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Tax Litigation Archives

Taxpayers see delays in their offers in compromise to IRS

For some California taxpayers with burdensome tax debts, an offer in compromise, commonly abbreviated OIC, can provide relief. Under an OIC, the Internal Revenue Service agrees to accept less than the full amount of a person's tax liability in satisfaction of the debt. Many taxpayers are discovering that the relief provided by an OIC is slow in coming, however, according to a Treasury Inspector General for Tax Administration report.

As filing deadline approaches, IRS offers tips for tax debts

The calendar has already turned to April, and the deadline for filing your tax return for 2011 is fast approaching. While some may have already filed and received a refund, others may be delaying filing because they will owe money with their return. Some may even be in a position where they cannot afford to pay all of their tax debt with their return.

California taxpayers may be affected by case against TaxMasters

Two weeks ago we discussed the bankruptcy and legal troubles of TaxMasters, a national tax firm. That blog post noted that the company had settled a lawsuit filed by one state attorney general, but that it still faced another. That other suit came to a conclusion last week when a jury in the company's home state found that its practices repeatedly contravened the state's Deceptive Practices Act.

Certain tax returns more likely to be audited by IRS

At this time of year, taxpayers in California and around the country are hoping to avoid the dreaded tax audit letter. The good news is that the Internal Revenue Service only audits a small percentage of the overall population--currently about 1 percent. The bad news is that audit rates are much higher among certain groups of taxpayers, whose returns single them out for additional IRS scrutiny.

Suffering complaints, national tax service declares bankruptcy

Many California taxpayers have undoubtedly seen the television advertisements for large-scale tax firms that promise aggressive representation in tax cases with the Internal Revenue Service. Two of those firms, however, have already gone bankrupt, and a third sought bankruptcy protection this week.

IRS adds to Fresh Start program to help people pay taxes, Part 2

In our last post, we discussed how some California taxpayers can benefit from a six-month extension to pay taxes this year. But some taxpayers have large debts to the IRS that may take them a significant amount of time to pay off. There are other options that can help these taxpayers, such as installment agreements and offers in compromise. Under the Fresh Start program, the IRS has also announced changes to these options with the goal of helping struggling taxpayers.

IRS adds to Fresh Start program to help people pay taxes, Part 1

The deadline to file taxes with the IRS is just over one month away. People can face significant penalties and interest for failing to file returns and failing to pay taxes by the appropriate deadline. But Orange County taxpayers should know that the IRS has initiated new developments this year under its "Fresh Start" program that could ease the burden on those having difficulty filing and paying their taxes.

Additional taxes may apply to early withdrawals from IRAs

The economic downturn of the past few years has caused many people in California and across the country to tighten their belts and watch their budgets carefully. For some people, wages and savings were not enough to cover costs and they unfortunately had to withdraw money from retirement accounts. Under certain conditions, taking funds out of an IRA account can have tax consequences.

Complex tax rules await some California taxpayers this year

The legendary complexity of the Tax Code is common knowledge among Californians. While the IRS has taken steps to simplify the tax return process, arcane and difficult rules can come into play for many taxpayers, and mistakes made on returns can lead to contact from the IRS. In addition, the differences between California's tax laws and the federal government's can be enough to confound even the savviest taxpayers.

Certain types of forgiven mortgage debt are free from taxation

The home mortgage crisis hit many California homeowners hard, leaving some with underwater mortgages and others with foreclosed homes. Those who had mortgage debt forgiven through a foreclosure sale are not out of the woods yet, however. The amount of the debt forgiven by lenders may be subject to taxation.