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New York Tax Lawyer Blog

Why on-demand workers are more likely to get audited

Being audited is a big fear for many New Yorkers, especially around this time of year. It can not only be a long and burdensome process, it can also be quite scary because of the potential penalties involved.

Unfortunately, if you are an on-demand worker, such as a driver for Uber, Sidecar or Lyft, it is almost inevitable that you will be audited at some point in the near future, according to a Forbes.com article.

IRS details ‘dirty dozen’ tax scams of 2015

Tax season is in full swing and tax professionals across New York and the rest of the country are hard at work. But do you know who else is hard at work? Tax scammers. Tax season can be stressful enough as it is, and falling for a scam only makes it that much worse.

The IRS recently released a list of the “dirty dozen” scams tax preparers need to watch out for this year. Here are several of the scams included on the list:

What three celebrities can teach us about IRS tax liens

This week, actor Robert De Niro was hit with a tax lien from the IRS on his Manhattan condo for owing $6.4 million in unpaid taxes. De Niro took action right away to pay the debt, and his spokesperson said that the taxes were unpaid because he had not received the notices.

This isn’t the first time that a celebrity has run into trouble -- or a misunderstanding -- with the IRS. In fact, there are at least three lessons that celebrities have had the opportunity to teach us about tax liens, in particular. 

Stop hiding from your tax debt; confront it head-on

Is the upcoming tax season drawing up a sense of fear and anxiety within you over your unpaid taxes? Do you feel overwhelmed and at a loss over how you will ever be able to pay the back taxes you owe? Are you expecting your tax debt problems to only get worse with the upcoming tax deadline?

If you answered "yes" to any of these questions, you can now breathe a sigh of relief because we are here to help.

Are tax debts dischargeable in bankruptcy?

Tax debts are not always dischargeable in bankruptcy, but they can be. Determining whether your tax debts are dischargeable depends on a variety of factors, including the type of bankruptcy you file, the type of tax debt you have, how old the tax debt is and whether or not you committed tax evasion.

First, tax debts are more likely to be discharged if you file for Chapter 7 bankruptcy, which involves having debts completing discharged, than if you file for Chapter 13 bankruptcy, which involves creating a repayment plan to repay most of your debts over an extended period of time. 

IRS won’t be much help this tax season; turn to us instead

Thanks to budget cuts the IRS is warning that many taxpayers will not get the assistance they need this tax season.

It is expected that only about half of the people who call the IRS for assistance this year will be connected with a live person, and those callers who do get through could be put on hold for 30 minutes or more even to get answers to simplest of questions.

The National Taxpayer Advocate, who is an independent IRS watchdog, said taxpayers might not only find the lack of support annoying, it could also make it difficult for them to comply with the law. 

Outlook ‘Grimm’ for lawmaker who pleaded guilty to tax fraud

A Staten Island lawmaker could see his political career come to a screeching halt after pleading guilty to tax fraud last month. U.S. Rep. Michael Grimm (R-NY) pleaded guilty to one count of aiding in the filing of a false tax return, in 2009.

Grimm, an ex-Marine and FBI agent, now faces a maximum of three years in prison, which would force him to resign from Congress. His sentencing date has been scheduled for June 8, where a judge will decide his fate.

What if I can’t afford to pay my taxes in full?

If you know you won’t be able to afford to pay the income taxes you owe in full this year, you might be starting to panic as tax season approaches.

As we all know, failing to pay taxes can result in significant fines as well as criminal charges, so it’s smart to get a plan in place now. The good news is that there are options available for people in your situation.

These options from the IRS help you to avoid the interest and penalties that are normally associated with failing to pay the taxes you owe. They include:

States cracking down on nonresident income taxes

Nonresident income taxes are income taxes that a worker owes in a state in which he or she does not reside. The taxes require an employer, in some circumstances, to without payroll taxes from both states, and an employee to file a nonresident tax return in the state he or she worked but does not live.

Essentially, the employee usually ends up paying the same amount in income taxes because the home state often gives the employee credit for the income taxes that were paid to the non-home state. While the issue shouldn’t seem to matter much to employees, employers or the IRS, states do care because they see it as lost or added revenue.

When to talk to a tax lawyer

As we discussed in an article on our website, most people don’t think of contacting a tax lawyer until they are facing some kind of problem such as being accused of not paying taxes or being audited. However, it’s best to work with a tax lawyer before that happens in order to avoid these problems in the first place.

For example, one time New York residents may run into tax issues is after receiving an inheritance. Typically, receiving an inheritance is not a taxable event, but there can be tax controversies that arise and greatly complicate the inheritance for the beneficiary or the executor of the estate.

In order to avoid this, it’s best to consult a tax attorney who can work with the estate planning lawyer to make sure that all potential tax issues are resolved. 

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