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Owning a second home, especially in retirement, isn’t unusual. Others may not want the responsibility of owning a second home and instead rent homes in Arizona to escape winter. What many don’t realize is that, even if their residency remains in another state, they may still be on the hook for paying taxes in Arizona.

With the latest news release from the IRS, we can expect increased scrutiny for Employee Stock Ownership Plans.

When the IRS wants to collect a tax debt, it has several options, including tax liens and levying property to satisfy a debt. But when the government is concerned that following the usual collection procedures will result in a loss to the government, they can use a jeopardy assessment or levy.

Section 6321 of the Internal Revenue Code (IRC) grants the Internal Revenue Service (IRS) the ability to issue liens on a taxpayer's property. Overall, this provision is very broad, covering almost any delinquent taxes, but there are subtleties in the law that can profoundly impact taxpayers' liability.

If the IRS has levied and seized your property, you probably have many questions about how this works and whether you can recover your property. In some cases, you can recover your property if you act quickly enough, make alternate payment arrangements, or you can show the property seizure creates an economic hardship.

From news articles to casual conversations, people often use the terms “tax fraud” and “tax evasion” as if these two things are the same. But, in the eyes of the law, these concepts are not synonyms. They're different concepts with distinct requirements and consequences. Tax Fraud vs. Tax Evasio...

If you're facing prosecution for a tax crime, you may be considering fleeing the United States to avoid prison and wonder what would happen if you do so. It's impossible to state all of the possible outcomes in a blog post—for that, you need an experienced attorney to review your case—but we can ...

How long does the Internal Revenue Service have to collect unpaid taxes from you? The statute of limitations under the Internal Revenue Code is then years that begins running after the first notice you receive foran outstanding tax balance.

A taxpayer’s intent, or reasons, for underreporting income or otherwise having errors on a tax return matters. The IRS divides this into willful and non-willful conduct.

Arizona is a "community property" state, meaning the law supports that spouses share ownership of assets acquired during their marriage. This can include any debts that are owed by spouses to the Internal Revenue Service. The IRS uses a two-step process to determine what qualifies as community property regarding one spouse's debt. In determining the

Whether a taxpayer’s activity is a business or a hobby can potentially affect their taxes and tax liability. The IRS defines a hobby as an activity a person pursues for enjoyment and not for making a profit. Businesses, in comparison, are activities that are engaged in for the purpose of making a profit.

Taxpayers have the right to minimize their tax liability. The problem arises when they use illegal or prohibited practices to escape their liability. One of these banned methods is known as sham transactions.

Recognizing that even the best-run businesses often have gaps in their documentation, the Cohan Rule fills out a middle ground, allowing businesses to claim expenses even when they’re missing receipts or other needed documentation. The rule essentially recognizes that businesses incur expenses, and estimates of those expenses are reasonable.

Under the new rules, partners no longer have a role to play in any audit or examination. They aren’t even notified of the audit and won’t be part of any defense during the examination. While the partnership itself will be notified of the audit, individual partners won’t be informed.

Mistakes happen on tax returns. In some cases, the IRS will request a revision, and the taxpayer will correct the mistake. In other cases, the taxpayer may need to pay not only the unpaid taxes and interest but also a penalty.

When the IRS is investigating a taxpayer for mistakes on a tax return or a lack of a return, the agency has the power to gather evidence. This includes books, papers, records, and other documents that might be relevant for the investigation.

When employers fail to pay payroll taxes, the IRS may assess them under the Trust Fund Recovery Penalty (TFRP). The IRS may assess the TFRP against anyone who is responsible for collecting and paying these taxes and willfully fails to pay them.

One of the lesser-known branches of the IRS is the Office of Professional Responsibility (OPR), which oversees professionals who work with taxpayers. OPR’s responsibilities include ensuring tax advisors and other tax professionals follow Circular 230’s standards.

The IRS will send out Notice LT16 when the agency believes a taxpayer hasn’t filed their tax return or has unpaid taxes. Regardless of what they think they have or haven’t done, taxpayers should respond to the notice. Failure to communicate with the IRS could result in continuing action against the taxpayer and limit their options for resolving the issue.

When taxpayers underpay their taxes to the IRS, they have to pay interest on the underpaid amount. The same is true when a taxpayer overpays their taxes, and the IRS owes them money.

The majority of audits that the IRS conducts are resolved as civil matters. Some, however, may transform into criminal investigations that can potentially lead to criminal charges and prosecution. If a taxpayer is convicted, they can face significant federal penalties, up to and including jail time.

The Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) requires any sale or disposition of U.S. real property interests that involves a foreign seller to submit 10 or 15 percent of the sale price to the IRS for withholding. While the tax debt is the seller’s, it’s the buyer’s responsibility to send the withholding amount to the IRS.

One of the quirks of FIRPTA is that the buyer, even if a U.S. citizen or domiciled corporation, is responsible for withholding the required amount and sending that amount to the IRS. The buyer is also generally responsible for completing and submitting Form 8288 or Form 8288-A.

One of the commonly known rules about our criminal justice system is that spouses can’t be forced to testify against each other. What’s less known is how one spouse’s tax debt can affect the other spouse’s assets.

For some people, filing for bankruptcy is the best choice for getting a clean financial slate.  Before opting for that choice, however, individuals should be aware of all of the pros and cons of filing, including timing requirements related to discharging tax debts.