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Nashville Tax Law Legal Blog

IRS trying to enforce tax rules against pot companies

It remains to be seen whether (or when) medicinal marijuana will be legalized in Tennessee. It is also possibly light-years away from allowing recreational use of the drug, like a handful of states have. But one thing is certain. The federal government does not want companies involved in the marijuana trade to realize any tax deductions.

A recent article highlighted the IRS’ efforts to seek records from certain businesses in the industry to see just how much they have grown and sold since Colorado changed their law. The businesses subject to IRS subpoenas claim that the government is essentially conducting criminal investigations without a legal basis.

What would you do with extra time to pay your tax bill?

When business owners and their accountants prepare their tax returns next year, chances are that there may be a discussion about what to do with income stemming from contracts or products sold in the fourth quarter of 2017.

Why is this? It is likely because the business (or the accountant) wants to save money on taxes to be paid for 2017, or more time is needed to pay such taxes. Because of this, business owners should be cognizant of the difference between the cash method of accounting and the accrual method. 

Don't catch grief when there's relief

The day you began your married life, tax liability was probably one of the farthest issues from your mind. You also were likely not thinking about divorce. Years later, you're now preparing for a new lifestyle, one that doesn't include a spouse. You realize these things happen and are doing your best to remain positive and keep your children's best interests at heart as you move forward to a new, successful future. The tax issue may now be a bit more in the forefront in your thoughts now, however.

You're worried about certain deductions or credits your former spouse claimed and don't want to be left holding the bag on financial accountability for another person's mistakes.

Should you use an accountant or a tax attorney?

As we have noted in a number or our posts, dealing with tax issues can be an arduous process, regardless of whether it is dealing with an IRS lien notice or determining exceptions to one’s tax bracket.  In resolving these issues, it may be hard to decide who would be helpful with your problem: an accountant or a tax attorney.

Indeed, both have the requisite knowledge to interpret the U.S. Tax Code. Additionally, qualified accountants may represent clients in cases before U.S. Tax Courts. While a tax attorney may be trained to help in preparing for litigation, an accountant may be helpful in financial planning that could avoid the problems that could land a client in tax court. 

The problems with taxes in Puerto Rico

As the economy has improved over the past few years, much has been said about catching tax cheats and making them pay their fair share to Uncle Sam. Much of the news focuses on corporations doing inversion deals so that taxable income stays overseas, as well as tracking down individuals stowing away millions in offshore accounts.

While these entities and individuals hide, there is a place where thousands “hide” in plain sight. 

The ins and outs of a tax audit

You got it, that dreaded letter from the Internal Revenue Service that says it is going to audit you. Scared? You shouldn't be. A tax audit, though intimidating, is not always a sign that you did something wrong.

For most Tennessee residents, the reason an audit seems frightening is because it is an unknown. It is something that most people have never been through before, so they do not know what to expect or where to get help. It is amazing how getting just some basic information about the process can ease one's fears and make the whole process easier to handle.

Top sports gambling events can result in taxable income

With Game 1 of the Western Conference Finals in the books, scores of sports gamblers are breathing a collective sigh of relief after the Golden State Warriors earned a two point win over the San Antonio Spurs. Indeed, the Spurs covered the spread in Game 1 (they were a 10 point underdog), but it remains to be seen how they will fare in the series.

While many bets (especially those made outside of Nevada) are illegal underground bets, many people may not realize that winnings from sports gambling are taxable as income. Aside from the NBA playoffs, a number of huge betting days come around each year. This post will highlight a few of them.

How far back can the state go back to assess taxes?

It is not uncommon for taxing authorities (state and federal) to review past returns determine whether calculations were incorrect, and assess additional taxes to be owed. However, there are limits. Besides, it would be particularly egregious for the federal government to apply retroactive taxes and seek payment on taxes that were not applicable when the return was originally filed.

As ridiculous (and troubling) as this might sound, the State of Washington is asking the U.S. Supreme Court to issue a ruling that would allow it to do just that. 

How real estate investors can save on next year's taxes

For accountants and CPA’s tax season commonly begins in the months before the income tax filing deadline (i.e. right after New Years in January). But for most businesses, it begins at the beginning of their fiscal year. This beginning may vary, but one thing is for certain; tax planning is a year-round exercise.

This is especially true for real estate investors. After all, these business owners may not be taxed in the same way that other self-employed taxpayers must pay Uncle Sam. For instance, a business owner working for themselves may pay 15 percent in income taxes for the business, as well as 15 percent in self-employment taxes. However, a real estate investor deriving much of their income from rents and short term capital gains may end up paying much less after applicable deductions and depreciations.

What can I do if I haven't filed my return?

If you are concerned about what will happen next if you didn’t file your federal income tax return on April 18 (last Tuesday), you are certainly not alone. Given the legendary power of the IRS, it is understandable that people facing this issue will be afraid of what lies ahead. But just like any horror movie, it is the fear of the unknown that can be debilitating. And naturally, things tend to go from bad to worse when you do nothing.

But it does not have to be this way. You can avoid the wrath of the IRS if you take some proactive steps. This post will highlight two important options

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