At the Law Offices of Nick Nemeth, we focus on helping taxpayers put their IRS problems behind them. As you know if you have ever endured such a situation, it can be a very stressful and unpleasant experience. That is why we work hard to help our clients get through these difficult times and get back to enjoying life.

Obviously, the best course of action is to avoid IRS problems in the first place. And as this year’s tax filing season wraps up, it is an ideal time to look ahead and ensure that you’re taking steps to avoid IRS trouble. Below are five keys to keep in mind.

1) Carefully record your deductions. If you are claiming deductions beyond the standard deduction, it is critical that you keep careful records. The IRS often looks at deductions very skeptically, and a high level of deductions can raise red flags at the agency. This isn’t intended to scare you away from claiming deductions that you are legally entitled to—just a reminder to be sure that you can substantiate them if the IRS demands it.

2) Keep clear and accurate records. Beyond your deductions, it’s important to maintain careful records of income, expenses, and other circumstances. Maintain these records for several years of prior returns as well, as IRS audits can occur three (or sometimes more) years after filing. Clear, accurate records are your best friend should the IRS decide to audit your returns.

3) Withhold income, especially if you are self-employed or own a business. If you are self-employed, you can’t depend on your employer withholding taxes from your paycheck in order to ensure that you are able to pay your bill each year. It is your job to plan ahead and withhold a portion of your income—and failing to do this often results in a tax bill that you can’t pay. 20% is often a good amount to withhold, but you may need to adjust that number up or down depending on your specific situation.

4) File on time. This is simple advice, but many taxpayers get themselves in trouble because they don’t do it. Even if you have a complicated situation, even if you can’t afford to pay your taxes—make sure you file on time. Otherwise you will face significant penalties and further complication.

5) Don’t cheat. None of us like to pay taxes. We would all prefer to keep our hard-earned money in our own pockets. But paying taxes is the law, and while there are plenty of legal strategies you can pursue to minimize your tax liability, trying to outright cheat the system is a sure way to find yourself in trouble. Discuss your tax strategy with a qualified professional, do all that you can to minimize the amount that you owe—but don’t break the rules. If you do, chances are that you will regret it later.

These suggestions will help you avoid IRS trouble. But if you are currently facing an IRS dispute, don’t panic! Contact us today and let us handle your tax dispute so that you can stop worrying about it. We’re standing by to help!  

We have previously identified steps that you can take as a taxpayer to reduce your chances of being selected for an IRS audit. That said, there is no way to completely eliminate this possibility. If you own a business, your chances of being audited are even higher, because the IRS typically scrutinizes self-employment deductions very closely.

We hope hope that you never find yourself facing an IRS audit, but if you do, you’ll need to know how to proceed. That’s why today we are going to take some time to discuss the steps you need to take should you be selected for an audit. Below are four keys to keep in mind:

1) Don’t panic. Take a deep breath. Sure, it’s not pleasant to receive an audit notification. But keep things in perspective. First of all, in many cases IRS audits end without the taxpayer owing any additional tax—and in some cases even result in a refund. If you have kept proper records and filed your return properly, you have nothing to worry about. Even if you’re concerned that you may have made some mistakes, there’s no reason to panic.

2) Follow instructions. It may sound silly, but you would be surprised how often taxpayers simply ignore their audit notification. Ignoring it will not make it go away. The best course of action is simply to follow instructions. If the IRS has simply requested further information, send it to them by the date they require. However, don’t make the mistake of sending the agency anything more than they’ve requested. Many taxpayers get themselves in trouble by providing more information than necessary, giving the IRS an opportunity to find additional problems. It’s normally a good idea to talk to an accountant or lawyer at this stage.

3) Compile and organize relevant information. If you’re being audited, odds are good that the IRS is going to demand additional information from you. Save yourself stress down the road by taking the time right now to find and organize any records that may be relevant to your case. “I can’t find it” is never an excuse the IRS will accept, so make sure that you’ve got all the information you need. Again, if the situation is complex, you’re well advised to speak to a professional during this process.

4) If you’re self-employed, find a way to substantiate your deductions. If you’re self-employed and facing an audit, you can count on the IRS to focus specifically on the deductions you claimed. In particular, the IRS will scrutinize items such as a home office deduction, travel expenses, and vehicle mileage. Hopefully, you’ve kept records to substantiate your claims. If not, you’ll need to look for other ways to prove your case. This is an area where a tax professional can be very helpful.

Hopefully, you’ll never be selected for an IRS audit and you won’t need this information. But if you do receive that dreaded notification, keep these four tips in mind. And please don’t hesitate to contact us for further assistance!

Thousands and thousands of taxpayers across the country face tax disputes each and every year. And as you can imagine, these disputes aren’t pleasant, or cheap. In addition to the financial cost, IRS disputes and penalties can cause extreme stress. IRS disputes can bankrupt businesses, shake up families, and ultimately make life very difficult. And the tragedy is that in many cases, the taxpayer was guilty of nothing more than a minor innocent mistake.

But here’s some positive news: there is hope. Regardless of how bad your situation may seem, there is a light at the end of the tunnel. We’ve seen difficult situations resolved favorably many, many times. But it is vital that you understand that IRS problems will not go away on their own! It is up to you, as the taxpayer, to take action. And we can help!

Don’t Pay IRS Penalties That Can Often Be Avoided

Taxpayers are often surprised to learn that they may be able to avoid paying IRS penalties that have already been assessed. It is easy to file late or make mistakes, which result in penalties—but if you can provide an explanation, in many cases some or all of your penalties may be forgiven. Unfortunately, you are presumed guilty until proven innocent in the eyes of the IRS. And because the IRS can be so intimidating, many taxpayers are afraid to take action and plead their case. So they don’t, and they end up paying far more money than they should have. These are costly mistakes that can be avoided when a qualified attorney is on your side!

The IRS has the authority to levy more than 140 different types of penalties, including common penalties like “failure to pay” and “failure to file”. When the IRS applies these penalties to business owners and taxpayers, it happens automatically. It’s done by a computer system that doesn’t take the circumstances of the case into account. You may have a perfectly valid reason for filing late, but their automated system doesn’t know it.

IRS Intimidation Often Leads Taxpayers To Overpay – Don’t Let This Happen to You

This is just one common scenario that causes taxpayers to end up with overwhelming IRS penalties. Unfortunately, there are many more examples that we could share. At the Law Offices of Nick Nemeth, we want to help. Whether it’s contesting penalties that have already been assessed, fighting for the removal of liens or other collection efforts, or resolving the most complicated tax disputes, we’re here for you. We understand that IRS disputes are stressful and confusing. We recognize that the IRS takes advantage of their power to intimidate taxpayers, and we want to fight the agency on your behalf.

If you are facing an IRS tax dispute, understand that the IRS won’t leave you alone unless you take action. If you’re ready to put your IRS problems behind you, get in touch with us today and let us go to work for you!

While the IRS has never been a “kind and gentle” agency, in recent years they have begun to crack down particularly hard on Americans with overseas assets. The agency has discovered that many taxpayers, particularly wealthy taxpayers, often invest abroad—sometimes in an attempt to shield their assets from taxation.

Of course, the IRS wasn’t happy, and so they took action. But as is so often the case, the agency implemented policies that make life very difficult for taxpayers, even when the taxpayers are trying to do the right thing. From extreme penalties to mountains of paperwork required to disclose overseas assets, it has been very difficult indeed for many taxpayers to follow IRS regulations. And many taxpayers have found themselves facing extremely harsh penalties thanks to these policies. Forbes.com reports:

It’s no secret the IRS is taking a hard line on undisclosed foreign bank accounts. An IRS voluntary disclosure can bring accounts into compliance with finite penalties and no criminal prosecution for those who come forward before being discovered. For those who don’t participate, the odds of being treated harshly seem to be increasing.

What’s harsh? Consider Mary Estelle Curran of Palm Beach, Florida, who pleaded guilty to filing false 2006 and 2007 tax returns. Her husband died in 2000 leaving her Swiss and Liechtenstein accounts which she failed to report from 2001 through 2007. The IRS lost out on approximately $667,716 in taxes. By 2007, the accounts totaled over $42 million.

Her penalty? 50% of the highest balance: $21,666,929, and that’s not all. She has not yet been sentenced but faces a potential prison term up to six years. The IRS and DOJ have more and more resources at their disposal and urge taxpayers to address compliance failures before it’s too late.

Disclosure and finite penalties are vastly better, especially when discovery by the IRS is more and more likely. Merely closing a foreign bank account does not solve disclosure problems.

IRS penalties are no joking matter. Tax evasion can carry a prison term up to five years and a fine up to $250,000. Filing a false return can result in a prison term of up to 3 years and a fine up to $250,000. Failing to file required FBARs can carry penalties up to $500,000 a prison term of up to 10 years.

In other words, there is a whole lot to lose. If you find yourself in a difficult situation relating to overseas assets, we can help.

But IRS overreach isn’t limited to those who have invested abroad. Every year, thousands of hardworking taxpayers across the United States find themselves engaged in IRS disputes. And the penalties can be similarly harsh, even when the individual is only guilty of an innocent mistake. The IRS simply has more resources than most taxpayers do—and that’s why it’s important to seek help from a partner that can help you fight back. At The Law Offices of Nick Nemeth, we can help you put your IRS problems behind you. Give us a call today!

The IRS is known for their take-no-prisoners approach to collecting from taxpayers. Recently, the city of Brighton, Alabama, discovered exactly what this means when they had a levy placed on their bank account due to a tax dispute. As AL.com reports:

The Internal Revenue Service has given the city of Brighton 30 days to come up with a plan to pay back about $800,000 in unpaid federal payroll taxes, interest and penalties.

These were the primary outcomes of a meeting held December 19 in Birmingham between the IRS and Brighton city officials, according to Mayor Barbara Watkins.

The meeting was held to discuss a way forward for the cash-poor West Jefferson community after the agency placed a levy, or hold, on its bank account Monday.

“We have 30 days to come up with a definite plan, so if we renege on this plan, we will be right back where we started,” said Watkins, who took office in November and inherited significant financial problems. “(The IRS) said, ‘We understand your situation, and we want to work with you, but you must work with us and do exactly what we tell you to do.’”

Beginning January 1, the city will also be expected to promptly pay new taxes owed, in addition to making good on the old debt.

Watkins described the IRS hold on Brighton’s account as “a one-time levy” and said she was told that the city will be allowed to use any additional revenues that continue to come in.

“The money that we collect and put in the bank, that is not part of the levy unless we renege on our payment plan we finalize in 30 days,” Watkins said.

Here’s one thing you can certainly say for the IRS: they are consistent—at least in their willingness to take on anyone or anything that owes them money. The IRS has made life miserable for millions of taxpayers over the years, subjecting them to phone calls, threatening letters, and even in-person visits from aggressive IRS agents. And now, they’re employing the same tactics against an entire town.

If you’re facing a similar situation, we can help.

But you must take action. Too many taxpayers continue to battle the IRS on their own, and as a result may end up in a helpless spiral of taxes, penalties, and interest. The IRS is concerned with collecting revenue, not with the well-being of the taxpayers they deal with each day. And they’ve got an army of lawyers and agents lined up against you. Don’t choose to do battle against them without help. The tax code today is impossibly complicated, and it’s important that you have experienced representation on your side.

IRS problems get old—let us get the IRS off your back so that you can enjoy the rest of the holiday season… and a pleasant, stress free 2013! Give us a call today.