Los Angeles Tax Lawyer & CPA
Los Angeles is a vibrant, dynamic, and successful city that attracts motivated people and entrepreneurs from across the nation and around the world, all of which need to utilize an experienced Los Angeles tax lawyer to defend and protect what they have built. While Los Angeles and the surrounding areas are probably most known for Hollywood and the entertainment industry, the economic activity in the area is as diverse as it is successful. Los Angeles’ port is the busiest in the nation and is adjacent to the Port of Long Beach – the second busiest port in the nation. This significant trade with China, Japan, and other parts of Asia and the world means that there is significant economic opportunity available in the city and region. Many people have leveraged these opportunities into significant financial success.
However, the cost of success is a higher than average chance of facing a tax audit that can uncover serious problems and tax liabilities. Part of this is because people with significant incomes are more likely to be audited by the IRS. This is simply the IRS going where the money is in an attempt to maximize the return on its enforcement dollar. Therefore if you have characteristics that make you a more attractive target for an audit such as significant income, ownership of a small business, or the failure to file a return you should consult with a Los Angeles tax lawyer to assess your exposure and to devise a strategy to come back into compliance with the U.S. Tax Code.
Individual and Corporate Tax Filing Duty
In the days leading up to April 15th, it seems that everyone is scrambling to get their income tax filings in order or attempting to file an extension to give them more time to figure out their individual finances. However, it is important to note that an extension applies only to the time one has to file. If a tax debt is due, that debt or a significant portion to satisfy the safe harbor provision must be paid by the original due if the taxpayer wishes to avoid the imposition of additional fines and penalties.
The truth of the matter is that most people have an obligation to file taxes each year. The reason for this is that the gross income one can earn before a tax filing obligation is triggered is relatively slight. Consider that an individual who has not yet reached age 65 and who files as a sole filer can only earn $10,150 before he or she is obligated to file a tax return, which encompasses most people residing in Los Angeles and the surrounding areas. Furthermore, many people earning less than this amount will want to file any way because filing one’s income taxes is the only way one can receive their income tax refund.
Taxpayers who fail to file, fail to pay their taxes, fail to include all sources of income, or fail to address Schedule B when they have offshore assets face a significantly higher chance of an audit and subsequent IRS tax enforcement action. Taxpayers with outstanding tax liabilities and tax issues should take pro-active steps to prevent the penalties and tax debt from continuing to grow.
International Tax Filing Obligations
Aside from satisfying one’s income tax filing obligation, many taxpayers in Los Angeles and its surrounding neighborhoods may be required to disclose foreign assets and accounts they hold or control. Whether one has an obligation to file FATCA (Foreign Account & Tax Compliance Act) is based on both the taxpayer’s filing status and whether they reside within the United States or abroad. As a general rule, taxpayers filing jointly or while living in a foreign country can hold or control a greater amount of foreign assets before a disclosure is necessary. For FATCA, a disclosure is necessary when the taxpayer holds or controls assets in excess of $10,000 regardless of filing status or where the taxpayer resides.
The failure to comply with FBAR can lead to serious penalties. Even accidental non-compliance with FBAR can result in the imposition of a $10,000 penalty for each year of noncompliance. Penalties for willful violations of the disclosure law are extreme and often exceed the original value of the account. For FATCA, a fine of $10,000 also be imposed for one’s initial non-compliance with the law. Continued non-compliance can result in the imposition of an additional $50,000 fine. Depending on your non-compliance a civil fraud penalty of 20 or 77 percent can be imposed.
We Live and Practice Tax Law in Los Angeles
While the penalties for non-compliance with tax and disclosure obligations are harsh and intimidating, the silver lining is that taxpayers can correct most filing errors while paying significantly reduced penalties. The guidance of an experienced domestic and international tax attorney can help the Los Angeles taxpayer make informed strategic and technical decisions regarding his or her tax situation. To schedule a reduced-rate consultation with the Los Angeles tax lawyer professionals of the Tax Law Offices of David W. Klasing call 800-681-1295 or contact us online today.
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