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Organizing Tips For a Stress-Free Tax Season

2008-01-23T06:02:00.000-08:00

The holidays are over. The barrage of catalogs in your mailbox is turning into a flurry of year-end tax statements. If you dread tax time and usually spend your spring stressing over getting taxes done on time, these tips are for you! The best time to prepare for tax time is the year before. But if you didn't do it last year, it's not too late to start now! With this simple system, you'll get your taxes done early and be ready to enjoy spring!

Separate Business and Personal Finances

This article focuses on preparing Personal Tax Returns but these financial organizing tips work for small business owners who file Schedule C's as well! If you are a small business owner, I strongly recommend keeping your business and personal checking & credit accounts separated. Filing systems, too! It may seem more complex to do that, but it actually makes it much easier to track your financial performance and to prepare your tax return!

Start Early & Set an Early Deadline To Submit Paperwork!

If you don't do your own taxes, schedule an appointment with your tax preparer NOW for mid to end of February. (TIP: Create a recurring annual reminder to do this! See my blog "Productivity & Time Management category for details on how to do this.)

Creating an appointment for February gives you a deadline to submit paperwork and it gives your preparer ample time to review your documents and provide advice for next year's tax planning.

NOTE: One Size Does NOT Fit All!

There are many ways to effectively organize tax papers, and one size doesn't fit all. The tips below work for many people, but if you have a unique tax situation or are overwhelmed trying to decide what will work best for your organizing needs, consult an organizing professional to help you set up a simple, efficient, easy-to-maintain system and ensure a stress-free tax season!

Establish Categories

When your filing system is a mirror of the categories you usually use on your return, it's MUCH easier to complete your return. Review last year's return and note which expense and income categories have entries. Use those categories as the basis for creating a Master Category List that will guide you in creating your file structure, sorting your paper work and adding it up. For example, your Master List may look like this:

• Taxable Income Categories
o Salary & Wages
o Commission
o Interest & Dividends
o Rental Income
• Common Deductible Expenses
o Donations
o Property Taxes
o Mortgage Interest
o Medical
o Childcare
o Job-related Moving

Now estimate the number of documents you expect to collect. If you don't have more than 30 or so tax documents total, keep it simple! Use only 2 categories: Income and Expenses!

Gather Paper, Sort and Eliminate

If your papers are scattered, gather them all up into a single box or other container. Then sort your papers into the categories you decided on. Eliminate any unneeded papers as you go.

Use file folders for each category as you sort. That way, it will be easy to resume sorting if you have to stop and come back later. You can also move your project to any location if it's contained. (NOTE: You can use any kind of container you prefer: file folders, baskets, envelopes, accordion files or even individual pockets in a binder!)

Be sure to label your files/piles/containers temporarily! (I use Super Sticky Post-its.) That makes it easy to change your labels if you determine some categories can be combined into a single folder. For example, if you have fewer than 10 income documents, you can paperclip the documents by sub-category and label with a post-it and put them all in a single folder called Income.

About Receipts

Keep only receipts that prove your taxable income and deductible expenses. If a receipt is for something that is NOT tax-deductible, NOT insurable, NOT under warranty, and NOT income to you, get rid of it! You don't need to keep electric bills unless you claim a home office deduction!

Choose a Home

Where will you keep your papers once they are organized? Once you have it all sorted out, you can see how much you have. Choose an appropriate location to store them till it's time to submit them to your tax consultant / preparer. In doesn't matter where, as long as it is near where you process mail and pay bills, easy to access, easy-to-use and easy-to put away. You want it to be handy so that as you receive tax documents you can immediately file them. As you receive statements, toss the envelopes and any unnecessary paper. This will keep your files lean and easy to use. Then file the statement into your new system.

Submit / Prepare Return

By early February, all your critical documents should be received and organized. All you have to do now is add up the totals by category and prepare your return! If you prepare your own return, consider using an online system such as http://www.neatandsimple.com/organizing_services.html#financial It stores your past returns and pre-populates this year's return. I find that with Turbotax, I get my refund much faster and It's Deductible is included free! It's fabulous for valuing your donated items! Last year I got over $1000 more back in my refund just because I used It's Deductible!

Get Ready for Next Year - Archive

Instead of creating a whole new system for next year, empty the system you created this year, put all the tax return related documents in a single envelope or folder labeled Tax Documents 2006. Create a folder for your final Tax Return as well, and archive it in a safe, out-of-the-way place.

Relax!

Now you can relax! When spring rolls around, take your refund and do something fun as a reward for not waiting till the last minute!

Interesting Facts About The New Business Tax Law

2007-12-22T06:40:00.000-08:00

Before getting involved into any business deductions, one should first have a good understanding of the business tax law. The business tax law involves the taxation of income and property acquired through professional efforts. In addition to income tax, there is sales tax, capital gains tax, property tax, and other areas of tax. Every business liable for income tax must keep a record of all transactions made so that the total amount of the gross income can be estimated. The interesting thing about business tax law are the changes made by the Bush administration with the 'Tax Increase Preven-tion and Reconcilia-tion Act of 2005.' This act includes several important business tax changes that will examine.

The new business tax law allows small business to deduct up to $100,000 of investments in qualifying depreciable assets through 2007. Also, under current law, the domestic manufacturing deduction is also limited to 50% of a taxpayer's total W-2 wages. The new law modifies the wage limitation so that taxpayers may only include W-2 wages that are deducted in arriving at qualified production activities income.

For all you business owners out there, there are some advices that you can use in respect to those business tax law changes. First of all, you can continue to treat dividend payments at the lower rate.

The main business tax increases in the new law consists of - limiting the foreign earned income exclusion for housing expenses; repealing the foreign sales corporation and extraterritorial income exclusion benefits for certain "grandfathered" contracts; denying tax-free treatment to certain "cash-rich" spin-off transactions; and requiring withholding after 2010 on government contract payments.

The act also modifies certain corporate estimated tax payment requirements for large corporations (those with a minimum of $1 billion in assets), requires reporting of interest on tax-exempt bonds, and applies the earnings-stripping rules to corporate partners. Other business revenue-raisers affect foreign investors in U.S. real estate, major integrated oil companies and pooled financing bonds. Find out more about tax law and tools at http://www.localtaxabatement.com

According to the new business tax law, the self-employed tax contribution base is increased from $94,200 to about $102,000 in 2008. The self-employment tax rate continues to be 15.3%. The full rate applies to the first $102,000 of self-employment income; after that only the 2.9% Medicare tax applies.

Keep in mind that US business are taxed on their worldwide income. In other words, no matter where your business earns money from (in terms of geographic locations), it's still treated as income taxable in the US. There is just one exception to this rule and it's only if your business is located outside of the US and you reside there for most of the year.

How To Check Your Tax Return Filing Status In Easy Steps

2007-12-16T02:05:00.000-08:00

Taxpayers have two options when filing a national or state income tax return. Taxpayers can have their tax returns professionally prepared or they can prepare their own taxes. Whatever tax preparation option an individual chooses, it is likely they will have a number of tax questions. To find the answer to a tax question many taxpayers research and review general tax information.

Since each state has different tax laws and tax forms, taxpayers looking for tax information are encouraged to contact their local or state government. Many local county officials may be able to answer common tax questions or point taxpayers in the right direction if they are unable to help. The majority of state tax officials can be contacted by obtaining a phone number from the Internet. In addition to using the Internet as a way to obtain contact information, many taxpayers may also be able to find valuable state tax information on the Internet. The majority of states have a website that is related to state taxes. It is not uncommon for a number of these tax websites to offer tax tips and other valuable state tax information.

From Where to Get Started:

We all work so hard for our money that the thought of parting ways often makes us restless, yet everyone knows that our government was designed to function with our tax paying dollars. Many of us out there feel as though the only thing you can count on is death and taxes. Often times we ask ourselves, 'Would the government know if I didn't pay my taxes?' Yes, the Internal Revenue Department is adamant that we all do our part to keep the country economically viable. Ever heard of Al Capone? The FBI tried for years to convict him of his many heinous crimes. Who finally got him and trotted him off to jail where he died? Yes, the IRS tried him for income tax evasion and put him in prison. Finally, one of the most notorious criminals of the Twentieth Century went to jail because he didn't pay his taxes.

According to federal and most state laws, if you made some sort of an income last year, than you must file an income tax return. Income tax returns are required regardless if you had income tax withheld or not; while all businesses except partnerships must file an annual tax return. For the individual, when determining whether you must file or not, the IRS takes into account your income, filing status, and age.

To Sum up with:

There is assistance from commercial tax filing services for low income tax payers. One service provider, VITA, provides free basic income tax return preparation to individuals with income of $34000 and below. The IRS stresses that it does not provide free electronic filing or tax return preparation services, which is why it formed this public-private alliance. Are you planning on filing your taxes yourself? You should consider avoiding filing manually and file electronically.

Filing electronically is less cumbersome and less stressful. Make sure that you are using the appropriate tax rate for your filing status.

Essential Tax Info That You Can Use

2007-12-08T03:36:00.000-08:00

Don't let the April 15th rush to prepare and file your taxes cost you unnecessary money. By taking time to explore tax reduction tips, you can file on time and still keep more of your hard earned money.

Small Business Pension Plan Tax Credit

If your small business employs fewer than 100 people, you can claim a tax credit of $500 for each of the first three years after the implementation of an employee pension plan. Tax credits are more valuable than deductions because they directly reduce the net taxes you owe instead of reducing your gross taxable income. Establishing a pension plan can increase employee retention and help your bottom line come tax time.

You can claim up to 50% of eligible start up costs incurred in every one of the first three years of the plan. Additional costs that are eligible to be claimed for this credit are any retirement planning education that you provide for your employees.

If you spend $2000 establishing an employee pension plan in 2004 and $1500 a year maintaining it for the next two years, you will be eligible to claim a $500 tax credit for each of the three years. The tax credits you receive over the life of the three year credit are enough to fund the plan for one year.

Personal Business Loans

Make sure you keep your personal money separate from your business money. Many owners make personal loans to their business, but do not keep correct records. By inaccurately counting loan proceeds as business proceeds they incorrectly inflate gross revenues, costing them money in unnecessary taxes. Review past tax records to make sure that this is not a problem for you. Separate personal and business credit cards can help keep spending separate and can save you money.

You Can Still Claim the SUV Deduction

Originally, the "SUV Deduction" allowed the owners of SUVs over three tons to deduct up to $100,000 of the price of their vehicle. Despite popular belief, the American Jobs Creation Act did not do away with this deduction, but it has been chopped by three quarters, down to $25,000. The remaining $75,000 is allocated to depreciation of the vehicle. While not as large a deduction, it is still large enough to have a significant effect on your taxes. You are not limited to the $25,000 deduction is you purchased a 6,000 pound vehicle that is not classified as an SUV.

Sales Tax Deductions

You can deduct state and local sales tax or you can choose to deduct your local and state sales tax. This tax deduction can result in significant savings if you live in a state that does not collect income tax. If you have questions about this deduction, see IRS Publication 600.

Discrimination Lawsuit Cost Deductions

The deduction for discrimination lawsuit costs is available if you lad to be lawyer's fees and court costs after being sued for discrimination. The Alternative Minimum Tax does not limit your ability to claim this deductions.

How Long Does the IRS Have to Collect Taxes From You?

2007-11-30T04:21:00.002-08:00

The statute of limitations on the collection of a tax liability is 10 years. (Internal Revenue Code 6502.) After ten years the debt is wiped out. (continue to read for provisional conditions)
There are a number of ways the ten-year period can be extended.

1. The ten-year period does not start until you file your tax return and IRS assesses the tax against you. So NOT filing a return and hiding for 10 years won`t get your tax debt wiped out.

2. IRS can extend the ten-year period by suing you in federal court. This does not happen very often, so I am told.

3. If you file an Offer in Compromise, or traveling or living outside of U.S., or involved in a dispute with IRS, or file bankruptcy or request a Taxpayer`s Assistance, sign a waiver form or request any kind of hearing; your ten-year period is extended until any of these issues are involved.

usually IRS will make every effort to collect the Tax liability before the 10-year period is up. This includes garnishment of your wages and placing a levy on your bank account.

Back Taxes, You Forgot to File, Now What?

2007-11-30T04:21:00.001-08:00

Problem? Yes and No. No because you can file ASAP. Yes, because penalties and interest can be fairly steep. (Generally, interest is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is determined every three months and is the federal short–term rate plus 3 percent. Interest is compounded daily)

(If you owe tax and don`t file on time, the total late–filing penalty is usually four and one-half percent of the tax owed for each month, or part of a month, that your return is late up to five months. If your return is over 60 days late, the minimum penalty for late filing is the smaller of $100 or 100 percent of the tax owed)

If IRS has sent you communications that you had to sign for - then your time may be short before they start the process to levy your wages or your bank account. Once this happens you will need to talk to them one way or another, either by calling them or by contacting a tax professional who will call them for you. (I recommend the second option)

If IRS levies your bank account, your bank must hold funds you have on deposit - up to the amount you owe, for 21 days. This period allows you time to solve any problems from the levy or to make other arrangements to pay. After 21 days, the bank must send the money, plus interest if it applies to the IRS. Contact Us (Note: If you own Real Estate or have a Small Business and IRS has sent an intent to Levy, it is best to contact an Enrolled Agent or a Tax Professional as soon as possible).

Your question might be, at this point, "If I did NOT file my taxes, how do they know how much I owe"?Answer: IRS completes your tax return for you; based upon 1099s and W-2 information from your employer. The tax liability that IRS computes stands as the collection amount UNTIL you file your tax return for that year. And of course their tax return almost always generates a higher tax liability then if you had filed your own taxes!

Taxes Will Travel specializes in filing Back Taxes for Individuals. A consent form from the client is necessary in order to obtain income information from IRS for the year(s) in question. Once this task is completed and SS numbers, dependents, deductions, etc information is received the tax return(s) can be completed immediately.

Hiring an Attorney

2007-11-29T04:38:00.000-08:00

When is it wise for you to invest in an attorney? Quite frankly, any time you are faced with a significant legal issue that leaves you baffled about the law is the time you should consider investing in an attorney. An attorney can help you through any number of legal situations and can also help you avoid the pitfalls associated with many legal situations. Finally, an attorney can serve as your legal guide and if you really feel like you need a friend in your corner, then it may be time to hire an attorney.

Lawyers specialize in all sorts of fields. The most commonly known lawyers are divorce and family court lawyers. Both can assist you with child support, child custody, and family court issues that may arise as the result of a divorce. Likewise, criminal lawyers are lawyers that help many individuals when they are faced with unfortunate criminal charges and the like. Yet, there are many other lawyers in the legal field and people often don't think about lawyers until they are really needed.

For instance, there are tax lawyers. Tax lawyers can assist individuals with tax related issues whether they are of a personal or business nature. In fact, small business owners and corporations often speak with tax lawyers to get advice about deductions and information about the proper methods for filing taxes. Moreover, tax lawyers can help people understand the various complex tax laws that may otherwise baffle them. Immigration lawyers assist individuals that want to become a citizen of a certain country. The immigration laws can be just as complicated as tax laws, perhaps more so, and lawyers can help individuals fulfil the requirements they need to in order to become a citizen.

Conversely, there are Worker's Compensation Lawyers that help clients fight for their rights in worker's compensation related claims and there are employment lawyers that will help clients battle out their claims for job discrimination and the like. Labor lawyers also help unions fight for the rights of employees and there are a number of lawyers that specialize in the employment area. Along the same lines, for those individuals that have filed a claim to receive social security benefits and have been denied, there are lawyers ready and willing to help you win your case.

Accident and personal injury lawyers help people reclaim their lives after traumatic injuries. Likewise, medical malpractice lawyers help people go after doctors or hospitals for poor medical treatment and/or practices. Some lawyers specialize in the writing of trusts and wills while other lawyers focus solely on the art of finance. Clearly, no matter what the legal situation may be, there is always a lawyer available to help.

Ultimately, the cost of any lawyer will vary from one to the next and are usually based on the time that your case will involve, the amount of work involved, and the lawyers overall expertise. The more experienced a lawyer is, the more expensive that lawyer can become. If you are interested in hiring a lawyer however, many lawyers are willing to give clients a free initial consultation.

International Tax Attorneys

2007-11-25T01:21:00.000-08:00

Taxes must be paid on the basis not just of income earned within the country, but also outside the national borders. The IRS has international tax laws that deal with such income and an international tax attorney will be able to give you the best possible information on international tax laws. This will enable you to take advantage of legal exemptions and credits without the risk of committing tax fraud.

International tax attorneys act as advisors for anyone with sources of income outside the national border, from multinational organizations and US citizens living abroad, to US residents with property, assets, or businesses abroad.

International tax attorneys advise international business firms on issues like mergers, joint ventures, expansion, contracts, and leases. They negotiate on the basis of tax agreements between the US and other countries. They assist in structuring the company from a tax point of view.

For non-resident US citizens, international tax attorneys help secure certain exemptions from having to pay double income or property tax in form of a tax to the country of residence as well as to the IRS. They deal with issues of transfer pricing on tax, foreign estate laws, customs duty, and income tax laws. They also fight cases for US citizens charged with tax fraud abroad.

With more and more multinational firms expanding their businesses worldwide and the fluid world of e-commerce making borders redundant, business transactions between US and foreign firms have gone up, which brings the tax laws of many countries into play. The services of the international tax attorney are crucial for these companies.

Also, more US citizens are working and settling abroad and foreign citizens are choosing to own property in the US. This makes the assistance of an international tax attorney essential for not just big firms, but also ordinary citizens.

Tips On Finding The Best Tax Attorney

2007-11-25T01:20:00.000-08:00

Getting the best tax attorney is very important when you want someone to take care of your finances. In order to do that you need to know how to choose the best tax attorney. Doing some research will surely help you to know what aspects to look for when you intend to hire the best tax attorney. You will then know exactly what question to ask the aspirants for the job that you offer. If you do your research you will also know what kinds of references to search for when you want the best tax attorney. It is in your interests to ensure the investment you are making is worthwhile.

If you really need the best tax attorney the first thing that you have to inform yourself of is the experience that the attorney has. This means that you have to know what education he/she has and if he or she actually worked as a tax attorney. You should ask if the person ever worked for the IRS because if he or she did, it will be much easier to negotiate in your benefit. If your problem is a non-criminal issue then the best tax attorney for you is the one that has experience in the IRS Office of Chief Counsel. Even if we should give a chance to people that do not have yet this kind of experience if you have a difficult tax matter the best tax attorney is the one that has worked for the IRS or for another financial authority.

The minimum that a tax attorney should have is a Master’s of Law in Taxation. This is also named the LLM in taxation and it shows that the person studied the tax law for at least one year. The best tax attorney should continue to learn about the tax law even after he or she graduated because the tax law is constantly changing. This aspect could be verified by searching for evidence like articles published by the tax attorney in publications in the domain. Quality advice can be given only by the tax attorney that knows what changes occurred in the tax law evolution.

A specialist is the best tax attorney for you if he or she already handled the exact matter that you have now. When you want to know this you have to put questions to the about the topic that you are interested in and you should start a detailed discussion.

There are some other general but important aspects that you must consider too when you want the best tax attorney. The specialist should have good communication skills and should be a good negotiator. In this way, he or she will be able to do the best in your case. An essential requirement is for you to search more than one option when you intend to employ the best tax attorney.

Tax Attorney Explains How To Survive An IRS Audit

2007-11-25T01:19:00.000-08:00

IRS audits can be stressful, time consuming and, in some cases, expensive. This article provides an overview of how to approach an IRS audit.

The first step is always to gather information. Taxpayers should start by locating their tax returns for the tax year being audited and the tax year prior and subsequent to the tax year being audited. Taxpayers should then look for documentation to support any tax deduction or tax credit that they claimed on these tax returns.

Particular attention should be paid to expenses listed on Schedules E (for investment property) and C (for small businesses) and items listed on Schedule A (assuming that the taxpayer opted not to itemize their deductions). Mileage expenses, charitable gifts, contract labor, cost of goods sold, and other unusually large items will draw the IRS auditor’s scrutiny.

Also, taxpayers should double check the items of income on the tax returns to verify that they did not omit any items from their tax return. Taxpayers often discover that they omitted interest or dividend payments from small savings or brokerage accounts. In many cases taxpayers fail to report these items due to the investment company failing to send out the required tax documents to the taxpayer. Taxpayers should be prepare to explain any unreported income.

Having copies of each of these items to provide to the IRS examiner can prove very helpful in resolving an IRS audit in a timely manner.

Taxpayers can expect that the IRS examiner will want to meet at the taxpayers house and/or business. The idea is that the IRS can ask the taxpayer to go fishing for additional documentation when they are in these locations. That is why it can be helpful for taxpayers to request to meet at the IRS examiners office.

Taxpayers should also be advised that the IRS examiner’s job is to assess the most tax possible. Unfortunately, many taxpayers forget this fact as the IRS audit progresses. The result is typically a notice of proposed adjustment mailed to the taxpayer a month after the IRS audit that is completely out of sync with what the taxpayer expected. To avoid this, taxpayers must always recognize the IRS examiner’s role and the taxpayer must be proactive in asking questions and determining what EXACTLY the IRS examiner needs to allow the taxpayer’s deductions and credits.

Assuming that there are no items of unreported income and the taxpayer is able to substantiate all of their tax deductions and credits, then the IRS audit should be fairly straightforward. If the taxpayer is not able to substantiate deductions or credits or items of unreported income are involved or the IRS audit uncovers these items, taxpayers should immediately consult with an experienced tax attorney. The same goes for tax periods in which the taxpayer did not file tax returns. The relatively modest cost for an experienced tax attorney can significantly reduce the amount of tax that the taxpayer may end up having to pay.

Why You Shouldn't Take on Your IRS Tax Problems Alone

2007-11-25T01:17:00.002-08:00

If the IRS determines that you owe the government money, then your first instinct may be to fight them. A tax attorney seems too expensive, so you decide to represent yourself.

However, that's a dangerous course to take for a number of reasons. First of all, tax law is extremely complicated, and only professionals who are truly trained and experienced in it, and who have access to specialized (and expensive) tax law databases and libraries and know how to use them, are truly capable of navigating through it. The number of things that can go wrong by taxpayers attempting to represent themselves is legion.

I have seen dozens of situations where taxpayers came to me to represent them after they had attempted to do so themselves. Most of my job, in those cases, consisted of undoing the damage they had done. This includes highly educated professionals who hired me too late -- after they left prison after tax convictions.

Protect yourself against IRS mistakes
If you've watched legal dramas at all, you've no doubt heard the phrase, "Anything you say can and will be used against you in a court of law." The same thing goes for the IRS. Every conversation you have with IRS personnel is saved in memoranda of one kind or another, and these IRS personnel are perfectly capable of mistaking what you say. As Martha Stewart found out, any false statement to any federal official of any kind, even though not made under oath, can result in criminal indictment.

Without knowledge of the law, taxpayers can easily make seemingly innocent statements that IRS personnel interpret very differently, even if those IRS agents are acting in good faith, which, unfortunately, is not always the case.

Leave tax law to the experts
Because the tax law is so complex, taxpayers are likely to do more harm than good if there is any questionable issue between them and the IRS. And if you're having a conversation with the IRS, a questionable issue is almost always the case.

Every action in this area can have serious repercussions. You wouldn't try to do your own brain surgery, so why risk your financial life by attempting something equally complex: taking on the IRS alone?

The stakes are high and the requirements are numerous and complex. You could very well make a mistake and not even know it until after even more serious problems than those you were attempting to fix arrive.

With the help of a tax lawyer, you'll be able to avoid speaking to the IRS yourself at all. He can handle all communications with them for you.

Gain the full protection of the law
Don't rely on IRS personnel to protect you. They're on the government's side, not yours. A tax lawyer, on the other hand, knows what you're entitled to.

Believe it or not, Congress actually gave taxpayers significant new procedural protections in 1998. However, if you're representing yourself, you have no real way of forcing the IRS to respect those protections. A tax lawyer would know what those protections are, and how to help you make the most of them.

Pick the right tax attorney - they'll tell you if you need a lawyer or not
Everyone's situation is different, but it's rare that you won't save money by using a tax lawyer to interface with the IRS. When people don't need me, I tell them so. Sometimes I'll charge them a relatively nominal amount for a brief education on how they should conduct themselves with the IRS. I never do that unless I have first determined that there's no possibility of criminal exposure for those people with their specific tax problems.

When you're looking for a tax attorney, make sure you find a lawyer with specialized education (an LL.M. in Taxation). Good references, like other lawyers, judges, or peer-reviewed ratings like Martindale-Hubbell, will also help you in making a decision. Good tax attorneys will also have years of litigation experience under their belts.

Don't take on the IRS alone. You'll be inviting more stress and numerous unknown problems if you should make a mistake. A tax attorney may seem expensive, but the mistakes they help you avoid and the money they could help you save make them well worth it

When An IRS Tax Attorney is Needed

2007-11-25T01:17:00.001-08:00

Tax payers having problems with the IRS often wonder when they need the assistance of an IRS tax attorney versus trying to handle these problems on their own. The question as to whether or not a tax lawyer is needed can be very important because many options available to taxpayers, whether or not they have filed their back tax returns, have definitive time frames.

The short answer to when do you need IRS tax attorney help is simple. You should seek the assistance of an IRS tax attorney as soon as you start thinking you might. If there is any question in your mind as to whether or not you need a lawyer to help you with IRS issues, then chances are you already passed the threshold of when one may be of great assistance to you.

The IRS has many different collection options at their disposal and will be aggressive in their collection of perceived or real back taxes, penalties, and interest. Did you know, however, that you have legal rights that the IRS may have violated? Did you know that you can sue the IRS for improper actions? An experienced and qualified tax lawyer will know this and should be able to protect your rights.

Every day the IRS makes mistakes and those mistakes can cause significant harm to taxpayers who may or may not have violated tax laws. Even if you believe you made mistakes in the filing of your taxes that does not mean you do not have recourse. You need to make sure your rights are protected by having a qualified tax attorney review your particular circumstances and provide you with information about what, if any, recourse you have.

Protecting your rights against the IRS is something you need to take seriously and you should consider an experienced IRS tax attorney. Law firms like the Mandale Law Firm in Pennsylvania & New Jersey concentrate specifically in this area of the law in order to protect your rights as taxpayers.

Tax Attorneys

2007-11-25T01:15:00.001-08:00

Tax attorneys are legal professionals who advise people in terms of tax planning and represent clients in cases of tax disputes or problems with the government. A tax attorney’s job involves much more than just representing a party in case of civil or criminal lawsuits related to taxation. It also involves advising people beforehand on the legal intricacies of tax laws, and how to minimize their tax liabilities in a legal manner.

In tax planning, it is important to consult an experienced tax attorney so he can advise the best legal means available to minimize taxes, get exemptions or rebates, and the best arrangement for filing returns. The federal and state tax laws are intricate and sometimes the laws differ from state to state. There are many tax exemptions available for certain groups like senior citizens, who may not be aware of those exemptions. However, trying to minimize or avoid paying taxes using legal loopholes without first consulting an attorney is risky and can land one in trouble with the government and Internal Revenue Service.

Tax attorneys also represent a person or organization under investigation for tax evasion/fraud. This involves negotiating with the IRS on behalf of the client, fighting for the client in case criminal proceedings are initiated as well as working on reduction of penalties if client is found guilty. A skilled tax lawyer can reach an out of court settlement for the tax defaulter and minimize penalties if he or she is convicted.

Consulting a tax attorney is a better option than consulting a tax advisor or accountant because as a lawyer, a tax attorney cannot be forced to appear as a witness against his client. So all communication between the attorney and his client is confidential, which is not the case if a tax advisor is made to testify against a person charged with tax crimes.

Selecting the right attorney, with expertise in the area required is very important. Apart from experience, he or she should have excellent references and be a member of the bar association. A good tax attorney is an asset which can save you from much trouble later.

Tax Attorney Jobs

2007-11-25T01:13:00.000-08:00

Tax attorney jobs are available in the fields of business, income, property, estate, and international taxes. Apart from a proper degree in taxation law, experience is also crucial. While a majority of tax attorneys in the US have a private practice, some attorneys work as advisors and prosecutors on behalf of the government.

Tax attorneys are also advisors to their clients. They must have a vast knowledge regarding the complicated tax laws regarding their area of specialization which can only come through years of experience. It is for this reason that most big law firms specializing in the area of taxation employ attorneys with at least 2-3 years experience. Young lawyers fresh out of law school must first start out working as apprentices, then move up the ladder through growing experience and branch out into their own private practice if they choose.

The field of international tax attorneys is rapidly expanding. With country borders becoming more porous and outsourcing and e-commerce becoming the norm, the aspiring tax attorney must now be able to take on tax laws of countries apart from his own.

Most firms advertise for attorneys with good writing skills, negotiating ability, and the ability to interact with management and staff of client companies. It is also essential that he should be a member of the Bar Association if he wants a credible private practice. Apart from this, he should be skilled in tax planning and advising.

The job of a tax attorney is filled with challenges. Criminal cases regarding tax involve white collar crimes like fraud, but are not as grueling as trying heinous crimes like murder. The job requires a good financial head, knowledge of laws, and the ability to drive hard bargains with the opposition.