Archive for the ‘Collections’ Category
Thursday, May 21st, 2009
The IRS is planning more employment tax audits and examinations over the next three years. A national research project is underway right now and the IRS has announced that it will conduct detailed employment tax examinations of certain taxpayers. The selection process for taxpayers has begun and the program will last for three years.
The IRS estimates there will be over 3000 examinations and audits. Although the IRS may look at any line on an employment tax return during the examination, it will primarily focus on the following issues: (1) worker classification (employee vs. independent contractor), (2) fringe benefits, (3) officer’s compensation, and (4) reimbursed expenses.
Often the IRS will receive Form SS 8 from a worker who wants a determination of whether he/she is an independent contractor or employee. The IRS will collect information from the worker and from the company involved. The IRS will either conduct a compliance check, make a determination based on the information collected or conduct a detailed employment tax examinations. If the IRS determines the worker is and was an employee, there are serious tax implications for the employer. It could be costly for the employer in terms of back taxes.
There are several ways to challenge the IRS’ decision about whether the worker is an independent contractor or an employee. It is best to consult a tax professional if you have been contacted about an employment tax matter.
Bill Lowrance
Lowrance Law LLC
McLean, VA
703 506 1600
Tags: collect tax, Employee, employment tax, Independent Contractor, tax collection, Tax Problems
Posted in Attorney, Collections, Controversy, Employee, Independent Contractor, Tax Attorney, Tax Problems, employment tax | No Comments »
Tuesday, January 6th, 2009
The Treasury Inspector General for Tax Administration (TIGTA) is the only government entity that conducts internal audits the IRS. Well, now you can read the most recent interesting report that covers their audit April 1, 2008 through September 30, 2008. The report is TIGTA’s semiannual report to Congress.
There are some “blockbuster” (technical tax term) statements and recommendations in the report.
TIGTA says that IRS must focus on closing the Tax Gap noting that IRS does not consistantly assess penalties or penalize taxpayers for making false statements when filing returns. TIGTA recommends that IRS expand its enforcement efforts. As I have predicted before, along with other tax experts, in the future IRS will be increasing enforcement efforts. In fact, Chief Counsel, IRS, is looking for more attorneys, see Click Here
TIGTA said: “Now, more than ever, the IRS must focus efforts to close the Tax Gap – the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. In audits conducted over this reporting period, TIGTA found that the IRS has neglected to consistently assess penalties on non-compliant businesses and individuals. Additionally, TIGTA noted that the IRS generally does not penalize taxpayers for making false statements when filing official tax forms. The IRS must aggressively address the lack of taxpayer compliance and hold those in violation accountable for their actions.”
Read the whole report: Click Here
Bill Lowrance
Tax Attorney
Tags: cirme, collect tax, failure to pay, income tax, Office of Chief Counsel IRS, Tax, tax collection, tax crimes, tax evasion
Posted in Attorney, Collections, Controversy, IRS, IRS Audits, Tax Attorney, Tax Crime, Tax Liens, Tax Litigation, Tax Problems, Tax Research, Uncategorized, income tax | No Comments »
Thursday, October 30th, 2008
IRS has a great Small Business web page at IRS Business. Check out starting, operating or closing a business at Start/Close Business. Also, check the latest business news that gives small business owners information about the latest mileage rates, worker classification (employee vs. independent contractor) and other announcements See Business News. Get the IRS information on business expenses at Business Expenses.
But as always, remember this is IRS general information. For a more in-depth research and analysis check with your tax attorney or accountant.
Bill Lowrance
Tags: IRS, small businenss, tax news
Posted in Attorney, Collections, Controversy, IRS, IRS Audits, Tax Research | No Comments »
Wednesday, October 29th, 2008
Most businesses withhold payroll taxes from employees’ salary checks. Taxes withheld are income, social security and medicare payments. Other withholding items are for State taxes, retirement funds and unemployment funds.
Right now in the hard economic times, business owners may be tempted to use the money they deduct from their employee’s wages for other expenses. The only problems is that the deductions are not the employer’s funds. The funds should be deposited into special accounts for payment to the proper taxing authorities.
If the employer does not make timely deposits, there will be penalties to pay. In addition, if the business goes down, the owner or “responsible person” in the business may assessed the missed deposits under IRC section 6672–the 100% penalty provision. The “responsible person,” usually the business owner will personally owe the money not properly withheld and paid over to the IRS.
If you, as a business owner, are subject to the 100% penalty assessment, contact your tax attorney right away.
See the IRS publication Click Here
Bill Lowrance
Tags: 100% penalty, business owner, employment tax, failure to pay, IRS, tax collection
Posted in Attorney, Collections, Controversy, IRS, IRS Audits, Tax Attorney, Tax Problems | No Comments »
Monday, October 20th, 2008
 You may not think international tax law applies to you, but it may. Do you have a bank account outside of the United States? If so, you are supposed to report it on your tax return. There is a check box on the tax return to report any foreign bank accounts. If you do not report your account, the IRS may come calling on you.
I worked as an attorney in the International Division of Office of Chief Counsel, IRS, for many years. As such, I assisted the IRS in gathering information from many foreign countries including most of the the Caribbean jurisdictions. So, there is a process for the IRS to collect foreign bank account and business/financial information.
The IRS has many ways to find out about your foreign activities. Many foreign countries have tax treaties with the US. All the treaties have an “exchange of information” section. The taxing authority of each country often spontaneously furnishes business and financial information to the IRS. Well, the IRS takes it from there. In addition, the IRS has Tax Information Exchange Agreements with many foreign jurisdictions. Offshore financial centers like the Cayman Islands, Bahamas, Bermuda and many other counties signed these agreements. Basically, the IRS can request business, banking or financial information from the foreign tax authority. The foreign tax authority will get the information and give it to the IRS.
So, do not think your financial or business information is out of the IRS’ grasp just because the information is in another country.
More on this interesting subject will be in another post soon. Keep coming back and read about it.
Bill Lowrance
Tags: foreign bank accounts, income tax, IRS, tax information exchange agreements, tax treaties
Posted in Collections, Controversy, IRS, IRS Audits, Offshore Accounts, Tax Attorney, Tax Crime, Tax Litigation, Tax Problems | No Comments »
Saturday, October 11th, 2008
 According to an Associated Press article, many states are increasing tax enforcement and collections efforts as state revenues decline in our present economic condition.
States like New York, California, Massachusetts and Illinois are ”beefing up” tax enforcement and collections. You can believe Virginia will, and is, doing the same thing. Sometime ago Virginia contracted with a collection agency in Livermore, CA, to collect past due taxes. This collection agency, Diversied Collection Services, Inc. gets taxpayer information from the Virginia Department of Tax. The agency starts calling and writing the taxpayer demanding payments. Check out the Virginia Department of Tax Here
I spoke to a person identifying herself as Fay Miller at Diversied the other day. I called on behalf of a client who, in the past, did not have money to pay taxes. Well, Ms. Miller demanded full payment of the client’s tax bill. Of course, this was done without the Virginia Department of Tax contacting me as the representative of my client. But, that is another story I will talk about later.
States are facing budget and revenue problems. The taxing authorities will be increasing enforcemnt efforts against companies, small businesses and individuals. Now that may mean turning over collection to collection agencies. I am appalled that the states, especially Virginia, contracts with a collection agency in California to contact Virginia taxpayers using the famous and infamous collection agency techniques.
I hope to find out more information about the Virginia contract with this collection agency and the process used to collect past taxes. Of course, everyone should file returns and pay taxes on time. The facts are, however, that some people have hard times and cannot pay the tax due.
Anyway read the entire AP story Click Here
Bill Lowrance
Your Virginia Tax Attorney www.lowrancelaw.com
Tags: collect tax, Collection Agencies, States, Tax Authorities, Virginia Department of Tax
Posted in Collections, Controversy, IRS, Tax Attorney, Tax Problems | No Comments »
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