The Crypto Lawyer

Friday, June 7, 2024 - Welcome to the Trust Radio Network, where we bring you insightful interviews with leading attorneys. In this episode, we are honored to have attorney Nishay Sanan join us. Nishay is a highly respected legal professional known for his outstanding work in criminal defense and complex litigation.

Join us as we delve into Nishay's journey in the legal field, exploring his most challenging cases, the intricacies of criminal defense, and his views on the current legal landscape. Whether you're a legal enthusiast, a professional in the field, or simply interested in the stories behind the headlines, this episode promises to offer valuable perspectives and engaging conversation.

Tune in to the Trust Radio Network and discover the insights and experiences that shape the world of law with our esteemed guest, attorney Nishay Sanan.

Discover the key differences between an S Corporation and a Single-Member LLC in our latest video. We delve into the advantages and considerations of each business structure, including tax benefits, operational flexibility, and compliance requirements.

Whether you're seeking to minimize taxes with an S Corp's salary-dividend strategy or prefer the simplicity and ease of a Single-Member LLC, we've got the insights to help you make the best choice for your business.

Don't miss out on essential tips to navigate your business structure decision with confidence. Watch now and
empower your business journey.

In this short video, I share the journey of my family across generations, transitioning from the hard labor of ironworking to the strategic battles of tax law. My story begins with my father, who carried on the ironworking legacy of my grandfather but sought independence from the constraints of union life.

Driven by a desire for autonomy, he started his own janitorial business, tackling a wide array of clients from grocery stores to airplane hangars. Despite the company's growth, a significant oversight in maintaining proper records led to its downfall.

Following in the footsteps of my father and grandfather, I too became an ironworker, proud to be the third generation. However, life steered me towards a different path, and now I'm a tax attorney. My mission is to help business owners safeguard what they've worked hard to build. Battling the IRS isn't just a job for me; it's personal. This isn't merely a story of shifting careers; it's a narrative about legacy, evolution, and a deep-seated drive to overcome challenges.

The Secret to Stress-Free Tax Season: Mastering Record-Keeping

Attorney Leahy explains IRS Form CP2000

Attorney Leahy reviews Trump's Promise to protect Americans from a Central Bank Digital Currency

Friday, December 1, 2023 - In this insightful episode of Today’s Tax Talk, Attorney Steven Leahy explores the intricate process of selling property under the weight of federal and state tax liens.

With a focus on practical guidance, the episode demystifies the complexities surrounding federal tax liens, offering step-by-step advice on handling IRS Form 14135 and navigating the necessary documentation for a successful property sale.

This episode also delves into the specifics of dealing with state tax liens, using Illinois as a case study. This is a must-listen for homeowners and real estate professionals grappling with tax-related property sales, providing clarity and insights into this challenging aspect of real estate.

Tuesday, November 21, 2023 - I recently wrote about the residency vs domicile question for Illinois residents moving to Florida. These taxing authorities do not acquiesce to taxpayers’ stated residency. They do not want to let the tax dollars go to any other jurisdiction. If you want to go to a low-tax State from a high-tax state – be prepared for the State to object.

In that vein: Pop superstar Shakira has avoided potential imprisonment by striking a last-minute deal on the opening day of her tax fraud trial in Barcelona. After nearly five years of maintaining her innocence, she admitted to six counts of failing to pay 14.5 million euros ($15.8 million) in Spanish taxes between 2012 and 2014. The trial, anticipated to last weeks with over 100 witnesses, ended within eight minutes.

Shakira agreed to a suspended three-year sentence and a 7.3 million euro ($8 million) fine, along with unpaid taxes and interest. A guilty verdict for tax fraud is now on her legal record, impacting another ongoing tax case.

The case revolved around her residence during 2012-14, with prosecutors arguing she spent sufficient time in Spain to warrant paying taxes on her global income, even though her official residence was in the Bahamas, where taxes are lower. Spain has pursued high-profile tax evasion cases. And will pursue more, I’m sure.

The Spanish Government alleged fraud – and threatened to imprison Shakira. Even if she believed she was innocent, it’s hard to face jail time if you lose. Innocent people go to jail all the time.

Thursday, November 9, 2023 – Attorney Leahy explains how to protect your Social Security money using a special law known as 42 U.S.C. § 407. This law keeps your Social Security benefits safe from most debts and the people you owe money to.

Attorney Leahy points out that there are a few instances when this law doesn't apply, such as if you owe child support or taxes. He explains that the best way to keep your Social Security money safe is to segregate Social Security funds into a separate bank account – and don’t commingle any other funds with it.

By treating your Social Security this way, even a bankruptcy trustee can’t reach it. And, if a creditor tries to take your Social Security money, alert your bank right away and remind them of your rights.

By breaking down these steps, it is easy to understand how you can look after your Social Security benefits.

Friday, November 3, 2023 - Here at Opem Tax Advocates, Inc. we help lots of business owners transition their sole proprietorship into real corporations. The dream of guiding your own company toward success begins with a solid foundation, which is rooted in the systematic process of incorporation. In this column, we'll review the 8 steps of incorporating a business.

1. Pick a Name: Your Business Identity

Your business name is more than just a label; it's an essential aspect of your brand identity. When selecting a name, consider its relevance to your business, ease of recall for potential customers, and its marketing potential. Ensure it's unique, and not overly similar to existing business names, to carve out your own niche in the market.

2. Search State Database: Verifying Name Availability

Once you’ve chosen a prospective business name, the next step involves verifying its availability. Most states provide an online database where you can conduct a name search to ensure no other entity is operating under the same or a highly similar name. The aim is to avoid legal disputes and ensure that your business name is distinctly your own.

3. Complete Articles of Incorporation: Establishing the Legal Framework

Drafting and filing the Articles of Incorporation with the relevant state authority solidifies your business's legal foundation. This document generally encompasses essential information like your business name, purpose, duration, stock details, and information about the incorporators and registered office. Ensure accuracy and thoroughness to prevent potential legal complications down the road.

4. Name a Registered Agent: Your Legal Liaison

A registered agent acts as your corporation’s official point of contact, receiving legal papers and government notifications on your behalf. Choose a reliable individual or service with a physical address in the state of incorporation and who is available during standard business hours to manage such important documents.

5. Pay the Fee: Investing in Your Entity

There's a requisite fee associated with filing your Articles of Incorporation, which varies by state. Make certain to review your state’s specific fee structure and ensure timely payment to avoid any unnecessary delays or complications in the incorporation process. Remember, filing fees are required yearly. In Illinois, the filing fee is $75.00 minimum.

6. Obtain an Employer Identification Number (EIN): Your Tax ID

Securing an EIN from the Internal Revenue Service (IRS) is crucial for tax purposes and is typically required to open a bank account under your business name. This unique number identifies your business in the federal tax system and can typically be obtained swiftly online. It acts much like your social security number.

7. Elect Subchapter S Designation: Navigating Tax Implications

If you choose to opt for Subchapter S designation (S-Corp), ensure to file Form 2553 with the IRS. This election allows corporations to bypass federal income tax, with profits and losses directly passed through to the shareholders. Ensure compliance with all requirements, and consider seeking advice from a legal professional to navigate the complex tax implications.

8. Open a Business Bank Account: Securing Your Financial Foundation

With your Employer Identification Number (EIN) in hand, the next pivotal step is to establish a business bank account. This is not merely a step towards financial organization but also a crucial move to ensure the separation of your personal and business finances - a distinction that is vital for legal and tax purposes.

Continuing your business by incorporating need not be overwhelming. By systematically navigating through these steps, you fortify your business's legal and operational foundation, paving the way for a stable and successful future. Good Luck!

Wednesday, November 1, 2023, "Domicile" and "residency" are terms that are often used in legal, tax, and personal identification contexts, and they can have different meanings based on the jurisdiction or the specific situation in which they are used. However, in a general sense, here's how the two terms differ:
Domicile:

Definition: Domicile refers to the place where an individual has their permanent home and to which they have the intention of returning, even if they are currently living elsewhere. It's about long-term or permanent attachment to a location.

Intention: A person can only have one domicile at a time, and changing one's domicile often requires a clear demonstration of intent to abandon the old domicile and establish a new one. This might involve actions like buying a home, establishing social and economic ties, or registering to vote in the new location.
Legal Implications: Domicile can affect issues like jurisdiction for legal actions, marital rights, inheritance, and certain tax obligations. For example, in many jurisdictions, your domicile can impact where your will is probated or how your estate is taxed.

Residency:

Definition: Residency refers to the place where an individual currently lives, even if it's temporary. Unlike domicile, an individual can have multiple residences in a year.
Duration: Residency can be established more easily than domicile and might be based on a certain minimum duration of living in a place or other criteria.

Legal Implications: Residency can influence where you pay state or local taxes, where you can vote, and where you can claim benefits like in-state tuition at universities. Some places have specific criteria to determine residency for tax purposes, which might differ from the criteria used for other purposes.

It's important to note that both domicile and residency can have specific legal definitions and criteria that vary by country, state, or jurisdiction. Therefore, when addressing issues related to either term, it's essential to understand the specific rules and definitions that apply to the relevant jurisdiction.

We put together a checklist of actions you can take to change your domicile. The Illinois Department of Revenue is often aggressive in fighting the transfer of Domicile from Illinois to another state. The checklist is a non-exhaustive list. Conceivably, you can check every box and still be challenged on Domicile. Illinois wants your tax money and is willing to fight to get it. If you would like a checklist, send me an email request. [email protected].

Friday October 13, 2023 - Meet Attorney Heidi Keenan. Attorney Keenan. has been in operation since 2005. During that time, she has helped clients navigate life's changes from buying their first home, to settling their final affairs. Her practice focuses in three primary areas: Estate Planning, Probate, and Guardianship; Social Security and Veterans Disability; and working with small businesses.

Tuesday, October 10, 2023 - No one likes letters from the IRS – especially when the letter signals an audit! When the alarm bells of a tax audit ring, panic can ensue, and the immediate reaction is to pick up the phone and call: your accountant. Your accountant may have a deep understanding of your financial situation, but think twice before sending them out to represent you. Here are Three reasons hiring your accountant is a bad idea.

1. Lack of Legal Privilege
Unlike attorneys, there isn’t any accountant/client privilege. That means your accountant may be required to expose sensitive information during an audit. Attorneys are shielded by the Attorney-Client Privilege. This privilege provides a secure environment for you to disclose all necessary information without fear that it might be used against you.

Unfortunately, conversations and correspondences with accountants may be scrutinized in an audit. So, be careful, your accountant may be required to expose your financial dilemmas and strategies.

2. Training – Law, Negotiation, and Tactics
Your accountant may be a financial wizard but probably doesn’t have the training as an advocate, or negotiator. Remember, IRS Collections and examinations are a whole different area of the tax code than accounting. Tax attorneys possess a deep understanding of tax codes, precedent, and legal argumentation that can make all the difference in challenging the IRS's claims and presenting a strong defense.

3. Preventing Conflicts of Interest
Remember, if your accountant was responsible for preparing your returns, they might inadvertently become part of the audit scrutiny. Their work, advice, and any errors or misjudgments they may have made will be under the microscope, potentially placing them in a position to defend their professional competency. If that happens, they may throw you under the bus.

When it comes to audits, don’t play games, hire a professional. You need an attorney with precise knowledge of tax law, negotiation capabilities, and a detached perspective. These qualities can pave the way for a more strategically sound, confidential, and strong defense against audit claims.

In the taxing times of audits (pun intended), remember that the right representative can be the linchpin in safeguarding your financial health against the scrutinizing eyes of the IRS.

If you want more tips, tricks, and info about the IRS go to OpemTax.com – OPEM tax.com and sign up for our Freedom Fighters newsletter. It’s FREE.

Wednesday, October 4, 2023 - The game is changing. I saw at least 10 articles today about the IRS targeting business owners and high-net-worth individuals. So, now more than ever, you need to secure your business’s financial matters. So, how do we navigate through this and safeguard our endeavors? Here’s a simplified guide:

1. Immaculate Record-Keeping is Non-Negotiable

Every Penny Counts: Ensure each penny that enters or leaves your business is well-documented. This guards not only against audit troubles but also provides a clear financial picture of your business.

Embrace Technology: If you haven’t yet, incorporate online accounting software like QuickBooks or Patriot into your financial management. With the advent of Artificial Intelligence, these tools are becoming increasingly adept at simplifying bookkeeping.

Secure Professional Help: Engage a tax advisor and, if needed, a bookkeeper to ensure that all is accurate and orderly.

2. Be a Maestro of Smart Tax Planning

Navigate the Maze: Taxes can perplex even the savviest among us. Smart planning transcends lawful adherence; it's about harnessing the rules to benefit your business.
Strategic Knowledge: Know what actions are permissible and advantageous, understand what to claim, and discern where savings can be maximized to bolster your business financially.

3. Uphold a Clean and Honest Business Ethic

Beyond Morality: An honest and transparent business approach isn’t merely ethically sound; it’s economically smart too. A clean modus operandi does not only facilitate smooth interactions with the IRS but also enhances your reputation, which is an invaluable asset.

Unified Honesty: Ensure your team embodies the same ethical values to maintain consistency and integrity across all business operations.

4. Leverage Expert Advice

Decoding the Financial Language: The financial regulatory environment can be a perplexing landscape. Aligning with a professional who comprehends the intricacies can shield your business and unveil new financial opportunities.

In essence, with the IRS scrutinizing more stringently, ensuring our business finances are clean, transparent, and above reproach is paramount. Methodical record-keeping, intelligent tax planning, ethical business operations, and procuring professional advice are not just shields but also strategic weapons in ensuring your business not only survives but thrives in this scrutinized environment.

Maintain honesty, act smartly, and let’s fortify our businesses to be robust and untainted. Also, consider becoming a Freedom Fighter to harness collective wisdom and support. Visit OpemTax.com and subscribe to our FREE email newsletter for more insights and support tailored for business owners like you.

Tuesday, September 26, 2023 - In my IRS news feed today, there was a deluge of articles – count them, 15 – all spotlighting a fresh IRS rule concerning the resale of concert and sporting event tickets. Normally, when you see a spike in stories around a particular IRS subject, it screams of a new revelation, report, or directive by the IRS. I did a bit of digging but found nothing new.

But, let’s cut through the fog – this isn’t groundbreaking news. I’ve been on this story for some time now. This tax-related stipulation was slipped into the American Rescue Plan Act of 2021, amidst a maze of other budgetary components. It modifies the reporting standards of IRS Form 1099-K, a change that took some digging to unearth.

To bring you up to speed: In the past, Third-Party Settlement Organizations (TPSOs), think Ticketmaster and StubHub, were required to issue 1099-K reporting forms only to users raking in $20,000 in revenue AND logging more than 200 transactions. So, the paperwork was minimal. The new regulation mandates reporting for anyone pulling in over $600 in revenue, no matter the number of transactions, widening the net considerably.

This piece of regulation was scheduled to roll out in the 2022 tax year. But the IRS, seemingly playing it wise, put the brakes on it on December 23, 2022, right when the 2022 filing season was knocking on the door, labeling this delay a “transition period.”

Now, as the transition period wraps up, the new regulation is on deck for the 2023 tax year. There’s legislative maneuvering in progress to amend this rule. The Small Business Jobs Act is gunning to overturn the new rule and reinstate the old ones. Meanwhile, the Red Tape Reduction Act wants to boost the threshold to $10,000 in revenue and 50 transactions.

The final resting point of the threshold is yet to be seen. But what’s clear as day is that the IRS is poised to be swamped, seemingly unprepared for the impending avalanche of forms expected with any tweak to the current setup. It’s time to stay informed, be proactive, and always remember, in a world full of red tape and regulation, knowledge is your greatest ally and weapon.

Monday, September 25, 2023 - Listen up, taxpayers—I'm here to tell you that your business structure isn't just a bunch of paperwork; it's a game-changing strategy. Get this wrong, and you'll pay for it, literally—in taxes, and maybe even in lawsuits. But get it right, and you're one step closer to financial freedom.

You've got options. Let's start simple: Sole Proprietorship. It's the easiest to set up but don't get too excited. This structure ties your personal finances to your business, meaning if your business goes belly-up, your personal assets are on the line. And here's another kicker: all your business profits are taxed as personal income. You think that's smart money? Think again.

Now, let's talk about the Limited Liability Company, or LLC. It's the darling of the small business world for good reason. With an LLC, your personal assets get a layer of protection, and you can decide how you want the IRS to tax you. But remember, flexibility means more decisions; more decisions mean more room for mistakes. Get educated.

Then we have corporations—S-Corps and C-Corps. S-Corps are similar to LLCs but come with their own maze of rules. As for C-Corps, they’re their own beasts entirely. The corporate tax rate may be lower but beware of the double taxation trap. Profits can get taxed twice—first at the company level, then again when they reach your pocket as dividends.

Look, taxpayers, don't play guessing games with your financial future. It's critical to talk to a tax attorney and get the best advice for your specific situation. Remember, it's not just about making money; it's about keeping it, and making it work for you.

Crypto-Tuesday, September 19, 2022 - Hey taxpayers, If you're messing around with this Bitcoin and other digital money, you better brace yourselves. The government wants their cut too, and they're real serious about it.

So here's the thing: end of the year comes, and WHAM! You get hit with a ton of these 1099-B tax papers (soon to be 1099-DAs) What's a 1099-B? Well, it's a paper that says how much you made or lost trading stuff. And guess what? Every place you traded crypto is gonna send you one. So if you're trading a lot, or using different apps to do it, you're gonna have a mountain of papers to deal with. I have clients who received 100’s of 1099-B forms in one year!

Don't think you can get just any brainiac with a calculator to figure this out. This crypto tax stuff is like the Wild West, and you need someone who knows the ropes. So get someone who really gets how digital money taxes work.

And here's the kicker: some of these trading places don't even send out 1099-Bs. So you gotta be real careful, or you're looking for trouble with the IRS. My old man used to say, "Time is money." So use your time wisely and get to know how taxes work with this crypto stuff.

Hey, I know it sounds like a headache, but life ain't always easy, right? This is part of the game if you wanna get rich and keep your money safe. Just remember, the taxman always wants his share, so you better be ready. It's not just about making a quick buck; you gotta be smart about keeping it too.

Monday, September 18, 2023 - Listen up, taxpayers. You think you know, but you have no idea. The game's changing, especially when it comes to taxes and the IRS. I've been teaching high-level classes on this stuff for years, and let me tell you, the best way to master something is to teach it. Currently, I'm working on my third class with Lorman Education Services, and we're diving deep into the world of IRS Form 1099.

Now, I bet most of you have heard of a 1099 form. You've probably even received one. But do you actually know the true power behind this simple piece of paper? It falls under what they call "Information Returns," and these are the IRS's watchdogs, making sure you, me, and everyone else are paying our fair share.

Last year, get this, there were nearly 5.5 billion of these third-party information returns filed—5.5 billion! And a whopping 86% of those were 1099 forms. But it doesn't stop there. There are 21 different flavors of this form, and the IRS just introduced a new one, Form 1099-DA, for digital assets. That's right, they're keeping an eye on your crypto.

And you know what else is hitting the headlines? The rules for the 1099-K cash apps. They were supposed to kick in, but Uncle Sam pushed it back a year. So, in 2023, the game changes. The threshold for getting hit with a 1099-K just plunged from $20,000 and 200 transactions to a mere $600. You think this won't affect you? Think again.

Erin Collins, the Taxpayer Advocate, is speculating that this change might double the number of 1099s next year. If that happens, well, brace yourself for the IRS to be slower than molasses, trying to sort it all out.

So, if you're in business, or thinking of getting into business, you better get your ducks in a row. These 1099 rules aren't just random guidelines; they're how the IRS keeps tabs on us. So educate yourself. It's not just about making money; it's about understanding the rules of the game so you can play it better than anyone else.

Thursday, September 14, 2023 - It's clear as day: Biden's promise to refrain from auditing households and small businesses making less than $400,000 a year was never believable from the get-go. The Treasury Inspector General for Tax Administration (TIGTA) just dropped a bombshell report saying as much. They reveal that the IRS is hopelessly out-of-date, using income thresholds from 1976! That's right—while your cost-of-living skyrockets, the IRS is stuck in a time warp, holding onto an archaic definition of "high income" set at $200,000. This bureaucratic inflexibility isn't just a quirky footnote; it's leading to more audits for the little guy.

What's even more shocking is that when TIGTA recommended that the IRS update this decades-old standard to align with Biden's supposed $400,000 pledge, the IRS flat-out refused. They claim they need "agility" to go after anyone they please. This isn't agility; it's a power grab. The IRS wants an unchecked ability to audit whomever they wish, flying in the face of the President’s alleged intentions.

TIGTA didn't mince words either. They slammed the IRS for having "no common understanding" of what high-income even means. And let's not forget the report’s title: "The IRS Needs to Leverage the Most Effective Training for Revenue Agents Examining High-Income Taxpayers." Translation? The IRS is not just outdated but woefully unprepared to enact even their own directives.

So here it is, plain and simple: the IRS isn't about to rein itself in, and the Biden administration's pledges are looking emptier by the day. It’s another glaring example of why expansive government power should be viewed with the utmost skepticism.

https://www.tigta.gov/reports/audit/irs-needs-leverage-most-effective-training-revenue-agents-examining-high-income

Monday, September 13, 2023 - The IRS was granted $80 billion in the Inflation Reduction Act, a development that has many concerned about an uptick in audits. I've long warned that the real issue to watch out for is the increased scrutiny enabled by information technology and artificial intelligence (AI). Now, my concerns are coming to fruition.

Armed with this windfall, the IRS has declared its intent to use AI to audit wealthy individuals and large financial partnerships, specifically those with an average of $10 billion in assets. While the agency's initial focus appears to be on high earners and the ultra-rich, the fundamental issue is the Pandora's Box that opens when the IRS begins to integrate AI into its audit procedures. Once the technology for "pattern recognition" and trend identification is unleashed, what safeguards are in place to prevent its application on middle-income Americans?

Today, the IRS says it will go after those who earn more than $1 million and have more than $250,000 in recognized tax debt. Seems fair, right? But don't be fooled. The IRS has also signaled its intention to cast its AI net over digital assets—a rapidly expanding field that many average earners are entering - and all 1099 information return earners.

So, why does this matter? Because today's focus on high-income earners is just a precursor to extending this technology to average Americans. While some may celebrate these developments as efforts to make the wealthy pay their 'fair share,' we must question what this means for the freedoms and privacy rights of all taxpayers. With the IRS's enhanced capabilities courtesy of the Inflation Reduction Act, it's more critical than ever to remain vigilant against potential overreach and abuse.