White Plains New York Tax Blog

Begin preparing for an audit soon after receiving notice

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Monday, May 25, 2020.

Receiving a notice from the IRS is something that many people feel nervous about. It can certainly be difficult for any New York resident to learn that he or she is facing an audit. Unfortunately, it is all too easy to make errors when filing taxes, and these mistakes could easily raise red flags with the government agency.

If individuals do receive notice that they are being audited, they can take steps to prepare. First, it is important to read the letter sent by the IRS to understand the type of audit involved and how the IRS agent will be in contact. In some cases, mailing documentation back is enough, and in others, a person may need to go to an IRS office, or an agent may come to the taxpayer. The notice will contain various vital information.

Facing collections for tax debt make some vulnerable to scams

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in federal and state tax collections on Wednesday, May 20, 2020.

Facing any type of financial debt is difficult. It can weigh on anyone's mind and leave people constantly wondering what to do. Some New York residents may face collections due to having tax-related debt, and this type of debt may bring about even more stress and anxiety. As a result, some people may look for relief anywhere.

Unfortunately, many unscrupulous people and companies prey on people in this type of vulnerable situation. They may offer quick-fix debt relief methods that seem too good to be true. In many cases, these offers are too good to be true and turn out to be scams, which often leave those struggling financially in even worse predicaments. It is not unusual for those trying to use these programs to pay hundreds or even thousands of dollars in service costs and other fees without seeing much relief.

Criminal charges result from sales tax issues

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in criminal/civil tax litigation on Tuesday, May 19, 2020.

Money problems can quickly spiral out of control. Some people may begin to have financial troubles and soon feel unable to handle important matters, such as paying taxes. Unfortunately, if New York residents are suspected of not properly handling their tax-related matters, criminal charges could result.

One woman in another state was recently taken into custody on two charges relating to tax matters. The woman is the owner of a sports bar and has been under investigation by the state's Department of Revenue for failing to remit sales tax and filing false tax returns. During one investigative interview, the woman indicated that she was having financial troubles and wanted to sell her possessions, including the bar. She also indicated that she could not access the funds in her bank account, and as a result, she could not pay her taxes.

What is innocent spouse relief relating to a joint tax return?

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Monday, May 18, 2020.

When filing their taxes, most married couples in New York choose to file jointly. This common practice can offer benefits when it comes to utilizing credits and deductions available for specific couples. However, if one spouse or a former spouse omits information or improperly claims deductions on a joint return, the IRS may flag a problem with the return. Often, this means that the couple is liable for the taxes, interest and penalties that result. Fortunately, some parties may qualify for innocent spouse relief.

Some people may feel it is unfair for both parties to be held liable for the consequences of one spouse's mistakes. Innocent spouse relief may help parties if they believe that the errors on their joint tax return are the sole responsibility of their spouse or ex-spouse. This relief could help remove liability for at least a portion of the penalties, if the person qualifies.

Not filing a tax return could lead to complications

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Sunday, May 17, 2020.

The issues that can come about relating to tax matters are, unfortunately, numerous. Some New York residents may simply want to pass up the task of filing their tax paperwork altogether, but that is not necessarily a wise choice. The IRS can still attempt to collect taxes even if a person does not file a tax return, which is less than ideal.

When individuals file their own returns, they can deduct their allowable credits, and if the IRS must determine how much a person owes, the agency will not take deductions into account. The person will receive a notice of deficiency and a substitute return, which is the document that the IRS essentially filled out on behalf of the taxpayer. The person can accept that return, send back one that he or she completed, or explain why a return is not necessary.

Divorced parents claiming same dependent could lead to audit

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Wednesday, April 29, 2020.

Filing taxes may seem like simply filling in certain information on the correct forms, but the chance exists for numerous issues to arise during filing. In some cases, a New York resident could face an audit if the IRS believes that something in that individual's information is incorrect or if some other problem arises. One issue in particular that could lead to a closer look is if a child is claimed as a dependent by more than one person.

This type of problem could arise for divorced parents especially. After all, both parents may feel that they can claim the child as a dependent. However, if one child is claimed as a dependent on both parents' tax returns, it could raise a red flag with the IRS. As a result, the agency may have to determine who can claim the child.

3 practical tips for your IRS audit

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. on Monday, April 27, 2020.

It's the notice no one wants to receive; a brown envelope marked "Official Government Business." In some cases, it may be the first indicator you're getting audited. However, you shouldn't panic immediately.

Often, the IRS sends these notices because of a simple math error, or because your W2 and your return don't quite line up. But in others, the notice may state the agency is reviewing one or more of your returns in full.

Taxpayers shouldn't go it alone in court

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. on Thursday, April 23, 2020.

If you're facing conflict with the IRS, you want someone good with numbers. Accountants indeed understand taxes better than most people. However, they don't always have the experience or skills to defend you against this Goliath.

The IRS has unwavering power and if taxpayers don't understand their rights under the law, the system is designed to make their lives miserable. Because of this, you'll want a tax attorney on your side.

New IRS initiative could provide tax relief for those struggling

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. on Tuesday, April 21, 2020.

Many New Yorkers are in a tough spot right now. As the recent pandemic has shut down businesses across the state, people and businesses are facing an economic downturn they didn't expect.

And for those dealing with tax issues, this time can be especially stressful. But in response to recent events, the IRS is working to provide relief by expanding the tax filing deadline by 90 days and temporarily altering its practices from April 1 through July 15, 2020.

Did tax avoidance actions lead to tax evasion accusations?

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Tuesday, April 14, 2020.

Taxes are complicated to address. Of course, most New York residents and those across the country want to do what they can to minimize the amount of taxes they owe. However, it is important to remember that certain measures to reduce taxes, like tax avoidance, are legal, and some actions, like tax evasion, are not.

Avoiding taxes and evading taxes may seem like the same thing, and some people do use the terms "tax avoidance" and "tax evasion" interchangeably. However, if a person is trying to avoid certain taxes, he or she is typically using legitimate methods to reduce the tax amount owed. This could happen by taking deductions or utilizing available tax credits. It is also possible to set up tax-deferred accounts, like certain retirement accounts, that allow parties to pay the taxes on those funds at a later time.

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