• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Raleigh Estate Planning and Corporate Law Attorneys

  • ABOUT US
  • Attorneys
    • Lesley W. Bennett
    • Frances M. Clement
    • Reginald B. Gillespie, Jr.
    • Campbell K. Kargo
    • Michael A. Ostrander
    • Daniel C. Pope, Jr.
    • Kristine L. Prati
    • James E. R. Ratledge
    • Toler W. Ratledge
    • Paul F. Toland
    • Thomas J. Wilson
  • Practice Areas
    • Business Law
      • Business Startup
      • Business Operation
      • Mergers And Acquisitions
      • Exit Strategy / Succession Planning
      • Professional Practice Representation
    • Civil Litigation
    • Estate Planning and Trusts
      • Estate Planning and Asset Preservation
      • Estate and Trust Administration
      • Estate and Trust Disputes and Litigation
      • Special Needs Trusts
      • Medicaid Planning
      • Elder Law
    • Commercial Bankruptcy Litigation
    • Government Defense
    • Real Estate, Development & Land Use
    • Workers’ Compensation Defense
  • Blog
  • Resources
  • CONTACT US
  • 919-787-7711
You are here: Home / Blog

So You Received Notice Of An IRS Audit. What’s Next?

October 7, 2021 By wrlaw

IRS audits are thorough and often result in penalties (and prosecutions in cases of criminal conduct). Consequently, many people are alarmed when they get a letter from the tax man notifying them of an audit of their taxes. 

There is nothing to be worried about if you don’t have anything to hide. However, it is still important to prepare properly for the audit to expedite the process and avoid harsh consequences. Here is a brief guide on what to do if the IRS is auditing you. 

Know What to Expect 

One of the first questions that will pop up in your mind when you receive the audit notification is, “what will happen now?” It’s easy to start to worry about worst case scenarios – instead, conduct quick research to familiarize yourself with IRS tax audits. 

Start by reading the audit letter from the IRS carefully. The letter will contain important information regarding the audit, including:  

  • Why you have been selected for the audit 
  • The steps to take to comply with the audit 
  • The deadline for complying with the request 

It is important to find out how the IRS intends to conduct the audit. The IRS can take one of three approaches: 

  • Correspondence audit (by mail)
  • An office or desk audit (at the local IRS offices)
  • A field audit (in person at your home or business) 

Finally, don’t hesitate to ask as many questions as you may have regarding the process and why you were selected for the audit. Ensure that you get your information from trustworthy sources to avoid potentially costly confusion. 

Prepare Your Responses & All Relevant Documents 

The IRS will include instructions in the notification letter on what to do to comply with the audit. These instructions mostly entail providing the IRS agents with receipts and other financial documents relevant to the audit process. 

Some of the common documents required in an IRS audit include: 

  • Bills 
  • Receipts 
  • Bank statements 
  • Copies of old tax returns 
  • Tickets 
  • Canceled checks 
  • Medical records 
  • Loan agreements 

Please ensure that these documents are authentic and up to date. Whether you’re being audited or not, it is a good idea to properly store and retain your financial records and documents in preparation for situations such as these. 

It is important to comply with these requests on time to expedite the process and avoid harsh penalties – don’t hesitate to request a postponement to collect and organize all of the requested documents. Additionally, it is advisable to avoid providing more documents than requested (some people do this to try to prove their innocence), as this may send the auditor looking for more errors.

Hire a Tax Attorney 

The IRS uses complex algorithms to identify potentially fraudulent practices that warrant an audit. Additionally, tax law and calculations are just as complex – often too complex for the ordinary person to follow. It is easy to make mistakes that warrant harsh penalties, such as expensive fines and prosecution (with the potential for serving time in jail in some of the worse cases). 

Many times, it is advisable to hire a tax attorney familiar with these types of proceedings before starting correspondence with the IRS. Tax attorneys are intimately familiar with tax law, and so your attorney will do their best to shield you from unfair treatment from the IRS. Other benefits of hiring a tax attorney include: 

  • Helping you find and prepare all documents requested by the IRS 
  • Reducing the risk and severity of tax liabilities, penalties, and other charges resulting from the audit 
  • Defending you against allegations of wrongdoing and filing an appeal when necessary 

It is especially important to hire a tax attorney if the audit will be held at the local IRS office or at your home or workplace, or if you often engage in large and complex financial transactions.

Wilson Ratledge has helped clients of all sizes with tax audits and other tax controversy situations with the IRS – call us today at 919-787-7711 today to schedule a consultation!

Do You Need A Tax Attorney Or A CPA?

September 20, 2021 By wrlaw

The tax season can be a challenge for most businesses and individuals. Filing taxes is a daunting task, especially if you are unsure of what to include. It’s therefore essential to get the right help when you find yourself in this position.

The two most popular options are a Certified Public Accountant (CPA) or a tax attorney. However, it can be challenging to know if a CPA or a tax attorney is the right choice. The right choice depends on your goals, unique needs, and your status with the Internal Revenue Service.

Hiring the right professional is crucial to ensure you don’t fall behind with tax filing and payments for your North Carolina business. Read on to learn the difference between a tax attorney and a CPA and who best suits your case.

Tax Attorney

A tax attorney is an expert in legal matters related to filing taxes. They understand the ins and outs of the IRS tax code and can help you with anything from developing a plan for your business taxes to representing you in court.

Tax attorneys offer business guidance and represent you in legal matters like audits and disputes with the IRS and other federal tax authorities. They can provide advice and guidance on complicated legal issues, including estate planning, tax disputes, business law, and trusts. Just as most other attorneys specialize in working with certain types of clients, tax attorneys can specialize in certain verticals or types of clients, so make sure the tax attorney you choose is a good fit for your organization.

One common skill between tax attorneys is expertise in dispute resolution. Tax lawyers undergo years of training to help you go up against federal tax authorities like the IRS during adverse tax actions. Although most are skilled in dispute resolution, if you are in a tax controversy situation, it’s important to find an attorney that specifically works in that area like Wilson Ratledge.

The following are various reasons why you may need to consult a tax attorney:

  • Criminal tax investigation and defense
  • IRS tax audits
  • International business transactions
  • When starting a business and require legal guidance on the tax treatment and your company structure
  • You have a lawsuit against the IRS

Certified Public Accountant

Unlike tax attorneys, CPAs are educated in maintaining business and financial records. They help you avoid tax filing problems while tax attorneys work to help you straighten problems that have already occurred.

CPAs help you follow the tax code, file and correct your tax returns. They know how to abide by federal laws and will help you maximize your tax benefits while lowering your tax liability.

It’s essential to develop a strong relationship with a CPA, especially when you have a large amount of money coming in and out.

You need a CPA in the following situations:

  • Filing taxes
  • Managing payroll
  • Creating financial risk management strategies
  • Undergoing an IRS audit
  • Finding tax credits and deductions, you qualify for
  • Acquiring, merging, or selling a business
  • Determining the proper business structure
  • Choosing between accrual or cash accounting
  • You need help figuring out a long-term tax plan

Do You Need a Tax Attorney or CPA?

If you still are unsure whether you need a tax attorney or CPA, consider your tax situation. If you have complicated business or personal taxes and want to minimize tax liability, hire a CPA. If you are in trouble with the IRS or dealing with a tax controversy issue, a tax attorney is your best fit. Remember, don’t hire a tax attorney when you need a CPA. This will create more trouble and will cost you more than it would initially.

A tax attorney will help you in tax planning to minimize your tax liability by structuring your assets. If you only need help with tax preparation and filing and have no trouble with the IRS, consider hiring a CPA.

Confused and Overwhelmed? Wilson Ratledge Can Help

Taxes can be daunting. Understanding your tax situation will help you choose between a tax attorney and a CPA. While tax lawyers provide legal advice, CPAs help you in tax preparation and avoid tax filing problems. If you have an overwhelming tax situation that you don’t understand, contact Wilson Ratledge today to schedule a consultation.

Are Forgiven PPP Loans Taxable In North Carolina?

September 14, 2021 By wrlaw

The Paycheck Protection Program (PPP) is one of the ways the United States government helped small businesses during the pandemic. In 2020 alone, the program distributed over $500 billion in loans. Businesses that were struggling because of the COVID-19 pandemic had the option of using the Paycheck Protection Program.

The PPP loan was, therefore, the most popular way for small businesses to recover. There is no doubt that the PPP loan has been helpful for small businesses, but its tax implications have been confusing for most business owners. If you are wondering how the PPP programs work and if a PPP loan is taxable in North Carolina, then continue reading.

How do PPP loans work?

The Paycheck Protection Program (PPP) is one of the relief measures in the Coronavirus Aid, Relief, and Economics Security Act (CARES Act). The PPP loan program has been authorized to provide billions in forgivable loans to small businesses. The main aim of the PPP loan is to ensure employees remain on the payroll and fill gaps in mortgage interest, rent, supplier costs, and other related expenses.

The PPP was meant to assist both nonprofit and for-profit organizations to maintain their payroll during the COVID-19 crisis and to keep the economy afloat. Under the PPP program, the Small Business Administration (SBA) provides federally insured loans for the covered expenses. 

How to get PPP loan forgiveness

You would benefit from the loan forgiveness if your business meets the eligibility requirements. If you had a PPP loan, it can be forgiven as long as you have used 60% of the loan on employee payroll costs. You are allowed to use the other 40% on rent obligations, mortgage interest, utility costs, supplier costs on essential goods, and personal protective equipment.

Forgiveness of the PPP loan is based on your continuing to pay your workers at the normal levels for eight to 24 weeks after getting the loan. If you are seeking PPP loan forgiveness, you have to fill in the applications and submit them to the private lender where you got the loan. 

Are PPP loans taxable in North Carolina?

After the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) was passed into law, forgiven PPP loans are tax-exempt and not considered part of the taxable income. At the federal level, the forgiven PPP loans are tax-free, which is different from how such loans are normally treated. If your business received the Paycheck Protection Program (PPP) loan, it’s not considered income for federal income tax purposes. The expenses covered by using the PPP loan are also deductible under federal tax purposes.

Traditionally, that was not the case at the state level. In North Carolina, prior to June 2020, you would have to pay tax on forgiven loan proceeds.

The state, however, has taken steps to address the issue of forgiven PPP loans being taxable. North Carolina’s governor, Roy Cooper, signed House Bill 1080 to incorporate loan forgiveness under section 1106 of the CARES Act. Under the new Bill, North Carolina will improve cash flow for organizations that have been impacted by the pandemic. Therefore, North Carolina now joins the list of states that have to provide tax relief for small businesses with PPP loans.

Contact Our North Carolina Tax Attorneys

If you have questions about loan forgiveness or other business tax-related issues, contact our North Carolina tax attorneys today – call us at 919-816-2683 or fill out our online contact form to schedule a consultation with our team.

Offers In Compromise And How They Help With Tax Debt

August 23, 2021 By wrlaw

It can feel a little overwhelming when you owe the Internal Revenue Service (IRS) or the North Carolina Department of Revenue (NCDOR) money. The IRS is one of the few entities to have inordinate power to reclaim funds owed, including placing a lien on your bank accounts, home, and businesses.

You may find that they’ve garnished your wages, reducing your paycheck. They can also seize items of value, sell them, and use the proceeds to pay off your debt. Yes, there is good reason to worry when you owe money to the IRS. However, an offer in compromise might help you settle the debt. This guide can help you understand your options.

What is an Offer in Compromise?

With an offer in compromise, you’re able to settle your tax debt by paying a lower amount than you owe. The IRS accepts an offer in compromise when it’s an amount that they can reasonably expect to recoup over a reasonable amount of time even though it isn’t the full amount. 

When deciding whether to accept an offer in compromise, the IRS and NCDOR consider several things about your unique circumstances, including:

  • Income
  • Living and other expenses
  • Equity available in assets
  • Ability to pay the amount owed

If you qualify for an offer in compromise, you can lower your tax bill and get out of debt. There are a few basic requirements to even begin to be considered eligible. These include:

  • You can’t currently be in bankruptcy.
  • You need to have filed all of your most recent tax returns.
  • You need to have made some estimated tax payments.
  •  If you’ve filed for an extension for the current year’s tax return, it isn’t considered. 

When you file an offer in compromise, it’s important to have a tax attorney on your side to help you navigate the procedure. The application requires a fee to process and might require a payment on your current debt. Here’s a look at the most commonly asked questions:

FAQs

If the IRS accepts my offer in compromise, do I need to pay back all the money at one time? 

No, the IRS will accept either a lump sum or monthly payments. However, if you opt for monthly payments, make sure you don’t miss any. When the NCDOR accepts an offer in compromise, you must pay the full amount minus any payment you made with the application within 30 days. 

While the offer in compromise is considered, will interest continue to accrue on my account?

Yes, both the IRS and NCDOR debts will continue to accrue interest while your offer is considered. 

How much money should I offer? Is there a percentage or formula?

No, there isn’t a set percentage or formula that the IRS and NCDOR use to determine if the offer is reasonable. You need to determine how much you can afford to pay based on your income, assets, and expenses. If the offer is too low and gets denied, you can always reapply with a larger offer. 

What happens if my offer in compromise is declined? 

If you filed the offer in compromise with the IRS, you have 30 days to appeal the decision. You can even file an application for a new offer in compromise. The NCDOR doesn’t offer an appeals process, and the decision is final. However, the NCDOR can make a counter offer that you can either accept or reject. 

An offer in compromise is a legal way to lower your debt to the IRS and the NCDOR, so you can repay it and escape any liens placed on your property. It’s a complicated application process, and you’ll need to provide financial documentation.

If you have questions about the offer in compromise process, contact our North Carolina tax attorneys today – call us at 919-787-7711 or fill out our online contact form to schedule a consultation with our team.

How Do I Close My Business In North Carolina?

August 9, 2021 By wrlaw

Whether you’re looking to retire or begin a new business venture, you may be in the situation where you need to close an existing venture. It may seem easy to just walk away, however, there are a variety of legal requirements that may make the process seem daunting at first. Here are a few important factors to keep in mind when closing your business.

Agree to Close the Business

Some businesses may need to formally decide to close the business. This is dependent on the business type and will vary whether it is a sole proprietorship or another business type. LLCs and corporations, in this case, follow the same guidelines.

Sole Proprietorships

Sole proprietors are allowed to make the decision to close their business on their own. Owners of a sole proprietorship can simply follow along with the necessary steps for business dissolution.

LLCs and Corporations

Voluntary dissolution of an LLC or corporation has more rules and regulations than a sole proprietorship. These rules are typically found in a company’s formational documents. If you own an LLC, you are covered under North Carolina’s LLC Act for an alternative route. So long as there is unanimous consent among all LLC members, there is no need to follow the procedures outlined in the formational documents. Either way, this decision requires written documentation to be valid.

File Dissolution Documents

In-State Registration

Businesses registered in North Carolina will need to submit the required forms in order to proceed with the dissolution. If the company does not have any shareholders, they can file Articles of Dissolution Prior to the Issuance of Shares. Companies with shareholders, on the other hand, must file Articles of Dissolution by Board of Directors and Shareholders.

Without legally dissolving your business, you may have to pay additional taxes and fees associated with filing requirements. As such, filling out the necessary paperwork is vital for a smooth dissolution process.

Out-of-State Registration

If your business is also registered in other states, you will need to follow those states’ regulations in order to close your business. Without this process, you may continue to incur fees and taxes from these states. Be sure to look up each state and fill out their required forms.

Cancel Any Business-Related Accounts

When closing a business, you’ll need to close anything related to the business as well. This includes registered names, permits, licenses, and so on. You will also need to send a letter to the IRS in order to close your business account.

Resolve Any Outstanding Obligations

Taxes

Taxes are conducted according to the IRS and are done in the calendar year the business is dissolved in. Companies must make final tax payments and list that it is their final return on their tax form. If for some reason there were issues with withholding income, Social Security, and/or Medicare taxes, these issues will need to be resolved as well. Otherwise, the IRS will issue the Trust Fund Recovery Penalty, which charges unpaid taxes plus interest. This is issued in cases of willful tax evasion only, however.

State taxes must also be resolved as well. While you do not need tax clearance to dissolve a business in North Carolina, you will need to pay any outstanding taxes regardless. It is better to complete this process sooner rather than later.

Employee Payments

You will also need to resolve employee payments. This has to be done within a certain timeframe, as The Worker Adjustment and Retraining Notification Act (WARN) requires that companies give a 60-day layoff notice to employees if they have over 100 employees. This has additional stipulations as well, so be sure to consult your business attorney for additional guidance on this. You will also need to give employees their final paycheck.

Notifying Creditors and Claimants

You should also notify creditors and other claimants. While this is not required per North Carolina law, it is recommended. You can either notify them through direct written notice or publish the notice in a newspaper. Either route has certain regulations and procedures, so it is highly recommended that you consult your business attorney on this matter.

Keep Records

Business owners must also keep records following the dissolution. It often takes years before these documents can be safely discarded. The IRS recommends keeping records of employment taxes for at least four years, although you may have to keep the documents longer. Ensure all documents are in a safe and accessible place post-dissolution so you can access them if needed.

Our North Carolina Business Attorneys Can Help

At Wilson Ratledge, we have over 60 years of experience helping business owners from formation all the way through exiting their businesses. We understand that no two businesses are the same, and we treat your situation with the attention and expertise you deserve. Contact us today to schedule a consultation with one of our North Carolina business attorneys to make sure your business dissolution goes according to plan.

How To Prepare Your Business For A Sale

July 23, 2021 By wrlaw

There are many reasons business owners choose to sell their businesses. It could be because they want to move to another state or city, they want to retire, sales are down and they don’t have the energy to continue, or they are just looking for a new challenge. 

No matter what reasons you have to sell your business, there are certain things you need to do to maximize your business’ value and have a smooth selling process. Here are the basics on how you should prepare to sell your business.

1. Prepare For The Sale In Advance

Poor preparation can lead to a waste of time and effort. You should start with your exit planning 18-24 months ahead of when you’d like the sale to close. Preparing for the sale earlier can improve your financial records and improve the business structure. Such improvements will make the transition easy for the buyer and potentially increase your valuation. Here are a few things you should do as you prepare your business for sale:

  • Increase Profitability – Investors want to buy a profitable business – identifying unnecessary costs and improving efficiency will make the business more valuable and attractive to buyers.
  • Update Processes – You’ll put buyers at ease when you create and document processes that will enable the business to function without you being involved. Think of the places you’re involved in the day-to-day operations of the business and document how it could run if someone were to step into your role.
  • Keep Your Team Happy – No investor will want to deal with businesses with high employee turnover and uncertainty. Keeping your team engaged and focused on the goal during the acquisition process is critical to a successful transaction.

2. Identify Tangible And Intangible Assets

As the date of the sale draws near, you should list all the physical assets, which include inventory, equipment, fixtures, and furnishings. It’s also crucial to consider intangible assets like customer relationships, contracts, and brand recognition. During the due diligence process, your buyer (or their attorney) will likely request all of these items so it’s useful to have the information collected beforehand.

3. Put Yourself In The Buyer’s Shoes

What is your buyer looking for? A business they can step into as an owner-operator? Are they a competitor looking to add to their book of business and merge your team into their business? Are they someone providing a product in an adjacent market and looking to add capabilities to their offering?

Putting yourself in your buyer’s shoes and marketing your business to them based on what they want can help you negotiate a better deal.

4. Create A Timeline

2-3 years is a reasonable time to prepare for your business sale. That’s enough time to build profitability for the business and ensure you are ready for the transition. You’ll get a maximum return when you show your business has increased profitability over the past few years. 

5. Get A Business Valuation

The next thing you should do is determine the value of your business. A business valuation helps you determine the right price for your business. Make sure you use a business appraiser to get the valuation. Having a professional valuation will help you gauge your buyer’s offers.

Through a business valuation, you can know about your financial situation, market position, and your organization’s strengths and weaknesses. You can get the valuation from regional business brokers, local accounting firms, or investment banking firms. 

6. Use A Broker

Depending on your situation, using a business broker can maximize the value you get for the sale, even after their fees. Ask around your professional network for recommendations and vet them thoroughly. Have they sold other businesses like yours? Check references and make sure the broker is providing consistent results.

7. Prepare Documents

You should also have your financial statements ready before you sell your business – bank statements, credit card statements, financial statements, and don’t forget the tax returns! Make sure you review any permits, incorporation papers, leases, licensing agreements, and vendor contracts as well.

8. Keep Employees Incentivized

Key managers can create a conflict of interest during the sale. Make sure to keep your key team members happy and engaged throughout the process to avoid any uncertainty during the sale. You may think you can rely on non-compete or non-solicit agreements, but it’s much easier to keep your team happy.

9. Find A Buyer

A business sale can take between six months and two years. It can be a challenge to find the right buyer. Buyers always look for business with good cash flow. They want to invest in a business that can increase their return on investment. If you build your company to provide the buyer with what they need, you will usually not have a problem finding a buyer. Often, a buyer will even come from the network you’ve built over the years of operating your business.

Raleigh Business Acquisition Attorneys

It’s important to have the right team on your side during an acquisition. The team at Wilson Ratledge has worked with many business owners to sell their businesses over the years, and helped them get to the next phase in their journey. We can help you too – call us today at 919-787-7711 or fill out our online form to schedule a consultation today!

  • « Go to Previous Page
  • Page 1
  • Interim pages omitted …
  • Page 17
  • Page 18
  • Page 19
  • Page 20
  • Page 21
  • Interim pages omitted …
  • Page 42
  • Go to Next Page »

Primary Sidebar

Search

Categories

  • AI
  • Bankruptcy
  • blog
  • Business Law
  • Commercial Bankruptcy
  • Corporate Transparency Act
  • Estates and Trusts
  • Exit Planning
  • Firm News
  • Medicaid Planning
  • Mergers and Acquisitions
  • Real Estate
  • Special Needs
  • Taxes
  • Uncategorized
  • Workers' Compensation

Footer

Contact Us

Raleigh, NC

4600 Marriott Dr., Suite 400
Raleigh, North Carolina 27612
Phone: 919-787-7711
Fax: 919-787-7710

Connect With Us

  • Facebook

Practice Areas

  • Commercial Bankruptcy Litigation
  • Business Law
    • Business Operation
    • Business Startup
    • Exit Strategy / Succession Planning
    • Mergers And Acquisitions
    • Professional Practice Representation
  • Civil Litigation
  • Government Defense
  • Real Estate, Development & Land Use
  • Estate Planning and Trusts
    • Asset Preservation Planning
    • Estate and Trust Administration
    • Estate and Trust Disputes and Litigation
    • Estate Planning and Asset Preservation
    • Special Needs Trusts
    • Medicaid Planning
    • Elder Law
  • Workers’ Compensation Defense
  • Tax Audits
  • Tax Collections
  • Tax Liens

Copyright © 2025 Wilson Ratledge PLLC. · Site by LegalScapes · Privacy Policy · Disclaimer

  • Commercial Bankruptcy Litigation
  • Business Law
  • Civil Litigation
  • Government Defense
  • Real Estate, Development & Land Use
  • Estate Planning and Trusts
  • Workers’ Compensation Defense