Best Lawyer in Philadelphia ~ Amanda S.

Best Lawyer in Philadelphia ~ Amanda S.

When I needed the best lawyer in Philadelphia to handle a sophisticated real estate case that not only had over 200,000 documents but they were also in English and French. I needed Gregory McCauley. As a well-known handwriting expert [Sandy Stevens, CDE] I needed an attorney who could ask the right questions of me to expose the numerous Questioned Documents. Not only that, we were going to go before different judges in New York and Pennsylvania. These questioned documents entailed hundreds of different names and dates. I needed a lawyer to work with who had a sterling reputation and a very high class demeanor. A man who could impress a judge, a jury and a very discerning and wealthy client. Many other lawyers had bailed just glancing at the monumental and complicated task presented to them. But not Gregory McCauley. The case went on for seven years, with mind-boggling depositions that intimidated the opposition, and it was settled because no one wanted to go up against Gregory McCauley. He is one of the finest lawyers in America. Gregory McCauley is also a very decent and honest man to work with, and I have worked with hundreds of lawyers in my 45 years as a Document Examiner and Expert Witness.

Exceptional Service ~ Mate D.

Exceptional Service ~ Mate D.

The McCauley Law Offices provide exceptional services on par with many of the larger firms in this practice area, both personal and corporate, of which I am familiar. If you’ve had any exposure to this practice area for whatever reason, you will quickly recognize the value Gregory and his entire team provides. I wish them all continued success.

Connecticut Man Faces Prison Term for Hiding Income in Panama

Saul Hyatt, from Weston CT., pleaded guilty to one count of concealing over $1.5 million in income by using an undeclared bank account in Panama.

Hyatt registered a Panamanian Corporation, The Centennial Group, which bought and sold duty-free alcohol and tobacco products.  Both products were shipped to warehouses in the US and the profits, totaling $1,627,832 were wired to the account in Panama. Hyatt used some of the money to buy a Mercedes Benz SL 550R and pay for $19,000 in interior design and goods.

Federal law requires individuals to report any financial interest and account information and list the country the account is located in.  All income earned from foreign financial accounts that have a value of more than $10,000 must file with the Department of Treasury a Report of Foreign Bank and Financial Accounts (FBAR). Sentencing is scheduled for Jan. 6, 2017, where Hyatt faces a statutory maximum sentence of 5 years in prison.  He has agreed to file true and accurate tax returns to pay the IRS all taxes and penalties owed.  He will also pay a penalty for failure to disclose his foreign accounts in the amount of $854,465.

Contact our Attorneys today if you have a Foreign Bank Account.


Year End Tax Planning Tips

Here are some of the most important, according to AccountingToday, 2016 tax-planning considerations for individuals:

  1. Accelerate Deductions and Defer Income:  It sometimes makes sense to accelerate deductions and defer income. There are plenty of income items and expenses you may be able to control. Consider deferring bonuses, consulting income or self-employment income. On the deduction side, you may be able to accelerate state and local income taxes, interest payments and real estate taxes.
  2. Bunch Itemized Deductions:  Many expenses can be deducted only if they exceed a certain percentage of your adjusted gross income (AGI). Bunching itemized deductible expenses into one year can help you exceed these AGI floors. Consider scheduling your costly non-urgent medical procedures in a single year to exceed the 10 percent AGI floor for medical expenses (7.5 percent for taxpayers age 65 and older). This may mean moving a procedure into this year or postponing it until next year. To exceed the 2 percent AGI floor for miscellaneous expenses, bunch professional fees like legal advice and tax planning, as well as unreimbursed business expenses such as travel and vehicle costs.
  3. Make Up a Tax Shortfall with Increased Withholding:  Don’t forget that taxes are due throughout the year. Check your withholding and estimated tax payments now while you have time to fix a problem. If you’re in danger of an underpayment penalty, try to make up the shortfall by increasing withholding on your salary or bonuses. A bigger estimated tax payment can leave you exposed to penalties for previous quarters, while withholding is considered to have been paid ratably throughout the year.
  4. Leverage Retirement Account Tax Savings:  It’s not too late to increase contributions to a retirement account. Traditional retirement accounts like a 401(k) or individual retirement accounts (IRAs) still offer some of the best tax savings. Contributions reduce taxable income at the time that you make them, and you don’t pay taxes until you take the money out at retirement. The 2016 contribution limits are $18,000 for a 401(k) and $5,500 for an IRA (not including catch-up contributions for those 50 years of age and older).
  5. Reconsider a Roth IRA Rollover:  It has become very popular in recent years to convert a traditional IRA into a Roth IRA. This type of rollover allows you to pay tax on the conversion in exchange for no taxes in the future (if withdrawals are made properly). If you converted your account this year, reexamine the rollover. If the value went down, you have until your extended filing deadline to reverse the conversion. That way, you may be able to perform a conversion later and pay less tax.
  6. Get Your Charitable House in Order:  If you plan on giving to charity before the end of the year, remember that a cash contribution must be documented to be deductible. If you claim a charitable deduction of more than $500 in donated property, you must attach Form 8283. If you are claiming a deduction of $250 or more for a car donation, you will need a contemporaneous written acknowledgement from the charity that includes a description of the car. Remember, you cannot deduct donations to individuals, social clubs, political groups or foreign organizations.
  7. Give Directly from an IRA:  Congress finally made permanent a provision that allow taxpayers 70½ and older to make tax-free charitable distributions from IRAs. Using your IRA distributions for charitable giving could save you more than taking a charitable deduction on a normal gift. That’s because these IRA distributions for charitable giving won’t be included in income at all, lowering your AGI. You’ll see the difference in many AGI-based computations where the below-the-line deduction for charitable giving doesn’t have any effect. Even better, the distribution to charity will still count toward the satisfaction of your minimum required distribution for the year.
  8. Zero out AMT:  Some high-income taxpayers must pay the alternative minimum tax (AMT) because the AMT removes key deductions. The silver lining is that the top AMT tax rate is only 28 percent. So you can “zero out” the AMT by accelerating income into the AMT year until the tax you calculate for regular tax and AMT are the same. Although you will have paid tax sooner, you will have paid at an effective tax rate less than the top regular tax rate of 39.6 percent. But be careful, this can backfire if you are in the AMT phase-out range or the additional income affects other tax benefits.
  9. Don’t Squander Your Gift Tax Exclusion:  You can give up to $14,000 to as many people as you wish in 2016, free of gift or estate tax. You get a new annual gift tax exclusion every year, so don’t let it go to waste. You and your spouse can use your exemptions together to give up to $28,000 per beneficiary.
  10. Leverage Historically Low Interest Rates:  Many estate and gift tax strategies hinge on the ability of assets to appreciate faster than the interest rates prescribed by the IRS. An appreciating market and historically low rates create the perfect atmosphere for estate planning. The past several years presented a historically favorable time, and the low rates won’t last forever.

IRS Announces 2017 Pension Plan Limitations

The IRS has released cost-of-living adjustments for the dollar limitations for pension plan contributions and other retirement-related items for tax year 2017.

The contribution limit for 401(k)s remains unchanged, at $18,000 for 2017.  However, income ranges for eligibility to make deductible contributions to traditional IRAs and to Roth IRAs, and to claim the saver’s credit, all increased.

The phase-out ranges for when taxpayers or their spouses who were covered by a retirement plan at work were also changed for 2017:

  • For single taxpayers covered by a workplace retirement plan — $62,000 to $72,000, up from $61,000 to $71,000.
  • For married couples filing jointly where the spouse making the IRA contribution is covered by a workplace retirement plan — $99,000 to $119,000, up from $98,000 to $118,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is $186,000 to $196,000, up from $184,000 and $194,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual COLA and remains $0 to $10,000.
  • The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000. For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000.
  • The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual COLA and remains $0 to $10,000.
  • The income limit for the saver’s credit or the retirement savings contributions credit, for low- and moderate-income workers is $62,000; for married couples filing jointly is up from $61,500; $46,500; for heads of household, it is up from $46,125; and it is $31,000 for singles and married individuals filing separately, up from $30,750.
  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000. The catch-up contribution limit for employees aged 50 and over who participate in those plans remains unchanged at $6,000.

Check Cashing Store Owner Sees Dead People and Cashes Their Tax Refund Checks

Owner, Junior Jean Baptiste, of a North Miami check cashing store named Surveillance Masters, was convicted of numerous crimes including theft of government funds, or plainly stated he cashed in other peoples’ tax refund checks.

Evidence presented at court showed that from 2009 to 2011, Baptiste knowingly cashed over $11 million in fraudulent tax return checks that had been issued to dead people, disabled people and other individuals that would not typically file tax returns.  His “fee” for cashing these checks was half the amount of the checks.  Baptiste’s trial did not disclose the persons providing the checks, which typically ranged from $1,000 to $9,000 each.

During his arrest, investigators found more than 900 false driver’s licenses, work permits and green cards.

Trial evidence showed that Baptiste used the check-cashing fees to buy a cargo ship, multiple vehicles and the rights to an album of a prominent hip-hop artist.

How To Request Your Own IRS Transcripts

When negotiating a deal with the IRS it is extremely important to have all of the facts.  The IRS knows everything about you and your past filings, so shouldn’t you too?  In all matters that we handle with the IRS, we ALWAYS request the taxpayers, or business’ IRS transcripts.  While we have a special privilege and can access your transcripts more quickly than you may be able to, the IRS has laid out how taxpayers may request copies of their own transcripts: here.

You will be able to request copies of the following documents from the IRS:

  • Tax Return Transcript – shows most line items including your adjusted gross income (AGI) from your original tax return (Form 1040, 1040A or 1040EZ) as filed, along with any forms and schedules. It doesn’t show changes made after you filed your original return. This transcript usually meets the needs of lending institutions offering mortgages and student loans.
  • Tax Account Transcript – shows basic data such as return type, marital status, adjusted gross income, taxable income and all payment types. It also shows changes made after you filed your original return.
  • Record of Account Transcript – combines the tax return and tax account transcripts above into one complete transcript.
  • Wage and Income Transcript – shows data from information returns we receive such as Forms W-2, 1099, 1098 and Form 5498, IRA Contribution Information. Current tax year information may not be complete until July.
  • Verification of Non-filing Letter – provides proof that the IRS has no record of a filed Form 1040, 1040A or 1040EZ for the year you requested. It doesn’t indicate whether you were required to file a return for that year.

If you would like our office to conduct a Transcripts Analysis, please contact us today.

Are You Withholding Properly?

If you are a W-2 employee, the IRS Withholding Calculator can help you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay.

The IRS tool will also help you fill out the W-4, but cautions that it may not work perfectly for all taxpayers and that you should contact a Tax Professional before changing your withholding.


Employers Face New W-2 Deadline; IRS To Delay Some Refunds

Employers and small businesses have a new January filing deadline for W-2s, the Internal Revenue Service warned, adding that it must also hold some refunds until Feb. 15.

A new federal law accelerates the W-2 filing deadline for employers to Jan. 31. The new law also requires the IRS to hold refunds involving two key refundable tax credits until at least Feb. 15.

The Protecting Americans from Tax Hikes (PATH) Act of 2015 was passed by Congress and signed by President Obama in December.

There are also changes in requesting an extension to file the W-2: Only one 30-day extension to file a W-2 is available; this extension is not automatic. If an extension is necessary, a Form 8809 must be filed as soon as possible, but no later than Jan. 31.

The Jan. 31 deadline has long applied to employers furnishing copies of these forms to their employees; that date remains unchanged.

Due to the PATH Act change, the new law requires the IRS to hold the refund for any return claiming either the Earned Income Tax Credit or the Additional Child Tax Credit until Feb. 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.

Instructions for filing W-2’s can be found here.

IRS to improve OIC according to reports

The Internal Revenue Service has taken steps to improve the offer in compromise process for both taxpayers and the IRS, but it can still do more, according to a new report.

An OIC is an agreement between a taxpayer and the IRS that settles a tax liability for a payment of less than the full amount owed. The report, from the Treasury Inspector General for Tax Administration (TIGTA), acknowledged that the IRS has made progress in the offer in compromise process since a previous TIGTA report in 2012.

However, according to the National Taxpayer Advocate’s Annual Report to Congress in 2014, the processing of offers in compromise continues to be one of the most serious problems affecting taxpayers. In our firm’s experience the typical processing time between submission of the OIC and when an Examiner reviews the submission is averaging roughly nine (9) months.

In its new report, TIGTA found that IRS employees did not always complete the initial processing of offers in compromise on a timely basis, nor did they always contact taxpayers by the promised date, or send interim letters when the promised dates were not met. In addition, TIGTA found that 10 of the 92 rejected offer cases in its sample (that is, 11 percent) did not include any documentation that alternative resolutions were discussed with the taxpayer.

The OIC is a powerful tool that unfortunately does not apply to all cases that we handle. Advertisements on television and radio are simply sales tools to get you to call. Be weary of sales persons who promise you results without conducting a thorough review of your IRS transcripts and personal finances.

Contact McCauley Law Office, P.C. today to discuss whether you may qualify for an OIC.