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Zaher Fallahi, Certified Public Accountant (CPA) Since 1983, Dental CPA, Medical CPA, Doctors' CPA

Zaher Fallahi, Certified Public Accountant (CPA) and Attorney At Law, is a CPA and Law firm with emphasis on US tax, tax controversy, un-disclosed offshore accounts, international tax, foreign gifts, and Office of Foreign Assets Control (OFAC) Regulations. We are licensed in California and Washington D. C., and represent tax and OFAC clients throughout the United States and overseas. Depending on the case, telephone appointments are available for long-distance clients.   

Toll Free 877-687-7558

 

Harvard Law School

Zaher Fallahi has completed “Negotiation and Leadership” and “Leveraging the Power of Emotions as You Negotiate” Certificate Programs at Harvard Law School.


Accounting Services and Financial Statements Preparation

Zaher Fallahi, Certified Public Accountant (CPA), has practiced as Dental CPA and Doctor’s CPA and provided tax and accounting services to dentists, physicians, other doctors and small businesses in Los Angeles and Orange Counties since 1992.

We prepare and analyze financial statements for tax preparation purposes. Financial statements are important in annual and year-end tax planning, and are powerful tools in representation of an entity before the IRS tax audit, Franchise Tax Board (FTB) tax audit, California Employment Development Department (EDD) tax audit and California Board of Equalization (BOE) tax audit. Financial statements provide the business owner with the peace of mind necessary to concentrate on planning the growth of her or his business.


General Tax Planning for Dentists, Physicians and others; Zaher Fallahi, CPA,  Attorney At law

Disclaimer: The tax and legal tips contained herein below are for general informational purposes only. They are not intended for, and may not be construed as, rendering tax or legal advice. For your specific situation, please consult us or your tax or legal advisor.

General Tax Tips for Doctors and others

1- If you are a sole proprietor Doctor (Physician and Dentist) or other small to mid-sized business with      gross receipts in excess of $100,000 per year, you are more susceptible to an IRS audit than an                average taxpayer. Consult a tax attorney or business lawyer to incorporate the practice.

2- Incorporating your Dental or Medical practice does not protect from malpractice and you must have      insurance coverage. These are lawsuits brought by your patients regarding professional services you      provided;

3- After incorporation, have your lawyer draft business, employment and other contracts in the name of      your corporation;

4- Dental or Medical Corporations, protect against general liabilities, if the Medical or Dental                    Corporation is:

(a) Properly incorporated. Often, Doctors use services of non-lawyers to keep their costs down.         Unbeknownst to them, their corporations never get incorporated properly. Often, they find           out about deficiencies in their corporations when they are sued in court, or audited by IRS.

(b) All formalities are compiled with. In addition to incorporation, each corporation must                   comply with the state law all the time, not just at the time of incorporation.

 General liabilities may arise from:

(a) Employees termination, payroll issues such as overtime, sick leave, vacations, holidays, etc.;       and,

(b) Suppliers, Land-Lords, and other business parties.

5- Doctors should think of their Medical or Dental Corporations as separate legal entities, and                     transactions between them and their corporations must be handled under the corporate law;

6- To prevent piercing the corporate veil, do not commingle. This means that if you do not separate             your corporation from your personal accounts, the court may set aside the corporate shield and hold       you personally responsible for the corporate debts. As such;

a) Do not pay your personal expenses from your corporation;

b) Your loan to and loan from the corporation should be handled legally to comply with the state       law and the IRS requirements; and,

c) Have your lawyer prepare corporate minutes for all major business decisions.

7- In purchasing a Dental or Medical practice:

          a) Buy the assets rather than the corporation, to avoid any pending lawsuits associated with the                   selling practice, unless there is valuable goodwill in the target practice;

b) Have a thorough due diligence study done by a lawyer or CPA experienced in the industry             before the purchase;

           c) Seek legal advice from a lawyer on drafting the purchase contract;

 d) Consult a tax lawyer for a tax-advantageous allocation of the purchase price among various                    assets on the escrow papers. It is important to note that this has far-reaching tax effect on                        your practice; and,

            e) You may follow different procedures in selling your Dental or Medical practice.

8- For income tax purposes, consider an S corporation, which does not pay income tax to the IRS, and        its California income tax is the greater of $800 or 1.5% of the annual net income.

9- If you are working in your S corporation, you must be must on the payroll at reasonable                          compensation;

10- For tax planning purposes in an S corporation, the net income is divided into the Doctor’s salary            and K-1 distribution. Paying unreasonably low salary to S corporation shareholders has been a                major IRS audit trigger in the recent years.

      Although, there is no rule of thumb formula for determining “reasonable salary” for a Doctor, such        determination is made by your tax advisor using case laws, your specialty and experience, the net          income and other pertinent facts and circumstances.

11- The IRS has claimed that some Doctors have not paid themselves reasonable salaries in an S                   corporation. Strangely enough, they have argued that the owners of C corporations have paid                 themselves excessive compensation. Each argument may have its own merits and important tax             consequences;

12- Seek advice of CPAs or tax lawyers with hands on experience in Dental and Medical fields;

13- Have your payroll done by your tax preparer CPA firm so that they monitor the reasonableness of          your compensation and perform your year-round tax planning;

14- Do not classify other dentists or physicians working for you as independent contractors without              discussing it with your tax attorney or CPA. This misclassification has subjected Doctors and                  Dentists to the IRS and EDD audits, and resulted in additional taxes, penalties and legal fees;

15- During employment tax audits, auditors extend their audits to three previous years. There are                  numerous statutory determinant factors by which the courts determine proper classification of                someone working for you as an independent contractor or an employee. There are twenty                        requirements by the IRS and twenty two requirements by California to make such determination.           There are 4-5 major factors used by auditors in conducting their tax audit;

16- Use services of experienced CPAs in medical and dental fields in preparing your accounting and             tax work. Based on our experience in representing Physicians and Dentists before the IRS, FTB             and EDD, this issue has been a major audit trigger. A professionally trained CPA or tax lawyer               ensures proper preparation of the underlying financial statements and may eliminate many tax                 audit triggers;

17- Many audited Doctors use services of low quality accounts because of their low fee or free service.         Ironically, most the time, it is the very low quality work of those accountants that may have caused         the tax audit. Additionally, the individual preparing your tax returns has a major conflict of interest         in representing you in a tax audit;

18- In hiring professional services, always remember the famous British saying; “I am not rich enough        to afford cheap service”. Most the time, these cheap services end up being costly; and,

19- For competent representation in a tax audit, consider hiring a tax attorney because:

 a) Attorney-Client Privilege prevents the IRS from subpoenaing an attorney;

 b) Attorneys are well trained to defend clients before the IRS or tax court; and,

 c) If the case turns into a criminal one, non-lawyer tax advisors may be ordered to testify                   against you. 

20- New 20% tax deduction
     
There is a new 2018 deduction of 20% for pass-throughs; New 20% Deduction for Pass-Throughs

Zaher Fallahi, Dental CPA and Doctor’s CPA, has specialized in providing tax and accounting services to Dentists and Physicians, in Orange County and Los Angeles County, since 1992. Zaher Fallahi, Tax Attorney, CPA represents clients before taxing authorities through appeals and tax court. Telephones: Los Angeles (310) 719-1040 and Orange County (714) 546-4272 or e-mail: taxattorney@zfcpa.com

Toll Free 877-687-7558 

 

 We can help with your Tax Audit

Zaher Fallahi, Attorney At Law, has been rated 10 out of 10 by Avvo  Rated 10 of 10 .

Zaher Fallahi, Tax Attorney, Certified Public Accountant (CPA), has been named a top tax attorney TOP Tax Attorney

About 1.8% of the US lawyers are also Certified Public Accountants (CPAs), and we are proudly one of them.

 

To help with your Tax Audit, contact us at:

(310) 719-1040 (Los Angeles)

(714) 546-4272 (Orange County)

e-mail taxattorney@zfcpa.com

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