When one leaves the workforce to retire, one would think that taxes would get easier. Unfortunately, they do not. There are a number of reasons why retirees in Connecticut may face tax audits.
The first reason to be discussed is: making too much money. Is there really such a thing as making too much money? According to the Internal Revenue Service, there is. Those who are retired and report incomes between $200,000 and $1 million are more likely to be audited.
Did you fail to file a tax return? Maybe you just did not make your full tax payment. Either way, you are one of the numerous Connecticut residents who owes back taxes, and the Internal Revenue Service has tacked on a significant amount in penalties to the amount you owe. What can you do?
If the penalties associated with back taxes are killing you financially, you may be able to do something about it. Yes, penalties are common when you fail to pay taxes, but sometimes, the IRS applies these penalties inappropriately. To see if that is happening in your case, let an experienced tax attorney look into your case.
Paying taxes is often unavoidable, especially for business owners. In fact, someone who runs a Connecticut business likely has numerous taxes to pay, including state employment taxes, income taxes and federal unemployment taxes. While it may be tempting to hold back taxes and claim them as profits, business owners who do so are subject to heavy penalties if the government catches up with them. Two restaurant owners are currently facing criminal charges for tax evasion and other accusations.
Apparently, the U.S. Department of Labor obtained information that a husband and wife who own a chain of sushi restaurants in another state had not paid their employees according to state law. The DOL notified the county's district attorney that the restauranteurs allegedly paid their workers with cash to avoid paying payroll taxes. The district attorney's office that filed the charges claims the couple owes over $1 million in payroll taxes and close to $270,000 in back wages for underpaying their workers.
Connecticut residents who have found themselves in the position of being unable to meet their tax obligations may have found themselves in trouble with the Internal Revenue Service. How exactly? They may have received notice that tax liens have been filed against them. Here are some things people need to understand about tax liens.
First, let's talk about the purpose of a tax lien. A tax lien allows the government to claim a person's property if he or she fails to pay taxes due. This basically gives the government first dibs on property should any other creditors come looking to collect on unpaid debts.
The IRS has a reputation for being ruthless and terrifying. While this may not necessarily be true, it may seem so if you have fallen behind on your taxes. The fact is that the IRS does have power that other creditors do not have to collect what it wants you to pay. However, the agency also offers numerous options to satisfy any debt it claims you owe.
If you are behind on your taxes or other bills, you may be tempted to leave your mail unopened, especially those envelopes with the IRS logo. This may be the worst decision since ignoring the demands for payment from the IRS can lead to swift and severe consequences.
When accused of any sort of crime, the first person Connecticut residents may think to call is a criminal defense attorney, which is understandable. While they can help on some level, when accused of tax crimes, a tax attorney with experience handling tax crimes cases may be a better option. The consequences associated with conviction on such crimes can be significant. Having someone who has a strong knowledge of tax law can certainly prove valuable to your case.
Being accused of a tax crime is not a small thing. It is certainly enough to throw anyone off their game and cause a lot of worry and frustration until the matter is resolved. It is understandable that you would feel that way. Thankfully, there are ways to address the problem and seek the best possible outcome.
Aside from paying taxes, the one thing just about everyone dreads is being picked for an audit. Tax audits, under certain circumstances, can have significant consequences. However, many people who are picked for audits really do not have a lot to worry about. The biggest cause of worry for most Connecticut residents really comes from not knowing how audits work.
Many people receive calls from automated machines saying that the Internal Revenue Service is investigating them. These calls are a scam and should be ignored. The IRS does not contact taxpayers that way. Those who are being audited will receive a letter in the mail. That letter will contain information about the tax year being questioned, what information is needed and the name and contact information of the agent handling one's case.
When going through the divorce process, taxes are probably the last thing on a person's mind, but they should not be. Divorce, and all that it entails, can cause some serious income tax issues for Connecticut residents. Take selling the marital home, for example.
Some couples choose to sell their home right away, while others choose to continue living in the residence during or even after divorce. There is no right or wrong way to go about this. It all depends on what the former couple feels comfortable doing. When they eventually choose to sell their home, there may be questions about which party gets to reap the tax exclusion benefit.
Business owners in Connecticut have a lot of responsibilities. Dealing with sales tax is one of them. Connecticut is, after all, of the many states that require sales tax be collected, reported and paid on all taxable products and services.
So, how does one go about collecting sales tax? First, one needs to determine how much sales tax to charge for certain products and services. Unfortunately, there are different rates for different things, and the rates are subject to change from year to year. Once the tax is figured out, it is a matter of adding to the product cost at the register.
You have certainly heard horror stories about people dealing with the Internal Revenue Service. The IRS has long carried a reputation for coming down hard on citizens who fail to pay their taxes. While it is true that the government can exact stiff penalties on those who intentionally evade paying what they owe, you may be relieved to know that the IRS also offers numerous options for people who intend to pay their taxes but simply have no way of affording to.
One of those programs is the offer in compromise. Through this program, you may be able to settle your tax debt for less than you owe. However, because so many have taken advantage of the option, the IRS has made it more difficult to qualify.
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