Frequently Asked Tax Law Questions

I haven't filed taxes for six years. So far, the IRS has not sent me any letters. I don't think I owe any taxes. Should I file the back returns?

If you worked or had taxable income in any of the years, you should file for that year or those years. If you are due a refund, you waive (give up) that refund if you wait too long to file your return. That means that the refund will not be applied to a year that tax is due. Even if you don't owe taxes for a year that you had taxable income, you should file. The IRS can file a return for you, taking into consideration only your income, but not your deductions or correct exemptions.

I never worked until after my divorce two years ago. My husband always took care of the checkbook and the tax returns. In fact, I never signed a tax return. The IRS now says that I owe back taxes. What can I do?

You may qualify under the "innocent spouse" provisions of the IRS Code. Under that provision, a spouse can be excused from tax liability if certain facts are present.

My wife and I are getting a divorce. She will have the children with her and I will be paying child support and temporary alimony. Who gets what exemptions and deductions?

Unless the divorce decree says otherwise, you will get a deduction for the temporary alimony and she will include the temporary alimony as income; the child support is not deducted by you nor included by her as income; the exemptions for the children go to the parent with whom they live.

I am going to be buying and selling stock. What records should I keep for my taxes?

You need to keep a record of the dates of each transaction, the number of shares in each transaction, the cost per share for each transaction and your commissions. If you are buying through a broker, you should receive written confirmation of each transaction as well as a year-end summary. Keep all this information together. You pay tax on a gain only when you sell. It may be several years before you need the information, so save everything and match up your purchases and sales as they occur.

I want to give my children each a sum of money over the next 10 years. What do I need to do as far as the IRS is concerned?

Depending on how much you give in any given year, the effect can vary. You may be required to file a gift tax return in some instances. Such gifts to your children are not tax-deductible on your personal tax return.

Attorney Brian D. Williams, with his academic background in accounting and economics and professional experience as an accountant, has in-depth understanding of taxation issues related to a variety of legal matters. Call 832-717-1717 or email us to schedule a consultation.