Federal Estate Tax Exemption for 2021

The Federal Estate Tax Exemption for 2021 is $11,700,000.00, an increase of $120,000.00 from 2020.  If the Decedent’s taxable estate exceeds this amount, the excess will be taxed at a flat rate of 40%.  The exemption for married couples can total $23,400,000.00 because of the “portability” option which can be used at the first death to transfer any unused portion of the deceased spouse’s exemption to the surviving spouse.  In 2026, the exemption is scheduled to decrease to $5,490,000.00 with an inflation adjustment.  New tax legislation may change the scheduled decrease, possibly lowering the exemption sooner than 2026 or reducing the exemption below $5,490,000.00.  In the meantime, the current exemption levels could give you an opportunity to make gifts to utilize some or possibly all of your available exemption before the exemption is decreased.  Please contact us if you would like to discuss this or any other estate planning questions or concerns. 

Negotiating with Oil and Gas Companies

Tips for Negotiating with Oil and Gas Companies

As former project manager and attorney for companies in the oil and gas industry, McNamara | Attorneys at Law’s own Jerad Zibritosky has a few thoughts to share about how to approach negotiations with oil and gas companies.

  1. Learn about the people and companies reaching out to speak with you. Oil companies often contract with third party land service providers (often called landmen) to negotiate leases and/or pipeline easements. This creates an immediate issue regarding the landman’s authority to bind the oil company to terms of any agreement.  A shrewd landowner will be sure to find out if the landman at their front door is an employee of the oil company or an independent contractor working for a land service provider.  Generally, a landman that is an employee of the oil company may be better able to change terms or conditions of an agreement with the authority and approval of the oil company.  Independent landmen are not generally able to change the terms or conditions of any agreement without express consent from the oil company itself.
  2. GET EVERYTHING IN WRITING. If you want to negotiate a term or change anything in any lease, or easement or other agreement, every landowner, every time, must see that change in writing. If you do not see the term you want in writing, it does not exist and will not help you protect your interests.  Leases and easements are read and interpreted by the language used in the actual document, not on assurances or promises made orally or off the cuff by a landman in person or over the phone.  We recommend you correspond with landmen and oil companies by written correspondence to maintain an appropriate paper trail of any negotiations or changes to the deal.  Even when you write and collect letters and emails with terms and desired changes, you should never sign any instruments or contracts unless and until every term, addition, or change is expressly included in the document you are about to sign.
  3. Learn the jargon. The oil industry is now different than any other industry. It has its own jargon and lingo that may be confusing to an outsider. If you are unsure of the difference between “net” or “gross” when calculating royalties, it is difficult to make sure you get the best deal.  Similarly, if you don’t understand “pooling” or what a “Pugh clause” is, it might be best to come see Jerad Zibritosky at McNamara | Attorneys at Law to help explain the lease and help negotiate the best deal.
  4. Work with a lawyer you can trust. The best way to make sure your interests are protected is to speak with a knowledgeable attorney familiar with the ins and outs of the oil and gas industry. We provide free 20 minute initial consultations for you oil and gas needs.  You can reach us at 330.699.6703 or stop by our office located at 12370 Cleveland Avenue, N.W., Uniontown, OH 44685 to schedule a time to talk with Attorney Jerad Zibritosky about any oil and gas matters.

Overcoming Failure to Pay Employment 941 Taxes

Installment Agreements and Settlements – Offers in Compromise

Over the course of years representing various businesses, I find that one of the areas which gets small to mid-sized businesses, and sometimes large businesses, in significant difficulty is failure to pay employment taxes, known as 941 taxes. When businesses become financially stressed, it is very easy to fail to either file or pay 941 withholding taxes. The Internal Revenue Service doesn’t start sending notices for six months to a year after you fail to make a deposit and generally doesn’t take any significant enforcement action for eighteen months or two years. While the taxpayer/company believes it will straighten out its financial problems by basically taking a “loan” from the government by not filing or paying its 941 taxes, it is simply getting itself into a virtually irreversible problem. There is a failure to file penalty, a failure to deposit penalty, a failure to pay penalty and an interest calculation, all of which adds a very significant amount to the actual amount of the tax withheld. Dependent upon the length of time that this matter continues, the increase due to penalty and interest can be anywhere from sixty to eighty percent of  the tax that should have been withheld and paid to IRS. The taxpayer, when contacted by the IRS, frequently starts paying on the arrearage but can’t both stay current and make payments. That is the worst thing that can happen as new penalties are now incurred on the current taxes which are not getting deposited, filed or paid. We have had significant success in working out installment payments and/or Offers in Compromise which are based on the taxpayer’s ability to pay while requiring them to stay current in order that no additional penalties are incurred.

The IRS may issue what is known as a 100% penalty against the individual who is determined to be the responsible party for not filing, depositing or paying the 941 taxes.The shareholders, officers and/or people who were check signatories are the individuals that IRS will look to for payment. The 100% penalty is 100% of the amount withheld but not paid over. It does not include the penalty or interest. An Offer in Compromise is generally most effective after the individual is personally assessed, although it is very helpful if we get involved prior to the assessment. These settlements are based on the taxpayers financial status and ability to pay, not on the amount owed.

We have had significant success with Offers in Compromise for the individual taxpayer who has been assessed. Examples are as follows:

McNamara - IRS Blog Chart

This content is made available by McNamara, Attorneys at Law for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this site you understand that there is no attorney client relationship between you and McNamara, Attorneys at Law. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.