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New York Tax Lawyer Blog

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. 

Justice Department striking down on tax evaders

In recent years, the U.S. government has been cracking down on individuals who hide money in overseas bank accounts in effort to evade taxes. The Justice Department has mainly focused its efforts on foreign bank accounts in Switzerland but it beginning to expand to other countries such as Israel as well, the Wall Street Journal recently reported.

The Justice Department has not only been targeting individuals that have attempted to evade paying taxes themselves, but also top bank officials who allow it to happen. However, the government has learned that it’s not always easy to do that. 

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.

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