Many small businesses elect to file income taxes as S-Corporations. As an S-Corporation, income taxes are not paid at the corporate level as C-Corporations are, but flow to the personal tax returns of their shareholders, where taxes are reported and paid.  One of the perceived advantages of electing S-Corporation status for a business is the ability to avoid or minimize self-employment taxes on earnings or a part of earnings.  How does this work? An S-Corporation shareholder may be both an Shareholder/Investor and an employee of the business.  As an employee, they should be paid wages for their services, just as any other employee would be paid. The wages are subject to both income taxes and Social Security and Medicare taxes.  As shareholder, they receive a Form K-1 for their portion o... 07/24/2019

When taxpayer’s come into my office in Richardson, TX related to IRS tax collection problems, the entire process often seems like a maze to them and they don’t know where to start. The first step for me is to just understand where they are in the process. Once I know where the client is in the collection process, it helps me to understand risks and opportunities and formulate a plan to move forward. Today, I want to spend some time walking through an overview of the process. What is the IRS Collection Process: Assessment of the Tax – Preferably, a taxpayer files their return voluntarily. If the don’t the IRS will create a substitute return on their behalf to file the return and assess the tax. 10 Year Collection Statute – Once the tax is assessed, it begins the ticking of the 10 year cl... 07/21/2019

Taxpayers who come into our Richardson, TX tax office are sometimes confused by the difference between  Innocent Spouse vs. Injured Spouse tax relief. Today, we’ll outline the differences between the two. Injured Spouse Injured Spouse Relief occurs when a couple file a joint return and the refund for the return is offset against a debt that relates to only one of the spouses. In these cases, the spouse who does not owe that financial obligation is the “Injured Spouse”. Financial Obligations that the IRS offsets refunds for include prior IRS debt, State Income Tax Debt, unpaid child and spousal support, and defaulted educational loans.  In order to protect their share of the refund, the injured spouse will seek relief by filing Form 8379.  Page 2 of the form includes an allocation of the... 07/19/2019

You may have heard the term Fractional CFO and wondered what that means.   A Fractional CFO is typically a consultant who provides CFO (Chief Financial Officer) services to a business on a part time basis. A Fractional CFO is also referred to as a Part-Time CFO, Outsourced CFO, Virtual CFO, and a Project CFO among other terms. With a Fractional CFO, smaller organizations that do not have the full-time need or the financial wherewithal of a larger company, have access to the same experience and skills of those larger organizations, at a fraction of the cost.  What does a Fractional CFO do?A Fractional CFO should be able to provide the same skills and financial leadership that a Full-Time CFO can provide to a larger company, based on the needs of the organization.  Some of the these would... 07/18/2019

Most married taxpayers file using the Married Filing Joint filing status. This makes sense in most cases since it typically results in the lowest combined tax for the taxpayers. However, one impact of filing Married Filing Jointly, is that by default, each spouse is jointly and severally liable for the taxes due on a joint return, regardless of who earned the income, and the IRS can collect from both spouses.  This is usually fair and equitable as joint filers, but what happens if one spouse was unknowingly the victim of fraud or misstatement on a tax return? Is the “Innocent” spouse responsible for the additional tax burden? As mentioned above, by default they are, but if they qualify for Innocent Spouse Relief, they may be able to get relief from all or part of the IRS debt. Innocent ... 06/11/2019

Payroll Tax Debt can become a nightmare for a taxpayer who gets behind. In addition to the potential penalties to a corporation, LLC, or partnership for unpaid taxes, there is also the potential for personal liability. Today, we will cover Payroll Taxes and personal liability. When taxpayer’s come into our Richardson TX office with Payroll tax debt, one of our priorities is to minimize their potential personal exposure.  Remember, from our previous article that there are two Sides of Payroll Withholdings - Trust Funds – the fiduciary portion withheld from the employee’s pay and includes Federal Income Tax withheld as well as the employee’s portion of Social Security and Medicare. Employer Taxes – Employer’s match of the Social Security and Medicare taxes and Federal Unemployment.  As I ... 05/28/2019

Payroll Tax Debt can be a true nightmare for a taxpayer. It can impact both the business of the taxpayer, as well as put their own personal assets at risk. It’s critical to understand these issues when working resolve tax debt related to payroll.   When taxpayer’s come into our Richardson TX office with Payroll tax debt, we make special efforts to educate them and work to resolve the tax debt, while minimizing their potential personal exposure. This article is the first in a series of articles related to payroll tax. Today will be an overview of the consequences of Not Timely Making Payroll Tax Deposits timely.  Payroll taxes are becoming a higher priority for the IRS and Department of Justice (DOJ). In 2015, 68.6% of the IRS’s Revenue collection is through payroll withholding. There ar... 05/26/2019

In our last blog installment, we had an overview discussion on IRS Tax Penalties including a brief overview of Tax Penalty Relief. If you’re like most clients who come into my Richardson TX office with Tax Penalties, they feel that the IRS should just remove their tax penalties. As discussed, the IRS does not simply remove penalties upon request. It is the government’s position that penalties serve as a valuable tool in compliance. However, in certain situations that is possible. Today, we’ll dig into those alternatives a little further.  First Time Penalty Abatement – If the taxpayer qualifies, this is typically the easiest way to remove a penalty. The First Time Penalty Abatement (FTA) is available for 3 penalties – Failure to File Failure to Pay Failure to Deposit (Payroll Deposits) ... 05/24/2019

Have you ever heard the late night commercials where the person says that they can remove all of your IRS penalties?   We often get taxpayers who come into our Richardson, TX office have hard the commercials, and they want to know how they can have all of their penalties removed. The reality is in some cases, it is possible, but it depends on your situation. Today, I’ll give an overview of tax penalties and a quick discussion on penalty relief.   In the next week, we’ll cover the topics in more depth. Unfortunately, the IRS does not simply remove penalties as a matter of procedure. From the government’s perspective, there are legitimate reasons for penalties. The IRS lists several purposes of penalties in the Internal Revenue Manual (IRM). One purpose of penalties is to encourage timely... 05/21/2019

When taxpayer’s come into my office in Richardson, TX related to IRS tax debt problems, IRS Liens are often the major issue they are working to resolve, and taxpayers want to know how to get rid of an IRS lien.   As mentioned in a previous blog, there are two types of liens – General or “Silent Lien” – automatic by statute.  No one including the taxpayer is notified. A Notice of Federal Tax Lien (NFTL) – publicly filed  The NFTL is what causes pain to the Taxpayer, harming their ability to access credit and transfer assets.  The IRS is permitted to file an NFTL on tax debts > $10,000 and typically does.  When an IRS lien is filed, in most cases, unless the tax debt is paid off, the lien remains. Here are a few ways to have a lien discharged or released – Pay the tax debt off in full, Fi... 05/19/2019

When taxpayer’s come into my office in Richardson, TX related to IRS tax debt issues, threat of or Notice of a Federal Tax Lien is one of the major reasons. Taxpayers often don’t understand the process, how a Tax Lien impacts them, and what they can do to avoid one or remove one. This is one in a series of articles discussing the IRS Tax Lien.   The Types of LiensThere are two types of liens that Congress has authorized the IRS to use under Section 6321 of the Internal Revenue Code, to use when a taxpayer is liable to pay any tax, and fails to pay the tax after a demand by the government for payment. The two types of liens are known as: The general lien, better known as the “Silent Lien”, and The Notice of Federal Tax Lien (NFTL)  In the last installment of our series on the IRS Tax Lie... 05/17/2019

When taxpayer’s come into my office in Richardson, TX related to IRS tax debt issues, one of the major reasons is that either they fear a lien or have received a Notice of Federal Tax Lien. Taxpayers often don’t understand the process, how a Tax Lien impacts them, and what they can do to avoid one or remove one. This is one in a series of articles discussing the IRS Tax Lien.   The Types of LiensThere are two types of liens that Congress has authorized the IRS to use under Section 6321 of the Internal Revenue Code, to use when a taxpayer is liable to pay any tax, and fails to pay the tax after a demand by the government for payment. The two types of liens are known as: The General Lien, better known as the “Silent Lien”, and The Notice of Federal Tax Lien (NFTL)  Today we will focus on ... 05/15/2019

I manage a tax practice in Richardson, TX, and one of the major issues that taxpayers come to me with are problems related to IRS Liens. Taxpayers often don’t understand the process, how a Tax Lien impacts them, and what they can do to avoid one or remove one. This is the first in several articles that I will write on the lien process. In the following articles, I will dig deeper into the process as well as what to do if the IRS places a lien on your assets. The Impact of the Tax LienAn IRS lien is a very powerful tool for the IRS. It attaches to all property owned or acquired after the lien is issued. For example, if a taxpayer purchases property while under the lien or acquires it in another manner such as inheritance, the lien will attach to those assets as well.   However, there is ... 05/12/2019

  Address SqFt Total Beds  Full Baths Half Baths Pool Current Price 100 Brookwood Drive 1,614 3 2   No $250,000 428 Grace Drive 1,285 3 1 1 No $254,900 2108 Oak Brook Drive 2,084 5 3   No $259,000 2013 Meredith Lane 1,690 3 2   No $262,000 618 Scottsdale Drive 1,408 3 1 1 No $269,800 1128 Pacific Drive 1,359 3 2   Yes $269,900 705 Nottingham Drive 1,718 3 1 1 No $270,000 1202 Dearborn Drive 1,472 4 2   No $274,000 1813 Hanover Drive 1,940 4 2   Yes $274,990 602 Sherwood Drive 1,315 3 2   No $275,000 427 Sandy Trail 1,540 3 2   No $279,686 1416 Somerset Place 2,059 4 2   No $279,900 916 Sandalwood Avenue 1,957 3 2   No $279,900 633 Nottingham Drive 1,433 3 2   No $280,000 1115 Kenshire Lane 2,747 3 2 1 Yes $284,900 708 Gaylewood Drive 1,856 3 2   No $286,000 1800 Auburn Drive 2,423 5 2  ... 05/10/2019

The Tax LevyThe Levy is a powerful tool available to the IRS to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office. There are many different types of assets that the IRS can levy. One of these categories are Retirement Accounts. Some people believe that the IRS cannot touch retirement accounts, however, that is not true. Today, we’ll discuss what the IRS can and cannot levy in regards to Retirement Accounts. The IRS and Retirement Accounts The IRS is exempt from the anti-alienation provisions of REISA have no effect against an IRS levy. As a general rule, the IRS does not like to take monies from a retirement plan, but this “may” be an option for the IRS. Essentially, the IRS has the r... 05/10/2019

The Tax LevyThe Tax Levy is probably the IRS’s most potent tool to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office. In prior blogs, we’ve discussed the Levy Process and what to do if you find yourself levied. In this installment of the IRS Levy series, we’ll take a look at what the IRS CAN NOT levy.  What the IRS Can’t Levy Certain Property is Exempt from Levy. This Property includes – 85% of Unemployment Benefits (Meaning 15% is available for levy) 85% of Worker’s Compensation Payments 85% of Certain Public Assistance Payments including Social Security Certain Annuity and Pension Payments (will be covered in more depth in a future blog) Judgments for Support of Minor Children Certa... 05/05/2019

A tax levy is the actual seizure of a taxpayer’s property by the government in order to resolve delinquent tax debt. The tax levy is probably the IRS’s most potent tool to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office. The IRS issues tax levies after they have sent several notices to the taxpayer that have gone unanswered, or the taxpayer has failed to stick to an agreement. What You Should Do If You Receive a Final Notice of Intent to Levy?Before you are levied, you will receive a Final Notice of Intent to Levy. At that time, you will also receive notice of your right to a Collection Due Process (CDP) hearing. You can request a CDP hearing by filing IRS Form 12153 within 30 days ... 04/30/2019

The Tax Levy is probably the IRS’s most potent tool to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office.  Types of Levies A regular levy is a levy that is effective against only the taxpayer’s property being held at the time the levy is served. Examples are Bank levies, levies on receivables, and retirement accounts. As an example, here’s how a regular levy works for a bank levy. Banks will hold money for days before sending it to the IRS.On Day 1, bank receives a notice of levy for a customer. At the time the levy was received, the bank balance was $100. The next day, the customer gets a deposit for $25,000. The amount that is held by the bank to forward to the IRS is $100, the amou... 04/28/2019

How Do Tax Levies Work?Probably the most frequent reason that I have clients come into my Richardson, TX office, related to IRS debt, are when they are levied by the IRS. Being levied, or even the threat of a levy, is a horrible experience for most people, and when it happens, taxpayers are either extremely frightened or angry when they come to my office. This is understandable and we often work with clients to remove the levies and get life back to normal.  Today, we’ll address the overall process. In our next blog, we will discuss in greater detail how to have a Levy released. What is a Tax Levy and Why Does the IRS Levy Taxpayer’s Assets?A levy is the taking of the taxpayer’s property. IRC 6331 authorizes the IRS to levy to collect delinquent tax. This includes any property, or right... 04/25/2019

With most of my tax clients that come into our Richardson, TX, tax office, they get their tax returns filed timely, and are either able to pay their taxes timely, or we immediately get them set up a payment alternative early on and minimize the problem. However, I often do meet with taxpayers who come to us and who 1) did not file their returns timely, and due to a variety of circumstances, 2) did not pay the balance due. Often years go by, and eventually they get a point of a bank or wage levy, a seizure of an asset, or some event triggered by the IRS’s enforcement actions, that creates chaos in their lives. At that point, they’re terrified, or sometimes incredibly angry, don’t know what to do and come to us. The goods news is there is help. The IRS is more than happy to work with taxp... 04/19/2019