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Danbury Tax Law Blog

Are fraud and negligence both tax crimes?

Receiving word from the Internal Revenue Service that something does not seem right on one's taxes can be alarming. As tax crimes are an issue in Connecticut and elsewhere, the IRS will take the time to investigate. Here is the thing, though — not everyone intentionally commits fraud when doing their taxes. Some people just make mistakes. Negligence and fraud are not the same things, and negligence is not necessarily a crime.

A person is said to have committed income tax fraud when he or she intentionally attempts to defraud the IRS or evade taxes. The key word in that sentence is intentionally. A few examples of tax fraud include:

  • Failing to file a tax return
  • Failure to pay taxes
  • Making false claims
  • Preparing a false return

A few facts about estate taxes

Those who own property in Connecticut, regardless if they are residents of the state, need to know what taxes will apply to them now or their estate when they pass away. Estate taxes, for example, are no joke and can cost a lot if the proper estate planning protections are not put in place. Here is what people need to understand about estate taxes.

Fact number one: not all estates will be taxed. In Connecticut, for an estate to be taxed, its value has to be over $2.6 million. There is currently a cap on estate taxes, which is set at $20 million. Meaning taxes will only have to be paid for that $20 million and nothing more. The cap will be reduced to $15 million in 2019.

Have a tax concern? A tax attorney may be able to help

When you think about your taxes, you probably think a tax preparer or an accountant is the person you need to talk to about any concerns you may have. While these individuals can offer some great guidance to Connecticut residents, they may not be able to address all of your concerns. A tax attorney, however, may be able to.

What is your tax concern? Do you have questions about income taxes? Business or sales tax? Lose a loved one and have estate tax questions? Maybe you are facing an audit or are accused of tax crimes.

What kind of taxes does your business pay?

No one likes to think about paying taxes. Even so, it's a necessary part of business. The IRS enjoys a significant amount of power when it comes to collecting the taxes it says your business owes.

When it comes to collecting taxes from a business, the IRS may do so from several different sources. In order to ensure that your company does not inadvertently fail to pay all of the taxes owed under all of the relevant categories, it may be beneficial to seek out the appropriate guidance. After all, this is something you certainly don't want to get wrong.

Remove tax liens from credit reports with 5 simple steps

Credit reporting is one way the Internal Revenue Service tries to get Connecticut residents to pay their taxes. When the IRS files tax liens, this information is sent to credit reporting companies and placed on one's credit report, which can do a lot of damage to one's already delicate financial situation. Those who have tax liens posted on their credit reports may have them removed by following these five simple steps.

Step number one: complete a tax lien withdrawal form. Known as IRS form 12277, it allows one to give written notice to the IRS about why removing the lien is in everyone's best interest. When filling out this form, it is good to reference the information provided in the original tax lien notification, but doing so is not necessary for one's request to be considered.

Connecticut residents facing tax audits do have rights

The hope every Connecticut resident has when filing taxes is that they will not hear anything but good news from the Internal Revenue Service. However, months or even years down the line, there are an unfortunate few who receive letters stating they have been selected for tax audits. Audit is a word that can strike fear into anyone's heart. Not to worry, though; when it happens, taxpayers are protected by the Taxpayer Bill of Rights.

Every single taxpayer is guaranteed certain rights when they find themselves having to deal with the IRS. Only a few of those rights will be addressed here. The first is the right to information about one's case. The IRS cannot keep taxpayers in the dark about why they are being audited. People have a right to know why they were chosen for an audit, what the procedures for the audit process are and what is going on with their case.

Are tax fraud and tax evasion the same thing?

It is not uncommon for certain terms to be used interchangeably. Tax fraud and tax evasion are often considered to be one in the same, but the truth is, tax fraud is just a type of tax evasion. Here is what Connecticut laws say about tax evasion and tax fraud.

If a person purposely makes fraudulent statements on his or her tax return, he or she is said to have committed tax fraud in an effort to evade paying his or her due share in taxes. The penalties for fraud include a fine of up to $1,000 and having to pay the amount evaded to the IRS. In order to be convicted on a tax fraud charge, prosecuting attorneys have to be able to prove that the accused willfully attempted to evade his or her tax obligation and had the intent to defraud.

Connecticut new online sales tax law take effect Dec. 1

Earlier this year, the U.S. Supreme Court made a decision that will affect those who sell products online. Online retailers are now required to pay sales taxes to the states in which they do business, whether or not they have a physical presence in those states. Connecticut was ahead of the game on this, as the governor had already signed a bill into law requiring online business owners who sell more than $250,000 in products or services to pay sales tax. The Connecticut-specific sales tax law takes effect Dec. 1.

For business owners in the state who only do a small amount of business online, this new sales tax law is not likely to affect them. It is meant to hold those business owners who primarily sell online responsible for meeting their tax obligation. This is something many online retailers have been failing to do for a long time.

Your divorce may leave you with unresolved income tax issues

Divorce is a complex process of dividing assets. Whether you reside in Connecticut or elsewhere, the problem with dividing certain assets is the income tax issues that are likely to follow if they are not divided the right way. A tax attorney may be able to assist you in decreasing your tax burden by helping you properly structure your divorce settlement.

What are some of the most commonly seen tax issues noted in divorce? First, there is the marital home. If the property is sold, one or both parties will have to make the tax payment on the sale.

When the IRS threatens wage garnishment

Among the many government agencies, the IRS may be the one people vilify most. After all, when a large percentage of your paycheck disappears before you even earn it, it's difficult not to have hard feelings about it. While you know the good things that are accomplished with your tax money, you also know there are many good things you can do with that money on your own.

Your opinion of the IRS has not improved since you fell behind on your taxes. If you owe the government money, you should be careful not to think of it as just another bill. The IRS has authorities that other creditors do not, and they will claim what you owe even if they have to garnish your wages.

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