When a lender cannot collect debt and subsequently cancels the debt (which we are seeing alot of in the form of foreclosures in this struggling economy) - the IRS considers the canceled debt as taxable income.
Additionally, the IRS may also remove tax liabilities in the case of bankruptcy, but it’s a good idea for taxpayers to hire experienced and specialized tax experts to help them determine whether or not their taxes are eligible for discharge in bankruptcy.
CCH (http://tax.cchgroup.com/) reports:
A married couple was required to recognize cancellation of indebtedness because the husband’s credit card debt was forgiven and he did not show that he qualified for any exceptions. Because the husband defaulted on his payment plan, his bankruptcy case was dismissed, his original debts were restored and the debt was not discharged in bankruptcy. The husband did not show that he was insolvent in the tax year the debt was forgiven, nor did he produce any evidence showing that his liabilities exceeded the fair market value of his assets. Thus, the couple did not qualify for any of the Code Sec. 108 exceptions and cancellation of indebtedness income was recognized.
** For more advice and information on resolving tax debt, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-IRS-PROBLEMS.
Great news for troubled taxpayers! New legislation has been introduced to end Offer in Compromise down payments and make it easier for recession burdened taxpayers to enter into a tax settlement with the IRS.
Qualifying for the Offer in Compromise program can save taxpayers thousands of dollars in taxes, penalties and interest. Negotiating a compromise on your back tax deb is the closest thing to “amnesty” that the federal government offers and is an important alternative for Americans who have lost their jobs or are experiencing financial difficulties in this weak economy.
The proposal will remove the provision enacted in 2006 that effectively blocked many legitimate offers when the taxpayer could have complied, but for the partial payment required with most offers.
**If you owe back taxes or need income tax relief, our specialized staff of 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.
The Treasury Department released its “General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals,” including greater detail on the Obama administration’s proposed tax provisions, plans for tax relief, and efforts to boost IRS enforcement budgets. The “Green Book” also explains tax rate increases, measures to close loopeholes in the tax code, and broad international tax changes, that would collectively bring in over $900 billion of tax revenue over 10 years.
CCH (http://tax.cchgroup.com/) reports:
The Treasury Department released its “General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals,” (“Green Book”), which provides details of the tax provisions initially unveiled in the Obama administration’s budget outline on February 1. The Office of Management and Budget (OMB), meanwhile, updated its deficit projections, concluding that the federal deficit in fiscal year (FY) 2009 and FY 2010 will be $90 billion higher each year than the administration’s February estimates. The economic assumptions will be revisited as part of the OMB’s mid-session review in the summer. The Board of Trustees of the Social Security Trust Funds released a report indicating that expenses are outpacing income for the Medicare and Social Security programs, while a Senate Finance Committee hearing addressed health care proposals.
White House
The higher deficit numbers reported by the OMB are attributed largely to lower projected receipts and new data on the administration’s financial stabilization efforts undertaken through the Troubled Asset Relief Program and the FDIC (TAXDAY, 2009/05/12, T.1). OMB Director Peter Orszag maintained that the updated deficit forecast has not changed the administration’s key priorities to invest in education, health care reform and clean energy or its goals to cut the federal deficit in half over the next four years and provide a middle-class tax cut for 95 percent of U.S. taxpayers.
Congress
The Board of Trustees of the Social Security Trust Funds released its annual report on May 12 that shows that expenses are outpacing income for the Medicare and Social Security programs (TAXDAY, 2009/05/13, C.2). In order to make up the shortfall, the report suggests either cutting benefits or raising payroll taxes. The report notes that the financial imbalance has been made worse by the current economic recession. In addition, the report projects a two-year drop in the Medicare solvency date, from 2019 to 2017. According to the report, Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16-percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two.
Senate Subcommittee on Aviation Operations, Safety, and Security Chairman Byron L. Dorgan, D-N.D., said on May 13 that Senate lawmakers are just beginning the process of drafting their version of the FAA Reauthorization Bill of 2009 (HR 915) (TAXDAY, 2009/05/14, C.1). Dorgan said he expects to have the process completed within the next few weeks and that the measure will likely be passed by the Senate during the 111th Congress. The House Transportation and Infrastructure Committee approved HR 915 on March 5. The bill would provide $70 billion to the FAA and federal aviation infrastructure programs for the next four years.
A bill aimed at boosting the financial stability of the Highway Trust Fund was introduced on May 13 by House Oversight Subcommittee Chairman John Lewis, D-Ga. (TAXDAY, 2009/05/15, C.1). The measure, called the Highway Trust Fund Fairness Bill of 2009 (HR 2391), would modify current law to allow any interest generated by trust fund monies to be retained by the fund. The measure would also shift credits for certain exemptions and repayments away from the responsibility of the trust fund into the Treasury general fund.
The Senate Finance Committee on May 12 looked at the current tax treatment of health care and considered, among other proposals, ways to modify the current unlimited exclusion for employer-provided health care as a means to raise revenue (TAXDAY, 2009/05/13, C.1). Chairman Max Baucus, D-Mont., said he also wantsto look at tax-preferred health accounts and the itemized deduction for health expenses in an attempt to make sure that those benefits are structured fairly and efficiently. Baucus made clear that elimination of the exclusion was off the table, but that there is room for modification. Witnesses said capping the exclusion or capping the deduction for the self-employed at the 90th percentile might be necessary. The Finance Committee is slated to determine revenue measures for health care reform during meetings in the week beginning May 18.
As the committee explored ways to pay for health care reform, including modifying the current unlimited exclusion for employer-based health insurance, White House Press Secretary Robert Gibbs maintained it is possible to make “sustainable progress in cutting the cost of health care without raising taxes.” He noted that President Obama opposed taxing employer-provided health insurance during the presidential campaign. Gibbs said that the president wants to preserve the employer-based health care system but in a way that “envisions significant reform in how we’re spending money.”
Treasury/IRS
The Treasury Department released its “General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals,” on May 11 (TAXDAY, 2009/05/12, T.1). The 132-page “Green Book” adds much-awaited detail to the tax provisions initially unveiled in the Obama administration’s budget outline released on February 1. While some provisions are not proposed to take effect until 2011 or later, others would be effective starting in 2010. A few, such as enhanced net operating loss carrybacks, would apply to 2009. In addition to providing greater detail onta the administration’s plans for tax relief, however, the Green Book also explains the tax rate increases, “loophole” closing measures, LIFO repeal and broad international tax changes, which, collectively, would bring over $900 billion into the Treasury over 10 years.
Withholding Adjustment for Pension Plans. The IRS released new withholding adjustment procedures that allow pension plans to raise withholding amounts now being taken from distributions to pension recipients (IR-2009-50; TAXDAY, 2009/05/15, I.1). The general withholding tables that have been used since April to reflect he making work pay credit have also been used for pension distributions, often inaccurately reflecting entitlement to the making work pay credit. The IRS is also encouraging pension payors who implement the new, optional withholding adjustment procedures to contact retirees who previously submitted a Form W-4P, Withholding Certificate for Pension or Annuity Payments, to adjust for the change.
2010 Deduction Limits for HSAs.The IRS announced the 2010 inflation- adjusted amounts for health savings accounts. The annual limit on deductible contributions will rise to $3,050 for self-only coverage in 2010, up from a limit of $3,000 for 2009 ($6,150 for an individual with family coverage, up from $5,950). Likewise, the deduction floor for a “”high-deductible health plan” will rise to $1,200 for self-only coverage ($2,400 for families), and the out-of-pocket cap will increase to $5,950 ($11,900 for families) (Rev. Proc. 2009-29; TAXDAY, 2009/05/15, I.2).
2009 Renewable Electricity Production Credit Factors.The IRS published the inflation adjustment factors and reference prices to be used in computing the renewable electricity production credit for 2009. They apply to sales in calendar year 2009 of kilowatt hours of electricity produced in the United States or a U.S. possession from qualified energy resources (Notice 2009-40; TAXDAY, 2009/05/11, I.2).
Nonacquiescence. The IRS recommended nonacquiescence in a 2008 case in which the Tenth Circuit Court of Appeals held that an IRS Appeals officer was disqualified from conducting a Collection Due Process (CDP) hearing because of prior “involvement.” In the case, the officer had considered the taxpayers’ liabilities during a CDP hearing for a prior year (AOD 2009-01; TAXDAY, 2009/05/11, I.8).
Disaster Relief. The IRS extended return-filing and payment deadlines for victims of the severe storms, flooding, and tornadoes in certain counties in Alabama that were declared federal disaster areas on March 25, 2009 (TAXDAY, 2009/05/12, I.1). The IRS also updated notices released in April granting relief to victims of severe storms and flooding in Georgia (TAXDAY, 2009/05/11, I.10) and North Dakota (TAXDAY, 2009/05/15, I.3), severe storms and tornadoes in Arkansas (TAXDAY, 2009/05/11, I.10), and severe storms, flooding, tornadoes and straight-line winds in Florida (TAXDAY, 2009/05/13, I.1).
By Jeff Carlson, Stephen K. Cooper, Paula Cruickshank and George Jones, CCH News Staff
The IRS has announced a six-month Voluntary Disclosure program that offers lower penalties to those who come forward and pay taxes due on the secret holdings in offshore accounts. Until now, the IRS could impose penalties of at least 50% for all years in which an account wasn’t disclosed. In some cases, that could exceed the value of the offshore holdings.
The IRS also issued a list of 30 frequently asked questions about the Voluntary Disclosure process – which offers leniency to taxpayers with unreported income relating to offshore transactions. Along with lower tax penalties, those who comply are expected to avoid criminal prosecution
We have been making one disclosure after another – including some “quiet disclosures.” While the IRS encourages taxpayer to come forward under the voluntary disclosure offer, it is also possible to file amended returns and pay any related taxes and interest for previously unreported offshore income without otherwise notifying the IRS.
Quiet disclosures should only be attempted by specialized and experienced tax experts, as any amended tax returns reporting increases in income run the risk increased scrutiny from the IRS.
Income tax relief under the voluntary disclosure process is open to all taxpayers that comply with IRS’s terms, including corporations, partnerships and trusts, as well as those taxpayers that have an offshore merchant account. The offer doesnot apply if IRS has initiated a civil examination of the taxpayer, regardless of whether it relates to undisclosed foreign accounts or undisclosed foreign entities.
Under the plan, owners who disclose foreign accounts would pay:
* Back taxes and interest for a minimum of six years.
* A 25% delinquency penalty for each year in which tax returns weren’t filed, or a 20% accuracy penalty for years in which returns were filed but income from offshore accounts wasn’t included.
* A penalty equal to 20% of the highest aggregate value at any point during the last six years for all previously secret foreign accounts.
Robert McKenzie, a lawyer for more than a dozen American clients with UBS accounts, predicted the program would prompt more disclosures because it would enable evaders to compute their liability “almost to the penny” — which wasn’t possible before. The IRS said the number of Americans who have disclosed foreign accounts has more than doubled this federal fiscal year over 2007-08.
** If you require assistance with a voluntary disclosure or need help resolving other IRS problems, contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site for a free income tax relief consultation or call us at 866-IRS-PROBLEMS.
The additional $400 million is an increase of about 8% that would bring the total IRS enforcement budget to around $5.5 billion for FY 2010. By doubling the tax law enforcement budget, the White House hopes to collect an additional $17 billion in taxes by 2010.
Obama has also announced a legislative proposal to hire 800 new IRS agents to enforce the tax code and focus on the offshore tax problem to help close the $345 billion tax gap.
The IRS also plans to triple the total amount it pays to informants who help catch tax cheats. Such payments totaled $22 million in 2008. The IRS expects to pay out $50 million to informants in 2009, and has budgeted another $75 million for 2010.
Mr. Obama also proposed steeper levies on payments to federal contractors that owe back taxes to the IRS. The administration asked to increase from 15% to 100% the amount of federal payments to contractors that the IRS can levy.
The current limit of 15% is due to a technical error in a 2004 law, according to the White House budget proposal.
In addition, the administration would allow such levies to be imposed more quickly than under current law. The proposal would allow levies on contractor payments before all IRS administrative appeal processes have run their course.
The White House estimates that the two changes would allow IRS to collect roughly another $200 million a year in delinquent taxes.
The IRS is growing increasingly aggressive when pursuing tax cheats. If you can’t afford to pay your taxes or have unfiled tax returns, it’s more important than ever to know your options for income tax relief!
** If you have unfiled tax returns or other IRS problems, contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-IRS-PROBLEMS.
There are currently 35 million taxpayers in trouble with the IRS. When I appeared on LA Talk Radio with T.J. McCormack earlier this week we talked about income tax relief advice for the 15% of the population of tax paying adults that are in trouble with the IRS.
We’re past the April 15th tax deadline, but this is when people start thinking about the tax returns they haven’t filed. If you’re a non-filer and your conscious is starting to get to you, know that the IRS may get to you too and there are lots of compelling reasons to file your delinquent tax returns as soon as possible – including avoiding a penalty for late filing, a penalty for not paying your taxes owed, and a penalty for accuracy-related errors on your tax return.
Not to mention, it’s a criminal offense to not file you tax returns – even if you don’t think you
owe takes. That’s why Wesley Snipes will be doing time for his 3 years of unfiled tax returns.
And what lots of people don’t know is that if you don’t file your taxes, the IRS may prepare your tax returns for you without you to taking any of your allowable deductions. They file what is called a Substitute for Return (SFR).
What people don’t realize when they hear that taxes are voluntary, is that it’s voluntary to file a tax return. It’s not voluntary to pay. You have to pay. The voluntary part is that if you don’t file your own tax return, the IRS will do it for you. And they’re going to do it in their best interest.
Filing a Substitute for Return
When filing a SFR, the IRS takes all your third party information (like 1099s and W-2) and they classify you in the highest possible tax bracket. For example, even if you are married, they will classify you as “married filing separate.” So even if you are married with 10 kids, they don’t give you any consideration or credit for your wife and kids. They also won’t give you consideration for any business deductions that you may have that are directly related to your 1099, any stock sales (including the basis of or the cost of those sales, and any mortgage interest or property taxes.
If the IRS files your tax return for you, you can end up with a huge tax liability. And that’s how they get your attention so that you’ll come in and file your own tax return to get it right.
Regardless of what you have heard, you have the right to file your original tax return, no matter how late it’s filed. So you can replace an SFR return at any time – even if it’s 20 years old – and retroactively fix it.
** If you have unfiled tax returns or other IRS problems, contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site for a free income tax relief consultation or call us at 866-IRS-PROBLEMS.
President Obama announced an overhaul of the tax code to “detect and pursue” U.S tax evaders and go after their offshore tax shelters.
The President’s two-part plan calls for nearly 800 new IRS agents to enforce the U.S. tax code – and help wage war against multi-national corps and their offshore tax havens.
Under the current tax code, companies with operations overseas pay U.S. taxes only if they bring the profits back to the United States. If they keep the profits offshore, they can defer paying taxes indefinitely.
Obama’s plan, which would take effect in 2011, would crack down on these loopholes and companies would no longer be able to write off domestic expenses for generating profits abroad. The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries.
The president said that his plan would generate $210 billion in new taxes over 10 years and “make it easier” for companies to create jobs at home. Over a decade, $210 billion would make a modest dent in the forcasted $1.8 trillion federal deficit.
While the administration is not seeking to repeal all overseas tax benefits, Congress is expected to resist significant portions of Obama’s plan.
Meanwhile, the government will be looking to collect funds as the federal deficit continues to grow. Taxpayers can expect more aggressive collection tactics by the IRS to close in on the $400 billion tax gap that estimated each year,.
Individuals and businesses – both big and small – will see a noticeable increase in IRS enforcement. In the current economic downturn, we are seeing many struggling businesses falling behind on payroll tax deposits. And business owners need expert tax representation to protect the future of their companies and avoid IRS levies on their wages and bank accounts.
** 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.
Question: Does the 10 year collection statute begin when the civil penalties are due? Or, when the installment agreement has begun? Or, as in my case, when the installment agreement was reinstated?
Answer: The 10 year Collection Statute Expiration Date (CSED) begins on the ASSESSMENT date, not when the taxes are due and not when you begin an Installment Payment Plan.
There are exceptions to this rule, including if the taxpayer agrees in writing to allow the IRS more time to collect the tax by signing a waiver
If you are approaching the 10-year date, you should request copies of your IRS transcripts to verify the assessment date.
The IRS will NEVER inform you when the 10 years are up. They will continue to send you invoices and collect on your tax debt. It is up to the taxpayer to prove to the IRS that the 10 year CSED has in fact expired.
We have saved our clients millions of dollars by advising and strategizing with them to wait out the 10 year expiration date, especially if their debt is close to expiring. We may also be able to simultaneously obtain a certificate of Lien Release (if a lien was filed) so that your credit score can have an opportunity to recover as well.
Got questions about IRS audits, wage garnishments, bank levies, payroll tax problems, or income tax relief in general? Visit the Tax Resolution Services web site for a free tax relief consultation or call 866-IRS-PROBLEMS.
I was recently interviewed by Thom Senzee for the San Fernando Valley Business Journal. We talked about companies that utilize online technologies like webinars and online video to reach customers and educated the public.
In addition to this blog, I Twitter (@taxresolution), author tax help articles, and use YouTube to share helpful income tax relief videos. We use these online channels to educate users on some lesser known facts about tax liability.
For instance many people (even most layers) don’t know that income tax is eligible to be discharged in Chapter 7 bankruptcy. Knowing the tax laws inside and out is even more important these days as many people are struggling to find ways to get out of tax debt.
To benefit from the Bankruptcy laws and avoid paying income taxes, the taxpayer’s income tax liabilities must qualify. Therefore, it is highly recommended that the taxpayer seek out experienced tax professionals that specializes in tax bankruptcy.
It was interesting because Thom ask me if I ever worry about giving away too much information on my quest to educated taxpayers of their tax debt options.
The answer is never. While I’m passionate about educating the public, I also know that the tax code is very complicated and technical, so the taxpayer who is being targeted by the IRS will still need our services to resolve their tax problems.
Here’s a video that talks about our average client who has 4-11 years of unfiled tax returns and how the IRS can take everything you own if you are in tax trouble.
Danny Pang, and Orange County money manager, was arrested on suspicion of evading currency reporting laws. According to the Los Angeles Times, Pang is accused of bilking investors of hundreds of millions of dollars and has allegedly sought to hide more than $300,000 in cash from the government.
On Monday, Pang’s assets and those of his Irvine company, Private Equity Management Group Inc., were frozen at the request of the SEC. He was asked to surrender his passports, return any “ill-gotten gains” and any money that might have been sent overseas.
The SEC said in a complaint that Pang had used money from newer investors to make interest payments to earlier investors, a tactic often used in Ponzi schemes.
I’ve helped victims of investment fraud – including those scammed by Madoff’s Ponzi scheme - recoup 30-40% of their losses from the IRS. By filing tax theft loss deductions, fraud victims can qualify for an IRS tax break to recover taxes paid on phantom income — profits that appeared on their annual account statements but didn’t actually exist and were never paid to the investor — from the last five years.
The IRS has released Safe Harbor Guidelines for helping taxpayers recoup fraud losses, but I recommend that fraud victims get a specialized tax expert to navigate the tax code and assist them through the highly complicated and technical process.
The IRS just released its strategic plan for fiscal years 2009-2013. The plan outlines how the agency will improve service to taxpayers and enforcement of the law over the next five years.
According to IRS Commissioner Douglas H. Shulman, the agency’s first goal is to make voluntary compliance easier in an effort to maintain the fairest and most effective system of voluntary compliance in the world.
In other words, their goal is to increase the enforcement of tax law and ensure that all Americans pay their full tax liability. This is no surprise. With the current economic slump, tax revenue is down and government spending is up, so it only makes sense that tax enforcement and collection efforts will be increasing.
According to the IRS, nearly 84 percent of all taxes are paid on time by taxpayers reporting freely and voluntarily.
This means that 16% of of the taxpaying public have tax problems. And in this recession, we can expect that percentage to increase significantly.
The report also looks at the nation’s sizeable the tax gap – estimated at a net of $290 billion a year, after IRS enforcement actions that bring in $55-60 billion.
The IRS declares that they owe it “to all the citizens who … pay their taxes to be vigorous in pursuing individuals who are not paying what they owe.” At the same time, the plan indicates that “the IRS cannot audit its way to full compliance” and that a multi-pronged approach is required.
Bottom line: If you can’t afford to pay your taxes or have unfiled tax returns, it’s more important than ever to know your options for tax relief! My best advice is to file your 2008 tax return as well as any prior delinquent tax returns as soon as possible to avoid the wrath of the IRS.
** If you owe back taxes and need income tax relief, our specialized staff of 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.
I’ve blogged before about the investment fraud loss and deductibility rules outlined in Internal Revenue Code 165, and how the tax code can help victims of investment fraud recoup their losses. Now Madoff victims are hoping to get refunds on past state taxes paid on income from Madoff that they might never have received.
The Los Angeles Times reports that hundreds of Californians, many of them elderly and nearly broke, are pressing legislators for help in getting compensation for some of the money they lost in a Ponzi scheme run by confessed swindler Bernard Madoff.
Madoff pleaded guilty in March to 11 securities-related fraud counts. He is in jail awaiting a June 16 sentencing hearing.
Now, more than 400 of his victims who live in California are seeking passage of a bill that would give them the right to get back tax payments on so-called phantom income — profits that appeared on their annual account statements but didn’t actually exist and were never paid to the investor — from the last five years. The group represents about a tenth of all victims nationwide of the $65-billion fraud.
Such refunds on amended prior tax returns currently are allowed by the U.S. Internal Revenue Service but not by the California Franchise Tax Board, which collects state income taxes.
The state is refusing to make its income tax rules conform with federal law. Some of the Madoff victims who lost millions of dollars in the investment scam feel like this is inherently unfair and that they are being victimized a second time by the state of California.
I handle IRS cases for victims of investment fraud – especially those scammed by Madoff’s Ponzi scheme – who a are looking to recover 30-40% of their losses by filing tax theft loss deductions. Fraud victims qualify for this IRS tax break, but will need to go back and amend their tax returns to recoup their losses. Even though the IRS has released Safe Harbor Guidelines for recouping their fraud losses, taxpayers will still need a specialized tax expert to help them navigate the tax code and assist them through this process.
QUESTION: Some of my income is paid to me in cash. If I do not report all of it, will the penalty be a fine?
Answer: Whether you underreport some, most, or all of your income, the penalties are severe! Do not think that the IRS will fine you and that is it! The IRS will consider you a tax cheat and you will be guilty of tax evasion, even for a the smallest amount of underreported income.
In a severe case, like the one below, the man faces up to five years in prison and a fine of up to $100,000!
John Patrick Armstrong, 45, of Raleigh, N.C., was indicted for tax evasion relating to individual returns for the years 2002 to 2004.
The government alleges Armstrong underreported his income from 2002 to 2004 by $1.5 million. In addition to the tax evasion charges, Armstrong is cited with failing to disclose his interest in or authority over financial accounts in a foreign country for the years 2002 to 2004.
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Got tax questions about tax audits, wage garnishments, IRS bank levies, payroll tax problems, or tax relief in general? Call us today at 1-866-IRS-PROBLEMS or visit www.taxresolution.com for a free risk-free tax resolution consultation.
Daniel L. French, of Akron, Ohio, was charged with three counts of attempting to evade his personal income taxes and two counts filing false income tax returns for a solely-owned corporation he operated in Macedonia, Ohio.
The first two counts allege French filed false returns for the years 2002 and 2003, which listed deductions for corporate payments that were in fact disbursements for personal benefit. These disbursements are alleged to be checks to a fictitious entity whose bank account French controlled under that name. He was also charged with attempting to evade his taxes for 2004 by failing to file an income tax return.
When I was on the BigBiz Show with Russ and Sully ealier this month, we talked about what taxpayers should know about working with the IRS to solve their tax problems. We also talked about the tough economic times that we’re experiencing and how it’s not so much a Great Depression – but a Great Correction.
And as Sully pointed out, for many Americans, April 15th is not tax filing deadline, it’s tax extension filing deadline. Listen to the full interview or catch some of the highlights below.
The hot topic of the interview? With everybody forgiving debt to help stimulate the economy, is the IRS going to go easier on people with tax problems?
But in reality, the IRS is only increasing their enforcement and collection efforts.
I read something yesterday that said the IRS, in what may be considered financial sensitivity training, is encouraging people who are struggling to pay taxes during the global economic crisis, reach out and talk to them. So whether you decide to take your IRS agent out to lunch, know that there are income tax relief options available.
For one thing, we’re able to negotiate IRS payment plans for over 7 years instead of 5. So it is helpful to some people and we’re able to get some levies released a lot quicker.
If there’s a levy filed on your bank accounts or your assets, it’s probably because you haven’t been communicating with the IRS and you’ve put yourself in an adversarial position. You’ve ignored them, you’ve ticked them off, you’ve ignored every single letter, and there’s 5 letters in a series for every year that you owe that you get, the last 2 come certified. So you’ve got to really ignore them for them to get ticked off and levy you.
If you ignore the IRS, they’ll come right to your front door. You don’t want to tick them off!
You don’t even need to look them up. No 800 number, no Google search…*knocks* IRS! “been expecting you!”
And you can definitely expect more aggressive tax collection tactics this year – given this extraordinary economy, there’s a lot of tax loss, which mean less revenue for the government.
For the year 2008, they’ll collect about $2.5 trillion and in 2007 they collected over $3 trillion. So they’re making up the difference by going after tax cheats, dead beats, tax cheaters.
The IRS collected about $56 billion in back taxes in 2008, which is about 14% higher than it was in 2006. And there’s still an approximated $345 billion tax gap.
Individuals with tax problems make up an entire microcosm of our society .
15% of the American tax paying public either has not filed or has a tax delinquency problem.
That is more than the foreclosure rate and the unemployment rate put together. And it affects everybody: rich, wealthy, poverty…everybody.
So if you are a late filer or need help resolving your tax debt, get expert help from the nation’s leading tax negotiation and mediation firm! Call us at 1-866-IRS-PROBLEMS for a free tax consultation.
Michael Rozrbruch Talks About Providing "Emergency Room" Services for Individuals and Small Businesses with IRS Tax Problems (click to view)
News, commentary, insight, tips and humor from tax expert Michael Rozbruch
Michael Rozbruch is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA.
IRS PROBLEMS?
If you find yourself in trouble with the IRS and need professional tax attorney and tax resolution services, call (888) 699-7630. Effective tax negotiation and representation means that your tax attorney, Certified Tax Resolution Specialist or CPA will take over all communications with the IRS, filing any delinquent tax returns to bring you to full IRS compliance while vigorously defending your rights as a taxpayer to permanently resolve your back taxes and IRS problems.
