In previous posts we have mentioned that the Internal Revenue Service is attempting to crack down on those with unpaid taxes. Whether it is someone who made an honest mistake or it is well-planned tax evasion, the IRS is going after unpaid income taxes.
Our Bay Area readers are no doubt aware that the national election is just days away and depending upon who wins the Presidency, there may be changes in personal income tax deductions. If fact, no matter who wins there may be changes to the income tax code. So what are we all to do?
Contrary to what may be considered common wisdom, tax law is not set in stone. It is updated on a regular basis as taxpayers and professionals struggle to keep up with it. Likewise, tax shelters are not illegal but can be legitimate ways to mitigate the impact of taxes upon a company's bottom line or on an individual taxpayer's bank account.
Many people in California may be unaware of all of the tools that the Internal Revenue Service has at its disposal. If you are an individual, sole proprietor or business owner, you may one day have the first-hand experience of opening a letter from the IRS in which they request more information about a tax return.
Olympic athletes often give up a lot to pursue their sport. They may delay college, marriage, children or "real" jobs. They train and practice long and hard with the hope of getting a gold, silver or bronze medal. However, when they win that medal, they come home to a tax bill. That hardly seems fair does it?
As we enter the fall election cycle, California and the rest of the nation is talking about the economy, employment and taxes. Recently the Treasury Department released information that affects all three of those contentious topics.
Most of us in the Bay Area file our tax returns like clockwork. Many of us get a refund after the tax deadline. Some of us find that we owe money to the Internal Revenue Service. When we owe a lot of money or we don't have the cash on hand, we may put off paying the IRS without discussing it with them. Fines and penalties begin to accrue and then, seemingly overnight, there is a huge tax debt.
In a previous post we reminded our California readers that June 30 was the deadline to file their Report of Foreign Bank and Financial Accounts, or FBAR, to the Internal Revenue Service. The report is required for anyone with more than $10,000 in a foreign or offshore account.
Individual taxpayers in Sacramento no doubt have April 15 locked in their brains. Those who are self-employed also have June 15, Sep. 15 and Jan. 15 in their permanent memory banks. For those who have foreign or offshore bank accounts that earn interest, there is another date of which they should be aware.
A few former employees of a company prepared a 32-page document for the Internal Revenue Service alleging that their former employer, Alliantgroup LP, helped its clients avoid taxes through false classification of salaries and other expenses under the tax deductible category of research.