Tax Lawyer Annapolis, MD
If you are being faced with a tax issue outside of your knowledge or experience, then hiring a tax lawyer in Annapolis, MD is often something you should consider. Hiring a Maryland tax lawyer is one of the ways you can avoid costly mistakes when you run into complex tax issues. These mistakes can truly add up and if you can avoid making them, then do.
Now, if you are going about folding your regular tax return, then you likely won’t need the services of a lawyer. Many people can file their taxes and be just fine. However, there are times that you should consider a tax lawyer.
When to Consider a Tax Lawyer
Life has this way of throwing curveballs our way, and they can end up being fairly expensive ones. Here are some of the times that you may benefit from a tax lawyer:
- Trust and Este Planning: It doesn’t matter if you are transferring property, assets, or setting up an estate plan, you need a lawyer on your side. A tax lawyer can help you compile the paperwork and, if possible, reduce taxes. If you are thinking of starting the process, then a lawyer is going to help you get the most out of it.
- Settling Tax Disputes: If you have any kind of tax disputes with the IRS, then it is better to seek out a tax lawyer in Annapolis, MD than to go at it alone. A lawyer has the skills to help advise you on the right course of action and how to solve the dispute.
- Getting Tax Relief: If you are someone who needs to resolve back taxes, then talking to a lawyer is often in your best interest. They can help you settle your debt with the IRS in the most efficient way possible.
- Starting a Business: When you decide to start a business, there are numerous tax issues that you need to work through. If you want to get the most out of your strategies, minimize your tax bill, and get through audits, then a tax lawyer is what you need.
- Investing in Real Estate: A tax lawyer can help you if you are looking to invest in real estate properties. Often these properties have multiple owners and it can be difficult to track them all down.
WHEN TO CONSIDER A TAX LAWYER INFOGRAPHIC
What To Do If Behind On Taxes
If you have yet to file tax returns for a certain year, then it’s no surprise to hear that the IRS is probably making your life miserable. Not only does the Internal Revenue Service continue to inflict penalties and interest on those who have back taxes, but they may go to great lengths to interfere with that person’s life. And, the IRS can file a tax return on a person’s behalf and make collection attempts on the amount due, even if it’s way more than what they would have owed in the first place.
Sometimes, the best route to handling such a tricky situation is to hire a lawyer who understands how the tax system works and can use this knowledge to your benefit. We understand that life can get hard, and you may not have the funds to shell out hundreds or thousands of dollars in taxes all at once. Especially in recent years with COVID and other worldly events, we may not have the financial footing that we would have had if the times were better.
We routinely help clients in becoming compliant with the IRS and submitting any number of returns that are past due. We can assist you in getting this debt resolved and advocating for your behalf. When meeting with a member of our legal team, prospective clients may ask us what happens if they lost their income documentation. In most situations, it won’t pose a serious problem. We can locate and obtain your income and wages transcripts that show us the information we need to help.
Based on how many years of back taxes you have, you may need to do more than simply submit your tax returns. You may be happy to learn that you actually are entitled to a refund that you would have otherwise missed out on. But the only way to get a realistic picture of what handling back taxes will look like for you is to get help from a lawyer who can guide you through this process. Organizing your taxes may sound overwhelming, but it’s better to set it right and current so you can slowly pay them off instead of feeling the daily burden of back taxes you haven’t dealt with yet. If you aren’t sure if now is the time to finally get your overdue taxes handled, here are signs that you probably should:
- The stress of knowing you have back taxes causes you stress everyday
- The IRS keeps pestering you relentlessly
- You have received late penalties or other fees that just keep accruing
The IRS has begun collection efforts for your taxes (even if you haven’t filed the return yet)
A tax lawyer is there to help you understand the complicated tax laws that come with these scenarios. Often they can help make your life a little easier, as you know you won’t have to be handing these things alone and risking an easy mistake. The laws are difficult to understand if you don’t have a background in them, but a lawyer does. This is why you shouldn’t ever handle a difficult tax issue on your own.
If you or someone you know is going through the need to find a tax lawyer in Annapolis, MD, then reach out to the team at Crepeau Mourges to find out what we can do to help you today.
Death and Taxes
Many people think that once an individual dies, so too does their obligation to pay the government anything in taxes. Unfortunately, this is often not the case. Any income tax that they owed the government while they were alive will still be owed even though they have died. There is also the potential for the decedent’s estate to now owe inheritance or estate taxes.
If a person is not well versed in tax law, knowing what types of taxes may be owed can be confusing. This is why it is always a smart idea to consult with an experienced Annapolis, MD tax lawyer to make sure that you and your family are fully protected from any issues the IRS may claim you have.
Filing Income Taxes for an Estate
When a person dies, one of the duties of the executor the estate must address is filing a tax return in order to report any income the decedent had earned during the time period from the last time they filed income taxes up to the day they died. If the decedent had failed to file tax returns for any prior years, the executor must also file returns for those years, as well.
As an Annapolis, MD tax lawyer can explain, when it comes to any back taxes the decedent owed to the IRS, there is a statute of limitation in place of how long the agency can pursue collection of those taxes. The agency has 10 years from the date the agency assessed that tax obligation. The IRS may also audit a decedent’s taxes after they have passed, however, there is a statute of limitation for that action, as well. They only have three years unless the return underreports the decedent’s income by 25 percent or more. In these cases, the statute of limitation is pushed to six years.
The executor is also required to report any income the estate itself may generate if that amount is more than $600 per year. For example, if the decedent owned rental property, the income that comes in each month in the form of rent needs to be reported to the IRS and taxes may need to be paid on that amount, depending on what type of deductions the estate is entitled to take. These taxes must be paid out of the estate before the estate is distributed to the heirs named in the decedent’s will.
Contact Our Office Today
As you can see by the above factors, tax laws for estates can be complex and confusing. An executor who is responsible for the accuracy of how an estate is handled can be quickly overwhelmed by what they are now required to oversee, especially if they had no idea that the decedent had outstanding tax issues with the IRS. To make sure this doesn’t happen with your estate, call Crepeau Mourges today to schedule a consultation with a skilled Annapolis, MD tax lawyer.
Common Myths About Taxes
As most people know, paying taxes is just a part of life. However, that doesn’t mean that dealing with your taxes and the Internal Revenue Service (IRS) can’t be confusing. There’s certainly a lot of misinformation. Here are a few common myths about taxes that you shouldn’t believe.
- People always go to jail for unpaid taxes. Unfortunately, this is one of the most common misconceptions about taxes. While owing taxes can be quite stressful, it usually won’t land you in jail. If you simply forget to file your taxes or pay them late, the IRS likely won’t criminally prosecute you. People can, however, face jail time if they knowingly commit tax evasion. Although you might not be sentenced to jail for not paying your taxes, you can face other penalties, like fines.
- If you owe back taxes, entering into a payment plan is your only option. Payment plans are certainly a common way to deal with tax debt, but they aren’t the only option. If you have tax debts, you may qualify for certain programs. For instance, may be eligible for an Offer in Compromise, which allows you to pay your tax debt for less than you know. An experienced tax lawyer can inform you of all your options.
- If you file an extension, you have more time to pay your taxes. This isn’t true either. Filing an extension just gives you more time to file your taxes, not additional time to pay them. If you don’t pay your taxes by the deadline, you may receive penalties.
- You can claim your pets as dependents. Although you may think of your pets as members of your family, you are not allowed to claim them on your taxes. Pets are considered property under the eyes of the law. Attempting to claim on your taxes can be considered fraud.
- If you don’t make a high income, you can’t get audited. Some people assume that they can only get audited by the IRS if they make a six-figure salary. This just isn’t the case. Even if you don’t make a lot of money, the IRS would audit you if they notice red flags.
- Your tax preparer is responsible for mistakes on your tax returns. Even if you hire a professional to prepare your taxes, you will be the one liable for errors on your return. As such, you should double check the paperwork for any mistakes.
Behind On Taxes: Frequently Asked Questions
If you are behind on taxes, often the most important step you can take is to contact an Annapolis, MD tax lawyer to have your questions answered. However, generally when people are behind on taxes, they have many questions about the options available to them and what the Internal Revenue Service (IRS) can levy. Here are some answers to frequently asked questions when someone is behind on their taxes.
Will the IRS negotiate the amount of money I owe in taxes?
The IRS does have an option called an “offer in compromise” that can help you to settle your tax debt for a fraction of the amount you actually owe. In order to apply, you must first fill out a Form 656-B, which can be found on the IRS website. Eligibility requirements include an inability to pay the full amount owed without creating an undue economic hardship, such as losing your only place to live. The IRS also takes into account your income, expenses, and assets. Based on the IRS determination, they may settle with you if they do not believe they will be paid the full amount in a reasonable time period.
My tax audit made me fall behind on my taxes. Why did I get audited?
It is not always clear why the IRS chooses to audit people. The IRS sometimes audits at random, but most of the time it is due to something that looks suspicious on a person’s taxes. Suspicious activity can include failing to report all of your income, running a cash-based business and not filing appropriately, using round numbers or even claiming too much charitable giving. Other times, the oddities can simply be the result of a mistake. If you are being audited, especially if it puts you behind on your taxes, it is a good idea to consult an Annapolis tax lawyer.
I already know I cannot afford my taxes. What should I do?
Even if you cannot afford your taxes, it is a good idea to file them anyway since not filing can be a criminal offense. Additionally, not filing by the deadline can lead to an additional financial penalty. After filing, contact an Annapolis, MD tax lawyer for options. The options available may include requesting a payment plan from the IRS, requesting to delay payment, or agreeing to an offer in compromise.
What can the IRS levy from me if I cannot pay back what I owe?
The IRS is legally allowed to seize your property, if you are unable to pay your taxes. They may also garnish your wages, which means they will take a certain percentage, usually up to 25%. They can also seize money already in your bank account or sell some of your valuable assets, such as vehicles. But the good news is that this will not come as a surprise. The IRS will notify you of their intent. If you have already received a Final Notice of Intent to Levy and Notice of Your Right to A Hearing, you have limited time to find a solution, and you should consider contacting an Annapolis, MD tax lawyer immediately.
Are there types of income the IRS cannot seize?
While the IRS can seize many types of income such as wages, salaries, and interest, there are some types they cannot seize. These include child support and foster care benefits. They are also not allowed to seize various veterans benefits or combat pay. If you are receiving worker’s compensation for an accident, they are not able to levy those funds to pay your taxes.
If you are behind on your taxes, do not wait any longer. Contact Crepeau Morurges today for a consultation!