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McFarlane Law

A Tax Law Firm - 480.991.0032

What to Do When You Cannot Pay Your Taxes

When you need assistance in resolving a tax issue, you can rely on our experience and knowledge to efficiently and effectively respond to the IRS and find a reasonable resolution to your tax problem. The IRS and ADOR will not allow you to delay dealing with your tax problems. However, there is assistance that we can provide to help you deal with the IRS and ADOR.

Rather than let the IRS take your property or bank accounts, you can negotiate a collection alternative to those actions. You can enter into an installment payment plan to pay the full liability. You can also request Uncollectible Account status. Lastly you may qualify for an Offer-in-Compromise (OIC). The type of agreement that works for you depends on your facts and circumstances.

When available, we prefer the OIC option. The basis for an OIC is a formula referred to as “Reasonable Collection Potential” or “RCP.” RCP is effectively the net equity in assets plus the taxpayer’s excess future income for 12 or 24 months, depending upon how the OIC Application is structured. There can be significant planning done to help a taxpayer maximize the potential for the OIC’s acceptance.

If you or someone you know has an issue with paying their federal or state taxes and needs help to end their IRS nightmare, please contact us.

When you need a top Arizona tax lawyer, call:

McFARLANE LAW – A Tax Law Firm

T. 480-991-0032 / e: [email protected]/ net: www.taxlawaz.com

All we do is resolve tax problems! We have years dealing with the local IRS and ADOR agents.

With offices around the Phoenix valley, Tucson, and Flagstaff.

We represent clients at all administrative agency and appeal levels, the Arizona Tax Court, and the federal US Tax Court, and throughout Arizona: Phoenix, Glendale, Peoria, Scottsdale, Mesa, Tempe, Chandler, Queen Creek, Yuma, Casa Grande, Tucson, Sierra Vista, Bisbee, Flagstaff, Prescott, Payson, Coconino County, Yavapai County, Maricopa County, Pima County, Cochise County, Pinal County.

WE’VE GONE VIRTUAL!!

McFARLANE LAW-A Tax Law Firm is now a virtual law firm!
Send any mail or correspondence to:
PO BOX 30405, PHOENIX, ARIZONA 85046-0405
Our phone number and email address remain the same.

With over 30 years of experience in Tax Audits, Appeals, Tax Court Litigation, Collection, and Payment Plan Negotiations, we can assist you or your clients resolve tax problems.

Referrals: We regularly work with attorneys, CPAs, and bookkeepers. We are especially respectful of your relationship with your clients in a referral situation.

Thank you for your continued confidence in our practice !

McFARLANE LAW – A Tax Law Firm

PO BOX 30405 * PHOENIX * AZ * 85046-0405

T: (480) 991-0032 | F: (480) 483-6673

[email protected] | www.taxlawaz.com

Tips for people starting a new business

Understanding the tax responsibilities that come with starting a business venture can save taxpayers money and help set them up for success. Contact your local tax attorney for advice and answers to help you through the process of starting a new business.

Here are five tips for new business owners.

Choose a business structure.

The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:

  • Sole Proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more people. A partnership is a flow thru entity, meaning that income, losses, deductions and credits flow thru to the partners based on agreed upon allocations.
  • Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders.
  • S Corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders – much like a partnership. An S Corp must file an election with the IRS to be treated as an S Corp.
  • Limited Liability Company: A business structure allowed by state statute. 

Choose a “tax year.”

A “tax year” is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:

  • Calendar year: 12 consecutive months beginning Jan 1 and ending Dec 31.
  • Fiscal year: 12 consecutive mos ending on the last day of any month except Dec. 

Apply for an employer identification number.

An “EIN” is also called a federal tax identification number. It’s used to identify a business. Most, but not all, businesses need one of these numbers. It’s important for a business with an EIN to keep the business mailing address, location and responsible party up to date.

IRS regulations require EIN holders to report changes in the responsible party within 60 days. They do this by completing Form 8822-B, Change of Address or Responsible Party and mailing it to the address on the form.

Have all employees complete these forms:

  • Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
  • Form W-4, Employee’s Withholding Allowance Certificate

Pay business taxes.

The form of business determines what taxes must be paid and how to pay them. Be sure to engage a knowledgeable tax attorney and CPA/bookkeeper to assist in setting-up the tax payment structures before you start the business.

Starting a Business? Contact us!

If you plan to start a business, call McFARLANE LAW – A Tax Law Firm for assistance.

McFARLANE LAW – A Tax Law Firm

T. 480-991-0032 / e: [email protected]/ net: www.taxlawaz.com

All we do is resolve tax problems! We have years dealing with the local IRS and ADOR agents.

With offices around the Phoenix valley, Tucson, and Flagstaff.

We represent clients at all administrative agency and appeal levels, the Arizona Tax Court, and the federal US Tax Court, and throughout Arizona: Phoenix, Glendale, Peoria, Scottsdale, Mesa, Tempe, Chandler, Queen Creek, Yuma, Casa Grande, Tucson, Sierra Vista, Bisbee, Flagstaff, Prescott, Payson, Coconino County, Yavapai County, Maricopa County, Pima County, Cochise County, Pinal County.

Beware: The IRS is Sending Important Notices with Bad Dates

Several of my clients received IRS Notices with due dates that already expired by the time I received the Notices because the mail date stated on the Notices was months ago-this despite being recently mailed!! The pandemic shutdown really messed things up with all agencies.

The National Taxpayer Advocate stated that the IRS generated more than 20 million notices that were printed but not immediately mailed. As a result, the notices bear dates that now have passed, some by several months. Many of the Notices are time sensitive and require taxpayers to respond by deadlines that have also passed.

The IRS is aware of this problem and by allowing the Notices to be “late mailed,” they are intentionally creating a false entry on tens of thousands of taxpayers official records of account (ie., transcripts).

After Congressional intervention and demand, the IRS is now granting additional time to respond before interest or penalties apply and the IRS is putting inserts with the letters to explain something about the mismatch in the date of mailing and the dates on the letters. The problems are many with this error on the IRS’s part that will impact taxpayer’s accounts into the future.

If you have received an incorrectly dated IRS Notice, call:

McFARLANE LAW – A Tax Law Firm

T. 480-991-0032 / e: [email protected]/ net: www.taxlawaz.com

With offices around the Phoenix valley, Tucson, and Flagstaff.

We represent clients at all administrative agency and appeal levels, the Arizona Tax Court, and the federal US Tax Court, and throughout Arizona: Phoenix, Glendale, Peoria, Scottsdale, Mesa, Tempe, Chandler, Queen Creek, Yuma, Casa Grande, Tucson, Sierra Vista, Bisbee, Flagstaff, Prescott, Payson, Coconino County, Yavapai County, Maricopa County, Pima County, Cochise County, Pinal County.

The IRS Has Been Sending Notices with Bad Dates

Taxpayers need to keep a careful eye on their IRS Notices. Many IRS Notices, many with statutory deadlines were dated during the IRS shut-down due to COVID-19, but not immediately mailed. Consequently, there are many IRS Notices with expired action dates.

The TaxpAyer Advocate stated that during the shutdown, the IRS generated more than 20 million notices, many of which were not mailed.  As a result, the notices bear dates that now have passed, some by several months and some of the notices require taxpayers to respond by deadlines that have also passed.

This IRS mishandling creates a false entry on tens of thousands of taxpayers’ official records of account. The expired action dates could preclude taxpayer’s appeal rights.

If you have just received an IRS Notice with a mailing date in March, April, May, or June, be sure to keep the envelope and Notice and record the day you received the Notice. You should call your tax attorney to discuss whether the situation requires action.

When in doubt and in need a top Arizona tax lawyer, call:

McFARLANE LAW – A Tax Law Firm

T. 480-991-0032 / e: [email protected]/ net: www.taxlawaz.com

All we do is resolve tax problems! We have years dealing with the local IRS and ADOR agents.

With offices around the Phoenix valley, Tucson, and Flagstaff.

We represent clients at all administrative agency and appeal levels, the Arizona Tax Court, and the federal US Tax Court, and throughout Arizona: Phoenix, Glendale, Peoria, Scottsdale, Mesa, Tempe, Chandler, Queen Creek, Yuma, Casa Grande, Tucson, Sierra Vista, Bisbee, Flagstaff, Prescott, Payson, Coconino County, Yavapai County, Maricopa County, Pima County, Cochise County, Pinal County.

I Owe Past Due Taxes. Can the IRS Take My $1200 Economic Impact Payment?

Generally, the answer is no. The exception is if the taxpayer owes child support arrearages.

Under the CARES Act guidelines and subsequent direction, Economic Impact Payments/recovery rebates/stimulus checks cannot be offset to pay any debt except child support.

However, “normal” federal tax refunds remain fair game in the absence of an Offset Bypass Refund (OBR) request. NOTE: OBRs may be slightly easier to come by in these coronavirus times.

If you will have a refund on your 2019 return, but owe past due taxes and wonder if you will receive your refund this year, you should file an extension until Oct 15, 2020 and contact a tax lawyer to analyze your potential for an OBR.

When in doubt and need a top Arizona tax lawyer, call:

McFARLANE LAW – A Tax Law Firm

T. 480-991-0032 / e: [email protected]/ net: www.taxlawaz.com

All we do is resolve tax problems! We have years dealing with the local IRS and ADOR agents.

With offices around the Phoenix valley, Tucson, and Flagstaff.

We represent clients at all administrative agency and appeal levels, the Arizona Tax Court, and the federal US Tax Court, and throughout Arizona: Phoenix, Glendale, Peoria, Scottsdale, Mesa, Tempe, Chandler, Queen Creek, Yuma, Casa Grande, Tucson, Sierra Vista, Bisbee, Flagstaff, Prescott, Payson, Coconino County, Yavapai County, Maricopa County, Pima County, Cochise County, Pinal County.

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