Topic No. 205 Innocent Spouse Relief

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Proven Results We solve Tax Problems so you can get on with your life. Specializing in unpaid Income, Sales and Payroll taxes. We negotiate excellent Payment Plans, Offers in Compromise, Audits and all other tax matters. 

Expedited Service Do you have un-filed Tax Returns? We can prepare and file all of your missing tax returns in just 48 hours, guaranteed. Same day and emergency appointments are available Monday through Friday. 

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Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows them. When filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise from the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses on a married filing jointly return are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from being jointly and severally liable.

Types of Relief

There are three types of relief from the joint and several liability of a joint return:

1. Innocent Spouse Relief provides you relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
2. Separation of Liability Relief provides for the separate allocation of additional tax owed between you and your former spouse or your current spouse you're legally separated from or not living with, when an item wasn't reported properly on a joint return. You're then responsible for the amount of tax allocated to you.
3. Equitable Relief may apply when you don't qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the amount of tax reported is correct on your joint return but the tax wasn't paid with the return.

Note: You must request innocent spouse relief or separation of liability relief no later than 2 years after the date the IRS first attempted to collect the tax from you. For equitable relief, you must request relief during the period of time the IRS can collect the tax from you. If you're looking for a refund of tax you paid, then you must request it within the statutory period for seeking a refund, which is generally three years after the date the return is filed or two years following the payment of the tax, whichever is later. See Publication 971, Innocent Spouse Relief for additional restrictions on refunds available under innocent spouse relief, equitable relief, and relief based on community property laws. Refunds aren't available under separation of liability relief.

Innocent Spouse Relief

You must meet all of the following conditions to qualify for innocent spouse relief:

• You filed a joint return that has an understatement of tax that's solely attributable to your spouse's erroneous item. An erroneous item includes income received by your spouse but omitted from the joint return. Deductions, credits, and property basis are also erroneous items if they're incorrectly reported on the joint return
• You establish that at the time you signed the joint return you didn't know, and had no reason to know, that there was an understatement of tax and
• Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax

Separation of Liability Relief

To qualify for separation of liability relief, you must have filed a joint return and must meet one of the following requirements at the time you request relief:

• You're divorced or legally separated from the spouse with whom you filed the joint return
• You're widowed, or
• You haven't been a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you request relief

If you had actual knowledge of the item that gave rise to the deficiency at the time you signed the joint return, you don't qualify for separation of liability relief.

Equitable Relief

If you don't qualify for innocent spouse relief or separation of liability relief, you may still qualify for equitable relief. To qualify for equitable relief, you must establish that under all the facts and circumstances, it would be unfair to hold you liable for the deficiency or underpayment of tax. In addition, you must meet the other requirements listed in Publication 971, Innocent Spouse Relief. See Revenue Procedure 2013-34 (PDF) for information about how the IRS will take into account abuse and financial control by the nonrequesting spouse in determining whether equitable relief is warranted.

Form to File

To seek innocent spouse relief, separation of liability relief, or equitable relief, you should submit to the IRS a completed Form 8857, Request for Innocent Spouse Relief (PDF) or a written statement containing the same information required on Form 8857, which you sign under penalties of perjury. You may also refer to Publication 971, Innocent Spouse Relief for more information. If you request relief from the joint and several liability of a joint return, the IRS is required to notify the spouse you filed jointly with of your request and allow him or her to provide information for consideration regarding your claim.

Community Property States

If you lived in a community property state and didn't file as married filing jointly, you might qualify for relief from the operation of state community property law. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Refer to Publication 971 for more details.

Injured Spouse vs. Innocent Spouse

An injured spouse claim is for allocation of a refund of a joint refund while an innocent spouse claim is for relief or allocation of a joint and several liability reflected on a joint return. You're an injured spouse if all or part of your share of a refund from a joint return was or will be applied against the separate past-due federal tax, state tax, child or spousal support, or federal non-tax debt (such as a student loan) owed by your spouse. If you're an injured spouse, you may be entitled to recoup your share of the refund. For more information, see Form 8379, Injured Spouse Allocation (PDF) or refer to Topic No. 203.

Company owner charged with falsifying federal records, tax evasion and a whole lot more (better call SELIG & Associates)

The owner of an automobile transport company has been charged with falsifying federal records, fraud, identity theft and tax evasion. U.S. Attorney Aaron Weisman says 39-year-old Michael Chaves, was arraigned in federal court on Friday. His bond was set at $100,000. Weisman says Chaves is accused of attempting to influence and impede inspections of his business by falsifying U.S. Department of Transportation records, and of using someone else’s personal identifying information to continue operating after being ordered to shut down for safety violations. 

Selig & Associates

We take a practical approach to problem solving and strive to obtain the best possible outcome for our clients

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We successfully solve IRS and New York State Tax problems, including suspended Drivers Licenses and Passports. Specializing in large dollar Payroll, Sales and Income Tax Representation for Individuals, Professional Practices and Businesses. 

We negotiate excellent Payment Plans, Audits, Offers in Compromise, Payroll & Trust Fund Recovery Penalties, and most other tax issues. Do you have Unfiled Tax Returns? We can have them prepared and filed for you within 48 hours, guaranteed. Same day and emergency appointments are available Monday through Friday in our New York City office. 

To schedule a Free and Legally Privileged Consultation with a Federal Tax Practitioner and Attorney contact us Online

or Call (212) 974-3435

Helping Undocumented Immigrants and Understanding the Causes of Identity Theft

Up until recently, identity theft was as popular as it was pervasive. And notwithstanding a small smattering of high profile cases, identity thieves went largely unpunished. 

But what exactly is identity theft? In a nutshell, identity theft occurs when one person intentionally misappropriates another person’s name and Social Security number to commit fraud and crime. 

Since I am a Federal Tax Practitioner I will discuss the two types of identity thieves that our Office most frequently encounters. The first identity thief steals someone’s name and Social Security number so she can file a phony tax return and pocket a refund. This particular crime is commonly referred to as “refund theft”. The second identity thief a/k/a (criminal "Number Two") commits what is colloquially called “employment theft”.  The perpetrators, who are usually in the country illegally, steal someone’s Social Security number, or alternatively, knowingly purchase a  stolen Social Security number ostensibly so they can work. 

"Employment theft casts a long shadow and causes its victims considerably more inconvenience". 

Unfortunately, a goodly percentage of these so-called "Employment Thieves" are also common criminals who aggressively leverage their purloined identities to obtain entitlements, benefits and merchandise that they’re not entitled to. The costs associated with “employment theft” exceed One Hundred Billion Dollars a year. 

And that’s all there is to understanding identity theft. Nothing fancy, nothing elaborate, just a parasitic self-serving crime committed by a cold-blooded coterie of parasitic self-serving criminals. 

In 2011 David Selig publicly exposed the astronomical amount of earned income fraud that illegal immigrants were committing under IRC Section 152. Believing that “sunlight is the best disinfectant” Selig lobbying for change, made over 100 television appearances between 2011 and 2016. In December 2017 President Trump successfully addressed and curtailed these abuses by implementing the "Tax Cuts and Jobs Act" which was signed into law on 22 December 2017.

NYS Tax Department Doesn’t Want Taxpayers to be Represented by Lawyers and Accountants

On June 3^rd 2019 the New York State Department of Taxation and Finance published a online article entitled “Resolve Your Tax Debt Directly with the Tax Department” subtitled “Taxpayers can save time and money by contacting a Tax Department representative themselves” 

Not surprisingly, the Tax Department is actively encouraging taxpayers to “work directly with New York State” without the aid of a tax attorney or accountant. 

The article invites taxpayers to call the State directly to: pay their balance in full; to set up a monthly payment plan, and to “discus their debt” with a State representative (who is in reality a Civil Enforcement Agent with the power to levy your bank account and garnish your wages). The article then quotes the Executive Deputy Commissioner of Taxation and Finance Andrew Morris, who says: “Taxpayers don’t need to hire outside help or enlist the services of a third party to settle their tax debt” and similar self-serving sentiments. 

But conspicuously absent from Mr. Morris’s lopsided observations are the many pitfalls that await these unsuspecting callers. For example, the State claims it will not levy certain exempt funds, e.g. Social Security, public assistance, alimony, child support, unemployment, disability, workers compensationand pensions. Unfortunately they neglect to mention that there is no protection once these so-called “exempt funds” are deposited into a bank account. 

In fact the State can and will seize your entire bank account. And after your entire bank account has been seized the State frequently refuses to grant taxpayers so much as a partial release to pay for food, diapers, medication and health insurance. 

As for “payment plans” the State has 20 years to collect on tax debts - but that doesn’t stop them from demanding taxpayers make a “good faith deposit” and agree to full pay their debt in 24 to 36 months *This unnecessary time requirement is why the vast majority of taxpayer negotiated payment plans default. And when a taxpayer defaults (as most do) he or she is punished with even more levies and tougher payment terms. 

Lastly, taxpayers have rights that must be properly asserted within a prescribed period of time (known colloquially as the doctrine of “use it or lose it”).  And whether you like it or not, the State has no obligation to tell you your legal rights and possible options. Meaning, when the time to contest an erroneous tax liability expires, the debt becomes “fixed and final” and you're stuck with it. 

In conclusion, I suggest readers consider the severity of their debt and the likely consequences they will encounter before deciding to “go it alone”. 

We take a practical approach to problem solving and strive to obtain the best possible outcome for our clients.

Effective Tax Advocates we successfully resolve most IRS and New York State tax problems including suspended Drivers Licenses and Passports. We specialize in unpaid payroll, sales and income taxes and negotiate excellent installment agreements for businesses and individuals. To schedule a free consultation with a results driven Federal Tax Practitioner and Attorney please call us directly at (212) 974-3435.

Large Insurance Claims we settle insured property damage claims in the shortest amount of time and at the least cost to the policyholder and insurance company. Insurance litigation is costly and time consuming. Accordingly we provide policyholders and their insurance companies with a cost effective alternative to litigation. Commercial and residential insurance representation includes: Environmental Damage, Mold (removal & remediation) Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage.  

Trust Selig & Associates our offices are conveniently located in New York City and we meet with each and every client personally. To schedule a free legally privileged consultation with a Federal Tax Practitioner CPCU and Attorney please call us directly at (212) 974-3435.

  

Owner of Restaurant and Pub Charged with Sales Tax Evasion! Multiple Felonies! $488,000 in Sales Taxes Allegedly, Allegedly, Allegedly

And now he’s facing multiple felonies for allegedly failing to remit $488,000 in sales tax collected from customers

The New York State Department of Taxation and Finance and the Rockland County District Attorney’s Office announced the arrest and arraignment of the owner of D & D’s Restaurant and Pub, located at 191 South Main Street, New City, for allegedly failing to file sales tax returns and turn over more than $488,000 collected from customers. Thomas Schunke, 38, of 102 Robin Hood Lane, West Nyack, NY turned himself into investigators from the New York State Tax Department and the District Attorney’s office. He is charged with five felony counts of criminal tax fraud and one felony count of grand larceny. He’s accused of collecting $488,000 in sales tax from his customers from 2012 to 2018 and failing to pay that money to New York State, as required by law. In addition, he’s charged with failing to file sales tax returns from 2014 to 2018. He was arraigned at Rockland County Court on June 27 following a grand jury indictment. He is scheduled to return to court on July 3. “Business owners who disregard their obligation to pay the sales tax they collect violate the trust of their customers, deprive the communities where they operate of revenue needed for vital services, and put similar businesses at a competitive disadvantage,” said New York State Commissioner of Taxation and Finance Michael R. Schmidt. “We will continue to work closely with our partners in law enforcement to bring tax criminals to justice, and we thank the Rockland County District Attorney for prosecuting this case.” "As a matter of law, business owners must turn over sales taxes collected from customers,” said Acting Rockland County District Attorney Kevin Gilleece. “By purposefully evading his tax obligations, this defendant defrauded the state and all law-abiding taxpayers. My office will continue working with the New York State Department of Taxation and Finance to identify unscrupulous business owners and hold them accountable."

A criminal complaint is only an accusation; the defendant is presumed innocent until proven guilty.

We take a practical approach to problem solving and strive to obtain the best possible outcome for our clients.

New York City Tax Advocates we successfully resolve most IRS and New York State tax problems including suspended Drivers Licenses and Passports. We specialize in unpaid payroll, sales and income taxes and negotiate excellent installment agreements for businesses and individuals. To discuss your specific situation with an experienced Federal Tax Practitioner and Attorney please call us directly at (212) 974-3435 or contact us online.  

Large Dollar Insurance Claims we settle insured property damage claims in the shortest amount of time and at the least cost to the policyholder and insurance company. Insurance litigation is costly and time consuming. Accordingly we provide policyholders and their insurance companies with a cost effective alternative to litigation. Commercial and residential insurance representation includes: Environmental Damage, Mold (removal & remediation) Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage.  

Selig & Associates our offices are conveniently located in New York City and we meet with each and every client personally. To schedule a legally privileged consultation with a results driven Federal Tax Practitioner CPCU and Attorney please call us directly at (212) 974-3435.

Can NY State Suspend My Drivers License for Unpaid Taxes? (Yes)

If your drivers' license has been suspended for unpaid taxes, we can help. New York State can suspend your drivers' license if you owe $10,000 or more in taxes, penalties and interest. See: New York Tax Law Section 171-v. Call (212) 974-3435 for immediate assistance. 

Selig & Associates is a Tax Representation and Insurance Claims settlement firm in New York City. Same day and emergency appointments are available Monday through Friday. To schedule a legally privileged consultation call (212) 974-3435 or contact us online. 

We successfully resolve civil and criminal tax problems including suspended Passports and Drivers Licenses. Specializing in unpaid income, sales and payroll taxes. We provide practical solutions to difficult tax problems. For example, we negotiate affordable installment agreements, and if you have missing or unfiled tax returns, we can have them prepared and filed for you within 48 hours guaranteed. For immediate assistance call (212) 974-3435 now. 

Is your Insurance Company treating you unfairly?  Have they offered you substantially less than your claim is worth? If the answer is yes, then call us directly. We successfully settle most first-party insurance claims without ever having to go to court. Commercial and residential insurance representation includes: Environmental Damage, Mold Removal, Remediation & Restoration claims, Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage. To consult with us personally call (212) 974-3435 or contact us online. 

Our mission is to identify and obtain the best outcome through transactional negotiations. We take a practical approach to problem solving and continuously evaluate the likelihood of success, the potential consequences, and the costs associated with taking, or failing to take a particular action. For additional information about our services call (212) 974-3435. 

   

New Yorker Charged with Possessing 8,300 Untaxed Cigars

NYS Tax Department criminal investigators also seized cash and rolling supplies

The New York State Department of Taxation and Finance announced the arrest on June 17, 2019, of a Buffalo man for allegedly possessing 8,299 untaxed cigars and 30 small boxes of tobacco-based wraps used to roll cigars. They also seized $795 in cash in the case. New York State Tax Department Criminal Investigations Division investigators arrested Mohamed A. Saleh, 40, of 454 E. Utica Street, Buffalo, and charged him with the crime of possessing more than 2,500 untaxed cigars. Additional charges are pending. Saleh was arrested after he allegedly attempted to make a delivery of untaxed cigars to a Buffalo deli. Investigators pursued the case after learning that Saleh would regularly travel to Pennsylvania to pick up a variety of tobacco products, which he then allegedly sold to various Buffalo delis in violation of the law. Saleh is not registered in New York State as a distributor of tobacco products. “Those who evade our cigarette and tobacco products tax deprive communities and the state of revenue needed for vital services and put honest businesses at a competitive disadvantage,” said New York State Executive Deputy Commissioner of Taxation and Finance Andrew Morris. “We’ll continue to work with all our law enforcement partners to bring tax criminals to justice, and thank the Erie County District Attorney for prosecuting this case.” Saleh is scheduled to appear in Erie County Court on July 15, 2019. A criminal complaint is only an accusation; the defendant is presumed innocent until proven guilty.

Selig & Associates We are a boutique Tax Representation and Insurance Advocacy Firm in New York City. Our offices are conveniently located and easily accessible by car, subway or train. Same day and emergency appointments are available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. To schedule a legally privileged consultation call (212) 974-3435 or contact us online. Your initial consultation is absolutely Free.

Tax Representation Our Tax Advocates are experienced, effective and results driven. Representing individuals and businesses before the IRS and State. We successfully resolve most Civil and Criminal tax problems including suspended Passports and Drivers Licenses. We specialize in unpaid income, sales and payroll taxes and provide practical solutions to difficult tax problems. For example, we negotiate affordable payment plans, and if you have missing or unfiled tax returns, we can have them prepared and filed for you within 48 hours, guaranteed. For immediate assistance call (212) 974-3435 now. 

Insurance Claims Is your Insurance Company treating you unfairly?  Have they offered you substantially less than your claim is worth? If the answer is yes, then call us directly. We successfully settle most first-party insurance claims without ever having to go to court. Commercial and residential insurance representation includes: Environmental Damage, Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage. To consult with David Selig, CPCU, Claims Adjuster and Attorney Bradley H. Dorin, call (212) 974-3435 or contact us online. 

About Selig & Associates Our primary skill set is the ability to determine and achieve the desired outcome through transactional negotiations. We take a practical approach to problem solving and continuously evaluate the likelihood of success, the potential consequences, and the costs associated with taking, or failing to take a particular action. For additional information about our services call (212) 974-3435. 

Attorney Guilty of $2 Million Investment Fraud Pleads Guilty to Not Filing Tax Return

Selig & Associates

A former attorney recently convicted of securities fraud by a jury in the District of Columbia, pleaded guilty today to failure to file an income tax return and pay taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. Brynee Baylor pleaded guilty today to one count of willfully failing to timely file a 2010 individual income tax return and to pay taxes. She admitted to causing a tax loss of $79,000. On April 30, 2019, the jury convicted Baylor of one count of conspiracy to commit securities fraud, one count of securities fraud, and five counts of first-degree fraud under District of Columbia law. According to court documents and the evidence presented at trial, Baylor, a former partner in the D.C. law firm Baylor & Jackson PLLC, conspired with a Pennsylvania man and his company, known as the Milan Group, to recruit investors to a purported trading program. Investors were promised extremely large profits in a short time with little or no risk. In 2011, the Securities and Exchange Commission (SEC) sued Baylor and others for fraud in connection with the purported trading program. Sentencing is scheduled for Sept. 12.  Baylor faces a maximum sentence of one year in prison for the failure to file a tax return conviction, five years in prison for the conspiracy count, 20 years in prison for the securities fraud count, and 10 years in prison for each of the first-degree fraud counts. Baylor also faces a term of supervised release and monetary penalties. Principal Deputy Assistant Attorney General Zuckerman thanked the SEC for its invaluable assistance and commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey McLellan and Eric Powers of the Tax Division, who are prosecuting the case.

Selig & Associates We are a boutique Tax Representation and Insurance Advocacy Firm in New York City. Our offices are conveniently located and easily accessible by car, subway or train. Same day and emergency appointments are available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. To schedule a legally privileged consultation with David Selig, Federal Tax Practitioner, CPCU, Claims Adjuster and Attorney Bradley H. Dorin, call (212) 974-3435 or contact us online. Your initial consultation is absolutely Free.

Tax Representation Our Tax Advocates are experienced, effective and results driven. Representing individuals and businesses before the IRS and State. We successfully resolve most Civil and Criminal tax problems including suspended Passports and Drivers Licenses. We specialize in unpaid income, sales and payroll taxes and provide practical solutions to difficult tax problems. For example, we negotiate affordable payment plans, and if you have missing or unfiled tax returns, we can have them prepared and filed for you within 48 hours, guaranteed. For immediate assistance call (212) 974-3435 now. 

Insurance Claims Is your Insurance Company treating you unfairly?  Have they offered you substantially less than your claim is worth? If the answer is yes, then call us directly. We successfully settle most first-party insurance claims without ever having to go to court. Commercial and residential insurance representation includes: Environmental Damage, Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage. To consult with David Selig, CPCU, Claims Adjuster and Attorney Bradley H. Dorin, call (212) 974-3435 or contact us online. 

About Selig & Associates Our primary skillset is the ability to determine and achieve the desired outcome through transactional negotiations. We take a practical approach to problem solving and continuously evaluate the likelihood of success, the potential consequences, and the costs associated with taking, or failing to take a particular action. For additional information about our services call (212) 974-3435. 

IRS Enforcement Action Against Offshore Depositors (a/k/a “Cheaters”) Continues with a Vengeance

The IRS says people involved in offshore tax avoidance should come in voluntarily and face the music. (IR-2019-43) Hiding money or assets in unreported offshore accounts remains on the Internal Revenue Service’s “Dirty Dozen” list of tax scams for 2019, the agency said today. Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime, including offshore schemes. Many of these peak during filing season as people prepare their tax returns or seek help with their taxes.Taxpayers should remain wary of offshore avoidance schemes. Following the IRS intensifying efforts on offshore issues in recent years, many taxpayers have already voluntarily disclosed their participation in these schemes. The IRS conducted thousands of offshore-related civil audits that resulted in the payment of tens of millions of dollars in unpaid taxes. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitution.“Offshore evasion remains a primary focal point of overall IRS enforcement efforts,” said IRS Commissioner Chuck Rettig. “Our Criminal Investigation and civil enforcement teams work closely with the Justice Department in the international arena to ensure our nation’s tax laws are followed. Taxpayers considering hiding funds or assets offshore should think twice; the civil penalties and criminal sanctions can be severe.” Illegal scams like these can lead to significant penalties as well as interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

Hiding income offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by attempting to hide income in offshore banks, brokerage accounts or nominee entities. They then access the funds using debit cards, credit cards or wire transfers. Others have used foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose. The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as bankers and others suspected of helping clients hide their assets overseas. While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting requirements are breaking the law and risk significant fines, as well as the possibility of criminal prosecution. The IRS reminds taxpayers who have failed to properly report their offshore investments or pay tax on these investments’ income, to come forward.  Since the circumstances of taxpayers vary widely, the IRS offers several options for addressing the noncompliance.

Third-party reporting  

Under the Foreign Account Tax Compliance Act (FATCA) and the network of intergovernmental agreements between the U.S. and partner jurisdictions, automatic third-party account reporting continues. The IRS receives more information regarding potential non-compliance by U.S. persons because of the Department of Justice’s Swiss Bank Program. This information makes it less likely that offshore financial accounts will go unnoticed by the IRS. Penalties for failure to properly report offshore transactions can be severe. A summary of these potential penalties as well as a comparison of what must be reported on Form 8938, Statement of Specified Foreign Financial Assets, and the Report of Foreign Bank and Financial Accounts (FBAR) can be found on IRS.gov.

Selig & Associates We are a boutique Tax Representation and Insurance Advocacy Firm in New York City. Our offices are conveniently located and easily accessible by subway, car or train. Same day and emergency appointments are available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. To schedule a legally privileged consultation with a Federal Tax Practitioner, CPCU, Claims Adjuster and Attorney call (212) 974-3435 or contact us online. Your initial consultation is absolutely Free.

Tax Representation Our Tax Advocates are experienced, effective and results driven. Representing individuals and businesses before the IRS and State. We successfully resolve most Civil and Criminal tax problems including suspended Passports and Drivers Licenses. We specialize in unpaid income, sales and payroll taxes and provide practical solutions to difficult tax problems. For example, we negotiate affordable payment plans, and if you have missing or unfiled tax returns, we can have them prepared and filed for you within 48 hours, guaranteed. For immediate assistance call (212) 974-3435 now. 

Insurance Claims Is your Insurance Company treating you unfairly?  Have they offered you substantially less than your claim is worth? If the answer is yes, then call us directly. We successfully settle most first-party insurance claims without ever having to go to court. Commercial and residential insurance representation includes: Environmental Damage, Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage. To consult with a CPCU, Claims Adjuster and Attorney call (212) 974-3435 or contact us online. 

About Selig & Associates Our primary skillset is the ability to determine and achieve the desired outcome through transactional negotiations. We take a practical approach to problem solving and continuously evaluate the likelihood of success, the potential consequences, and the costs associated with taking, or failing to take a particular action. For additional information about our services call (212) 974-3435. 

Concerning IRS Telephone Scams

Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2019-28).

Food Court Vendor Charged with Criminal Tax Fraud (he should hire SELIG & Associates)

He’s been accused of failing to remit $186,000 in sales tax collected from customers 

The New York State Department of Taxation and Finance today announced felony tax fraud and grand larceny charges against Robert V. Gourlay Jr., 56.  As the operator of Fresh Healthy Café, Gourlay is accused of collecting more than $186,000 in sales tax from his customers and failing to remit that money to New York State, as required by law. He ran the business between August 2010 and February 2018. Gourlay was arrested and arraigned on Wednesday, June 12. "Business owners who disregard their obligation to remit sales tax violate the trust of their customers, deprive the communities where they operate of revenue needed for vital services, and put similar businesses at a competitive disadvantage,” said Executive Deputy Commissioner Andrew Morris.  A criminal complaint is only an accusation; the defendant is presumed innocent until proven guilty. 

Selig & Associates We are a boutique Tax Representation and Insurance Advocacy Firm in New York City. Our offices are conveniently located and easily accessible by subway, car or train. Same day and emergency appointments are available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. To schedule a legally privileged consultation with a Federal Tax Practitioner, CPCU, Claims Adjuster and Attorney call (212) 974-3435 or contact us online. Your initial consultation is absolutely Free.

Tax Representation Our Tax Advocates are experienced, effective and results driven. Representing individuals and businesses before the IRS and State. We successfully resolve most Civil and Criminal tax problems including suspended Passports and Drivers Licenses. We specialize in unpaid income, sales and payroll taxes and provide practical solutions to difficult tax problems. For example, we negotiate affordable payment plans, and if you have missing or unfiled tax returns, we can have them prepared and filed for you within 48 hours, guaranteed. For immediate assistance call (212) 974-3435 now. 

Insurance Claims Is your Insurance Company treating you unfairly?  Have they offered you substantially less than your claim is worth? If the answer is yes, then call us directly. We successfully settle most first-party insurance claims without ever having to go to court. Commercial and residential insurance representation includes: Environmental Damage, Fire, Business Interruption, Burglary, Vandalism, Windstorm and Water Damage. To consult with a CPCU, Claims Adjuster and Attorney call (212) 974-3435 or contact us online. 

About Selig & Associates Our primary skillset is the ability to determine and achieve the desired outcome through transactional negotiations. We take a practical approach to problem solving and continuously evaluate the likelihood of success, the potential consequences and the costs associated with taking, or failing to take a particular action. For additional information about our services call (212) 974-3435. 

Tax Representation before the IRS & NY State (advertisement)

Selig & Associates provides the most aggressive tax representation allowed by law. To schedule a legally privileged consultation with a Federal Tax Practitioner and Attorney please call (212) 974-3435 or contact us online. 

We represent Individuals and Businesses before the IRS and State and specialize in unpaid Income, Sales and Payroll taxes. We negotiate excellent payment plans, compromise tax debts and resolve all civil and criminal tax issues, including suspended New York State Drivers Licenses. 

We provide Restaurant and Business owners with effective Sales and Payroll tax representation, including audits and all Department of Labor and Workers Compensation issues. Missing tax returns can be prepared and filed within 48 hours, guaranteed.   

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("misclassification of employees as independent contractors")

 

Employer misclassification of employees as independent contractors is a widespread phenomenon in the United States. The Internal Revenue Service estimates that employers have misclassified millions of workers nationally as independent contractors. While some employers misclassify their workers as independent contractors in error, often employers misclassify their employees intentionally in order to reduce labor costs and avoid paying state and federal taxes. The distinction between genuine independent contractors and employees misclassified as independent contractors, while complicated, is a crucial matter. While the definition of misclassification is a function of a complex set of statutes and policies set forth by federal and state agencies, the effect on employees is straightforward. Misclassified employees lose workplace protections, including the right to join a union; face an increased tax burden; receive no overtime pay; and are often ineligible for unemployment insurance and disability compensation. Misclassification also causes federal, state, and local governments to suffer revenue losses as employers circumvent their tax obligations.

 

Defining Independent Contractor

 

An independent contractor provides a good or service to another individual or business, often under the terms of a contract that dictates the work outcome, but the contractor retains control over how they provide the good or service. The independent contractor is not subject to the employer’s control or guidance except as designated in a mutually binding agreement. The contract for a specific job usually describes its expected outcome. Essentially, independent contractors treat their employers more like customers or clients, often have multiple clients, and are self-employed.

 

For some professionals, the line between employee and self-employed independent contractor is often blurred, and employers can classify workers as either. There are several different standards used to determine if an individual is legally an independent contractor. While the intricacies of contracting are too numerous for a comprehensive treatment and the applicability of the test depends on the specific workplace situation, generally, the independent contractor tests employed by the IRS and the Department of Labor (DOL) offer useful guidelines as to who is and who is not an independent contractor.

 

Internal Revenue Service Test

 

The IRS has a stake in identifying the misclassification of employees because it typically results in lost tax revenue. However, the IRS does not have one set of qualifications that it uses to determine the status of “employee” or “independent contractor.” Instead, the IRS looks at a number of factors that help it determine whether an employer has the right to control the details of how the worker(s) performs the services. Generally, if the employer controls the services the worker performs, then the worker is an employee, not an independent contractor. According to the IRS, the facts that provide evidence of the degree of control and independence fall into three categories:

 

Behavioral

 

Does the company control or have the right to control the worker as well as how the worker does his or her job? For example, if a company provides training for the worker, this signals an expectation to follow company guidelines and therefore indicates that the worker is likely an employee.

 

Financial

 

Are the business aspects of the worker’s job controlled by the payer? (These include things like how a worker is paid, whether expenses are reimbursed, who provides tools, supplies, etc.). Only an independent contractor can realize a profit or incur a financial loss from his or her work.

 

Type of Relationship

 

Are there written contracts or employee-type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue, and is the work a key aspect of the business? 

 

The issue of who has the right to control is often not clear-cut and the tax code does not define “employee.” Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor.

 

The DOL Economic Reality Test

 

The DOL has an interest in ensuring accurate classification because only employees receive Fair Labor Standards Act (FLSA) benefits (Federal minimum wage, overtime pay, etc.). The DOL uses an “economic reality test” to determine who is an employee and, thus, eligible for FLSA benefits, by trying to establish whether the worker is economically dependent on the supposed employer. According to the DOL, “an employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves.”

 

The DOL derives its position from judicial precedent. As the U.S. Supreme Court has not established a single rule or test for determining whether an individual is an independent contractor or an employee, the DOL stresses seven factors the Court has considered significant:

1.    The extent to which the services rendered are an integral part of the principal’s business.

2.    The permanency of the relationship.

3.    The amount of the alleged contractor’s investment in facilities and equipment.

4.    The nature and degree of control by the principal.

5.    The alleged contractor’s opportunities for profit and loss.

6.    The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.

7.    The degree of independent business organization and operation.

 

 

These seven factors of the economic reality test aim to assist employers in determining employee or independent contractor status, but in most cases, common sense judgments are sufficient. An employee who only invests time in one enterprise and who sells his or her services to only one “customer,” the employer, is economically dependent upon that work. An independent contractor is in business for him or herself, invests in his or her own equipment and supplies, and has a broad customer base.