The Gartzman Law Firm, P.C.The Gartzman Law Firm, P.C.2026-03-17T06:40:51Zhttps://www.gartzmantaxlaw.com/feed/atom/WordPressOn Behalf of The Gartzman Law Firm, P.C.<![CDATA[What happens if you miss a payroll tax deadline?]]>https://www.gartzmantaxlaw.com/?p=502322025-05-28T05:05:12Z2025-06-02T05:04:52ZMissing a payroll tax deadline might seem like a simple oversight. However, to the IRS, it’s a serious matter. Whether you run a business or manage payroll for one, missing these deadlines can have severe implications.
Below is some key information on payroll tax deadlines.
Penalties start instantly
Once a payroll tax deposit is late, penalties start to apply. The IRS charges a failure-to-deposit penalty based on how many days the payment is overdue. For example, being just one day late can trigger a 2% penalty. After 16 days, that rate can jump to 10%.On top of that, interest begins to accrue. These penalties apply even if the payment is only partially late or if you filed the required forms on time.
Repeated problems worsen the penalties
Missing one deadline can be costly. Missing several can attract significant attention. The IRS watches for patterns. If a business repeatedly misses deadlines, it may be flagged for closer review. That can lead to audits, increased scrutiny or even a referral to the IRS Criminal Investigation division if fraud is suspected.Georgia also requires timely payroll tax payments for state withholding. Missing those deadlines can result in separate penalties at the state level.In serious cases, the IRS may assess what is known as the Trust Fund Recovery Penalty. This penalty allows the IRS to hold certain individuals personally responsible for unpaid payroll taxes. That means the IRS can come after a business owner, manager or even a bookkeeper if they had control over payroll decisions.Payroll tax deadlines are not flexible. Once missed, the consequences can worsen over time. Even if the mistake was unintentional, the IRS treats unpaid payroll taxes as a top priority for enforcement. If you are under investigation, it is essential to seek legal guidance. ]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[Do you have to pay taxes on your side hustle?]]>https://www.gartzmantaxlaw.com/?p=502282025-05-19T17:19:29Z2025-05-19T17:19:29ZThe gig economy is more popular than ever. It’s a great way to pursue your passion while still having the steady income and benefits a regular full-time job provides.
However, the government wants its share regardless of how you make money.
Don’t forget the self-employment tax
The IRS requires that you report all of your income, even if you don’t receive a tax form, such as a 1099 or W-2. This includes rideshare operators, freelancers, online sellers and part-time gigs such as tutoring or playing in a band.One bonus is that you can take advantage of tax deductions that will lower your taxable income, such as:
Home office expenses
Supplies and materials like art supplies or baking equipment
Professional fees, like productivity software or tax preparation services
Marketing costs, including ads for your services and website hosting fees
Business auto use
You must keep detailed records and receipts for all your expenses.Unfortunately, if you made more than $400 from your side hustle, you may also have to pay self-employment taxes, which cover Social Security and Medicare taxes. In a traditional job, your employer usually pays a portion of these taxes. However, with a side hustle, you will need to pay both the employer and employee portion, which is currently 15.3% of your net earnings.It can be tempting not to report the income from your side hustle, especially if it’s cash under the table or you don’t receive a 1099. But with the continued rise of the gig economy, the IRS has systems in place to track unreported income.Not paying your taxes can result in serious consequences, such as:
Accrued penalties and interest making the amount you owe significantly higher than your original tax bill
Audits
Tax liens against your property
Wage and bank account levy
Many people run into tax issues because they didn’t realize they were breaking the law. You will want to discuss the situation with a legal professional if that occurs. They may be able to help you negotiate with the IRS and minimize the financial impact.
]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[Over $50k in tax debt? Find out if you qualify for IRS relief.]]>https://www.gartzmantaxlaw.com/?p=502062024-12-27T18:52:44Z2024-12-27T18:52:44ZWhat is the Currently Not Collectible status?
If you owe balance due tax liabilities, but cannot pay them due to a difficult financial situation, the IRS may agree to place your account under Currently Not Collectible (CNC) status. This means the IRS acknowledges that you cannot afford to pay what you owe without serious financial hardship.
Typically, the IRS will not try to collect from accounts under CNC status. However, your tax obligations don't simply vanish. The IRS may continue to add interest and penalties to your balance and may apply any tax refunds you're owed to your existing debt. Your annual bills will also continue to come.
Do you qualify for CNC status?
You must demonstrate your financial hardship to apply for the CNC status. Some example scenarios include:
You cannot pay taxes and afford basic necessities at the same time
You are experiencing a temporary setback but expect to recover later
You have limited income or assets that you can use to pay tax debt
You are not employed or are significantly underemployed
You will still need to file tax returns even if you cannot afford to pay what you owe. Doing so will prevent late-filing penalties.
To request for CNC status, you can contact the IRS or respond to their notices to discuss this option.
How can a tax attorney help?
Even the most successful individuals and businesses can make tax errors. Unfortunately, these mistakes usually amount to significant tax debt for high-income earners.
If you cannot pay the amount you owe right now, consider consulting a tax attorney to help explore your legal options. They can help determine if you should request for CNC and, if you qualify, guide you through the application process.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[What types of accounts do you need to report in your FBAR?]]>https://www.gartzmantaxlaw.com/?p=501992024-11-22T15:36:30Z2024-11-22T15:36:30Zapplies to any U.S. citizen, resident or entity who owns financial accounts in other countries, even if they do not generate income. It also applies to those with signature authority over foreign accounts, even if they don't own them.
Common types of foreign accounts you need to report
You need to know which foreign accounts you must report on your FBAR to stay compliant. This can include:
Savings, checking and time deposit accounts
Brokerage accounts and investment portfolios, including stocks, bonds or other securities in foreign financial institutions
Foreign mutual funds, even if the fund invests in U.S. securities
Foreign life insurance policies with a cash-value component if their value exceeds the reporting threshold.
Retirement accounts outside the U.S.
Foreign pension accounts
Remember, this list doesn't cover every possible reportable account. The key is whether you have a financial interest in or signature authority over the account.
What accounts do you not need to report?
While many foreign financial accounts require FBAR reporting, some are exempt. This includes:
Correspondent or nostro accounts
Government-owned accounts
Accounts owned by international financial institutions
Accounts on U.S. military banking facilities
If you're an owner or beneficiary of an Individual Retirement Account (IRA) or a participant or beneficiary of a retirement plan that holds foreign accounts, you don't need to report them in your FBAR. You can also skip reporting certain foreign accounts when someone else has reported them for you. For example, a trustee or agent of the trust may have already reported your foreign trust accounts. Your spouse might report all the accounts you own together on their FBAR. In these cases, you don't need to file your own report.
Get the clarity you need
FBAR rules can be complicated, and mistakes can be costly. If you're unsure about any of your foreign accounts or have concerns about past filings, it's wise to consult with a tax attorney.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[Can you inherit tax debt from a loved one?]]>https://www.gartzmantaxlaw.com/?p=501932024-11-22T15:31:34Z2024-11-22T15:31:34Zpaying off a huge tax debt out of your own pocket. Inherited tax debt often becomes a genuine concern only if the amount is too big for the estate to pay off.
Who pays for the deceased’s tax debt?
When someone passes away, their estate becomes responsible for settling any outstanding tax debts. Heirs or beneficiaries often do not become personally liable for the debt.
Generally, the government has a claim against all back taxes the deceased owes from the estate before any named beneficiaries can receive their inheritance with some expceptions. While you do not directly inherit the deceased’s tax debt, you may still feel its impact on the assets you stand to inherit.
In the case of insufficient estate assets
If the tax debt is larger than the estate's value, you may have nothing left to receive. The IRS may write off any balance left on the tax debt as a loss. This holds true even if the debt and estate you were supposed to receive are under your parents’ names.
In some cases, the IRS may try to collect payment for sizable unpaid taxes from the deceased’s beneficiaries. The agency can do this using the concept of “transferee liability” or “transferee theory.” However, this sometimes happens in cases involving significant tax evasion or fraudulent activities.
Indirect ways you can inherit tax debt
Take note that there are some cases where you may indirectly inherit tax debt or deal with issues related to unpaid taxes. These include:
Inheriting property with a tax lien
Being named executor of an estate with unpaid taxes
Receiving assets from a trust with outstanding tax debts
Being a co-signer or joint owner of a property with back taxes
What to do if you inherit tax debt
If you want to keep a particular property or asset rather than use it to help pay off your loved one’s sizable debt, it may be possible to negotiate a payment plan with the IRS. Don’t hesitate to seek professional legal advice. Consulting a tax attorney can help you understand your situation and obligations, as well as find the best solution for your circumstances.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[When payroll goes wrong: Protecting yourself from personal IRS liability]]>https://www.gartzmantaxlaw.com/?p=501892024-10-22T07:32:33Z2024-10-22T07:30:58ZUnderstanding IRS payroll tax disputes
The Internal Revenue Service (IRS) takes payroll tax compliance seriously. When they identify unpaid payroll taxes, the IRS may hold individuals personally responsible through the Trust Fund Recovery Penalty (TFRP). This penalty can apply to anyone with decision-making authority over finances, including but not limited to business owners, corporate officers, and employees responsible for collecting or paying withheld taxes.
The financial implications
The consequences of payroll tax errors can be devastating. The threat of hefty (penalties) or even jail time can cast a shadow over everything you have worked for. Personal assets, such as your home, savings and retirement funds, could all be on the line. The emotional toll can also be immense, affecting not just you, but your family too.
Taking action to protect yourself
Do not let fear paralyze you. To safeguard your interests, consider these crucial steps:
Maintain detailed records: Document all financial decisions and payments
Communicate openly: Ensure clear communication with management about tax obligations
Seek legal counsel: Consult an attorney experienced in high-stakes IRS disputes
It is important to take prompt action. Many professionals facing similar situations have found relief and protection from personal liability with experienced legal help.
Light at the end of the tunnel
While payroll tax disputes can be daunting, you do not have to face them alone. With proper information, legal support and strategy, you can face the IRS with confidence and protect what matters most – your future and peace of mind.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[What are the potential outcomes of a tax audit?]]>https://www.gartzmantaxlaw.com/?p=501872024-10-10T11:32:57Z2024-10-10T11:32:57ZWhat happens next?
Once the audit process is complete, the IRS will conclude the audit. The process can end in three ways:
No change: In (this) scenario, the audit results in no changes to your original tax return. You have provided sufficient documentation and evidence to support your income and claimed deductions and credits, (with) the IRS (finding) no errors. In this case, you can finally breathe a sigh of relief and consider the audit process closed.
Agree: If the IRS proposes changes to your tax return, for the balance due or perhaps a refund, and you agree with those changes, you will have to sign a form. This action signifies your acceptance of the changes and willingness to comply with the IRS findings.
Disagree: If you disagree with the proposed updates, you may request a meeting with an IRS manager to discuss the disputed issues and try to resolve them. Alternatively, you can take advantage of the IRS alternative dispute resolution (ADR) program, which provides a mediated solution to resolve the dispute.
If you disagree with the proposal and there is enough time remaining on the statute of limitations, you can appeal with the IRS. This process allows you to present your case to an independent appeals officer who will review the audit findings and make a final determination.
Upon receipt of a Notice of Deficiency you would have the opportunity to file a petition with the US Tax court.
Preparedness is key
A tax audit can be scary, but it's not the end of the world. By understanding the outcomes and taking proactive steps to ensure compliance, you can minimize the disruption to your business and even use the experience as an opportunity to refine your financial tax processes.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[Preparing for an IRS audit: A guide for consultants and independent contractors]]>https://www.gartzmantaxlaw.com/?p=501702024-08-27T19:37:06Z2024-08-27T19:37:06ZMaintain accurate records
To ensure a successful audit, you must be meticulous in record-keeping. It will be beneficial if you:
Keep comprehensive records of all your income sources, including client payments and other business-related income.
Document all business expenses thoroughly, including receipts, invoices and bank statements.
Organize your records chronologically and by category for easy access.
It may be best to retain records for at least seven years. The IRS can audit returns up to three or six years old if it suspects substantial underreporting.
Understand your tax obligations
As a self-employed individual, you have unique tax responsibilities. It helps if you:
Familiarize yourself with Schedule C, which reports profit or loss from your business.
Understand self-employment taxes and estimated tax payments.
Know which deductions apply to your business and ensure you can justify them.
Consider hiring a tax professional or an experienced attorney to help you navigate complex tax laws.
Receiving an audit notice is not a reason to panic. Instead, you may review the letter carefully to understand what information the IRS requires. After that, you can gather all relevant documents. You can also seek professional help if you feel confused or overwhelmed.
Honesty is crucial during an audit. It is essential to provide accurate information. It also helps if you avoid making false statements or hiding income. If there are mistakes on your tax return, it is best to disclose them upfront rather than having the IRS discover them.
It pays to be well-prepared for an IRS audit. The process may seem intimidating, but ample preparation can make it less stressful. The key is to stay organized, understand your obligations and seek professional help when necessary. With the right approach, you can confidently face an IRS audit and emerge successfully.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[Trust Fund Recovery Penalty: A Hidden Threat to Business Owners]]>https://www.gartzmantaxlaw.com/?p=501662024-08-05T20:52:42Z2024-08-05T20:52:42ZWhat is the Trust Fund Recovery Penalty?
The TFRP is a penalty imposed by the Internal Revenue Service (IRS) on business owners and executives who fail to pay their business's payroll taxes. These taxes include Social Security, Medicare and income taxes withheld from employee wages. If the person responsible for taxes willfully fails to collect, account for and pay over trust fund taxes, they can receive this penalty.
Who is a "responsible person"?
You may think that only the business owner is responsible for paying payroll taxes, but that is not the case. Anyone who has control over the business's finances, including executives, accountants and even HR managers, can be held personally liable for unpaid payroll taxes.
The consequences of non-compliance
The TFRP can be severe, with penalties ranging from 100% of the unpaid taxes to criminal prosecution. Imagine receiving a letter from the IRS stating that you owe tens of thousands of dollars in unpaid payroll taxes, plus penalties and interest. The emotional and financial toll can be overwhelming.
Protecting yourself and your business
So, what can you do to avoid the TFRP? First, ensure that your business complies with all payroll tax laws and regulations. File timely tax returns, make timely payments, and maintain accurate records.
If you are already facing a TFRP, it is essential to seek guidance from a legal professional who can help you manage the complex process of resolving your case. With their guidance, you can minimize the risk of penalties, fines and even criminal prosecution, allowing you to get back to running your business with confidence.
Remember, the TFRP is a serious threat to your business and personal finances. By taking control of your payroll taxes, you can protect yourself and your business from this hidden threat.]]>On Behalf of The Gartzman Law Firm, P.C.<![CDATA[Do taxes apply to foreign accounts held before entering the U.S.?]]>https://www.gartzmantaxlaw.com/?p=501652024-08-05T20:51:04Z2024-08-05T20:51:04Zrequire the disclosure of foreign assets, including foreign bank accounts. Those who decide to hold their resources in an offshore account have an obligation to report those resources to the IRS when filing their annual income tax returns.
There are many scenarios other than tax avoidance that could lead to someone holding international resources, such as a foreign bank account. Some people enter the United States with foreign assets already in their names. Does someone who has relocated to the United States have an obligation to report a bank account that they held before entering the country?
Most foreign assets require reporting
People with resources in another country might live in the United States for a variety of reasons. They may have become naturalized citizens of the United States. They may temporarily be in the country on an educational, employment or investor visa. They may have dual citizenship in the United States and another country.
In any of those scenarios, someone living in the United States typically has to report their foreign assets to the IRS when they file a tax return. The assets need to have a minimum value to require reporting. If the maximum balance of all foreign accounts reaches $10,000 at any point throughout the year, then the account holder must report it to the IRS.
When and why they started the foreign bank account does not matter. What matters is their eligibility for taxes in the United States and the maximum balance of those foreign bank accounts. Complying with Report of Foreign Bank and Financial Accounts (FBAR) requirements can be difficult.
Most people are unfamiliar with this niche area of tax law. Immigrants and those with dual citizenship may need assistance when preparing their tax returns or responding to a tax controversy. Small mistakes related to reporting foreign bank accounts could have major implications for a taxpayer. Learning more about reporting requirements, and seeking personalized legal guidance as necessary, can help people to better ensure that they appropriately comply with domestic income tax regulations.]]>