Why Living In Las Vegas is Great For Your Taxes

Posted by on Apr 21, 2017 in Advice From the Experts, Legal, Tax Litigation |

There are so many reasons to live in Las Vegas. Underneath its glorious entertainment façade, Las Vegas which is under the state of Nevada, also boasts itself for being one of the nine states that do not collect income tax from its residents. The other eight states include Alaska, Florida, South Dakota, Texas, Washington, Wyoming, and Tennessee. It doesn’t mean, however, that the residents of these states do not pay taxes altogether. The state needs funds to finance their social and economic programs but in these states, the taxes are being collected in other forms.

Being free from paying income taxes, Las Vegas is an ideal place to consider during retirement. It is also a better place to find a job since your take home pay will be bigger because it is not subjected to tax. And since Las Vegas is a wealthy city with all its entertainment establishments and business centers, there are more chances that you can find a job here that pays better than the rest of the states.

Many wealthy individuals also live in Las Vegas. Las Vegas has more to offer than the Las Vegas Strip. There are many beautiful neighborhoods and communities dotted with lavish homes. The golf courses surrounding these communities also makes it a great city for retirees to live in. The luxury homes in Las Vegas, Nevada are fairly priced, so you’ll feel like you’re getting your money’s worth.

Being the gambling and tourism capital of the world, Las Vegas has been attracting businessmen and tourists every year. In recent years, its revenue from non-gambling tourism like shows, nightclubs, retail and electronic dance music has increased. The reason for the influx of business and tourism in this area is contributed to its no income tax policy for businesses and resident. In lieu of income tax, businesses are only being subjected to a business tax of only 1.17% (2% for a financial institution) on their employees’ salary after deducting healthcare expenses.

Again, Nevada also needs funds to finance its programs and them way to do that is by putting tax through sales and services around 6.85%.  This is where 72% of Nevada’s revenue is coming from. Under the Tax Foundation’s 2011 report, the state ranks 15th lowest out of all 50 states when it comes to average per-capita and local tax payment.  This is good news for you since most of the taxes are coming from sales and services that most tourists would shoulder instead of you paying for income tax.

If there is a downside to living in a state with no income tax, it is the above-average sales tax that you also need to face every day. But this can easily be resolved by wise decision-making and creating a budget for only the important things that you will need. You can start making a “to-buy” list with the salary you receive free from hefty deduction of income tax. You will agree if I say that it is easier to make a budget from a bigger capital than a limited income.


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Understanding How the IRS Handles Tax Fraud Cases

Posted by on Apr 5, 2017 in Advice From the Experts, Legal, Tax Litigation |

How the IRS Handles Tax Fraud Cases

The method put in place by the IRS to identify tax offenders is seamless starting from alerts using credit scores and social security numbers. Offenses when identified fall into two categories: negligence and fraudulence.

Defining Negligence

The act of negligence is defined in terms of a taxpayer making an error in the computation of tax which often involves wrong figures and mixed up calculations in tax returns. In this case, the IRS views this as not a willful attempt to avoid paying taxes and therefore files civil charges. Lawrence Bronw, a tax attorney in Dallas, often tells people that hiring a trustworthy accountant is imperative. If an accountant accidentally enters a wrong number or files your taxes incorrectly, you’ll end up with a big headache.

Defining Fraud

Fraud, on the other hand, is definitely a wilful attempt to cheat the system and avoid paying rightful taxes. Fraud covers having different accounting records, forging of relevant documents, and alteration of figures in tax records and avoidance of filing tax returns for no justifiable reason. When crimes such as the before mentioned are committed, the IRS pursues legal action in both civil and criminal areas.

Studies: 17% of Taxpayers Cheat

A recent study conducted by the IRS revealed that in the United States, 17% of taxpayers cheat when filing tax returns. The perpetrators are often engaged in occupations that are mainly cash heavy. They include the hospitality industry workers, construction crews, shop attendants, lawyers, wayside shops, and doctors. Even with the known statistic, the rate at which the IRS charges offenders is relatively low.

In the year 2016, the number of individuals and corporations charged with tax offenses in total accounted for less than 1%. The audit process for tracking down both classes of offending taxpayers is currently receiving an overhaul so as to fast track the process. Previous year figures show that audits for all taxpayers groups have been increasing.

The actual conduction of the criminal investigation is carried out by the IRS Investigations Department where specially trained agents are well versed with the methods and in the knowledge of how to identify potential tax cheats and prosecute the offenders with the evidence gotten from investigations.

Also, how to build a case is something they are well versed in so if the matter happens to be charged with a criminal offense, the process of evidence gathering would not be a problem. In the likelihood of being contacted by any IRS agent, then you should be aware that criminal charges are being investigated.

Before the IRS launches a full on investigation, the first step and also the most common is to launch an audit. This starts by sending a correspondence audit; a letter stating that the IRS is getting ready to charge your return and also more money. This is often caused due to discrepancies and differences between your documents and that of a third party.

To handle this, the best way would be to reach out to the IRS by asking where the problems are and correcting them before sending back. The other step involves an office audit where the IRS auditor engages you in a face to face conversation going over the details of your return. This step only comes about if you failed to cover the errors in the correspondence audit.


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