Tag Archives: Tax Law

When Should You Hire a Tax Attorney

The 2017 Tax Cuts and Jobs Act (TCJA) has made major changes to the tax code. While its effects varied widely by state, the bill has made it easier for corporations to pay less in taxes than before. Those who live in high-tax states may find that they will pay more in taxes in 2019.

When deciding whether to hire a tax attorney or represent yourself, the advantages and disadvantages should be considered. Although it is possible to represent yourself, you should not handle a tax case that exceeds $10,000 or where criminal charges are looming. The IRS has special programs for taxpayers, including the offer-in-compromise (OIC) program. You must meet certain requirements to qualify. If you do not qualify for these programs, your best bet is to hire a tax attorney.

In general, a flat-amount settlement is appropriate in small-dollar cases involving several issues. Rather than calculating damages, a flat-amount settlement requires the parties to know the tax amount attributable to each issue. If you are unsure of your tax amount, the skilled tax attorney in Oregon can help you calculate it. Ultimately, the tax amount should be fair to both parties. Once you know the amount of tax owed, you can negotiate a fair settlement amount.

Whether you are a business or an individual, a tax attorney can help you resolve your financial problems. There are many ways to resolve your tax problems, from filing returns late to appealing a levy. If your case is a tax controversy, an experienced attorney can help you resolve the issues in the most effective and cost-efficient way possible. If your case involves audits, appeals, collections, and appeals, he can help you find a solution.

The IRS has taken the next step by clarifying the tax rules for consumer protection settlements. The restitution fund would make payments to the consumers. However, there is a concern that the fund may not be completely used for restitution. There may be consumers who have not claimed the money or have been untraceable. If that’s the case, the IRS can pursue criminal charges against the settling entity. This law would also undermine the settlement structure.

The IRS does not consider emotional problems as physical injuries and illnesses. It does, however, distinguish between physical pain and emotional pain. This distinction can be important in employment cases. In these cases, the plaintiff may argue that the employer caused them to develop PTSD or made their medical condition worse. However, a settlement agreement with the IRS will be followed even if the plaintiff and defendant agree that the emotional distress was not a result of their employment. There are many nuances to these matters, but the IRS generally follows it.

The TCJA has also introduced some tax relief measures. One of the biggest changes involves attorneys’ fees. Unlike other types of fees, attorneys’ fees are no longer subject to the Alternative Minimum Tax or the 2% floor on miscellaneous deductions. For the 114th Congress, these bills were introduced by Jim Sensenbrenner and John Lewis. The bill counteracts the negative effects of multiple back pay awards by allowing incoming averaging on recovery.

In addition, settlements for property damages are not taxable. The IRS considers such settlements as reimbursement. However, if you recover $10,000 in additional damages, this would be considered taxable income. Punitive damages, on the other hand, are always taxable. It’s important to note that even if a lawsuit involves property damages, the value of the lost property will not exceed the settlement amount. If you don’t know the specific tax laws for your case, you can seek legal counsel.

An additional wrinkle to tax laws comes from emotional distress claims. While emotional distress settlements aren’t taxable, those involving physical injury are. In a car accident case, for instance, an employee may be awarded money for emotional distress and depression because of the accident. A settlement for emotional distress will not be taxable if the emotional stress is the result of a physical injury. However, an employee may be awarded compensation for emotional distress if she was the victim of malicious or libelous speech.