Bruce D. Kowal, CPA

02/28/2025

Are you Self-Employed and behind in your taxes? IRS and your home State.

There are two steps you can take right now that can save you thousands of dollars in late filing penalties and keep IRS from tax liens and levy!

Call Bruce Kowal, CPA for a free consultation.
If you try calling IRS or your State on your own, well it’s like calling the District Attorney by your self and telling him you’re innocent.

Get it?

employed

03/11/2024

09/22/2023

WHO CONTROLS YOUR BANK ACCOUNT IF YOU DIE?. . . UNEXPECTEDLY.
[We are all going to die. We just don't think it will happen today or tomorrow]

You are a big shot [in your own mind]. Controlling all the finances of your family. Control the bank accounts and brokerage accounts. Maybe a joint account with Spouse. Every think about how your Spouse gets her hands on your dough if you die suddenly? Maybe screen shots and a list of passwords?

You could go to an attorney and title all accounts as Tenants by the Entirety. Right. Maybe tomorrow you will call the Attorney and pay him $1,500.

There is a quick, cheap and effective solution: a Payment on Death account. Also called a Totten Trust.

You name your Spouse as Beneficiary in event of death. She presents death certificate to bank, and she has control of the money. You can set this up easily with a bank officer.

But you need to DIE, before she gets the money.

What if you are in a coma, incapacitated? Well, maybe work on that three-ring binder with screen-shots and passwords. Right?

The POD account is a quick solution. It is not a substitute for a complete estate plan. But, Good Grief, you don't want to leave your Spouse with not even enough money on hand to put you in the ground.

[By the way, I really like Nerd Wallet. They simplify and explain better than anyone I have seen writing content on the 'net]

https://www.nerdwallet.com/article/investing/payable-on-death

Payable on death (POD) designations mean that assets in a bank account automatically transfer to a beneficiary when the owner dies. POD accounts bypass probate.

09/21/2023

If you owe IRS back taxes . . . and if you could waive a magic wand and have your entire IRS issue resolved, and out of your life, WHAT WOULD THAT LOOK LIKE?

Yeah. . . that's what I thought.

(Who's your Daddy?)

09/20/2023

ATF? No, not that ATF. Are you AFRAID TO FILE? That ATF . . .

You know, you have not filed in, oh Gosh, how many years has it been?

So, now your knees are shaking. But maybe you filed an extension on April 15. You made a resolution to file your 2022 tax return. Remember?

Well, the deadline is October 15. [Are you still with me?}

Here's what you do. FILE ANYTHING!!!

IRS has free file. But you can't use it! Because you need information from last year's return. https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

So, you download form 1040, and fill it out by hand. Do the best you can. Estimate. Use round numbers. The main thing is that you sign and date. You can likely find a helpful video on Youtube.

Why are you doing this? Because the late filing and failure to file penalties are 25%. Plus interest.

And, later, you WILL get more accurate information and you WILL file an AMENDED tax return.

Why are we doing this? To AVOID penalties. And the same for your State, if they accept a tax return by mail. Consult a CPA.

When? October 15.

Why? To Avoid Penalties

Which penalties? Later filing and/or Failure to file.

How much are the penalties? Up to 25%. With interest on top of that.

See how clever you are now!

09/08/2023

IRS Deadlines this week. How long? Statutes of Limitations. This is good stuff.

For example, how far back will IRS seek my unfiled tax returns? I get people calling me, they haven't filed for years. They don't know how long. Why?

Life happens. Big shocks. Death, Divorce. Horrible personal loss. Bankruptcy.

So, here is the good news. Buried VERY DEEP in the Internal Revenue Manual.

Six Years. SIX YEARS.

1.2.1.6.18 (08-04-2006)
Policy Statement 5-133, Delinquent returns—enforcement of filing requirements

And here, in all its resplendent prose:

"Normally, application of the above criteria will result in enforcement of delinquency procedures for not more than six (6) years. Enforcement beyond such period will not be undertaken without prior managerial approval. Also, if delinquency procedures are not to be enforced for the full six year period of delinquency, prior managerial approval must be secured."

SIX YEARS.

More to come . . . statutes of limitation on collecting. IRS, NY, NJ and CT.

https://lnkd.in/eqrU55MG



👉 👉 👉 👉 PLUS: Whenever you're ready... here are 4 ways I can help protect you NOW from the Internal Revenue Service:

1. Stop Collection actions now. With one phone call I can usually stop collection activities immediately. Levy, Garnishment, asset seizure.

2. File Back Taxes. I can get official IRS transcripts of information, which show all your W2’s, 1099’s, and your payment history. Filing back taxes shows good faith, and helps stop collection actions.

3. IRS Audits. If your were audited, and feel that IRS did not properly consider all of your documentation, I can request that IRS Reconsider your audit.

4. Get Penalties removed. IRS calls this Penalty abatement. We will try to find a “reasonable cause” for removal of those enormous penalties. Sometime, one call phone call will do the trick.

Chapter 2. Servicewide Policies and Authorities
irs.gov • 5 min read

09/07/2023

What is best form for a new business? Good grief! A lot of writing on this. I can only give you MY best advice, based upon decades of experience.

Always, Keep It Simple for as long as you can.

If you are a one-person business, stay as a Sole Proprietor as long as possible.

Next step, if you are still a one-person shop, form an LLC. You will be a Single Member LLC. Easy for taxes. Stays on your 1040.

Why form the LLC? Looks better to Customers, to be honest. Get some protection from Creditors, too.

Use an Attorney. Don't pay more than $1,000. If you are forming in New York State, there is an expensive trap. You need to publish your LLC formation, and it costs advertising bucks. Just a heads up.

There you go. We'll talk about growth some other time.



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09/06/2023

Starting a new business? Side job. Something from home?

Keeping it SIMPLE!!!!

Where to deposit the money? That is your first decision

1] Change nothing. Deposit your earnings in your existing checking account. This is for people who know you, and trust you. Zelle. If you have expenses, pay for them out of the same checking account. End of month, print out the bank statement, use a highlighter and pick off the business expenses. End of year put expenses in a few columns on a spreadsheet and hand over to your CPA. Done.

2] If you want to operate under a name, an "assumed name", you will need a bank account, titled with your business name.

And lets assume that you are a one-person operation, providing

Now it gets a little more involved.

To open a business bank account, the bank needs evidence of your new name AND a tax id number. With those two pieces of paper, you can open a business bank account, with the name of your business on the checks.

Go to your County Clerk for the Assumed Name Certificate, and IRS website for Form SS-4.

You are a Sole Proprietor. Congratulations. Keep it simple at the beginning.

👉 👉 👉 👉 PLUS: Whenever you're ready... here are 4 ways I can help protect you NOW from the Internal Revenue Service:

1. Stop Collection actions now. With one phone call I can usually stop collection activities immediately. Levy, Garnishment, asset seizure.

2. File Back Taxes. I can get official IRS transcripts of information, which show all your W2’s, 1099’s, and your payment history. Filing back taxes shows good faith, and helps stop collection actions.

3. IRS Audits. If your were audited, and feel that IRS did not properly consider all of your documentation, I can request that IRS Reconsider your audit.

4. Get Penalties removed. IRS calls this Penalty abatement. We will try to find a “reasonable cause” for removal of those enormous penalties. Sometime, one call phone call will do the trick.

09/05/2023

Donations of conservation easements, and Rehabilitation Credits. Similar, yet different.

Just a heads up. A very big player in the use of Rehabilitation Credits, GBX PR LLC is currently embroiled with the IRS, as a result of an Examination [audit]. The case is here: https://lnkd.in/ezKkcP2d

Now, a visit to the website of the company shows really impressive work in rehabilitating older buildings, and restoring a very pleasing ambiance. And much of this was spurred by the use of a federal rehabilitation credit [IRC §46].

Well and good, I say.

But the IRS audit, which is ongoing, is targeting "donated historic easement and development rights", not the §46 credits. This is significant. The credits are essentially issued by the National Park Service. So, they are "bulletproof". Whereas donated easements, well, there has been a lot of abuse in the area, and the IRS is in "beast" mode.

In this case, IRS has proposed additional tax and penalties of $39 million.

That is where this matter is now. Just an IRS Notice of Determination. The next stop will be US Tax Court. Which might mean a hearing no less than 12 months from now.

Who cares? Well, a lot of individual investors which fund these projects will care. And if the IRS prevails, those taxes and penalties will flow through, several years from now to prior tax returns. And? Three years or so of elevated interest plus penalties will raise the final bill by almost 50%. This audit was for just one year, 2019. If IRS prevails, they will go after more years, and more LLC's. [There are 80 LLC's] 🤔

So, if you are an investment adviser or a CFP with Clients in these types of investments, brace yourself. BOLO - Be on the lookout. 🕵‍♂️ And you might ask syndicators of these deals whether they are dealing with the §46 credits or the more risky donations.



👉 👉 👉 👉 PLUS: Whenever you're ready... here are 4 ways I can help protect you NOW from the Internal Revenue Service:

1. Stop Collection actions now. With one phone call I can usually stop collection activities immediately. Levy, Garnishment, asset seizure.

2. File Back Taxes. I can get official IRS transcripts of information, which show all your W2’s, 1099’s, and your payment history. Filing back taxes shows good faith, and helps stop collection actions.

3. IRS Audits. If your were audited, and feel that IRS did not properly consider all of your documentation, I can request that IRS Reconsider your audit.

4. Get Penalties removed. IRS calls this Penalty abatement. We will try to find a “reasonable cause” for removal of those enormous penalties. Sometime, one call phone call will do the trick.

United States of America v. GBX PR LLC
docs.justia.com • 26 min read

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