No one likes to hear that the government is auditing them. Whether the Internal Revenue Service or revenue officials in Minnesota or Wisconsin wield the fine - toothed comb, the prospect of the process is enough to leave a person with a major lump in his or her throat.
Individuals in Minnesota and Wisconsin can find themselves in difficulty with the IRS for all sorts of reasons. Sometimes the wounds are self-inflicted. Sometimes they are the result of bad actions on the part of others. Regardless of how the troubles surface, action is required to get the matter resolved. If the tax dispute happens to be over an amount in the tens of thousands of dollars or more, it may well be time to call in a legal professional with solid experience to help.
Communication is a two-way street. It is successful when sender and receiver actually exchange information. Breakdowns in personal communications can mean big trouble for Minnesota spouses, parents, children and whole families. Business conducted without clear communication can quickly lead to disaster.
We have written before that when a Minnesota taxpayer is in a dispute with the IRS, it's important to have the right representation. The level of success may well depend not only on whether you have a qualified accountant at your side, but also if you have an experienced tax lawyer with you.
Not everyone is flush with ready cash at any given moment. Many families in Minneapolis-St. Paul work on tight budgets. So, when the IRS drops a notice on you that says you have an outstanding tax obligation due, it may not only come as a surprise but also cause you a lot of consternation. If you don't have the funds available to pay, what are you supposed to do?
Earlier this year we wrote about how the long arm of the Internal Revenue Service can crimp the free movement of individuals. As that set of posts noted, what the State Department gives -- that is, documentation of one's U.S. citizenship -- the IRS can take away if the individual owes more than $50,000 in taxes, interest and penalties. A passport could be also be revoked if a person is too delinquent on child support payments.
History has a way of repeating itself. The passing of Minnesota music icon Prince may serve to provide the latest legal battleground. That's because the rock star died last month without a will. Many may be aware that legal wrangling continues today over the estate of Michael Jackson. He died in 2009.
As of March 7, the IRS was still encouraging taxpayers who had had their identities stolen by fraudulent refund filers in the past to take the added precaution of getting an Identity Protection Personal Identification Number before filing this year. As of March 9, the agency had pulled the plug on the tool saying it had failed to offer the security intended.
We are continuing our discussion of a tax case recently decided by the Minnesota Supreme Court. While the taxpayers lived in Florida, they maintained a house in Minnetonka. In August 2007, they moved here permanently. When they filed their tax return with the state, they filed as part-time residents. The Department of Revenue determined that they had been full-time residents and, as a result, owed the state a tidy sum -- almost $650,000 -- in back taxes, interest and penalties.
A recent decision from the Minnesota Supreme Court illustrates a few important aspects of tax law. First, the statutes can be ambiguous. Second, the Department of Revenue's attempts to clarify a statute may not reflect legislative intent. Third, sometimes, a court can just confuse things even further.