Tax Lawyer in Denver on Solicitations from Tax Relief Companies

You have seen their commercials on TV.  You have heard their commercials on the radio.  Maybe you have even been directly Denver Tax Attorneysolicited by them over the telephone.  I am writing about national tax relief companies, or so they call themselves tax relief companies, but the majority (vast majority) will only take your money with little work.  Many of these so called tax relief companies have been shut down by attorney general offices or other government offices.  If a company has contacted you, do some research online and you can pretty much trust the horror stories you read.  The article below drafted by a Denver tax attorney should help you understand how these companies work and why you should never (never ever!) work with them.

Fear Tactics & Bate and Switch: Most, if not all national tax relief companies use fear tactics.  These companies use salesman to call potential clients (this is unethical solicitation as well if an attorney or attorney(s) work at the firm) from a tax lien list and will tell the potential client that they are going to be levied if they do not hire the firm.  Our clients have been contacted by these firms and have been told that the company was speaking with the IRS revenue office, which is completely untrue.  The potential client is told by a salesman that their debt will be settled and/or penalties removed.  Again, all this is coming from a salesman who may not have a high school degree and certainly is not an attorney or CPA.  So the potential client is told that for a sum of money their tax debt will be settled and penalties reduced.

Who Works the File?  After the individual or business signs on with the tax relief company and makes payment, their file goes to the “associate.”  This associate may be an attorney, but often the associate is an individual that has learned how to rip people off by working at the company.  Your associate may not have a high school degree or college degree.  Thus, you are not being “represented” by or speaking with an attorney.  An attorney will sign a Power of Attorney but will not be the person you speak with and the Power of Attorney will only work on the file minimally, which of course you will likely be double-billed for.  The person you speak with has been trained how to be friendly to you and bill down your money to ask you for more and more money.

Money: Within 30-90 days of hiring the “tax relief” company, you will receive a call from your associate that your retainer needs to be updated, which means, you need to pay more money.  Likely no work and no progress has been made, but the associate will give you an excuse that you owed more than initially thought or your case is more complicated.  If you do not pay more money, they will close your case.  Hopefully, nothing has been accomplished to give you the false sense of security that this company will do much for you, because you really can get raked through the coals.

Tax Attorney: Save yourself the time and trouble.  Call a legitimate tax attorney or tax law firm.  Most offer a free consultation and can give you an honest analysis of your case.  Based on your circumstances, you may never be able to settle your tax debt or have penalties abated, but you could have spent and wasted thousands of dollars with a national tax relief firm attempting these resolutions and options.

In short, do NOT hire any “tax relief” company that is soliciting you.  If you have a question, call a local tax attorney or speak with a Denver tax attorney at The McGuire Law Firm.

 

Denver Tax Lawyer Explains a Schedule C

What is a Schedule C?  This is a common question asked of business attorneys and tax attorneys.  The article below hopefully will Denver Tax Attorney help answer the above question and give additional insight as to the importance of the Schedule C.

IRS Form Schedule C is titled Profit or Loss From Business and is a schedule attached your 1040 Individual Income Tax Return if you are required to file a Schedule C.  In general, self employed individuals or a single member of a limited liability company must file a Schedule C with their 1040 tax return.  Additionally, some individuals do not realize they are required to file a Schedule C.  If you receive a 1099 for non-employee income or miscellaneous income, this income should likely be reported on a Schedule C.  For example, an individual may work for an employer and receive a W-2, but perhaps this individual works for another company a few days a year and is issued a 1099 for this secondary income.  The third party would likely issue a 1099 for the monies paid and this income should be claimed on a Schedule C, or you may be able to file a Schedule C EZ under certain circumstances.

A Schedule C is used to calculate your net income and thus the amount of income you are taxed on.  On the Schedule C, you will state you gross receipts, and other income and then your allowed expenses to calculate your net income.  Allowable expenses would be those related to the operation of the business and a few are listed below.

–          Advertising

–          Car and truck expenses

–          Depletion

–          Depreciation

–          Interest

–          Contract labor

–          Commission Payments

–          Legal and Professional Payments

–          Rent

–          Office Expenses

–          Office Supplies

–          Taxes & Licenses

–          Meals & Entertainment

–          Wages

–          Travel

–          Utilities

–          Other Expenses

Once your net income has been calculated the net income is then stated on Schedule SE, which is used to calculate your-self employment tax.  Self employment tax is stated on Form 1040 as a tax amount and half of the self employment tax can be deducted as an adjustment to income.  Your net income from the Schedule C is also stated on page one of the 1040 as income and is added to other income in the overall calculation of your federal income tax.  Thus, if you are self employed individual or the single member of a limited liability company (LLC) the Schedule C is a vital piece of calculating your total tax due.

A Denver business attorney or tax attorney at The McGuire Law Form can assist you questions and issues regarding your business and the taxation of your business entity.  Further, we can assist you with tax planning matters and analyze the tax implications from specific transactions.

Contact The McGuire Law Firm to speak with a Denver tax attorney or business attorney and schedule a free consultation.  Offices in Denver and Golden Colorado.

 

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Preparing to Sell a Business by: Denver Business Attorney

You have worked hard and built a successful business.  Your business may have significant value and could provide additional Denver Business Attorneyretirement funds or significant money for retirement.  But, how do I go about selling my business or my business interests?  This is a common question clients ask a Denver business attorney, and a very important question.  How you prepare to market and sell your business may impact the overall purchase price you are able to obtain and the ease at which you are able to sell the business or interest.  The article below, drafted by a Denver business attorney at The McGuire Law Firm to discuss issues to consider when preparing to sell your business.

First, the seller should obtain realistic valuations and these valuations may differ depending upon the type of business being sold, the assets of the business and the potential buyers of the business.  The seller should look at the value of the business as a whole from two perspectives: one from the point of view of a financial buyer(s) who has no business connections or synergies and two, from the perspective of a strategic buyer who has a business connection or motive and may be willing to pay a premium.  A realistic valuation of the business can assist in discussing realistic purchase prices with the potential buyer from the beginning.  Given the purchase price is typically the most common pitfall, it can be beneficial to discuss the purchase price from the beginning.  When the purchase price is discussed and based upon a realistic valuation, you limit certain issues that could create problems later in the negotiations.

Seeking a potential buyer is an important step in selling your business, but is discussed by our business attorneys in a separate article.  The potential buyer will want to conduct their due diligence, which is discussed below.  It is recommended that you enter into a non-disclosure agreement prior to disclosing and providing information that is requested by the potential buyer.

The more organized you are, the easier it will be to provide the documents requested from a potential buyer.  Further, you will want to make sure you can provide all documents that are reasonably requested.  The inability to provide certain documents can weaken your position and thus lessen the purchase price.  The list below is a general list that you could expect a potential buyer to request.

 

–          Letter or certificate of good standing with the Secretary of State, and any necessary certificates from states in which you are operating;

–          Current financial statements (income statement, balance sheet etc) and prior three years financial statements;

–          Copies of current contracts with third parties;

–          Current list of assets, fair market value and any encumbrances;

–          List of any intellectual property such as copyrights, trademarks, patents;

–          List of other business loans and lines of credit;

–          Conduct a judgment and lien search;

–          Copies of appraisals;

–          Prior three year tax returns;

–          Customer list;

–          Profit and gross margins analysis;

–          Sales & Marketing Summary (price points, lead generation, training etc);

–          Disclosure of current or potential liability and litigation;

–          List of employees, employee benefits, pay structure etc.

The above list is a general list, but you should expect a similar request from potential buyers while they conduct their due diligence.

A Denver business attorney at The McGuire Law Firm can assist you with selling your business.  From the preparation to the drafting of documents and negotiating, we will assist you.

Contact The McGuire Law Firm to schedule your free consultation with a Denver business attorney.

 

Denver Tax Attorney Explains a Schedule A

What is a schedule A?  What are itemized deductions?  Can I write off my medical expenses?  These are common questions asked of a Denver Tax LawyerDenver tax attorney by clients at The McGuire Law Firm.  The article below has been drafted by a tax attorney at The McGuire Law Firm to assist with some of the questions above.

A Schedule A is the schedule in which a taxpayer states their itemized deductions.  A taxpayer will either take the standard deduction or itemize their deductions.  A taxpayer will itemize their deductions if their itemized deductions are greater than the standard deduction.  Thus, Schedule A can be used to calculate itemized deductions and is the schedule in which a taxpayer will use to report their itemized deductions on their 1040 Individual Income tax return.

Below is a list of deductions that can be taken on a Schedule A:

–         Medical expenses (the medical expenses that can be itemized are those that are greater than 7.5% of the taxpayers adjusted gross income, or 10% if the taxpayer is a certain age)

–         Taxes: State income taxes or general sales tax, real estate taxes, personal property taxes and other taxes can be deducted as itemized deductions on Schedule A

–         Mortgage interest: You should receive a Form 1098 stating your mortgage interest, or you can report mortgage interest paid that is not reported on a Form 1098, but you will need to provide additional information

–         Mortgage insurance premiums

–         Gift to charity- these can be gifts by cash or check, or property that was donated to charity.  Certain reporting requirements apply when the gifts claimed are above $500 and this figure can change

–         Casualty and theft losses

–         Unreimbursed employee expenses

–         Tax return preparation fees

–         Other expenses

In general, your itemized deductions will lower your taxable income and thus the amount of tax you pay for the year.  Your itemized deductions can be phased out depending upon your adjusted gross income meaning that your itemized deductions are reduced (thus the benefits lessened) when you make a certain amount of money.

Your Schedule A is attached and included with your 1040 Individual Income Tax Return that is filed with the Internal Revenue Service.  In addition to lowering your federal income taxes, if your state income taxes are calculated based off of your federal taxable income, these itemized deductions can also reduce your state income taxes.

You can speak with a Denver tax attorney by contacting The McGuire Law Firm and scheduling a free consultation or email Mr. McGuire at John@jmtaxlaw.com

 

 

Limiting or Expanding Corporate Provisions by Denver Small Business Lawyer

Overall corporate planning may require options to modify, limit or expand provisions that are authorized by statute.  Certain Denver Business Attorneyprovisions may only be included within the Articles of Incorporation, some provisions included within the corporate bylaws and some made via other corporate action.  The chart below drafted by a Denver business attorney at The McGuire Law Firm outlines sections of the Colorado Business Corporate Act allowing for a modification of the statutory rule, the type of modification and where within the corporate documents such modification should occur.

SectionModificationCorporate ArticlesCorporate BylawsOther Corporate Action
7-101-401(36)Creating Voting GroupsX
7-102-107Prohibiting Emergency BylawsX
7-103-101Limiting Corporate PurposeX
7-103-102Limiting Corporate PowerX
7-106-101Additional Classes of SharesX
7-106-102Authorizing Series SharesX
7-106-202Reserving the power to issue shares to shareholdersX
7-106-202(6)Prohibiting the issuance of par value shares at less than parXX
7-106-203(2)Providing personal liability to shareholders or subscribersX
7-106-204Prohibit or restrict dividendsX
7-106-205(2)Prohibit or restrict share rights or optionsX
7-106-207Prohibit/restrict uncertified securitiesX
7-106-208Implement transfer restrictionsXX
7-106-301Provide or restrict preemptive rightsXXX (per shareholder agreement)
7-106-302Prohibit/restrict the reissuance of reacquired sharesX
7-106-401Prohibit/restrict distributions to shareholdersX
7-106-401(7)Requiring designations, restrictions or reservations for distributions of par value sharesXX
7-107-101Establishing time & place of annual meetingX
7-107-102Authorizing persons to call special meetingsX
7-107-102(3)Establish place of special meetingX
7-107-104(1)Prohibiting shareholder written consentsX
7-107-104(1)Permitting consent by shareholders holding a majority of the sharesX
7-107-104(2)Prohibit/restrict consent by faxX
7-107-105(2)Require the purpose in notices of annual meetingsX
7-107-105(5)Require notice for adjourned shareholder meetingX
7-107-107Fix record dateX
7-107-108Prohibit/restrict electronic communication for shareholder meetingX
7-107-202Change one vote per shareX
7-107-204Provide for recognition of beneficial owner of nomineeXXX (board resolution)
7-107-206(1) & 7-107-208Change quorum of shareholders from majorityX
7-107-206(3)Increase voting requirement of shareholders from majorityX
7-107-207Provide for voting groupsX
7-107-209(2)Provide for shareholder notice to use cumulative votingX
7-108-101(1)Eliminate Board of DirectorsX
7-108-101(2)Limit or delegate authority of boardX
7-108-102Establish qualifications for board membersX
7-108-103Establish number of directorsX
7-108-104Establish classes of directorsX
7-108-106Stagger terms of board membersX
7-108-108Provide removal of director only for causeX
7-108-110Limit manner to fill director vacancyX
7-108-111Limit directors fixing their own compensationX
7-108-201Prohibit or restrict electronic communication for director meetingsX
7-108-202Prohibit/restrict director written consentsX
7-108-203(1)Require date, time and place in the notice of regular director meetingsX
7-108-203(2)Require different period of notice for special director meetingsX
7-108-205(1)Change quorum of board from majorityX
7-108-205(3)Change vote of board from majorityX
7-108-206Limit the creation and authority of committeesX
7-108-301Delegate and designate authority of officersX
7-108-303(4)Limit removal of an officerX
7-108-402Limiting personal liability of corporate officers and directors.X
7-108-105Limiting application to a court regarding indemnification by directorX
7-109-107Limiting indemnification of employee, officer and agentsX
7-110-102Limiting board approval of administrative amendments to articlesX
7-110-103(5)Requiring greater than a majority vote to amend articlesXX (adopted by shareholders)X (board resolution)
7-110-201(1)Reserve power to amend bylaws solely to shareholdersX
7-110-202Allowing shareholders to amend bylaws to increase quorum and voting requirementsX
7-111-103(5)Requiring greater than majority vote for mergers or share exchangeXX (adopted by shareholders)X (board resolution)
7-112-101(2)Requiring shareholder approval for ordinary sales, pledging of assets or mortgages
7-112-102(6)Requiring greater than majority vote of shareholders for sales outside the normal course of businessXX (adopted by shareholders)X (board condition to effectiveness of the applicable transaction)
7-114-102(5)Requiring greater than majority vote of shareholders for dissolutionXX (adopted by shareholders)X (board resolution)

Contact The McGuire Law Firm to schedule your free consultation with a Denver business attorney!

Article by Denver Business Attorney: How Do I Start a Business?

How do I start a business?  This is a common question client’s or potential clients ask a Denver business attorney.  Although there Denver Small Business Attorneyare many issues to consider when starting a business and different directions that can be taken, the article below should outline in general the steps that need to be taken.

 

–         First, you need to consider what type of entity you want your business to be.  You could form a corporation, a partnership or if you are the sole business owner you could operate as a sole proprietorship.  Our business attorneys would recommend you always consult an attorney to discuss the type of business entity you will establish.

–          After you have made your choice of entity, you will need to file the appropriate articles with the Colorado secretary of state.  If you are forming a corporation, you will need to complete articles of incorporation.  If you are forming a partnership, you will need to file articles of organization.  These documents can be filed online with the Colorado Secretary of State.  Please know that a fee does apply to the file the appropriate articles.  Further, depending upon your business, you may choose to file multiple business entities.  For example, you may establish one business to hold certain assets and act as a holding company and file another entity that would operate and conduct the day to day operations of the business.

–          Once you file the articles of incorporation or organization, you likely need to obtain an Employee Identification Number, which is typically referred to as an EIN.  You can obtain your EIN online at the IRS website (www.irs.gov) by completing Form SS-4.  The IRS has a link on their website to obtain the EIN and generally you can obtain the EIN immediately.

–          Now that you have the appropriate articles and your EIN, you should be able to open up a business bank account.

If you establish a corporation, you will want to have corporate bylaws to direct and control the corporation and corporate decisions.  Further, the corporation will establish a board of directors and officers, and should establish a method to insure that the corporate requirements are met.  If certain corporate requirements are not met, the limited liability afforded to a corporation could be lost.  If you establish a partnership, such as a limited liability company, our business attorneys would highly recommend that the partners enter into some form of partnership or operating agreement that will direct and control certain issues within the partnership such as how items of income, gain, loss and deductions are allocated amongst the partner and other pertinent partnership issues.

In addition to the above, we recommend you speak with a tax attorney to make sure you understand the tax implications to the business and business owners based upon the entity that has been established.

As a Denver business attorney, John McGuire has helped many business owners establish entities, draft the appropriate documents and analyze tax issues & implications to the business and business owners.

You can schedule a free consultation with a Denver business attorney or tax attorney by contacting The McGuire Law Firm.

 

Optional Provisions in Articles of Incorporation by Denver Business Attorney

In previous articles a Denver business attorney from The McGuire Law Firm has discussed filing Articles of Incorporation and the mandatory provisions.  TheDenver Small Business Attorney article below drafted by a business attorney discusses optional provisions business owners may choose to include in their Articles of Incorporation.

Below is a list of optional provisions recommended under Section 7-102-102(2) of the Colorado Business Corporation Act.

 

–          Names and addresses of those individuals who have been elected to serve on the initial board of directors, until the first annual meeting is held, or successors are elected (note the board of directors shall consist of one or more members, with the number specified in the accordance with the corporate bylaws under the Colorado Business Corporation Act);

–          The purpose of which the corporation has been organized.  If a statement regarding the purpose is not stated in the Articles of Incorporation, the corporation may engage in any lawful business for which corporations can be incorporated under the Colorado Business Corporation Act;

–          Provisions that relate to and outline the overall management of the business operations of the corporation, and that regulate corporate affairs;

–          Provisions that would limit, define and regulate the powers of the corporation and the corporation’s board of directors and shareholders;

–          Statement regarding the par value of corporate authorized shares or classes of shares (this may not be necessary if the par value of such shares is expressly stated in the Articles of Incorporation or the corporate bylaws;

–          Provisions that would impose personal liability on the shareholders of the corporation for the debts of the corporation under certain terms and circumstances;

–          Other provisions that are not contradictory or inconsistent with the current law to regulate internal issues & affairs of the corporation.

Other options exist when reviewing the Colorado Business Corporation Act to deal with allocating control within the corporation, protecting certain financial interests, shareholder & director checks and balance and changing the degree of certain veto powers.  Additionally, certain provisions can be affected by the type of entity that is being organized such as a closely held corporation, non-profit and/or professional corporations.  Our Denver business attorneys feel the most important issues to consider and thus draft into Article provisions are those dealing with limitations or qualifications affecting securities, choices of different classes of corporate stock, dividend & liquidation preferences, voting issues, convertibility issues with corporate securities and transferability issues regarding stock and ownership interests.

A Denver business attorney at The McGuire Law Firm can discuss your business needs and the optional provisions you may wish to include within your Articles of Incorporation.  The Articles and corporate bylaws create the foundation from which your corporation will operate and be organized.  Therefore, it is of vital importance to make as many considerations from the beginning.

Call The McGuire Law Firm to speak with a Denver business attorney and schedule a free consultation.

Colorado Offer in Compromise by Denver Tax Lawyer

The majority of taxpayers know that they can settle their tax debts with the IRS through an offer in compromise.  However, many Denver Tax Lawyertaxpayers ask a Denver tax lawyer if Colorado or other states have a similar program whereby they can settle their debts.  Although, each state has different programs to resolve tax liabilities, the state of Colorado Department of Revenue does have an offer in compromise program to settle taxpayer’s debts.  The article below was written by a Denver tax lawyer regarding settling a tax debt with the Colorado Department of Revenue.

Although, the Colorado Department of Revenue will settle a tax debt with an offer in compromise, the taxpayer must firm have settled their tax debt with the IRS through a federal offer in compromise.  This can create a situation whereby the taxpayer has submitted an offer to the IRS, but has yet to receive a response, but also must take action with their Colorado state debt to prevent enforcement.  Generally, a tax lawyer will work with the CO Department of Revenue to establish a minimal installment agreement until a determination is received on the federal offer in compromise.

Once a taxpayer has received acceptance of their offer from the IRS, they can submit their offer to the Colorado Department of Revenue.  In submitting the offer, the taxpayer must include:

–          Form 433A that was submitted to the IRS

–          Form 656 that was submitted to the IRS

–          Acceptance letter from the IRS verifying the federal offer in compromise was accepted

–          Verification the federal offer was paid

–          Colorado Department of Revenue Financial Statement

–          Colorado Offer in Compromise Checklist

–          Amount you are proposing to settle your Colorado tax debt

–          IRS Account Transcripts for each period of debt you are requesting to settle with the Department of Revenue

–          If you are represented by a tax attorney, a copy of the Power of Attorney should be included as well

–          You can also include payment for your offer if you choose

After all of your documents have been compiled, submit the documents to the Colorado Department of Revenue.  The address for the Department of Revenue should be 1375 Sherman Street, Denver, Colorado.  Typically, the Department of Revenue will respond within 30-60 days after you have submitted your offer in compromise.  If your offer is accepted by the Department of Revenue, and you made payment when submitting the offer, you may be all done.

A Denver tax lawyer at The McGuire Law Firm can help you settle your tax debts with the Colorado Department of Revenue.  If you owe taxes to the Colorado Department of Revenue we would welcome the opportunity to discuss your options to resolve your tax debt.

You can reach a Denver tax attorney and schedule your free consultation by contacting The McGuire Law Firm.

 

Denver Business Attorney on Articles of Incorporation

A Denver business attorney at The McGuire Law Firm can assist you with all types of business issues including the Denver Business Attorneyformation of the business.  When forming a corporation, Articles of Incorporation must be filed with the Secretary of State.  The article below, drafted by a Denver business attorney, discusses filing Articles of Incorporation with the Colorado Secretary of State.

Articles of Incorporation (or Articles of Amendment if/as amended), commonly referred to as “Articles” must be filed with the Secretary of State and accepted by the Secretary of State to effectuate the organization as a de jure (matter of law) corporation.  When the Articles are filed, a corporation exists.  Under Colorado law, no certificate of incorporation is required.  Moreover, an initial capitalization requirement of the corporation is not required under Colorado law as a condition precedent to incorporation status.

Under the Colorado Business Corporation Act, Section 7-102-105 requires an organizational meeting of the incorporators to elect directors and adopt corporate bylaws, if initial directors are not stated in the Articles.  Furthermore, the elected board of directors or as named in the Articles are to hold an organizational meeting to adopt bylaws, elect officers and transact other business.  Although, these meetings are required under the Act, the acceptance of the Articles once filed with the Secretary of State allows the corporation to exist and thus the corporation has begun.

The Articles can have an effective delay date of up to 90 days after the Articles are filed under Section 7-90-304(2) of the Colorado Business Corporation Act.  This effective delay date can also be revoked if the proper corporate action is taken and presented to the Secretary of State.  Further, upon filing the Articles, and fee must be paid to the Secretary of State, and the fee is generally less if the Articles are filed electronically.  Failure to properly the Articles creates a defective incorporation, which may lead to the loss of limited liability generally afforded a corporation.

Mandatory inclusions within the Articles under Section 7-102-102 of the act would be:

 

–          Name and address of the incorporator.  The incorporator may be an individual 18 years of age or older or another entity.

–          Domestic entity name

–          Street address of the initial registered office, and name and address of the initial registered agent

–          The aggregate number of shares which the corporation has the authority to issue.  Under Section 7-106-101 of the Act, the Articles must describe the classes of shares and the number of shares of each class the corporation is authorized to issue

–          The address of the corporation’s initial principal office

–          The name and address of the person who files the Articles

–          Statement on cumulative voting

Questions regarding the filing of Articles can be addressed by your business attorney and should be discussed and considered prior to filing the articles.

A Denver business attorney can be reached at The McGuire Law Firm, and you can schedule a free consultation!