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New York Tax Lawyer Blog

Why individuals facing IRS criminal charges need an attorney

While there's no way for an individual to completely avoid paying taxes, there are ways to cut and reduce the amount of taxes an individual owes. By being proactive and engaging in tax planning, an individual can often reduce his or her tax liabilities substantially. It's important to note, however, that there are creative strategies that can be employed to reduce the amount of taxes one pays and then there are those that are questionable or outright illegal.

Simply failing to file and/or pay one's taxes is never a good idea. Not only is an individual likely to accrue costly fees and penalties, but he or she may also face criminal charges related to tax evasion. Additionally, it's never a good idea to file or submit tax-related documents that contain false or doctored figures. Again, an individual who under- reports the amount of income or overestimates deductions will incur costly fines and penalties and may face charges of tax fraud.

Should tax preparers be licensed by the IRS?

Each year, countless Americans are duped by so-called tax preparers who commit identity theft or fraud, or at the very least, file incomplete or inaccurate returns. Possibly contributing to this problem is the fact that the IRS lost the ability to regulate the licensing of tax preparers who are not attorneys or CPAs last year following a Supreme Court ruling.

However, a new bipartisan bill that has been proposed in Congress would give the Department of the Treasury and the IRS the authority to regulate tax preparers once more. As a recent Forbes article reported, the bill would allow the two agencies to oversee “all aspects of Federal tax practice, including paid tax return preparers.” 

Recently passed bills affects many U.S. taxpayers

In two recent blog posts, we discussed issues that may affect and lengthen the statute of limitations for IRS audits as well as options for taxpayers who fail to comply with FATCA reporting requirements. Recent actions by members of the U.S. Congress resulted in some important changes with regard to both of these IRS matters.

Oddly enough, these important tax changes were rolled into a completely non-tax related bill, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, making it likely that many taxpayers will miss them. Below are some of the important deadline and other changes that affect individual taxpayers, business owners and foreign-account holders.

What you need to know about IRS audits

For many who reside in the state of New York, one of their biggest fears is to be audited by the Internal Revenue Service. People who are concerned about this occurring probably believe that three years after a return is filed, they are in the clear. While it is true the statute of limitations for tax returns is generally three years, under certain circumstances it is possible that period could extend to six years. In some cases it could go even longer.

What to do and not do if you receive an IRS letter or notice

Denial, avoidance and procrastination are all activities in which an individual may engage when faced with something that he or she would rather not deal with or do. However, such coping tactics are almost always sure to backfire and make an unpleasant or difficult situation even worse. This is especially true in cases where an individual receives communication from the Internal Revenue Service. 

Anyone who opens their mailbox and sees a letter from the IRS is likely to panic. Whether an individual chooses to throw the sealed envelope away or simply disregard its message, ignoring the IRS can end up costing an individual hundreds to thousands of dollars in fines and, in some cases, a whole lot more. 

FATCA noncompliance and the IRS' Offshore Voluntary Disclosure Program

Enacted in March of 2010, the Foreign Account Tax Compliance Act, or FATCA as it’s more commonly known, has been the subject of much concern and confusion for many U.S. citizens who are either living abroad or who have foreign-held assets or property. The unpopular piece of legislation was passed in an effort by the U.S. government to keep track of U.S. foreign asset holders and crackdown on offshore tax evasion activities.

FATCA's provisions apply to U.S. citizens with foreign assets or property that is valued in excess of $50,000. While this requirement seems straight forward enough, many individuals who are subject to FATCA's terms would likely argue that attempting to abide by the law's provisions is anything but simple or straightforward.

How small business owners can avoid misclassifying employees

To start and grow their businesses, small business owners must wear many hats and become pseudo-experts in marketing, sales, accounting, tax planning and human resources matters. Given the varied and complex nature of each one of these business principles, it's no wonder that many small business owners make mistakes that, if not corrected, can end up costing them dearly.

Earlier this month, the shipping and delivery giant FedEx agreed to settle what's being called a landmark employment and tax case. At issue was whether FedEx erred when the company classified delivery drivers as independent contractors rather than employees. While the company maintains it committed no labor law violations, its decision to settle the case for $228 million speaks volumes and serves as a wake-up call for all U.S. employers—big and small.

What's a federal tax lien and how do I get rid of it?

There are many scenarios that may result in an individual accruing tax debt. In cases where an individual is notified by the IRS via a Notice and Demand for Payment of an outstanding tax bill, it's wise to address such matters in a prompt manner. At times, an individual may refute the amount or existence of tax debt. When contacted by the IRS, individuals who fail to take action with regard to an outstanding tax bill may be subject to fines and penalties including a federal tax lien.

Individuals who receive a Notice of Federal Tax Lien are likely to have many questions and concerns about how a lien affects their financial standing and credit. An attorney who handles tax issues can assist with problems that stem from and disputes related to tax debt.

What to do when the IRS gets it wrong

Now is the time of year when taxpayers begin getting those dreaded letters from the IRS saying that they didn’t pay the taxes that they owed. In some cases, people might be expecting the letters, knowing that they didn’t pay their taxes in full.

But in other cases, people might believe that the letter was sent in error. In this case, the good news is that there are steps that can be taken in order to figure out if the IRS has made a mistake. Believe it or not, the IRS has been known to get it wrong from time to time.

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