IRS Archives - Chicago IRS Tax Attorney

The Trifecta of Trouble: Top Three Reasons Not to Hire Your Accountant For Your Audit

October 10, 2023 by admin

Tuesday, October 10, 2023 – No one likes letters from the IRS – especially when the letter signals an audit! When the alarm bells of a tax audit ring, panic can ensue, and the immediate reaction is to pick up the phone and call: your accountant. Your accountant may have a deep understanding of your financial situation, but think twice before sending them out to represent you. Here are Three reasons hiring your accountant is a bad idea.

Lack of Legal Privilege
Unlike attorneys, there isn’t any accountant/client privilege. That means your accountant may be required to expose sensitive information during an audit. Attorneys are shielded by the Attorney-Client Privilege. This privilege provides a secure environment for you to disclose all necessary information without fear that it might be used against you.

Unfortunately, conversations and correspondences with accountants may be scrutinized in an audit. So, be careful, your accountant may be required to expose your financial dilemmas and strategies.

Training – Law, Negotiation, and Tactics
Your accountant may be a financial wizard but probably doesn’t have the training as an advocate, or negotiator. Remember, IRS Collections and examinations are a whole different area of the tax code than accounting. Tax attorneys possess a deep understanding of tax codes, precedent, and legal argumentation that can make all the difference in challenging the IRS’s claims and presenting a strong defense.
Preventing Conflicts of Interest
Remember, if your accountant was responsible for preparing your returns, they might inadvertently become part of the audit scrutiny. Their work, advice, and any errors or misjudgments they may have made will be under the microscope, potentially placing them in a position to defend their professional competency. If that happens, they may throw you under the bus.

When it comes to audits, don’t play games, hire a professional. You need an attorney with precise knowledge of tax law, negotiation capabilities, and a detached perspective. These qualities can pave the way for a more strategically sound, confidential, and strong defense against audit claims.

In the taxing times of audits (pun intended), remember that the right representative can be the linchpin in safeguarding your financial health against the scrutinizing eyes of the IRS.

If you want more tips, tricks, and info about the IRS go to OpemTax.com – OPEM tax.com and sign up for our Freedom Fighters newsletter. It’s FREE.

Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

4 Key Strategies to Beat The IRS

October 5, 2023 by admin

Wednesday, October 4, 2023 – The game is changing. I saw at least 10 articles today about the IRS targeting business owners and high-net-worth individuals. So, now more than ever, you need to secure your business’s financial matters. So, how do we navigate through this and safeguard our endeavors? Here’s a simplified guide:

Immaculate Record-Keeping is Non-Negotiable

Every Penny Counts: Ensure each penny that enters or leaves your business is well-documented. This guards not only against audit troubles but also provides a clear financial picture of your business.

Embrace Technology: If you haven’t yet, incorporate online accounting software like QuickBooks or Patriot into your financial management. With the advent of Artificial Intelligence, these tools are becoming increasingly adept at simplifying bookkeeping.

Secure Professional Help: Engage a tax advisor and, if needed, a bookkeeper to ensure that all is accurate and orderly.

Be a Maestro of Smart Tax Planning

Navigate the Maze: Taxes can perplex even the savviest among us. Smart planning transcends lawful adherence; it’s about harnessing the rules to benefit your business.
Strategic Knowledge: Know what actions are permissible and advantageous, understand what to claim, and discern where savings can be maximized to bolster your business financially.

Uphold a Clean and Honest Business Ethic

Beyond Morality: An honest and transparent business approach isn’t merely ethically sound; it’s economically smart too. A clean modus operandi does not only facilitate smooth interactions with the IRS but also enhances your reputation, which is an invaluable asset.

Unified Honesty: Ensure your team embodies the same ethical values to maintain consistency and integrity across all business operations.

Leverage Expert Advice

Decoding the Financial Language: The financial regulatory environment can be a perplexing landscape. Aligning with a professional who comprehends the intricacies can shield your business and unveil new financial opportunities.

In essence, with the IRS scrutinizing more stringently, ensuring our business finances are clean, transparent, and above reproach is paramount. Methodical record-keeping, intelligent tax planning, ethical business operations, and procuring professional advice are not just shields but also strategic weapons in ensuring your business not only survives but thrives in this scrutinized environment.

Maintain honesty, act smartly, and let’s fortify our businesses to be robust and untainted. Also, consider becoming a Freedom Fighter to harness collective wisdom and support. Visit OpemTax.com and subscribe to our FREE email newsletter for more insights and support tailored for business owners like you.

Strategies for High-Income Taxpayers: Fight Back Against the IRS

October 4, 2023 by admin

Tuesday, October 3, 2023 – The Internal Revenue Service (IRS) has recently showcased a markedly antagonistic stance towards affluent taxpayers and prosperous businesses under the guise of taking a determined stride in ensuring that wealthier taxpayers pay what’s deemed their “fair share” in taxes. This stance, unambiguously reflected in their public pronouncements, puts wealthy individuals and successful businesses under a pronouncedly meticulous lens. Make no mistake, they are targets!

With an $80 billion influx from the Inflation Reduction Act, the IRS is ready to onboard 87,000 new agents, a hefty investment with an anticipated retrieval of $180 billion in additional revenue. The agency’s strategy is undeniably transparent: it’s targeting high-income earners, presuming that some may be employing illegal strategies to sidestep their full tax obligations.

In addition to this, the IRS has taken several pivotal steps. First, they’ve suspended a pandemic-era initiative, the Employee Retention Credit (ERC), which has been a financial lifeline for numerous businesses amidst the pandemic. Second, an additional 3,700 auditors are being recruited, specifically tasked with scrutinizing the financial filings of affluent individuals and complex business entities. Third, a new division focusing on corporations with substantial pass-through income is being established. Finally, non-traditional earners, especially those using digital payment platforms, will be subject to forthcoming regulations.

Regardless of your perspective on the IRS’s intensified tactics, a prevailing theme emerges: businesses and individuals alike, especially those in wealthier brackets, should brace for amplified scrutiny.

My streamlined advice: Join our Freedom Fighters membership and Fight Back! Because when the IRS comes calling, you’ll want your financial house in impeccable order. Welcome to the new era of fiscal vigilance. Go to OpemTax.com to become a Freedom Fighter!

Demystifying the New IRS Rule on Ticket Reselling

September 26, 2023 by admin

Tuesday, September 26, 2023 – In my IRS news feed today, there was a deluge of articles – count them, 15 – all spotlighting a fresh IRS rule concerning the resale of concert and sporting event tickets. Normally, when you see a spike in stories around a particular IRS subject, it screams of a new revelation, report, or directive by the IRS. I did a bit of digging but found nothing new.

But, let’s cut through the fog – this isn’t groundbreaking news. I’ve been on this story for some time now. This tax-related stipulation was slipped into the American Rescue Plan Act of 2021, amidst a maze of other budgetary components. It modifies the reporting standards of IRS Form 1099-K, a change that took some digging to unearth.

To bring you up to speed: In the past, Third-Party Settlement Organizations (TPSOs), think Ticketmaster and StubHub, were required to issue 1099-K reporting forms only to users raking in $20,000 in revenue AND logging more than 200 transactions. So, the paperwork was minimal. The new regulation mandates reporting for anyone pulling in over $600 in revenue, no matter the number of transactions, widening the net considerably.

This piece of regulation was scheduled to roll out in the 2022 tax year. But the IRS, seemingly playing it wise, put the brakes on it on December 23, 2022, right when the 2022 filing season was knocking on the door, labeling this delay a “transition period.”

Now, as the transition period wraps up, the new regulation is on deck for the 2023 tax year. There’s legislative maneuvering in progress to amend this rule. The Small Business Jobs Act is gunning to overturn the new rule and reinstate the old ones. Meanwhile, the Red Tape Reduction Act wants to boost the threshold to $10,000 in revenue and 50 transactions.

The final resting point of the threshold is yet to be seen. But what’s clear as day is that the IRS is poised to be swamped, seemingly unprepared for the impending avalanche of forms expected with any tweak to the current setup. It’s time to stay informed, be proactive, and always remember, in a world full of red tape and regulation, knowledge is your greatest ally and weapon.

Sole Proprietorship, LLC, or Corporation: Making the Right Choice

September 20, 2023 by admin

Monday, September 25, 2023 – Listen up, taxpayers—I’m here to tell you that your business structure isn’t just a bunch of paperwork; it’s a game-changing strategy. Get this wrong, and you’ll pay for it, literally—in taxes, and maybe even in lawsuits. But get it right, and you’re one step closer to financial freedom.

You’ve got options. Let’s start simple: Sole Proprietorship. It’s the easiest to set up but don’t get too excited. This structure ties your personal finances to your business, meaning if your business goes belly-up, your personal assets are on the line. And here’s another kicker: all your business profits are taxed as personal income. You think that’s smart money? Think again.

Now, let’s talk about the Limited Liability Company, or LLC. It’s the darling of the small business world for good reason. With an LLC, your personal assets get a layer of protection, and you can decide how you want the IRS to tax you. But remember, flexibility means more decisions; more decisions mean more room for mistakes. Get educated.

Then we have corporations—S-Corps and C-Corps. S-Corps are similar to LLCs but come with their own maze of rules. As for C-Corps, they’re their own beasts entirely. The corporate tax rate may be lower but beware of the double taxation trap. Profits can get taxed twice—first at the company level, then again when they reach your pocket as dividends.

Look, taxpayers, don’t play guessing games with your financial future. It’s critical to talk to a tax attorney and get the best advice for your specific situation. Remember, it’s not just about making money; it’s about keeping it, and making it work for you.

The Trifecta of Trouble: Top Three Reasons Not to Hire Your Accountant For Your Audit

4 Key Strategies to Beat The IRS

Strategies for High-Income Taxpayers: Fight Back Against the IRS

Demystifying the New IRS Rule on Ticket Reselling

Sole Proprietorship, LLC, or Corporation: Making the Right Choice

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