Tax Planning, Audits And Tax Collection

IRS and New Jersey tax collections and tax audits are not one-sided. It is a negotiation process. You need help negotiating and winning against state and IRS audits, bank levies, wage executions and collections.

Owe Money To The IRS Or The State Of New Jersey?

You need a tax lawyer to negotiate the debt. Lawyers, by training and personality, are usually much better and more comfortable at negotiating with the New Jersey Division of Taxation or the IRS. Stay away from the big TV advertising “tax debt collection” companies. Many of them have had problems over the years, and you can do better with your own tax lawyer.

Also, make sure your tax returns are all filed. If you are going to owe taxes for the current tax year, definitely file timely (usually by April 15) even if you cannot pay in full. Also, do not file without talking to a tax attorney. If you are married, you may need to file separately.

Received An IRS Audit Letter?

Revenue agents are trained IRS auditors. If you receive an audit notice, you are always better off having a tax attorney meet with the revenue agent. Is this audit of a business or personal tax return? Some personal matters are simpler, and you may be able to handle the audit yourself. Nevertheless, you should contact a tax attorney at Ronald J. Cappuccio J.D., LL.M. (Tax), and have me review the matter before deciding whether to handle this by yourself.

Typical Asset And Tax Protection Question

Question: “I need advice. I am reading “Rich Dad, Poor Dad,” and it has piqued my interest in starting a corporation. It would be really small (I have little start up $), but I like the idea of living off a corporation (obviously that would take years). My plan was to devote some $ for this corporation and invest in the stock market under this corporation name. Is this a good idea? I have researched on KY Sec. of State web, and it does not seem really all that difficult to start a corporation. I might be missing something but all I see is the incorporation fee $50 and a yearly update to KY. With a corporation, would I have to issue stock? How much do I issue, and do I make it “no par value?” Your thoughts are appreciated” – Doug

Answer: “First of all, filing online is just the “cover page” of the corporation. You need all of the correct corporate bylaws, resolutions and tax elections. Frankly, I think this is a really poor idea in the circumstances you present. You should talk to a tax and estate planning lawyer to review your choices. For example, can you contribute to a Roth IRA or regular IRA? What about an employer’s matching 401k? These need to be reviewed before you take action. I hope this helps!” – Ron Cappuccio

Determining Employee Vs. Independent Contractor Status

Determining whether one is a contractor or employee can sometimes prove difficult. However, it is essential to choose the right status for tax purposes. Consider the following metrics for determining whether someone is an employee or independent contractor:

1. Instructions – Direction and Control. Employees generally follow instructions about when, where and how work is to be performed; contractors establish their own hours and have no instructions regarding how the job should be completed.
2. Training. Employees typically receive training via classes and meetings regarding how services are to be performed; contractors generally establish their own procedures and receive no training.
3. Services rendered personally. Services are typically performed personally by the employee; contractors may utilize others to perform job tasks and duties.
4. Supervision. Most employees are supervised by a foreman or representative of the employer; contractors generally are not.
5. Set hours of work. An employee’s hours and days are set by the employer; contractors dictate their own time and are often retained to complete one particular job.
6. Full time required. An employee typically works for only one employer; contractors may have several jobs or work for others at the same time.
7. Work on premises. Employers work on the premises of an employer or on a route or site designated by the employer; contractors typically work from their own premises and pay rent for their own premises.
8. Manner of payment. Employees are generally paid in regular amounts at stated intervals; contractors are paid upon the completion of the job or project, in a lump sum or other arrangement, such as on a commission basis.
9. Furnishing of tools and materials. Employees are usually furnished tools and materials by employers; contractors typically furnish and pay for their own tools, materials and expenses.
10. Profit. Employees generally receive no direct profit or loss from work performed, while contractors do.
11. Job security. Employees may be discharged or quit at any time without incurring liability; contractors are typically discharged after a job is completed and are legally obligated to complete a particular job to avoid liability.

For further answers pertaining to this subject, contact my firm to discuss your questions.

Contact Ronald J. Cappuccio For Professional Tax Representation

Tax planning, audits and asset protection are highly complex matters, and there are very real repercussions for oversights and mistakes. To protect yourself and learn more about your options, please contact my office in Cherry Hill by calling 856-665-2121 or send an email.