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Thursday, October 22nd, 2009
Celebrities, just like average taxpayers, can run into serious IRS problems. You have an edge over the high-profile celebrity tax cheats in that you can learn how to avoid IRS tax problems from the worst celebrity tax evasion cases.
Recently Access Hollywood compiled a list of celebrity tax cheaters who found themselves in deep IRS trouble with Uncle Sam. With thousands of fans and loyal followers, ending up on the California’s list of people who owed the most in back taxes does not sound very good for publicity.
The old trick of moving overseas no longer work for tax evasion as many foreign bank accounts are seriously contemplating not accepting American account holders (after the latest UBS ordeal). Some countries like the UK has set up special VIP celebrity tax evasion squads to come after those who are rich and famous with a dislike of paying taxes.
The list of celebrity tax cheaters is impressive: Leona Helmsley, Al Capone, Judy Garland, Annie Liebovitz, O.J. Simpson, Luciano Pavarotti, Martha Stewart, “Stone Cold” Steve Austin, David Brenner, Anna Kournikova, Lea Thompson, Method Man, Floyd Mayweather, Jim Thorpe, MC Hammer, Nicolas Cage, Stephen Baldwin, Toni Braxton, Robin Givens, Dionne Warwick, Sinbad, Buster Keaton and Willie Nelson.
Some of the most famous celebrities are on the California’s Top Delinquent Tax Bill List. Read more on my blog post about how celebrity tax evasion added to the $143 Million in California Back Taxes. Let these celebrity tax cheaters’ pains be your gain. Here are some important tax evasion lessons you can learn from these celebrity tax cheaters:
1. Marc Anthony’s celebrity tax evasion lesson: Trust, but verify. Celebrity tax cheater Anthony’s (singer, actor and J.Lo’s husband) tax evasion problems started with four years of unfiled tax returns. With the help some of the best tax attorneys money can buy, he convinced the IRS that he didn’t commit tax evasion because he trusted his financial team to file the returns for him. According to Anthony, he didn’t know he was a celebrity tax cheater and was surprised to discover his team had gotten him on the hook for tax evasion. Because he convinced the IRS he wasn’t complicit in the unfiled tax returns, Anthony escaped the celebrity tax cheater label (and more importantly tax evasion jail time), but still had to pay $2.5 million in back taxes. The tax evasion lesson here is to confirm that your taxes have been filed. If you suspect someone on your team is making you a tax cheater, or hasn’t been acting properly, contact a tax attorney immediately.
2. Sophia Loren’s celebrity tax cheating lesson: Even an innocent spouse can end up doing jail time. The tax evasion case against the Italian screen siren had more to do with her celebrity tax cheater husband Carlo Ponti’s unpaid taxes, but Loren ended up doing 17 days of a 30-day sentence in a Naples jail for tax evasion. If you file a joint return, your neck is on the tax evasion line for your tax cheater spouse’s taxes. Many couples appoint one partner to handle the finances. If you feel your tax cheater spouse hasn’t been faithful with their taxes, take your returns to a tax attorney or tax resolution specialist to see if you qualify for innocent spouse relief.
3. Abbott and Costello’s celebrity tax cheating lesson: Don’t let your nice guy image get in the way of avoiding a tax evasion problem. Although he played the fool in the movies, Lou Costello (the dumb one of the comedy duo) was the more astute businessman and Bud Abbott (the smart one) was constantly making bad business decisions. Sometimes our self or public image prevents us from being assertive with our business and financial advisers when it comes to the topic of tax evasion. This lack of follow-through cost the celebrity tax cheating comedy duo dearly. According to Wikipedia, in 1956, the Internal Revenue Service charged the celebrity tax cheaters with tax evasion, forcing them to sell their homes and most of their assets, including their lucrative film rights. In 1957 they formally dissolved their partnership. Don’t let a tax evasion problem destroy your partnerships, always asks tough tax evasion questions of your financial team. And contact a tax evasion attorney or certified tax resolution firm immediately if you need tax help with your IRS problems.
4. Wesley Snipes’s celebrity tax cheating lesson: Write your politics on your blog, not on your tax forms. According to his tax evasion trial coverage, one of the reasons celebrity tax cheater Wesley Snipes didn’t file his tax returns was due to bad tax evasion advice that was politically motivated. Although failure to file your taxes is a misdemeanor, celebrity tax cheater Snipes was sentenced to three years of jail time and millions in back taxes and tax evasion penalties. You may have heartfelt political or religious feelings about how your taxes are used, or even the validity of the U.S. Government to levy taxes, but put those tax evasion thoughts in your blog, not on your tax forms. Once you file (or don’t file) your taxes, it becomes tax evasion, which can send you to jail. If you’ve gotten on the tax cheating side of a political tax protest, contact a tax evasion attorney before the IRS or other G-men come knocking on your door.
5. Richard Hatch’s celebrity tax cheating lesson: Don’t “forget” to pay taxes on income (especially when 51 million people saw you get it). As the first winner on Survivor, celebrity tax cheater Richard Hatch argued that he wasn’t guilty of tax evasion because he believed that CBS had paid the taxes on his million-dollar win (despite clear language in his contract explaining that he was liable for paying all taxes). If you get advice that says you don’t have to pay taxes on income, get a second opinion. If you make serious bucks, have your financial team’s tax work audited by another firm. If you think you’ve been given bad tax evasion advice, run, do not walk, to your nearest tax attorney or tax resolution specialist.
6. Joe Francis’s celebrity tax evasion lesson: Just because you’re incorporated, doesn’t make everything you grope a “deduction”. The celebrity tax cheater producer of the Girls Gone Wild videos claimed more than $20 million in phony tax deductions. His tax cheating returns were more like Accountants Gone Wild. If you’ve got some filer’s remorse, and suspect that you might be guilty of tax evasion, you can always file an amended return, but consult with a tax evasion attorney first. You don’t want your amended return to be seen as an admission of guilt for more serious tax evasion charges.
7. Darryl Strawberry’s and Pete Rose’s celebrity tax evasion lesson: What part of INCOME taxes don’t you get? At one time, celebrity tax cheaters Darryl Strawberry and Pete Rose were baseball’s biggest stars, making their autographed memorabilia very valuable. While these celebrity tax cheaters could rattle off their statistics for every season, the one figure they forgot to include was the income from autograph and memorabilia shows. When they autographed their tax returns without that income, they became celebrity tax evaders. Celebrity tax cheater Strawberry was ordered to pay $450,000 in back taxes, while celebrity tax cheater Rose had to pay $366,000 and went to jail for five months for tax evasion. If you’ve “forgotten” some income (such as eBay profits), you’re a tax cheater. Consult a certified tax resolution specialist or tax attorney on how to amend your IRS return without getting hit with severe penalties for tax evasion.
It is true that even the beautiful and rich cannot escape Uncle Sam, but some people may not realize that the IRS doesn’t only go after the “Big Fish.” I recently blogged about how average Joes are just as likely to get into IRS trouble. You may envy the celebrities for their glam and fortune–but if you take these tax evasion lessons to heart, you will have something much more valuable than fame. You will have your financial and personal freedom.
For more information on achieving a tax resolution for your back taxes or IRS debt, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.
Tags: Back Taxes, celebrity tax cheats, celebrity tax evasion, Innocent Spouse, IRS debt, Michael Rozbruch, tax attorney, tax expert, tax help, Tax Tips, unfiled taxes
Posted in Back Taxes, IRS Question Corner, Innocent Spouse, Seeking Professional Tax Help | 2 Comments »
Wednesday, October 21st, 2009
When tax problems arise in a family, it could end the marriage. Sometimes, the spouse is truly innocent of their partner’s tax problems and the IRS realizes that this may be the case. There is such a thing as Innocent Spouse Tax Relief and the IRS has a series of questions and Innocent Spouse Tax Relief Rules to extricate the innocent person from being responsible for the tax problem. If you find yourself in a tax problem with your spouse, and feel that you qualify for Innocent Spouse Tax Relief, you will need a tax professional to help you through the process. Tax Resolution Services has a team of qualified tax experts and tax attorneys that can help you find tax relief. Then there are other cases where spouses are aiding each other in tax evasion and they always wind up in prison and with a hefty fine, like the story below!
Lili A. Brown, 46, of Beaverton, Ore., was sentenced to four months in prison after pleading guilty to one count of tax evasion. She is required to pay $130,871 in restitution to the IRS. Brown allowed her husband, Johnny Brown, to file tax returns for her that helped him by acting as a nominee owner of various assets in order to avoid tax liability. The Browns together operated a Kirby vacuum distributorship.
Tax Resolution Services offers a free tax consultation, call us at 1-866-IRS-PROBLEMS to speak with a member of our professional tax team today!
Tags: avoiding tax liability, facing tax charges, Free Tax Consultation, Innocent Spouse, innocent spouse relief, innocent spouse tax relief, professional tax team, qualified tax professionals, tax attorneys, tax charges, tax cheat, tax evasion, tax problems, tax professionals, tax resolution services
Posted in IRS Tax Cases, IRS Times and Inquirer, Innocent Spouse | No Comments »
Wednesday, October 7th, 2009
The IRS can be difficult to understand–they have a whole set of terminology that is not used in any other realm except the one concerning taxes. So on top of understanding your legal tax obligations, it’s also important to know what key tax terms mean. Resolving your IRS problems can be frustrating and complicated, but getting the tax help you need doesn’t have to be.
This combination of deciphering the IRS tax “code” along with following your tax laws can quickly become overwhelming. The first step in resolving tax problems is obtaining a full understanding of your tax situation–you simply can’t do that if you don’t know the meaning of all the tax terms the IRS used against you. (For example: If the IRS chases you for your spouse’s back taxes, will you know to apply for Innocent Spouse relief without knowing what it meant?)
Tax Resolution Services offers a great tax help glossary that defines major tax terms in layman terms so that regular taxpayers like you can understand them without having to consult a tax expert for a definition.
IRS tax problems are challenging enough by themselves, don’t be left in the dark about the tax terms. Consult our tax help glossary today so that you are not a victim of complex IRS tax terms!
Tags: Back Taxes, Innocent Spouse, Michael Rozbruch, tax help, tax help glossary, tax relief, tax resolution, tax resolution services, tax terms definition, tax terms help
Posted in Back Taxes, Innocent Spouse, tax help | No Comments »
Tuesday, September 15th, 2009
Auto dealers across the nation have been benefiting from the “Cash for Clunkers” stimulus program–selling more fuel efficiency cars in exchange for fuel-guzzling “clunkers.”
Not only are average consumers loving the $4,500 non-taxable cash vouchers from trading in their old cars for new ones, auto dealers can also benefit above and beyond the mere increase in sales. In order to auto dealers to save money and avoid serious IRS tax problems, they must accurately account for the taxability of the credit amount they receive from the “Cash for Clunkers” program.
Auto dealers are required to include the full amount of the auto stimulus voucher in addition to any value left from the traded-in “clunkers” as a part of the dealership’s income. Fortunately, dealerships can offset regular and additional business expenses from participating in the program–such as the cost of disposing of the “clunkers.”
The best way for auto dealerships to ensure that they receive the full amount of their tax deductions is to keep clear and consistent documentation of all transactions including gross receipts from the sales of new vehicles and any expenses incurred. Proper record keeping will help any business or individual get the tax help they need while making sure they avoid additional IRS penalties.
In times like this when the number of IRS audits for small businesses is on the rise, having strong and accurate records will prevent IRS tax problems such as back taxes, unsubstantiated tax deductions, and IRS penalties.
If you find yourself in IRS trouble, you are entitled to get professional tax help. You can get help from our specialized staff of tax attorneys, CPAs, EAs and tax professionals at TRS. Visit Tax Resolution Services for a free income tax relief consultation or call us at 866-IRS-PROBLEMS (1-866-477-7762).
Tags: Back Taxes, cash for clunkers, income tax relief, IRS debt, irs problems, IRS tax audits, IRS tax breaks, Michael Rozbruch, tax attorney, tax deductions, tax help, tax relief, tax resolution, tax resolution services
Posted in Back Taxes, Expert Help From Tax Attorney, Tax news and tips | No Comments »
Monday, September 14th, 2009
Tax evasion is tempting – especially when you are a business owner and the money is flowing in. Who doesn’t want to live a luxurious lifestyle by evading taxes and pocketing the extra money, like the story below of this man from Rhode Island. But what about his spouse? Is she an innocent spouse eligible for tax relief?
A Rhode Island man pleaded guilty to tax evasion and bankruptcy fraud after admitting he failed to pay $2.1 million in employment taxes for his two construction companies from March 2005 to July 2006.
Steven Allard, 47, of Scituate, R.I., also admitted that in October and November 2005, he made false statements in a personal bankruptcy petition and during the bankruptcy creditor’s hearing, in that he failed to disclose his ownership of real property in Warwick, R.I.
Instead of paying the employment taxes, Allard used funds from his companies for the benefit of himself and his wife and by diverting funds from the companies to Eaglewood Realty for the purchase of luxury automobiles. He faces up to five years in prison and a fine of up to $100,000.
When someone in a marriage is caught up in a tax scam, what happens to the spouse? The IRS has Innocent Spouse Tax Relief Guidelines that may qualify a person as an “innocent spouse” and make them eligible for tax relief. If you find our that your spouse has been cheating taxes and you are an innocent spouse, you will need professional tax help! Tax Resolution Services offers a free tax consultation for those of you who find that you need a tax attorney or IRS specialist on your side.
Tags: innocent spouse help, innocent spouse tax relief, IRS help, IRS innocent spouse, irs tax relief, professional tax help, spousal tax help, tax attorney, tax cheat, tax evasion, tax fraud, tax help, tax relief attorney, tax resolution services, tax scam
Posted in IRS Tax Cases, IRS Times and Inquirer, Innocent Spouse | No Comments »
Friday, September 11th, 2009
In my industry, I see many cases where taxpayers could avoid or reduce IRS penalties if they provide sufficient documentations that substantiate their business deductions.
Upon IRS request, you must have sufficient documentation to prove the legitimacy of your tax deductions in order to avoid tax evasion charges. If however, you are unaware of illegal deductions that your spouse made on your joint tax return, you are eligible to file for Innocence Spouse (again, with sufficient proof in favor of your position).
Recently, the IRS imposed tax penalties on a couple who failed to provide sufficient documentation to support their business expense deductions. The wife was able to prove her lack of involvement in the case and thereby received partial Innocent Spouse relief.
CCH (http://tax.cchgroup.com) reports:
Couple Fails to Substantiate Deductions; Penalties Imposed; Innocent Spouse Relief Partially Applied to Penalties
A doctor and his wife, who filed jointly, failed to produce business records, documents, or other evidence sufficient to sustain deductions claimed for an emergency room physician business, horse training and related sales activities, interest expenses, or legal and professional services expenses. The horse training and related sales activities did not meet the threshold standard for an activity engaged in for profit under Code Sec. 183 because the taxpayers failed to produce credible evidence sufficient to demonstrate that they maintained detailed and contemporaneous records for those activities, conducted the activities in a businesslike manner, or had the requisite intent to make a profit from those activities; accordingly, deductions under Code Sec. 162 were not allowed.
The taxpayers also were liable for additions to tax under Code Sec. 6651, and an accuracy-related penalty under Code Sec. 6662. They presented no evidence regarding their failure to file their tax returns or their substantial understatement of tax. Equitable relief applied under Code Sec. 6015 to relieve the wife from liability for penalties with respect to tax deficiencies stemming from the husband’s emergency room physician business because she had no substantial involvement in that business and did not assist in maintaining its business records during the years at issue. Further, there was no evidence that the family’s lifestyle changed; therefore, she had no reason to know that the deductions her husband claimed were erroneous.
T.L. Phemister, TC Memo. 2009-201
It’s important for you to know what tax deductions you are entitled to and what records you need to keep in order to prove the legality of your deductions. If you think that you may have wrongfully deducted some expenses or if you are expecting an IRS audit, I strongly encourage you to get expert tax help from a tax attorney to reduce your penalties.
You can get help from our specialized staff of tax attorneys, CPAs, EAs and tax professionals at TRS. Visit Tax Resolution Services for a free income tax relief consultation or call us at 866-IRS-PROBLEMS (1-866-477-7762).
Tags: Back Taxes, business expense deductions, delinquent tax returns, delinquent taxes, Free Tax Consultation, IRS debt, Michael Rozbruch, tax attorney, tax evasion, tax relief, tax resolution, tax resolution services, wrongful tax deductions
Posted in Back Taxes, Innocent Spouse, Seeking Professional Tax Help, Tax news and tips, tax help | 1 Comment »
Thursday, August 20th, 2009
When you’re battling with the IRS, you need to make sure that you have chosen a qualified tax attorney who specializes in your type of tax problem to represent you. There are many types of IRS issues out there–a corporation’s tax problem will differ substantially from a personal one. Therefore, it is the most prudent to first understand your personal tax situation before seeking a the appropriate tax attorney’s help.
Here are a few questions to ask yourself in order to fully understand the type of tax representation you will need:
* Are you looking at personal income tax issues (you are an innocent spouse or a victim of tax fraud), business tax problems (such as unpaid payroll taxes, sales taxes), estate taxes, foundation or charity tax issues?
* Are you dealing with just federal or state taxes too?
* Do you have tax problems in multiple states or jurisdictions?
* Does the IRS know about the issue yet or have you just discovered it?
* Did the IRS contact you but you’ve buried your head in the sand hoping it would go away?
* Are your records a shambles?
* Can you attempt a true reckoning of what happened?
* Has the IRS come to your home or place of business?
* Has the IRS demanded an in-person audit?
* Has the IRS garnished your wages, put in tax liens or seized any property?
To find the best qualified tax lawyer for you, it is crucial to determine the type of tax problem you are facing before you do anything else. Once you determine the type of IRS problem you have, you will have a much better way of filtering out the tax attorneys whose specialties do not match your needs.
It is extremely valuable to invest in the expertise of a good tax attorney. Tax attorneys who specializes only in tax resolution will be familiar with the latest tax news and laws so that they can better fight your case for you. Oftentimes, you will see some tax resolution firms that will have a team of expert tax professionals including tax attorneys, certified tax resolution specialists and CPAs to help you get the best possible outcome for your tax settlement.
Read more questions to ask when choosing your tax attorney.
Read more helpful articles:
7 Ways to Ensure That Your IRS Tax Problems Are in Good Hands
Why It’s Important to Look Outside of Your Local Area to For a Certified Tax Resolution Specialist to Solve Your IRS Tax Problems
Know How To Select an Ethical and Professional Tax Resolution Firm – With or Without the Help of the Better Business Bureau
Tax Resolution Services is the only national tax resolution firm certified by the ASTPS to negotiate tax settlements with the IRS. We are a nationwide professional tax solution company with a team of tax attorneys and IRS specialists who can help you find tax relief. Free tax consultation – sign up on our website or call us at 866-IRS-PROBLEMS (866-477-7762).
Tags: delinquent taxes, IRS debt, IRS help, IRS problem solver, irs problems, IRS resolution, Michael Rozbruch, tax advice, tax attorney, tax lawyer, tax problems, tax resolution, tax resolution expert, tax resolution services
Posted in Expert Help From Tax Attorney, Seeking Professional Tax Help, Tax news and tips | 1 Comment »
Monday, August 10th, 2009
Nobody wants to be in trouble with the IRS for someone else’ mistake. If your spouse is in trouble with the IRS, his/her penalties will be transferred to you in a marriage. If you can prove to the IRS with reasonable evidence that you were unaware of the fraudulent activities of your spouse, you will qualify for Innocent Spouse relief.
Filing and getting approved for Innocent Spouse relief is crucial to protecting your financial well-being. It is important to know the rules and deadlines for the application so that you are not mired in IRS trouble due to administrative negligence.
In a recent case, an individual lost his chance to dispute the IRS decision because he had failed to petition for Tax Court to review the IRS denial within a 90 day period.
CCH (http://tax.cchgroup.com) reports:
Denial of Innocent Spouse Relief Was Not Abuse of Discreation
The IRS did not abuse its discretion in denying a taxpayer’s request for innocent spouse relief from joint and several liability at a Collection Due Process (CDP) hearing. The IRS had already made a final determination denying the taxpayer’s request for innocent spouse relief; therefore, she could not raise the issue during the subsequent CDP hearing. In addition, the taxpayer failed to petition the Tax Court to review the final determination within the allotted 90 days after the IRS mailed it; thus, the Tax Court lacked jurisdiction to review it.
Learn more about how to qualify for Innocent Spouse relief.
Note: You cannot file an Innocent Spouse Claim if you are still married. You must be separated or divorced.
I deal with tax problems every day and this year alone, my firm has successfully negotiated hundreds of IRS settlements at a rate of $0.13 on the dollar. For a free, no-risk consultation, please call my office at 866-IRS-PROBLEMS (1-866-477-7762) or visit the Tax Resolution website.
Tags: Back Taxes, delinquent taxes, Innocent Spouse, innocent spouse defense, innocent spouse help, innocent spouse relief, IRS debt, IRS help, irs problems, IRS tax audit, tax attorney, tax help, tax lawyer, tax problems, tax resolution, tax resolution expert, tax resolution services, tax settlement, wage garnishment
Posted in Innocent Spouse, Tax news and tips | 1 Comment »
Tuesday, July 21st, 2009
Principles and ideals of equal rights aside, the IRS will not allow you to file a joint tax return if your marital status is not legally recognized by the state in which you reside. Some same-sex marriage proponents have been refusing to file individual tax returns as an act of civil disobedience. However, the current climate is that the IRS only accepts joint returns from people whose marriages are legalized by their state of residency.
CCH (http://tax.cchgroup.com/) reports:
Individual Not Married Under State Law Not Entitled to Joint Filing Status; Joint Return Never Filed in Response to Substitute Return
An individual was not entitled to claim joint filing status for years in which he did not file returns because he failed to file joint returns after substitute returns were prepared by the IRS. The individual was a prominent gay-rights activist in a committed same-sex relationship and refused to file returns on behalf of himself as a form of civil disobedience advocating equality for same-sex marriage.
The IRS prepared a substitute return for him, determining his filing status as single because, under the laws of his state of residency, same-sex marriage was not recognized, and he was, therefore, not married under Code Secs. 6013 and 7703. The individual was not subsequently entitled to joint filing status because he failed to file a joint return in response to the substitute return prepared by the IRS.
If your state recognizes same-sex marriage or if you are legally able to file a joint tax return, it is extremely important for you to understand the financial liabilities that come with a joint tax return. If your spouse is in trouble with the IRS (wage garnishments, bank levies, and other IRS penalties), his/her IRS debt will be transferable to you unless you can prove that you are an “Innocent Spouse.”
Tax Resolution Services can help you understand whether your taxes are eligible to be discharged in bankruptcy. If you have deliquent tax returns that could jeopardize your eligibility, get help from the specialized staff of tax attorneys, CPAs, EAs and tax professionals at TRS. Visit Tax Resolution Services for a free income tax relief consultation or call us at 866-IRS-PROBLEMS (1-866-477-7762).
Tags: failing to file federal tax return, failure to file, i need tax help, Innocent Spouse, IRS debt, IRS help, IRS problem solver, irs problems, IRS tax problems, Michael Rozbruch, tax attorney, wage garnishment
Posted in Filing Unfiled Returns and Replacing Substitute for Ret, IRS Tax Cases, Innocent Spouse, Seeking Professional Tax Help, Tax news and tips, Taxpayer Rights, tax help | 3 Comments »
Tuesday, June 16th, 2009
It is extremely important for both parties entering into a marriage to understand the joint financial liabilities that come with matrimony. If someone enters into a marriage without fully knowing the extent of his/her partner’s financial situation with the IRS, he/she may find that IRS debt will apply to both persons in the marriage. During my talk with TJ McCormack last month on LA Talk Radio, we discussed the repercussions of marrying someone who has IRS debt and how this can affect your perfectly healthy stance with the IRS once you get married.
You can listen to excerpts from the interview here.
The Facts about Filing a Joint Return:
The minute that you and your spouse file a joint tax return, you’re attached at the hip; especially if you have bank accounts that have both names. The IRS will attach the bank account to both people. Therefore, if the wife is the only one in debt with the IRS, the husband’s money in the bank account will also be liable (it does not make a difference whether the wife has any money in the account; as long as her name and her husband’s names are both on the statements).
There are a number of things you can do to protect yourself from inheriting your spouse’s IRS debt:
If you’re contemplating marriage and your fiancé has a tax problem, file a prenuptial agreement and record it with the County Recorder. This is a community property stake in California, so you’ve got to be very careful. Or you can wait to get married after the debt problem has been resolved.
How You Can Qualify for Innocent Spouse Relief
If you had no idea about the financial activity of your spouse and how your spouse was manipulating the books, you can qualify for Innocent Spouse relief. This means:
- You did not share bank accounts—you had no access to his/her account activity
- Your spouse had a separate business that he/she operated independently
- You did not benefit in lifestyle from the extra money that was a result of tax manipulation
Once you file for an Innocent Spouse Claim, the IRS will send you a questionnaire which will verify the validity of your story. I also recently blogged about the sharing of financial information in innocent spouse cases.
Note: You cannot file an Innocent Spouse Claim if you are still married. You must be separated or divorced.
I deal with tax problems every day and this year alone, my firm has successfully negotiated hundreds of IRS settlements at a rate of $0.13 on the dollar. For a free, no-risk consultation, please call my office at 866-IRS-PROBLEMS (1-866-477-7762) or visit the Tax Resolution website.
Tags: income tax relief, Innocent Spouse, IRS debt, IRS help, irs problems, LA Talk Radio, Michael Rozbruch, prenuptial agreement, tax attorney, tax expert, tax help, tax liability, tax resolution, tax resolution expert, tax resolution services, TJ McCormack
Posted in Innocent Spouse, tax help | 2 Comments »
Monday, April 13th, 2009
Taxpayers can get in tax trouble because of their spouses or (ex-spouse’s) financial problems – but the good news is the IRS has guidelines for innocent spouse relief. And in a recent email, the Chief Counsel’s office has just released additional guidelines on the sharing of information in these types of cases.
CCH (http://tax.cchgroup.com/) reports:
The Chief Counsel’s Office has provided guidance, in an e-mail, regarding the sharing by the IRS, in innocent spouse cases, of information submitted by the requesting spouse concerning that individual’s current financial condition with the non-requesting spouse. According to the e-mail, the IRS cannot share the requesting spouse’s current year separate return. With respect to information from years before the return at issue (which might not necessarily relate to prior returns), that may depend on whether the information pertains to the requesting spouse’s knowledge of an item giving rise to a deficiency or knowledge that the non-requesting spouse would not pay the tax.
Regarding knowledge as to whether the tax was paid, the IRS often uses information from periods before the requesting spouse signed the return to establish knowledge such as the fact that the requesting spouse knew that the non-requesting spouse was having financial difficulties. This could show that it was unreasonable for the requesting spouse to believe that the non-requesting spouse would pay the tax. Therefore, if the requesting spouse provided information that indicated that she was not aware of the non-requesting spouse’s financial problems, the IRS could provide that to the non-requesting spouse, and the non-requesting spouse could provide information to prove that the requesting spouse actually did know of his financial problems.
With respect to knowledge of an item giving rise to a deficiency, the e-mail questioned whether any information from prior years would be relevant to this issue. One example might be if the requesting spouse claimed that she did not know that the non-requesting spouse had previously invested in a tax shelter (and benefits from that tax shelter the IRS reported on the return for the year at issue) and the non-requesting spouse would provide information that the requesting spouse did, in fact, know. Nevertheless, the test would really seem to be what the requesting spouse knew about the benefits reported on the return at issue.
The e-mail also pointed out that the sharing of information submitted by one spouse with the other spouse, as required under Reg. §1.6015-6(a)(1), “works both ways.” Thus, information submitted by the non-requesting spouse may also need to be disclosed, upon request, to the requesting spouse. The e-mail noted that the failure by the IRS to always comply with requests for information by the requesting spouse is an issue that has been raised in the past by the Tax Court.
*If you are in trouble with the IRS, our specialized staff of tax attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-IRS-PROBLEMS.
Tags: Innocent Spouse, IRS help, IRS problem solver, irs problems, IRS tax problems, Michael Rozbruch, tax attorney, tax expert, tax help, tax relief, tax resolution, tax resolution expert, tax resolution services, tax settlement, tax shelter
Posted in Innocent Spouse, Working with the IRS | 1 Comment »
Tuesday, December 30th, 2008
Far too many business owners and individuals are looking over their shoulders in fear of the IRS. I appeared as the guest tax expert on Strictly Business on BlogTalkRadio.com earlier this month to share some insider secrets of tax relief with business owners and individuals struggling to overcome their tax burdens.
I discussed some of the tax resolution strategies we employ with the program’s host Anna D. Banks, a business coach and consultant who is dedicated to helping support and build entrepreneurship within a local community, and throughout the county.
Among other things, we talked about how more people will be qualifying for offer in compromise settlements now than in the last few years because of the state of the economy.
Listen to the full interview here or check back for transcripts from the show!
Anna Banks: You were explaining some of the different options in your tax relief toolbox. If you could go a little more in depth with that, because a lot of people don’t know these things
Michael Rozbruch: Let’s start with the offer in compromise, because that’s probably the one that most people are familiar with because they see these commercials on TV that say, “Let us settle your debt for pennies on the dollar.” However, most people do not qualify for the offer in compromise unless you’re destitute.
The program is the closet thing to amnesty that the government will offer and its basically meant for the government to collect a small lump sum now – in other words, it’s cheaper for them administratively to accept a small lump sum now, then to go after the tax payer until the statue on limitation expires, which is 10 years on the debt. They don’t want to spend all this money administrative and salaries to go after somebody who doesn’t have the money or who will never have the money, its like getting blood out of a rock, they would much rather take a small settlement now and get them back in the system and off their books.
That’s the offer in compromise program, it’s a very formulaic driven process, it takes a look at one’s assets and also their monthly household income verse their monthly household expenses, the people who are best qualified are the people who are just making ends meet or who are in the negative each month, and not having any equity in assets. To tell you the truth were seeing a lot more people qualifying now than in the last few years because of the state of the economy.
AB: That was something I was about to mention, because of what is happening in the economy do you think that the IRS will accept more people for the offer in compromise?
MR: I think there will be a lot more submissions and acceptances. However from a percentage standpoint just to give you an idea from 2007 and I am talking national there were only 46,000 offers submitted and only 12,000 accepted. That’s about 17% -20% not even that much, our success rate is 5 times that amount because we don’t submit frivolous offers, like I said most people don’t qualify.
Just a few years ago that number that submitted were almost 140,000 that submitted and more people were accepted. When the economy was strong the IRS really tightened the rules on offers, but now what they have got to do is loosen the screws a little bit. But you know is a bureaucracy and it takes along time for them to do anything, I just hope they do it sooner than later, because a lot of people do deserve to take advantage of the offer in compromise program.
AB: I agree with you Michael. But the thing is because of the President signing the help for people who were in foreclosure I would think that the IRS would want to follow suit with that, because it is happening nationally, at all areas of the socioeconomic levels.
MR: On the other hand, that’s the only place the government has left to really beat the taxpayer over the head with a club to get the money, because with the decrease of revenues at the state level and at the federal level to pay for a lot of these programs, they’re going to go after the people who have not filed with regard to doing more audits using their computer technology in more advanced way to find the cheater and non-filers.
I think and I’ve already seen it – that they have already stepped up in forced collection, I think they got marching orders from the Treasury. You don’t hear about that in the media about the treasury easing up or adding more pressure. But that’s where they’re going to get the money; they’re going to be going after the back taxes to get the money.
AB: So can you go over some of the processes? Some of the things people need to go through. What is it that people do when they get letters? What should they do, what happens?
MR: There is usually a series of five letters per quarter, if you do payroll taxes, once you’re in the collection division which means you owe taxes, the first letter its called the cp-14 that’s what it says on the top part of the letter says you have to pay this amount in 10 days, that letter usually doesn’t require a response if you have the money pay it.
If you don’t pay that money in 10 days a tax lien already exists. In other words, even though the IRS doesn’t have to file a piece of paper with the county recorder – that’s why I call them a very special creditor – which means legally a lien already exists against all your property and all the property you acquire in the future. And if you think about it that’s why they can levy your bank account and your wages without filing the piece of paper, which is the certificate notice of federal tax lien with the county recorder.
Now the second notice is a little worse than the first but we usually don’t respond to that one either, the 3rd one is called the cp-503 and that’s the one we start to respond on and a lot of times were able to get a 60 day hold or freeze on the account so were able to work it out.
AB: Is that when you’re talking about “we” that’s their representative we’re talking about – like your company? The general taxpayer or business owner doesn’t have that?
MR: Correct, they have got to remember when they’re calling the automated collections system of the IRS which is the 800 numbers on these notices they’re speaking to clerical people who are making 9- 10 bucks an hour and they have your financial fate in their hands. So that’s another reason you need, see we know the law, we protect our clients rights that are preserved under the constitution and under the law, and we assert those rights, I got tell you 9 out of 10 times the IRS person on the other side of the phone has no clue of those rights. And that is scary.
AB: You’re right that is more than scary. They have all of our financial fate and health in their hands these clerical people, as well meaning as they might be.
MR: They can come without a court order and pad lock your front doors of your business, if it goes far enough and you ignore the notices and you owe all this money and you’re not filing your returns they can actually pad lock your front doors.
AB: That’s so scary. Please continue, you said they have the 5 letters, and you said they usually don’t come to you till the 3rd and then you start to respond.
MR: and the 4th and 5th letters are the most important those come certified. Let me explain that most people say that they don’t receive letters. The IRS under operation of law is only obligated to send notices to the last known address so if you haven’t filed for a long time chances are you moved, the IRS is not obligated to find out where you moved and serve you with those notices they just send them to the address that’s in the computer that could be years old, that’s how people wake up in the morning and go to the morning and see that the money isn’t there or the human resources person in pay roll has just given them a wage garnishment to fill out.
So the 4th letter comes certified its called a cp-504 but the last letter is the one that we can do a lot of good stuff with the last letter is called the final notice of intent to levy where they say they are going to take your first born if you don’t respond in 30 days.
AB: Haha depending who your first born is!
MR: Ha yea come and get them. What we do is in the small print in the letter, that you could never interpret is an opportunity to file what is called a request for a processed due hearing letter, an appeal collection due process, which means we change the venue of the case form collections to appeal, that means we stop everything in its tracks.
In that collection due process appeal letter we put in all the things that we have in our tool box that we may or may not use because we don’t know that were going to be doing for the resolution part, but it takes 4 or 5 months to get that hearing so by that time we have things sorted out we have the returns filed we know the financial situation of the tax payer so were able to go to that hearing and present that case whether its an offer in compromise or a payment plan, or innocent spouse defense or an audit defense based on the time available to ascertain what is going on.
For more advice and information on negotiating an offer in compromise settlement, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-477-7762.
Tags: audit defense, blogtalkradio, Innocent Spouse, IRS audits, IRS enforcement, IRS levy, Michael Rozbruch, Offer in Compromise, payment plan, Payroll Taxes, small business taxes, tax audits, tax help, tax lien, tax problems, tax resolution
Posted in Offers in Compromise, Tax news and tips | 2 Comments »
Friday, August 15th, 2008
A team of our IRS debt relief specialists recently attended the IRS Problem Resolution Boot Camp in Los Angeles to further their professional education and help better serve their clients. The special two-day seminar, held by the American Society of Tax Problem Solvers (ASTPS), attracted attendees from all over the United States who successfully took their tax problem resolution skills, knowledge, and professionalism to the next level.
The program titled “The Current Climate of the IRS” focused on negotiation installment agreements, abatement of penalties, innocent spouse relief, and appeals and mediation services. Attendees worked through many real life, real time case studies that involved employment tax problems, obtaining information from the IRS and clients, offers in compromise and financial analysis and forms.
ASTPS is a national, not-for-profit organization of professionals who specialize in representing taxpayers before the IRS. In 2005, Rozbruch received ASTPS’s prestigious Top Practitioner Award for his exemplary professional accomplishments, dedication, and contributions to the organization and the profession. Read more about our firm’s involvement in this national tax help seminar!
Tags: Innocent Spouse, installment agreements, IRS debt, IRS solutions, Offer in Compromise, Penalty Abatement, tax expert, tax help, tax problem solvers, tax relief, tax resolution
Posted in Tax Liens and Levies | 1 Comment »
Thursday, May 22nd, 2008
I just wanted to thank Bob McCormick at KNX 1070AM for his enthusiastic support for Tax Resolution Services. Bob covers the money beat and contributes reports about Wall Street, the economy, business matters for CBS 2 and KCAL 9 News. He is also the host of the popular “Money 101” on KNX 1070, where he examines the most relevant news affecting consumers and small business owners.
Here’s a little of what Bob had to say:
Make no mistake about it. The IRS and the California Franchise Tax Board are aggressive tax collecting machines. Think about this. Over half of the referrals to the IRS criminal investigation unit come from the nice person who conducted your audit.
If you’re under audit, call the tax resolution experts who’ve been helping people with their tax problems for more than 10 years. I know Michael Rozbruch who runs the firm of 40 people helping folks like you resolve their problems with the IRS.
Those problems aren’t going away till you do something about them. 1 out of 7 of us has tax problems and unpaid bills. Maybe you’re an innocent spouse with a big tax bill. The experts on tax resolution and mediation can help you set up an offer in compromise, penalty abatement requests, or payment plans that would help you solve your problems. Don’t lose another night’s sleep wondering when the tax collector’s going to come after you.
Click here to listen to more about Tax Resolution Services on KNX 1070.
Tags: Bob McCormick, Innocent Spouse, IRS audit, KNX 1070, Offer in Compromise, payment plan, tax abatement, tax audit, tax help, tax problems, tax resolution, tax resolution expert
Posted in Innocent Spouse, Offers in Compromise, Penalty Abatement, Seeking Professional Tax Help | No Comments »
Monday, May 12th, 2008
While on the air with KLOS 95.5FM, Michael Rozbruch got to spend some time talking with listeners and answering their tax questions. We wanted to share some of these questions in case anyone out there is in a similar situation.
Q: I have a question in regards to my father. He has not filed his income taxes for at least 20 years plus. And it has gotten to the point where he has had his wages garnished. My poor mother has tried to get involved and the IRS will not give her any information even though she’s his wife and an innocent spouse.
A. They probably file separately. If she were on the joint return with him, they should give her the information. He’s got a major problem, but it’s fixable. There’s a solution to every problem. He needs to get the last 7 years filed. Our average client has 4-11 years of unfilled returns. Listeners should know that it’s a misdemeanor, punishable up to 1 year in prison, $10,000 fine per year for unfilled returns even if the IRS owes you money.
Q. I wasn’t making any of my quarterly payments to the IRS for several years. And this year I surpassed $25,000, which puts you in a different category. I had to fill out a bunch of forms and now they’re going to be evaluating my finances to determine how fast this can be paid back. What can I do?
A. Nothing. What you should’ve done is gotten representation. Once you’re over $25,000 you’re in the Big Leagues. It’s full financial disclosure so you’ve given the IRS a roadmap to your assets and income so you’re basically at their mercy with regard to what they want you to pay back over the next 60 months. If you had representation there’s a certain way with being honest and truthful on how to fill out that roadmap that could have resulted with you paying less than what you’re probably going to end up paying.
Q. I have a question in regards to selling stuff online, like on eBay. Do I need to claim that income?
A. It’s all reportable income. Actually now the IRS is looking at PayPal accounts. That’s going to be their next big project. All that money is includable on income. But so are the expenses to do business on eBay
Click here to listen to the interview.
Tags: Innocent Spouse, interview, IRS, KLOS, Michael Rozbruch, tax expert, tax resolution, tax resolution expert, Tax Tips, wage garnishment
Posted in Innocent Spouse, Seeking Professional Tax Help, Tax Resolution Options and Alternatives, Unfiled Returns - Delinquent Tax Returns | No Comments »
