IRS Tax Lawyer Due Diligence

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IRS Tax Lawyer Due Diligence

Tax attorneys can help people with IRS problems. The IRS is always willing to work with the tax payer to get issues resolved. But most people need professional representation because of the complex rules and regulations involved in most tax matters. An experienced irs tax lawyer will have a complete understanding of the applicable rules and regulations as well as the internal workings of the IRS. The typical tax payer that tries to go it alone will spend a lot of time talking to people at the IRS and get nothing accomplished. This is because they do not have access to the right people inside the IRS, the decision makers. An experienced irs tax lawyer will have access to the right people and be able to get issues resolved in a much more timely manner than the typical tax payer. This alone will save money on interest and penalties.

Many tax resolution companies that advertise on TV and over the internet do not actually have tax attorneys on staff. They sell the person on a tax resolution service and then outsource the business to an actual tax attorney. The taxpayer ends up with a tax attorney that they know nothing about and had no say in selecting and the price for the services are higher because there is another party involved in the process that must get paid. The most important thing when selecting a tax resolution firm is the due diligence or research by the tax payer to find a reputable firm that actually has tax attorneys on staff to handle their tax problems. Elias V. Lorenzana Jr is an experienced tax attorney, find out more by visiting  . Also see Mouris Behboud at , he offers services nationwide.

Lauryn Hill Fails To Fulfill Her Free Federal Tax Filing Obligations

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Lauryn Hill is charged for not filing free federal tax returns

On Thursday the U.S. attorney’s office in New Jersey publicized that the Eight-time Grammy award winner, Lauryn Hill, was charged because of her inability to file income tax returns with the IRS for several years.

Free Federal Tax Filing

Lauryn hill’s main source of income is the royalties she gets from the recording and film industries. Between 2005 and 2007, she earned more that $1.6 million and these are the years she failed to oblige to her free federal tax filing obligations. According to the court documents, she is also the owner and operator of Creations Music Inc., Boogie Tours Inc., L.H. Productions 2001 Inc. and Studio 22 Inc.

After the announcement, her California based lawyer as well as her publicist got word of the charges. However, her publicist did not reply to the emails immediately.

Although Hill began her first solo career in 1998 with the highly acclaimed album “The Miseducation of Lauryn Hill,” the 37 year old celebrity got her start with The Fugees.

Time magazine called her the face of “The Hip-Hop Nation” because of her first album. Critics claimed that her synthesis of rap and soul lyrics helped her sell 8 million copies of the album.

Later after this success she disappeared from the public scene in order to raise her six children. Five of them she had with Rohan Marley.

She attended Columbia High School in Maplewood and her current residence is based in Orange County, a suburb just west of Newark.

Her hearing is scheduled before a federal Judge on the 29th of June. If she is convicted, she is likely going to face a year in prison and pay a penalty of $100,000 on each charge.

Bringing Down the Burden of Tax Debt – Offers in Compromise

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People all over the world are struggling with debt in the current global financial climate. For most people these debts will be to do with credit cards and loans, or having over-extended on a mortgage. For a small number of people however, it will be large tax debts owing that are causing them trouble. And often these debts can be just as stressful and just as crippling, with the belief that there is nothing you can do when you face going under, simply because you are dealing with the IRS. To a certain extent this is true – the IRS expects its taxes to be paid. But it is worth bearing in mind that in some cases it is possible for a certain amount of leeway to be given, or even an exception to be made, and that tax debt can be reduced through something called an Offer in Compromise.

Such a deal is rare, but comes about when the IRS either thinks there will be little or no chance of you paying the full tax debt owed, or it is in dispute with you about your total tax liability and whether you owe what they think you owe. In certain of these cases the IRS is permitted, at its own discretion, to look at, consider and then accept your submission of what is known as an Offer in Compromise. The Offer in Compromise is essentially an offer that you will make to the IRS that suggests a figure you think you can pay that is less than the figure they are asking for. Unbelievable as it may sound, they will often be willing to accept such an offer because they will look on it in such a way that they are at least going to recoup a portion of the debt you owe. Without that Offer in Compromise you may go bankrupt or not be able to pay them any of the outstanding debts.

Continue reading Bringing Down the Burden of Tax Debt – Offers in Compromise

Taxing the Sin of Luxury

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The luxury tax and it’s close relative the sin tax are concepts that are up for debate. Depending on which economist you speak to you will get a wide range of opinions on whether this type of tax is helpful or hurtful to the economy. The luxury tax pretty much affects only the wealthy (i.e. those who can afford to buy luxury items) and consist of a tax that is applied to goods that are deemed unnecessary or nonessential. The sin tax applies to things can be seen as extreme, sinful and unnecessary to the individual and to society, like cigarettes and alcohol. Another example of the sin tax is the increased rate at which lottery and game-show winnings are taxed.

The luxury tax was originally imposed during times of war as a way to increase government revenue and to have wealthy families pay more, since theoretically they could afford it. But in reality is it helpful or harmful?

One way of looking at it is to take the concept of Veblen goods. These are items that go up in popularity as their price increases. The reasoning behind this is that it increases the items ‘snob appeal’ and gives the purchaser greater status. Examples of items that could be a Veblen product are fancy cars, expensive wines, designer-handbags, decadent jewelry, furs and yachts. When the price of these items go down then certain people don’t want to buy them as much. These goods are often sought out to increase social status, as a way to show-off to peers and to give the owner a feeling of satisfaction. It all comes down to exclusivity, aka the ‘Snob Effect’.

Those against it argue that adding a luxury tax to an item may curb demand, which will then end up hurting the middle class, i.e. the workers, as their products won’t be sold. If buyers seek other items, when this happens the middle class lose there income and this leads to increased unemployment benefits, so the government actually loses money. For example when a 10% federal surcharge was enacted on luxury goods in the US in 1991, sales of the effected products decreased drastically. Since it led to such a negative effect on the economy through job loss and tax revenues from lost sales it was quickly dropped.

This also happened is Canada in the late 1980s, when a large luxury tax was added to cigarettes. Instead of seeing tax revenue increase, there was actually a decrease as people stopped buying them legally and cigarettes started appearing on an oftentimes violent black market. This led to more government resources being used to fight this crime, and so the tax was soon repealed.

On the other side, the consumers that can afford non-necessities are usually rich and lead extravagant lifestyles. In 2007, luxury goods in the US were a $157 billion dollar industry. Between 1979-2003, income grew 49% for the top 5% of earners and 111% for the top 1%, and it has been shown that even in a slow economy there will always be a luxury market. This is an enormous tax base that could bring much needed revenue to the government.

 

Sarah Parker is a writer and blogger from Greensboro, NC. She enjoys all things outdoors, especially camping, gardening, and swimming. Her favorite time of the year is summer (of course!) and she aims to leave as tiny of a carbon-footprint as possible throughout her daily life.

 

 

Proper Bookkeeping for a Solid Business Future

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Business owners would agree that a proper bookkeeping system is not only essential, but it’s also the foundation that will secure your company’s financial future.

Running a business means more than just keeping your clients happy; it requires proper systems that are in place to secure your company’s future, whether this is looking after your employees, providing top-notch customer service, or maintaining a decent set of books. Bookkeeping is one of the most important aspects of managing an organization and failing to look after this important part of your office can ultimately lead to a financial disaster.

The Basics of Bookkeeping

The main purpose of bookkeeping is to keep an accurate record of a company’s financial transactions. This can be done in-house, but you may also find a bookkeeper from an external source to handle your company’s books. The person does not necessarily need to be qualified, but he or she should be very knowledgeable regarding the functions of a bookkeeper and the specific guidelines and State laws that your company should adhere to.

Bookkeeping also entails proper record keeping of the company’s various spending and income activities; such as supplier payments, customer payments, employee salaries and advertising costs. These items should be categorized and properly filed, in a way that the records are easy to find. Financial statements are also an important aspect of every company’s books, and they give you an accurate overview of your performance, and they are reliable measuring tools when comparing your performance against those of your competitors.

Budgeting is equally important and allows you to set sustainable financial goals and constantly guard against overspending. Comparing your budgets against your actual spending also gives business owners a good indication of the goals accomplished, and the areas that can be improved. If you are looking to hire an individual that can accurately prepare budgets on you company’s behalf, try to find a bookkeeper that has significant experience and sufficient knowledge to assist you.

Complying with tax laws is also an area that every business needs to focus on. Filing tax returns is very important and if your financial system is in order, it will make this task so much easier. Your tax returns need to accurately reflect your company’s profit, turnover and spending. This is best done by a professional and it is advisable that you hire such a person to oversee these activities.

The Importance of Record Keeping

Document retention is something that every business should adhere to, and it can help a company with litigation and to ensure that all State laws and regulations are met. Here are the basics that every business owner should be aware of:

  • Records can refer to both hard- and soft copy documents; for example a physical receipt for goods purchased, or an email from a customer.

 

  • The length that you keep these records will differ, for example sales receipts are only valid up to the time the limitations expire. Important documents such as cancelled checks, duplicate bank deposits and employment records should be kept for a few years.

 

  • Documents are kept to avoid the burden of proof in the future. Documentation would need to be provided in case any issues or claims arise a few years from now.

 

Anthony Azevedo, CPA is the managing member of EZCFO, an accounting and bookkeeping company specialized in payroll, human resource and employer solutions.

Seven Great Ways to Get an IRS Audit.

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If you really, really want an audit, the following list will show you exactly how to get one:

(1) Get Paid in Cash – If you’re a waiter or waitress, market trader or professional gambler, then you get paid in cash a lot. To the IRS this means you have an opportunity to hide some of that cash. This makes you a more likely target for an audit.

(2) Get Yourself a Bank Account in Another Country – Nothing makes them more keen on going through your finances than you stashing some of that lovely money in a foreign country. People with overseas accounts tend to be quite well off and they will want to know why those riches are going somewhere else. New rules make foreign accounts easier to access for the IRS so don’t think you can hide it!

(3) Become Successful – Earn over $200,000 and you are more than 50% more likely to be the recipient of an audit.

(4) Become Unsuccessful – If you file a loss on Schedule C as a self-employed worker for your first year they’ll understand. Do it year on year and they’ll get suspicious. Either you are really bad at business, or you are deducting a little too much for their liking.

(5) Be Like Robin Hood – If you are too charitable, to the point where your donations are matching your income levels, they may want to take a look at why you’re so darn good and wholesome. 80% donations will be a huge red flag.

(6) Round ‘em Up – If all the numbers in your deductions and income columns are rounded and neat numbers like $1000 or $15,000 then they might start to wonder if you are rounding up or down. Even if you are rounding in their favour, they’ll still want to check those books.

(7) Moving that Money – If you move large sums from your business accounts to your personal accounts then they will come knocking at your door. Banks are under obligation to tell the IRS if you receive deposits in excess of $10000.

Alex is a freelance journalist and financial blogger. He loves to write about baseball and jazz but spends most of his days writing about mortgages, credit cards and umbrella companies .