Tax Relief News Round Up: Top IRS Tax Stories this Week

This was a busy week in tax relief and IRS news. The stories that caught our attention ranged from how long to keep IRS tax records, to celebrity tax woes and finding tax debt solutions to the pro’s and cons of IRS prepared returns.

This week started with a helpful post titled: Tax Relief Tips for How Long to Keep IRS Records. A general rule of thumb guideline suggests that tax records be kept for three years. However, there are some exceptions where records must be kept longer or even indefinitely such as:

• Taxpayers who underreported more than 25% of their gross income
• Taxpayers who filed fraudulent returns or did not file at all
• Taxpayers with property deductions
• Businesses with Employees

Important note: Make sure your check with your tax professional before getting rid of important records. If your tax pro says it’s ok and your files are really, really old go ahead and shred.

Celebrity Tax Woes Abound – As I have said before, the IRS does not discriminate – it goes after millionaires, celebrities and average taxpayers equally if they believe them to be cheating or not paying taxes. Here are two celebrities who learned this first hand:

Singer Lauryn Hill Gets Three Months in Jail for Tax Evasion – Actress and award winning singer – Lauryn Hill was sentenced Monday to three months in prison plus three months home confinement for failing to file tax returns for five years and not reporting more than $2.3 million in income. Hill stated she had always meant to “eventually” pay her tax debt but was unable to during a period of time when she dropped out of the music business. Last year on her Tumblr account, Ms. Hill claimed that she went “underground” as a means of survival but did not “deliberately abandon” her responsibilities (meaning her IRS tax debt). Naturally, the IRS did not see it that way.

Actor Stephen Baldwin Guilty of Tax Charges – Stephen Baldwin pleaded guilty to failing to file his income taxes for three years and was ordered to pay $300,000 in back taxes to the government. Baldwin, the youngest of the Baldwin brothers, blamed his tax troubles on mistakes made by professionals he hired to manage his affairs while he was away shooting the reality TV show Survivor.

This week’s post titled: For Those with Tax Debt, Solutions Are Available was an appeal to those who haven’t addressed their tax troubles that it’s time to see a qualified tax professional to get to know your options. Sometimes people just need to know they are not the only ones facing IRS stress. To help them understand that cases like theirs are resolved every day, I highlighted the success story of a client named Bill.

Bill was reluctant, scared and overwhelmed by his IRS tax debt issues. As one of my newest clients, Bill was certainly one of my most nervous. He explained that his business had gone under as a result of the economic recession and due to some bad tax advice, he not only owed IRS back taxes, he was worried that not everything had been reported. The good news is that Bill is now on the road to tax recovery because of the strategies we employed, primarily our IRS negotiations that resulted in him entering into an Offer in Compromise agreement. This significantly reduced Bill’s IRS debt and gave him a fresh start.

IRS Prepared Tax Returns: Are They a Good Idea? I decided to compose a post based on being asked what my thoughts were about the IRS’ proposal to pre-prepare tax returns. Read the post for my entire commentary but my bottom line is this: this recent IRS press push appears to me to be a way for them to garner support for how the new system will decrease of audits. The idea of “fill in all the line items received from third party and self-accept the way it comes across” just does not sound like a viable solution. The proposed system also seems like a ploy to raise an inordinate amount of money to fill government coffers.

Have a great weekend!

Tags: Audits, Back Taxes, Celebrity Tax Woes, IRS back taxes, irs problems, IRS tax debt, Lauryn Hill, Offer in Compromise, Qualified Tax Professional, Stephen Baldwin, stephen baldwin tax problems, tax relief, Tax Resolution University
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Celebrity Tax Case: Actor Stephen Baldwin Guilty of Tax Charges

Actor Stephen Baldwin pleaded guilty to failure to file income taxes for three years and will pay $300,000 in back taxes to the government.

Baldwin, the youngest of the Baldwin brothers and best known for his roles in The Usual Suspects and The Flintstones in Viva Rock Vegas, was arrested in December on charges that could have resulted in a prison sentence of up to four years.

According to Balwin’s attorney, if the actor pays back the $300,000 he owes, the tax charge will be removed from his record. If he does not pay his back taxes, he will receive five years of probation and will have five years to pay the $300,000.

Baldwin blamed his tax troubles on mistakes made by professionals who were paid to manage his affairs while he was on a remote island shooting the reality TV show Survivor.

Tags: Back Taxes, celebrity tax cases, celebrity tax problems, failure to file income taxes, Famous People with Tax Troubles, fan, stephen baldwin tax problems, tax case, tax charge, tax cheat, tax evasion, tax resolution services, tax troubles
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Singer Lauryn Hill Gets Three Months In Jail for Tax Evasion

Apparently, Lauryn Hill’s “Miseducation” may relate to how badly she handled her IRS tax problems. According to Accounting Today’s article titled: Fugees Singer Lauryn Hill Sentenced to Prison for Tax Evasion, Hill was sentenced Monday to three months in prison plus three months home confinement for failing to file tax returns for five years and not reporting more than $2.3 million in income. The article explains the terms of her sentence:

• In 2012, Hill pleaded guilty to charges specifically related to 2005-2007 tax years when she received more than $1.8 million in income. Her new sentence also takes into account the following:
  • Additional income and tax losses for 2008 and 2009
  • She failed to file federal returns for 2008 and 2009
  • Her outstanding tax liability to the state of New Jersey
  • The total income Hill owes is $2.3 million and total tax loss of approximately $1,006,517.

• Judge Arleo also sentenced Hill to serve a year of supervised release and ordered her to pay a $60,000 fine in addition to her IRS restitution. The judge has also ordered Hill to fully cooperate with the IRS, including payment of outstanding interest and IRS penalties on her tax obligations.

According to a Wonderwall MSN article, Hill explained to Judge Arleo she had always meant to eventually pay the taxes but was unable to during a period of time when she dropped out of the music business. Just last June, I wrote a post last June just after Ms. Hill was charged about her explanation for not paying her taxes on her Tumblr account blog. She claimed that she went “underground” in order to live without “being manipulated and controlled by a media protected military industrial complex with a completely different agenda.” She stated back then she didn’t “deliberately abandon” her fans or her responsibilities (taxes) but instead “chose to retreat as a means of survival.”

Even back then I knew IRS criminal investigators were not going to see it that way. Arguing this type of defense never works, especially of you are a celebrity because the IRS is going to make an example of you because you are famous.

The Internal Revenue Service does not discriminate – it goes after millionaires, celebrities and average taxpayers with the same rigor if they believe them to be cheating or not paying taxes. As seen in the case of Lauryn Hill, they also have no trouble handing down prison sentences to tax evaders if the circumstances warrant no matter who they are or how much money they have.

If you are saddled with significant tax debt or have underreported your income, there’s never a bad time to come forward to deal with your tax debt issues. Your best defense is to consult with a certified tax resolution specialist, tax audit expert, or tax attorney who are IRS problem solvers. These tax professionals can help keep you out of prison and get back into IRS compliance.

Tags: certified tax resolution specialist, IRS problem solvers, irs problems, IRS tax problems, tax attorney, tax audit expert, tax debt, tax evasion, tax resolution
Posted in 365 Ways to Keep the IRS at Bay, Back Taxes, Celebrity Tax Woes, Seeking Professional Tax Help, Tax Evasion Advice, Tax Relief News, Unfiled Returns - Delinquent Tax Returns, income tax relief, tax help, tax resolution, tax resolution services | No Comments »

Back Taxes Owed by Terrell Owens Amounts to $430,000

Terrell Owens, a six-time NFL Pro Bowl wide receiver, has caught an enormous tax bill from the Internal Revenue Service.

According to celebrity news website TMZ, Owens — popularly known by his initials, T.O. — owes $430,000 in unpaid taxes for the years 2007 and 2009.

During the years Owens racked up the IRS debt, he had lucrative contracts to play football for the Philadelphia Eagles, Dallas Cowboys and Buffalo Bills.

Since not being re-signed by the Cincinnati Bengals after the 2010 season, Owens has struggled with his career. He played in 2011 in the Indoor Football League. Then, on Aug. 6, 2012, he signed a one-year contract with the Seattle Seahawks. Twenty days later, the Seahawks released Owens.

Tags: back tax debt, celebrity tax problems, Celebrity Tax Woes, IRS debt, tax debt, tax evasion, tax resolution services
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Back Taxes Owed by Snoop Dogg Amount to $546,000

Hip-hop artist Snoop Dogg owes more than half a million dollars in back taxes to the Internal Revenue Service.

According to a lien the government filed, Snoop Dogg, whose real name is Calvin Cordozar Broadus Jr., owes $546,270.29 in unpaid taxes for the years 2009 and 2011.

Snoop Dogg, who was discovered by rapper and record producer Dr. Dre, has sold more than 30 million albums worldwide. His first album, Doggystyle, sold nearly a million copies in its first week of release and was a four-time platinum album.

This isn’t Snoop Dogg’s first brush with the IRS. According to celebrity news site TMZ, Snoop Dogg owed $476,000 in back taxes in 2008. He paid that debt when it came to his attention.

Tags: Back Taxes, back taxes owed, celebrity tax cases, IRS Tax Cases, snoop dogg tax problems, tax cases, tax lien, tax resolution services, tax woes
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Tax Protesters Still Lose to IRS

I wrote a post on the Tax Matters blog about tax protesters and how their frivolous tax defense against the IRS is a losing battle. Evidence of that is celebrity tax protester, Wesley Snipes who is currently serving a three year prison sentence for willfully refusing to file and pay millions in taxes for years 1999 through 2001. A recent Forbes article titled: “Are Tax Protesters Actually Winning?” examined just how far individuals who believe that paying taxes is wrong will go to prove their point.

The article’s author, Peter J. Reilly focuses on the case of Laurel Ann Curtis versus the IRS. After Curtis’ latest appearance in Tax Court, where Reilly says she got creamed, the question is whether Curtis, (who wrote a book about her winning against the IRS) actually “won.” Here are a few details about why she wound up in tax court:

• The Tax Court found that Curtis’ claims were frivolous and groundless positions about her taxable income.
• A tax audit showed that Curtis had not filed returns for 4 years (’94-98) and had a history of unfiled tax returns dating back to 1983.
• She was uncooperative with auditors and did not provide proper documents to examiners.

• Curtis’ tax debt including penalties and fines was over $400,000 for four years. Given that the IRS penalties include a 75% fraud penalty double tax, and a sanction of $25,000 for frivolous arguments, Reilly believes her entire tax liability is probably over a million dollars.

Reilly believes Curtis may appeal. If she does, she will be in for the following:

• Curtis will wind up in Tax Court again.
• The Circuit will add more sanctions. Each time she returns to tax court means she could be subject to a $25,000 sanction.
• If Curtis delays payment of her IRS tax debt by appealing her case, she will rack up the interest and return to Tax Court.

The courts “victories” the protesters boast about, according to Reilly, are limited to an occasional criminal acquittal and penalty reductions. The protesters don’t “win” – in fact they end up owing more IRS back taxes than a negotiated IRS tax settlement could have.

Sadly, Curtis and Snipes are among the many who are seduced by charismatic promoters of frivolous schemes that encourage taxpayers to avoid paying their taxes. Ironically, these outrageous claims leave promoters unable to prove their case before the court and they often wind up in jail. Eddie Ray Kahn who convinced Snipes of a “pure trust” scam and Irwin Schiff who inspired Curtis are both in federal prison for their gross misinterpretation of the law.

We live in a civilized society meaning we have an obligation to pay taxes. If you have significant tax debt or have participated in any sort of frivolous tax argument or tax shelter you could be looking at an audit and major IRS problems. Your best defense is to consult with an expert certified tax resolution specialist or tax attorney or who can help you get back into tax compliance and in favor with the IRS once again.

Tags: certified tax resolution specialist, IRS back taxes, IRS penalties, irs problems, IRS tax debt, IRS tax settlement, tax attorney, tax audit, tax court, tax protesters, wesley snipes, wesley snipes and taxes, Wesley snipes tax evasion
Posted in 365 Ways to Keep the IRS at Bay, IRS payment plan, IRS tax audit, Tax Evasion Advice, Tax Relief News, Tax Scams, Tax news and tips, Unfiled Returns - Delinquent Tax Returns, income tax relief, tax help | No Comments »

Make a New Year’s Tax Resolution to End Tax Debt

If you have back tax issues, a New Year’s tax resolution should top the list. As I mentioned in a previous post, the IRS is getting more aggressive with consumers including celebrities who may be hiding income, cheating on taxes or ignoring their back tax debt.

The latest celebrity who should be considering New Year’s tax resolution is rapper Joseph Cartagena, aka Fat Joe. Accounting Today reports in their article: Rapper Fat Joe Failed to file for $700k that Fat Joe pleaded guilty to two counts of failing to file tax returns for 2007 and 2008. For those tax years, he owes taxes of $713,038 for approximately $3.7 million in income.

The musician has been released on $250 thousand dollars bail, but still could face up to two years in prison and a fine of $200,000 plus court costs. Failing to file income tax returns is very serious, and I use this case as an example because without the right tax representation, Fat Joe could wind up behind bars-like actor Wesley Snipes who is serving three years in prison for not filing his.

Here’s hoping Fat Joe rings in the New Year with an IRS tax settlement that gets him back into tax compliance and keeps him out of prison.

Lindsay Lohan’s New Year’s Tax Resolution: Paying Tax Debt

For some celebrities, finding tax debt relief means taking their IRS tax problems very seriously. An example is Lindsay Lohan and her chronic tax problems with the IRS. As I wrote about not so long ago, Ms. Lohan ignored her massive tax liens, causing the IRS to levy her bank accounts for payment. However, it appears the 26 year old actress may have finally begun her “tax resolution“ with Uncle Sam by paying off portions of her enormous tax bill.

According to an exclusive TMZ article titled: Lindsay Lohan: Proof I’m Paying Taxes with Charlie Sheen’s Money, it appears the actress paid off a tax lien using money Charlie Sheen gave her.  TMZ found the “official” lien release revealing the actress paid her 2009 tax debt of $93,701 in full.

Also, according to TMZ, sources close to Lindsay have said she taking serious steps to free herself from IRS debt by doing the following:

• Applying the remaining $6,300 (from Charlie Sheen’s $100k contribution) to pay down her 2010 IRS debt of $140,203.
• Actively attempting to raise money so she can get out of the red as soon as possible.

With the New Year just days away, it is a great time to make your News Year’s tax resolution to put your tax debt issues behind you and get into tax compliance. Contact a seasoned qualified tax professional who can discuss tax relief options with you to help resolve your tax problems once and for all. Get a fresh start today!

Tags: back tax debt, back tax issues, IRS debt, IRS tax settlement, new year's tax tips, tax debt, tax debt relief, tax levy, tax lien, tax problems, tax relief, tax resolution
Posted in 365 Ways to Keep the IRS at Bay, Back Taxes, Celebrity Tax Woes, Seeking Professional Tax Help, Tax Liens and Levies, Tax Resolution Options and Alternatives, income tax relief, tax help, tax resolution | No Comments »

With Vigilant IRS, Take Care of Your IRS Tax Debt Now

The year is ending, and this is the time for tax cheats and debtors to come clean.

———————————-

Charlie Sheen spent some time recently with Lindsay Lohan.

The two actors, both controversial and sources of tabloid fodder, were on the set of Scary Movie 5.

According to news reports, Lohan told Sheen about her tax problem. She owes, according to previous reports, as much as a quarter of a million dollars in back taxes for 2009 and 2010.

And she couldn’t pay the bill.

That’s how bad tax problems can get. A famous actress was underwater with her tax bill.

Sheen, apparently taking pity on the actress, sent her a check for $100,000 for her to use to pay down the tax debt.

And that’s what Lohan did, using the money to help get out from under her debt to Uncle Sam.

But this isn’t intended to be a celebrity story. Instead, it’s meant to be an instructive one.

If Lindsay Lohan, the former Disney TV star-turned-Hollywood bad girl, can dig a tax hole so deep she has trouble climbing out of it, doesn’t that mean average Americans can find themselves in big IRS trouble — so much so they might not be able to get out of it?

Of course.

Just this month, in fact, there were reminders of this truth.

A Florida dentist, who over three years diverted business income to a personal account in an attempt to hide it from the IRS, is now facing three years in prison. Read story here.

Across the country, in Colorado, a former Air Force pilot asked the aviation companies he worked for to make payments to him in the name of a corporation. He then funneled those payments through another corporation before he took possession of the money personally, hoping this would allow him to hide the income from the IRS. It didn’t work. He’s now facing up to five years in prison. Read story here.

You might be asking yourself:

Why’s he telling me all this?

The answer is simple. In case you haven’t noticed, the IRS is more aggressive than ever on consumers who are hiding income or otherwise cheating on taxes or not paying their back taxes.

With the economy down, there’s even more pressure on the IRS to bring in revenue.

IRS audits and enforcement have been the key areas of IRS investment, and this is plainly evident through cases including Lindsay Lohan’s as well as those of the Florida dentist and Colorado pilot.

Truth be told, the chances of getting away with cheating on your taxes have never been slimmer and the penalties, including possible prison time and hefty fines, have rarely been higher.

That’s why, with the year coming to a close, now is perhaps the best time to consider whether it’s worth coming into compliance with the IRS.

If you’re cheating on your taxes or have large tax debt, you have options for coming forward. A qualified tax professional can help you navigate these options and represent your interest as you negotiate with the IRS.

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This article was written by Michael Rozbruch. I am a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA.  You can contact my office – Tax Resolution Services – at 866-477-7762 to obtain a free subscription to our newsletter titled The IRS Times & Inquirer.

Tags: celebrity tax cases, Celebrity Tax Woes, cheating on taxes, IRS audits, IRS trouble, Michael Rozbruch, not paying back taxes, pay down tax debt, Qualified Tax Professional, tax bill, tax cheats, tax evasion, tax problems, tax resolution services
Posted in Back Taxes, Celebrity Tax Woes, IRS Tax Cases, IRS Times and Inquirer, IRS help, IRS tax audit, Seeking Professional Tax Help, Tax Debt Help News, Tax Liens and Levies, Tax news and tips, tax help | 1 Comment »

Weekly Tax Relief News Round-Up

Happy Friday! Here is a recap of some of the tax relief news reported on this week.

Tax Liens and Levies – I am proud to announce the release of the 14th episode of my national network television show, Tax Man. This episode was designed to feature many different tax topics so that people in trouble will have a reference and better understanding of what to do when tax problems occur. The topic in this video episode explains the very important and often mistaken differences between tax liens and tax levies.

Tax Fraud – Dentist, Edward James Weiss, 63, of Rockledge, Fla., may be looking at three years in prison after pleading guilty to making a false statement on a federal income tax return for omitting income from tax returns for the years 2005 through 2007. Weiss diverted income over three years from his dental practice bank account and avoided paying $264,581 in taxes.

Avoiding an IRS Audit – While many taxpayers are planning their end-of year charitable gift giving, it’s important they don’t overstate these “gifts” and claim charitable deductions significantly higher than their income level. This attempt at lowering their tax liability throws up an IRS red flag and often triggers an IRS audit. This post encourages smart charitable gift giving that will help keep IRS auditors at bay.

IRS Tax Relief - I have said many times before; there is a solution to every problem. Even the most difficult and complicated IRS issue can be resolved due in large part to vaudevillian entertainer, George M. Cohan. George M. Cohan, aka Yankee Doodle Dandy, won a groundbreaking tax audit case over 80 years ago that set precedence for cases where taxpayers cannot produce all of their documentation. Since a typical, non-filing Tax Resolution Services client has between 4-7 years of unfiled tax returns and often no documents, thanks to the Cohan Rule, we can still file their missing tax returns and get them into tax compliance. Now there is no excuse to put off resolving your back tax issues!

Celebrity Tax Problems via Twitter:

Tax Evasion:

• Forbes @taxgirl Kelly Phillips Erb reported that Stephen Baldwin was arrested for not paying $350, 000 in personal taxes to the state of New York for tax years 2008 through 2010 $350,000. If convicted, Baldwin could face up to four years in prison. Article link: http://onforb.es/TPLfdT

Back Tax Debt:

• @HuffPostCeleb is reporting that Pamela Anderson owes more than $350,000 back taxes to both the IRS and the state of California. Familiar with tax issues, in 2010 Anderson owed Uncle Sam more than $1.7 million in tax debt. Article link: http://huff.to/Vwbh5R
• It appears that controversial celebrities can tire of other controversial celebrities. According to Yahoo News, actor Charlie Sheen claims that Lindsay Lohan never thanked him for his generous gift of $100k to help pay her back tax debt. Article link: http://yhoo.it/UUGPpk

Have a great weekend everyone!

Tags: back tax debt, celebrity tax issues, IRS audit, IRS tax problems, tax levies, tax liens, tax relief, TaxMan, unfiled tax returns
Posted in 365 Ways to Keep the IRS at Bay, Back Taxes, Celebrity Tax Woes, Filing Unfiled Returns and Replacing Substitute for Ret, IRS tax audit, TAX MAN TV, Tax Liens and Levies, Tax news and tips, income tax relief, tax help, tax resolution | No Comments »

IRS Seizes Bank Accounts of Actress Lindsay Lohan

The IRS is one of the most brutal collection agencies on the planet with the authority to aggressively “collect” overdue tax debts by seizing bank accounts and assets. This collection tactic is typically the result of a lack of communication between taxpayer and the IRS – just ask Lindsay Lohan who, as of yesterday, is experiencing her own IRS seizure nightmare.

According to TMZ.com, the IRS was tired of waiting for the 26 year old actress to settle her massive IRS debt and seized ALL of Ms. Lohan’s bank accounts. Back in February, the IRS filed tax liens against her for tax years 2009 and 2010 claiming she owed $233,904 in unpaid federal taxes.

In a blog post last week I reported that actor and friend Charlie Sheen made a gallant attempt at tax relief by writing the actress a check for $100k to help her 2009 IRS tax problem. However, it appears this generous gift was merely a drop in the bucket due to the additional taxes she owes for 2011.

TMZ reports Lohan “is in full-on panic mode about her financial situation”, and “desperately trying to make some cash to get out of the red.” It’s too bad Ms. Lohan’s expert team of IRS tax attorneys and advisors couldn’t resolve this back tax issue after the tax liens were filed in February. But even if they did, the IRS holds taxpayers personally responsible for their own taxes and will go after tax cheats in spite of celebrity status if they fail to pay. The IRS does not roll out the red carpet for anyone, let alone a non-compliant celebrity.

I mention Ms. Lohan’s story as a “worst case scenario” involving IRS tax liens and levies and to caution taxpayers that it’s best to prevent them in the first place. Here are some important points to know:

IRS Levy

• An IRS levy is the actual seizure action taken by the IRS to collect back taxes, generally resulting from bad communication between the IRS and the taxpayer.  The IRS has the legal ability to levy taxpayer wages or accounts receivable and all other sources of income. Tax levies are to be avoided at all costs.

IRS Bank Levies

• When bank account is levied by the IRS, referred to as “one shot” levies it is only for the day the levy is received by the bank.
• In that day, the bank is required to 1) remove the amount available in the account to satisfy the levy, 2) send the funds to the IRS within 21 days unless otherwise instructed by the IRS.
• This type of levy does not affect future deposits into the bank account unless the IRS issues another Bank Account Levy which they will do if there is a remaining amount to be collected.

The good news is that IRS tax liens and levies are preventable! If you’ve been threatened with the following:

• IRS bank levy
• Tax lien
• IRS Seizure
• Denial or termination of an installment agreement

Don’t ignore an IRS collection notice, unless you want an empty bank account. Instead, hire an expert IRS tax attorney or certified tax resolution specialists to file an IRS Collection Appeal to stop an IRS levy or seizure process and help you resolve your IRS problems once and for all. But you must act quickly to resolve this matter if you ever hope to own anything again.
Sources:

TMZ: Lindsay Lohan-IRS Seizes Bank Accounts http://www.tmz.com/2012/12/03/lindsay-lohan-irs-bank-accounts-taxes/

Examiner.com: http://www.examiner.com/article/lindsay-lohan-irs-seizes-bank-accounts-for-unpaid-federal-taxes

@nydailynews: http://www.nydailynews.com/entertainment/gossip/lindsay-lohan-bank-accounts-seized-irs-article-1.1212445

Tax Resolution University post: http://www.taxresolution.com/blog/140k-tax-lien-for-lindsay-lohan/

Tags: actress lindsay lohan, celebrity tax problems, certified tax resolution specialist, IRS enforcement, irs problems, IRS tax attorneys, Lindsay Lohan, tax attorney, tax relief, tax resolution
Posted in Tax Problem FAQs | No Comments »

Actor Janeane Garofalo and IRS Back Taxes

It appears that comedian and actress Janeane Garofalo did not know she was married for 20 years. The idea of not knowing something this significant sounds absurd, the fact that she may owe the IRS back taxes for her nuptials may not be. A Slate/Explainer article titled Does Janeane Garofalo Have to Amend 20 Years of Tax Returns? attempts to answer whether she and her “husband” will be required to amend 20 years of tax returns due to their marital status. As someone who solves IRS problems on a daily basis, I didn’t think Slate’s legal team gave a complete answer. Below are some points I wanted to add to the discussion:

According to Slate, Garofalo and writer and producer Rob Cohen got married in what they thought was a 1990’s, Las Vegas “sham wedding.” Since this news hit the airwaves a few weeks back, the couple has annulled the marriage in Nevada. They will most likely not have to amend 20 years of back taxes but could face an IRS audit and pay fines, interest, or IRS penalties.

Slate’s legal team did not mention tax representation in their article yet they will play an integral role should Cohen and Garofalo get audited. I would have advised anyone looking at a potential IRS tax problem, to consult a qualified tax attorney to discuss this matter – especially if their case might involve an IRS audit. Instead the team offered the following: “If the IRS decides to audit the couple, the most likely result is that they’ll pay the higher married rate. No penalty will apply, because they made an honest mistake and acted in good faith.” Here is why that comment may be a bit naive:

• The IRS is the most brutal collections agency on the planet–always has been and always will be. As I have written about in previous posts, the wealthy are often a target of taxing authorities because that’s where the money is.
• There is no “honest mistake” in the IRS eyes that will dissolve any one taxpayer’s back taxes.
• Representing yourself in an IRS audit is not something you do by yourself, especially if you are a high-profile, wealthy celebrity. You will get creamed.

For those who have experienced unusual circumstances (such as a death or serious illness of a loved one or natural disasters) and as a result, failed to pay back taxes, are more likely to get penalty relief from the IRS. A sham marriage 20 years ago in Las Vegas may not qualify.

However, if Garofalo and Cohen pick a good tax expert to represent them and choose their words correctly, they stand a good chance of a substantial penalty reduction should they get audited. A seasoned tax attorney or Certified Tax Resolution Specialist typically takeover all communications with the IRS typically resulting in an IRS tax settlement that taxpayers can live with.

Tags: Back Taxes, certified tax resolution specialist, IRS audit, irs problems, IRS tax problem, IRS tax settlement, Janeane Garofalo, sham wedding, tax attorney
Posted in 365 Ways to Keep the IRS at Bay, Ask the Expert, Back Taxes, Celebrity Tax Woes, IRS payment plan, IRS tax audit, Penalty Abatement, Tax news and tips, tax help, tax resolution | No Comments »

Tax Trouble Leads Joe Francis to File Lawsuit

Joe Francis, an American entrepreneur and film producer best known for producing the Girls Gone Wild series, has filed a lawsuit against his accounting firm, alleging that the company involved him in bogus tax shelters.

After the Internal Revenue Service discovered Francis’ use of these tax shelters, it cost him more than $12 million, according to celebrity news website TMZ.

Francis’ lawsuit against BDO Seldman alleges that the company admitted to criminal conduct in the use of the tax shelters and agreed to pay $50 million in fines. According to TMZ, the accounting firm told Francis that the tax shelters it was using were in compliance with federal law.

Tags: bogus tax shelters, celebrity tax cases, celebrity tax troubles, Celebrity Tax Woes, joe francis tax case, joe francis tax troubles, tax resolution services, tax scam
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Warwick, Seagal and Minor Top Calif Tax Debt List

Last week, California’s Franchise Tax Board released its “Hall of Shame” list of the top 500 individuals and businesses who owe the most in back taxes. According to an Associated Press (AP) article, Warwick, Seagal among those who owe Calif. Taxes, the most famous celebrity tax evaders topping the list are none other than singer Dionne Warwick and actor Steven Seagal.

• Warwick, who has been delinquent since 2003 and now lives in New Jersey, owes the California Franchise Tax Board a whopping $2.6 million in back taxes. Kevin Sasaki, Warwick’s publicist, says the singer has worked out a repayment plan with the state and is paying down her massive tax debt.
• Seagal, has been on the list since April after the state filed a tax lien for the nearly $350,000 back tax debt he owes for the 2010 tax year. There is no word from the actor or his staff if he is resolving his tax problem.
• CNET founder, entrepreneur and philanthropist, Halsey Minor tops the list for owing the most = $10.7 million.

Owing back taxes to a state taxing authority is a big deal, especially in a state like California who, desperate to collect ANY revenue just to survive, has begun to raise the stakes. Last year, I wrote a blog post entitled Owe State Back Taxes? Your Driving Privileges May Be in Jeopardy about Governor Brown’s signing of a bill on October 4th, 2011 that would aggressively go after state’s top tax delinquent citizens by denying their driver’s license and publishing their names for public view.

Creative collection of tax revenues is not unique to California. Many states facing budget shortfalls have begun stepping up their collection efforts as well. Since tax issues with any taxing authority are a complicated matter, it’s best to resolve them before they become too large you face losing privileges. If you have back tax issues, you are advised to speak to a Certified Tax Resolution Specialist or tax attorney who can help you resolve your back tax problems and keep you in the driver’s seat for good.

Tags: back tax debt, back tax issues, Back Taxes, celebrity tax issues, certified tax resolution specialist, Dionne Warwick, stephen segal, steven segal, tax lien, Tax Resolution University blog
Posted in 365 Ways to Keep the IRS at Bay, Back Taxes, Celebrity Tax Woes, Tax Liens and Levies, Tax Relief News, Tax news and tips, income tax relief, tax help, tax resolution | No Comments »

Tax Relief Weekly News Round Up

Happy Friday! Here’s a recap of the tax relief news that made headlines this week.

Celebrity Tax Issues, IRS Audits and Enforcement

It seems like there is always a celebrity in the news currently facing down the IRS or other tax authorities.  This is not by accident. Since the Great Recession tax revenues have been down so to increase collections, the IRS has been going after celebrities and wealthy Americans to help fill in the budget gaps through the use of IRS audits. After investing in technologies such as sophisticated algorithms to raise enforcement and collection numbers, celebrities and Average Joe Taxpayer are getting hit with tax liens and criminal charges in record numbers. Average Joe cases are actually more common – just not as interesting to read about.

Tax Evasion Cases

In spite of better methods of tax fraud detection, some taxpayers still think they can out-smart the IRS. This week’s stories feature:

• The former mayor of a Port Richey, Florida, Richard Rober, 52, and his wife Averill Rober, 47 both plead guilty to conspiring to defraud the IRS and were sentenced two six months in prison, followed by six-month terms of home detention.
• Renee Lamar Joseph, 38, of Norwalk, Connecticut, a bookkeeper for her husband’s company Joseph Landscaping and Masonry, plead guilty to filing a false federal income tax return and faces three years in prison and a fine of up to $250,000.

IRS Procedures and Taxpayers Rights

Taxpayers take note: If you receive an IRS audit letter in the mail doesn’t mean you should panic and do nothing.  It also means you shouldn’t be pushed around especially if you disagree with the IRS. Taxpayers have basic fundamental rights of due process including the ability to appeal but in order to find tax audit relief for their case they will need to pay very close attention to certain IRS procedures and deadlines relating to their audit.

Paperwork for Offshore Tax Accounting; Daunting

A recent broadcast from NPR’s Planet Money Team titled “The Downside of Tax Havens? Paperwork,” highlighted the fact that buying the two shell companies in tax havens such as Belize and Delaware was quick and easy. Completing the required paperwork required to stay legal and tax compliant: time-consuming and difficult. Not only must these companies be declared to the IRS, the paperwork to proper report them in accordance with FBAR regulations must be correct and timely or you face IRS penalties and fines.

Twitter – IRS Tax Related News

@Reuters – reported that on Tuesday, the U.S. Justice Department launched its newest efforts to thwart identity theft specifically used to steal income tax refunds, by granting federal prosecutors the authority to arrest suspects quickly.

@AccountingToday – The IRS announced it would be help for ranchers and farmers struck by this year’s drought by offering assistance in the form of IRS tax relief. According to Tuesday’s IRS announcement, farmers and ranchers forced to sell livestock as a result of the drought will be granted an extended time period to replace the livestock and defer tax on any gains from the forced sales.

@Reuters – Uncertainty for the IRS in the 2013 tax year as the current IRS Commissioner, Douglas Schulman steps down and a permanent replacement is sought out. As of now, Steven Miller will be selected as interim Commissioner.

Annnnn…. TaxMan returns next week with new tax relief videos. Stay tuned!  Also, check out the Tax Resolution Services You Tube channel for other tax help news and information.

Have a great weekend!

Tags: FBAR regulations, IRS audits, IRS penalties, irs tax relief, tax fraud, tax liens, tax relief, tax resolution services
Posted in 365 Ways to Keep the IRS at Bay, Celebrity Tax Woes, IRS tax audit, Tax Evasion Advice, Tax Relief News, Taxpayer Rights, income tax relief, tax help | No Comments »

Celebrity Tax Troubles Hint at IRS’s Watchful Eye

The IRS has been busting celebrities. But you and your neighbors aren’t safe from the taxman either.

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O.J. Simpson will be remembered for many things.

He was a football player.

He was a product spokesman and actor.

He was an accused murderer who was found not guilty in a criminal trial only to be found guilty later in a civil one.

He was an armed robber who went after sports memorabilia.

But there’s one more thing Simpson might be remembered for: tax debt. Simpson, in prison in Nevada, owes the Internal Revenue Service $179,453.07 in back taxes.

When it comes to celebrities with tax problems, Simpson is hardly alone lately.

Boxing legend Evander Holyfield, bankrupt and having lost his home outside Atlanta to foreclosure, owes $200,000 to the IRS.

Lauryn Hill, an eight-time Grammy Award-winning singer, pleaded guilty in June to not paying taxes on more than $1.5 million in income earned over three years. She faces up to one year in prison for each of her three counts.

Another singer, R. Kelly, owes a staggering amount in taxes — $4.8 million in unpaid taxes from 2005 through 2010.

And the list goes on and on. Ozzy and Sharon Osbourne had recent trouble with the IRS. Robin Thicke and Paula Patton owe half a million dollars.

You might be asking yourself: What does this have to do with me?

Potentially, a lot.

Since the beginning of the Great Recession, incomes have been down nationwide, and as a result, so have taxes. The IRS has been under continued pressure to increase collections.

So how can the IRS increase collections when taxable incomes are down?

The answer: enforcement.

Or, as you may have heard it called before: tax audits.

For several years now, the IRS has invested in strategies and technologies that will help increase enforcement and collection numbers.

That means celebrities, such as O.J. Simpson and Lauryn Hill, are getting hit with tax liens or criminal charges.

But it also means Average Joes are getting hit with tax liens and criminal charges as well. In fact, these cases are even more common than celebrity cases — it’s just that you hear on the news about a celebrity’s tax problems and you don’t hear about your neighbor’s tax troubles.

In the last year, the IRS’s audit percentages and enforcement revenues have gone up — a red flag for anyone who’s cheating on taxes.

At the same time, the IRS is now using sophisticated computer algorithms to identify likely tax cheats — an unprecedented move and another red flag.

If you’re cheating on your taxes, it’s time to stop. Just look at Lauryn Hill. She’s likely headed to prison.

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This article is written by Michael Rozbruch. I am a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA.  You can contact me at (888) 699-7630 to obtain a free subscription to my newsletter titled The IRS Times & Inquirer.

Tags: back tax debt, celebrity tax evasion, celebrity tax problems, Celebrity Tax Woes, IRS tax liens, tax audit, tax audits, tax cheats, tax debt, tax liens, tax resolution services, tax troubles
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