Few areas of the law are as complicated as the tax code. If it wasn’t enough dealing with the federal government regarding taxation issues, the State of Florida also has its own taxation issues, as well. Often, you could face tax consequences from both state and federal governments at the same time.
A tax lawyer in Melbourne, Florida could help you with any of these matters. An attorney from our firm could work with you to develop a plan for the future or resolve your IRS tax debt from the past.
Tax Planning Issues
Tax lawyers can help you develop a plan to minimize your tax liabilities. This process is known as tax planning, and it could have a tremendous impact on your finances now and in the future.
Estate Tax
For some people, the threat of estate tax is the biggest taxation issue they face. However, the brunt of the estate tax burden will be felt not by the individual making the tax plan but instead by their heirs.
There is no estate tax under Florida state law; however, the federal estate tax can be substantial. In some instances, this tax could take as much as 40 percent of the entire taxable estate. The good news is there are exemptions that apply to estate tax. Our team can work with you to develop a plan that minimizes the impact of the estate tax after your passing.
Capital Gains
Certain investments, including stocks and real estate, could result in sudden and substantial profits. However, these profits could be subject to a steep capital gains tax. There are several ways to bypass this tax liability under the law. This includes the use of exemptions for your primary residence.
There are also options for charitable giving or gift-giving that spreads these gains out to other entities. This lowers your total tax burden while allowing you to shift assets to loved ones or charities close to your heart.
Income Tax
Florida is one of only seven states to lack any form of income tax. Be that as it may, there are federal taxes a Florida resident should be aware of. Florida also has lax rules regarding taxing Social Security benefits or 401(k) withdrawals.
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Resolving Tax Controversies
A tax controversy arises from a discrepancy between your tax returns and the other records related to your income and assets. Controversies could involve acts of fraud, simple math errors, and anything in between. These controversies could occur with either the state or federal government.
Dealing with the IRS
Federal tax controversies must be resolved with the Internal Revenue Service (IRS). These controversies could arise after you notice you have unpaid tax obligations. Alternatively, you might learn of this tax debt during an audit by the IRS. Under either scenario, there are five options available to resolve these tax controversies.
- Installment Agreements. The simplest method for resolving a tax controversy with the IRS is to simply pay what they say you owe. Since most people do not have cash on hand that will cover their full tax burden, the IRS will negotiate installment agreements that involve monthly payments until the delinquent balance is paid in full.
- Partial Payment Installment Agreements. This option is similar to a standard installment agreement. Where they differ is that a partial payment installment agreement only pays back a portion of the total debt owed. You would have to not only negotiate an installment agreement with the IRS but also get them to agree to take less than the full balance.
- Offer in Compromise. An offer in compromise is the best possible outcome for most tax controversies. This is an agreement that allows a taxpayer to resolve their debt for less than what they owe. While these are particularly favorable, the reality is they are also uncommon. Only a fraction of the people that owe the IRS money will resolve their debts with an offer in compromise each year.
- Bankruptcy. Usually, a bankruptcy discharge will have no effect on a person’s tax debt, but there may be some tax debts that are dischargeable through bankruptcy, especially older debts.
- Declared Uncollectible. Another option is to be declared “currently not collectible” by the IRS. This status means you do not have the resources to pay your tax payments. While this option allows you to defer your debts to a later date, your taxes will still be owed once your financial situation improves.
Dealing with the State of Florida
You could also find yourself facing tax consequences with the Florida Department of Revenue. Like the IRS, the Department of Revenue is in charge of tax collection for the State of Florida. Like the IRS, the Department could have any number of reasons to flag you for an audit.
Some examples could include a late payment or a transaction with someone else that is already under audit. What’s more, the State of Florida could decide to audit you based on the knowledge that the federal government is currently auditing you as well.
You could need a variety of documentation to deal with the audit process. This could include everything from business expenses to cash receipts. You could also be required to provide tax documentation from previous years, as well as the general ledgers used by your business. An attorney from our firm could assist you with putting together this documentation.
Whether you are facing an audit, dealing with a tax conflict, or require planning advice, a tax lawyer in Melbourne could have the answers you need. Our attorneys are ready to help you no matter what your tax circumstances might be.
Work on Your Tax Issues with a Melbourne Tax Lawyer
If you are ready to address your taxation issues head-on, the team at Bogin, Munns & Munns can serve as your advocate. Our firm is dedicated to helping consumers navigate state and federal tax laws. Our ultimate goal is to ensure your rights are protected and you do not pay more than is required under the law. To learn more, call for your initial consultation.
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