Ten Year-end Tax Moves To Make Now!

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Tax planning: What’s the good news? It’s never a waste of time… there still are some tax breaks on the books that you can use to your advantage before the end of 2014. Some types of time or monetary investments have risks, but not tax-planning. This is why EVERYONE should do it.

The bad news is that there is no guarantee that all the extenders (there is more than 50 business and individual tax breaks) — including popular things such as the higher education tuition and fees deduction, and itemized claims for state and local sales taxes and private mortgage insurance payments — will be renewed after December 31, 2014. Lawmakers are expected to consider, or extend (hence the laws’ collective name) after the November 4th election.

Some tax moves will take a little planning. Others are very easy to accomplish. But all are worth checking out to see if they can reduce your tax bill.

Following are ten year-end tax moves to make before New Year’s Day.

1. Defer your income

The top tax rate is 39.6% on taxable income of more than $406,750 for single taxpayers; $457,600 for married couples filing joint returns ($228,800 if filing separately); and $432,200 for head-of-household taxpayers. If your remaining pay will push you into the top tax bracket, defer receipt of money where you can.

Ask your boss to hold your bonus until January. Put more money into your tax-deferred workplace retirement plan. Hold off on selling assets that will produce a capital gain. If you’re self-employed, don’t send out invoices for year-end jobs until early 2014.

This strategy works even if you are not in the top tax bracket, but just about to cross into the next higher one.

2. Add to your 401(k)

Even if you are nowhere near the top tax bracket, putting as much money as you can into your company’s 401(k) or similar workplace retirement savings plan is a good idea. Since most plan contributions are made before taxes are taken out, you will have a bit less income that the IRS can touch. Exceptions are contributions to Roth 401(k) plans, where you put away after-tax money and get tax-free growth. Plus, the sooner you put the money into the account, the longer the earnings will grow tax-deferred.

Few of us will reach the maximum $17,500 that employees can stash in a 401(k), but any amount you can contribute is good. If you are age 50 or older, you can put in an extra $5,500.

In most cases, you can modify your 401(k) contributions at any time, but double-check with your benefits office to be sure of your plan’s rules.

3. Review your FSA amounts

Another workplace benefit, the medical flexible spending account, or FSA, also requires year-end attention so you do not waste it. You can contribute up to $2,500 to an FSA via paycheck withdrawals. If that limit seems lower, you’re right. As part of the Affordable Care Act the maximum contribution amount was set at $2,500; before the health care law change there was no statutory limit.

As with 401(k) plans, money goes into an FSA before your taxes are calculated, saving you some tax dollars. But if you leave any money in your FSA, you lose it. Some companies allow a grace period into the next year to use the untouched FSA funds, but not all. And though the U.S. Treasury recently announced a change in the use-it-or-lose-it rule, allowing account holders to carry over up to $500 in excess money into the next benefit year, your company has to take steps to adopt it.

Be sure to check with your employer, and if you must use your FSA money by December 31st, make sure you do.

4. Harvest tax losses

If you have assets in your portfolio that have lost value, they could be a valuable tax tool. Capital losses can be used to offset any capital gains. If you have more losses than gains, you can use up to $3,000 to reduce your ordinary income amount. More than $3,000 can be carried forward to future tax years.

Capital losses could be especially helpful to higher income taxpayers facing the 3.8% Net Investment Income Tax. This surtax, part of the Affordable Care Act, applies to the unearned income of taxpayers with modified adjusted gross incomes of more than $200,000 if they are single or head of the household; $250,000 if married and filing jointly; and $125,000 if married and filing separately. High earners with investment income can reduce this new tax burden by using capital losses to reduce their taxable amount.

If you do face the 3.8% surtax, consult with your financial adviser and tax professional. In addition to figuring your modified adjusted gross income, you must take into account the different types of investment earnings that are subject to the tax and how to appropriately calculate losses within each category.

5. Make the most of your home

Homeownership provides a variety of tax breaks, some of which you can use by year-end to reduce your current year’s tax bill. Make your January mortgage payment by December 31st and deduct the mortgage interest on your coming tax return. The same is true for early property tax payments.

6. Bunch your deductible expenses

Taxpayers who itemize know there are many ways on Schedule A to reduce adjusted gross income, or AGI, to a lower taxable income level. But in several instances, deductions must be more than a certain threshold amount.

Medical and dental expenses, for example, cannot be deducted unless they exceed 10% of AGI. Miscellaneous expenses, which include business expense claims, must be more than 2% of AGI.

To get over these deduction hurdles, start consolidating eligible expenses now. This strategy, known as bunching deductions, will push them into one tax year where you can make maximum tax use of them. The sooner you start this process, the better. It’s much easier to plan your costs now than scramble to come up with eligible expenditures as December days fade.

7. Add to or open an IRA

Remember that added money you put in your 401(k) to lower your taxable income? Bulk up your retirement planning even more by contributing to an individual retirement account.

If you have an IRA account or open a traditional IRA, you might be able to deduct at least some of your contributions on your tax return. If you don’t make a lot of money, your contribution also could be used to claim the retirement savings contributions credit.

Even if you won’t get a deduction, you’ll be adding to your nest egg so that you can retire on your terms. And while it’s true you can wait until the April 15 filing deadline to contribute for the previous tax year, the sooner you put money into an IRA, traditional or Roth, the sooner it can start earning more for your golden years.

Self-employed workers also get an added retirement saving benefit. There are a variety of plans — SEP-IRAs, Keoghs, solo 401(k) plans — into which you can put some of your self-employment earnings. If you are a sole proprietor, your contribution to a self-employed retirement plan also is deductible on your tax return.

8. Be generous to charities

As you are putting together your holiday shopping list, be sure to include charitable gifts that could help reduce your tax bill. In addition to the usual dollar donations or household goods and clothing, consider some less traditional ways to give to charities.

Many groups will accept vehicles, with some even making arrangements to pick up the jalopies.

Donate stock or mutual funds that you’ve held for more than a year but that no longer fit your investment goals. The charity gets the asset to hold or sell, and your portfolio rebalancing nets you a deduction for the asset’s value at the time of gifting. Even better, you do not have to worry about capital gains taxes on the appreciation of your gift.

9. Pay college costs early

The spring semester’s bill isn’t due until January, but it might be worthwhile to pay it before year’s end. By doing so, you can claim the American Opportunity Tax Credit on this year’s tax return.

The American Opportunity credit replaced the Hope tax credit in 2009 and is in effect through the 2017 tax year. It’s worth up to $2,500 with up to 40% of the new credit refundable. That means you could get as much as $1,000 back as a tax refund even if you don’t owe any taxes.

Tuition, fees and course materials for four years of undergraduate studies are eligible expenses under the American Opportunity credit. This includes education expenses made during the current tax year, as well as expenses paid toward classes that begin in the first three months of the next year.

10. Adjust your withholding

Did you write the U.S. Treasury a big check in April? Or did you get a large refund from Uncle Sam instead? Neither is a particularly good financial or tax plan.

Most of us cover our eventual tax bills through payroll withholding. Ideally, you want the amount coming out of your paychecks throughout the year to be as close as possible to your final tax bill. If you have too much withheld, you’ll get a refund; too little withheld will mean you’ll owe taxes when you file.

You can correct the imbalance by adjusting your payroll withholding now. The correct amount taken out of your final 2014 paychecks will help ensure that you don’t over- or underpay the tax collector too much next filing season

What Should You Do?

You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

How To Make Your Clothing, Uniforms and Costumes Tax Deductible?

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Now when I think of Halloween, I look forward to seeing all of the different costumes that people wear. Some are very extravagant and I am sure pricey. And for some they would like to know how that can be deductible. Since costumes fall under the category of clothing or uniforms, you need to be aware of what the tax law requires.

The tax law requires the following three elements for clothing useful only in the business environment to be deductible:

  1. The clothing is required or essential in the taxpayer’s employment;
  2. The clothing is not suitable for general or personal wear; and
  3. The clothing is not so worn for general or personal wear.

If these three requirements are satisfied, not only is the cost of the closing deductible but also its upkeep.

Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc.).  Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear.

Work Clothes Of Painters And Welders.

But let’s say that you are a painter and you are required by your union to wear on the job a white cap, white shirt or white jacket, white bib overalls, and standard work shoes and there is nothing on any of the clothes that indicate the company this you work for. You would think this to be deductible but the IRS would say no because the clothes are not distinctive.  Similarly, blue work clothes worn by a welder are not deductible even if the foreman requires them.  However, required protective clothing like safety boots, safety glasses, hard hats, and work gloves are deductible. Likewise, just by adding the company’s logo on the clothing will make it deductible even if it can be worn outside the scope of employment because you are advertising your company. In that case you are a walking billboard.

Military Uniforms.

We have a large military presence here in San Diego County so we are asked many times what rules apply for military uniforms?  You generally cannot deduct uniforms if you are on full-time active duty in the armed forces.  However, reservists can deduct the unreimbursed cost of uniforms if military regulations restrict wearing it except on duty.  Still, you must reduce your deduction by any nontaxable allowance you receive.  If local military rules don’t allow wearing fatigues off duty, you can deduct the amount by which your uniform cost exceeds your uniform allowance. 

“Business Attire”.

Given today’s dot.com and casual era environment, people are not coming to work as dressed up as they used to. So could lawyers and others argue their suits are just like uniforms and therefore ought to be tax deductible?  No. Where business clothes are suitable for general wear, there’s no deduction even if these particular clothes would not have been purchased but for the employment. 

Is Being On TV Any Different?  

While these tax rules are pretty circumscribed, they are also intensively factual.  Someone is always pushing the tax envelope.  Such was the case with an Ohio TV news anchor, Anietra Y. Hamper. She was claiming approximately $20,000 a year in 2005, 2006, 2007 and 2008 in clothing expense that included not only what she wore for each broadcast but also lounge wear, a robe, sportswear, lingerie, thong underwear, an Ohio State jersey, jewelry, running shoes, dry cleaning, business gifts, cable TV, contact lenses, cosmetics, gym memberships, haircuts, Internet access, self-defense classes, and her subscriptions to Cosmo, Glamour, Newsweek, and Nickelodeon.  Her argument was that as a TV anchor she was required to maintain a specified appearance described in the Women’s Wardrobe Guidelines.  These guidelines say the “ideal in selecting an outfit for on-air use should be the selection of ‘standard business wear’, typical of that which one might wear on any business day in a normal office setting anywhere in the USA”. The IRS and U.S. Tax Court did not agree stating that where business clothes are suitable for general wear, there’s no deduction even if these particular clothes would not have been purchased but for the employment.  For this TV anchor, that was no help.  She claimed the requirement to dress conservatively made the clothing unsuitable for everyday, and that’s how she treated it.  She wore the business clothing only at work and even kept it separate from her personal clothing.  Not only did the IRS and Tax Court denied her wardrobe deductions, they added penalties.

And Finally A Winner!

There is one group that in the history of tax law prevailed in getting their costumes deducted – that was the Swedish disco group ABBA! According to ABBA: The Official Photo Book, released to commemorate the 40th anniversary of the group career-making Eurovision victory for Waterloo, the Swedish foursome adopted their outlandish dressing style in order to ensure they could deduct the cost of their costumes under Swedish tax code. Like U.S. tax law, Swedish laws allowed work wear to be tax deductible so long as it was demonstrably apparel that couldn’t be worn on the street – which, with its garish coloring and liberal use of sparkle, ABBA’s certainly was.

What Should You Do?

Now while you will find no one at the Law Offices Of Jeffrey B. Kahn, P.C. wearing outlandish costumes, we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

 

How To Make Your Halloween Candy Tax Deductible?

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You can in fact deduct Halloween candy if you figure out a way to make it business related. The IRS doesn’t say a lot about this topic because they don’t want to give you “permission” to deduct these items, but they also have not specifically stated that you cannot deduct Halloween candy.

Here are five ways to deduct those over-priced bags of snack size chocolates:

1. Make a promotion out of it. Attach your business card or a promotional flyer to packets of M&M’s and voila! Deductible.

2. There are many companies who will print candy wrappers with your logo on it. An even better and more advanced way to promote your business and still have something for trick-or-treaters.

3. Send a box of candy to potential or existing clients during October. This promotes your business and would likely not be questioned as a business deduction.

4. Donate any leftover candy to the US troops. Charitable organizations with 501(3)(c) status like Operation Gratitude (EIN 20-0103575) and Soldiers’ Angels (EIN 20-0583415) collect leftover Halloween candy to include in care packages for soldiers. They are two of many 501(c)(3) organizations on the IRS-approved list to donate tax deductible charitable goods. Always be sure to check the IRS list before claiming your donations are tax deductible, as status can change.

5. Make it a party. You can deduct a portion of a Halloween party if the party is to conduct or promote business. Typically this looks like an open house of some sort where you mingle with current and potential clients, play a few Halloween games, give out candy and treats, and discuss business. The IRS does not specify how much time you must spend discussing the business to claim a deduction but you must invite people that you do business with or are looking to do business with.

What Should You Do?

You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

Trick Or Treat – Fake IRS Agents Stealing You Identity And Scamming You For Money.

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With Halloween coming up, it is just not the neighbor kids looking forward to trick or treat but also people pretending that they are the Internal Revenue Service looking to steal your identity and scam you for your money.

The scam artists exploiting innocent law-abiding taxpayers has been a big problem for the IRS and despite issuing multiple consumer alerts, the bogus emails, the bogus IRS letters and the bogus telephone calls continue and unfortunately taxpayers are still falling for this. The government estimates that taxpayers have lost roughly $5 million to scammers.

Every week our office receives about a half-dozen inquiries from taxpayers asking whether the communication they just received is really from the IRS. I do not want you to become the next victim of any such scam so read on to what we have to say.

The communication methods used by the scammers are email, letters and telephone calls. The scammers are still going strong doing this to people who are unsuspecting and don’t know how systems work and could very easily frighten them to turn over money. So I am going to break down each type of fraudulent communication for you and give you the warning signs and tips that you should be aware of.

Emails.

When identity theft takes place over the Internet, it is called phishing. Phishing (as in “fishing for information” and “hooking” victims) is a scam where Internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund.

Remember, too, the IRS does not use unsolicited email, text messages or any social media to discuss your personal tax issue so if this is the form of communication used – avoid it like you would avoid the plague.

Letters.

If you receive a notice regarding your taxes which does not bear the official seal of the Internal Revenue Service and an official verifiable address of an IRS office or Service Center, that is a sign that it really isn’t the IRS sending you a notice.

The most recent scam that the public has told our office involves a sophisticated fraudulent tax collection notice scam targeting taxpayers for which the IRS has filed a Federal Tax Lien.

Here is how it works: The scammers will search public records for the filing of a Federal Tax Lien by IRS and with the information gathered from that filing will generate a form letter and mail it to the targeted taxpayer. The letter is designed to mimic an IRS notice but it is really coming from a third party having nothing to do with the IRS. If the recipient of the notice contacts the number listed, the person answering your call will purport to be working for the IRS. The intended victim is told he or she owes money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, he or she is then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the person who answered your call becomes hostile and insulting.

Telephone.

These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves. They may know a lot about you and may be able to recite the last four digits of a victim’s Social Security Number and your place of business. They usually alter the caller ID to make it look like the IRS is calling – many times they will use a Washington, D.C. area code. The area codes for the Washington D.C. area are 202, 301 and 703. They will also background noise of other calls being conducted to mimic a call site. If you don’t answer, they often leave an “urgent” callback request and if they have your email address, will send bogus IRS emails to some victims to support their bogus calls. After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

How Do You Recognize That This Call Is Fake?

Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:

  1. Call you about taxes you owe without first mailing you an official notice.
  2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  4. Ask for credit or debit card numbers over the phone.
  5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

So What Should You Do?

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484. So far for this year, the government has received more than 90,000 calls.

And if you do owe taxes and you have not already resolved this with the IRS, then that is where we come in. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

My Halloween Nightmare – How I Almost Lost My Identity And Money To A Fake IRS Agent.

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With Halloween coming up, it is just not the neighbor kids looking forward to trick or treat but also people pretending that they are the Internal Revenue Service looking to steal your identity and scam you for your money.

Listen to the story of Arati who works in New York City and immigrated to the U.S. from India. Arati received a call from a Brian Cruz who called her house early in the morning before Arati left for work. He left his telephone number, name and noted he was calling from the IRS. Arati put the number in her cell phone without searching for it online first. After all it had a 202 area code which is Washington D.C. so she figured it had to be official. Once she got into her car she called, and the man who picked up the call answered that this was the investigations bureau for the IRS. Arati asked for Cruz, but he wasn’t available. The man who picked up the call told Arati to give him the telephone number where Cruz left the message. She did, and then it began.

After the man confirmed Arati’s home telephone number, he stated that she attempted to defraud the IRS, and that the government was now taking legal action against her including issuing a warrant for her arrest within the next hour. When Arati asked what this was all about, he asked if she aware of an investigation against her. Arati replied “I have no clue about an investigation. This is the first time I’m hearing about any of this”. Arati started to panic. The man asked if Arati had a lawyer, and then told her about the investigation ordering her not to interrupt him while he speaks. He then recited the last four digits of Arati’s social security number and recited where she worked. He seemed to know all of Arati’s personal information. He told Arati that she failed to declare all of her income and engaged in tax fraud. He then told Arati that the government was seizing all property and all assets in her name that it had already froze her bank and credit card accounts, suspended her driver’s license as well as her passport. Furthermore, there would be a massive penalty, plus possible jail-time and that her social security number was now blacklisted.

Arati listened with fear to this man who went on to tell me someone would be waiting at her office to arrest her. When she interrupted him to ask why this was the first time she was hearing about this, he ignored her question, paused and began repeating the details of the investigation. Arati then asked again why this was the first time she was hearing about it. His reply: “This isn’t our first attempt to make you aware. We came to your house but you were not home.” Arati then asked what she owed the government. He replied approximately $4,900. Arati then asked why she couldn’t just pay him the amount owed. He told her that the investigation was beyond the point of payment–it was too late.

The man then asked Arati questions like: Have you been part of any previous tax fraud cases? Are there currently any judgments against you? Are there any lawsuits pending against you? The man then stated that since the warrant for Arati’s arrest had yet to be issued, she could pay the amount owed and avoid the legal mess he’d been threatening her with by wiring the amount owed or delivering a check to him.

Now at this point Arati was starting to think that something was wrong. Being an IRS agent, wouldn’t he already have records showing that she has a clean record? Wouldn’t she have been audited if the IRS believed she owed taxes? Why would the IRS look to take such drastic action for only a $4,900 liability? Arati started to doubt the man and when she pressed him to independently confirm that he works for the IRS, he replied: “How would you even find me using the IRS 1-800 number? This is my direct line. Do you want to find out if I’m a real IRS agent? You’ll see in an hour when the arrest warrant is issued.” Then, he hung up. Arati then showed up at work and no agents were waiting for her.

I tell you this true story so you can get an idea on how far these scam artists are willing to go.

So What Should You Do?

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484. So far for this year, the government has received more than 90,000 calls.

And if you do owe taxes and you have not already resolved this with the IRS, then that is where we come in. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

Tax Time – Why We Pay.

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It began with an earthquake. What hit San Francisco in 1906 was one of the worst natural disasters in American history. Once the water mains broke, there was no way to fight the dozens of fires caused by ruptured gas mains, except by dynamiting buildings in the fire’s path, which made things worse. People raced to the San Francisco Bay and boarded ferries to escape the flames. The fires lasted for days. A handful of men rushed to the banks, but before long all that was left of the city’s deposit and lending institutions, aside from rubble and ashes, were their fireproof steel vaults: red hot, smoking, and locked. More than 3,000 people died, including the city’s fire chief, who fell two stories after the dome of the California Hotel crashed into the fire station. Most of the city was destroyed.

Economic aftershocks were felt as far away as London. Twelve insurance companies went bankrupt, and, after a gold shortage and a doomed scheme to corner the copper market, the Knickerbocker, the second-largest trust in New York, failed, setting off the Panic of 1907. The New York Stock Exchange nearly collapsed. So did the United States Treasury.

The Panic of 1907 contributed to the passage of the Sixteenth Amendment, in 1913, which granted Congress the right to levy an income tax, and to the establishment of a central banking system, the Federal Reserve. Both the Sixteenth Amendment and the Federal Reserve turned a hundred years old in 2013.

Constitutional amendments are notoriously difficult to ratify. The Sixteenth Amendment was not. Once it got out of Congress, it passed, handily, in 42 of 48 states, six more than required, and took effect on February 25, 1913. The House voted on an income-tax bill in May; Woodrow Wilson signed it in October. Its highest rate was 7%. The next year, the Bureau of Internal Revenue printed its first 1040. The form was three pages, the instructions just one.

Taxes have got a lot hairier since. The Revenue Act of 1916, anticipating the United States’ entry into the war in Europe, raised taxes on incomes, doubled a tax on corporate earnings, eliminated an exemption for dividend income, and introduced an estate tax and a tax on excess profits. Rates on the wealthiest Americans began to skyrocket, from 7% to 77%, but most people paid no tax at all. By 1918 only about 15% of American families had to pay personal income taxes, and the tax payments of the wealthiest 1% of American families accounted for about 80% of the revenues.

Taxes are what we pay for civilized society, for modernity, and for prosperity. The wealthy pay more because they have benefitted more. Taxes, well laid and well spent, insure domestic tranquility, provide for the common defense, and promote the general welfare. Taxes protect property and the environment; taxes make business possible. Taxes pay for roads and schools and bridges and police and teachers. Taxes pay for doctors and nursing homes and medicine. During an emergency, like an earthquake or a hurricane, taxes pay for rescue workers, shelters, and services. For people whose lives are devastated by other kinds of disaster, like the disaster of poverty, taxes pay, even, for food.

What’s surprising, given how much money and passion have been spent to defeat a broad-based, progressive income tax over the past century, and how poorly it has been defended, is that it has endured. In addition, the IRS which is government agency charged with administering the tax laws and enforcing compliance has become one of the largest and most powerful government agencies.

Let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble! And it all started with an earthquake in San Francisco.

Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

When Should You Lawyer Up When Dealing With the IRS?

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If you receive a notice from the IRS regarding small mistakes and omissions with your income tax return, you can probably deal with the IRS directly or by giving your tax preparer a quick call. However, if there is any chance your case could go sour, you need to call a qualified and experienced tax attorney, and pronto. A good rule of thumb is that if you’re asking yourself whether it’s serious enough to merit calling a tax attorney, it probably is.

Maybe these two true life stories will help:

In January 2014, Beanie Beans founder Ty Werner was convicted of evading $5.5 million in taxes owed on the $27 million in interest accrued from millions of dollars stashed away in a Swiss bank account. The sentence? Two years on probation and some hefty fines, which were small change for a billionaire like Werner.

Unrelated, and a couple of months earlier, Daniel Thody, a defense contractor was found guilty to five counts of tax evasion for failing to report $15,000 and $50,000 in taxes from $1.8 million earned as a contractor for the Department of Defense. He faces up to 25 years in prison, 5 years for each count.

Which one do you think hired a tax attorney and which one thought representing himself would be the smarter option?

Three good reasons you should lawyer up when dealing with the IRS:

1. Taxpayers with Legal Counsel are Treated Better. It’s unfair, even illegal, but it’s also human nature. IRS agents are flesh and blood and if they can get away with bullying someone into their interpretation of the law, they probably will. A tax attorney can ensure the IRS is playing by the rules and treating you fairly. IRS investigators are much more careful about asking inappropriate questions or wasting your time with unnecessary requirements, if they know they are dealing with a tax attorney.

You don’t have to worry about an IRS agent getting upset with you for hiring a tax attorney either. The good ones prefer dealing with tax professionals because they don’t have to waste their time and patience explaining you the ABC’s of a tax audit or the basic IRS guidelines for a criminal investigation. In fact, hiring an experienced tax attorney is generally seen as a sign of good faith to resolve your tax issues.

2. The IRS Has Serious Muscle. The IRS is a behemoth of an agency, one of the most powerful organizations on the planet. From 2008 through to 2014, over 50 bankers from Switzerland, India, Israel and other countries have been indicted for helping rich Americans squirrel billions of dollars into offshore accounts.

If you think this is just posturing, you may want to talk to former banker Raoul Weil. In October 2013, he was picked up in Italy while on vacation with his wife and extradited to the United States. He is now on trial for conspiring to help thousands of Americans hide $20 billion in numbered accounts at UBS.

In 2013, the IRS also cracked the code of silence of Swiss financial institutions and got UBS, the largest Swiss Bank, to divulge confidential information on American tax evaders, and pay a $780 million penalty.

3. Only a Tax Attorney Can Represent You in a Criminal Investigation. When it comes to tax planning, business budgeting and asset management, a CPA is – all things being equal – more useful than a tax attorney is. But when you have a dispute with the IRS, especially if you’re accused of tax fraud or tax evasion, a tax attorney is the only intelligent choice. Tax attorneys are the only ones who can represent you in a court of law and provide you the legal advice and analysis you need. Anything discussed with your tax attorney is protected under the attorney-client privilege. Unlike CPA’s and accountants, attorneys cannot be subpoenaed to testify against a client in a criminal procedure.

What Should You Do?

Tax attorneys know how the IRS operates. So they know what to say, what not to say, and what buttons to push when negotiating your case. Hiring a tax attorney sends the IRS a clear and powerful message. You’re taking the investigation seriously; you’re not going to let IRS agents push you around; and you want to work with the IRS to avoid criminal charges.

Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

With All The Identity Theft Going On With IRS, Maybe e-filing Isn’t Worth It?

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Identity theft cost the Internal Revenue Service $5.2 billion in tax year 2013, according to an analysis from the U.S. Government Accountability Office. While the IRS estimates it prevented $24.2 billion in fraudulent refunds, there are still thousands of taxpayers whose tax refunds were delayed because a criminal beat them to the joyous task of filing tax returns.

Regardless of the fact that it’s not the best budgeting strategy, people often rely on their tax refunds to pay bills. When an identity thief files a fraudulent return which is usually done through the IRS e-filing system using someone’s Social Security number, that person won’t know about the fraud till they attempt to file themselves, and instead of the speedy refund they may have been counting on, they may have no idea when they’ll get their money from the IRS.

E-filing your taxes might appear to be the easiest, most convenient solution, but sometimes appearances can be deceiving. A few disadvantages associated with e-filing might make you think twice the next time you are filing a tax return. By knowing the cons of filing and not just the pros, you can choose which method is right for you.

Identity Theft

Although online tax software is secure, your own computer might provide an opening for a thief to steal your identity while you’re filing your taxes online. A virus or malware on your computer could grab passwords or financial data. If you use a tax program in an airport, Wi-Fi hotspot or other public location, your computer needs a strong firewall to keep others from accessing your information. Make sure to keep your security and antivirus software programs updated in order to avoid identity theft issues.

Cost

While filing by mail only costs the price of a stamp, e-filing can be more expensive. Tax filing software can be expensive and the price increases if you have to file state taxes or business taxes. The IRS offers a free online filling service, but it is only available to people who have an adjusted gross income of less than $57,000 a year.

Complicated Tax Forms

Although online tax programs that provide e-filing may be the most efficient methods, they may not be the best choice if you have a unique situation or a complicated tax return. If you own many types of investments or are part of a corporation, for example, your tax return may involve many finely detailed laws that tax software just is not sufficient enough to cover. Trying to get help on a complicated tax question from a website help desk may not be nearly as useful as getting help from an in-person tax professional.

Computer and Internet Glitches

Software glitches and Internet issues can cause unexpected problems for people who file electronically, especially if they wait until the last minute. Tax websites are typically swamped on the last day and could experience system slowdowns or errors. In addition, if your computer breaks down and you’re filing the night taxes are due, you might be out of luck. Problems can also happen after filing. In 2012, a glitch in the IRS software delayed refund payments only to taxpayers who filed online.

Not Fileable

Sometimes you might pay money for tax software and spend time preparing your taxes to be filed electronically, only to find that you’re ineligible to e-file. This can happen due to user error or other more serious issues. The IRS and state governments do not allow certain types of taxes to be e-filed, such as returns without any taxable income, prior-year tax returns or more than five tax returns filed using the same tax software.

Choosing to File by Mail or Online

Of course, there are advantages to filing online also, such as having fewer errors because the errors are caught quicker by the tax software and the digital submission will speed up the issuance of your refund. But until the IRS discontinues paper filing of tax returns, it is up to the individual taxpayer which method is best for his particular situation.

What You Should Do If You Really Do Have Tax Issues?

The tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego, San Francisco and elsewhere in California know exactly what to say and handle the IRS.  Our experience and expertise not only levels the playing field but also puts you in the driver’s seat as we take full control of resolving your tax problems.

Description: The Law Offices Of Jeffrey B. Kahn, P.C. has helped many people avoid collection action by the IRS and State tax agencies. Working with one of our tax attorneys is the best bet for reducing or eliminating the amount you owe.

Have You Been Subpoenaed To Appear Before A Grand Jury?

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Federal grand juries have a maximum of 23 members, 16 of whom must be present to form a quorum. Indictments are returned by a vote of 12 or more members. Federal grand juries typically sit for a term of 18 months and meet at regular intervals. Grand juries can use the court’s power to subpoena evidence.  A subpoena (which translates, essentially, as “subject to sanction”) commands someone to do something.  The subpoenas are actually issued by the court clerk’s office.

The prosecutor will go to the court clerk’s office and obtain blank subpoenas.   The prosecutor then fills them in, putting in the name of the person or corporation that is being subpoenaed, and telling them what they have to do (testify or produce documents) and when they have to do it.  The prosecutor then has someone–often a police officer or federal marshal–serve the subpoena on the person the government seeks to compel.

Someone who receives a subpoena from a grand jury has three choices:  (1) comply with the subpoena; (2) convince a court that he or she does not have to comply with it; or (3) refuse to comply and be held in contempt.

You comply with a grand jury subpoena by doing what it tells you to do. If it says you are to show up before the grand jury at a given time on a specified date and testify, you do that. If it says you are to show up at that date and time and produce documents or other evidence for the grand jury to review, you do that. 

If you think you shouldn’t have to comply with the subpoena, you would need to persuade the court to quash the subpoena. The two main defenses to quash a grand jury subpoena would be that by that making you comply with it would violate your constitutional rights or that what it asks you to do is “unreasonable or oppressive”. Usually though the court in such actions will usually modify the subpoena so that you are ordered to answer questions that do not violate your constitutional rights and ordering that the grand jury does not ask questions that if answered would violate your constitutional rights. Where you are claiming that the subpoena is unreasonable or oppressive the Court usually will modify the subpoena so that you will be able to do what it tells you to do.

If you simply refuse to do what the subpoena orders you to do, the prosecutor, acting on behalf of the grand jury, will ask the court to hold you in civil contempt.  Unless you have a very good reason for not complying, the court will do so. 

Civil contempt is not a crime.   It is, instead, a way the court coerces you into doing what the grand jury wants you to do.  Once you’re held in civil contempt, you will be locked up until you agree to comply with the subpoena or until the grand jury’s term ends, whichever comes first.   Once the grand jury has been dissolved, the subpoena is no longer valid and you can’t be held in contempt.  Of course, a prosecutor can re-subpoena you to testify before a new grand jury and if again you refuse, you can be held in civil contempt and locked up until that grand jury’s term ends, which could be another year and a half or even two.

Here are 9 tips you must know about the federal grand jury.

1. Keep Your Attorney Close At Hand. Your lawyer can’t be with you in the grand jury room, but he can be right outside the room and you have the right to consult with him after each and every question. In fact, you can spend as much time as you need conferring with your lawyer, as long as you are not attempting to disrupt the grand jury process. You can also leave the grand jury room in order to brief your attorney about the questions being asked and your responses. In most federal jurisdictions you can also take notes of any questions asked during the grand jury session. These can later be shared with your attorney.

2. Don’t Agree to Interviews With The Government Before Your Appearance. You are under no obligation to talk to government agents before the grand jury process begins. Some Assistant United States Attorneys trick unrepresented persons into interviewing with federal agents prior to the beginning of the grand jury session. The letter accompanying the witness’ subpoena may ask or direct the witness to appear an hour or two early at the grand jury room or the U.S. Attorney’s Office. These pre-grand jury interviews are dangerous and ill-advised and the government has no authority to compel them. You may make a harmful admission during one of these interviews. In addition, you may be accused of lying to a government agent during the interview. Lying to government agents during an interview, like lying to the grand jury, is a federal crime. At the grand jury session, however, there will be an official recording and/or transcript of the proceedings, so there will be no dispute about what you say. The pre-grand jury agent interview will not be recorded. Two federal agents will take notes of what you say and it will be their word against yours in the event of a dispute.

3. Don’t Be Bullied Or Misled About Grand Jury Secrecy. Federal grand jurors, grand jury court reporters and the prosecutors running the grand jury are under a strict duty to keep any “matter occurring before the grand jury” a secret. This duty is codified in Rule 6(e) of the Federal Rules of Criminal Procedure. Violations of this rule can result in sanctions or criminal contempt charges against a prosecutor. But the rule of secrecy does not apply to federal grand jury witnesses. If you are a grand jury witness, you have the right to tell the whole world about your grand jury testimony. Of course, it may not be in your interest to do this-you may want to keep your appearance before the grand jury under close wraps. You need to understand, however, that it is your call and not the government’s. It does not matter even if the federal prosecutor attaches a cover letter to the grand jury subpoena, informing the witness that revealing the contents, or even the existence, of the subpoena “may impede” a criminal investigation. An experienced criminal tax defense attorney knows how to respond to such requests or demands made by the federal prosecutor.

4. Insist On Grand Jury Secrecy For The Government. Recall that Rule 6(e) prohibits the government from revealing “a matter occurring before the grand jury.” This prohibition of course covers the content of grand jury testimony. But it goes much further. The government cannot even reveal that you appeared before the grand jury or that you have been subpoenaed or scheduled to appear. Many prosecutors and agents get sloppy about this and reveal that a person or company has been subpoenaed. In addition, some grand juries have waiting rooms where multiple witnesses are invited to wait until they are called. In these situations, each witness is told, in effect, that the other witnesses waiting with him have been summoned to appear “before the grand jury.” On other occasions, members of the press, who know what day the federal grand jurors meet, have been tipped off to be at the courthouse entrance, so that they can see a grand jury witness enter and draw the obvious conclusion. An experienced criminal tax defense attorney should be vigilant in guarding against these abuses and should put the federal prosecutors handling your appearance on notice not to violate grand jury secrecy with such maneuvers.

5. Let Your Attorney Accept Service Of The Subpoena. Your attorney should arrange with the prosecutor to accept service of the grand jury subpoena on your behalf. This spares you the embarrassment of being personally served by FBI agents at your home or in the workplace. What if the agents don’t know or care that you have an attorney, and decide to serve you personally anyway? You should politely accept service, tell the agents that you have an attorney, and decline to answer any and all substantive questions about the case. Refer all questions to your attorney. What if you don’t yet have an attorney when you are personally served with the grand jury subpoena? Politely accept service and tell the agents that you will decline to answer any substantive questions until you have had the opportunity to obtain an attorney. You are under no obligation to do anything other than accept service of the subpoena. If you say anything at all about the case to the agent you could be making dangerous admissions that may be used against you at a later time. For example, let’s say that you are being investigated in connection with an alleged tax fraud scheme involving foreign trust accounts. Assume that there are no documents which on their face tie you to any such trust accounts. Then an FBI Special Agent (or an IRS Criminal Investigation Division Special Agent) serves you with a grand jury subpoena for all records related to those foreign trust accounts. When she serves the subpoena, the agent asks: “Are you going to cooperate?” You respond: “Yes, I’ll cooperate. You’ll get the documents.” What have you done? You have just admitted to the government that you possess or have access to the foreign trust account documents. You have in effect acknowledged a connection between yourself and the foreign trusts. If you instead respond to the agent as follows: “I’m sorry, but I have an attorney and she will be contacting you,” you have admitted nothing.

6. Learn The Difference Between Types Of Grand Jury Subpoenas. Federal grand jury subpoenas are for (a) testimony (ad testificandum); (b) documents or objects (duces tecum); or (c) both. The face of the subpoena will inform you which type of subpoena you received. You will be subpoenaed as an individual or as a custodian of records for a business entity. In many instances, individuals have the right to refuse to answer grand jury questions by invoking the Fifth Amendment’s Privilege against Self-Incrimination. Corporations and other business entities, however, cannot invoke this privilege. But since a corporation operates through human agents, it must designate a custodian of records when subpoenaed by the federal grand jury. Under Supreme Court case law the corporate custodian is only required to answer a narrow category of questions, related to how the subpoenaed documents were searched for and gathered. If you are properly subpoenaed as a business custodian, it is very important that you limit your answers to this narrow category of questions. Prosecutors love to get corporate custodians into the grand jury room and ask extra questions. These questions might seem innocuous, but they are often very dangerous. You need to have your criminal tax defense lawyer with you for consultation, right outside of the grand jury room, to insure that you are not tricked into answering one question too many. Some federal prosecutors have recently started the practice of issuing one subpoena to a person in that person’s individual capacity and his custodial capacity. This tactic is dangerous, confusing, and, in my view, unauthorized. It is tantamount to issuing one subpoena to two persons or companies. Your criminal tax defense attorney should insist on two separate subpoenas-one for you as an individual and one to the company’s custodian of records.

7. Don’t Testify If You Have Exposure. If you are subpoenaed for testimony in your individual capacity, you may be able to avoid answering substantive questions by invoking the Fifth Amendment’s Privilege against Self-Incrimination. This is true even if you are not a target of the investigation. The right to invoke the Privilege against Self-Incrimination is much broader than most witnesses realize. If a truthful answer to a grand jury question would even tend to incriminate you, you can invoke the privilege and refuse to answer. An answer tends to incriminate you if it furnishes a link in the chain that might lead to your conviction. Can a person who is totally innocent of wrongdoing invoke the privilege? Absolutely! The Supreme Court has ruled that the privilege protects the innocent as well as the guilty. An innocent person wants to invoke the privilege to keep from being ensnared by a mistaken, incompetent, or unscrupulous prosecutor. By consulting with an experienced criminal tax defense attorney, you should not fall into such a trap.

8. Review Your Prior Testimony. Some federal prosecutors like to call witnesses back to the grand jury to testify on multiple occasions. This is dangerous, because it can cause you to inadvertently give inconsistent testimony under oath. Under §1623(c) of the federal criminal code, the government can prosecute you for testifying to two irreconcilably contradictory statements under oath, and the government does not even have to prove that either of the statements in question was false. When you are called back to the grand jury to testify for a second time, your criminal tax defense attorney should insist on your right to review ahead of time the official transcript of your first session. In this way, you can refresh your recollection as to your earlier testimony, correct any mistakes, and prepare yourself for the upcoming session. The Federal Courts have ruled that grand jury witnesses, even if they have not been called back to testify for a second time, have an inherent right to review a transcript of their earlier testimony.

9. Know If You Are A Witness, Target Or Subject. Other than violating certain testimonial and constitutional privileges, the federal grand jury can pretty much do what it wants so it is important to determine if you are considered to be a witness, a subject or a target. A witness should pose the least risk at the IRS is looking for information to go after someone else. A target is the one that IRS is looking to come after – the IRS does not subpoena targets due to a person’s 5th amendment right against self-incrimination. A subject is someone who at the time is not a target but could become one later on. It is this determination that is most troubling but it is possible and not unusual for cases under suspicion for tax crimes be removed from consideration for criminal prosecution. An experienced criminal tax defense attorney is instrumental in determining whether you are a witness, target or subject.

What Should You Do?

You should never attempt to face these risks without the help of an experienced criminal tax defense attorney. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego, San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

Being Careful In Navigating Between Tax Avoidance and Evasion

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Most people think they pay too much in taxes and will do their best to avoid them, but few take that a step further into illegal tax evasion. Such was the case with Christopher B. Berg of Portola Valley, California. Mr. Berg worked as a consultant in 1999 and by 2000, had begun depositing parts of his income into an undisclosed Swiss bank account. After 5 years of doing this, he had transferred more than $640,000 out of the country. That was bad; worse was he used the cash during his trips to Europe, purchasing cars and obtaining cash while travelling. That conduct implicated that he was aware of his obligations to disclose the foreign bank account and report the income earned. On February 26, 2014 he was sentenced to one year and one day in prison followed by three years of supervised release. Prior to the sentencing Mr. Berg paid the IRS $250,000 as well as a $267,896 penalty for hiding the Swiss account he had in 2005.

So as far as tax evasion goes, where is the most peril?

It is fairly difficult to evade taxes on legitimate investments because the IRS can crosscheck the forms supplied by the company and the individual. Where people run afoul of the law is when they cut corners.

One of the most brazen tax dodges is not declaring income. This is difficult for anyone who receives a W-2 or 1099 form for money earned. The IRS receives those forms, too.

But for people in businesses that are cash-based, the temptation to cut corners and the belief that they will get away with it can be greater. I have seen this happen with bars and restaurants where cash has been diverted and literally put it into the backyard. You can’t divert income.

One of the giveaways for an IRS auditor is people living a lifestyle not possible given the amount of income declared. Another is bank accounts that show a deposit record of unreported income.

But the most frequent area for tax evasion for individuals comes from overstating deductions. It takes all forms, including brazen bids to cheat and efforts to push to the line of legality.

Some common examples include claiming too much for car use for work or a home office deduction, overstating charitable deductions and putting dependents on a tax return who are not true dependents. The IRS also scrutinizes returns tax returns showing refundable credits — like the earned income credit for people with children. Problems arise when people provide only partial support for nieces and nephews, or any amount for children who do not exist.

Where the IRS sees the same problems surface on different returns prepared by the same tax preparer, the IRS will go to that tax preparer and say give us every one of your returns for where you took a child care credit (or reported some other tax benefit) and audit them, too.

Another area of potential trouble is for people who lost their jobs in the recession and began working from home. They are entitled to deduct part of their home expenses as business expenses, but the issue is how much. To deter overzealous deductions, the IRS for the 2013 tax year created a standard deduction for a home office of $1,500.

The penalties for pushing tax avoidance into evasion depend on the severity of the offense.

There’s a fine line between conduct that rises to a potential charge for tax evasion and activities that don’t rise to tax evasion. It comes down to burden of proof. There has to be willfulness.

The penalties for criminal tax fraud are the most severe. This is where the most egregious undisclosed foreign bank account cases fall, like the ones when a person created a series of shell companies to mask the ultimate owner of an account. Penalties here include jail time.

The penalties for civil fraud are monetary and structured on a sliding scale, depending on the severity of the offense. But the penalties can run to 75% of the taxes owed. With the undisclosed foreign bank account cases, additional penalties come from not filing forms telling the IRS that a foreign bank account exists.

What should you do?

Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego, San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.