Year-end tax planning is approaching, which means thousands of ads are going to flood your computer while browsing the web with suggestions on what to do in order to help you prepare.

The fact of the matter is that somehow and somewhere; you’re going to collect information and put it to use. However, we want to make sure you’re choosing the right sources to consume information from.

Being a business owner, you understand that taxes are a mandatory and vital component of operating a business. One small mistake can cost you a nice chunk of money. And proper preparation can save you tons of money as well.

Your tax money is used for mostly government functions. But, that’s beside the point. The point is that you need to be more involved and educated in order to make sure you consume the right information and make the right decisions when preparing for tax season. The good thing is that this can be accomplished by becoming active incredible organizations such as; The National Small Business Association, or the local state and National Chamber of Commerce.

When it comes to consuming information, you only need to trust reliable sources like the ones mentioned above. Just because a person is a; friend, neighbor, or relative doesn’t mean they’re educated in taxes and finances. Sorry to burst your bubble. They could be consuming the wrong information as well since there’s so much false information circulating around in society anyway.

So, if you can’t rely on people close to you such as relatives or friends, who do you go to? The simple answer is to hire a CPA. Although, there are definitely untrustworthy and inexperienced CPA’s, this is your best bet. But, figuring out who to trust all comes down to your best judgment.

Owning a business and dealing with highly complex tax returns will require education and experience in an accountant. We understand the importance of hiring an advisor or accountant to handle your financial affairs. However, the dilemma that most business owners face is choosing whether or not to hire an individual accountant or a firm.

This decision will all come down to how much firepower will be needed for the job. For example, paying $400/hr to a tax analyst for a simple 1040EZ is wasteful. That’s a simple job that shouldn’t require you to pay an arm and a leg. Therefore, it all comes down to how complex your situation is.

Another good rule of thumb is making sure your tax advisors main focus is tax pro. We’ve have seen many individuals try to have a tax auditor prepare their taxes, and it just doesn’t work out the way they want it to all the time. This is due to many advisors having different primary practices. Even if you’re paying top dollar, that doesn’t mean you’re going to get the best results if their primary practice is different than what you require.

Besides being wary of the advisor you hire, be careful of ads on the radio and TV as well. There are many companies who spend tons of money on advertising, using the money they made from previous clients they charged. Simply put, you want to hire people with experience and not because they engaged in a marketing blitz to make themselves seem credible.

Your chances of getting positive results this tax year will drastically increase when hiring the appropriate person, and being cautious of who and where you consume information from. Consider all of these options, and you will have much success this filing season.

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If you haven’t heard of Renee M. Schoenberg, you will now. Her work is all over the map in multiple countries! Renee is a DLA Piper Senior Counsel who has structured and helped so many nonprofits across 5 continents. She has helped so many that she can’t even name some of the countries that they’re located in right off the top of her head.

Some of these organizations work in an array of fields which include; fighting global hunger, offering less fortunate D.C. residents affordable legal services, sparking interest in science experiments for Chicago youth, and much more!

What makes these projects impressive isn’t just the projects themselves, but the complexity and new problems that arise during the projects. All of the causes that Schoenberg supports brings about new technical challenges when applying for tax-exempt status from the Internal Revenue Service (IRS).

This is the reason for Renee becoming interested in doing work for the public good in the first place. She enjoys the challenges that arise by overcoming them, and the emotional response that comes with overcoming these challenges comes second.

Renee has earned many achievements from doing this as well. She was one of the 5 recipients recognized for her “outstanding commitment” to volunteer legal services.

“To me, it’s the pinnacle of recognition, like a lifetime achievement award,” according to Renee.

It’s not a surprise that Schoenberg is someone who is dedicated to perfecting her craft and making a difference. Many wonder how Renee first started getting into the act of her pro bono work. Well, Renee first started helping nonprofits as a spinoff from her trust and estates work. She knew of a family who wanted to underwrite a psychiatrist’s fees so that people of lower-income can afford it.

Due to fear that the psychiatrist was trying to turn his organization into a tax-exempt organization, Renee’s application was rejected by the IRS. However, the second application was approved once she showed how the psychiatrist was charging less than the market value price for low-income customers. This sparked her interest even more in learning how to structure many different nonprofit organizations.

Renee went on to learn that the key to success when applying for tax-exemption is “Knowing what the hot button issues are going to be and diffusing them in the application.” She gives credit to thorough research to accomplish this.

Anne Geraghty Helms, who is DLA Piper’s U.S. Pro Bono Programs director and counsel, refers to Schoenberg as the nonprofit guru of the office. She consistently supervises and mentors young tax attorneys or young tax lawyers who are interested in her field, while helping the firms thousands of tax attorneys or tax lawyers located in over 30 countries.

Renee is serving a good cause in the world. No one has ever heard of Renee “declining” someone who may be in dire need of support. The fact of the matter is that they’re not too many Renee Schoenberg’s out here, that’s for sure.

There’s no question that small business owners are good for the economy and our country as a whole. They create jobs and provide helpful services and products for consumers. However, some small businesses may not have the resources or staff available to handle their finances and accounting procedures in the company, which makes the actual owners themselves man the books, and do as they please with earned capital. When the tax is evaded purposefully it is a federal offence even your tax attorney or tax lawyer won’t be able to help.

 Some may be tempted to falsify earnings since they’re handling all of the calculations. This causes many business owners do not satisfy tax obligations, whether it’s accidental or purposeful, that they’re required to follow.

Last August, Thomas G. Klocker was fined $500,000 and sentenced to 6 months in federal prison due to tax evasion. The IRS investigation that followed showed that he used business money for expensive vacations and other personal expenses not related to the company.

In Thomas Klockers’ case, his actions weren’t due to lack of knowledge, it was done purposefully. According to the judge who was over the case, his actions were “very calculated and made to cheat the system.” According to prosecutors, Klocker committed tax evasion by lying to his tax preparers by telling them his family vacations were business trips and reporting fake losses.

Klocker purposely misused company money for his comfort and lied about the use. His tax attorney tried to argue that he was a man of the community and did lots of charitable work, which he did. However, that didn’t stop him from being sentenced to 6 months in federal prison, along with a $500,000 fine.

No one wants to be Thomas Klocker in this case. Especially when you have to face a highly experienced and aggressive prosecutor from the federal government. He also paid more than $ 1.2 million in restitution before being sentenced. With that being said, it’s best to understand the tax obligations that all businesses must obey and follow. The lavish lifestyle and additional income are not worth facing months or years in federal prison, along with a hefty fine and restitution that has to be paid. So appoint a tax lawyer or a tax attorney and file your tax in time and correctly.

The Internal Revenue Service (IRS) loves to give the impression that taxpayers have many rights to IRS actions. This stands as true. However, they fail to mention how limited these rights are. In other words, they’re less than desirable. The tax system works against taxpayers. It’s as simple as that.

The IRS has been granted a massive amount of authority to assess and collect taxes, even without a judge or jury has to be involved. Many people tend to turn to the individual who prepared their tax return when battling a tax controversy or an audit. This method is fine because it does solve the majority of tax disputes.

However, tax controversy procedural rules, and correctly advising taxpayers of their limited rights to court hearings are all things you should want your tax attorney or tax lawyers to know. For this reason, the tax preparer certified public accountant or enrolled agent isn’t a good idea. If your rights aren’t correctly exercised, the IRS has the right to collect on taxes without a true fight.

Once the audit is done, the IRS will deliver a Notice of Deficiency if the IRS believes the taxpayer still owes them money. Often, accountants and clients still believe they can work with the auditor on various issues. This couldn’t be further from the truth. The Notice of Deficiency acts as the final decision made by the IRS and cannot be taken back in most cases. If for whatever reason, the Notice is rescinded, then it has to follow the procedures outlined in Revenue Procedure 98-54.

The Notice of Deficiency is considered legally assessed after 90 days and the IRS will certainly begin collecting on it if the taxpayer doesn’t properly contest the Notice of Deficiency that is.

The only two options at this point will be to either; dispute the matter in tax court, or pay the tax for now, and file a claim for a refund in federal court later. Of course, tax court is the most appropriate for taxpayers. They even offer an extremely simplified process for small cases. However, the catch is that small cases are not able to be appealed.

Cases that do not make it to the Tax Court must be brought to the Federal District Court or the U.S Court of Federal Claims, which is very expensive. Where does that leave the taxpayer? That leaves them having no choice but to pay since the federal court doesn’t make financial sense.

The “Flora Rule”, which is a huge rule that works against taxpayers, states that the taxpayer must pay the tax believed to be owed before a federal court will take on their case. Lawsuits filed against the IRS in federal court every year is only a few hundred, while tax court has tens of thousands.

The system has put up many barriers that prevent the taxpayer from getting a fair trial. Due to this, every notice that you receive from the IRS should be taken seriously and handled with urgency.

If you feel as if you are getting audited after receiving notice from the IRS, it’s crucial to see a professional tax attorney or tax lawyers who have extensive experience in tax controversies immediately. An experienced tax attorney or tax lawyers will help you go over all of your available options, and guide you to the most appropriate solution.

Many businesses and individuals fall victim to IRS penalties due to lack of knowledge. There’s no doubt that the IRS has lots of rules and regulations that may be confusing to some who are new to it. If this is the case for you, you most likely need the services of an experienced tax attorney.

Investing in a tax attorney can save yourself and your business from; criminal charges, interest, and IRS penalties that can sneak up on you. Tax attorneys are simply lawyers with extensive knowledge in the very complicated and technical field of taxes.

When is the right time to hire a tax attorney or tax lawyers?

1. If you have a taxable estate and need to file an estate tax return, you need a tax attorney or tax lawyers. You will lose out on lots of money if you don’t have a tax attorney in your corner to help you with complicated estate planning strategies.

2. If you’re starting a business, especially an LLC or corporation, you will find a tax attorney or tax lawyers useful for legal counsel. This will also help you decide on which business structure will make the most sense for you, from a financial standpoint, in the beginning, stages.

3. When conducting business internationally, you are entering into different territories where the laws and regulations are different from that of the USA. With that being said, having an attorney handy will help you with creating appropriate contracts, and other legal matters related to business.

4. When bringing a case to the IRS. Many cases brought to the IRS usually falls on death ears. An attorney will make the process easier and give you a fighting chance.

5. When there’s a criminal investigation against you brought by the IRS, this shouldn’t even be up for discussion. There’s a 100% chance a tax attorney will be needed.

6. If you commit tax fraud (which we don’t encourage), a tax attorney can help with protection on privilege.

7. When you want an independent review of your case in front of the US Tax Court, an attorney is needed 100% of the time.

What does a good tax attorney or tax lawyers look like?

At the minimum, tax attorneys have a Juris Doctor degree and should be admitted to the state bar. However, you want a tax attorney with in-depth training in tax law. Some may even have a master of laws degree in taxation. Simply put, the more education and expertise your attorney has in taxes, the better. Choosing a good tax attorney can save you a prodigious amount of money while hiring a basic lawyer can cost you money.

When handling business in general, you need a tax attorney. This is especially true if you have something to lose, which most of us do. This can be personal finances, business revenues, or your freedom (if you’re fighting a fraud case that could lead to jail time). Either way, make sure you understand when it’s time to hire a tax attorney, and how to pick a good one.

There’s no doubt that a small business owner has an overwhelming number of responsibilities that are all calling for your attention at once. However, being pressed for time isn’t a good thing because you tend to ignore the little things that can cause more stress in your life. Yes, we’re referring to an audit. While an audit isn’t something “little”, the mistakes that can bring about an audit are minor with the help of a tax attorney or a tax lawyer. The thought of a tax audit representation makes small business owners cringe inside. Although, it isn’t guaranteed that you can stop an audit from ever happening, there are some steps that you can take as a small business owner to stop it from happening in the meantime.

An audit typically involves the IRS going through your income and expenses to make sure that the amounts reported are actually accurate. During an audit, the IRS is mainly looking for; exaggerated deductions, and unreported or under-reported income. You are obligated to provide all documentation as requested by the IRS.

In order to avoid the unnecessary hassle of an audit, here are 7 red flags that should be avoided at all costs to reduce the risk of your small business being audited.

1. Having a net loss profit for 3 out of 5 years

Your business must be able to have a profit for at least 3 years out of a 5-year period. If not, the IRS will become really interested in why you’re not returning a profit but manage to stay in business.

2. Late filing and late payments

Not meeting deadlines is against your obligation and will create unwanted attention on your business, along with additional money (penalties) that will need to be paid. Always try to pay on time or at least inform the IRS that payment will be late.

3. Shareholders who are also employees getting paid big salaries

All employees should be given reasonable salaries based on their; skills, type of industry, and experience. Paying excessive salaries simply because they’re shareholders is a surefire way to the IRS wondering what else you may be up to.

4. Prodigious Deductions for entertainment, food, etc.

The best way to prove that your deductions are accurate consists of keeping all receipts. If receipts and extensive documentation isn’t available, that automatically makes you look guilty in the IRS eyes. Especially since this is a very common method individual used to get out of paying taxes.

5. Transferring income to tax exempt organizations such as nonprofits

This is a form of tax evasion in its finest form. Giving away money to charities isn’t an issue. However, it becomes an issue when it’s solely for the purpose of getting out of paying taxes on it. The IRS will be more than happy to send an audit your way and see if your “charitable” donations check out.

6. 100% Vehicle Business Use

Again, the IRS wasn’t born yesterday. Deducting money for business vehicle use is one of the oldest tricks in the book. If the vehicle isn’t designated for complete business use, it’s good to keep logs of mileage and the purpose of each trip.

7. Majority Cash Businesses

This is where places like car washes, barbershops, and bars have to be really careful. No matter what precautions you take, you’re always going to be under the magnifying glass of the IRS due to the easiness of hiding and underreporting income.

Small business owners are already up to their necks with busy work. However, it is important to document everything you do and keep receipts. You can even potentially create a system that only important files for compliance are uploaded to.

The last thing you need is the IRS knocking at your door for an audit. If you do receive a notice, do not ignore it as some businesses do. It’s in your best interest to contact a tax lawyer. Although these steps do not guarantee the IRS will audit you, it doesn’t hurt to try your best to prevent the hassle.