BACK TAXES:
California Back Taxes are State or Federal taxes that are outstanding from previous tax periods. These taxes usually result in some sort of penalties or interest because they are overdue, and will continue to accumulate until they are paid. In the interest of avoiding liens or forced collection actions taken against you by tax agencies, it is highly recommended that back taxes are dealt with as quickly as possible. Read More
OFFER IN COMPROMISE:
One option for California taxpayers with back taxes is an Offer in Compromise. An Offer in Compromise (OIC) is an agreement between the I.R.S. and a liable taxpayer that settles the debt for less than the full amount owed. Read More
UNFILED RETURNS:
Conscientious citizens that obey the law under every other circumstance may be remiss in filing their tax returns. Why? There are a variety of reasons. Studies have shown that California taxpayers neglect to file returns in years when there are changes in circumstances. Reasons can also be emotional or financial, if they are unable to pay their tax returns. Sometimes it’s just the result of procrastination. Read More
PAYROLL TAX PROBLEMS:
Neglecting to file and pay payroll taxes is a surefire way to incur serious penalties and debt, and employers may run the risk of federal charges, not to mention the loss of their business. The penalties on late payroll tax filing or payment can increase exponentially in a very short time, and the I.R.S. are especially aggressive in their efforts to collect past due payroll taxes, since they assign higher priority to them than individual income taxes. Payroll tax problems in California affect more than just the employer; it can mean the breakdown of your entire income, and the livelihood of every other employee in your business. Read More
REMOVAL OF I.R.S. BANK LEVY
When the I.R.S. means business, they will seize your assets to settle back taxes, otherwise known as a “bank levy”.|The term “bank levy” refers to a freeze on a bank account or the seizure of some or all funds in a bank account, usually due to unpaid taxes or unpaid debt. Bank levies are the result of a creditor or agency attempting to collect an unpaid debt after an extended period of time. In the case of the I.R.S., they will initiate bank levies after repeated attempts to contact and settle with taxpayers, which the taxpayers either ignore, refuse to pay or establish a settlement agreement. The danger of a California bank levy is that you risk losing all of the money in your checking and savings accounts, investments, IRAs, accounts receivables, inheritances, social security, pension, insurance policies and anything else you have with equity. Read More
REMOVAL OF I.R.S. WAGE GARNISHMENT
Of all the means the I.R.S. use to collect back taxes in California, one of the most common forms is Wage Garnishment or a Wage Levy. With this type of forced collection, the I.R.S. instructs the negligent taxpayer’s employer to withhold a certain amount of each paycheck to be put toward the tax debt. No matter how good a relationship you may have with your employer, the chances are good that they will obey the I.R.S.’s instructions; if they don’t , they will be held personally accountable for the amount that should have gone to the I.R.S. Wage Garnishment will continue until the tax amount has been collected, plus interest in penalties, or if you settle the entire tax amount in an alternate fashion. Read More
PENALTY ABATEMENT
If you have underpaid on your taxes, failed to file returns or pay taxes in a timely manner, you are a prime target for I.R.S. penalties and interest. There are a variety of reasons that taxpayers in California, who are otherwise conscientious citizens, fall short of the mark when it comes to paying taxes. Studies have shown that taxpayers neglect to file returns in years when there are changes in circumstances. Reasons can also be emotional or financial, if they are unable to pay their tax returns. Sometimes it’s just the result of procrastination. Read More
I.R.S. APPEALS
Getting hit with an I.R.S. audit is stressful, and it’s even more so when the I.R.S. makes an audit recommendation with which you don’t agree. But taxpayers in distress need not panic; these recommendations are not irreversible, and you have a legal right to an I.R.S. appeal in California. I.R.S. appeals, however, are very involved and are difficult to orchestrate yourself. It is highly recommended that to put a successful I.R.S. appeal into effect, you enlist the help of a qualified tax professional or appeals officer. Their expertise can make all the difference between a favorable appeal and a serious financial setback for you. Read More
I.R.S. AUDIT
An I.R.S. Audit is when the I.R.S. investigates the details of your tax return to determine if it is accurate. The odds that the I.R.S. will select your tax return for audit is relatively low; usually, no more than 2% of individual income taxes are audited, about 1 in every 75. However, bout 80% of all people will be audited at least once throughout their tenure as an employee. Most Americans do not have means to attract I.R.S. attention, and the I,R,S lacks enough staff to audit every citizen’s tax return. Depending on income levels and profession, you may or may not be a target for a California I.R.S. audit. Read More
I.R.S. TAX LIENS
California taxpayers with unpaid back taxes that have avoided settling their debt with I.R.S. are prime targets for a Tax Lien. The term “Tax Lien” refers to the I.R.S.’s legal claim on a taxpayer’s property as payment for their debt, and it’s one of the first aggressive steps the I.R.S. takes to collect on back taxes after previous contact has been ignored. If a Tax Lien is also ignored, it will then turn into a Tax Levy. Read More
INNOCENT SPOUSE RELIEF
Most married couples choose to file their taxes jointly in order to take advantage of higher tax breaks. Even if one spouse earns 100% of the income, both spouses are liable for the taxes reported on the return. Therefore, the I.R.S. is able to collect taxes from either spouse, no matter if they earned the money or not, or if they reported the taxes or not. This applies even after couples divorce. Read More
TAX FRAUD AND CRIMES
California tax fraud is separated into different categories: tax evasion of assessment taxes, evasion of payment, failing to file a tax return, and filing a false return. Regardless of the category, if you are convicted for tax fraud you could face serious jail time and be fined anywhere upwards of $25,000. Regardless of the potential consequences, there are people who choose to deliberately break the law and beat the tax system. They fail to state the correct amount of income earned, overstate deductions and falsify documents. They conceal or transfer income and report personal expenses and business expenses. In these cases, legal and financial consequences are justified. Read More
TRUST FUND RECOVERY PENALTY
Trust Fund Recovery Penalties are actions taken against the owners, officers, directors, shareholders or other persons with an interest in a corporation with unpaid employment tax liabilities in California. By enacting a California Trust Fund Recovery Penalty, the I.R.S. makes the individuals who run the business personally responsible for the unpaid taxes; if the situation escalates far enough, the I.R.S. can collect from their personal assets. Read More
TAX AND ESTATE PLANNING
While no one likes considering the prospect of his or her life ending, it is prudent to protect your assets and minimize tax issues subsequent to one’s death. While a simple document allocating funds and assets may seem like a viable option, without the proper education about tax and estate planning in California, your property and funds may become more of a liability than an asset to your loved ones. Read More