If You Receive an IRS Notice of Intent to Levy

This article describes how to become a tax lawyer. Tax lawyers are experts in working with customers to resolve their problems with state revenue departments and the Internal Revenue Service (IRS). They normally focus only on tax issues and relief. They can support clients who experience difficulties in getting through an audit, having liens removed, reducing fines, and helping them to solve self-employment and small business issues. Tax lawyers can help avoid tax problems that might happen checking for potential problem spots and giving advice on how to avoid these issues. They explain complex and not easily understandable tax laws in practical way.

Tax lawyer helps people control business’ and company’s tax matters. They work for business owners with planning taxes explaining when, why, and how to file. Another issues tax lawyer can be helpful with is filing for bankruptcy. Besides, they can provide help with setting up stock portfolios, trust funds, and other investment accounts.

Education requirement to become a lawyer is usually a 4-year college degree and 3 years of law school. Many tax lawyers pursue an undergraduate degree in accounting. To be admitted to any law school that is approved by the American Bar Association students are required to take the Law School Admission Test (LSAT). Since tax laws change very often, tax lawyers must be informed about current laws and follow through continuing legal education courses.

Tax lawyer in all states must be licensed. Applicants are required to pass a written bar examination. Students must be graduates from an American Bar Association accredited law school if they want to apply for the bar exam. Moreover, there are states that require passing an additional written ethics examination.

Property Tax Attorney

A property tax attorney can be of assistance if a homeowner is concerned about any of the town’s statements on their property tax bill.  A homeowner may want to contest the property tax assessment value of their home or issues such as the town’s failure to include in that assessment certain environmental or conservation tax exemptions or abatements from that assessment.  A homeowner can successfully pursue that process himself but may be overwhelmed by the legalities involved with State hearings and town filings.  Sometimes a homeowner may want to involve that services of a property tax attorney to best asset his rights and interests in a property tax abatement hearing.

Contesting Property Value Tax Assessments

A homeowner’s property is taxed based on the town’s assessment value of that property and the value of any homes or other dwellings on it.  Property tax assessments are not made every year and when they are made, they very rarely go down, but rather they usually go up. This may cause the homeowner problems if he wants to sell his property. Many potential buyers look at the town’s property tax record and the town’s valuation and assessment of the property as well as the fair market value.
 Other types of issue that can arise involve such mistakes as the town claiming taxes on a two family home rather than a single family home.  A single family homeowner will have less property tax liability on the dwelling than a two family homeowner.

Delinquent Property Taxes

A property tax attorney can provide important assistance if a homeowner owes delinquent property taxes.  A tax attorney may be able to help you save your property from a town held property tax auction of the home and land to pay those taxes.  Many time in hotly contested divorces that family home is intentionally placed at risk of loss by one of the parties by non-payment of town property taxes.  The person still living in the home may be booted out onto the street by a town forced sale of the property to recover the unpaid taxes.  It is a heartless tact that unconscionable attorney often use to extort that title to the land from the proper owner.  To fight that kind of situation the only answer is to resort to the assistance of a qualified property tax attorney.  He may be able to establish a repayment plane with the town to keep the roof over the heads of the homeowner and his children.

Help for Property Taxes

A homeowner may need the assistance of a property attorney that understands the property tax laws and has dealt with property tax issues. Consider years of paying thousands out in improperly assessed taxes at an undue rate against the cost of hiring a property tax attorney to contest the town’s assessments and successfully abate them.  Many a town has denied a homeowner property tax abatement petitions without genuine basis or cause.

What is the Federal Gift Tax?

The gift tax federal rules are set forth in Chapter 12, Subtitle B, section 2501 of the Internal Revenue Code.
The federal gift tax is a tax imposed on any gratuitous transfer of ownership of property.  The gift tax is imposed on the giver  of the gift - not on the recipient.  Gifts subject to the tax can be in the form of cash, stocks, real estate, or other tangible or intangible property.  A transfer is completely gratuitous when the giver receives nothing of value in exchange for the gifted property.  A transfer is gratuitous in part where the giver receives something of a value that is substantially less than the value of the property given by the donor.  In such a case, the amount of the taxable  gift is the difference between the value of the gift and the item received in exchange.  For example, if a person gifts an automobile to a neighbor and receives a lawnmower in return, the difference between the value of the automobile and the lawnmower may be taxable.

Exemptions from Gift tax

Not all gifts are taxable under the federal gift tax rules, the following are usually exempt:

• Gifts that are not more than the annual exclusion for the calendar year, which is $13,000 per person per year for tax year 2010
• Gifts to a political organization for its use
• Gifts to charities
• Gifts to one's spouse
• Tuition or medical expenses one pays directly to a medical or educational institution for someone

There are two levels of exemption from the gift tax. First, there is the exclusion noted above for gifts up to $13,000 per person per year. An individual can make gifts up to this amount to as many people as he or she wishes each year. A married couple can pool their individual gift exemptions to make gifts worth up to $26,000 per person per couple per year without incurring any gift tax. A lifetime gifting limit of $1,000,000  is allowed before anygift tax is incurred.
The treatment of a gift for purposes of the federal gift tax should not be confused with the treatment of gifts for other tax purposes. For example, for U.S. income tax purposes, most gifts are excluded from the gross income of the recipient under Internal Revenue Code section 102, and thus are not taxed as income.  If you give or receive a gift of over $13,000, you should seek advice from a tax attorney.

How to Calculate the Gift Tax Rate

Everyone who is considering giving a substantial gift to someone else should understand not only that there is a gift tax that must be paid, but what the gift tax rate is. There can be significant tax penalties for those who do not take these factors into consideration before making their gift, up to a possible 45% of the gift amount in some cases, as of 2009. However, there are also some tax exclusions that may be able to protect a donor from some tax, or in some cases, any tax.

Rules Governing Gift Taxes

Some wealthy individuals in the past have attempted to avoid the substantial estate taxes their heirs would face after their death by giving away their estate prior to their demise. In order to close this loophole, the IRS enacted a gift tax that would impose a tax upon such gifts as high, or nearly as high, as the estate tax. This law was not meant to penalize those attempting to provide legitimate gifts for their children or others, so there are two types of exclusions that donors may apply:

• Individual gifts under $13,000 in any given year are not subject to the gift tax, no matter how many such gifts are given

• Gift amounts over $13,000 can be excluded from the gift tax through a $1 million lifetime, cumulative exclusion. However, that exclusion can also be applied to the estate tax the deceased’s heirs would be required to pay. In 2009, a $3.5 million estate exclusion could be reduced by the amount of the $1 million gift tax credit not used in their lifetime.

There are additional types of gifts that are exempt from gift taxes altogether, including gifts to spouses, gifts of tuition paid directly to the school, gifts of medical payments to medical facilities, and gifts to charitable organizations.

Filing a Gift Tax Return

In many cases, donors must file a Gift Tax Return for gifts upon which they were not required to file an exclusion, such as gifts to spouses. The required paperwork is IRS Form 709, and it contains a table for computing the gift tax, when necessary. It specifies the actual breakdown of when these amounts apply, but in general, the tax rates for 2009 gift taxes range from

• 18% for taxable gift amounts less than $10,000

• To 28% for taxable gift amounts less than $100,000

• To 39% for taxable gift amounts less than $1,000,000

• To 45% for taxable gift amounts over $2,000,000

These rates only apply to amounts that are not excluded. For a gift of $14,000 in 2009, the rate would be 18% on $1,000, or $180. Of course, if the filer chose to apply that amount to their $1 million lifetime exclusion, they would not owe any gift tax on it at all.

Getting Legal Help with Gift Tax Return Rates

There are many details to include when filing a Gift Tax Return, including documentation, correct tax calculations, and all required gifts. There are penalties for failing to list all gift amounts, as well as for attempting to defraud the government by assigning an incorrect value to the gift or gifts given. A skilled tax lawyer can help prepare IRS Form 709 accurately and thoroughly, as well as take advantage of all the exclusions to which their client is entitled.

How can I be sure I am complying with sales tax law as a vendor?

As a vendor, you need to make sure that you are complying with sales tax law. You surely know how important tax laws are and the trouble that you can find yourself in if you don't follow those laws. Here is how you can be sure you are complying with sales tax law as a vendor.

How to Get Licensed

To begin with, you need to check with your state's Department of Taxation to make sure that you are adhering to all rules and regulations specific to your state. A lack of knowledge is not an acceptable reason for not following sales tax law. In general, vendors who make taxable sales will need to apply for and obtain a vendor's license. There are several different types, such as regular, delivery, transient, and service vendor's licenses. You will need at least one type of license and possibly more than one.

Handling the Sales Tax Matters

Once you have obtained your vendor's license or licenses, then you need to collect the correct amount of sales tax whenever you conduct a transaction where sales tax is applicable. You will also have to maintain records of all these transactions. Finally, you will have to make sure that you file your tax returns while including the payment of those taxes that you collected.
You may wish to hire a lawyer to help you to understand the whole process and so that you do not encounter any problems later. This brief explanation covers the major details of the process, but you may have special circumstances that a lawyer will be able to further illuminate.

Help from a Tax Attorney

There are many types of Tax Attorneys who specialize in nearly every facet of tax law.  As a general rule, tax attorneys are often critical to the successful negotiation of issues that will have an impact on the taxpayer.   It is important to seek out a taxation attorney who specializes in the particular area of tax law that applies to the client and to the situation of the business or entities involved in a transaction.  As tax laws get more complicated, it becomes even more necessary to have a taxation attorney on hand to discuss the options and ensure the legality of decisions that will impact tax liability. 

Role of Tax Attorneys

Since tax laws in the United States are very intricate and difficult to understand, the role of a tax attorney is critical when making important decisions that will impact the tax liability of an individual.   For both businesses and individuals, seeking the advice of a qualified tax attorney can often mean the difference between making a good choice and a poor choice when it comes to tax deciding personal tax issues.  From providing guidance so that individuals are able to create things like trusts that have beneficial tax implications, to helping businesses structure themselves in a way that allows profits to be maximized, the role of a tax attorney is critical.
Additionally, the role of a tax attorney is to help individuals and businesses operate within the confines of the applicable tax laws.  Attorneys who have skill and knowledge around tax rules and can understand the impact that certain decisions will have on overall tax liability can make a substantial difference in the business endeavors and personal affairs of their clients.  

Tax Problems an Attorney Can Help With:

Tax attorneys can be very helpful in a wide range of situations where tax liability is involved.  Some of the common issues Tax Attorneys help with include the following:

• Property Tax Appeals: Appealing Reassessments and lowering Property Taxes
• Tax Evasion: Fighting or Minimizing Charges
• Tax Audits: Setting up a defense for beating or minimizing the damage of an audit
• Innocent Spouse Tax Relief: freeing an innocent spouse from their spouses tax debts
• Wage or Bank Levies: reducing or fighting wage bank levies or wage garnishments
• Asset Seizure: minimizing or fighting them
• Tax Penalties: reducing the extent of penalties and fines, setting up repayment plans
• Unpaid Income Taxes: minimizing the reprecussions and setting up a plan to pay them back
• IRS Tax Collections and Reducing Tax Debt
• Tax Fraud and Litigation
• Tax Liens: filing or releasing them
• Self Employed or Business Tax Legal issues

Types of Tax Attorneys

Just as there are many types of taxes, there are also many types of tax attorneys.  Some tax attorneys specialize in the tax benefits associated with estate planning and the creation of beneficial trusts.  Other tax attorneys specialize in highly complex business structures that are intended to allow taxation to flow-through or exempt certain entities.  Finding the right type of tax attorney requires the client to do their homework and research attorneys who specialize in the areas that pertain to their needs.

• Tax Litigation Attorney
• Income Tax Attorney
• Property Tax Attorney
• Criminal Tax Attorney
• Business Tax Attorney
• Property Tax Attorney

Finding a Tax Attorney

Since effective help and guidance from an attorney can make a significant difference in the overall success of a business in properly handing their business tax issues, it is highly recommended that the services of a tax attorney be sought whenever necessary.  While the rules and regulations may seem straightforward in certain areas, there are nuances and details that may slip through the cracks without attorney involvement.  Especially as it pertains to decisions that will have a major impact on tax liability, a tax attorney should always be consulted. Visit our Tax Attorney Directory to find Attorneys specializing in Tax Laws in your state and city. A free case review is right at your finger tips to determine your legal help options for Tax Relief.

Income tax lawyers ask for extension in deadline

KARACHI: The Income Tax Bar Association (ITBA) has requested for an extension in the deadline for filing income tax returns to November 30. The bar has said that this will allow taxpayers to file their returns and statements with ease in light of problems with the electronic filing portal.
The request was made by ITBA President Ali Rahim in a letter to Federal Board of Revenue Chairman Sohail Ahmed.
The letter said that ITBA has always encouraged the electronic filing of taxes and that the FBR had pledged its support to the bar in this regard.
The earlier extension from October 15 to October 30 was requested on the premise that the electronic filing portal of the FBR was not functioning properly. However, the portal was not functioning properly up to October 22, said the letter, adding that lawyers were filing sales tax returns, which had a deadline of October 25, for the first three days following October 22.

Irs Tax Relief - Are You Looking for IRS Tax Relief?

IRS Myth #1 - If the IRS starts a substitute return for an unfilled tax return, you're in trouble: First of all, no matter whatever tax relief myth you've heard, you are entitled to file your original return, regardless of how late it is. If you have failed to file taxes in the past and are afraid the IRS creates a substitute return, there is relief obtainable. The average client looking for IRS tax relief who visits an income tax lawyer or Certified Tax Resolution Specialist accumulated four to eleven years of unfilled returns. To achieve the best results, a good tax expert should represent you before the IRS to obtain for you the tax relief you deserve and assist you in turning your financial life around. IRS Myth #2 - You need to owe a lot of money before you should think about hiring an income tax attorney or tax resolution expert: This IRS myth can be really costly, requiring lots of money and, sometimes, your freedom. Beyond simple tax relief, in case you are threatened by potential prison time, you need skilled tax help from an experienced Certified Tax Resolution Specialist. Since the establishment of our democracy while facing the government you were entitled to have someone represent your interests. Tax relief is also this kind of situation. IRS Myth #3 - You are required to pay your IRS tax bill in total: The average taxpayer also may not be aware that the IRS offers assistance with payment options for taxpayers in trouble who can't afford to pay their tax bill in full. Most Certified Tax Resolution Specialists will counsel you against setting up an IRS payment installment plan which can be the most costly way to settle your IRS back tax debt because you are paying the full sum owed in addition to interest plus fees. An experienced income tax attorney can reduce your IRS back tax and IRS penalty debt load, sometimes giving you the ultimate tax relief by removing your tax burden completely.

How to Solve Your Income Tax Problems

1. WHAT ARE INCOME TAX PROBLEMS

Clients often come to us who have unpaid income tax problems. These tax problems come in several varieties. Unpaid taxes can result from:

Didn’t file Form 1040's tax returns for various years

Did file the required IRS income tax returns, but didn’t have the money to pay the tax

The IRS filed a tax return for you and you owe taxes.

Any combination of the above scenarios.

2. SOME ROOT CAUSES OF UNPAID OR UNFILED INCOME TAXES

A client’s failure to file their income tax returns or to pay their taxes usually come about because of one or more of the following reasons:

Clients has low income which causes them to have to spend the money they had set aside for taxes.

Clients have low income which causes them to not be able to set aside enough money to pay the taxes in full.

Clients have poor bookkeeping habits which causes them to accidentally spend the tax money.

Clients have their records lost or destroyed which causes them to not file their tax returns or not know how much tax they actually owe.


A spouse either runs off with the tax money, or doesn’t pay it to the IRS on time, or doesn’t file the tax returns..

Client intentional tries to avoid paying the payroll tax.

Client is a tax protestor.
3. UNDERSTANDING THE IRS’ ATTITUDE TOWARD TAXPAYERS WITH UNPAID TAXES

To say the least, the IRS attitude toward taxpayers who owe taxes is never “friendly”. Their job is to collect the taxes from you, and they’ll do whatever it takes to legally get the job done.

The IRS can be very aggressive, and they put a lot of pressure on taxpayers to pay unpaid taxes.

The IRS’ attitude toward you goes something like this:

There is NEVER any circumstance in life that should keep you from paying your taxes.

If you owe taxes you are probably untrustworthy at best, and a scoundrel at worst.

Caution! Their collection efforts may result in you going out of business, or make it very difficult to pay your necessary living expenses. But the IRS really doesn’t care. After all, you caused this problem, not them.

They will use ALL the weapons in their arsenal to collect the money you owe them, including seizing business and personal assets. You must be very aware that they don’t care about what happens to you or your business, just as long as they get their money.

Laws, written to greatly favor the IRS, make it more difficult for you to file bankruptcy against income taxes. This means that you might not be able to get rid of income taxes simply by filing bankruptcy.
4. KNOWING THE IRS’ SPECIAL RULES FOR SETTLING UNPAID TAXES

Special IRS rules apply if a client wants to file an “Offer in Compromise” on income taxes. An Offer in Compromise is when you pay less than you owe to settle your tax debt. Sometimes you can settle for a lot less than you owe, and the IRS still considers your tax debt to be “paid in full”.

Special rules that apply:

You must have filed your most recent Form 1040 Form, or at least have it filed by the time the settlement Offer is filed.

In addition, you should also have filed the previous five tax year’s Form 1040 tax return

If you have a business, you should have filed your most recent tax year’s Form 941 tax return.

Also, if you have a business, you must have filed the last two quarter’s Form 941 Forms, and paid them in full.

After an Offer has been accepted by the IRS, you must file ALL required tax returns and pay ALL required taxes for at least the next five years. If you don’t do this then the IRS will revoke the Offer and they will begin collecting the entire tax amount originally due, PLUS interest and penalties.
5. DEALING WITH THE STRESS OF FACING THE IRS

Dealing with the IRS under any circumstance can be stressful. But taxpayers who owe taxes to the IRS face even greater stresses. These additional stress factors include the following:

Having to worry about concentrating on your job or business, AND worry about raising money to pay the back taxes.

Having to worry about the ordinary pressures of life, such as paying personal expenses, while also paying the back taxes.

Having to worry about paying current taxes and filing the current tax returns - on time, every time.

Pressure from very aggressive IRS collection folks, who don’t understand how tough it is to work a regular job or to run a business, pay your expenses, and pay taxes.

And perhaps the greatest stress of all for some is the stress of trying to keep your marriage from falling apart due to these extra stresses.
6. STEPS YOU MUST TAKE TO PREPARE TO DEAL WITH THE IRS

Certain steps must be taken in almost every case when beginning to defend a Client against the IRS.

These steps include obtaining the following information and documents from the Client:

Obtain an up to date Income & Expense Statement for the Client’s business, if it is still in business.

Obtain a completed IRS Form 433-B on the business to determine what assets it has and their values.

Obtain a completed IRS Form 433-A on Client’s personal finances to determine what income, expenses and assets the Client may have.

Obtain a very detailed budget form for Client’s personal expenses.

Make sure that Client’s business, if one is operating, has filed its most recent Form 941, Form 940, and Form 1120 if needed.

Make sure that Client has filed his most recent tax year’s Form 1040, as well as for the past five years as well.

Obtain copies of the most recent tax year’s IRS Form 1040 and Form 1120 (if Client has an incorporated business which is in operation).
7. DEVELOPING A GAME PLAN TO SOLVE YOUR TAX PROBLEM

Once the Client’s financial information has been complied by my office, we will begin to analyze it. We do the analysis in order to accomplish several goals:

Obtain the IRS’ own internal information on Client. This special IRS internal information shows us all of the Client’s tax debts, important dates such as when tax returns were filed, and which tax returns the IRS believes, rightly or wrongly, have not yet been filed, as well as other important information.

We attempt to stop any IRS collection action, such as garnishments or the placement of liens on any business or personal assets.

We may set up an Installment Agreement (an IRS monthly payment plan). We may do this even if we are going to settle with the IRS by filing an Offer in Compromise (an Offer is where you settle with the IRS for less than the amount of taxes you owe, sometimes much less ).

We must become very well-acquainted with your financial facts so we can determine if you are even a good candidate for an Offer in Compromise (an Offer is where you settle with the IRS for less than the amount of taxes you owe, sometimes much less).
8. CONCLUSIONS YOU SHOULD REACH IF YOU ARE SERIOUS ABOUT SOLVING YOUR TAX PROBLEM

The best way to deal with a tax problem is to NOT ignore it. Just like with rotten vegetables, unpaid taxes don’t get better just because you put them into a dark closet. You must:

Reach down within yourself and get the courage to face up to your problem.

Deal with your problem sooner, rather than later.

Try to develop a workable plan to deal with your problem, both now and in the future

Hire a tax professional who can advise you each step of the way

Hire a tax professional who stand between you and the IRS and will be an emotional buffer between you and the IRS, so that you don’t have to talk or meet with the IRS.

Realize that there’s a lot at stake here. This is your life we’re talking about. ONLY hire a true licensed tax professional, who can verify that he/she has the experience (and guts) necessary to defend tax clients.

MAKE SURE sure that your licensed tax professional has defended clients, just like yourself, a large number of times. Unfortunately, hiring a local accountant or CPA may not get the job done. You certainly don’t want them to use your case to learn on. You’re not a guiena pig. Let them learn on someone else.
9. TAKE ACTION
Forcing yourself to action may the be the hardest step of all. You must:

Deal with your problem — Don’t ignore it.

Only YOU can start the process of dealing with the IRS — START TODAY.

Try to get a good night’s sleep. When you go to bed at night, try to sleep. Try to stop your mind from thinking about just your tax problem.

Get out of bed in the morning. When you wake up in the morning and you want to simply pull the bed covers up over your head and hide from your problem — don’t do it. Jump out of bed and take action.

Don’t forget to spend quantity time with your family all through this crisis. You’ll need this time to recharge your mind and body — Plus your wife and children still need you to.
NEED A FRESH START ON LIFE?
DON’T BE AT THE MERCY OF THE IRS — LEARN WHAT YOUR OPTIONS ARE

Income Tax Audit Lawyers

What Is Income Tax?

Income Tax is a tax on the money people earn. Usually, the tax is a percentage of your earnings, and is due every year on April 15. Income taxes are paid both to the State and Federal governments. These taxes are used for funding the operations of the government, from national security to local education.

How Much Income Tax Will I be Paying?

The amount of tax you pay is generally a function of your income minus any deductions that the tax law allows. The amount of taxes you have to pay is set by legislators. The taxes are collected by the Internal Revenue Service (IRS).

What Happens if I Don't Pay all of My Taxes? What if I Only Pay Part of Them?

You are required to pay taxes by law. If you don't, the government can demand the money you owe and even put you in jail for tax evasion. If you underpay your taxes, you'll probably have to face an audit.

What is an Income Tax Audit?

When the IRS thinks that you haven't paid your fair share of taxes, they may perform an "income Tax audit" of your tax return. They usually come to this conclusion when they think either you 1) haven't reported all your income, or 2) made deductions you shouldn't have.
In an income tax audit, you meet with an IRS officer who asks you about your tax return. You'll have to convince the officer that you fully reported all your income and that all the deductions you declared were appropriate. If you succeed, your tax return will be closed and you have nothing to worry about. If you don't succeed, then you may be subject to additional taxes and monetary penalties. Therefore it is very important to keep your expense records that substantiate the deductions that you claimed on your tax return.

Tax Court

If after your audit, the IRS demands payment of less than $50,000 in taxes during a single year, you can go to tax court. In tax court you can dispute the amount of money you owe. The judgment of the tax court is final.

What Is an Offer in Compromise?

An offer in compromise is an agreement between an income taxpayer and the IRS to allow the taxpayer to pay less than the full amount of back taxes owed. You should speak to an attorney about whether an offer in compromise is an option for you.

What Is an Installment Payment Agreement?

Many income taxpayers are unable to pay the full amount of tax they owe. In some instances an installment payment agreement can be reached between the taxpayer and the government to pay back taxes in installments. A lawyer with income tax experience can help negotiate an installment payment agreement.

Do I Need an Attorney to Help Me with My Income Tax Problem?

Tax law can be very difficult to understand. To make matters worse, tax law changes every year. An attorney can help you understand current tax law and how it affects your income tax problem. If you haven't paid income taxes for several years, a lawyer can assist you by negotiating with the IRS for an offer in compromise or installment payment agreement. If you need to go to tax court, an attorney can represent you and help minimize your income tax bill. An expert Income Tax Lawyer can protect your rights and interests in the event of income tax audit.

Income Tax Attorney

When Uncle Sam demands payment, an income tax attorney can help resolve indebtedness and stop harassing collections. Owing the Internal Revenue Service is no laughing matter. Millions of taxpayers are troubled by mounting penalties and interests, wage garnishments, bank levies, and ruined personal credit all due to an inability to pay or resolve past due federal taxes. While most individuals view the Internal Revenue Service as a big bad wolf eager to devour little Red Riding Hood, the federal government's goal is to collect taxes which help fund services for public programs. The nation depends on such revenue to keep the country financially solvent; and when taxpayers defer to pay, everyone suffers. "For this cause pay ye tribute also: for they are God's ministers, attending continually upon this very thing. Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour. Owe no man any thing, but to love one another:" (Romans 13:6-8a). In addition to penalties and interest, delinquent tax obligations are not dischargeable by bankruptcy and can severely damage an individual's credit worthiness. But an independent IRS tax lawyer can work with debtors to clear up past delinquencies.

A reputable income tax attorney works with delinquent taxpayers to mediate Internal Revenue Service issues, stop collection efforts, and settle federal and state unpaid obligations by negotiating with the IRS and state revenue agencies to reach favorable and manageable debt resolution. The Internal Revenue Service provides many options to resolve taxpayer debt; and an experienced IRS tax lawyer will be familiar with methods which are applicable to a client's particular situation. Attorneys may negotiate a payment plan, or Offer in Compromise, which reduces the amount owed and enables delinquent taxpayers to make monthly installments until the reduced amount is paid in full. Debt solution attorneys help debtors prepare lengthy income earnings statements, records of creditors owed, and listings of assets and liabilities. While Internal Revenue Service counselors consult with a debtor's legal representative to work out the details of payment plans, the debtor is under no obligation to personally confer with the IRS. Debt collection proceedings cease during negotiations and once payment plans have been implemented.

In order to work out an Offer in Compromise with the Internal Revenue Service, debtors must file all returns for prior years. A competent IRS tax lawyer can help delinquent payers comply with filing regulations for individual and business requirements. In many instances, the Internal Revenue Service will work with attorneys to restructure business and personal revenue debts, or resolve long standing discrepancies on old returns. The U.S. Department of Revenue understands that delinquency can be a result of a myriad of financial setbacks. Individual taxpayers may become unemployed or disabled and are left with unpaid obligations. Divorce, death of a spouse, and bankruptcy are also contributing factors which can lead to an inability to meet obligations. But knowlegeable lawyers can negotiate old debts according to a taxpayer's current financial situation by presenting substantial evidence of the debtor's changing economic status.

Men and women who serve overseas in the military also face revenue issues. While the U.S. Armed Forces employs military personnel to help service men and women resolve complicated financial matters, stateside spouses and family members may consult an income tax attorney to help clarify and mediate problems. Military personnel returning from overseas assignments may fall behind in revenue obligations due to an inability to secure employment. An astute IRS tax lawyer will know how to deftly plead a serviceman's case to the Internal Revenue Service and negotiate a favorable settlement on the client's behalf. While IRS obligations are not dischargeable in Chapter 7, 11, or 13 bankruptcy cases, an experienced tax attorney can negotiate for a debt reduction or settlement, which will enable debtors to gradually clear up delinquencies. Again, once an attorney begins negotiating with the Internal Revenue Service, collection efforts cease. And although the debt cannot be forgiven, the taxpayer is alleviated from the emotional trauma of dealing with the collection process.

Once the government accepts an Offer in Compromise, or debt resolution, the IRS tax lawyer will advise the client to not default on payment arrangements. Defaulting on an Offer in Compromise will result in back taxes being due and payable, including interest and penalties. In other words, debtors will be back to "square one" and a second Offer may not be accepted due to a failure to honor the first commitment. Debtors should work with an attorney to ensure that the Offer in Compromise suggests a reasonable payment plan within certain budget restraints. IRS debt settlement is usually limited to no more than five to six years to catch up delinquent payments. Depending on the amount owed, some debtors may ask attorneys to devise a more manageable plan to reduce their debt.

Hiring an income tax attorney can be expensive. Taxpayers seeking legal help in resolving Internal Revenue Service disputes should be prepared to pay either a retainer, an hourly fee, or a percentage of monies owed. Retainers are flat rates for services rendered during a specific time frame. Hourly rates can range from $100 to $250 depending on the complexity of the case. Attorneys may charge 10, 15, or as much as 30 percent of the adjusted fee settlement, which can amount to a hefty sum! Of course, a reputable lawyer may offer payment via installments. Debtors should select attorneys who are knowledgeable of federal and state revenue regulations, particularly intricate details of collection and debt resolution proceedings. Dealing with the IRS is one instance when hiring a novice is definitely not a good idea! Some attorneys are retired IRS counselors and are intimately aware of how the system works. Above all, debtors should steer clear of debt resolution attorneys or firms which make claims of settling back taxes for pennies on the dollar. Remember: If it sounds too good to be true, it probably is.

YEAR-END TAX PLANNING

Tax-planning is simply legally reducing one’s taxable income by taking full advantage of deductions and credits and other techniques. Tax planning is often an ongoing process. However, as we draw to a close to the present taxation year, special attention should be paid to year-end tax planning.
The following are some tax planning considerations. Consultation with a tax advisor may be advisable to properly implement certain of the suggestions.

TIMING OF INCOME AND EXPENSES

Generally speaking, you want to accelerate expenses and defer income. The opposite will be true only if you anticipate high income in the next taxation year and low income in the present taxation year.
Accelerating expenses means making expenditures in the present taxation year, rather than in the next taxation year. For example if you plan to purchase a new computer in the first quarter of the next taxation year, consider making the purchase now so that you can depreciate it this year.
Income that has been earned cannot be deferred. However if you have a project that you can delay starting until the new year, do so. That way the income won’t be taxed until the next taxation year and you won’t pay tax on it until the year after that.

RRSP’S

RRSP contributions are one of the key tax planning tools available. An RRSP allows you to receive a deduction while having your capital earn income tax free until the funds are withdrawn upon retirement.
You should contribute to your RRSP as soon as possible due to the additional year of income compounding you can enjoy by making the contribution at the start of the year rather than at the end.
For the present taxation year, you can claim an RRSP contribution of up to 18% of income earned from employment or business in the former taxation year, up to a maximum of $15,500. You are allowed to make an excess contribution of as much as $2,000.00 without it being subject to the 1% per month special tax.
If you contributed less than the maximum allowable amount of your RRSP in a previous year, you can use your unused RRSP contribution room for the present taxation year by contributing an additional amount equal to the amount of the unused room.
The contribution deadline for the present taxation year is March 1, of the next taxation year.
Interest paid on funds borrowed to make an RRSP contribution is not deductible. Generally, if you do borrow, make sure that the earnings in your RRSP are growing at a higher rate than your interest payment on the loan.

Setting up an RRSP for your child is an excellent opportunity to not only save tax, but to also create large gains in long term investment growth, and an even larger deduction when your child starts to pay tax.
Disclaimer:
"This article provides information of a general nature only. It may no longer be current. It does not provide legal advice nor should it be relied upon. If you have specific legal questions you should consult a lawyer."

CRA New Rules for Tax Amnesty (Voluntary Disclosure Canada)

It appears that CRA (the Canadian tax department) is set to relax the rules for income to be included in the Canada Voluntary Disclosure (VDP or Canadian Tax Amnesty) program.
At present the VDP only applies to the latest 10 years or undeclared income or unfilled returns.  There are no penalties and often a reduction of income for that 10 year period.  However there was no amnesty available for prior years.  The voluntary disclosure officer might in some cases not require that all previous year’s income be included, but this was not a matter of CRA policy and was not consistently applied.  It appears that this is about to change.
CRA will apparently change the Canadian tax amnesty rules to bring them closer in line with the IRS tax amnesty program.  The voluntary disclosure department will only go back a maximum of 10 years when determining what income is to be reported and taxed in a tax amnesty application.
This possible shift in policy appears to be prompted by the US UBS prosecution that has resulted in concern by Canadian taxpayers with undisclosed offshore bank accounts.  Many of those Canadians with offshore assets and income were concerned about filing a VD application due to the uncertainly of what would happen with older years.  The worries of those individuals with unreported offshore income will now be alleviated.
Since the new VD policy has not yet been announced by CRA, Canadian taxpayers considering submitting a tax amnesty application should contact us to discuss the appropriate strategy.  There is no time frame from the Canadian tax authorities for the new VD rules, so a delay in submitting the application exposes the taxpayer to interim action by CRA that would potentially disallow a future application.

Does CRA prosecute tax amnesty applicants?

The REAL truth about Canadian Tax Amnesty

Are you considering a voluntary disclosure (VDP or tax amnesty application) to the Canadian tax department for unflled Canadian income tax returns or undeclared income, but are feeling confused due to all of the conflicting information on the internet?  Are you afraid of a sinister “tax man” or “tax police” in dark glasses waiting to pounce on you and throw you in jail for tax evasion or not filing tax returns?  Nothing could be further from the truth.  You CAN sleep at night, despite the fear mongering that you may have seen to the contrary.
I have been a Chartered Accountant since 1977 and a tax lawyer since 1982.  I have submitted VDP applications on behalf of Canadian taxpayers since the early 1990s.  I have publicized and demystified the tax amnesty procedures on my website since 1997.

What CRA department administers the VDP?

The audit directorate of the Canada Revenue Agency (CRA) administers the voluntary disclosure program in Canada. This is NOT the department that investigates tax evasion and prosecutes tax evaders.  The so-called “tax police” is the Investigations Division of CRA.  The Investigation Division has nothing to do with tax amnesty processing.

Can a CRA employee reject a valid application?

CRA’s employees have NO discretion to reject an application if the criteria are met.  The CRA has published “Voluntary Disclosure Program Guidelines” on September 30, 2002 and modified them on October 22, 2007.  The Federal Court of Canada will enforce these guidelines if not properly applied.  We have successfully appealed to the Federal Court in cases where the guidelines were not followed by the tax department.

CRA absolutely does not prosecute VDP applicants.  The purpose of the Canadian tax amnesty program is to encourage taxpayers to voluntarily comply with their obligations to report all income and to file tax returns.  Prosecution would defeat the purpose of this program.  It would also be contrary to the published guidelines that make it clear there will be no prosecution.  The latest published statistics from the tax department shows that for 2008-2009 CRA referred 164 income tax and GST/HST investigations to the Public Prosecution Service of Canada.  During this same time period there were over 11,000 voluntary disclosures submitted.  These prosecutions were for taxpayers who were caught evading taxes, or who were sent requests and demands to file tax returns and ignored the demands.  The prosecutions are NOT as a result of submitted VDP applications.