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New York Tax Lawyer Blog

Know your rights when you owe the IRS

If you owe the IRS back taxes, chances are that you are feeling scared and powerless. But the good news is that even if you are partially in the wrong, you still have rights thanks to The IRS Restructuring and Reform Bill of 1998 and the more recently adopted Taxpayer Bill of Rights.

Under these policies, the IRS has to fully communicate with taxpayers and afford them “due process” rights before pulling one of the many levers it has to make a taxpayer’s life miserable. Understanding your rights can make all of the difference when dealing with the IRS and back taxes.

Have unfiled federal taxes? We can help

When a New York resident has failed to file a federal tax return in the past, he or she may try to ignore the issue and hope that it goes away. But it won’t be long until the Internal Revenue Service catches on and comes after the delinquent taxpayer with guns blazing.

For that reason, it’s best to take advantage of the IRS’s “voluntary disclosure” policy, which allows individuals to file unfiled back tax returns, almost always without the risk of criminal prosecution. 

'Jersey Shore' star gets himself into a 'situation' with the IRS

When average people become famous seemingly overnight, they can go from earning average paychecks to bringing in thousands of dollars per week. When income changes drastically like this, it’s important to work with a tax professional to make sure that proper income taxes are paid.

Unfortunately, not all people do this and they can easily get into trouble with the IRS. Just take case of Mike "The Situation" Sorrentino, of “Jersey Shore” fame. The Situation and his brother, Marc, got themselves into quite the predicament with the IRS after allegedly failing to properly pay taxes on close to $9 million in come. 

Bill seeks to close gap in tax code for forgiven student debt

Student loans are now one of the highest sources of debt for Americans, with more than $1 trillion owed. On average, college students graduating with about $30,000 of debt, and many can barely afford to make their loan payments each month.

Earlier this year, President Obama expanded the “Pay as You Earn” program, which is intended to help borrowers in this situation by basing their monthly loan payments on their income. Then, after 20 years of consistent payments, any remaining student loan balance is forgiven. 

Redford opposes bogus tax bill with massive interest

While all of us would like to have more money, few of us like the idea of having to pay taxes and deal with the IRS in connection with that wealth. For better and for worse, those with significant wealth also end up owing significantly more taxes and having more potential to catch the attention of the IRS. A good example of this is actor Robert Redford, who is currently suing the state of New York in connection with a tax bill. The bill, which goes back to 2005, is for a total of $1,568,470, nearly half of which is for interest.

The bill is connected to the sale of Redford’s ownership stake in the Sundance Channel, which features independent films. Redford, who didn't even know about the bill until recently, argues in his suit that he is being subjected to double taxation and that he already paid taxes for the sale in Utah, since all operations are based in Utah. 

What 'Seinfeld' taught us about taxes and the IRS

This month marked 25 years since “Seinfeld” debuted on television. And while it is often described as a “show about nothing," but in reality it was about all of the ordinary things New Yorkers go through in life, including paying taxes.

Recently, a Forbes article highlighted the fact that taxes and the IRS were discussed in at least 10 episodes. One episode talked about gift taxes, another discussed classifying workers as independent contractors and there was even an episode that highlighted the importance of mailing dates.

Foreign account tax issues may concern some New York residents

Tax time comes and goes every year, and residents in New York may wonder if filing taxes on foreign accounts on-time is always the best thing to do. Typically, the answer to that question is yes, but those with a first time FBAR, or Foreign Bank Account Report, may benefit from waiting to avoid tax issues. As the deadline for FBAR filings just recently passed, account holders -- particularly those who are new to foreign accounts -- may wonder how filing now will affect them.

To avoid tax issues, such as the need to amend a return shortly after filing, it is always beneficial to have all necessary information and documents in place. Sometimes, the required information needed to file simply isn't available in time. While submitting a tax filing after deadline may result in penalties, the cost would be far less than not filing at all.

IRS adopts Taxpayer Bill of Rights

Thanks to the efforts of the “national taxpayer advocate,” Nina E. Olson, the Internal Revenue Service recently adopted a "Taxpayer Bill of Rights." If you have received an audit notice or fear that you might, it’s important to know how your rights protect you.

Under the Taxpayer Bill of Rights, you have the right to:

Understanding the newest reform to the FATCA

In the president’s most recent proposed budget, a relatively obscure direction appears. It reads that the federal government shall “Provide for reciprocal reporting of information in connection with the implementation of FATCA.” This provision will likely mean little to many Americans and will affect few Americans directly. However, it will impact certain individuals and corporations in significant ways.

FATCA stands for “Foreign Account Tax Compliance Act of 2010.” This legislation helps to ensure that American individuals and companies do not misuse offshore accounts in attempts to evade federal tax liabilities. This important law was inspired partially by a number of tax investigations that revealed significant abuses of the system and evasion of massive federal tax liabilities.

Tax debts could be sent to collections under proposed bill

A new measure has been proposed in the U.S. Senate that would require the Internal Revenue Service to send delinquent tax debts to a private debt collector. If it becomes law, the measure would require the IRS to send unpaid tax bills to collections if the IRS is unable to locate or make contact with the debtor for a year.

The U.S. Taxpayer Advocate said in a letter to lawmakers that sending unpaid tax debts to private debt collection agencies would be a “bad idea,” and is one that has failed in the past. Additionally, the taxpayer advocate told lawmakers that the measure would unfairly target the nation’s poor and vulnerable taxpayers.

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