Federal Tax Law

Federal Tax Law

federal tax returns get most of the attention, they only tell half the story.
Your state tax returns are equally important and typically need to be filed
around the same time as your federal taxes. While many state tax codes mirror
the federal code, there are often key differences between each state which are
important to know before you start the tax process. Below, you will find
state-specific tax information and related resources — including state tax
forms and links to tax laws in all 50 states and D.C.

Tax Basics: A Beginners Guide to Taxes

writes the Internal Revenue Code (IRC), also called the tax code, which directs
the collection of taxes, the enforcement of tax rules, and the issuance of tax
refunds. The Internal Revenue Service (IRS) is the government agency within the
U.S. Department of Treasury that carries out these functions. The IRS
interprets the tax laws through their regulations, which provide guidance about
how tax laws are applied. The IRS also uses revenue rulings, procedures, and
letter rulings to offer guidance. Although the IRS can offer its
interpretations the federal courts have the final judgment on the
interpretation of the tax code regardless of the IRS’s position.

income, payroll, sales, and real estate taxes from individuals and companies
are disbursed by the federal government, according to its budget, to finance
programs such as national defense, Social Security, education, national parks,
and services such as welfare.

types of income are subject to taxation; earned and unearned income. Earned
income includes salaries, wages, tips, commissions, bonuses, unemployment
benefits, sick pay, and some noncash benefits. Unearned income includes
interest, dividends, profits from the sale of assets, business and farm income,
rents, royalties, gambling winnings, and alimony. Contributions to a retirement
account such as a 401(k) or IRA may reduce a taxpayer’s taxable income.

Which Tax Form Should I Use?

taxpayers must use one of three forms to file your return: Form 1040EZ, Form
1040A, or Form 1040. Form 1040EZ is the simplest form to use. In order to use
Form 1040EZ the taxpayer must meet all of the following requirements:

  • must be filing
    as single or married filing jointly;
  • must be under 65
    and not blind;
  • must not be
    claiming dependents;
  • must be claiming
    less than $100,000 in taxable income;
  • must be claiming
    income only from wages, salaries, tips, and a limited number of other
    kinds of income;
  • must not receive
    any advanced earned income credit payments;
  • must not claim
    any adjustments to income such as IRA and student loan interest
  • must not claim
    any credits other than earned income credit;
  • must not owe any
    household employment taxes on wages paid to a household employee.

If you
do not qualify to use Form1040EZ you may be able to use Form1040A. This form
has many of the same restrictions, though it permits a wider array of tax
credits. Form1040 is available to report all types of income, deductions, and
credits. Form1040 also permits itemized deduction, some adjustments to income,
and credits that may be unavailable on Form1040EZ and Form1040A.

Free Consultation with a Utah Tax Attorney

If you are here, you probably have a tax law issue you need help with, call Ascent Law for your free tax law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Source: https://www.ascentlawfirm.com/federal-tax-law/


Terminology Used in Divorce

Terminology Used in Divorce

divorce community debts

Like community property, all
debts acquired during the marriage are community debts. Both husband and wife
are equally liable for these debts. In most cases, this includes unpaid credit
card balances, home mortgages and car loan balances.

automatic restraining order

When the divorce petition is
served, neither spouse can take any children out of state, sell or borrow
against property, or borrow or sell insurance held for the other spouse. These
orders remain in effect until the judgment is signed by the court.

personal property (divorce)

Any property that is
moveable, as opposed to land or attached to land. Cars, jewelry and furniture
would all be defined as personal property.


The first document filed in
court and the one that starts the clock running on any required waiting
periods. The petition includes important information about the marriage, such
as the husband, wife, and any children’s names, whether there is any separate
or community property, child custody, child support and spousal support. The
document is sometimes referred to as the complaint.


The law requires both
spouses to provide the other with all information related to their property,
income, assets and debts. This is called Full Disclosure. Failing to fully
disclose all relevant information or concealing information can have serious
consequences. It’s important to be precise and thorough when listing assets and
debts. There are two disclosure forms that will be generated.

marital settlement agreement

An agreement by which both
spouses document the terms of the divorce, such as the division of property,
child custody and spousal support. See “Marital Settlement Agreements in a
Divorce” for additional information.

judgment document

The most important document
of your divorce. It is the document reflecting the final resolution of all your
legal issues. Every part of your judgment is finalized when it is signed by the
court, including the marital settlement agreement (if it is attached).

irreconcilable differences

When marital difficulties
cannot be resolved and have led to the permanent breakdown of the marriage.
These are legally sufficient grounds for a divorce.


The person who first
“petitions” the court for a divorce. Some states allow for

separate debts

All debts incurred before
marriage that remain the obligation of only one spouse. Any educational or job
training loans acquired before marriage would be separate debts.


Most states do not require
physical separation in order to divorce. The date of “separation” is
the date when both the husband and wife officially decide the marriage is over.
The date of separation is often defined by evidence of the marriage ending,
such as one person moving out.


May be filed by the
respondent to agree with or dispute the facts set forth in the petition, often
referred to as an Answer.

community property

It includes all property
acquired during the marriage and is deemed to be owned equally by wife and
husband. It includes money and wages earned during the marriage, as well as
anything purchased with that money, regardless of who actually earned it. 

Community property is observed in the following states: Arizona, California,
Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Utah does not have community property but has something similar called Marital Property – meaning property that belongs to both spouses as the marital estate.

Free Consultation with a Divorce Lawyer

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Source: https://www.ascentlawfirm.com/terminology-used-in-divorce/

Tax Identity Theft

Tax Identity Theft

First and foremost, you always want to contact the police. Call them right away and do what they tell you to do. Second, call a tax lawyer and talk to them about your situation and do what they say. Any type of identity theft can turn your life upside down. It creates financial problems and can tarnish your credit history, not to mention the time, money, and patience it takes to resolve. Now fraudsters are targeting your tax refund!

identity theft occurs when someone uses your Social Security number (SSN) to
file a tax return claiming a fraudulent refund. Thieves frequently file early
to avoid detection, and make off with your refund before you’ve had a chance to
file. The IRS reports that tax identity theft is on the rise. So it’s important
to understand the warning signs and know how to deal with tax identity theft
when it occurs.

Warning Signs

you file your taxes only to have it rejected by the IRS because a return using
your Social Security number was already accepted? Or, did the IRS send you a
letter saying it identified a suspicious return using your personal
information? These are signs that your tax identity may be in the hands of criminals.
Other warning signs include:

  • You owe additional taxes, refund offset, or have a collection action against you for a year you did not file a tax return.
  • IRS indicates you received wages from an employer you can’t identify.
  • Your state or federal benefits were reduced or cancelled because a government agency received information reporting an income change.

What to Do If You Are a Victim

you’ve been the victim of tax identity theft, it’s important to act quickly to
prevent any additional fraud from occurring. Unfortunately, your refunds will
likely be delayed for an extended period while the IRS resolves the matter. A
typical case can take about 180 days to complete.

these steps to secure your personal information and any refund rightfully due from
the IRS:

Identity Theft Affidavit with the IRS

If you
did not receive a notice but believe you’ve been the victim of identity theft,
contact the IRS Identity Protection Specialized Unit. You will also need to
fill out the Identity Theft Affidavit.

Respond to Any IRS Notice

If the
IRS receives a suspicious tax return filing, they may send a “5071C Letter”
asking that you verify your identity. Typically, you can identify yourself over
the phone or through the IRS’s Identity Verification Service website.

Report Fraud to Federal Trade Commission (FTC)

from taxpayers help the FTC detect larger patterns of fraud and abuse. The FTC
has a web-based reporting form that asks a few questions about the fraud you
suffered. It should only take a moment to complete, and your participation will
assist with the creation of programs to fight tax identity fraud.

Contact Your State Tax Agency

criminals typically target your federal return, you will want to also contact
your state tax agency to the report income tax fraud. Call either the state’s
tax hotline or go to their website and find the fraud reporting procedures.
Some states require you to fill out a form to mail.

Place a Fraud Alert on Your Credit Record

one of the nationwide credit reporting companies, such as Equifax, Experian or
TransUnion. Ask for a fraud alert to be placed on your credit report. The
company you call is required to contact the other two credit agencies so they
will put the fraud alerts on their files too. An initial alert is good for 90
days. Taking this step makes it hard for someone to fraudulently open new
accounts in your name.

Contact your Financial Institutions

someone has enough of your personal information to file a tax return, they may
be able to access your bank accounts. Contact your bank and other financial
institutions to have a fraud alert placed on your account.

Free Consultation with a Tax Identity Theft Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you need help regarding identity theft, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Source: https://www.ascentlawfirm.com/tax-identity-theft/

Business Succession Planning

Business Succession Planning

corporations, small businesses and partnerships without solid succession plans
often fail when the owner or a senior-level partner retires, becomes
incapacitated or dies. Problems also can arise when partners no longer get
along and decide to part ways.

succession planning is essential for family businesses in particular, which
will have to either identify family members who are qualified for leadership
positions or consider other contingencies beyond the family. 

early, basing decisions solely on business needs and revisiting the plan as
conditions change are the keys to a successful hand-off. You may also benefit
from the counsel of a skilled small business attorney.

Steps for Developing a Succession Plan

are several different strategies and options for succession planning. The
following five general steps for developing a plan provide a good road map for
the process:

  1. Choose Your
    – Start by
    looking within the organization, examining employees who may have the
    right leadership skills. Family businesses may benefit from impartial
    third-party consultants, given the emotional aspects of choosing among
    family members. This should begin at least 15 years prior to a planned retirement.
  2. Develop a Formal
    Training Program
    – First,
    identify critical functions of the company and then have your successor
    work in each of these areas. It’s not enough for your successor to
    understand the executive duties alone, since he or she needs to understand
    the breadth and depth of the organization. You may also have to allow your
    successor to make some mistakes along the way.
  3. Set a Timetable – Determine how and when control
    of the company will be shifted to your successor. Ease your successor into
    the position and avoid the impulse to routinely overrule his or her
    decisions during this transition phase.
  4. Plan Your Own
    – This may not
    seem related, but it’s important for departing officers to prepare for
    their departure and plan the next chapter of their lives. This also will
    make it easier for you to let go and for your successor to fully take the
  5. Execute the
    Succession Plan
    – If you have
    made the proper preparations, this should be as simple as handing over the
    company and stepping aside. Businesses whose owners install their
    successor during their lifetime typically have a much smoother transition
    to the new principal.

Succession Planning Strategies

usually think of a business owner simply handing over the reins to a new owner
or principal when we think of succession planning. But there are several
different financial options for business owners who would like their
organization to survive beyond their own tenure. Below are six such strategies
for succession planning:

  1. Selling Your
    Business Interest
    – You may
    choose to sell your business interest outright in return for cash or other
    assets. Most partners or company officers have the option of selling
    before they retire, at retirement, at death or at any time in between. You
    may have to pay capital gains tax if you sell before your death.
  2. Transferring
    Business Interest with Buy-Sell Agreement
    – This is a legal contract that
    arranges the sale of your business interest in advance, to be enacted at a
    predetermined event such as retirement, divorce, disability or death. The
    buyer is obligated to purchase your interest at fair market value at the
    time of the triggering event.
  3. Granter Retained
    Annuity Trusts or Unitrusts

    – GRATs and GRUTs are irrevocable trusts to which you transfer assets while
    still obtaining an income for a given period of time. At the end of this
    period or upon your death, the assets in the trust go to the other trust
    beneficiaries. This is considered to be a quite sophisticated succession
  4. Private
    – This is the
    sale of property in exchange for regular payments to you for the rest of
    your life. Ownership of the business is transferred to family members or
    another buyer, who promises to make periodic payments until your death
    (and sometimes for the life of a surviving spouse). This allows you to
    avoid gift or estate taxes.
  5. Self-Canceling
    Installment Notes
    – SCINs allow
    owners to transfer a business to a buyer in exchange for a promissory
    note, requiring the buyer to make a series of payments. The remaining payments
    are canceled upon the seller’s death.
  6. Family Limited
    – This can help
    when transferring business interests to family members. You first
    establish a partnership with general and limited partnership interests,
    then transfer the business to the partnership. Over time, you may gift
    your business interest to family members.

Free Consultation with a Business Lawyer

When you need help with succession planning for your business, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Source: https://www.ascentlawfirm.com/business-succession-planning/

Income Tax Fraud

Income Tax: Fraud vs.

Income Tax Fraud

IRS estimates that only a small percentage of tax crime convictions,
representing less than one percent of taxpayers, occur in a year. Yet the IRS
also estimates that 17 percent of taxpayers fail to comply with the tax code in
some way. It is individual taxpayers, rather than corporations, that commit 75
percent of income tax fraud. But are all violations of the tax code fraud?

are some definitions and ways in which the IRS attempts to distinguish between
income tax fraud and negligence.

tax fraud is the willful attempt to evade tax law or defraud the IRS. Tax fraud
occurs when a person or a company does any of the following:

Intentionally fails to file a income tax return

Willfully fails to pay taxes due

Intentionally fails to report all income received

Makes fraudulent or false claims

Prepares and files a false return

IRS understands that the tax code is a complex set of regulations and rules
that are difficult for most people to decipher. When careless errors occur, if
signs of fraud are absent, the IRS will usually assume that it was an honest
mistake rather than the willful evasion of the tax code. In this circumstance,
the tax auditor will usually consider it a mistake that is attributable to
negligence. Although unintentional, the IRS may still fine the taxpayer a
penalty of 20 percent of the underpayment.

IRS can usually distinguish when an error is the result of negligence or the willful
evasion of the tax law. Tax auditors look for common types of suspicious and
fraudulent activity, such as:

Overstatement of deductions and exemptions

Falsification of documents

Concealment or transfer of income

Keeping two sets of financial ledgers

Falsifying personal expenses as business expenses

Using a false Social Security number

Claiming an exemption for a nonexistent dependent, such
as a child

Willfully underreporting income

workers paid mostly in cash and self-employed taxpayers running cash-based
businesses have been identified as the taxpayers committing most of the tax
fraud because it is easy to underreport cash income. Restaurant and clothing
storeowners, car dealers, salespeople, doctors, lawyers, accountants, and
hairdressers were ranked as the top offenders in a government study of income
tax fraud. Service workers, such as restaurant servers, mechanics, and
handymen, also commonly underreport cash income.

IRS Criminal Investigation into Income Tax Fraud

IRS conducts investigations into alleged violations of the tax code through the
IRS Criminal Investigation (CI), the law enforcement branch of the agency. CI
agents investigate tax crimes, money laundering, and Bank Secrecy Act
violations. Investigators use sophisticated methods to uncover computer
information protected by encryption, passwords, and other barriers.

the tax system relies on “voluntary compliance,” or the
self-assessment of the taxes owed, the IRS attempts to discourage violations by
publicizing convictions, seeking prison time for offenders, and by assessing
fines, civil taxes, and penalties.

Penalties for Income Tax Fraud

taxpayer that willfully attempts to evade paying income taxes is subject to
criminal and civil penalties. The type of fraud will determine the applicable
penalty. The following are some examples of possible punishments for specific
types of tax fraud:

Attempt to evade or defeat paying taxes: Upon conviction, the
taxpayer is guilty of a felony and is subject to other penalties allowed by
law, in addition to (1) imprisonment for no more than 5 years, (2) a fine of
not more than $250,000 for individuals or $500,000 for corporations, or (3)
both penalties, plus the cost of prosecution (26 USC 7201).

Fraud and false statements: Upon conviction, the
taxpayer is guilty of a felony and is subject to (1) imprisonment for no more
than 3 years, (2) a fine of not more than $250,000 for individuals or $500,000
for corporations, or (3) both penalties, plus the cost of prosecution (26 USC

Willful failure to file a return, supply
information, or pay tax at the time or times required by law.
This includes the failure
to pay estimated tax or a final tax, and the failure to make a return, keep
records, or supply information. Upon conviction, the taxpayer is guilty of a
misdemeanor and is subject to other penalties allowed by law, in addition to
(1) imprisonment for no more than 1 year, (2) a fine of not more than $100,000
for individuals or $200,000 for corporations, or (3) both penalties, plus the
cost of prosecution (26 USC 7203).

Free Consultation with a Tax Attorney

If you are being accused or income tax fraud or need help with an IRS or Utah State tax matter, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

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Child Support Amounts

Child Support Amounts

In Utah, there are certain formulas that judges use to calculate how much child support is owed by one parent to another after a divorce. Typically, judges and court commissioners will follow the child support guidelines; however, they can deviate from those guidelines. If you feel as though your case may be an exception to the rule, you have the ability to inform the judge of special circumstances.

Examples of situations where child support may need to be more than what the guidelines suggest may include the following: You have a child with special needs. If a child is disabled or has special needs that require additional care or medical treatment, state-recommended child support amounts may not be enough to provide proper care for your child. Increased support may also be needed to maintain a child’s particular passion for an interest such as a musical instrument or membership in a sport’s team.
Your spouse earns considerably more than you do. If you have primary custody of your children, but your child’s other parent makes a significant amount more than you do, a judge may require the noncustodial parent to pay more than the state’s recommendation. This can also apply if the child’s noncustodial parent has a substantial amount of assets, or if their job provides special compensation measures such as company-provided cars or housing.

Conversely, situations exist where a parent may be required to pay less than what is typically required, including: A noncustodial parent does not have adequate funds. Sometimes a parent has experienced a change in their income level and is no longer able to pay the same amount of child support. In this case, a judge or court commissioner may reexamine the total child support required and lower it to a manageable amount.

The state’s guideline requires an excess of the child’s situation. If a noncustodial parent earns a salary that is greatly above the average person’s income, the state-guided formulas may require a payment of more than what is needed. In this case, the court may lower child support payments to a reasonable amount for the parents’ and child’s circumstances.

Make Sure You Get a Prenup

In recent years, there has been a notable increase in the number of empty-nesters and retirees who’ve gotten divorced. It makes perfect sense not to spend your golden years in a broken relationship, but once you’ve found a new relationship, you should bear in mind that it too could break.
Here are few points to consider:

The impact of your divorce on your finances — Getting your freedom was great, but it probably came at a cost. For many grey divorcées, that means less in the retirement fund and long-term alimony payments. A prenuptial agreement can secure your remaining wealth against the possibility of another divorce.

Your desire to leave a legacy for your children — Who gets your wealth if you pass away unexpectedly? Unless you’ve planned explicitly — with a will, a living trust or a prenuptial agreement — your new spouse might inherit much of the wealth you’d rather pass to your children. Then when your spouse dies, your children could be totally shut out.

None of us is getting any younger — With age comes infirmity, and sudden disabling injuries or illnesses are more likely. A prenup can spell out how you are going to deal with long-term care issues.

Of course, many seniors will decide that once through the divorce mill is enough. So, rather than getting married, they’ll simply cohabitate. But it still helps to put forth a clear, explicit statement of the relationship in a cohabitation agreement.

Free Consultation with Child Support Lawyer

If you have a question about child support or if you need to collect back child support, please call Ascent Law at (801) 676-5506. We will help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

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Paying Your Taxes

Paying Your Taxes

Obviously, paying your taxes plays a large role in avoiding tax problems. I’ve seen this as an International Tax Attorney, but I also know that you may be in a situation where you can’t pay your taxes. We can help you with that. However, making tax payments isn’t always as simple as writing a check. In addition to basics on how to pay your taxes, below, you’ll find resources on getting an extension of time to pay and working out an installment agreement with the IRS if you cannot pay all that you owe at one time.

There are more ways to pay your taxes now than ever before. You can address your tax liability by filing and paying electronically or by sending a check or money order made out to “United States Treasury.” You can pay in full or seek a repayment plan, sending payment in whatever amount you are able and can agree upon with the Internal Revenue Service (IRS.)

In some circumstances it can be advisable to pay your tax liability in full by taking a loan, such as a home equity loan from a financial institute or by paying with a credit card. This may be wise since unpaid taxes are subject to interest that is compounded daily, as well as incurring a monthly late payment penalty. This means paying in full can minimize the amount of interest and penalties that accrue and reduce the overall expense. Interest rates charged by banks are usually lower than the combination of interest and penalties charged by the IRS.

Where an installment agreement is necessary you can choose to make installment payments by direct debit from your bank account, by payroll deduction from your employer, or by a regular installment agreement. Payment amounts are based on your ability to pay and should be an amount that can be maintained over the lifetime of the installment agreement.

What About Penalties and Interest?

When a taxpayer owes money to the IRS and cannot pay immediately there are significant penalties and interest that apply to the amounts owed. The interest rate owed on unpaid taxes varies from 4-9% generally, which may be lower than some bank interest rates, but the penalty for filing taxes late is generally 5% per month up to 25% of the total tax liability. Late payments incur a penalty of 1/2 of 1% per month, up to 25% of the unpaid amount due.

There are some exceptions to these penalties and if the taxpayer can demonstrate that one of several conditions exists the IRS may waive some or all of the penalties. Exceptions may be made where a serious illness, death in the family, or loss of records due to a natural disaster frustrate a taxpayer’s ability to pay in a timely fashion.

Can You Appeal?

The IRS has an appeals system for taxpayers who don’t agree with the results of their tax return or other adjustments made to their tax liability. If you have dealt with an IRS employee and disagree with their findings you can request a meeting with their supervisor. If this meeting does not produce a satisfactory agreement or if the examination was conducted through correspondence you may then request a conference with an appeals officer.

Appeals conferences are informal meetings. You may represent yourself or seek the assistance of an attorney, a certified public accountant, or an individual enrolled to practice before the IRS. If you don’t reach an agreement with the appeals officer some actions can be appealed in the courts.

Free Consultation with a Utah Tax Attorney

If you are here, you probably have a tax law issue you need help with, call Ascent Law for your free tax law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Source: https://www.ascentlawfirm.com/paying-your-taxes/