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Boston Tax Law Blog

The IRS sometimes goes after the wages of those with tax debts

For most people, their paychecks from work are their financial lifeblood. Receiving such wages is often an essential part of a person's ability to meet the various expenses they incur as a part of everyday life. Thus, one could imagine how alarming a person would find it if the amount of their wages that actually went to them suddenly dropped significantly. This situation is one that individuals who have a federal tax debt may find themselves in.

This is because wage garnishment is one of the tactics the Internal Revenue Service is allowed to use to collect back-due taxes a person owes. This tactic involves redirecting a person's wages from work away from the person and towards the tax debt.

Tax preparers, part 2: credentials and legal responsibility

In the first part of this post, we began discussing the importance for millions of taxpayers of choosing the right tax preparer. As we noted, a very basic place to start is with making sure that the preparer has a Preparer Tax Identification Number (PTIN).

But there are several other factors to keep in mind as you choose a preparer to work with. In this part of the post, we will discuss the various credentials that different types of preparer have. We will also discuss consequences for the taxpayer that can result from fraud by a preparer.

Paid preparers and tax compliance, part 1: choosing a preparer

The IRS will begin accepting tax returns for the new filing season on January 20, one week from today. It's a time of year when taxpayers across the country are considering what resources they need to comply with a federal tax code that has become notorious for its complexity.

Some taxpayers choose software to help them navigate this complexity and file on their own. For those who do not itemize deductions, this may well make sense. But for tens of millions of others, it is important to find a competent and trusted tax preparer.

In this two-part post, we will discuss the role of tax preparers in facilitating tax compliance.

How does divorce affect your taxes? Part 2: property transfers

Let’s continue our discussion of ways in which divorce can affect your taxes. In part one of this two-part post, we explained that even something as seemingly simple as filing status is not always as straightforward as it seems.

In this part of the post, we will consider the question of property transfers between spouses.

How does divorce affect your taxes? Part 1: filing status

For many years, the divorce rate for first marriages hovered around 50 percent in the U.S. It was as if every marriage were a coin flip.

The rate has declined somewhat now, to around 40 percent. But this still means a lot of people end up getting divorced, raising issues that range from the emotional to the financial.

One of those issues is the effect of divorce on taxes. In this two-part post, we will discuss that question.

Tax appeals, part 2: challenging the IRS in Tax Court

In the first part of this post, we distinguished between two different meanings that the word “appeal” can have when referring to a tax controversy.

When you get into a dispute with the IRS, one way to challenge the agency is through an internal appeal within the agency. We discussed the procedure for that type of challenge in part one of this post on December 10.

Today we will discuss another type of appeal of IRS action: challenging the IRS in U.S. Tax Court. We will do this by looking at a specific case involving the taxation of two IRA accounts.

Dealing with federal tax liens

There are many different actions the federal government can take against a person in relation to a tax debt. Sometimes, having back-due taxes leads to a person facing having a federal tax lien issued against their property by the federal government.

A federal tax lien can have some significant impacts. For example, it may impede a person's ability to perform certain business or real estate transactions, such as getting a business loan, selling a business, getting a home refinanced or selling a home. Thus, a person may be very worried about their financial future when they discover they are facing a federal tax lien.

Tax appeals, part 1: collection due process within the IRS

With the days dwindling, we've got only a few posts left this year. We'll save end-of-year tax planning for our final post of 2014. Before that, however, we will take on an important tax concept called Collection Due Process (CDP).

In today's post, we will explain the basic framework of CDP. In part 2, we will apply this framework to a specific case involving the relative of a notorious criminal who pursued her case in the U.S. Tax Court.

Can bankruptcy be used to get rid of tax debt?

For many people, the end of the year brings many other emotions besides seasonal joy. The waning sunlight can also bring into focus financial problems that have been shadowing you for a long time.

If you are in this position, is filing for bankruptcy a sensible step toward a brighter future? In this post, we discuss one aspect of that decision: the effect of bankruptcy on personal tax debt.

Many expatriates share London mayor's outrage on global taxation

It’s been awhile since we wrote about the IRS’s ongoing efforts to collect taxes from U.S. taxpayers on income from outside the United States. Implementation of the Foreign Account Tax Compliance Act (FATCA) has raised the ante on those efforts in recent months.

FATCA has wide-ranging implications not only for individual taxpayers, but for foreign financial institutions that are increasingly required to share data with the IRS. Financial professionals in the U.S. and abroad are also seeking to sort out the nature of their obligations regarding offshore accounts.

In today’s post, we will take note of a well-publicized story that highlights the extent to which U.S. authorities are willing to go in their attempt to tax foreign income.

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