Law Office of Luis R. De Luna, PLLC Experienced, Effective Representation For Tax, Business And Probate Matters 2026-05-29T12:18:56Z https://www.delunataxlaw.com/feed/atom/ WordPress /wp-content/uploads/sites/1300850/2020/11/fav-icon-75x75.png On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Can bankruptcy eliminate your business’s IRS debt?]]> https://www.delunataxlaw.com/?p=47648 2026-05-29T12:18:56Z 2026-05-29T12:18:56Z Not all IRS debt receives the same treatment Bankruptcy law does not treat every business tax debt the same way. Some income tax liabilities may receive more favorable treatment, while payroll tax liabilities and debts connected to fraud generally do not. A court may consider factors such as:
  • The kind of tax the business owes
  • How long the debt has existed
  • When the business filed its returns
  • Whether fraud allegations exist
  • How much interest and penalties have accumulated
These factors can influence how the debt receives treatment during the bankruptcy process.

The timing rules can affect your options

Federal bankruptcy law includes timing requirements that apply to many tax debts. Certain tax liabilities generally must reach a specific age before they may qualify for different treatment under bankruptcy law. The filing date of a tax return can also affect the analysis. Recent tax liabilities usually remain collectible after bankruptcy, and late-filed returns may receive different treatment. As a result, two businesses with similar tax balances may face different outcomes.

Payroll tax cases create unique risks

Payroll taxes involve money that businesses withhold from employee paychecks for federal tax obligations. During financial hardship, some businesses use those funds for operating expenses instead of sending them to the government. The IRS treats these situations seriously because the business already collected the money from employees. The agency may assess a trust fund recovery penalty against owners, officers or others who controlled financial decisions. Bankruptcy generally does not eliminate this type of liability.

Bankruptcy may pause collection efforts

Filing for bankruptcy usually triggers an automatic stay, which temporarily stops many collection activities. The automatic stay may affect:
  • Wage garnishments
  • Bank levies
  • Collection lawsuits
  • IRS enforcement actions
  • Property seizure efforts
The automatic stay can provide temporary relief from collection activity while the bankruptcy case moves through the court system. It does not permanently resolve the underlying tax debt.

Bankruptcy is not a guaranteed solution for business tax debt

Bankruptcy can help address some IRS obligations, but it is not a universal solution. Certain tax debts may receive favorable treatment, while others can survive the bankruptcy process and remain subject to collection. For business owners, the nature of the liability is often more important than the dollar amount. A business that owes income taxes may face a very different situation than one that failed to pay over employee withholding taxes, which is why IRS debt and bankruptcy do not always go hand in hand.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Addressing an IRS letter after tax return season ends]]> https://www.delunataxlaw.com/?p=47647 2026-05-25T19:20:17Z 2026-05-25T19:20:17Z Review the notice carefully The IRS may send letters advising people of an underpayment of taxes. Notices could address allegedly unreported assets or income. They could advise of an upcoming audit. In some cases, they may include an amount due to the IRS, as well as information about penalties and interest. Taxpayers should read the letter carefully to determine the exact underlying cause of the tax controversy and respond appropriately. The letter may include critical deadlines for addressing the issue.

Contact a tax attorney

Understanding the basis of the IRS letter does not resolve the issue. Taxpayers may need to prepare for an audit, communicate with the IRS or gather evidence to prove that the claims made in the letter are actually inaccurate. A tax attorney can manage much of that process on behalf of a taxpayer. They can make sense of the IRS's claims, advise the taxpayer of what evidence might be necessary and help them avoid escalating consequences.

Respond appropriately

Taxpayers may need to submit documentation, negotiate an offer in compromise or prepare for an audit. They need to avoid actions that could worsen their situation, such as transferring assets to others to avoid collection activities. An attorney can help ensure that people address the issues in an IRS letter before any deadlines. Delays when responding to IRS notices may result in additional penalties or interest accruing. Timely action is necessary, but the exact steps a person should take depend on the type of notice they’ve received and whether the IRS accurately assessed the situation or not. Scheduling an initial consultation with the tax attorney as soon as possible after receiving an IRS tax letter can help people avoid worsening financial consequences and other potential penalties.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[How do plea deals work in Texas criminal tax cases?]]> https://www.delunataxlaw.com/?p=47645 2026-04-30T09:56:52Z 2026-04-30T09:41:01Z you face criminal tax allegations in Texas, conversations about resolving the matter often start early, sometimes even before trial preparations begin. A plea deal sits at the center of that process. It reflects an agreement between you and the prosecution that may shape how the case moves forward and what outcome you might expect.

What does a plea deal involve?

A plea deal or plea bargain generally means you agree to plead guilty to a specific charge or a less serious version of it. In return, the prosecution may narrow the charges or suggest a more limited sentencing range. In Texas, these cases often follow one of two tracks depending on the type of tax issue involved:
  • State level cases may involve the Texas Tax Code, such as sales tax or motor fuel tax issues
  • Federal cases may involve the Internal Revenue Code, including allegations like tax evasion
Choosing a negotiated resolution instead of a trial can reduce uncertainty and may shorten the overall process. Still, the outcome often depends on the details of your situation and how both sides evaluate the facts.

How do negotiations typically develop?

Negotiations usually unfold through a series of discussions between your defense position and the prosecution. These conversations often focus on what the evidence shows and how your intent appears in financial records and filings. During these discussions, several key points often come up:
  • The charge that best matches the facts of the case
  • The level of intent reflected in your financial history and records
  • Your willingness to take responsibility for certain actions tied to the allegations
As the parties review these points, both sides may adjust their positions. Transitioning from early discussions to a structured agreement often depends on how each side interprets the strength of the evidence.

What are the possible sentencing outcomes?

If you reach a plea agreement, sentencing may differ from what could follow a trial conviction. A deal may reduce the severity of charges or create a more predictable sentencing range. In some situations, certain counts may no longer move forward. Federal cases often rely on the U.S. Sentencing Guidelines to help structure outcomes. State cases follow the Texas Penal Code framework. In both settings, a judge reviews the agreement and considers whether to accept it. In some Texas state court situations, if a judge rejects a plea agreement, you may have the option to withdraw your plea and reassess your approach.

Which factors influence the final deal?

Several factors often shape plea discussions in tax cases. These may include the amount of tax involved, your level of cooperation during the investigation and your prior filing history. Clear and organized financial records can also influence how both sides view the case. Because each situation carries unique details, outcomes may vary depending on how the evidence presents these factors and how the parties interpret them during negotiations.

Final thoughts on resolution strategies

Plea deals in Texas criminal tax cases often serve as one possible path to resolve disputes without a trial. They can provide structure and reduce uncertainty, although the terms depend heavily on the facts and how the case develops over time.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Organizing your assets for your heirs in Texas]]> https://www.delunataxlaw.com/?p=47644 2026-03-27T14:32:34Z 2026-03-27T14:32:34Z Getting your affairs in order is a practical step to protect your family. In Texas, clear organization helps your heirs avoid the confusion, delays and added costs of the probate process. A simple plan guided by state law makes a difficult time much easier for everyone involved.

Create a clear and complete asset inventory

Start by listing everything you own, including bank accounts, retirement funds, real estate and vehicles. Do not forget digital assets, such as cryptocurrency or online accounts. Under the Texas Revised Uniform Fiduciary Access to Digital Assets Act, simply writing down passwords may not be enough. You should use online tools provided by providers like Apple or Google to name a legacy contact, as these settings legally override instructions in a will. For each asset, note account numbers and locations. Keep this in a secure place and tell a trusted person where it is. An organized inventory helps your executor comply with the law, which requires them to file a formal inventory with the court within 90 days of their appointment.

Keep ownership and beneficiary details updated

In Texas, some assets, such as life insurance and retirement accounts, pass directly to named beneficiaries. However, this only works if you list a valid living person. If you name your estate or leave the section blank, the asset must go through a full probate court process. Thus, you need to check how you titled each asset. Also, review joint ownership carefully. In Texas, owning an account or house with someone else does not automatically transfer it to them when you die. Under Texas law, you must sign a separate written agreement that specifically grants a right of survivorship. Without this, your share may go to other heirs instead of the co-owner.

How legal guidance protects your plan

Even a well-organized plan can fail if it does not meet Texas legal standards. An attorney can help you align your beneficiary designations with your will and prevent conflicts. Taking these steps now protects your wishes and gives your family peace of mind.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[5 common tax mistakes to avoid that could lead to an audit]]> https://www.delunataxlaw.com/?p=47642 2026-03-23T10:09:35Z 2026-03-23T10:09:35Z Your chances of an IRS audit depend largely on what is in your tax return. In 2024, the agency audited over 500,000 returns. Because it lacks the resources to audit every filing, the IRS focuses on returns with specific warning signs. The common thread? Many taxpayers made the same avoidable mistakes. Protecting yourself and your business from an audit means recognizing and eliminating these five recurring errors before you file.

Failing to report all income sources

The IRS receives copies of every 1099, W-2 and income document that third parties send you. When your reported income does not match these records, automated systems will flag your return instantly. This issue typically affects freelancers, gig workers and small business owners. You must report all income, including cash payments, side job earnings and rental revenue. Texas business owners who handle cash transactions face extra scrutiny because the IRS assumes unreported income occurs more often in cash-based industries. Under federal tax law, omitting income can result in penalties of up to 20% of the underpayment.

Overstating business deductions

Business expenses legally lower taxable income. Still, deductions that are unusually large for your revenue or industry draw IRS scrutiny. The agency targets these particular categories:
  • Home office expenses that exceed actual business use
  • Vehicle deductions claiming 100% business use without proof
  • Inflated meals and entertainment expenses
  • Travel costs without a clear business purpose
  • Round-number expenses that look like guesses
You need receipts, logs and documentation for every deduction you claim. The government requires you to prove your expenses, not the other way around.

Making basic math errors

Calculation mistakes seem minor but they catch IRS attention immediately. The agency's computers scan every return for arithmetic errors, transposed numbers and incorrect totals. These discrepancies often happen when you rush through your return or skip the final review. Using tax preparation software helps, but you still must verify all numbers before submitting. 

Misclassifying workers

If you are a business owner or employer, treating employees as independent contractors generally saves you money on payroll taxes, workers' compensation and benefits. The IRS, however, actively investigates this practice because it costs the government billions in lost revenue. Federal law uses a multi-factor test to determine worker status. The test examines who controls the work, who provides tools and materials and whether the relationship is permanent. Texas follows these federal guidelines strictly. Misclassifying workers triggers audits and leads to back taxes plus penalties. You also face potential liability under employment laws that can reach back several years.

Mixing personal and business expenses

Commingling funds is a major red flag for any auditor. When you use a business credit card for groceries or a personal vacation, you risk losing the legal protections of your business entity. Using business accounts for personal expenses suggests you treat your business as an extension of yourself rather than a separate company. This practice can lead to "piercing the corporate veil" in legal proceedings. If this happens, a court could expose your personal assets to business liabilities.

How to stay compliant and avoid tax audits?

Prevention is typically easier and less expensive than dealing with an audit after it starts. Consider the following strategies:
  • Keep a solid record system: Store all receipts, invoices and financial documents in one secure location, whether digital or physical. This system simplifies filing and provides the proof you need if questions arise later.
  • Check your books regularly: Review your tax situation quarterly rather than waiting until April. This approach gives you time to identify potential issues, adjust your estimated payments and ensure you capture all deductible expenses.
  • Educate yourself about the tax rules: The IRS publishes industry-specific audit guides that outline what auditors look for in different sectors. This way, you can prepare stronger documentation and avoid common pitfalls in your field.
If you receive a notice from the IRS, consider getting help before responding to inquiries. Experienced professionals understand what the agency wants, how to present information effectively and when to negotiate. Securing this representation often resolves issues faster and more favorably than handling matters on your own.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Silent partner suddenly wants control? You have legal options]]> https://www.delunataxlaw.com/?p=47641 2026-02-24T11:05:26Z 2026-02-24T11:05:26Z What makes a partner "silent"? A “silent partner” is an informal label for an investor who provides capital to your business but stays out of daily operations. They earn profits based on their ownership percentage without managing employees, signing contracts or making business decisions. This arrangement benefits both parties: you get funding, and they get returns without the work. Whether a person qualifies as a silent or limited partner depends on the entity type and, most importantly, the partnership or operating agreement. Simply put, the written agreement is the primary source of each party’s rights and duties.

How do silent partners commonly overstep?

When a previously passive investor starts exerting influence, they often do so in specific, identifiable ways:
  • Pressing to hire or fire key employees
  • Demanding approval rights over vendors, contracts, or purchases
  • Insisting on attending or directing management meetings
  • Threatening to block major business decisions
  • Requesting detailed day-to-day financial access or control
  • Attempting to sign contracts or otherwise act for the business
Any of these steps can disrupt operations. Depending on your agreement and the facts, these actions may breach contractual limits on the investor’s role.

What is the risk for the silent partner?

Texas law generally protects limited partners or other passive investors from personal liability for partnership obligations as long as they remain passive. If a passive investor starts exercising control inconsistent with that status, a court may find they assumed managerial functions and could lose limited liability protections. That risk is fact-specific. Courts will look at the totality of conduct, such as signing contracts, directing employees and making operational decisions. Not every vote or meeting attendance will automatically strip limited status.

What are the legal tools you can consider?

Your partnership agreement serves as your primary protection. This document defines each partner's rights, duties and limitations. Texas courts enforce these agreements when they clearly establish management roles. You can send a formal demand letter reminding your partner of their contractual obligations. Many disputes resolve at this stage once the silent partner understands they lack legal standing. If they continue interfering, you can pursue mediation or arbitration if your agreement requires these steps. Litigation remains an option for serious breaches. You can ask the court to enforce your agreement and stop the partner's interference. Texas law allows managing partners to seek injunctive relief, which prevents silent partners from taking unauthorized actions. You might also explore buying out their interest or restructuring the partnership entirely.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[What happens if you do not have an executor for your estate]]> https://www.delunataxlaw.com/?p=47635 2026-01-29T07:43:45Z 2026-01-29T07:43:45Z When there is no named executor When someone passes away in Texas, their estate typically goes through probate. This legal process allows the courts to validate a will and distribute assets. However, if there is no executor named in a will or no will exists, the court steps in to appoint an administrator. While an administrator has similar goals to an executor—collecting assets, paying debts and distributing property—the process is often far more restrictive. Additionally, the court generally cannot choose based on who is most qualified. Instead, state law enforces a strict priority list to determine who serves. For example, the surviving spouse is usually first on that list, though the court can disqualify them if they are unsuitable or incapable of managing the estate.

What cost and complications follow

Without a named executor, your estate may face additional expenses and a longer probate timeline. One significant difference involves dependent administration versus independent administration. In Texas, independent administration allows an executor to handle most estate matters without constant court approval. This option is faster and less expensive. However, when there is no named executor and heirs cannot agree, the court may require dependent administration instead. Dependent administration means the court supervises every major action the administrator takes. Each transaction may require a court hearing and approval. This process must remain open for at least 6 months and often takes much longer. A court-appointed administrator is almost always required to post a bond. This bond acts like an insurance policy protecting the estate from potential mismanagement. Bond premiums typically cost between 0.5% and 1% of the bond amount, usually the value of personal property, and must be paid annually until the estate closes.

How you can avoid this situation

Avoiding these issues is straightforward with some basic estate planning. Creating a valid will that names an executor is the most direct solution. You can also name backup executors in case your first choice is unable or unwilling. Your will can include language that authorizes independent administration and waives the bond requirement. These provisions can significantly reduce the cost and complexity of probate for your family. If you already have a will, reviewing it periodically is a wise practice. Life changes such as marriages, divorces and deaths can affect your estate plan. Consider discussing your wishes with the person you plan to name as executor to ensure they understand the responsibility.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Estate planning for cross-border families: what Texans with Mexican ties should know]]> https://www.delunataxlaw.com/?p=47621 2026-01-10T01:36:36Z 2026-01-10T01:36:36Z Many families in Texas maintain deep roots in Mexico. You might own a rancho in Michoacán or have family living in Monterrey. Managing assets across the border comes with unique legal considerations. Without a clear plan, your loved ones could face high taxes and long court delays. Understanding the rules in both the United States and Mexico is the first step toward a secure legacy.

Navigating tax laws and treaties

The U.S. and Mexico have different ways of taxing wealth. The U.S. taxes its citizens on their worldwide assets. Meanwhile, Mexico primarily taxes income and property transfers within its borders. Fortunately, a tax treaty exists between the two nations to help prevent double taxation. Keep these specific tax issues in mind as you plan:
  • Treaty benefits: You can often claim credits for taxes paid in one country to offset liabilities in the other
  • Estate tax gaps: Mexico does not have a federal estate tax, but the U.S. does for large estates
  • Asset reporting: You must report foreign bank accounts and property to the IRS to avoid heavy fines
These tax strategies work best when you coordinate them with your legal documents. Because each country uses a different legal framework, you must bridge the gap between two distinct systems.

Bridging the legal divide

Texas follows common law, but Mexico uses a civil law system. This difference affects how courts view your instructions. For instance, Mexico has "forced heirship" rules that might require you to leave parts of your estate to specific family members. A standard Texas will might not be enough to handle your Mexican property. Use the following legal tools to stay in compliance:
  • Dual wills: Consider having a separate will for each country to speed up the probate process
  • Mexican trusts: Use a fideicomiso to hold coastal or border property in Mexico safely
  • U.S. trusts: A trust in Texas can help protect your American assets from public probate court
Using these legal tools allows you to move assets more freely. It also helps you manage more complex holdings that often come with high-value estates.

Protecting high-value assets

High-net-worth individuals often face more scrutiny. Safeguarding a luxury home or a family business requires precise structures. You should ensure that your powers of attorney are valid in both jurisdictions. This allows a trusted person to manage your affairs if you become unable to do so.
Planning early helps your heirs receive their inheritance without stress. It keeps your private matters out of the public eye. Most importantly, it ensures your wishes are followed on both sides of the Rio Grande.
]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Steps to stop wage garnishment from unpaid federal taxes]]> https://www.delunataxlaw.com/?p=47620 2025-12-29T14:26:41Z 2025-12-29T14:26:41Z Facing a wage garnishment can feel like your paycheck is slipping through your fingers. You may notice less money arriving each week while bills keep piling up. This situation can affect your daily life and make managing your finances harder. Learning what actions may reduce garnishment can give you more control over your money and your future.

Exploring payment plans with the IRS

The IRS offers several ways to manage unpaid taxes over time, which may help reduce the immediate impact on your paycheck. Considering different plans can provide more breathing room for monthly expenses and help prevent further penalties. Some common options include:
  • Standard installment agreements: Allows you to pay your debt in monthly installments over several years
  • Partial payment plans: Makes smaller payments if you cannot afford the full monthly amount
  • Short-term deferrals: Delays payments for a few months if you expect your finances to improve soon
Choosing the right plan can create a structured path to resolving your tax debt while protecting your income. Each option has its own rules, deadlines and paperwork requirements that can affect how much garnishment may be reduced.

Considering an offer in compromise

An offer in compromise can allow you to settle your tax debt for less than what you owe in some situations. Exploring eligibility for this option may reduce the total debt and create an opportunity to regain financial stability more quickly.

Claiming financial hardship

If paying your taxes would create serious difficulties, the IRS may temporarily lower or pause garnishment. Showing financial hardship can protect part of your income and give you space to handle essential expenses.

Checking exemptions that protect income

Certain exemptions may shield a portion of your paycheck from garnishment. Reviewing which income can be exempt can help ensure you retain enough to cover basic needs while taxes are being resolved.

Working with a tax professional

Tax attorneys and CPAs can guide you through IRS rules and paperwork. Professional support may increase your chances of reducing garnishment and finding a solution tailored to your situation.

Getting your paycheck back on track

Dealing with wage garnishment does not have to be permanent. Exploring IRS programs and professional guidance can help protect your income and reduce financial strain. Knowing your options can give you a clearer path to keeping more of your earnings while responsibly resolving unpaid taxes.]]> On Behalf of Law Office of Luis R. De Luna, PLLC <![CDATA[Can the IRS seize assets of Texans in criminal tax cases?]]> https://www.delunataxlaw.com/?p=47618 2025-12-02T10:59:16Z 2025-12-02T10:59:16Z You could face asset seizures in Texas if the Internal Revenue Service (IRS) investigates you, but the process often depends on whether your case is civil, where you owe money or criminal, where authorities suspect illegal activity. Liens and levies generally help the IRS collect debts, while forfeiture comes into play when authorities pursue criminal prosecution. Understanding the differences can help you respond more effectively.

How do IRS tax liens affect you in Texas?

Most IRS actions begin as civil enforcement. A federal tax lien gives the government a legal claim to your assets when assessed taxes go unpaid. In Texas, a lien could attach to your home, car, business interests or property you acquire in the future. You might first notice a lien when the IRS files a "Notice of Federal Tax Lien" with your county or the Texas Secretary of State. Although major credit bureaus no longer list tax liens on consumer credit reports, the lien remains public. Lenders could see it during a title search, which may make selling or refinancing your property more complicated.

How can the IRS seize your property through levies?

A levy differs from a lien because it allows the IRS to take property to satisfy a tax debt. In Texas, the agency could reach your bank accounts, wages or accounts receivable if notices go unanswered. Before a levy, you generally receive written notice and may request a hearing. It is important to understand that Texas law protects your home and many personal assets from most private creditors, but these protections do not necessarily stop federal authorities. While seizure of a homestead is rare, federal rules may take precedence, so you might face risks even if your property is usually protected under state law.

What changes if your case is criminal?

Once investigations move beyond unpaid taxes into suspected criminal activity, the process can change significantly. Federal authorities may pursue cash, bank accounts or real estate they believe is linked to criminal conduct, such as fraud, tax evasion or money laundering. Texas state authorities may also use civil forfeiture laws. If they show that your property was involved in a crime, you might need to demonstrate that you qualify as an “innocent owner,” meaning you did not know about the illegal activity. Acting quickly and understanding your options can help you protect your assets.

How can you respond to protect your assets?

In a civil matter, you could request a Collection Due Process hearing or negotiate a payment plan to reduce the risk of a levy. In a criminal investigation, you may want to avoid contacting the IRS directly to arrange payments, as that could complicate your situation. Instead, consulting professionals who understand the intersection of Texas and federal law may give you a clearer picture of your legal options.

Defend your future

Criminal tax investigations in Texas can put both your assets and your freedom at risk. Acting early and understanding the differences between civil collection and criminal enforcement can help you safeguard your financial future and your business interests against criminal tax charges.]]>