Monthly Archives: December 2022

EPISODE 3: Starting Your First Business in Texas – State and Federal Tax Obligations and the Upcoming FinCEN BOI Reports

Coleman Jackson, P.C. | Transcript of Legal Thoughts
Published December 26, 2022

Overview:

Legal Thoughts is an audiocast presentation by Coleman Jackson, P.C., a law firm based in Dallas, Texas serving individuals, businesses, and agencies from around the world in taxation, contract litigation, and immigration legal matters.

This episode of Legal Thoughts is an audiocast where the Attorney, Coleman Jackson is being interviewed by Alexis Brewer, Tax Legal Assistant of Coleman Jackson, P.C. The topic of discussion is “Starting Your First Business in Texas – State and Federal Tax Obligations and the Upcoming FinCEN BOI Reports.” You can listen to this podcast by clicking here:

If you enjoy this podcast, make sure to stay tuned for more episodes from the taxation, litigation, and immigration Law Firm of Coleman Jackson, P.C. Be sure to subscribe. Visit the taxation, litigation and immigration law firm of Coleman Jackson, P.C. online at www.cjacksonlaw.com.

TRANSCRIPT:

ATTORNEY: Coleman Jackson

LEGAL THOUGHTS

COLEMAN JACKSON, ATTORNEY & COUNSELOR AT LAW

ATTORNEY: Coleman Jackson

Welcome to Legal Thoughts

My name is Coleman Jackson and I am an attorney at Coleman Jackson, P.C., a taxation, contract litigation and immigration law firm based in Dallas, Texas.

In addition to myself, we have Alexis Brewer – Tax Legal Assistant, Leiliane Godeiro – Litigation Legal Assistant, and Johanna Powell – Tax Legal Assistant.

On today’s “Legal Thoughts” podcast, our Tax Legal Assistant, Alexis Brewer, will be interviewing me on the important topic of: Starting Your First Business in Texas. This is a series of podcasts, and today’s episode will focus on: “State and Federal Tax Obligations and the Upcoming FinCEN BOI Reports”

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Hi everyone, my name is Alexis Brewer and I am a Tax Legal Assistant at the tax, contract litigation and immigration law firm of Coleman Jackson, Professional Corporation. Our law firm is located at 6060 North Central Expressway, Suite 620, right here in Dallas, Texas.

Good afternoon, Attorney; thank you for agreeing to sit with me as I interview you with respect to this hot tax topic: “Starting Your First Business in Texas – State and Federal Tax Obligations and the Upcoming FinCEN BOI Reports.”

Let’s jump right in,

Question 1: Attorney could you give us a quick picture of the type of taxes imposed in state of Texas?

Attorney Answer – Question 1:

Hello Alexis.

First and foremost, everyone needs to understand that the State of Texas imposes a series of taxes on individuals and businesses, but there are no income taxes in Texas. Also, folks, individuals and businesses need to understand that property taxes are levied by local governments, such as, city, county, school districts and etc. throughout the State of Texas. The law of local property taxes is fairly straight forward and our law firm does not practice this area of law.

So, let me name several of the significant taxes imposed on individuals and businesses. Texas imposed the following taxes, among others:
Limited Sales, Use and Excise Taxes are imposed on individuals and businesses;
Texas Franchise Taxes are imposed on certain types of businesses;
Estate and Generation-Skipping Taxes are imposed on estates;
Unemployment Compensation Taxes are imposed on employers in Texas with employees;
Alcoholic Beverages Taxes are imposed on establishments with such licenses to sell or distribute alcoholic products;
Insurance taxes;
Hotel taxes are imposed on guess of hotels, motels and similar establishments;
Motor fuel taxes

This is just a list of eight types of taxes imposed by the State of Texas which generates the most revenue for the state. There are a number of other types of taxes that Texas imposes on individuals and businesses operating within the State of Texas. Anyone wishing to discuss these taxes can contact us with any specifics or follow our Blogs at www.cjacksonlaw.com; or follow our Legal Thoughts Podcasts; or follow our Law Watch videos on our You-Tube Channel where we frequently discuss various topics dealing with taxation, contracts, litigation and immigration matters those folks ought to know about.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

That leads me right into my next question, Attorney –

Question 2: What is the number one type of tax imposed by the State of Texas that everyone in Texas needs to know about?

Attorney Answer – Question 2:

Well Alexis, property taxes that are imposed by local governments is clearly a tax everyone in Texas should be aware of since Texas is one of the highest property tax states in the nation. Property Taxes are taxes imposed by local governments throughout the State of Texas. All people residing in Texas need to know about the property tax system because this is how public schools are financed as well as public hospitals and health services and a number of other major local and municipal services.

Alexis with that said, the number one type of tax imposed by the state that everyone needs to be aware of is the Texas Limited Sales, Use and Excise tax which is applies to most purchases of goods and some services.

Remember, as I previously stated; Texas does not have a state income tax. So, our listeners should be asking themselves; so how does the State of Texas pay its bills? The Limited Sales, Use & Excise Tax is; by far, the biggest tax revenue generator for the State of Texas. The Limited Sales, Use, & Excise Tax generates about 58% of Texas’ tax revenues annually. This is the first major tax imposed by the State of Texas that everyone in Texas must be aware of. Anyone operating a business or thinking about starting a business in Texas must do their due diligence with respect to whether their products, goods and services are subject to the Limited Sales, Use, & Excise Tax. If their products and services are subject to this tax; the business-owner is a trustee for the State of Texas and must obtain a sales tax permit, collect the appropriate sales taxes from each transaction and report and submit the monies to Texas Comptroller of Public Accounts, who is the chief tax collector for the State of Texas. Business owners and other responsible parties can become personally liable for messing with Texas with respect to these sales, use and excise tax matters.

Texas imposes a 6.25% sales and use tax on sales, leases and rentals of touchable movable property (“tangible property”) and on certain specified services in Texas Tax Code Section 151. Localities are also allowed to impose up to a maximum of 2% sales and use tax with respect to transactions within their jurisdictions. The maximum limited sales, excise and use tax permitted in the Texas Tax Code is 8.25% of the gross taxable sales amount.

The sales and use tax are complimentary which means that Texas only gets to collect the tax as a sales tax paid by the purchaser at the time of the sale, or as a use tax paid by the merchant in the event the sales tax was not paid by the purchaser at the time of the sale. Bottom line, the tax should only be paid once either as a sales tax or as a use tax. Merchants in Texas are required under the Texas Tax Code to collect the tax as a trustee for the state of Texas. Since the United States Supreme Court’s Wayfair decision, a couple of years ago, out of state merchants selling customers in the state of Texas could be subject to the same Texas Tax Code obligations as brick and mortal merchants operating with facilities and agents physically within the state. The Texas Comptroller has issued guidance for out of state providers of taxable services and goods selling to customers inside Texas which can be found on the Comptroller’s website.

Any merchant inside the state or outside of the state who conducts a business subject to the Texas Limited Sales, Use and Excise Tax must obtain a sales tax permit from the Texas Comptroller of Public Accounts. Again, the Texas Comptroller of Public Accounts is the chief tax collector for the State of Texas who administers the Texas Tax Code. All kinds of useful and informative information can be found on the Comptroller’s website.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Question 3: Attorney, is there any other major tax imposed by the State of Texas that impacts business owners in Texas?

Attorney Answer – Question 3:

Alexis, another major tax imposed in Texas is the Texas Franchise tax; which is also known as the Margin’s Tax. The Texas Franchise Tax is a tax imposed on some businesses for the privilege of doing business in Texas. Anyone interested in this topic can find this tax in the Texas Tax Code.

Several entities subject to the Texas Franchise Tax are:

Corporations;
Limited Liability Companies (LLC, including single member and/or husband and wife owned LLC);
Banks;
State limited banking associations;
Savings and loan associations;
S Corporations;
Professional Corporations;
Partnerships (general, limited and limited liability);
Trusts;
Professional Associations;
Joint Ventures; and
Other business entities not exempt by statute

Entities not subject to the Franchise tax are:

Sole Proprietorships;
General Partnerships (when ownership consist solely of natural persons or individuals. The partnership cannot have any legal entity owners);
Certain grantor trusts , estates of natural persons and escrows;
Exempt entities under Tax Code Section 171, Subchapter B;
Various other unincorporated passive entities, real estate investment trusts and entities classified under Insurance Code Chapter 2212;
Certain trust subject to Internal Revenue Code Section 401(a) or 501(c)(9).

Alexis, the actual computation of the Texas Franchise Tax can be an extremely complicated accounting computation; and any business subject to this tax should hire a very competent Certified Public Accountant who works with business owners who must regularly pay franchise taxes. Many businesses; perhaps most Texas businesses, who are subject to the Texas Franchise Tax only have to file a no-tax due report each year. Franchise tax reports are filed annually online with the Texas Comptroller of Public Accounts and there are penalties for failure to file and/or failure to timely pay any franchise taxes that are due for the period.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant
Attorney, so far, we’ve been discussing some of the taxes imposed by local governments, property tax in particular imposed locally, and some of the important taxes imposed by the State of Texas in this podcast – for example, the sales, use and excise tax and franchise tax. There are some upcoming changes on the federal law horizon that you mentioned to me a few of days ago, and I thinking we should wrap up this podcast by explaining that.
Question 4: Attorney, can you briefly explain the Corporate Transparency Act and its key provisions?

Attorney Answer – Question 4:

This is a great question and it’s a very important one!

This past year, Congress passed the Corporate Transparency Act (CTA) as a part of the Anti-Money Laundering Act of 2020 (AMLA). The stated goal of the AMLA was to aid the federal government in detecting and preventing money laundering, tax fraud and other illicit activities.

The Corporate Transparency Act, as a result, imposes new mandatory reporting obligations with the stated intention of catching and stopping this illicit behavior. The FinCEN reports created under this mandatory rule are called, “Beneficial Ownership Information Reports” or BOI reports. The Corporate Transparency Act will require most corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company, to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

The Corporate Transparency Act and its new reporting requirements is a huge change coming for all businesses structured under any state or tribal entity organization structuring laws and impose significant new disclosure obligations on business organizers and business owners of entities structured under state and tribal business organizational laws. The Financial Crimes Network (FinCEN) is the U.S. Department of Treasury agency authorized to enforce the Corporate Transparency Act.

The final rules implementing the Corporate Transparency Act was published by the Financial Crimes Network (FinCEN) on September 30, 2022 in the Federal Register, and applies to domestic & foreign “reporting companies of all sizes, including the smallest of companies.”

A reporting company is a corporation, limited liability company, or any other entity created by filing entity structuring instruments with a secretary of state or any similar office under the law of a state.

For example, in Texas, the term “reporting companies” would include most business entities structured under the Business Organization Code, with the exception of sole proprietorships and general partnerships. If the business filed organizational documents with the Texas Secretary of State, the final FinCEN rules implementing the Corporate Transparency Act applies to them.

A “beneficial owner” under the FinCEN final rule includes any individual who, directly or indirectly:

exercises substantial control over a reporting company, or
owns or controls at least 25 percent of the ownership interests in a reporting company.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Attorney, these sound like huge changes for business owners! Do you mean to say that the rules apply to even a mom-and-pop business that operates as an LLC!

Question 5: What kind of information will this mom-and-pop organization and other businesses structured under state law have to file and where will they have to file it?

Attorney Answer – Question 5:

Yes, Alexis, that is exactly what I am saying. The final FinCEN rules do not exempt small business from the obligations imposed on affected business organizations. The rules apply to the mom-and-pop limited liability company as well as other businesses structured under state and tribal laws. They all meet the definition of ‘reporting company’ and must comply with the reporting rules.

When a reporting company files a “Beneficial Ownership Information Report,” or BOI report, with the Financial Crimes Network (FinCEN), they are required to identify themselves and report four types of information about each of its beneficial owners:

Name
Birthdate
Address, and
A unique identifying number issued by a jurisdiction in an acceptable document. A copy of this acceptable identifying document must be sent to FinCEN for inspection. The document must be valid and current.

The FinCEN final rules implementing the Corporate Transparency Act and the related new reporting obligations are effective on January 1, 2024.

Reporting companies created or registered before January 1, 2024 will have one year (until January 1, 2025) to file their initial BOI reports
Reporting companies created or registered after January 1, 2024, will have 30 days after receiving notice of their creation or registration to file their initial BOI reports.

Alexis, our law firm will continue to monitor developments with respect to the Corporate Transparency Act and FinCEN announcements implementing the BOI rules. Our office has been filing FBAR reports with the Financial Crimes Network on behalf of taxpayers for years now; and FinCEN is where the new BOI reports will be filed as well. Any of our listeners should follow our blogs and Legal Thoughts Podcasts where we discuss these types of topics.

Interviewer Wrap-Up

Attorney, thank you for siting with me today to explain the tax obligations of starting a new business in Texas. Today the key take aways from this podcast discussion are:

Texas sales & use tax in Texas: This is a major tax imposed by the State of Texas impacting everyone who buys or sales goods and certain services,
Texas Franchise tax: This too is a major tax imposed by the State of Texas on certain business structured under the Texas Business Organization Code and filed with the Texas Secretary of State, and potentially the big federal rule. Attorney even impacting
Corporate Transparency Act: This is a new, big federal rule coming up in 2024. The new mandatory rule issued by the Financial Crimes Network (FinCEN) requires businesses structured under state or tribal entity organizational laws to file “Beneficial Ownership Information Reports” with the Financial Crimes Network. This rule is wide-reaching and will even impact the small mom-and-pop LLCs. Our office needs to watch the BOI report developments and perhaps produce future blogs, videocast and Legal Thoughts podcasts on this topic.

To our listeners who want to hear more podcast like this one please subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or where ever you listen to your podcast. Take care, everyone! And come back in about two weeks, for more taxation, litigation and immigration Legal Thoughts from Coleman Jackson, P.C., located right here in Dallas, Texas at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206.

English callers: 214-599-0431 | Spanish callers: 214-599-0432 |Portuguese callers: 214-272-3100

Attorney Closing Remarks

This is the end of today’s Legal Thoughts!

Thank you all for giving us the opportunity to inform you about: “Starting Your First Business in Texas – State and Federal Tax Obligations and the Upcoming FinCEN BOI Reports”

If you want to see or hear more taxation, litigation and immigration LEGAL THOUGHTS from Coleman Jackson, P.C. Subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever you listen to your podcast.

Stay tuned! We are here in Dallas, Texas and want to inform, educate and encourage our communities on topics dealing with taxation, litigation and immigration. Until next time, take care.

UNITED STATES DESIGNATION OF ETHIOPIA FOR TEMPORARY PROTECTED STATUS

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By: Coleman Jackson, Attorney
December 24, 2022

FIRST LET US TALK ABOUT TEMPORARY PROTECTED STATUS IN GENERAL TERMS:

Temporary Protected Status (TPS) was established by U.S. Congress in 1990. Congress established TPS as part of the Immigration Act of 1990 to provide humanitarian relief to citizens of foreign countries whose countries were suffering from natural disasters, protracted unrest, or conflict. What is important to know about TPS

What is TPS?

TPS is a program that allows migrants whose home countries are considered unsafe the right to live and work in the United States for a temporary, but extendable, period of time. Though they are not considered lawful permanent residents or U.S. citizens, many have lived in the United States for more than twenty years. TPS is for people who cannot go back to their home country because of danger. These may include armed conflict, environmental disasters, or other temporary dangers. This status is only available to nationals and individuals having no nationality who last habitually resided in the designated country. The Department of Homeland Security (DHS) Secretary is the designating authority of the U.S. government. The Secretary designated Ethiopia for Temporary Protected Status (TPS for 18 months beginning on December 12, 2022 and ending on June 12, 2024.

What are the benefits of TPS?

You can stay in the USA legally for a set period of time
You can apply for a work permit in the USA
You can apply for a document to travel outside the USA
You will be protected from detention and deportation
You can have TPS at the same time as another immigration status. You can apply for asylum, lawful permanent resident status (green card), or other protected status if you meet the requirements for those particular immigration benefits.

How does TPS work?

Once a country receives a TPS designation, any citizen of that country who is already physically present in the United States is eligible to apply for the program provided they meet certain requirements set by U.S. Citizenship and Immigration Services (USCIS), a DHS agency. Disqualifying factors include criminal convictions in the United States and participation in terrorist activities.

The authority to grant a country TPS designation is held by the Secretary of the Department of Homeland Security, who can extend it indefinitely if when concluding that conditions in the country prevent individuals from returning home safely. Reasons for TPS designation include:

ongoing armed conflict, such as a civil war;
an environmental disaster, such as an earthquake, hurricane, drought, or epidemic; and other extraordinary and temporary conditions that render the country unsafe.

Once a country’s designation expires, individuals return to the immigration status they held prior to receiving TPS, which for most migrants means reverting to undocumented status and facing the threat of deportation to their country of origin. They can apply for work or student visas, if eligible, though those are temporary. However, those TPS immigrants whose spouses or adult children are citizens or legal permanent residents could be eligible to stay in the country legally upon approval of an immigrant petition. Certain employers also could file immigrant petitions on behalf of TPS workers. Therefore, TPS immigrants may have lots of alternative ways to remain and work in the United States even when their TPS status expires.

NOW LET US TURN OUR FOCUS TO THE U.S. DESIGNATION OF ETHIOPIA FOR TEMPORARY PROTECTED STATUS (TPS):

Who designated TPS for Ethiopia?

On October 21, 2022, the Department of Homeland Security (DHS) designated TPS for Ethiopia due to the current situation. The status will last 18 months from when the federal register notice is shared. DHS recognizes the ongoing armed conflict and the extraordinary and temporary conditions engulfing Ethiopia. This designation is based on both ongoing armed conflict and extraordinary and temporary conditions in Ethiopia that prevent Ethiopian nationals, and those of no nationality who last habitually resided in Ethiopia, from returning to Ethiopia safely. Due to the armed conflict, civilians are at risk of conflict-related violence, including attacks, killings, rape, and other forms of gender-based violence; ethnicity-based detentions; and human rights violations and abuses. Extraordinary and temporary conditions that further prevent nationals from returning in safety include a humanitarian crisis involving severe food insecurity, flooding, drought, large-scale displacement, and the impact of disease outbreaks.

Who Qualifies to apply?

According to USCIS, individuals eligible for TPS under Ethiopia designation must have continuously resided in the United States since October 20, 2022. Individuals who attempt to travel to the United States after October 20, 2022, will not be eligible for TPS under this designation. Ethiopia’s 18-month temporary protection status designation went into effect on December 12, 2022 and ends on June 12, 2024. Anyone who qualifies must apply for TPS within the designation period.

If you are applying for the first time, you must meet the following requirements:

Be a national of Ethiopia, or a person without nationality who lived in Ethiopia for a long time before arriving in the USA
Have continuously lived only in the USA since October 20, 2022
Have not left the USA since October 20, 2022

How to apply?

You can apply for TPS Ethiopia by filing Form I-821, Application for Temporary Protected Status. You can also file your application online with USCIS. You must send documents showing proof of your identity, nationality, date of entry and evidentiary proof that you have continuously resided in the United States of America October 20, 2022. You must pay a fee if you are applying for TPS for the first time. The current filing fee for initial TPS filing is $50 plus $85 biometric fee. You might be able to apply for a fee waiver if you can’t afford to pay the fee.

Further you can apply for employment authorization concurrently when filing Form, I-821 by Filing Form I-765, Application for Employment Authorization. Currently the filing fee for the initial work authorization is $410.

TPS processing time?

There is still no defined processing time for the Ethiopian TPS, but taking into account the others, the process takes around five and a half months to complete.

Law firms, like ours, can help you complete your application, counsel you on assembling evidentiary supporting documents, and review all of your possible immigration options. The United States Embassy in Ethiopia could offer more information. You can contact the U.S. Ethiopian Embassy at (202) 364-1200 or visit its consular offices in Washington D.C., Los Angeles, CA, and St. Paul, Minnesota. USCIS offers other immigration services that may help people affected by extreme situations. Call 800-375-5283 to learn how to request help.

Disclaimer: All of the government contact information is provided as a courtesy to our blog readers. We think it is accurate as of the date of the first publication of this blog. Our law firm is a private law firm without any affiliation with the U.S. government or any other government.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader. You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432 | Portuguese (214) 272-3100

Temporary Protected Status (TPS)

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Coleman Jackson, P.C. | Transcript of Legal Thoughts
Published December 12, 2022

Overview:

This episode of Legal Thoughts is an audiocast where the Attorney, Coleman Jackson is being interviewed by Alexis Brewer, Tax Legal Assistant of Coleman Jackson, P.C. The topic of discussion is “TEMPORARY PROTECTED STATUS (TPS).” You can listen to this podcast by clicking here: https://anchor.fm/coleman-jackson/episodes/TEMPORARY-PROTECTED-STATUS-TPS-e1ot2v4

TRANSCRIPT:

ATTORNEY: Coleman Jackson

LEGAL THOUGHTS

COLEMAN JACKSON, ATTORNEY & COUNSELOR AT LAW

ATTORNEY: Coleman Jackson

Welcome to Legal Thoughts

My name is Coleman Jackson and I am an attorney at Coleman Jackson, P.C., a taxation, contract litigation and immigration law firm based in Dallas, Texas.

In addition to myself, we have Alexis Brewer – Tax Legal Assistant, Leiliane Godeiro – Litigation Legal Assistant, and Johanna Powell – Tax Legal Assistant.

On today’s “Legal Thoughts” podcast, our Tax Legal Assistant, Alexis Brewer, will be interviewing me on the important immigration topic of: “TEMPORARY PROTECTED STATUS.”

INTERVIEWER: Alexis Brewer, Legal Assistant

Good afternoon, Attorney; thank you for agreeing to sit with me as I interview you with respect to this important immigration law topic: “TEMPORARY PROTECTED STATUS?”

Let’s jump right in,

Question 1: What does the legal term “Temporary Protected Status” mean?

Attorney Answer – Question 1:

Good morning, Alexis. The Immigration Act of 1990 (IMMACT 90) established a procedure by which the U.S. Attorney General may provide Temporary Protected Status (TPS) to nationals of a particular country who are in the United States and are unable to return to their home country due to-

Ongoing armed conflict within the state and, due to that conflict, the return of nationals to that state would pose a serious threat to their personal safety.
An environmental disaster resulting in a substantial, temporary disruption of living conditions, the state is temporarily unable to adequately handle returning nationals and the state therefore requests TPS designation.
Other extraordinary and temporary conditions in the state that prevent nationals from returning safely, unless the Attorney General finds that permitting nationals of the state to remain temporarily is contrary to the national interest of the United States.

After consultation with the appropriate agencies of the government, the Attorney General (AG) may decide to designate a foreign state or part thereof as eligible for TPS because one or more of the reasons discussed in this podcast have been met.

Notice of the designation is published in the Federal Register. TPS designation will be effective for a minimum of 6 months to a maximum of 18 months. Sixty days prior to the end of the designated TPS period, the Attorney General will review the conditions in the designated state and determine whether the designated conditions still exist. If so, the TPS designation could be extended for an additional 6, 12, or 18 months.

INTERVIEWER: Alexis Brewer, Legal Assistant

That leads me right into my next question –

Question 2: Who is eligible to apply for Temporary Protected Status?

Attorney Answer – Question 2:

That’s a great question.

An individual may be eligible for TPS if they are a national of a country designated by the Attorney General for Temporary Protected Status, or if the individual is a person who has no nationality but last habitually resided in the TPS designated country.

Individuals must consult the Federal Register or USCIS website to ascertain whether they are nationals of countries with TPS designations and they must apply for TPS during the specified registration period.

Certain individuals are ineligible for TPS; such as,

Individuals who are not nationals of the designated TPS country. Non-nationals who have not habitually resided in the designated country just prior to coming to the United States are also ineligible;
Individuals who do not register for TPS during the initial registration period;
Individuals who cannot demonstrate continuous physical presence in the United States since the effective date of the TPS designation;
Individuals who are inadmissible as an immigrant due to conviction of any felony or two or more misdemeanors and individuals who are inadmissible for other reasons, such as, national security; and
Individuals who do not meet residency requirement stated by the Attorney General when making the designation.

INTERVIEWER: Alexis Brewer, Legal Assistant

Question 3: What are some benefits for individuals who are in the United States on temporary protected status?

Attorney Answer – Question 3:

The benefits that an individual can obtain by applying for temporary protected status during the designated TPS registration period are that upon approval of their Form I-821:

Individuals on TPS can reside in the United States without the fear of being deported to their home country
Individuals on TPS can apply for work authorization by filing Form I-765 when they file for TPS and work anywhere in the country;
Individuals on TPS can file Form I-131 to apply for advance parole to obtain travel authorization; and
Some of the filing fees may be waived upon request.

These are some of the legal benefits that individuals could obtain by Temporary Protected Status. A real and enormous benefit of TPS is the potential to live a peaceful and productive life.

INTERVIEWER: Alexis Brewer, Legal Assistant

Question 4: What happens when the temporary protected status designated period ends?

Attorney Answer – Question 4:

Temporary protected status is a temporary benefit. TPS does not lead to lawful permanent resident status nor does it lead to any other immigration status. Therefore, when the TPS period ends the national of the designated country must return to their home country, or they will begin to accrue unlawful presence in the United States. The national can be deported from the United States if they refuse to leave voluntarily once their TPS ends.

Keep in mind; however, the Attorney General may review the conditions in the designated country and extend the TPS designation as I discussed earlier during this podcast. TPS can be extended and often has been extended in the past. Some individuals have been here for years on TPS. Good examples of this are nationals here on TPS from El Salvador, Haiti, Honduras, Nepal, and Nicaragua.

INTERVIEWER: Alexis Brewer, Legal Assistant

Question 5: What countries have the Attorney General currently designated for Temporary Protected Status?

Attorney Answer – Question 5:

The Attorney General has made many TPS designations over the years; current designated countries are – Afghanistan, Burma (Myanmar), Cameroon, El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, Sudan, South Sudan, Syria, Ukraine, Venezuela, and Yemen.

For specified designations and eligibility and other issues regarding a particular country, a particular national or particular habitual resident of a designated country, we need to evaluate each situation on a case-by-case basis in our office since often the application of law is more complex than it might first seem. Facts matter in law as they do in life.

INTERVIEWER: Alexis Brewer, Legal Assistant

Attorney, I know you touched on Temporary Protected Status eligibility requirements previously; but could you expand on this since immigrant cases can have a lot of complicating facts and circumstances.
Question 6: What are the eligibility requirements for nationals of the Temporary Protected Status designated countries?

Attorney Answer – Question 6:

True, as I have previously stated, facts matter in law and in life! Nationals and habitual residence of the TPS designated country must apply for TPS and meet all of the following eligibility requirements:

Be a national of a country designated for TPS, or a person without nationality who last habitually resided in the designated country;
Apply during the open initial registration or re-registration period, or you meet the requirements for late initial filing during any extension of your country’s TPS designation;
Have been continuously physically present (CPP) in the United States since the effective date of the most recent designation date of your country; and
Have been continuously residing (CR) in the United States since the date specified for their home country. The law allows an exception to the continuous physical presence and continuous residence requirements for brief, casual and innocent departures from the United States. When you apply or re-register for TPS, you must inform USCIS of all absences from the United States since the CPP and CR dates. USCIS will determine whether the exception applies in your case. USCIS exercises discretion in TPS cases; so, the presentation of your case matters.

INTERVIEWER: Alexis Brewer, Legal Assistant

Question 7: What kind of things could make an individual ineligible for Temporary Protected Status?

Attorney Answer – Question 7:

An individual may not be ineligible to apply for temporary protected status if they:

Have been convicted of a felony or two or more misdemeanors committed in the United States;
Are found inadmissible as an immigrant under inadmissible grounds in INA section 212(a), including non-waivable criminal and security-related grounds;
Are subject to any of the mandatory bars to asylum. These include, but are not limited to, participating in the persecution of another individual or engaging in or inciting terrorist activity;
Failure to meet the continuous physical presence and continuous residence in the United States requirements;
Failure to meet initial or late initial TPS registration requirements; or
If granted TPS, failure to re-register for TPS, as required, without good cause.

Interviewer Wrap-Up

Attorney, thank you for siting with me today to explain you for being here today with us, this information is very important for nationals who are here in the United States and who are from countries designated by the U.S. Attorney General as temporary protected status (TPS).

It seems like the take away here is that some nationals in the United States could be eligible to apply for temporary protected status but the process could be complex and require attorney guidance and representation.

English callers: 214-599-0431 | Spanish callers: 214-599-0432 |Portuguese callers: 214-272-3100

Attorney Closing Remarks

This is the end of today’s Legal Thoughts!

Thank you all for giving us the opportunity to inform you about: “TEMPORARY PROTECTED STATUS”

Stay tuned! We are here in Dallas, Texas and want to inform, educate and encourage our communities on topics dealing with taxation, litigation and immigration. Until next time, take care.

THE IRS COLLECTION PROCESS AND TAXPAYER’S OPTIONS

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Coleman Jackson, P.C. | Transcript of Legal Thoughts

LEGAL THOUGHTS: THE IRS COLLECTION PROCESS AND TAXPAYER’S OPTIONS | Published November 28, 2022

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This episode of Legal Thoughts is an audiocast where the Attorney, Coleman Jackson is being interviewed by Johana Powell, Tax Legal Assistant of Coleman Jackson, P.C. The topic of discussion is “THE IRS COLLECTION PROCESS AND TAXPAYER’S OPTIONS.” You can listen to this podcast by clicking here: https://anchor.fm/coleman-jackson/episodes/THE-IRS-COLLECTION-PROCESS-AND-TAXPAYERS-OPTIONS–ENGLISH-VERSION-e1ooft6

TRANSCRIPT:

ATTORNEY: Coleman Jackson

LEGAL THOUGHTS

COLEMAN JACKSON, ATTORNEY & COUNSELOR AT LAW

ATTORNEY: Coleman Jackson

Welcome to Legal Thoughts

My name is Coleman Jackson and I am an attorney at Coleman Jackson, P.C., a taxation, contracts litigation and immigration law firm based in Dallas, Texas.
Other members of the law firm are Alexis Brewer and Johana Powell – Tax Legal Assistants, Leiliane Godeiro – Litigation Legal Assistant, and Gladys Marcos – Immigration Legal Assistant.
On today’s “Legal Thoughts” podcast, our Tax Legal Assistant, Johana Powell, will be interviewing me on the important topic of: “THE IRS COLLECTION PROCESS AND TAXPAYER’S OPTIONS.”

INTERVIEWER: Johana Powell, Tax Legal Assistant

Hi everyone, my name is Johana Powell and I am a Tax Legal Assistant at the tax, litigation and immigration law firm of Coleman Jackson, Professional Corporation. Our law firm is located at 6060 North Central Expressway, Suite 620, right here in Dallas, Texas.

Good afternoon, Attorney; thank you for agreeing to sit with me as I interview you with respect to this interesting topic: “THE IRS COLLECTION PROCESS AND TAXPAYER’S OPTIONS.”

Let’s get started!

Question 1:

Attorney what is likely to happen when a taxpayer files a tax due return with the IRS?

Attorney Answer – Question 1:

Good afternoon, Johana.

When a taxpayer files a tax return with the IRS, they can expect the following to happen in short order: If a balance is due on the return;

the IRS will— Put the balance due on its books; technically that step is called ‘tax assessment’ under tax law;

the IRS will— Send the taxpayer a bill requesting full payment by a certain date;

In the event the taxpayer fails to pay the first bill in full or contact the IRS to make payment arrangements, the IRS will send the taxpayer a second bill requesting full payment of all taxes, penalties and interest due by a certain date;

In the event the taxpayer fails to pay the second bill in full or contact the IRS to make alternate payment arrangements, the IRS will pull tools out of its collections tool box and rachet up the heat on the recalcitrant taxpayer.

INTERVIEWER: Johana Powell, Tax Legal Assistant

Okay attorney; how much heat can the taxpayer expect to be coming their way if they fail to voluntarily pay that tax debt!

QUESTION 2: Explain what collection tools are in the IRS collection’s tool box?

Attorney Answer – Question 2:

Johana, taxpayers who owe the IRS need to understand that the law gives the IRS broad authority and awesome powers to collect delinquent federal taxes, penalties and interest without any involvement of the courts. In fact, injunctive relief is not available to the taxpayer. Taxpayers cannot get any court to enjoin the IRS in its collection efforts. Taxpayers may have the right to seek that federal courts review and quash some of these collection tools that I am about to discuss; but extremely strict rules apply to quashing an IRS action. The IRS is authorized under the provisions of the Internal Revenue Code; which is codified in 26 United States Code, to collect taxes by use of its collection tools:

1. The IRS is authorized to apply all refunds due to any delinquent tax debt owned by the taxpayer until the delinquent taxes, penalties and interest are paid in full;

2. The IRS is authorized to file a federal tax lien in the property records wherever the taxpayer has property. The IRS tax lien attaches to all property owned by the taxpayer at the time the lien is recorded in the records and it also attaches to all property of any kind the taxpayer may have in the future until the taxes, penalties and interest are paid in full or the lien is lawfully released;

3. The IRS is authorized to assign a Revenue Officer to physically contact the taxpayer at home or at the taxpayer’s business without notice in an attempt to collect the taxes, penalties and interest owed;

4. The IRS is authorized to summon the taxpayer or third party to appear in the IRS offices to give testimony and produce relevant documents to an IRS Officer;

5. The IRS is authorized to serve a levy on third parties to collect the taxes, penalties and interest owed by the taxpayer. For example, the IRS levy and seize the taxpayers bank accounts, wages and other monies owed the taxpayer or held on behalf of the taxpayer; and

6. The IRS collections division is authorized to make criminal referrals to the IRS Criminal Division for criminal investigation and potential criminal tax charges against the taxpayer and others aiding and abetting the taxpayer in violation of U.S. Tax Laws; and finally;

7. The IRS is authorized to file a declaration with the U.S. Department of State declaring the taxpayer’s account seriously delinquent; thereby, informing the U.S. Department of State that the seriously delinquent taxpayer’s U.S. Passport should be revoked or the taxpayer’s passport renewal should be denied.

Let me point out clearly here; all of the collection tools that I have discussed here can be used by the IRS without any court involvement or supervision what-so-ever!

INTERVIEWER: Johana Powell, Tax Legal Assistant

Well with all that potential heat! What are the actions that the taxpayer should take when they receive a tax bill from the IRS?

Attorney Answer – Question 3:

The taxpayer should immediately open the correspondence from the IRS as soon as they receive it. That is the very first thing the taxpayer should do. Time is of the essence because critical deadlines to act are often in IRS correspondence. By failing to act, taxpayers can forsake very important rights. For example, the right to seek relief in the U.S. Tax Court without first paying the taxes, penalties and interest due comes in a 90-day letter from the IRS. Failure to act within 90 days and you lose that right forever.
Second, the taxpayer should read the correspondence carefully; and if they don’t understand it, they should either contact the IRS and arrange to discuss it with them; or, contact an attorney, accountant or IRS enrolled agent and schedule an appointment and bring the IRS correspondence with them to their initial meeting.
Third thing that needs to happen is that the taxpayer will need to decide what further actions they need to take; that is going to depend upon the following
1. What actions are the IRS requesting the taxpayer to take in the correspondence, if any;
2. If it’s a tax bill or notice of tax adjustment where the IRS is requesting a payment by a date certain-
  1. In the event the taxpayer agrees that they owe the taxes, penalties and interest, the taxpayer either needs to pay in full or negotiate some kind of payment arrangement with the IRS;
  2. In the event the taxpayer disagrees with the balance owed or any part of it; the taxpayer needs to exercise its collection due process rights, or the taxpayer’s right to challenge the assessment in court within the deadlines set forth in the IRS correspondence, or exercise any number of other rights the taxpayer may have depending upon all the facts and circumstances.

Taxpayers dealing with the IRS should seriously seek professional representation; especially, if they are certain about what the tax issues are or they are in great civil and criminal exposure.

INTERVIEWER: Johana Powell, Tax Legal Assistant

Question 4: Attorney Jackson, what happens if the taxpayer cannot pay the taxes, penalties and interest in full?

Attorney Answer – Question 4:

Again, the particular options available to a taxpayer is going to depend on all the facts and circumstances. Facts matters, such as, the type of tax debt; such as, income taxes, business taxes, payroll taxes, excise taxes and things like that. The amount of the tax debt is very important as to what options are going to be available to resolve the matter. The taxpayer’s history with the IRS also can matter a lot. Anyway, all the facts and circumstances matter as to what options are available. Some of the options that might be available are

Negotiate a full pay or partial pay installment payment arrangement with the IRS. Again, depending on all the facts and circumstances the taxpayer may be able to apply for an installment agreement at irs.gov, on the phone, by mail or by visiting an IRS local office. Again, whether this can be done is going to depend upon the amount of the tax debt, the tax payer’s prior history, the taxpayer’s current tax compliance, and a lot of other things. The taxpayer may want to consult and attorney or other professional whenever they are dealing with large tax debts, unfiled tax returns and other times when they have criminal exposure due to their actions or inactions as far as it goes in terms of compliance with U.S. federal tax laws.
The fresh start or offer in compromise might be available for some taxpayers. There are some options for these taxpayers but they must act promptly once they receive their bills. The taxpayer that cannot pay in full may apply for an installment agreement, which consists in a payment plan so the IRS will allow you to make smaller periodic payments according with your financial capacity. Usually, you can apply for the installment agreement online, by phone, by mail, or in person in one of the local offices, however, this is just possible when it is early in the process. When a taxpayer has a big tax debt or it is past due from several years and has interest and penalties accrued for a long period of time, you should consult with your tax attorney. An offer in compromise is sought to settle unpaid taxes for less than the full amount owed, the IRS may accept an OIC when the Service believe that the taxpayer’s tax debt might not be accurate, or when the taxpayer has proven to the OIC division of the IRS that the taxpayer does not have sufficient assets and income to pay the tax debt, or because paying the debt would cause the taxpayer undue hardship. In recent years, not many offers in compromise request are approved. The IRS is more likely to accept a partial pay installment agreement or put the taxpayer’s account in uncollectable status and review it in subsequent years to determine whether the tax debt is collectible.

INTERVIEWER: Johana Powell, Tax Legal Assistant

Attorney, thank you for siting with me today to inform us about the IRS collection process and taxpayer’s options, it is very important for the taxpayers to be aware of this information. In United States all individuals and businesses must prepare tax returns, it is important to maintain records of this returns, and to make them accurate to avoid issues with the IRS.

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English callers: 214-599-0431 | Spanish callers: 214-599-0432 |Portuguese callers: 214-272-3100

Attorney Closing Remarks

This is the end of today’s Legal Thoughts!

Thank you for giving us the opportunity to inform you about: “THE IRS COLLECTION PROCESS.”

If you want to see or hear more taxation, contracts litigation and immigration LEGAL THOUGHTS from Coleman Jackson, Professional Corporation. Subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever you listen to your podcast.

Stay tuned! We are here in Dallas, Texas and want to inform, educate and encourage our communities on topics dealing with taxation, litigation and immigration. Until next time, take care.