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Boston Tax Law Blog

Timing and discharge of tax debts in bankruptcy

Of all the debts that can be discharged in bankruptcy, past due federal taxes might be subject to the most complicated timing rules. There are generally no exceptions, so get a date wrong and you might not receive a discharge.

We’ll discuss one case that highlights what can go wrong. Bringing in the assistance of an attorney who understands both bankruptcy and tax law can avoid any timing problems.

Nelly’s tax troubles may soon include seized ticket sales

We don’t often write about celebrity tax problems in this blog. And while you may not owe $2.5 million in back taxes, this story does illustrate the tools the IRS has at its disposal to collect.

In August, the IRS filed a $2.4 million tax lien against the rap artist’s property. Now the Service is seeking some of the income he is scheduled to earn from five concert tour dates. A request to seize a portion of the proceeds from ticket sales has been sent to Ticketmaster. Could your wages be taken if you have past due tax debt?

Expanded streamlined processing for installment agreements

Installment agreements are available in most cases when you owe taxes to the IRS. This can allow you to make manageable monthly payments and avoid collection actions like wage garnishment or a levy of your bank account.

The IRS announced last week that it will be testing expanded criteria now through September 17, 2017. Depending on the results the changes may become permanent.

IRS begins using private collection agencies next spring

A federal law enacted almost a year ago authorized the IRS to start working with private contractors to collect overdue federal tax debts. Next spring, four contractors will begin taking over older, overdue accounts that the Service is no longer actively working.

The move is to continue collection efforts and fill in when the IRS lacks the resources to go after the debt. Dealing with the IRS can be a difficult experience and it may be even harder to resolve tax collection cases when private contractors are involved.

Massachusetts estate tax on property outside the state

An estate tax return must be filed after the loss of a loved one. The federal Estate and Gift Tax exemption has increased over the last few years to its current $5,450,000. A couple can combine the exclusion to pass up to $10.9 million dollars without federal tax consequences.

However, Massachusetts has a lower exemption amount of $1 million. And the state does tax Massachusetts residents on the value of property owned outside of the state. This can have significant consequences for snow birds with homes in Florida. In this blog, we explain more.

How to submit an Offer in Compromise that will be accepted?

Make a mistake in the filing process or offer an amount that is too low and you could have to start from scratch again. In our last post, we explained how it is necessary to be up-to-date in filing your tax returns.

In this post, we discuss the OIC filing process in more detail and what you need to do while waiting on a decision.

All tax returns must be filed before an Offer in Compromise

It may become impossible to stay ahead of tax debt as penalties and interest add to the balance. An offer in compromise (OIC) may provide some relief. It is a way to settle with the IRS for less than the full amount you owe.

A prerequisite, however, is to file all required tax returns. The IRS will not consider an OIC application if you have unfiled returns. This does not apply to the current year though if you have received a valid filing extension.

IRS collection actions: 10 year statute of limitations

The amount of the time that the IRS has to collect back taxes is generally 10 years. Certain actions can stop the clock. An offer in compromise is one of them.

In this post, we will look at a story where a taxpayer was not successful in arguing the state of limitation barred collection efforts. The saga starts in 1997 and illustrates that time alone is not always sufficient.

What are the fees for tax installment agreements?

The IRS recently proposed a new fee schedule that would take effect at the beginning of 2017 for taxpayers who enter installment agreements. While the overall fee increases, direct debit and online options will reduce the total you pay.

What are the general requirements to qualify for an installment agreement? You need to owe less than $50,000 in income tax, penalties and interest. You also have to file all required returns.

Tax evasion plea deal could result in two years behind bars

Federal taxes are in large part paid through income withholdings by employers. The employer is trusted to withhold the right amount from employee wages and turn that sum over the IRS.

In Boston, a longtime owner of the city’s largest taxi company hadn’t been doing this. Coupled with the tax issue were other employment law lapses. The company hired drivers who were in the U.S. without proper documentation and never paid overtime when employees worked more than 40 hours in a week.

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