The IRS Audit Blog

Posts Tagged ‘lawyers’

Question: How do I know if I am legally shielded from my small business Sub S corporation?

This is a followup to a previous question. I’ve got a sub S corporation for a small business that I’ve kept established with Florida state for years. Recently, the Yellow Pages has instigated a lawsuit against my company for a bogus debt they claim I owe. The company is very small – basically just me. I do file and pay the annual “report” for the corp. Also, I keep expenses/income reasonably separate with a merchant and checking acct in corp name. However, I do make purchases, transfers, etc. from the corp accts to my personal. I haven’t yet “paid myself a salary” on income tax (I know I should). However, all I want to know at this point is could this creditor realistically go after my last savings held in a personal saving acct? I’ve had that money saved up for years before this hapenned. Thanks for any tips as I can’t get entirely straight answers from attorneys I have paid.

Answer: Yellow pages cannot go after your personal savings if they are filing against your business. They can only file against your business.

Second, you are going to get audited for doing the practices you are doing. You are illegally taking personal money out of your business account. You have to pay yourself and not continue these practices. If the IRS looks into this they will audit you and find out there’s more years to audit you still. You’ll end up owing the feds tons of money for these types of practices.

Do not pay your personal stuff out of your business account, you’ll get caught eventually.

If these yellow pages are starting a lawsuit, great. Let them. They have to prove that you agree’d to their services, they have to prove you are liable for the money they are claiming. All of it rests on them to prove you owe them. They need to prove that they provided a service that you agree’d to pay for. Should be easy to prove that you did nothing of the sort and you should be free and clear from this.

When it comes to debt collectors, you can send in a written statement that this service was never agree’d upon and that you had no idea of it until long after they claimed it. You have the legal right to ask them to attach your letter to this debt, so that anyone bringing up your credit sees it right away. I know it has to be written within so many words, so you need to find the guidelines there. I’d do that part immediately!

Lastly, why pay all the extra for a corp if you really aren’t running your business like one? Why not just work off of your social security number instead? It would save you quite a bit of money every year and you could pay your personal bills and your business ones out of the same account legally, instead of illegally like you are now. Really makes little sense for you to have an S corp under your circumstances. I can’t see paying thousands of dollars worth of fines if the IRS gets their claws into you just so you can buy toilet paper or groceries out of your business account.

Back to your main question. Personal and business cannot be legally tied together. If i file bankruptcy on my business, the money won’t be able to be taken from my personal account. I have a feeling, with the way you are doing your bank accounts, that’s why the lawyers aren’t helping you. They see you doing things illegally and don’t want much of a part of it and won’t give solid advice due to it. If they did, they could be liable as well. If i heard you robbed a bank, from your own lips, and didn’t go to the police, i could be charged with accessory. This is why you aren’t getting good help or good legal advice. With the way you are doing things, your s corp cannot protect you as well as it could have if you were doing things legally.

If this company files to go through your records, which it could have a right to do in a lawsuit, it could easily prove you fraudulent there. Which would almost ensure you looking guilty in other fields as well. Like finding out your 20 is missing and knowing there’s someone who was once picked up for shop lifting. You’d accuse them and believe it because you could prove they once stole before.

Your business practices are fraudulent with the way you pay for things. It’s easy to “pay” yourself instead and put the money into a personal account then it is to do it the way you are doing it. You can pay yourself as often as you need so that your stuff is paid for. If you have too, get a personal American Express card that has to be paid off at the end of every 30 days. Then buy all your stuff on it and then pay it off at the end of every month with one large check to yourself in that exact amount.

Local sites would be affected if government closes down

Prospects for an imminent shutdown of the federal government seem unlikely, but even if the government does shut down temporarily starting Friday, the effects locally would be limited to “non-essential” services — for instance, staffing the Lincoln Home National Historic Site.

Drunk District Attorney hits and runs from teenager.

Current rating:

As part of the contract, the borough will get to keep all the fines collected in the township. The township also adopted its 2011 budget at the meeting. There is no tax increase in the $515,284 budget.

Tom Corbett Subpoenas Twitter, Wants Anonymous Critics’ Names

Question: Can you file a second “Offer To Compromise” with the IRS if one already was rejected by appeals department?

My attorney submitted an Offer to Compromise to the IRS to resolve an outstanding tax debt. The IRS made a counter offer and my attorney said that he felt he could get them to come lower. He submitted my case to the IRS appeals department. It appears that my attorney dropped the ball in subsequent communications with the IRS and, due to not responding in a timely manner, my appeal was rejected. I just want to know if I still have the option to submit a new Offer To Compromise or if the rejection of the old one makes me not eligible.

Answer: You can always submit a new offer. You at least have an indication of what IRS wants and you can show how that is excessive.

I am an enrolled agent, a tax specialist licensed by the US Treasury Department Office of Professional Responsibiltiy (not IRS employees) to represent taxpayers the same way as attorneys and CPAs and specialize in clients who have substantial outstanding tax liabilities or long periods of failing to file returns. If you do not want to continue with the same attorney and would like some additional information outside this forum, you can send me email through my profile.

IRS reminding tax preparers to get ID numbers

The Internal Revenue Service plans to contact more than 15,000 Alabama tax preparers and 9,000 Mississippi tax preparers this week to remind them that they must renew their Preparer Tax Identification Number in order to prepare federal tax returns in 2011.

Preferred Tax Relief is Staffed with Ex-IRS Tax Attorneys a

Three-way race shapes up for two Madison council seats

MADISON – Two Republicans, one of them an incumbent, and one Democrat met Monday’s filing deadline to seek their party’s nomination in the primary elections Tuesday, June 8, to the Borough Council.

Md Biotech Tax Credits – UM BioPark

Question: Is this a crime, embezzlement, etc? Are taxes due?

A has had a bank account for years. Couple of years back A puts B and C voluntarily on the account which becomes a joint account. A deposits money in the account and takes money out (salary, bills etc). C takes money once and deposits it back. B only withdraws money several times. After a period of time B, C are removed from the account. I have the following questions about this situation:
1. Does embezzlement apply in any way to B’s actions?
2. Does B owe taxes and is this considered income? If B is late on taxes can B be officially charged and indicted by the IRS?
3. Does A have the right to take B to court for the money B withdrew? Is A entitled to have the money back.

The account was joint at the time (between relatives; no one is a spouse.)

Anyone in the judicial system, please help! No attorneys available on weekends!

Thank you!

Answer: The situation you’re in is much like lending money to a friend without a contract. Anyone with access to the account has a legal right to withdraw funds. The only way you could get your money back would be if there were some way of proving this money was a loan. You “might” be able to convince a small claims court judge to rule in your favor but I think he would rule in the other party’s favor. Also, even if you got a judgement it’s difficult to collect.

You have a point about the money being considered as income. The answer is what did B do with the money? If he just purchased items or put the money under a mattress than the IRS will have no paper trail. If he deposited the money into an account or purchases some intangible assets such as stocks there would be a paper trail for the IRS to follow. Note that with any transaction of 10,000 or more the financial institution has to fill out a CTR(currency transaction report.) I think the answer here is anyones guess. You could try small claims court. You could also tip off the IRS(this will help you prove a loss for your own write-off purposes.

Senate to take up resolution against schools using tax dollars to sue state

A resolution aimed at discouraging a lawsuit by school districts against the state of Kansas is heading for a Senate debate.

Salary Sacrifice and Fringe Benefit Tax