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White Plains New York Tax Blog

What can you do after receiving a big tax bill from the IRS?

No one particularly likes paying taxes, but it is a part of living in this country. To say filing taxes is confusing is an understatement. There are different forms, deductions and you need to know the right things to claim. A mistake may show up years later.

Receiving a letter that says you made a mistake on your taxes is nerve-racking. A letter that states your mistake means you owe the IRS a large amount of money is particularly daunting. You may have not realized you owed the money. You also may not have the cash to pay for it. It is also possible the bill is an error. Before you start to panic, here are some options for handling a tax bill from the IRS.

The tax collection process

Each year, tax filings can change. For some, it stays fairly set, as not much changes from year to year. However, if something has changed with real property ownership or there was a gambling win, changes in taxes due will likely occur. And because life changes can increase the amount owed, life changes can also impact one's ability to pay these taxes as well.

If an individual in New York and elsewhere does not pay their taxes in full when his or her tax return is filed, a bill for the amount still owed will be issued. Receiving this bill initiate the tax collection process. This process continues until the account is satisfied or until it is determined that the IRS can no longer legally collect the tax. It is possible for the period of tax collection to expire, and when it does, the IRS can no longer seek collection.

Helping you resolve tax controversies

Paying taxes seems like a simple and straightforward process in New York and elsewhere, as tax time happens each and every year. However, it can be a very complex matter, causing some to file incomplete returns or improperly filing them. Whether an individual had the assistance of an accountant or not, it is important to become fully informed of their options if he or she is facing penalties for tax fraud or tax evasion.

When the IRS investigates an individual, this can be a very stressful and nerve-wrecking situation. However, it is a situation where action can be taken. By taking legal action, you can have your finances properly assessed. Financial experts could help establish the actual debt involved. This information could help individuals challenge the allegations, providing them with a strong defense.

What is an eggshell audit?

Paying taxes may not be enjoyable or glamorous. However, it is something that individuals in New York and elsewhere must do. While filing tax returns seems like a routine process, mistakes can be made. These mistakes can look like intentional actions to evade paying taxes or to pay less than what one might owe. When the IRS is under the impression that a taxpayer is not in compliance with a tax law, an audit could ensue. This could evolve into a tax controversy.

What is an eggshell audit? While many are aware of an audit and what this process generally entails, most are unaware of what an eggshell audit is. This audit occurs when an auditor is unaware the there is potential evidence to show civil tax fraud or a criminal tax violation but the taxpayer presumably filed a fraudulent return a prior year.

Tax opinions and tax litigation

Individuals in New York and elsewhere have tax obligations each year. While some years may be more than others, the reality is that one cannot avoid these financial obligations once it is established that a person owes taxes to the state or federal government. Despite this, some fail to meet these obligations for a wide range of reasons. In some cases, one does not have the finances necessary. In these cases, it is important to consider how this could impact them.

In fact, it is vital to obtain a full picture on how a certain matter could affect an individual, their family and even a their business. A tax opinion is available to help one consider what tax obligations could be involved, and if so, what could occur if they do not pay them. Additionally, a tax opinion considers ways one could offset some of these obligations, reaching a deal or settlement with the IRS.

What happens during an audit?

Thousands of business and personal account audits occur throughout the United States every year. The documentation review works to ensure that you or your business accurately pays government taxes, so that you may live and work legally in the country. Evading taxes constitutes a serious crime, so it is essential to follow all tax regulations to avoid criminal charges.

Understanding the unique steps that the Internal Revenue Service (IRS) takes to ensure you pay taxes may help you in knowing what to expect during the audit process. If you or your business prove ready for its potential occurrence, your preparation may help you gather documents quickly and avoid mistakes.

Claims of tax fraud can have serious legal consequences

Preparing and filing one's own income taxes is an esoteric exercise that New York residents must perform each and every year to avoid running afoul of the law. While many people have a good idea of what constitutes their wages and what deductions they may be qualified to claim, not everyone will get their taxes right on their first pass. When individuals make mistakes in the preparation of their tax documents, they may be flagged by the Internal Revenue Service as having committed tax fraud.

Fraud in the context of taxes is similar to fraud committed in other criminal pursuits in that it must involve the intentional desire to defraud someone in some way. Tax fraud can take the form of a willful avoidance of filing one's tax returns, intentionally leaving income off of one's filings to avoid paying more taxes, choosing to not pay one's tax obligation, and other intentional conduct. Tax fraud is generally not the inadvertent mistakes many Americans make when they become confused and lost in the complex process of preparing their own tax documents.

Helping New Yorkers address tax collection issues

Individuals and businesses in New York and elsewhere are aware that taxes are likely owed each year. One is also responsible for reporting income or profits earned each year. While addressing tax law matters can seem complex and challenging no matter a person's circumstances, it is important to address them, as they could evolve into larger issues.

Being involved in a tax debt and collection matter can be an emotional process. One may not fully understand the situation and what repercussions could result if one does not act timely. This is where a trusted law firm can be of assistance. At Auerbach Law Group, P.C., our team of lawyers has been helping individuals and businesses in the White Plains area for over three decades. Our goal is to help client become informed, act proactively and prevent their account from becoming delinquent.

Supreme Court decision about online tax may hurt small businesses

The Supreme Court just passed down a ruling allowing states to require online retailers from out-of-state to collect sales taxes on purchases. Previously, states could only ask online sellers to collect sales taxes if that seller was located in the state.

According to The Washington Post, states were losing out on an estimated $8 billion to as much as $33 billion each year in taxes. This will be a huge windfall for states. It may also level the playing field for brick-and-mortar businesses that have always paid local and state taxes.

How has the child tax credit changed?

The tax legislation from late 2017 made many changes to U.S. tax law. This includes changes to the child tax credit. These changes apply to tax year 2018, so they will be a factor next filing season.

This tax credit is one that families can typically claim for dependent children under 17 who lived with them for at least half of the year. So, it is a credit many families may look into. Today, we’ll go over some of the key changes that the 2017 tax legislation made to this credit.

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