Tax Legal Questions

Get a tax attorney to represent you. IRS auditors aren't authorized to force you to accept their results. You need someone between you and the auditor. The first issue is to determine who's correct: you, the auditor or perhaps both or right on some issues. Then options are to attempt to persuade the auditor, to speak with the auditor's supervisor or to appeal the issues.... Read More

The bank can issue a Form 1099-C whenever they determine that they're going to forgive the debt. So the amount on the 1099-C should be any shortage between the amount of the loan and the proceeds of selling the car (the bank calls this the deficiency). The 1099-C is only taxable income, if you're solvent. So if your debts are more than the value of your assets, it's not taxable but you need to report this on your income tax return.... Read More

I don't believe there is any statute of limitations for items not reported on your filed tax returns. For example: If you filed a return, but did not include income that should have been included, the IRS can go after you anytime. If you did not file a return and you should have, the IRS can come after you anytime. For filed returns that properly include all income and properly deduct all allowed deductions, the statute of limitations is either 3 or 6 years after the return is filed.... Read More

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