Archive for February, 2012

Chicago Commissioner Indicted on Tax Fraud Charges

Wednesday, February 29th, 2012

The Chicago politician currently on the hot seat is Cook County Commissioner and former South Side alderman William Beavers. Beavers is facing indictment on tax fraud charges for keeping campaign funds and a county stipend without paying federal taxes on them. A Chicago Tribune article entitled William Beavers Indicted on Tax Fraud Charges reported on just how far Beavers is willing to go to protect his name and perceived political
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Delinquent and Unfiled Tax Returns? 8 Steps to Resolving Them

Wednesday, February 29th, 2012

If you have unfiled and delinquent tax returns, you’re probably dreading this tax season; owing back taxes to the IRS is a big burden. Doing nothing to resolve them, however only makes matters worse and more expensive. Even if the IRS isn’t currently knocking on your door to remind you of your tax debt, you are not out of the woods and will need to devise a plan for
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Obama Proposes More Money for IRS Enforcement

Tuesday, February 28th, 2012

A major focus of the Obama Administration has been to reduce the “tax gap” (the difference between the amount of taxes reported and what the government actually collects). Nowhere has this become more obvious than with the President’s 2013 budget request.  A recent article in OMB Watch entitled Obama Proposes Exempting IRS from Budget Caps, reports on the Administration’s request to have some IRS enforcement spending be “excluded” from budget
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Payroll Tax Reduction Equals More Money in Your Pocket

Tuesday, February 28th, 2012

Just last week, on February 22, 2012, President Barack Obama signed into law an extension of the Middle Class Tax Relief and Job Creation Act, which effectively slashes the payroll tax, meaning employees get to keep a higher percentage of their paychecks. The payroll tax cut translates as a reduced social security tax withholding rate of 4.2 percent, which is a full 2 percent lower than the original 2011 act
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Avoid Tax Scams: Inflated Income and Expenses

Tuesday, February 28th, 2012

Some taxpayers have a tendency to overstate their income or expenses. The IRS “Dirty Dozen” Tax Scam # 6 – False and Inflated Income and Expenses makes this list annually simply because taxpayers still believe they can get away with it. What many don’t anticipate is that stepped-up IRS scrutiny of their flawed returns will yield not only IRS problems for them but also less money in their pockets as
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Filing Joint Tax Returns? Prevent IRS Problems

Friday, February 24th, 2012

An article in Smart Money Magazine entitled Your Tax-Cheating Spouse May Cost You, considered the benefits of married couples filing joint tax returns. It also discussed what you may want to consider if your spouse was not on the level with “your” previous tax returns. Filing separately from your spouse could prevent IRS problems from occurring in the first place, but in each unique situation this may not be possible.
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Rapper Nas and His Giant IRS Tax Issues

Friday, February 24th, 2012

Weekly, if not daily, there is news of yet another celebrity encountering IRS tax issues. While I stop to mention these stories as a cautionary tale of prevention, I am continually struck by how vulnerable the famous and newly wealthy really are with their finances, especially when it comes to paying their income taxes! I am beginning to think there should be a special course for celebrities to get their
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Tax Scam Warning-Beware of Tax Appeal E-mail

Friday, February 24th, 2012

A recent Forbes article by Kelly Phillip Serb entitled Tax Appeal is a Scam gives readers a look at just how pervasive the tax scams are becoming out there. Upon first glance, this e-mail may look official to some of you, but scan the document and scratch the surface like Kelly did and you’ll get a sense that some things “just aren’t right.”

The text in the e-mail reads:
Dear Accountant Officer,
Hereby
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Swiss Proposals Maintain Tax Compliance and Secrecy

Thursday, February 23rd, 2012

In another chapter of Swiss Banks versus the IRS, strong pressure from both U.S. and European governments, have forced Swiss lawmakers to take a stand. Yesterday, Switzerland announced it outlined proposals for how it aims to do the following:

improve its reputation as a private global banking center.
comply with the exchange of tax information that includes requiring all offshore account holders to declare their taxable assets.

A Wall Street Journal article titled
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Five Tips to Resolving Payroll Tax Problems

Thursday, February 23rd, 2012

Payroll Tax Problem Question:
Our business has done well financially until a year ago when some of our best customers got behind on their payments to us; the crushing blow came when one closed its doors before we could to collect. We are still behind and the loss in income has weakened our business finances so much, we cannot afford to make the payroll tax payments. I’m really worried about
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Failure to File Income Taxes Gets Kentucky Man 24 Months in Prison and $2.4 Million Fine

Wednesday, February 22nd, 2012

A Boone Count, Ky., man who evaded paying his federal income tax liability from 1995 to 2001 was sentenced today to 24 months in prison.
He was also ordered to pay approximately $2.4 million in restitution to the Internal Revenue Service.
From 1995 to 2001, William C. Shehan Jr., 45, failed to file federal income tax forms and diverted money that should have been paid in taxes into private business ventures and
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No Tax Relief Through IRS Refund Delays

Wednesday, February 22nd, 2012

I recently noticed several news agencies reporting on how the IRS refund delay is angering taxpayers who filed their tax returns early and electronically expecting to receive their refund within 15 days and are still waiting. According to an article in Accounting Today, entitled IRS Experiences Further Tax Refund Delay Problems many early filers received a notice of acknowledgement the IRS received their return. But later when they checked the
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IRS Offer in Compromise Tax Settlement Program: What You Need to Know

Tuesday, February 21st, 2012

Question: I really find it hard to believe that through the Offer in Compromise, which you’ve discussed in previous issues, the Internal Revenue Service would be willing to accept less than full payment from indebted taxpayers. Can you explain what the government’s motivation is here?

Answer: That’s a great question, because it goes to the heart of why some people think the Offer in Compromise is too good to be
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Filing False Tax Return Gets Lawyer One Year in Prison

Monday, February 20th, 2012

Leslie W. Jacobs, 67, of Gates Mills, Ohio, was sentenced to one year and one day in prison and ordered to pay a $10,000 fine after pleading guilty to making and subscribing to false personal income tax returns. According to court records, Jacobs, a partner in a Cleveland law firm, filed joint income tax return on which he inflated his law firm business expense deductions and, as a result, falsely
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No Free IRS Money-Avoid Tax Scams

Monday, February 20th, 2012

In a recent blog post called IRS Warns of Dirty Dozen Tax Scams, I covered in detail the top four most common and pervasive tax scams currently permeating the tax system. It’s important to prevent IRS tax issues from the start and covering each tax scam separately could go a long way to help consumers first recognize then steer clear of “IRS deals” and false promises that would end up
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