What to do when you receive a tax notice
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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.

Tuesday
Apr082014

Advantages of Setting Up a Small Business as an S-Corp, With Rob Wood, Tax Attorney, San Francisco, California

The old model of how a company is formed has changed over the years with tax law and the evolution of different types of business entities, says Rob Wood, a tax attorney with Wood, LLP in San Francisco, however some fundamental things have stayed the same.

Businesses need to look at how their business is run, how the income will be taxed and what happens on sale, whether it's anticipated or unanticipated.  Wood says to set it up right from the beginning to avoid getting hurt on taxes.

A C-corp and an S-corp are tax terms that refer to articles of a corporation.  They are very simple and are mostly for liability protection, says Wood,  An S-corp, which stands for Sub Chapter S of the Internal Revenue Code, is a one page form, signed in a certain way and the shareholders have to give consent.  The IRS form is a 2553 form.  Wood says the business is taxed as a flow-through, so the corporation doesn't pay tax, except for a few here and there, and is treated like a partnership.  That's the reason it's attractive, says Wood, because it's a corporation that is an entity with liability protection that's taxed like a partnership.  Wood says most small businesses can qualify and should take advantage of S-corps.

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,  a featured network of the Legal Broadcast Network and Sequence Media Group.