Pennsylvania’s Tax Amnesty Program

Beginning in April of 2017, Pennsylvania will begin offering a Tax Amnesty Program to eligible taxpayers. The program is geared toward taxpayers, both individuals and businesses, who owe outstanding taxes. This program will allow eligible taxpayers to ultimately pay less than the total owed to the Pennsylvania Department of Revenue if the taxpayer is able to pay the entire amount of the principal tax due.

If the delinquent taxpayer can satisfy the principal tax amount in its entirety, the Pennsylvania Department of Revenue will waive all penalties associated with the outstanding balance and also waive one-half of the interest associated with the underlying tax. To participate, taxpayers must file an online amnesty return, file all delinquent tax returns and make the required payment within the 60 day amnesty period.

Timing is critical and inflexible. This amnesty program will only be in effect from April 21 through June 19, 2017. The Department of Revenue will not accept requests for extensions of time to file an amnesty  application, so June 19, 2017, is the absolute cut-off date established by the program as currently written.

The amnesty program is applicable to almost all state taxes. However, failure to take advantage of this program if you are eligible carries significant consequences. After June 19, 2017, when the amnesty window closes, an additional 5 percent penalty will be added to eligible taxpayers who did not participate, and the interest which would otherwise have been cut in half will continue to accumulate. This essentially means eligible taxpayers can either pay less now or owe more down the line.

Pennsylvania had a similar program in 2010. Those taxpayers who participated in the 2010 tax amnesty program are presumed ineligible.

 

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell, LLP, nor do they establish an attorney-client relationship of any kind. Howland Hess O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.

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Checklist for Preparing to Create a Will or Estate Plan with your Attorney

Meeting with an attorney to discuss your wishes and objectives as it pertains to your estate plans may seem overwhelming. Make no mistake about it, the decisions you will be making in creating a will, trust, or other estate planning document are critically important. However, if you review this checklist below beforehand, you will likely find the meeting and process will go much smoother once you’re actually in the office with your attorney.

  1. Bring All Financial Information: When you meet with your attorney, you’ll need to be able to provide him or her with a full picture of your financial status for planning and tax purposes. You’ll want to bring documentation reflecting any bank accounts, stocks, investments accounts, or bonds in your name or held jointly. You’ll also want to bring documentation showing your liabilities (such as loans, mortgages, credit card statements, etc.). Clients often find it helpful to prepare their own financial worksheet, with one column showing assets and the other debts. Be sure to include account names, numbers and your most current statements. Also specify any life insurance policies or retirement savings information like 401(k)s and IRAs.
  2. Give Your Attorney a Full Family Picture: Think of this as creating a family tree! Be ready to provide your attorney with a detailed breakdown of the makeup of your family. Specifically, these individuals must be considered when creating an estate plan: a spouse, ex-spouse, children, grandchildren and step-children. Be sure to have the ages and names for your family members, and also their address. A key to estate planning is specificity, so the more detailed and less ambiguous you are in drafting the document the better. You should also develop some initial scheme of distribution as it pertains to your family member, even if that scheme is potentially leaving them nothing.
  3. List Your Business Interests: Do you own your own business? Are you part of a partnership, or a member of an LLC? This information is of critical importance in not only planning how to protect and distribute your assets, but also determining the sustainability of your business after your death.
  4. List All Real and Personal Property: We started off by discussing the importance of detailing your financial information. As important, if not more so, is putting together a list of all your real property (land, homes, buildings, etc.) and personal property (everything that’s not land, homes, buildings). Put pen to paper and break your property listing into two groups. The first is for real property: list your primary residence, any vacation or second homes, and any business or rental properties. If you have a timeshare, bring all documentation you have pertaining to that interest as well. Next, list your personal property. You should not feel obligated to list every single knick-knack or trinket, but instead focus on pieces that have either monetary or sentimental value. Examples include family heirlooms, works of art or other collectibles, vehicles, jewelry and even furniture.
  5. Recognize the Vast Power of a Properly Drafted Estate Plan: When we think of estate planning, our attention immediately goes to how we want our money and property to be distributed. But please realize that an artfully drafted estate plan can do far more than just dictate “who gets what”, so to speak. By working hand-in-hand with your attorney, you can do all of the following: (1) make well-informed decisions about appointing a reliable executor, power of attorney, and/or guardian for your minor children; (2) understand and manage the tax implications of your distribution plan; (3) designate whether you want to donate your body to science or donate organs; (4) dictate your funeral arrangements and decide whether you want to be buried or cremated; and (5) allocate a portion of your estate to a charity or church or other not-for-profit entity. These are just a few of the many possible functions of an estate plan to reach below the surface of money and property and give you more control to ensure your wishes are followed!

If you don’t have a will, or you have a will which you drafted which has not been reviewed by a licensed attorney, now is a good time to consider creating or reviewing your document with an attorney. Howland Hess O’Connell has a team of attorneys practicing in the field of Estate Planning available to help you today, including: Richard Torpey, George O’Connell, Michael Cassidy, Thomas Guinan,Bruce Hess, John Howland, Karen Angelucci, Dennis MeakimKaren Mavros and Joseph Winning.

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland Hess O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.

Starting a Business? Here are a Few Key Legal Issues to Consider.

I am awed by the drive, ingenuity and courage of those willing to make the jump and carry out their dream of being their own boss. It takes a lot of hard work and skill, and for those of you who have recently started your own business or are planning to in the future, here are a few legal issues to keep in mind as you make the jump!

  • Business Form: In today’s market, businesses take on many different shapes and sizes. There are sole proprietorships, partnerships, corporations, Subchapter S Corporations (S Corporations), and Limited Liability Corporations (LLCs), to name a few. Why is the business form decision so important? Because, depending on your state, it will likely affect how much you pay in taxes, the amount of paperwork your business is required to prepare and file, the personal liability you face and your ability to borrow money. Notably, sole proprietorships remain the most popular business structure, which is likely due to the ease of their formation (you may not even realize you’ve created one!).
  • Exit Strategy: It may seem like a strange proposition, but arguably just as important as considering how to get your business off the ground is considering how to get out or how to get others out. What’s your plan if you or one of your partners wants to withdraw from the venture? How much are you being paid to go or paying your partner to go? What other terms will apply to your or their buyout? What happens if one of you passes away unexpectedly? These are key issues to consider (and document) when starting a business to avoid confusion down the line.
  • Employees: Whether you have one or one-thousand employees, make no mistake: employee issues will arise. The number of employees under your hire will determine whether you are subject to certain laws (such as those relating to age discrimination, for example), but regardless of the number of your employees there are several key provisions to include in your agreement to hire. The two most important are non-compete and non-disclosure agreements. It is your obligation as the employer to make the terms extremely clear as ambiguity in a contract is read against the party who drafted it. If you’re not sure what to say and/or how to say it, you should consider speaking to a business law attorney in your area!
  • Dollars and Cents: It’s a beautiful thing to start seeing money come in, not always so beautiful seeing it go out. However, you have to be incredibly diligent in accounting for both. Bookkeeping is critical in managing finances, and a small mistake today could cost you big down the line if you don’t exercise caution. There is software and CPAs to help you manage your dollars and cents, and this is one area you definitely don’t want to spare.

There are a multitude of other legal issues to consider in starting your own business, like business permits, licenses, federal tax ID numbers, business names, and protection of intellectual property, just to name a few. As an aside, those of you in the process of starting your own business or with the intention to do so in the future should be wary of using solely the services of an internet-based company to form and register your company without also consulting an attorney. The attorneys at Howland Hess O’Connell are experienced and well-versed in the field of business law and are available to assist you today.

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland Hess O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.

IRS Fraud Alert: Spot the Scam

Today’s posting, while on the lengthier side, is intended to serve as a reminder to remain aware of the potential dangers of IRS scams. There are bullet points listed below highlighting key takeaways as previously emphasized by the U.S. Department of Treasury Inspector General’s office and the Internal Revenue Service’s Taxpayer Guide to Identity Theft, as well as the video linked below.

According to the U.S. Department of Treasury Inspector General’s Office, individuals posing as IRS employees have targeted thousands of people by randomly calling taxpayers claiming that federal taxes are owed and must be paid immediately. The caller uses a fake name, IRS I.D. number and alters the caller ID to make it appear as though the call is originated from the IRS. The caller will insist that the taxpayer use a pre-paid debit card or wire transfer for payment. Should the taxpayer refuse, they are threatened with arrest, deportation or loss of a business or license.

Another tactic includes callers advising taxpayers they are entitled to a refund and then requesting personal information to process payment. Sadly, victims have lost millions of dollars in tax refunds as a result of these telephone scams.

Please recognize the following:

  1. The IRS will never call to demand immediate payment for any reason;
  2. The IRS will never call about taxes owed without first having mailed correspondence detailing their actions;
  3. The IRS will never demand an individual pay taxes without providing instructions on the appeal process that is afforded to all U.S. taxpayers;
  4. The IRS will never require an individual to use a specific payment method;
  5. The IRS will never ask for credit or debit card numbers;
  6. The IRS will never threaten to utilize local police or other law; enforcement groups to support their cause.

Identity theft/refund fraud:

Tax related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Generally, the identity thief will use your SSN to file a false return early in the year. You will be unaware you are a victim until you try to file your taxes and learn one already has been filed using your SSN.

♦ Know the warning signs: Be alert to possible identity theft if you receive an IRS notice or letter that states that:

• More than one tax return was filed using your SSN;

• You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return;

• IRS records indicate you received wages from an employer unknown to you.

♦ Steps to take if you become a victim:

• File a report with law enforcement;

• Report identity theft at: www.ftc.gov/complaint and learn how to respond to it at www.identitytheft.gov;

• Contact one of the three major credit bureaus to place a “fraud alert” on your credit records (Equifax: 1-800-525-6285 – www.equifax.com; Experian: 1-88-397-3742 – www.experian.com; TransUnion: 1-8000-680-7289- www.transunion.com);

• Contact your financial institutions and close any accounts opened without your permission or tampered with;

• Check your Social Security Administration earnings statement annually.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, take these additional steps:

  1. Respond immediately to any IRS notice; call the number provided;
  2. Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form available at IRS.gov, print it, then mail or fax according to instructions;
  3. Continue to pay your taxes and file your tax return, even if you must do so by paper.

If you previously contacted the IRS and did not have a resolution, contact the Identity Theft Protection Specialized Unit at 1-800-908-4490. There are teams available to assist you.

♦ Ways to reduce your risk:

  1. Don’t routinely carry your SS card or any document with your SSN on it.
  2. Don’t give a business your SSN because they ask – only when absolutely necessary.
  3. Protect your personal financial information at home and on your computer.
  4. Check your credit report annually.
  5. Check your SS earning statement annually.
  6. Protect your personal computer by using firewalls; anti-spam/virus software, update security patches and change passwords for internet accounts.
  7. Don’t give personal information over the phone, through the mail or internet unless you have either initiated the contact or are sure you know who is asking.

Note that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Report suspicious online or emailed phishing scams to phishing@irs.gov. For phishing scams by phone, fax or mail, call 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General or Tax Administration.

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland Hess O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.