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Nashville Tax Law Legal Blog

What should happen if you are selected for an audit?

As we have noted in prior posts, small business owners must be vigilant in keeping good records not just for tax season, but throughout the year. Not only is this a practice that is vital to business success, but mistakes and inaccuracies can lead to audits.

Indeed, the 2018 tax season may see fewer audits because of budget cuts, but scores of small businesses will still be subject to tax inquiries. In the event your company is selected for an audit, this post will give you some helpful information as you prepare. 

The tax implications of flipping houses

Flipping houses may be an attractive way to make money. Taking a distressed house, making repairs and putting it back on the market seems easy enough, especially when you have a penchant for craftsmanship or a good relationship with a contractor. Nevertheless, as much money as you think you will make flipping houses, always remember that Uncle Sam will want his cut.

This post will highlight the tax implications of flipping a house in Tennessee.

Reporting problems to avoid on your next tax return

The 2018 tax season is six months away, but it is never too early to plan for the correct reporting of income. As we have noted in prior posts, the federal government is cracking down on improper income reporting, and there is anything that will raise the IRS’ ire, it is the notion of hiding taxable income.

With that, the old adage “prepare for the worst, expect the best” holds true here. If you plan for the worst possible audit, you can expect to pass such scrutiny with flying colors. To do so, knowing what income to report is key. This post will highlight a few categories that may go unreported. 

How a tax attorney can help with criminal charges

Not many business owners think about tax season at the end of July. After all, it is the height of the summer and the chance for many to take some much needed vacation time. However, business owners should be wary of their actions as to whether they violate federal law.

There are countless stories about how business owners try to reduce their tax burdens through transactions they believe to be lawful, only to find out later that they amount to tax evasion. Also, in a prior post, we highlighted how federal prosecutors are construing vague language to bring criminal charges to punish transactions that are otherwise lawful. 

DMX facing a bevy of tax fraud charges

It may have been years since the hard core hip-hop anthems, “Party Up” and “X Gon’ Give it to Ya” were tearing up clubs and airwaves, but apparently rapper DMX still makes quite a bit of money from artist royalties and television appearances. However, the federal government believes that it has not received its fair share in tax withholdings for quite some time.

According to a recent report, DMX, whose real name is Earl Simmons, was arrested last week on suspicion of tax fraud. He faces 14 counts of criminal tax charges from the Internal Revenue Service, which accuses him of failing to file tax returns between the year 2010 and 2015, and engaging in a scheme to defraud the government of more than $1.5 million during that period. 

Stay alert for scams and changes in IRS tax collection

Scams are common hazards, especially for those who are in vulnerable financial situations. If you are behind on your taxes, you may find yourself talking to a scammer posing as an IRS agent trying to get you to pay. Fraudsters may threaten to revoke your Tennessee driving privileges, have you arrested or deport you for unpaid taxes to pressure you into sending money. They may also demand payment in such unorthodox forms as prepaid debit cards or gift cards.

The Internal Revenue Service will never use these tactics. However, recent changes in IRS methods for collecting unpaid taxes have caused some confusion and even caught the attention of lawmakers.

Just how broad can 'obstruction' be?

If you have paid any attention to national political news over the last few months, the term “obstruction of justice” has been mentioned a number of times. To the uninitiated, federal law is broadly defined to punish conduct that affects the “due administration of justice.” This largely means that conduct that would adversely affect a pending judicial proceeding or law enforcement investigation.

But when it comes to obstructing justice with regard to tax administration, what type of conduct may be punished? Moreover, does a person have to be under investigation or subject to an IRS audit before obstruction occurs?

What to know about the IRS' ability to collect back taxes

Most business owners understand that they must file a federal income tax return on or before April 15 of each year; and if they don’t, they may be subject to penalties and interest. Indeed, those who believe that they will have a large, unaffordable tax bill may not want to file their taxes. But what happens when a refund is expected?

Under federal law, tax returns essentially are governed by a three-year statute of limitations. This means that the IRS has three years from the time the return is filed in order to collect on taxes owed stemming from the return. 

Mistakes non-profits should avoid before next year's tax season

As we approach the Independence Day holiday, most people think that accountants, bookkeepers and tax attorneys will be on vacation or marginally busy because tax season is not for another seven months. This sentiment may be applicable to non-profits, but it may be a dangerous feeling to hold.

According to a recent report, non-profits should take this time to ensure that they will be prepared for the next time they have an audit, which could come during…or even before next year’s tax season. This is especially important for non-profits that have chronic bookkeeping and reporting problems. 

Legislators think tax debt collectors may be disingenuous

It’s no secret that the IRS is now turning to private debt collection companies to follow up on certain categories of past due tax debt. Indeed, there was a certain amount of controversy attached to this plan when it was introduced last year, but it appears that legislators now understand the gravity of how private debt collectors can negatively affect consumers.

A recent article highlighted a letter sent by four U.S. Senators to Pioneer Credit Recovery and its parent company, Navent. Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Jeff Merkely (D-Ore.) and Benjamin Cardin (D-MD.) expressed their concerns that scripts used by Pioneer’s employees could be harmful to consumers. 

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