Monday, March 31, 2008

New Legal Podcasts

Recently, a few lawyers at Weiss Berzowski Brady LLP (the law firm I work with) recorded a few new podcasts concerning various business law issues. As I believe the legal podcasts address issues that may be relevant to readers of this blog, I include information about the podcasts (and links) below.

The first legal podcast was recorded by Attorney Jim Swiderski on March 27, 2008.

This podcast introduces the listener to various techniques utilized by majority shareholders to force out troublesome minority shareholders in Wisconsin corporations. The techniques covered by Jim Swiderski include mergers (statutory, short-form, and triangular and reverse triangular), reverse stock splits, and voluntary corporate dissolutions. Click here to go to the podcast.

The second legal podcast was recorded by Attorney Mark Siler on March 28, 2008.

Mark Siler discusses the flexibility of a limited liability company (LLC) operating agreement and the Wisconsin Limited Liability Company Law (WLLCL). Despite the flexibility of this business form, additional issues may arise, as illustrated by the case Kasten v. Doral Dental USA, LLC (2007 WI 76). (Click on the case name for the written decision.) Click here to go to the podcast.

Friday, March 28, 2008

Friday's Tax Quote.

"Taxes: Of life's two certainties, the only one for which you can get an automatic extension."

- Anonymous

Tuesday, March 25, 2008

“Pay Pennies on the Dollar” or Something Like That (thoughts on picking a tax professional to help you resolve your tax debts).

If you have ever stayed up later than you should on weeknight, you have seen the commercials promising that if you call their company, you won’t have to pay all of your tax debts. They say that you can settle your tax debts for “Pennies on the Dollar.” Unfortunately, you can’t get out of all of your tax troubles for “Pennies.”

What these commercials are talking about is the Offer in Compromise program. Under the program, a person that qualifies can resolve their tax liabilities for less than the full amount. The program exists but the catch is that you have to qualify. Not everyone qualifies, in fact, most do not.

If you are going to investigate the Offer in Compromise option, you will want to consult with a reputable tax lawyer or accountant. That tax professional should give you an honest assessment as to whether you stand a chance at a compromise. If you blindly sign up with the company that promises the most, beware, you may end up paying a large fee for a compromise application that is doomed to fail.

When considering whether to file an Offer in Compromise, you should be aware of the following statistics:

-- Generally, only 25% of all filed offers are accepted by the IRS. (While the acceptance percentage has remained somewhat consistent since 2005, the total number of filed offers have dropped.)

-- Since 2005, the number of offers submitted has dropped by almost 38%.

-- Since 2001, the number of offers submitted has dropped by 63%.

-- The total number of accepted offers in 2007 was only 11,618. This is down from 19,080 in 2005 and 38,643 in 2001.

(see chart below for additional statistics.)

What does all of this mean? It means that it is becoming more and more difficult to get an accepted compromise of tax debts. It also means that you should be careful in choosing a professional to help you. Before you submit an Offer in Compromise based on an inability to pay, your representative should review a financial analysis of your circumstances. If they do not, you will want to ask plenty of questions as to why they believe you would qualify for a compromise. Make sure that you are comfortable with what you are being told and that you don’t buy in to promises that are too good to be true.

Tuesday, March 18, 2008

The IRS Announces the Economic Stimulus Payment Schedule.

Whether people are calling them Economic Stimulus Payments, tax rebates, tax refunds, or whatever, the fact is, the IRS will start sending them out soon. If you qualify, your stimulus payment should be deposited into your account or mailed to you between May 2 and July 11. (Click here to read a blog post on whether you qualify.) The deposit/mailing schedule is outlined in the image below.

If you have already filed and told the IRS to direct deposit any refund into your bank account, you should expect that the stimulus payment will be deposited between May 2 and May 16. If you filed and told the IRS to mail the refund to you, it could be as late as July 11 that the IRS mails the payment. The message? When you file your tax return, tell the IRS to direct deposit your refund. That should get the stimulus payment to you sooner.

The payment schedule depends on the last two digits of your Social Security Number. The lower that number, the sooner you will get the payment. This is the same way that the government sent out the rebate checks last time. Maybe sometime they’ll go in reverse numerical order.

A caveat on these payments, however, is that if you owe back taxes, delinquent student loans or child support, don’t expect a stimulus payment. The IRS will apply the stimulus payment against these outstanding debts. Also, if the IRS has trouble processing your return (for whatever reason) your stimulus payment will be delayed. For this reason, make sure that your return is correct. Don’t inadvertently delay your payment by transposing figures in your child’s Social Security Number.

If you are interested in more information, you can check out the podcast that the IRS prepared on the Economic Stimulus Payments by clicking here.

The IRS has also created a handy on-line calculator to help those who have filed returns, determine the amount of their stimulus payment. The calculator can be found by clicking here.

Sunday, March 16, 2008

The IRS Sends An Economic Stimulus Payment Notice.

The images above are from the recent notice that the IRS is sending out to taxpayers to tell them about the Economic Stimulus Payments that most people will qualify to receive. If you qualify for the stimulus payments, all you need to do to get the payment is file a 2007 tax return. Ordinarily, certain taxpayers are not required to file a tax return if their income falls below a certain amount. The notice serves to tell these people that even if they are not required to file for 2007, they should file a 2007 tax return if they want to receive the payments. The message? If you do not file a 2007 tax return, the IRS will not know that you are entitled to a payment and you will not get one.

Generally, to qualify for the payments a person must have $3,000 or more in earned income, Social Security benefits, and/or certains veterens' payments. People may be able to receive up to $600 ($1,200 for those married and filing a joint return). A taxpayer may also get a $300 payment for each child. The payments will be phased out and eliminated for those with an adjusted gross income in excess of $75,000 ($150,000 for married filing jointly).

Once a return is filed, the IRS will sort out the amount of payments that you should receive. If you want to read the full notice on the Economic Stimulus Payments, just click on the above image for a full screen view.

Friday, March 14, 2008

Friday's Tax Quote.

"The power to tax the exercise of a privilege is the power to control or suppress its enjoyment."

-William O. Douglas

Friday, March 7, 2008

Friday's Tax Quote.

"[The Internal Revenue Code is] about 10 times the size of the Bible and, unlike the Bible, contains no good news."

-Don Nickles