Tuesday, July 30, 2013

Eagle Ford Workers - Fight that IRS Wage Garnishment

Hey Eagle Ford workers - don't let the IRS garnish your paychecks!

Taking action now - not later - right now, insures that you can keep more of that hard earned overtime dollars. The IRS does not care how many hours you put in or that it was over 100 degrees while you were putting in your time.

Here are a couple of things that we can do to help - so keep them in mind:

1. While we can't stop the garnishment immediately, I can have the IRS fax your payroll office a notice to stop the garnishment.

2. The IRS will issue this notice as soon as you've entered into a payment agreement.

3. You must file any back year tax returns before you can enter into an installment agreement. We deal with this all of the time and have a plan of action for you to take care of this issue painlessly.

The biggest service we provide to you is getting this huge gorilla off your back. The sooner you act, the sooner you can begin to enjoy more of your paycheck.

Call San Antonio Tax Attorney Martin Cantu today - 210/549-6036. 

#IRS #EagleFord #sataxhelp

Saturday, July 20, 2013

Texas Taxes - Austin, We Have a Problem!

#IRS #Taxes #TexasComptroller

We're seeing a number of clients having problems with the Texas Comptrollers Office for state due on businesses that were shut down years ago.

While the taxpayer may have viewed the business as shut down, the Comptroller did not. What starts out small grows huge - if only our 401k's grew as fast. The scenario is something like this:

1. Business incorporates and obtains a sales tax permit.

2. Business goes kaput, is shut down, but corporation and sales permit stay active.

3. No reports filed - the Comptroller prepares substitute returns for a couple of years.

4. Taxpayer moves, ignores certified mail from the comptroller, summons, etc. Judgment is taken, including the substituted returns where no actual sales are made.

5. Taxpayer finds out about the judgment years later, after the debt has grown ten-fold.

6. Comptroller refuses to negotiate on the amount due, leaving you between a rock an a hard place - an not able to get that house or car you want because of the debt.

So what to do? First, terminate the sales tax permit, and be sure to file returns while you do have it, even if there is no sales. Second, terminate your entity according to the rules. Third, open that certified letter.

Have questions on taxes? Contact Tax Attorney Martin Cantu.

Tuesday, July 16, 2013

Special Tax Benefits for Armed Forces Personnel

Members of the U.S. Armed Forces receive several tax benefits. Special tax rules apply to military members on active duty, including those serving in combat zones. These rules can help lower your federal taxes and make it easier to file your tax return.

Here are ten of those benefits:

1. Deadline Extensions.  Qualifying military members, including those who serve in a combat zone, can postpone some tax deadlines. 

2. Combat Pay Exclusion.  If you serve in a combat zone, you can exclude certain combat pay from your income. 

3. Earned Income Tax Credit.  You can choose to include nontaxable combat pay as earned income to figure your EITC. 

4. Moving Expense Deduction.  If you move due to a permanent change of station, you may be able to deduct some of your unreimbursed moving costs.

5. Uniform Deduction.  You can deduct the costs and upkeep of certain uniforms that regulations prohibit you from wearing while off duty. You must reduce your expenses by any reimbursement you receive for these costs.

6. Signing Joint Returns.  Both spouses normally must sign joint income tax returns. However, when one spouse is unavailable due to certain military duty or conditions, the other may, in some cases sign for both spouses, or will need a power of attorney to file a joint return.

7. Reservists’ Travel Deduction.  If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain travel expenses on your tax return. You can deduct unreimbursed expenses for traveling more than 100 miles away from home to perform your reserve duties.

8. Nontaxable ROTC Allowances.   Educational and subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.

9. Civilian Life.  After leaving the military, you may be able to deduct certain job hunting expenses. Expenses may include travel, resume preparation fees and job placement agency fees. Moving expenses may also be deductible.

10. Tax Help.  Most military bases offer free tax preparation and filing assistance during the tax filing season. 

Have questions about your taxes? Contact Tax Attorney Martin Cantu

Tuesday, July 9, 2013

Update from the IRS Audit Battlefield - Tax Return to Audit to Tax Return

Here are three tips from the IRS Audit front line:

1. Business Owners, reconcile your total bank deposits with reported income. This is request number one on the auditor's list. Help yourself out and have this list ready when you receive your audit notice by making it part of your tax return supporting documents.

2. Travel Logs - use a calendar, excel spreadsheet and a mapping tool such as Google Maps to document regular trips and the distance per Google maps. This is an easy sign off by the auditor.

3. Credit Cards - the best comment I heard from an auditor is to treat credit cards like another bank account. Account for each charge as a separate item. Not all charges may be deductible, just like a business bank account.

Hope this give you a heads up on your tax return and audit planning.

Have questions on your return or IRS audit? Contact tax attorney Martin Cantu.

Friday, July 5, 2013

IRS Whistle-blower Alerts to Huge Tax Loophole

Great article in the Austin American Statesman about an IRS whistle-blower and his attempts to point out the huge cost to taxpayers on ITIN numbers.

The article is chock full information on a number of items - the ITIN program itself; how fraudsters and maybe even drug cartels are using loopholes costing taxpayers huge amounts of money; how the whistle-blower process works.

But in light of the ongoing Tea Party fiasco, the more interesting thing is how the IRS works on a personal level. I often tell clients that no two tax cases are the same, primarily because the IRS seems to have different "tracks" to handle cases.  Their computer systems handles cases differently. Add the human touch, and you the process gets even trickier. This article describes how IRS workers are evaluated and how one case can get lost in a volume of cases. This is great example of why its sometimes best to "kick the can down the road".

The two examples also explain why a number of other techniques work. For example, I'm adamant about over preparing for an audit - it makes the auditor more likely to pass on otherwise key issues. Or, the easier you make on the IRS agent, the easier it is for them to check you off your list and let them focus on a more difficult case.

It also points out that the human touch can be detrimental - see the Tea Party cases.

Monday, July 1, 2013

1099s - The Gift That Keeps on Giving

1099s are a road map into your financial situation. The IRS uses 1099s as a road map to track any number of financial transactions in which you participate. For example:

  • Non-employee compensation;
  • Rents;
  • Sale proceeds;
  • Forgiveness of debt;
  • Interest earned and paid;
  • stock and commodity transactions.
The IRS uses a matching program to verify whether you included these items in your return. Sounds simple enough, but often times the system is blind. For example, it cannot located sums included with other amounts, say in gross rents. It will not deduct basis or expenses from the amounts. It cannot tell if the forgiven debt was for homestead or investment property.

All of these situations are a critical part of your tax calculation in a given year. Here's the kicker - the IRS may not send you an inquiry for years. So your left digging in your records to justify an expense 3 years ago, or to figure out how you calculated your gross income.

The IRS can also use it on a going forward basis, asking you to document why you did not earn the same income in the succeeding years.

So pay attention to those 1099s, and pay attention what ID number you down when someone asks you a w-9 - it may come back to haunt you down the road.