Ronald J. Cappuccio, J.D., LL.M.(Tax), Tax Lawyer, is a Business and Tax Attorney emphasizing Personal and Business IRS Tax Negotiation and controversies, past due taxes, Offers In Compromise, Installment Agreements, as well as Audits, Delinquent Tax, and Tax Collections Issues, Employee and Independent Contractor issues, Payroll Taxes, Tax Liens, Wage Levy Release, Bank Levies and Seizures. NJ Tax Court, US Tax and US Court of Federal Claims representation.

We can help you start a Limited Liability Company ( LLC ) which can be the best form of business organization, as well as establish Corporations, S Corporations, Partnerships, Limited Partnerships and Non-Profit organizations. We also can represent you in Buying and Selling a business.

IRS and States attacking Independent Contractors

The Internal Revenue Service and 37 states are attacking companies that try to trim payroll costs by changing employees' status to independent contractors. Business Tax audits and State Tax audits are focusing on 1099's and subcontractors. Unless you have a tax attorney prepare proper subcontract agreements and help your business extablish the necessary records to demonstrate the person providing services is independent and not an employee, you could unnecessarily loose an IRS Tax Audit or State Tax Audit.

For example, the New Jersey Department of Labor conducts audits taxing independent contractors as employees.

The Governments  want the extra taxes from employers even though it hurts small business and cuts employment.  Click here for factors to determine independent contractor status.  The IRS and States are matching 1099's and K-1s to increase audit activity trying to catch under-reporting by partners, LLC members and independent contractors. In an important case, Federal Express won against employee groups and man states, including New York, California and New Jersey by having the Federal Court uphold Independent Contractor Status for its drivers.

New Jersey is continuing the attack on Home Improvement Contractors. more...

IRS Increases Small Business Audits

The Internal Revenue Service is increasing field audits of small businesses (<$10mil of assets) and stepping up the intensity of mail audits. The  IRS plans to check for unfiled tax returns and look for unreported income from sole proprietors of small businesses during correspondence audits. The IRS is also attacking sole proprietors  seeking unreported cash income.

IRS is also attacking multinational companies for inter company transfers. Even smaller businesses that sell good and services or license intellectual property are under attack. 

Cash transactions are under increased IRS audits. 

Large Business Audits

Large business audits (companies >$10 mil of assets) are being attacked by the LB&I (Large Business and International) section of the IRS. The latest area being review is the DPD (Domestic Production Deduction.) This used to be relatively simple, but now since the deduction can be up to 9% of a  corporations's profit, this is becomming an area of audit focus.

All large business audits (and small business audits) should be headed by a tax attorney. Typically, the IRS has a team lead by a Revenue Agenet and Manager, engineers, appraisers, IT staff and more. Your audit team should be lead by your tax lawyer that understands tax controversies and IRS Audits, CPA, internal accounting department (such as your CFO) and other support staff.

Taxpayer Compliance Audits

 Inside sources at the IRS said Taxpayer Compliance audits will be “excruciating” and somewhat like seeing a proctologist. In its alert to employers the IRS advises companies to plan their response carefully should they receive a letter initiating an audit under the research program. The IRS says companies should form an internal team consisting of representatives from payroll, accounts payable, accounting, human resources, internal auditing, general counsel, and outside tax lawyers.

Call Ronald J. Cappuccio, J.D., LL.M.(Tax)  at 856 665-2121 right away if you have independent contractors or receive an audit notice.

Tax Collections - Bank Account Levy, Wage Execution, Installment Agreements

The IRS has professional tax collectors, known as Revenue Officers. The job is to collect taxes regardless. If you get a notice, letter, or visit  by the IRS, immediately call a tax lawyer. Quick action can stop a bank account levy, prevent wages from being seized and prevent the IRS from contracting your customers. It takes work, but frequently an installment Agreement can be set-up to avoid "enforcement" actions.  Here is what you should do if the IRS or other tax collector comes to your door.

Time to Buy and Expand a Business

The current depression/recession is has been a disaster for many businesses.  Companies, both large and small, are unloading assets and cutting staff. This may be the perfect time to start or expand a business to take advantage of some good opportunities. Acquiring a struggling rival business, hiring talented experienced people and growing your market share. A business can focus on opportunities like these to improve its competitive position at fire-sale prices. Time to Buy a Business

IRS Audits!

IRS audits are increasing!  Small business audits, especially Schedule C filers and pass-through entities such as Partnerships, S Corporations, and Limited Liability Companies (LLC) are the focus of the government. Because small businesses are the best form of tax shelter for most people, they are under the greatest scrutiny.

The number of audits jumped 11 percent from returns with earnings of $200,000 or more, but rose 30 percent for returns showing earnings of $1 million or more. For those under $200,000 the number of audits remained steady at about 1%. ...More

Wealthy Taxpayers Attacked! The IRS released a report showing that the IRS audited 18.4 percent of taxpayers whose incomes exceeded $10 million last year, compared to 10.6 percent in 2009. ....More

If you get a notice of an audit, call
Ronald J. Cappuccio, J.D., LL.M.(Tax) - tax attorney- at 856 665-2121.

Do not speak to the IRS. We will do it for you and possibly prevent you from jeopardizing your case! ...More

IRS Auditing to Collect Tax

The IRS us beginning to Audit taxpayers who claim exemption from cancellation of indebtedness income. To claim the exemption, IRS Form 982 is filed with the 1040. Although most Cancellation of Indebtedness Income (COD)  on a principal residence is excluded, investment properties, credit cards and other loans are not unless the taxpayer is bankrupt or insolvent. The Government Accounting Office is looking for the IRS to collect billions in extra tax.

Tax Court Loosens Innocent Spouse Rules

Sometimes when a joint return results in liabilities in the form of penalties, tax, and interest, one spouse may be innocent. It used to be that an innocent spouse had only two years to apply for relief in such cases. Now a recent Tax Court decision loosens the restrictions in some circumstances....more

Tax Audits focus on Home Interest deduction

The IRS has a special tax force conducting audits on individuals with home mortgage interest greater than $35k.  These audits are total pain! The IRSW demands excessive documentation - typically your HUD-1 settlement statement, Mortgage, Note, Statements from the Bank, refinancing documents and payment history. The problem is that many of these documents may 10  or more years old! Then, after producing the documents, the IRS denies the deduction and it has to be Appealed to the IRS Appeals section.  

Former IRS Agent Sentenced for Soliciting a Bribe

December 16, 2010 in federal court in St. Paul, a tax revenue agent with the Internal Revenue Service ("IRS") was sentencedto 33 months in Federal Prison for soliciting and receiving a $9,700 bribe. More

IRS Revenue Agent Convicted for Preparing Fraudulent Tax Returns

Former IRS agent Ronald A. Bright pleaded guilty  to assisting in the preparation of a fraudulent tax return as part of his Delaware Tax Preparation business. t Bright routinely included various types of false deductions and credits on his clients’ tax returns, including education credits, Individual Retirement Account deductions, charitable donations, unreimbursed employee business expense deductions, and Earned Income Tax Credits. More...

Cherry Hill Property Tax Appeals
Cherry Hill, NJ is reassessing all 27,000 parcels of residential and commercial real estate. Now is the time for a Property tax appeal.

Voorhees Property Tax Appeals
Voorhees is revaluing residential and commercial properties. The last major reasseessment was 2006. This is a revaluation where there tends to be more variances than a reassessment.

Moorestown Tax Appeals
Moorestown is reassessing alll residential and commercial real estate.

IRS Announces 2013 Standard Mileage Rates

As of Jan. 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 56.5 cents per mile for business miles driven 
• 24 cents per mile driven for medical or moving purposes 
• 14 cents per mile driven in service of charitable organizations

The rate for business miles driven during 2013 increases 1 cent from the 2012 rate.  The medical and moving rate is also up 1 cent per mile from the 2012 rate.

See  IRS Announcement

Interest Rates

Interest rates have continued the same since the 4th qtr of 2011. The 4th qtr  2013 IRS interest rates will be:  

• three (3) percent for overpayments [two (2) percent in the case of a corporation];
  
• three (3) percent for underpayments;
  
• five (5) percent for large corporate underpayments; and
  
• zero and one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

See  IRS Notice
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