Swiss banks are shutting the accounts of Americans as the Internal Revenue Service accelerates the hunt for tax dodgers. The country’s biggest banks, UBS AG and Credit Suisse Group AG, have told Americans to move their money into specially created units registered in the U.S., or lose their accounts. Smaller private banks such as Geneva-based Mirabaud & Cie. are closing all accounts held by U.S. taxpayers.
After the American government’s legal battle to get UBS to disclose the owners’ names for 52,000 accounts in which Americans evaded taxes – the IRS announced a new Voluntary Disclosure process that offers leniency to taxpayers with unreported income relating to offshore transactions. Along with lower tax penalties, those who come forward, pay their taxes, and comply with the IRS are expected to avoid criminal prosecution.
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. But voluntary disclosure isn’t about how much you end up paying, it’s about being able to avoid jail time.
While the IRS has since increased pressure on Americans to disclose offshore accounts, Swiss banks must comply with U.S. tax rules and register with the Securities and Exchange Commission to accept a investment from a U.S. person.
While the banks declined to say how many people are affected, more than 5 million Americans live abroad, including about 30,000 in Switzerland, according to estimates from American Citizens Abroad in Geneva. Swiss banks must register with the Securities and Exchange Commission to provide services for those customers.
SEC registration means clients don’t enjoy the protection of Swiss banking secrecy laws, which make it a crime for money managers to disclose the names of clients without their consent. Switzerland said in March it would cooperate with international tax evasion probes after Zurich-based UBS admitted helping U.S. clients avoid taxes.
The IRS has since increased pressure on Americans to disclose offshore accounts as it seeks to recoup an estimated $50 billion in unpaid taxes. The agency set a deadline of Sept. 23 for taxpayers to declare all foreign accounts or face possible criminal prosecution that could result in as much as 10 years in prison and $500,000 in penalties.
Presumption of Guilt
U.S. citizens must file tax returns, report offshore accounts that contain more than $10,000 and pay tax on any income earned, no matter where they live. To take advantage of the amnesty program, taxpayers must file six years of returns, plus pay back taxes and a penalty, according to the IRS.
If you owe the IRS more than you can afford to pay, 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).
Edward Finley, 67, of Spearfish, S.D., pleaded guilty to one count of an indictment that charged him with conspiracy to defraud the United States. Finely had falsified tax returns for another person for the years 2001 to 2003. The investigation was conducted by IRS. Finley faces up to five years in prison and a fine of up to $250,000.
The president outlines a plan to work with overseas banks and target tax cheats. He also wants to hire 800 new IRS agents to hunt down those not complying. By Michael Rozbruch
———————————-
Just months into office, President Barack Obama has publicly announced the targets of his administrations.
Worldwide terrorist networks?
Check.
Guantanamo Bay?
Check.
Carbon emissions?
Check.
Tax cheats?
Che— Say what?!
That’s right. Among President Obama’s high-value targets are tax cheats who hide money in overseas bank accounts. On May 4, at the White House Grand Foyer, President Obama laid out his new measures to go after tax cheats, no matter where they stash their cash.
“One of these measures would let the IRS know how much income Americans are generating in overseas accounts by requiring overseas banks to provide 1099s for their American clients, just like Americans have to do for their bank accounts here in this country,” Obama said. “If financial institutions won’t cooperate with us, we will assume that they are sheltering money in tax havens, and act accordingly. And to ensure that the IRS has the tools it needs to enforce our laws, we’re seeking to hire nearly 800 more IRS agents to detect and pursue American tax evaders abroad.”
Now, that’s big news in the world of tax compliance. Not only does the Obama administration want to force overseas banks to disclose the holdings of U.S. customers, but it also plans to hire 800 new agents to sniff out tax cheats living on American soil.
For those who thought Obama would be easier on tax compliance than President George W. Bush — who made a name for himself as an advocate for aggressive tax compliance — they received a rude awakening in May. In fact, Obama has positioned himself to be even more aggressive on tax cheats than his predecessor.
What’s more, Obama likely will have the tools do it. A decade ago, forcing overseas banks to file 1099s would have sounded ridiculous. Today, it sounds plausible. Here’s why: As a result of our global financial meltdown, banks are working with governments like never before. In addition, even notoriously secret Swiss banks are cooperating. Earlier this year, UBS, the largest bank in Switzerland, agreed to provide the U.S. government with the names of those it suspects of using its accounts to evade paying taxes in the United States.
And those 800 new IRS agents? Not hard to find a budget line item for them, considering Washington is funneling billions out of the Treasury as part of the economic stimulus package.
So if ever the U.S. government sounded a warning to tax cheats, it came in May, when Obama declared a sort of war on those who refuse to pay their fair share.
If you are among them, now is a good time to come forward and wave the white flag.
———————————- Michael Rozbruch, of Tax Resolution Services, is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA. You can contact him at 866-IRS-PROBLEMS (866-477-7762) to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.
The former chief executive of a Nevada sports energy drink company has been indicted on tax evasion charges.
Xyience CEO Russell Pike, of Las Vegas, is charged with one count of tax evasion for failing to file a federal individual income tax return for 2006 and failing to pay taxes on more than $6.9 million in income he earned in 2006. Pike is also charged with using nominees and a forward-dated stock sale agreement to conceal his true income from the IRS.
Pike founded Xyience, which manufactured, marketed and sold sports energy drinks — most notably, Xenergy — which was sold in more than 45,000 stores throughout the United States. The indictment alleges that upon the inception of Xyience in 2004, Pike received at least 12 million shares of Xyience stock. During 2006, Pike sold more than 4.4 million shares of his Xyience stock for approximately $6.9 million.
In June 2006, Pike listed his income as $100,000 plus on a brokerage account application. In July 2007, Pike listed his assets as $27 million and his liabilities as $2 million on a life-insurance application. In September and November 2006, Pike purchased a condominium in Las Vegas which was titled in the name of a nominee and made payments on a 2005 Lexus SUV that was held in the name of a nominee.
If convicted, Pike faces up to five years in prison and a fine of up to $250,000.
President Obama has been working hard to ensure that American taxpayers are held more financially accountable. I recently blogged about how new tax enforcement regulations have been put in place in order to make it more difficult for business owners and wealthy people who put their assets overseas to escape taxes. In my recent interview with Mike Jaxson on KSVP, I discussed with him some important new changes to tax enforcement and how these changes can negatively impact innocent taxpayers who have not done anything illegal.
There has been a regulation for some time where banks are required to fill out a Currency Transaction Report for whenever someone deposits more than $10,000 all in one visit. Now, there’s even a more stringent form called the Suspicious Activity Report –this report is filled out any time someone deposits less than $10,000 but does it regularly over a period of time. The IRS investigates the Suspicious Activity Report more thoroughly than the Currency Transaction Report. Thus the people who have to file The Suspicious Activity Report are waving a larger red flag to the IRS than those who are only filing the Currency Transaction Report.
I know a couple who recently got married and received $37,000 in cash gifts. The groom knew that if he deposited all of the $37,000 into the bank at once, he would have to file a Currency Transaction Report. However, he did not realize that by going into the bank every week for six weeks and depositing $6,000 or $7,000 each time actually caused the bank to fill out a Suspicious Activity Report which got him into IRS trouble.
The IRS investigated the couple and accused them of not disclosing their full income. Of course, the IRS did not know that the $37,000 was a gift (which you do not have to disclose as income), so the burden of proof was on the couple. They had to get a tax attorney to represent them in order to prove to the IRS that what they did was completely legal and that the $37,000 was not income and thus not taxable. After four months, the couple was finally off the hook.
The Obama Administration enacted these new tax regulations in order to get to the guilty tax cheats and to penalize them accordingly. However, the process of instilling new enforcement may also wrongfully incriminate many innocent people. Some people get in trouble with the IRS because they are unaware of the new rules. Don’t be one of these people. If you find yourself in trouble with the IRS, get a tax expert on your side to represent your story in order to safeguard your financial future.
** For more information on resolving tax debt, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-IRS-PROBLEMS.
In an effort to curtail corporate financial irresponsibility, the Obama administration has been working fervently to control white-collar tax cheats. The media has successfully portrayed the businesses that have overseas bank accounts as “suspicious” and potentially guilty of tax evasion. In 2001, there was a $345 billion tax gap–most of which can be accounted for by the underground economy of tax evaders who have strategically utilized foreign tax havens and other methods to avoid giving away 1/3, 1/4, or 1/5 of their income to the U.S.† government. I spoke with Chuck Morse early this month on The Chuck Morse Show about the new tax enforcement regulations and how they can affect your financial well-being.
Click here to listen to the entire interview online.
President Obama has gathered momentous support for his expansion of the IRS; this year, 1,000 new IRS agents will be hired, followed by another 1,000 new tax agents in 2010. In 24 months, the IRS is scheduled to grow by 25% in size. This means the IRS will have even more resources at their disposal to come after your hard-earned money. This is the most crucial time to be aware of the new tax regulations in order to protect your assets domestically or internationally.
The New Tax Enforcement Climate
The main focus of these new tax regulations is to target the offshore bank accounts of American businesses; these accounts are relatively protected from the IRS if they are in a country that does not have a tax treaty with the US–such as Switzerland. Lately, IRS has been pressuring convicted tax cheats to give up names of other tax cheaters in exchange for leniency in penalty. This creates a ripple effect that not only incriminates other tax cheaters, but also potentially jeopardizes the innocence of the tax advisers to the tax cheaters–such as lawyers and accountants. All of the sudden, lawyers and accountants who gave legal advice to their clients may now find themselves under investigation by the IRS for suggesting overseas-tax shelters to their clients.
Once the IRS accuses you of a tax violation, you are considered “guilty till proven innocent.” Some taxpayers go to tax court, but only about 6% of cases that go through tax court are actually ruled in favor of the taxpayer. Most of the time, the government wins. Therefore, it is imperative for you to seek a tax attorney’s expertise to handle the tax problem before you contact the IRS yourself. One of the most common and most incriminating mistakes people make is to speak to the IRS themselves without consulting professional tax guidance first.
What the New Tax Regulation Climate Means to You
Large sums of money deposits into your bank account will require you to formally alert the IRS
“Suspicious Activity Report“–this is the sister form to the “Currency Transaction Report” (which has been around for some time). The Currency Transaction Report is a form that the bank fills out any time you deposit $10,000 or more into your account. The Suspicious Activity Report is the form the bank fills out when you deposit less than $10,000 at regular intervals (i.e. if you go into your bank once a week for six weeks to put in $7,000 each time). The Suspicious Activity Report is investigated by the IRS more thoroughly than the Currency Transaction Report. All tax investigations are conducted by the IRS privately without public notice.
Casual cash gifts can get you in trouble–and you have the burden to prove your innocence If you receive large amounts of cash gifts (be it at a wedding or birthday, amounting to more than $10,000) and you go to deposit this amount into your bank, the IRS may accuse you of inaccurately disclosing your income. The IRS does not investigate the details of each cash source; therefore if you are in trouble with the IRS due to a personal circumstance unrelated to undisclosed income, you have to prove to them why you are innocent.
If your business accepts credit card payments, you have to fill out a 1099 form
By the end of 2010, all credit cards and merchant processors are going to be required to issue the business establishment a 1099 for all the gross credit card receipts that they processed on the business’s behalf. This means restaurants or anyone who takes credit cards as a business are now going to get a 1099 and the IRS is going to compare that to the businesses’ tax returns. This is one area that’s going to go through the roof in terms of enforcement.
If your business accepts PayPal, you may also need to fill out an IRS Office of Management and Budget Form
If you’re a business and you take more than one thousand dollars in one day of money orders, or you get a certified check of a thousand dollars or more in one day, you are considered a “currency operation”-in other words, they consider you just like a check-cashing establishment and you have to fill out an IRS Office of Management and Budget Form to alert the IRS that you’re one of these money service operations, even though you’re in a totally different business than cashing checks.
The Amnesty Period and Why You Need to Act Now
With the strict new tax enforcement laws, the U.S. government has offered an “Amnesty Period” which will expire on September 22, 2009. This amnesty period is a “break” for business owners with offshore accounts to voluntarily admit to tax evasion in order to reduce the amount they are fined. Before this period, the penalty is only 5-20% of the tax amount. However, after September 22, 2009, the penalty will be five to seven times the largest amount in your account over the last 6 years. Therefore, it is a really good idea to get your tax problems sorted out now before the September deadline.
Currently, the problem is that in this strenuous effort to enforce overseas tax cheats, a lot of people are going to get caught up in trouble who have not done anything wrong and who in the past, would have done the same thing without thinking twice about it, such as making a standard bank transaction. It is important to remain emotionally detached when dealing with the IRS, and it is an especially good idea to hire professional tax help–someone who knows the laws and are familiar with the IRS–to help defend you against unjust penalties.
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 Services web site.
Michael R. Aldridge, 42, of Memphis, was convicted of one count of tax evasion the tax years 1991 to 1997.
Evidence presented during the eight-day trial revealed that Aldridge owed more than $261,000 in taxes. Evidence also showed that Aldridge signed and submitted false Forms 433-A and 433-B with two Offers in Compromise to the IRS and made false statements and submitted false documents during the negotiation of these Offers in Compromise.
In addition, Aldridge purchased vehicles in the names of family members and friends during tax years 2001, 2003 and 2004, and purchased a residence using two different nominees between 1992 and 2005.
Evidence revealed that in 2004, Aldridge liquidated the assets of his corporation, Pro Oil, for a profit of $433,000, and through an elaborate scheme, diverted these funds for his own benefit. In an attempt to conceal the scheme, Aldridge made it appear that various relatives had loaned the corporation money. Testimony during the trial showed that Aldridge directed his attorney to disburse the proceeds of this sale to various relatives. Most of these relatives had not made loans to the corporation and they were instructed by Aldridge to deposit $50,000 checks into their personal bank accounts.
The IRS Offer in Compromise program is here to help you and trying to cheat it is not okay. Let a Tax Resolution Specialist help you with your tax problems. We have a wide variety of tax services and will find the one that best helps you find tax relief. Contact us at 1-866-IRS PROBLEMS (1-866-477-7762).
When you have decided to seek professional tax help to battle your debt with the IRS, there are many factors to seriously research and consider before handing over your financial file. I spoke with TJ McCormack last month on LA Talk Radio regarding the important indicators taxpayers need to pay attention to in order to find the best tax attorney available. After all, taxpayers are putting their financial fates in these professionals’ hands.
There are currently 35 million taxpayers with IRS problem. And there’s a ton of competition out there to choose from, but not a lot of them credible. So here are a few things people need to do to make sure that they’re getting credible and expert tax representation. To find out more, read my article on how to hire a tax resolution company you can trust.
1) Check out the company’s BBB Report (Better Business Bureau). TRS have been an accredited member for 11 years and we have a B+ rating, which is a very high rating. Most of our competition have F ratings or are not rated.
3) Ask if they have any ex-IRS guys on staff? We actually use that as a point of difference, we don’t have any. I won’t hire any. I did and I’m done and here’s why: for years and sometimes decades, the IRS officers are trained to think that everybody a tax cheat. They don’t necessarily realize that bad things happen to good people; that they put the taxes on the back burner because someone died, someone is sick, someone just lost a job, someone had to take money out of their 401K, someone is bipolar…life happens!
So they have a very difficult transition to the other side of the desk. After all those years of being trained to think that “everyone is a tax cheat”, it goes against their grain to help people. Another factor is that they’re civil servants–think about it, if you have an ex-IRS guy who is help you out, where do you think their pension is coming out from? They’re getting money every week from the government, how hard do you think they’re going to advocate for you?
The bottom line is: taxpayers have rights—they are not automatically guilty as soon as the IRS finds them. The worst thing (and the most common) is for the taxpayer to unknowingly self-incriminate by calling the IRS without knowing all the facts and options. It would be better to simply say “I will have my tax representation answer your questions.”
Anyone that’s going up against the IRS themselves, it’s like going to court without a lawyer although most of this is happening in the administrative or civil arena. It is practicing law before the IRS. Most of the things the IRS does to us are in the administrative or civil arena. However, to rectify the situation, you are essentially practicing law before the IRS. And that’s why there are only three people in the world who are allowed to represent clients: a CPA, a tax attorney, or an enrolled agent. In my case I’m also a certified tax resolution specialist, because I’ve been trained and learned through experience, we know the law better than the IRS knows the law. And that’s why we get the tax debt settlements that we get.
** If you have tax debt, our specialized staff of tax attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site for a free income tax relief consultation or call us at 866-IRS-PROBLEMS.
John Kerry’s dispute with the IRS over payroll taxes makes him the latest politician with tax problems to make headlines.
According to The Washington Times, the Internal Revenue Service has filed a tax lien seeking more than $800,000 from Sen. John Kerry’s 2004 presidential campaign, escalating a dispute over payroll taxes that the lawmaker’s office blames on faulty government paperwork.
The candidate must now convince the government’s tax collector that his campaign already paid the taxes and doesn’t owe any more.
Kerry’s office said the IRS claim is erroneous and that the campaign paid its taxes correctly in 2004 when the Massachusetts Democrat challenged President Bush and lost.
The IRS filed a tax lien earlier this year, claiming that a previous attempt to collect the money was unsuccessful. The IRS is taking action more than a year after the campaign closed its books and sent nearly $200,000 in leftover presidential campaign money to Kerry’s Senate election fund.
Payroll tax problems should not be taken lightly. IRS penalties can add up quickly and IRS levies on your wages and bank accounts can cause you to lose your business!
** If you have payroll tax problems or 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.
With people looking for ways to save money this year, the tax-scam artists are having a field day. But here are the 12 tax scams you are most likely to encounter
By Michael Rozbruch
———————————-
April 15 has come and gone. You can check off one more line in the Death and Taxes column.
But that doesn’t mean you should relax. With identity theft on the rise and scamsters preying on taxpayers looking for a break in these hard economic times, it can be a scary, scary taxpaying world.
For that reason, the IRS is continuing in its annual tradition of releasing a “Dirty Dozen” list — the 12 most common tax scams that could put you in a world of financial hurt. I blogged about the Dirty Dozen list when the year started, and feel it is important to mention it again to prevent you from getting caught in a tax scam.
Whether perusing your e-mail inbox or the local classifieds, beware of these 12 tax scams in 2009:
1. Phishing:Internet-based scam artists use phishing to trick victims into revealing personal or financial information for the purposes of identity theft. Phishing scams often take the form of an e-mail that appears to come from a legitimate company or government entity, such as the IRS. The IRS never initiates unsolicited e-mail contact with taxpayers.
2. Hiding Income Offshore: This is a time-honored tax evasion scam. But don’t fall for it. Today, even Swiss banks are opening up records to the IRS. Using this scam could land you in prison.
3. Filing False or Misleading Forms: Some scam artists promote frivolous information returns, such as Form 1099-Original Issue Discount (OID), claiming false withholding credits are used to legitimize erroneous refund claims.
4. Abuse of Charitable Organizations and Deductions: Watch out for people claiming you can shield income form taxes using tax-exempt organizations.
5. Return Preparer Fraud: Be skeptical of tax return preparers who guarantee large refunds. They aren’t working magic; they’re cheating.
6. Frivolous Arguments: A number of tax-shelter promoters nationwide use frivolous arguments that do not withstand court scrutiny. You can find a list of legal arguments taxpayers should avoid at www.irs.gov.
7. False Claims for Refund and Requests for Abatement: This scam involves a request for abatement of previously assessed taxes using Form 843, Claim for Refund and Request for Abatement.
8. Abusive Retirement Plans: Be wary of anyone encouraging you to shift large assets into IRAs or companies owned by IRAs.
9. Disguised Corporate Ownership:The IRS actively investigates the use of corporations to facilitate the underreporting of income.
10. Zero Wages: Some scam artists advocate simply filing your taxpayer income as $0.
11. Misuse of Trusts: Although there are legitimate uses of trusts, scam artists employ them as tax shelters.
12. Fuel Tax Credit Scams: This tax credit was largely intended for commercial farmers, but some individual taxpayers are abusing it by submitting frivolous credit claims.
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 866-477-7762 to obtain a free subscription to the IRS Times & Inquirer newsletter.
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.
A revenue agent with the Internal Revenue Service has agreed to plead guilty to a federal tax fraud charge for filing a personal income tax return that claimed he suffered a loss in a real estate transaction when in fact he realized a substantial profit.
In a plea agreement, Jim H. Liu, 43, of Diamond Bar, Calif., agreed to plead guilty to subscribing to a false tax return — a charge that carries a penalty of up to three years in federal prison. As an IRS employee, Liu conducted audits of taxpayers.
Liu admitted he filed a false tax return for the 2002 tax year that improperly claimed a loss on his sale of a property in Pomona. Liu sold the property for a profit of more than $48,000, but he instead claimed a loss of more than $4,200. The tax loss to the government, as a result of Liu’s filing, was approximately $14,642.88.
No one can evade taxes. I’ve blogged about celebrities, businessmen and women, attorneys and more who have been caught cheating on their taxes. If you are having tax troubles, Tax Resolution specialists can help you find a tax solution! Fill out a free tax consultation form or call us at 1-866-IRS-PROBLEMS (1-866-477-7762).
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.
—————————————
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.
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)
I recently appeared as the tax expert on Financial Lifeline Radio with hosts Dave Harbison and John March.We talked about all the tax buzz this year. It’s almost become a cultural movement in this bad economy with everyone struggling with tax debt - we’re seeing all the tax tea parties and stimulus packages making headlines.
Not to mention, it seems like you must have tax problems to be nominated by the Obama administration!
But seriously… If the government really wanted to stimulate the economy, they should have everyone who owed $50,000 or less not pay any taxes OR have the individual choose one year that they don’t pay taxes in the next 3 years. That would really stimulate the economy. Not these $600 or $1200 stimulus payments – that’s just going to go toward paying your credit card or other debt.
So far this fiscal year, tax revenue is down 14% and government spending is up 33%!
And I expect the Treasury will be down about $500 billion in collections this year. They usually collect about $3 trillion in tax revenue but will probably only receive about 2.5 trillion this year.
The government will have to make up the money by going after the tax gap – the non-filers, tax cheats, people who overstate deductions and understate income. And 85% of that $345 billion tax gap is due to self-employed individuals – the independent contractors who don’t get a 1099 the way large businesses do.
In this current climate, the IRS will be cracking down on small businessess with increased tax audits and aggressive collection tactics including bank levies. However, it’s just as important for individuals to know the consequences of not filing their taxes. April 15 may have come and gone, but it’s not too late to file your delinquent tax returns!
Listen to the full interview from Financial Lifeline Radio here.
** 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.
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.
