Dale O'Neal's areas of practice includes the following:

  • Mediation
  • Federal Taxation
  • Estate Planning
  • Probate

Some of the topics under Federal Taxation include:

  • Reducing the Chance of an IRS Audit When Filing
  • IRS Audit Process
  • Failure to File Income Taxes
  • IRS Substitute For Returns
  • IRS Tax Liens
  • Offer in Compromise: Settling Taxes For a Fraction
  • Unpaid Taxes
  • Innocent Spouse Relief - The Conscience of the IRS
  • What To Do When A Loved One Dies
  • The Basics About Texas Wills

Contact Dale O'Neal by going to our Contact page.

Areas of Practice Topics

  • Mediation

    Mediation: A Better Option Than Litigation

    What Are the Advantages to Mediation?

    You get to decide: The responsibility and authority for coming to an agreement remain with the people who have the conflict. The dispute is viewed as a problem to be solved. The mediator doesn’t make the decisions, and you don’t need to “take your chances” in the courtroom. Many individuals prefer making their own choices when there are complex trade offs, rather than giving that power to a judge. You need to understand your legal rights so that you can make decisions that are in your own best interests.

    The focus is on needs and interests: Mediation examines the underlying causes of the problem and looks at what solutions best suit your unique needs and satisfy your interests.

    For a continuing relationship: Neighbors, divorcing parents, supervisors and their employees, business partners, and family members have to continue to deal with each other cooperatively. Going to court can divide people and increase hostility. Mediation looks to the future. It helps end the problem, not the relationship.

    Mediation deals with feelings: Each person is encouraged to tell his own story in his own way. Acknowledging emotions promotes movement towards settlement. Discussing both legal and personal issues can help you develop a new understanding of yourself and the other person.

    Higher satisfaction: Participants in mediation report higher satisfaction rates than people who go to court. Because of their active involvement, they have a higher commitment to upholding the settlement than people who have a judge decide for them. Mediations end in agreement 70 to 80% of the time and have high rates of compliance.

    Informality: Mediation can be a less intimidating process than going to court. Since there are no strict rules of procedure, this flexibility allows the people involved to find the best path to agreement. Mediation can deal with multiple parties and a variety of issues at one time. In family mediation, for example, two children, Mom, Dad and Grandma might be involved. They may need to talk about chores, school performance, curfew, allowances, discipline, and the use of the kitchen.

    Faster than going to court: Years may pass before a case comes to trial, while a mediated agreement may be obtained in a couple of hours or in sessions over a few weeks.

    Lower cost: The court process is expensive, and costs can exceed benefits. It may be more important to apply that money to solving the problem, to repairing damages, or to paying someone back. Mediation services are available at low cost for some types of cases. If you can’t agree, other legal options are still possible. Even a partial settlement can lessen later litigation fees.

    Privacy: Unlike most court cases, which are matters of public record, most mediations are confidential.

    WITH OR WITHOUT LAWYERS After 30 years of handling large, contested divorces in Tarrant County, I turned my focus to helping people by alternative methods of resolving their divorce. I offer mediation to clients with or without lawyers. If you have a lawyer, then odds are I have worked with the lawyers representing you and your spouse. If you have lawyers, then the lawyers can contact my office and we coordinate a time for all of us to mediate in my office.

    WITHOUT LAWYERS Many people want to avoid having two lawyers, each representing one spouse. I often mediate without lawyers. The benefit of “without lawyers” is the efficiency and speed of resolution. You and your spouse no longer need to try to schedule a meeting around four calendars. It’s just me and the two of you. I often meet on Saturdays and on occasion after hours. There is no opposing lawyers, just a team of the three of us trying to peacefully resolve the issues. I believe that if you and your spouse were able to create an estate, then surely with a little help from a Board Certified Family Law Specialist then we can calmly and peacefully divide your estate. I have successfully mediated over 5,000 divorces. This method is designed for divorcing couples who want to stay in control over the process. I have a success rate of over 94%.

    But for many people who use my services without lawyers, the success they enjoy the most is a salvaged relationship with the spouse they just divorced. After spending years together with your spouse, there’s no need to make the wound deeper by contested litigation. Just get a mediated divorce. Minimize the conflict. Minimize the pain. Minimize the cost.

    I schedule a time for you and your spouse to come in for an initial joint session. In the initial session, we discuss the issues, the assets, the debts, and any child related issues. At the first meeting, please bring copies of the past few years income tax

    returns, financial statements (that are usually filed with a bank for a loan), retirement accounts, mortgage payoff balances, recent 401K statements, a running list of all credit card debt, etc. A complete financial package. If there is child support, then I need to see respective payroll stubs, and you may need to put together a monthly budget.

    I remain neutral and I do not “take sides.” I do not represent one party against the other party. I mediate and bring 30 years of family law expertise to the table to cut through the red tape, add insight and wisdom, and hopefully expedite the process.

    If the parties trust each other to be truthful about the size and value of the estate, then we can quickly begin putting together a settlement. If one spouse is unsure about the size and value of the estate, then the parties can prepare a Sworn inventory and Appraisal. I can help each of you with that legal document. This is a legal document in which you swear that you have disclosed all assets. This document is sworn to in the presence of a Notary public. A Sworn inventory and Appraisal compels people to properly disclose all assets. If an asset is omitted from the Sworn inventory by a party, then that asset can be awarded to the other side by a Judge. Inventories can be as complex or as simple as the estate being divided. Inventories focus on the larger assets and debts. Houses, real estate, ranches, retirement, 401K, IRA, cars, investments, benefits of employment, financial accounts, collectibles, etc. Usually there is little or no focus on household goods or personal property unless something has a large value.

    Debts are also an important part of the Divorce Inventory. Credit cards, mortgage balances, car payoffs, outstanding IRS debts, loans against the retirement plans, etc.

    CHARACTERIZATION OF ASSETS This is a lawyer’s way of asking if the asset is a “separate property asset” or a “community property asset.” In divorce, we usually only divide the community property. If someone has separate property, then they usually keep that separate property. Of course, in a mediated or agreed upon divorce, parties can trade or exchange any property they choose. Separate property in Texas divorce law is usually any property that was owned by one party prior to the marriage, or, property that was inherited (from a deceased friend or relative) or property that was acquired by gift. If you received a gift, even if it was from your spouse, that gifted item is your separate property. (assuming we all agree it was a gift.)

    VALUATION OF ASSETS Often the parties agree that the estate owns an asset, but disagree to the value of the asset, If the asset is a large, valuable asset that would justify an appraisal by an expert, then I often suggest that the asset be appraised by a neutral, professional appraiser. Houses and raw land often need appraisals. Another

    asset that needs appraisals is a small business. Small business appraisals require a complete disclosure of the business assets, business debts, income, expenses and profit and loss statements. A neutral, independent appraisal is usually far better than each party hiring a “hired gun” and trying to get a distorted valuation. That method only causes pain and costs more money.

    MEDIATION OF DIVORCE ISSUES Once both parties are satisfied with the valuation and characterization, we begin the actual negotiations. Calm, unemotional mediation and negotiation. This process is much more family friendly than traditional divorce litigation. Not only is this method more affordable financially, but it’s easier! Easier on your emotions, easier on your relationship! Let’s face it, divorcing someone you once loved is not easy! Let’s do all we can to minimize the cost, the time and the truma. Do all you can to avoid a contested divorce and avoid a courtroom conflict.

    I suggest that both parties watch my video “Winning at Mediation” which is available on my home page. Note: The State Bar of Texas has approved this video for lawyers needing to fulfill their annual State Bar Minimum Continuing Legal Education Requirements. Lawyers watch this video and learn from it. But it’s good information for everyone, not just lawyers! And it also gives you a chance to see me and hear me before we meet.

    MEDIATED SETTLEMENT AGREEMENT Once we reach an agreement on all issues, I draft a Mediated Settlement Agreement. This is a very important legal document. The Mediated Settlement Agreement is the most binding legal document in Texas. The Supreme Court of Texas has stated that it is virtually impossible to be released from a Mediated Settlement Agreement. Therefore, before you sign a mediated Settlement Agreement, you should review the entire document, ask any questions that you may have, and speak up if you have any concerns or reservations.

    DECREE OF DIVORCE once we reach a complete agreement, and after we have all executed a Mediated Settlement Agreement, then I will draft a Decree of Divorce. The Decree will be reviewed by both parties and signed by both parties. The Decree of Divorce is a public document. Upon request, I am able to keep certain terms of the agreement confidential. In larger estates, the divorcing parties do not want the public to have access to the terms of the agreement, Please let me know if you wish to keep the terms confidential. If so, I can petition the Court and ask that the divorce file be sealed. Alternatively, I can draft a Decree that grants the divorce and recites any agreements relating to children. Then draft a different legal document, an Agreement Incident to

    Divorce, that contains all the property agreements. The public would never see the Agreement incident to Divorce. The public would never see the terms, the size of the estate, etc. This can be very important for anyone seeking privacy, confidentiality, advanced estate planning after the divorce, etc. I encourage everyone to remain as confidential and private as possible with any and all information about their assets and their estate. Without this confidentiality, anyone can simply drive to the Tarrant County Family Courts Building in downtown Fort Worth and ask to to see your Decree. They can actually pay a small fee to the Tarrant County District Clerk and leave with a certified copy of your decree of divorce. Using my methods of an Agreement Incident to Divorce, the terms remain confidential. The assets remain confidential. If you were smart enough to create a large estate, let’s work together to keep the estate safe and secure.

    TAXES In addition to being Board Certified in Family Law, I have an advanced L.L.M. Degree in Federal Taxation. Taxes can sometimes be the most difficult aspect of a divorce. If you are have tax liens or other problems, we can address those in the divorce. I can give each party my opinion as to the tax consequences of the division of the estate. I am here to help.

    LOCATION AND CONTACT INFO I am located in Fort Worth, 1205 North Main Street. The building is owned by Avery McDaniel and his name is prominently displayed outside. My phone number is 817-877-5995. Email me at This email address is being protected from spambots. You need JavaScript enabled to view it.. Of course, just emailing me does not create an attorney client relationship….

    WHO I HELP I help anyone in Texas. Of course most of my work is in Tarrant County. Fort Worth and Arlington are the largest two cities in Tarrant county, but I work with people from Southlake, Westover Hills, Colleyville, Keller, Hurst, Trophy Club, Westlake, Westworth Village, Bedford, Benbrook, Blue Mound, Burleson, Crowley, White Settlement, Dalworthington Gardens, Watauga, Edgecliff Village, Sansom Park, Flower Mound, River Oaks, Grapevine, Mansfield, Haltom City, Haslet, etc.

  • Reducing the Chance of an IRS Audit When Filing

    Reducing the Chance of an IRS Audit When Filing

    There is no surefire way to Audit-proof your tax returns, though you can cut the odds. Nevertheless, a messy return-cross out, sloppy handwriting, smudges-almost screams “audit me.” This tells the IRS that you are careless and disorganized. So does the use of round numbers for deductions-$1,000 or $12,000 instead of $978 or $12,127. It’s an Indication that you are estimating things rather than keeping good records. Here are some suggestions which may-or may not-work to reduce your audit risk.

    • If you claim large deductions for unusual items, such as an earth-quake, flood, or fire loss, attach documentary proof to the back of your tax return. Copies of repair receipts, cancel checks, insurance reports, and pictures are advisable. This won’t stop the IRS computer from flagging the return. These attachments, however, should catch the attention of the IRS classifier who next screens computer-picked returns for audit potential. If the person thinks you documentation looks reasonable, you won’t get audited.
    • Avoid filing an income tax return with Schedule C, Profit or Loss from Business, that reports a net loss from a small business venture. IRS auditors go after these returns like bees toward honey.
    • Report side-job income as other income on line 22 of your tax return. This should be done only if this income is relatively small, and you are not claiming any business deductions against it. Technically, side- job income is usually reported on a Schedule C, profit or loss from business. But filing a Schedule C undoubtedly increases your audit chances.
    • Prepare your tax return by computer. A neat, computer-prepared returned looks more official to IRS classifiers and avoids math errors, which catch the IRS’s attention. Most professional tax preparers now use computers. There are also tax preparation programs, such as Intuit’s Turbo Tax, that you can use to prepare your own return.
    • Don’t use electronic filing or the IRS preprinted address label on your tax returned. These enable the IRS to get your return into the processing cycle, including the audit cycle, more quickly than otherwise would happen. Anything that slows down the IRS machine can’t be bad. On the flip side, using electronic filing or the label usually means that any refund will come faster. If you expect a refund but fear an audit, you’ll have to weigh the pros and cons.
    • Live in a low audit area. Your audit chances are radically different depending on where in the United States you live. For example, Nevada taxpayers are audited four times more than people in Wisconsin. While this is extreme, it might make sense if you have travel most of the time or have addresses in several areas. If you have flexibility in choosing your tax reporting address, choose the one with the lower audit rate. If you’re really interested in this, ask a tax professional or check the IRS website for audit statistics.
    • If you can, report less than $100.000 in total positive income from salaries, self-employment, and investment. These people have the lowest audit rate.
    • Don’t report less income than is shown on your W-2s, Form 1099s, and other third-party forms you receive. If one of them is incorrect, get the issuer to correct the form and reissue it.

    Let me know if I can help. Please call me at 817-877-5995 or toll free at 800-651-0528.

    Serving the following areas:
    Fort Worth, Arlington, Mansfield, Dallas, Weatherford, Cleburne, Burleson, Hurst, Euless, Bedford, Keller, Colleyville, Watauga, Saginaw, Pantego, Dalworthington Gardens, Grand Prairie, North Richland Hills, Westover, Westworth Village, Benbrook, Crowley, Grapevine, Southlake, Blue Mound, Haslet, Denton, Krum, Flower Mound, Dallas County, Tarrant County, Willow Park, Hudson oaks, Mineral Wells, Jacksboro, Springtown, Azle, Decatur, and all local areas.

  • IRS Audit Process

    The IRS Audit Process

    Generally, your tax return cannot be audited after three years from its original filing date. If you filed before the due date, April 15 of the due date, April 15, the three years starts running from April 15 of the year it was due..

    • If you understate your income by 25% or more on your tax return, the audit deadline is extended to six years.
    • If you file a fraudulent return, there is no time limit on an audit. Tax fraud is conduct meant to deceive the IRS, such as using a false Social Security number. A really big mistake, if done negligently, not intentionally, isn’t fraud. The burden of proving fraud is always on the IRS. And the IRS seldom audits returns after three years even if fraud is suspected.
    • The audit time limit period, called a statute of limitations, starts to run only if and when you file a tax return. Nonfiled tax years are always open to audit. If, however, you haven’t filed and haven’t heard from the IRS within 6 years of the due date of a tax return, you have probably escaped the audit net.

    Audit notices are usually mailed between 12 and 18 months after you file return. Generally, if you haven’t heard from the IRS within 18 months you won’t be audited. IRS audit notices are sent by first class mail and never by email or telephone.

    Let me know if I can help. Please call me at 817-877-5995 or toll free at 800-651-0528.

    Audit Selection-Why me, O Lord?

    You just got an examination notice from the IRS. Are you merely unlucky, or are there more sinister forces at work?

    Computers and Classifiers

    The IRS computer is to blame for more audits, Each year, your tax return data is sent to the IRS National Computer Center where it is analyzed by a computer program called the Discriminant Function. Your tax return is given a numerical DIF the higher the score, the more audit potential the return has.

    The IRS has a second computer scoring program to catch people not reporting all of their income. This is a slightly different approach from the DIF program, which relies heavily on deductions and exemptions claimed. This program is called the Unreported Income Discriminate Information Function (UIDIF). It scores individuals based on a high-expense/low-income ratio. In plain English, tax man is looking for folks who look like they are living beyond their means.

    According to the IRS Manual, only significant items should be examined. What is considered significant depends on the IRS’s overall view of the return as well as particular items that seem questionable. Factors that are likely to figure into the audit selection process include:

    • Comparative size of an item to the rest of the return. A $5,000 expense on a tax return reporting $25,000 in income would be significant; the same expense on a $100,000 income return wouldn’t be.
    • An item on the return that is out of character for the tax payer. A plumber claiming expenses relating to a business airplane would cause suspicion
    • An item that is reported at an inappropriate place on the return. For example, $2,000 of credit card interest is reported as a business expense. The IRS might suspect that you improperly deducted personal interest as a business expense.
    • Evidence of intent to mislead on the return. Filing a tax return with missing schedules or not providing all information asked for on the forms raises an IRS classifier’s eyebrows.
    • Your gross income. The IRS scrutinizes high earners. If you make over $100.000 per year, your audit like hood is one in 20 versus one in 100 for the general population.
    • Self-employment income. The IRS is most suspicious of people in business for themselves. Sole proprietors are four times more likely to be audited than wage earners.
    • Losses from business and investments claimed on the tax return. If your business and investments show losses on your tax return, the IRS may want to know how you paid your bills. Most likely to be audited are taxpayers reporting a small business loss.
    • Sloppiness and round numbers. A messy return, especially if hand- written attracts the attention of a classifier who may think you don’t take your tax-reporting responsibilities very seriously. Use of round numbers-for example, $5,000 for business advertising, $2,000 for transportation and $1,500 for insurance- is a dead giveaway that you are estimating, not reporting from records.

    How the IRS Investigates Your Lifestyle

    You can understand the IRS’s focus on lifestyle audits by looking at the IRS training materials for auditors. They look at the following lifestyle-related issues. The standard of living a taxpayer:

    • What does the taxpayer and dependent family consume?
    • How much does it cost to maintain this consumption?
    • Is reported net income sufficient to support this?

    The Accumulated Wealth of a Taxpayer

    • How much capital /assets has taxpayer accumulated?
    • When and how has this wealth accumulated?
    • Has reported income been sufficient to pay for these items?
    • If not, how did taxpayer obtain and repay credit?

    The Economic Story History of a Taxpayer:

    • What is the long-term pattern of profits and return on investment in the reported activity?
    • Is the business expanding or contracting?
    • Does the reported business history match with changes in the taxpayer’s standard of living and wealth accumulation?

    The Business Environment

    • What is typical profitability and return on investment for the taxpayer’s industry and locality?
    • What are the typical patterns of noncompliance in the taxpayer’s industry?
    • What are the competitive pressures and economic health of the industry within which the taxpayer operates?

    Other Non-taxable Sources of Funds

    • Do claim of nontaxable sources of support make economic sense?
    • How creditworthy is the tax payer-how many claimed loans?
    • How did the sources of claimed fund transfers obtain those funds? For example, it is unlikely that subsidies will be obtained from countries where dollars are hard to obtain.

    Types of Audits

    There are three types of IRS audits: correspondence, office, and field. The way the IRS goes about auditing you can produce very different results. A few years back, office audits resulted in additional tax and penalties averaging $1,965 per individual return, correspondence audits $3,817, and field audits a whopping $16,248. For those tax payers who made more than $100,000 per year, filed audits resulted in added taxes, penalties, and interest averaging $35,295! In a recent year, The IRS performed 1.7 million audits.

    Correspondence Audits-Please, Mr. Postman

    The correspondence audit is by far the IRS’s preferred method of attack. Seventy-eight percent of all IRS audits are by mail. Like it sounds, a correspondence audit comes by first-class mail. The IRS never notifies by telephone or email of the beginning of a correspondence audit .The IRS requests that you mail information or documents instead of meeting with you. This method of auditing is used to verify such things as stock market transactions, real estate sales, and itemized deductions. Amended tax returns are often audited by mail. These audits often result from mismatch of a third-party payment report on a form 1099 or W-2.

    You should almost always cooperate with an audit be thankful that you weren’t chosen for a field or an office audit. Unless the documents requested are lost or nonexistent prompetly send copies. Don’t send originals- you won’t get them back. It’s possible to call the auditor to discuss your case. Or, write and ask the auditor to call you. A name and telephone number should be listed in the IRS notice you received. As a precaution, send document copies by certified mail, return receipt requested. Always keep photocopies of everything you send to the IRS.

    The office audit is announced by an IRS letter sent to your last known address either setting a time or requesting you to call for an appointment. The letter tells you the year being audited and often specifies documents you are requested to bring with you, such as receipts and canceled checks. It may also list up four specific areas of the IRS wants to examine- such as rental property income, deducted interest expenses, deducted unreimbursed business expenses, and charitable contributions.

    Thankfully, the IRS doesn’t expect auditors to examine every item on a tax return. Remember- only significant items are selected by classifiers, although IRS examination group managers may modify the list before the audit appointment.

    You don’t have to respond to everything immediately. If you are questioned about unlisted items and you don’t want to answer, just say that you are not prepared to discuss those issues. The auditors will probably drop it, or give you more time to get prepared and set a second meeting date.

    Review the Audit Notice Carefully

    As By law, the IRS normally has three years to audit you after you file tax return. So, if the year on your notice is more than three years ago, either the IRS made a mistake or the IRS suspects you of fraud or of substantially understating your income. If you believe it’s a mistake, call the number on the notice and ask that the audit be canceled. If you’re told it is no mistake, then head straight for a tax professional’s office.

    Your Rights During an Audit

    IRS publication 1, your rights as a taxpayer, should be included with your audit notice. It very clearly explains the Taxpayer Bill of Rights. The most important audit rights are to:

    • Be treated fairly by IRS personnel. If you find someone who is not professional, prompt, and courteous, you have a right to speak to a supervisor.
    • Have a representative handle your audit. He or she must qualified to practice before the IRS and have your written power of attorney. With a few exceptions, the IRS can’t force you to appear or even contract you if you send a representative in your place.
    • Sound record the audit, although this isn’t recommended. Taping an audit would most likely only cause the auditor to be unfriendly and work harder.
    • Not have to submit to repeat audits. If you ever audited within the last two years, and the IRS made few or no tax adjustments, you can’t be audited for the same items again. The IRS can, however, examine different items in your return. If you believe you’re being audited again for the same items, complain to the IRS appointment clerk or auditor. The no-repeat audit policy does not apply to examinations of business-related items on an individual’s return.
    • Have proposed adjustments explained. Audit reports are vague, so you are entitled to get a detailed explanation if you ask for it. You can do this by phone or in person. If the auditor refuses, talk to her or his manager.
    • Not be forced to incriminate yourself. You always have this. Constitutionally guarantee right when dealing with the government, even IRS. For example, if you earn your living by robbing banks, the IRS can’t demand that you give details, as long as you report the income. You cannot, however, lie to the IRS about the source of your income. In this case, you should state on your tax return or during an audit that you are claiming the Fifth Amendment- but see a tax or criminal attorney before doing so.
    • Appeal your audit.

    What to Expect at a Field Audit

    • Revenue agents’ primary focus is to find unreported income and personal expenses claimed as business deductions. Field audits typically zero in on the following areas of your work and personal lives

    Unreported Income. This is the auditor’s number one concern. An agent is particularly suspicious if your small business or profession has a lot of cash transactions. This is why so many restaurant, bar, liquor store, Laundromat, and grocery store owners are audited. The IRS is always looking for the skimming of cash off the gross receipts of the business.

    To ferret out unreported income, the IRS uses indirect methods of detection, unless you furnish direct evidence, such as confessing to the auditor that you didn’t report everything.

    There are four common methods the IRS uses to probe for income. All four methods have been challenged in federal court; all four methods have survived the challenge. Each one is explained below, with possible defenses you can raise:

    • Net Worth Methodstrong> Using this method, the IRS attributes any increase in your net worth during the year in question to taxable income- unless you offer a reasonable explanation. The IRS tries to establish your net worth- your total assets less your liabilities- at the beginning of the year and then again at the end. Then it compares the two figures to see if your net worth increased over the year. Assets like real estate and stock are valued at their original cost, so appreciation won’t enter into the computation. Typically, the IRS asks for financial statements that may have been prepared for your business or in a loan application. Any increase in your net worth over a prior year will be compared to the income reported on your tax return. If your net worth has increased but your income has not, the IRS will assume you’re not reporting all your income.
      Defense. Show that the IRS’s calculations are wrong or that your net worth increased due to nontaxable factors. For example, you may have inherited money or assets or have a cash hoard accumulated in prior years. The law then shifts the burden to the IRS to negate any explanation you offer before making an audit adjustment.
    • Expenditures method. The IRS totals up all of your known and estimated expenditures for the year and compares the result with your reported income. If you spent more than you claim you earned, the IRS will attribute the difference to unreported income. Defense. Show the IRS didn’t add and subtract correctly or that money you spend was from nontaxable sources, such as loans, gifts, inheritances or prior accumulations.
    • Bank deposit method. this is the IRS’s favorite indirect method of proving unreported income and is always used by field auditors, the IRS simply tallies up the deposits made in all of your bank accounts and compares the total with your reported income if you have deposited more than you claim you earned, The IRS will attribute the difference more than you claim your earned, the IRS will attribute the difference to unreported income.

    Some business owners take great pains to skim receipts, but then stupidly put that money into their bank accounts. Financial records can easily be obtained by the IRS from your bank or stock broker if you don’t produce them voluntarily. Revenue agents almost always perform a bank deposit analysis early on in a field audit.

    Do your own bank deposit analysis before the audit. Make notes on your bank statements that explain the source of the deposits. There can be any number of explanations when deposits exceed taxable income-loans. Redeposit of bad checks, transfers between accounts, inheritances and gifts received, sales of assets, and the like.

    How an Auditor Approaches an Examination

    The tax code gives the auditor wide latitude and authority to pry into your financial affairs. The basic tools in the auditor’s kit are the interview, summons, IRS and other government files, and contracts with third parties, like your bank, who have knowledge of your finances.

    Information Document Request. Along with your audit notice may come a separate form called an Information Document Request, or IDR. An auditor commonly issues multiple IDR’s if the audit, usually a field audit, continues beyond one meeting. an IDR is a written solicitation of records or other papers either in your possession or accessible to you. Typically, bank statements and canceled checks are listed on an IDR. The IRS knowsthe truth of the words of a former U.S. Supreme Court justice that “a person can be defined by the checks he writes.”

    Ordinarily, you will be given until a follow-up audit appointment or a few weeks to mail these things to the auditor. A sample IDR follows.

    If You Don’t Give Auditors What They Ask For

    When you don’t give the auditor information that has been requested, the auditor has three choices:

    • Drop it. You’d be surprised how many auditors back off or are forgetful they are working on many other cases. If they have most of the information requested from you, they may let it slide.
    • Go further without your cooperation. Auditors call, write, or issue summonses to third parties, such as your bank, for records of your transactions. Auditors can, but rarely do, summons (order) you to appear before them and provide information.
    • Issue an examination report anyway. The auditor can issue the report based on the information in hand and estimates for the missing income or expense data. By far, this is the most likely consequence of your not cooperating with and auditor.

    Your Audit Goals

    You have two goals in the audit:

    • To minimized the financial damage. Because the odds are great that your audit will end with a tax bill, your goal should be damaged control- keeping your liability as low as possible. But, don’t go to in with a defeatist attitude. If you owe no money, try to prove it. Just don’t have unrealistic expectations. In a recent year, audits resulted in $19 billion in a additional taxes and penalties, and about $600 million in refunds- a ratio of 32 to 1 against you.
    • To prevent expansion. Office audits are initially limited to the items listed on the audit notice. If auditors see other problems, however, they will pursue them. This often happens when you show an auditor a document that you weren’t obligated to show or you make a slip of the tongue. As a rule, never show the auditor anything not specifically related to the tax year in the audit notice. For example, before showing your check registered or business diary, edit out the portions that portions that relate to personal matters or that into other years.

    Audits may be expanded into other tax years. An auditor may get permission from his or hers manager, to examine any open tax years tax year if it is likely to be fruitful. Open years are those within three years of when a return was filed, or six years if the IRS finds serious underreporting.

    Don’t show the auditors copies of tax returns for years other than the one in the audit notice. If the IRS expands the audit, you should demand an official written notice from the auditor.

    Documents To Bring To The Audit

    The audit notice includes a list of documents you are supposed to bring to the audit. You may want to bring additional documents you need to explain or reconstruct missing records. IRS Publication 552. Recordkeeping for individuals, shows how the IRS wants you to keep you records. Don’t worry if you haven’t followed all the IRS suggestions. You just need to be able to show income and expenses to the auditor in some understandable manner, listed here are specific documents to bring. >

    Canceled checks and Receipt.Take only the checks and receipts relating to the areas listed in the audit notice. Rummage through all your checks and receipts. If it appears that you are spending more money that you are reporting, the auditor may become suspicious . you can bring your credit card or bank account statement instead of a cancel check. (IRS Revenue Procedure 92-71.)

    Books and Records, if you operated a business. You aren’t required to have a formal set of books as long as the auditor believes your records reflect your true income expenses. A check register may take the place of set of books, if it’s backed up by canceled checks and receipts.

    If your business has no records, you can be fined for failure to keep adequate records. The auditor can make up missing records by guesswork. For example, the auditor may double your gross receipts based on published industry or government statistics.

    Appointment books or business diaries. If you claimed travel or entertainment expenses, you will need a writing showing dates and times the expenses were incurred, their business purposes, and who was visited of entertained. If you have no diary, you can write one up for the audit, but tell the auditor it is a reconstruction if you are asked.

    Auto logs. Auto logs aren’t required by law- despite what some auditors say-but they will help you prove business auto expenses. Again, you can create one after the fact, but be up-front about it Repair and maintenance receipts should have odometer mileage written on them, and your diary may have notations of trips and expenses.

    Escrow papers. These are necessary if you claim rental property depreciation deductions to show how much of a deduction you are entitled to. They are also required if you sold the property.

    Receiving the Examination Report

    When the auditor completes the work, you will be handed or mailed IRS Form 4549, an examination reports. It shows changes proposed to your tax liability for the years under audit, And for any other open years if the auditor expanded examination. The report also provides a brief explanation for each change, such as “You did not prove the amount shown was a rental expense.”

    Understanding the Examination Reports

    The total amount of taxes, penalties, and interest added by the audit is shown on you report. Each change is listed, the tax code section cited, and a general explanation given. As started, most explanations are vague. You are usually not specifically told how you failed to prove your case. An auditor must tell you where you failed.

    The total amount of taxes, penalties, and interest added by the audit is shown on you report. Each change is listed, the tax code section cited, and a general explanation given. As started, most explanations are vague. You are usually not specifically told how you failed to prove your case. An auditor must tell you where you failed.

    Serving the following areas:
    Fort Worth, Arlington, Mansfield, Dallas, Weatherford, Cleburne, Burleson, Hurst, Euless, Bedford, Keller, Colleyville, Watauga, Saginaw, Pantego, Dalworthington Gardens, Grand Prairie, North Richland Hills, Westover, Westworth Village, Benbrook, Crowley, Grapevine, Southlake, Blue Mound, Haslet, Denton, Krum, Flower Mound, Dallas County, Tarrant County, Willow Park, Hudson oaks, Mineral Wells, Jacksboro, Springtown, Azle, Decatur, and all local areas.

    Dale can help. Please call 817-877-5995 or toll free at 800-651-0528.

  • Failure to File Income Taxes

    Failure to File Income Taxes

    Consequences of Not Filing

    It is a crime not to file a tax return if taxes are owed. By contrast, there is no criminal penalty if you file but can’t pay your taxes. You’ll owe interest and penalties, but you won’t be sent to jail. So even if you don’t have two dimes to rub together and owe a bundle of taxes, file your return. If you ignore this advice and fail to file, you can be fine up to $25,000 per year and/or sentenced to one year in prison for each unfiled year. Our justice system, however, doesn’t have enough jails to put away even 1% of the nonfilers, so going to jail is highly unlikely-even if you owed hundreds of thousands of dollars.

    IRS Hunting For NonFilers

    The IRS looks for nonfilers through its computerized Information Returns Program (IRP). This tremendously effective operation matches information documents-W-2 wage statements and 1099 income reports from payers (such as your client or the bank where you earn interest on your deposit account)-against tax returns you have filed. If the computer search fails to find a return, the IRS initiates a Taxpayers Delinquency Investigation, or TDI. A TDI is an IRS search to find out why a taxpayer didn’t file a tax return.

    TDIs usually begin with computer-generates notices. If you don’t respond to the notices, your case is eventually turned over to a tax payer service representative for telephone contact or more letters. If the IRS is really serious, your file is assigned to a revenue officer at your local IRS office who goes out looking for you.

    If you’re an Independent contractor, earn investments or interest income, sell real estate or stocks, the IRS receives payment information on you annually. The IRP will probably catch that you didn’t file. The IRS is about 12 to 24 months behind in notifying the nonfilers it discovers. So don’t think that because you haven’t heard from the IRS within a year or two after the filing due date you are home free. The IRS will catch you-it just a matter of time.

    IRS Notifying NonFilers

    How The IRS contracts you is the key to how seriously the IRS views Your case. There are four ways you can be notified-and they are not mutually exclusive. If the IRS tries one of the following methods and you don’t respond, it will no doubt try another.

    • Written requests from the IRS over a 16-week period. Most nonfilers are initially contracted in this relatively nonthreating manner. Threats come later if you ignore these notices. These notices usually mean that you aren’t targeted for criminal nonfiling.
    • Telephone call or letter with a deadline to get your returns filed, usually within 30 days.
    • Visit or call from an IRS agent. The officer will give you a deadline to file the missing returns directly with him or her, or will offer to help you prepare your returns. If you still don’t file, the IRS can legally prepare a return for you, based on any information it has and guesses it makes.
    • Visit by a Criminal Investigation Division agent. This is the very worst way you can be contracted. This means that your nonfiling is the subject of a criminal investigation. This usually happens only if the IRS suspects you of not reporting hundreds of thousands of dollars in income over multiple years.

    Remember: Anything you tell me is confidential as I am a Lawyer.

    Anything you tell a CPA or Accountant is not confidential and must be disclosed to the IRS by the CPA or by the Accountant.

    Dale can help. Please call 817-877-5995 or toll free at 800-651-0528.

    Serving the following areas:
    Fort Worth, Arlington, Mansfield, Dallas, Weatherford, Cleburne, Burleson, Hurst, Euless, Bedford, Keller, Colleyville, Watauga, Saginaw, Pantego, Dalworthington Gardens, Grand Prairie, North Richland Hills, Westover, Westworth Village, Benbrook, Crowley, Grapevine, Southlake, Blue Mound, Haslet, Denton, Krum, Flower Mound, Dallas County, Tarrant County, Willow Park, Hudson oaks, Mineral Wells, Jacksboro, Springtown, Azle, Decatur, and all local areas.

  • IRS Substitute For Returns

    IRS Substitute for Returns

    If You Fail To Fail Your Tax Returns

    The IRS has the power to, in effect, prepare and file tax returns whenever you don’t file. (Internal Revenue Code § 6060.) In IRS-speak, this is called a Substitute For Return, or SFR. Usually, it is not to your advantage to have the IRS do this. IRS prepares may give you the bare minimum-one exemption, no dependents, and the standards deduction. The IRS can guesstimate your tax liability, usually from W-2 forms and 1099 informational reports. If these are not available the IRS can impute income to you based on tables from the Bureau of labor Statistics showing income needed to sustain a minimal lifestyle by area of the country. This can result in a much higher tax bill than you would had prepared your owned tax return. If the IRS prepares an SFR, it will mail a copy to your last known address asking you to sign it in and return it. It may not be in your best interest to sign, even if the fugues are accurate. Instead, prepare a return yourself and send it to the IRS with a copy of the SFR. If your return be accepted in lieu of the SFR. If your return looks okay, the IRS will accept it. The IRS can audit it first, but this doesn’t often happen.

    Another reason to prepare the return yourself is because the normal statute of limitation rules for auditing a filed tax return don’t apply with SFRs. If the IRS prepares an SFR, it will be able to audit it forever, unless you sign the SFR and agree to the tax liability. But, if you prepare a tax return, the IRS normally has only three years from the time you file it to Audit you. An IRS-filed tax return does not start the normal ten-year statute of limitations on collecting any taxes due.

    A final reason for filing your own return has to do with qualifying to discharge (eliminate) your tax debt in bankruptcy

    If you don’t offer your own return, the IRS finalizes the SFR, whether or not you sign it. Any taxes due, plus penalties and interest, will then be formally assessed against you

    It’s Better To File Before The IRS Contact You

    If you haven’t file a tax returned for a year or more, It’s never too late. The IRS has a policy of not criminally prosecuting those who file before they are contracted by the IRS. (IR-92-114.) Also, the IRS is often more gentle in collecting from voluntary filers than from the ones they catch. When you file your return on your own accord, the somewhat remote IRS campus initially handles your file. But if the IRS has sought you out, your local IRS office probably has the file and can put more pressure on you than a campus.

    Example: Uncle Jack worked in construction for 50 years. He bragged that he never filed a tax returned or got an IRS notice. He changed addresses with the seasons and use many different Social Security numbers, none of which were his own. Because the IRS relies primarily on Social Security numbers to keep track of taxpayers, it never found Jack. He didn’t get Social Security benefits either. If Jack were around today, His chances of outrunning the IRS computer would be slim-better than beating the house in Las Vegas, but not by much.

    Voluntary Filing to Minimize the Chance of a Criminal Investigation

    The government policy is not to prosecute most citizens who haven’t filed. Who does the IRS criminally prosecute? The most likely candidates are public figures, such as sports stars or entertainers or nonfiling and hundreds of thousands in taxes owed. It is usually best for most non-filers is to simply start filing their tax returns-without first contacting the IRS.

    Get Dale. Please call 817-877-5995 or toll free at 800-651-0528.

    Serving the following areas:
    Fort Worth, Arlington, Mansfield, Dallas, Weatherford, Cleburne, Burleson, Hurst, Euless, Bedford, Keller, Colleyville, Watauga, Saginaw, Pantego, Dalworthington Gardens, Grand Prairie, North Richland Hills, Westover, Westworth Village, Benbrook, Crowley, Grapevine, Southlake, Blue Mound, Haslet, Denton, Krum, Flower Mound, Dallas County, Tarrant County, Willow Park, Hudson oaks, Mineral Wells, Jacksboro, Springtown, Azle, Decatur, and all local areas.

     
  • Offer in Compromise: Settling Taxes For a Fraction

    Offer in Compromise: Settling Taxes For a Fraction

    Settle for Pennies on the Dollar

    The IRS has a program called the Offer in Compromise that allows the IRS to compromise outstanding tax liabilities with a financially burdened tax payer for often less than the amount they owe to the Federal government. When the IRS accepts an Offer in Compromise they allow the taxpayer to pay what they can afford and the remaining balance is wiped clean. The tax payer is then said to be in good standing with the IRS again. Realize, that most Offer In Compromise requests are rejected by the IRS.

    The IRS sometimes allows individuals to settle their taxes owed for less (although it is rare) because in certain circumstances they stand to collect more from a taxpayer by having them pay a fraction of what they owe as opposed through enforced IRS collections. In other words, the IRS will only accept an Offer in Compromise if they feel that your offer is equal to or greater than the amount they would ever collect from you, even if they used forced collection mechanisms. This is based on the concept of a taxpayers Reasonable Collection Potential. In February 2012, the IRS stated it “has more flexibility with financial analysis for determining reasonable collection potential for distressed taxpayers.”

    Offer in Compromise Requirements to Qualify

    The IRS only allows individuals that meet a specific set of requirements to compromise their taxes with the IRS. There are three different circumstances in which the IRS will consider a taxpayer for an offer in compromise.

    1. There is doubt that the tax, penalties and interest will be collected in the foreseeable future through the normal collection procedures of the IRS. The IRS refers to this as doubt as to collectability. When the IRS considers doubt as to collectability cases, they mainly consider these three questions. If the answer is no to each of these questions then the OIC case has a high probability of being accepted.
      • Is it likely that the IRS would be able to collect more through forced collections than if they were to accept the OIC? In other words, the IRS works like a business and they need to be convinced that it is saving them money to accept the OIC rather than using forced collections.
      • Is it feasible to let the taxpayer’s financial situation improve a bit over time and collect the taxes in the future?
      • Would other people perceive that if the offer was accepted it was improper?
    2. There is doubt that the taxpayers assessed tax liability is correct. This could be because the examiner made an error interpreting the tax code when the assessment was made, the examiner failed to use all the support and evidence that the taxpayer presented or the taxpayer has new documents to prove that the tax amount they were assessed was incorrect. The IRS refers to this as doubt as to liability.
    3. There is no doubt to the amount that is owed, but there are certain circumstances that exist in the particular case that if the IRS were to collect the taxes owed it would create financial hardship or would be unfair and inequitable to the taxpayer. The IRS refers to this as effective tax administration.

    If a taxpayer meets any of these three circumstances, there is a chance they may be eligible to receive an offer in compromise settlement. Below are some additional requirements needed in order to qualify for an offer in compromise:

    • Cannot be currently going through bankruptcy
    • Taxpayer must have filed all federal tax returns that were required for prior years
    • If a business, must have filed payroll tax returns for prior two quarters
    • Must pay the Offer in compromise application fee of $186 in order for the request to be processed
    • Must submit the proper offer in compromise documentation>

    The IRS recently made new announcements (Feb 2011) stating their were going to start relaxing the requirements on their new “Streamlined Offer In Compromise” program. Now taxpayers making up to $100,000 with up to $50,000 in tax debt may qualify. Many of these new policies will be reviewed in a year, but the IRS is trying to help taxpayers in this tough economy. Filing for an Offer In Compromise can be very tedious and it is highly suggested for taxpayers that feel they may qualify to use the services of a Tax Attorney. Dale O’Neal 817-877-5995.

    Serving the following areas:
    Fort Worth, Arlington, Mansfield, Dallas, Weatherford, Cleburne, Burleson, Hurst, Euless, Bedford, Keller, Colleyville, Watauga, Saginaw, Pantego, Dalworthington Gardens, Grand Prairie, North Richland Hills, Westover, Westworth Village, Benbrook, Crowley, Grapevine, Southlake, Blue Mound, Haslet, Denton, Krum, Flower Mound, Dallas County, Tarrant County, Willow Park, Hudson oaks, Mineral Wells, Jacksboro, Springtown, Azle, Decatur, and all local areas.

  • IRS Tax Liens

    IRS Tax Liens

    How a Federal Tax Lien Works

    A tax lien is the first major step the IRS takes against taxpayers in order to collect delinquent taxes. The IRS uses the lien to secure claim to assets in order to ensure the taxpayer pays their taxes owed. Understanding how a tax lien works is important in order to figure out how to get the IRS to remove it. Please call Dale O’Neal for help at 800-651-0528

    What is a Tax Lien? Why IRS Uses Federal Tax Liens

    What is a Tax Lien?

    The IRS places tax liens on property in order to help secure payment of taxes that are owed. A tax lien is the government’s claim to your property. Once a notice of federal tax lien is filed it attaches to just about everything you own, have rights to, or that property has rights to. This means that if you try to sell or make money off of your “property”, the IRS has the right to take its cut to cover the amount of taxes owed, plus interest and penalties. A tax lien will remain in effect until the liability for the amount assessed becomes satisfied or becomes unenforceable by reason of lapse of time.

    When the IRS will Impose a Tax Lien?

    The IRS will impose a tax lien when there are unpaid tax amounts and you have failed to pay or take action when the IRS sent a notification. The IRS states that they may file a notice of federal tax lien only after the following three steps have been made:

    • The IRS assessed you with a tax liability
    • The IRS sent a notice to demand payment of the tax liability
    • You did not pay the debt in full within 10 days after you were notified about the tax liability

    Once the IRS takes these three steps they can file a notice of federal tax lien. A lien will then be placed on your property for the amount of taxes owed plus interest and penalties. The IRS will not check to see what property you own before filing it because it doesn’t matter to them. Once the lien is filed it will cover any assets you currently own or any assets you may own in the future.

    Effects of a Federal Tax Lien once it is Recorded

    Once the notice of federal tax lien is recorded all of your creditors are notified that the IRS has a claim against all of your property and all property that is acquired after the lien is filed. The IRS has some of the most powerful collection mechanisms and even if you owe other creditors, the IRS is typically a priority over them. For that reason, it will make it nearly impossible to borrow or make large purchases in the future.

    Example: If you want to buy a home and you borrow money from the bank, that bank typically will have dibs on your house if you cannot pay your mortgage, but once you have a tax lien placed on your property and future property the bank will no longer have first dibs, the IRS will. For this reason the bank views you as being too risky and will not lend money because they will require more risk in lending you the money

    Once a lien is placed it will be nearly impossible to hide it from creditors because it will be easily accessible to the public through public records and tax lien notices are picked up by all the major credit reporting agencies. So in essence, a lien severely impacts your credit rating and may make it extremely difficult to get a house, buy a car, get a new credit card or sign a lease.

    Fortunately, at the beginning of 2011 the National Taxpayer Advocate released a report that may have led to the IRS making changes to their tax lien policy (which will be reviewed in a year). Basically, in most cases, the IRS increased the tax debt threshold for issuing a tax lien from $5k to $10k, and made it easier for taxpayers who owe less than $25k to have a tax lien withdrawn after a few successful direct installment agreement debit payments are made. For anyone who paid off their taxes or resolved them, but are facing the negatives consequences of their credit showing that a tax lien was “released,” can request to have the tax lien withdrawn. Again, the taxpayer needs to request it from the IRS.

    Property Subject to Tax Liens

    The federal tax lien will attach to all property owned by the taxpayer as well as all rights to property. This includes all future purchases or property acquired after the lien was placed. The wording is kept really broad to allow the IRS to attach the lien to anything that could be of value. Property can include both tangible and intangible items. With that being said there is no complete list of property that is subject to a tax lien because it really can be anything. Below is a list of common property effected by a tax lien.

    • House
    • Motor Vehicles
    • Accounts Receivable
    • Remtal Income
    • Securities

    The purpose of the tax lien is to make the taxpayer pay the taxes they owe. The IRS tries to make it so it is easier for the taxpayer to pay off the taxes they owe or to come to some sort of settlement with the IRS rather than trying to live with the effects of the tax lien

    How We Release A Tax Lien: Guide on Removal of a Federal Tax Lien

    Once the IRS files a notice of federal tax lien the effects of the lien will remain intact until you get back into compliance with the IRS. In order to release a tax lien you will need to obtain a certificate of release of lien from the IRS. The IRS will need to ensure that your tax liability will be fufilled in order to issue the release. It used to be rare that the IRS would release a tax lien without the liability being fufilled but recent policy changes (February 2011) by the IRS states that taxpayers who enter into a direct debt installment agreement can have tax liens withdrawn in most cases.

    There are a few main ways the IRS will release a tax lien (or withdraw it with the policy changes recently). Below are the details on each method. Once either of these conditions has been satisfied, the IRS will have 30 days to release the tax lien.

    The Taxes Owed Are Paid in Full

    The IRS will release the lien once they have received all tax amounts owed, plus interest and penalties. Before the recent announcements in policy changes, a tax lien that was released still showed on your credit history or report as “paid” or released which impacted taxpayers negatively in other ways. The IRS decided to make a change whereby the taxpayer can request to have the tax lien withdrawn so the credit stain of a tax lien is removed. They IRS has begun to streamline processes in order to provide tax lien relief to thousands of taxpayers. This policy will be reviewed in 2012.

    Setup a Direct Debit Installment Agreement

    Many times taxpayers cannot pay off the taxes in full so the IRS has Payment plans available for taxpayers to pay off the taxes overtime. If you choose to pay off the taxes overtime, the lien will still remain in effect in most cases, unless you setup a direct debit installment agreement. As long as you have less than $25,000 in tax debt, generally as of February 2011 or thereafter, an IRS Installment Agreement that is setup with a payment arrangement as direct debit (which means monthly payments are automatically withdrawn from your checking account) can lead to a tax lien being withdrawn upon request. The IRS states though first a period of succussful payments must be shown before the lien will be withdrawn. Before these policy changes, or if you setup a different type of agreement, the IRS will not reduce the tax lien when payments are made, meaning the entire balance of the tax lien will show until the total amount of taxes are paid.

    Taxes Are Settled Through An Offer In Compromise:

    The IRS recently relaxed requirements on the Offer In Compromise program. Notably, you can have annual income up to $100,00 now and owe up to $50,000 to qualify with a new Streamlined Offer In Compromise program. The Offer In Compromise program allows taxpayers to settle their taxes owed for less than the total amount. In order to qualify for this the taxpayer will be required to meet a strict set of requirements set forth by the IRS. The taxpayer must make an offer to the IRS for an amount that is equal to or greater than what the IRS would ever expect to collect from the taxpayer, even if they used forced collection mechanisms. An Offer In Compromise is one of the the hardest settlement methods to qualify for and it has a very high denial rate. If you are considering an Offer In Compromise it is highly advised that you use an experienced tax professional to file for you. A tax professional will also assess your situation and determine if you are a likely candidate to receive this type of relief before applying.

    Statute of Limitations Expires With Lien Not Enforceable

    Like most other debts, IRS debts have a statute of limitations. The typical period is 10 years from the date the IRS sends out your first assessment notice of taxes owed after you have filed. Sometimes the statute of limitations can be extended if bankruptcy was involved and the tax was not discharged, an offer in compromise was filed, form 900 was sign allowing the IRS more time to collect or several other sly tactics the IRS has been known to use.

    IRS Accepts a Bond Guaranteeing Payment of Tax Debt

    The IRS will remove the lien within 30 days of them accepting a bond that you submit to them. This bond will guarantee your payment of the taxes owed and is almost the same thing as paying the taxes owed in full. It may be difficult to qualify for a bond because the requirements pretty much require you to have enough money to pay the taxes owed in full.

    Once 30 days have passed after you have met any of the above requirements the IRS should release the lien and again becuase of recent policy changes you can request it be withdrawn in most cases. In many cases, the IRS will not release the lien, in which case a little bit of work on your part must be done to get things straightened out. One way you can go about this is by contacting the Centralized Lien Unit by calling the toll free telephone number, (800) 913-6050. You may have to show them some proof the tax was paid and a written acknowledgment of the payment from the IRS. Also, once you get the certificate of release you must record it if the IRS does not. You can also send a copy of the certificate of release to the three major credit bureaus to make sure it gets updated in your credit report that the lien was released.

    Tax Lien Frequently Asked Questions (FAQ)

    Q: How will you know if a tax lien has been placed on your property?

    A. Before the IRS can place a tax lien they will first assess a taxpayer with a liability and demand payment. If no payment is made within 10 days of the demand the IRS can send out a notice of federal tax lien. The IRS will then send you in the mail a notice of federal tax lien after the lien has been filed. They may also try to contact you by phone, but that is not required.

    Q: How will a tax lien effect me?

    A: A tax lien will have a major impact on a taxpayers credit report. Once the lien is filed all of your creditors will be notified and the IRS will have claim to your property before any other creditor. Since the IRS has claim before any other creditor this makes it nearly impossible to borrow future money. The tax lien will show up on your credit report and will be available to all lenders to see. Recently, the IRS stated that those who pay off their tax debt or paid it off can request to have the tax lien withdrawn from their credit altogether. Furthermore, those who owe less than $25k but setup a Direct Debit Installment Agreement and have the tax lien withdrawn (removed from public records) after demonstrating a successful payment history

    Q: What property is subject to a tax lien?

    A: A tax lien covers all property a taxpayer owns plus any future property they may acquire. The rule keeps it very broad and open to interpretation and can pretty much cover anything. The property can be both tangible assets and intangible assets.

    Q: Can a tax lien be released?

    A: Yes, a tax lien can be released. The IRS requires you to get back into compliance with your taxes for the lien to be released. You can release a tax lien by paying in full, settling through an offer in compromise, letting the statute of limitations expire on the tax debt, or if the IRS accepts a bond that guarantees payment of the tax debt. If you paid your tax debts, be sure to ask now for your tax lien to be withdrawn instead of paid or released on your credit by contacting the IRS.

    Q: How can I avoid a tax lien?

    A: The best way to avoid a tax lien is to stay in full compliance with tax law. If you find you cannot pay taxes it is best to contact the IRS and make an agreement with them to pay your taxes back through one of the various settlement mechanisms instead of avoiding or not taking immediate action on IRS notices that have been received.

    Q: Why did the IRS file a tax lien on my property?

    A: The main reason why the IRS files tax liens are because of unpaid income taxes. It has been reported that tax liens will generally now be filed if you owe $10,000 or more but could be filed with smaller debt amounts. There can be various reasons as to why taxes were not paid, but when the IRS finds a taxpayer that they feel may be trying to not pay their taxes they will place a lien to ensure they will get payment of the taxes they owe.

    Q: What is the difference between a tax lien and tax levy?

    A: A tax lien is only the governments “invisible” claim on the property that is owned by the taxpayer, but a tax levy is the actual seizure of the assets owned by a taxpayer. With a levy the IRS can take money from bank accounts, garnish wages, or even seize physical property owned by the taxpayer.

    IRS Tax Lien Help: Relief from Your Federal Tax Lien

    A tax lien can have a devastating effect on a taxpayers credit and financial well being. We will match you with the best tax firm that can help sort through your tax problem in order to find the best plan of action to take in order to resolve your tax lien. Depending on your financial situation and tax situation there are many different courses of action. You can be assured that you will find the best one because you will be able to talk with multiple tax professionals and get various opinions. Tax liens can be extremely complicated, especially if you have never handled one before. All of our tax professionals are experienced in handling tax liens and have worked many cases to resolve them successfully.

    How it Works

    • Consult with us
    • We determine the best solution for handling your tax lien
    • Find out if an offer in compromise is a likely option to remove the lien and settle taxes owed for less.
    • Find out if any errors are discovered in the tax lien process and get an immediate appeal of the filing of the tax lien.
    • Our office will file the appropriate documents with the IRS to stop the IRS from harassing you. All communication from the IRS will be routed to your chosen tax firm.
    • My office then prepares all necessary documentation and negotiate on your behalf.

    Get Dale. Call 817-877-5995 or toll free at 800-651-0528.

    Serving the following areas:
    Most people think that my practice is limited to Fort Worth, Dallas, Arlington, Bedford, Hurst, Euless, Burleson, Blue Mound, Colleyville, Crowley, Grand Prairie, Grapevine, Keller, Mansfield, Saginaw, Haslet, Cleburne, Weatherford, Denton, Southlake, Trophy Club, Watauga, Westlake, Westover Hills, White Settlement, Addison, Balch Springs, Carrolton, Cedar Hill, Combine, Coppell, Dallas, DeSoto, Duncanville, Farmers Branch, Garland, Highland Park, Irving, Mesquite, Richardson, Rowlett, Sachse, Seagoville, Sunnyvale, University Park, Mineral Wells, but I practice nationwide in U.S. Tax Court.

    It is recommended that you work with a tax professional or tax relief service that specializes in helping individuals achieve penalty abatement.

  • Unpaid Taxes

    Unpaid Taxes: IRS & State Penalities

    Options & Help with Unpaid Taxes

    If you have been assessed a tax bill that you cannot pay, or if you know you will not be able to pay your taxes when due, or if you have unpaid income taxes due to the IRS, then it is important to understand how the IRS works so you can avoid any unnecessary penalties and interest and most importantly to understand what options are out there. Everyone’s situation is different and there is not one solution for everyone in these types of cases.

    Unable To Pay Taxes? Can’t Pay IRS Taxes? Various Options For You

    TWhether you have been assessed with a tax bill that you can’t pay or you have a tax filing coming up and you know you will not be able to afford the taxes due, your options are about the same. Owing the IRS and avoiding them is a big deal, but if you owe the IRS and you are willing to work with them on a resolution, then things can go smoothly. Or at least smoother. The IRS realizes that there are times when taxpayers cannot pay their taxes and the IRS is willing to work with you. The IRS has their own programs, rules, and payment plans for taxpayers.

    The IRS realizes that not all cases are the same when someone can’t pay their taxes. For this reason they have come up with many different alternatives so that no matter what financial and personal situation the taxpayer is in, they will be able to fall into one of the alternatives. The alternatives that the IRS offers range from short term extensions of paying, to allowing the taxpayer to negotiate the taxes owed for a fraction of the total amount. Not just anyone can pick which method they want to use but must prove to the IRS that they meet specific criteria in order to be considered

    Below are some common alternatives to paying your IRS taxes in full. Some methods are IRS sponsored and others are not. If you choose to use an IRS sponsored method you must be sure you meet the specific requirements set forth by the IRS. No matter what you do, always make sure you file first, even if you cannot pay your taxes in full.

    IRS Sponsored Alternatives to Paying Taxes in Full

    • An Installment Agreement: the IRS offers multiple forms of installment agreements. All the installment agreements are similar in the fact that they allow you to pay off your taxes owed in monthly increments. The main different between them is the period in which you must pay back the taxes and the amount of taxes you owe. Below are the various forms of installment agreements.

    Guaranteed Installment Agreement is the easiest form of installment agreement to obtain. It is only for those taxpayers that owe less than $10,000 in taxes and can pay back the entire amount in 3 years or less.

    The Streamlined Installment Agreement: this installment agreement is for taxpayers that owe $25,000 or less (now $50,000 with Fresh Start program). With this payment plan the taxpayer has to pay back all the taxes owed (including interest and penalties) in a period of 60 months or less.

    The Financially Verified Installment Agreement is what must be used for taxpayers that owe more than $50,000 in taxes. These are trickier to obtain because you must provide detailed financial statements to the IRS to prove you have the means to make the required payments in order pay back the taxes owed.

    A partial payment installment agreement is available to those taxpayers that cannot make the required monthly payments required with the other forms of installment agreements. In order to qualify for this type you must prove to the IRS that you cannot pay the minimum and must submit detailed financial statements. If approved you will pay a smaller monthly amount.

    Hardship status is when the IRS declares you temporarily not collectible. The IRS has guidelines it follows as to how much individuals need to live (funds to cover basic necessities such as food, clothes, rent, transportation, etc) and if you fall below that amount they can put a temporary hold on your account. In order to qualify for this you must prove to the IRS your financial situation by filling out detailed financial statements for them. Once the IRS reviews your financials and determines that if you were to pay the taxes owed it would create economic hardship on your part, they will put you on hardship status. Once on hardship status they will check back with you every few months to every couple years to see if your financial situation has improved enough in order for you to pay.

    An offer in compromise is a tax settlement method created by the IRS that allows taxpayers in very poor financial situations to negotiate the taxes they owe and settle for less. In order to qualify for this you will need to prove to the IRS that the amount of tax assessed was not correct or there is doubt as to your ability to ever be able to pay back the entire tax amount owed. This is a highly sought after tax settlement method and the IRS is very strict with who qualifies. In order to qualify a taxpayer must prove that the amount that they want to settle for is equal to or greater than the amount the IRS would ever expect to collect from them.

    Non IRS Sponsored Alternatives to Paying Taxes in Full

    Let me know if I can help. Please call me at 817-877-5995 or toll free at 800-651-0528.

    • Borrow From Family & Friends: Having family and friends to help you with your tax problems is one of the last methods you should consider. For many people this can be an easy solution because it gets around having to deal with the IRS but sometimes it is best to just deal with the IRS and work with them on an agreement that works for you financially. There are only a few times where it can be OK to go to family and friends to help. The most common reason is if you expect to have a payment coming in the near future that will cover 100% of your tax liability but you won’t receive that money until after the due date for taxes. If you are unsure of when you will receive that payment it can be best to use a payment plan instead.

    No matter what your financial situation you can find some way to pay the IRS. One important note is that no matter how much you owe even if you cannot pay it is always important to file your taxes. Filing your taxes can prevent large penalties from adding up. Not being able to pay is not considered a big deal to the IRS because of all the various options they offer to taxpayers. So if you owe taxes and can’t pay, start working with the IRS right away to get your problem figured out and to prevent unneeded penalties and interest.

    Unpaid & Underpayment Tax Penalties: Consequences of Unpaid IRS Taxes

    April 15th is the deadline for most individuals to pay and file their taxes. Some individuals may request an extension to file, but there really is no request for an extension to pay. If you request an extension to file you must pay 90% or more of the taxes that you owe in order to prevent the failure to pay penalty. Interest and penalties on unpaid taxes start being charged on April 15th. Penalties and interest are the same for unpaid amounts vs underpaid tax amounts. Below are the penalties and interest on these amounts.

    Failure to Pay

    • Penalty: Underpayment and unpaid tax penalties are calculated from the due date of taxes (typically April 15th). This penalty is .5% of the tax owed for each month, or part of a month. The maximum this penalty can be is 25% of the total tax owed. This penalty will be increased to 1% if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. This rate will drop for individuals to a quarter percent for any month in which an installment agreement is in effect.
    • Interest: The interest rate you are charged on unpaid and underpaid tax amounts changes every three months. It is determined by the federal short-term rate plus 3% and interest is compounded daily. This interest rate is typically about 4% per year. Interest will continue to add up as long as taxes are owed, there is no maximum amount to interest owed.

    Further Consequences of Unpaid Taxes

    Once the IRS realizes that taxes are owed they will begin their automated collection system (ACS). When the ACS starts they will begin by assessing taxes owed and will add up penalties and interest and send various notices to the owing taxpayer as noted above. This process will keep moving along its set path until the taxpayer has paid their taxes or taxes have been resolved in some other way. Below are the basic steps the ACS follows although it sometimes may be different depending upon the IRS’s perception of what actions they think you will take.

    • Receive CP Letters: CP Letters are computer paragraph notices. Each notice is noted by a CP number on the top of the letter. The first letter you receive will assess you with a tax amount owed and will demand payment of that amount. These notices will continue for a period of 2-6 months depending upon how much is owed in tax. Each letter will get a bit more demanding and threatening. The IRS does not take any collection action when these notices are being sent out but they do continue to notify you of your additional penalties and interest you are being charged.
    • Notice of Federal Tax Lien: if no action is taken when CP notices are received the IRS may choose to place a lien on the taxpayers assets. A tax lien is placed in order to secure payment of taxes. A tax lien is the government’s claim to your assets. This means if you try to sell that asset the IRS will be able to take its cut of the funds before you do.

    A Tax Levy is the last step the IRS will take if no actions are taken to settle or pay the taxes owed. A tax levy is the legal seizure of property by the IRS in order to satisfy unpaid taxes. Collections only get to this point if the taxpayer continues to ignore requests of the IRS and takes no action to work with them on another resolution. Depending upon your financial situation the IRS may implement any of

    1. The Wage Garnishment: the IRS will contact your employer and demands that they take out a portion of your paycheck and send it over to the IRS.
    2. Bank Levy:The IRS will contact your bank and your bank will immediately freeze your account so you cannot take any money out. The IRS will then require the bank to send over funds from the account in order to satisfy the unpaid taxes.
    3. The IRS can seize assets such as cars, homes, boats, and anything else they think they can sell in order to gain funds to satisfy unpaid taxes.

    It is important to know that the IRS has many great programs available for individuals that have unpaid taxes. If you work with the IRS it is very likely that you will be able to eliminate or limit penalties, interest and other consequences that unpaid taxes may have. If you are unsure of the best way to handle your unpaid taxes it is a good idea to consult with a tax professional to find the best solution.

    IRS Underpayment Penalties & Interest: Failure to Pay Tax Penalty

    Not paying your taxes or underpaying your taxes can lead to a whole slew of problems, but first off you will be charged with penalties and interest that relate to these unpaid taxes. Many times when taxpayers cannot pay their taxes they will file their tax return and then not work with the IRS to solve their unpaid or underpaid tax problem because they are scared as to what will happen. Actually, the IRS prefers to have people work with them if they cannot pay and those people that work out an agreement will typically be charged half of the failure to pay penalty.

    When the Failure to Pay Penalty is Charged

    Each year the payment date for individuals to pay their taxes is April 15th, even if an extension has been filed. A request for a tax extension only extends the tax filing date, not the tax payment date. If you enter into an installment agreement, which allows you to pay taxes back over a period of time, you will still be charged a failure to pay penalty starting the day after taxes are due, but this penalty will only be half of the normal failure to pay penalty.

    Failure To Pay Penalty Explained Details

    The failure to pay penalty is a monthly penalty between .25% to 1% of the unpaid or outstanding tax amount owed. The normal failure to pay penalty is .5% a month that is calculated starting April 16th. This penalty will continue to add up monthly as long as there is a tax amount that is not paid or some other arrangement has been made to pay back the taxes owed. The maximum that this penalty can reach is 25% of the original tax amount owed. If you enter into an installment agreement the failure to pay penalty will be reduce to .25% a month opposed to the .5% that is normally charged. This penalty can be increased to 1% if the IRS issues an Intent to Levy and the tax balance remains unpaid for 10 days.

    If you have also failed to file your taxes, you will be charged with the failure to file penalty as well. When both the failure to file and failure to pay penalties are charged at the same time, it is a maximum of 5% a month that can be charged. This is called the combined penalty. Normally the failure to file penalty is 5% and the failure to pay penalty is .5%, but the IRS reduces the failure to file penalty by .5% when these two are charged together. The maximum the combined penalty can be is 47.5% of the tax amount owed, as long as no tax fraud is involved.

    Interest on Unpaid or Underpaid Taxes

    The interest that the IRS changes will change every 3 months because it is based off of the federal short-term rate. It is calculated by taking the federal short-term rate and adding another 3% to it. The typical annual interest is between 4% and 10%. The interest that is charged is based off of the total tax amount owed plus prior interest and penalties. The IRS charges interest because they consider not paying taxes the same as borrowing from them, so they require you to pay interest on these outstanding balances.

    Removing the Failure to Pay Penalty

    The IRS does realize that there are times that taxpayers cannot always stay in full compliance with their taxes and they do allow people that have “reasonable cause” to remove their penalties. About 33% of all tax penalties that are charged by the IRS are later removed. It is possible that this number would be higher if most individuals knew about the penalty abatement provision that is offered by the IRS. In order to receive penalty abatement, you must prove to the IRS that you have a legitimate excuse for not paying your taxes on time. The IRS has accepted a wide range of excuses and they handle each on a case by case basis.

    IRS Statute of Limitations For Collection of Tax Debt

    Individuals or businesses who have unpaid taxes to the IRS may wonder how long the government can continue to collect on this debt. The length of time allowed by law to file legal proceedings against a person is known as the Statute of Limitations (SOL). While this definition applies to all types of legal proceedings, in the case of back taxes and the IRS it refers to Collection Statute Expiration Date (CSED) or the length of time the IRS can legally collect outstanding tax balances. The SOL varies for different types of debt and may also vary based on the state in which you live. Here we look at the CSED for tax liabilities owed to the IRS.

    IRS Collections

    As a general rule, the IRS is restricted by a 10 year Collection Statute of Limitations. This means individuals or businesses who owe back taxes that are ten years or older may not legally be sued in a court of law for those tax obligations. It is important for all taxpayers to understand how the statute of limitations works in order to properly understand and assert their rights.

    Exceptions and Extensions

    The ten year rule for IRS collections is not one that is set in stone. There are several circumstances or situations which may result in a longer period of time in which the IRS can legally go after a taxpayer who owes back taxes. The ten year CSED begins when the tax liabilities have been assessed. This is a very important part of the CSED to understand as many people assume the CSED begins the year the taxes are filed. If an individual files a tax return for 2007 in 2010 and the outstanding tax balance is not assessed until 2011- the CSED begins in 2011. Under this rule, the SOL for tax liabilities owed for 2007 does not expire until 2021. Other scenarios which may result in the extension of the CSED is the filing of an Offer in Compromise or bankruptcy (for taxes not discharged). In both cases, the IRS may extend the CSED effectively increasing the amount of time in which they can legally collect tax debt. Additional causes of an extension include: military deferment, leaving the country for at least 6 months, certain collection due process hearings, filing for Innocent Spouse Relief, requesting a taxpayer assistance order and other reasons.

    Considerations regarding the CSED

    Taxpayers who have filed a fraudulent or false tax return with the intent to avoid paying taxes are not protected by the 10 year CSED. Some filers are under the false impression that the SOL effectively erases your debt. If the IRS has placed a lien on your assets and the SOL passes, they may choose to erase your debt or reduce the lien to judgment and continue collection for an extended period of time. As with all other debt collections, the expiration of the Statue of Limitations does not mean you no longer owe the money. It simply means if a lawsuit is brought against you to collect that debt, you may use the expiration of the SOL as a defense. This generally results in the dismissal of the case. Finally, tax debt may continue to appear on your credit report after the CSED has expired, therefore affecting your credit for a longer period of time.

    Unpaid Taxes Frequently Asked Questions (FAQs)

    Q: What if I can’t pay my taxes in full when they are due?

    A: If you can’t pay your taxes in full you have many different options. If you want to pay your taxes back over time you can enter into an installment agreement with the IRS. If you can’t meet the requirements for an installment agreement you may be able to settle your taxes owed through an offer in compromise or you may be able to get declared uncollectible until your financial situation improves enough to allow you to pay back your taxes.

    Q: What are the penalties for unpaid taxes?

    A: Penalties for unpaid taxes are typically a half of a percent of the taxes owed for each month. This penalty can grow to a maximum of 25% of the total taxes owed. This penalty will increase to 1% if the tax remains unpaid 10 days after the IRS issues an intent to levy. The penalty will decrease to a quarter of a percent for any month in which an installment agreement is in effect.

    Q: What interest will I be charged on unpaid or an underpayment of taxes owed?

    Q: Is the IRS going to levy my assets for having unpaid taxes?

    A: The IRS can levy your assets for having unpaid taxes. It may take several months for the IRS to get to that point and it will not be a surprise if they do. The IRS will typically send a series of letter demanding payment and if all of those are ignored the the last letter the IRS will send before they levy is called the Notice of Intent to Levy. This notice will give you 30 days notice prior to them beginning to levy. If taxes are not paid or settled in some other way during this time then the IRS will levy.

    Q: Can I settle my unpaid taxes for less?

    A: Yes you can settle unpaid taxes for less than the total amount owed. The two most common ways to do this are through either an offer in compromise OR a partial payment settlement agreement. There are strict requirements for each and you will have to give the IRS detailed financial information about yourself in order to prove that you meet the qualifications for either of these.

    Q: If I can’t pay my taxes should I still file my return?

    A: YES!! Not filing a tax return has much harsher consequences than not paying. The penalty on unpaid taxes owed when no tax return is filed is 5% a month but the penalty for not paying taxes taxes when a return is filed is only .5%, so you can see the penalties will add up much faster if you did not file a return. Not paying is not that big of a deal to the IRS as long as you are willing to work with them on a resolution. The IRS has many payment and resolution alternatives.

    Get Dale. Call 817-877-5995 or toll free at 800-651-0528.

    Serving the following areas:
    Most people think that my practice is limited to Fort Worth, Dallas, Arlington, Bedford, Hurst, Euless, Burleson, Blue Mound, Colleyville, Crowley, Grand Prairie, Grapevine, Keller, Mansfield, Saginaw, Haslet, Cleburne, Weatherford, Denton, Southlake, Trophy Club, Watauga, Westlake, Westover Hills, White Settlement, Addison, Balch Springs, Carrolton, Cedar Hill, Combine, Coppell, Dallas, DeSoto, Duncanville, Farmers Branch, Garland, Highland Park, Irving, Mesquite, Richardson, Rowlett, Sachse, Seagoville, Sunnyvale, University Park, Mineral Wells, but I practice nationwide in U.S. Tax Court.

     
  • Innocent Spouse Relief - The Conscience Of The IRS

    INNOCENT SPOUSE RELIEF – THE CONSCIENCE OF THE IRS

    By Dale O’Neal, Tax Attorney

     

    EQUITY IS IN THE EYE OF THE BEHOLDER

    Several years back, Congress and the President increased the subjective nature of tax administration by coming up with Internal Revenue Code Section 6015(f), pertaining to requests for innocent spouse relief.  It states:

    “…if, taking into account all the facts and circumstances, if it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either); the Secretary may relieve such individual of such liability”

    As with any substantive changes in the law, it sometimes takes years for the details to work out as to the administration of the law.  That was the case with the revisions to innocent spouse law made in the 1990’s and it may be that the IRS is softening up on what it proposes to be the rules.

    Congress and the President mandated equitable treatment within the ambiguous discretionary limits implied by the law. Our goal at the O’Neal Law Firm is to gather as much information as possible to support your claim and present that information in an organized, effective manner to the IRS.

     

    TIME IS OF THE ESSENCE

    The IRS can garnish up to 50% of your wages to satisfy tax debts.  The IRS is extremely powerful!  However, by filing an innocent spouse claim, the IRS will review your information and work with you on an appropriate settlement without excessive legal hair-splitting.  Your former spouse will receive copies of all documents you file, and, can file a response.  Under law, tax liability is joint and several which means the IRS can satisfy 100% of the tax debt plus penalty plus interest from either party – not necessarily half and half!

    LEGAL REQUIREMENTS FOR INNOCENT SPOUSE RELIEF

    In order for the IRS to grant innocent spouse relief, the following requirements must be met:

    • A joint income tax return for the year in question must have been filed with the IRS for the year in question; and,
    • Within that joint income tax return, an understatement of tax must have been made due to an error by your spouse.
    • You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998.

    OUR MISSION

    So now that you know why you should file an innocent spouse claim and if your claim qualifies, here’s how The O’Neal Law Firm will proceed . 

    We, literally, want to plead your case.  We want to show the IRS your past, present and future with respect to your tax debt.  Our goal is to explain to them exactly who you are, what you have been through, and the travesty of your situation.  We will submit the required paperwork and then advocate your defense through the most elaborate means possible which may include video depositions of you and any witnesses to your claim.  Our concentration will be in the following areas, as applicable:

    • How much did you know, or should have known, about the level of income in your household and the filing of tax documents? When you signed the tax return that reflected an understatement of income, how much knowledge did you have?  Partial relief may be available for the amount you did not know about.
    • Any and all spousal abuse that occurred during that tax filing year(s). Spousal abuse is a very broad term and includes physical, emotional, psychological, sexual, or abusive threats involving a third party (i.e. threats to injure a child, if you failed to sign the tax return);
    • Your tax paying history;
    • Your legal obligation to pay the tax debt. You may not be legally obligated to pay if, during the tax year in question, you no longer owned the assets that generated the income, but your spouse did, as in the case of a divorce.
    • What significant benefit, if any, did you receive from the income being taxed?
    • What was the condition of your mental and physical health when you signed the tax return in question? Did you have the mental capacity to participate in fraud, or, the physical health required to actually question the tax documents in question?
    • Economic hardship that would be imposed upon you if your request is denied. Economic hardship can be shown by your providing 2 documents which you compile.  The first, a simple income and expense worksheet.  Income is usually determined by paychecks so attach copies of typical net paychecks you receive.  As far as expenses, review cash receipts, checkbooks registers, credit card statements, etc. and divide your expenses into categories such as food, clothing, housing, transportation, utilities, insurance, debt repayment, education and other recurring usual monthly expenses.  The second, a financial statement listing all of your outstanding financial obligations – mortgage, car loans, student loans, debts of any kind.
    • Lastly, whether or not your former spouse committed adultery during the marriage. Although not a legal factor, the IRS takes this into consideration along with the assumption of money being expended.

    ALTERNATIVE FORMS OF RELIEF

    Separation-Of-Liability relief is available when spouses have divorced or separated after filing a joint return.  While relief under Innocent Spouse could be for the entire tax understatement and penalties and interest, Separation-Of-Liability relief determines the liability of each spouse separately by allocating the income and deductions from the joint return to each spouse.  In essence, amending a joint return into separate ones.  To qualify for Separation-Of-Liability relief requires the following:

    • A joint income tax return must have been filed for the year in question;
    • At the time you file Form 8857, you and your spouse must be divorced ,or are legally separated, or have not been members of the same household during the prior 12 months;
    • Any relief will not apply to any portion of the tax understatement that is due to erroneous items about which you had actual knowledge; and,
    • There was not transfer of property to you for the main purpose of avoiding tax or payment of tax.

    Equitable relief under section 6015(f) may be available if you don’t qualify for Innocent Spouse or Separation-of-Liability relief and be relieved of liability for understated or unpaid tax.  To qualify for this relief, an individual must have an unpaid amount of understated or underpaid tax, must not be eligible for relief under either of the two previously mentioned sections, and

    • After taking into account all of the facts and circumstances, it would be unfair to hold the spouse liable for the understated or underpaid tax;
    • There was no transfer of any property to one another as part of a scheme to avoid tax or to defraud the IRS or another third party such as an ex-spouse, creditor or business partner;
    • The income tax liability from which relief is sought by one spouse is attributable to a tax item or omission of the other spouse (Revenue Procedure 2003-61). to defraud the IRS or another third party such as an ex-spouse, creditor or business partner; and
    • The income tax liability from which relief is sought by one spouse is attributable to a tax item or omission of the other spouse (Revenue Procedure 2003-61).

    Note that innocent spouse relief and separation-of-liability relief apply only to an understatement of tax, but equitable relief also applies to any underpayment of tax. Also note that although innocent spouse and equitable relief under sections 6015(b) and (f) can result in a refund, separation-of-liability relief under section 6015(c) does not result in a refund (see section 6015(g)(3)).

    Taxpayers in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin) should know that a determination under any of the provisions of section 6015 is made without regard to community property laws. Relief is also available under section 66 for taxpayers in community property states who have a similar problem: They are married but living apart from each other and filing separately, and they omit from gross income their share of community earned income. Like section 6015, section 66 has both “traditional” and equitable relief provisions (sections 66(a) and (c), respectively). Form 8857 is also used for this type of innocent spouse relief.

    Both sections 6015(b) and (c) require requesting relief by filing Form 8857 within two years of the initiation of an IRS “collection activity” with respect to the innocent spouse. Treas. Reg. § 1.6015-5(b)(2) provides that collection activities include notice of an intent to levy (a section 6330 notice) offsetting one spouse’s separate overpayment against a joint liability, and certain other legal actions taken by the IRS. Although the equitable relief provisions of section 6015(f) contain no mention of a time limit for filing, in Treas. Reg. § 1.6015-5(b)(1) the IRS applied the same two-year limit to equitable relief under section 6015(f). The Tax Court has ruled in favor of several plaintiffs who argued that the omission of any stated time limit in the statute means Congress intended for there to be none, and that the regulation is invalid.

    The IRS maintains that the same time limit found in sections 6015(b) and (c) nonetheless applies to section 6015(f), and the Seventh Circuit held the regulation to be valid. Similarly, although section 66(c) doesn’t mention a time limit for community property equitable relief claims, the IRS applies a two-year limit for them as well (Revenue Procedure 2003-61, section 4.01).

    WHAT TO BRING FOR YOUR INTERVIEW WITH THE ONEAL LAW FIRM

    Please bring the following items with you for your interview:

    • A copy of the transcript of your case from the IRS. The transcript is the IRS’ file on your case and can be obtained by contacting the IRS office that issued correspondence.  If you do not have a copy, we will obtain one for you.
    • Any and all information relative to the areas of our firm’s concentration listed above in OUR MISSION. This includes the income and expense worksheet and financial statement described above. Additionally, make and bring with you a detailed list of each and every event that falls within any of the areas of our concentration.  Remember, the O’Neal Law Firm is telling your story to the IRS.  Obtain copies of any and all documents that substantiate your story within these areas.
    • Make a list of each and every witness to every act that occurred within any of the above areas. The list should include the witnesses name, mailing address, telephone number, email address and a short narrative of what the witness saw and heard.
    • Bring a copy of any documents you signed in connection with your tax liability (i.e. divorce decree).
    • A copy of each and every medical record(s) that shows abuse – emergency room reports, prescriptions, explanation of benefits from health insurance company.

    PENDING DIVORCE FROM AN ABUSIVE SPOUSE

    If possible, the divorce court pleading should include content to maximize the possibility of a favorable ruling. If applicable and your state allows, your divorce court pleadings should allege that you are a victim of some sort – a victim of abuse, manipulation, secrecy, financial mismanagement by your spouse.  Or, possibly, that you suffer mental or physical health problems.  All of these should be substantiated with factual allegations not mere conclusions.  Also, if allowable, divorce pleadings should have a notarized affidavit attached that sets forth in detail and with specific dates, any events of abuse.  This affidavit can be used as evidence in your Innocent Spouse Petition so it is important that it contain as many factual allegations as can be legally supported. Your divorce pleadings and this affidavit will be filed in the public records and will be stamped by the court clerk as evidence of such.  A copy will be sent by our firm to the IRS as part of our handling of your Innocent Spouse claim.

    Also, our firm will review all divorce depositions.  In the event we are co-counsel on the divorce, then, our firm will participate in the divorce depositions.  In divorce court, the actual depositions are not always filed the divorce court file, but there is almost always a certificate filed showing that a deposition was taken, which party requested the giving of a deposition, the name of the witness, etc.  If we determine the deposition is overall beneficial for your Innocent Spouse claim, we will copy and submit it to the IRS. 

    INJURED SPOUSE RELIEF

    In addition to the forms of relief mentioned above, the is Injured Spouse relief which usually occurs when a refund due (or a portion of a refund due) from a filed joint return was intercepted by the IRS as a result of one spouse’s tax filings prior to the marriage.  The logic is that the Innocent Spouse cannot be legally liable for tax returns and insuing liabilities that occurred prior to the marriage.

    THE PETITION AND THE PACKAGE

    Our firm submits a “package” of information to the Office of Innocent Spouse whenever we file a petition. An organized package of information, facts, affidavits, depositions, video depositions, medical transcripts, etc.

    Most firms submit a petition. In our firm, the petition is only a small part.

    We organize the package of information in order to have the greatest impact on the Office of Innocent Spouse. We determine which of the eight categories is our strongest case, and we organize the submission packet accordingly.

    OUR SUCCESS RATE: To date, our firm has had 100% success in our Innocent Spouse Petitions. We try to go above and beyond. Our objective is to overwhelm the IRS, and to intimidate the former spouse. Remember that the former spouse will be given an opportunity to respond. The former spouse will receive copies of all documents we file with the Office of Innocent Spouse. In my experience, if we overwhelm everyone with our evidence, the other side often chooses to simply never respond. If we overwhelm everyone, often the other side fails to respond and the IRS can rule in our favor like a “default ruling. ” We are available to work as co-counsel with referring attorneys and enrolled agents and CPA firms.

    We are available for outright referrals.

    We are available for divorce consultations or to co-counsel divorce litigation.

    Please call me at 817-877-5995. We have a nationwide innocent spouse IRS practice.

    Our firm has represented clients in each of the following states: California, Texas, New York, Pennsylvania, Arizona, Florida, Indiana,​ New Mexico, Colorado, Vermont, Maine, Oregon, Washington State, Washington DC, Montana, Wyoming, Nebraska, South Dakota, Louisiana, North Dakota, Oklahoma, Georgia, Virginia, Massachusetts, Missouri, Maryland, Wisconsin, South Carolina, Alabama, North Carolina, Kansa, Nevada, Pennsylvania, Ohio, Michigan, New Jersey, Alaska, Connecticut, Iowa, Utah, Mississippi, Arkansas, Kansas, Idaho, Hawaii, New Hampshire, Maine, Rhode island, and other locations throughout the world.

  • What To Do When A Loved One Dies

    WHAT TO DO WHEN A LOVED ONE DIES

     Dale O’Neal Attorney at Law, Fort Worth 

     Tel 817-877-5995

     CHAPTER 1 CHANGE OF ADDRESS WITH U.S. POST OFFICE

    Immediately following the loss of a loved one, we suggest that you file a change of address form with the United States Post Office.

    The new address should be the address of a most trusted close family member or friend. The more secure, the better.

    The purpose of a change of address form is to make sure that mail does not fall into the wrong hands. Often times, following the loss of a loved one, no one resides at the former residence. Fill out a change of address form with the United States Post Office.

    If the mail will be forwarded to you, inform your personal letter carrier that you will be receiving the mail and give your letter carrier the name of the person who has passed.     

    CHAPTER TWO: SOCIAL SECURITY ADMINISTRATION:

    If the decedent receives Social Security benefits, notify the Social Security Administration of the passing of your loved one. Notify them of the death, and request that all payments cease. You may contact the Social Security Administration at 18007721213.

    At the time of this writing, you must make a phone call to this number. At this time you cannot report this information online.

    Please note any money received after the death of the family member, must be returned to the Social Security Administration. The Social Security Administration will actively seek return of any monies paid after the date of death.

    However the Social Security Administration does pay a death benefit. Currently the death benefit is $255.00.

    The death benefit is paid to the beneficiary whose name appears on the person's Social Security card.

    I strongly suggest that you investigate Social Security Survivor Benefits. Family members may be eligible to receive monthly survivor benefits. Qualifying survivors include a widow or widower if 60 or older, and it may be payable as young as age 50 if the survivor is disabled. In addition, there are benefits for the decedent's unmarried minor children, sometimes adopted minor children, step-children and step grandchildren. In some cases there are benefits for divorced spouses.

    Even if the decedent was not receiving Social Security, survivors may still be eligible for some benefits. Always check with the Social Security Administration and inquire about survivor benefits. When you contact the Social Security Administration inquiring about benefits, you must provide the Social Security Administration with a copy of the death certificate, the decedent's Social Security number, your Social Security number, your birth certificate, as well as additional information in selected cases. For example if the applicant is a spouse then they will need to provide a copy of the couple's marriage certificate. If the applicant is a divorced spouse then they must provide a copy of the decree of divorce. If the applicants are dependent children or step children then all Social Security numbers of the children must be provided as well as each applicant's birth certificate. If direct deposit is requested, then be prepared to furnish the routing numbers and account numbers for the appropriate bank accounts.

     CHAPTER 3: SEEK INFORMATION REGARDING LIFE INSURANCE DEATH BENEFITS.

    First determine if there is any life insurance. The decedent may have left a financial portfolio indicating the names of all life insurance companies, as well as the payoff amount. If the decedent left an organized financial statement, then your job is much easier. Simply contact each life insurance company, and be prepared to give a copy of the death certificate to each life insurance company. If the decedent did not leave an organized financial portfolio, and if you must try to find the name of life insurance companies, then begin with the decedent's employer. Often employees of large corporations have life insurance as a benefit of employment.

    If the decedent was not an employee, then look at the decedent's checkbook and bank statements. Often times life insurance requires monthly premiums. If the decedent made monthly premiums, you can determine the name of the life insurance company by determining the payee of each premium, or determining if there is an automatic deduction from the decedent's bank account payable to a life insurance company.

    Keep a copy of each and every communication you have with a life insurance company. Make a note of the name of the person you talked to. If you communicate in writing, keep a copy of each and every letter that you write.

    If the decedent was a member of the military, or a prior member of the military, then inform the Veteran's Administration of the death. The Veteran's Administration pays death benefits. Often times these benefits range from $7,000.00 to $10,000.00.

    CHAPTER 4: LOCATING ASSETS       

    If the decedent had a financial advisor, contact the financial advisor and inquire about any and all life insurance policies. If the decedent had a long history of employment, please contact any and all prior employers and inquire about pension benefits, retirement benefits, and death benefits. Keep detailed notes of any and all conversations. If the decedent was a current or past federal government employee, then survivors may be eligible for benefits. Contact the Office of Personnel Management at 18887676738. The next major job will be to locate the decedent's assets and to organize an inventory of those assets.

    The best way to locate assets is to look through the decedent's personal papers and files. Locate deeds, titles to vehicles and trailers and boats, bank statements, stock ownership, investment and bonds, mutual funds, annuities and other investments. This investigation can get rather complicated. Simply be relaxed, be methodical, and buy some organizational tools from your local office supply store.

    Inventory the decedent's safety deposit box. If you have a key to the safety deposit box and a copy of the death certificate, usually the financial institution will at least let you look inside. They may not allow you to remove anything without a court order or some sort of written communication on a lawyer's letterhead.

    Review the decedent's income tax returns. Often the income tax returns give you a paper trail of investments and assets. Any and all income from investments is usually reported on the income tax returns. Therefore if the decedent owns stock that paid dividends, then the dividends would be reflected on the income tax returns. If the decedent had bank accounts that paid interest, then those interest payments will be reflected on the income tax return, as well as the name of the financial institution, the account number etc. Obtain a copy of the last 3 to 4 years income tax returns of the decedent. If you can only find one return, then look at the name of the prepared of that return. The decedent may have used the same income tax preparation service for several years. If the decedent used a paid professional income tax return preparer, then that preparer would probably keep copies of prior years' returns.

    Look at the computer of the decedent.  Often times people prepare personal inventories on their computers.  Look at the email and correspondence on the computer.  Search for financial institutions.

    Look for quarterly statements from financial institutions.  If you have filled out a change of address form, then these quarterly statements will come to you at your new address.  And of course at the end of each tax year, there will be tax documents generated by financial institutions. 

    Review the financial records of the deceased. Try to locate each and every bank account, including the specific account numbers and the name of the bank or financial institution. This includes credit unions, savings accounts, etc.

    Review the checkbook of the decedent. Look at the expenses paid typically each month by the decedent. Cancel any non-necessary recurring expenses. This can include magazine subscriptions, newspaper subscriptions, satellite television, internet, landline telephones, etc.

    CHAPTER 5: CERTIFICATES OF DEATH

    Always obtain multiple copies of the certificate of death. You wilI need multiple copies of the certificate of death. This important legal document will be required by banks, financial institutions, life insurance companies, the Social Security Administration, et cetera.

    Usually we can help you you obtain certificates of death.

     It is much easier to get the copies at the time of the arrangements than it is to obtain additional copies later.

     CHAPTER 6: DEBTS

    Find out all the information that you can about the decedent's debts. Understand that the passing of the decedent does not eliminate the debt of the decedent. Of course you probably have no personal obligation to pay the debts of the decedent. Usually the obligation to pay the debts of the decedent is limited to the assets of the estate the decedent.

    If you're the surviving spouse of the decedent, then you may have personal liability to pay the debts of the decedent.

    Of course the estate must pay all debts owed to the IRS, state taxes, Medicare, Social Security Administration for overpayment, et cetera.

     It is wise to continue payments on any and all mortgages and motor vehicle loans. If these payments are not timely made, then the lending institution may begin foreclosure.

    Following probate of the estate, the heirs of the estate usually are required to make payments on debts associated with any property they receive.  For example, if an heir receives an automobile that has a monthly payment on it, then that heir would be required to make future payments on the automobile, after the estate has been probated and after the heir has received that asset.

    If there is a home or automobiles, then please make sure that the insurance stays in full force and effect on these assets.

    If there are significant credit cards, then make a list of the credit cards, the account numbers, et cetera. Most credit card companies do not seek repayment from an estate, unless the estate is significant. Credit card companies do have the ability to review the inventory of an estate that is pending in probate court.

    Some credit cards have built in life insurance. The purpose is to pay off that debt upon the death of the credit card holder. If you're contacted by a credit card company, be sure to inquire about any death benefits of the card.

    If there was a home, then continue to pay the regularly recurring bills. These would include the mortgage, utility, telephone, cable etc, as long as someone is residing in the home.

    If no one is residing in the home, we suggest you continue to keep the electricity and water turned on. Oftentimes, homeowners insurance will terminate if there is no electricity or water provided to the home. This is for safety reasons.

    Some insurance policies are void if the home is unoccupied. Contact the agent of the deceased to determine if this particular policy requires occupancy of the deceased home.

    If the bank freezes the funds of the decedent, then you may be forced to notify creditors that the bills will be paid once the estate has been probated and the accounts are available.

    If there is a surviving spouse, that person must pay the decedent's outstanding debts as they come due. This is assuming that all debts are valid and legally collectible.

     

    THE FIRST CHECKLIST IS "WHO TO NOTIFY."

    Here is a list of who to notify of the loss:

    1.  The deceased's employer
    1.  Retirement plans
    1.  Social Security Administration

                            1-800-772-1213

    1.  U.S. Post Office

                            Change of address form

    1.  Credit reporting agencies
    1.  Medicare – Medicaid
    1.  All creditors
    1.  Financial advisors
    1.  Voters registration
    1.  Former employers – Inquire about death benefits and retirement benefits
    1.  Veteran's Administration
    1.  The decedent's C.P.A.
    1.  Life insurance
    1.  Disability insurance carrier
    1.  Probate estate attorney Dale O’Neal, Fort Worth Tarrant County 817-877-5995

     DOCUMENTS TO LOCATE

    1.  Last Will and Testament
    1.  Marriage certificate
    1.  Birth certificate
    1.  Life insurance policies
    1.  5 years of income tax returns
    1.  Military discharge papers
    1.  Deeds
    1.  Bank statements
    1.  Financial records
    1.  Life insurance policies
    1.  Automobile titles
    1.  Deeds and mortgages
    1.  Stock certificates
    1.  Bank passbooks
    1.  Retirement accounts such as IRAs, 401ks, and pensions
    1.  Credit card statements
    1.  Powers of attorney

     

    USEFUL CONTACTS IN FORT WORTH TARRANT COUNTY

    ATTORNEY ESTATE / PROBATE: DALE O'NEAL 817-877-5995

    HANDYMAN: BRETT JEFFREYS 817-560-4070

    HANDYMAN: RONNIE RANDLE 817-923-6100

    PLUMBER: CHARLIE'S PLUMBING 817-465-6902

    ELECTRICIAN: BLESSED ELECTRIC 214-801-5755

    APPLIANCE REPAIR: GUINCO 817-835-1110

    CHAPTER 7: MISCELLANEOUS

    If applicable, notify the deceased's landlord, rental agency, or administration office (for Assisted Living or Nursing Home) as soon as possible, to discuss lease or rental agreements, and important moving out dates if necessary. Request refunds of security deposits. 

    Insurance Companies:  Contact all. the insurance companies on the list you made from the deceased's records. This includes policies that might pay death benefits to the beneficiary or beneficiaries named in the policy (such as life insurance or annuities). Contact an insurance company if you see its policy might pay for account balances (such as for mortgages, credit cards or other loans). 

    Employee Pensions and Benefits:  If you are listed as the employee's beneficiary, contact the deceased's employer and ask about any possible death benefits, retirement annuity or pension plans, and life and health insurance coverage. Unions and other professional organizations may provide benefits also. Note: Sometimes you must return the deceased's final monthly pension payment to the pension company before they send a new, adjusted payment. If the deceased was employed, notify the employer.

    Veterans Affairs:  If the deceased was a veteran, notify the VA to ask about possible death and burial benefits, and also for survivor's benefits. For information about Veteran's survivors' benefits, see the "Veterans' Benefits" section in the Financial Benefit Programs chapter in the Handbook for Washington Seniors: Legal Rights and Resources.

    Banks, Financial Institutions, and Credit Card Companies:  If you were a CO-Signer or had a joint account with the deceased, you must notify the bank or other financial institutions (including credit card companies) of the death. For joint accounts "with the right of survivorship" the survivor owns all of the money in the account, but you still must notify the bank of the death.

    Credit Bureaus:  Send a copy of the deceased's Death Certificate to each of these three credit bureaus, to help avoid identity theft:  1. Equifax By phone:  1-888-766-0008 (toll-free) By mail:  PO Box 105139, Atlanta, GA 30348 Online www.equifax.com 2. Experian By phone:  1-888-397-3742 By mail:  PO Box 4500, Allen, TX 75013 Online:  www.experian.com 3. TransUnion By phone:  1-800-680-7289 By mail:  PO Box 2000, Chester, PA 19022 Online:  www.transunion.com

     

    CHAPTER 8: THE FAMILY

    If your family has tension or is divided, then please encourage all family members to put aside their anger during this process.

    Include all family members in the ceremonies, decisions, and grief process.

    Focus on the positive aspects of the lives of the family rather than on the negatives.

    Use this time to heal old wounds and to renew family friendships.

    Try to avoid saying anything negative about any family member, including the deceased.

    Consider counseling to repair relationships.We offer grief counseling. Contact us for additional information.

    CHAPTER 9: THE ESTATE

    No funds or property should be distributed unless approved by the probate court. 

    However, certain designated beneficiaries may receive benefits without court approval.  Examples include life insurance benefits. 

    Secure all assets of the decedent.  Photograph personal property.  Have witnesses as you inventory assets. Give lists of assets to all heirs.

    Determine the identity of the executor. The executor is usually named in the Last Will and Testament of the deceased.

    If there was no Last Will and Testament, the heirs should discuss who “will be in charge.”

    Transparency and communication avoid problems and minimize professional costs.

    Never make a false representation about any assets.

    CHAPTER 10: PROTECT AGAINST FINANCIAL FRAUD

    • Be careful with social media. It's tempting to go on Facebook or other social networking sites to post tributes, create online memorials and offer personal reflections about a loved one who has died. But experts caution against it. 'The more information people give away about their deceased relatives, the more information that identity thieves will be getting," warns fraud specialist “Identity Theft 911”. Also, don't notify people of someone's death via a social networking site. If you absolutely must use these networks to communicate a death notice, send a direct message that the person has died and then shut down the account, just like you would financial accounts.
    • Don't toss; shred. If you're cleaning out a loved one's home after their death, be mindful of dumpster divers and others who steal mail. Shred important documents instead of putting them in the trash, Sileo recommends.
    • Limit personal access to sensitive data. Lastly, avoid the mistake of letting copies of the death certificate or personal records lay around unprotected, even in boxes. Take extra care to secure the financial documents of those who had been living in nursing homes or assisted living facilities. Remember, when you're dealing with a chronically-ill person or someone in a nursing home who has died, and the person was often sedated or sleeping, health care workers often have opportunity to rifle through the person's mail and files.  Unfortunately, that can lead to tragic financial events.

     YOU CAN SEE YOUR LOVED ONE AGAIN

    We believe that once a person leaves this earth that they will have the opportunity to spend eternity with God and with family, friends and loved ones. 

    But we believe the only way to spend eternity with God is to believe that Jesus is the son of God who gave his life as a ransom for man's sins, died on the cross, and arose from the grave.

    If you would like to spend eternity with God and your loved ones, then say this prayer:

    SALVATION PRAYER

    Dear God in heaven, I come to you in the name of Jesus.  I acknowledge to You that I am a sinner, and I am sorry for my sins and the life that I have lived; I need your forgiveness.

    I believe that your only begotten Son Jesus Christ shed His precious blood on the cross at Calvary and died for my sins, and I am now willing to turn from my sin.

    You said in Your Holy Word, romans 10:9 that if we confess the Lord our God and believe in our hearts that God raised Jesus from the dead, we shall be saved.

    Right now I confess Jesus as the Lord of my soul.  With my heart, I believe that God raised Jesus from the dead.  This very moment I accept Jesus Christ as my own personal Savior and according to His Word, right now I am saved. 

    Thank you Jesus for your unlimited grace which has saved me from my sins.   I thank you Jesus that your grace never leads to license, but rather it always leads to repentance.  Therefore Lord Jesus transform my life so that I may bring glory and honor to you alone and not to myself.

    Thank you Jesus for dying for me and giving me eternal life.  AMEN.

     

  • The Basics About Texas Wills

    The Basics About Texas Wills

    A Last Will and Testament is a document that can be used to control who gets your property after your death, who will be guardian of your minor children and control the property that you leave to your children, and who will manage your estate upon your death.

    A will becomes effective ​only after your death. When you sign a will in accordance with Texas laws, it is ​valid. But it does not become effective until after you die. Many people think that a power of attorney can be used to give your property away after you die. This is not true. A power of attorney dies with you. That is, when you die, the power of attorney is no longer effective.

    Before making your will, you should understand how a will works and what a will can and cannot do. If you do not understand these things, your wishes may not be carried out and people you do not intend may end up with your property.

    How a Will Works

    A will serves a number of different purposes. Each purpose is important and depending on your particular circumstances, having a will can be crucial.

    The most obvious role of your will is to direct the disposition of your property after your death. You can give specific gifts of personal items to individuals, make specific ​bequests (or gifts) of money to individuals, and allocate the balance of your assets among individuals in varying percentages. You can also leave gifts to churches, schools, and charities.

    Without a will, you have no control over who will receive your property and how much they will receive. If you do not have a will, who your beneficiaries will be and the share of your property to which they are entitled is established by Texas law—not your wishes.

    Texas calls the person who represents your estate and handles the probate process the ​executor. An executor is the person who gathers together all of your assets and distributes them to the beneficiaries. A will allows you to decide who will be the executor of your estate. If you do not name an executor in your will or if you do not have a will, the executor of your estate will be appointed by the court. Texas has a statute that establishes who can be appointed as executor and in what order. While family members are generally favored under the statutes, it is possible that an unrelated person, a bank or trust company, or even a creditor of your estate can be appointed executor of your estate.

    With a will, you can provide that your executor does not have to post a surety bond with the court in order to serve. This can save the estate a sizeable amount of money. The executor can also be granted broad powers in addition to the powers given to executors by law to handle estate matters. If you own a business, you can designate that the executor has full authority to operate the business without posting a bond or employing a professional business advisor.

    Perhaps one of the most overlooked purposes of a will is the designation of a ​guardian for minor children. In a will, you can designate who will be entrusted with the care and upbringing of your children. This way, you can avoid fights among relatives and make sure that the person who is most familiar with you and your children will raise them. If you do not appoint a guardian for your minor children, Texas law designates who will be eligible to be appointed guardian. Often to assist the court with this determination, a social study will be conducted by the child services department to evaluate who is best suited to raise your children.

    Many people have definite ideas about who they want to raise their minor children but are not confident in the guardian's ability to manage the children's inheritance. In your will, you can also designate a person to act as guardian of the children's financial inheritance.

    Your Will and Probate

    Some people think that a will avoids the probate process when in fact it does not. However, having a Last Will and Testament greatly streamlines the probate process and reduces the probate fees for your estate. A will is the document used in the probate process to determine who receives the property, who is appointed to be guardian of minor children, and who is appointed to act as executor of the estate.

    Probate is the legal process by which property is an estate is transferred to the ​heirs and ​beneficiaries of a deceased person (the decedent). Heirs are persons who are entitled to receive a decedent's property if the decedent dies without a will. Beneficiaries are persons who are named in a decedent's will to receive property.

    The probate process begins by presenting the will of the decedent to the judge or, if there is no will, by presenting a list of the decedent's property and a list of the people to whom it is proposed that the property be given.

    Property That Passes by Will

    Property that is in the name of a person will be transferred under the terms of the person's will unless it falls within certain exceptions.

    Our Law Firm

    Please call our law firm if you have questions about estate planning, a Last Will and Testament, or probate matters in general. The law offices of Dale O’Neal are in Fort Worth Texas and we serve residents of Fort Worth, Arlington and lll of Tarrant County. Please call Dale O’Neal at 817-877-5995. We draft wills as part of a complete Estate Planning Package for Texas citizens.

  • Estate Planning and Probate

    ESTATE PLANNING AND PROBATE

    Since 1983, my law firm has handled thousands of estates. 

    Estates in Fort Worth, Arlington, and throughout Tarrant County and adjoining counties.

    We would be happy to assist you with your estate planning needs and any probate issues you may have.

    Estate planning begins with a Will. 

    A Last Will and Testament is considered the most essential estate planning document.  Every person needs a Last Will and Testament.  The Last Will and Testament minimizes your probate expenses after your death, and assures that your estate will be distributed to the heirs of your choice.  Your Last Will and Testament dictates what assets go to which people, and in what order.

    Without a Last Will and Testament, the State of Texas will determine who inherits the assets of your estate.

    Without a Last Will and Testament, there is an increase of the probability of a contested probate proceedings wherein the State of Texas will determine which heirs will inherit which assets.  Without a Last Will and Testament, there is a greater chance of your surviving family getting into litigation among each other.

    The Last Will and Testament can do more than simply bequeath your estate.  If you have minor children your Last Will and Testament can appoint a guardian for your minor children. 

    Your Last Will can name a trusted person to manage the children's money (a trustee).

    Your Last Will and Testament can implement a trust that protects your minor children’s inheritance until they attain a specific age.

    A properly drafted Last Will and Testament designates the executor of your choice.  The purpose of the executor is to designate an individual who will manage your affairs, comply with the Will, and distribute the assets of your estate pursuant to your express wishes.

    A carefully drafted Last Will and Testament will appoint an alternate executor in case your primary executor is unable to serve.

    In Tarrant County all Wills are probate in the Tarrant County Probate Courts.  Tarrant County has two Probate Courts. Tarrant Probate Court No. 1 and Tarrant Probate Court No.2.

    Your Will can contain specific bequests.  A specific bequest is a gift of a specific item to a specific person upon your death.  An example might be your china goes to your daughter or grandpa's shotgun goes to your son.

    You can designate alternate beneficiaries.  The purpose of an alternate beneficiary is to make a gift in case the primary beneficiary predeceases you. 

    Texas law allows for a Will that is properly drafted to be admitted into probate in an expedited fashion.

    A properly drafted Last Will and Testament will have an attached affidavit. The affidavit will be executed in the presence of a notary.  This attached notarized affidavit  enables the Probate Court to administer the estate in a very efficient manner.

    You may disinherit anyone you chose in a properly drafted Last Will and Testament. 

    You may designate your personal funeral arrangements in your Last Will and Testament.

    As I said, your Last Will and Testament is the most basic legal document for estate planning. 

    Additional estate planning includes a Durable Power of Attorney, as well as a Medical Power of Attorney, and a Texas Directive to Physicians. 

    A Texas Directive to Physician is a document that allows you to instruct your physicians to refrain from using artificial methods to extend your life in the event you're diagnosed with a terminal or irreversible condition.

    The Texas Medical Power of Attorney is a document that allows you to designate a trusted family member or a friend of your choice to make medical decisions for you in the event you become unconscious or mentally incapable of making those decisions for yourself.

    A Texas Medical Power of Attorney is not just for the elderly.  Anyone can have an unexpected illness or an accident or an injury that can occur, so we recommend that every person has a Texas Medical Power of Attorney.

    It's important to keep these legal documents in a trusted place.  Each of these documents become very important if you become incapacitated or if you should pass.

    Probating a Will has become somewhat streamlined in the State of Texas, assuming that the Will is properly prepared by a competent attorney.

    The purpose of Texas probate is to honor the wishes that you have expressed in your Will.  The Probate Court approves the executor of your choice.  The Probate Court admits the Will into probate.  Once the Probate Court admits the Will into probate, then the assets can be distributed pursuant to the terms of your personal Will.

    Some Probate Courts require additional notice requirements to all heirs and to all designated beneficiaries.  There are special procedures that must be followed if an heir cannot be located.

    If you have a properly drafted Last Will and Testament, then the Probate Court should allow an independent administration.  An independent administration allows your designated executor to handle the affairs of your estate with minimal court interference. 

    An independent administration by the Probate Court can allow your executor to serve without posting a bond.  Once all the notice requirements have been met, and once the Probate Court has admitted the Will into probate, then the Probate Court can issue letters testamentary.  These are the court documents that allow the executor to handle all the legal aspects of your estate.  The letters testamentary act as a court authorized document that allow third parties to enter into agreements with your executor, such as buying and selling assets, etc. 

    The probate of an estate is in the county of Texas where the decedent resided.  Tarrant County has two Probate Courts.  If your spouse has predeceased you, then you may have to probate the second estate in the same Probate Court in Tarrant County that handled the first estate.  

    Each of these two courts, and state law, requires that the executor prepare an inventory of all of the assets and debts of the estate.  No two probate inventories are alike.  The inventory focuses on the larger items of the estate first.  Typically real estate, houses, and then to financial investments, etc.  When an individual hears the word "inventory" they usually think that they need to make a list of the furniture in the house.  That's not true.  The inventory focuses on the larger assets. 

    If you die in Texas without a valid Last Will and Testament, then your heirs will have a very difficult procedure.  Without a Last Will and Testament, a Texas Probate Court will impose upon your heirs a dependent administration.  A dependent administration is a court procedure that requires the court to approve virtually every transaction.

    When the probate  court reviews every transaction, you have to have a lawyer appear with you in the court for each review.  For this reason alone, it's vital that every Texas resident with any assets whatsoever have a Last Will and Testament. It’s far cheaper, and more prudent, to pay the expense of estate planning rather than leave your heirs with a difficult, expensive and frustrating probate procedure.

    If the court orders the estate to have a dependent administration, then the Court will require an accounting.  An accounting of how much money comes in, how much money goes out.

    An independent administration usually does not require an accounting.

    If there is no Last Will and Testament, then the court and state law have alternative remedies.  These are commonly called "procedures in lieu of administration."

    Texas law allows for a muniment of title.  A muniment of title is available if there is a Last Will and Testament and there are no unpaid debts.

    Texas law allows for a "proceeding to determine heirship." 

    A proceeding to determine heirship can be used to distribute the estate of a person who does in Texas without a Will and leaves an estate that needs to be distributed to obvious heirs. 

    Texas also has a procedure for smaller estates.  A small estate can be distributed at times with an affidavit if properly drafted by an attorney and filed with the appropriate records of the county. 

    Our law firm has handled thousands of estates.  We have represented clients in Ft. Worth, Arlington, as well as all of the other cities within Tarrant County.

    We realize how important this is to you.  An estate is often a lifetime accumulation.  An estate can be your lifetime efforts, your estate represents your lifetime savings.  Your estate represents everything that you have created and saved to give to specific heirs.  We understand how important this is to you.  Please call our law offices if we can help.  Dale O’Neal, Attorney at Law. 817-877-5995  God bless.