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Maryland Tax Law Blog

Why you don't have to feel powerless against tax authorities

If you were to find a random letter from the Internal Revenue Service or Comptroller of Maryland in your mailbox, chances are good that you would experience a tremendous sinking sensation. Indeed, you'd probably be reluctant to open this unanticipated correspondence, fearful of whatever presumably bad news was contained on the pages within.

Why does any correspondence from federal or state tax officials evoke such a response? While some of it can obviously be attributed to the fear of being hit with a large tax bill or worse, at least some of it likely has to do with the feeling of powerlessness. Specifically, taxpayers feel they're outmatched and without rights.

Do you really qualify for the Foreign Earned Income Exclusion?

You live overseas, but you do spend some time in the United States every year. You want to know if you qualify for the Foreign Earned Income Exclusion, or the FEIE.

Your desire to claim the FEIE makes perfect sense: You can reduce your taxable income significantly. In 2015, the IRS reported that you could claim a full $100,800 in some cases.

Tax obligations and vacation property

It may come as an unwelcome surprise to learn that we're already approaching the midpoint of summer. While this is never really a welcome reality -- especially for those of us who live in areas with long winters -- the good news is that there is still plenty of time left for vacations and other warm weather activities.

In fact, there is still plenty of time for those who own some manner of vacation property to not just take a trip to their home away from home, but also rent it out to someone else looking to get away from it all.

Why are Baltimore County residents being told to disregard property tax bills?

While there is perhaps no better feeling than owning your home or the structure in which you conduct your business, this possession of real property comes with a host of real responsibilities. Indeed, not only is it your responsibility to make repairs and secure insurance, it's also your responsibility to pay both the mortgage and, of course, property taxes.

Regarding this latter responsibility, this is typically the time of the year in which property owners here in Maryland will start to see their property tax bills from the county arriving in the mail. Interesting enough, however, taxpayers in the state's third largest county -- Baltimore County -- are now being told to disregard bills that arrived last week.

IRS warning taxpayers to be on the lookout for a summertime scam

At this time of the year, the last thing on the minds of most people is their taxes. This makes perfect sense when you consider that Tax Day 2018 is still so far away and there are so many warm weather activities to enjoy.

While slowing things down during the summer makes sense, the Internal Revenue Service is once again reminding taxpayers that con artists are inclined to do no such thing. Indeed, the agency is now warning about "a new twist to an old scam."

Updating withholding information ensures you pay enough taxes

Your income taxes are probably something you only think about in the late winter or early spring when you file your return. If you are employed and use a W-4, your employer handles the withholding and payment of your taxes from each pay period. It's important to note that the amount your employer withholds is directly related to the forms you fill out.

When you begin your job, you fill out a packet of both state and federal tax documents. These forms, in turn, help your employer to calculate how much should get paid toward each applicable tax, including Social Security and federal income tax.

Just how reliable is IRS.gov?

For years, the first stop for taxpayers and tax professionals with any sort of tax-related question was the Internal Revenue Service's phone line, which has always been staffed by agency employees during regular business hours Monday through Friday.

However, as wait times only continued to increase and staff became even more overwhelmed -- especially during tax season -- the agency began increasingly directing taxpayers and tax professionals alike to its website IRS.gov. The idea behind this push being that the answers to most questions could be found here.

A closer look at the enforcement options Maryland uses to collect tax debt - III

In a series of ongoing posts, our blog has been examining how it's not just the Internal Revenue Service that has a host of collection options at its disposal, but also the Comptroller of Maryland. To that end, we've been exploring just how deep the agency's toolbox is, with those who have not made or are unable to make payment arrangements facing everything from interest and penalty charges to salary liens.

We'll conclude this discussion in today's post, examining some of the more serious measures that the Comptroller's Office will not hesitate to take to collect past-due taxes.

Understanding state income tax obligations: Corporations

When a group of entrepreneurs comes together with a shared vision for a product or service for which they believe there is a real demand, it can prove to be an exciting time. That's because there will be testing to undertake, financing to arrange, employees to hire, space to rent, and even shelves to stock.

There is, however, at least one step that will likely need to be taken before any of this: the selection of a business entity. For many prospective business owners, the choice will prove to be a corporation, which offers limited liability and distinct tax advantages. 

How concerned should I be about that IRS letter?

As you make your way to the mailbox these days, chances are good that your biggest fear may be a large credit card bill, a rejection letter for a job you really wanted, or an unwanted invitation.

In other words, the last thing you expect to see in your mailbox is an audit notice from the Internal Revenue Service. This makes sense, of course, as figures show the agency audits less than 1 percent of the tax returns it receives.

Firm news & Events

Friday, November 18, 2016

Chaya Kundra will be a panelist at the New England IRS Representation Conference on Preparer Penalties.

Preparer Penalties: Everything You Need to Know! Over time the IRS has increased its focus from individual taxpayers to tax preparers. When the IRS identifies a pattern of false or fraudulent returns, it does not hesitate to impose penalties on the return preparers. This panel will walk you through the various penalties and what preparers need to know to protect themselves.

Moderator: Amanda Evans, Green & Sklarz LLC, New Haven, CT

Panelists: Chaya Kundra, Kundra & Associates, Rockville, MD, Barbara Kaplan, Greenburg Traurig, New York, NY

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