Tax Trouble? Attorney Claudia Moncarz Shares Tips for Resolving Issues with the IRS
Claudia Moncarz is an experienced tax attorney based in Florida. She received her Juris Doctor degree from the University of Miami School of Law and has been admitted to practice in the state of Florida and before the United States District Court for the Southern District of Florida.
With over two decades of legal experience, Claudia has a proven track record of success in both the trial and appellate courts. She is known for her strong advocacy skills and her dedication to fighting for the rights of her clients. Claudia Moncarz is fluent in both English and Spanish, which allows her to effectively represent a diverse range of clients.
In addition to her legal practice, Claudia Moncarz is an active member of the legal community. She is a member of the Florida Bar Association, the American Immigration Lawyers Association, and the National Association of Criminal Defense Lawyers. She also regularly volunteers her time to provide pro bono legal services to low-income individuals and families.
Claudia holds a masters degree in tax law and is also the creator of My Tax Alarm, a platform designed to help individuals and businesses avoid tax fraud and identity theft. The platform provides real-time alerts to users when there is any suspicious activity related to their tax accounts, allowing them to take prompt action to protect their personal and financial information.
As a former Assistant State Attorney and Certified Fraud Examiner, Claudia Moncarz has extensive experience in identifying and investigating fraud. She developed My Tax Alarm as a solution to help individuals and businesses proactively safeguard their sensitive information and avoid falling victim to tax-related fraud.
Through My Tax Alarm, Claudia has been able to help countless individuals and businesses in Florida and beyond to protect themselves from tax-related fraud and identity theft. Her innovative solution has been recognized by various media outlets and has received numerous awards, including the Women Who Mean Business Award from the South Florida Business Journal.
In this episode of How To Trade It, Casey & Claudia discuss how to avoid an IRS audit, what you can do if you owe the IRS money, and the importance of keeping good records. You don’t want to miss it! Keeping good records, as a trader, is vital to surviving an audit, according to tax attorney, Claudia Moncarz. Join us on this episode of How To Trade It to find out more! #IRS #TaxCompliance #DigitalAssets #IdentityTheft #MyTaxAlarm Click To Tweet
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You’ll want to listen to this episode, if you are interested in hearing Tax Attorney, Claudia Moncarz discuss…
- [01:42] For the love of taxes
- [03:04] Difficulties with the IRS
- [05:35] Dealing with an unexpected tax bill
- [09:44] Ignoring the IRS
- [12:45] Protecting yourself
- [15:15] Interest & Penalties
- [18:22] 1099s from Venmo+
- [19:08] Digital assets
- [22:18] Long-term holdings
- [24:31] Take action
Ignoring the IRS
If you don’t respond to a tax letter from the IRS, the agency make take several actions to collect the taxes owed even though they do not have the legal authority to do those actions.
Some of the actions that the IRS may take include:
- Imposing penalties and interest: If you owe taxes and don’t respond to a tax letter, the IRS can impose penalties and interest on the unpaid amount, which will continue to accrue until the taxes are paid in full.
- Filing a tax lien: The IRS may file a tax lien against your property, which can affect your credit score and make it difficult to obtain loans or credit in the future.
- Levying your bank account or wages: The IRS may also levy (seize) funds from your bank account or garnish (take) a portion of your wages until the tax debt is paid in full.
- Taking legal action: The IRS may take legal action against you, which can result in a court order to pay the taxes owed.
It’s important to respond to any tax letter you receive from the IRS in a timely manner to avoid these consequences. If you’re unsure how to respond to a tax letter, it’s best to consult with a tax professional or an attorney who can help you navigate the process.
The Taxpayer Bill of Rights
The Taxpayer Bill of Rights is a set of 10 rights that every taxpayer in the United States is entitled to when dealing with the IRS.
- The Right to Be Informed: Taxpayers have the right to be informed about their tax obligations and to receive clear explanations of the tax laws and procedures.
- The Right to Quality Service: Taxpayers have the right to receive prompt, courteous, and professional assistance from the IRS.
- The Right to Pay No More than the Correct Amount of Tax: Taxpayers have the right to pay only the amount of tax that they legally owe, including interest and penalties.
- The Right to Confidentiality: Taxpayers have the right to have their personal and financial information kept confidential by the IRS.
- The Right to Challenge the IRS’s Position and Be Heard: As mentioned earlier, taxpayers have the right to disagree with the IRS’s position and to provide further documentation or explanations to support their own position.
- The Right to Appeal an IRS Decision in an Independent Forum: Taxpayers have the right to appeal most IRS decisions, including audits, collection actions, and penalties.
- The Right to Finality: Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position, as well as the finality of any administrative or judicial decision.
- The Right to Privacy: Taxpayers have the right to expect that any IRS inquiry or examination will be conducted in a manner that is respectful of their rights and privacy.
- The Right to a Fair and Just Tax System: Taxpayers have the right to expect that the tax system will be fair and impartial, and that the IRS will treat them with professionalism, courtesy, and respect.
- The Right to Retain Representation: Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS, including during audits, appeals, and collection actions.
Interest & Penalties
The Internal Revenue Service (IRS) is responsible for collecting federal taxes in the United States. When taxpayers fail to pay their tax obligations on time, the IRS can assess interest and penalties to encourage timely payment and deter noncompliance.
Interest is charged on the amount of unpaid taxes from the due date of the return until the date of payment. The interest rate is determined by the federal short-term interest rate plus 3%, and is compounded daily. The interest rate can fluctuate over time, but it typically ranges between 3% and 6%.
Penalties, on the other hand, are assessed when taxpayers fail to comply with tax laws. The most common types of penalties are failure-to-file, failure-to-pay, and accuracy-related penalties.
Failure-to-file penalties are assessed when taxpayers fail to submit their tax returns by the deadline, which is usually April 15th. The penalty is typically 5% of the unpaid tax amount per month, up to a maximum of 25% of the unpaid tax amount.
Failure-to-pay penalties are assessed when taxpayers fail to pay their tax obligation by the due date. The penalty is typically 0.5% of the unpaid tax amount per month, up to a maximum of 25% of the unpaid tax amount.
Accuracy-related penalties are assessed when taxpayers make mistakes or omissions on their tax returns, such as understating their income or overstating their deductions. The penalty is typically 20% of the amount of tax underpaid as a result of the error or omission.
In addition to these penalties, the IRS may also assess other penalties for various infractions, such as the failure to make estimated tax payments or the failure to report offshore assets.
Taxpayers who cannot pay their tax obligation in full may be able to avoid or reduce penalties by requesting an installment agreement or an offer in compromise with the IRS. These programs allow taxpayers to pay their tax debt over time or settle for less than the full amount owed, respectively.
It is important for taxpayers to be aware of their tax obligations and deadlines to avoid interest and penalties. The IRS provides resources to help taxpayers stay informed and compliant, such as the Taxpayer Advocate Service and the IRS website.
Digital Assets…moving beyond crypto
The Internal Revenue Service (IRS) has recently shown an increased interest in digital assets, such as cryptocurrencies like Bitcoin, Ethereum, and others. This is due in part to the growing popularity of these assets, as well as concerns about potential tax evasion and other illicit activities that may be facilitated by their use.
In 2014, the IRS released guidance on the tax treatment of digital assets, stating that they should be treated as property for tax purposes. This means that gains or losses from the sale or exchange of digital assets are subject to capital gains tax, and that transactions involving digital assets must be reported on tax returns.
However, despite this guidance, many taxpayers have failed to properly report their digital asset transactions on their tax returns, either due to ignorance of the rules or a deliberate attempt to evade taxes. In response, the IRS has taken steps to increase its enforcement of digital asset tax compliance.
One way the IRS is doing this is by issuing summonses to digital asset exchanges and other service providers, requiring them to turn over records of transactions by U.S. taxpayers. The IRS has also developed new tools and technology to help identify potential tax evasion involving digital assets.
Additionally, in 2019, the IRS added a new question to the front page of Form 1040, the main U.S. tax return form, asking taxpayers if they received, sold, sent, exchanged, or otherwise acquired any financial interest in any virtual currency during the year. This move signals the IRS’s intent to improve compliance by making it more difficult for taxpayers to claim ignorance of the rules.
The IRS’s increased focus on digital assets has not been without controversy, however. Some in the digital asset community have expressed concerns about the potential for the IRS to overreach in its enforcement efforts, particularly in cases where the rules are unclear or where there may be legitimate differences of opinion about how to apply the tax law to digital asset transactions.
Despite these concerns, it is clear that the IRS is committed to ensuring that taxpayers properly report their digital asset transactions and pay any taxes owed. Taxpayers who hold digital assets should be aware of the rules and their reporting requirements, and should seek professional advice if they are unsure of how to comply with the law. With the IRS’s increased attention on this area, it is more important than ever for taxpayers to be vigilant about their tax compliance.
Resources & People Mentioned
- Internal Revenue Service
- FREE Audit Guide (plus bonus guide when you sign up)
Connect with Claudia Moncarz
- Website: www.moncarzlaw.com
- YouTube: “Ask the Tax Attorney”
- LinkedIn: https://www.linkedin.com/in/claudiamoncarz/
- Facebook: https://www.facebook.com/mytaxlawyer
- Email: WeCare@MoncarzLaw.com
- Phone: 786.541.2705
Connect With Casey Stubbs
- Website: https://caseystubbs.com
- Website: https://tradingstrategyguides.com/
- YouTube: https://www.youtube.com/TradingStrategyGuides
- YouTube: https://www.youtube.com/caseystubbs
- Twitter: https://www.twitter.com/caseystubbs
- Facebook: https://www.facebook.com/TradingStrategyGuides
- LinkedIn: https://www.linkedin.com/in/caseystubbs/
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