Your IRS Questions Answered Here…

Question: I’m currently separated from my spouse, who owns his own business, and we are in the process of getting a divorce.  I have always filed jointly with my spouse and now the IRS is sending me notices stating I owe $35,000.  I have no idea how they are coming up with this amount as my spouse said he was paying the IRS.

Answer:  You may be able to avoid this liability entirely under the IRS’s Innocent Spouse Relief rules.  Under federal law if an income tax return is signed by both husband and wife, both spouses are 100% responsible for the taxes owed.  However, the law permits special consideration where a spouse cannot be held responsible for mistakes that are attributable to the other spouse.

If you meet the following criteria you may be able to apply for innocent spouse relief:  Your spouse didn’t report all their income; and you were not aware of it and no reason to know about it when you signed the tax return; and it would be unfair to hold you liable for the taxes owed due to your spouse’s error. If you feel you were deceived by your spouse or tricked into signing a return you thought was correct this will help your case too.  There are many other ways you may be eligible for relief under the IRS’s innocent spouse rules and we can help sort this out and determine the proper path for resolution.

Controller Takes Control and Funds Her Own Company

Sue O’Neill, controller for Marco Contractors in Pittsburgh, PA has been sentenced to 64 months in prison for wire fraud and filing false income tax returns.

O’Neill embezzled approximately 8.7 million dollars over a nine-year period from the family owned business. She used 6.7 million dollars of the stolen money to open Bulldog Contractors with a partner, and the remaining two million went into her personal bank account.

O’Neill bought two 1969 Ford Shelby GT500s for $165,000 each and spent $163,000 renovating a 1969 Ford Mustang. She also spent hundreds of thousands of dollars on a country club membership and jewelry and didn’t report any of the stolen funds on her tax returns.

In addition to the prison sentence, she is ordered to pay restitution of 8.5 million dollars to Marco Contractors, $215,000 to another Marco controlled company, and $428,000 to the IRS.

Avoid These 5 Common Tax Filing Mistakes That Can Get You In Tax Trouble

Whether you file the simple 1040EZ or a complex 1040 and a raft of schedules, making a mistake on your tax form could lead to big tax trouble. Something as simple as a math error or unsigned form could invite extra attention from the IRS.

The tax agency sees those mistakes every year, and IRS representatives warn taxpayers to be careful when filling out their forms. Even if you think you have everything filled out perfectly, it never hurts to double-check and look for these common tax day errors.

 

#1 – Assuming Your Tax Pro Prepared Your Taxes Properly

Blindly trusting your accountant or tax preparer to file your taxes correctly can be costly. Of course you want to assume they do a great job, and most tax professionals do, but letting them file without your thorough review is a mistake. We resolve back tax problems for people, and often what gets people in trouble is a simple mistake; like forgetting to report income, missing deductions, or taking too many deductions which can lead to an audit.

These are sometimes honest mistakes that if not caught early, can trigger red flags and have  the IRS sending you letters of balances due.  No one knows your financial situation better than you do so it’s important you double check your return so you’re not blindsided with an unwanted surprise.

 

#2 – Waiting Until the Last Minute

Filing taxes is stressful enough. You do not need to make things worse by waiting until midnight on April 15 to get your return in the mail. Give yourself plenty of time to gather all the necessary documents and complete your return.

Keep in mind that unexpected problems could interfere with your last-minute tax filing plans. Getting your taxes done early is the only way to protect yourself from unforeseen circumstances that can delay your tax filing.

 

#3 – Failing to File on Time

If you cannot file your return on time, you can ask for an extension by filling out a single form. Even if your documents are in disarray, there is no excuse for not filing on time. Filing an extension gives you six more months to get everything in order and complete your return.

Keep in mind that you will still need to estimate the tax you owe and make your payment, even if you file an extension. Filing an extension extends the amount of time you have to get your return to the IRS, but it does not provide a reprieve from your tax debt. If you wait to make your tax payment, you will get hit with penalties and interest.

 

#4 – Not Making a Backup or Keeping Good Records

Making backup copies of your tax returns, income documents and schedules is an essential part of tax planning and preparation. Set up a folder or file box and use it to store your tax documents as they come in, and then scan each one before you put it away.

Once you have completed your return, be sure to make copies of every document, including your W-2 form and tax schedules, before sending the return to the IRS. If you file electronically, be sure to save a PDF copy of your return before completing the final step. Save all of those electronic tax documents on your computer or cloud storage device. Ordering a lost copy of a past year’s return from the IRS is time-consuming and expensive. You can save time and money by making your own backup copies. If the IRS audits you or requests more information from you, all your records will be extremely helpful in the process.

 

#5 – Ignoring Letters From The IRS After You File Your Taxes.

Sometimes the IRS will send follow up correspondence, especially if you owe money to the IRS. It can be easy to ignore the first few letters. Even if you have the intention of paying your taxes soon you should still take action and either get on an installment agreement or reach out to a tax relief firm if your financial situation requires it.

 

OWE BACK TAXES?

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out.  If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.


At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.

What is a IRS Levy? IRS and Other Asset Levies Explained

IRS and Other Asset Levies Explained

Falling behind on your debts is never a fun place to be. It’s less fun when a levy is placed on your assets. In this article, we take a look at what an IRS levy is, why it happens, and what you can do about it.

Note: If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief. Often, we can resolve your IRS levy without you having to talk to the IRS. Call today.

Simply put, if you owe back taxes and you ignore the IRS, the IRS can seize your property, take money from your bank accounts, or sell your assets in order to satisfy the balance due.

The IRS will give you plenty of notices via mail before they take this step. If you do not satisfy the debt or make payment arrangements by the specified date, the IRS will attempt to take the amount of the levy directly out of your bank account.

Other types of levies

Private creditors may issue a levy against your bank account with a court order. Court orders are not required for levies by government agencies. The creditor must notify you of the upcoming levy at least 21 days before removing any funds from your account. You may not withdraw money or close the account during this waiting period.

Funds earned from child support, social security, unemployment, workers’ compensation settlements and certain other types of government agency payments are exempt from levy. You must request the exemption and offer proof of the source of the funds.

Wage Garnishments

Government agencies may also garnish an employee’s wages for back taxes, child support and other delinquent payments required by law.

The IRS has the authority to levy up to 85 percent of the employee’s paycheck. The levy notice will be sent to your company’s payroll or human resources department. You must then withhold the appropriate amount of money from the employee’s paycheck and send it to the IRS or state tax board. The employee must provide a wage garnishment release if he is able to work out a payment arrangement.

If you are behind on your taxes, the IRS may levy most payments from federal agencies. This includes railroad retirement benefits, Medicare supplier and provider payments, payments on contracts between your company and a government agency, federal retirement annuities and travel reimbursements.

You may apply for a hardship exemption if the levy will cause your company undue financial distress. Companies going through bankruptcy proceedings are automatically exempt from IRS levies.

Seizing Your Assets

The IRS may also seize your real estate and personal property such as a car or boat. You will receive a 30-day notice indicating that seizures will follow if you do not pay your outstanding taxes or contact the IRS to make payment arrangements. This authority also extends to property and money you own that are being held by another party, such as life insurance cash value. The government sells its seized property at auction to recover some of the funds owed by delinquent taxpayers.

What To Do If You Have An IRS Levy

Back taxes don’t just disappear if you ignore them long enough. Putting your head in the sand will cause the problem to get worse.

If you have back tax debt, we highly recommend you reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation.


At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.

Paul Piper In a Pickle After Picking More than a Peck of Boss’s Cash

Paul Piper was sentenced to 63 months in prison for bank fraud and filing a false tax return after embezzling more than 1.7 million dollars from the Lake Michigan Car Ferry, where he was employed as the company’s controller.

Piper stole the funds between 2007 and 2018. He wrote checks directly to himself and to two businesses he owned, Piper Tax and Accounting and Piper Group. He forged the signatures of company owners or used a signature stamp without permission and hid the transactions by attributing them to an insurance expense code or by making false entries.

Piper was ordered to pay restitution to the Lake Michigan Car Ferry, which operates between Luddington, Michigan and Manitowok, Wisconsin, in the amount of $1,740,037.91. Prior to his conviction he had already forfeited a 2018 Ford Ram Truck, a 2008 Glacier Bay recreational vehicle and cash.

Businessman Steals $570,000 In Payroll Taxes From His Employees and Gets Caught for the Third Time

The owner of two Rhode Island businesses, that supply steel and iron to construction sites pleaded guilty to intentionally failing to turn over to the IRS federal employment taxes and FICA payments withheld from his employees totaling more than $570,000.

Steven Allard’s companies, BR Steel Corporation and Greystone Iron, have more than 100 employees combined, and specialize in major construction projects such as shopping malls and school buildings. Allard used $216,000 to pay for “credits” to a dating website, RussianBrides.com, and $93,000 in rent payments for a luxury home.

This is the third time Allard has been convicted of a crime. In 2009 he was sentenced to 30 months in prison for tax evasion and bankruptcy fraud after spending 1.6 million dollars that was owed to the IRS in employment taxes. He was also charged with making false statements about real estate holdings in a bankruptcy. Before that conviction Allard was sentenced to 10 months in prison for accepting kickbacks from public employees.

Take 1.2 Million of These and Call Me in the Morning

Dr. Sanjay Kumar, whose medical practice in North Carolina treated patients with chronic pain, was sentenced to 20 years in prison for tax evasion, money laundering and unlawful distribution of opioids.

When Kumar found himself on the brink of financial ruin after Blue Cross terminated his contract due to billing irregularities, he fired his entire staff and became a one-man prescription machine. His new office hours were late afternoon and evening, and he only saw “patients” who paid him $200 cash for a monthly prescription for opioids. Dr. Kumar went from writing 100 prescriptions for controlled substances in 2011 to prescribing more than 1.2 million oxycodone pills alone between 2013 and 2016.

Kumar deposited the cash in multiple bank accounts, always making sure the deposits were under the minimum amount to trigger reporting to the Department of the Treasury. He spent over $175,000 on four cars, $70,000 at Best Buy, and hundreds of thousands of dollars in purchases from Amazon.

At his arrest Kumar had $145,000 cash with him and another $450,000 was discovered in his home. Police also found 35 firearms and more than 40,000 rounds of ammunition.

True Lies and the IRS Agent Who Told Them

Jennifer True, who was employed by the IRS for 22 years as a Lead Contact Representative, pleaded guilty to the preparation of at least 70 false tax returns while an employee of the United States.

True filed more than 500 tax returns for herself and others and admitted to falsifying items such as individual retirement accounts, medical expenses, unreimbursed business expenses and/or tax preparation fees. The IRS prohibits employees from “Engaging in the preparation of tax returns for compensation, gift or favor.”

True faces up to eight years in prison and $500,000 in restitution.

Grass Isn’t Greener on the Other Side for this Couple

Dick Brocato and his wife Judith, owners of Superior Lawn Service in Beaumont Texas, have each been sentenced to 33 months in prison after a jury found them guilty of conspiracy to defraud the United States for purposes of impeding the government functions of the IRS, and six counts of making and submitting false tax returns.

The Brocatos who started their business in 1981, grew it to include eight full-time teams of lawn care specialists. The couple under reported their income by $503,281 in 2012, $687,534 in 2013 and $513,498 in 2014. To facilitate their scheme, the Brocatos cashed numerous checks from customers instead of depositing them into the company’s accounts, then failed to report the cash on their tax returns.

The Brocato’s son, Brandon, is listed as an employee of the company but has not been charged with a crime. In addition to the prison sentence the Brocatos were ordered to pay restitution in the amount of $617,762 to the IRS and fines of $15,000 each.

Your IRS Questions Answered Here…

Question: I received a Notice of Federal Tax Lien via certified mail for unpaid taxes and I’m scared and don’t know what to do. How do I get this situation resolved?

Answer: A Notice of Federal Tax Lien (NFTL) is public record and is generally filed with the County Recorder where you reside.  It’s a formal notice to all your creditors that the IRS has a secured interest in your real and personal property. A federal tax lien is usually the “kiss of death” however, there are 4 ways to resolve a federal tax lien – You can request a Lien Subordination, a Lien Discharge, a Lien Release, or a Withdrawal of a federal tax lien.

A federal tax lien will make it very difficult, if not impossible, for you to purchase or sell a home, vehicle and other property on credit.  It may also prevent you from accessing the equity in real property you may have built up over the years.  However, the IRS has several different options that deal with resolving a NFTL if you qualify.   One of these is to apply for a Withdrawal of the lien.  Winning a Withdrawal of a NFTL is as if it never happened in the first place! The IRS will consider this if the Lien was filed prematurely or was not in accordance with IRS procedures, which happens a lot!  The good news is that you generally won’t have to meet or even speak with the IRS while we’re retained.  It’s important to consult with a tax professional to see what Lien relief programs you may be eligible for before the IRS starts seizing your property. We can help protect what you already own and preserve your rights!!