Category: Blog

Falsely Padding Deductions: A Prime on IRS’ “Dirty Dozen” List of Scams

Say No to falsely padding deductions

The Internal Revenue Service (IRS), in many cases, does not have the resources to verify every deduction reported on the tax returns it receives from taxpayers. Many taxpayers take it as an opportunity to falsely inflate deductions or expenses on their returns. As a result, they underpay what they owe to the government and receive larger refunds. Every year, a number of taxpayers fail to resist the temptation of fudging their income-related information, which explains the inclusion of falsely padding deductions in the IRS’ Annual “Dirty Dozen” List of Tax Scams. Let’s take a closer look at the situations that

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Think You Can Evade IRS Taxes? Here’s a Wakeup Call

Avoid penalties for not paying IRS taxes

The IRS never forgets. It’s evident from various news flashes about people being chased around for non-payment of taxes, for years. In one such instance, the Internal Revenue Service followed the trails of a company and collected a 30-year old tax debt! In 1982, the company was unable to pay off its tax debts  due to insufficient fund, and later filed for bankruptcy. The IRS, in addition to the actual amount owed, charged a penalty of 100 percent for tax evasion. Examples like this remind us of the persistence, power, and reach of the IRS. In this post, we discuss

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Gambling Loss Deductions: All You Need to Know

Most people who gamble assume that they can use their gambling losses as write-offs, which is simply untrue. You need to know that gambling losses are tax deductible to the extent of your winning limitation. The limitation is applicable to all types of gambling, including slots, poker, lottery, and horse racing, among others. It’s also worth mentioning that you can’t reduce your tax burden by showing your gambling losses by claiming the standard deduction. The purpose of this post is to help you learn about the ways to deal with tax liability changes that manifest from gambling. Gambling Loss Deductions

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4 Must-Know Signs to Identify an IRS Scam and Take Guard

Know Signs to identify call from IRS Scammers

IRS phone scammers have become increasingly deceiving and untraceable in recent times. Since October 2013, the Treasury Inspector General for Tax Administration (TIGTA) has received approximately 290,000 contacts from US citizens reporting a possible scam. The TIGTA has also confirmed that among the contacts, nearly 3,000 have fallen victims, collectively paying more than $14 million to fraudsters who made unsolicited calls to them claiming to be IRS officials. Considering the outreach of IRS scammers and the extent of possible damages, it becomes essential for every US taxpayer to know how to protect themselves from getting duped. To help, this post

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Procrastination in Filing Taxes Can Cost You Dearly

Procrastination in filing pending dues

When it comes to filing taxes, many people tend to get stressed out, which often leads to procrastination. Taxpayers, however, are not the only ones to blame for such indecisions. The intricacies of the U.S. Tax Code is a cryptic language for most taxpayers, which is why many people are unable to file their taxes and have to bear various consequences including penalties. To validate the significance of filing taxes before the annual deadline (April 15), in this post, we discuss the penalties taxpayers have to pay for late filing and payment. Penalties The US citizens run the risk of

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Tax Evasion is a Road to Nowhere: A Lesson Learned the Hard Way

The Thin Line Between “Tax Evasion” and “Tax Avoidance”

Tax evasion costs the US government billions of dollars in losses every year, which explains why they are one of the biggest concerns of the IRS. There are companies with international subsidiaries in tax haven jurisdictions, established with the sole purpose of evading taxes. A recent study conducted by the University of California, at Berkeley reveals that the total overseas holding of US based companies is approximately $7 trillion – a sum that’s equivalent to the collective value of global gold reserves. The Thin Line Between “Evasion” and “Avoidance” What many people don’t know is that tax avoidance (nonpayment after

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Behind with Your Taxes? The IRS Fresh Start is a Possible Way Out

IRS Fresh Start Initiative helps struggling taxpayers deal with taxes

In 2011, the IRS acknowledged the challenging times people were facing in the depressed economic climate by rolling out the Fresh Start Initiative (FSI). The Economic downturn we faced in 2015 suggests a revitalization of the is program may be on the horizon. The initiative provides a ray of hope to financially distressed and struggling taxpayers, giving them a chance to keep up with their tax payments and avoid tax liens. The program helps qualified taxpayers by exempting them from penalties on unpaid dues and accrued interest. Since inception, the IRS Fresh Start Initiative has helped thousands of struggling taxpayers

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IRS Pursues Indian Tribes for Tax Evasion

A longstanding tax dispute between the Miccosukee Indian tribes in Florida and the Internal Revenue Service (IRS) has snowballed into a major controversy. The dispute is over whether or not gaming profits should be subject to federal tax withholding. In this post, we discuss the regulatory framework about gaming on Native American lands. The Indian Gaming Regulatory Act of 1988 (IGRA) Until 1988, there were no federal laws to regulate the gaming structure on Indian owned land. That’s when the US government came up with The Indian Gaming Regulatory Act that established a legal framework to govern Indian gaming. The

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“Seriously Delinquent” Tax Debts May Impede Your Travel Plans

The world has gone global, and American citizens travel frequently to various parts of the world. When traveling abroad, carrying a valid passport as a proof of US citizenship is essential for routine activities such as foreign exchange transactions or checking into your hotel. It may come as a surprise, but if you have a ‘seriously delinquent tax debt’, you may have to put your travel plans on the back burner. The number of IRS tax defaulters is increasing sharply, and many of them are still unaware of the fact that their unpaid debts can jeopardize their travel plans. In

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Tax Basics: Know Your Way Around Payroll Taxes

Learn tax basics of payroll taxes

So many companies are downsizing, shrinking staff, declaring bankruptcy, or shutting down completely. The most common reason is failure to pay or settle their payroll taxes. Payroll taxes, also known as employment taxes, and frequently referred to as 941 taxes, are State and Federal taxes imposed on employers on behalf of their employees. Many cash-strapped companies, including start-ups and big corporations, fail to pay their payroll taxes when due. State and federal tax authorities typically do not come to the doorstep demanding money; they wait until the company accumulates cash to settle the debt. Unfortunately, when profits don’t rise and

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