Tax Problem Attorney Blog

What Should I Look for in a California Tax Lawyer?

December 8, 2016 | by Dennis N. Brager

When you need tax help, it only makes sense to look for in-depth experience in all of the tax laws relevant to you and your business. Federal and California state tax laws are constantly changing, and it isn’t easy for the average taxpayer to keep up with all of the changes from one tax year to the next. You need professional guidance from a tax lawyer.

Accountants and tax preparers can handle certain tax matters, but there are some situations where working with a tax attorney has its advantages. The attorney client privilege offers protection for your communications with your attorney. This is particularly important if you are concerned that the IRS may bring a criminal tax case against you.

What to Expect from a California Tax Lawyer

Can Back Taxes and Penalties Be Negotiated?

December 6, 2016 | by Dennis N. Brager

Back taxes can be financially crippling both to you and your business. If your tax debt is more than you can afford to pay back in a lump sum, or if you think there may be some error on the part of the government in assessing how much you owe, you do have some options at your disposal.

Offer in Compromise to Reduce Back Taxes

One such option is known as the Offer in Compromise, which is an application to reduce your tax liability to less than the full amount you owe, under certain circumstances. Acceptance of an OIC is at the discretion of the IRS and is based on a combination of factors including your ability to pay, income, assets and total expenses. To be eligible to submit an Offer in Compromise, you must be current on all your tax filings and not be in a bankruptcy proceeding.

The Value of Attorney Client Privilege with Your Tax Lawyer

December 1, 2016 | by Dennis N. Brager

Attorney client privilege is a concept from the law of evidence that protects communications made between a client and his or her attorney. A client can claim this privilege to prevent the attorney from being forced to testify or produce evidence that is protected under this rule. This encourages the client to be forthcoming with all the information the attorney needs to represent the client’s interests.

Communications with accountants and tax preparers may also be privileged, but these privileges are much more limited than the attorney client privilege. There are situations where accountants and tax preparers can be forced to testify as a witness against their own clients.

Attorney Client Privilege Offers the Most Protection

IRS Tax Audit. What Do I Do?

November 8, 2016 | by Dennis N. Brager

Getting a letter from the IRS notifying you of an upcoming tax audit is never a welcome event. At the very least, it can be a major inconvenience. At worst, it could mean the possibility of criminal investigation for tax fraud. Knowing how to proceed when you are notified can help you prepare for the worst while hoping for the best.

Types of IRS Audits

Not all IRS tax audits are the same. When notified of an impending audit, carefully read the verbiage used in your letter. IRS tax audits are often pursued if information on your tax return doesn’t match the IRS records or inconsistencies are found, but they can also be random selection or for the collection of data. The type of tax audit requested can help you determine what you should do next:

Behind on Payroll Tax Deposits? Here’s What You Need to Know

November 4, 2016 | by Dennis N. Brager

As a California employer, you are responsible for making payroll tax payments to the California Employment Development Department and the IRS. These payroll tax deposits must be made regularly, often monthly or weekly as taxes are withheld from payroll disbursements. If you become behind on making these deposits, you could face serious consequences and personal liability for the money owed. Knowing your rights, obligations and options is crucial to avoid the consequences of not paying these taxes on time.

The Trust Fund Recovery Penalty

Not making payroll tax deposits in accordance with the law is illegal, and collecting them is a high priority for the IRS. Payroll taxes are considered a trust fund tax, which means you are withholding taxes from your employees in trust for the government. Delaying payment of these taxes means you have “stolen” money that belongs to the IRS and you may be subject to the Trust Fund Recovery Penalty (TFRP).

Understanding the Federal Tax Appeals Process

November 2, 2016 | by Dennis N. Brager

Tax laws change regularly, and are a challenge to adequately decipher under the best of circumstances. Even with the requisite due diligence and the help of a CPA, you may find yourself the recipient of a letter from the IRS “inviting you to an audit.” If you’ve been audited by the IRS and disagree with their findings, all is not lost.

Your rights as a U.S. taxpayer include the right to contest an IRS bill which you feel is inaccurate or unfair by filing an appeal. The key to gaining a satisfactory result from an appeal is strict adherence to each step of the process. Guidelines and deadlines must be closely followed.

How it Works

Brager IRS Survey Yields Surprises

September 29, 2016 | by Dennis N. Brager

Periodically, the Brager Tax Law Group surveys tax preparers and/or taxpayers on a variety of issues. Our most recent survey targeted tax preparers and their interaction with the IRS in a number of areas, including disclosure programs, FBARs and marijuana businesses.

The survey contained several quantitative questions with a scale from 1 to 5 with 1 as poor and 5 as excellent. The lowest scoring statement was respondents’ experience in getting a response from the IRS within a few business days, which scored only 1.96. The highest score was on respondents’ experience in participating in the Offshore Voluntary Disclosure Program, which scored 3.20. Overall interactions with the IRS scored 2.79.

No survey respondents have been contacted by the IRS subsequent to filing amended returns as part of the Offshore Streamlined Procedure submissions.

Tax Considerations When Living Abroad

September 21, 2016 | by Dennis N. Brager

Tax season is difficult enough. When living abroad, it can become even more complicated. As a U.S. citizen, you must file a tax return with the IRS, regardless of where you are living in the world. You also may need to pay and file taxes in the country where you live. Here are a few of the tax considerations that may affect you while you are living or working abroad.

Worldwide Income

Your tax return must include all your income, whether or not it was earned on U.S. soil. Income earned in a foreign country is taxable by the IRS and must be claimed on your tax return. It may also be taxed by the country where it is earned, causing a double taxation situation. However, you may be able to deduct the tax that you pay to another country. But this can be tricky. Number one, it must be considered deductible by the IRS, which can depend on the country where you are living. Secondly, you must be able to prove you paid the taxes – this can be difficult due to the difference in tax years, and documentation available in various countries.

IRS Appeals Division Slashes Taxpayer Rights

September 20, 2016 | by Dennis N. Brager

The IRS announced that effective Oct. 1, 2016, it will rarely conduct Appeals Conferences in person. More specifically, Internal Revenue Manual (IRM) 8.6.1.4, blandly entitled “Conference Practices,” provides that ALL conferences will be held by telephone except under certain specific enumerated circumstances. Those circumstances are as follows:

There are substantial books and records to review that cannot be easily referenced with page numbers or indices
The ATE [that’s Appeals Team Employee, aka Appeals Officer, or Settlement Officer] cannot judge the credibility of the taxpayer’s oral testimony without an in-person conference

IRS Taxpayer Advocate Releases Mid-Year Report; Dings IRS on Levying on Retirement Accounts

July 27, 2016 | by Dennis N. Brager

The Taxpayer Advocate is a tireless champion of taxpayer rights. The Taxpayer Advocate is required by law to issue reports to Congress. Her most recent mid-year report was recently released. One of her issues was that the IRS continues to levy on retirement accounts even though the IRS guidance to its revenue officers is “insufficient to protect taxpayer rights.” As her report points out, the IRS has identified three steps which MUST be taken before a Notice of Intent to Levy can be issued on a retirement account such as IRA Qualified Pension, Profit Sharing, and Stock Bonus Plans under ERISA, and Retirement Plans for the Self-Employed (such as SEP-IRAs and Keogh Plans). These steps are:

Determine what property (retirement assets and non-retirement assets) is available to collect the liability;
Determine whether the taxpayer’s conduct has been flagrant; and