Bank

Wednesday, February 11, 2015
Once again Swiss banking giant HSBC is in the news for helping their rich clients worldwide evade paying their taxes which has resulted in the UK losing millions in taxes.  A document was released in the UK with information about 106,000 clients in over 200 countries, who evaded their taxes. Of those, approximately 7,000 clients (7%) are based in the United Kingdom.  The banking giant has confessed that they were responsible for assisting with tax evasion. Now the bank’s position is that they changed their banking standards which are stricter than in the past.  Currently, HSBC is facing criminal investigations worldwide except in the UK, where HSBC headquarters are.  The bank is complying with the authorities to provide relevant information about their clients.  The British government has been successful in prosecuting tax evaders and have also raised additional tax revenue.  In France, the tax authorities assessed that last year 99.8% of the French population evade tax.

As tax evasion attorneys at the Strategic Tax Lawyers in Los Angeles, California, we assist our clients with cases regarding offshore accounts.  We inform our clients that offshore bank accounts are legal; however, they can become illegal if individuals use the accounts to keep cash hidden from the tax authorities.  Tax evasion is different than tax avoidance.  With tax you hide money purposely and don’t pay taxes on it, while tax avoidance is the avoidance of paying taxes which is technically legal.  

The HSBC investigation revealed that 1,100 British clients of 7,000 were identified as not paying any taxes.  After five years, the British government only prosecuted one tax evader.  In addition, since the data was disclosed, HSBC has paid back $135 million pounds have in the form of interest and penalties.  Yet many feel that the tax authorities are not being assertive enough to collect the money that is due to the British government since HSBC assisted each client actively break the law.  For example, the bank assisted one of the wealthier families by providing them with a foreign credit card to access their cash overseas.  On top of that, the Swiss bank assisted their clients by protecting them from the law.

In 2005, a directive was introduced to catch and eliminate tax evaders by fining the banks with the amount of money that was evaded.  HSBC did not collect this money.  Instead, the Swiss bank found ways for their clients to evade the new tax; however this has been denied by HSBC.

A former tax inspector phrased it well.  He believed that HSBC was a “tax avoidance and tax evasion service” since the clients were very aware of the tax dodging service they would receive at the bank. Since then, HSBC stated that they changed their private banking business by implementing new initiatives against tax evasion, while also decreasing the amount of Swiss bank accounts by 70% over the last eight years.

Do you need assistance with tax evasion?  Are you looking to hire tax evasion attorneys? The Strategic Tax Lawyers, LLP are tax evasion attorneys with years of experience.  They are here to help you with any tax issues you may have.  For a free consultation to assist you with your tax-related issues contact the Strategic Tax Lawyers at (800) 669-4775.



The Strategic Tax Lawyers Advise Give Tax-Related Legal Tips

Monday, February 9, 2015
The Strategic Tax Lawyers are tax attorneys in Los Angeles who are here to give you some legal tax tips.

As the new tax season is beginning, we feel it’s a perfect time to give taxpayers some advice about taxes, the IRS and your tax liability.

First of all, you don’t want to have any tax debt. Once you do, you will require our services.  If you do have tax debt, you will find that you will pay up to 14% in interest, which means that the IRS will be hovering to get the money.  Especially since Congress has provided the IRS with the legal ability to collect tax that are past due.  In addition, the IRS has the ability to seize your belongings, including your home, income and any money in your bank account.  Legally, the IRS can do this at any time and there is no need for a court order to obtain your belongings.  We have seen the IRS send taxpayers a demand letter notice before any actions occur, but in many instances, the IRS is not required to give any warning to taxpayers.  Basically, the IRS is able to shut down your business or seize your assets if they have a reason to.  That means they can lock your doors and you can’t do a thing.  Until you find tax attorneys in Los Angeles.  

We will give you some good news, the IRS is busy, which means by the time they are going to collect what you owe them, you will have time to strategize and find a tax attorney in Los Angeles. At the beginning you will receive notices and tax bills. However, it will take time until the IRS has time to confront you face-to-face since the tax agency is limited with resources and lack of staff.  The IRS will attempt other ways to get their money before they assign an IRS case officer to your case.  You won’t be off the hook because the IRS can generate tax liens and levies that will be just as difficult to deal with as an IRS case officer.

Whatever the case, we as tax attorneys in Los Angeles, believe it is best to be as cooperative as possible with the IRS and also provide them with the documents that they are requesting.  Also never lie to the IRS, and you don’t have to disclose information about your finances to the IRS unless they have served you with a summons.  It is best to hire a tax attorney in Los Angeles to assist you with your legal rights.  Tax attorneys can assist with negotiation of payments plans or discounts.  However, during this time that you are waiting, interest and penalties are accruing.

Don’t take these tips lightly, say professional tax attorneys in California.  If you or someone you know a tax attorney in Los Angeles, contact 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.


IRS tax attorney - Tax Season May Have Delayed Refunds

Thursday, February 5, 2015
The 2015 tax season officially starts on Tuesday, January 20, 2015 and there are already projections being made by the tax specialists and IRS tax attorney at the Strategic Tax Lawyers that tax refunds may delayed this year.  This is no surprise to us, so taxpayers shouldn’t be surprised if they are waiting for their tax refund.
The Internal Revenue Service (IRS) is facing severe budget cuts which means reduced staff, less resources, and a decrease in services that will be available to all taxpayers.  In general, the IRS will have less resources to work with this year, so a delay in tax refunds is very much anticipated.

The tax specialists and IRS tax attorney at the Strategic Tax Lawyers suggest that identity theft could be on the rise, so taxpayers need to beware.  Identity theft is always a concern of the federal government, and now there will need to be additional measures and stricter protections.  Tax scammers have found more ways to steal identities and the authorities can’t keep up.  There are telephone scammers who pose IRS tax representatives, and they have managed to cheat the IRS out of over $5 million in 2014.  Scammers are very sly, and they can come up with clever tricks to not get caught.  The tax specialists and IRS tax attorney at the Strategic Tax Lawyers say that tax scamming and identity theft has become more rampant with no end in sight.  Now with the IRS budget cuts, we can expect the tax authorities to slow down their investigations.

This year, we can expect refund delays. For taxpayers who don’t file electronically, there may be a wait of an extra week or more to receive their tax refund.  Hopefully it will not affect refunds that are e-filed.  We may even start seeing the IRS send correspondence asking for more time to complete tasks.  This is a direct reaction of fewer IRS staff.  We should also expect that our cases may not be resolved in a timely manner.  And imagine the numbers of unanswered phone calls to the IRS call center.  We predict that many taxpayers will be irate while waiting for their questions to be answered. Tax experts claim that it is possible for less than half of taxpayers to reach a live person at the IRS.
Another important consideration is shutdowns, just like in 2013 due to mandated furloughs.  We may be facing two dates of temporary shutdowns if the situation gets worse with the IRS budget.  The good news about having reduced staff and resources could mean fewer taxpayer audits and collection case closures. 

We are not surprised by any of this information. We tax professionals and tax attorneys have seen harsh tax seasons, and this one doesn’t look good. The Strategic Tax Lawyers are tax specialists and IRS tax attorneys with years of experience in IRS issues.  We can help you with IRS-tax issues.  For a free consultation, contact the Strategic Tax Lawyers at (800) 669-4775.


Tax Season Is Here

Tuesday, February 3, 2015
Believe it or not, the IRS has announced that the tax file season has opened, and it’s on on-time this year.  We can look forward to many online services for the 2015 season.  Some features will assist U.S. taxpayers learn about how the Affordable Care Act (ACA) will influence their taxes, as well as the Free File program which will be available to all taxpayers.  As usual, the tax filing deadline is April 15, 2015 to file 2014 tax returns, which included the payments you owe the federal government.  

This year the IRS anticipates that approximately 150 million individual tax returns will be filed, and 80% are expected to be e-filed.  This year, the IRS is offering the Free File program, which is available on the IRS website.  This program will be available starting January 16, 2015 in preparation for the acceptance of your 2014 tax returns which will be accepted and processed starting January 20th.  California tax lawyers, the Strategic Tax Lawyers, say that this year, questions will be asked about the Affordable Care Act (ACA) for the first time.  For 75% of taxpayers, this will simply require a check mark to confirm that they have health insurance.  For those 25% who do not have coverage, there are tips on the IRS website.  The IRS, as always, wants taxpayers to file electronically and use the tools online instead of calling the IRS call center, as they are expecting a heavy call volume, which could take as much as 30 minutes to talk to a live person.  That’s why they are offering the Free File system which is available on January 16th, before the tax season starts, on January 20th.   The Free File system will offer electronic fillable forms for taxpayers at all income levels.  The California tax lawyers, the Strategic Tax Lawyers, say this will be convenient for those who want to fill out their own tax returns.  But remember to double check your submission for errors, have documentation for everything and be truthful about your income since you don’t want to send any red flags to the IRS.

If you want a quick refund, make sure to e-file and request a direct deposit.  It is easier not to avoid any mistakes with Free File.  Even paid tax professionals use e-file to expedite the process and reduce any mistakes.

This year, the IRS would like to issue 90% of refunds within 3 weeks of electronic submission, like in 2014.  Of course, paper returns will take longer to process.  Also consider that the IRS is short staffed so expect the IRS to take longer to process paper returns.  Also,California tax lawyers, the Strategic Tax Lawyers, recommend that you pay close attention to the Affordable Care Act portion questions so that you don’t red flag the IRS.  The requirement is for taxpayers and every family member to check a box if they qualified for coverage during the year.   You could qualify for an exemption when you file the tax return.  If so, you will need to include Form 8965 and include it with the return.

Don’t take these tips lightly, say California tax lawyers, the Strategic Tax Lawyers.  Contact the Strategic Tax Lawyers, LLP if you have a tax-related issue.  Call (800) 669-4775 for a free case consultation.


Tips to Deal with IRS Penalties

Tuesday, February 3, 2015

As we all know, the IRS is notorious for giving out penalties for various tax offences, and while some penalties are have more serious consequences and fines, they should all be taken seriously say Los Angeles based tax attorneys.  In general, the Internal Revenue Service will issue a penalty to taxpayers because the either did not file a tax return or they did not pay their income tax liability.  These penalties are known as a Late Filing penalty, which is a fine for missing the tax return filing deadline.  No taxpayer will want to pay an additional 5% to 25% of their tax amount, would they? But that’s the fine amount for a Late Filing penalty.  Los Angeles based tax attorneys have clients who receive this client often, so they recommend to file your tax returns on or before April 15, 2015 to avoid any penalties.  The IRS can also issue a Late Payment penalty if a taxpayer just doesn’t want to pay their taxes.  This doesn’t come without a cost.  The IRS can charge you interest of up to 0.5% each month you don’t pay them.  You should note that if you request a filing extension, it is recommended to pay a minimum of 90% of what is due along with your tax return so that you avoid the Late Payment penalty.  The IRS will charge a minor penalty of 0.25% of the remaining balance.  The IRS will issue an Underpayment penalty if a taxpayer underpays what is owed, either due to a mathematical error in record keeping, not reporting actual income, or keeping assets hidden, for example in an offshore account.  This penalty is more substantial and will cost you 20% to 40% of what you still owe the IRS.  Of course, say Los Angeles based tax attorneys, there are many more penalties that the IRS can issue, but these are the most common.  
 
The Los Angeles based tax attorneys advise taxpayers to arrange payment plan with the IRS if they cannot make the whole payment at one time.  For example, many individuals and most small businesses are able to work out a payment plan with the IRS.   When you owe money to the IRS, the Los Angeles based tax attorneys recommend that you keep in touch with the IRS regarding your case.  The IRS may leave you alone for a short while, but they have not forgotten about you. You can bet that the IRS will be back to collect their money, most likely at a time that is not opportune for you.  If you ignore the IRS, then the penalties will continue to accrue and business owners could lose their business.   And the longer you ignore the tax notices, the more your tax debt will increase.

Need a reliable Los Angeles based tax attorney? Then contact 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.


What Does Health Insurance Coverage Have To Do With Taxes?

Tuesday, February 3, 2015
Because of the Affordable Care Act (ACA) in 2015 tax returns all taxpayers will be asked if they had health insurance in 2014.  All that will be required is a simple check in a box. But it also means that the IRS will begin charging monetary fines from taxpayers that are uninsured.  This is the first time in history that such a personal question will be asked. You will need to state whether the health insurance was purchased privately, received through an employer or from one of the health insurance exchanges.  If you can’t choose one of these, then there is a penalty in your future.  This is because the federal government has made it a requirement for everyone to have minimum essential coverage unless they qualify for an exemption.  For taxpayers who are uninsured the penalty is based on the new law, thank Obama, which makes health care coverage the responsibility of employers and individuals.

In addition, if you had any life changes, such as new employment since you received any tax credits, there could be a chance you will owe money back to the IRS.  However, if you were unemployed, you could be eligible for certain credits, say Los Angeles tax lawyers.  Los Angeles tax lawyers suggest you pay attention to these items on your tax forms, since you don’t want any penalties or audits from the IRS.  

The penalty will be more than 1% of your household income, or $95 for adults, $47.50 for each child, and a family maximum amount of $285.  But for 2014, it is expected that the penalty will be more, closer to $301.  And according to Los Angeles tax lawyer, you can expect the penalty to increase for taxpayers that stay uninsured in the subsequent years.

For individuals who have health care coverage, the process will be easy to document that you have it and you will not be subject to any penalties.  Individuals who received health care coverage from an exchange need to fill out Form 1095a to prove their coverage, as well as if they received a premium tax credit.  This year, employers will not need to provide any proof of coverage.

For taxpayers who don’t have any health insurance, you will need to fill out Form 8965 to assess whether you qualify for an exemption and it will be used to assess your penalty if you did not have any health coverage.  The Los Angeles tax lawyer says there is a lot of information and it is complicated, especially with the new forms and rules for exemptions, so consult a tax professional in order to avoid any mistakes that could cause problems in the future.  The IRS has offered online support on their website which will help with the Affordable Care Act.  Due to the complexity of the requirements, the IRS expects an increase in questions and phone calls.

The Strategic Tax Lawyers, LLP are professional Los Angeles tax lawyers with years of experience in tax-related and IRS issues.  For a free consultation to assist you with your tax-related issues contact the Strategic Tax Lawyers at (800) 669-4775.


What If Taxpayers Were Not Procastinators?

Thursday, January 29, 2015
Can you imagine a tax world where taxpayers are not procrastinators? Or if the Internal Revenue Service would collect its money from taxpayers by changing their behavior to make them aware of the how much the government is not being paid what it is owed?  There has been data that shows people can get motivated by factors including risk of doing or not doing something and severity of doing something.  For example, imagine if the IRS motivated taxpayers to pay taxes by suggesting the severity of not paying.  This would assume that taxpayers want to see themselves as a compliant and good patron instead of doing the wrong thing. 

This would happen, say taxation lawyers, if the IRS would use psychology to increase tax compliance by increasing taxpayer and paid tax preparer psychological costs to reduce non-compliance and other errors.
One study in the UK studied tax compliance and taxpayers’ behavior by sending letters to those who had delinquent tax debts which personalized the information to allow them to understand that they are in a distinct group that is non-compliant and did not pay on time.  This study showed that there was a difference in the way taxes were collected, which has become an important analysis.  If the IRS incorporated this study, say taxation lawyers, perhaps the IRS could collect the billions they are due. 

The IRS is challenged with underpayment of taxes.  The IRS faces challenges to determine if taxpayers truly have a financial burden which explains their non-payment or if the taxpayers are purposely choosing to not pay their tax liability due to non-concern, procrastination, etc.  Currently, the underpayment tax gap is estimated to be $46 billion.
As the tax season starts, the IRS expects to receive tax returns that will ultimately either add to detract from the billions of dollars that is due to the federal government.  The IRS, say taxation lawyers, could group these taxpayers into categories, (1) taxpayers who can’t fully pay because they have legitimate financial hardships and (2) taxpayers who technically can afford to pay, but they choose not to.  At this point the IRS could send letters to taxpayers which explain what they owe, as well as what the consequences would be if they do not pay.  We would probably see some taxpayers be fully compliant by paying their full tax liability, others will attempt to respond, and the remaining will ignore the letter.  The message could make a difference to taxpayers who won’t or don’t pay, but not the can’t pay group. Those that are the won’t pay are considered procrastinators, versus those that can’t pay due to financial issues. 

This study, say taxation lawyers, could be an interesting solution for the Internal Revenue Service with benefits that could influence behavior on taxpayers.  
The Strategic Tax Lawyers, LLP are professional taxation lawyers with years of experience in tax-related and IRS issues.  For a free consultation to assist you with your tax-related issues contact the Strategic Tax Lawyers at (800) 669-4775.



Did You Check Our Facebook?

Wednesday, January 28, 2015
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