Retirement assets often represent a substantial portion of a taxpayer's wealth.
The retirement assets may be accumulated in a 401(k) plan, 403(b) arrangement,
in another type of qualified plan or an IRA. Regardless of the retirement type
arrangement that is involved, the tax consequences of making the right move
at the right time can be financially beneficial for the taxpayer and his/her
family. Conversely, making the wrong move at the wrong time can be financially
hazardous to both the taxpayer and his/her family.
The problem with retirement distribution planning is a simple one. It may just
be too complicated to deal with. The taxpayer may rely upon an advisor who may
be well versed in a particular discipline but may not know how to integrate
retirement assets with an overall estate plan.
The IRS has many rules that involve retirement distributions. In addition,
each year the IRS issues many pronouncements and rulings that involve retirement
assets. The problem is that the average practitioner is overwhelmed with these
rules and generally cannot devote a substantial period of time in mastering
them. [Read More]
NUTS AND BOLTS OF A NEW YORK STATE OFFER IN COMPROMISE: A POSSIBLE SOLUTION
FOR CLIENTS WHO DON'T HAVE DEEP POCKETS
Your client telephones your office, frantic, because he has just received a
Notice of Determination ("Notice"), showing that he is liable for sales tax,
interest and penalties as an officer of his company. There is no question that
he is a responsible person for tax purposes; there is also no doubt that he
will never be able to pay the amount owed. What can you do to help?
A new client calls, admitting that he filed his tax returns for the past few
years but he hasn't paid the tax owed. He's been sick, and his company went
out of business. He has a low-paying job now and he's only a few years away
from retirement. He's been receiving Notices and he wants to straighten out
his affairs with New York State. He hasn't got any spare cash or other assets.
What should he do?
SUBMIT AN OFFER IN COMPROMISE
In both of these circumstances, and in many others, a good answer is to file
a New York State Offer in Compromise ("OIC"). This is a procedure which may
allow a taxpayer to pay less than the full amount owed of tax, interest and
penalties. It involves submitting various forms to the State, backed up by documentation
and persuasive arguments. If accepted, the liability of that taxpayer is reduced.
An OIC can be submitted on behalf of an individual taxpayer or a corporation. [Read More]