A law firm tied to Stormy Daniel’s attorney is in hot water with the IRS over a missed back tax payment of over $440,000 that was due the week of May 14.

Michael Avenatti “personally guaranteed” the payments, according to court records as reported by the Daily Mail.

He could soon be the subject of legal action by the government.

As reported in the Los Angeles Times, Avenatti and his firm, Eagan Avenatti, agreed to pay the IRS $2.4 million to settle their back tax bill in January.

Over 50% of that amount – $1.3 million of the $2.4 million – was for payroll taxes that had been withheld from employee’s paychecks.

However, the firm failed to turn those monies over to the federal government.

Avenatti made an initial payment of $1.5 million, leaving it with an approximately $880,000 remaining balance.

More Troubles for the Firm

This is in addition to missing a $2 million payment to former partner Jason Frank that was needed for the firm to settle its bankruptcy. Because of the missed payment, a bankruptcy court ordered the firm to pay $10 million on May 22.

Avenatti Denies His Ties to the Firm

According to court documents, Michael Avenatti is a “managing member and majority equity stakeholder” of the firm in question, Eagan Avenatti.

In spite of this, Avenatti claims he has no ties to the firm that bears his name.

There is much evidence to the contrary, however.

First, the California State Bar lists him as an attorney with the Eagan Avenatti firm.

Avenatti also sent emails to the Los Angeles Times about the case from Eagan Avenatti’s address and with Eagan Avenatti’s URL at the bottom of his emails.

Not only that, according to the Los-Angeles-based U.S. attorney’s office, Avenatti blamed the failure to remit payroll taxes on a payroll company.

Why would you do that, if you were not a managing partner of the firm?

Unfortunately, that question will go unanswered.

What Not to Do

If you happen to find yourself in the middle of a legal storm (no pun intended), just remember that claims such as these are very easy to check out.

So be very, very careful about making such blatantly false statements. You will be caught in their web… and it can be much worse than if you simply owned up to the facts.

As always, honesty is the best policy… closely followed by paying your taxes on time!

Employers Beware

When you withhold payroll taxes from employees, you have the responsibility to turn those taxes over to the proper authority.

If you do not, you can face criminal charges, in addition to penalties and interest.

This goes for any taxes a company may owe.

As well, if there is an installment agreement in place with the IRS, you need to abide by that agreement. Make all of your payments on time to avoid further collection action such as tax liens, levies, and even criminal charges.

Professional Advice Pays Off

No matter what your financial situation is, you need to address any outstanding issues with the IRS.

A qualified tax professional can help you determine the best course of action for your unique circumstances. They can also analyze your situation to determine how best to lower your tax liability – legally.

SFS Tax Problem Solutions has over 35 years of experience helping businesses and individuals reach a favorable outcome with the IRS. As an Enrolled Agent, Jeffrey Schneider, principal of SFS Tax Problem Solutions, is one of American’s Tax Experts, who has earned the privilege of representing taxpayers before all administrative levels of the Internal Revenue Service.

For a free initial consultation, call us at (772) 337-1040.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting Services as well as the Enrolled Agent and Certified Tax Resolution Specialist for SFS Tax Problem Solutions.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

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For more on SFS Tax & Accounting Services, visit http://sfstaxacct.com/
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