A tax dispute with the IRS is the stuff of nightmares for almost every taxpayer, causing sleepless nights and making many taxpayers break out in a cold sweat at the thought of this situation. There are many horror stories about the IRS and the abuses that this agency has performed in the past. The odds are at least one friend, relative, or coworker has found themselves in a tax dispute with the IRS and ended up losing money, time, and even sleep because of it.
The IRS can be quite aggressive, this can be seen with firsthand stories and actual cases where this agency has overstepped heir boundaries or with agents who were out of control in attempts to collect a tax debt that they believe is owed. It is important for consumers to understand that you can keep control in a tax dispute with the IRS but only if you act quickly and know what steps to take to keep this type of situation from spiraling out of control. There are strategic mistakes that can make your situation worse, and these should be avoided at all costs.
4 Steps to Take Right Away With Any IRS Tax Dispute
1) Contact an experienced attorney who deals with the IRS on a regular basis, one who understands this agency and the current tax laws very closely. Trying to take on the IRS without an attorney is usually a big mistake, one that can be very costly. The IRS will try to be aggressive, intimidate you, and even bully you into complying with their demands. An experienced tax attorney will not be bothered by these scare tactics though, because the IRS attorney knows the law and the limits of this government agency. An attorney can put the IRS in check for you, providing support and legal advice every step of the way.
2) You should always take care to meet any deadlines. It may be tempting to ignore the issue or bury your head in the sand but this will not make the IRS or any tax debt go away. The IRS is not going to forget about you or disappear. By missing deadlines or ignoring the problem you are making things worse, and you will end up paying more in any interest and penalties that are accumulating.
3) Gather all documents and documentation that you will need and put these in order. When you are involved in any tax dispute with the Internal Revenue Service documentation is critical. The more you can document the data and information on your tax returns and filings the better you will be to defend these filings and be successful in any tax dispute with the IRS. Get all of the documentation for your tax dispute and keep it together in an organized fashion.
4) Only provide what the IRS asks for. Many taxpayers want to show complete cooperation, and this often means turning in more than what was requested by the IRS. When this is done the IRS is given the opportunity to closely examine all of the information and documents provided, not just the information that they asked for. This can complicate the tax resolution situation even further and actually make things worse. Only provide the information and documents that are requested by this agency and nothing else.
No one wants a tax dispute with the IRS, but if one is started it is essential to take action quickly in order to minimize the damage. An experienced tax attorney can help. Contact us today and let us deal with the IRS for you!
Any taxpayer feels a bolt of fear when they look in the mailbox and see correspondence from the IRS, or when they answer a phone call and it is the IRS on the other end of the line. This government agency is the most well known, the most feared, and the least liked out of all the government agencies, and for very good reasons. The Internal Revenue Service has a variety of powers, and this agency can make the life of any taxpayer miserable when the taxpayer does not comply or understand their rights.
The IRS uses fear, exaggeration, and intimidation as scare tactics so that taxpayers comply without protesting or consulting a qualified and experienced tax attorney. There are a number of myths and false strategies that are widely available which many tax payers believe, and hopefully this article will correct this inaccurate information and expose the truth about the IRS and what this agency can do.
Myth 1: The IRS Only Audits High Income Earners
Fact: If you are a high income earner then you have a higher risk of being audited by the IRS but even low income earners may be audited in any given year. Every single tax return that is filed for the year has the possibility of being audited, no matter how simple the return may seem or how low the income reported is on the tax return. If you assume that this government agency will not audit you because of your lower income then you could be creating future IRS problems and tax disputes for yourself in the future.
Myth 2: You Can Not Avoid Paying Your Tax Bill In Full
Fact: The IRS wants every taxpayer to pay off the full amount that this agency claims is owed, and IRS agents will not usually be quick to explain that there are alternatives for taxpayers, The truth is that taxpayers have a number of options and programs available to settle IRS tax debts and tax disputes. A qualified tax attorney with experience dealing with the IRS can help taxpayers navigate the paperwork and applications necessary in order to access programs which can assist with resolving tax debts for less than the full amount.
Myth 3: Ignoring the IRS and Dragging Your Feet Will Make the IRS Go Away
Fact: This is a strategy that many taxpayers use, but it will not help resolve a tax debt and it is a big mistake. Ignoring this powerful government agency will not cause them to go away, it will only compound the problem and create additional problems, penalties, and interest amounts for the taxpayer. Meet the problem head on, and contact an experienced IRS lawyer for advice.
Myth 4: The Collection Powers of the IRS are Unlimited
Fact: It is true that the IRS is a very powerful government agency, and they have a wide range of options in their attempts to collect a tax debt that is owed. The powers of the IRS are not unlimited though. This agency can freeze accounts, seize assets, and even cause companies to close down,. In serious cases the IRS can even file criminal charges against a taxpayer that could result in jail or prison time if the taxpayer is found guilty. In spite of all these powers there are still rules, regulations, and laws in place that IRS agents must follow. An IRS attorney can help the taxpayer understand the rules, and ensure that the IRS follows them.
Myth 5: Leaving the State or Even the Country Can Stop the IRS
Fact: It is not possible to out run the IRS, this agency will usually find you no matter where you go. You should never underestimate the ability of the IRS to track down a taxpayer who owes a tax debt. Instead of running contact a tax dispute attorney and meet the problem head on.
A tax dispute with the IRS is the stuff of nightmares for a taxpayer. This agency of the government is very powerful and incredibly intimidating, and they are not above using bullying and other scare tactics in order to take every penny that a taxpayer has with all possible collection efforts allowed. The IRS can seize bank accounts, freeze assets, garnish wages and earnings, and even close down legitimate businesses and put taxpayers in jail in some situations. With all of these collection powers it is easy to see why taxpayers are fearful of the IRS.
We have listed 4 very important facts that taxpayers need to know so that they can put any IRS controversy behind them, and move forward without any tax disputes or IRS problems.
1) The IRS will take advantage of taxpayers who do not have legal representation. The IRS is supposed to follow various rules and regulations, and these were put in place to protect taxpayers and ensure that the IRS complies with all laws when it comes to collecting tax debts and settling tax disputes. Taxpayers who fail to get an experienced tax attorney on their side may not get far when dealing with the IRS, because the agency may try to step outside of the rules and regulations due to no one being present to keep the agency in check. Having an experienced tax attorney will keep any IRS agent honest and ensure that all rules and regulations are followed.
2) Waiting will only make problems with the IRS worse. It may seem like waiting or putting off any action is the best choice but this is actually the worst thing that a taxpayer can do. No one wants the stress or hassles of a tax dispute with the IRS, but burying your head in the sand and ignoring this type of problem will not cause it to disappear. Immediate action is needed though, because the IRS will not stop until a tax dispute is resolved. The more you put this type of problem off the higher your financial penalties and interest amounts will be. Instead of ignoring the situation contact a qualified tax attorney right away.
3) Only provide the specific information that the IRS has asked for, and nothing else. Providing more information than what is requested will allow the IRS to scrutinize all of the additional data and documentation submitted, and this can invite eve bigger problems. Taxpayers do not have to exceed the information request by the IRS, only provide the exact information that is requested by the agency.
4) There are IRS settlement programs available that will allow taxpayers to save money and resolve any tax dispute or controversy with the IRS at the same time. If a taxpayer owes a large tax debt to the IRS the first reaction may be panic and fear. Coming up with an amount that the IRS claims is owed may be impossible, but there are programs that can resolve tax debts for less than the full amount in many situations. Contact an experienced and qualified tax attorney as soon as possible to see what tax dispute relief programs you may qualify for.
Any taxpayer who is facing a tax dispute with the IRS is under a great deal of stress, but there is help available for those who are willing to ask for it from a tax attorney.
A dispute with the IRS over taxes is the last thing that any taxpayer wants to engage in. This is a government agency with a reputation for intimidation and fear tactics, and the collection process used by the IRS can be quite brutal and aggressive. On top of this the tax code is so complicated that few taxpayers understand it, and the IRS is well aware of this fact and will use it to their advantage if the taxpayer lets them. Agents for the IRS may get away with actions and threats that are not allowed if the taxpayer does not have an experienced attorney and understand their rights completely.
This article will cover 5 common ways that the IRS may try to take advantage of uninformed taxpayers who do not have an experienced tax dispute attorney representing them. Make sure this does not happen to you, never take on the IRS without consulting an attorney who understands this agency and the tax code.
1) The IRS will take full advantage of any lack of knowledge that the taxpayer has. Since most taxpayers are not extremely knowledgeable about the US tax code the IRS will use this to their advantage. An IRS agent will typically not tell you that there are options or that you have rights, even if it means that you pay every penny you have and do not take advantage of programs and savings that are available. You should always have an experienced tax attorney with you before you try to take on the IRS, otherwise you will be like David facing down Goliath but you will probably not win the battle.
2) The IRS will not stop until they get what they want, making the taxpayer miserable in the process. This agency has a wide range of powers that can be used against a taxpayer, and the IRS may even cross the line at times unless the taxpayer stops this by having a tax dispute attorney on their side. The scare tactics and intimidation used by the IRS can include phone calls involving threats, letters meant to intimidate the taxpayer, and even personal visits from a revenue agent at times. A lawyer who has experience dealing with the IRS will protect the rights the taxpayer has and resolve any tax dispute without these types of intimidation.
3) In many cases the IRS will not inform a taxpayer of the rights that they have, and the agency will take advantage of the lack of knowledge that the taxpayer has in this area. An IRS dispute does provide certain rights for taxpayers. If you are not aware of your rights then this gives the IRS an advantage. It is important to have a tax lawyer with IRS experience on your team so that the IRS must play by the rules or be held accountable.
4) The IRS loves taxpayers who are honest that provide additional information, and this is a common mistake made. Many people want to comply with an IRS request, and they tend to give this agency more than what they were asked for. Most of the time the IRS wants to gain the upper had, and they will use information provided by the taxpayer to do this if possible. Get an attorney and don’t give the IRS this opportunity.
5) Some of the most effective tools that the IRS has are fear and intimidation, and this agency uses these tools on a regular basis. The power that IRS agents have can be extremely intimidating, and taxpayers fear garnishments, property seizures, and even incarceration because this agency has the ability to do these things. Hiring a tax attorney will keep the IRS in line, because this legal professional knows what the IRS is allowed to do and when they cross the line.
Any taxpayer who has ever faced a tax dispute with the IRS understands how stressful and overwhelming this can be. Our office has seen the devastation that a tax dispute can cause, and how it can make life almost unbearable for taxpayers. No matter how bad your situation may seem it is important to remember that there is a solution available that can resolve your tax controversy with the IRS.
The most important thing to remember is to face this problem and head it off early rather than ignoring the issue. You may feel overwhelmed but ignoring this situation will not make it go away, the IRS will just keep coming and will not simply disappear. The five places to start taking action if you have a tax dispute with the IRS include:
1) Consult with a tax attorney who has experience dealing with the IRS. It is never a good idea to try to take on this government agency without a good lawyer who understands the tax code. The average American taxpayer does not understand the tax code because this code is so massive and complicated, but the IRS does because the agency is responsible for the tax collection. You need someone on your side who understands IRS rules and regulations so that you have a fighting chance and do not get taken advantage of.
2) As soon as you realize that there is a tax dispute with the IRS gather all relevant records and documents that you have and organize them. When dealing with the Internal Revenue Service records are critical, and the more information and documentation you have available the better. Get everything together as soon as the IRS informs you that there is a tax dispute so that you are prepared.
3) Always meet any deadline that the IRS gives you. When you are notified of a tax dispute the IRS will detail the information that the agency wants and the time frame when this must be provided. If you miss deadlines this will just compound the problem and inflate any interest and penalties that you will be assessed. Why make things harder on yourself? Pay attention to IRS deadlines and meet them whenever possible, the dispute process will be easier and less painful on you.
4) Only give the IRS the details and information that has been requested, never provide more than what you were asked for. You may be tempted to send extra documents and information that was not requested, especially if you did nothing wrong, but this error can be a huge mistake. The added information will not typically help your case, but you could be allowing the IRS the opportunity to scrutinize your situation even further. The situation could become worse as a result of your effort to go above and beyond the IRS request.
5) Know what your options are. Before you can decide which option to take you need to know what your choices are and what options you have to choose from. Is paying the full amount that the IRS claims impossible? Would you be able to make a payment plan and keep to it? Are there any IRS programs that you would qualify for which may help eliminate some of your tax debt? Few IRS agents will explain your options clearly so that you know what you can do in this situation. An IRS attorney or qualified tax lawyer can help explain your various options.
If you have been notified of an IRS tax dispute taking action is important. This problem will not simply resolve itself, and you need someone on your side!
Few people in America would describe the IRS as a popular agency of the government, in fact this agency has some of the lowest ratings of any organization. Why is this though? The IRS has caused many lives to be ruined, and they have devastated households and families across the country.
If a taxpayer owes a tax bill there are a variety of aggressive collection methods and tactics that the IRS can use in order to collect the amount that this agency claims the taxpayer owes. The IRS has a reputation as the most aggressive collection agency. When the IRS decides to target a taxpayer for a tax dispute they will use all of their powers and the full force of this government agency in order to meet this goal, and make your life miserable in the process.
If you are involved in a tax dispute with the IRS you will find that the agency may:
1) Send you letters with threats, or make demanding phone calls. This can be nerve racking for typical taxpayers, and the threatening letters and obnoxious phone calls will not stop until the tax dispute is resolved. This is usually the first step in the IRS collection process, and ignoring these contacts will only escalate matters and cause the IRS to step up the aggression with their collection efforts.
2) Visit you, either at home or at work, to discuss your tax dispute. No one wants an IRS agent to suddenly appear and pay a personal visit to discuss a tax controversy. This agent will explain the tax dispute and the position of the IRS, and they are not usually very friendly or helpful during the process. Often this discussion includes threats of severe financial penalties if you do not comply with the IRS demands.
3) If the first two steps do not resolve your tax dispute and force you to pay what the IRS says that you owe then the agency will start assessing considerable penalties and substantial interest on top of the amount that the IRS claims the taxpayer owes. The longer the situation stays unresolved the higher these financial penalties will be. In many cases the interest and penalties can be just as big as the unpaid taxes that the agency claims you owe.
4) Usually wage garnishment is the next step that the IRS will take in order to collect any unpaid taxes that they believe you owe the government. Unlike most creditors the IRS does not have to take the taxpayer to court or get permission from a judge before garnishing your paycheck, and they do not care about your financial situation or that your pay is what you need to live on and take care of your family.
5) Another way that the IRS can make your life miserable when you are involved in a tax dispute with this agency is to seize your property. The agency can actually seize property that you legally own, and then sell off this property in order to satisfy any tax debt that you owe. This property can include vehicles, boats, and even your home or business at times. Many Americans are surprised to learn that the IRS has the power to seize personal property because this seems to go against everything that the country stands for, but the reality is that the IRS can and will do this is you do not resolve a tax debt.
6) If all other collection methods fail the IRS can file criminal charges against a taxpayer, and this can lead to further fines and possibly even jail or prison in some cases.
These collection methods and actions explain the unpopularity of the IRS, The good news is that an experienced tax attorney can help you resolve a tax dispute before things reach these stages. Sometimes it is even possible to settle a tax dispute with the IRS for less than the full amount owed, but only if you address the issue immediately and do not delay or ignore the problem.
Death and taxes are the two inevitable events in life, and no one wants to die but for many this may be preferable to dealing with the IRS or trying to resolve a tax dispute. That is a sad commentary on this government agency when death is more popular than the IRS.
No one volunteers to be part of a tax controversy with the IRS, and no sane person would want to be caught up in this type of situation. There is reason for optimism if you find that the IRS has a tax dispute with you though, and there are options available for taxpayers who are informed and who know their rights. Listed below are three reasons for optimism when dealing with the IRS over a tax dispute. Remember that you must take action though, this problem will not just disappear or go away without any effort on your part. You should contact a qualified IRS lawyer as soon as you realize there is a tax dispute.
3 big reasons for optimism if you are facing a tax dispute or IRS scrutiny include:
1) A experienced IRS attorney will help you deal with this agency, and they can face the IRS in your place so that your life is less stressful. As soon as the IRS determines that there is a tax dispute he harassment and stress starts. You will start to receive threatening letters, nasty phone calls, and even visits from IRS agents at your home and place of employment. Who wouldn’t feel intimidated in this situation? For most people these measures alone may be enough to get payment, just to stop the stress and the constant contact. When you have an experienced lawyer on your side then this legal representative can negotiate with the IRS on your behalf. Your attorney can negotiate so that the agency stops contacting you, giving you some relief from the stress.
2) If you have a tax dispute with the IRS then a qualified attorney can make the IRS follow all of the rules and regulations, and this can make the agency back off and give you some breathing room. A common tactic used by IRS agents is to try and pressure the taxpayer into coughing up what the agency says is owed, even if this means stepping over the line and breaking the rules in the process. With a tax attorney you can force the IRS to play by the rules and put an end to the pressure. Make the agency stay within their legal authority, and call the IRS on it when the rules and regulations are not followed closely by having a lawyer who understands the tax code and the laws.
3) In many cases it is possible to settle a tax debt for less than the full amount that the IRS claims you owe. There are programs available but the IRS does not widely publicize these options to taxpayers, so most people do not even realize that paying less than the full amount may be possible. The agency does not advertise these programs because the hope is that bullying and intimidation will get the desired results. When you have the legal advice of an experienced IRS attorney this is a possibility though. The IRS makes a settlement difficult but your attorney will be able to negotiate this option and you may be able to reduce your tax debt and will show you how to avoid future tax issues in the first place.
For most taxpayers an IRS tax dispute is the stuff that nightmares are made of, and this can cause fear and anxiety in the most honest taxpayer. This government agency has a reputation for being highly aggressive and unforgiving, and this reputation is well earned. IRS revenue agents have a wide range of powers at their disposal. These agents can garnish earnings and paychecks, seize property and freeze accounts, and even take your home or put you in jail at times.
As experienced IRS attorneys we see the devastation that the IRS can cause on a regular basis if the taxpayer does not take quick action to prevent it. If you are in a tax dispute with the IRS then you should contact a qualified tax attorney as soon as possible.
The best way to avoid being intimidated and bullied by the IRS is to avoid a tax dispute entirely, and there are five facts that can help you do this.
1) The IRS understands the tax code, but they are betting on the fact that most taxpayers do not understand this code and they will take advantage of the lack of knowledge that a taxpayer has. If you do not have a tax attorney on your side then you are at a disadvantage right from the start. Every year the United States tax code gets longer and more complicated, and taxpayers can not keep up unless they are continuously educating themselves on these changes. An experienced lawyer will be aware of the changes and stay on top of the tax code each year.
2) Computerized systems at the IRS are programmed to check tax returns for any red flags. These red flags are indications that the taxpayer has made a mistake or that the individual is trying to illegally lower the tax debt that is owed. The IRS does not have enough resources or agents to look over every single tax return that is filed each year. Learning what causes the system to send up a red flag can help taxpayers avoid an audit.
3) Extensions allow a taxpayer to file a tax return after the deadline, but this will not allow the taxpayer to pay any taxes owed after these taxes are due. For most taxpayers this does not make sense but it is the reality of the IRS. If you can not prepare your tax return fully before the filing deadline then an extension will provide more time for you to file, but you can not ay any taxes owed late or you will be assessed late payment penalties and interest. The penalties and interest can add up very quickly.
4) Ignoring the IRS will just make your situation even worse. This may be a common reaction for those who receive notice of a tax dispute with the IRS but it is the worst mistake that you could make. There is a reason why the IRS is seen as persistent, the agency will not stop or give up. The right move is to try to resolve the dispute, and this will go better if you have an experienced IRS attorney at your side.
5) The IRS will often settle a tax debt for less than the full amount owed, but only for those who know how to ask for this. The IRS intentionally makes this process difficult so that all taxpayers do not take advantage of these programs, but with the right legal representation you can resolve your IRS tax debt for less.
Avoid the misery of dealing with the IRS. Knowing these five tips can help you avoid a tax dispute with the IRS, and if one starts then you should consult a qualified attorney right away.
Controversy with the IRS is something to be avoided whenever possible. When the IRS puts a taxpayer in their sights the results are usually predictable. The agency will start piling up penalties and interest, seize assets and property, freeze bank accounts, and even start criminal prosecution against the taxpayer sometimes. The IRS will use every resource and weapon that they have available, sinking in their teeth like a rabid dog and refusing to let go.
If you find that you are in an intimidating tax dispute situation with the IRS don’t worry, there is help available and things that you can do. It is better to avoid this situation in the first place. Below we will examine four of the most common red flags that get the attention of the IRS, and these will increase your odds of being audited by the agency. Avoiding these red flags and common mistakes can keep you away from the watchful eyes of the IRS and prevent you from having your life devastated by a tax dispute.
1) Simple mistakes in math are a good way to cause your tax return to be flagged. When you are adding, subtracting, and multiplying always double check the answers to make sure that you avoid simple math mistakes. These small errors could cause you to be audited and start a nightmare scenario. Check your work very carefully, or hire a professional tax preparer or accountant to prepare your tax return for you.
2) Claiming business deductions that seem excessive. Always claim any legitimate business deductions that you qualify for, but if the numbers seem excessive for the industry that you are in then you can expect the tax return to be flagged by the IRS computer system. If you have excessive business deductions then always keep any documentation just in case your return does get audited. This documentation will be very helpful during any audit or tax dispute. Even if you claim legitimate deductions if these are considered excessive for the industry that you work in then you should realize that you will have a higher chance of the return being audited.
3) Failing to report all of the income that you have made. This is especially true if the income will be reported to the IRS by someone else. It may seem tempting to conceal certain income, especially if you think that the IRS will not find out. This is a big mistake though. The IRS has ways of cross checking and many different methods that can be used to uncover income that is not reported on your tax forms. If you fail to report income that you have earned during the year then you can expect to be audited, and failing to report income to the IRS can carry a criminal charge as well as financial penalties.
4) Claiming a dependent when this person is also claimed by someone else. Since all of the tax returns filed are entered into the IRS computer the dependent being claimed on two different taxes will raise a red flag and start a tax dispute or audit. Once this happens then every taxpayer who claimed the dependent will be looked at more closely. If you plan on claiming a dependent that you are entitled to make sure this dependent will not be claimed by anyone else.
Keeping these helpful audit tips in mind when you prepare your tax return can help you avoid any red flags. If you do receive notice of a tax dispute with the IRS then do not panic, contact an experienced tax attorney as soon as possible.
An IRS dispute is something that no taxpayer wants to be involved in, and a letter notifying you of an IRS dispute or audit can be the worst thing in the mailbox. The Law Offices of Nick Nemeth specializes in representing taxpayers who have a tax dispute with the IRS, We will work diligently to ensure that the entire process is as stress free as possible, and get you the most favorable terms that the tax code and laws allow. It is better to head off trouble before it can start, so we are providing practical tips that can help you avoid an IRS tax dispute in the first place.
1) Always proofread and double check your tax return carefully. Look for math mistakes, misspelled words, and other common mistakes that will get the attention of the IRS. If you list your address with the wrong spelling or with two of the house numbers transposed this can cause your return to be flagged for further review. Even forgetting to sign the return could cause you to be audited. Take the time to make sure everything is correct before you file your tax return.
2) If you donate to charity in an excessive amount make sure that these donations are substantiated and documented. The United States tax code encourages charitable contributions but it is expected that your charitable giving is in line with the income that you make. If you honestly donated a considerable amount then you should claim this, but make sure you can back up the claim with proof because your tax return is more likely to be flagged for further scrutiny and a possible audit.
3) Never use a tax preparer that is disreputable or unethical in any way. There are many tax preparation companies and individuals who are willing to break the law so that your tax liability is reduced, but when the preparer is discovered you will end up right in the middle of the mess. Your tax returns could be audited, your deductions could be disallowed, and you could end up owing the tax man a large chunk of money as a result of using a less than reputable preparer for your taxes.
4) Only claim tax credits that you truly qualify for. The IRS allows many different tax credits for taxpayers, but only if the taxpayer actually qualifies for the credit. Before you claim a home buyer credit or list a child care credit make sure that you meet the criteria to qualify.
5) Always report all income that you have, never try to hide earnings or income from the IRS. If you try to hide income from the agency this can bring serious trouble. It may be tempting to fail to report cash payments, tips, and other types of income in the belief that the IRS will not catch you but this should be avoided. If the IRS suspects that you have concealed income the audit process will be especially painful and drawn out.
6) Don’t claim a dependent that someone else can claim. If you do this then you can expect the IRS to give your return more attention and scrutiny.
7) Business losses cause suspicion at the IRS, so never claim any business deductions that are not legitimate or that you ca not back up with proof. This is really true if the business has been operating for more than a year. If you have real business deductions and losses then you should claim these, but be prepared for the extra attention and higher audit risk that this involves.
If you are a taxpayer then the last thing you want to find in your mailbox is a letter from the IRS. This government agency has a well earned reputation, and the IRS uses fear and intimidation to get taxpayers to comply without question regardless of what the circumstances are. The IRS has found that bullying and aggressive intimidation tactics can be highly effective so the agency continues to use these methods and even push the legal boundaries in many cases.
The IRS maintains their reputation and tries to strike fear in the hearts of taxpayers with the goal of keeping taxpayers honest and preventing tax fraud. If the taxpayer believes that the IRS is all powerful then individuals and businesses are far less likely to try and fudge or fail to report income. The IRS wants taxpayers to to know that this agency has many powers and that they will use these powers against taxpayers without hesitation.
Intimidation is not the only tactic used by the IRS to ensure taxpayer honesty. IRS agents will hound any taxpayer who is unlucky enough to come to the attention of this agency. Most of the time the taxpayer gives in before they are ever visited by an IRS agent, the threatening letters and intimidating threats made over the phone are typically enough to scare a taxpayer into paying any amount claimed without question.
If you receive notice of a tax dispute from the IRS do not let this intimidate you. There are 3 things that you need to know as a taxpayer so that any IRS tax dispute is handled properly and you get the best possible outcome without all of the intimidation and bullying:
1) Having a qualified tax attorney on your side ill help you ensure that your rights are protected and defended. When you have a tax dispute with the IRS then it is crucial that you have a lawyer representing you who has experience dealing with the IRS. This professional will make sure that your legal rights are protected during the tax dispute and will prevent the IRS from trying to intimidate or bully you. The tax attorney will deal with the IRS for you, giving you much needed peace of mind and letting you get back to a normal life once more.
2) Every taxpayer has specific legal rights, and the IRS must acknowledge and respect your rights during any tax controversy. IRS agents will not tell you what your rights are, but a qualified tax attorney will. This government agency will not make your life easy, and they may try to violate your rights if you are not aware of the them. The lawyer that you choose to represent you with the IRS can explain all of your rights and make sure that they are well protected.
3) The IRS does have the power to seize your property, but only after they have followed certain procedures and you have been provided due process. Most taxpayers fear that the government agency will try to seize vehicles, homes, bank account balances, and other property. This is a real possibility if you have a tax dispute with the IRS, but only after due process has been followed. Taxpayers are given plenty of time to come to an agreement and resolve the tax dispute before the IRS before any seizure is ordered. An IRS notice should not cause you to panic, but you should take steps to resolve this issue as soon as possible.
With the New Year holidays coming up you may be hoping for an IRS tax dispute resolution, or that you never have to deal with this agency again in the coming year if you have had past controversy with the IRS. We want to assist you in your goal in staying in the good with the IRS and avoiding any tax disputes.
Listed below are 6 steps which can help you avoid problems with the IRS, and keep any damage as small as possible if you do find yourself involved in a controversy with this agency:
1) Avoid panicking. No matter what your tax dispute with the IRS you are facing, it is panicking will not help your situation any. If you receive notice that the IRS has a tax dispute against you stay calm and consider your situation. You may start to feel overwhelmed or unsure of what steps you need to take. Consult with a qualified tax attorney as soon as possible.
2) You should never try to take on the IRS without professional legal representation. If you have a dispute with the IRS over your taxes a qualified tax attorney can help you resolve any issues without aggressive collection tactics. The lawyer will ensure that you are treated fairly and that the IRS follows the laws. This will help you get the best possible outcome from the tax dispute. This government agency has many attorneys, you should have a qualified and experienced tax attorney on your side as well.
3) Don’t bury your head in the sand when it comes to IRS communications and problems. The IRS will not leave you alone until any tax dispute is resolved, and when you ignore this agency things will only go down hill and you could end up facing asset seizure, wage garnishments, personal visits from an agent at your job or home, and other aggressive IRS collection methods.
4) If you are a business owner make sure you retain copies of all your business records. Careful record keeping is crucial for any business owner, and you need to make sure that you document all of the business income and earnings for each year. If there is any tax dispute with the IRS then this agency will ask for documentation to verify these factors. If you can not produce the requested records and information then the IRS may disallow the related business expenses.
5) Always keep documentation for any deductions that you claim on your personal and business tax returns. The IRS is big on documentation, and they are always suspicious if you can not provide it. Any charitable donation deductions, use of your vehicle for business purposes, and any other personal or business deductions should have supporting documentation to back up all of the deductions that you claim.
6) Organization is very important when it comes to your tax forms and documents. Always keep all supporting documentation for tax deductions and other aspects of your tax return completely accessible and very well organized. Spend a couple of hours at the beginning of the year creating a well organized system for filing and storing any tax documents and supporting evidence of tax deductions, making it much easier to quickly locate them if there is an IRS tax dispute.
These 6 key steps can help you avoid any problems with the IRS. The Law Offices of Nick Nemeth is available if you need additional information or an experienced tax attorney who will work with you to resolve any IRS tax dispute.
One of the things that most taxpayers are terrified of is to get into a tax dispute with the IRS. Anyone who has ever been in this position understands why the IRS is the most dreaded of the government agencies, and anyone who has never tangled with the IRS is extremely lucky. You do not want to catch the notice of the IRS if you can help it!
The new year is right around the corner, and our law offices wish that no Texas taxpayer would have their lives made miserable by the IRS in the coming year but that is not going to happen. Unfortunately the IRS will target many taxpayers in this state and start a tax dispute with thousands of Texas residents. This can be very traumatic, and if you are involved in an IRS tax dispute or controversy there are 5 top things that you need to remember:
1) Keep panic out of the equation. When you receive a communication from the IRS the first thing that many people do is start to panic, and you need to avoid panic and keep your wits about you. The IRS is a very intimidating agency that no one wants to deal with, whether you are being contacted by mail, by phone, or in person. The IRS relies on fear and intimidation tactics in order to get taxpayers to comply immediately. Remember that there are laws that the IRS MUST follow, and the IRS will not advertise this fact but you do have rights as a taxpayer in the USA.
2) Get all of your records and documentation in order. The IRS insists on documentation if they question any aspect of your tax returns, and you need to have your records in order so that you can document your case to the agency. You should have an experienced tax attorney work with you so that you avoid the most common mistakes and resolve your case in the best possible way.
3) Look at the communication from the IRS closely. After you have successfully pushed the initial panic away look at the letter or notice that you have received from the IRS, and read the entire correspondence carefully. What is the agency asking you to do or what do they want you to provide to them? Make sure you understand what is needed and when you are expected to return it by. Pay close attention to the deadline given by the IRS, if you do not provide the information or documentation required by the deadline this will only make things worse. Before you do anything it is essential that you know what you are supposed to do and when.
4) Never send the IRS anything except for the specific information and documentation that they have requested from you. When you volunteer extra information you may think that you are being honest but you are actually complicating matters. Giving the IRS more than they want will only open up other possible areas of scrutiny for the agency. The qualified tax attorney that you have chosen will explain this further.
5) Always get a qualified and experienced tax lawyer, never try to negotiate or deal with the IRS on your own. Many people feel that they did nothing wrong so there is no reason to involve a legal professional, but this is a huge mistake. The IRS does not always play fair and will not defend your rights as a taxpayer, only a tax attorney will.
Small businesses form the background of this country’s economy. So, you would think that the government would go out of their way to assist small business owners, especially given the current economic struggles we are facing.
Unfortunately, it sometimes seems like the government is doing exactly the opposite – at least as far as the IRS is concerned. I couldn’t even count the number of small business owners that I have worked with over the years, who have come to me frustrated and frightened that the IRS is going to ruin everything they’ve worked for.
If you own a small business and you’re having IRS problems, we can help you!
If you’re not having trouble with the IRS, we want to help you keep it that way. Below are four principles which will help keep you out of hot water with the agency:
1) Keep your personal bank accounts separate from your business accounts. Always keep your business transactions separate from personal transactions – even if you’re a “one man shop” and all of the money is yours to begin with. Separate banking and accounting allows you to paint a clear financial picture for the IRS – which ultimately saves you money.
2) Stay on top of payroll tax obligations. Many business owners find themselves in hot water because they can’t meet their payroll tax liabilities. Don’t “put off” these withholdings, because if you can’t afford it now, chances are you won’t be able to afford it later, either.
3) Document your expenses. Claiming expenses on your tax return? You’d better be able to document them or the IRS may disallow them. Organize and save receipts and invoices.
4) Plan ahead for “tax day.” Many business owners are shocked to discover just how much money they owe to the IRS on tax day. And in many cases, they can’t pay because they haven’t been saving the money or making estimated payments. Your accountant should be able to help you project your tax bill—plan ahead so that you don’t find yourself unable to pay.
Questions or comments? Do you need help solving an IRS tax problem in your business? Give us a call today!
If you are in the midst of an IRS dispute, you may feel that your life is coming apart at the seams. It sounds dramatic to those who have never been on the wrong side of an IRS tax dispute, but we have personally seen the stress and misery that the IRS inflicts on taxpayers and business owners across the country.
The truth is that an IRS controversy is far worse than other situations, such as credit card debt, because of the way the IRS approaches the debt. Sure, credit card debt is no picnic. But when is the last time that a Visa or MasterCard agent showed up at your door threatening to kick you out of your house, seize your car, or put a lien on your bank account?
The IRS is a brutal collections agency, and they are very good at intimidating and threatening taxpayers until they get what they want. They know that most taxpayers aren’t thoroughly versed in the latest changes to the tax code, and they use the fear that most people have of the IRS as a tool.
But there is good news. You aren’t powerless against the IRS, even if they want you to believe that you are. If you’re currently facing an IRS dispute, don’t panic. Instead get out your pencil and take notes, because there are four things that you need to know.
1) Ignoring the problem will only make it worse. Many taxpayers initially try to take the “ostrich” approach—they bury their heads in the sand and think that if they can’t see the problem, it will cease to exist. But throwing that letter from the IRS in the trash, or letting it gather dust in a file somewhere, will only make things worse. Yes, it’s stressful. Yes, you don’t want to deal with it. But ignoring the problem will make things significantly worse, so don’t do it.
2) The IRS won’t stop until they get what they want. If you are hoping for compassion or mercy from the IRS, you are going to be disappointed. Quite frankly, the agency doesn’t care how financially desperate you are, or how much stress you are facing. Their agents have one goal: to collect every last penny that they say you owe. And they won’t stop until they’re done.
3) A tax attorney can force the IRS to play by the rules. A tax attorney can stand up to the IRS and force them to play by the rules. The IRS relies on fear and intimidation to get their way, but a tax attorney can see through their efforts and work towards a fair settlement for you.
4) We will deal with the IRS so that you don’t have to! Perhaps the best news of all is that we can take on the IRS so that you don’t have to deal with them! Our team will correspond with the IRS and work tirelessly on your behalf to secure the best possible resolution of your tax debt.
Questions or comments? Do you need help resolving an IRS dispute? Please contact us today to learn more!
In Washington D.C, it’s not unheard of for the D.C. Office of Tax and Revenue to make the mistake of counting property owners as delinquent even after they paid their taxes. This can result in liens on their properties which are mistakenly sold to investors. These unfortunate and often stressful mistakes make it so people have to fight for their homes in some cases for years. Often times, the owners are elderly and poor, making it even more difficult to fight for their home and clear their name.
In one instance, according to The Washington Post, a 48-year old math teacher paid his taxes in 2007, but the tax office took his $1,400 payment and applied it to the wrong house, crediting a completely different taxpayer. Fortunately, the mistake was found with enough time to save his home.
This was not the case for a ninety-five year old that lost her home due to a $44.79 tax debt even after paying her taxes. The office officials have claimed that they have taken steps to cut back on their errors, but have also blamed many of the canceled liens on property owners due to not paying their tax debt in time. Even if this is the case in some instances error rates have been at 21% over the last several years. Most find this to be unacceptable. To learn more about these types of errors read the full article here: http://www.washingtonpost.com/sf/investigative/2013/09/10/mistakes-put-homes-in-peril/
In a recent study, it was surprising to find that only 28% of couples were confident that either spouse could handle the finances alone if there was a death, divorce or accident that left one disabled. Most couples don’t like the idea of having to think about the possibility of something so unnerving, but it is important for both to have an understanding of the family finances on both sides. The Wall Street Journal article, “What Each Spouse Should Know About Finances,” gives a helpful list of tips so that each partner is able to manage their financial affairs alone if they have to.
Creating an inventory of assets is the first step to help you make informed decisions if something unexpected happens. Make a list of financial accounts, 401(k)s, and insurance policies-including where they are held along with a note of the beneficiary listed for each. It is also recommended to itemize physical assets including houses, cars or boats. Atypical assets are often forgotten-airline miles or valuable collectables, but these can become helpful forms of financial help if need be.
Having your assets organized and discussing options before something sudden happens will help prepare you to make smart decisions during difficult times. To find out more, read the full article: http://online.wsj.com/article/SB10001424127887323394504578609623238153836.html?mod=WSJ_Taxes_MoreHeadlines
At the Law Offices of Nick Nemeth, we believe in giving back to the community. Aside from helping our clients through difficult tax issues, I have made a commitment to the non-profit organization Esperanza International. Esperanza International has been working for almost thirty years to empower women in impoverished countries to start small businesses of their own.
Just as I have a passion for helping my clients get back on their feet, so is helping to free families from poverty. Through Esperanza-mothers who come in feeling hopeless-are given a new start. They are able to generate an income, get an education, and renew self-worth. Their knowledge and skills are then able to reverberate through their family and community, creating a ripple effect of a wonderful outcome.
I would like to invite you to contribute to this amazing cause by investing in the Bank of Esperanza Sponsorship. When you donate a gift of $4,500 or greater, you provide microfinance services in the Dominican Republic and Haiti, as well as Christian ministry. The sponsorship that you provide will let you invest in the loans of at least fifteen women and men. You are given access to the client management system and are able to directly see how your loans are being used and the amazing results they create.
Join me in the power of giving back. The experience on both sides is life changing. To donate or learn more visit my site at http://www.myirsteam.com/giving-back
For over 15 years I have had the privilege of helping people resolve their IRS tax issues. I strongly believe that the success we have at our law firm comes from our commitment to doing things the right way. Tax law is complicated and if you try to fight a case without truly understanding the ins and outs of the IRS, the outcome can be devastating.
Not only do I value having as much knowledge as possible when it comes to tax law, I also believe in treating every client and issue as a completely unique case. There is no exact formula for each problem, which means getting to know your financial history, concerns, and needs one-on-one. Taking the time to understand your IRS problems, and constantly staying on top of the ever-changing tax code, is essential to finding an agreement that satisfies everybody.
I want to keep the IRS as far away from you and your assets as possible until I find the most manageable and PERMANENT solution. My goal is to make sure you don’t make the same mistakes again and fall into the same trap in the following years. Often times, national tax relief companies will only fix the immediate problem. This creates a vicious cycle of unfiled taxes, debts, and eventually having to go back to the tax relief company. My hope is that after I solve your IRS problems we won’t have to see each other again, unless it’s just for a friendly hello.
Saving money for you is only one part of my dedication to each client. Giving someone peace of mind is what truly makes me happy. The IRS can be unrelenting. Too many people live in fear of the next knock on their door being someone with a badge and a levy notice. Let me and my team at the Law Office of Nick Nemeth help you. Call today for a free consultation so the weight of your tax problems can finally be lifted for good.
The Federal government reached new levels of dysfunction in recent weeks, culminating in a partial shutdown. While polling has shown that a majority of Americans are disgusted with both political parties and with the government in general, some taxpayers may have spotted a “silver lining” to the situation owing to the fact that the IRS has largely shut down as well.
Unfortunately, this silver lining turned out to be a mirage. Not only do taxpayers still owe money to the agency, but the IRS computer system is continuing to run, cranking out levies and liens at a frightening pace.
In fact Forbes recently reported that the IRS heavily relies on their automated computer system to perform much of the leg work related to “enforcement.” These computers produce millions of tax assessments, as well as liens and other penalties, year in and year out. Normally, human IRS agents are at least able to supervise the machines and potentially override them when the situation calls for it, but not during the shutdown.
The IRS computer system was responsible for more than one million liens placed on taxpayer property in 2012. That is one million families that were forced to face the very real possibility of losing their home or other personal property due to IRS collection efforts. It’s alarming to realize just how easy this process has become for the IRS – it doesn’t require much human effort or time in order to turn a taxpayer’s life upside down.
The IRS has long been known as an inflexible and often brutal collections agency, and for good reason! And while many taxpayers may have expected a break from the aggression during the government shutdown, the situation has actually gotten even worse.
If you’d like to learn more, or if you need help defending yourself, your business, or your family from IRS aggression, we are here to help. We will take on the IRS on your behalf, so that you can focus on living your life. Get in touch with us today!
There’s a famous analogy that a college chemistry professor used to teach his students about stress. If you hold out a glass of water for a few minutes, nothing will happen to you physically. If you hold the glass of water out for an hour though, it will undoubtedly become uncomfortable. Keep holding the glass of water for 24 hours and you would probably be in extreme pain. All the while though, the weight of the water never changes. Finally, the professor asks how you could avoid the pain and the class responds that you should put down the glass of water.
This same analogy can be used when dealing with the stress of the IRS. The glass of water represents your IRS problems and the level of discomfort depends on how long you carry the burden of unfiled or unpaid taxes. As soon as you make the decision to finally hire a tax attorney or speak with the IRS, the weight of financial stress can be lifted. While getting IRS help and solving tax problems isn’t easy, the problems won’t go away by ignoring them.
As an experienced tax attorney I understand the mixed feelings of fear, embarrassment, and frustration of having the IRS and tax problems looming over your head. There are many solutions to tax problems, but the first step is to take action quickly! Ignoring payments and notifications will only result in more penalties. The following tips can be applied to all IRS problems and will help guide you to a solution:
1. File your taxes – While this sounds simple, it can be one of the steps that is most difficult for people after holding on for so long. The longer you wait, the fewer legal options you may have for IRS help. Often, the IRS views not filing your taxes worse than not paying and can put you in trouble legally.
2. Hire a tax attorney – Hiring a tax attorney, such as myself, will alleviate a majority, if not all of the stress and questions you have about your situation. Every tax problem is different and trying to navigate through the situation by yourself can be very confusing. Avoid further penalties and fines by hiring a professional who knows how the system works.
3. Can you appeal? – It is a guaranteed legal right for all taxpayers to be able to appeal IRS actions. If you disagree with the IRS, you have the right to ask the IRS Appeals Office to review your case.
4. Request your tax file – Your IRS tax file is the starting point to determine how to best solve your IRS problems. You can access your tax records by simply requesting them. Again, it is best to have a tax attorney look at these with you in order to understand them to the fullest.
Taking these initial steps will help with getting the process started and hopefully begin to alleviate some of the stress. Put down the “glass” you’ve been holding out and find relief. Contact us today for a free consultation or request a free awareness guide, How to End IRS Problems Forever.
If you are experiencing IRS tax issues, the most important thing to realize is that YOU HAVE OPTIONS. Believe it or not, the IRS wants to work with you to ensure that your debt is paid. A payment installment agreement is worth considering.
Dealing directly with the IRS can be challenging. Make sure to work with an experienced attorney when negotiating with the IRS. For more information regarding payment installment agreements, visit: http://taxes.about.com/od/taxdebts/ht/Partial_Pay_IA.htm
If you’ve had your wages garnished, you are likely feeling overwhelmed, scared and embarrassed. In the midst of the chaos, stand firm and know that you still have rights. For example, did you realize that garnishment does not justify being fired by your employer?
If the IRS is garnishing your wages, it’s important to work with an experienced law firm. To read more on this topic, visit: https://newbiznews.jux.com/1049206
Running a small business involves keeping many moving parts functioning properly along the way. Some small business owners seek out strategic alliances with other professionals in hopes of trading services to save money and increase profits. While synergistic relationships offer many benefits, it’s important to make sure that all activities are legal. This can become an issue for individuals who barter, or exchange services, with others.
According to the IRS’s article “Four Things To Know About Bartering”:
In today’s economy, small business owners sometimes save money through bartering to get products or services they need. The IRS wants to remind small business owners that the fair market value of property or services received through barter is taxable income.
If this is an issue for your business, the Law Office of Nick Nemeth can help you resolve your IRS tax issue. For more information, read: http://www.myirsteam.com/blog/dont-let-irs-disputes-ruin-your-life-how-to-prepare-for-an-audit.php
If for any reason you’ve made an error on your tax return, the IRS can make your life a living torment. The IRS is known to be relentless in the process of an audit. The Law Office of Nick Nemeth is experienced with successfully resolving even the most challenging IRS cases. And, we look forward to working with you.
The best way to avoid an IRS audit is to ensure that your taxes are filed properly each year. Unfortunately, even the most well-intentioned taxpayer can make mistakes. If you’ve made an error, there are several IRS-recommended tips to correct such mistakes. Read full post:
You wouldn’t know it if you were unlucky enough to deal with an IRS audit or tax dispute in recent years, but the IRS has actually reduced the number of “enforcers” on their payroll over the past couple of years. That meant less audits and less intimidating tactics—although, again, if you were unfortunate enough to face an IRS dispute you wouldn’t have known the difference.
Now, it is possible that this recent trend is going to reverse itself, allowing the IRS to “beef up” by hiring more auditors moving forwards. Bloomberg reports on these recent trends, but notes that the Obama administration has increased a larger IRS budget for the upcoming year:
The IRS shed 8,000 full-time positions from 2010 to 2012 including 5,000 front-line enforcement workers. That represents a 14 percent reduction, according to the report from the Treasury Inspector General for Tax Administration.
House Republicans are proposing to cut the IRS budget by 24 percent for the fiscal year that starts Oct. 1. In seeking to make their case, they point to overspending on agency conferences and bonuses to IRS executives involved in the scrutiny of Tea Party groups seeking tax-exempt status.
“Our concern is where the next step is arbitrarily cutting the budget,” said Edward Karl, vice president for taxation at the American Institute of Certified Public Accountants in Washington. “Oversight is appropriate. Effective administration is appropriate. But so is full funding.”
The Obama administration proposed a $1 billion, or 9 percent, increase for the IRS for the coming fiscal year. Danny Werfel, the agency’s acting commissioner, is scheduled to testify today before a House Ways and Means subcommittee.
What would an increase in the IRS budget mean for you? Quite simply, more IRS agents means more audits, more threatening letters, and more unhappy taxpayers. If you have ever experienced an IRS audit, you know exactly what we mean. An audit is a stressful and time-consuming experience… and that’s the best case scenario. The worst-case scenario involves huge financial penalties, which may lead to bankruptcy, and can even include prison time. We have seen businesses closed and homes foreclosed on due to IRS disputes, and it’s heart breaking every time.
And now, the IRS wants to expand their reach. It remains to be seen what will happen, but we will certainly keep you posted.
In the meantime, should you be contacted by the IRS, we can’t stress enough how important it is that you don’t face the agency alone. The IRS relies on intimidation and fear in order to get their way—and unsuspecting taxpayers will quickly find themselves in hot water. Because the tax code is hopelessly complicated, it is almost impossible for a taxpayer today to understand their rights and take action to protect themselves. A tax attorney, on the other hand, is prepared with the experience and the information necessary to take on the IRS on your behalf.
If you would like to learn more, please get in touch with us today!
Contrary to popular belief, bankruptcy is generally not the result of frivolous finances and whacky scams on the part of the taxpayer. Most bankruptcy cases are a result of financial hardships like medical bills or other huge life changes such as the death of a loved-one, loss of a job, unexpected economic factors, or the end of a marriage. Unfortunately, these life changes usually take a huge emotional toll. In these situations, it’s nice to know that there is an experienced Dallas tax team that is ready to help you navigate the rough waters.
In the midst of a highly emotional financial storm, responsible people can find themselves on the wrong side of an IRS dispute. For many, the realization that they are over their heads financially is hard to comprehend and difficult to overcome. At the Law Offices of Nick Nemeth we focus on providing the right solutions to IRS tax problems. We understand that you didn’t intend to wake up one day with an catastrophic tax issue. And, we are here to help you get your life back on track.
Bankruptcy is a viable option for individuals who have experienced a huge decrease in their income, or a sizable increase in their debt. If you are in over your head financially, it’s better to find out, sooner than later, if bankruptcy is a viable option for you. The reason timing is so critical is that filing for bankruptcy can get creditors off your back, at least temporarily. It can also halt foreclosure proceedings. Ignoring the problem can result in garnishment. Being proactive is the best solution to this complicated problem. During a free consultation, Nick Nemeth’s team of experienced Dallas tax lawyers can determine if bankruptcy is an option for your situation.
As you may already know, there are two types of bankruptcy options. One is Chapter 7, which allows you to basically walk away debt-free. This is available to individuals who are in over their heads so much that a payment plan, of any type, is not viable. The other bankruptcy option is a Chapter 13, which allows an individual to work out a debt repayment plan that is to be settled within 3-5 years. When determining which route to take, it’s very important to work with a local tax attorney who knows the intricacies of Dallas tax law. The Law Office of Nick Nemeth can help by providing the best step-by-step process for your particular situation. We are here to assist you, when needed most.
We know that you want to fix your IRS problem. If bankruptcy is in your future, avoid the temptation to go it alone. Do research, ask questions, gather all your tax forms and paperwork. And, work with a seasoned team of Dallas tax attorneys. In the long run, hiring an attorney can improve your settlement terms, save you money, and ensure that you get the best outcome from your bankruptcy. At the Law Offices of Nick Nemeth, we are committed to providing timely resolution to levies, garnishments, seizures and other common problems associated with IRS tax debt. To learn if chapter 7 or chapter 13 bankruptcy is an option for your situation, contact our office today. Call us at 972-484-0TAX (0829) or visit our website today: http://www.myirsteam.com/
Thousands of taxpayers across the nation find themselves in trouble with the IRS every year – and many of them owe tens of thousands of dollars, or even more, to the IRS.
What’s more, many of these taxpayers have no idea how they’ll be able to pay this debt. This often leaves them feeling frustrated, stressed, and scared. If that’s your situation, you’re not alone. And we may have some good news for you.
The IRS has created a program, called an “Offer in Compromise”, which gives qualifying taxpayers the opportunity to settle their tax debt for less money than originally owed.
What’s an “Offer in Compromise”?
An Offer in Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer’s liability for a reduced amount. The IRS is required by Congress to settle or compromise federal tax liabilities by accepting less than full payment if certain conditions are met. The compromise process is available to provide taxpayers with a fresh start, hopefully making it possible for them to comply with tax law going forwards.
Submitting Your Offer in Compromise is a Complex Process
Unfortunately, submitting an Offer in Compromise is a complicated process. You cannot simply call the IRS and offer a certain amount of money. In-depth financial disclosures must be made to the IRS and the process involves completing several IRS forms, gathering and organizing necessary financial records, complying with the IRS tax regulations and ultimately filing the “offer” for review with the IRS.
Simple Mistakes in Your Offer in Compromise Can Lead to Rejection
The final decision as to whether an Offer in Compromise is accepted ultimately rests with the IRS but, if accepted, the tax debt is effectively settled for a significantly reduced amount. Unfortunately, many taxpayers who file an IRS “offer” have it returned by the IRS for “technical” reasons, like an improperly completed form. This means that the “offer” never makes it to a point of final IRS review. That’s why it’s important to have a qualified tax attorney on your team, to make sure that all of the details are properly managed and your offer has the best possible chance of being accepted.
If you’d like to learn more about this process, and discuss whether it is right for your specific situation, please get in touch with us today!
Not even in death do you have the option to not pay your taxes. Simply put-there is no miraculous loophole to get out of paying back taxes. However, there are five ways to pay off your taxes and liberate yourself from the harassment you feel from the IRS.
1) Paying monthly on the amount owed will reduce the debt much quicker than most people think.
2) Partial payment installments is another option. This is a long-term commitment to pay your taxes often at a reduced rate.
3) Another option to consider is an “Offer In Compromise.” This requires making payments either in a lump sum or short-term payment plan. There are some incentives with this payment as it can resolve tax debt for less than what was originally owed.
4) Through an agreement with the IRS you may be eligible for a year of bereavement from paying taxes. “Not Collectable At This Time” puts payments on hold and the IRS does not attempt to collect the debt during this time.
5) Strict rules apply to this last option and should be taken seriously. If you consider filing Chapter 7 or Chapter 13 bankruptcy you may be able to discharge tax debt. Asking a tax professional about this option is necessary so you are informed and supported while making this important decision.
To learn more about these payment options read here: http://taxes.about.com/od/taxdebts/a/tax_debt.htm
If you have never been forced to deal with the IRS, trust us: you want to keep it that way! And if you have experienced an IRS dispute or audit in the past, the last thing you want to do is relive that nightmare.
Trust us, we understand!
That’s why today we are going to highlight seven ways to attract IRS attention on yourself or your business. Obviously, you’ll want to avoid these mistakes unless the idea of a thorough and often costly IRS audit appeals to you!
1) Conceal offshore assets. Many people have a misconception that it is illegal to have overseas assets. It’s not illegal, in most cases. But it IS illegal to conceal those assets while filing your tax return. The IRS works hard to gather information from foreign entities about American investors, and there’s a very good chance that they’ll find out about your foreign assets. If you didn’t report them, you can count on hearing from an IRS agent very soon.
2) Underreport your income. It’s tempting to underreport your income and save some money on your taxes. But the IRS has an extensive computer system which specializes in tracking down and identifying any discrepancies. Long story short: Honesty is the best policy, even if it costs you money in the short term.
3) Claim excessive charitable deductions. There’s nothing wrong with giving extravagantly to charity. In fact, it’s great to do so. But if you do make sizable donations, you’d better be ready to document them. If you claim a level of charitable donations that doesn’t seem to make sense when compared with your income level, the IRS will want an explanation.
4) Use too many “round numbers” while claiming deductions. Round numbers make everyone’s life easier, but the IRS knows that in the “real world” round numbers are relatively rare. So if your tax return is packed with round numbers, the agency may suspect that you don’t have documentation and therefore are just estimating. And that’s a red flag for every auditor.
5) Make mistakes while filing your return. Simple errors, like arithmetic mistakes or even forgetting to sign your return are a good way to attract extra attention. And that’s the last thing you want – so double check your work before filing!
6) File late… or not at all. Some taxpayers are under the impression that if they don’t file a return at all, they’ll somehow slip through the system. This is most definitely not the case. Your best chance of avoiding IRS trouble is to file your return on time!
7) Regularly claiming a home-based business loss. If you are claiming a home-business loss year after year, the IRS is going to have questions for you. If this is legitimately the case, you’ll need to be prepared to prove that you’re actually trying to make a profit. Again, honesty is the best policy – don’t claim a business loss if it’s not a legitimate business loss!
Questions or comments? Give us a call today to learn more!
Many people are confused about why they owe the IRS and how – in some situations – it feels like the problems came overnight with no warning. Did you know the best way to stay out of tax trouble is to simply file your taxes? Protect yourself by following a few steps during the year so when it is time to file your taxes you are prepared.
● Try to be organized with receipts and tax documents. Keep them in a safe place. Use an organizer for receipts. If you find that you do not have the necessary W-2 or other documents you can request them from the IRS for free.
● You may decide to file your taxes yourself or with the help of a tax professional. It is important to know that if you owe back taxes, you can use software to prepare your taxes however, you cannot file your back taxes electronically. You may even be entitled to a return but you will not know until you complete the necessary tax forms and file them.
● In many instances late filers actually get a return. If you are eligible for a return pay close attention to the amount and if it will be applied to past tax years debt.
● If you are self-employed or if you claim more dependents that will create tax debt at the end of the year plan to pay if you owe. You can pay monthly, quarterly or in a lump sum.
It is true that these steps may take a little patience on your part. Planning ahead and staying organized is the best way to stay out of tax trouble and owing the IRS. There are time limits for receiving a refund. To avoid penalties and tax liabilities file your taxes on time! One last thing to remember-seek the advice of a tax professional when doubt. To see more information and steps to file your current and back taxes visit this link http://taxes.about.com/od/taxtrouble/a/back_taxes.htm
There are many ways to handle problems with the IRS. You can choose to handle the issues yourself, which may create more problems along the way. When you are not informed, and you do not have the tools or “behind the scenes” knowledge it takes to deal with skilled IRS agents you could be making matters worse. You could actually be helping the IRS by giving them information you are not required to give. Don’t hesitate to stop talking to the IRS until you have an attorney who can do it the right way.
When you do choose an attorney to help you with IRS issues make certain they are informed and have the experience you deserve on your side. Many tax resolution specialists claim to have the knowledge and often give open promises for which they cannot deliver. We guarantee to find tax resolutions for you. We will speak to the IRS on your behalf. At the law office of Nick Nemeth we believe in doing things the right way from beginning to end. Call us for your free, confidential consultation at (972) 484-0TAX (0829). We also offer a free tax analysis and a free special report. End your tax problems forever! Find out how http://www.myirsteam.com/our-firm/our-staff
Running a business is difficult – particularly a small business. If you are like many of our small business clients, you find yourself wearing numerous hats every day. From marketing director to accountant to HR director, you do it all.
And one thing you can’t afford to waste your time on is the IRS. Unfortunately, thousands of businesses across the country find themselves facing IRS trouble each and every year. In order to help you avoid this predicament, here are five tips to keep in mind
1) Separate business and personal funds. It sounds obvious, but you would be surprised how many business owners mix up their business funds with their personal funds. This leads to a giant nightmare in the event of an IRS audit. It’s critical that you maintain separate bank accounts and credit cards for your business and your personal expenditures.
2) Document expenses. Should your business be audited, the IRS is almost always going to ask for documentation of your expenses. Don’t have any? Then the IRS won’t consider your deductions valid. Document your expenses, even though it can be tedious!
3) Make estimated payments throughout the year if applicable. One way to avoid the shock of a huge tax bill on April 15 is to make estimated payments throughout the year. In many cases, you will be penalized if you don’t do this. Making estimated payments will make your final tax bill much more affordable.
4) Don’t conceal income. It’s very tempting for a business owner to conceal income from the IRS. But this is a bad road to go down. Should you be caught, you’re going to face serious consequences. And if you find yourself in a position to sell your business, the income listed on your tax return will be important in establishing the value of the business. So don’t short-change yourself!
5) If you do face an audit or IRS controversy, don’t “go it alone.” Finally, if you do find yourself in trouble with the IRS, hire a qualified tax attorney to assist. The IRS loves to use intimidation in order to get their way, but a lawyer with an understanding of tax law will ensure that the agency plays by the rules.
Questions or comments? Get in touch with us today to learn more!
Your concerns regarding IRS tax issues are justifiable. The IRS has tremendous power that can threaten your livelihood and ability to care for yourself, your family, and your business. You may be challenged with unfiled tax returns, tax liens, bank levies and wage levies. All of which can feel paralyzing. Without legal help, the IRS-governmental entity-can and will garnish wages and seize assets when there is unresolved tax debt.
It is important to have an attorney with a no nonsense-straightforward approach that can keep the IRS away from you, your money, and your assets. Your attorney can negotiate a suitable solution for your tax issues. Once there is an agreement-setting goals for the future should be a priority so that you never find yourself in this situation again.
Nick Nemeth is proud to serve the Dallas/Fort Worth area -the community he lives in. He will keep the IRS away from you and your assets. He will negotiate with the IRS to help resolve your current tax issues. Nick Nemeth has over 15 years of experience dealing with the IRS- his focus is to improve taxpayers’ financial well-being. He is a member of the State Bar of Texas and admitted to practice before the United States Tax Court.
If you or someone you know is experiencing stress and fear dealing with the IRS we can help! We understand no two situations are the same. We understand there is a right way to do things. We will begin finding your permanent solution right away. Contact us! http://www.myirsteam.com/our-firm/our-staff
Divorce can be a difficult-life changing-event in our lives that impacts us emotionally and financially. The process of divorce is usually fueled with emotion making the dissolution of marriage a life-changing event. Imagine going through this emotional grieving process along with the Internal Revenue Service expecting payments on income that you were not aware of. Unfortunately some spouses do have to go through the intense process of divorce and are faced with the IRS demanding payments. That is why there is a benefit known as “Innocent Spouse Relief.” This may be the one “get out of jail” card you will ever get.
In the past there were many mitigating factors that applied to this benefit. One of them being the amount of time you had to apply for Innocent Spouse Relief. There has been a two-year window of opportunity to claim this benefit however; the IRS recently eliminated the two-year time limit, which will extend help to more innocent spouses.
There are specific requirements that apply to certain relief requests. An individual must meet one of the three criteria to qualify for Innocent Spouse Relief.
● “Your spouse reported erroneous items, creating an understated tax.”
● “You didn’t know-or have any reason to know-of the understated tax.”
● “Holding you accountable for the taxes (and penalties/interest) would be unfair.”
This information was obtained from http://www.irs.gov/Individuals/New-Rule-for-Innocent-Spouse-Relief “
A few other guidelines to consider when applying for Innocent Spouse Relief include:
There are also conditions that must be met to qualify for the Innocent Spouse Relief:
Finally, upon filing the Innocent Spouse Claim, the information will be verified by the IRS. You will be required to validate your story and information. During this process you should seriously consider having an experienced tax attorney to help guide you through the process, help you organize and prepare your financial documentation, and to communicate with the IRS on your behalf.
As you can see this is an extremely complicated process. If Innocent Spouse Relief is approved you may not have to pay the taxes you owe or the interest and penalties related to your spouse (former spouse). Also, due to the nature of this type of request, your personal information (current address, location, phone numbers) is confidential to the IRS so that your privacy and safety are considered and respected.
Divorce, manipulated-understated taxes by your former spouse can be an overwhelming process. If you or someone you know is dealing with a situation like this it is important to have support and legal representation as you proceed. We are here to help you! Contact us at (972) 484-0TAX (0829). Or visit our website for more information. http://www.myirsteam.com/areas-of-practice/spouse-tax-relief
One thing that no taxpayer ever wants to experience is receiving a letter from the IRS in their mailbox, and then opening it to see that they’ve been selected for an audit… or worse.
An IRS dispute is incredibly stressful. And unfortunately, the feeling of panic that most taxpayers experience can cloud their minds and keep them from handling the dispute in the best possible manner.
While we certainly hope that you never face an IRS dispute, if you do, we want you to be prepared. So today we are going to cover seven key points to remember if you should find yourself stuck in a dispute with the IRS.
You can’t ignore the issue. The first instinct many taxpayers have upon being notified of an IRS audit or a dispute is simply to hope that the problem goes away on its own. They are already stressed and busy, and the last thing they want to think about is an IRS dispute. But this strategy has a 100% failure rate. Ignoring the issue only makes matters worse.
Documentation is critical. In most disputes, the ability to document the claims you have made in your tax returns is critical. Taking the time to locate and organize your records will make things easier in the future.
The tax code grows more complex every year. Unfortunately, the tax code is so complex that even the most brilliant minds out there usually can’t make sense of the law without years of study. This is a significant problem, as you will see, because…
The IRS won’t defend your rights. You do have rights under the law. But because the tax code is so complex, it can be hard to figure out what they are. And one thing you can be sure of is that the IRS will not protect your rights. In fact, IRS agents love to deal directly with taxpayers who have no idea what their rights are—because it makes it easier for the agents to collect.
The IRS will threaten and intimidate. The IRS may be a government agency, but that doesn’t mean that they won’t stoop to the level of using fear and intimidation to get their way. They’ll start with threatening letters. Next may come phone calls or even a visit to your home. They’ll threaten to take your home, your cars, or your business. They’ll do their best to scare you into compliance.
The IRS will back up their threats. However, there is a difference between threats and idle threats. And the threats the IRS makes are not idle. They really will seize your home, your car, or your business should they deem it necessary.
You shouldn’t face the IRS alone. For all the reasons we’ve just discussed, it is a mistake to take on the IRS by yourself. You need a qualified tax attorney who will fight the IRS on your behalf. The IRS won’t respect your rights—so partner with a lawyer who will force them to.
Questions or comments? Do you need help resolving your IRS dispute? Please contact us today!
If you are considering starting a business or if you recently have, it’s important to be aware of your tax responsibilities. The first question is what type of business should you start? Sole proprietor, C-Corp, LLC, S-Corp, partnership? Each type entails different tax laws. Next, you should know there are different types of taxes in business. Self-employment tax, employment tax, income tax and excise tax. It is important to know which of these will affect you. Next, your new business needs a tax id number or EIN (employer identification number) in order to open a checking account and to file taxes. This can be accomplished easily online through the IRS. (www.irs.gov)
As your business opens its doors, it is important to keep records of your expenses and incoming payments. Also track your mileage and travel expenses if they pertain to your business- these can be used as itemized deductions. Detailed records will make preparing your tax return easier and help with creating your financial statements. It is also important to budget estimated tax payments so you aren’t caught off guard come tax day. Estimated tax payments allow you to make payments to the IRS monthly or quarterly.
Lastly, each business must decide and adhere to a certain accounting method. Each method has its own rules. Two of the most common accounting methods are cash and accrual. To learn more about these and other tax implications of starting a business, see this informative article on Investopedia: http://www.investopedia.com/university/small-business/understanding-small-business-taxes.asp
IRS tax disputes can have severe consequences, as many of you know. In addition to severe penalties and interest charges, taxpayers can even face jail time in certain circumstances. Singer Lauryn Hill found out the hard way that the IRS takes their collection efforts very seriously.
According to the USA Today:
Grammy-winning singer Lauryn Hill began serving a three-month prison sentence on Monday for failing to pay about $1 million in taxes over the past decade.
Hill, who started singing with the Fugees as a teenager in the 1990s before releasing her multiplatinum 1998 album The Miseducation of Lauryn Hill, pleaded guilty last year in New Jersey to failing to pay taxes on more than $1.8 million earned from 2005 to 2007. Her sentencing also took into account unpaid state and federal taxes in 2008 and 2009 that brought the total earnings to about $2.3 million.
First of all, no matter who you are, don’t think that you can evade the IRS. The agency employees thousands and thousands of revenue agents who spend all of their time tracking down taxpayers—and sooner or later, they are going to find you.
Secondly, if you are engaged in an IRS dispute, don’t kid yourself into believing that it will resolve itself. I understand—you’re busy, you’re stressed, and the last thing you want to do is worry about an IRS dispute. But ignoring the problem will only make it worse. If you’ve been selected for an audit or are engaged in a dispute, you must address the situation, as unpleasant as that may sound!
Finally, if you’re involved in an IRS dispute, seek help from a qualified tax attorney. Many taxpayers elect to represent themselves to the IRS—a decision that often leads to disaster. Our tax code is so complex that unless you have spent years studying the law, there is no way that you can properly understand your rights. And unfortunately, the IRS won’t protect your rights. It is your job to demand them—and that is why you need an attorney who thoroughly understands the law on your team!
Don’t try to out-run the IRS—because as Lauryn Hill found out, eventually you will pay the price. Contact us today if you’d like to learn more!
If you and your spouse work full-time and utilize daycare or an in-home caretaker during the summer months, I have good news for you. Your childcare expenses may qualify for a tax credit. In fact, if you incur child care expenses anytime during the year, you may be eligible for the tax credit.
In order to qualify for the tax credit you must have earned income from either wages or self-employment. If married filing jointly, your spouse must also have earned income. If your spouse is a full-time student or unable to care for themselves due to mental or physical issues, you can still qualify. The child(ren) receiving childcare for must be under 12 years old and must be claimed as dependent(s). The childcare expense can qualify for either in-home care or a daycare facility. Please note that overnight camps or summer tutoring do not qualify. If you pay other members of your family to babysit, this does not qualify. Keep your receipts and records to document this expense.
If you have tax questions or tax problems call us today at 972-484-0829 and see http://www.myirsteam.com/
Sometimes I hear of someone who decides to take on the IRS on their own. Maybe they haven’t filed for a few years and now the IRS is hunting them down. This person may try to deal with the IRS and figure out for themselves how to handle the situation. In reality this can be a dangerous method. The tax law is so complex and constantly changing that it is difficult for someone to know what their options are and how to handle them correctly. One wrong step and you could end up in deeper trouble than you already are. One wrong word and the IRS can use it against you.
In situations like these it is best to work with someone who knows how to do the right thing. What is right for your friend who faced a similar problem is not necessarily the best option for you. This issue you are facing is probably new for you. What are you going to do?
I work in this industry because I love getting things done the right way, especially complex problem like IRS and tax issues. With over 15 years of experience and thousands of successful outcomes, I am an expert in this area. I can guide you. I can make sure you get the best result from a difficult situation. Do not go it alone. Serious tax problems need a skilled attorney.
At the Law Offices of Nick Nemeth, PLLC there are systems in place to handle even the most difficult tax cases. We find the best course of action to get you to your goals and ensure that everything is done correctly. From dealing with the IRS on your behalf to developing manageable solutions, we provide competent, dependable tax resolution for our clients that allow them to move on with their lives. More details here: http://www.myirsteam.com/areas-of-practice
Imagine this scenario. You send in your tax return, excited for your refund to arrive. Instead the IRS kicks your return back and tells you a refund has already been claimed under your name and social security number. You’ve just been victimized by the latest form of identity theft. Dishonest people get your information and file a false tax return and claim a refund from the IRS. If this happens it is important to act quickly. You need to file a report with the local police or sheriff and present the report to the IRS along with a paper tax return. (You may not e-file in this situation.)
Another identity theft scam is receiving an email from the IRS. The IRS NEVER sends emails. If you get an email from someone appearing to be the IRS, DO NOT open it. This is a scam and one way that identity thieves try to get your personal information. Be aware that the IRS can call you and they will if you haven’t filed or paid your tax returns. In some cases a revenue officer may come to your door, but they will never email. If you get an email that is posing as the IRS you should forward it to firstname.lastname@example.org so they can take steps to resolve the problem.
The identity theft problem has skyrocketed as many people have switched to filing electronically. Should you choose to e-file your taxes next year there are a few preventative steps you can take to decrease the odds of identity theft. Do not use a public computer to file, and do not use a public network either. Always shred or burn your old tax records that you no longer need. (You don’t need to keep paperwork older than seven years.) And never open an IRS email as discussed above. If you are a victim of tax identity theft or if you have issues with the IRS please call my office today at 972-484-0829. Learn more about what we do: http://www.myirsteam.com/our-firm/dallas-tax-attorneys
April 15th has come and gone. Before you know it will be time to start pulling together tax documents for 2013. But what if you still have not filed or paid your taxes from last year or a previous year? The best action you can take is to file as soon as possible. Interest and penalties are adding up, causing your tax burden to grow month by month. The longer you put off paying the more these penalties accrue against you. Not to mention that failing to file a tax return is a felony. In other words you could end up in jail in a worst-case scenario.
What is the penalty?
The penalty for filing late is approximately 5% of the unpaid taxes you owe for each month (or part of the month) the tax return is late. This percentage can go up to 25%. For example, if you owe $10,000 your first penalty for the month is $500. But there’s more. There is also a penalty for failing to pay. This penalty is one half of one percent of the unpaid taxes. Similar to the failure to file penalty, this penalty cannot exceed 25% of the net amount of taxes due. Most of my clients are shocked when they learn about the severity of these penalties.
What is an extension?
A lot of people think that by filing an extension with the IRS it allows them more time to pay their tax bill. This is false. An extension merely affords you more time to file your return. If you think you’ll owe taxes that amount is still due April 15th. If you are going to owe money you need to send an estimated tax payment in with the extension. For instance if you think you are going to owe $10,000, it was still due April 15th. The extension deadline to file is October 15th. The extension to pay is….no extension.
What if I haven’t filed with the IRS for a couple years?
The first priority is to get you caught up on your filings. Once we know the total amount you owe including interest and penalties, I may be able to negotiate with the IRS and get you set up with a payment plan. You may qualify for an Offer In Compromise in which the IRS agrees to settle for an amount less than what you owe. I handle those negotiations with the IRS for you. It is best for a tax professional to handle these situations because I know how to talk to the IRS. The taxpayer may say things that are not in their best interest and could be used against them.
If you haven’t filed, sometimes the IRS will file a tax return on your behalf. This option is not in your best interest either. They are trying to get you into compliance with the tax code, but usually you end up owing much more than if you filed on your own. The IRS doesn’t itemize any deductions and of course they use the highest possible tax rate. By letting the IRS file for you you’re just hurting yourself.
On the IRS Watch List
If you haven’t filed in a while the IRS will probably send you a notice. What you do with this notice is very important. If you fail to respond to it, the notices will start arriving more often and they’ll start getting nastier. If you continue to do nothing you will get a notice that warns you that a levy will be placed on your bank account or your wages because you haven’t paid any attention to previous notices. If it gets to the point where the IRS is threatening to levy bank accounts and wages, they will be quite aggressive and fairly difficult to deal with. They have already decided you are not willing to cooperate.
So Far, So Good
If you are in good standing with the IRS or at least working towards getting into compliance, it is wise to begin preparing for 2013 tax time. Start by checking your withholding. Adjust the withholding to have more taxes taken out of your paycheck if you are employed. If you are self-employed it is best to budget estimated tax payments. Set the money aside throughout the year. It is difficult to part with this money when you run a small business, but you will be much happier and more prepared come April 15th if you do. Also it is helpful to keep detailed records, mileage logs, charity receipts, etc. If you get audited you will need to produce detailed records.
I am here to help you with your tax problems whether you are late in filing, paying late, receiving threats from the IRS, or facing an audit. I can help you get into compliance and plan for a better future that is free of IRS problems. Call today and let’s begin working toward resolution together. Call 972-484-0829 or online at http://www.myirsteam.com/contact-us
In the wake of recent IRS scandals, there are thousands of taxpayers across the United States who are thinking to themselves that “it’s about time these abusive practices were publicized!”
You see, while it took revelations of improper IRS targeting of conservative political groups to attract the glare of media spotlights, this type of IRS bullying is nothing new. The fact is that the IRS relies on bullying and intimidation to collect from taxpayers, and this has been the case for decades. Here are seven lessons relating to the IRS that have been made clear in recent years:
1) IRS disputes are expensive. It’s not easy to go toe to toe with the IRS. But the results of these battles can be even worse, as taxpayers can find themselves owing enormous sums of money to the agency after penalties and interest accumulate.
2) IRS disputes are stressful. As the victims of improper IRS scrutiny will attest, entering into a dispute with the agency is highly stressful. The IRS is always quick to point out that prison time and massive fines await if you make a mistake.
3) The IRS doesn’t always play by the rules. One of the “saving graces” of the IRS has been, for many years, the perception of the public that the IRS operates fairly. Few people like the IRS, but as long as it operates fairly most Americans understand that it’s necessary to keep the country running. Recent revelations have proven that this isn’t always the case any longer!
4) IRS agents will do whatever it takes to extract revenue from taxpayers. IRS agents thrive on intimidation. From scary letters to threatening visits, the IRS loves to apply pressure to taxpayers in order to compel them to give the agency what it wants. And when the agency has the weight of the law behind it, this pressure can be very frightening indeed.
5) IRS agents make more errors than you might expect. You would expect that the IRS, an agency that expects taxpayers to account for just about every penny they earn, would be very disciplined and accurate themselves. But a number of stories featuring major IRS blunders (such as the issuance of improper refunds) prove otherwise.
6) When you don’t have a lawyer, IRS agents’ eyes light up. IRS agents prefer to deal directly with taxpayers for the simple reason that taxpayers are not generally able to demand their rights in a way that an attorney can. The tax code is simply too complex to digest for non-specialists, and IRS agents love to deal with taxpayers who may be unaware of, or unable to defend, their rights.
7) You can’t solve an IRS issue by hoping it goes away. The IRS is relentless. They will stop at nothing to collect revenue from taxpayers, and ignoring the issue and hoping it goes away only makes matters worse. If you’re facing an IRS dispute, you can’t afford to ignore it!
Questions or comments? Do you need help resolving an IRS dispute? Please get in touch with us today!
Along with all of the recent scandals and investigations that the IRS is now facing they are also being sued. Forbes online reported recently that billionaire investor Peter R. Kellogg and IAT Reinsurance Co. Ltd. are suing the Internal Revenue Service for refunds of $186 million in taxes and interest that they paid the IRS. Court documents show that Kellogg and IAT state that the IRS officials were “unduly prejudiced” against them and that that prejudice was politically motivated.
Whether the judgment in this specific case will be for or against the IRS is still to be determined. However, even if you do owe the IRS money there is the potential that they can get details wrong and demand unnecessary payments or judgments against you. If you are facing tax problems make sure you get help to deal with the process and find a tax attorney that will look into any potential mistakes or unjust actions the IRS is guilty of. To read the rest of the Forbes Article about billionaire Kellogg suing you can go here. http://www.forbes.com/sites/janetnovack/2013/06/17/billionaire-seeks-186-million-tax-refund-claims-irs-biased-by-politically-charged-atmosphere/
The IRS has been in the news a whole lot recently. You’re probably aware that the agency recently admitted to inappropriately targeting non-profit organizations for extra scrutiny, based on their political views. Unfortunately, this scandal is just another reminder that the IRS doesn’t always abide by the rule of law. That’s why it’s so important that you have a qualified tax attorney on your team while you are battling the IRS. Along those lines, here are five important reasons to consider hiring a tax attorney during your IRS dispute.
1) The IRS doesn’t always play by the rules. As we were reminded last month, the IRS certainly can’t be trusted to play fair. They have been known to bend the law in the past, and will do it again. A tax attorney can fight back and keep them honest.
2) The IRS uses intimidation to get their way. The IRS thrives on using intimidation to extract revenue from taxpayers. They know that threatening letters and intimidating phone calls are very effective. A tax attorney won’t be intimidated because they know exactly what the IRS can and cannot do.
3) The tax code is incomprehensible to most taxpayers. Unfortunately, the tax code is so complex that it takes years of study before it can begin to make sense. If you don’t have the time (or the desire) to learn the tax code backwards and forwards, you’re at a disadvantage to the IRS. Hire a tax attorney who thoroughly understands the law!
4) Dealing with the IRS is time consuming and stressful. Most taxpayers have better things to do than deal with the IRS. And nobody enjoys the stress that the situation creates. A tax attorney will deal directly with the agency so that you don’t have to!
5) You do have rights, but the IRS won’t tell you how to use them. As a taxpayer in this country, you do have rights. But the IRS hopes you won’t exercise them. An experienced tax attorney knows will enable you to exercise your Constitutional rights in order to achieve the best possible result.
Questions or comments? Would you like help resolving your IRS dispute? Please contact us today to learn more!
Facing a tax audit can be extremely stressful. Often the first feeling someone has when they get a letter from the IRS informing them of the audit is absolute dread. However, there are some things to keep in mind if this happens to you. First, there are different types of audits. Not all IRS audits are full audits. Sometimes the IRS contacts you for a specific item on your tax return or they only challenge a portion of your taxes. Many times these types of audits can be taken care of by just supplying the receipts or items that pertain to the specific area in question.
Even if you do have a full audit on your hands you need to remember that you have rights. If you are worried about your specific situation, feel that the IRS is being unfair towards you, facing penalties or you owe back taxes you should speak with a tax attorney. Many people get confused and feel intimidated by IRS investigations. Having someone on your side who knows how to handle the IRS the right way helps relieve your stress and worry. To read the article “What to do when you are facing a tax audit” on Smart Money Resources go here. http://www.smartmoneyresources.com/86/what-to-do-when-you-are-facing-a-tax-audit/
Yes, successfully solving your IRS problems can include saving you money. However, there are more devastating issues that can be associated with having tax problems. For this reason our firm looks at the burden of stress and other hardships that may be affecting our clients and we do everything that we can to help them overcome the devastation. Saving money is important but saving your health, sanity, relationships and sense of empowerment are also necessary for you to move past your tax problems.
Many clients who come to us start out in a state of fear. They are feeling intimidated and confused. When a client has delinquent tax returns they often don’t fully even understand what they owe and why they may owe it. At our office we walk them through the process step by step. We help them file past returns and we stand between them and the IRS. We want to make sure that they work out their tax problems from a place of understanding, not fear. To learn more about our practice read here. http://www.myirsteam.com/our-firm/meet-nick-nemeth
You have finally decided to face your IRS problems. You have chosen to face the dreaded lump in your stomach and the fear in your heart. You have started to research, to ask questions, to look for help.
You need to in order to move away from the burden of fear and stress that hangs on your shoulders. You need to in order to sleep again. You need to so that you can walk out your front door without feeling like you have to look over your shoulder.
You need relief so that the stress doesn’t burden your health. You need relief so that you can move away from the financial devastation caused by liens and levies. You need relief so that you do not fear losing your families financial future.
This is a time that you want to work with a tax attorney that believes in doing things the right way. You do not want to increase your IRS burden by avoiding a straightforward assessment of your situation and your options. At this point what you need is to make sure that this is the last time you are faced with this situation. You want to make sure that all aspects of your tax problem is taken care of correctly. Then you can feel confident to move forward out of the burden of your past tax problems and into a future free of them forever. http://www.myirsteam.com/our-firm/meet-nick-nemeth
Are you thinking of remodeling your home? Maybe you feel it is time for a new addition. Maybe you wanted to add a swimming pool or some professional landscaping. Perhaps the remodel is something that just needs to get done, a new roof or furnace.
When you consider remodeling your home it is normal to look at your finances. However, have you considered how such remodeling will affect your taxes? No? Well, you probably should. There are two ways that remodeling your home may significantly affect your taxes. Knowing how will help you make good decisions for yourself. So, before you call in the handyman look at each scenario and decide, from the beginning, just how you might handle this from a tax standpoint.
Remodeling and your property tax.
If extensive remodeling takes place it could lead to an increase in property taxes. While this might not be significant enough to make you want to not remodel and enjoy your home you should be aware of the possibility. This is especially true if an increase in your property tax will have a huge negative affect on your personal finances.
Keeping the improvements on the inside of your home is one way to minimize a property tax increase. Indoor improvement can significantly increase the quality of life and increase your homes value but they do not get noticed by the County assessor. If your home is old enough than upgrading flooring material, remodeling the kitchen or replacing the bathroom fixtures can actually be considered repairs and may not qualify for an increase anyway.
On the other hand adding visible outside improvements will be more likely to increase your tax. For instance, installing a swimming pool, a noticeable home addition or high-end landscaping becomes something that the County assessor may take note of when determining your property taxes. Again, these home improvements have a significant value to your personal quality of life so you need to weigh the potential consequence of raised taxes to the value you gain in the home improvement.
You should also know that if you are in a neighborhood that already has many people making noticeable large home improvements your property tax will likely inflate as their homes are improved upon. If this is the case then making improvements yourself on your home will likely have little effect on a property tax that is already rising.
So now that we have looked at the potential tax downside of home improvements lets look at a way that you can gain some tax perks by putting in that new swimming pool.
Remodeling and Tax Deductions.
If you make any home improvements on your house then the first thing you should do for your own tax benefit is SAVE THE RECEIPTS. Why? Well, doing so may reduce your tax burden on any capital gains income that comes to you the day that you sell. This is good to know, especially if your home improvements have drastically increased your homes value or you have lived in your home for a very short time and do not qualify for any tax-free profit.
Let’s say that you have only lived in your home for one year but the value of the house has risen significantly. You have not lived in the home long enough to avoid paying capital gains taxes. For that reason when you sell the house for 40,000 dollars more than what you bought it for then you will be required to pay taxes on that 40,000 dollars. However, if you have receipts and can show that you spent 25,000 dollars on qualified deductible repairs and remodeling then you will only need to pay the taxes on 15,000 dollars.
This can be applied even if you have lived in your home and qualify for tax-free profit. For instance, if you are single and have lived in your home long enough then you can profit up to 250,000 dollars without needing to pay capital gains taxes. However, if you make 300,000 dollars you will be required to pay taxes on the 50,000 dollars extra profit. Again, if you have proof of qualified home repairs you can deduct those costs from that 50,000 dollars.
Remodeling and improving your home can bring great satisfaction to your life. Doing so can also increase your home value and potential profits when you sell. However, knowing what to expect when it comes to taxes can help you avoid surprises and can also assist you in deciding what to improve on and when. You can get a list of deductible home improvements from the IRS Publication 523 and make sure you follow current tax rules as they can change through time. As with any tax decision, if you are confused or have questions then make sure you speak with a qualified tax professional to help answer those questions and make sure that you file and use your deductions in the right way.
The IRS has been in the headlines quite a bit in the last several weeks – most notably as the story of improper scrutiny being given to conservative groups has emerged. But even before that scandal broke, much has been written about the increasing size of the IRS as well as their plans to target high-income individuals and business owners for scrutiny while processing tax returns.
We speak to taxpayers every day—and many of them are increasingly nervous. We get questions all the time relating to the IRS and their aggressive tactics. Today, we would like to take some time to discuss the first steps you should take if you are targeted by the IRS for an audit or some form of dispute. Note that for specific advice pertaining to your specific situation, you should always speak to a professional.
1) Don’t panic. First and foremost, don’t panic. Nobody likes receiving a letter from the IRS. And certainly nobody is happy to receive notification that they have been selected for an audit… or worse. But panicking simply makes the situation worse. Despite the threatening language and intimidating letterhead, you do have rights and plenty of opportunity to prove your case. So don’t panic!
2) Get organized. You shouldn’t panic—what you should do is get organized. Locate whatever paperwork and supporting documentation you have relating to the matter. Whether you deal directly with the agency or work with a professional, you will need to have this information accessible and well organized.
3) Don’t ignore the notice. Many taxpayers are so overwhelmed and intimidated that they simply ignore the correspondence. This is similar to an ostrich burying his head in the sand and thinking that he is invisible—it doesn’t work. And it only makes the matter worse. Read the notice, take note of the actions required and the deadline, and make a plan of action. Addressing the issue promptly and directly is the best way to resolve a tax dispute quickly.
4) Speak to a professional. Unfortunately, the US tax code is impossibly complex. And the IRS is extremely good at intimidating taxpayers in order to achieve the results they desire. For that reason, we highly recommend working with a professional in these matters. Professional tax attorneys know the law and they know the process. The eyes of IRS agents light up when they have the opportunity to deal directly with a taxpayer… because they know that their job will be that much easier.
5) Know your rights. The IRS may not make you feel this way… but you do have rights. The law provides a number of specific protections and courses of action for taxpayers involved in a dispute with the agency. Again, we strongly recommend working with a professional that can represent these rights on your behalf—but even if you decide to “go it alone”, don’t let the IRS push you around!
Questions or comments? Would you like help resolving your IRS dispute so that you can get back to enjoying your life? Please contact us today to learn more!
The IRS has been in the news lately for targeting conservative groups trying to file for tax-exempt status. Here is yet another story from a noted Catholic professor and sociologist, Dr. Anne Hendershott. She claims the IRS targeted her with a 2010 audit that was emotionally and financially draining and scared her into silence until now. Apparently, the IRS demanded to know which groups were paying her and for additional background information about them. The Dr. wrote critical articles about President Obama’s policies and George Soros’ funding of liberal Catholic groups and thinks this may have prompted the audit.
The IRS called her and said they needed to audit her on “business grounds” for her writing activities. Hendershott found this strange considering she doesn’t run a business per se, and usually doesn’t show a profit for her writing endeavors. Many of the organizations she writes for don’t pay her at all. Her husband, the bread-winner of the house, was not included in the audit even though they file jointly. This also raised a red flag.
Hendershott has been rather vocal against progressive Catholic groups in her writings and can’t help but wonder if her controversial writings lead to the audit. She was frightened by what happened and has only recently spoken out about her story in light of the recent IRS scandal that is surfacing now. Read more in this detailed article: http://www.theblaze.com/stories/2013/05/15/exclusive-prominent-catholic-prof-claims-irs-audited-her-after-speaking-out-against-obama-and-demanded-to-know-who-was-paying-her/
We are well into 2013. Tax day has come and gone and you might not want to think about taxes right now. However, now is the best time to start getting organized for 2013 tax time. The more organized you are upfront the smoother your process will go next year. Here is a list to get organized.
Set up your 2013 tax file
Some of the items on the list are meant for January so the deadline has already passed, yet this article also offers detailed info on the items listed above plus these important tax goals for the rest of the year:
Resolve to pay no more than your share of taxes.
Read the full article here: http://articles.marketwatch.com/2013-01-07/finance/36182471_1_tax-calendar-tax-year-tax-return
The IRS is a powerful, intimidating agency. And because of the negative impact that IRS audits and other IRS controversies can have on taxpayers, there is a great deal of fear surrounding the agency as well.
But in addition to the legitimate fears and concerns, there is plenty of misinformation regarding the agency. Today, we are going to examine five common myths relating to the IRS:
1) Only “high income” businesses and individuals get audited. While the IRS may look for certain “red flags” in a tax return which increase the likelihood of an audit, the truth is that every single taxpayer faces the possibility of an audit. So don’t try to “get away” with anything illegal just because you think that the IRS won’t audit your return.
2) Being audited always results in penalties. Sure, nobody ever wants to be audited by the IRS. But the truth is that many IRS audits actually end up with the taxpayer receiving a check from the government, because the taxpayer actually overpaid. As long as you’ve filed your tax returns properly, there’s no reason to worry!
3) Ignoring the problem will make it go away. Many people think, for whatever reason, that simply ignoring IRS correspondence will cause the problem to resolve itself. This couldn’t be farther from the truth—the longer you ignore the issue, the worse off you will be. Take action and resolve your IRS dispute… we can help!
4) IRS audits happen soon after filing tax returns. Many taxpayers believe that once the IRS processes their tax return, they are “out of the woods” as far as an audit is concerned. In fact, the IRS can audit your return up to three years after you filed it – and sometimes even later. So keep your records!
5) The IRS can do whatever they like to satisfy my tax debt. The IRS can levy your bank account. It can seize assets, even cars and homes. But it’s not all-powerful. It must comply with the law. You still have rights. And we can protect them!
Questions or comments? If you’d like to learn more, or if you’d like help resolving an IRS dispute, please contact us today!
I believe there is a right way to get things done. I apply this belief in everything I do, including the way I run my tax resolution law firm. When a client has a problem with the IRS and doesn’t know where to turn, the Law Offices of Nick Nemeth offer a no-nonsense, proven system that resolves tax issues and brings much needed peace of mind.
With over 15 years of legal experience, I know exactly what each individual client must do in order to get into compliance with the government and stay there. I have set up a process that takes my clients smoothly from their initial one-on-one consultation to completion of their case, covering all of the details and checking off every requirement of the IRS along the way.
Serious tax problems deserve the attention of a skilled attorney — an attorney who is dedicated to handling issues with the IRS in the right way. I take the time to explain the entire process to my clients so they are clear on the choices available to them. Once their current situation is fully assessed, I map out the specific steps and correct sequence of events that will end their tax problems once and for all. Call today to get started on your path to tax resolution. 972-484-0829, http://www.myirsteam.com/our-firm/dallas-tax-attorneys
Famous people have their share of making the news for reasons not associated with their area of fame. Rather their stories hit the news because they are evading taxes. The latest casualty is Grammy-winning singer Lauryn Hill. She recently appeared before the judge and said she intended to pay her tax debt she just wasn’t sure when. The judge reminded her that we don’t get to choose when we pay and we all have the same deadline. Hill was then sentenced to three months in federal prison, which will begin July 8.
The vocalist has been in hot water with the IRS for a while now. She failed to pay taxes for three years on more than $1.8 million in income. She was then sentenced to three months of home confinement and a year of supervised probation. She must still pay her debt plus penalties and a $60,000 fine.
Hill stated that although her music has sold millions of copies she has seen very little of that as the bulk of the money was “earned for other people”.
“Someone did the math, and it came to around $600 million,” she said. “And I sit here before you trying to figure out how to pay a tax debt? If that’s not like enough to slavery, I don’t know. This wasn’t a life of jet-setting glamour. This was a life of sacrifice with very little time for myself and my children.”
Yet the IRS was not sympathetic. Her lawyer stated, “Ms. Hill did not get a slap on the wrist and let off with just paying a certain amount of money but has had to go through this entire criminal prosecution.”
If you are in a bit of trouble with the IRS, don’t let it get this far! I strongly encourage you to call my office today. Let’s get you back to a life of freedom. 972-484-0829 http://www.myirsteam.com/
“Knowing what we know now, the IRS was at best being far from forthcoming, or at worst, being deliberately dishonest with Congress.”
This quote is by Senator Orrin Hatch of Utah. What is he referring to? To put it bluntly, the latest IRS scandal. Speculations have been circulating about the IRS targeting tea party groups who filed for tax-exempt status. However, as more evidence surfaces the allegations are no longer merely speculations and tea party groups are not the only ones being inspected. IRS officers in multiple branches have been probing for information about these groups’ donors and other aspects of their operations.
Employees of the IRS are even admitting fault now. Lois Lerner, who oversees tax-exempt groups for the IRS said these “absolutely inappropriate” actions were taken by “front-line people” at the IRS office in Cincinnati. Apparently groups were targeted who used words such as “tea party”, “patriot”, or “9/12” in their name. Additionally the IRS is said to have targeted organizations focused on the Constitution, government spending, or those who are critical of how the country is being run. According to one news source, the additional scrutiny of these groups began in 2010 and the list of their targeted groups has grown since then. These actions by the IRS are creating delays in organizations receiving their tax-exempt status.
One media report defends the IRS saying that it has been a long-standing practice of the IRS to make sure similar groups receive similar tax treatment. In this case the groups seeking a status of “social welfare” are grouped into hospitals, churches, or political actors to name a few.
Senate Minority leader Mitch McConnell called on the White House “to conduct a transparent, government-wide review aimed at assuring the American people that these thuggish practices are not underway at the IRS or elsewhere in the administration against anyone, regardless of their political views.”
Opposingly, NAACP spokesman Julian Bond said that scrutiny of tea party groups is just and correct because these groups are “overtly racist” and the “Taliban wing of American Politics”. Even if such sweeping generalizations were true, the point is it appears the IRS has expanded its activities to aim at more and more organizations so now any group classified as “conservative” may be under scrutiny.
On the surface it is easy to justify the IRS’s actions. When filing for tax-exempt status it is not permissible to have a primary purpose of election-related activities or to overtly support political candidates. It is possible the IRS may have targeted groups with certain names to be more efficient in their investigations under the limited resources of the organization. Yet one must wonder why the names chosen are predominantly associated with conservative groups. Has the IRS gone too far? Many are saying, “Yes.”
President Obama called the IRS’ actions “intolerable and inexcusable.” The Justice Department is now investigating the IRS for further proof in this widening probe. I will continue to follow this story and report here how it unfolds in the upcoming months. In the meantime check out more of my articles here: http://www.myirsteam.com/news
Dallas, TX, May 1, 2013
Respected Dallas tax attorney, Nick Nemeth, has a newly updated Facebook page and is using it to reach out with information to anyone who is struggling with IRS debt. The Law Offices of Nick Nemeth is successfully using the social media platform, Facebook, to open up communication between attorney and client. The use of Facebook allows Mr. Nemeth to provide up-to-date information on tax law and tax resolution to anyone in the Dallas area and beyond who has questions.
The Law Offices of Nick Nemeth’s Facebook page is located at http://www.facebook.com/pages/Law-Offices-of-Nick-Nemeth-PLLC/361713033841139. The law firm created the page as a resource for clients and other interested parties to find current information regarding IRS debt and collections. Mr. Nemeth and his staff regularly post videos, helpful tips, and articles on the new and improved Facebook page. This information is meant to inform followers on ways they may be able to resolve their IRS tax debt problems.
The use of social media networks, like Facebook, allow The Law Offices of Nick Nemeth to provide current information about dealing with the IRS, updates about their Dallas office, and testimonials from previous clients. Using Facebook allows Mr. Nemeth and his team to effectively communicate their services to followers in Dallas and the surrounding areas.
About The Law Offices of Nick Nemeth
Nick Nemeth believes that there is a right way to get things done, and this is exactly how he runs his tax resolution law firm. With over 15 years of legal experience and a no-nonsense, proven system that resolves tax issues, Nick Nemeth is the Dallas tax attorney to turn to if you have a tax problem. Call the Law Offices of Nick Nemeth PLLC today for a free consultation at 972-484-0829 or visit his website http://www.myirsteam.com/ for more information.
The Law Offices of Nick Nemeth, PLLC
Tax season is behind us for another year, and millions of taxpayers and business owners across the country are breathing a sigh of relief.
But for many taxpayers, preparing and filing tax returns is a stressful process—and if you’re like many people that we’ve spoken to, you may be fearful that you made a mistake which will come back to haunt you.
And while this year’s return is already filed—now is the perfect time to make changes which will ensure that all of your “i’s” are dotted and your “t’s” are crossed moving forwards. Here are three specific suggestions to make tax filing easier, and more importantly, to keep you out of trouble with the IRS!
1) Create a system for recording your deductions. Whether it’s child care, medical expenses, student loan payments, or whatever… it’s important that you be able to document your deductions should the IRS question them. Trying to go back and recreate these records can be a nightmare—so be sure that you’re documenting these expenses throughout the year.
2) If you expect to owe taxes on tax day, start saving now. If you are self-employed or if your employer is not withholding enough from each paycheck, you’ll end up with a bill on tax day. This can be a shock if you’re not prepared for it—so be sure you’re saving a portion of your income all year long.
3) Make sure you can account for all of your income. Should you be chosen for an audit, in some cases the IRS will actually examine your bank statements in search of income that you may not have reported. Keep records and ensure that you can account for your income.
Nobody enjoys writing a check to the government each year, but it is something that we all have to do. To ensure that the process goes as smoothly as possible, and to stay clear of IRS trouble, it is critical that you are keeping clear and organized records all year long. These three steps will help.
If it’s too late and you’re already facing an IRS audit or a dispute, don’t worry, we can help! Give us a call today and let us deal with the IRS on your behalf.
Our practice is focused on helping taxpayers resolve their IRS problems once and for all. As you know if you have ever faced a dispute with the IRS, it can be an extremely stressful and unpleasant experience. Our mission to help taxpayers get through these difficult times and get back to enjoying life.
Of course, the ideal course of action is to avoid IRS problems in the first place. And as this year’s tax filing season wraps up, now is a good time to look ahead to the future and ensure that you’re taking steps to avoid IRS trouble. Below are five keys to keep in mind.
1) If you’re self-employed, withhold income from each check. If you are self-employed, you can’t depend on your employer withholding taxes from your paycheck in order to ensure that you are able to pay your bill each year. It is up to you to plan ahead and withhold a portion of your income—and failing to do this often results in a tax bill that you can’t pay. 20% is often a good amount to withhold, but you may need to adjust that number up or down depending on your specific situation.
2) File on time. This is simple advice, but many taxpayers get themselves in trouble because they don’t do it. Even if you have a complicated situation, even if you can’t afford to pay your taxes—make sure you file on time. Otherwise you will face significant penalties and further complication.
3) Document your deductions. If you are claiming deductions beyond the standard deduction, it is critical that you carefully document them. The IRS often looks at deductions very skeptically, and a high level of deductions can raise red flags at the agency. This isn’t intended to scare you away from claiming deductions that you are legally entitled to—just a reminder to be sure that you can substantiate them if the IRS demands it.
4) Keep careful records. Beyond your deductions, it’s important to maintain careful records of income, expenses, and other circumstances. It’s important that you keep these records for several years of prior returns as well, as IRS audits can occur three (or sometimes more) years after filing. Clear, accurate records are your best friend should the IRS have questions about your returns.
5) Don’t try to beat the system. None of us like to pay taxes. We would all prefer to keep our hard-earned money in our own pockets. But paying taxes is the law, and while there are plenty of legal strategies you can pursue to minimize your tax liability, trying to outright cheat the system is a sure way to find yourself in trouble. Discuss your tax strategy with a qualified professional, do all that you can to minimize the amount that you owe—but play by the rules.
These suggestions will help you avoid IRS trouble. But if it’s too late and you’re already facing an audit (or worse), don’t worry! We can help. Contact us today and let us handle your IRS dispute so that you can get back to enjoying your life. We’re standing by to assist.
The US and Switzerland have agreed to work together to crackdown on tax evaders. The two countries have made changes to the protocol, now allowing more sharing of information between each other. Discussions between the two became necessary after the giant Swiss Bank UBS was reprimanded for helping thousands of US customers avoid taxes in America. “This treaty will increase our ability to enforce our tax law and will help bring an end to an era of offshore accounts and investments being used for tax evasion,” said Treasury Secretary Timothy Geithner.
US authorities have been pushing the UBS to share information on about 52,000 people suspected of tax evasion. The Swiss were avoiding the request saying it would violate their own laws, so a new protocol was needed. UBS has already paid $780 million in fines and restitution to settle allegations of helping US citizens avoid paying taxes. Read more about this case in this ABC News Report: http://abcn.ws/YzQh3d
Running a business requires successful navigation of many moving parts. Sometimes money needed for one thing gets used to pay for other things and before you know it it’s tax time and you underestimated the amount you owe or maybe even forgot about it in the midst of paying other bills.
It is important to make estimated tax payments if you’re worried your current withholding won’t cover your total tax liability for your business. There are two lines on your tax return that can help you estimate your quarterly or monthly estimated payments. Look at your total tax and your total withholding. (On Form 1040 that’s line 62 and 63.) Subtract the two lines and this gives you the unfunded tax liability for the year.
Read this step by step guide on how to calculate your estimated tax payments to ensure you won’t be scrambling to come up with the extra money come April 15th! http://taxes.about.com/od/taxplanning/ht/estimated_taxes.htm
Earlier this month we discussed steps that you can take as a taxpayer to minimize your chances of being audited by the IRS. Unfortunately, there is no way to completely eliminate this possibility, as a small percentage of taxpayers are audited at random each year. If you own a business, your chances of being audited are even greater, as the IRS typically scrutinizes self-employment deductions and other items very closely.
So while we certainly hope that you never find yourself facing an IRS audit, today we are going to take some time to discuss the steps you need to take should you be selected for an audit. Below are four keys to keep in mind:
1) Remain calm. Don’t panic. Sure, it’s not pleasant to receive an audit notification. But keep things in perspective. Believe it or not, oftentimes IRS audits end without the taxpayer owing any additional tax—and in some cases even result in a refund. If you have kept proper records and filed your return properly, you have nothing to worry about. Even if you’re concerned that you may have made some mistakes, don’t freak out.
2) Do what the IRS asks. It sounds ridiculous, but you would be surprised how often taxpayers simply ignore their audit notification. Ignoring it will not make it go away. The best course of action is simply to follow instructions. If the IRS has simply requested further information, make sure to get it them by their deadline. However, don’t make the mistake of sending the agency anything more than they’ve requested. Many taxpayers get themselves in trouble by providing more information than necessary, giving the IRS an opportunity to find additional problems. It’s normally a good idea to talk to an accountant or lawyer at this stage.
3) Get your records together. If you’re being audited, odds are good that the IRS is going to demand additional information from you. Save yourself stress down the road by taking the time right now to find and organize any records that may be relevant to your case. “I don’t know where it is” is never an excuse the IRS will accept, so make sure that you’ve got all the information you need.
4) Collect “supporting evidence”, especially if you’re a business owner. If you’re self-employed and facing an audit, you can count on the IRS to focus specifically on the deductions you claimed. In particular, the IRS will closely examine items such as a home office deduction, travel expenses, and vehicle mileage. Hopefully, you’ve kept records to back up your claims. If you haven’t, you’ll need to look for other ways to prove your case. This is an area where a tax professional can be very helpful.
There is a good chance that you won’t ever be selected for an IRS audit and therefore you won’t need this information. But in the event that you are audited, keep these four tips in mind. And please let us know if you would like further assistance!
The IRS has ways of getting their debts paid. Two of their most extreme collection methods are levies and liens.
A lien secures another party’s interest in your personal or business property for the purpose of getting paid for debts owed to them. A lien can be placed by the state or even by contractors who don’t get paid. It could mean you cannot sell the property until the lien is removed. Your credit rating can be negatively impacted too. In this case we are referring to a federal tax lien placed on your property by the IRS. Once the IRS has assessed your liability and sent you a notice regarding the amount you owe, if you neglect or refuse to pay the full amount on time, the IRS can then file a lien on your property. Obviously the best way to get rid of a lien is to pay it off or at least make arrangements to do so. The IRS must release the lien within 30 days after receiving payment.
Perhaps the most feared tactic of the IRS is the tax levy. The IRS may seize property to satisfy the tax debt. No court order is needed to perform this action and seizure by any means is permissible according to the IRS code section 6331. The levy can be placed on personal assets such as property. But a levy can also be placed on third parties such as the taxpayer’s bank or brokerage house. Levies can be placed on a person’s wages, bank accounts, social security benefits, accounts receivable, insurance payoffs, and real property. Typically the IRS will prefer to place a levy on bank accounts. This allows them easier access to liquid cash much quicker than confiscating tangible assets and selling them.
We have several options we look at with our clients to ensure they don’t get to this point. When we decide to take a case, we solve that case. Granted, your expectations must be realistic. If you owe the IRS money it is unlikely you will end up paying nothing. We are very upfront about that. However, if you are motivated to take control of your tax issues, we can help. Call us today for more information. 972-484-0829 and visit: http://bit.ly/179zN5C
At the Law Offices of Nick Nemeth, our practice is devoted to helping taxpayers resolve their IRS disputes. The IRS and their agents are extremely aggressive and will stop at nothing to collect every penny that they can from taxpayers—and it’s our job to step in and represent the rights of the taxpayer.
Of course, the better course of action as a taxpayer is to avoid getting involved in an IRS dispute to begin with. And while there is no way to completely eliminate the possibility of an IRS audit, there are several steps that you can take while preparing your returns to dramatically reduce your chances of being audited:
Triple-check your math. Figures that don’t add up are a sure way to attract the attention of the IRS. If you are doing your taxes yourself, it’s critical that you double and triple-check your work. That includes checking your math, as well as ensuring that you’ve completed the right fields, used correct personal information, and so forth. This is also another reason not to delay filing until the last moment, because you’re more likely to make mistakes when you’re in a rush.
Don’t fail to report any income. Yes, it can be very tempting to conceal income to avoid paying taxes on it. But if you’ve been issued a W-2 or a 1099, the IRS also has a copy. And even if you aren’t issued such a form, there are a variety of ways by which the IRS could ascertain your income. If they suspect that you aren’t reporting everything, you can expect them to audit you with a fine-tooth comb!
Don’t claim an unreasonable amount of business expenses. Writing off personal expenses as business losses may seem like a great way to reduce your tax liability. And it is… but the IRS is fully aware of this reality. As a result, they pay close attention to business expense claims and will quickly flag your file for an audit if they have reason to believe that you may have abused the system. Don’t risk it!
The best way to resolve an IRS dispute is to avoid it in the first place. These steps will help you avoid raising red flags with the IRS – contact us today if you’d like to learn more!
Hi, I’m Nick Nemeth, and I believe in doing things the right way. If you are in Dallas and have a problem with the IRS, even if you feel like you’ve waited too long to do anything about it, I can help. I take care of tax problems the way they should be taken care of – I don’t sugar coat your options on how to solve your problem – and I make the right decisions so you get the best results. Handling your case this way sets you up for success, giving you a permanent solution so that you can move on with your life.
My ultimate goal is to get the IRS out of your hair once and for all. Everything at my Dallas office is done in an organized way – we have systems set up and a step by step process that gets results. We do the required research to find out exactly what options you’re eligible for and once those goals are set, we move towards those goals. It’s a step-by-step process that get’s you out from under your tax issues and free to live your life.
Maybe you’ve neglected to file your tax returns for years – maybe you filed but couldn’t pay – maybe you have payroll tax problems in your business – I have been helping people like you in the Dallas – Fort Worth area for over 15 years, and I can help you too. When you come to my office you will have face-to-face time with me and I will look over every detail of your case.
If you have an IRS problem, don’t wait any longer to fix it. It will not go away on it’s own. Contact my office today and we will deal with the IRS on your behalf. We will fix your IRS problems from the past and, we will help you get compliant and stay compliant to ensure you won’t have problems in the future. Call me so that we can discuss how to resolve your tax problems the right way.
If you have been out of work and receiving unemployment benefits, you may be unfamiliar with how to handle this situation when tax time comes. So how do you deal with this? The short answer is that if you received unemployment benefits, you must report them on your federal income tax return. You must include all unemployment compensation you received in your total income for the year. You should receive a form 1099G, Certain Government Payments. It will show the amount you received plus the amount of any income tax that was withheld from your payments.
There are several different types of unemployment benefits. The first and most common type includes benefits paid by the state from the Federal Unemployment Trust Fund (UTF). This fund is a division of the United States Treasury which holds accounts for each state plus District of Columbia, The Virgin Islands, and Puerto Rico. Each state account holds the contributions and reimbursements collected by each state. Each account earns interest that is credited to that account and the monies paid out are for people who have lost their jobs.
Railroad unemployment compensation benefits are specifically for railroad workers. This benefit is allowed if the worker meets certain criteria such as a working for a specific number of months. There is a maximum amount that can be received per day and per month.
The next form of unemployment benefit is disability payments from a government program paid as a substitute for unemployment compensation. This would occur if unemployment is the result of an injury.
Next are trade readjustment allowances under the trade act of 1974. This program offers income support for people who have exhausted regular unemployment compensation and whose jobs were affected by foreign imports. These benefits include paying for training for a new job, financial help in performing job searches in other areas, or relocation to an area where jobs are more available.
Finally, an individual may receive unemployment assistance under the disaster relief and emergency assistance act. Here, an employee would be eligible if their employment (or self-employment) has been lost or interrupted as a result of a major disaster AND if the person is not eligible for regular unemployment benefits. A “major disaster” refers to no longer having a physical place to work, the place of work cannot be reached, or the place of work has been so damaged that work cannot be performed at that location, or if an injury was caused due to the disaster.
In addition to reporting unemployment income, you must also include benefits from regular union dues paid to you as an unemployed member of the union. However, other rules apply if you contribute to a special union fund and your contributions are not deductible. If this applies to you, only include in your income the amount you received from the fund that is more than your contribution.
You can chose to have federal income tax withheld from your unemployment benefits. You can make this choice using form W4V, Voluntary Withholding Request. If you complete the form and give it to the paying office they will withhold tax of 10%. If you chose to not have tax withheld you may have to make estimated tax payments throughout the year. It is always best to spend a little extra time upfront to prepare your tax return properly in the first place than dealing with IRS problems in the future. I hope you have found this helpful. If you have any questions about this or any other tax problem you may be facing, I encourage you to give me a call at 972-484-0829 or www.myirsteam.com/contact-us
Logically, we know that the IRS wasn’t created with a specific mandate to harass taxpayers and make their lives miserable. We know that the agency was in fact created to be the mechanism by which the government collects revenue, enabling the government to defend citizens and provide important services.
But sometimes, it doesn’t seem that way. As someone who has spent the vast majority of his career doing battle with the agency, I can tell you firsthand that the IRS sometimes seems to be on a mission to make taxpayers miserable.
Take IRS penalties. Originally intended to be a “slap on the wrist” to encourage taxpayer compliance, they have now become destructive weapons. The onslaught of penalties can be so overwhelming and so fast that it leaves a taxpayer or a business with no choice but to give up and declare bankruptcy—and in many of these cases, the taxpayer was guilty of nothing more than a simple mistake!
And if you owe the IRS money, the agency doesn’t mess around. They start with threatening phone calls and letters. You will often receive an intimidating visit from an IRS agent who threatens you with financial ruin. And if you can’t come up with the money that you owe the agency, you’ll wake up one morning to find that they are taking money directly from your paycheck. Or, you’ll discover that they’ve seized your car and other assets.
The net result of these activities, for thousands of taxpayers, is extreme financial and emotional stress. The financial stress exists for obvious reasons, but what you may not realize until you experience it is just how emotionally stressful an IRS dispute is. The IRS seems to delight in creating fear and uncertainty in the minds of taxpayers… and they’re very good at it!
The good news is that, even though the IRS may seem like it is out to get you, we can help. If you’re facing an IRS dispute, give us a call today and let us get the agency off your back!
Nothing good comes from refusing to file your taxes. Even if a taxpayer is afraid to file their taxes because they fear they will not be able to pay what is owed they should know that not filing is one of the worst mistakes they can make. The consequences can be harsh and you may face a drain on your bank account or possible jail time.
The penalty fees for failure to file are ten times worse then the late payment penalty. On top of the failure to file penalty a 0.5% fee is assessed on any unpaid taxes every month until the balance is paid. Those fees can double if the IRS issues a letter demanding payment. To learn more about failure to file tax consequences view this article. http://www.prweb.com/releases/IRS-Attorney/Dallas-fort-worth/prweb9674328.htm
Every employer must withhold from an employee’s pay a certain amount of money to cover income tax liability. In addition to income tax an employer also has to manage withholding and paying the employees social security and Medicare taxes. The combination of these withheld taxes are called “trust taxes” and is considered money that still belongs to the employee since it was withheld from his/her pay.
When a business has unpaid employment taxes the IRS will seek to collect those debts from the business assets. If a business cannot pay the IRS will seek out an individual that can be held personally responsible for this type of debt. Similar options used to resolve individual problems with the IRS may be available to resolve payroll tax problems.
Whether or not your company is still operating we can help guide your business through the payroll tax maze. Make sure that your tax situation is handled correctly and get help facing the IRS.
If you owe taxes but cannot pay the entire amount all at once then one of the options that might be available for you is an IRS Tax Installment Agreement. The Installment Agreement request will generally prohibit the IRS from taking enforcement collection actions against the taxpayer. However, it can be tricky to make sure you lock in an agreement that includes a payment you can afford.
The IRS wants it’s money as quickly as possible but the taxpayer wants (and most likely needs) a payment that is manageable. Unfortunately, many taxpayers agree to monthly payments they cannot afford and this causes hardship. Learn more about what an IRS Tax Installment agreement can do for your tax situation and see if it is something you might be able to manage. http://www.myirsteam.com/areas-of-practice/irs-tax-negotiation
Thousands of taxpayers across the United States are impacted by tax disputes each and every year. Obviously, these disputes aren’t pleasant. They can obviously be expensive financially, and IRS disputes and penalties can also cause extreme stress—both mental and physical. IRS disputes can bankrupt businesses, shake up families, and ultimately make life very difficult for the taxpayer. And this is true whether you’re at fault or not!
But here’s some good news: there is hope. No matter how bad your situation may seem, there is always a light at the end of the tunnel. We’ve seen difficult situations resolved favorably many, many times. But it is vital that you understand that IRS problems will not go away on their own! It is up to you, as the taxpayer, to take action. And we can help!
For instance, many taxpayers are surprised to learn that they may be able to avoid paying IRS penalties that have already been assessed. The fast-paced life we all lead can make it easy to file late or make mistakes, which results in penalties—but if you can provide a valid explanation, in many cases some or all of your penalties may be forgiven. But the truth is that you are presumed guilty until proven innocent in the eyes of the IRS. And because the IRS can be so intimidating, many taxpayers are afraid to take action and plead their case.
The IRS has the authority to hand down approximately 140 different types of penalties, including common penalties such as “failure to pay” and “failure to file”.
But when the IRS applies these penalties to business owners and taxpayers, it happens automatically. It’s done by a computer system that doesn’t take the circumstances of the case into account. You may have a perfectly valid reason for filing late, but it won’t matter if it’s left up to the automated system.
This is just one example of the way that taxpayers end up with often overwhelming IRS penalties. At the Law Offices of Nick Nemeth, we can help. Whether it’s contesting penalties that have already been assessed, fighting for the removal of liens or other collection efforts, or resolving the most complicated tax disputes, we’re here for you. We understand that IRS disputes are stressful and confusing. We recognize that the IRS takes advantage of their power to intimidate taxpayers, and we want to fight the agency on your behalf.
But the first step must be taken by you. If you don’t get in touch, we can’t help. And ignoring the IRS isn’t a good option either—penalties and interest will continue to accrue until you take action.
So if you’re facing an IRS tax dispute, it’s important to understand that the IRS won’t leave you alone until you take action. If you are ready to put your IRS dispute behind you and get back to enjoying your life, give us a call today and let us take on the IRS on your behalf!
They may have fame and fortune but even America’s Superstars need to pay their taxes. Some Hollywood Idols tax problems include, Pamela Anderson’s consistent problems with tax liens, Nicolas Cage’s overwhelming $6,000,000 dollar back tax debt, Willie Nelson’s assets being seized in the 1990’s and actor Wesley Snipes being convicted of three misdemeanor accounts for failing to file in 2008 which ultimately led to his imprisonment in 2010.
While we might find reports about these stars problems entertaining the truth is that there are a couple of valuable lessons that everyone can learn from these cases. One, nobody is immune to the scrutiny of the IRS and actually bringing in large amounts of income can even increase your chances of having your tax returns being investigated. Two, when looking at the details of these Hollywood cases it can become obvious that many of the issues were based on bad money management or misinformation on the parts of these stars. Don’t let the same thing happen to you or your business.
Many of us looking at these cases believes that “Surely this can’t happen to me. I’m not a multimillion dollar movie star.” However, the truth is tax problems can happen to anyone and they need to be taken seriously. The same IRS scrutiny can be applied to the average day taxpayer or small businessman. Bad money management or misinformation can get a taxpayer in trouble whether they make $30000.00 a year or $3000000.00.
First, take your IRS obligations seriously, even if you don’t make very much money. Don’t make the mistake of not filing your returns like Wesley Snipes and face potential imprisonment. If you do have some unfiled tax returns then make sure you file them. Not filing is bad and definitely do not purposefully falsify your tax returns when you do file. Mr. Snipes faced misdemeanor charges but if he had purposefully falsified his returns he would have faced felony charges.
Along with filing your tax returns also pay attention to your money and learn how to manage your personal income, business and taxes correctly. If you are worried about your taxes and/or confused about how to handle your situation find knowledgeable and reliable professionals who can help you process your taxes or face your tax problems correctly. Don’t make the mistakes of these Hollywood millionaires and ignore your finances.
Musicians and actors are not the only professional who can go from making next to nothing to suddenly pulling in millions, this can happen to a small business as well. If you have a small business, make sure you know what you need to do with your finances as your company grows. Sometimes small businessmen who have spent years not making a huge income find their business growing and do not know how to deal with the extra growth, income and inevitable taxes. It can be easy to mismanage your money if you are not prepared to suddenly face a higher tax bracket or tax laws you never had to deal with before your company gained success.
Again, if you are confused or facing current tax problems make sure you get help to handle your problems correctly. Hiring an informed attorney who is familiar with the current tax laws can be extremely beneficial. If you already have tax problems then you do not have to face the stress of dealing with the IRS alone. Act now and contact us for a free consultation so that you can be properly informed about what your options are.
It’s not news to anyone that the IRS has begun to crack down on Americans with overseas assets over the past several years. The IRS has come to realize that many taxpayers, particularly wealthy taxpayers, often invest overseas—sometimes in an attempt to evade paying taxes on the assets.
Naturally, the IRS wasn’t happy about this state of affairs, and so they took action. Unfortunately, as is so often the case, the agency implemented policies and procedures that make life very difficult for taxpayers, even when the taxpayers are trying to play by the rules. From extreme penalties to mountains of paperwork required to disclose overseas assets, it has been very difficult indeed for many taxpayers to comply.
Many taxpayers have found themselves in hot water thanks to these policies. Forbes.com reports:
It’s no secret the IRS is taking a hard line on undisclosed foreign bank accounts. An IRS voluntary disclosure can bring accounts into compliance with finite penalties and no criminal prosecution for those who come forward before being discovered. For those who don’t participate, the odds of being treated harshly seem to be increasing.
What’s harsh? Consider Mary Estelle Curran of Palm Beach, Florida, who pleaded guilty to filing false 2006 and 2007 tax returns. Her husband died in 2000 leaving her Swiss and Liechtenstein accounts which she failed to report from 2001 through 2007. The IRS lost out on approximately $667,716 in taxes. By 2007, the accounts totaled over $42 million.
Her penalty? 50% of the highest balance: $21,666,929, and that’s not all. She has not yet been sentenced but faces a potential prison term up to six years. The IRS and DOJ have more and more resources at their disposal and urge taxpayers to address compliance failures before it’s too late.
Disclosure and finite penalties are vastly better, especially when discovery by the IRS is more and more likely. Merely closing a foreign bank account does not solve disclosure problems.
Now, it is important to note that tax evasion can carry a prison term up to five years and a fine up to $250,000. Filing a false return can mean up to three years in prison and a fine up to $250,000. Failing to file FBARs can carry penalties up to $500,000 and prison up to ten years.
In other words, the stakes are very high. If you find yourself in a difficult situation, we can help—get in touch with us today.
But IRS overreach isn’t limited to those with assets overseas. Every year, thousands of hardworking taxpayers and business owners find themselves engaged in IRS disputes. And the penalties can be just as devastating, even when the individual is only guilty of an innocent mistake. The bottom line is that the IRS has more resources than most taxpayers do—and that’s why it’s important to seek help from a firm that can fight back. At The Law Offices of Nick Nemeth, we can help you put your IRS problems behind you. Get in touch with us today and let us know how we can help!
At times, the IRS seems completely incompetent. Simply filing a form or requesting information from the agency can seem impossible. On the other hand, when it comes to extracting money from hardworking Americans, the IRS will stop at nothing to get the job done.
A recent example of the IRS’ persistence involves OJ Simpson. Simpson is currently imprisoned—but that hasn’t stopped the IRS from tracking him down. South Florida’s GossipExtra reports:
The Internal Revenue Service filed its second tax lien against imprisoned football icon O.J. Simpson, according to Miami-Dade County records.
The recent one covers Simpson’s income taxes for 2011, a total $17,015.99.
Simpson, who lived in Kendall, Florida until he was arrested for robbery and kidnapping in Las Vegas in 2007, may have a valid excuse for not filing.
He is, after all, serving 33 years at the Lovelock Correctional Center in Nevada.
But while the former Buffalo Bills runner cools his heels in the desert, he’s still getting a nice NFL pension, believed to be about $19,000-a-month — and the IRS claims it hasn’t been getting its cut!
The IRS hit Simpson with a first lien on his Kendall house last year, this one for a total $179,437 in unpaid incomes taxes between 2007 and 2010.
Meanwhile, a trial is scheduled in a Miami-Dade court Jan. 30 in the foreclosure action that JP Morgan Chase undertook against Simpson for his not paying the mortgage on his $575,000-house.
Yale Galanter, Simpson’s lawyer, didn’t return a call for comment about the new filing, which guarantees that Simpson’s taxes would get paid when his house is sold.
If you need a form filed with the IRS or an answer to a simple question, forget about it. The bureaucratic nature of the agency makes it seem impossible to get anything done. But when the IRS spots an opportunity to collect from a taxpayer, watch out! They spring into action and do whatever it takes to get what they want.
Unfortunately, if you’re engaged in an IRS dispute, the agency will do their best to make life miserable for you. As OJ Simpson’s story shows, they will stop at nothing to collect every penny.
The good news is that we can help. If you’re tired of the stress caused by your IRS dispute, let us take on the IRS on your behalf! Contact us today to learn more!
If the IRS will come after big businesses and celebrities, there’s no question that they will come after individuals like you and I. We’ve discussed many of the celebrity run-ins with the IRS in this space, but today we’ve got something new. The city of Brighton, Alabama, recently had a levy placed on their bank account due to their tax dispute. As AL.com reports:
The Internal Revenue Service has given the city of Brighton 30 days to come up with a plan to pay back about $800,000 in unpaid federal payroll taxes, interest and penalties.
The agency will also allow the city to operate normally and pay its employees during that 30-day period.
These were the primary outcomes of a meeting held December 19 in Birmingham between the IRS and Brighton city officials, according to Mayor Barbara Watkins.
The meeting was held to discuss a way forward for the cash-poor West Jefferson community after the agency placed a levy, or hold, on its bank account Monday.
“We have 30 days to come up with a definite plan, so if we renege on this plan, we will be right back where we started,” said Watkins, who took office in November and inherited significant financial problems. “(The IRS) said, ‘We understand your situation, and we want to work with you, but you must work with us and do exactly what we tell you to do.’”
Beginning January 1, the city will also be expected to promptly pay new taxes owed, in addition to making good on the old debt.
Watkins described the IRS hold on Brighton’s account as “a one-time levy” and said she was told that the city will be allowed to use any additional revenues that continue to come in.
“The money that we collect and put in the bank, that is not part of the levy unless we renege on our payment plan we finalize in 30 days,” Watkins said.
In addition, the agency will release enough of the city’s money already in the account for them to make payrolls, including one this week, according to the mayor.
“We are going to continue to operate,” Watkins said.
Attending the meeting today with Watkins were Councilwoman Annie Woods, chair of the city’s finance committee; Councilwoman Rhonda Bean; City Clerk Hazel Williams; and the city’s accountant.
In addition to the IRS debt, Brighton in 2011 defaulted on $1.12 million in warrants issued in 2003 to buy police cars and a garbage truck.
Here’s one thing you can certainly say for the IRS: they are consistent—at least in their willingness to take on anyone or anything that owes them money. The IRS has made life miserable for millions of taxpayers over the years, subjecting them to phone calls, threatening letters, and even in-person visits from aggressive IRS agents. And now, they’re employing the same tactics against an entire town.
If you’re facing a similar situation, we can help. Let us get the IRS off your back so that you can enjoy the rest of the holiday season… and a pleasant, stress free 2013! Give us a call today.
Over the years I’ve spent working with individuals and business owners who are struggling with IRS disputes, I’ve identified a relatively common emotion that many of these individuals share: a feeling of shame or embarrassment. There’s a stereotype out there that people who are on the “up and up” don’t run into tax disputes.
As a result, many people who are facing serious IRS trouble don’t seek the help that they need—because they are conditioned to believe that they are the ones at fault. This couldn’t be further from the truth. I can’t tell you how many times I have seen good, honest men and women run into IRS problems by making a simple mistake and not catching it in time.
But you don’t have to take my word for it—because it seems like every couple of weeks news breaks that another a-list celebrity is in trouble with the IRS. These people have plenty of money and can afford great accountants—and yet, they aren’t immune to IRS problems. Recently, news broke that actress Pamela Anderson is facing IRS trouble. TimesColonist.com reports:
Pamela Anderson has run afoul of the Internal Revenue Service, TMZ.com reported Monday.
Anderson, 45, reportedly owes more than $370,000 in total, according to tax liens filed against the actress and model. Anderson reportedly owes $259,395 to the IRS and $112,119 to the state of California, both for the tax year 2011.
The Vancouver Island native has faced tax troubles before.
In 2009, a tax lien by the state of California was filed against Anderson for $493,144. People magazine, quoting L.A. County records, reported in 2009 that Anderson owed $1.1 million to “various construction companies for remodeling work on her Malibu home, as well as back state taxes.”
At the time, she also owed $252,360.39 in back taxes and penalties for 2007, according to People.
If it can happen to celebrities like Pamela Anderson, it can happen to you. If you’re facing IRS problems, you’re not alone. Thousands of Americans each and every year run afoul of the agency. And if that’s you, we can help! Give us a call today and let us face the IRS on your behalf—so that you can go back to enjoying life!
The holidays are here, and millions of Americans around the country will be enjoying quality time with family and friends.
Unfortunately, if you’re in the midst of an IRS dispute, you may find that it’s impossible to enjoy the season.
When you’re dealing with IRS problems, it can often seem like there is no hope for the future. Between the penalties and interest which continue to compound and the repeated phone calls and visits from overly aggressive IRS revenue officers, many taxpayers feel trapped and completely helpless. And these circumstances make it impossible to enjoy the holiday season!
If that’s you, we have good news: no matter how hopeless it seems, you CAN solve your IRS problems.
But it’s equally important to understand that they won’t go away by themselves!
In fact, IRS problems will only get worse if you ignore them. Penalties and interest continue to accumulate and the threatening IRS letters become even more aggressive and threatening.
IRS penalties were initially designed to be a slap on the hand in order to help taxpayers learn from their mistakes and avoid them in the future. But they have now evolved into a sledgehammer which pounds taxpayers so far into the ground that there appears to be no way out.
It is essential that you take the first step in order to solve your IRS problems. We work with taxpayers who are tired of the endless cycle of IRS harassment—and we can help you, too! But you have to take the first step. Fortunately, it’s an easy first step to take: make up your mind that enough is enough and that you aren’t going to take it anymore!
And then, give us a call! We are standing by to discuss your unique circumstances—and to deal with the IRS so that you don’t have to.
You CAN resolve your IRS dispute—and we’ll help you do it. Get in touch with us today and let us help you put your IRS dispute behind you… so that you can relax and enjoy your family and friends this holiday season!
If you’ve had the displeasure of experiencing an IRS dispute, you know how miserable the agency can be to deal with. But despite the reputation of the IRS as an aggressive, unpleasant bureaucracy, most Americans consider the agency a “necessary evil” that must be dealt with.
That’s why reports such as we are going to share below have been raising eyebrows—because many Americans living abroad are reportedly planning to renounce their citizenship thanks to IRS aggression. As the Huffington Post reports:
In 2005, Richard Morrison made a major life change. He moved from the sunny climate of San Diego to the chillier environs of London. It was a good move for his career and allowed him to climb the corporate ladder to where he is today, a legal counsel for an energy investment firm.
But now he’s ready to make another life change: Morrison plans to ditch his American passport and become a British citizen. It’s not because Morrison, 37, loves the London fog, but because his Yankee credentials will soon bring the Internal Revenue Service’s gaze where it’s unwanted: his workplace.
Under a new rule that is part of the Foreign Account Tax Compliance Act, or FATCA, all foreign financial institutions must report any accounts that have an American co-signer. Information required includes accounts used for personal and business reasons, and banks will face a hefty fine if they don’t comply. American citizens abroad will also now be required to disclose certain types of assets.
In an email to The Huffington Post, Morrison said he fears the new regulations will make him appear as a liability to his employer, hindering a hoped-for move the partner level at his firm. “If I am a signatory, all the firms’ accounts will be monitored by Uncle Sam,” he said. While it’s not Morrison’s employer that is required to report to the IRS, but rather the bank that holds the firm’s accounts, Morrison said he is taking no chances.
The rule change followed legislation made in the wake of the financial crisis that was meant to help the U.S. government close the tax gap and combat tax evasion. But the FATCA rule change is shaping up to be an administrative and diplomatic nightmare for some foreign banks. For expats, it is complicating life overseas, curtailing opportunities in everything from jobs to getting bank accounts — and, of course, potentially raising their tax burden. The Wall Street Journal reported last month that Swiss banks are shutting Americans out from their client lists, as the institutions just don’t want to bother with the administrative headache of having to answer to the U.S. tax bureau.
Renouncing your citizenship may sound extreme—but stories like this make it easy to understand why Americans living abroad may consider it.
The larger point in this story is that the IRS is growing out of control. They will stop at nothing to gather information (not to mention money!) from taxpayers, regardless of the complexity their efforts create. While most Americans won’t find themselves contemplating whether or not to renounce their citizenship, IRS aggression takes a heavy toll on millions of Americans each and every year. If you’re currently engaged in a dispute with the IRS and need help getting the agency off your back, get in touch with us today!
As a small business owner, does it ever seem like the IRS is on a mission to make your life more difficult? If so… it’s not just your imagination. In recent years the IRS has focused their audit and collection efforts on small business. As RealClearPolitics.com reports:
President Barack Obama and Governor Mitt Romney continue to tussle over tax rates and deductions. Ignored, however, have been questions about tax collection and enforcement—tools presidents use to achieve their economic policy goals. Hit a wall ramming your tax hike or cut through Congress, simply increase or decrease tax enforcement and audits.
Under the Obama Administration, the Internal Revenue Service has placed small and medium-size businesses—the engines of job creation—in its auditing crosshairs.
According to IRS statistics, from 2009 to 2011, the coverage rate (number of audits as a percentage of total returns filed) for corporations with assets between $10 million and $50 million has increased 32 percent. The coverage rate for corporations with assets between $50 million and $100 million has increased at the same rate. Some businesspeople file individual returns, and those with incomes higher than $1 million have experience a 94 percent increase in their coverage rate, and a 29 percent increase in the actual number of exams since 2009. Those with incomes $200,000 and higher have seen a 36 percent increase in their coverage rate.
So, has ratcheting up audits on small and medium-size businesses produced more revenue bang for the IRS’s buck? Hardly.
Using 2011 IRS data, the Transactional Records Access Clearinghouse (TRAC) at Syracuse University found that audits of a company with assets between $10 and $50 million yielded $702 in recommended additional taxes per hour. For large corporations with assets of $250 million or more, the recommended additional taxes are $9,173 per hour. Yet while the coverage rates of companies with assets between $10 to $50 million are up 32 percent, rates for companies with assets of $250 million or higher are up just 7.4 percent.
In short, for every hour the IRS spends auditing a small or medium business, it would have recouped $8,471 more dollars auditing a large corporation. Nevertheless, the IRS continues to aggressively increase audits on small and medium companies over their larger counterparts.
If you own a small business, you’re probably not surprised by this information. The IRS has made a concerted effort to squeeze more revenue out of small businesses over the past several years.
But there is good news—if you’re stuck in an IRS dispute, we can help. Give us a call today and let us deal with the IRS so that you can go back to running your business… and enjoying your life!
One way to get out of debt with the IRS seems to have attracted more abuse than any other…
This method has become downright controversial – so much so that the IRS made changes to the “rules” regarding this debt relief method for both taxpayers and tax relief specialists…
So what is it about the Offer-In-Compromise that’s attracted so much attention?
When President Clinton signed into law the IRS Restructuring and Reform Act of 1998, it opened the door for taxpayers to potentially have crushing tax debt actually forgiven by the IRS.
According to the Act, a taxpayer could make settlement proposals to the IRS and “plead their case” that they could not otherwise pay the debt by making an “Offer-in-Compromise”.
Also, according to the Act, while an OIC offer is pending (and 30 days beyond if rejected), the taxpayer’s property could not be seized.
Although there were (and still are) other ways of paying down the debt with the IRS, this was the only method that had the potential of having a portion of the debt forgiven entirely, until 2005.
In 2005, the IRS implemented the Partial Payment Installment Agreement option, which is also a way that a taxpayer may be able to negotiate with the IRS to pay less than the full debt owed.
Needless to say, if a person could possibly have the option of having their tax debt erased completely – it’s going to attract a lot of attention…and abuse.
All of a sudden, late night TV became filled with commercials from “Offers-In-Compromise mills” promising troubled taxpayers the chance to “pay pennies on the dollar to the IRS”.
These scams usually just fill out the OIC paperwork, and send it to the IRS regardless if a client meets the criteria for being accepted or not. Either way, the “mills” get their money…even if the client never had much of a chance of being accepted.
Not only has this practice created huge numbers of people getting ripped-off, it may have caused an actual reduction in Offers-in-Compromise which are actually being accepted by the IRS.
Why is it that the IRS seems so incompetent in so many different areas—except when it comes from draining every last penny from a taxpayer during a dispute? Forbes.com highlights the agency’s mistakes when it comes to managing reports of fraud:
Reporting fraud to the IRS can be effective and isn’t a waste of time. Yet review the report issued by the watchdog Treasury Inspector General for Tax Administration, you might wonder if it’s worth the bother. Tipping the IRS with evidence of fraud may not produce results.
Here are some rather grim statistics about reports of fraud to the IRS in fiscal 2011:
Unfortunately, as many taxpayers and business owners have learned the hard way, the IRS is not nearly so incompetent when it comes to squeezing every penny from a taxpayer who finds himself or herself in a dispute. If you’re in the midst of an IRS dispute, we can help. Call us today—because while the IRS may be incapable of managing reports of fraud, they are highly skilled at making taxpayers miserable until they have paid in full.
We’ve told our clients for years that the IRS will stop at nothing to collect every last dime that it is owed by taxpayers. This month, we were reminded again of this reality. Paying a tax evader over $100 million dollars to blow the whistle on fellow conspirators may seem over the top—but that’s exactly what the IRS just did. The New York Times reports:
Sometimes, crime does pay.
Bradley C. Birkenfeld, a former banker at UBS, recently served two and a half years in prison for conspiring with a wealthy California developer to evade United States income taxes.
But Mr. Birkenfeld, 47, has a lot to show for his time and effort: The Internal Revenue Service acknowledged on Tuesday that information he had provided was so helpful that he would receive a $104 million whistle-blower award for revealing the secrets of the Swiss banking system.
By divulging the schemes that UBS used to encourage American citizens to dodge their taxes, Mr. Birkenfeld led to an investigation that has greatly diminished Switzerland’s status as a secret haven for American tax cheats and allowed the Treasury to recover billions in unpaid taxes.
In addition to paying $780 million in 2009 to avoid criminal prosecution, the bank turned over account information regarding more than 4,500 American clients.
The disclosure of Swiss banking information — which caused a fierce political debate in Switzerland before winning approval from the country’s Parliament — set off such a panic among wealthy Americans that more than 14,000 of them joined a tax amnesty program. I.R.S. officials say the amnesty program has helped recover more than $5 billion in unpaid taxes.
Mr. Birkenfeld’s award, the largest ever paid by the I.R.S., is also a milestone for the agency’s whistle-blower program, which offers informants rewards of up to 30 percent of any fines and unpaid taxes recouped by the government.
The program was revamped in 2006, offering higher rewards and more incentives for citizens to report tax dodges, in an effort to help recover more of the estimated $100 billion a year in underpaid taxes. But the program has been dogged by bureaucratic delays and institutional resistance within the I.R.S., causing some members of Congress to complain that it was being undermined.
Though Mr. Birkenfeld’s $104 million award is far less than the billions he sought, its sheer size — more than $4,600 for every hour he spent in prison — could spur a surge in new whistle-blower complaints.
“The I.R.S. sent 104 million messages to whistle-blowers around the world — that there is now a safe and secure way to report tax fraud,” said his lawyers, Dean A. Zerbe and Stephen M. Kohn, in a written statement.
So there you have it – in addition to conducting their own extensive investigations, the IRS is willing to fork over huge sums of cash for whistle-blowers. Now obviously, you shouldn’t be breaking the law. But these whistle-blowers can report taxpayers and business owners for innocent mistakes, as well. The bottom line is that the IRS will do whatever it takes to collect as much money as it possibly can. And once the agency comes after you, it doesn’t stop. If you’re currently in the midst of an IRS dispute or are concerned about running afoul of the agency in the future, please get in touch with us today!
If you have ever dealt with the IRS, you know that the agency is anything but flexible. In fact, the IRS is your textbook example of a cold, rigid bureaucracy when it is dealing with taxpayers. Late to file your returns? You face potential penalties and interest. Need a little more time to pay your debt? You better expect to be penalized!
That is why it so shocking to learn how differently the IRS treats other government agencies as opposed to everyday citizens. BusinessWeek reports:
The IRS needs to take a closer look at the federal government in its search for tax scofflaws.
That’s right — a Treasury Department watchdog office said Thursday that 70 federal agencies owed about $14 million in unpaid taxes at the end of last year.
Federal agencies are exempt from paying federal income taxes, but they are responsible for turning over employment taxes, mainly Social Security and Medicare taxes, that their employees must pay.
The Treasury Inspector General for Tax Administration said 40 of these delinquent tax accounts totaling about $2.6 million were still open three years after being identified, and in 80 percent of those cases, the investigations had been suspended. The offending agencies were not identified.
The $14 million isn’t a lot compared to the $768 billion in employment taxes the IRS collected in 2011.
But Inspector General J. Russell George stressed that “federal agencies must comply with the same filing and paying standards that apply to all American taxpayers.”
They “must comply” – but they clearly don’t. Now, if that was you, or I, or any taxpaying citizen in this country, how do you think the IRS would respond? They’d do their best to make the taxpayer’s life miserable. They’d send threatening letters. They’d call at all hours of the day. They’d show up at your house or place of business.
It’s infuriating, but it’s a reality. And unfortunately, the reality facing everyday taxpayers is that we must comply with the IRS… or face the consequences. If you’re in the midst of learning this lesson the hard way, and you need help solving your IRS dispute, please get in touch with us today!
Flexible Programs Help With Tax Debt
If you are feeling the pinch when it comes to taxes, the IRS is going to do more for those who are financially strapped and unable to clear tax debts.
When the Fresh Start initiative started in 2008, the IRS announced that it would provide taxpayers with lien relief if they were trying to sell or refinance a property. New flexibility was added in 2009, along with expanded thresholds for small business owners.
In January of 2012, the IRS agreed to a tax installment agreement that would allow taxpayers to set up payment arrangements with the taxpayers who have had to provide a large amount of financial information to the IRS in the past.
The federal government is also allowing taxpayers to pay back their student loans including delinquent local and state taxes under the most recent phase of the Fresh Start initiative.
The IRS is also revising the way it calculates the future income of taxpayers and is expanding the amount of living expense allowances.
The Fresh Start was put into place to assist individuals who have faced extreme financial hardship. An OIC allows tax liabilities to be settled for less than the amount owed. The IRS will look at the income of the taxpayer to determine the reasonable potential for collection. An OIC is usually not accepted if the Internal Revenue Service believes that the debt can be paid back through payment arrangements or a lump sum.
When it comes to calculating a reasonable collection from the taxpayer, the IRS will look at one year of potential future income instead of the previous 4 years, if the tax debt is paid in 5 months or less. All accepted offers must be paid in full within 24 months.
The IRS understands that many individual taxpayers are finding it tough to pay their bills and have been making changes to the Fresh Start program that relates to real life situations. The new National Standard includes a miscellaneous allowance that taxpayers can use for bank fees and credit card payments.
Because of the changes, some taxpayers will be able to resolve their tax issues in as little as two years, as opposed to the five or six that it took in the past.
These days, even something as simple as donating to your favorite charity can create all sorts of trouble with the IRS. We often hear from business owners and individuals who are interested in supporting a charity but don’t know how to begin. A recent article on Patch.com offers several important factors to keep in mind:
Tax-exempt status. Contributions must be made to qualified charitable organizations to be deductible. Ask the charity about its tax-exempt status, or look for it on IRS.gov in the Exempt Organizations Select Check, an online search tool that allows users to select an exempt organization and check certain information about its federal tax status as well as information about tax forms an organization may file that are available for public review. This search tool can also be used to find which charities have had their exempt status automatically revoked.
Fair market value. Cash contributions and the fair market value of most property you donate to a qualified organization are usually deductible. Special rules apply to several types of donated property, including cars, boats, clothing and household items. If you receive something in return for your donation, such as merchandise, goods, services, admission to a charity banquet or sporting event only the amount exceeding the fair market value of the benefit received can be deducted.
Records to keep. You should keep good records of any donation you make, regardless of the amount. All cash contributions must be documented to be deductible – even donations of small amounts. A cancelled check, bank or credit card statement, payroll deduction record or a written statement from the charity that includes the charity’s name, contribution date and amount usually fulfill this record-keeping requirement.
Large donations. All contributions valued at $250 and above require additional documentation to be deductible. For these, you should receive a written statement from the charity acknowledging your donation. The statement should specify the amount of cash donated and/or provide a description and fair market value of the property donated. It should also say whether the charity provided any goods or services in exchange for your donation. If you donate non-cash items valued at $500 or more, you must also complete a Form 8283, Noncash Charitable Contributions, and attach the form to your return. If you claim a contribution of noncash property worth more than $5,000, you typically must obtain a property appraisal and attach it to your return along with Form 8283.
Timing. If you pledge to donate to a qualified charity, keep in mind that for most taxpayers contributions are only deductible in the tax year they are actually made. For example, if you pledged $500 in September but paid the charity just $200 by Dec. 31 of that same year, only $200 of the pledged amount may qualify as tax-deductible for that tax year. End-of-year donations by check or credit card usually qualify as tax-deductible for that tax year, even though you may not pay the credit card bill or have your bank account debited until after Dec. 31.
It’s important to remember that every case is different, and while this general information should be helpful, if you’d like specific advice, please give us a call today. The ever-increasing complexity of our tax code has made it easier than ever to get in to trouble with the IRS—so don’t take any chance
The IRS is deeply unpopular with taxpayers and business owners, and understandably so. Receiving a letter from the IRS sends chills down most spines! That said, most taxpayers tend to assume that the agency is all-knowing and all-powerful—that the IRS is judge, jury, and executioner.
The truth, however, is that the IRS consists of agents who are people just like you and I. They make mistakes. They screw up. They break the law… as this recent article published on Philly.com illustrates:
A former mail-room worker at a Philadelphia IRS office admitted in federal court Tuesday that she used a database at work to steal her landlord’s identity and open credit-card accounts – and got caught when she tried to pay a $1,003 utility bill with a fraudulent Capital One card.
Domeen Flowers, 48, a Philadelphia native now living in Winter Park, Fla., was hired in 2007 to work at the IRS, authorities said. She was renting a house from the landlord, identified only as “E.R.,” on Hale Street near Brous Avenue in Mayfair, when she tapped into the system in June 2009.
Capital One placed a hold on one of the cards when Flowers tried to pay the large utility bill, and the company mailed a letter to E.R. at the Hale Street address saying it needed additional information to remove the hold.
Several days later Flowers drafted a bogus letter on IRS letterhead and sent it to E.R.’s residence to obtain more identifying information so she could get the hold removed. The letter said the IRS would audit her unless she faxed copies of her driver’s license and Social Security card to the IRS. The letter instructed E.R. to fax the documents to Flowers’ work area.
Flowers subsequently was transferred to IRS offices in Maitland, Fla., before authorities informed her that she was a target of the investigation, Assistant U.S. Attorney Floyd Miller said. The prosecutor said Flowers quit the IRS last year.
Now, this type of criminal behavior is certainly not common. But the point is that the IRS is fallible and does make mistakes. If you find yourself in the midst of a dispute with the agency, do not assume that they are correct. If you’re currently going through an IRS dispute, please don’t hesitate to contact us! It just may be the most valuable phone call you ever make.
If you have ever had the misfortune of experiencing an IRS dispute, you know exactly how stressful and difficult the process can be. The IRS is often referred to as the “world’s most brutal collection agency”, and for good reason. Once it has determined that you owe it money, the IRS will employ a wide variety of tactics designed to extract their payment as quickly as possible. These tactics include garnishing checks, seizing assets, and much more.
There is a bit of good news, however, if you are in the midst of such a dispute. Though the IRS doesn’t want you to know this, the truth is that you do have rights and you can fight back. Contact us today if you are in the midst of such a dispute and need help to get the IRS off your back.
Of course, the best way to avoid an IRS dispute is to make sure that you file your taxes properly each year. Unfortunately, it’s easy for even the most well-intentioned taxpayer to make a mistake. Today, we’re going to share information provided by the IRS which discusses the process of correcting such mistakes. Below are several tips—to read the full story, click here.
When to amend a return. Generally, you should file an amended return if your filing status, number of dependents, total income, tax deductions or tax credits were reported incorrectly or omitted. Additional reasons for amending a return are listed in the instructions.
When NOT to amend a return. In some cases, you do not need to amend your tax return. The IRS usually corrects math errors or requests missing forms – such as Forms W-2 or schedules – when processing an original return. In these instances, do not amend your return.
Form to use. Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend a previously filed Form 1040, 1040A, 1040EZ, 1040NR or 1040NR-EZ. Make sure you check the box for the year of the return you are amending on the Form 1040X. An amended tax return cannot be filed electronically.
Multiple amended returns. If you are amending more than one year’s tax return, prepare a separate 1040X for each return and mail them in separate envelopes to the appropriate IRS processing center (see “Where to File” in the instructions for Form 1040X).
Form 1040X. The Form 1040X has three columns. Column A shows original figures from the original return. Column B shown the changes you are making. Column C shows the corrected figures. There is an area on the back of the form to explain the specific changes and the reasons for the changes.
If you’ve made a mistake on a tax return and you catch it on your own, the information provided above will help you correct the situation. However, if you didn’t catch your mistake on time and are now dealing with an IRS dispute, get in touch with us today. Nobody should take on the IRS by themselves, and with the Law Offices of Nick Nemeth on your side, you don’t have to!
Love it or hate it, President Obama’s Affordable Care Act, known to many as “ObamaCare”, has passed the test of constitutionality and is the law of the land. Of course, one side effect of this law is increased responsibility for the IRS. How will they handle the law, and what does this have to do with you? MSNBC.com breaks it down:
The Supreme Court’s decision to uphold most of President Barack Obama’s health care law will come home to roost for most taxpayers in about 2½ years, when they’ll have to start providing proof on their tax returns that they have health insurance.
That scenario puts the Internal Revenue Service at the center of the debate, renewing questions about whether the agency is capable of policing the health care decisions of millions of people in the United States while also collecting the taxes needed to run the federal government.
Under the law, the IRS will provide tax breaks and incentives to help pay for health insurance and impose penalties on some people who don’t buy coverage and on some businesses that don’t offer it to employees.
The changes will require new regulations, forms and publications, new computer programs and a big new outreach program to explain it all to taxpayers and tax professionals. Businesses that don’t claim an exemption will have to prove they offer health insurance to employees.
The health care law “includes the largest set of tax law changes in more than 20 years,” according to the Treasury inspector general who oversees the IRS. The agency will have to hire thousands of workers to manage it, requiring significant budget increases that already are being targeted by congressional Republicans determined to dismantle the president’s signature initiative.
“Knowing the complexity of the health law, there’s no question that the IRS is going to struggle with this,” said Rep. Charles Boustany Jr., R-La., chairman of the House Ways and Means oversight subcommittee. “The IRS wants more resources. Well, we need to start digging down into what are they doing with the resources and personnel.”
If you are like most taxpayers, the idea of a beefed-up IRS doesn’t please you—no matter what you may think of the President’s reform. At the Law Offices of Nick Nemeth, we deal with the IRS every day on the behalf of our clients, and we understand the frustration and anger than many of you are feeling. Whatever happens over the next two years, you can count on us to continue to work hard to resolve your IRS disputes.
If you’re facing an IRS dispute, please don’t delay. Pick up the phone and give us a call today!
IRS disputes make life miserable for thousands of taxpayers and business owners each year. At The Law Offices of Nick Nemeth, we specialize in resolving these disputes and allowing our clients to get back to living their lives.
Of course, the best way to resolve an IRS dispute is to avoid it in the first place—and today we are going to share several tips to help business owners. FoxBusiness.com offer three valuable tips for small businesses:
Tip No. 1: Maintain your books and records on computerized software and reconcile your bank accounts.
Auditors are trained to detect unreported bartering income. Remember that even if no money changes hands, you are required to report all bartering income, and the IRS knows this is an area of high noncompliance. It’s a tough economic climate right now, and many entrepreneurs turn to bartering to help protect cash flow.
Agents know to look for Forms 1099-B filed with the IRS, which report barter income, and they will look around your place of business for stickers or plaques that announce your participation in a bartering exchange club. They will check your website to see if you’ve listed a bartering exchange organization. While examining your books, agents will look for fees paid to bartering exchanges. And of course, an agent will straight up ask about your participation in bartering activities. Tell the truth, and take the knocks if you must. Remember, the agency has ways of finding out.
Tip No. 2: Make it a matter of course to record all bartering activity in your books at its fair market value.
Assigning income to other parties—such as another business that you own to reduce net operating losses in that company and avoid self-employment and income tax on the income can be a hairy issue. If the auditor goes through your contracts and finds one that appears to be unfulfilled (because the income was shifted), be ready to provide copies of tax returns for your other businesses for examination. Do I hear the popping sound of the can of worms being opened?
In the case of Lucas v. Earl, U.S.T.C. 496 (1930), the Supreme Court ruled that income is taxable to the one who earns it regardless of the fact that he may enter into a legally-binding agreement to have it paid to another.
Tip No.3: Don’t play games with the money. Keep your businesses separate from each other and record all income and expenses accordingly.
When looking at bank statements, an auditor will add up all the bank deposits for the year and compare them to your reported sales. If there is a discrepancy, the agent will want an explanation. Amounts deposited that exceed the amounts reported on a tax return will raise eyebrows, but there may be plausible explanations. You may have transferred personal funds into the business account to remedy a cash flow problem, or there may be deposits of other nontaxable income such as loan proceeds, or a cash gift from mom and dad.
Following these steps will help you reduce the chances of experiencing a costly and stressful IRS dispute. If you’d like to learn more, or if you need help resolving an IRS dispute, please contact us today!
IRS disputes impact thousands of Americans each and every year. And while the financial repercussions are severe, in many cases the emotional turmoil is even worse.
One of the worst parts, for many taxpayers that we have spoken to, is feeling all alone. The IRS is intimidating, and many people just don’t know where to turn.
If that’s your situation, understand that you do not have to face the IRS alone! We can help. At the Law Offices of Nick Nemeth, we understand the stress that our clients feel when they have the IRS breathing down their neck. Needless to say, any organization as powerful as the IRS with the authority to levy or seize your property without having to go to Court can be tremendously intimidating. Our primary goal for our clients is to alleviate the stress and fear associated with tax problems and devise a solution to resolve existing or future IRS problems.
You should also know that you are far from the only person facing IRS issues. Even the “rich and famous” aren’t exempt. Findlaw.com reports:
Things might be looking a little rosier for Nicholas Cage’s IRS tax troubles. The “Ghost Rider” star has paid the government $6,257,005 in back income taxes from 2007, ABC News reports.
The multi-million dollar payment got the federal government to remove a lien that was placed on the actor’s real estate holdings in 2008.
This all sounds pretty groovy for Cage, but the reality is still pretty grim for the Hollywood star.
That’s because Cage still owes over $6 million more to the tax man, TMZ reports.
Cage’s tax problems date back to 2002. He claims it was his former business manager that was responsible for his current predicament and has since hired new management.
That explanation might help keep a person from going to jail, but it won’t stop the IRS from still wanting its money. And they’ll employ pretty creative ways to get it. From wage garnishments to liens, like the one placed on Cage’s property holdings.
Nicolas Cage’s tax troubles will continue to haunt him for now. But until his IRS problems are solved, it’s probably safe to assume we’ll be seeing him pump out a lot more movies.
And Nicholas Cage isn’t alone. In fact, Grammy Award winning songwriter Lauryn Hill recently made headlines after being charged with failing to file and pay three years worth of back taxes. If she is found guilty, Hill could potentially face fines of up to $100,000 for each count—in addition to possible prison time.
The lesson? It’s easy for anyone, no matter how much money they have, to run into trouble with the IRS. In fact, in most cases, it is a perfectly innocent mistake that lands a taxpayer in hot water to begin with.
Are you facing IRS disputes? If so, we can help. The IRS is powerful and intimidating—but you don’t have to face them alone. Get in touch with us today and let us deal with the IRS so that you can get back to living your life.
There are few words that sound worse to a taxpayer than “The IRS has selected your return to be audited.” Unfortunately for taxpayers, and in particularly for small business owners, audits stand to become even more frequent in the future.
As OnWallStreet.com reports:
The IRS is beefing up its ranks of auditors, and doing more audits, according to a leading accountant addressing the Financial Planning Association of New York’s spring forum.
“With everybody losing jobs, the biggest hire is the taxing authorities. They are hiring left and right to do audits,” said Mark Josephson, partner at New York City-based Murray & Josephson. “Contrary to what you might be reading in the press, when I speak to an auditor, and they say, ‘Yeah we just hired 31 people in our department,’” he said.
He added that as the IRS is auditing more taxpayers, including small business owners, the audits are taking longer because the agents are demanding more details. He said on every audit he’s seen recently, agents have demanded every brokerage statement, every bank statement, and any other type of financial statement. He noted that they always had a right to demand this documentation, but only asked for it occasionally in the past. “One of the main reasons is they want to add up all the deposits and make sure you’re picking up all your income. The audits are becoming more and more tedious,” he said.
Murray highlighted one particular new disclosure requirement that is getting extra scrutiny: small businesses must disclose if they were required to issue 1099 forms to outside contractors, and then disclose whether they did or not. He said many do not want to bother with the extra chore and expense of issuing these forms, and skip it. If the small business owner then declares on her taxes that she was not required to issue 1099 forms, and she should have, it’s perjury, he said. At that point, the client is facing both penalties and possible criminal charges.
Got that straight? Not only is the IRS adding agents and performing more audits than ever, but now a simple mistake could have you on the hook for criminal charges in addition to penalties! It’s more important than ever that you file your taxes properly.
Unfortunately, even an honest mistake can lead to a stressful and costly dispute with the IRS. At the law Offices of Nick Nemeth, we can help! We only deal with IRS disputes. Our primary goal for our clients is to alleviate the stress and fear associated with the tax problems and devise a solution to resolve existing or future IRS problems.
If you are facing IRS problems, it’s critical that you seek professional guidance immediately. The problem will not go away by itself, and the longer you wait to address it, the worse it will become. Don’t get stuck in the destructive cycle of IRS penalties and interest—contact us today to learn more!
If you have had the misfortune of dealing with an IRS dispute, you know that the agency will stop at nothing to collect—and won’t hesitate to make things worse by slapping on penalty after penalty.
Each year, hard working business owners and citizens across the country have their lives turned upside down by IRS disputes. Incredibly, the IRS may become even more powerful in the near future. As Investors.com reports:
The Republican House of Representatives may soon follow the Democratic Senate and give the IRS the power to confiscate your passport on mere suspicion of owing taxes. […]
‘America, Love It Or Leave It” might be an obsolete slogan if the “bipartisan transportation bill” that just passed the Senate is approved by the House and becomes law. Contained within the suspiciously titled “Moving Ahead for Progress in the 21st Century Act,” or “MAP 21,” is a provision that gives the Internal Revenue Service the power to keep U.S. citizens from leaving the country if it finds that they owe $50,000 or more in unpaid taxes — no court ruling necessary.
It is hard to imagine any law more reminiscent of the Soviet Union that America toppled, or its Eastern Bloc slave satellites.
In his 1967 CBS “Town Meeting of the World” debate with Bobby Kennedy, Ronald Reagan declared, “we don’t want the Berlin Wall knocked down so that it’s easier to get at the throats of the East Germans. We just think that a wall that is put up to confine people, and keep them within their own country instead of allowing them the freedom of world travel, has to be somehow wrong.” […]
As Reuters reported Monday, overtaxation has led to close to 1,800 Americans living abroad renouncing their U.S. citizenship last year or turning in their green cards — many of them with broken hearts because of their love for this nation. The record number of former U.S. citizens is nearly eight times more than those who renounced U.S. citizenship in 2008, and it exceeded 2007, 2008 and 2009 combined.
They did it because of the nightmare the U.S. government puts them — and non-American spouses — through, sniffing over any and all of their finances.
As a taxpayer, the last thing you want to hear is that the IRS is becoming more powerful. The agency already has the capability to turn an individual’s life into a nightmare, creating an endless cycle of penalties, interest, and more penalties. But it seems highly likely that now, Americans won’t even be able to leave the country if they owe the IRS a significant sum of money.
If you’re dealing with IRS problems, here is what you need to understand: They won’t go away on their own. You have to take action. You CAN resolve your IRS dispute—and we’ll help you do it. Get in touch with us today and let us help you put your IRS dispute behind you!
IRS disputes, if they are not properly addressed, can make your life miserable. They can put incredible pressure on you, your family, and your business. In addition to the financial difficulties IRS disputes create, they take an emotional and a physical toll as well. But there is hope, no matter how dire the situation may seem. If you’re in the midst of an IRS dispute, contact us today for a confidential consultation and let us go to work resolving it for you.
Of course, the best way to resolve IRS issues is to avoid them to begin with. Today, we’re going to examine several common mistakes—and how to avoid them. The following is information published by the IRS in order to help taxpayers avoid mistakes:
Of course, it’s entirely possible to make mistakes—even when you’ve done your best to comply with the convoluted tax code we face today. Unfortunately, the IRS is quite unforgiving—and it’s easy for an innocent mistake to spiral out of control and result in thousands of dollars (or more) in penalties and interest. If you’re facing an IRS dispute, give us a call today and let us help! If not, consider yourself fortunate—and pay attention to the tips we’ve shared above in order to avoid future problems.
If you are dealing with IRS problems, it can often seem like there is no hope for the future. Between the penalties and interest which continue to compound and the repeated phone calls and visits from overly aggressive IRS revenue officers, many taxpayers feel trapped and completely helpless.
If that’s you, sit up and pay attention: no matter how hopeless it seems, you CAN resolve your IRS disputes. But it’s equally important to understand that they won’t go away by themselves!
Not only do IRS problems not go away, they actually get worse if ignored. Penalties and interest continue to accumulate and the threatening IRS letters become even more threatening . Many taxpayers experience extreme emotional duress and physical signs of stress, in addition to the obvious financial fallout.
Originally, IRS penalties were designed to be a slap on the hand in order to help taxpayers learn from their mistakes and avoid them in the future. But they have now evolved into a sledgehammer which pounds taxpayers so far into the ground that there appears to be no way out. And as the situation continues to escalate, the IRS begins to make life increasingly miserable for the taxpayer. The IRS will utilize bank levies, wage garnishments, and may even seize your assets to satisfy a tax debt. My experience dictates that the IRS collection official has no concern for your well-being … their objective is simply to get as much money from you as quickly as possible by using any of the weapons at their disposal.
That’s why it is essential that you take the first step in order to solve your IRS problems. Our firm works with taxpayers who are tired of the endless cycle of IRS harassment—and we can help you, too! But you have to take the first step. Fortunately, it’s an easy first step to take: make up your mind that enough is enough and that you aren’t going to take it anymore!
Then, you’ve got three choices:
1. Call our office for a Free Tax Analysis, 972-484-0TAX (0829) or 1-800-287-0626
2. Complete the “Free Tax Analysis” section near the top right of this page. We will contact you promptly.
3. Should you simply wish to obtain a copy of our FREE special report entitled “How to End IRS Problems Forever,” simply fill out the Free Report section near the top right of this page and one will be mailed to you immediately.
There is a light at the end of the tunnel. You CAN resolve your IRS dispute—and we’ll help you do it. Get in touch with us today and let us help you put your IRS dispute behind you!
It is not an exaggeration to say that IRS disputes can make your life miserable. If you or your business has dealt with IRS problems in the past, you know exactly what I am talking about. If you haven’t, you’re fortunate!
The fundamental mistake that many people make when confronted with IRS disputes is to ignore the problem and hope that it goes away.
But let me tell you… after more than 15 years in this business, I can say with certainty that IRS problems NEVER go away by themselves.
In fact, they only get worse. Why?
Because during the period of time that you are ignoring the issue, the IRS is slapping your account with penalty after penalty. If you file late, you’ll face a penalty. If you pay late, you’ll face a penalty. If you make a mistake, you’ll face a penalty. If fail to disclose certain information, even if it’s an innocent mistake, you’ll face a penalty. If you own a business and you fail to withhold the proper amount for your employee compensation, you’ll face a penalty and remember, interest never stops accruing in addition to the penalties.
And the longer you wait to address the issues, the worse it gets.
As you can imagine, it doesn’t take long for things to get out of hand.
To illustrate, here’s a story we’ve seen time and time again:
A business owner makes a relatively minor mistake while preparing his return. (When you consider how complicated our tax code has become, it’s easy to understand why mistakes happen!) The IRS, in turn, assesses a penalty. The business owner is already stretched thin dealing with the day-to-day management of his business and doesn’t respond to the matter. The IRS steps up their efforts the contact him, causing further stress and anxiety. By the time he actually addresses the matter, the amount he owes has skyrocketed thanks to additional penalties, fees, and interest.
What was initially a manageable bill is now a nightmare. Now, the business owner has no chance of paying what he owes—but the IRS won’t back down. The stress this causes is overwhelming, and it’s not uncommon to see businesses go belly-up as a result. Of course, in many cases even bankruptcy doesn’t stop the IRS, as they can often pursue an individual’s assets as well, depending on how the business was structured. All the while, the penalties and interest continue to accrue.
How does this saga end? It doesn’t—until you consult with a tax law professional. At the Law Offices of Nick Nemeth, we only deal with IRS disputes. Our primary goal for our clients is to alleviate the stress and fear associated with the tax problems and devise a solution to resolve existing or future IRS problems.
If you are facing IRS problems, it’s critical that you seek professional guidance immediately. The problem will not go away by itself, and the longer you wait to address it, the worse it will become. Don’t get stuck in the destructive cycle of IRS penalties and interest—contact us today to learn more!
Great news for everyone who enjoys the prospect of a beefed-up IRS: the Obama administration has requested that, starting in 2013, the agency receive an additional $944.5 million over its budget for fiscal year 2012. For those scoring at home, that brings next year’s IRS budget to approximately $12.8 Billion.
Michael Cohn of Accounting Today explains:
“The fiscal 2013 budget includes $403 million for new IRS enforcement activities, which are expected to raise $1.48 billion in revenue annually at full performance, once new hires are fully trained and develop broader experience by fiscal 2015, representing a 4.3-to-1 return on investment.
‘The return on investment is even greater when factoring in the deterrence value of these investments and other IRS enforcement programs, which is conservatively estimated to be at least three times the direct revenue impact,’ said the IRS.
The enforcement budget also includes $200 million in additional examination and collection programs that the agency anticipates will generate more than $1.1 billion in additional annual enforcement revenue by fiscal 2015. The IRS plans to use the money to improve international tax compliance by businesses and individuals, in part by hiring more international technical specialists, and to expand its efforts to identity tax refund fraud and tax-related identity theft. The IRS also plans to use the money to implement new information reporting requirements and enhance oversight of complex financial situations, including transfer pricing and uncertain tax positions.”
What does that mean for individuals and business owners?
What the IRS refers to as “return on investment” means increased tax revenue. More agents, more audits, more penalties, and more collection enforcement.
And when you factor in the Administration’s current plan to allow the Bush-era tax cuts to expire for many individuals and families, the bottom line is simple: Americans, particularly high-income earners, are going to see their tax bills climb.
Of course, you can take action to protect your hard-earned income. Contact the Law Offices of Nick Nemeth today if you are facing IRS debt that you simply cannot pay.
The tax code is more complicated than ever—and it’s essential that you seek professional help to minimize your liability… and reduce the likelihood of liens, levies, garnishments and seizures. Contact us today to learn more!