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David Warren Klasing
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David Klasing’s Answers

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  • Months ago I filed for innocent spouse relief and today was granted. Does the IRS lawyer represent me and my separated spouse?

    The IRS atty told me my relief was granted. My ex and I re in divorce proceeding. Does she also represent him or interview h or how how does this all work when he disputes the relief?

    David’s Answer

    I agree - IRS does not represent you. If the IRS indeed granted you innocent spouse relief ask for it in writing. How does it help you? Possible amnesty for any tax crimes committed on a joint return that you signed. They might criminally prosecute your husband but not you. They may (not guaranteed they will) only look to your husband's community property share of the marital property and his separate property for the tax debt you claim he caused that you are innocent from following the divorce. Make sure (through your divorce attorney) the divorce court is at least aware of this allocation and does not hit your one half of the community property irregardless of what the IRS is or had done.

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  • Does a U.S. Citizen who has always lived abroad need to file a tax return when sponsoring an immigrant ?

    My brother was born in the U.S. and is a U.S. Citizen. However other than being born here he has never lived here, never had a social security card and never filed taxes. He does have a U.S. Passport. He would like to sponsor his wife and both mo...

    David’s Answer

    Your brother is a good candidate for the Streamlined Offshore Voluntary Disclosure program and will be required to file 3 years of tax returns to get back into compliance but will not face the draconian FBAR penalties that are on the books right now if he gets to the U.S. government before the U.S. government gets to him... U.S. citizens are taxed on their world wide income even if never residing in the U.S. - also subject to world wide information reporting.

    See: https://www.irs.gov/Individuals/International-Taxpayers/U-S-Taxpayers-Residing-Outside-the-United-States

    Here are some resources on my website that might be additionally helpful.

    http://klasing-associates.com/question/2014-revisions-streamlined-program-disclosing-foreign-accounts/

    http://klasing-associates.com/2014/03/27/irs-announces-efforts-help-u-s-citizens-overseas-including-dual-citizens-foreign-retirement-plans/

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  • Self published Author

    Hello everyone. I am a self published author and am getting nervous about tax season. I was wondering if I have to pay self employment tax , income tax, federal and state tax etc on money earned in England . My book is sold through amazon and I kn...

    David’s Answer

    The Fed and many states tax on world wide income. If your in CA, CA taxes on WWI. The fed will give you a credit for the foreign taxes paid against your U.S. tax liability, CA will not.

    For more info see: http://klasing-associates.com/

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  • What kind of lawyer do I need?

    On a matter involving myself, my business partner Cat and John, our accountant for the business. I went into a business venture with my partner in 2014, who had a pre-existing business (Medical Dispensary) and who also had unfinished business with...

    David’s Answer

    It sounds like you could use a good business attorney, tax attorney and a CPA. Hmmm.... Wouldn't it be nice to find all those qualities in one professional?

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  • I am about to file 2 returns: 1040 & 1065. Penalties will be imposed. Am I entitled to 2 separate First Time Abate relief?

    I am about to file my individual and partnership returns. For the 1040, I expect to have failure to file and failure to pay penalties. For the 1065, I know I will have to pay $4K for failure to file penalty. I am a general partner in the partne...

    David’s Answer

    Here is some helpful information on penalty abatement procedures. Yes penalty abatement is possible if you have a valid reasonable cause argument. What constitutes reasonable cause is somewhat subjective but I have content on that in the literature I'm attaching. Penalty abatement is optional on the part of the IRS in most situations. Penalties are designed to curb abusive behavior. http://cdn.klasing-associates.com/wp-content/uploads/2015/09/What-Do-I-Do-When-I-Miss-a-Deadline-Outline.pdf

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  • Can a tax attorney charge on a contingency basis for resolving IRS and State tax problems?

    Ex. Attorney charges a flat fee in the beginning and 20% of what he saves client from the IRS at the end of the case. Is this allowed?

    David’s Answer

    Found a great article by an author is respect and trust on the subject.

    http://www.forbes.com/sites/robertwood/2012/05/15/can-lawyers-or-accountants-do-your-taxes-on-contingency/

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  • Do I need a tax attorney

    I own a gas station. When I bought it a few years ago I went to the BOE to get the tax information needed so my pumps could reflect the correct tax rate the customer paid. Years later I got a collection notice from the BOE saying I owed close to $...

    David’s Answer

    Unfortunately I believe you may be on the hook for the extra taxes. There is lots of case law which basically holds that the IRS is not responsible for its own negligence. I think the same may hold true of the BOE. You may have grounds for penalty abatement but probably not for any additional taxes owed. Contacting an attorney might be advisable to work out penalty abatement and to work out an installment agreement.

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  • Can the FTB go after my personal accounts and assets to collect the yearly LLC tax fee or can they only pursue LLC assets?

    The FTB in CA is trying to collect $6,800 in back taxes for years 2010 through final year 2014. I was not aware of this yearly fee until I finally got a bill from the FTB last December 2014. The LLC never made money and was not actively pursuing...

    David’s Answer

    Official answer - yes your on the hook. Unofficial answer?

    See: http://klasing-associates.com/2014/03/ralite-decision-avoiding-personal-liability-unpaid-corporate-franchise-tax-walk-away-type-dissolution/

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  • If i am giving my daughter a house as a gift, does any taxes apply in the transaction?

    I have a house which my daughter is the beneficiary. If I decide to give that house to her as a gift before I die, who pays for the taxes in the transaction, if any? How do I protect that house from any future divorce from her husband? If I includ...

    David’s Answer

    If you have not used up your lifetime gifting exemption, no gift tax will apply to the transaction. A gift tax return will need to be completed. The house will be the wife's separate property if acquired outright by gift. Make sure no community property assets are used to maintain it and it will remain her separate property even in a divorce. (Will not be part of the community property estate upon divorce so will not be split with Husband). Yes - gifting the property in trust for your daughter would help protect the property in the event of a divorce. See an attorney - Do a parent to child transfer of the property so that its value will not be stepped up for property tax purposes.

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  • Husband lied on his taxes

    What happens when the spouse who works lies on his taxes

    David’s Answer

    Lying spouse risks going to jail.

    http://klasing-associates.com/law-library/tax-law-faq/criminal-tax-representation-faq/

    You should consider making an innocent spouse claim but remember that its hard to get spousal support from an in mate.

    http://klasing-associates.com/law-library/tax-law-faq/innocent-spouse-relief-faq/

    Seek a consultation and I do not recommend discussing a potential criminal issue here...

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