Demetrius J. Karos, Ltd. Tax Representation From A Former IRS Employee
According to some statistics, fewer than 1 out of 3 family-owned businesses actually make a successful transition in ownership from one generation to the next.
The prospects of a family-owned business making it down to the fourth generation or further are quite slim, with only 3% of all family-owned businesses hitting this benchmark.
A couple made famous by their reality television show is now facing several years or even decades in federal prison on tax evasion charges. The couple's accountant also faces charges and has been accused of lying to IRS investigators.
For their part, the couple claims that they are innocent of federal tax evasion. They say that the accusations against them are based on the word of unreliable ex-employee who gave the government bad information and false documents which painted the couple in a guilty light. The government, not surprisingly, views the case differently.
Most people would agree that owing the IRS money is not a position you want to be in. If it does happen, odds are that you may not have the funds readily available to pay what you owe.
If you are like other people across the country, including many here in Illinois, you may already be struggling to keep up with all of your other financial obligations. Under these circumstances, you may find it difficult to even enter into an installment agreement or an offer in compromise in order to settle your tax obligations. Are there any other alternatives?
Previous posts on this blog have discussed how our law office can help clients in the Chicago area plan to pass their wealth down to the next generation. Indeed, careful estate planning can ensure that a family receives their loved one's property with as little conflict and as a minimal of a tax burden as possible.
However, planning an estate is still only the first step in a complicated process. After the death of a loved one, and possibly even during their lives, a family will also have to deal with probate or trust administration. In some cases, administering a guardianship or handling an elderly or ill person's affairs through a power of attorney may also present legal challenges for a family.
Contrary to popular perception, it is not illegal to pay an employee in cash per se.
However, it is a risky move for a number of reasons. The big issue with so-called under the table, that is, cash, payments is that it is quite easy to fall short in one's legal obligations to withhold and tender payroll taxes to the federal and state governments.
A power of appointment is an estate planning device, used in a will, with which many people in the greater Chicago area may not be familiar.
Basically, a power of appointment confers on another person the ability to give to a third party some portion of a decedent's property. To give an example, the most basic power of appointment might specify that "my wife Jane shall distribute my baseball card collection as she so desires." Unless the power of appointment explicitly prevents Jane from doing so, Jane can even choose to give the baseball card collection to herself.
Especially when one is self-employed in a business, getting a notice of a proposed adjustment to taxes can mean a lot more than just having to come up with some extra money to pay the IRS, or the state taxing authorities, for back taxes.
Indeed, sometimes these adjustments could lead to a bill of tens of thousands or even hundreds of thousands of dollars for several years of tax returns. Few small businesses can afford to pay off a bill of this amount all at once.
If you started a business in 2019, you probably heard that you wouldn't get many tax breaks because of the 2017 Tax Cuts and Jobs Act. While some self-employment deductions have gone away, some only temporarily, you still have others you can take advantage of when you file your taxes.
As you plan the remainder of your year in anticipation of tax time, it would help you to know what you can and can't do when it comes to filing your taxes.
When people think of setting up a limited liability corporation, or LLC, it is usually for business reasons. For example, a businessperson may like the idea of having some degree of legal protection like what an LLC offers. Moreover, an LLC also offers important tax benefits to businesses.
In some cases, it may even be a good idea for a person to use an LLC as an estate planning device. Basically, to use this device, a couple would spend the money to form an LLC. Typically, the directors and officers of an LLC would be the parents. However, the LLC would also include the children as non-voting members so they can receive the benefits from the LLC.
A businessman in another state recently pled guilty to federal charges alleging that he engaged in a rather elaborate scheme to avoid paying taxes. The man was involved in supplying building materials as well as other businesses, some of which he operated with his family.
According to the IRS, the man used his business account to pay the real estate taxes on his vacation home. While this would qualify as an in-kind benefit, and thus, reportable business income, he did not report this on his individual 1040 tax return.
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