Tax Debt Questions
- Can I speak with an attorney now regarding my tax problem?
- Can you help me stop a wage levy or bank levy right away?
- I have a tax lien on my record, can this be removed?
- I haven't filed taxes in many years, what can I do?
- I filed my returns but I can't afford to pay my taxes, what are my options?
- Can taxes be discharged in bankruptcy?
- I filed bankruptcy already, can I file again?
- Will I go to jail for not paying or filing my taxes?
- IRS has rejected my Offer in Compromise several times; what is wrong?
- I own a house, can I still do an offer in compromise?
- Do I need to see a tax attorney for my tax problems?
- How long can the IRS come after me for my taxes?
- I have been receiving certified mail from the IRS. What should I do?
- My employer sent me a copy of a letter they received from the IRS to levy my wages. What does this mean?
- I think I am being investigated by the IRS. What should I do?
Tax Audit Questions
- Why am I getting audited?
- I am being audited by the IRS. What should I do?
- What are my rights in an audit?
- What are the IRS' rights in an audit?
- What does the IRS auditor look for in an audit?
Estate Planning Questions
- Do I need a Will?
- Can I avoid probate if I have a Will?
- What assets can I transfer by using a Will?
- What is probate?
- How can I avoid Probate?
- What is a living trust?
- Can I avoid Estate Taxes if I have a living trust?
Business Formation Questions
- Can I speak with an attorney now regarding my tax problem? Yes, you can call 1(888) 553- 8000. Our office hours are from 8:30 am to 7:00pm (PST); however you can always reach our "on call" attorney even after hours to discuss your case 7 days a week.
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Can you help me stop a wage levy or bank levy right away? Yes. We'll need to contact the IRS immediately. Often, these tax levies can be released within a day so that you can receive your wages or access your bank account right away.
I have a tax lien on my record, can this be removed? Yes, either by submitting an offer in compromise, negotiating structured payment of debt, or by requesting a discharge of lien, your tax liens can be released.
I haven't filed taxes in many years, what can I do? For one reason or another, many Americans do not file their tax returns. Some of our clients haven't filed their returns for over ten years before coming to us. Regardless of your reason for not filing, it is very important to review your case with a qualified attorney before any further action is taken. By reviewing your case, an attorney may be able to greatly reduce taxes and penalties which you would otherwise owe by coordinating the timing of your tax return filing.
I filed my returns but I can't afford to pay my taxes, what are my options? There are many options for those with tax debts who cannot afford to pay. Offer in compromise, innocent spouse and installment payments are some of the options available to manage your tax debt. In some cases, attorneys can negotiate with the IRS to stop all collection activity against you and not pursue you at all for the taxes outstanding. In addition, by reviewing your case, penalties, interest and even some of the taxes may be reduced.
Can taxes be discharged in bankruptcy? Most people don't know that certain taxes can be eliminated through the bankruptcy process. In fact, most bankruptcy attorneys or even tax attorneys do not know that certain taxes may be eliminated through the bankruptcy court. To properly handle tax matters in the Bankruptcy Court, you need an experienced attorney that has been trained and understands the complexities involved in handling tax matters through the Bankruptcy Court. Keep in mind that only a lawyer can give you legal advice and discharge taxes in bankruptcy for you. Because of the complexities, no other professionals, including CPA, or EA are permitted to handle tax bankruptcy cases.
I filed bankruptcy already, can I file again? Yes. Depending on what chapter you filed. If you filed Chapter 7 Bankruptcy, you can file Chapter 13 Bankruptcy after you receive your discharge. If it has been more than 6 years since you received your last discharge, you can file another bankruptcy now.
Will I go to jail for not paying or filing my taxes? It is a federal crime not to file tax returns for tax periods in which taxes were due, in most cases. In most cases, IRS will initiate criminal actions against you only if additional factors warrant such criminal tax prosecution. The most important step is to make proper arrangements through an experienced tax attorney and get into compliance with the IRS before they decide to come after you.
IRS has rejected my Offer in Compromise several times; what is wrong? Many taxpayers get their Offer in Compromise rejected or not even considered by the IRS simply because they received poor representation. There are many non-lawyers who advertise as tax resolution companies offering "pennies on the dollar" settlement. These non lawyers give taxpayers bad advice and cost them a lot of money. Make sure that you hire a competent tax lawyer. No one else can give you the proper legal advice to fully solve your tax problems.
I own a house, can I still do an offer in compromise? Yes. Ownership of any assets does not prevent you from receiving a good settlement of your taxes with the IRS. The government does focus on the equity in your assets as one of the factors in determining the acceptance of your offer. However, IRS may consider different valuation methods in calculating value of your particular asset.
Do I need to see a tax attorney for my tax problems? Only conversations with attorneys are absolutely protected by the rules of confidentiality to prevent the IRS from prying or forcibly obtaining sensitive information to be later used against the taxpayer. Everything you say to a CPA, EA or anyone else concerning your tax problem can be used against you if the IRS decides that your case warrants criminal prosecution. In fact, the IRS can investigate and force your CPA, EA or anyone else, other than a lawyer, to testify against you for your indictment. Always insist that you speak with a lawyer only.
How long can the IRS come after me for my taxes? There are many factors which will determine how long the IRS can chase you to collect taxes. Generally, IRS has 10 years from the date of tax assessment to collect their taxes. However, there are several tolling factors which could extend the 10 years to collect.
I have been receiving certified mail from the IRS. What should I do? In most circumstances, IRS sends you certified mails to levy bank accounts, levy wages and to file tax liens against you. The green certified mail slip on the envelope usually indicates that you must act immediately or you may be harmed by the government's tax collection activity.
I think I am being investigated by the IRS. What should I do? Any involvement in a criminal investigation is extremely stressful and potentially dangerous to any taxpayer. If you have been contacted by criminal investigation division or believe that you may be involved in some type of investigation by the IRS, contact a lawyer immediately so that we can make a determination whether you are a target of criminal investigation.
Why am I getting audited? IRS uses variety of methods to select people for audit. IRS likes to apply computer scoring system which compares your ratio of income and expenses to that of others in similar businesses and locations. The focus of IRS' audits, unfortunately, are targeted towards small business owners and self employed people.
Certain business industries are also targeted by the IRS for audit including realtors, contractors, doctors, textiles, car sales, manufacturers, employment agencies and people with investment losses. In addition, if you had prior audits or were involved in any business dealings with people who were under criminal investigations for tax crimes, your chances of an audit will be much higher.
I am being audited by the IRS. What should I do? You do not personally have to attend your audit. It is advisable to hire a tax professional to handle your case if you are concerned that there may be some discrepancies in your tax return. In addition, even if you decide to represent yourself, it may be a wise move to consult an attorney for some audit defense techniques prior to your meeting with the IRS.
What are my rights in an audit? Through the Taxpayer Bill of Rights, you are given more legal and procedural protection from the IRS in an audit including the right to hire a representative to meet with the IRS on your behalf, record your meetings with the IRS, and discuss with IRS mangers if you feel that you are being mistreated by the auditor.
What are the IRS' rights in an audit? IRS' power in an audit is broad. They can literally demand that you produce any and all documentation to support your tax return. For example, IRS is allowed to inspect your business location, review your records with a fine toothed comb, contact third parties concerning your business, contact banks, suppliers and customers about you.
INCOME: IRS will review records to determine whether your stated income is accurate by looking at bank statements and your sales ledgers. If your business has a lot cash transactions, IRS may further probe your stated income for accuracy. IRS may refer your case for criminal prosecution, if the IRS finds that there is a significant under reporting of income.
EXPENSES: IRS will look for back up documents and receipts which will support your claimed expenses. IRS may try to determine whether any of your personal expenses were claimed as business expenses including usage of your auto, entertainment expense, travel expense and so on.
Do I need a Will? Everyone should have a Will. It serves to specify who will receive your properties upon your death. In addition, if you have minor children, a Will can appoint legal guardian who will care for your children after your death. If you do not have a Will, your property will be distributed out according to California State law.
Can I avoid probate if I have a Will? No. Property left for distribution through a Will must go through the Probate Process. Probate is expensive and frustrating experience for surviving members of your family. In that regard, you should try to plan your estate so that you could avoid probate all together.
What assets can I transfer by using a Will? Although creating a Will allows you to transfer most of your assets, certain properties held in a living trust, life insurance proceeds, retirement benefits, joint bank accounts, and jointly held real estate, cannot be transferred by using a Will.
What is probate? Probate is an expensive and time consuming process which is designed to distribute your assets to your beneficiaries with the supervision of the State Court system. Many estates which are probated can take over a year to process which means that your family members may not benefit from the use of your assets during such time.
How can I avoid Probate? By hold your assets in a Living Trust and other probate avoidance devices, you can completely avoid Probate. Jointly held properties such as bank accounts and real estate can be transferred without Probate.
What is a living trust? A living trust is a legal document that allows you to transfer your assets held in the trust without probate. Upon your death, your beneficiaries will receive the properties designated and held in the Living Trust without the hassle and expense of going to court. Living Trust is extremely flexible and allows you to transfer properties "in and out" of the trust at your discretion. The properties in a Living Trust can be used by you exactly in the same manner as before the creation of the trust. For example, you can refinance your home held in a Living Trust, you can sell your car held in a living trust, use your brokerage and bank accounts without any restrictions.
Can I avoid Estate Taxes if I have a living trust? Currently, a lifetime exemption of $1,500,000.00 per individual allows you to transfer equity in assets valued up to $1,500,000.00 to your beneficiaries upon your death free of any estate taxes. The total amount exempted from estate taxes increases every year and peaks out at $3,500,000.00/person in 2009. However, Congress at any time after 2010 may reenact new Estate Tax rules which may take away or lower any tax exemption provisions.
Accordingly, it would be a good idea to meet with an attorney to review your estate and plan out a strategy which will both avoid probate and minimize or eliminate any estate tax exposure. A carefully planned "AB Living Trust" for married American couples could allow significant estate tax savings.
For example, Jack and Diane are married and live in California. They each have $1,500,000.00 in their estate. If Jack dies tomorrow and leaves all his assets to Diane, there is no estate tax due because Jack can transfer up to $1.5 million tax free. However, if Diane also dies later in 2004, she would leave behind $3,000,000.00 in her estate. The highest estate tax rate in 2004 will be 48% which means that approximately $650,000.00 in estate taxes would be due. If Jack and Diane planned their estate properly, they would have set up "AB Living Trust". By setting up an AB Living Trust, Diane would be allowed to use Jack's assets after he dies and transfer up to $3,000,000.00 (for tax year 2004) in assets to their children without paying any estate taxes. It is always smart to plan ahead.
What is the best business form that I can set up for my business? There are many different types of business forms that an entrepreneur may select to operate his or her business. While each form has its advantages and disadvantages, the new business person must review the different types of organization and select the one which best suits the company's needs at the outset. Most tax attorneys would probably advise you that setting up either a Limited Liability Company or a S-Corporation may be the best structure to organize your new business. However, before you select a business form, it would be wise to consult with an attorney to describe your needs and highlight your particular concerns before taking additional steps.