TAX DEBT & AUDIT EXPERTS

FAQ 2

Have questions regarding tax laws and your IRS tax debt? Our Tucson tax attorneys have put together this collection of commonly asked questions about IRS tax problems.

TAX COLLECTION

It is possible to discharge some income taxes in a Chapter 7 Bankruptcy, but we do not recommend that you start with a bankruptcy proceeding if the only reason that you are filing is for your tax debt. There are too many other remedies under the tax law that might resolve your situation without going through the pain and credit problems of a bankruptcy. The rules for discharge of income taxes in bankruptcy are complex. Newer tax debts are usually not dischargeable. If all else fails to resolve your tax debt problem then you may want to look to a Chapter 7 bankruptcy. It should be the last thing that you try.

You can never discharge Form 941 Employment taxes that you may owe from a business that you own or have owned in the past. Nor can you discharge a tax debt called a civil penalty.

You may be able to use a Chapter 13 or Chapter 11 reorganization bankruptcy to help with employment tax debts. In these types of bankruptcies you cannot discharge or get rid of the taxes. You will wind up paying all or almost all of the taxes over a period of years under a plan sanctioned by the bankruptcy court. These types of bankruptcies can be helpful but they can also be very expensive. Other tax resolution methods should be tried before considering these types of bankruptcies. Contact the Lazarow Law Firm now at 520-623-5856 to discuss what other tax resolution methods might be available to you.

First of all, don’t just ignore your situation. Tax problems don’t go away by themselves. If you know that you are going to have a problem with the IRS or if you are being chased by the IRS now, contact a tax attorney immediately. A qualified tax attorney can, in most situations, put plans into place that can stop the IRS cold. He or she can then analyze your situation and work with you to obtain an appropriate remedy with the IRS so that you can go about your life in peace. Contact Attorney Sheldon Lazarow now at 520-623-5856 to find out what can be done for you.
 

AUDITS

The official answer to your question is yes, of course you have to keep all of your receipts. But, I have yet to see a small business person that has actually done that. Look, you need to keep receipts on your big purchases. What does that mean? It means that when the IRS does audits they don’t waste their time looking at every little expenditure. The IRS looks at the major expenses that you claim on your tax return. If you are a small business and have expenses for a thousand dollar piece of machinery or ten thousand dollars worth of materials that you use in your business, you had better have proof in the way of receipts for those purchases. If you bought a box of tacks at the drug store nobody really cares about seeing the receipt.

This is a very common problem especially if you do your income tax return yourself. It is caused because, at the end of the year, your investment firm or bank sends a Form 1099 to the IRS showing what you sold stock for during the year. The problem is that the IRS doesn’t know if the amount that you received from the stock sale was a gain or a loss unless you tell them what you paid for the stock originally. This is done on Schedule D of the Form 1040 income tax return. If you have this problem all you have to do is to file an amended Schedule D that shows the basis (what you paid for the stock originally) for the stock that they are auditing you for. A qualified tax preparer can help you with this.

By the way, there are new laws that now require your investment firm to show the basis of the stock on the Form 1099 that they file with the IRS. Hopefully fewer people will have trouble with this in the future.

The short answer is that you may not need a lawyer to represent your interests with the IRS. However, you should arm yourself with all the information that you can get about your situation. If you owe less than $10,000 to the IRS and can afford to pay the entire amount either in one lump sum or through an installment agreement, then you probably don’t need representation. There are also other situations where it might be o.k. to deal with the IRS by yourself. However, for the vast majority of cases it might be foolish for you to talk to and deal with the IRS by yourself. What I would advise would be to amass as much information as you can about your specific problem and then at least consult with a qualified tax lawyer to determine whether you really need representation. Many tax lawyers will give you a free initial consultation. I emphasize talking to a lawy

GENERAL

Yes. Sheldon Lazarow is an Arizona licensed attorney, but he is authorized to represent people in front of the IRS nationwide. He has represented clients from coast-to-coast and Alaska. He has also represented American citizens living in foreign countries for tax problems they have had in the United States. Contact Sheldon Lazarow now at 520-623-5856 for help with your nationwide tax problems.

Yes. We accept Visa, Mastercard, Discover and American Express for payment. We also accept debit cards. We can also arrange for you to pay your attorney fees in reasonable installment payments.

 

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