Best Tax Attorneys in Woodbridge, VA

The foreign financial institutions send FATCA letters to account holders because they are required to share the information of US persons (i.e. US citizens, residents, and domestic businesses) with the IRS. These FATCA letters request the account holders to confirm whether they are a US person. Even if the account holders do not reply to the FATCA letters, the foreign financial institution will share the account information with the IRS. If a taxpayer has not fully reported his or her worldwide income or reported the foreign accounts on an FBAR, the taxpayer should speak with a tax attorney to discuss resolution options upon receipt of a FATCA letter.

By assessing the Trust Fund Recovery against the business owner, the IRS now has the legal authority to pursue both the business and the owner for the full balance of the trust fund taxes. If the tax debt exceeds $10,000, it is likely that the IRS will file tax liens against the business and the owner. Before the IRS will consider collection alternatives, both the business and the owner need to be in current filing and payment compliance. The business and the owner need to ensure that all tax returns for all prior periods have been filed. Additionally, the business needs to make all required federal tax deposits for the current quarter. The owner needs to make all required estimated tax payments for the current year. The IRS is less likely to shut down a business if it is in current filing and payment compliance. Only in an egregious situation would a taxpayer be in a circumstance where the IRS would take his or her home. The IRS will release an IRS levy (i.e. wage garnishment or seizure of bank account) if it is causing an economic hardship. The business needs to separately provide a collection alternative to the IRS. This typically involves an installment agreement. As long as the business abides by the terms of the installment agreement, the IRS will not pursue tax collection against the business owner.

The IRS typically selects tax returns for examination based upon red flags such as unreported income or larger than normal deductions. A smaller amount of tax returns is selected at random for audit. Preparation is the key to successful audit defense. The IRS examiner will have many questions about the tax return. It is not recommended that the taxpayer handles the audit on their own because anything the taxpayer says could be used against them. If the IRS examiner starts to get suspicious about the taxpayer, the scope of the examination may increase for the tax return at issue and may open additional tax years to the audit. Legal counsel will answer the IRS questions and support the positions taken on the tax return to minimize the assessment of additional tax. Taxpayers with substantially underreported income or overstated deductions should stop all communications with their accountant upon receipt of the audit examination letter. In this situation, the accountant may be forced to testify against the taxpayer. Attorney-client privilege prevents the government from compelling the attorney from disclosing confidential communications related to legal advice.

Generally speaking, individuals can discharge their income tax debt if the following four requirements are met: Three years have passed since the tax return was due, Two years have passed since the tax return was filed, 240 days have passed since the tax assessment, and The tax returns were not fraudulent. Before filing for bankruptcy, it is very important to determine if the income tax debt is dischargeable.