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IRS Tax Help: IRS Prosecution

September 30, 2010 By

IRS Prosecution of Tax Deception Rises – Get Help for Back Taxes

There have always been tax cheats. However, because times are tough, the amounts of taxpayers thinking about some deception on their tax returns are rising. The best advice is not to cheat. The Internal Revenue Service is determined to get as many tax evaders or tax cheats as they can. The consequences of tax fraud are serious. The best way to see cheating doesn’t work is to take note of actual cases where people got caught.

The owner of an automatic car wash company had their customers pay cash and coins prior to entering the wash stall. The person in charge of the book-keeping took the money home. There, the money was counted and the cash was totaled in two registers. One register for actual revenue and the other for the money they were going to declare. The revenue they were going to declare was placed in a bank account. The other was utilized for personal expenses. They believed that money could not be traced.

The car wash business was eventually caught by the ever vigilant Internal Revenue Service. They were faced with a $250,000 fine and up to five years in jail. Their crime was cheating the Internal Revenue Service of $133,000. More and more people are being tried for tax fraud and this should act as a warning. The consequences are always far greater than the amount that is owed.

Another case involved a business person in Iowa who got a jail term of three and half years. His crime was bankruptcy fraud. This business person filed tax returns that were false. Another case involved a man in Florida who got four years in jail. He did not declare earnings of $3 million. Both these individuals believed what they did was under the radar and therefore not traceable. It is far more sensible to seek the help that is available from the Internal Revenue Service.

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Easiest Ways To Get A Tax Levy Release

September 29, 2010 By

What Are The Easiest Ways To Get A Tax Levy Release?

If you have already received a notice that says “Intent to Levy” from the IRS, you only have 30 days before the IRS will send collections to seize your assets. This could be anything from property to vehicles and more. During these 30 days, it’s imperative that you work fast and get everything in order. The easiest ways to get a tax levy release are:

Payment Agreement

The IRS wants their money and they’d rather cooperate with you to make payments over a longer period of time than try to auction off your assets. A payment agreement is similar to an installment agreement except you will normally pay less than the total amount you owe the IRS and you will also make smaller payments. For this to be an option, you have to prove you don’t have the ability to follow the standard installment agreement.

Pay It Off

If you pay what you owe immediately, the tax levy release will happen right away. This usually isn’t an option for many people by the time they reach this point but if you can do it, all your problems pretty much go away overnight.

Offer in Compromise

This is very similar to what a credit card company offers if you’ve owed them money for a long time. You can make an offer that is less than the total amount that you owe and you can go from there. If accepted, your tax levy release will happen right away. If not, you will have to try some other type of payment options.

These 3 options are the fastest and easiest methods to get a tax levy release. Since you don’t have a lot of time, ensure that you handle it immediately.

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Installment Agreements and IRS Penalties

September 27, 2010 By

Drowning in IRS Penalties

If you have an installment agreement, you might have discovered that IRS penalties along with interest are resulting in you paying a lot more than what you owe. An installment agreement might make things easier than paying your entire debt off at once, but you might still end up struggling financially.

Unfortunately, there is no proper way to stop IRS penalties from building up. For many, the only solution to this problem is to file for bankruptcy. If you file for a Chapter 13 bankruptcy, you can create a different payment scheme which will eliminate IRS penalties and interest from building up. If you do this, you can even speed up how quickly you can pay off the debt, since you’ll be paying less overall!

Aside from stopping interest (it is a rule that interest cannot be charged under a Chapter 13 bankruptcy) and penalties being reduced (and as another bonus, the penalties you’ve already received can be reduced!), you don’t necessarily have to pay the full amount of what you owe to the IRS with a Chapter 13 bankruptcy. In some cases, people can pay as little as 1% of what they owe. The amount you pay depends on how much the IRS deems you are able to afford. Additionally, under Chapter 13 bankruptcy, the IRS cannot levy your property.

Another reason many people choose Chapter 13 bankruptcy over an installment agreement is that they are allowed more expenses, which means the IRS gets a substantially more realistic idea of your cash flow to take into account when assessing how much you need to pay them back.

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Tax Relief: What Do You Mean, I Can’t Claim Spot As A Dependent?

September 24, 2010 By

It’s always been tempting to me to claim my dog as an income tax deduction. I mean if he’s not dependent on me, then what is? Do you have any idea what it costs today to maintain a pooch? Heck, even the pound charges you to adopt a dog from the pound today. The IRS says that to claim a dependent, I have to materially support them, right? Who do they think pays for the vet? Spot?

Then, there’s the license? My dog can’t drive so I’m not sure how they came up with a dog license? My 5 year old got his shots free before entering kindergarten, but my Vet charged me $85 to give my dog his shots! But, whom does the IRS let me declare as a dependent?

Do you have any idea what it costs today to send your pooch to obedience school? What’s worse is that you have to attend the class with him, unlike your kid who you can just drop off at school. See, how it would make much more sense to be able to declare your pooch as a dependent? He’s a lot more dependent on me than Jr. ever was!

Besides, when I took Spot to obedience school, I came back knowing ten times more than Spot would ever know. They spent more time teaching us stuff, so actually I became very obedient in obedience school, and wish Spot had. He still gives me that tail wag and that empty look when I give him a command. He didn’t learn a thing about being a dog, but I was expected to learn a lot about having a dog, and how to set up my life so that I could come home for lunch to let Spot out!

So, just because you can’t claim Spot as a deduction, you might want to think about an S- Corporation, which will allow you to reduce your payroll taxes.

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Tax Relief Options

September 23, 2010 By

Careful Consideration of IRS Problems Will Save You Time

It’s natural to want to resolve problems with the IRS as soon as possible. This is why many taxpayers don’t spend sufficient time thinking through their tax problems. If you have such problems with the IRS, there important considerations:

Is the way you want to solve your IRS problems possible? One of the better means of solving a tax problem is to opt for an Offer in Compromise. Prior to making this decision you must decide if you are a suitable applicant. There are specific blueprints used by the IRS to work out the amount for settlement. More often than not, their blueprint is not the same as your reality. The most common disagreement is the dissimilarity between the amount the IRS expects and your living costs. If the IRS blueprint is rigid and your living costs can’t cope with their expectation then consider bankruptcy or an installment plan.

Can the IRS seize your property? Due to the gravity, you must ascertain risk of levy and seizure. Even though it’s not common, you must negotiate with that risk possibility in mind.

The IRS has a preference for liquid assets like salaries and cash in the bank above assets without equity like bank loans, houses and cars. They must warn you prior to levying or seizing any assets. They must allow you to settle or appeal before they act. You must know if the IRS has the right to take this action prior to making a choice.

What time limit is provided by the Statute of Limitations on Collection? According to the statute the IRS is allowed a collection period of ten years beginning from the time your liability is recorded by the IRS. Careful consideration is a must as your actions during that time affects the date of conclusion. E.g. if an Offer in Compromise (or OIC) is refused the IRS gets further collection time because it takes up to one year.

If there’s only a short time before the ten years ends avoid an OIC. It is better to opt for an installment plan. A Hardship or Currently Not Collectible declaration is also preferable.

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Two Important Words: Tax Relief

September 22, 2010 By

Educator Excitement

Tax relief– two words that go great together and for good reason. People pay a lot of money each year in taxes and in today’s economy, any savings are good savings. Federal and state governments offer a lot of help that people simply don’t realize is available. This is great news if you owe the IRS some money or are looking to save during the filing of next years taxes. Most tax preparers will offer you tax relief help but it’s a good idea to ask them if you qualify because they may not know your circumstances. Here are a few common types of tax relief:

Penalty Abatement

A lot of people owe the IRS money; penalties and interest will accumulate as long as you don’t comply with them. You can get penalty abatement tax relief which will reduce the penalties or even eliminate them completely for past taxes owed.

Installment Agreements

This is exactly what it sounds like. You can work with the IRS to pay them back slowly over a period of months or years instead of paying them a large lump sum.

Disaster Tax Relief

Were you in a recent disaster like Hurricane Katrina? If so, the government will offer you complete tax relief. This means you don’t have to pay taxes for that particular year or the IRS will offer you an extension on your back taxes. Tax relief help of this kind doesn’t occur very often however; you should inquire about this form of relief if you feel you qualify.

Offer in Compromise

Like many credit card companies, the IRS may offer you a compromise. This could be the best route if you owe a lot of money. You could pay well under 40% of what you actually owe because the IRS doesn’t like to waste time and resources by taking you to court.

Tax relief help is very important. An experienced tax professional can find more areas that you may qualify for than you can on your own. Even if they charge a fee for their service, odds are you will get back much more than you pay.

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Wage Garnishment Release And You

September 21, 2010 By

Wage Garnishment Release And You: What You Should Know

Many people will find themselves in a position at some time in their lives when they owe the IRS back taxes. It’s easy to ignore this in hopes that it will simply go away– but it won’t. If you haven’t made any kind of agreements with the IRS, chances are you’ll end up with a wage garnishment. A wage garnishment is when the IRS takes a percentage (25% usually) of your paycheck. The first time this happens, you’ll be very unhappy, especially if all of your utility bills are due. A wage garnishment release can help you remain in a stable financial position.

To get a wage garnishment release, you’ll have to provide a good reason to the IRS. A good example is if you made $3000 per month before the garnishment, afterwards you only made $2250, and you have monthly bills totaling $2500. Obviously, the IRS will realize this isn’t going to work because it may lead to you selling your property; they don’t want that to happen. The IRS will usually authorize the wage garnishment release if you comply with a payment plan.

Before you start this process you will want to get all needed documents in order and these are: Paycheck stubs, bank statements, bills, property appraisals, and proof of other types of income such as child support, worker’s compensation, and other income types. The more you provide, the better your chances.

Using a service or tax attorney is the best way to get a wage garnishment release. They will not charge you an arm and a leg because they are trying to get you tax relief and understand the burden you already have financially. The Internet is a great resource to find a service that will do this for competitive prices.

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Statute of Limitations for IRS Audits

September 17, 2010 By

IRS Audits: When can I breathe a sigh of relief after filing my tax return?

Once you file your tax return, you can be left with an uneasy feeling about whether or not you will receive an audit. There is no uniform answer to this question, and it entirely depends upon the situation.

When you file your return, what is known as a statue of limitations, which is the term used to refer to how long the IRS has to perform an audit, is put into place. The statue of limitations last for 3 years, and this time span includes actually carrying out and finishing the audit. Outside of this period, the IRS cannot audit you or get any owed taxes from you. However, as always, there are exceptions to this rule.

In cases of fraud, which is classed as wilful tax evasion, the time span for an audit can be unlimited. The IRS has to prove beyond reasonable doubt that it was fraud, but if it does, you can be subject to an audit even 20 or 30 years after you filed your return.

In cases where married couples file joint tax returns, if 25% of gross income has not been reported, the time span for an audit increases to six years, so long as the IRS can prove its case. If one partner is found to have provided fraudulent information in their return, both partners can be subject to an extended statue of limitations. This is not always the case, but it is important that you ensure you both provide accurate information.

You should note here however that you should avoid disposing of any financial documents once the period of limitations has ended. There is always a chance that such documents will be relevant to tax returns you file later in your life, so getting rid of these is never a good idea.

Click here for more information on IRS Audits

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Tax Relief Tip: How to Avoid an IRS Wage Levy

September 16, 2010 By

How to Avoid an IRS Wage Levy Before It’s Too late

If an IRS wage levy is something you have had to deal with in the past or if it is something you feel may happen to you in the future, the most important thing to do is to pay off any tax debt you may have as quickly as possible – if you are able to, of course. Additionally, you need to make sure that you keep up to date on all your taxes; you do not want the IRS to think you are behind in paying them.

You should think about paying your taxes or paying off any tax debt in the same way as you think about any other types of expenses you have. It is something you really need to budget for if you want to avoid action such as an IRS wage levy being taken against you. You should aim to pay the IRS before you pay off other debts (for example, credit card debt).

If you are self-employed, a good idea to budget for your taxes is to set aside a separate bank account for them. This is a good way to avoid an IRS wage levy as not only are you making sure you’re taking your taxes into consideration, but you are also showing the IRS that you are planning to pay them – which is something they cannot fail to be impressed about. You should aim to put between 10 to 20 percent of your earnings into this separate tax account, and more if you have debts or penalties to pay off. This is a very simple and easy way to avoid an IRS wage levy being filed against you.

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2 Types of Tax Relief

September 15, 2010 By

2 Forms of Tax Relief You May Qualify For

Tax time seems to come faster and faster each year. As you prepare for that day, it’s a good idea to ask yourself whether or not you might qualify for any kind of tax relief. This comes in many forms ranging from aid to those in a disaster to keeping your assets separated from your spouse. If you are unsure, it’s a great idea to ask a tax preparer for tax relief help and if you qualify for anything. Here are a few examples:

Innocent Spouse Relief

One of the most common forms of tax relief is called “Innocent Spouse”. When you request this, you can avoid paying taxes and penalties that your spouse (or ex) may be responsible for. This could be due to unreported income, faulty deductions, or if you know you aren’t responsible for something. A great example of this is if your spouse is required to pay child support and you are expecting a tax return. If they are behind, your tax return can be used to pay for your spouse’s child support.

Homeowner Relief

In the US, there are a few programs out there that will help cut the taxes of homeowners. This is both federal and state. Some countries may even offer relief to renters. You should definitely inquire about this form of tax relief; if you qualify, you could pay much less in taxes.

These are just a few common examples of the types of relief you may qualify for. It’s difficult to determine what you qualify for so by getting tax relief help from a professional, you might find yourself saving thousands of dollars. It’s definitely worth your time to pursue this each and every year.

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