The Tax Problem Attorney Podcast

Many taxpayers who receive an examination (“audit”) notice from the IRS often are concerned whether “they could go to jail.”  Indeed, problems originate with the tax return as a result of errors or fraud.

 The courts have long since opined connecting the audit to criminal tax convictions.  In a Ninth Circuit opinion case,  United States v. Andy S.S. YIP   (2010), the defendant owned a legitimate business but operated “off-the-books.”  The court stated the following.

 “An IRS audit is an official investigation that may be the first step leading to a criminal conviction for tax violations.  United States v. Peters, 153 F.3d 445, 447 (7th Cir.1998).   The audit places a taxpayer on notice that the government is looking into the accuracy and propriety of his or her tax returns.   Evidence gathered during such an audit properly may be transferred to prosecutors.  United States v. McKee, 192 F.3d 535, 544 (6th Cir.1999).   The IRS may distinguish between the procedures to be followed during the civil and criminal phases of an audit, Peters, 153 F.3d at 447, but to a taxpayer under suspicion, the latter merely represents an escalating development in the same underlying investigation.   Obstruction during an IRS audit justifies enhancing a defendant's sentence for obstruction “during the course of the investigation.”  U.S.S.G. § 3C1.1 (2001).”

  Nehemiah Jefferson, Esq., LL.M., is Managing Principal of The Jefferson Firm, PLLC. The taw law firm provides comprehensive Tax Preparation, Tax Representation, Tax Litigation, and Tax Consultation services to individual and small business clients nationwide. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, The District of Columbia, and is a member of the United States Tax Court Bar. He may be reached at (877) 575-7765 or nj@thejeffersonfirm.com.

For those individual taxpayers who are unable to file their tax returns by the April 15, 2019, they should file Form 4868 before the deadline. Note that an extension of time to file is not an extension of time to pay.   Therefore, if you expect to owe, you should also pay what you can by April 15th.

 It is important to note that failure to file a required tax return is a crime.  You should always file your tax return, regardless if you have a balance due. Moreover, this starts the very important statute of limitations regarding collections.

Only hire a Tax Attorney, Certified Public Accountant (“CPA”), or Enrolled Agent (“EA”) to prepare your tax return.   These individuals have met education and ethical requirements; and have submitted to background checks.

Nehemiah Jefferson, Esq., LL.M., is Managing Principal of The Jefferson Firm, LLC. The taw law firm provides comprehensive Tax Preparation, Tax Representation, Tax Litigation, and Tax Consultation services to individual and small business clients. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, The District of Columbia, and is a member of the United States Tax Court Bar. He is also an IRS Enrolled Agent and may be reached at (877) 575-7765 or nj@thejeffersonfirm.com.

The 2018 tax filing season is well underway.   The Tax Cut and Jobs Act brought about many changes.

Here are some things you should know:

(1) There is only one primary filing Form 1040, and it looks different!  Gone are forms 1040EZ and 1040A.
(2) There are no more personal and dependent exemptions.
(3) Standard deductions have increased (almost doubled) and therefore some taxpayers will not be able to itemize deductions.
(4) Many small business owners operating as pass-through entities may be eligible for a 20% qualified business income deduction.
(5) An extension of time to file is not an extension of time to pay.  Filing deadline is April 15, 2019.
(6) If you owe and cannot pay, there are options but you may be subjected to failure to pay penalties and interest.

 It is important to note that failure to file a required tax return is a crime.  Therefore, even if you owe, you should always file your tax return. Moreover, this starts the very important statute of limitations regarding collections.

Only hire a Tax Attorney, Certified Public Accountant (“CPA”), or Enrolled Agent (“EA”) to prepare your tax return.   These individuals have met education and ethical requirements; and have submitted to background checks.

Nehemiah Jefferson, Esq., LL.M., is Managing Principal of The Jefferson Firm, LLC. The taw law firm provides comprehensive Tax Preparation, Tax Representation, Tax Litigation, and Tax Consultation services to individual and small business clients. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, The District of Columbia, and is a member of the United States Tax Court Bar. He is also an IRS Enrolled Agent and may be reached at (877) 575-7765 or nj@thejeffersonfirm.com.

Small business owners have many tax compliance responsibilities.   This includes making sure that payroll taxes are paid to the IRS.   Failure to remit payroll taxes could subject an owner to both civil penalties and criminal charges.

 An owner who fails to remit owed payroll taxes could be subjected to the Trust Fund Recovery Penalty under IRC Section 6672 as a responsible party. Even worse, since the IRS and the Department of Justice has made payroll tax compliance a priority, an owner could face criminal charges under IRC Section 7202 for the willful failure to pay employment taxes or tax evasion under IRC Section 7215.

If you have a payroll or employment tax issue, hire a tax attorney immediately to receive the most complete legal advice.

Nehemiah Jefferson, Esq., LL.M., is Managing Principal of The Jefferson Firm, LLC. The taw law firm provides comprehensive Tax Preparation, Tax Representation, Tax Litigation, and Tax Consultation services to individual and small business clients. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, The District of Columbia, and is a member of the United States Tax Court Bar. He is also an IRS Enrolled Agent and may be reached at (877) 575-7765 or nj@thejeffersonfirm.com.