Charlotte Attorney's Informative Blog

The deadline to file your federal return is April 18th 2012. North Carolina returns are due by April 15th 2012, unless you have filed an extension to file your return.

Penalties and Interest

Penalties and interest are applied to returns that are filed late. The longer you wait the more interest will have accrued on your account.

Failure to file returns

If you are required to file a return for that year and do not file one, IRS will file a substitute return on your behalf. This substitute return will not include any of the credits that you are entitled to, or exemptions, and your deductions could be far less than you are entitled to. The end result is that you are taxed at the maximum rate possible. You can file a return to remedy this issue. You have up to ten (10) years after the substitute return is filed by IRS to file a return. You only have three (3) years after a return is due to file a return or an amendment and receive a refund if one is due. Just because the deadline has passed that does not mean you can not correct the the return.

Maxwell Law Firm, PLLC can assist you with filing your 2011 and prior year returns. We represent clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and Income Tax Services you may call them at 704-461-1883 or receive a discount off our already low fees by your appointment scheduling online.

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Taxpayer’s are often ignore notices from irs and the state and allow the problem to snowball, says Tax Attorney, Victorianne C. Maxwell. Finding a solution to your tax debt asap is the best thing to do and can help you avoid unnecessary penalties and garnishments.

Collectability of the tax debt

IRS has a 3-year statute of limitations for the IRS auditing a tax return (from the date of filing) and a 10-year statute of limitations for collecting tax once it is deemed owed.

Under N.C. Gen. Stat. § 105‑241.8, North Carolina Department of Revenue has three (3) years from the filing of the return or when the tax would be due. Pursuant to N.C. Gen. Stat. § 105‑242, the department of revenue has ten (10) years to collect on a debt, once the assessment has been properly performed.

Programs available for Tax Payers

Under the new and expanded provisions, certain taxpayers who have been unemployed for 30 days or longer will be able to avoid failure-to-pay penalties. The IRS is also doubling the dollar threshold for taxpayers eligible for installment agreements to help more people qualify for the program.

Installment agreement programs are similarly available for North Carolina State Tax Collections.

OTHER FORMS OF TAX RELIEF

There are a number of things that can be done to relieve a taxpayer’s liability, often times filing an unfiled return with all the taxpayer’s available credits and exemptions will relieve their liability. In other occasions, where a return has been filed, these old taxes are subject to discharge in bankruptcy or are no longer collectible. Talking to a tax professional will be the best thing an individual can do, even if a garnishment is already in place.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and Income Tax Services you may call them at 704-461-1883 or receive a discount off our already low fees by your appointment scheduling online.

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SAVE 30% OFF THE FEES WHEN you prepay for your tax preparation services and schedule the Service online.

You’ve decided to hire someone to file your taxes this year. You’ve looked at your tax pro options and decided which kind of paid preparer fits your needs.

Now the next step: Thoroughly vetting the tax professional.

Remember, regardless of who fills out your 1040 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it’s crucial to hire a tax pro who’s not only knowledgeable, but also ethical.

Most tax preparers are honest and provide quality service. But as with any consumer transaction, it’s up to you, the buyer of the services, to make sure you’re hiring a true professional.

Here are some things to keep in mind when someone else prepares your return.

Check on IRS registration

Starting this year, preparers must be registered with the IRS to file a return. Make sure the person you hire has done so.

If you live in a state that licenses or registers tax preparers, contact that regulatory office to make sure there are no complaints against the person you plan to hire.

Do they belong?
Check your preparers professional affiliations. Membership in such groups requires that a tax preparer follow a code of ethics and participate in continuing education programs.

Office hours are important
Make sure your tax preparer will be around after the April filing deadline. Some offices open up just during filing season and then disappear as soon as returns are filed. But the IRS can come asking questions about a return months later. The person who helped you file it should be around so you can get the answers to any possible IRS questions. We are open five days a week and if you are unable to come to the office you can mail or fax your tax documents to us. Our turnaround time for tax information that are faxed or mailed in is often less than a week.

Who does the actual work?
If your tax preparer is part of larger firm, determine whether he or she will be the person actually doing your tax work or whether your taxes will be delegated to someone else in the office, perhaps a person with less tax training.

Also find out if your preparer exports tax returns for preparation. Foreign countries do not have the same security and privacy laws as the United States, nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures.

How do they charge?
Don’t hire a tax preparer whose fee is based on how big of a refund you get. That’s usually an indication that tax law envelopes will be pushed to get you more money than you’re rightfully entitled to just so your tax preparer can make more money.

Similarly, avoid preparers who claim they can get you a larger refund than other preparers. If your returns are prepared correctly, every preparer should come up with essentially the same tax and refund numbers. Our fees are competitive and relatively low for the amount of expertise and professional services you are receiving. HR Block charge anywhere from $200 – $300 for a single w2 earner where as we are charging you $150.00 or less. HR preparers are only required to have a high school diploma. Our Attorney has been assisting clients with tax related issues for several years and is familiar with most deductions.

Find someone who wants to know
Be wary of preparers who aren’t concerned about documentation. Reputable tax preparers will request to see your receipts and will ask you detailed questions to determine your qualifications for expenses, deductions, credits and the like. It’s always better that these questions are asked by your preparer and answered before filing, rather than later by an IRS examiner.

Avoid blank return requests
Remember that warning about being responsible for the return you sign? If a tax preparer asks you to sign a blank tax return, find a new tax pro. Never sign a tax document before it’s finished and then only after you’ve read it carefully and understand the entries.

If you’re unsure about an entry and your tax pro can’t explain it to your satisfaction, then don’t sign the return. A tax preparer who won’t or can’t explain the items on your 1040 and associated schedules is either incompetent or unscrupulous.

Sure, thoroughly checking out your tax pro takes some time. But it’s time well spent when it ensures that your taxes are completed properly.

For several years now Attorney Maxwell has assisted clients with tax collection defense and has seen several of her clients audited based on improperly prepared returns and countless other issues and errors on income tax returns which cause her clients a lot of trouble and money in the end. She is a Tax Lawyer that offers Low Cost Income tax preparation services, FREE ELECTRONIC FILING for both individuals and businsess tax payers, 1040 filings, 1099 filing assistance,  and year round income tax service

She also assists with:

•Itemized Deductions (Sch A)
• Interest and Ordinary Dividends (Sch B)
•Sole Proprietorship Income & Expenses (Sch C)
• Capital Gains and Losses (Sch D)
• Calculating Cost Basis on Long Term Investments
• Rental Property Income, Expenses and Depreciation (Sch E)
• Household Employment Taxes (Sch H)
• Income Tax Filing Extensions

Clients have several options for having their returns prepared. We have two locations one on Charlotte and One in Concord. For more information see our tax intake form. Save 30% off the fees by prepaying for the service and scheduling your appointment and or the service online.

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Tax Attorney

HOW THE INNOCENT SPOUSE RULE WORKS

The IRS created innocent spouse relief for situations where it would be unfair to hold a spouse liable for the tax liability that was created. It can relieve you from taxes, penalties and interest that were acquired from a joint tax return that you filed with your spouse or ex-spouse. The IRS offers innocent parties a way to get out from under tax debt liability that is the result of mistakes or errors not made by another party on a joint tax return. Innocent spouse relief may be available even if you’re still married to, and living with, the spouse who should have reported additional tax.

REQUIREMENTS FOR RELIEF UNDER INNOCENT SPOUSE RULE

• You filed a joint return on which there was an understatement of tax due to an erroneous item relating to your spouse.
• Actual Knowledge: You didn’t know, and had no reason to know, about the understatement when you signed the return.
  • An exception to this rule is Domestic violence. If you are victim of domestic violence than IRS feels that it would be reasonable that you knew and signed the return.
• Equity: Looking at all the facts and circumstances, it would be unfair to make you pay the tax.
  • Whether you received a significant benefit (defined
    erroneous item that belongs to your spouse (or former below), either directly or indirectly, from the under stated tax.
  • Whether your spouse (or former spouse) deserted
    of the understated tax.
  • Whether you and your former spouse are separated or divorced.
  • Whether you received a benefit on the return.
• You apply for relief under this provision within two years after the IRS begins trying to collect the tax from you.

SEPARATION OF THE TAX LIABILITY

In a situation where there was not an understatement of tax and the tax was merely unpaid you may be able to apply for a separation of the tax liability from your former spouse IF:

• You are divorced or legally separated from your spouse and
• No longer living in the same household.
• You did not transfer property to your spouse or them to you.

EQUITABLE RELIEF

If all else fails then you maybe to still apply under equitable relief if you can prove:

You may qualify for equitable relief if you meet all of the following conditions.

1. You are not eligible for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law.
2. You have an understated tax or an underpaid tax.
3. You did not pay the tax. .
4. You establish that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated or underpaid tax.

• Whether you are separated (whether legally or not) or divorced from your spouse. A temporary absence, such as an absence due to imprisonment, illness, business, vacation, military service, or education, is not considered separation for this purpose. A temporary absence is one where it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse’s return.
• Whether you would suffer a significant economic hardship if relief is not granted. (In other words, you would not be able to pay your reasonable basic living expenses.)
• Whether you have a legal obligation under a divorce decree or agreement to pay the tax. This factor will not weigh in favor of relief if you knew or had reason to know, when entering into the divorce decree or agreement, that your former spouse would not pay the income tax liability.
• Whether you received a significant benefit (beyond normal support) from the underpaid tax or item causing the understated tax.
• Whether you have made a good faith effort to comply with federal income tax laws for the tax year for which you are requesting relief or the following years.
• Whether you knew or had reason to know about the items causing the understated tax or that the tax would not be paid, as explained next.

1. You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner.
2. Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax.
3. You did not file or fail to file your return with the intent to commit fraud.
4. The income tax liability from which you seek relief must be attributable to an item of the spouse (or former spouse) with whom you filed the joint return, unless one of the following exceptions applies:

• The item is attributable or partially attributable to you solely due to the operation of community property law. If you meet this exception, that item will be considered attributable to your spouse (or former spouse) for purposes of equitable relief.
• If the item is titled in your name, the item is presumed to be attributable to you. However, you can rebut this presumption based on the facts and circumstances.
• You did not know, and had no reason to know, that funds intended for the payment of tax were misappropriated by your spouse (or former spouse) for his or her benefit. If you meet this exception, the IRS will consider granting equitable relief although the underpaid tax may be attributable in part or in full to your item, and only to the extent the funds intended for payment were taken by your spouse (or former spouse).
• You establish that you were the victim of spousal abuse or domestic violence before signing the return, and that, as a result of the prior abuse, you did not challenge the treatment of any items on the return for fear of your spouse’s (or former spouse’s) retaliation. If you meet this exception, relief will be considered although the understated tax or underpaid tax may be attributable in part or in full to your item.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Bankruptcy: Chapter 7 and 13, and  Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

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I often have clients tell me that they were apprehensive in approaching an Attorney for tax services and issues. Some people seem to assume that a Tax Attorneys are not as knowledgeable as an CPA and that simply is not true. A qualified Tax Attorney should be able to do what a CPA can do and even more.

POWER OF ATTORNEY

The form 2848 Power of Attorney gives your Tax Attorney the right to speak to IRS on your behalf without you being present. It is a form that is signed by the client authorizing the Tax Attorney to do specific acts.

CPA VS. ATTORNEY

Though CPAs may have extensive knowledge on accounting, income tax services, and tax principles they can not provide you with legal advice. A Tax Attorney can not only provide with the correct tax principles, but also provide you with legal advice as it relates to your tax case. A growing number of Tax Attorneys also provide income tax services, where they can prepare and amend your returns.

CONFIDENTIALITY

When you retain an Attorney and provide that Attorney with information that information is privileged. This Attorney/Client privilege protects conversations that you have with your Tax Attorney. This privilege means that the information you share with your attorney cannot be given to third parties, including the IRS , a state taxing authority or a court, UNLESS you specifically authorize your Tax Attorney to  provide this information.

No such privilege exists for CPAs and other tax professionals.

NEGOTIATION SKILLS

Attorneys go through years of school and training that provides them with the negotiation skills necessary to work out deals in your favor. There are have been countless number times when I have been able to get tax penalties removed on the basis of law and practice.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

Disclaimer: This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

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IRS has implemented new the changes will affect taxpayers’ 2012 returns, due in April 2013.

TAX BRACKET CHANGES

The 25% Tax bracket income threshold will increase to $70,700 for joint filers and $35,350 for single filers. So persons who adjusted gross income is lower than those figures will be responsible for taxes at a lower rate..(See IR-2011-104)

INCREASED STANDARD DEDUCTIONS

2012 The standard deduction for married-filing-jointly couples will be $11,900, a $300 increase, and for single filers and couples who file separately it will rise $150 to $5,950. For head-of-household filers, the standard deduction will increase $200 to $8,700.  The additional standard deduction for blind people and senior citizens remains $1,150 for married individuals and $1,450 for singles and heads of household.(See IR-2011-104)

EARNED INCOME CREDIT INCREASES

The maximum earned income tax credit or EITC will go up to $5,891, from $141.00 increase from 2011. The maximum amount available to working families with three or more qualifying children. The maximum income limit to claim the credit will increase to $50,270 from $49,078 in 2011. (See IR-2011-104)

RETIREMENT PLAN CONTRIBUTIONS INCREASE

The maximum contribution to 401(k), 403(b), most 457 plans and the government’s Thrift Savings Plan will jump to $17,000 in 2012, from $16,500 in 2011. But the catch-up contribution limit for those 50 and older will stay the same, at $5,500.

The income phase-out for those who contribute to a Roth IRA also will increase. The phase-out range is going up to $173,000 to $183,000, from $169,000 to $179,000.  (See IR-2011-103)

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, bankruptcy services, business start up services; Income Tax Services you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

Disclaimer: This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

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INDIVIDUAL INCOME TAX FORMS

Individuals are required to file individual tax returns if you meet certain filing requirements. There are three type of individual tax return forms : 1040, 1040EZ, 1040A.

1040

This is the catchall tax form and anyone can file this form even if you qualify to file the other forms. If you can not  file Form 1040EZ or Form 1040A, you will file Form 1040. All types of income, credits, deductions, and taxes can be reported on this form. Additional schedules and forms can be attached to this form for individuals who own businesses (Schedules C) or claim itemized deductions (Schedule A), and certain credits (Earned Income), ect.

1040EZ

You may file a 1040EZ form if:

• Your taxable income is less than $100,000.
• You are under age 65 and are not blind.
• Your filing status is single or married filing jointly.
• You do not claim any dependents.
• You do not claim any adjustments to gross income.
• You do not claim any credits other than the Making Work Pay Credit or Earned Income Credit.

1040A

You may file a 1040 form if:

• You are claiming standard deductions
• Your taxable income is less than $100,000
• Your income is only from:
  • Wages, salaries, tips
  • Interest and ordinary dividends
  • Capital gain distributions
  • Taxable scholarship and fellowship grants
  • Pensions, annuities and IRAs
  • Unemployment compensation
  • Taxable Social Security and railroad retirement benefits
  • Alaska Permanent Fund dividends.
• Your adjustments to income are only from: Educator expenses, IRA deduction, student loan interest deduction, and or Tuition and fees deduction.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, business start up services, Income Tax Services you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online

Disclaimer: This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

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WHAT IS AN EIN

An EIN or employer identification number is similar to a social security number but it is used by a business owner in lieu of using their individual social security number.

WHAT IS THE PURPOSE OF EIN

Most transfers and income is reported under an identification number. This income is reported to IRS during a tax year as income to the payee. The number is used to track taxable payments income received by  that payee.

WHO NEEDS TO USE AN EIN

You are required to have EIN if any of the following is true:

• If you have employees or contractors or required to withhold taxes
• If you operate an incorporated business (LLC, S-corp, C-Corp, Partnership)
• Nonprofit Organizations
• If you are required to file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
• Certain Trusts or Estates

YOU NEED TO CONSULT WITH A TAX PROFESSIONAL 

To avoid confusion, notices, and issues in the problems consult with an Attorney to assist you in setting up your business such as incorporation and provide you with general tax advice.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, business start up services; Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

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BY TAX ATTORNEY

Under some circumstances people may not be required to file a Federal Tax Return. But in most cases individuals are required to file a Federal Tax Return annually.

2011 Minimum Income Requirements to File a Federal Income Tax Return

If you are unable to pay to have your return prepared there are low income free filing services available at VITA locations. Our firm offers great fast, affordable services and free e-filing services too our clients.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Preparation Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

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The state of North Carolina has collected more than $135 million in taxes from confiscated illegal substances since 1990 – about $50 million of it within the past five years.

WHAT IS AN UNAUTHORIZED SUBSTANCE TAX

North Carolina imposes  an excise tax on controlled substances (marijuana, cocaine, etc.), illicit spirituous liquor ("moonshine"), mash and illicit mixed beverages.

HOW DOES NORTH CAROLINA DETERMINE THE RATE OF TAX

They have a chart and scale of tax depending on the type of substance and the amount.

HOW DOES NORTH CAROLINA ENFORCE THIS TAX

Not paying it within 48 hours of acquiring the substances can also mean a 40 percent penalty on the tax due.

The North Carolina Department of Revenue gets the money by seizing bank accounts, garnishing wages or auctioning off personal assets, such as cars, boats, motorcycles, electronics and jewelry.

The statute is not clear as to whether a conviction is required and I am sure more litigation will have to occur for the law to either be ruled unconstitutional or to define exactly whether a conviction on the underlying drug possession charge will be necessary.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

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