The Internal Revenue Service’s (“IRS”) First Time Abate (“FTA”) policy provides for an abatement of certain financial penalties for taxpayers with a record of tax compliance who are current with filing and payment requirements. It is essentially a streamlined IRS process to abate or remove a first-time tax penalty as a one-time consideration based on a taxpayers’ compliance history.
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When a client wishes to leave an inheritance to a minor (a person under age 18), the most important advice is to never leave the bequest outright. The same notion is true for someone who is disabled as we recently posted about on our Blog at https://www.jacksonlawgroup.com/asset-protection/the-use-of-supplementalspecial-needs-trusts-in-estate-planning/. The problem with leaving an inheritance outright to a minor is that the court will require the establishment of a guardianship for the minor’s benefit, which can be very costly and overly burdensome.
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Posted in Tax Law & IRS Defense
Calendaring important IRS deadlines can save you a lot of headaches at tax time. To avoid paying penalties, keep a calendar and review tax deadlines with your accountant, CPA, or tax attorney. The following are a few examples of important dates:
January 15, 2014 is the deadline for the 2013 4th quarter estimated tax payment.
January 31, 2014 is the deadline for employers to distribute Form W-2 Earnings Statements to employees, businesses to issue Form 1099 Statements, and self-employed individuals to file and pay taxes.
February 28, 2014 is the deadline for businesses to mail in Forms 1099 and 1096.
March 17, 2014 is the deadline for corporate tax returns. It is also the final deadline for a corporate taxpayer to file an amended corporate tax return for tax year 2010 and still claim a refund.
April 1, 2014 is the deadline to file tangible personal property tax returns on Form DR-405.
April 15, 2014 is the deadline to file individual tax returns and make tax payments, final deadline for an individual taxpayer to file an amended tax return for tax year 2010 and still claim a refund, file estate income tax or trust income tax returns, final deadline to file amended estate income tax or trust income tax returns for year 2010 and still claim a refund, file partnership tax returns, final deadline to file amended partnership tax returns for year 2010 and still claim a refund, and for the 2014 1st quarter estimated tax payment.
May 15, 2014 is the deadline to file non-profit organization tax returns.
June 16, 2014 is the deadline for the 2014 2nd quarter estimated tax payment.
September 15, 2014 is the deadline for corporate, trust, and partnership tax returns if an extension was requested and the 2014 3rd quarter estimated tax payment.
October 15, 2014 is the deadline to file individual tax returns if an extension was requested.
Posted in Tax Law & IRS Defense
The penalty for failing to file your tax return is typically 5% of the unpaid taxes for each month (or part of a month) that your return is late (not to exceed 25% of the unpaid taxes). If you file your tax return more than 60 days after the date it was due, the minimum penalty is $135.00 or 100% of the unpaid tax, whichever is smaller. Generally, the failure to file penalties are greater than the failure to pay penalties. As a result, you should typically file your tax return, even if you cannot afford to pay the tax owed, in an attempt to reduce your potential tax penalties. If your failure to file your tax return was not due to willful neglect and you can show “reasonable cause” for not filing, you may be able to avoid the failure to file penalties. As always, it is best to consult with a Florida attorney who may be better able to evaluate the tax penalty assessments.
For more information regarding the failure to file penalties, please visit www.irs.gov.
Posted in Tax Law & IRS Defense
Ordinarily and generally speaking, if a bank relieves a taxpayer of mortgage debt (through a short sale or deficiency waiver for example), the Internal Revenue Code (“IRC”) requires the taxpayer to report the cancelled or forgiven debt amount as taxable income (subject to any applicable exceptions or exclusions). This is commonly referred to as “cancellation of debt” or “discharge of indebtedness” income. Therefore, even though the taxpayer never actually realizes the forgiven debt as disposable income that year, the IRC holds the taxpayer liable for the appropriate tax amount based on the forgiven or cancelled debt. See Section 108 of the IRC.
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Many disabled Americans receive governmental benefits such as Supplemental Security Income and Medicaid to assist in their time of need. These individuals rely on this assistance for supplemental income and medical care expenses (including nursing home care). While governmental benefits assist disabled individuals with covering their expenses, the benefits often cannot cover all expenses. In these cases, family or friends sometimes provide financial support and help cover any remaining expenses. These same family and friends also wish to assist after they pass away so they include the disabled individual in a will or name the disabled individual as a beneficiary of a trust. In this respect, family and friends should be aware of the implications that leaving assets or money in the form of a gift or bequest to a disabled person as it relates to current or future needs for governmental benefits. In other words, family and friends should be aware that their generosity in the form of a gift or bequest may also affect the eligibility of a disabled person for governmental benefits.
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Posted in Asset Protection,Business & Corporate Law
If you own a business in Florida, you should make sure your personal assets are protected from your business liability and your business assets are protected from personal liability. This level of planning is often referred to as Inside-Out vs. Outside-In asset protection. Inside-Out liability refers to when a business owner can have his or her personal assets attacked based on a business lawsuit. This is one of the primary reasons that someone forms a business entity – to protect one’s personal assets from business liability. It is important how a business entity is structured to achieve the best asset protection in this regard.
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Posted in Asset Protection,Business & Corporate Law,Probate & Trust Administration,Real Estate Law,Tax Law & IRS Defense,Wills, Trusts & Estate Planning
The attorney-client privilege is one of the most important legal protections that an individual or entity has when seeking legal advice from a Florida attorney. Section 90.502(c) of the Florida Statutes states that communication between an attorney and a client is confidential if it is not intended to be disclosed to a third-party other than when the communication to a third-party is made in the furtherance of legal service to the client or when the use of a third-party is reasonably necessary for communication between the attorney and client. It is important to note that there are exceptions that may apply, such as when the attorney’s services are sought to enable what the client knows to be a crime or fraud. The purpose of the statute is to protect almost all information disclosed by the client. However, this protection can be waived and subject to disclosure if third-parties are involved in the communication. Moreover, Section 90.507 of the Florida Statutes provides that the attorney-client privilege is waived when a confidential matter is voluntarily discussed in a manner where a reasonable expectation of privacy does not exist. Examples may include copying a third party to an email to your attorney, forwarding an email from your attorney, including a friend in a meeting with your lawyer, or encountering your lawyer at a public venue with other people listening to the conversation and discussing your case.
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