Michigan Tax Legal Questions

No, what it means is the IRS will be aware that you had some discharge of indebtedness income, so they will be looking for an income tax return that either includes this income or that explains why the income is not taxable. Of course, if there is taxable income, then you will need to pay the tax or the IRS will issue an assessment, place a lien on your assets, and, eventually, perhaps, levy (seize) assets to satisfy the tax liability.... Read More

You haven't provided enough information to give you any specific answer. In general, however, a taxpayer does not incur discharge of indebtedness income until the debt obligation is forgiven. Just because you gave a deed in lieu of foreclosure doesn't mean you don't have a continuing debt obligation to the lender. Only if, as part of the transaction, the lender agreed to release you from further liability, would you potentially have discharge of indebtedness income. Additionally, the property was worth something. To the extent of the value of the property, there will be no discharge of the debt without consideration. For example, if the property was worth $100,000 and the amount owed was $100,000 and the lender agreed to accept the property in satisfaction of the debt, there would be no discharge of indebtedness income. Instead, essentially, you sold the property to the lender for $100,000. If, however, the property was worth $100,000 and the amount owed was $200,000 and the lender agreed to take the property in satisfaction of the debt, then there may be discharge of indebtedness income.... Read More

I do not believe, in the facts presented, you are entitled to any refund. The accountant did his best and is entitled to his fees for the effort. That the IRS insists on full payment is unfortunate, but perhaps reasonable in the circumstances. As for your implied belief the IRS would never "deal" with an non-resident and therefore the effort and attempt was always futile, if would assume the opposite. the IRS is interested in collecting to the maximum extent possible taxes due, and the fact your friend is out of the country and therefore must be assumed to be more difficult to collect from than a resident or citizen means they should have had more motivation to compromise as a bird in the hand is most certainly worth two or even more in the bush. Leave the accountant alone, you have not outlined a malpractice and his earned fees are, without a lot more facts, not "rightfully" your friends. There are no guarantees in the law, or dealing with the IRS.... Read More

It is doubtful that the IRS can or will take your disability payments. This, of course, would not prevent it from placing tax liens against you. If the IRS does this, they must give you notice. If the IRS attempts to take money in a bank account they must give you advance notice of its "intent to levy." You need to contact the IRS and talk to someone there about the situation. Were these taxes you think you owe properly assessed? You need to retain the services of a tax professional such as a tax attorney or a CPA.... Read More

There is a potential gift tax issue, depending on the basis. It would suggest there are other alternatives which might be better for any number of reasons, including medicare/medicaid issues and recapture. Sometimes the easy way is not the best, or least expensive, in the long run. Seek counsel.... Read More

I would certainly need more details before I could form an opinion, yes it is possible to sue an accountant for malpractice however you have two issues, one it would appear that the claim maybe time barred by the statute of limitations, which is very short and professional malpractice cases, and the other is that you should be reviewed and been aware of the contents of your various returns before you signed and submitted them.... Read More

Set up an LLC or corporation as owner of the US bank account. If the account is opened under your social security number, it will appear that you're profiting in the Fx transactions. In addition, having bank accounts in your name and social security number with other people's money in them is playing with money laundering. That might attract attention that you don't want.... Read More

To some degree you are putting the cart before the horse, you should do all things which are necessary in order to properly set up a limited liability entity before you commence doing business in order to minimize the personal risk should something go wrong. I would suggest you buy an hour or so with a business attorney to determine how to best undertake your fledgling enterprise. Generally, nothing works unless it is done right the first time and corrections are more expensive than proper preparation.... Read More

If you live in Missouri, you don't have to pay inheritance tax because Missouri no longer has such attacks. Depending on the size of the estate of the person from whom you are inheriting there might be a federal estate tax due on that estate and generally speaking the personal representative of an estate pays any taxes which are due prior to distributing property or money to the beneficiaries of the estate. If you are in a state other than Missouri you need to check and see whether that state has an inheritance tax. If the person from whom you are going to inherit lives in another state other than Missouri that state may also have an inheritance tax. The exemptions from the federal estate tax are substantial - currently the exemption for each estate is $5,250,000.... Read More

501(c)(3) organizations are not allowed to give any of their fund raised money to one of their members - that would violate their charter and they could lose their tax exemption. They aren't even allowed to direct their benefits towards the kids who raised the funds - no 501(c)(3) can say "Only the kids who work on the fundraiser get to go on the Chicago trip." (Try telling that to the charity that supports a high school band). So, a kid that is responsible for $800 of fund raising can't be treated any differently than a kid who raised zip. They can't give her the money and they can't direct the money to follow the kid around to other groups. Refunding the extra money to the kids at the end of the season also violated their charter.... Read More

When you file a joint return, each of you is responsible for the entire amount of unpaid taxes but as long as your ex-husband is in Chapter 13, the IRS isn't permitted to take any action to collect the debt from you. This is called the "co-debtor stay". Since 2010 taxes are a "priority" debt (meaning a debt that must be paid in full during the Chapter 13), his Chapter 13 should provide for payment to the IRS. ?You need to check the terms of his Chapter 13 plan to verify that the IRS is being paid.... Read More

Your question has two distinct and separate parts, the tax part and the Illinois Secretary of State part. First, the tax part. If you filed final tax returns, federal and state, specifically marked as "final", then your tax filing obligations as to the State of Illinois and the IRS should be at an end. As to the Secretary of State, you can file dissolution documents if needed at any time. However, if you did not file the corporate annual report or pay the associated fee, then it is likely that the Illinois Secretary of State has already dissolved your corporation. You can go to the Illinois Secretary of State's website and determine the corporate standing of your business here: http://www.cyberdriveillinois.com/departments/business_services/corp.html If the Illinois Secretary of State still considers your business as in good standing, you can still file the articles of dissolution. If it is already dissolved, you probably do not need to take any further action. Because these are separate and distinct issues, I would not file another tax return as you suggest below.... Read More

Sec 131 of the Internal Revenue Code specifically exempts payments to foster parents, not natural parents, and the IRS has maintained that the exemption doesn't apply to natural parents. However in January 2014, the IRS changed it's position an it now considers payments to natural parents exempt. You have 3 years from when you filed the return to file a claim for refund. So, if you filed your 2010 income tax return on or before April 15, 2011, you must file any claim for refund for 2010 on or before April 15, 2014. You file a claim for refund on IRS Form 1040X.... Read More

You need to report all income earned on your Form 1040, regardless of where it was earned (if you are actually a full time resident in another country there are different rules). ?It doesn't matter whether you get a W-2 or not. Income earned overseas should be reported as income on Line 7 of your Form 1040. ?If you paid any income taxes to the overseas government, those are taken as Foreign Tax Credit on Line 47.... Read More