Tax Resolutions Podcast with Tom Scott

If you get a tax notice from the IRS, don’t put your head in the sand. Instead, call your tax advisor or a tax resolution specialist.Click here for a FREE tax relief consultationCheck out our FREE tax resource library Dealing with the IRS is usually a scary subject for most people. If they receive a piece of mail from the IRS, they might look at it a while before opening the envelope...if they open the envelope at all. They don’t want to know what’s inside because it’s almost always bad news. They know they owe the IRS and think that if they just don’t open the envelope, the problem will go away! This is the No. 1 problem people have when dealing with the IRS: putting your head in the sand. This is no good, and it will only result in another piece of mail from the IRS in about a month, right about the time you forget about the first letter. Perhaps you finally open the second envelope and find that you owe the IRS a ton of money. You have no idea what to do, so you call the phone number on the tax notice and get put on hold for about an hour before you talk to someone. The IRS agent then talks to you about how you messed up and didn’t report some income, or how you’re getting audited and better pay up or be prepared to defend yourself. They tell you to pay now or you will have more penalties and interest or you could get your bank accounts and property levied. You might not know what “levied” means, but you know that it’s a very bad thing and understand that you could lose your property to the IRS.  If you have a problem with the IRS, it won’t go away if you just stick your head in the sand.We have all heard stories about the big bad IRS taking people’s bank accounts and homes. So what do most people do? They panic and hang up, of course. The problem will go away if they ignore it. Again, this is not good. What should you do instead? If you receive a tax notice from the IRS, open it immediately. If it’s not just a little amount for interest, call your tax advisor or a tax resolutions specialist. We are equipped to work with the IRS for you. By the way, if you ever receive a call from the IRS, whether it’s from a human or it’s a robocall, immediately hang up. This is a scam. The IRS never calls—they only send mail through the US post office. Additionally, you should sometimes beware of those mail items, because they can occasionally be scams too. It’s a scary world, so call your tax resolutions specialist if in doubt. If you have any type of tax problem, you should protect yourself by hiring a qualified tax problem specialist. We’re experienced in negotiating with the IRS to get you the lowest amount that you have to pay. If you have any other questions about this topic, you have a tax problem, or you know someone with a tax problem, don’t hesitate to reach out to me. I look forward to hearing from you.

What tax-related issues can arise for self-employed people and 1099 employees? Let’s discuss this critical subject today. Click here for a FREE tax relief consultationCheck out our FREE tax resource library Today we’re going to talk about the 1099 self-employed and their growing tax problems. This is a subject I deal with all the time when speaking with clients. Many of the people I have conversations with have no idea how to get into business, and make a lot of tax mistakes that end up costing them dearly. While, by definition, a person getting paid as an independent contractor, such as a Realtor, is self-employed, many employers try to pay their “employees” as independent contractors. They do this to selfishly save on costs like payroll taxes, worker compensation insurance, and benefits. As a result, this creates serious tax problems for 1099 employees, because they generally don’t understand the costs they’re agreeing to pick up. This includes expenses such as the IRS Self-Employment tax, Federal and State tax, insurance, and more. Many times, the unsuspecting 1099 employee is lured in by the prospect of earning more than a regular employee. The prospect of being able to work for more than one employer is attractive, as it suggests the possibility of increased income and independence. Being self-employed, though, equates to a huge cost and responsibility, as you will be required to pay 15.3% in Self-Employment tax on your profits. 1099 employees must also put aside estimated tax payments for this cost, as well as their federal and state income tax. Most who start out with this responsibility simply don’t understand the full financial ramifications and penalties associated with neglecting these payments. Instead, most 1099 employees simply receive their “paychecks” from their employees and spend the funds without regard these expenses. Personally, I would guess that 90% of newly self-employed people get surprised with a huge tax bill in their first year. Being self-employed, though, equates to a huge cost and responsibility.This lack of preparation puts them into a terrible and terrifying pattern of not paying, getting an installment agreement with the IRS, etc. They simply don’t have the money to get out of this cycle and also don’t want to compromise the spending that supports their personal lifestyle. Year after year, this problem will only grow. For example, I’m currently working with a young man who is a 1099 employee. This man’s wife is a regular employee, but under-withholds on her income taxes. For the past five years they’ve been accruing close to $10,000 each year. Now, they’ve accumulated a debt of $50,000 and are in the middle of getting divorced, while still facing this huge tax problem. Now, their only solution is to sell their home and use the proceeds to pay part of their taxes, as well as either using Installment Agreements to pay the remaining past taxes or an “Offer in Compromise” to decrease their debt. The young man is still a 1099 employee, but I am currently helping him sort through the prospect of becoming a regular employee. This transition would lead him to technically receive lesser pay, but, as I explained to him, the offer of lesser pay in this case is actually more than he’s currently earning as a 1099 employee. So, moving on from this situation, I’d like to address an important question: When should a newly self-employed person consult with a tax advisor? Actually, the answer is as soon as possible. Any delay in this consultation will cause issues. It’s easy to get in over your head, but hard to know what to do once you are. Once people reach this point, it’s critical for them to reach out to a tax professional who can help them work through their circumstances. And I don’t know of any tax professional that provides specific mentoring and guidance 1099 employees and self-employed people the way I do. So, if you are facing this problem, please give me a call or send me an email. I would be happy to guide you. And, as always, if you have any other questions or would like more information, feel free to get in touch. I look forward to hearing from you soon.

Taxpayers often make the mistake of ignoring inheritance assets on their tax return. I’ll explain how to avoid and fix this mistake today. Click here for a FREE tax relief consultationCheck out our FREE tax resource library A frequent error taxpayers make is ignoring inheritance assets. When a person inherits stocks or other assets, they often believe that they are not taxed. This is partially correct; the assets are not taxed when received. But when the assets are sold later on, you must report the sale on your tax return. I’ve had many cases where ignoring these sales caused tax notices with huge taxes, penalties, and interest that surprised and scared the taxpayer. Since inherited assets receive a step up in basis (or tax cost), there is often very little gain or loss. There would be little, if any, effect if a sale occurs quickly after inheriting these assets and the sale is reported correctly. When the assets are sold later on, you must report the sale on your tax return.To correct this problem and eliminate surprise taxes, we must amend the original tax return that ignored the sale and provide evidence of the death of the person receiving the stocks, stock ownership statements showing the history of previous ownership, and receipt and eventual sale. I have had several cases where, in the end, there is very little tax effect. The time and fees paid to a professional to amend a tax return are expensive. A taxpayer can save themselves a lot of grief and money by understanding that any asset they inherit and later sell must be reported on their tax return. If you have tax problems, you should protect yourself by hiring a qualified tax problem specialist. We have experience in and strategies for negotiating with the IRS to get you the lowest amount that you have to pay. If you have any questions, just give me a call or send me an email. I would be happy to help you!

What are tax liens and levies? I’m going into detail about both today.Click here for a FREE tax relief consultationCheck out our FREE tax resource libraryIf you don’t pay your debts, the IRS can use wage garnishment to take most of your paycheck away. Ignoring your taxes can lead to the IRS collecting them instead. A wage garnishment or levy will only occur after you have received many notices and had many opportunities to handle your taxes on your own accord. If a wage garnishment does proceed, the IRS will decide how much to take. This could be up to 75% of your entire check, leaving you nowhere near enough money if you live paycheck to paycheck like most Americans.Ignoring your taxes can lead to the IRS collecting them instead.However, there are ways to negotiate with the IRS to avoid a wage garnishment. Tax professionals can help put forward an installment plan or settlement offer. As professionals, we can take into account your living costs to keep your payments to the IRS under control and within your budget. Our team gives you a voice in what you can pay the IRS. We can get wage garnishments removed or greatly reduced. So, if you have tax problems, you must protect yourself by hiring a professional. If you have any other questions, would like more information, or would like to have a consultation at no charge, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What are tax liens and levies? I’m going into detail about both today.Click here for a FREE tax relief consultationCheck out our FREE tax resource libraryWelcome back to another edition of our series exploring various tax problems you can run into. Today, we’re talking about tax liens and levies. When the IRS issues a lien, it’s a lien on all of your property. It doesn’t matter if it was recorded in your county or not. This results in your inability to sell your home, car, or anything else without paying the IRS first.These liens can elevate to a levy on your bank account. Yes, the IRS will take money directly from your bank accounts. They’ll take money from all of them if necessary. These liens also give the IRS the right to dip into your retirement accounts. “These liens can turn into levies quickly.” When the IRS files a federal tax lien to the county clerk in your area, it’s a public notice that you owe the IRS and must pay them first before you sell your home or anything else. A bank levy is sent to your bank saying that they must freeze the cash in your accounts up to the amount that you owe the IRS and send it to them. The freeze can last for 21 days, then the bank must send the cash to the IRS.Bank levies are a result of ignoring multiple notices that you have been sent by the IRS. While it might be too late already, the best chance you have at removing the levy is by reaching out to an experienced tax problem specialist like myself. We can help you negotiate the amount that you owe to the IRS. We’ve had great success in the past negotiating with them. We have years of experience negotiating with the IRS in order to get our clients the lowest bill possible. There are many solutions that we can come up with, but time is of the essence. Once you get that notice of levy, you only have 21 days to respond before they start taking your money. If you have any questions for me about how I can help you with a problem like this, give me a call or send me an email. I look forward to hearing from you.

Do you have tax debt? If so, here are some solutions.Click here for a FREE tax relief consultationCheck out our FREE tax resource libraryOne of the most common tax problems we see people running into is simply not being able to pay their tax debt. It can be hard to stay calm when you’re worried about how you’ll live when the IRS is after you. Problems like this can deteriorate marriages and decimate bank accounts and paychecks.It’s a bad situation to be in. However, there are solutions. The first and most popular is the offer and compromise. This is where you negotiate with the IRS to pay less than what is owed. There are specific formulas and processes to accomplish this strategy. It doesn’t get done overnight or on a phone call. The entire process can take anywhere from six months to a year to complete.You’ve likely seen advertisements on T.V. for places like Taxbuster or the Tax Relief Center. However, most of these heavy advertisers simply take your money and don’t accomplish anything. They may stave off the IRS temporarily, but they are so concerned with sales and getting money that this is where they spend all their resources, not on getting your case done.“There are solutions to this problem.” You should hire a local professional who is a CPA or attorney and does this kind of work every day. It should be someone you know by name and someone you can get in contact with regularly. Dealing with the IRS is intimidating. To get the best deal with them, you should really hire a tax problems specialist such as myself. Someone who knows the ins and outs of the process and has years of experience in the business.If you have any questions for us or want to learn more about how we can help you with your tax problems, don’t hesitate to reach out and give us a call or send us an email. We would love to hear from you soon.

You are already on the cloud (whether you know it or not),so how can you use it to improve your business? Click here for a FREE tax relief consultationCheck out our FREE tax resource libraryI’ve run into many business owners who say that they don’t want to put their accounting on the cloud. They don’t trust the cloud. They are afraid of being hacked. Some people even say, “I don’t want any part of the cloud!”Well, I have some news for you: you are already on the cloud.If you have a utility bill, a bank account, credit score, or do anything online, then you are already on the cloud. I cannot tell you that the cloud cannot be hacked because just about everything can be hacked. However, the point is that the cloud and the companies that support the cloud spend your annual budget hundreds of times over to protect the cloud and their clients.“You are on the cloud already,whether you like it or not.” In other words, the security on the cloud is of a much higher grade than anything you have on your business or on your desktop computer. We all operate on the cloud. The only way to completely escape the cloud is to get off the grid completely and go live in a cave somewhere.The train has already left the station, so how can you use the cloud to improve your business? We will help you explore what the cloud can do for you.The cloud is the business of the present and the business of the future. We all need to utilize it to the maximum degree. Just give me a call or send me an email and I would be happy to help you do just that.

Many entrepreneurs find something they love and turn it into a business, but eventually wind up running a business instead of focusing on the thing they loved in the first place. Here's how we can help get you back to doing what you love.We work closely with many small businesses and find that people have become entrepreneurs by circumstance. After all, not many children say that they want to be an entrepreneur when they grow up.So how does one become an entrepreneur?Most of us started working just to make a living. Many of us worked a lot of different jobs because we didn't enjoy what we were doing to make a living, but then we finally found something we really enjoyed—and it paid.We weren't always the best at these things, but we stuck with them and got better. Before we knew it, we were pretty good at something. Then, we became recognized by the people we worked with as being pretty good. We made progress in pay grade and other areas, and really set out on a career.Somewhere along the line, however, we found ourselves getting frustrated at the people we worked for. Maybe we didn't like the way they ran their business or how they treated their employees. At some point, we reached a point where we thought, "You know what? I can do this better than these bozos that I'm working for." That's when many of us entrepreneurs decided to go into business for ourselves.Then, we scraped up a little bit of cash, a ton of courage and opened our own businesses. Sure enough, many of us found that we could do it better than the bozos we used to work for. We expanded our businesses to the point where we needed to hire employees, buy equipment, and do other things to stay on a successful path. “Running your business isn't always the sameas doing the thing you loved in the first place.” At that point, many of us realized that we were no longer doing what we liked—we were running a business.Running a painting contractor business is not the same as being a painter. Running a plumbing business is not the same as being a plumber. Eventually, we found that the business forced us to get involved with things we didn't know very much about and weren't very good at, and we spent more and more time away from the things we really like doing.That's where I can help.Accounting is generally one of those things that entrepreneurs generally don't like to do. As a recovering accountant, I certainly know how that works. That's why we encourage entrepreneurs to hire people who actually enjoy the parts of the business that you don't like or don't have expertise in. It frees you up to go back to doing what you like best: taking care of your customers, making sure your crews do things right, and doing a good job for your business.We perform all the services that help you grow to your full potential, and we can do that remotely with online technology and the cloud. We don't have to take up your time and space. We've even approached business on the basis of eliminating their offices completely!If you have any questions at all about how we can help you grow and increase your business, don't hesitate to call or email us today. We'd love to help!

If you only study your profit and loss statement, you aren't getting the full picture of your business finances.“My financial statements show I’m making money, but I don’t have any cash.” We hear this statement all the time from entrepreneurs like yourself. Most assume they should just drastically cut expenses and they’ll be OK. Here’s what you should do instead.If all you are looking at is the income and expense portions of your financial statement, you are only seeing part of the picture. Your financial statement consists of two parts, the profit and loss and a balance sheet of assets, liabilities, and equity.The profit and loss portion reports your income and expenses, which all flows into the balance sheet. The balance sheet tracks the changes in the assets, liabilities, and equity. These two separate documents arithmetically prove each other by being in balance. Each is useless without the other. To see the entire picture of your business, you must be able to read and understand both.Now, where does the cash go? The answer is revealed by the balance sheet. Let’s say that last month you made a profit of $49,000 but your cash went down by $35,000 and you’re feeling broke. What happened?“We want you to understandyour company’s full financial picture.” Well, the inventory went up by $18,000, you bought a piece of equipment for $13,000 in cash, your receivables went up by $26,000, and your payables went down by $27,000. This is where the cash went. The activity is revealed to you in the balance sheet if you read it or hidden in there if you don’t. That’s where the cash goes to hide.We aim to teach you how to read the complete financial report on your business. We can also help prepare a simple supplementary piece called “The source and use of cash statement,” which highlights the cash activity for you.This is just one of the reasons why you need much more than just bookkeeping from an accountant to protect and maximize your business’s performance. You need a qualified, experienced accountant on your team. You worked too hard to not hire the best, you deserve it.If you have any questions for us at all, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.

As you will see today, measuring the health of your business is not much differentthan measuring your own personal health.Is your business healthy? How can you determine if it is or not?The process mimics how you determine your own personal health. When you see your own personal physician for your annual checkup, they start with some basic information. In the medical field, these are called “vital signs.” Your blood pressure, body temperature, height, weight, etc., are captured before the doctor even sees you. The doctor then listens to your heart and lung palpitations and asks you how you feel. Based on this simple process, the doctor determines whether further tests are necessary.Your business has vital signs that can be measured and monitored, as well. They aren’t physical signs, though—they’re accounting signs produced as a part of the accounting process. Naturally, you have to have accurate and up-to-date information to determine the relative health of your business.“Your business has vital signsthat can be measured, too.” If we were the ones screening your business through this process, we would then look at some basic measurements. If there are symptoms of underlying issues, we can initiate further tests to identify and treat them. We’d then quickly compare your business ratios to those of your industry and identify areas in need of improvement. We have years and years of experience to propose and implement strategies to make your business healthier.Our goal is to put you in a position to maximize the potential of your business as well as your own personal development. You’ve worked relentlessly to get to where you are, but hard work can’t be the only strategy you employ to take your business to the next level and beyond. We will help you determine other strategies to reach and exceed your dreams.If you have any questions about determining the health of your business, please don’t hesitate to reach out to me by phone or email. I’d be happy to help!

Have you heard about cloud accounting? It utilizes online servers for your accounting needs so you don't have to worry about expensive equipment or constant software upgrades.I want to take a moment today to tell you about cloud accounting.We CPAs are involved in varied areas of accounting and tax. One of my specialties happens to be income tax and tax problems. I also specialize in accounting and consulting for small business, which some may refer to as bookkeeping and consulting. Today, I wanted to introduce some things to you in the area of cloud accounting.Cloud accounting is similar to traditional, desktop-based accounting solutions, except for the fact that it uses Internet servers to host the programs and data rather than your in-house machines and software. Most of the services are provided very inexpensively as software or as a service, rather than requiring a large up-front investment.You also don’t have to worry about maintaining expensive equipment and constant software upgrades. You can access your programs and data on almost any device, including your iPhone, Android, iPad, or computer. As long as you have a good high-speed internet connection, you can work on cloud accounting programs without the expense of the latest and greatest hardware.“With cloud accounting, you don't haveto maintain any expensive equipmentor constantly upgrade software.” The companies who now provide cloud accounting services to small companies include Intuit Quickbooks, Xero, NetSuite, Freshbooks, and more. All the good cloud accounting services are secure and have a high level of protection. Here are some of the many benefits of cloud accounting:Safe storage of financial data; you don’t have to worry about backups.These programs offer many automated processes that link your bank and loan accounts to the software. This saves a huge amount of time in data entry as some of the account coding can become automatic. Your bank accounts are also reconciled very quickly, saving more time.The software can size with your company, starting out very inexpensively with modest increases for additional features, adjusting to the growing needs of your company.Your data can be synced between your cloud accounting software, add-on software, and other vendor offerings to help your business run more efficiently.Multi-user issues are simplified with access for all your users from anywhere.Cloud applications are more reliable than a local application on your computer. You never have to worry about backups or hardware upgrades.Access is secure, usually with multi-level security requirements.If you are interested in learning more about the growing cloud accounting revolution, please give me a call or send me an email soon. I'd be happy to help you.

As technology advances at a rapid rate, your business needs to be able to move more data than paper. 21st Century Office can help you accomplish this. Our Sales Manager, Stan Newton, covers this in our latest video.Who remembers Y2K? You know, the predicted ruination of the power grid? A lot of people were concerned about this, but when the clock passed midnight on Dec. 31st, 1999, nothing much happened. A new millennium began, and technology advanced into the 21st century quietly.Since that memorable non-event, technology has exploded. There has been more growth in computer capabilities in the last 10 years than the last 50 years of the 20th century. Your car has more computing capacity than the lunar module that landed on the moon in 1969. You can make bank deposits on your phone without ever having to actually step foot inside the bank. Can you keep up with this technological advance in your business office, or are you still stuck in the 20th century?The 21st century game is limited to two elements: paper and data. If you move more paper than data, you lose. This means you need to focus on data. Accounting and bookkeeping are the historical data of what happens in your business numerically. The challenge has always been to record this historically in as close to real time as you can economically. The information is most useful when recorded as a current event. Some people settle for information that is months or even years behind. To deal with the challenges of the 21st century, you must be on top of your business at all times.“If you move more paper than data, you lose.” What if you could remove 80% to 90% of the paper that you move around in your office? What if you could outsource your bookkeeping that would eliminate the necessity of having an in-house bookkeeper in your office? This is what the 21st century office looks like. What if you could scan your documents to a portal in the cloud and be able to retrieve them electronically without keeping any copies? What if your outsourced bookkeeping department right here in Tucson could access the documents in the portal, record them in your accounting system, and do it for less than it currently costs you?Accelerated accounting has the technology to do this for you and provide you with current and accurate financial statements on a timely basis. We also have the expertise and decades of experience as chief financial officers to help you understand and use your financial statement to accelerate the growth of your business.Here’s what the 21st Century Office does:Pays its bills electronically. No checks.Pays its employees electronically by direct deposit or debit card.Collects money from its customers mostly by credit card or debit card.Stores its accounting records on the cloud electronically.Strives to use a minimal amount of paper.Records useful and timely information for the business owner. If you have any questions about transitioning your office into the 21st century or using 21st Century Office, don’t hesitate to give me a call or send me an email. I look forward to speaking with you!

Today we’re talking about the IRS Office of Appeals.We’ve got some information you need to know.Many tax disputes are not resolved in favor of the taxpayer. Many times, the IRS is wrong in their conclusions. There are remedies if you feel you have a strong case and can support that case with the IRS.The IRS Office of Appeals was formed in 1927. Their mission is, “To resolve tax controversies, without litigation, on a basis which is fair and impartial to both the government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the service.”Tax controversies can involve proposed tax assessments, tax collection, or other IRS actions. Once the IRS issues a final notice, taxpayers can generally seek a remedy from the courts. However, the appeals process is less formal and less costly than court proceedings and is not subject to judicial rules of evidence or procedure. Historically, it has been able to settle the majority of the cases that have come before it. In addition, taxpayers do not give up judicial review by coming to the IRS Office of Appeals and can still go to court.One very important aspect of the Office of Appeals is that the office is independent from IRS compliance functions and this is critical for it to accomplish its mission: to resolve disputes effectively.“The office is independent fromIRS compliance functions. ” How do you know if the IRS Office of Appeals is the right place for you? To qualify for appeals, ALL of the following items must apply:You received a letter from the IRS explaining your right to appeal the IRS’s decision.You do not agree with the IRS’s decision.You are not signing an agreement form sent to you.If all of the above are true, then you may be ready to request a conference or hearing.This course of action is not for you if ANY of the following apply:The correspondence you received from the IRS was a bill and there was no mention of appeals.You did not provide all information to support your position to the examiner during the audit.Your only concern is that you cannot afford to pay the amount you owe.If you cannot qualify for the IRS Office of Appeals, you should talk again with the person at the IRS you have been dealing with or contact taxpayer services for assistance. You can also contact the taxpayer advocate service if you feel your taxpayer rights have been violated.If you have tax problems, you should protect yourself by hiring a qualified tax problem specialist. We have experience in strategies in negotiating with the IRS to get you the lowest amount that you have to pay.If you have a tax problem or know someone with a tax problem, please share this video or contact me by giving me a call or sending me an email. I look forward to hearing from you soon.

Today we're back to talk about the last five rights you have according to the Taxpayer Bill of Rights. It's important to be aware of these in case you ever find yourself in a tax dispute with the IRS.Today, we’re back to talk about the second part of our series on the Taxpayer Bill of Rights.You can see the first portion here.Last time I talked about the first five rights under the Taxpayer Bill of Rights. Today, let's talk about the other five.6. You have the right to finality. Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year. Taxpayers have the right to know when the IRS has finished an audit.7. You have the right to privacy. Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and a collection due process hearing where applicable.“You have the right to privacy and confidentiality. ” 8. You have the right to confidentiality. Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect the IRS to investigate and take appropriate action against its employees, return preparers, and others who wrongfully use or disclose taxpayer return information.9. You have the right to retain representation. Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to be told that if they cannot afford to hire a representative they may be eligible for assistance from a Low Income Taxpayer Clinic.10. You have the right to a fair and just tax system. Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.If you have tax problems, you should always protect yourself by hiring a qualified Tax Problem specialist. We have experience in strategies in negotiating with the IRS to get you the lowest amount that you have to pay. If you have a tax problem or know someone with a tax problem, give me a call or send me an email soon. I'd be happy to help.

You have rights as a taxpayer. We will be going over the first five items on the Taxpayer Bill of Rights today.As U.S. citizens, we all have rights. We have rights as taxpayers, too, so the IRS has come up with the Taxpayer Bill of Rights. This is a list of 10 rights you have as a taxpayer that you should know about. Today, we’re discussing the first five:1. You have the right to be informed. You have the right to know what you need to do to comply with certain tax laws. You are also entitled to clear explanations of laws and procedures in all tax forms and instructions. Finally, you have the right to be informed of IRS decisions on your tax accounts and to receive clear explanations of the outcome.2. You have the right to quality service. You also have the right to receive prompt, courteous, and professional assistance in your dealings with the IRS. You have the right to receive clear, easy, and understandable communication and a way to file complaints about inadequate service.“We’ll go over the other five items next time. ” 3. You have the right to pay no more than the correct amount of tax. Taxpayers have the right to pay only the amount of tax that is legally due and to have the IRS apply all tax payments properly.4. You have a right to challenge the IRS position and be heard. Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions. You also have the right to expect that the IRS will consider your objections and document them promptly and fairly. 5. You have the right to appeal an IRS decision in an independent forum. You are entitled to a fair administrative appeal of most IRS decisions, including those on penalties, and you have the right to receive a written response regarding a decision. Those are just the first five items on the Taxpayer Bill of Rights. Next time, I’ll cover the other five. If you have any tax problems or know someone who does, give us a call or send us an email. It’s always in your best interest to hire a qualified tax problem specialist. We have experience negotiating with the IRS to settle debts. We look forward to hearing from you soon.

There’s an ongoing scam out there involving fake call centers claiming to be the US tax authorities and demanding bogus unpaid taxes. How can you avoid falling victim to this scam? Welcome to the second part of my two-part series dealing with fake tax notices and other scams you need to watch out for. First, I’m happy to report some good news about fake IRS collection scams.Last week, authorities in India arrested about 70 people and are questioning hundreds more after uncovering a massive scam to cheat thousands of Americans out of millions of dollars by posing as US tax authorities and demanding unpaid taxes. According to police in Mumbai, the year-long scam involved fake call centers which sent voicemail messages threatening US citizens with collection action because they supposedly owed back taxes. Those who called back believed the threats and would fork over thousands of dollars to “settle” the debt. The payment methods demanded were made by cashier’s checks, gift cards, and vouchers.These scammers collected up to $150,000 per day and the estimated total collected is about $30 million. It is believed that up to 600 people in India were involved and they had a US-based partner providing names and telephone numbers of vulnerable US citizens. The IRS has received up to 900,000 complaints about similar scam calls since October 2013. More than 5,000 people have fallen for this scam, paying out over $26 million.“Never give any information away to someone you don’t know. ” What can you do to avoid falling victim to a scam like this?First, remember that the real IRS will never call and demand immediate payment. Neither will it ever require you to use a specific payment method for paying your taxes, such as a gift card or a prepaid debit card. The IRS will also never ask for credit card numbers over the phone.If you receive a call from someone claiming to be from the IRS who is asking for money, don’t give out any personal information. Instead, report the call to the IRS using their IRS Impersonation Scam Reporting web page. You can also call (800)-366-4484. Don’t simply say “OK” and send money. Not ever. If you have a personal policy of never giving information to someone you don’t know, you can protect yourself from scammers. Don’t give any personal information, banking information, credit card numbers, or social security numbers to anyone that contacts you first.If you have tax problems, hire a qualified tax problem specialist. We have experience in strategies in negotiating with the IRS to get you the lowest amount that you have to pay. If you have any questions, have a tax problem, or know someone who has a tax problem, feel free to call me or send me an email. I’d be happy to help!

What happens when you receive an Audit Notice from the IRS?More than likely, your first instinct will be to panic. However, getting audited doesn’t always mean that an error was made on your tax returns. Returns are chosen for a few different reasons:Most audits simply come from Document Matching. When you receive a W-2 form or a 1099, that information is also sent into your file at the IRS, ready to be matched. If you do not report that income on your return, the IRS computer will automatically spit out a notice recalculating your income and tax, along with a bill for that tax, plus penalties and interest.When this happens, you must defend yourself and do some research to find out whether the IRS is correct. Many times they are correct about the oversight in reporting the income, but most of the time they are wrong in regard to the ways that it will increase your tax.If you don’t have experience dealing with the IRS, you’ll need a Tax Professional to defend you. If you choose to defend yourself, you’ll most likely be paying far more to the IRS than you should—if you should be paying at all!Some audits simply come from random selection. These audits come from statistical formulas. If you have outlandish deductions compared to your income, or if your deductions don’t make sense for the type of taxpayer you are (for example, if you have too many travel and entertainment expenses for your type of income), you have a high likelihood of being audited. This has happened less frequently lately, as the IRS’s operating budget has been cut by Congress. This can change, however. “Protect yourself by hiring an experienced Tax Professional. ” Another reason for being audited is due to Related Examinations. You may be selected for an audit if there are issues with other related taxpayers, like business partners or investors, whose returns were also selected for auditing.In all cases, the IRS will notify you by mail if you’re being audited. Occasionally, you will receive a phone call with a confirmation notice in the mail, but you will never receive an email, since email notification is not used by the IRS.There are numerous telephone scams which call taxpayers to tell them that they owe money to the IRS and are subject to lawsuit. Don’t fall for this. Report the phone number or caller to the IRS or legal authorities.What do you do during the audit? Be honest, but be sure to only provide the information that they are asking of you, unless that information is evidence to lower your potential tax. Also, protect yourself by hiring an experienced professional in the audit area.Remember, you have rights. You have the right to be represented by a Tax Professional, such as a CPA, Tax Attorney or Enrolled agent. You also have the right to privacy and confidentiality about tax matters. You have the right to know why the IRS is asking for information, how the IRS will use it, and what will happen in the event that you don’t provide the requested information. In addition, you have the right to appeal a disagreement with the IRS findings, both within the IRS and before the courts. Most of all, you have the right to be treated professionally, courteously and fairly by the IRS employees.If you have tax problems, you should protect yourself by hiring a qualified Tax Problem Specialist. If you have questions on this topic or any others, please don’t hesitate to give me a call or send me an email. I’d be happy to help you.  

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property, and financial assets. A federal tax lien exists after the IRS:Puts your balance due on their books and assesses your liabilitySends you a bill that explains how much you owe called a “Notice and Demand for Payment” If you neglect or refuse to fully pay the debt in time The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property How does a lien affect you? First of all, a lien attaches to all of your assets, including real estate and securities, such as stocks and vehicles. This also includes future assets acquired during the life of the lien. A lien also limits your ability to get credit. “Paying your tax debt in full is the best way to remove your federal tax lien. ” If you have a business, the federal tax lien attaches to all of your business property, including your accounts receivable. If you file for bankruptcy,  your tax debt, lien and notice of federal tax lien may continue after bankruptcy.There are many ways you can get rid of your federal tax lien: Pay your tax debt in full: This is the easiest way to get rid of a federal tax lien. The IRS will release your lien within 30 days after you have paid your tax debt. Discharge of Property - Publication 783: This removes the lien from a specific property. If you sell a property which has an IRS lien, there are several circumstances to have the lien removed so you can sell. It must be in the IRS’s best interest to discharge a lien. If there is other property where the lien is covered by two-times the remaining lien after paydown or non-payment, the IRS will release the lien so you can sell, so long as there is no net value after paying off other senior liens, such as mortgages. The proposed escrow instructions and appraisal on a sale must be submitted to the IRS for approval, along with form 14135 Application for Certificate of Discharge of Property from Federal Tax Lien.Subordination: This does not remove the lien, but allows other creditors to move ahead of the IRS so that you can refinance an existing mortgage. This is in the borrower’s best interest to improve cash flow and does not harm the IRS. IRS publication 785 gives instructions on how to apply for a subordination. Withdrawal: This removes the public notice of federal tax lien and ensures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due. Finally, you should know about two new withdrawal options that resulted from the 2011 Fresh Start initiative. If your tax liability has been paid and your lien has been released, you are in compliance for the past three years in filing your tax returns and you are current on your estimated tax payments and federal tax deposits. Secondly, you may enter into or convert your installment agreement to a direct debit installment agreement. If you owe less than $25,000, your direct debit installment agreement must pay the amount you owe in fewer than 60 months or before the collection statute expires (10 years). You must be in compliance with all filing requirements and be current on other tax payments.  If you have tax problems, reach out to me today. As a qualified tax resolutions specialist, I have experience in negotiating with the IRS to get you the lowest amount you have to pay. I would be happy to answer any questions you might have!

Get a FREE Tax Relief ConsultationLearn About Our Tax Relief Services Can you eliminate tax debts in bankruptcy? In many cases, a taxpayer is still liable for tax debts after bankruptcy. However, bankruptcy law allows the discharge of tax debt only in some circumstances. A tax debt is more likely to be discharged in Chapter 7 than in a Chapter 13 bankruptcy. In Chapter 13, tax debt, just like any other debt, is paid back on a repayment plan. Chapter 7 bankruptcies allow a debtor to discharge or wipe out debts, including federal tax debt. “A tax debt is more likely to be discharged in Chapter 7 than in a Chapter 13 bankruptcy. ” Federal tax debt that can be wiped out, depending on the type of tax debt and certain conditions under Chapter 7 bankruptcy, such as: The tax must be for income taxes. Payroll taxes and penalties for fraud are not eligible for discharge. The tax returns for the debts must have been filed two years before filing bankruptcy. The tax liability is at least three years old. In other words, the tax debt is from a tax return that was originally due at least three years before filing bankruptcy. The IRS assessed the tax debt at least 240 days before the debtor filed for bankruptcy. The taxpayer did not commit willful tax evasion. Possible evasive actions include changing your Social Security number, your name, the spelling of your name, repeated failure to pay taxes, filing a blank or incomplete tax return, and withdrawing cash from a bank account and hiding it. The taxpayer did not commit tax fraud. Penalties on taxes can also be wiped out in bankruptcy. After the discharge of the tax liability, the taxpayer is no longer responsible for paying the taxes and the IRS may not garnish wages or bank accounts. Even if the discharge of tax debt occurs under Chapter 7, if the IRS placed a federal tax lien on the taxpayer’s property prior to the bankruptcy case, it will remain after discharge. As a result, it is necessary to clear the title by paying off the lien before selling the property. There are tax debts that are not eligible for discharge, such as tax debts from unfiled tax returns and trust fund taxes or payroll taxes withheld from employee’s paychecks by the employer. If a taxpayer is not able to discharge the tax debts under Chapter 7, he or she should consider an installment plan or offer in compromise to settle the tax debt with the IRS. If you think you can wipe out your federal taxes under bankruptcy, you should hire a qualified tax problem specialist. We have experience and strategies negotiating with the IRS. If you have any questions, give me a call or send me an email. I would be happy to help you!

Get a FREE Tax Relief ConsultationLearn About Our Tax Relief Services Payroll taxes are taken very seriously by the IRS. What happens if you fail to pay payroll taxes or file them on time? You will get hit with a Trust Fund penalty. A Trust Fund penalty is a 100% penalty on the person who is responsible for payment of withheld federal payroll taxes and FICA taxes from the employees of a company. The IRS views failing to pay payroll taxes as the cardinal sin of tax delinquency because a large portion of the payroll taxes are your employees’ withholdings, not your own money. In other words, not paying your company’s payroll taxes is tantamount to stealing your employees’ money. As a result, penalties for not paying your company's payroll taxes and filing your payroll tax returns are much more severe than other types of penalties. They can drastically multiply and grow the amount you owe in a very short time. If you’re behind on paying payroll taxes on time for your company, watch out. If you are a control person, and not an officer or owner, you are also liable for these taxes personally. The IRS will seize your personal assets, bank accounts, and put your employer out of business rather than let you continue to avoid paying payroll taxes. “Failing to pay payroll taxes is the same as stealing money from your employees. ” The IRS will go after the company responsible for the payroll taxes and the control person at the same time. A control person may simply be the bookkeeper, the person who signs the checks, or another responsible person, even if that person is not the owner or officer of the company. The Trust Fund penalty is 100% of the withholdings of Federal and FICA from the employee, plus interest. Other payroll tax penalties to the employer include: Failure to file the payroll tax returns on time is 5% per month, up to 25% of the taxes. Failure to electronically pay your taxes on time can be 10% of the taxes not paid. The schedules of payment due dates depend on the amount of taxes due. This can be within three days of your payroll dates, up to once per quarter if the taxes are very low. Many small employers pay monthly.Actual due dates and more details are available at www.IRS.gov. This is a lot of information, but the point is you should never get behind on payroll tax payments or filings. The IRS takes payroll taxes very seriously! If you have any payroll tax problems or receive a collection notice for payroll taxes personally, you should hire a qualified tax problem specialist. We have experience and strategies for getting tax releases and negotiating with the IRS. Please give me a call or send me an email. I would be happy to help you with any questions!

Get a FREE Tax Relief ConsultationLearn About Our Tax Relief Services What’s the difference between wage garnishments and wage levies? A wage garnishment is a wage levy; they’re essentially different terms for the same subject. A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. Liens are legal claims that are recorded or noticed against your property to secure payment of a tax debt. The levy is the actual act of taking the payment or property in order to satisfy the debt. If you have a tax levy against your wages, you have either ignored the many notifications from the IRS or have not responded to them in the proper manner. Because they want their money and you have not responded accordingly, they will take that money directly out of your wages. If you fall into this pattern, the IRS will first send you a Notice and Demand for payment, better known as a tax bill. If you refuse to pay this bill, you’ll be sent a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing. You will receive these items approximately 30 days before the levy. “You have many options to resolve a levy. ” If you do not act and settle the debt, the IRS will levy your bank accounts, your personal property, your home, and anything else of value that you own. It’s easiest for them to levy your bank accounts and your wages. However, when you get a levy, how can you get it removed?You can pay the amount that you owe.The time period for collection expires before the levy is issued.You can enter into an Installment Agreement or an Offer in Compromise to negotiate the release of a levy.If the levy creates an economic hardship for you, you can have it removed.The value of the property is more than the amount owed and the levy will not hurt the IRS’s ability to collect the amount owed.If you’re having trouble with this issue, please don’t hesitate to contact me. I would be happy to provide you with assistance!