What is a IDR Audit?

Lets Talk about IDR Audits, and the Illinois Department of Revenue. By Alan Orlowsky

IDR stands for Information Document Request, IRS Form 4564.
It is a form that the IRS uses during a tax audit to request information from the taxpayer. Tax Litigation lawyers spend a lot of time thinking about how best to respond to IDR's in a way which is most appropriate, and does not reveal any information that is covered by attorney client privilege.

You have the right to fair and equitable treatment if your account has been selected for audit. Since the audit function is to determine whether the correct amount of tax has been reported, we are willing to acknowledge tax over payments or errors on our part as we are also able to recognize under payments. We may ask you to provide additional information to verify amounts shown on your returns. You have the right to know why the Department of Revenue is asking for information, how that information will be used and what will happen if you do not furnish the information. If you have questions about any of these please contact Alan today for a consultation.

Let's also talk about IL Department of Revenue Hearings, Audits or Determinations of Liability:

Whether it's a Payroll, Sales, Business Income Tax, or Personal Income Tax issue that you might have with the Illinois Department of Revenue (IDOR), there is a good chance Orlowsky & Wilson can help. We assist clients in Illinois Department of Revenue Audits and challenging tax liability assessments and or determinations. The typical IDOR audit involves a face to face meeting with a IDOR auditor. if you receive a Tax audit letter from the department of Revenue, you should examine your records to determine the nature and extent of the tax audit issue. While it is possible that IDOR will want to audit the entire tax return for a given year or years, more frequently the department of revenue will focus on a certain portion or schedule of certain tax years.

Often clients seek assistance before the hearing stage. We advise that you secure legal or other representation prior to this. Ideally, you should secure assistance in the way of representation as soon as you are contacted by the Illinois Department of Revenue. In most cases where things have progressed to the hearing stage, there has typically already been an audit or determination of liability  has already been entered against a tax payer or "responsible corporate officer." Alan Orlowsky has represented numerous clients in such hearings. If you have an IDOR hearing coming up, you should contact Alan immediately to find our what rights you might have.

If the issue concerns supporting documentation or alleged lack thereof, then you should send IDOR copies of any and all appropriate documents. Do not send originals to IDOR as there is no guarantee that they will return the documents to you. Additionally, originals might get lost in the mail or at the IDOR offices. If the tax notice questions whether you are entitled to a tax deduction or questions a tax position taken on the tax return, you should consult your tax adviser before responding to or submitting any documentation to IDOR. While a quick, satisfactory explanation can end the matter swiftly, there is no guarantee. Regardless, it is important to correspond with the IDOR in writing whenever possible. You should not delay in seeking assistance, legal or otherwise, in your IDOR matter. In some cases, the Department of Revenue can and will record liens against property or even levy wage garnishment against taxpayers.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559 or visit or website at http://www.orlowskywilson.com

5 Common & Costly Estate Planning Mistakes Northbrook IL

Let's talk about the 5 most common Estate Planning mistakes that can annihilate your business and Personal Finances.By: Alan Orlowsky

The honest unvarnished truth is that the vast majority of business owners and individuals fail to take simple precautions and preserve their personal and business wealth. Regardless of the value of your assets, they can be protected from unforeseen or even foreseeable  business and personal risk. Catastrophe may occur unexpectedly and can annihilate even the best run business and personal financial portfolio. Many businesses today are implementing "Asset Protection Planning Strategies" that will insulate their economic interests from events beyond their control that could otherwise lead to economic annihilation! As a practicing attorney with over 25 years experience, I have witnessed firsthand how little or not asset protection can lead to catastrophic results. With the use of basic asset protection strategies you can avoid the pitfalls of financial ruin.
Here is the 5 most common asset protection planning mistakes I see individuals and business owners make:

1) Failure to legally separate business from personal assets.

This mistake is made all the time and allows a business creditor to attack the personal assets of a business owner and his or her spouse. Many business owners erroneously believe they are protected by their companies shield when in fact they are not. Avoid this mistake and you just might avoid a personal Waterloo.

2) Failure to have or maintain required corporate legal records.

Time after time I see business owners who fail to expend the resources to create and maintain their corporate records. People are notoriously pound wise and penny foolish and just don't want to expend the time or finances engaging an attorney. In the long run failure to do so can lead to economic devastation. You only need good and up to date corporate records in order to protect your business, and sometimes your personal assets.

3) Failure to hire a good attorney.

Failure to hire a good attorney to navigate you through a virtual maze of rules and regulations is like rafting down the Amazon River in an inner-tube! Again, I have seen "Do it yourself" business records, contracts and paperwork lead to huge financial problems. I advise my clients that it is always more cost effective to hire me on the front end and prevent a legal problem, then to hire me later to fix it.

4) Unnecessarily having a spouse take on business liability exposure.

It is not an honor to be an officer or director of your spouse's company.....but in fact it is an obligation! Involvement in your spouse's business exposes you to lawsuits  bank obligations and worst of all, Federal and State obligations. Such exposure also violates one of my most sacrosanct rules.....Keep Marriage Our of Business!


5) No Estate Planning.

There is no easier way to ruin your Family's future than by failing to have a Will and Trust and the planning that accompanies them. There can be huge business and personal problems caused by an unplanned death. A few examples are:

• Forced Sale of a business to a surviving partner
• Loss of income for surviving family members
• fighting among siblings for control of family assets
• squandering a lifetime of your hard work 
• Government involvement and taxes

If you have a business, investments and a family and you wish to protect against the harsh realities and consequences of an unforgiving world, you must engage in at least the basic asset protection strategies that are available. Nobody can go it alone, so you will need to fire trained professionals to build the firewalls required in a risky and unpredictable world.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559 or visit our website: http://www.orlowskywilson.com

Family Disputes over Inheritance - Lincolnshire IL

 

Lets Talk about how to avoid Family Fights over inheritance.
By: Alan Orlowsky

An elderly woman on her deathbed has an estate worth $500,000. She has three children and a will stating each child will receive 33 percent of her assets after her death. The situation seems simple enough: the woman has a legal document in place, a will that contains specifics on how she wants her estate to be passed along to her children. The issue is according to some estate planning experts, this woman's death could kick off a long and expensive legal process that often turns ugly. Fights over inheritance can cause rifts in families that are sometimes impossible to heal.

"Family fights among children after death occurs in a large percentage of families" says Tim O'Sullivan, a partner and estate planning attorney at the Foulston Siefkin law firm. O'Sullivan went on to say "If the number 1 goal is to create family harmony, then the estate plan ought to be designed in a way that preserves it. It's so sad to see what happens in these situations."

To prevent this kind of conflict, more sophisticated legal arrangements are necessary. Even for people with modest wealth, advanced estate planning can help ease resentment during a painful time.

A will is essentially powerless until a family enters a process known as probate. Probate is essentially a set of procedural law that determines what happens to someone's property when they die. All heirs named in the will are part of the process, with the will serving as a guide for a judge to determine how assets should be allocated.

This process can differ from state to state, and can take up to a year to resolve. Additionally, the Probate process is public, meaning information that families might want to stay private becomes a matter of record. An attorney needs to be appointed to handle the procedure otherwise it can lead to family disputes and could be extremely costly. There is another option, revocable trusts. 

The Revocable Trust alternative:

A revocable trust is a less-complex method of estate planning. This trust is a contract that you make to establish an entity into which you transfer title of your assets, all in your name. If you should die, the trust does not die with you. A trustee is always appointed, often times an attorney who created the trust.

In this trust you can do anything you like. Once a trustee is named, he or she can divvy up assets based on wishes of the deceased family member. This has been referred as a "probate-avoidance tool" that largely removes the potential for family infighting.

To avoid conflict, you have to have a well written Will and a Trust, with an independent third party to oversee it. Ambiguity leads to conflict and if the trust is well thought out and well written conflict can be avoided.

With a will, the families fight about who gets what. With a trust, you stay out of the court. Additionally it can be more cost effective than just having a will.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559 or visit our website at: www.orlowskywilson.com 

Choosing a Life Insurance Provider - Lincolnshire IL

Choosing a Life Insurance Provider

Let's talk about Choosing a Life Insurance Provider. There are a number of factors that go into picking the right insurance company or companies for your insurance needs. The final decision will depend on what you are trying to accomplish.

Some factors that are commonly used by advisers when consulting with clients about their insurance needs include the following:


1. Rating

Ratings help in a general way to determine which companies are the strongest financially. Most ratings systems work on an easy-to-understand alphabetical structure similar to the credit markets. So a company that has a triple-A (AAA) rating is likely to be more financially sound than a company with a B rating. These ratings involve the opinions and judgments made by the ratings services.

There are 5 key rating services in the market today, including Standard and Poor's, Dun and Bradstreet, Weiss Research, Moody's Investors Services and A.M. Best. The issue is these various agencies have different scales with different letter ratings that do not necessarily correspond from one agency to another. In addition, not all insurance companies have ratings from each of the agencies.

In addition, there is a rating scale called Comdex. This places the company on a percentile ranking from 1 to 100. An insurance company with a Comdex Score of 90 would place it in the top 10% of all companies in financial strength. This percentile ranking has greatly simplified the understanding of all of the various ratings for the consumer. A Comdex score of at least 75 is desirable.

2. Underwriting

In addition to ratings, another key factor in your decision will be to look at how each insurance company rates you as the insured person. This is important because the better the rating you are assigned, the lower the insurance cost.

Some companies, often those with higher credit ratings, are very selective about who they select to insure. This results in a lower claims and higher profit for the company. Other companies specialize in insuring people with health problems. These are companies that are generally charging higher premiums to compensate for the increased risk.

If you are in poor health, your choice of carries may be limited.

3. Insurance Pricing

The actual pricing offer you receive for your insurance is also a factor in choosing a company. In larger cases, you will want to make sure that your under-witting file is seen by more than one company so that you will receive competitive bids. As long as the company with the lower premium meets the minimum rating screen that you and your adviser have established, it will make sense to go with the lowest premium possible.


4. Cost and Internal Rate of Return

A Calculation of internal rate of return (available from most companies as part of their illustration) will help you to compare one policy illustration or design with another. Because insurance costs, crediting rates, expenses, and other moving parts in an insurance contract vary from company to company, a way to compare the whole picture is to look at the death benefit at a given point in time relative to the premiums paid to that point in time. A good place to start is to look at the period of time around your life expectancy. If one policy shows that the internal rate of return (IRR) of 8.5% at life expectancy and another is showing an IRR of 6.8%, you will want to explore the policy features that are creating the difference.

In the end, your choice of companies is likely to be driven by a combination of all these factors, resulting in your choosing a company that has good ratings, offers a product that fits your needs at a price you can afford, from a company that has a good financial track record.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559 or visit our website www.orlowskywilson.com. 

Orlowsky & Wilson Reviews - Lincolnshire IL

Let's Talk About the reputation of Orlowsky & Wilson. We pride ourselves in our work, and treat our clients like family. Below are some testimonials from our clients I would personally like to share. We understand you have a choice for your Estate Planning needs and we would like to highlight some of our successes so we can earn your business.


Please contact us today so we can meet and exceed all your Estate Planning, Business, and Real Estate needs. You can also find us on Facebook. Here is what some of our recent clients have said about us:

1) "I am a very difficult client to work with. Estate Planning was the last item on my to do list. However, I decided that in order to protect my wife and children, I had to have a plan. Only because of Alan's relentless follow-up were we able to complete what I now know is a very thorough and sophisticated estate plan. I give Alan my highest recommendation." B.Z. - Glenview IL

2) "Until we meet Alan, we were hopelessly  confused and in need of direction. Alan gave us the direction we needed, drafted our documents, and more" C. & J.C. - Chandler, AZ

3) "Last year our family estate planning situation was in disarray. The strategies and techniques Alan has recommended will save us hundreds of dollars in estate taxes and probate costs." R.S. - Northfield, IL

4) "When I responded to Alan's ad, frankly, I was skeptical. But all doubts were dispelled after he professionally reviewed our plan, drafted our estate planning documents, worked with our bank trustee, solved our insurance needs and put my wife at ease! He's great - so don't hesitate in engaging his services." F.M.S. - Northbrook, IL

5) "I needed an attorney, and Alan was recommended by a V.P. with Northern Trust in Barrington. Al Provided me with the answers I needed and the follow-up he promised. He gets my recommendation." J.F.- Barrington, IL

6) "My wide and I were seeking a trustworthy and competent attorney to draft our new wills and trusts. Once we hired Alan, he went right to work, quickly completing our estate plan and transferring all of our assets to the trusts. Al is professional, innovative and intelligent." R.K. - Wilmette, IL

7) "Alan and his staff were a refreshing change of pace. They were not only knowledgeable estate planners, they took the time to answer all of my questions, so that I actually understood and appreciated the work they were doing for me. What's more they promptly returned all of my phone calls!" R.C. - Barrington, IL

8) "Alan is an excellent attorney, C.P.A. and businessman. He has terrific people skills and an engaging sense of humor. His work is always thorough and professional. I am so completely satisfied with the work he did in setting my mother's estate after her death that I have asked him to prepare my estate plan documents as well.  A.E.K. - Evanston, IL

Please visit our website for additional reviews, and I look forward to earning your business.
If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559. www.orlowskywilson.com