We got word today that a person connected to the White House and who didn't pay all his due taxes is pleading guilty to tax evasion.
No. It's not that person.
It's Hunter Biden, son of President Joe Biden.
The younger Biden has agreed to plead guilty to two charges of misdemeanor tax evasion and enter a pretrial diversion agreement on a firearm possession charge, according to a Justice Department court filing today in Delaware.
The two tax charges carry a maximum of one year in prison as well as a $25,000 fine. The arrangement reportedly also includes repayment of Biden's payment of back taxes. A date for the formal plea has not been set.
The guilty plea agreement effectively wraps up a five-year criminal investigation into Hunter Biden. Too bad it won't end the political posturing.
But we can glean some tax lessons from the Biden situation and its resolution.
Lesson number one is obvious. Pay your taxes.
The federal investigation alleged that Hunter Biden didn't pay more than $100,000 in federal income tax for both 2017 and 2018 tax years. Those Internal Revenue Service bills came from the more than $1.5 million the 53-year-old Biden earned in each of those two years while living in the District of Columbia.
It doesn't matter how much or how little you owe. Pay. Your. Tax. Bill. On time.
If you can't pay what you owe the U.S. Treasury in full, look into a payment plan. The IRS offers several installment payment options. Some you can apply for online.
If you don't and the IRS finds out, you'll need to heed the next lesson.
Lesson number two is hire a reputable attorney who can guide you through the tax and legal mazes.
My post Picking the perfect tax pro for your filing (and more) needs has more on, as its title says, finding the appropriate help. But for today's purposes, I'm reposting below the professional tax help section that looks at tax advisers whose credentials give them unlimited representation rights before the IRS. They are —
- Enrolled Agents (EAs). These tax professionals are licensed by the IRS, which involves a suitability check and successfully completing a three-part Special Enrollment Examination. This comprehensive exam requires the EA candidate to demonstrate proficiency in federal tax planning, individual and business tax return preparation, and representation. An EA must complete 72 hours of continuing education every three years.
- Certified Public Accountants (CPAs). These credentialed accountants are licensed by state boards of accountancy, the District of Columbia, and U.S. territories. To earn this designation, they must pass the Uniform CPA Examination. CPAs also have completed a study in accounting at a college or university, as well as met experience and good character requirements established by their respective boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education in order to maintain an active CPA license. CPAs may offer a range of services. Look for a CPA who specializes in tax preparation and planning.
- Attorneys. Lawyers are licensed by state courts, the District of Columbia, or their designees, such as the state bar. Generally, attorneys have earned a degree in law and passed a bar exam. Attorneys generally have on-going continuing education and professional character standards. These legal advisers also may offer a range of services, so look for an attorney who specializes in tax preparation and planning.
Yes, these tax pros cost more. But you want someone experienced and able to deal with a tax audit and, if worse comes to worst, any possible subsequent criminal tax proceedings.
Lesson number three is to take preventative tax action. If you find yourself totally befuddled by your tax situation, don't make it worse by doing your taxes yourself, poorly, and compounding your problems.
Hire a tax adviser (see lesson two above) to help you sort out your tax issues and get right with the IRS. If you wait and let the IRS discover your filing (or non-filing) and payment (or non-payment) problems, your tax circumstances most definitely get worse.
You also might find these items of interest:
- Preparing for a possible IRS tax audit
- Don't commit these federal tax crimes
- 4 ways to authorize a tax representative
- Tax audit lessons from 'Mom' on, of course, Mother's Day
- Tyler Perry audit ends in $9M refund, firing of accountants
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