Posted by LWM Team on Mon, Feb 08, 2010
Not a dime is floating into your pocket... you’re BUSTED? But the kids need shoes and the wife needs a new refrigerator because the old one quit. WHAT DO YOU DO? An Age Old American Tradition of bartering has kept poor families going for centuries. You’ve got what I need and I’ve got what you need... and ALL ends well in the world of barter trading! America REEKS of auction houses, used good stores, and antique shops that all use the barter system in any way they can! But hold on to your bedroom set and hold the delivery of the couch...the I.R.S. wants APPRAISAL and accountability! If the ‘fair market value’ of your bedroom set is below the value of the couch you’re getting, it doesn’t matter a BIT to the I.R.S. if you and ‘Joe’ agreed to trade ‘even-up!’ You have gained IMAGINARY dollars that you MUST report when filing your taxes! Did you follow that? So you owe TAXES on the difference in value of the two items! LEGALLY, that is. They just think of EVERYTHING to ruin our FUN and life as we know it!
Fat Chance They Will Catch You
The nations trade or DIE, slippery and cunning traders silently say...“Ha, ha...we know the loop-holes on this one,” and it’s NOT LIKELY pro barters will be caught...but should they? If two people decide that they are satisfied to trade items or services that benefit BOTH EQUALLY and no money changes hands, then WHY would the I.R.S care? Well, even with ‘friendlier’ faces they are still the I.R.S. and with THIS economy they suffer HIGH PRESSURE to find even ‘imaginary’ money. Wonder if they have talked to the President about that? Barter on-line exchanges present the most likely place for barterers to be caught. The records are there in black and white. So watch your imaginary dollars or Uncle Sam will have some!
If you need additional tax assistance, please contact our offices.
Posted by LWM Team on Thu, Jan 07, 2010
Currently Not Collectible status is used by the IRS to refer to an individual who is unable to pay their taxes due to financial difficulties. Currently Not Collectible status refers to an assumed temporary situation; therefore it does not mean that your debt to the IRS is forgotten about. What it means is that the IRS will not issue you levies or make any attempts to collect the taxes from you until you are able to pay.
Currently Not Collectible status is issued when it is deemed that one cannot pay their debts, their assets are not valuable enough and/or issuing levies would cause what is referred to as "economic hardship". Economic hardship is stated as being a condition where living expenses cannot be met. Currently Not Collectible status means the IRS puts a code "53" on your account, indicating that collection activities have been suspended.
In order to get this economic hardship status, the IRS has to review your income as well as your living expenses. They will also review your assets and any liabilities you may have. For your living expenses, reviewing means comparing them to the charts they have (which cover, food, clothing, car expenses and housing/utilities), in order to see if you really do seem to be in economic hardship. If any of your expenses are too high, you will be unable to claim economic hardship. You need to be aware that you need to have no cash flow to qualify for Currently Not Collectible status. If the IRS is not satisfied that you qualify, you can be given time to adjust your expenses. Although, not everyone manages to do this to the satisfaction of the IRS, and sometimes bankruptcy is a better option in these cases.
It should also be noted that Currently Not Collectible status does not mean interest and penalties are forgiven. You will still have to pay these eventually. However, for some individuals, being a code 53 can be a good thing, because after 10 years the IRS is required, by law, to clear the balance owed and bring it back to zero.