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St. Louis Tax Law Blog

Being dishonest about income can carry major consequences

Income can be a very sensitive subject for a person. There are a variety of reasons why a person might not want others to know how little, or how much, they make, including embarrassment. This may leave a person tempted to tell lies when asked about their income.

Lying about income is not without its consequences. A recent article on Nasdaq’s website went over some of the serious repercussions such lies can have.

When a person receives an inaccurate federal tax bill

The Internal Revenue Service may sometimes seem like an all-powerful and all-knowing entity to taxpayers. However, like any organization made up of humans, this agency is more than capable of making mistakes. For example, the IRS sometimes makes mistakes in the tax bills it issues to taxpayers.

One type of error that sometimes occurs on IRS tax bills is a person being billed for more in the way of taxes than they actually owe. Now, thankfully, taxpayers aren’t simply out-of-luck when an IRS error leads to them being assessed a larger amount in owed taxes than they should have been.

Failing to disclose partnerships could be very impactful under new audit regime

When a person is engaged in a business endeavor, one thing that can prove to be very important is what disclosures they make to the Internal Revenue Service. Inadvertently failing to disclose certain things to the IRS could expose a business owner to some very unpleasant surprises indeed. An upcoming change in IRS rules and practices is expected to add some big consequences to one particular type of missed disclosure: failing to disclose a partnership.

A new audit regime is being put in place regarding partnerships. The new regime is expected to come into effect at the start of next year. Purportedly, once this new regime takes effect, a person could trigger significant tax liabilities if they fail to disclose that a business endeavor of theirs is a partnership.

Soupman CFO facing tax evasion allegations

Some tax-related allegations can expose a person to more than just a tax dispute with the Internal Revenue Service. Some could land a person in serious criminal proceedings. Among such accusations is being accused of tax evasion. A person’s freedom and many other key things in their life can be at risk when charges of tax evasion are leveled against them. So, when such charges come up, having the advice of an attorney with a comprehensive understanding of the specifics and issues of criminal cases involving tax matters can be critical.

Many different types of accusations could expose a person to the possibility of tax evasion charges. And this doesn’t just include accusations of tax misconduct in relation to one’s personal finances. It also includes accusations of tax wrongdoing related to a business one owns or plays a big role in. There are various tax rules businesses/employers are subject to. This includes rules regarding reporting compensation given to employees. Accusations of having violated these rules to try to keep money from the IRS can put a person into a serious legal situation.

Received an IRS tax bill? Don’t ignore it

It is one of the big fears a taxpayer may have, that they will one day receive a big bill from the IRS that they don’t have the money to pay. Some people’s gut reaction to getting bad news might be to ignore it and delay taking any action regarding it, so they don’t have to think about it. Also, some individuals might make the incorrect assumption that if they have a tax bill that they currently are unable to pay in full, they have no real options and thus it really doesn’t matter how they respond to the bill.

However, ignoring a tax bill can have very serious consequences. It could expose a person to growing interest and penalties. Also, it could cause their tax debt issue to grow into a much bigger problem with the Internal Revenue Service that could have significant ramifications for their finances and their future. So, taking prompt action to respond can be very important when a person receives a tax bill that they don’t have the funds to immediately pay off.

The budget deal and the IRS

A budget deal was recently reached regarding the funding of the federal government for the period going up to the end of this September. Among the many provisions in the spending bill are provisions touching on the Internal Revenue Service.

For one, the bill sets the funding level of the IRS. Reportedly, it puts the IRS at around the same funding level it was at in 2016. This comes after a trend of budget cuts to the IRS that the last few years have seen.

Analysis looks at state income taxes and pro sports team competitiveness

Might state income taxes impact how competitive a state’s sports teams are? A recent informal analysis by an economist looked into this issue.

The economist compared the state income tax rates and winning percentages of teams in the National Football League, the National Basketball Association, Major League Baseball and the National Hockey League. In making these comparisons, the economist took efforts to control for other factors that he identified as having the potential to impact a team’s competitiveness.

IRS collection actions business owners should be aware of

Business owners struggling with debt may be more concerned with keeping their business afloat than paying all of their creditors. This may even be the case if the IRS is one of the creditors demanding payment. Indeed, the IRS’ power to collect taxes is legendary, but business owners may not realize this until the IRS closes their doors.

Because of this, business owners should know how the IRS collection process works, as well as the warning signs that a business in danger. This post will highlight a few. 

Earned income tax credit the focus of many audits

There are a range of things that could lead the Internal Revenue Service to decide to audit a given tax return. Among these are concerns related to credits claimed in the return. One type of tax credit that is involved in quite a few audits here in the U.S. is the earned income tax credit.

This can be seen in statistics from the IRS’ most recent annual data book. Reportedly, over a third (36.7 percent) of the just over 1 million IRS audits of individual tax returns that occurred in the 2016 fiscal year were initiated over concerns related to the earned income credit.

When it comes to taxes, misassumptions can cause big problems

There are various times when making incorrect assumptions can wreak considerable havoc on a person’s life. One of these times is tax filing time. Making incorrect assumptions when it comes to one’s taxes could result in a person making critical mistakes in their tax filings. Such mistakes could put a taxpayer under significant IRS scrutiny, and subject them to the many impactful things that can go along with such scrutiny.

Among the things that can lead to a person making false assumptions in relation to their taxes are tax myths. There are a wide range of tax myths out there. A recent article on Fox Business’ website went over some of the myths that could cause particularly big problems for taxpayers, such as the myth that cash income doesn’t have to be reported.

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The Law Firm of Lance R. Drury
150 Merchant Street
Ste. Genevieve, MO 63670

Phone: 314-200-0003
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