IRS Phone Scam Targeting Taxpayers Throughout The Country

The Internal Revenue Service warned consumers about a sophisticated phone scam targeting taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. “This scam has hit taxpayers in nearly every state in the country. We want to educate taxpayers so they can help protect themselves. Rest assured, we do not and will not ask for credit card numbers over the phone, nor request a pre-paid debit card or wire transfer,” says IRS Acting Commissioner Danny Werfel. “If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that

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The Importance of an Estate Plan

By Eric Rothenberg – Managing your assets is a very important part of your life. You plan and budget for any large purchase and you maintain the things you own while they are in your possession. However, many people fail to realize that it is just as important to manage your assets for the end of your life. This is something estate planning attorneys can assist you with. If you die without a will in the state of Massachusetts, everything you own is divided among your heirs according to Massachusetts intestacy laws. The division of your property depends on the kinship of your surviving relatives. The state, not you, controls who inherits your property. For example, if you die without children but have siblings, your spouse and your siblings and your parents share in the estate. Most people do not want that.

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DOMA Affects Income Tax Returns

By Eric Rothenberg – With the Supreme Court’s ruling on June 26th, 2013, that the Defense of Marriage Act (“DOMA”) is unconstitutional, there will be major tax implications to the lesbian, gay, bi-sexual and transgender (“LGBT”) community. So a couple that previously were forced to file as “SINGLE” when they were legally married under a state that sanctions such marriage, can now file as “JOINT” filing status. They can also go back to 2009 or earlier and file amended returns. If such amended return would result in a refund, then that means they can amend the two single returns and now file a joint return and get a refund from the IRS. However, there is a three year statute of limitations on claiming a refund. The three year period starts when the return was last due so if you did not file an extension of time to file the return,

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Tax Planning for Debt Forgiveness

By Eric Rothenberg – When your mortgage company lowers the principal amount you owe, or they forgive some or all of the principal amount you owe, you will receive Form 1099-COD for cancellation of debt or indebtedness and they will report it to the IRS. The instructions on the form  tells you that you must report such amount as income on your tax return. But they don’t tell you that it may not be income to you at all! And you can save a lot in income taxes if you have a tax return preparer that knows the rules. This is not something you should do yourself as the rules are complex and require special reporting. Interest on the debt forgiven may or may not be considered as well. We start with the notion that Forgiven Debt is income under IRC Section 61(a)(12). There are several exceptions to that rule.

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