The Tax Lady’s Tips

Last Friday, the new issue of my law firm’s newsletter was sent out. You can download a JPG of the letter here, or sign up to have it sent to your mailbox each month at RoniDeutch.com.

Law Firm Serves Up Legal Help at a Drive-Through

Over the weekend it was reported that a law firm in Connecticut opened the first drive-through law firm. Now, dropping off documents for clients of the personal injury firm is as easy as getting a Mc Vale meal.

Law.com reports:

The Kocian Law Group has opened a drive-through office in a building that once housed a former Kenny Rogers Roasters.

Attorney Nick Kocian tells WVIT-TV that clients can use the drive-through at the law firm's Manchester, Conn., site to drop off and pick up documents.

He says it's more convenient for his clients. A paralegal works at the window, handing out documents and answering questions.

Consultations and meetings with lawyers will still be scheduled for the office.

Check out an embedded video on the story below, courtesy of NBC Connecticut.com

2nd Circuit Rejects Firm's 'Bold Attempt' to Contest IRS Levy

The 2nd U.S. Circuit Court of Appeals made a significant ruling last Thursday when they decided that a law firm partner’s advances on partnership profits are subject to administrative levies imposed by the Internal Revenue Service.

As Mark Hamblett explains in this Law.com article, the circuit found that the advances, or partner "draws," at personal injury firm Moskowitz, Passman & Edelman constituted "salary or wages" under §6331(e) of the Internal Revenue Code. The firm will now have to pay the government nearly $1.5 million.

The circuit said it was unpersuaded by Moskowitz Passman's "bold attempt to evade the levies" as it also upheld a statutory fine imposed in United States v. Moskowitz, Passman & Edelman, 08-3017-cv.

Judges Pierre N. Leval, Robert D. Sack and Richard C. Wesley decided the appeal. Wesley wrote the opinion.

According to the ruling, managing partner A. Sheldon Edelman had an oral partnership agreement with Jeffrey Motelson, under which Edelman received 60 percent of the profits and Motelson received 40 percent.

Edelman was responsible for handling the checkbook and he wrote checks to both himself and Motelson on close to a weekly basis.

The IRS sought in 1996 to collect Edelman's unpaid taxes from 1990 through 1994 using administrative levies.

Continue reading at Law.com…

Hiring A Tax Attorney vs. Negotiating with the IRS on your Own

Earlier this week we posted a new entry to my law firm’s Tax Relief Blog describing the benefits and advantages of hiring a tax attorney versus negotiating a settlement with the IRS on your own. You can check out a snippet of the blog entry below, or check out the full version at the Roni Deutch Tax Relief Blog.

Being faced with a huge back tax liability can be scary to say the least. The IRS can use aggressive collection tactics such as bank levies and wage garnishments to take your money. Fortunately, the IRS has a number of settlement programs designed to help taxpayers resolve their IRS tax debts including Offers in Compromise and placement into Currently Not Collectible status. Although taxpayers have the right to negotiate directly with the IRS, it is often a good idea to hire a professional, such as an attorney, to represent you in the negotiations. However, there are some instances where a taxpayer may be better off working directly with the IRS.

Knowledge and Experience

The biggest reason to consider hiring a tax lawyer to negotiate a tax debt settlement with the IRS is because of the knowledge and experience they bring to the table. Tax attorneys may spend years studying the IRS tax code and honing their negotiation skills. They usually have experience in successfully helping taxpayers resolve their debts. Negotiating a settlement will require a lot of knowledge of complicated IRS laws and tax codes. Therefore, if you are going to do it on your own, then you will need to spend a decent amount of time researching tax law before you begin. You might even want to purchase a few books on tax debt resolution so that you can be as familiar as possible with the process.

Convenience

Another reason to consider hiring a tax attorney is the convenience it brings. Not only can negotiating with an IRS agent be stressful, but it also requires a lot of work. In order to qualify for most tax settlement programs, you will need to present the IRS with full financial disclosure and convince them you cannot afford to pay for basic living expenses in addition to a tax payment. Compiling all of this data, calculating the correct expenses, and presenting a case to the IRS is a very complicated process, and can easily take weeks of effort to complete.

The only exception is if you are trying to get placed on a Streamlined Installment Agreement, which does not require a financial disclosure as long as the taxpayer’s debt is under $25,000 and they intend to repay the entire tax liability within five years. Therefore, if you meet the conditions for a Streamlined Installment Agreement then you may be able to negotiate your own settlement. However, if you are hoping to qualify for an Offer in Compromise or a standard Installment Agreement then you might want to consider speaking with an attorney.

Tips to Recession-Proof Your Practice

ABA Journal.com recently posted this interesting article with 10 tips to recession-proof your law firm. Below are a few of the tips, but you can see the full list here.

1. CASH FLOW

Proper management of cash flow is critical. Take a good, hard look at your balance sheet. Draft a worst-case, 12-month cash flow scenario by assuming a drop in revenues of as much as 25 percent. Identify what changes you could implement and when, should the worst occur.

If you have an office administrator who handles budget management, consider the addition of monthly or quarterly status reports. Such reports can prevent a tardy reaction should there be a drop in your monthly financials.

And while the going is still good, try to put cash aside to build a financial safety net.

2. CREDIT

A good credit rating is crucial now, especially for solo practitioners, since personal credit is what banks normally look to when determining risk for an entrepreneur. Before your worst-case scenario occurs, it may be wise to consider increasing your line of credit. It’s better to approach a lender with a positive financial forecast than when your balance sheet reflects a recession.

3. ACCOUNTS RECEIVABLE

Keep an eye on someone whose debt to you is increasing. Before allowing a substantial debt to accrue, a diplomatic yet candid discussion can be beneficial.

Remember, if a client goes under and your cash flow is tight, that will adversely impact your compensation more than a one-time, frank discussion about timely payment. Institut­ing a retainer requirement for new clients is a good policy, and also useful for those with a history of delinquencies.

4. SPENDING

Discretionary items such as complimentary bagels and sodas are usually what most managers think to cut. Yet chipping away at the perks of the workday does little if your firm is nursing credit card debt or incurring unnecessary travel and operational expenses.

Reduce business costs by implementing time-saving technological advances. Teleconferences in lieu of travel, effective use of Internet and subscription services, non-duplication of administrative and operations duties, and a staff that matches your needs are budget savers.

ABA Accredits 199th and 200th Law Schools

Earlier in the week, the American Bar Association (ABA) granted provisional accreditation to Charlotte School of Law and Elon University School of Law. These two additions bring ABA’s total number of accredited law schools to 200, which is exciting for anyone in the field of law. To see their full list of accredited law schools check out ABAnet.org.

Redesigned RoniDeutch.com

Wednesday afternoon my web team published an all-new design for my law firm’s website, RoniDeutch.com. I’m really proud of this new layout which features numerous modern design elements to give the site a really fresh Web 2.0 feel. Every single page looks fresh and inviting to people looking for help with IRS tax debt relief. My law firm takes great strides to stay current with the latest technology advancements and we feel like this new website truly reflects our efforts. Check out the new design by going to RoniDeutch.com.