Michigan Tax Legal Questions

No, you're not liable on his back taxes. But you shouldn't marry him until you cleans up the back taxes issue. Either by filing bankruptcy, doing an installment agreement or an offer in compromise. Because if he's married that all those will be based on his joint income with you. Now they will only be based on his own income.... Read More

If the IRS hasn't issued a deficiency notice yet, then you don't owe it yet. If you're worried about the possible penalties (100% of the tax and interest 3% annually), you can make a DEPOSIT for the amount of taxes claimed. You must write a letter to the IRS stating that this is a DEPOSIT against a contested liability. Never say it's a PAYMENT.... Read More

There is no tax consequences from cashing a CD, the income has been taxes annually anyway. When you convert a residence to rental, you'll lose the home sale exclusion on any gain for selling the home (but it doesn't sound like you're sitting on a big gain anyway). You will be able to depreciate the house, which will probably defer taxes on all or substantially all the income from renting. A non-tax item you should know is that you'll have to replace your homeowners insurance with a commercial property policy. Cost shouldn't be much different (there is less property to cover - because all your stuff like TVs and clothes aren't in the rental, which makes it cheaper but there is more liability - your tenants can sue you for a fall on a broken step but you can't sue yourself - which increases the cost)... Read More

Generally, I advise all business people to have an attorney represent them at an IRS audit. ?Most people are quite nervous about an audit and being nervous tends to make you unsure and causes mistakes. ?Being represented by an attorney, deflects a lot of the pressure on the attorney. ?Of course, the attorney knows the limits of the IRS's authority and the IRS is much more willing to negotiate with an attorney than with the client. You have an additional problem - you don't have adequate records to support your deductions. ?The attorney will be able to help you reconstruct your records and support your return.... Read More

The first thing is to challenge the audit report to the auditor's supervisor. ?Some auditors come to amazing conclusions (I had one that wasn't familiar with the concept of a checking account or that expenses could be paid with a little piece of paper called a check. ?I've had several that didn't grasp that regardless of the amount of revenue taxable income was revenue minus expenses - "Your client had sales of $4 million dollars, so it's taxable income must have been at least $1 million.") ? If that doesn't result in a satisfactory resolution.... Read More

There is an annual exclusion and a lifetime exemption from the gift tax. The annual exclusion is $14,000 that mean you can give a person $14,000 every year without any gift tax effect. ?If a married couple is making the gift, the limit is $28,000 (husband can give $14,000 and wife can give $14,000) if the married couple is making a gift to a married couple the limit is $56,000. ? The lifetime exemption is currently $5,430,000. ?That means you can give a total of $5,430,000 (over any annual exclusions) to any number of people without paying gift tax. ?To use the lifetime exemption, you'll need to file a gift tax return to inform the IRS that you've used part or all of your lifetime exemption.... Read More

Yes, since you know that he hasn't paid the taxes and you're taking gifts from him, they can seize your assets up to the amount of the gifts over the last four years - whether you filed jointly or not. If you filed jointly, you're automatically liable on his taxes. There is something called "innocent spouse relief" but since you're accepting these gifts from him you probably don't qualify.... Read More

Eventually, the IRS will catch someone who spends money without filing a tax return. For example, it's easy to find every resident of an apartment block. If the rent is, say $1,000 a month and one of the residents doesn't file a tax return showing at least $30,000 of income, they'll get real nosy about how your paying the rent. Generally, I'll look at the paper trail a client has made before deciding whether to file for previous years. In any case, file for 2014. Then at least he's not going to be constantly making the problem worse.... Read More

The main issue is whether she had the authority to write checks or otherwise make payments. If she had the authority, then the IRS reasons that she made a choice not to pay the taxes and will be personally liable. If she didn't have the authority, then the IRS can't pursue her for the taxes. The first thing the IRS will do is look at bank records and see if she was a signatory on the company's checking account .... Read More

What exactly is the point of giving the money to your father for him to make your down payment? You can avoid any tax implications by simply making the down payment yourself. However, since there is actually no gift for your father here (he's does get to keep your money, when he gets it he's obligated to make the down payment). There is no gift tax. Just document the flow of cash in case the IRS ever looks at it. On the other hand, this has the smell of being money laundering. If it's illegally obtained money, don't get your father involved. It's a crime even if he doesn't understand what you're doing.... Read More

I need more details to counsel you. It may well be that you have been relieved of $20,000 in debt and it is been written off, therefore you would not have to repay that dad but you have other debts that you are paying. If the debt is not been written up, you should not have received a 1099.... Read More