Individual Taxation

Swift help for unfiled tax returns and other IRS red flags.

The goal of most taxpayers is to pay the least amount of tax in a manner that is unquestionably legal. The Law Offices of Alan F. Segal & Associates, encourages clients to take full advantage of legal deductions, to avoid deductions to which they are not entitled, and to recognize the difference. For more than 45 years, our tax attorneys in Chicago, Illinois have helped individuals with everything from long-term tax planning to questions regarding line items.

Common red flags for federal tax returns

Federal tax controversies often begin when the IRS processes a return and finds a common, obvious omission or misstep. Individual taxpayers should be careful to avoid drawing attention to their returns. Segal & Associates encounters clients with personal tax issues that include:

  • Lack of basis in an S-Corp to claim income loss — Often, the owner of an S-Corp will claim a loss on his personal income tax return for which he has insufficient basis for writing off that amount.
  • Failure to report stocks sales — If a taxpayer sold a stock at a loss, he might think he does not have to report the sale. However, the law requires this to be reported. If a taxpayer fails to report the loss, the IRS will treat the transactions as if they were no cost basis for the stock and assess a tax on the full amount of the sale.
  • Schedule C income omissions — An independent contractor is responsible for reporting all income on a Schedule C, regardless of whether he received a Form 1099 from an employer. When an employer fails to send the contractor a Form 1099, the contractor might assume he's been paid "under the table." But often, the employer fails to receive the income to the IRS.
  • Identity theft — If someone steals your Social Security number and uses it to obtain employment, his income will be reported in your name and the IRS will expect you to pay the appropriate taxes.

The Law Offices of Alan F. Segal & Associates assists individual taxpayers with advice, planning and representation during IRS inquiries.
To schedule a consultation, call us at 312-444-1700.