Are You Starting a Business? some tips from business tax attorneys

Tuesday, October 6, 2015
We are the Strategic Tax Lawyers, a firm of professional business tax attorneys in Los Angeles. If you are looking for legal advice regarding your new business, contact us for tax-related concerns.  When you start a business, the key to succeeding is understanding what your tax obligations are.  This not only includes income tax rules, but also rules about payroll taxes.  We are here to provide you with some information about legally starting your business. This information can also be found on the IRS website.
One of the first choices you will need to make is about the business structure. These choices can include sole proprietorship, corporation or partnership. Legally, the differences will determine which of the IRS tax forms you will be required to file each year.

Regarding business taxes, there are different types which include income tax, employment tax, self-employment tax, and excise tax.  The business structure that you will choose will determine the type of tax you will owe.  There may be a chance that you will need to estimate your tax payments.  Your paid tax professional will most likely advise you of this if you have one. But if not, we recommend paying the IRS directly online with IRS Direct Pay which can be set up to withdraw funds directly from your bank account.  Find out if you will need an Employer Identification Number (EIN) and if you do, you can apply for one on the IRS website.

There are two types of accounting methods you will need to familiarize yourself with to report income and expenses.  We advise our clients to choose one method and stay consistent with it. The two methods are cash and accrual. If you choose the cash method, your business will need to report all income and deduct all expenses in the same year in which you receive or pay them. On the other hand, the accrual method allows you to report income and deductions whenever you earn or incur them, which is not specific to a certain year.

Small businesses have to offer employee health care coverage. Then you will have the Small Business Health Care Tax Credit to assist with paying for health insurance for your employees. The credit is available to businesses with fewer than 25 employees, either full-time or part-time.  Some businesses can receive a tax credit up to 50% of what the premiums cost is. If you employee more than 50 full-time employees or part-time employees you may need to offer coverage that offers a minimum value and is affordable to their employees.

If you are looking to hire an experienced business tax attorney in Los Angeles, then the Strategic Tax Lawyers, LLP are the tax attorneys for you.  The experienced business tax attorneys in Los Angeles with years of documented successes dealing with the IRS and tax-related issues.  Contact the Strategic Tax Lawyers for a free case consultation at (800) 669-4775.

Tax attorneys in california explains What is the Taxpayer Advocate Service (TAS)?

Tuesday, September 22, 2015
The Taxpayer Advocate Service, also known as TAS, is an independent organization that is based within the Internal Revenue Service and serves to assist taxpayers with their tax issues.  TAS will assist individuals or businesses with any problems they have associated with taxes. The assistance is available for free to taxpayers. TAS will provide services that can help if tax issues cause you, your family or place of business any financial difficulty or any threat to terminate your business. If you have attempted to contact the IRS repeatedly without getting the assistance you need, then you should contact TAS.  TAS also offers services if the IRS does not issue you a response by the date they indicated they would.

The IRS follows the Taxpayer Bill of Rights, a set of ten basic civil rights that every U.S. taxpayer is entitled to when they are interacting with the Internal Revenue Service.  With these rights, taxpayers are provided with protection and civil liberties when dealing 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 privacy; (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; (8) the right to be informed and receive clear information and instructions; etc.

One of the rights allows taxpayers to appeal a decision that was made by the IRS.  However, to do so, the tax attorneys in California advise taxpayers to be aware of their rights.  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.

TAS will assist you with larger-scale tax issues that may also be affecting other taxpayers. They advise you to report any issues you may be having. Every state has a TAS office to advocate for taxpayers. Also, the IRS has YouTube Videos and Podcasts available in English and Spanish that outline the Taxpayer Bill of Rights. The newly revised Taxpayer Bill of Rights is a document that is currently available in six languages on the IRS website.

The Strategic Tax Lawyers, LLP is a firm with professional IRS Tax Attorneys that know the Taxpayer Bill of Rights and they can fight for your rights. The Strategic Tax Lawyers have experience successfully negotiating cases with the IRS.  Contact the IRS Tax Attorneys at the Strategic Tax Lawyers, LLP today for a free consultation at (800) 669-4775.

irs audit attorneys- Issues with the IRS’ Procedures to Authenticate Foreign Documents

Tuesday, September 22, 2015
Do you have questions about whether you need to file if you live or work overseas currently or at any point during the year? If you need to hire a reliable team tax professionals, which includes IRS Tax Attorneys, IRS audit Attorneys, and IRS Fresh Start Attorneys, contact the Strategic Tax Lawyers Firm.  We are tax lawyers who have 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.

According to the Internal Revenue Service’s (IRS) regulatory and auditing body (TIGTA), a new report indicates that the agency does not have in place effective procedures that are meant to ensure the authenticity of copies of important documents that are certified by a foreign issuing agency.  The authenticity is being jeopardized for applications applying for an Individual Taxpayer Identification Number (ITIN). TIGTA conducted this audit in an attempt to determine if there were procedures to ensure that documents are authentic when certified by a foreign issuing agency.  Originally, the audit began because there was a complaint made by an IRS employee that claimed that the IRS’s ITIN application procedures in fact are not guaranteeing that the documents certified by a foreign issuing agency are authentic.
It is important to have an ITIN Number for tax purposes if a taxpayer does not have a Social Security Number or cannot obtain one due to eligibility purposes. Individuals can be issued an ITIN regardless of their immigration status. In 2014, over 638,000 ITINs were issued by the IRS.  The audit validated the complaint that was made by the IRS employee. 

What does this mean? Basically, tax examiners are not qualified to authenticate copies of foreign documents that are certified by foreign issuing agencies.  The tax examiners do not have the tools in which to properly verify the foreign documents.  In addition, the procedures that the IRS developed cannot rule out if the ITINs are being issued due to false documentation.  It is critical for the IRS to be able to verify individuals’ identities and foreign status before processing an ITIN. This will affect tax returns and refunds that need to be issued. That’s why authenticating foreign documents is a necessary step in assigning an ITIN.

The IRS’ audit report requested that tax examiners be equipped with resourceful reference materials to assist them in the verification and authentication efforts of copies of certified foreign documents by a foreign issuing agency.  Also, a request was made for the IRS to create a process to train tax examiners on how to verify the authenticity of copies of foreign documents that have been certified by a foreign issuing agency.

New Tax Scams on the Rise

Tuesday, September 22, 2015
Have you received a phone call about owing money to the Internal Revenue Service for past taxes, owing a tax penalty, or about to get a refund? If so, be weary.  You may also get an email that asks you to go to an IRS online portal to update your personal information. Perhaps you may receive a letter in the mail that requests a past tax payment or current personal financial information.  In all these cases, the notifications seem authentic, whether the caller ID states the IRS phone number, the tax notice is on official-looking letterhead, or the email address is that of the IRS.

We are warning innocent taxpayers to be aware. There are tax scams that are always occurring and they are not ending any time soon. The Federal government has received reports of over 4,000 innocent victims getting swindled out of over $20 million.  There have been over 600,000 tax scam attempts since October 2013.

The IRS continually warns taxpayers to be aware of tax scams. We, the Strategic Tax Lawyers, want to remind taxpayers to take this seriously.  Tax fraud is a serious issue that leaves innocent taxpayers with major tax problems that can be frustrating, emotional and expensive to resolve.  The fact is, the scammers are becoming more technically savvy and more sophisticated.

For example, tax scammers will change the phone number that appears on your caller ID to look like the call is an official IRS call.  They will also use fake identifiers by making up names and job titles. Of course, this looks so official that it is hard to determine if it is a real call or a fake.  In fact, they get your personal information such as your name and home address by using the internet in order to make the call sound official.  In addition, they will scan and use official IRS letterhead to email or send mail. These are true con artists. Often times, the con artists who want immediate payment will provide directions to the nearest bank to get a payment. To make the scam look even more official, they have resorted to providing an actual IRS address for the taxpayer to mail a payment.

According to the IRS, they will never phone you to demand immediate payment. The IRS will not call you about any past taxes you owe. First, you will receive a notice in the mail. In addition, the IRS will never demand payment without giving you a chance to appeal or talk to your accountant. The IRS will never require that you pay in a specific manner. Nor will the IRS request any payment information over the phone. Also, the IRS will never make a threat, such as calling the police or immigration agencies. Also notice if official emails have the dot between "IRS" and "gov" since many fake emails will not.

We are the Strategic Tax Lawyers, LLP and we can assist you with your tax problems.  We are professional business tax attorneys, IRS levy attorneys, and audit tax attorneys 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.

Worried About an IRS Audit?

Tuesday, September 22, 2015
Are you keeping income hidden from the IRS? Even if you are not hiding any income and have given it your best effort, there still may be red flags that the IRS will notice.  Generally, taxes are complicated and the IRS may be suspicious of even the most innocent activities. It is important to understand the term limits of how far back the IRS can ask you to prove income, deductions, expenses, etc.

We are the Strategic Tax Lawyers, a firm of IRS Tax Attorneys in Los Angeles. Our IRS Tax Attorneys in Los Angeles can assist you if you have gotten an official notice from the IRS. Basically, what we want you to know is that the IRS has three years after you file your taxes to audit you. However, there are always extensions and loopholes.  These can occur if the IRS needs more time to audit. In that case, the IRS can send you a form that extends the statute, usually for one year. We, as IRS Tax Attorneys in Los Angeles, can assist you with circumstances like these. In fact, we tell our clients to agree and sign the form. But we advise to take the case for professional advice along the road.

There is one major exception to the three year audit rule. This is if you purposely exclude over 25% of your income. If this happens, then the IRS will have six years, or double the original audit time.  This applies to all tax returns that are filed as of August 1, 2015 or any previously filed returns that are currently pending. Legally, if you exclude over 25% of your income, it is known as a ‘substantial understatement’ of your taxable income.  This is different than overstating deductions.

This can be very nerve-wracking for some, especially since the IRS has no time limit if you never file a tax return.  If you don’t file a tax returns, then you can face criminal violations or fraud.  In addition, the IRS is focusing on offshore income and assets.  The six year rule also pertains if you exclude over $5,000 of foreign income in any overseas account.

Another important piece of information is about FBARs. Now, starting after January 1, 2016, FBARs will be due April 15 instead of June 30.  With this new transition, a six month extension will be allowable, just like traditional tax returns.

Strategic Tax Lawyers LLP are experienced IRS audit tax attorneys in Los Angeles who have counseled clients about their rights if they get audited.  These IRS tax attorneys can assist you with removing guesswork to prevent any issues.  The Strategic Tax Lawyers offer free and confidential consultations about tax-related issues. Call today at (800) 669-4775 if you need assistance.

Private Tax Collectors Not a Good Strategy for the IRS

Friday, September 11, 2015
Back in 1996, the IRS launched a program to utilize private debt collectors to assist the tax agency with collecting on the millions of dollars of unpaid taxes that taxpayers owe.  One year later, the program was cancelled when an investigation found that those debt collection firms were violating the Fair Debt Collection Practices.  This caused the Internal Revenue Service to lose almost $17 million.  
In 2004, a similar attempt was made to hire private debt collectors in order to create more jobs for the industry. This, however, also failed miserably during the Bush administration. There were major violations of the same Fair Debt Collection Practices with debt collectors calling and harassing the elderly over 150 times.

Currently, Senate just approved a new bill that requires the IRS to use private debt collectors. Third time a charm, maybe?  
The Senate approved the legislation which will cost the nation $275 billion over the six year program term.  Democratic Senator Schumer from New York believes this bill will help secure at least $2.4 billion over the next decade from debt collection by the private debt collectors.  Schumer believes that jobs will be generated in New York and tax revenue will be boosted. 

Republicans, on the other hand, are infuriated by this decision as well as by IRS practices.  They have continually reduced the IRS’ budget by 20% over the last five years.  Congressional cuts already have caused the IRS major damage due to reduced staff and decreased audit rates.
A tax attorney has commented that that this plan will create more problems.  Where are the lessons learned in all this? The tax attorney compared the IRS having discretion to pronounce some tax debt as merely uncollectible, due to financial or health issues, while private debt collectors will stop at nothing to get the debt returned. This is how problems are created.

Will this crate more budget cuts for the IRS? Less IRS audits?
Stay tuned for more news about this.
The Strategic Tax Lawyers are experienced IRS tax lawyers, IRS CP504 Attorneys and Audit Tax Attorneys who have counseled clients about the protection of their assets from creditors.  These IRS tax lawyers can help you plan how to remove guesswork to prevent any issues.  The Strategic Tax Lawyers offer free and confidential consultations about estate planning, estate tax exemption, will & trusts and tax-related issues. Call today at (800) 669-4775 if you need assistance.

Home Sales and Tax Facts

Friday, September 11, 2015
We are the Strategic Tax Lawyers, a tax law firm based in Los Angeles.  Our Los Angeles Tax Attorneys and Los Angeles Tax Relief Lawyers are experts in the IRS Tax Leniency program.  We want to share some important information about home sales and the legal aspect of tax responsibility relating to home sales. In general, gains from sales are taxable. We are here to let you know that if you sell your home then there is a chance that you will not need to pay taxes.  Below are a few tips on what you will need to consider if you are selling your home this year.

If you sell your home, you may be able to exclude either the total or a portion of the gain from the home’s sale. However, you need to meet the eligibility test and requirements in order for this rule to apply. The requirements will involve your ownership and how you use the property.  For example, you need to own the property and used it as a primary residence for a minimum of two out of the five years before you sell it.

As with any requirement, there are different exceptions that may apply.  These can include an exception to the use of the home or the ownership of the home. There are exceptions for persons with a disability and for certain military members and government workers.  

In addition, there is an exclusion limit that may apply, but the most gain you can exclude from tax is a maximum of $250,000 for an individual return and a maximum of $500,000 for joint returns. If the sale of your home results in a gain that is not taxable, then you may not need to report the information about the sale on your tax return.  However, you will need to report the sale of the home to the IRS on your federal tax return if the gain cannot be excluded. You must report the sale if you choose not to claim the exclusion.  If the IRS sends you a 1099-S Form, then you will also need to report the sale or real estate transactions. More information on this is available on the IRS website. According to the IRS, you can also exclude the gain from main home’s sale only one time every two years.  Also, if you own more than one property, you will only be able to exclude the gain on the sale of the primary property that you reside in for the largest percentage of time.

There are special rules that will apply to you if you were a first-time homebuyer and claimed the first-time homebuyer credit.  Also, if you sell your primary residential property at a loss, then you won’t be able to deduct the loss on your tax return.

The Strategic Tax Lawyers, LLP are Los Angeles Tax Attorneys and Los Angeles Tax Relief 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.

Santa Monica tax attorneys Advice to Keep Track of All Your Miscellaneous Deductions

Friday, September 4, 2015

We are the Strategic Tax Lawyers, Santa Monica tax attorneys, who want to give you some facts about how the IRS handles miscellaneous deductions and the importance of keeping track of all documents and forms so that it will not trigger an IRS audit.  In general, miscellaneous deductions will cut down on your tax liability. These deductions can include any of the expenses you may have paid for your career or employee-related expenses such as dry cleaning, transportation, conference or other association fees, etc.  According to the Internal Revenue Service, you need to itemize each deductions when you file your tax forms in order to claim these itemized deductions. According to tax professionals, if you normally will claim the standard tax deduction each year, you should think about itemizing your deductions instead to get a larger tax return. Surprisingly, you might even end up paying less taxes if you itemize your deductions. 

There are other tips that you should consider that could assist with reduce your tax liability. For deductions that are subject to the limit you may be able to deduct most of your miscellaneous items if the total sum equals to or exceeds more than 2% of your AGI (adjusted gross income), which includes certain expenses such as job searching charges if you are unemployed or looking for a new job, unreimbursed employee expenses, clothes and/or uniforms that pertain to your work, work-related tools or machinery, dues to the union, travel related to work, fees you pay for a professional tax preparer, for tax preparation software or for e-filing fees. Some deductions that are not subject to the 2% limit, according to the IRS, are theft, losses or damaged property that was kept for investment purposes. This consists of stocks, bonds, art work, or any other property. It also includes any losses from gambling and any losses from financial investment schemes.  There are a list of many other expenses that cannot be deducted, such as expenses for family or personal living.  Also, you can deduct hobby expenses if it provides you another source of income and doesn’t qualify as your business.  The amount you can legally deduct is the amount of money that you earned from that specific hobby. 

The IRS website is a good place to consult first if you have any specific questions. You can report any miscellaneous deductions on Form 1040, Schedule A. This cannot be reported on Forms 1040A or 1040EZ. If these deductions are less than your standard deduction amount, it may not be in your favor to itemize. 

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

Did You Receive a Federal Tax Lien By Mistake? (Part 2)

Friday, September 4, 2015

In our last blog, we discussed federal tax liens. As top Los Angeles tax attorneys at the Strategic Tax Lawyers firm, we assist clients with federal tax liens and even clients who mistakenly received one of these IRS notices. In general, a federal tax lien will make sure the IRS eventually receives its money from the taxpayer. This could involve a seizure or forced collection of money, assets, and/or property. In this capacity the IRS will be able to sell tat property to get paid.

On occasion, the IRS will make a mistake and a notice will be sent out inaccurately.  Whether the notice of federal tax lien is a mistake or not, we recommend that you act on this immediately, and we can assist you throughout the process.  This happened to celebrity and musician Dionne Warwick who was issued a federal tax lien by the IRS. Ms. Warwick proved that the IRS can be wrong with the assistance of her tax attorneys. The Strategic Tax Lawyers can also assist you if you mistakenly received an arbitrary notice from the federal government.

Another example we want to bring up is about super star and Oscar winner Robert De Niro, who received a $6.4 million tax bill in early 2015.  Mr. De Niro learned that his taxes went unpaid for his 2013 tax return. His tax debt was discovered accidentally and if it wasn’t the interest and penalties would have kept accruing since the actor was not aware of this tax issue. It is true that the notice he received revealed that in fact, he had a tax bill that went unpaid.  However, upon learning about the tax lien, he paid the IRS in full.  Apparently, Mr. De Niro’s IRS notices were sent to an old home of his. 

The point is, no matter who you are or what your status is, you can receive an notice for a federal tax lien for unpaid tax debt.  As we mentioned earlier, we advise to take care of this issue quickly because when tax bills get to this stage, the penalties and interest associated with it accrue very quickly.  The longer you wait to pay your IRS bills, the more you will be charged.  In addition, the costs of hiring a tax attorney to remedy the situation could prove expensive. 

The Strategic Tax Lawyers, LLP are a firm of professional and qualified Los Angeles Tax Attorneys, Intent to Levy attorney and Los Angeles Tax Relief attorneys who specialize in all aspects of the tax code, especially federal tax liens.  Our firm has years of experience dealing with the IRS about tax-related issues.  To get a free consultation, call the Strategic Tax Lawyers at (800) 669-4775 for assistance you with your tax-related matters.

Did You Receive a Federal Tax Lien By Mistake?

Friday, September 4, 2015

Federal tax liens are to be taken very seriously. These tax liens can damage credit scores, prevent real estate closings, and cause other serious problems in your life. The purpose of a tax lien is to make sure that the Internal Revenue Service receives their money.  They don’t care if you pay in one lump sum or if you negotiate for a payment plan with installments. The point is they are very serious about getting their tax money. 

The IRS is usually correct when issuing federal tax liens, but there are cases of mistakes.  Even if you fully pay off a lien, there is a chance that the lien may not be removed due to a mistake. These may be complications if you didn’t anticipate, especially if you didn’t know there was a tax lien filed against you.  There are always some lien notices that are mismanaged.  Actually, according to a report issued by IRS auditors, over 24,000 taxpayers may have been negatively affected by tax liens that the IRS botched.  In most of these cases, the IRS mailed out lien notices that explained the taxpayer’s appeal rights, which is the correct procedures if a notice is undeliverable by the post office.

However, 24,000 taxpayers is a significant amount that were affected by the IRS’ tax lien errors.  Even if you have a tax attorney or tax accountant, mistakes can still happen. In general, the IRS can file a Notice of Federal Tax Lien if (1) the IRS assesses the tax liability; (2) the IRS sends a Notice and Demand for Payment; and (3) the taxpayer fails to pay within 10 days.

In general, the IRS need to file a notice of lien so that creditors are aware of the situation. These tax liens cover all assets and property and it won’t make a difference if the property was acquired after the filing of the lien. Many times, this information is used for real estate auctions and bankruptcy proceedings.  The liens will usually last 10 years and unless the IRS refiles them, it will release automatically.  

As top tax attorneys in Los Angeles at the Strategic Tax Lawyers firm, we recommend that you remove tax liens immediately, and we can assist you throughout the process.  In general, a lien will be released if a taxpayer will (1) pay the tax and the interest and penalties associated with it or (2) post a bond that for a payment.  

The Strategic Tax Lawyers, LLP are a firm of professional and qualified California Tax Attorneys, Intent to Levy attorney and Tax Relief attorneys who specialize in all aspects of the tax code, especially federal tax liens.  Our firm has years of experience dealing with the IRS about tax-related issues.  To get a free consultation, call the Strategic Tax Lawyers at (800) 669-4775 for assistance you with your tax-related matters.