Taxes pose some of the most frightening challenges for individuals and businesses alike. They are confusing and expensive and bring the full weight of the government against you.
Tumer & Sharif has the experience and knowledge to help you with your tax challenge. Whether it is an overdue tax bill, unfiled taxes or a threat of liens and levies, we can help.
If you are worried about your taxes or have received an official letter from the IRS or the Franchise Tax Board, call Tumer & Sharif. We will help you understand your situation, the level of risk and give you a plan to move forward.
Are you paying too much in taxes? Many businesses and business people are, especially in California. See if you can save money by reorganizing your business or taking advantage of existing tax credits and deductions. A little planning goes a long way.
Business Tax Planning
Are you paying too much in taxes? Many businesses and businesspeople are, especially in California. See if you can save money by reorganizing your business or taking advantage of existing tax credits and deductions. A little planning goes a long way.
There’s a lot of bad information out there about tax planning. For example, you may have heard that if you incorporate in the right state, for example, Nevada, you will pay less taxes. While there are circumstances in which this is true, those circumstances are rare. Nearly all California businesses will see little change to their taxes from incorporating in Nevada or another tax haven state. In fact, some will pay more taxes and fees to the government.
The reality is that tax planning is a complex and important part of your business. What saves you a little money today might cost you a lot of money later and vice versa. Get the real story before you make decisions about your business structure. A knowledgeable tax lawyer can help you cut through the bad information and make an informed decision.
Personal Tax Planning
Tax planning isn’t just for the rich. Late in 2017, Congress significantly changed personal taxes. If you were smart, like some of our clients, you got in touch with a tax lawyer to get the best possible deal. In many cases, you could save significant amounts on 2017 taxes with a little planning. For example, some people prepaid their property taxes before that deduction was severely limited by the new law, saving thousands of income tax dollars this year, when paying the property taxes after the new year would no longer yield a viable deduction.
Did you have a major injury settlement? Sell a home or some investments? Get a big bonus at work? These can all have major tax consequences if they are not done right. These one-time events can bring a big surprise on April 15 if you are not careful. Planning ahead can save you thousands of dollars – or more!
Tax court and controversies
Taxes are different from other matters because they are often unambiguous, cut and dried, black or white. Which is not to say that they are easy. Often, for example, either the whole deduction is good or none of it is. But the rules governing which way the issue will fall are complex. Most often, our clients got advice about their tax position. The advice was often good, but the IRS has a different view of the matter. This is when you need to go to court to protect your rights.
You can go to Tax Court on your own. Many people do. But they don’t often get the outcome that they want, just like in regular court. If you want to win your case, your best bet is to get an experienced professional to represent you and prevent losing the case before you even get to court by forgetting to go through the appropriate procedural hoops.
With the right representation, you might even be able to avoid court altogether. It’s always our favorite result when we can solve the problem before it gets to that stage. If you think you have a good case, call a professional.
In the last 10 years, the United States has made strong moves to find and punish tax cheats hiding their money in overseas bank accounts. Now, most countries in the world have signed treaties promising to give the IRS the foreign bank records of US taxpayers, even including famous bank havens like Switzerland. Although this was meant to find cheats, it has also caught a lot of innocent people in its net.
If you have more than $10,000 in foreign banks, you could soon be in for a big surprise. The penalty for not filing is 50% of your bank balance per year. It’s easier to understand with a concrete example. Say you had $100,000 in a foreign bank account for 3 years and failed to report it. The penalty would be $150,000. That’s $50,000 (50% of $100,000) times 3 years – or more money than you even own. This is true even if you owe no taxes on the money. It’s just for failing to file the proper paperwork.
Can you afford these penalties just for forgetting to file a form? Probably not.
What’s worse – the IRS has reported that they will now be going after digital currency (sometimes called cryptocurrency or block chain currency) brokers and exchanges. Most of these brokers and exchanges that hold your bitcoin or other digital currency are based offshore, requiring reporting just like any other financial account. Volatile currency values may easily push your investment’s value over $10,000, even if just for a day or two, triggering possible reporting requirements. If you have invested in digital currency, you should consult a professional soon to keep on the right side of the law, or the same penalties will apply to you as would apply on a foreign bank account.
Fortunately, there are several amnesty programs in place to help people that failed to report these accounts. But they have complicated rules and you only get one chance to qualify. The best choice is to get a professional to help you through the process. Act quickly before the amnesty programs go away!
Tumer & Sharif specializes in helping people avoid the massive penalties for unreported foreign bank accounts and digital currencies. Call us today to find out how you can avoid these massive penalties and protect your savings and investments.
What should I do if I get a letter from the IRS or FTB?
It’s never a good idea, but most people ignore the first few letters from a debt collector. For most debt collection matters, there aren’t necessarily many bad consequences from that decision. For taxes, however, it’s a completely different story.
If you have received a letter from the IRS or the Franchise Tax Board, you need to see a tax professional immediately. Tax problems don’t work like other matters. For example, when you have a problem with the IRS, they often send you a Notice of Deficiency, which has a 90-day deadline to file a petition with the Tax Court. If you miss this deadline, you could lose your best chance to object to the IRS’ position. You have limited even your lawyer’s ability to fight for you. Once this 90 day window has closed, you have, in effect, conceded that you owe the money (the only way to contest the case at this point is to pay the IRS and sue them in federal court to return the funds). It’s common for us to see clients show up with a collection letter after already losing the chance to contest the claim.
It costs much more to fight these cases at this point. Its best to see a professional before it gets too late. So open those letters and give a tax professional a call before it gets too late.
Why did I get this bill from the Franchise Tax Board?
One of the more common things we see is a letter from California’s Franchise Tax Board (FTB) demanding between $2,000 and $3,000. Almost always, this is overdue fees on your LLC, S Corp or non-profit (along with penalties and interest).
In California (and many other states), there is an annual fee for these companies. California charges a minimum fee of $800 per year – or more, depending on your company’s annual revenues. Many businesspeople forget to pay this fee. The first year is often paid up front, along with your other filing fees to get your company going. But it’s easy to forget that the fee is due every year. This is especially true for non-profit corporations.
After about two years, the FTB will ask for that money, along with the penalties and interest. This money is due even if your company did no business at all during that time. It may even be due if you closed your company and did not file the proper paperwork with the state.
It is very difficult to fight this bill. Your best strategy is to make a point of paying the fee each year and properly shuttering your company after you have finished doing business. Ask a knowledgeable lawyer if you have any questions.
Tax Court and Tax Bills
If you have received a letter from the IRS or the Franchise Tax Board, you need to see a tax professional immediately. Tax problems don’t work like other matters – often, you lose the right to contest the debt if you wait too long.
Tumer & Sharif will explain what is going on, give you positive options for action and help you get the tax man off of your back.