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Work with experienced legal counsel to address issues with charitable donation deductions

Last time, we mentioned a legislative proposal that would make significant changes to tax law, changes that are very likely to have a significant negative impact on charitable giving. It isn’t clear yet how far the proposal will advance—there are certainly opponents—but if it does, the effects could be widespread, hitting nonprofit organizations hard.

Those who choose to make charitable contributions need to understand, of course, the rules surrounding charitable deductions in order to ensure they comply with the tax code. The general rules surrounding charitable contributions touch upon: the types of organizations to which charitable deductions may be made; the types of contributions taxpayers can deduct; how much can be deducted; the records that must be kept; and how taxpayers are supposed to report charitable contributions.  

4 tax mistakes freelancers need to avoid

A growing number of people are making a living as freelancers. In fact, a report from Forbes showed that freelancers currently make up at least 35 percent of the American workforce, and the total number of freelancers has risen to 55 million people. 

Many people make a great living freelancing, but there is a unique set of tax laws these professionals need to follow. There are common mistakes freelancers face, so they need to remain extra vigilant to avoid these typical pitfalls. 

Tax proposal could significantly reduce charitable giving

Charitable giving is something many people do in order to support a cause they believe in or to help those in need. For some people, charitable giving is sporadic or occasional, while others give regularly on an annual basis. However people give, one of the benefits of giving is that donations are tax-deductible. Tax deduction is only worth it, though, if taxpayers’ deductions exceed the standard deduction.

Not only do donors rely on the deductibility of charitable gifts in making gifts, but charitable organizations also count on deductibility to ensure donations keep coming. At present, though, proposals to change federal tax law in this area threaten to upset the system by disincentivizing charitable giving. 

A brief look at the IRS appeals process, and the benefit of working with skilled legal counsel, P.2

Last time, we began discussing the IRS appeals process. As we pointed out last time, the right to appeal an IRS determination is one of taxpayers’ basic rights, and taxpayers should not be afraid to make use of the process when they have a disagreement with a decision made by an auditor or revenue officer.

As we noted, taxpayers are required to make either a small case request or to file a formal protest in order to participate in an appeals conference. The difference between the two is largely based on the amount in controversy. 

A brief look at the IRS appeals process, and the benefit of working with skilled legal counsel, P.1

Although taxpayers may not realize it, they have clear rights when it comes to dealing with the IRS. These rights are embedded within the Internal Revenue Code, and are summarized in what the IRS calls the Taxpayer Bill of Rights.

Among the basic rights that belong to taxpayers are the rights to pay no more than the correct amount of tax they owe, the right to challenge the IRS’s position, and the right to appeal an IRS decision in an independent forum. The latter two rights encompass not only taxpayers’ right to raise objections with the IRS and provide additional documentation, but also taxpayers’ right to seek a fair and impartial administrative appeal of IRS decisions and, if necessary, the right to take the case to federal court. 

Ensuring release of tax lien after, before payment

Last time, we mentioned that Floyd Mayweather Jr. has filed an appeal with the IRS seeking temporary relief from payment of back taxes and a reduction in penalties. That appeal was filed in response to a tax lien the agency filed in April. It remains to be seen what will become of Mayweather’s petition, of course, but he is at least attempting to engage the IRS appeals process to protect his interests.

Tax liens are the IRS’ way of making sure they get paid, but a lien cannot be filed until certain conditions are fulfilled. In addition, once a lien is filed, it isn’t necessarily the final word on a taxpayer’s obligations to the IRS. 

Behind unusual boxing match: significant tax debt

Boxing fans may have heard that next month, champion boxer Floyd Mayweather Jr. is set for a much anticipated bout with Irish mixed martial artist Conor McGregor. The match-up is unique for several reasons. First of all, the bout has been in the pipes for a long time, going back to McGregor’s public insults toward Mayweather as McGregor rose through the Ultimate Fighting Championship.

Second of all, Mayweather is essentially coming out of retirement to engage with McGregor, who has never boxed professionally. Third, the motivation for the match is very likely that Mayweather needs the money he will gain from it in order to satisfy over $22 million in unpaid tax debt

4 common U.S. tax penalties

Tax penalties can be an unwelcome surprise to anyone who made an honest mistake when filling out their tax forms. In 2015, the Internal Revenue Service reported that it collected $12.4 billion from Americans in penalties.

It is not easy to get out of a penalty once the IRS has issued it. Therefore, it works in everyone’s best interest to prevent a penalty rather than deal with one after the fact. Any individual person who is filing tax returns needs to be wary of common pitfalls and take the necessary actions to avoid them.

“S” corporation vs. “C” corporation: a brief look at the tax difference

The corporate business form is complicated, but incredibly useful for many types of business. Structuring a corporation can be complicated, of course, but when it comes to the way the business is taxed, there are two basic options.

The default option is the “C” corporation, unless an election is made for “S” status. Both forms of corporation offer limited liability for shareholders and various other benefits attributable to the corporation business form. Ultimately, a filing for S status comes down to a decision about how the corporation will be taxed

Senators express concern over IRS contractor’s debt collection tactics

Last year, we wrote about the IRS’ decision to roll out a new program to assign tax debt to private collectors. As we noted then, the IRS has issued warnings to taxpayers to help ensure they recognize fraudulent notifications and communications when they see them.

The IRS contractors, of course, are bound by the requirements of the Fair Debt Collection Practices Act, just like any other debt collectors. Tax debtors who receive what they believe to be fraudulent communications, or who are subjected to abusive debt collection practices from IRS contractors, should contact the IRS and work with an experienced attorney to ensure their rights are protected. 

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Located in Atlanta, The Peck Group, LC, represents clients nationwide. Regionally, we are committed to serving clients in Fulton County and throughout the state of Georgia.