What to do when you receive a tax notice
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Thursday
Apr242014

Tax Mistakes to Avoid, With Rob Wood, Tax Attorney, San Francisco, California

There are many tax mistakes to avoid, many of which are common sense, says Rob Wood, a tax attorney with Wood, LLP in San Francisco, California. 

Failing to declare income is a big mistake, says Wood, as it's important to report all 1099's.  If you receive a 1099 and don't put it on your tax return, it will trigger an audit of some sort, Wood says.  If you receive income and don't get a 1099, it's not a mismatch to over-report and he notes that if you ask for it, it might have already been reported and you just never received a copy.  If that's the case, you run the risk of doubling the income.

Wood says sloppy records could lead to all sorts of trouble, so it's important to maintain accurate records.  Also, with the tough rules being enforced by FATCA, the Foreign Account Tax Compliance Act, there's more reporting than ever right now, so it's important not to forget about foreign income.

It's not always a better idea for married couples to file jointly, even though 95% of married couples do, says Wood.  He says you need to see if it's worth it and how much money you'd be saving.  It's especially a good idea to file separately if one spouse has financial problems outside of their joint income.

These are all good things to consider before things go south because by then, it's too late, Wood says.

For more information on the article Wood has written in Forbes magazine, click here.  Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.

Tuesday
Apr222014

How Long Can the IRS Audit, With Rob Wood, Tax Attorney, San Francisco, California

 

The IRS has three years to file an audit and generally speaking, one doesn't know if the audit is random or the result of a red flag.  When involved in a case, Rob Wood, a tax attorney in San Francisco, California with Wood, LLP, always asks from the auditor what it was that caused the audit.

There are things that people can do, such as 1099 matching and math errors to avoid audits but a lot of it is unknown, says Wood.  Wood notes that the normal 3 year statute is only a "normal rule," and there are all sorts of exceptions.  He recommends anytime you get a tax notice, to take it to a professional for advice.

For more information on the article Wood has written in Forbes magazine on this, click here.  Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.

Tuesday
Apr222014

Actor Steven Seagal Eyes Russian Citizenship, With Rob Wood, Tax Attorney, San Francisco, California

Actor Steven Seagal, fan of Russian President Putin and while practicing martial arts in Russia, says he's considering Russian citizenship.

Noted tax attorney, Rob Wood, of Wood, LLP in San Francisco, California, says he doesn't think it's for tax reasons, however the jury's still out on what he's going to do.

For more information on the matter, click here for an article in Forbes Magazine that Wood has written. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.

Wednesday
Apr092014

Should You Avoid Paying Online Sales Tax? With Rob Wood, Tax Lawyer, San Francisco, California

Avoiding sales tax online is a very divisive issue, according to Rob Wood, tax lawyer with Wood, LLP in San Francisco, California.  Amazon shows the evolution of this issue, as they started with not charging sales tax and now is charging sales tax in 20 different states. 

Until the law changes, Wood says to look at the merchant and see by the time you check out if you'll be charged sales tax.  Wood's advice is for people not to kid themselves and that if can get away with it do it, but you should know you have liability in most states and they may come after you.  You may be asked to certify on your income tax return if you have any sales where you use tax.

"Self-reporting and enforcing is coming," says Wood and he tells people to be careful.  For small merchants, the question is do they have enough contacts within a particular state that they should be required to withhold and send in sales tax.  For big merchants, it's tougher and that's why state tax authorities went after the merchants because it's much harder to find all the customers out there.

Wood says that if you're not paying use tax, you're not safe because you clearly owe use tax if not charging sales tax because it's an internet purchase.

Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.

 

Tuesday
Apr082014

Common IRS Audit Triggers, With Rob Wood, Tax Attorney, San Francisco, California

While it may be common sense and intuitive for some, there are some key things that might trigger an IRS audit.

While the IRS still does random audits and one may never know what specifically triggers them,  Rob Wood, a tax attorney, who's been practicing for 35 years at Wood, LLP in San Francisco, California, says the overwhelming majority of the ones he's seen have been triggered by something in particular.  He says to be aware of 1099's in particular and to keep track of them and make sure they're recorded on returns.  Usually, a 1099 issue is one where you forget to put it on the return, either received from a consulting job or a legal settlement or judgement.  The public ones, he notes, does make you a target, so those carry bigger risks of getting audited than the random ones.

Wood says to not panic if you are audited and to respond quickly and appropriately.  The majority of audits are correspondence that are very frequently computer-generated when something doesn't jive, he says.

For more information on the article written in Forbes magazine about this, click here.  Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.