Other Situations

Bankruptcy

Taxpayer must be compliant with IRS and state by having all back tax returns filed before bankruptcy can be contemplated. Should taxes be included in the bankruptcy is always a question. Can the taxes be included in the bankruptcy is the another question. Timing issues are paramount.

Alternatives to bankruptcy that we can offer include an Offer In Compromise, an Installment Agreement or a Currently Not Collectible request. For non-Tax Specialist Attorneys, these are the type of issues they would probably be looking to farm out in any case.

Cash Lawsuit Settlements

When dealing with lawsuits and awards the specific wording of the award decree is essential for the best tax outcome of the client. Compensatory damages versus Punitive awards make the difference. Other questions to be aware of are; type of injuries covered; physical versus pain and suffering; discrimination; and are the Attorney fees deductible under the decree.

The ability to deduct Attorneys fees as an above-the-line adjustment instead of an itemized deduction is a big factor in the wording of the final judgment. There are also specific Attorney related situations for SSA/VA/Disability Awards suits.

Business Start-Up

When an Attorney is consulted for the start up of a business there is a definite need for tax planning to be involved. Some of the questions that need to be answered before the papers are filed as as follows:

1. Type of entity?
2. Who will be involved?
3. Start up expenses?
4. Type of state entity to establish?

Attorneys and Tax Professionals can also work together on getting the record keeping training and tax filing completed. These are great areas for the Attorney to refer directly to the Tax Professional.

Estate Planning

When a client plans ahead for his beneficiaries future, should he let things run through an estate or should he do a trust? If a trust, what type of trust? Will there be state issues that make a difference in what he should do? Who are the beneficiaries? Is there the possibility of the beneficiaries contesting the estate? What to include in the corpus versus direct beneficiary of certain types of accounts like insurance, annuities, 401K and IRAs? These are all items that tax planning in the estate planning process can make a big difference to the heirs bottom line.

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