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Boston Tax Law Blog

Massachusetts man accused of failing to file tax returns

The income requirements for filing taxes are quite low. If filing single, you need to file a federal return if you earned more than $10,300 in 2015. The amount doubles for a married couple. If you earned more than $8,000, you need to file a state return. Filing a return is necessary if you expect a refund of taxes withheld by an employer or through the Earned Income Tax Credit.

With this background, an investigation by the Boston Globe indicated that a Massachusetts investor and developer only filed one state return in the last quarter-century. In lawsuits questioning his dealings in real estate transactions, there is evidence that the man earned significant profits.

Do you need to report an offshore account?

If you had one or several accounts outside the U.S. that had more than a combined amount of $10,000 at any time over the year, you probably need to file. The Report of Foreign Banks and Financial Accounts (FBAR), FinCEN Form 114 needs to be electronically filed with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

When does the report need to be filed? The due date is June 30, 2016. No extensions are allowed to file the FBAR. Next year the due date will change to coordinate with the more well known tax filing deadline of April 15.

More New England towns consider selling tax liens

The sale of debt is expanding from past due medical accounts and unpaid credit card balances to tax liens. The private investors who purchase these debts are usually much more aggressive with their collection efforts.

Recently, Harwich has considered selling liens to private investors. The town has 326 properties with tax title liens. The amount owed in unpaid taxes is approximately $5.6 million, according to CapeCod.com.

Work-related “uniform:” Does this include wardrobe costs?

The general answer is no. How broad in the definition of uniform?

A recent tax court case offers guidance. Forbes summarized the facts of the case. An employee worked for a clothing company. He was required to wear company-branded clothing whenever representing his employer. Clothing costs over the year were substantial, so he claimed then as work-related and deducted them on his taxes.

Prison sentence handed down in tax evasion case

Another tax season has come to an end. Now the IRS begins reviewing returns searching for discrepancies and underreported income.

The Service also works in coordination with other federal agencies to investigate fraudulent schemes. Masslive.com reported on a prison sentence handed down in one of these at the beginning of the month.

What to do if you cannot pay your federal tax bill?

The Boston marathon kicked off this morning in Hopkinton with approximately 30,000 runners traversing the city to finish on Boylston Street. The 26.2 mile event makes it more difficult to get around the metro area. For this reason, it is fortunate that the tax filing due date in Massachusetts is tomorrow, April 19th.

Massachusetts residents and businesses are expected to pay the Federal government more than $100 billion in taxes. That is right – billion with a B. If you are one of the thousands who cannot pay your tax bill, we have three tips for you in this post.

Down to the wire: 4 things to know about the tax filing deadline

If you're still getting your tax return ready to file, you've got plenty of company. Millions of taxpayers around the country wait until the last minute to file. On April 18 alone (the last day to file in 48 states), the IRS expects the number of returns that come in to be more than 5 million.

Here are four things to know about this year's filing deadline.

Not so FAST: Back taxes could put your passport in jeopardy

International travel is a necessity for many. It is often the only way to complete a deal or see loved ones in a home country.

Soon an unpaid tax bill could keep these travelers grounded. The provision was quietly tucked into a piece of legislation passed late last year – the Fixing America’s Surface Transportation (FAST) Act. The new rule allows the Internal Revenue Service to ask the State Department to deny or revoke passports when a taxpayer owes more than $50,000 in back taxes.

Easy steps to avoid one tax penalty

April is right around the corner, which means the tax filing deadline is almost here. If you owe this year, you are probably just starting to think about your options.

The Internal Revenue Service recently released some numbers about collection efforts from fiscal year 2015. The Service assessed approximately $14.5 billion in penalties for returns not filed timely. If you owe a significant tax bill and cannot immediately pay, you can avoid one penalty by filing your return before the deadline.

Business losses: Can you deduct them against other income?

Every so often the tax court rules on a case with interesting facts. The distinction between a business and a hobby is often the topic in these cases. A business loss can be deducted, but a hobby loss cannot. Get this wrong and you could owe a large tax bill.

A couple months ago, we wrote a two-part blog series on hobby losses. You can review our January 17 post on the nine-part test that the Internal Revenue Service uses to decide business versus hobby activities.

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