Even though the annual deadline for most individual taxpayers is behind us, taxes are paid quarterly by many businesses and some people haven’t been able to pay what they owe the IRS yet, so taxes are on the minds of many Americans year round. It’s a sore subject because no one really likes to pay taxes. It’s just one of those “necessary evils.”
Most people do pay their taxes even though they don’t like it. But when you hear that over a 10 year period 20% of IRS employees are behind in paying their taxes, maybe those folks who don’t work for that government agency won’t beat themselves up so badly for not being able to pay their taxes. According to a Washington Examiner article, at the IRS, “there were 18,300 cases of this in the last 10 years, in an agency with roughly 85,000 employees.”
Not only do the IRS employees not pay their taxes, they outright cheat, as the Washington Examiner reported, “1,580 IRS employees were caught intentionally cheating on their taxes between 2003 and 2014. These are not mere tax delinquents — people who filed honestly but couldn’t afford to send payment in a timely fashion. Rather, these are people who were caught willfully and knowingly breaking the law in order to reduce the amount they would have to send to the IRS — the very agency where they work.”
Most taxpayers who fall behind on their taxes do so through honest mistakes or true misfortune. These are the people I look forward to representing and helping negotiate ways of responsibly honoring their IRS debts. By law the IRS is required to terminate employees who cheat on their taxes or do not pay. But they don’t.
A new trend is sweeping the country creating extra income for many homeowners. If you have an extra room or a guest cottage right here in Fairhope, near the racetracks in Talladega, the sights in Mobile or near the Gulf coast beaches, you can rent them out for a few nights and visitors to the area can get a feel for living like a local instead of a tourist. The rates are typically much lower than the local hotel or resort.
While this “sharing economy” has been trending for several years, the rewards may be great until it’s time to file your taxes. I’m all for people who want to make extra money, however be sure your little love nest on the coast doesn’t turn tax time into a hornet’s nest.
According to CBSNews.com, companies like Airbnb, HomeAway, VRBO and others “typically send you a form 1099- MISC, which means they also let the IRS know the total amount of rental income you received through their service.”
So don’t forget to declare your rental income when filing your taxes or that could generate a red flag and a possible audit. There are many other aspects worth knowing for tax purposes when you rent all or part of your residence.
As cbsnews.com reports, “You need to become familiar with a new form you’ll be required to file with your tax return: Schedule E – Supplemental Income and Loss. You’ll also need to know the rules for reporting rental income and deducting rental-related expenses, which are included in IRS Publication 527, Residential Rental Property.” That’s right, you will also be able to declare expenses on your rental, so keep good records and the sharing economy could prove to be worth it – even at tax time.
You may be familiar with the excited exclamations of “I’m going to do this with my tax return,” or “I’m going to buy that with my tax return!” at tax time.In fact, you may even have expressed a similar sentiment yourself in the past, but have you ever stopped to think that maybe a big tax return isn’t a good thing? This year, the average taxpayer will receive a refund of $2,893. While that’s certainly a nice bump in cash flow, a lot of people look forward to it as a chance to splurge, pay down debt or add to their savings. But those people could have had that money all year long, if they had only withheld less of their paycheck.
Getting a big refund just means that you gave the government an interest free loan for a year.
A lot of people view their tax refund as a nice cash windfall, but if you had withheld less of your paycheck, you could have put that money in a savings retirement account to accrue interest throughout the year, or invested it in some other interest earning program.
While there is no right or wrong answer to how much of a refund you should aim to get back from the IRS, we know it can be tricky to estimate, and we want to help you figure out the best way to get the most of your money. However, it’s definitely worthwhile to regularly evaluate your with-holdings, and here’s why:
Major Life Changes
You may be used to receiving a tax refund – after all, 82% of American taxpayers consistently receive one – but a significant life change can affect how much you receive, or even if you get one at all. And it can be pretty shocking to find out that not only do you NOT get one this year, but that you owe money. Marriage, divorce, the birth or a child, the adoption of a child or a drastic change in your income should trigger a review of how much you have withheld from each paycheck.
Look for Patterns
While a major life change should evoke an evaluation of your with-holdings, if you receive a similar refund each year, you may want to reconsider how much you have withheld, because a consistently large refund means that you’re consistently doing something wrong. We understand that it’s difficult to be 100% accurate when estimating with-holdings, and we also understand that the last thing you want to do is owe the IRS at the end of the year, but withholding too much may not be the best thing for your long-term financial health.
According to one expert, a good place to be is owing a little bit, or getting a little bit back. Where’s a good place? According to the same expert, keeping your refund under $1000 is a good start.
Know Your Saving / Spending Habits
Some people believe that they wouldn’t be able to save that money if it didn’t come in a lump sum at the end of the tax year, and they view their tax refund as a forced savings. While we understand this – after all, everyone has their own way of doing things – if your refund exceeds $5,000, we encourage you to put 45-50% of it toward an IRA or other retirement savings account. Put the other 45-50% toward your debt (if you have any), and spend the remaining 5-10% on yourself, as a reward.
Also, consider the big picture first: do you look forward to a large tax refund but struggle to meet your savings goals on a monthly basis? If you find that you spend a lot of money but never have enough to set aside for the future, it’s time to revisit your withholding (and reevaluate your spending habits, too).
Food for Thought
Tax with-holdings are just an estimate of how much you’ll owe that current tax season, and it may take a few years before you’re finally able to find that “good place” mentioned above. It’ll also take a reevaluation of your current lifestyle and spending habits to determine what amount of withholding is best for you. For help with reevaluating your with-holdings so that you can maximize your earnings, visit http://www.irsallstar.com/our-services#15 or call 877-254-4254 today.
Taxpayers have every right to be furious with the prevalent tax scams occurring as a result of identity theft. Responsible citizens comply with their duty, only to have scammers skim billions of dollars from the coffers. The IRS is trying to prevent this from happening.
According to a recent Forbes article report, “From 2011 through October 2014, the IRS has stopped 19 million suspicious tax returns and protected more than $63 billion in fraudulent refunds.”
Sounds good, right? You almost feel like cheering. But then the article goes on to say, “Still, the IRS actually paid out $5.8 billion in fraudulent refunds that it realized were fraudulent only later. Also, there may be fraudulent refunds not included in these numbers. The IRS may never know just how many dollars of fraudulent refunds it has paid.” Not so good.
Apparently as the article reports, the Government Accountability Office says that the IRS is “trying hard to centralize its efforts to authenticate taxpayers.” Just how and what are they doing?
One thing they are doing according to a recent Wall Street Journal report is issuing “victims of tax identity theft a six-digit Identity Protection PIN for use in filing returns once cases have been resolved. Returns can’t be filed without the number, and the taxpayer receives a new one every year. In addition the IRS has initiated a pilot program in which they’re giving PINs to residents who filed returns in Georgia, Florida and the District of Columbia last year. These states, according to the article have the highest percentage of tax identify theft.
We can also urge Congress to act. According to the Wall Street Journal article, “Top lawmakers in both the House and Senate are probing this year’s spate of tax identity thefts, and the Senate Finance Committee is expected to focus on them in a hearing on tax scams in March. Experts say the fraudulent-filing epidemic is partly of the government’s own making, because easy e-filing and rapid refunds—both priorities in Washington—also offer myriad opportunities to criminals. The IRS often doesn’t get wage data until late spring, long after many tax refunds have been paid, so it is at a disadvantage.
Every taxpayer must do his or her best to protect his or her personal information too. The IRS cannot correct the problem alone. We must all help and pay attention when giving out our information.
You were looking forward to your tax refund this year with all the fervor and excitement of a kid on Christmas Eve waiting to see what Santa brought him, but then you received a notice from the IRS that crushed your hopes in one fell swoop: your refund has been garnished. You didn’t even know this was possible, but now that it has happened to you, you’re curious: who was allowed to garnish your tax refund?
You may be thinking that your credit card company found a way to get their money, or that maybe the dealership you bought your car from is the culprit, but in actuality, private and individual collectors cannot garnish your tax refund—only state and federal agencies can. (That doesn’t mean that these same rules apply once the refund is placed into your account – once there, it’s free game.) So who took it, and why were they allowed to?
The Treasury Offset Program (TOP)
The TOP is a program administered by the United States Department of Treasury’s Financial Management Service (FMS). TOP effectively allows federal and state government agencies to collect outstanding debts owed to them by garnishing your tax refund. Or, in other words, they offset your debt with your refund. Though you may have never heard of this program before, government agencies have been garnishing income tax refunds for quite some time, as they are the most common federal payments, and the easiest to get their hands on.
The TOP does have restrictions on what kind of debt is eligible for garnishing though, and what’s not. For instance, private collectors and creditors are going to have to use traditional means of collecting what’s owed to them, such as cold calling, sending notices via mail, talking to friends and family and showing up on your doorstep; they are NOT eligible for TOP. Furthermore, only certain government debts are eligible for TOP. These include past-due court-ordered child support payments, outstanding debts with the IRS, past due state income taxes and any unemployment you must pay back.
As Always, IRS is Priority
The agency trying to collect money from you may be a fellow government agency, but the IRS isn’t too concerned with brotherhood. If you owe other government agencies money AND the IRS money, the IRS will take what is owed to them first, before freeing up access to the remainder of your refund for TOP. Or, in simpler terms, the IRS pays itself first, before making your tax refund available for garnishment by other government agencies.
Once the IRS is satisfied that you do not owe them any money, there is a hierarchy of agencies that can collect from you. It is as follows:
If you have a tax refund due to you, the state agency that governs your child support payments has first claim to that refund if you have outstanding child support payments. The state can continue to do this each year until all of your child support payment obligations are met.
Non-Tax Federal Debt
Any federal agency has the next shot at garnishing your refund. So, for instance, let’s say you’re expecting a $6,000 refund, but you have an outstanding debt of $4,000 in student loans, and $2,000 in overdue child support payments. The state is allowed to take the $2,000 in past-due child support first, and the department of education is entitled to the remaining $4,000. That $6,000 refund you were expecting is now gone. (On the bright side, your debts are now paid off!)
State government agencies are the lowest guys on the totem pole, and are only allowed to garnish tax refunds for things like unemployment compensation payments or outstanding state income tax debts once the IRS, the state child-support agency and the non-tax federal agencies have been satisfied.
What Can You Do?
Unfortunately, if you owe the IRS or any other federal or state government agency money, they’re in the right to garnish your refund, and your wages. While it may not seem fair that you’re essentially being forced to pay off a debt you may or may not be able to afford at the moment, if your refund is being garnished, it’s because the agency felt they’d given you adequate amount of time to pay it off before taking alternative action.
While there is nothing you can do once the garnishment has occurred, there is something you can do to prevent future refund and wage garnishment. At IRS All Star, we do everything in our power to reduce your tax liability and maximize your refund. Visit http://www.irsallstar.com/our-services#3 to see how we can help you keep your money in your wallet – right where it belongs.
According to an article from Accounting Today, “In 2012, the IRS seized $446,651.11 from a Long Island convenience store distributor, Bi-County Distributors, and its owners, the Hirsch family, based on a pattern of cash deposits that had been deemed suspicious by federal agents.” The article continues to explain, “Federal law requires banks to report cash deposits larger than $10,000 to the IRS. Since the Hirsches frequently made deposits in amounts less than $10,000, the government claimed they were seeking to evade the reporting requirement.”
Fortunately the family that was victimized by the IRS decided they were not going to take it. They teamed up with the Institute for Justice who sued to force the government into court. The article reports that, “Rather than defend its actions in response to the lawsuit, the government agreed to return all of the seized money and to not pursue forfeiture of the funds in any civil or criminal action in the future.”
This victory against the IRS may not mean that they will stop seizing the assets of innocent Americans, but it does mean a precedent has been set and the IRS can be forced to return the money they’ve stolen. Who knows how many unhappy returns the IRS will be forced to make before they return their attention only to known criminals instead of innocent tax paying Americans.
We hear about it on the news. Watch movies where characters make millions from it. See individuals accumulate mass amounts of wealth over it. Yet, we’re told it’s wrong.
Tax fraud and tax evasion may be glorified on the big screen, but that doesn’t mean for a second that you should participate in either activity. Not only will you be required to pay a tax fraud penalty when (not if!) you’re caught, but you’ll also be required to pay INTEREST on that penalty. And the penalty is equal to 75% of the taxes owed.
But that is not the only punishment you’ll be subjected to. If the IRS suspects that you’ve committed fraud, and not mere negligence, they’ll send your case to the IRS criminal investigation unit for criminal tax prosecution. Penalties for criminal tax fraud are very serious, with consequences ranging from up to five years in jail, plus up to $500,000 in fines, plus the cost of prosecution for each separate tax crime. Once the case is completed, the IRS will add a civil tax fraud penalty on top of the criminal tax fraud penalty.
“But what if I just made a mistake?”
A lot of clients ask this, thinking that if they can convince the IRS that they just “forgot” to pay their taxes, their punishment will be less severe. However, the IRS has methods for determining the true frauds from the truly forgetful. Here are a few things the IRS looks for to determine a real case of tax fraud:
· Understatements of income;
· Inadequate records;
· Failure to file tax returns;
· Implausible or inconsistent explanations of behavior;
· Concealment of assets;
· Failure to cooperate with tax authorities;
· Engaging in illegal activities;
· Attempting to conceal illegal activities;
· Dealing in cash; and
· Failure to make estimated tax payments.
If you’ve committed any of the above, are being audited by the IRS or both, you may need to hire a tax fraud attorney. Actions you take from the moment the IRS contacts you can turn a run of the mill tax audit into a criminal tax fraud case. An experienced tax fraud attorney can help you navigate the mucky waters of your case and come up with an effective strategy.
Your financial well-being, as well as your personal freedom, may be at stake here. Contact us at 877-254-4254 or visit http://www.irsallstar.com/contact-us to speak with one of our tax attorneys today.
After six years of business owners not knowing whether or not President Obama was trying to make their lives easier or more difficult, the Obama Administration proposed a budget that will allow businesses to write off $1 million in investment-spending annually. This will affect businesses with gross receipts of less than $25 million annually, which means more than 99% of all businesses.
Today’s tax compliance rules are so complicated and convoluted that at least 75% of compliance hours for small businesses are spent dealing with taxes. About 60% of the costs of tax compliance are caused by the complexity of the rules on measuring income.
The Obama Administration’s plan is to dispense with most of these rules and allow businesses to use cash accounting, instead of the more complicated accrual accounting, which will significantly simplify how small businesses file their taxes. This simplified method, when combined with the $1 million investment-spending write off, will enable businesses to pay their taxes “on an amount much closer to their bank statement.”
Also in the works… “To eliminate capital gains taxation on investments in small business stock, increase the tax deduction for start-up expenses, and expand and simplify the Affordable Care Act Small Business Credit.”
At IRSALLSTAR, we’re always on the business owner’s side. See how we help businesses take care of their taxes and much more, at http://www.irsallstar.com/about-us.
Kids are expensive. There is no denying that. However, aside from the obvious, parenting does come with its perks—monetary ones at that. Here are eight (8) perks that will make this whole new parenting thing a little easier on you this tax-season.
1. Child Tax Credit: You can claim up to $1,000 for every child under the age of 17 in your household, so long as you make less than $75,000 as a single filer, and less than $100,000 as a married couple.
2. Earned Income Tax Credit: You can earn up to $6,143 with the EITC. Check out http://www.irs.gov/Individuals/EITC-Income-Limits,-Maximum-Credit–Amounts-and-Tax-Law-Updates for rates.
3. Childcare: Most families can deduct up to $3,000 for one child’s childcare, and up to $6,000 for two. Qualifying childcare includes day care, day camps and before- and after-school programs.
4. Flexible Spending Accounts: If your employer offers a FSA, take advantage of it, for both healthcare and dependent care. The maximum amount you can shelter is $5,000.
5. Medical Expenses: if you have high medical expenses, you can deduct total family healthcare expenses that exceed 7.5% of your adjusted gross income.
6. Adoption Costs: If you adopted a child and the process was finalized in 2014, you’re eligible for up to $13,190 per child in federal tax credits.
7. College Contributions: Most states offer tax deductions for residents who invest in their state sponsored 529 college savings plans.
8. If They’re Here, They Can Be Claimed: Even if your child was born in the very last second of the very last minute of the old year, deduct away!
Get the most of your return this year – visit http://www.irsallstar.com/our-services#16 to see how we are the team to help you do just that!
Filing taxes isn’t easy for anybody, but it’s even less so for millennials, who have no experience with the annual tradition, and who are undergoing an onslaught of life transitions that impact their filing status and who are frequently eligible for many of the ever-changing array of deductions and credits. If you are a millennial and you want to get the most of your tax return this year, you’re going to have to be strategic in your filing. Here are eleven (11) things you and your parents can do to work together to leave as much money in your bank account as possible:
1. Coordinate With Your Parents. If your parents still claim you as a dependent, then that affects your filing status. If you’re under 19 or under 24 and are still enrolled in school, are still living at home with them, receive support from them and earned less than $3,900, you would still be considered a dependent, and they have every right to claim you. Otherwise, you might want to consider filing as an Independent.
2. Take Advantage of Education Credits. There are several education-related credits out there, with deduction potential of up to $2,500 for many of them. Check with your tax-preparer to see if you qualify for any.
3. File Electronically. 90% of taxpayers do, because a) its easier and b) it reduces the amount of errors. Also, most e-file software is free.
4. Deduct Your Moving Costs. If you moved a certain distance for a new job, those moving costs are deductible. While you don’t need to itemize this deduction, you do need to work in the new job full time for at least 39 weeks for the deductions to apply. This deduction applies to new college graduates too.
5. Deduct Your Mortgage Interest. If you’re a millennial who bought a new home, congratulations are in order! But on a more serious note, your mortgage interest may be deductible. Check IRS.gov to see if you’re eligible.
6. Take Advantage of Child Related Deductions. Having children qualifies you for an array of credits and deductions, including childcare and tax-advantaged college savings accounts. Again, check IRS.gov to see which credits and deductions you’re eligible for.
7. Update Your Name. If you’ve changed your name in the past year, or since last filing, don’t forget to inform the social security office. Otherwise, problems may arise with your tax return, and you’ll have to file again.
8. Accurately Estimate Your Withholding. While there is nothing wrong with having a large portion of your paychecks withheld throughout the year only to receive a large refund come tax-season, doing so is similar to giving the IRS a free loan throughout the year. To make your withdrawal amount more accurate, go through your W-4 and update it accordingly to reduce your withholding.
9. Check Out the Earned Income Tax-Credit. The EITC is something not many people know about, and therefore, don’t take advantage of. This credit is worth between $496 and $6,143, depending on your situation. Check out the EITC table to see how much you qualify for: http://www.irs.gov/Individuals/EITC-Income-Limits,-Maximum-Credit–Amounts-and-Tax-Law-Updates
10. Don’t Make Mistakes. We know, hard to do, considering many people don’t make mistakes on purpose. But making mistakes on your taxes could mean the difference between a $600 tax return and a $6,000 tax return. The most common mistakes taxpayers make include missed deductions and credits, so if you’re filing on your own, make sure you know what you’re doing.
11. Max Out Your Retirement Credits. Don’t have a savings account? Maybe it’s time you opened one. For starters, many savings accounts are tax-deferred, such as a 401(K). If you’re in the beginning of your career, you might want to consider a Roth 401(K) if it’s available to you, as you’ll be in a lower tax bracket and therefore, pay lower taxes than later on, when you might face a higher tax rate.
Additionally, if your goal is to retire at age 65 with $1 million, then you’ll need to save $361 a month—assuming you’re 20 years old. If you wait until you’re 30, you’ll have to save almost $700 a month, and waiting until you’re 40 will require a monthly savings of $1436 per month.
You’re never too young to start taking your taxes seriously. After all, taxes are something you’ll be dealing with for the rest of your life. To get off on the right foot with the IRS, visit http://www.irsallstar.com/our-services#16 to see how we can help you prepare your taxes this year and every year forward.
“We’ll pay YOU $100 to do your taxes!”
“Free Beats Headphones!”
These are just a few of the ridiculous offers we’ve seen posted on tax-preparers storefronts. And while we’re over here wondering where the advertisements are for “skilled and seasoned Agents, Lawyers and CPAs,” many taxpayers are actually being lured in by the free gifts. This worries us, because a lot of tax preparers out there are scam artists who either don’t know what they’re doing and don’t help you get the most of your deductions and credits, or who know exactly what they’re doing and manage to squirrel away a large chunk of your refund for themselves. In neither of these instances is a “free 100 bucks” or “free Beats” worth the loss.
Furthermore, more often than not, there’s a catch to all the free stuff and low rates tax preparers offer. Those “low, low rates” promised quickly go way, way up once fees and taxes are added on.
And those promising a faster return, because they know that that’s what people want? Many times, a faster return just isn’t possible, especially if you’re e-filing. According to the IRS:
“Authorized e-file providers are prohibited from submitting electronic returns to the IRS prior to the receipt of all Forms W-2, W-2G and 1099-R from the taxpayer.”
On top of that, it’s not just the act of submitting returns without all the proper forms that’s banned; preparers aren’t even allowed to advertise that they can prepare returns without these documents. Yet, many preparers are not only willing to break this simple rule, but to FLAUNT it. Which makes us wonder: what other rules are they willing to violate?
We don’t want you to have to find out. To help you avoid an IRS headache, check out these ten (10) red flags to look for when looking to hire a tax preparer for your 2014 taxes:
1. Tax preparers who do not have a PTIN (Preparer Tax Identification Number). The IRS mandates that all tax preparers have a valid, 2015 PTIN. If yours doesn’t, then they’re not legally allowed to prepare your return.
2. Tax preparers who won’t sign your return. If they’re not willing or able to sign your return, they’re not allowed to submit your return.
3. Preparers who insist that you mail in your own return. Preparers are required to submit prepared returns electronically. If they don’t give you the option and won’t provide an explanation, be weary—there’s a reason, and chances are, it’s not a legitimate one!
4. Tax preparers who promise a higher refund than what you received last year, when your situation is the exact same this year. Tax rates haven’t changed much in the past two years, so if your refund is much higher than it was last year, your tax preparer may have inflated your deductions, which is a big no-no.
5. Tax preparers who want you to sign a blank return. You wouldn’t sign a blank check. You wouldn’t sign a contract without reading it first. Don’t sign a return until you can review it—meaning, when it’s filled out and there’s something to actually review.
6. Tax preparers who want to deposit your refund into an account that’s not yours. Preparers will give you a bunch of reasons for wanting to do this, but not one of them is legitimate, nor does the IRS recognize any as legal. If you work with a tax preparer that suggests this, you stand to lose your refund permanently.
7. Preparers who base their fee on a percentage of your refund. Statistically speaking, preparers who do this are more likely to be engaging in fraud or conduct that you’ll pay for later. Fees can be based on a number of factors, but your refund amount should never be one of them.
8. Preparers who promise refunds by a certain date. The IRS is adamant when it says that tax-preparers should not expect their refunds within a certain time. There are many reasons a refund might be delayed, and tax-preparers have no control over this. Those that claim they do are not to be trusted.
9. Tax preparers who guarantee a refund before even checking out your tax documents. No one can know just how much they’ll receive, or if they’ll receive anything, until they run the numbers. Same goes for preparers who tell you that you won’t owe anything—they can’t know that until they review your documents. Be wary of tax preparers who claim otherwise.
10. Preparers who imply endorsement by the IRS. Though the IRS recognizes certain credentials such as CPAs, attorneys, Enrolled Actuaries and Enrolled Agents, they don’t endorse any individual preparers.
Now, there is not always a rule against offering free headphones or a free meal to taxpayers to get them in the door, but we just caution you to consider how much you’re really paying—including for those “extras”—when your tax preparer is willing to offer you money and expensive gifts to do your taxes.
When looking for a tax preparer, don’t be greedy. Treat your taxes like the business task it is, and use your judgment. You want your taxes to be done correctly, because if they’re not, you will be the one paying for it. And your tax preparer? They’ll be sitting nicely on an island sipping Mai-Thais with your money.
To make sure you’re the one sitting nicely at the end of tax season, visit http://www.irsallstar.com/our-services#16 to see how we can help you prepare your taxes in a completely legal and trustworthy way.
Tax payers fail to file their tax returns for any number of reasons: they know they owe money and can’t afford to pay, they run out of time, they don’t know how to do it, or they simply forget. No matter your reasons are for not filing, it’s important that you DO file all past due returns as soon as possible. Normally, you can file your past due return at the same place you file your current return, but if you received a notice, send your past due return to the location indicated on the notice.
Why Should You File Your Past Due Return Now?
There are several legal reasons why you need to file your past due returns ASAP, but some that might get you doing so more quickly are:
· You’ll avoid additional penalties and interests
· You could lose out on your refund – for the years you didn’t file and for the coming years that you do – until all of your past due returns are filed
· You’ll protect your social security benefits
· You’ll avoid issues obtaining loans
What If You Can’t Afford to Pay?
If you haven’t filed because you know you owe taxes, there are several options available to you, including extensions, an installment agreement or even an offer in compromise.
What If You Still Don’t File?
If you choose not to file yourself, then the IRS may file a substitute return on your behalf. If they do, you will likely miss out on any deductions and exemptions you would otherwise have been entitled to.
If you received a notice from the IRS—a notice of deficiency CP3219N—you will have 90 days to file. If you still don’t file, the IRS will proceed with a tax assessment, or a substitute return.
Collections and Enforcement Actions
The return the IRS prepares for you will lead to a tax bill, which, if left unpaid, can lead to enforced collection actions such as liens, levies, wage garnishes, penalties or even criminal prosecution.
Help Filing Your Past Due Returns
The worst thing you can do is to not file your tax returns. Call us today at 877-254-4254 or visit us at http://www.irsallstar.com/our-services#16 to see how we can get you caught up with the least amount of hassle possible.
Tax season officially began on January 20th, yet many of us still find ourselves running around come April, trying to get everything in order so that we can get our returns in on time. This year, taxpayers are particularly antsy to get their returns in as soon as possible, as recent tax years have proven that the longer you wait to file, the longer it will take to receive your refund.
If you want to get a head start on your taxes this year, there are four essential numbers you’ll need handy when the IRS opens its proverbial doors for filing. They are as follows:
1. All of the relevant financial information about your job in 2014 – You’ll need key figures such as how much you earned, how much you had withheld from each paycheck and how much you had in deductible expenses like healthcare, savings, etc.
2. Investment income information – If you earned money from investments in 2014, you’ll need to have that amount handy when you start preparing your return.
3. Records on deductions and credits – If your deductions and credits exceed the standard amount set by the IRS; you’ll need to have records to support your claims.
4. Your bank account information – The quickest way for the IRS to get you your refund is for them to deposit it directly into your bank account. Using direct deposit saves the mailing time of a physical check.
Taxes and tax returns are never fun to think about or work on, and they can be time consuming if you have a lot of deductions and exemptions. For help filing your return in the most efficient and quickest way possible, visit http://www.irsallstar.com/our-services#16
When the Affordable Care Act (Obamacare) was passed into law in 2012, there was a lot of controversy swirling around the law as a whole. But the most controversial part of the law by far—and one of the only aspects that most Americans can agree is discouraging—is the individual insurance mandate, which states that every tax-paying American either obtain “minimum essential coverage” or pay a penalty for every month they are uncovered. The penalty is due with your tax return.
So, how will you determine how much you owe if you remain insurance-free this year? There are two ways to calculate the penalty: you will either pay a percentage of your household income, or a flat-fee, whichever is higher.
The Fee in 2015
If you don’t have the minimum essential coverage in 2015, you’ll pay the higher of these two amounts:
· 2% of your yearly household income. The maximum penalty is the national average premium for a bronze plan, which is around $2,500.
· $325 per person for the year ($162.50 per child under 18). The maximum penalty per family is $975.
The Fee for Not Having Coverage in 2014
If you did not have health coverage last year, you will pay the higher of these two:
· 1% of your yearly household income.
· $95 per person for the year ($47.50 per child under 18).
The Fee After 2015
The penalty for not having health coverage increases every year. In 2016, the penalty will be 2.5% of your household income, or $695 per person.
How You’ll Pay the Fee
You will pay the penalty on the federal income tax return that you file for the year you don’t have coverage.
If you already owe a lot in taxes, and if you don’t want to be stuck with even more fees on top of what you already owe, see how we can help lower your tax liability at http://www.irsallstar.com/our-services#13
For many years, the federal estate tax was one of the biggest concerns for wealthy individuals who wished to leave their estate to their heirs. However, that’s all about to change, as it was just announced that the estate tax exemption amount will rise to $5.43 million per individual this year. Now, married couples can get the benefit of two individual exemptions, making the total exemption per couple nearly $11 million.
With this new tax law in place, it is expected that only about 3,700 estates—or 0.12% of the total—will owe federal estate taxes this year.
The highest estate tax rate on those estates above the exemption amount is 40%.
The IRS also announced that the annual gift exclusion limit—or the amount an individual can give to another person who isn’t a spouse, tax free—will remain at $14,000 per recipient. There is no limit to the amount of gifts a person can give, so long as each is given to a different individual.
At IRSALLSTAR, we want to help you get the most of your money. Visit http://www.irsallstar.com/about-us to see how we help our clients do this every day, or give us a call at 877-254-4254 to enlist our services today.
If you’re saving for retirement, 2015 is shaping up to be an important year, with new guidelines from the IRS that will give you more tax-advantages on your savings accounts. However, while the changes may mean many of you will be eligible to contribute more, new restrictions require a bit of planning ahead.
Here are 5 changes to watch out for this year to get the most out of your saving’s contributions:
1. Higher Employers Plan Contribution Limits
The IRS is raising the limit on how much you can contribute to your 401(k), 403(b) and 457 plans based on how much you earn. The contribution limit was raised from $16,500 in the years 2009-2011, to $17,000 in 2012, to $17,500 in 2014 and now to $18,000. The catch up contribution limit – which is applicable only to employees aged 50 years or older – will also increase from $5,500 to $6,000 this year.
2. Higher Income Limits for IRA Contributions
Limits for deductible contributions to your IRA vary based upon whether or not you and/or your spouse are eligible for an employer-sponsored retirement plan. The income limit was raised to more than $69,000 in 2013 for individuals, to $71,000 in 2015. Similarly, the limit was raised from $115,000 to $180,000 for couples in 2015. These are based on maximum modified adjusted gross incomes (MAGI), and whether or not you receive a full or partial deduction depends on how much less your MAGI is than the limit.
If you don’t have an employer-sponsored retirement account but your spouse does, the tax deduction for your IRA contribution doesn’t count if your joint income is more than $183,000 but less than $193,000 in 2015.
The maximum contribution for an IRA did not change this year, and still remains at $5,500 for those under 50 years of age, and $6,500 for those 50 plus years old.
3. Higher Income Limits for Roth IRA Contributions
You can contribute $2,000 more to your Roth IRA in 2015, making the new income limits $116,000 or more but less than $131,000 for individuals, and $183,000 or more but less than $193,000 for couples.
Additionally, you can have both a traditional and Roth IRA, but the contribution limit is still $5,500 (or $6,500 if you’re 50+) across both accounts.
4. Limitation on IRA Rollovers
Beginning on January 1of this year, you can only use one rollover from one IRA to another in a 12-month period of time. Should you commit two rollovers in a single year, you could be subject to a 10% early withdrawal penalty and a 6% per year excess contributions tax, as well as be liable to pay your income tax at the time of the rollover.
5. Changes in Health Expense Accounts
Many people use FSAs – or Flexible Spending Accounts – to pay for their medical expenses, because FSAs allow you to save pre-tax dollars. However, whatever money you put into the account must be used within the calendar year.
Since 2013, you’ve been allowed to rollover $500 of unused funds into the next year plan. While that is not to change this year, what has changed is the restriction this benefit places on Health Savings Accounts.
If you choose to rollover $500 of your unused money at the end of the year, you will be ineligible to participate in an HSA. Based on this new restriction, you may want to weigh the pros and cons of setting up an HSA versus saving that $500 from your FSA.
The yearly contribution limit on employer-sponsored FSAs has been raised $50…from $2,500 to $2,550.
1) You will be able to contribute up to $18,000 to your 401(k) this year.
2) You are limited to one indirect rollover a year starting this year. .
At IRSALLSTAR, we understand that tax preparation is difficult enough without throwing in all of the New Year’s changes. We don’t want you to miss out on any savings opportunities because of the changes, which is why we offer tax preparation assistance. One of our seasoned tax professionals will assist you with your tax return this year, and will help you get all of the deductions, exemptions and credits you’re entitled to. Visit http://www.irsallstar.com/our-services#16 to see how we can help you make sense of all the changes to the tax code and get the most of your 2014 return.
One would hope the IRS would be more organized and incapable of making huge, glaring errors. Things like putting a lien and a levy on a well-known politicians’ house “by mistake” twice in five years, sounds like more than a fluke. However, according to a recent Forbes article, this is what happened to Christine O’Donnell, a former Senate Candidate.
Kelly Phillips Erb, the author of the Forbes article writes, “While it’s not out of the question for the IRS to make a mistake, I would agree that being the subject of a lien and a levy twice for the same transaction is more than a coincidence. I would agree that it smacks of either targeting or very bad record keeping or some combination of the two.” (www.forbes.com/sites/kellyphillipserb/2014/12/27/christine-odonnell)
Having a lien or levy placed against your property, assets or wages by the IRS is no fun for anybody. It almost always feels as though one is being unnecessarily targeted. Whether it is in error or not, stress levels skyrocket and any dealings with the IRS are always complicated.
IRS tax situations are generally private concerns. However, when the IRS places levies and liens against a property or seizes bank accounts they can move forward alerting creditors that the government has a right to your property. These liens become public when filed in court. So if your neighbors have a habit of reading the legal notices in your community, anyone can become aware of the situation creating even more stress.
To make matters worse, as the Forbes article explains, “When your wages are levied, your employer is required to send a certain amount of your pay directly to the IRS. A levy on your wages generally continues until your tax liability is paid off or until you ask the IRS to release the levy.” The same is true of liens – they are only removed once the debt is paid in full or by application.
The point is that the IRS does make mistakes. However, their mistakes only seem to come to light or attract media attention when someone famous has been wronged. When it comes to the law abiding taxpayer being told they owe back taxes or that their property and assets are being levied mistakenly, the toll can be far more serious.
Should the IRS mistakenly levy your bank account and you live in a small community, you’ll have to deal with your banker. The Forbes author explains the process, “When the IRS levies your bank account, the bank receives a notice that the levy has been issued. The bank must hold the amount that you owe for 21 days; after that time, the bank must send the IRS the amount owed. As a matter of practice, many banks will advise clients that the account has been frozen pending payment (the bank does not have discretion not to make payment unless there are ownership issues).”
The famous, the infamous, the ordinary citizen are all subject to mistakes by the IRS. They are capable and have been known to make big mistakes, little mistakes and mistakes that sometimes change lives. Don’t make the mistake of trying to correct these mistakes on your own. At IRSALLSTAR.com we exist to help those who are in trouble with the IRS – mistakenly or not – get their troubles resolved.
Well, here we are at the beginning of another 365-day cycle we refer to as a “year.” We all know what happens now. We have to start thinking about paying the “tax man.”
New tax bills have recently been passed that will bring a little good cheer to some. And while the good cheer may not be as far-reaching as we’d like, for those it does affect every bit of relief is welcome.
At long last, teachers who buy classroom supplies with their own money get a much-needed tax break. Commuters also have some breaks to look forward to, whether you drive to work or take mass transit. You don’t have to itemize for either of these breaks. Teachers get to deduct up to $250. Commuters get to reduce their income by $250 if they drive to work and pay for parking. Mass Transit commuters can reduce their income by $130.
If you itemize, you’ll get relief in the form of a deduction for paying local and state sales taxes in lieu of income tax. This represents an enormous benefit to the residents of the seven states that have no state income tax.
Those paying for higher education will also find some relief in the new education tax break. Whether you are a parent paying for a child, yourself or your spouse, you will appreciate a deduction up to $4,000 in qualified tuition and books.”
Also, some homeowners and some retirees with IRAs will benefit. In addition, a new provision will benefit disabled adults.
Be sure to ask your tax preparer to go over all the new tax breaks in detail to find out if they apply to you.
Carpenters have a very practical saying. “Measure twice, cut once.” When it comes to filing tax returns there needs to be a saying to the effect of triple check if you want that check! Something needs to be done that might help people avoid continually making the same mistakes over and over again. Maybe this article will help.
While it may seem amazing, the IRS reports that there are 10 common mistakes made by taxpayers year after year. Remember to go over your returns with a fine- toothed comb, because any mistake can delay a refund and could lead to – horror of horrors – an audit. Having your tax preparer file electronically can circumvent some of the common errors. However, there are many errors of omission that electronic filing cannot prevent.
As you begin preparing to file, keep these common mistakes in mind as reported by Tom Murse on the About News website. Do your best to avoid making any of them. (http://usgovinfo.about.com/od/incometaxandtheirs/tp/Ten-Most-Common-Tax-Mistakes.htm)
According to the article, the most common mistake is the failure to sign and date the return!
As a small business owner, it can be difficult to navigate the terrain of an IRS audit or exam…or even think about the possibility of dealing with one! While you should have a tax professional helping you out each tax season, it’s always helpful to have basic knowledge of your own. That way, you can have an idea of what is and what isn’t considered a business expense according to the IRS.
To make it easier for you, here are some quick tips on tax deductions for small businesses:
Tax-Tip #1: Home Office
Having a home office is not immediate grounds for an audit, so don’t let fears of the auditor dissuade you from claiming your home workspace. However, here are some things to consider before claiming your home office:
· Make sure your office is distinctly separate from the rest of your living space – meaning, your home office can’t double as a playroom or guestroom or anything other than an office.
· It will be hard to claim your computer if it’s the only one you own; no auditor will believe you don’t use it for personal reasons as well.
· To figure out the percentage of your home expenses that are deductible for your business, measure the square footage of your office space and divide that by the square footage of your entire home. That percentage is the portion of rent, mortgage, taxes, utility bills and maintenance expenses that you can claim.
Tax-Tip #2: Technology Purchases
Uncle Sam is kind to new businesses when it comes to technology. Computers, printers and even company vehicles are tax-deductible. Sometimes, you can even claim the entire cost of the purchase. You can distribute the amount over a period of years, or claim it all on one return. That being said, don’t be afraid to invest in the technology you need, because you will need it.
Tax-Tip #3: Travel Costs
Oftentimes, travel is necessary for small business growth and expansion. That being said, many business travel expenses are completely tax-deductible. Our tip on travel expenses? Write off airfare, hotels, car rental, mileage and even laundry costs. While food is deductible up to 50%, don’t over do it, because the government figures that you have to eat—traveling or not—and they won’t let you write off the entire expense.
· If you take your family with you, only YOUR expenses are deductible.
· If you take clients out for a meal, those costs are 50% deductible as well.
· Conference fees are 100% deductible, as long as the conference is related to your business.
· Entertainment costs are not deductible whatsoever.
While all of these tips should help to prepare you for tax season, the best advice we can give you is to always keep accurate records of your purchases and to have a professional help you out when it comes time to file your tax return. With a professional on your side, your taxes will be in order, the IRS will leave you alone, and you might even find some savings you wouldn’t have found otherwise! Contact us at http://www.irsallstar.com/contact-us and schedule a consultation to discuss how we can help you prepare your small business tax returns this coming tax season.
At IRSALLSTAR, we believe in helping the little guys go up against the IRS and win. Many taxpayers fear the IRS. They think that there is no winning with them. The IRS says jump, people jump. The IRS says pay, people pay. Not many people stop to think that maybe there is another way – that paying up or letting the IRS levy their property isn’t their only option. At IRSALLSTAR, we listen to your tax problems, and then we present you with all of your options, none of which involve giving up or giving in to the IRS.
How many options do you really have though? More than you think. Here are a few of the most popular ones:
· Installment Agreement, which involves setting up a monthly payment plan with the IRS.
· IRS Appeals, which involves you appealing decisions made or actions taken by the IRS.
· Levy Release, which helps to get your money back or to stop the IRS from continuing to take your money.
· Non-Collectible Status, which involves proving to the IRS tat you can’t afford to pay them.
· Offer-In-Compromise, which is a resolution where you ultimately pay the IRS less than what you owe…it works for you AND satisfies the IRS.
· Payment In Full, which, if you truly owe it and can afford it, is your best option.
· Penalty and Interest Reduction, which can reduce a significant amount of your final cost. It’s not unusual for penalties and interest charges to account for nearly 75% of the amount owed.
· Reduce Your Tax Liability, which involves going through your past returns and finding deductions you didn’t take but could have. We then re-prepare and re-file these returns but include those deductions this time around.
· Revenue Officer Assistance, which involves our team representing you when a revenue officer is assigned to your case.
If you owe back-taxes, you have many options, but the best thing to do first is to contact an experienced tax resolution attorney. We will work with you to get the best possible outcome for your situation. Contact us today at 877-254-4254, or visit http://www.irsallstar.com/contact-us
One of the greatest things about living in this country is our guaranteed right to a fair and speedy trial – whether innocent or guilty. It seems the IRS took a cue from the constitution, as every taxpaying citizen has the right to an appeal – whether you deserve one or not. For many taxpayers, this right has come in handy, especially when collections actions have been proposed…
If the IRS believes you owe them money, they can make your life extremely difficult. Liens and levies are just the first of many steps the IRS will take to get what they believe is rightfully theirs. If you do owe them money, we will help you work with them to develop a solution that both you AND the IRS can be happy with. However, if you are absolutely positive that you don’t owe them any money, then you have every right to file an appeal.
Like any legal trial, just because you file an appeal doesn’t mean you’ll automatically win. There are a lot of hoops you’ll need to jump through. For instance, you might get one appeal rejected, and then have to appeal that decision. But don’t give up, and don’t worry – no matter how many appeals you have to go through, our team at IRSALLSTAR will fight to get you the best resolution possible.
Visit http://www.irsallstar.com/our-services#6 to see why we’re the team you want on your side if you hope to win an appeal against the IRS.
“If you owe back taxes and don’t pay them today, the IRS CAN put a lien on your house!”
“Do you owe back-taxes? Call now before the IRS puts a lien on your home and bank accounts!”
Scare tactics like these are common in our industry, as well as unrealistic promises of making all of your problems magically disappear. If you talk to a tax resolution firm that uses scare tactics and big promises in an effort to “SELL” you on their services, you might want to take a step back and reevaluate whether or not they’re the best option for you.
Unfortunately, many of our clients are refugees from firms like these. When they come to us, they’re in worse shape than when they started.
If you’re already working with one of these firms and feel uneasy about the work they’re doing for you, give us a call before you get in any deeper with them. If you are considering hiring a firm that’s promising you results that sound too good to be true, it’s not too late to seek a second opinion. Contact us today to discuss exactly what you should be looking for in a tax resolution firm: http://www.irsallstar.com/contact-us.
A few things to consider before hiring a tax resolution firm:
1. Did they ask you to fill out a Form 433 on your own, after you sent them a power of attorney?
2. Are they filing your unfiled or back returns for outstanding tax years? Are you sure? If not, you need to be!
3. How long has the tax resolution company been in business?
Visit http://www.irsallstar.com/our-services#4 to see why the answers to these questions are so important.
You won’t see this kind of sign displayed in any bank or financial institution. You may be smurfing without knowing it or even knowing what it is but smurfing is something to become aware of and avoid at all costs. “Smurfing” or “structuring” involves a series of cash deposits made in one day or a short period of time in which the individual deposits are less than $10,000 but add up to $10,000 or more. Pursuant to the Bank Secrecy Act of 1970, financial institutions are required to report “smurfing” and/or “structuring” banking activity to the U.S. Government by preparing and submitting specific forms. The act also requires financial institutions to cooperate with the U.S. Government by flagging accounts reflecting this type of activity.
Under Chapter 31 United States Code, Section 5324, if a person’s “transaction could have been conducted as a single transaction and that person took actions to break it up to avoid a currency transaction report,” he or she is considered to be in violation of the law. According to the Bank Secrecy Act of 1970, “any person or persons, who receive more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, must file a Form 8300.”
Smurfing is Illegal and Could Subject You to IRS Civil Asset Forfeiture.
A one-time occurrence isn’t going to raise any red flags. If you break up your cash banking transactions with any regularity, however, you could become an IRS target. This practice is referred to as “structuring” or “smurfing” and is often done in an attempt to evade reporting requirements.
Originally created as a way to track the cash of criminals such as drug traffickers and terrorists, the IRS has recently turned their sights to average business owners. Once an account is targeted, the IRS can seize bank accounts and other assets in a process referred to as “civil asset forfeiture”.
Once the IRS seizes an account in this process, they can take the money without filing a criminal complaint. The burden is on the business owner or individual whose assets have been taken to prove that they are innocent. Small business owners across the country have been targeted even though they have no history of criminal behavior or intent. And, even if the person or business owner proves their innocence, the IRS never returns the funds.
The bank is sworn to secrecy and cannot alert the depositor that their account is being flagged. Talk to your tax resolution specialist about smurfing or structuring to make certain your actions don’t alert the IRS to activity that they could consider illegal.
We all know and dread April 15th as the income tax return filing deadline, but people who save big on their taxes know one secret that many others don’t: plan ahead! To ensure that you pay the IRS as little as possible of your hard-earned income, there are some moves you need to make before the year’s end.
While congress is making tax breaks harder and harder to come by, there are still a few breaks available—you just have to know where to look for them. True, some require a little planning, but others are quite easy to come by. However, all are worth checking out, as each can make a significant dent in your tax bill.
The following are eight (8) moves to make before the year’s end to ensure a big tax-savings:
1. Defer Your Income
The highest tax-rate is a whopping 39.6% on taxable income of more than $406,750 for single tax payers; $457,600 for married couples filing jointly; and $432,600 for head of household tax payers. If the pay you’re owed before the end of the year will push you into that top bracket, try to defer your receipt of money any way you can! Ask your boss to hold your bonus until after the New Year; put more money into your tax-deferred retirement account; if you’re self-employed, don’t send invoices out until early 2015.
This strategy works no matter what tax bracket you’re in, and is a great way to keep from moving up into the next higher tax bracket.
2. Add To Your Retirement
If your company offers a 401(K) or similar tax-deferred savings or retirement account, add as much as you can to it. Doing so will lower your taxable income significantly.
3. Review Your Flexible Spending Account (FSA) Amounts
Some workplaces offer something called an FSA in place of health insurance. You can contribute up to $2,500 of your paychecks to it, and it’s all tax-deferred.
However, the downside of an FSA is that, if you don’t use it by year’s end, you lose it. So while it may save you in taxes, it could hurt you in wasted money.
4. Take Advantage of Your Losses
Sometimes, losses aren’t all bad. If you have assets that have decreased in value over the past year, use them to offset any gains. If your losses outweigh your gains, you can use up to $3,000 to reduce your ordinary income amount. More than $3,000 can be carried over to use in future tax seasons.
5. Use Your Homeownership Status
There are several reasons it’s nice to own your own home, but tax breaks are high up on the list. For instance, did you know that if you make your January mortgage payment early—like, before December 31st—you can deduct the mortgage interest on your coming tax return? You can also do this with your property taxes.
6. Bunch Your Deductible Expenses
Many taxpayers know that there are some expenses they can write off to lower their adjusted gross income. However, many people don’t know that for many deductions, they need to hit a threshold amount before those deductions can apply.
For instance, in order for your dental and medical expenses to be written off, they must exceed 10% of your AGI. Miscellaneous expenses, such as business claims, must exceed more than 2% of your AGI. To make sure you meet these thresholds, start consolidating your expenses now. It’s much easier to plan your costs now than to scramble for eligible expenses come April.
7. Give, Give, Give!
Charitable donations and gifts can help reduce your tax bill significantly. Giving anything from clothes to furniture to vehicles will help—both you and the charity you’re giving to. You can even donate stock that you’ve held for more than a year. Each of these things can be written off for a certain amount, which is determined by the receiving charity.
8. Adjust Your Withholding
It’s so simple and so obvious, yet many people don’t think to do it. If you found yourself writing the IRS a big check back in April, or even if you received a rather large refund, you might want to consider adjusting your withholding.
Most of us cover our eventual tax bills through withholding, so if you find you’re getting a lot back, you’re withholding too much. The opposite is also true too: if you owe a lot at the end of the year, you’re withholding too little. Ideally, you want the correct amount to come out of your paychecks to ensure you don’t under or overpay.
Planning for taxes is difficult, especially if you hope to avoid being thrust into the next tax bracket. To ensure that you save as much money as possible this coming tax season, let us help you. Visit http://www.irsallstar.com/our-services#15 to see why we are the tax professionals you should want to work with!
IRS tax disputes impact thousands of taxpayers each year. While some taxpayers are fortunate enough to escape the process with only minor damages, many more taxpayers find themselves in a black hole of tax debt, penalties, and interest that seems impossible to escape.
One major problem with IRS penalties is that they are punitive in nature. Rather than providing encouragement for a taxpayer to learn from his or her mistakes, they instead overwhelm taxpayers with debt and can literally ruin their lives. IRS penalties accrue at an incredible rate, and no taxpayer is exempt. This story was recently driven home yet again as a well-known and wealthy lawyer found himself in the midst of a costly tax controversy.
A recent Boston Herald article reports:
Famed Hub lawyer Jeffrey Denner was sued in federal civil court yesterday for failure to pay $2.7 million in taxes and penalties, dating back to 2002, according to court filings.
The complaint filed in U.S. District Court in Boston states Denner is liable for federal income tax for seven years dating back to 2002 for a total of $2.7 million.
But Denner’s tax lawyer Bill Greenberg said the lawsuit is purely an administrative tool that the Internal Revenue Service is using to keep its claim to taxes from the early 2000s, which otherwise runs out after 10 years. He said the actual amount is much less.
Greenberg said this is a debt that Denner has been working to pay down for years. He said the original bill stems from 2003, when Denner suffered an aneurysm followed by an infection and nearly died. He said Denner spent two years recovering from his illness and could not pay his taxes during that time.
“Its been growing by 40 percent a year once he got behind,” Greenberg said. “I’ve been working with the IRS to get this under control. At this point we plan to try to compromise.”
Denner said he intends to pay what is owed, but has been attempting to negotiate the penalties and fees.
“I thought this was resolved years ago,” he said.
The complaint states Denner had a payment plan worked out for his 2002 taxes but did not keep up with the payments.
Did you catch the number at which Denner’s IRS tax debt increased? Nearly 40%! It’s illegal for credit card companies to charge interest rates that high, but the IRS can get away with it. And when you consider that many taxpayers who are in IRS trouble are already facing financial difficulties, you can see why excessive interest and penalties can seem like a black hole.
If you are facing an IRS dispute, it’s important that you take immediate action to get your situation under control. A tax attorney can help you fight for a fair settlement, preventing you from paying the IRS any more than you are legally required to. Please contact us today if you’d like to learn more about how we can help you resolve your IRS dispute!
50% of Americans owe taxes at the end of the year. If this is you, we understand your worry and panic. Whatever you do, it’s important to not allow those emotions to overrule your judgment, causing you to make a decision that will make it worse. This is the time to take a deep breath and consider these five options available to you:
1. Put it on your credit card. While this does nothing to eliminate your debt, it does take the pressure off if your inability to pay is a timing issue. Also, the interest rates on your credit card might be a lot lower than those levied by the IRS, which could save you a lot of money in the long run.
2. Refinance your home. This option makes sense if you have any equity, that way you can use that equity to resolve your outstanding tax debt. Unlike with credit card or IRS interest, you can deduct your mortgage interest on your income taxes if you itemize. However, only refinance if you’re absolutely sure that you can afford it.
3. Enter into an installment agreement. This is probably the best and easiest option – anyone can use if they owe less than $50,000 in combined income tax, interest and penalties, and so long as they’re current on all of their returns. However, like with credit cards, if you miss a payment – or are even a few days late – penalties will accrue, and they are HIGH. If you use this option, be sure that you are committed to making all of your payments on time.
4. Consider an Offer in Compromise (OIC). An OIC lets you pay less than you owe, but this is only available if you meet a number of requirements. The IRS will take the following into consideration before granting you an OIC: your ability to pay; income; expenses; and asset equity. Generally, the IRS will only agree to an OIC if they determine they won’t be able to collect the full amount within a given time frame.
5. Simply ask for more time. If you need more time, ask for it. You can request more time using the Online Payment Agreement Application or by calling the number provided. If your circumstances allow it, you’ll be granted an additional 60-120 days to pay off your taxes.
Help is always available so before you panic, take a deep breath and call us. We’ll see you through the initial stages of panic and help you decide on the option that’s best for you. Call us today at 877-254-4254 or visit http://www.irsallstar.com/our-services#9 to see how we can help.
Dealing with the IRS is frustrating at best, and debilitating at worst. The system is complicated, making it easy for taxpayers to mess up their returns and find themselves facing outrageous charges, penalties or other serious repercussions. One of those serious repercussions is having a Revenue Officer assigned to your case.
Revenue Officers are like coonhounds, relentless in their one purpose: to collect IRS back taxes. They’re extensively trained in this area, and use weapons such as liens, levies and seizures into cornering you for the catch.
At The Willis Firm, we believe in helping the underdog. In the case of taxpayer versus IRS, that is you. To level the playing field when a Revenue Officer has been assigned to your case, we offer Revenue Officer Assistance. When you’re not represented, the Revenue Officer assumes they’ve won the game; however, with us on your team, they’re in for a huge surprise.
If you’re tired of getting calls, letters and constant requests from the IRS to pay your taxes in full – if you can’t deal with the stress and embarrassment of having the Revenue Officer show up at your home or work anymore – or if you just want to put the whole ugly mess behind you once and for all, give us a call today at 877-254-4254 or visit http://www.irsallstar.com/our-services#14 to see how we help people like you deal with the IRS bloodhounds that are Revenue Officers.
When you owe money to the IRS, it’s important to keep in mind that they operate just like any other creditor—they are interested in one thing and one thing only: collecting what is owed to them. Because of this, they are always interested in working with you, even if it means compromising a bit. If you owe the IRS more money than you can earn in the next couple of years, an Offer in Compromise (OIC) isn’t out of the question…
While it’s always in your best interest to pay the IRS upfront what you can, we understand that this just isn’t possible for everyone. In today’s challenging economic environment, it’s hard to pay the bills, much less save money or pay outstanding debt. That is why a number of taxpayers look for a tax debt relief firm to help them deal with the government and navigate the numerous IRS channels. If you’re in hot water with the IRS, seeking representation is the best thing you can do for your peace of mind and your back account.
What if an Offer in Compromise is What We Suggest?
If we believe that an OIC is the best option for you, you will make an agreement with the IRS to pay less than the full amount you actually owe. With this type of agreement, you – the taxpayer – will choose to make a lump sum tax payment or set up an installment agreement. Whatever you choose to do, you must live up to your end of the compromise or the deal is off.
In order to be considered for an OIC, the IRS will take a number of factors into consideration, such as your income, ability to pay, current expenses and existing assets. The IRS must determine that, under your current circumstances, paying back the full amount just isn’t possible.
An OIC isn’t for everyone, and we don’t recommend it to everyone that is having trouble paying their taxes. In order to make the best decision for you, your family and your lifestyle contact us today at 877-254-4254 or visit http://www.irsallstar.com/our-services#9. See how we’ve helped people just like you achieve the best possible outcome.
Tax-deductions are an important part of keeping as much of your earned money for yourself, rather than giving it to the IRS. Many of these deductions may be small, but they do add up, and can really help out at tax time.
If you’re reading this you may be one of the many that haven’t yet learned about the 10 big tax deductions that will save your bank account – and your sanity – come April 15th. Because we believe in helping you achieve the best outcome when dealing with the IRS, we’ve put together a list of the 10 secrets to saving money this tax year.
1. Make charitable non-cash contributions, such as donating clothing, furniture or other objects to places like Goodwill and Salvation Army. Be sure to get written receipts for everything you contribute.
2. Any points you pay to refinance your home can be deducted on a monthly basis over the life of the new loan.
3. Don’t forget to use the old points you paid to refinance your home in conjunction with the new points when you refinance it again. This is a deduction that many people miss.
4. Health insurance premiums are potentially deductible, but they must be added to your medical expense pot, which has to exceed 7.5% of your adjusted gross income before it can be considered for tax deductions.
5. Educator expenses apply to all educators who use their own money to buy resources and materials for their students.
6. If you make less than $65,000 and went to college or obtained some kind of higher education, you qualify for an above-the-line-deduction for as much as $4000 paid towards higher education expenses.
7. If you make any energy saving home improvements, you qualify for a deduction.
8. Any expenses related to tax-planning are deductible, so long as they exceed 2% of your adjusted gross income.
9. If the President declared the area in which you live a “disaster area” during the tax year, then you qualify for Causality Deductions.
10. Take advantage of the Retirement Tax Credit if you’re a moderate- to low-income earner. Any money you add to your retirement account isn’t taxed unless you use it before the allowed time.
Visit us at http://www.irsallstar.com/our-services#13 to see how we can help you save money and stop stressing about your taxes today.
The end of the year is creeping up on us, and as we say goodbye to summer, we make way for the holiday season. While you might be tempted to spend all of your “financial thinking” on gifts, travel and holiday fun, take a moment to consider all of the financial loose ends you might have accrued over the past year.
However far off it may seem right now, in order to start the New Year off right there are 5 simple things you can start doing TODAY. If you pay attention to these now, in January you’ll have taken advantage of every savings opportunity available to you and your loose ends will be all tied up.
1. Use your flexible or healthcare spending account savings.
If your employer offers health coverage through either a flexible spending account or health savings account, part of your paycheck has been going towards childcare or healthcare costs all year long.
This is a great set up because it allows you to use your money on ANY medical procedure, and to visit the doctor of your choice – choices that typical health plans put limitations on. The money is also non-taxable. Most of these accounts are of the “use it or lose it” variety—meaning that if you choose not to spend the money in the account by year’s end, it’s gone.
To avoid wasting any money, check with your HR department to see how much you have left in your account, what expenses are allowed under your plan, and then figure out how you can use those funds before the end of the year.
2. Contribute to your retirement savings plan.
If you’re contributing to a 401(k) plan, check with your HR department to see how much you’ve contributed thus far. If you haven’t reached your maximum, ask if you can make a one-time contribution, or, if that’s not possible, if you can increase your per-pay-check contribution by 1% until the end of the year.
3. Bank your bonuses.
Like tax returns, many people use their year-end bonuses on vacations, a new wardrobe or that fancy gadget or accessory they’ve had their eye on for months. They don’t think to use the extra cash to get ahead and become more financially secure. Instead of blowing the money, you could pay off credit card debt or personal loans, pay off outstanding taxes, put money in a college fund for your children, put more money into savings or even invest that money for your future. Whatever you decide to do, you’ll be glad you put some thought into it and chose not to spend it on one impulsive buy.
4. Make a tax-deductible charitable gift.
Charitable gifts can make terrific itemized deductions. If you have extra stuff lying around the house, donate it! Or, if you have an extra lump sum in your bank account, give it to your favorite charity. Not only are you doing something nice, but you’re lowering your taxable income at the same time!
5. Get a jump-start on your New Year’s resolution.
Were you planning to make next year the year you achieved financial stability? Why put it off any longer? Commit to improving your finances today by identifying one thing you can begin doing now and start doing it. If you’re not sure where to start, just pinpoint one financial aspect you’re not comfortable with and concentrate on that. Need ideas? Here are a few:
· Balance your checkbook
· Make – and stick to – a budget
· Find a financial advisor
· Talk with your HR department about what your benefits are and see if you could make changes to your current plan. Sometimes altering your plan can save you big bucks in the future.
What Does This Have to Do With My Taxes?
As we progress in our careers, our paychecks often become larger and tax refunds become a thing of the past. More and more of us find that we have to pay taxes at the end of the year.
Next year, avoid having to get on an installment plan, or worrying about the IRS coming after you, and plan on paying as much as you can on April 15th. If you know you’re going to owe taxes, plan on using your year-end bonus towards that end. By following advice numbers two and four, you can lower the amount you owe exponentially – if you’re smart about it.
Getting hit with back-taxes can really hurt your financial self-esteem. However, changing just one thing – or taking one small step – can boost your financial self-confidence and set you on a solid path toward a more secure financial future.
If you’re still struggling to pay off your taxes from previous years, and if you want to be free from the IRS next year, contact us today at 877-254-4254 to see how we can help you get your tax affairs in order today!
We have written quite a bit in this space about the extreme measures the IRS will take to extract every last penny from taxpayers who owe the government money. A recent Forbes article reminds us just how far the IRS will go when pursuing a taxpayer:
The Internal Revenue Service says it made a mistake in valuing Michael Jackson’s estate. Nope, the IRS hasn’t abandoned its much discussed claim for $702 million in extra taxes and penalties—a bill Jackson’s estate is fighting in U.S. Tax Court. Instead, the tax agency is upping its demand by $29 million to nearly $731 million.
In a previously unreported court filing, the government says that IRS auditors originally thought the King of Pop owned only 50% of certain master recordings at his death in June 2009, when he really owned 100% of them. That 100% interest was worth $91 million by the IRS’ figuring, compared to the $11 million reported on the Jackson estate tax return.
The change brings the IRS’ valuation of Jackson’s estate and lifetime taxable gifts up to $1.178 billion, compared to the $7 million the estate reported. The IRS now wants a total of $525.6 million in tax and $205.1 million in gross valuation misstatement and negligence penalties. (Any interest owed will be on top of that.)
This story is instructive on several levels. First, it’s a reminder that a taxpayer can’t escape IRS pursuit just by passing away. For all we know, IRS Revenue Officers have the ability to pursue us into the afterlife as well.
Second, it’s a reminder that the IRS doesn’t care who you are… if they think you owe the government money, they’re coming after you. It doesn’t matter if you’re the King of Pop or a hardworking small business owner… nobody is safe.
And it’s a demonstration of how quickly an IRS dispute can spiral out of control. While the numbers in the Jackson controversy are much higher than the typical dispute, the process is the same: once the IRS latches on to a mistake, they keep digging. Your tax bill skyrockets, and penalties and interest pile on as well. It’s a frightening cycle for any taxpayer unlucky enough to be pulled in.
If you’re facing an IRS dispute, the good news is that we can help. Please contact us today to learn more!
The iconic “anonymous Swiss bank account” has achieved almost legendary status in TV shows and movies. These accounts were helpful for wealthy Americans who wanted to hold their wealth overseas and away from prying eyes… and away from the IRS!
And while this practice used to work for many people, in recent years the IRS has cracked down harshly on Americans attempting to conceal assets overseas, to the point where the famed anonymous Swiss bank accounts are no more. Americans who have assets in these types of foreign accounts are urged to come clean or face potentially devastating penalties. As a recent FOX Business article reports:
During the past several years, the IRS has become aware of a significant amount of income generated by foreign bank accounts that has gone unreported and untaxed. The agency has taken steps to eliminate this problem, meaning the days of the numbered Swiss Bank Account are gone.
You are likely aware that if you have a foreign financial account, including a bank account, brokerage account, mutual fund, trust or other type of foreign financial account with $10,000 USD or more in the account at any time during the year, you must complete an annual FBAR report FinCen 114, and file it with the IRS by July 31 of each year. There are severe penalties if you do not come forward and file this report.
If you have money invested overseas and you haven’t reported it to the IRS, it’s important that you comply as soon as possible – as penalties get worse if you wait. If you find yourself in this situation, don’t delay any further – please contact us immediately.
Of course, you don’t have to be a wealthy investor with overseas assets in order to face IRS trouble – the agency spends plenty of time harassing taxpayers right here at home. If you are stuck in an IRS controversy and need assistance, we can help. Please contact us today to learn more!
Local Attorney John Willis of IRSALLSTAR.com and The Willis Firm, PC will be a guest on WEBY radio this Wednesday, Sept. 10th at 4pm. Mr. Willis is ready to take on your tax problems live and in person, offering guidance and invaluable advice. Any issues you may be having with the IRS, from tax liens to garnishments to tax levies and more, may be answered during his interview on WEBY radio.
A respected tax attorney and published author, Mr. Willis has appeared in USA Today, as well as on ABC, NBC, CBS, and FOX affiliates around the country. WEBY host, Terence A. Gross, is a personal injury attorney who has actually referred some of his clients to Mr. Willis for tax help in the past, and has invited him to speak to taxpayers in person during the show.
Mr. Willis will be taking calls from taxpayers beginning at 4 PM on September 10th. If you owe the IRS money, have a tax levy or tax lien against you or your business, or you’re afraid that the IRS is going to take your money and your property, Mr. Willis will be available to answer your questions. The IRS All Star team knows the game that the IRS is playing, and is ready to provide you a workable plan that will allow you to win that game.
Listen to Mr. Willis live at 4 PM on September 10th at the following link: http://www.1330weby.com/index.php/listen-live
Mr. Willis is an experienced Gulf Coast tax attorney, a member of the Florida and Alabama Bar and is admitted to practice in front of the U.S. Tax Court. He can represent taxpayers before the IRS anywhere in the United States, and he can give you the answers you need to help solve your IRS tax problems.
At The Willis Firm, we believe that open communication, trust and honesty are the three keys to any successful professional relationship. When you’re dealing with the IRS, you want to be sure that the people on your side are people you can partner with successfully. The IRS can be tough to deal with – they can be tricky, confusing and frightening. That’s why you want someone on your side who knows how to talk to them – who knows how to deal with them – and who won’t be afraid to tell you exactly what needs to be done to achieve the best possible outcome.
That being said, here are a few tips and tricks when it comes to dealing with the IRS on ANY matter:
1. Always, ALWAYS be honest and upfront. Lying will not save you and will only get you into more trouble in the end.
2. Be prepared – whether you’re going through an audit or about to have your property levied, the best thing you can do for yourself is to be prepared.
3. Get help. If you owe the IRS a significant amount of money, if you are about to undergo an audit or if you fear your property is about to be levied, contact an IRS or tax attorney right away.
At The Willis Firm, we would never steer you wrong. We’re on your side, and we will fight to achieve the best possible outcome for you. To see why we’re the team you want on your side, visit http://www.irsallstar.com/about-us
People have enough worries when it comes to paying their taxes without having to deal with scams. Sadly, that’s just one more issue taxpayers have to deal with according to reports by NBC reporters. Individuals across the country are getting calls from the “IRS” telling them that they owe more money, and that if the individual doesn’t pay up right away, the agency will be “forced to take legal action.” And these scammers don’t let up – one victim claims that they call her at least three times a day.
Unfortunately, these scam artists do their homework before contacting victims – in many cases they know the last four digits of their victim’s social security number, making their scheme more convincing. However, no matter how convincing the caller may seem numerous State Attorneys General offices and the Federal Department of Consumer Protection urge individuals to hang up on these con artists immediately and contact the authorities. Furthermore, the IRS says that if you owe them money, they will not call you; they will send you written notification via mail.
If you believe that you’re the victim of an IRS scam, or if you suspect a loved one is, visit us at http://www.irsallstar.com/ or contact us at 877-254-4254 to see how we can best help you.
CNC – Currently Non-Collectible. To individuals with huge tax debts, this term seems like a free hall pass – a “Get out of jail free” card,” if you will – and for good reason. When an individual is declared CNC status, the IRS must stop all wage garnishments, release all levies and cease all collection activities entirely. However, it’s important to note: CNC status does not exempt you from paying your back taxes. What it does is stall the inevitable.
How to Obtain CNC Status
In order to receive CNC status, you must prove that you don’t have any assets that would enable you to pay off your outstanding tax debt. Furthermore, you need to prove that you make just enough money to cover your basic necessities such as rent, food, clothing, health insurance, car payments, court ordered payments (child support), loans, utilities, auto insurance, maintenance bills, etc. Seems simple, right? Unfortunately, dealing with the IRS is NEVER “simple”.
In addition to proving that you have nothing of value to offer the IRS – and in addition to documenting each and every one of your daily expenses – you must fill out and file the “Collection Information Statement for Wage Earners and Self-Employed Individuals” form.
And even when you complete all of this information, there is no guarantee that the IRS will take heart and have sympathy. They are, after all, not known for being overly accommodating.
In order to achieve the best possible outcome, contact us before attempting to file for Non-Collectible status. Visit http://www.irsallstar.com/our-services#8 to see what we can do to help.
An Installment Agreement (IA) is the most commonly used method of paying off back taxes. If you owe $50,000 or less, you should be able to get an installment plan set up by simply asking. Once it’s set up, you have up to 72 months to pay off the balance of your debt. However, while this may seem like a pretty good deal, there are some things you should take into consideration before agreeing to an IA with the IRS.
Before requesting an Installment Agreement, make sure you are current on your tax return filings. The IRS won’t approve you for an IA if they see that you haven’t filed all of your past returns. If you are self-employed, you must be current on all of your quarterly estimated tax payments, and if you have employees, you must be current on your payroll tax deposits.
The other thing to consider is whether or not an installment plan is actually going to save you money in the long run. Interest and penalties add up quickly with IA’s, and many people find that they actually owe more after a few years of paying than when they initially signed on. For example:
Mr. and Mrs. Smith owe the IRS $40,000 in back taxes. They agree to pay $300 a month. With 10% interest and penalties, an additional $4000 is added to their balance. At the end of one year, they will have paid off $3,600. However, while Mr. and Mrs. Smith’s balance should now be $36,400, it’s actually $40,400 after the $4,000 penalty and interest charges are tacked on.
Last but not least, make sure you have enough money to pay the IRS after all of your living expenses. Payment plans don’t work if you can’t afford them – if anything, your debt becomes much worse and the IRS becomes much more difficult if you agree to pay them and then don’t. If you simply cannot afford the taxes owed, there are alternatives. You may qualify for an offer in compromise, to be declared non-collectible or even to discharge the tax debt in bankruptcy.
Before entering an IA with the IRS, visit us at http://www.irsallstar.com/our-services#5 to see how we can help you work out the best deal.
Whether you’ve personally dealt with the IRS previously, or you’ve managed to fly under their radar all of your tax-paying years, everybody knows that the IRS is notorious for being a bully. While the IRS has been known to pull some pretty ruthless maneuvers to get money from taxpayers, a tax levy is one of the most aggressive ways they have of dealing with collecting tax debts.
What is a Levy?
A levy is the legal seizure of your property by the IRS to repay an outstanding tax debt. That property can be anything; your wages, your savings, your car, your house, or any other asset.
A levy differs greatly from a lien in that once the IRS takes possession of your property it’s theirs for good. With a lien, you do have a chance to repay the debt in X amount of time and get your property back.
However, the IRS won’t just levy your property without a sufficient amount of warning. They’ll usually only levy after these three requirements have been met:
· They have assessed the taxes owed and sent you a Notice and Demand for Payment;
· You either neglected or refused to pay your taxes; and
· They sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (a levy notice) at least 30 days before the levy went into effect.
While an IRS levy is not something that should be taken lightly, there are times when they take your current financial standing into consideration and remove the levy. If the levy causes you immediate economic hardship, you may be eligible for this procedure. This does not mean that you are exempt from paying your debt. The IRS can work with you, based upon your current financial situation, to develop a payment plan that reflects an amount that you can reasonably afford to pay each month.
Levy on Your Bank Account
When it comes to paying taxes, it seems as if the payments will never end. But be rest assured, tax levies don’t go on forever. When a levy on your bank account is issued, it will end when one or all of the following three conditions are met:
· The levy is released
· You pay your tax debt in full
· The time expires for legally collecting the tax (10 years)
If your bank account is levied, your bank is required by law to hold funds you have on deposit up to the amount you owe for 21 days. This 21 day holding period is simply in place to give the IRS time to resolve any issues regarding your bank account. Once the holding period is up, the bank will send the money – plus any interest – to the IRS. The levy is not continuous but the IRS can and will send additional levy notices to your bank if they receive money on a previously filed levy…and they will do this until your debt is paid off.
Can I Stop an IRS Levy?
If you receive a Final Notice of Intent to Levy and you simply don’t want to deal with the hassle, there are steps you can take to avoid the levy all together. You can
· Pay your taxes in full right away before the 30 day grace period is up
· Enter into an installment agreement
· File for an offer in compromise
· Get declared uncollectible
If you choose to take any of these steps, we advise you to consult with a tax professional before proceeding. Visit us at http://www.irsallstar.com/our-services to see how we can help you make the best decision based upon your current financial circumstances.
President Obama’s health reform law, commonly known as “Obamacare”, has attracted intense media attention every step of the way – from the controversial initial passage of the law, to the troubled rollout of the HealthCare.gov website, to the strong enrollment numbers in early 2014.
In 2015, Obamacare is set to once again dominate the headlines – this time, in relation to IRS enforcement. Regardless of your opinion on the political merits of the law, Obamacare is likely to result in major IRS tax headaches for taxpayers, especially in 2015. That’s because the IRS will be integrating data from new health insurance exchanges and requiring taxpayers to submit information regarding their health care coverage on their tax return for the first time ever. And as you know, the IRS isn’t exactly known for their user-friendly approach. A recent Politico article reports on the troubled waters ahead:
If consumers thought logging on to HealthCare.gov was a headache, sorting through complex forms ahead of tax deadline day 2015 is their next big Obamacare challenge.
The health care law’s benefits are rolling out, but its major math problems start next year as the IRS tries to ensure that millions of Americans are correctly calculating their benefits and that those who don’t have coverage are penalized unless they qualify for an exemption.
That means much new paper-shuffling between now and April 15, which could be especially confusing for low- and middle-income Americans unaccustomed to lots of reporting to the IRS. The insurance exchanges and employers must send consumers details about their health plan and benefits or exemptions in time for them to file a tax return. If any of that information is delayed or wrong, tax refunds could be delayed.
If you enjoy complex tax forms and lengthy conversations with the IRS, 2015 will be a great year for you. For the rest of us, unfortunately, 2015 has the potential to become the year of the IRS tax nightmare. As if dealing with the IRS wasn’t difficult enough already!
While this is bad news for taxpayers, the good news is that if you’re dealing with an IRS controversy, we can help. We’ll represent your interests before the IRS – allowing you to get back to enjoying your life. Contact us today to learn more.
The IRS is one of the most powerful governmental agencies in our country. Even CEOs of large corporations and Fortune 500 companies feel small in their presence. So it’s no wonder the average American taxpayer and small business owner fears them. For years the IRS has made people shudder, and now, with Obamacare in place, their reach of power has been extended.
Starting this year, the IRS has access to all of the information provided by individuals who enroll in the Obamacare insurance exchanges. That means everything, from your name to the number of people insured under your name, will be transferred to the IRS for tax purposes, with or without your permission.
While the IRS says this information is used to determine whether or not an individual is eligible for tax credits, can we ever be entirely certain how private information will be used once it has been released?
Many people feel uncomfortable about the idea of transferring private information from one governmental entity to another. Even if you don’t mind the sharing of your vital statistics, the process of transferring that information may open up areas of vulnerability. Whenever data is processed and distributed, the chance of losing data, altering data, or having it stolen increases.
Staying informed of the changes that are happening at the IRS and with other government programs like Obamacare helps you make intelligent decisions. While our government may not leave us a choice at this time, we can remain aware of the process and watch out for possible repercussions.
Some people think of tax season like Christmas because they are getting a big refund. For many others, tax season isn’t so jolly.
A large percentage of working Americans end up owing additional taxes at the end of the season, even when they’ve been paying throughout the year. When this happens, and they can’t pay their bill, they decide to not file at all. They just put off dealing with the IRS altogether. If you’re strapped for cash and thinking about doing this, don’t!
It is not uncommon for people to panic at the idea of owing taxes and simply decide to skip filing and paying their bill at all. Here at The Willis Firm we deal with these situations all of the time and it wouldn’t surprise us if that is exactly what you chose to do.
We would like to encourage you to face your fears and keep out of trouble by taking the following actions:
1. File your return as soon as possible – it’s better late than never!
2. Contact an experienced professional tax attorney
At The Willis Firm, we’re on your side no matter what, and we want to help you make it through these trying times with the IRS! By doing things right from the start, you have a much better chance at success going up against the IRS.
There is nothing more stressful than an IRS audit, especially when you feel that you must face it all alone. Fortunately, that is not the case. You can, and should, seek professional help if you are being audited. In fact, after years of experience helping individuals go through this arduous process, we have learned that the best thing you can do for your peace of mind is hire a seasoned, experienced tax attorney.
When faced with an audit, many people can’t help but wonder, “Why me?” They feel like one of the unlucky few who are chosen at random by the IRS. However, the IRS seldom works in random ways. In reality, they are very specific about who they target, and certain factors of your tax return may have caught their attention and made you their new bull’s eye.
If you are being audited, do you know what made your return stand out? There are ten(10) red flags that the IRS looks for when reviewing tax returns:
If the IRS noticed any of the above on your return, that may be why you’ve been selected for an audit. However, just because you’re under review does not mean that you did anything wrong or that you must face the IRS alone.
In the face of the IRS everyone feels small. However, when you work with a professional team that regularly battles the IRS, you’ll see how easy it can be to take a deep breath, stand up tall and fight for what is rightfully yours.
Here’s what we suggest you do in order to overcome an audit without breaking a sweat:
At The Willis Firm, we pride ourselves on being straightforward and honest with you about all of the details of your audit.We pride ourselves on getting the best possible outcome for our clients.
To see how we do this, visit http://www.irsallstar.com/about-us.
The US tax code is impossibly complicated. It can be a challenge for even full-time tax specialists to stay on top of the law, so it’s almost impossible to expect the average taxpayer to be able to make sense of the laws and regulations.
Unfortunately, when a taxpayer has a question or concern and needs to contact the agency, he or she has a nearly 50% chance of not being able to get through!
As The Guardian reports, the IRS is unable to answer the calls of many taxpayers:
IRS budget cuts over the last five years have resulted in poor customer service and weaker enforcement, a report found.
With the IRS overseeing implementation of parts of the Affordable Care Act, the lack of funding becomes troubling. US consumers, who are likely to have questions about the new healthcare law and how it affects their tax return, will have to prepare for long wait times and even the possibility of having their calls to IRS go unanswered.
Currently, the agency predicts that it will be able to answer only about half of taxpayers’ phone calls.
“If we don’t receive the funding and we can’t do the hiring needed to handle this call volume, we estimate our level of phone service next year would plunge to 53%, which would be the lowest since 2008,” said IRS commissioner John Koskinen at the IRS Nationwide Tax Forum in Chicago last week. “At 53%, that would mean close to half of those trying to get our help over the phone would not get through.”
So what’s a taxpayer supposed to do? If he or she is unable to receive an answer from the IRS and then makes a mistake while filing their tax return, you’d better believe that the IRS won’t accept “we couldn’t get an answer!” as an excuse.
It’s frustrating that the IRS is unable to provide basic customer service for taxpayers. But that frustration pales in comparison to the devastation that an IRS controversy can create for a taxpayer who is in the midst of a dispute with the agency. If you’re involved in a tax dispute and you’re worried about things like penalties, bank levies, and even criminal charges – we can help. Please contact us today to learn more.
A lot can happen in 2-3 years. You can start a new job, buy a house, lease a vehicle or have a child. You can also receive a pay cut, accrue credit card debt or lose your job entirely. Whatever life throws at you, all you can hope is that you overcome each obstacle intact. And sometimes that means doing things you never thought you’d have to do. Including filing bankruptcy.
When you heard you owed back taxes the last time you filed, you either made an agreement with the IRS that required you to pay a certain amount each month, or you assured them that you would be able to pay the entire debt in full by x date. Whatever the situation, you never imagined that you wouldn’t be able to pay the balance at all.
But that’s life—whether you lost your job, took on too much debt too soon or something else happened that changed your plans, and you find yourself unable to live up to your obligations, you feel defeated. But that doesn’t mean you don’t have options.
Through Bankruptcy you CAN have your back tax debt removed entirely, IF you meet all five of the following criteria:
1. The due date for filing was at least three years prior to the bankruptcy filing
2. The tax return was filed at least two years prior to the bankruptcy filing
3. The tax must be assessed at least 240 days prior to the bankruptcy filing
4. The tax return is in no way fraudulent
5. The taxpayer is not guilty of tax evasion
If you fit all five of the above criteria, filing bankruptcy may be just what you need to clear your tax debt and start all over again. To see how we can help you achieve a clean slate, visit http://www.irsallstar.com/our-services#2
Imagine your favorite business in town – let’s say Pop’s Pizza Shop – raised its low prices from $0.99 a slice to $2.50 a slice, and from $9.99 for a medium pie, to $15.99 for the same medium pie. There is no competition in town for Pop, which is why he felt confident that raising his prices would bring him more revenue. However, what Pop did not take into consideration was that half the reason the townspeople loved his pies wasn’t for their wonderful taste – it was for their wonderful prices. And now that Pop raised his prices – some by more than double! – people aren’t eating there as often. It doesn’t take Pop long to realize that he isn’t making money off of his new prices, but rather, he’s losing money.
Now, imagine this situation on a much grander scale – like, with the government for instance.
For as long as taxes have been around, Congress has been estimating the cost of new tax policies based off of a static scoring approach. What this means is that Congress has been trained to think that no matter how high they raise the taxes or how low they drop them, the cost of taxes will have no bearing on the economy whatsoever. However, the tax policy does claim that raising or lowering taxes will have an effect on individuals. My thoughts? How can taxes affect individuals and still leave the economy untouched?
The answer? They can’t.
When taxes go up, consumers and businesses hurt. And when consumers and businesses hurt, the economy hurts.
The same holds true when taxes are lowered: when taxes drop, consumers have more money to spend, therefore, increasing businesses’ revenue. When businesses have more money to spend, they hire more people, and the positive cycle continues.
So, the “static scoring approach” that Congress has maintained and which they vow to be the best method of scoring is actually completely bogus. So, where does that leave us?
Junior Senator from Ohio, Rob Portman, has an idea…http://thehill.com/opinion/op-ed/206689-give-congress-more-accurate-tax-information
Let us know what YOU think!
Tax season is over, which means that most Americans can stop thinking about the IRS and get back to enjoying their lives. (If you’re stuck in an IRS dispute and wish you could get back to enjoying your life, we can help!)
But just because the hectic tax season is behind us doesn’t mean that tax scammers will close up shop. As USA Today reports, a common and effective scam has cost taxpayers millions of dollars and is still in operation today:
This swindle is incredibly simple and straightforward. The crooks pretend to be an IRS agent or someone from the U.S. Treasury Department calling about a problem with your tax return.
“They say you didn’t pay enough or the money wasn’t received, and the only way to remedy this and make sure nothing bad happens to you is to get money to them immediately,” explains Lois Greisman, associate director at the Federal Trade Commission. “Some of them can become very threatening and very abusive.”
The scammers typically threaten potential victims with arrest or deportation. They may also claim that they can revoke a license or shut down a business if they don’t get the money right away.
To make their pitch seem more legit, they will often spoof the caller ID to make it display the IRS toll free number (800-829-1040).
If you hang up, another scammer may call, this time pretending to be with your local police department.
Whatever the exact pitch, the goal is always the same: To get your hard-earned money.
Please don’t get burned by this scam. Do not, under any circumstances, provide sensitive information over the phone or via email. If you are contacted by an individual claiming to be from the IRS and asking for this type of information, hang up and visit IRS.gov to report the encounter.
While scams can cost taxpayers thousands and thousands of dollars, the truth is that genuine IRS disputes can be even worse. If you find yourself in an IRS dispute, please get in touch with our firm today. We will represent your interests to the IRS and will negotiate tirelessly until we reach the best possible settlement. The harassing phone calls and threatening letters will stop, and you will be able to get back to enjoying your life. Please contact us today to learn more!
In a recent study, it was surprising to find that only 28% of all couples surveyed were confident that either spouse could handle the family finances alone if there was a death, an accident leaving one spouse disabled or a divorce. Obviously, no one likes the idea of something so unnerving, but it’s important for both people to have an understanding of the family finances. The Wall Street Journal article, “What Each Spouse Should Know About Finances,” gives a helpful list of tips so that each partner is able to manage their financial affairs alone…if they have to.
Creating an inventory of assets is the first step to help you make informed decisions if something unexpected happens. Make a list of financial accounts, 401(k)s and insurance policies, including information on where they are held and noting the beneficiary listed for each. It is also recommended to itemize physical assets, including houses, cars or boats. Atypical assets are often forgotten, such as airline miles or valuable collectables, but these assets can become helpful forms of financial help if needed.
Having your assets organized and discussing options before something sudden happens will prepare you to make smart decisions during difficult times. For more information or for help on how to create an inventory of your assets, contact me, John Willis. I can give you the peace of mind you’re looking for. Give IRS All Star a call at 877-254-4254 for all of your tax law questions. http://www.irsallstar.com/
You’ve probably heard the term statute of limitations before, but like most IRS terminology, it can be confusing and needs further explaining to understand what it really means. If you are faced with an IRS problem, the term statute of limitations applies to you in the sense that the problem has a time limit. The IRS can only collect on your taxes for 10 years from the date of the assessment of the tax. Also, there is a time limit on audits, which is three years from the date of the filing of the tax returns.
Before exhaling a sigh of relief, it’s important to know that there are factors that can extend these time periods. It all depends on your specific situation and what actions have been taken thus far. Actions such as requests for due process hearings or filings of offers in compromise or bankruptcy will determine when your statute of limitations actually expires.
In order for the statute of limitations to begin running, you MUST file a tax return or have a tax assessment for that particular tax period. Once you file your tax return, the IRS has three years to audit. After three years, the IRS cannot initiate an audit unless there is suspicion of tax fraud. The same goes for ten years to collect outstanding tax liabilities. In order to know the right way to go about dealing with your tax debts, it’s best to hire a tax attorney who can learn your history and find the optimum solution for you. The clock is ticking! Call us for a free consultation and get started today. 877-254-4254 or http://www.irsallstar.com/
Over the last several months, the rollout of “ObamaCare” has generated controversy, to say the least. But whatever your opinion on the politics of the matter, the Affordable Care Act will have a significant impact on the IRS and on taxpayers. Specifically, the IRS will have access to the personal data of individuals and families who purchased health insurance through the new health exchange.
A recent TheBlaze.com article reports on the specifics:
The Internal Revenue Service this week will publish a final rule requiring Obamacare health insurance exchanges to hand over key personal data to the IRS, which will use the information to implement the tax aspects of the controversial health care law.
The IRS rule covers health exchanges that sell insurance to individuals, and it takes effect this year. That means people enrolled in an Obamacare exchange this year will have their information given to the IRS as soon as it’s needed for tax purposes.
Information to be handed over from Obamacare exchanges includes names, addresses, taxpayer identification numbers, insurance premium amounts, the name of the insurance issuer, and the insurance plan policy number issued by the exchanges.
The IRS says this data is needed to assess whether people are eligible for a health insurance tax credit. “This tax credit can help make purchasing health insurance coverage more affordable for people with moderate incomes,” according to the IRS.
Whether you are in favor of ObamaCare or not, the fact that the IRS will have increased access to taxpayer information is concerning. The IRS is already known for their brutal collection tactics – once they have determined that a taxpayer owes them money, they’ll unleash a barrage of threatening letters, phone calls, and in-person visits. If they’re not able to resolve the matter to their satisfaction, the IRS will often garnish taxpayer paychecks, seize assets, and even force businesses to close. What will the IRS do with access to even more taxpayer information? Only time will tell, so be sure to stay tuned.
If you’re facing an IRS dispute, we can help you put the controversy behind you and get back to enjoying your life. Contact us today to learn more!
For over 10 years I have had the privilege of helping taxpayers right here on the Gulf Coast solve their IRS and tax problems. I strongly believe that the success we have had at my law firm comes from our commitment to doing things the right way. The tax laws are very complicated and trying to resolve tax issues or fight tax cases without truly understanding the ins and outs of dealing with the IRS can result in disappointing and often devastating outcomes.
Not only do I value having as much knowledge as possible when it comes to the laws regarding tax resolution, I also believe that every client file and every tax issue should be reviewed and resolved independently from every other file and every other issue. There is no “one-size-fits-all” fix for IRS or tax problems. By meeting with you one-on-one, I get a feeling and understanding of your financial history and tax history. I also get an opportunity to discover and determine your specific needs and concerns. Taking the time to understand your IRS issues and constantly staying on top of the ever-changing tax code is essential to crafting a solution to your tax problem that can satisfy everybody.
One of the goals at my law firm to keep the IRS as far away from you and your assets as is possible while we are working to implement the most manageable and PERMANENT solution to your tax problem. We want to ensure that you don’t make the same mistakes all over again and prevent you from falling back into the same tax predicament in following years. Often times, national tax relief companies will only fix the immediate problems. This creates a vicious cycle of unfiled tax returns, unpaid tax debts and eventually the need to go back to a tax relief company. My hope is that after we solve your IRS problems, your only need to see us again would be to prepare later year tax returns.
Providing true value to each client by performing high-quality professional services is only one part of our dedication to each client in my office. Giving our clients peace of mind is what truly makes us happy and how we ultimately gage our success. The IRS can be unrelenting, and too many people live in fear that the next knock on their door will be someone with an IRS badge and a levy notice. Let me and the members of my IRSAllstar team help you today. Call for a consultation today so the weight of your IRS tax problems can finally be lifted for good. 877-254-4254 or visit http://www.irsallstar.com/
There’s a famous analogy that a college chemistry professor used to teach his students about stress. If you hold out a glass of water for a couple minutes, most likely nothing will happen to you physically. If you hold the glass of water out for an hour, it will undoubtedly become uncomfortable. Keep holding the glass of water for 24 hours and you would probably be in extreme pain. All the while though, the weight of the water never changes. Finally, the professor asks how you could avoid the pain. After a few creative but complex responses, the answer ends up being the most simple, which is to just put down the glass of water.
This same analogy can be used when dealing with the stress of IRS problems. The glass of water represents your IRS problems and the level of discomfort depends on how long you carry the burden of unfiled or unpaid taxes. As soon as you make the decision to finally hire a tax attorney or speak with the IRS, the weight of financial stress can be lifted. While getting IRS help and solving tax problems isn’t easy, the problems certainly won’t go away by ignoring them.
As an experienced tax attorney, I understand the mixed feelings of fear, embarrassment and frustration of having the IRS and tax problems looming over your head. There are many solutions to tax problems, but the first step is to take action quickly! Ignoring payment requirements and IRS notifications will only result in more penalties. At IRSAllstar, we strongly believe in doing things the right way in order to avoid additional and future problems or complications. By doing it right the first time, you won’t have to go back to dealing with recurring problems. Take a look at the professional services we provide to see how we can help you – http://www.irsallstar.com/our-services
If you’re reading this blog, odds are you may be going through the unfortunate experience of dealing with a levy or a lien from the IRS. Anyone who has received a letter or a knock on the door from the IRS knows that tax problems can be extremely stressful. However, when it gets to the point where the IRS is seizing your property or wages, it can be a whole different ball game. That’s why it’s important to know the differences between a lien and a levy and what your options are. Trying to figure this out all on your own not only causes added stress, but can be very risky if you’re not completely informed and educated on IRS policies and language.
Once the IRS has caught on to the fact that you haven’t paid your taxes, which frequently takes months or even years, the situation can quickly escalate into an uphill battle that culminates with an IRS lien on your property and/or bank account levies. What’s the difference, you may be asking. Both are very effective methods of collection by the IRS, and both can be devastating for whoever is on the other end.
A lien, by definition, is the right to keep possession of property belonging to another person until a debt owed by that person is discharged. If a federal tax lien is filed against you, the lien protects the government’s interest in all of your property, which can include real estate, personal property and financial assets. But before an enforceable tax lien can be filed, three requirements must be met:
· A valid tax assessment of your liability must be made.
· The IRS must send you a notice or bill explaining the amount you owe and demanding payment within 60 days of the assessment.
· You must fail to pay the assessed amount.
It is possible to have a lien released or withdrawn. The best and most obvious choice is by paying your debt in full. In this case, the IRS should release your lien within 30 days of receiving full payment. If full payment of your tax debt is financially impossible, there are other options. These options include:
· Discharge of property, which allows property to be sold free of the lien
· Subordination, which doesn’t remove the lien, but allows for other creditors to move ahead of the IRS
· Withdrawal, which removes the public notice and assures that the IRS will not compete with other creditors for your property.
A levy is different from a lien. And believe it or not, dealing with a levy can be much more difficult and stressful than dealing with a lien. A levy is an actual seizure of your property to satisfy a tax debt. Levies can be divided into two categories. The first type are levies directed straight at the taxpayer and covers property owned by the taxpayer, such as a home, car, boat, belongings, etc. The second type are levies directed at third parties, such as banks or institutions that hold money or assets for the taxpayer, such as checking and savings accounts, insurance companies or employers that owe wages to the taxpayer.
The second type of levy, the kind that directly impact your income, can have a devastating domino effect on other payments you may have, such as car payments, house payments, credit cards, etc. Don’t let your tax problems get this far out of your control! If you are currently in a situation where you have not paid your taxes but the IRS has not yet contacted you, it’s best to deal with the IRS now…before liens or levies are filed and the resulting financial obstacles are created. If you have received notice of either a lien or a levy, contact me, John Willis, or my law firm today. We are tax professionals who will take on your burden and find the best solution possible so that you can move on with your life without the IRS looming over your head. Give us a call today at 877-254-4254 and let us help to get you back on track. http://www.irsallstar.com/
If you are having trouble with your spouse or if you’ve recently gone through a divorce, you’ve probably had enough emotional distress. So what happens if you discover your (ex) spouse was not forthcoming on your last joint tax return? Are you responsible for a spouse or ex-spouse’s tax problem? Take a deep breath and know there is an option for you. It’s called Innocent Spouse Relief.
Innocent Spouse Relief will clear you of liability, interest, and penalties as long as the return was filed jointly. This brings hope to spouses who were kept in the dark about tax problems, discrepancies, or lies.
There are certain qualifications for Innocent Spouse Relief. You may qualify if you filed a joint return that had an understatement of tax due to erroneous items of your spouse (or former spouse). You must be able to prove that when you signed the joint return you did not know, and had no way to know, that there were falsities in the tax return. When this can be sufficiently documented, the IRS may determine that it would be unfair to hold you liable for the understatement of tax.
Obviously, a request for Innocent Spouse Relief will not be approved if the IRS proves that you and your spouse (or former spouse) were involved in fraud. This could mean intent to defraud the IRS or another party, such as a creditor, another ex-spouse, or business partner.
To learn more about our services see: http://www.irsallstar.com/our-services
You are an ultra-successful real estate developer. You’ve made millions by converting hotels into condominiums. You’re on top of the world. So, what do you do? Turn to a life of tax evasion, of course! That’s exactly what happened to a man named Robert Falor. Currently age 48, he will be 54 years old before he steps out of a jail cell. Falor pleaded guilty to failing to pay nearly $2 million in taxes over a four-year period.
The real estate mogul was caught siphoning funds from his company to buy multi-million dollar homes, lavish cars, and other upscale treats when he should have been paying the IRS each year.
In this case it also appears that tax evasion runs in the family. Falor’s father was found guilty of tax evasion and sentenced to two years in prison. His brother has also pleaded guilty and is still awaiting sentencing.
The wealthy can get caught up in the game of tax evasion, but you don’t have to be a real estate god to wind up in trouble with the IRS. It happens every day to ordinary people, too. Don’t let it get to the point of facing a jail sentence. We can step in and help you. We can get you back on track to a life free of tax problems. Call us today at 877-254-4254 or learn more about us: http://www.irsallstar.com/about-us
It’s that dreaded time of year – tax day is April 15, and for millions of Americans that means sending a big fat check to the IRS.
And while nobody enjoys writing a check to the government… it could be a lot worse. Specifically, if you find yourself facing an IRS dispute, you could be in jeopardy of losing your business, your car, and even your home to the IRS. The IRS is a brutal and efficient collections agency, and once they latch on to a taxpayer, it’s not easy to get them to let go.
That’s why the best course of action is to avoid IRS trouble in the first place. Since tax returns are due this month, we thought it would be a good time to review four important steps to keep you out of trouble with the IRS.
1) Report your income accurately. It’s very tempting to under-report income to the IRS in order to lower your tax bill. But the risks aren’t worth the reward – should the IRS figure out what you’re doing, the penalties and interest you will face may be enough to force you into bankruptcy.
2) File on time, and avoid simple errors. File your returns and pay your taxes on time to avoid extra scrutiny. In addition, double check your math to ensure that you haven’t made any mistakes that could cause the IRS to take a closer look at your return.
3) Don’t claim excessive deductions unless you can document them. If you claim a higher amount of deductions or tax credits than average, the IRS is more likely to examine your return. That doesn’t mean that you shouldn’t claim everything you are entitled to… but it means that you should be prepared to offer proof when the IRS asks.
4) Unless your tax returns are extremely simple, seek professional guidance. Professionals can help you spot mistakes and red flags that could otherwise lead to a dispute with the IRS. We highly recommend that you work with a professional while preparing your returns – contact us today to learn more!
An IRS dispute can be stressful, time consuming, and expensive. Keep these four tips in mind as you prepare your taxes and you’ll have a better chance of avoiding an IRS dispute to begin with. Of course, if it’s too late and you do find yourself stuck in an IRS controversy, we can help. Contact us today to learn more!
The IRS is often portrayed as an evil empire set on collecting its debts using unscrupulous tactics. There is a good reason for this. The IRS can and will resort to some pretty nasty methods, especially if a taxpayer is not cooperating. They can garnish wages and knock on doors. So, if you are in trouble with the IRS what are you going to do? Even when you are willing to cooperate with them, you may not know your rights. You may not have a clue as to what your best option could be. This is where we come in.
At The Willis Firm, our purpose and goal is to fight for the little guy, the one who is being harassed by the IRS, but doesn’t know what to do. We know how to handle your tax problem the right way. We provide the right solution and we talk to the IRS for you, so you don’t have to deal with them.
We are experienced tax professionals and we love a challenge! At The Willis Firm, we’ve tackled some of the toughest tax problems. Additionally, we also help you move forward with your life once your tax problem is solved. We can guide you so you won’t have to deal with IRS threats ever again. Don’t wait another day. We can’t help you but you must take the first step. Commit to taking the first step to clean up your tax problems right now. Call us today at 877-254-4254 or contact us online at http://www.irsallstar.com/contact-us
Filing a tax return is not a simple procedure for most people. It can be complicated and confusing. Many people have questions and they aren’t sure how to get these questions answered. Here are some helpful free resources to guide you this tax season.
The IRS.gov website. Start at “1040 Central”. This is a first stop for getting answers to questions regarding your tax return. This section offers the latest news and frequently asked questions.
Use IRS Free File to complete your tax return. Anyone can use this free service to prepare and electronically file their tax returns. If you made less than $58,000 last year, you can use the Free File software. It will guide you through the process.
Community Help. The Volunteer Income Tax Assistance (VITA) program helps people who make less than $52,000 a year. Tax counseling for the elderly is also available for people over 60 years of age. These sites are located in neighborhoods across the US. If you visit the IRS website, type in ‘VITA’ in the search box to find a location near you.
Visit our blog for all the latest info and news about tax issues: http://www.irsallstar.com/category/blog/feed
Life can take unexpected turns, sometimes to the downside. You may find yourself in a situation where you can’t or haven’t paid your taxes. Being in this situation stirs up fear for most people. You may feel haunted by the notion of an IRS agent knocking on your door. By the time a person sits in front of me at my office, they are usually feeling a significant amount of discomfort. Often, the most fear-filled question I hear from clients is “Can the IRS take my home or my business?” This is an important question because there are misconceptions about what the IRS can and can’t do.
In short, yes, the IRS can take your home, business, or any asset in which you have equity. However, seizure is rarely their best option. The IRS has standard procedures they must go through to collect tax debts. It can take several weeks or months before the IRS will notice you owe them money. Once they realize this, your account goes into an automatic collection system. A series of three notices will be mailed to you over several months. Up to this point, the process is all computerized and a person is not involved in your case. But, if you don’t pay your tax debt during this time, your case will be assigned to an IRS collection officer.
The IRS wants to get their money. Therefore, it is in their best interest to work with you in the most efficient way possible. If you show a willingness to cooperate, they are likely to work with you to establish an installment agreement or some other agreement. However, if you are not cooperative, they will resort to harsher methods. Even at this point though, seizing physical property is not an efficient tactic. They can resort to simpler methods such as wage or bank account garnishments. Because these are cash sources they are easier to access.
Even if the IRS wants to seize your property, the collection officer assigned to your case can’t make this decision. The IRS must investigate the equity in your property. If you have no equity, it makes no sense for them to seize your property. If the home is seized and sold, all the previous lien holders will be paid off first, including the mortgage holder. So, if you own a $300,000 home and your mortgage balance is $250,000, it simply makes no sense for the IRS to take your home. Even if you do have substantial equity and the IRS wishes to seize the property, they must obtain a court order. You have the right to contest such an order. You can also request help from the Taxpayer Advocate Service to stop a seizure. The Taxpayers’ Bill of Rights discourages the IRS seizure of property, especially primary residences. Vacation homes or rentals are more likely to be targeted.
What about your business? Yes, the IRS can seize your business, but again…at what cost? The process is a headache for them. They must first get a writ from a Federal Judge. Then once the business is seized, they must inventory the business and sell off one item at a time. Can you image the amount of work involved for a collection agency that is already understaffed and backlogged?
Again, to reiterate, an IRS seizure of your house or business is possible, but highly unlikely. If the IRS gets to this point, it means they have received absolutely no cooperation from you. Don’t let it get to this point! Be proactive and be open to developing or discovering a solution to your problem. The longer you put it off, the more desperate the IRS becomes. So take action today by working with a team of experienced tax professionals who know how to get the resolution that works best for you. Call us today at 877-254-4254 or connect with us online at http://www.irsallstar.com/contact-us
Running a small business requires juggling many important tasks. These tasks include: business development, marketing, accounting, scheduling, billing and collecting on accounts. Tending to endless details can be exhausting. Tax time is always a good time to check on the status of your accounting functions. The IRS has some helpful tools for small business owners including:
Small business videos and webinars: These helpful tools allow business owners to tap into free resources specifically tailored to the growing needs of small business. Go to http://www.irsvideos.gov/ Small business workshops will be listed under the Business tab.
Tax calendar for small business: Do you ever wish you had a Fairy Godmother who would remind you of important tax dates and details? This tool has an option for you to send important reminders to your smartphone or computer. Most small business owners will welcome this automation. Learn more at: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/IRS-Tax-Calendar-for-Businesses-and-Self-Employed
When Uncle Sam knocks, it’s usually not going to be a fun visit. However, he does have some free tools available that small business owners may find very helpful. Check them out and see what they can do for you and your company.
IRS trouble can change your life – and not in a good way! In fact, the IRS has ruined the lives of countless taxpayers all across the nation. If this sounds like an overstatement, consider the power of the IRS: they have the ability to harass taxpayers over the phone and in person, they can garnish wages and levy on assets without a court order, they can seize property, and in certain circumstances they can even throw taxpayers in jail.
Trust me when I tell you that an IRS controversy is something that you want to avoid at all costs!
Here are four ways that you can reduce the likelihood of drawing unwanted attention from the IRS when filing your taxes. However, if it’s too late and you’re already facing an IRS audit or worse, we can help. Contact us today!
1) Double-check your return to avoid simple mistakes. Simple mathematical errors or even forgetting to sign your return can draw extra attention. Before submitting your tax return, double check it for accuracy. Is your name spelled right? Is your social security number and address listed properly? Have you performed all arithmetic correctly?
2) Don’t conceal income. Nobody likes writing a check to the government, and concealing income may seem like an easy way to reduce your tax liability. But the IRS has many ways of cross-checking to ensure that your income has been properly reported, and if they find that you’ve been concealing income, all sorts of trouble will follow.
3) Keep organized records so that you can document deductions. Whether it is business expenses or personal deductions such as charitable giving, it’s important to keep organized records. This is especially true if you are claiming high levels of deductions. There’s nothing wrong with claiming all that you are entitled to, just be ready to prove that the deductions are legitimate.
4) Don’t miss deadlines. Finally, you can often avoid trouble just by meeting deadlines. File your returns when they are due (or request an extension), and pay on time. Doing so avoids the nasty cycle of penalties, interest, and further IRS attention.
These tips will help you avoid trouble with the IRS. But if it’s too late, we can help get the IRS off your back! Contact us today to learn more.
Uncle Sam… Ready or not, here he comes! It’s tax time. For some folks it’s a welcome time of year when they anxiously await a tax refund. However, not everyone is in that coveted position.
Once you figure out how much money you owe, it’s time to take action. If you found that you owe the IRS more money than you are able to pay, it’s important to act quickly. Not filing a return is a felony and can land you in jail. The IRS is much more likely to work with you if you are proactive and have a plan.
Some options include paying your debt with a credit card or personal loan. Carefully weigh these alternatives and select the option with the least expense (i.e. interest rate). Although both of these choices may impact your credit score, not paying Uncle Sam is not a viable option.
Another consideration is entering into an installment agreement with the IRS. This type of arrangement allows you to pay back your debt over time. Seek the advice of a trusted IRS tax professional to learn more about the installment payment options.
Remember, paying your tax debt is required by law. If you don’t have a plan, the IRS will figure one out and will garnish your wages to get the money owed to Uncle Sam. It’s best to be proactive.
For more information regarding tax repayment options, please read this Fox Business article: http://www.foxbusiness.com/personal-finance/2014/02/14/what-to-do-if-cant-pay-your-taxes/
Are you feeling the pressure of the IRS? Are they calling you, sending you notices in the mail, and threatening to make your life a living hell? We are here to help.
As tax attorneys, we understand that you may have many good reasons to have not filed past tax returns. However, the IRS doesn’t care about excuses. Regardless of how complex your IRS problem is, we can help get Uncle Sam off your back.
Avoid jail time. Did you realize that failing to file your tax returns is a criminal offense that can result in jail time? Currently, the sentence is one year of jail time for each non-filed year. What’s worse is that the federal government may be increasing the criminal charge for not filing tax returns from a misdemeanor to a felony, punishable by up to 5 years in prison for each non-filed year. Needless to say, Uncle Sam is not messing around.
Regardless of your specific situation, you simply cannot avoid the problem any longer. Here are 5 steps to getting back in good standing with the IRS:
If your tax situation is complex, The Willis Firm can help. Together, we’ll put your days of non-filing status behind you! Schedule a FREE confidential, consultation by calling 877-254-4254 or visiting us online at: http://www.irsallstar.com/about-us
Yes. When Uncle Sam figures out that you haven’t filed your tax returns, he will find you and put you in jail. It’s not illegal to owe the IRS money. However, failing to file returns is a felony and not taken lightly in the legal system.
I work with clients everyday who live in fear, and every day I help clients dig their way out of their IRS mess. Our first order of business will be to determine exactly what is going on with your particular situation. Once we understand the issue, we will identify what options are available to you. Rest assured you do have options.
If you feel like the “underdog”, I have good news for you. Our team of IRS All Stars is dedicated to helping the little guy win. We’ll help you to cleanup your IRS mess and get you on a better path.
The best way to avoid jail time is to be proactive and honest with the IRS. We can help you devise a tax resolution plan. This will demonstrate to the IRS that you are ready to work with them and not against, them. Let’s face it; the IRS and the court system would be more understanding if you presented them with a well-devised action plan.
If the IRS is at your door, it’s time to hire a qualified and experienced tax attorney. It’s not a good idea to file past returns without legal help because submitting these returns is an “admission” of the amount owed to the IRS. Having appropriate counsel can save you many headaches down the road.
Stop being the underdog. If you owe back taxes and have not filed a tax return, The Willis Firm can help you understand your options and provide you with the legal counsel needed to avoid jail time. To learn how we can help with your specific case, contact our office today: 877-254-4254. You can also visit us online: http://www.irsallstar.com/our-services
Tax season is in full swing. With the ongoing changes to the tax code, the process of preparing and filing tax returns can be daunting. For that reason, many people rely on the help of a seasoned tax preparer. If you are enlisting the expertise of a Gulf Coast tax attorney, it’s important to select a professional who best meets your needs.
Here are 10 tips to help you find the right Gulf Coast tax preparer:
Did you know that filing your tax return is required by law? Not filing a return is a federal offense. The Willis Firm is here to help you every step of the way. Contact us today to schedule a free, confidential consultation: 877-254-4254 or online http://www.irsallstar.com/
The average taxpayer wants to have as little to do with the IRS as possible. And the last thing that any taxpayer wants to receive in the mail is that dreaded notification that they have been selected for an IRS audit. In this blog entry, we’re going to discuss several ways to reduce your chances of being audited.
But first, let’s talk a bit about the process. It’s important to understand that there is no way you can guarantee that your return won’t be audited. This is because a percentage of the audits performed by the IRS are selected at random. But the majority of IRS audits aren’t completely random. For one thing, the higher your income, the higher the chances that you’ll be audited.
In addition, there are many ways to raise “red flags” with the IRS that increase your chances of being audited. A recent MailTribune.com article highlights several of these red flags. Below are two of them:
Large itemized deductions: The IRS has established ranges for the amount of itemized deductions based on a taxpayer’s income. Deductions that exceed the statistical “norm” for a given state and region may be red-flagged for a closer look. This does not mean that you shouldn’t take legitimate deductions. Your deductions could exceed the IRS range due to high medical expenses and large charitable contributions.
Business expenses: Big deductions for business meals, travel and entertainment are always ripe for audit. A large write-off will raise red flags if the amount seems too high for the business. Taxpayers claiming 100 percent business use of a vehicle is also a huge red flag. The IRS knows it’s extremely rare for an individual to use a vehicle strictly for business. The IRS looks for personal meals or claims that don’t satisfy the strict substantiation requirements.
If you’d like to learn more about the IRS audit selection process, please contact us today. If it’s too late to avoid an audit because you’re already in the midst of an IRS dispute… we can help! Our team will represent you against the IRS, and we’ll work tirelessly for the best possible resolution to your tax dispute. Get in touch with us today to learn more!
A contractor who worked extensively with the Regional Transportation District (RTD) in Colorado pled guilty to defrauding the IRS out of nearly $6 million.
The Denver Post report based on a news release from Jeff Dorschner, the spokesman for the U.S. Attorney’s Office in Colorado, stated that the owner of Global Access, Lucilious Ward, pled guilty to one count of failure to account for and pay employment taxes that were withheld from employees’ paychecks. He also pled guilty to one count of making a false claim against the United States.
Ward’s company was paid more than $35 million from 2003 through 2012 for its contract with RTD. The company provided part of RTD’s Access-A-Ride bus services. During that time, it is stated that Ward withheld taxes from his employees’ paychecks but instead of turning the money over to the IRS, he used it to pay for other expenses. Remember, the IRS takes failure to deposit or pay payroll taxes very seriously. Using withheld payroll taxes to pay for other company expenses is a big NO NO and anyone caught doing so will be in deep trouble.
If that wasn’t bad enough, it also seems that Ward filed a fraudulent return to the IRS in 2010 in order to receive a refund of $76,479. Very bad move…
For each count against him Ward faces up to 5 years in federal prison and a fine of up to $250,000. He also owes $5,955,866 in restitution. Ouch!
Don’t follow or let your company follow this path of extremely bad tax decision making. If you have problems with or are confused by your payroll taxes make sure you get professional help and address the problem right now. Most importantly, don’t be tempted to file a fraudulent return to make a bit of extra money. No amount of refund is worth being locked up in prison or facing the wrath of a cheated IRS.
You can read the original Denver Post article here. http://www.denverpost.com/news/ci_24842126/rtd-contractor-guilty-defrauding-irs-out-almost-6
Everyone is familiar with tipping the wait-staff when receiving table service at a restaurant. It is also not uncommon to have those tips added automatically when going to the restaurant with a large group. However, there are some changes in how the IRS is having restaurants declare automatic gratuities that may end up curtailing the practice.
Starting in January 2014, automatic gratuities added to a table’s bill will be treated as a service charge and not a tip. The reason? Tips are defined as something given without compulsion and that the customer must have an “unrestricted right to determine the amount”. Therefore, an automatic charge put on the customer’s bill does not fall under the definition of a “tip”.
According to the Wall Street Journal, “The change would mean more paperwork and added costs for the restaurants – and a potential financial hit for waiters and waitresses who live on their tips but don’t always report them fully.”
If you are working in the restaurant industry make sure you and your tax preparer are up to date on this latest IRS rule. To learn more about the change to automatic gratuities you can read this article provided by NPR.
They guarantee they will settle your tax debt for pennies on the dollar. They may have said that you will get an Offer in Compromise. They most likely told you all of this without even reviewing your case in detail. Beware of such empty promises. The truth is that nobody can guarantee these types of results and that 75% of all Offers in Compromise are rejected.
Unfortunately, working with a tax resolution firm that unrealistically promises you the moon can leave you deeper in debt and in more serious trouble with the IRS.
At IRSALLSTAR we do offer our clients a guarantee that they will receive cost-effective legal services delivered in a timely manner. Our guarantee lets you know that we will involve you in strategic decisions and that we will communicate with you regularly. We guarantee that you will be satisfied with our services. And if you promptly inform us that you are unsatisfied, we will resolve the issue to your satisfaction. These are promises that we keep and not empty sales pitches.
Remember, you want to take care of your tax problems so that they go away and you can live again. In order to do that you need to work with a tax resolution firm that takes care of your case the right way. At IRSALLSTAR we help you build and follow a well thought out resolution strategy and we are honest about your options. Contact us today and let us help you take care of your IRS issues correctly. http://www.irsallstar.com/
As a local Gulf Coast tax attorney (licensed in Alabama and Florida) I enjoy helping clients take care of their tax problems correctly. The IRS is an intimidating force and they can easily make anyone feel like an underdog. We focus exclusively on tax resolution cases and we can help you take the necessary steps to move past your tax problems and move forward to a better future. So how do you start?
First, you can review our pre-game checklist here http://www.irsallstar.com/pre-game. This helps you get your head in the game right from the beginning and it will help us to start understanding your specific situation. Next, we will schedule you a free confidential consultation where we can take a closer look at your tax problems and give you an idea of what options may be available to you. From there, we build the right game plan that matches your needs. We help you take care of unfiled returns and set you up for the most successful result possible.
So what are you waiting for? Take the right action today so that you can sleep better tomorrow. Getting beyond your tax problem is not impossible! We can help you create a better future. Contact us today. http://www.irsallstar.com/
Receiving news from the IRS that you are going to be audited can fill you with dread. Dealing with an audit is one of the most stressful experiences you can have. When you’re faced with an IRS audit you may not know exactly how to respond, and sometimes not knowing how to face a challenging situation causes even more stress.
This is not the time to stick your head in the sand and ignore the problem. You should be aware that the IRS will not just disappear, and being audited is serious business. This is an excellent time to turn to a professional for help.
Watch this video for the top 3 reasons to hire a tax attorney to help you through your IRS audit.
The top 3 reasons you’ll want to consider hiring a tax attorney to help you with your audit.
You don’t have to do it alone. If you need help with an IRS audit, contact The Willis Firm today.
At times, our team at IRSALLSTAR finds that we have to help our clients clean up a tax mess that was left to them by someone else or partially created by someone else. Sometimes these problems were the result of their involvement with a spouse or business partner. Other times we find ourselves needing to help our clients recover from their unfortunate involvement with disreputable or incompetent tax resolution firms. In either instance, our clients are often emotionally and financially stressed and confused about what they need to do to put an end to their problems. We know it’s not easy to deal with tax problems and we know the burden is twice as hard when it was either handed to you by someone else or improperly handled and perhaps made worse by incompetent representation.
So what can you do about being left with what might be an unexpected tax burden? The answer will vary depending on your exact situation. However, the first thing you should understand is that there are solutions to all tax problems and that by taking action now to fix the mess at hand you are on your way to solving your tax problems. Many people will ignore their tax problems and ultimately find themselves in very serious trouble that they could have avoided by taking earlier action.
Now that you have determined to take action, you need to get help. Fighting the IRS is very difficult and if your tax issues are complex and confusing your battle will be even more difficult. The Federal Tax code contains over 3,700,000 words and it changes regularly! This should give you an idea of just how confusing a tax problem can get. Finding reputable, competent and reliable representation to assist you with your tax problem will not only relieve a certain amount of stress but it will ensure that you are fully aware of all of your potential options. For example, if your tax mess was left to you by your spouse, you may qualify for “Innocent Spouse Relief”. A competent tax resolution firm will review your case thoroughly, make sure that the debt you owe to the IRS is correct, and point you to realistic options for your case.
In order to find a tax resolution firm that can truly help you need to make sure that you interview them and ask them some questions. A tax resolution firm should never use scare tactics or provide you with unrealistic “guarantees” to convince you to hire them. They should make you feel comfortable and be upfront with their fees. They should also discuss any problems that may be unique to your case. Whether you are already working with a tax resolution firm or you are considering interviewing some tax resolution firms you should consider these questions:
Here at IRSALLSTAR we regularly help clients clean up their IRS mess then help them to resolve their underlying IRS problems. We can help you find the right solutions to repair damage left behind by past domestic tax issues, business problems or complications resulting from working with incompetent or unprofessional tax resolution firms. Contact us today and let’s start creating a game plan for a better future. See http://www.irsallstar.com/pre-game
An IRS dispute can be a long, stressful, and expensive process. If you’ve ever been unlucky enough to experience an audit or tax dispute you know exactly what we mean. Recently, the IRS has taken steps aimed at making the process less tedious, at least for some taxpayers. This month, the agency announced their rollout of a “fast track” program designed to provide rapid resolution to disputes.
Is this program a good option for taxpayers? First, the facts… BusinessManagementDaily.com reports:
The IRS has announced a nationwide rollout of its “fast track settlement” (FTS) program. Previously, the program was available only in certain specified jurisdictions.
In 2006, the SB/SE division launched the FTS as a pilot program for small businesses and self-employed individuals in 2006. It expanded the pilot program in 2011 to Chicago; Houston; St. Paul, Minn.; Philadelphia; central New Jersey; and San Diego, Laguna Niguel and Riverside, Calif. (IRS Announcement 2011-5)
According to Announcement 2011-5, the FTS program is generally available for cases under the jurisdiction of the SB/SE Division if:
Now the IRS says that FTS is available to small businesses and self-employeds around the country. It expedites case resolution through alternative dispute resolution techniques. Thus, it can help avoid formal administrative appeals or lengthy litigation. Audit issues are usually resolved within 60 days, rather than months or years.
So, is the “fast track” program a good option for taxpayers? That will depend on the specific issues involved in the case (please contact us if you’d like to discuss your case).
It is critical to understand when dealing with the IRS, either through this “fast track” program or in any other context, that taking on the agency without an experienced tax attorney on your team is a big mistake. The IRS has thousands of attorneys working for them – so shouldn’t you have an attorney on your team as well?
If you’d like to learn more about the IRS “fast track” program, or if you’d like help resolving your IRS dispute, we’re here to help. Please contact us today to learn more
Ty Warner was an actor who didn’t quite make it in Hollywood. Instead he invested all he had in his company, Ty Inc. and subsequently made a fortune. The self-made billionaire is now admitting to tax evasion and faces up to five years in prison.
Warner is the man behind the trendy, cute Beanie Babies which took America by storm in the 90’s. The adorable little animals brought Warner billions of dollars, but not without consequences. Now he is being accused of failing to report more than $3 million in income from an offshore account. Warner is cooperating with the IRS and has plead guilty. He will pay a $53.6 million penalty.
The action comes after negotiations between the U.S. and Switzerland have left the Swiss obligated to share information about American funds they have aided in hosting over the years.
Federal tax law requires U.S. taxpayers to pay taxes on any income earned worldwide. Failing to do so can result in up to five years in prison. USA Today has more on this topic: http://www.usatoday.com/story/news/nation/2013/09/18/beanie-babies-founder-warner-tax-evasion/2833359/
Apple, Inc. has been in hot water for its creative tax accounting many times over the years. Yet this company and other large multinationals continue to get away with making billions in profits while paying very little in taxes. Now, Apple is stirring up tax controversy again, this time in Italy. The company is facing allegations of hiding over $1 billion from Italian tax authorities. How are they doing this?
The simple answer is: other foreign subsidiaries. Apple booked some of its profits through its Irish subsidiary, which drastically lowers the taxable income in Italy and allows the income to be taxed at the lower Irish rate. The world has known for years that multinational corporations do this. Perhaps Italy and other countries under financial distress are becoming more aggressive with such companies. Apple is certainly no newcomer to such allegations. The company is scrutinized and often audited by countries around the world.
“There is a global process under way and the Italian tax authority is one of the most active,” said an Italian tax source. “In general, the focus is shifting towards multinationals that are able to lower their tax base through their international operations.”
We can expect to see similar actions in the future. Receive more details about the case at Reuters: http://www.reuters.com/article/2013/11/13/us-apple-italy-tax-idUSBRE9AC0RW20131113
Atlas Shrugged… 645,000 words.
The Bible… 700,000 words.
The Federal Tax Code… 3,700,000 words.
The amount of time taxpayers spend each year trying to comply with the tax code is over 6,000,000,000 hours…that’s 6 BILLION! (This is equal to 8,758 LIFETIMES.)
Number of changes congress has made to the tax code since 2001…5,000. (That’s more than one change per day from January 1, 2001 until now!)
The good news is since WE understand the tax code, you don’t have to! We take pride in handling your tax problems the right way. No matter how confusing your situation is, we can find the right solution. Don’t put it off another day. Put us to work for you. Contact our experienced tax professionals at 877-254-4254 or online at http://www.irsallstar.com/contact-us
Ever since the government shut down, the IRS has been scrambling to catch up. During the shutdown, the tax collecting organization received over 400,000 pieces of correspondence. They reportedly had 1 million items already in the queue before the shutdown. To add to the backlog, they are also implementing additional training, programming, and testing to provide additional checks and balances against fraud and identity theft.
Because of this massive backlog, the agency recently announced a one to two week delay in beginning the 2014 tax filing season. The original date to begin processing tax returns was scheduled to be January 21st. Now the starting day will occur somewhere between January 28th and February 4th. The new date will be solidified very soon and the IRS will not process paper tax returns prior to this start date. Of course, this does not mean the deadline to file your tax return will change! The April 15th deadline will remain intact.
Your source for the latest tax related information, see our blog: http://www.irsallstar.com/blog
Our top priority at The Willis Firm is to help you find a peaceful resolution to your IRS problem. But, it’s also important for us to keep our clients and friends informed about other tax related issues that could have an impact on any taxpayer. One of the biggest issues we see these days are scams. With all the natural disasters happening as of late, charity scams are popping up left and right.
The IRS has issued warnings to watch out for charity scams. They often occur after major disasters such as the typhoon in the Philippines, or the tornadoes in the Midwest. These crooks take advantage of innocent, well-meaning citizens who are just trying to help during times of disaster. The very impulse that drives them to give to charities can also make them less cautious about who they are giving to.
How can you spot a scam charity? It can be tricky because they appear to be legitimate. Such scammers may claim to be with real charities in order to gain your trust. They may also use charity names that sound similar to well-established groups. They may attack via email, leading people to official-looking websites that take phony donations. Scam websites can also be lurking at the URLs of common misspellings of legitimate organizations. Other times, they will use the phone to contact people and ask for “charitable donations.” The new trend in crowd-funding allows more opportunities than ever for charitable giving, but it also allows more opportunities to be the target of scammers.
“You can read stories about individuals in need, or organizations that may be soliciting for various projects,” says Bennett Weiner, chief operating officer of the BBB Wise Giving Alliance. “Don’t assume that the organizations or individuals on those sites have necessarily been vetted to any great degree. They may have verified that the organization has tax-exempt status, and that may be it.” This means you may be able to take a deduction for your donation, but the entity you are funding isn’t necessarily putting your money to use in the way you intended.
A big concern for charity scam watchers such as the Wise Giving Alliance is that people often don’t know they’ve been scammed. They don’t expect anything in return, so the truth is not discovered until much later, only after many folks have already been victimized.
The best way to protect yourself from charity scams is to only give to highly qualified charities. You can learn which charities are qualified at www.fema.gov. Organizations like the Wise Giving Alliance and Charity Navigator also provide online information about charities, including whether they meet certain standards and how efficiently they spend their money.
Never give out personal information such as social security numbers, credit card or bank account numbers, or passwords. Your identity and money can be stolen this way. Additionally, don’t give or send cash. This is for tax purposes. If you contribute to a charity, use a check or credit card so you have documentation of the donation. Finally, If you suspect tax or charity fraud, report it to the IRS on their website, www.irs.gov and click on “Reporting Phishing.”
Most charities are reputable and they do good work in the world. But just rust remember to always be careful and do your homework before giving. Here at The Willis Firm, our experienced tax professionals are doing our best to keep you alert and informed. Visit us at http://www.irsallstar.com/our-services
One thing you can say about the IRS – the agency doesn’t play favorites when it comes to collecting revenue from taxpayers. Whether you’re a celebrity, a business owner, or a student… the IRS will do whatever it can to extract every last penny from your wallet.
We received another reminder of this reality recently, when the IRS placed a lien on singer / celebrity MC Hammer. Forbes.com reports:
Stanley Kirk Burrell, known to his fans as MC Hammer, is facing a new challenge. According to TMZ, Hammer owes the Internal Revenue Service nearly $800,000 in back taxes. And now, it’s time to pay up: the IRS has slapped Hammer and his wife, Stephanie, with a $798,033.48 lien for failure to pay taxes dating back to 1996 and 1997.
[Burrell] struggled as a young rapper until the late 1980s when he was finally picked up by Capitol Records. His first album with the company sold over 2 million copies. His second album spawned the wildly popular single, “U Can’t Touch This” which he performed on the Arsenio Hall Show in 1989. He went on to release a number of other popular songs, including “Pray” and “2 Legit 2 Quit.”
The IRS generally has three years after the due date of the return, or 3 years after the date the return was actually filed, whichever is later, to assess a deficiency. The statute can be extended in cases of fraud or failure to file a return. After the assessment, the IRS has ten years to collect. It’s not unusual for the IRS to file a lien against an assessed taxpayer in order to protect what they believe to be their interest.
While it may take years for this dispute to be resolved, you can count on the IRS to come after Mr. Burrell’s assets relentlessly. We’ve seen firsthand the impact that IRS collection efforts can have on taxpayers and business owners. It’s an unpleasant, stressful, and costly process. The good news, if you find yourself facing an IRS dispute, is that a qualified attorney can handle the dispute on your behalf. If you’re stuck in an IRS controversy and not sure where to turn, we want to help. Please give us a call today to learn more!
If the IRS is knocking on your door, it’s important to work with a seasoned tax attorney who is trustworthy. In the midst of your stress, it may be tempting to take the easy way out and work with the first “IRS tax guy” you can find. However, when it comes to tax resolution with Uncle Sam, make sure to engage a reputable firm with an honest track record. You’ll want a tax professional on your side who is experienced with the legal code and IRS jargon and who knows the intricacies of IRS negotiations.
Unfortunately, not all IRS tax professionals are created equal. Some “professionals” prey on the vulnerability of their clients for selfish gains. Don’t be the next victim of a tax scam. Avoid fraudulent crooks like the one described in this article: http://www.fraudoftheday.com/2013/08/12/bragging-rights/
Everyone makes mistakes. It’s just a part of life. When it comes to owing the IRS money, there is a very fine line between unintentional oversight and overt tax evasion. If you’ve made a mistake on a tax return, you may wonder how long you will need to worry about the issue. In general terms, the IRS has three years to audit you if they’ve found a mistake on your return. However, if Uncle Sam suspects that you’ve hidden more than 25% of your income (intentionally or not); they have 6 years to audit your return.
Most reasonable people would agree that 6 years is a long time to wait it out. What’s worse, the IRS may not start running the clock until after they identify the “last act of evasion.” Believe me, this is a gamble you do not want to wage. It’s time to stop worrying and do something about your tax issue. Under the cover of attorney-client privilege, you can ask the questions that you’ve needed to ask, and get the answers you seek. Hire an experienced Gulf Coast tax attorney and get this problem behind you.
Timing is everything! Act now before it’s too late! Read this Forbes article to learn more about what you might be up against if you’ve made a mistake on a tax return: http://www.forbes.com/sites/robertwood/2013/10/13/how-far-back-can-irs-claim-tax-evasion-or-fraud-timing-is-everything/
You can see it every day. It’s on the radio, TV, social media, and even talked about openly at events with friends and family. No one is immune to the current state of our economy. When it comes to stressful financial times, folks often have no choice but to get creative. You know, withdrawing from one account to cover other expenses… However, when it comes to owing Uncle Sam payroll tax, it is illegal, unethical and personally dangerous if you rob Peter to pay Paul. In fact, it can land you in jail.
With other forms of IRS tax debt, it can take the IRS years to figure it out and begin the audit or collections process. However, with regard to payroll tax debt, Uncle Sam is extremely proactive. Did you know that the IRS has the authority and the legal means to padlock your business doors, intercept payments from your clients, and hold you (and your officers) financially responsible for payroll tax debt? This means that Uncle Sam can seize your personal assets including bank accounts, homes, cars, and even commissions from your clients to satisfy payroll tax debt.
I cannot overstate the seriousness of Payroll Tax problems. And here’s why… The IRS views payroll tax as a “trust fund tax” because as an employer, you are entrusted with funds that actually belong to your employees and/or the government. If you spend withheld payroll tax funds on anything other than payroll tax, it is illegal. When you don’t pay the payroll tax, it’s considered theft. I’m sure you realize that bad things happen to people who steal from the IRS.
If you’ve found yourself saddled with an IRS payroll tax dispute, it’s important to act quickly. Jay Willis and The Willis Firm can help you negotiate with the IRS, the right way, so that you can obtain the best solution possible. Contact us today! 877-254-5254.
Remember: When it comes to payroll tax, NEVER rob Peter to pay Paul! For more information regarding this issue, visit: http://www.irsallstar.com/our-services#11
Although there isn’t really a medical term for it, I often say that my clients have “Beaten Puppy Syndrome” because they are the underdog in a vicious battle with Uncle Sam. In this regard, I find great satisfaction in advocating for those on the Gulf Coast that are under-represented with the IRS. We all have our strengths, and I enjoy sharing my IRS knowledge with people who need my help.
The first thing I want all clients to know is that they are not alone. I’ve been at this tax resolution business for a very long time. Good people often find themselves in a troubling tax battle with the IRS. Over the years, I’ve helped countless individuals throughout the Gulf Coast transform from “IRS Under Dog” to “IRS Power Dog” by assisting them to grasp the true scope of their problem, understand their options, and turn their situation around. I believe that everyone deserves to be free from IRS tax problems. Being set free is a great feeling for my clients. As their attorney, setting my clients free is a great feeling for me.
Dealing with the IRS is intimidating. I’ve invested my career in learning the complexities of the IRS tax code. Believe it or not, there is a method to the madness. With my experience, we’ll identify the best possible solution for your tax problems. If you owe more than $15,000 to the IRS (no matter how you got there), it’s time to schedule a consultation and begin the process. You’ll be glad you did!
It’s time to free your inner puppy! Call our office 877-254-4254 or visit us online:
Remember how fun it was, as a child, to eat alphabet soup? The soup was delicious and there was something magical about spooning through all the letters to find words that we’d understand with our limited vocabulary. A lot has changed since those bygone days of our youth. Somewhere between bills, career, commuting, and raising a family, things have become much more complicated. For example, when the IRS dishes up ABC soup it’s more in the form of painful notices chocked-full of confusing acronyms. If an IRS envelope works its way into your mailbox, don’t panic. Jay Willis and The Willis Firm are here to help you deal with your IRS problem the right way.
If you receive a notice from the IRS, it’s important to realize that you are not alone. Every year, the IRS sends out millions of notices. Most of the time they are sent to make taxpayers aware of common filing mistakes that result in tax bill changes. Other notices are sent to request additional information about particular returns. Each notice is intended to define a specific issue and to provide a course of action needed to resolve the matter. It’s important that you give the notice immediate attention and take care of the problem right away.
Making Sense Out of IRS ABC Soup
Each IRS notice is defined by its CP (collection process) number located in the upper right corner of the first page of the correspondence. Each also has a large, bold title near the center of page one.
To help clarify, here is a list of the most common tax notices and why are they are issued:
CP number – Reason for Contact:
CP 12 – Correction needed for a miscalculation on return.
CP 14 – More money owed on unpaid taxes.
CP 49 – Overpaid tax applied to other taxes owed.
CP-90C & CP-297C (sent simultaneously) – Final notice: notice of intent to levy and notice of your right to a hearing.
CP-91 & CP-298 (sent simultaneously) – Final notice before levy on Social Security benefits.
CP 161 – No math error, balance due.
CP 501 – Reminder notice that a balance is due.
CP 504 – Urgent notice regarding balance due, seizure of state income tax refund imminent.
CP 523 – Notice of default on installment agreement and imminent seizure of assets.
CP 2000 – Income and/or payment details on the return does not match IRS records.
For more information regarding the notices listed above, or if you’ve received a notice that isn’t listed above, you may check the special IRS.gov notices page for the document: http://www.irs.gov/Individuals/Understanding-Your-IRS-Notice-or-Letter.
You also have the option of calling the IRS directly at the number listed on your notice or at the agency’s toll-free help line at 800-829-1040. (Warning: it’s not uncommon to be placed on hold for extended periods of time when calling the IRS. We recommend checking their website first. If you aren’t able to get through, we can help.)
If this whole process is overwhelming, please call our office for a FREE consultation. We understand that this is a lot of information. Here at The Willis Firm, we’ve spent years studying the laws and representing taxpayers just like you. We will help you solve whatever IRS problems you are having.
As if small business owners didn’t already spend enough time dealing with the IRS and their complicated tax code, the agency has recently announced that they will be broadening their focus and targeting a growing number of small businesses.
As Bloomberg News reports:
The Internal Revenue Service is shifting its small-business audit focus from corporations to various types of partnerships as those entities have grown more prevalent and complex, according to an agency official.
Examining the returns from partnerships and other so-called pass-throughs will be the “top priority” of the IRS’s Small Business/Self-Employed Division over the next year and beyond, said Faris Fink, the head of the office. As part of that shift, more and better training of IRS agents is needed, Fink said at the American Institute of CPAs National Tax Conference last week in Washington, Bloomberg BNA reported.
“The Service has for a long time focused its energy on corporations,” he said. “Frankly, we’re a little bit behind the curve in getting around to developing a partnership strategy.”
Pass-throughs, which include S corporations and sole proprietorships, are businesses that don’t pay income taxes directly. Instead, their income is passed through to their owners who pay taxes on it on their individual returns. Pass-throughs comprise almost 95 percent of all U.S. business entities, according to IRS statistics.
In other words, if your business is structured as an S-corporation, a partnership, or a sole proprietorship… the IRS is coming for you.
This is certainly not news that most business owners will be excited to hear. However, there is good news. First of all, despite additional IRS attention, business owners who follow best practices when it comes to their accounting and tax reporting will have nothing to worry about. And secondly, should your business run into trouble with the IRS… we are here to help! We’ll handle the IRS so that you can focus on running your business and living your life.
If you’d like to learn more, or if you need immediate help with an IRS problem, please contact us today!
During the G-20 summit in Moscow a few months ago, governments from the world’s richest nations agreed that widely used tax avoidance loopholes by multinational corporations should cease. Such loopholes have allowed large multinationals to pay a pittance in corporate income taxes for years.
It will most likely be many years before any changes actually take place, but this is the first time so many nations agreed that new implementations are necessary. However, it is expected that large companies will bring out their best lobbyists to fight against such measures.
Even so, the government has a strong motivation to push such changes…with lack of funds being the big one. Furthermore, common citizens are more aware than ever that they are paying higher tax rates while large corporations are legally getting away scot-free. Apple, for example, being the most profitable technology company in America, avoids billions of dollars in taxes globally. Get more information in this detailed article in the New York Times: http://www.nytimes.com/2013/07/20/business/global/g-20-nations-back-plan-to-curb-corporate-tax-evasion.html?pagewanted=all&_r=0
The Internal Revenue Service Office of Professional Responsibility (OPR) has disbarred a CPA after he was convicted of misappropriating funds while serving as conservator of his daughter’s trust account. David O. Christensen’s CPA licenses in Washington and Oregon have been revoked.
Christensen requested permission to continue a limited practice in preparing tax returns. He argued that his theft conviction resulted from a family matter that had nothing to do with his ability to prepare tax returns. The Administrative Law Judge (ALJ) denied his request.
Karen L. Hawkins, Director of OPR said, “OPR strives to protect the integrity of the tax system from unscrupulous and incompetent practitioners regardless of how those traits become known. Agreeing with OPR’s proposed sanction, the ALJ held the seriousness of Christensen’s offense warranted disbarment from practicing before the IRS finding that the “Respondent has displayed a lack of integrity, including in his testimony at trial, in attempting to distinguish his professional actions from his ‘father-daughter’ relationship.”
When you get notice after notice from the IRS, it may be frightening and seem like they own you. Your situation may seem so complicated that you don’t know where to begin. It doesn’t have to be this way. We can help you make sense of your situation. You most likely have several options for dealing with the IRS and getting them off of your back for good.
Obviously, the first and easiest action to take is to pay off your IRS debt in full and as soon as possible. If you have the resources, this is your best option. This will immediately stop the IRS’s actions against you. Of course, this is easier said than done. For most people, paying the IRS in full is not possible. Even a payment plan can be extremely difficult and can stress your finances and your life. If you fall into this category, do not be alarmed. There are other options. These could include reducing the amount you owe, being declared uncollectible, or various other options.
If you are paying off your tax debt in full or if you can handle the payments the IRS sets up for you, you can potentially take care of that on your own. But if these options aren’t available to you, or you don’t feel comfortable trying to accomplish one of these options on your own, then it’s smart to have a tax professional on your side. We can put your mind at ease by finding the best option for your specific situation.
If you are having complex problems with the IRS, we can help. We can evaluate your situation, make sense of the confusion and recommend a plan of action for you to follow. Get started on the road to freedom today. Call 877-254-4254 or on the web at http://www.irsallstar.com/contact-us.
Every day, many people get notices from the IRS that their wages are about to be levied. A wage levy is when the IRS takes a portion of your paycheck to pay down the debt you owe for taxes. Other forms of levies, such as a levy against your bank account, are only enacted once. But a wage levy will affect your wages continuously until the tax debt is settled.
This usually creates a huge burden for the taxpayer because they are already struggling to pay their bills. The good news is that under certain circumstances, it is possible to get a wage levy released. This may be difficult to accomplish on your own. It usually requires specific supporting paperwork and dealing with the IRS. But if you do successfully have a wage levy release, your paychecks go back to normal.
Generally, an IRS wage levy can be released if it can be shown that the levy causes an economic hardship that makes it difficult for the taxpayer to provide the basic necessities of day-to-day living. The catch, however, is that the IRS defines “basic necessities” different from how the taxpayer defines them. Because of this, it’s important to have a good understanding of how the tax laws work. This is where we come in.
If you have a wage levy and are trying to get it released, do not do it alone. We have the experience necessary to help you. Contact our experienced tax law professionals today at 877-254-4254 and see our 100% guarantee: http://www.irsallstar.com/100-guarantee.
The holiday season is just around the corner and your mind is probably busy making plans. It’s doubtful that you are thinking about taxes or tax returns right now. However, just because you aren’t thinking about taxes or tax returns doesn’t mean that tax-related scam artists aren’t thinking about it! Unfortunately, these scammers work year round so it’s best to always be aware of their latest scams and tactics.
The most common tax scam these days is identity theft.
Identity thieves have ways of getting your personal information. They can retrieve personal data by illegally buying or stealing information from individuals, employers, hospitals, nursing homes and various other sources. Once they have your information, the scammers will file a false tax return in your name and claim a refund from the IRS. And the crime of tax identity theft is on the rise! When this happens, it’s a time consuming processes to clear the legitimate taxpayer’s name. They must endure months of proving that they are who they say they are and ridiculous amounts of time waiting for the backlogged IRS to respond. If you are a victim of tax identity theft, here is what you need to know and what you should do:
If you receive an email from the IRS…it’s not really from the IRS.
Phishing scammers may pose as the IRS and send fake emails, set up phony websites, or even call you. They are usually offering a fictitious refund, the threat of an audit, or an investigation to lure people into giving out their personal information. Phishers then use the information to steal identities, access bank accounts, or file fraudulent returns.
To protect yourself from phishers, consider the following:
1. The IRS NEVER sends email. If you receive an email from the IRS, it IS a scam.
2. Do NOT click on any links contained in such email messages.
3. Forward suspicious email messages to the IRS at email@example.com or submit these messages through the IRS website: http://www.irs.gov/uac/Report-Phishing.
4. Never email personal information. Email is not a secure form of communication.
Know who is preparing your tax returns if you outsource this task.
By and large most people who prepare taxes are qualified accountants or reputable tax specialists. But, as with any industry, there are some dishonest people. Sometimes they will skim a portion of your refund or charge unnecessary or unreasonably high tax preparation fees. Some fraudulent return preparers promise tax refunds that are too good to be true. Here is some advice for selecting a tax preparer:
1. Check the tax preparer’s qualifications and history. All paid tax return preparers must have a Preparer Tax Identification Number (PTIN). You can view the preparer’s history via the Better Business Bureau website.
2. Ask about service fees up front. Avoid preparers who base their fee on a percentage of your refund. You should also ensure that your refund is deposited directly into your bank account, not theirs.
3. Never sign a blank tax return.
4. Review the entire tax return before signing.
5. Report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. You can get the form on the IRS website.
If you have been a victim of any of these scams it is important to act promptly. If you have additional questions about tax-related scams or need further advice, please call us now at 877-254-4254 or contact us online at http://www.irsallstar.com/contact-us.
As you know, the US government is currently in the midst of a partial “shutdown.” One of the many governmental agencies impacted by the shutdown is the IRS. In fact, according to CNN, over 90% of IRS employees are currently not working due to the shutdown.
So what does this mean for your tax responsibilities? A recent CNN reports addresses several common questions:
If you were thinking that the government shutdown meant you would get out of paying your taxes, think again.
While only 9% of Internal Revenue Service employees — roughly 8,750 out of nearly 95,000 workers — are currently working, the underlying tax law remains in effect.
Here are some other things you need to know about your taxes and the IRS during the shutdown:
Will I still have to meet the October 15 deadline?
Yes. Regular filing deadlines will remain in effect during the shutdown. So anyone who requested an extension on their taxes last spring should still file their returns by October 15.
The IRS is urging individuals and businesses to file their tax returns electronically because those returns are usually processed automatically. Paper returns will not be processed until full government operations resume. Yet, they still must be postmarked by October 15 to be considered filed on time.
That means I’ll get the tax refund I’ve been waiting for, right?
Wrong. While tax returns and payments are still expected to be filed during the shutdown, refunds won’t be issued until operations return to normal, the IRS said.
In other words- yes, you still owe the IRS money and are expected to pay, despite the shutdown. But if the IRS happens to owe you money… well, you’ll have to wait until the shutdown is resolved. This doesn’t come as a surprise to those of us who are familiar with the IRS, but it is another reminder of how one-sided the agency can be.
The bottom line, for tax purposes, is that nothing significantly changes during the shutdown. As much as we may wish that the shutdown was a “Get Out of Jail Free” card for taxpayers, that isn’t the case. If you’d like to learn more, or if you need help resolving an IRS dispute, please get in touch with us today!
If you owe taxes and haven’t paid, the IRS can place a lien on all personal property including real estate. But what if you have a mortgage on that property? The IRS does not get priority over other liens placed on that property at an earlier date. Therefore the mortgage, which is also considered a lien, is always the most superior lien on a property. This is because the bank granting the mortgage must use the property as collateral in case the homeowner defaults on the loan. An IRS lien never trumps the mortgage lender. This means the IRS can foreclose on a property, but they must pay the mortgage lender off first before collecting any remaining amount to cover tax debt.
Although a Forgiveness and Debt Relief Act exists to protect debtors who lose their homes to foreclosure, not all homeowners are protected. In certain cases the homeowner must pay the taxes. Learn more in this article: http://homeguides.sfgate.com/irs-liens-priority-over-mortgages-7035.html
If you are having issues with the IRS and it’s been going on for a while, you may be close to having your wages garnished. A wage garnishment is when the IRS takes money from your paycheck before you even see it. There is no limit on the amount the IRS can take out of your paycheck. There is only a limit on how much they have to leave you with. Anything over that amount will go straight from your employer to the IRS. As you can imagine this is a devastating outcome and one to be avoided when possible.
The good news is it usually IS possible to avoid wage garnishments. The IRS does provide a Wage Garnishment Release, which can stop the money from being taken out of your paycheck. This can be a viable option, but the requirements to qualify are strict.
The best way to handle tax problems is to start working with the IRS before they take a nasty action against you! Everyone’s situation is different and at The Willis Firm, we help you find the BEST option to clean up the problem. This video explains more about IRS Wage Garnishments. Take a look: http://www.youtube.com/watch?v=NyIWI8Bp1mg&feature=c4-overview&list=UUoUryOwvukxCP6VmqJ4KDAg
People feel desperate when they come into our office. Perhaps they’ve made attempts to resolve their issue with the IRS but they aren’t getting anywhere. They know they could lose their house, their car, they could lose everything. The IRS is powerful and they even fear going to jail. I believe in doing things the right way. I’m here to restore your peace of mind and when you’re being harassed by the IRS, I love helping the little guy succeed!
Once you begin working with us, we take the burden off your back and we carry it for you. We have a game plan, one that we’ve used time and again. But we don’t run off and leave you standing in the dust. We explain to you exactly what we are doing and we inform you of each step along the way in your case.
We develop relationships with our clients. We learn who they are, what they do for a living, and we truly help them reach a positive resolution with the IRS. We also form relationships with our business clients and offer them more than tax resolution. We do tax preparation, and we figure out new deductions you may qualify for. But that’s not all we do. We also help our clients through the healing process. You go through mental and emotional hardship getting tax issues fixed and there is a healing process that we help people through to get back into a good mental space.
We offer long-term management and hand-holding for businesses that have had tax problems in the past. We help you with your present problem, help you heal, and offer guidance for future planning. We help you now and in the future. With us on your team you can expect positive results and you will sleep better at night. Call us now at 877-254-4254 and learn more about our services: http://www.irsallstar.com/our-services
Whether you’ve dealt with the IRS or not you can probably imagine how tough dealing with them can be. If you say the wrong thing, for example, it can be used against you. When you call the IRS you may be on hold for long periods. When you call each time you will probably get a different person each time. It can be a headache.
This is another reason to work with a tax attorney. We develop professional relationships with the IRS caseworkers. We can get your case assigned to a single caseworker and then deal one-on-one with that caseworker. The ability to create this relationship allows us to speak with one agent about your case, and work to save your retirement while helping you maintain the lifestyle you want to live and STILL resolve your tax issues. When you work with an expert you can get the best resolution to your problem. Call us today to get started on the path to freedom and the comfort of letting an expert deal with the IRS on your behalf and represent your best interests. Call us at 877-254-4254 and learn how to get started here: http://www.irsallstar.com/pre-game
The last thing any taxpayer wants to experience is an IRS audit. But it happens to millions of unfortunate taxpayers every year. And as you know, if you’ve been paying attention to these blog entries and articles, small business owners are somewhat more likely to be audited than individual taxpayers.
So what should you do if you receive a notification from the IRS that you’re being audited?
First and foremost – get professional help! It’s a bad idea to face the IRS on your own. A recent Huffington Post article offers a number of additional suggestions:
These tips are helpful, and sticking to them will help avoid further trouble with the IRS. But we can’t stress enough how important it is to be represented by an attorney who focuses exclusively on IRS or tax matters when you face the agency. IRS agents rely on intimidation and other threatening tactics in order to get what they want. And unfortunately, most taxpayers simply aren’t familiar enough with the law to know their own rights and properly defend themselves against the IRS. That’s why you are always better off having an experienced lawyer on your team!
Contact us today if you’d like to learn more.
The Florida Gulf Coast is known as a great place to retire. You may be retired already or getting close, or even in the earlier planning stages. But what happens when you fall into trouble with the IRS? Can the IRS seize your retirement accounts? Even though retirement plans are protected from creditors, unfortunately, the IRS is an exception.
The general rule is if you can get access to it so can the IRS. The IRS can seize retirement accounts, including 401k plans, IRAs, and self-employed plans like SEP-IRAs and Keogh plans. There are no prohibitions in the Internal Revenue Code against it.
How might a person end up in this situation? Imagine someone who has been laid off and has difficulty finding another job. He is forced to live off of his retirement account. Then he gets hit with the tax bill for taking early distribution plus the 10% early distribution penalty, he has no way to pay the amount owed. If your only source of money is continuing to take distributions from your retirement accounts, the IRS will expect you to liquidate the account to pay off the taxes and penalties due.
However, many retirement plans deny you access to your funds unless you retire at the pre-designated age, separate from service, or experience a disability. Also, if you take a job with another company you cannot access the funds. This is good news for you. The IRS cannot force you to end your employment, and as long as you continue working the IRS cannot access your retirement account. The bad news is the IRS will still hunt for its money. They will look towards your wages and other personal assets in order to claim the taxes owed.
What happens if you do have rights to the money in your retirement account and the IRS can get to it? There are a couple of aspects to consider. First, what was your conduct leading to the liability. Was it flagrant? Examples of “flagrant conduct” would be tax evasion, fraud, or making contributions to the account while the unpaid taxes were becoming due. The second consideration is whether you depend on the money in the retirement account, or will in the near future. If it can be determined that your conduct was not flagrant or that you need to depend on the retirement money the IRS CANNOT levy your retirement account.
The IRS must stop trying to claim money that it has no rights to. Occasionally an aggressive IRS Revenue Officer will agree to not touch the retirement account but will instead place a levy on wages if the retirement money is not voluntarily withdrawn. But as you can see there are ways to protect your retirement account.
Any way you look at it though, once you are out of compliance with the IRS they can go to extreme lengths to collect the taxes. Don’t let it get to the point of retirement accounts and wage levies. If you’re in the Gulf Coast area we can help. Come in and meet us and let us show you some better options to get the IRS off your back for good. Call now at 877-254-4254, http://www.irsallstar.com/
You don’t have to feel bad if you do not know how to face a tax audit. Most people do not have experience dealing with this situation until it is unexpectedly put in their lap. It’s no wonder that it conjures up stress and extreme feelings of fear and dread. If you find that you are facing an audit and you are confused or overwhelmed by the process then you should remember that you have rights. Talking with a qualified tax resolution professional will help you better understand what you should do to protect those rights.
You should also be aware that there are different types of IRS audits and that not all audits are full audits. Sometimes the IRS contacts you for clarification on a specific item that they may be unsure of on your tax return. Other times they may only be challenging a portion of what was included on your tax return. These partial audits can often be taken care of by simply supplying the receipts or needed items that pertain to the section of your return that is under question.
Again, if you feel the IRS has made mistakes or is being unfair towards you then contact us today at 877-254-4254. To read Smart Money Resources description of the different types of tax audits go here. http://www.smartmoneyresources.com/86/what-to-do-when-you-are-facing-a-tax-audit/
With all of the scandals that the IRS has recently been facing they can’t really afford to be hit with more bad press. However, that is exactly what is happening. A recent evaluation by the Treasury Inspector General for Tax Administration revealed that many IRS seizures are actually illegal.
So what does this mean for a taxpayer? Well, it means that if you have tax problems you should make sure that you verify all claims against you and scrutinize how they are handled. It should also encourage you to seek professional advice when facing the IRS. Read more about the Government report in this article by Forbes. http://www.forbes.com/sites/robertwood/2013/07/05/many-irs-seizures-are-illegal-government-report-reveals/
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