Danbury Tax Law Blog

According to the dictionary, a lien is the right of a creditor to take possession of someone else's property until that person's debt is paid or discharged. When it comes to taxes, the government has the right to take one's property if taxes are not paid. Connecticut residents who are facing tax liens may have options to deal with the situation before it becomes a significant issue.

If the government issues a tax lien, how does one get rid of it? There are three basic ways to deal with this type of issue; first is to pay the debt -- easier said than done if money is tight. The second is to work out an offer in compromise with the IRS -- which simply means that a payment plan is reached for all or a reduced amount of the taxes owed. Finally, the third is to consider bankruptcy. Taxes may be discharged if the circumstances are just right.

As a Connecticut business owner, one of the surest ways to find trouble with the IRS is through mistakes in payroll deductions. Laws regarding the deduction and payment of taxes from employee paychecks is complex and easy to misinterpret. However, some employers may misclassify their employees, which leaves workers without benefits and opens business owners to legal trouble.

If you own a business, you may have employees or independent contractors. Often, there is such a fine line between the two that even the workers may not be certain if they are employed by you or are independent contractors. However, clarifying the classification of each employee is essential to avoiding the serious penalties you may face if you fail to pay the appropriate payroll taxes.

Business owners will do what they can to limit their tax liability. In doing so, some may make mistakes that could cost them dearly in the end. Recently, the owner of Pasquale Furano Landscaping -- a 48-year-old male -- recently opted to enter a guilty plea rather than be indicted for tax evasion.

According to a recent report in the Connecticut Post, this individual is accused of under-reporting receipts on his federal 2009 to 2013 tax returns. The amount he is said to have failed to report is roughly $2.5 million. This means that, over a five-year period, he ended up paying just over $44,000 in taxes rather than the $580,000-plus that he actually owed.

Every year, you've completed your taxes to your best ability. You've either taken on the role of tax preparer yourself or you turned to a trusted individual to get everything filed for you. Your returns were accepted with no problem, and you paid or received a refund as expected. Then it happens -- you receive notice that you are being audited for a tax return submitted two years ago. You and other Connecticut residents like you who are facing tax audits can seek help to get through it unscathed.

No one wants to be audited. Sometimes, people are chosen at random and just have to put up with the process, and sometimes, the IRS actually has reason to question one's tax return, either due to a minor a glaring error. It doesn't matter why the audit is occurring; it is, and how you handle it matters.