What’s Tucker to do?  I’m not sure how well stand up comedy gigs pay, and unless Tucker makes his way back into Hollywood soon, he could have a hard time getting the money back to the IRS. To his credit, he is reportedly attempting to sell his 9,000 square foot Florida estate to raise some quick funds. But, whatever the case may be, Tucker better act soon, or you can count on checking back one year from now for a third update, or maybe actually see him in jail, and this time for real.

Related posts:

1. Chris Tucker Owes $3.6 Million in Back Taxes
2. Chrysler Group’s CEO Jim Press Owes About $1M in IRS Back Taxes
3. Sinbad Owes Over $8 Million in Back Taxes

1. Lil Wayne- Perhaps Lil Wayne is really enjoying his time in prison? That’s our assumption at least, because this rapper is basically asking for more time in the slammer; this time, for failing to pay his taxes. Just last month, the IRS filed a $1.13 million, or as Wayne would put it, ‘a milli,’ tax lien against Lil Wayne for unpaid income taxes from years 2004, 2005, and 2007. And this isn’t his first encounter with the big boys, as Wayne previously had a lien filed against him in 2008, but managed to scrape up the $966,840 to pay it off.  Let’s see if he can do it again…
2. Chamillionaire- Our boy Cham’s recent house foreclosure in Houston proves his inability to meet off mortgage payments. But, turns out that Chamillionaire has been struggling paying off taxes, too. Owing $184,000 in back taxes resulting from unpaid income taxes in 2007, Chamillionaire could be in over his head this time. If this rapper doesn’t clean up his act soon, he may actually have to change his name for more reasons than one.
3. DMX- Income tax, Income tax, Income tax- how many times do we have to say it until our rappers get a hint? Maybe we could make up a rap about it for them to understand better. Regardless, DMX is another one who owes over one million to the IRS in back taxes from failing to pay his income tax in 2002, 2003, and 2005. The money added up and the IRS, along with the State of New York, issued out more than one lien against him- culminating to over $1.5 million dollars.
4. Nas- So did we save the best for last? You decide. The numbers speak for themselves in Nas’ case, as he owes over $2.5 million dollars to the IRS. The money is a result of a tax lien filed against the rapper from unpaid federal taxes from 2006 and 2007. Now, not only does Nas have to worry about child support payments to ex-wife Kelis, but paying off his major tax bill, too.

So,that’s all for now, ladies and gentlemen. But, we aren’t making any promises that this is the last time we’ll be reporting on rappers with tax issues…

Related posts:

1. NAS Owes the IRS 2.5 Million In Back Taxes
2. Chrysler Group’s CEO Jim Press Owes About $1M in IRS Back Taxes
3. Three Artists Who Cannot Seem To Rap Up Their Back Tax Issues

Starting with tax year 2012, that is all about to change.  Hidden in the Healthcare reform bill are changes to how 1099-Misc forms are used. You will need to report any and all transactions totaling more than $600 for the fiscal year, whether it is to independent contractors, businesses, or even retailers!

If you go to the store to buy a computer for your business that costs more than $600, you will need to issue them a 1099- Misc form!  You’ll need the store’s federal ID number to issue it.  If you pay more than $600 a year to your cable internet or phone companies, they will also need 1099-Misc forms.  Landlords, health insurance, accountants… the list goes on and on.

The new law for 1099-Misc extends extension 6041 of the Internal Revenue Code, which is the section that requires business owners to report income paid (non-salary) over $600 in a year, and changes it from having to send 1099-Misc forms to individuals, to any business or individual:

“Section 6041 of the Internal Revenue Code provides that all persons engaged in a trade or business who make a payment in the course of such trade or business to another person of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income of $600 or more in any taxable year shall render a true and accurate return setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment.Section 1.6041-1(a)(1)(i) of the Income Tax Regulations provides that the payments required to be reported under section 6041 include the following: (1) salaries, wages, commissions, fees, and other forms of compensation for services rendered aggregating $600 or more; and (2) interest, rents, royalties, annuities, pensions, and other gains, profits, and income aggregating $600 or more. The return of information required by section 1.6041-1(a)(1)(i) must be made on Form 1099. See section 1.6041-1(a)(2).”

If you thought filing your business taxes was a nightmare before, just wait until you deal with this nightmare of paperwork!  For small businesses without accounting departments, this is going to be a time consuming task.  While the changes are being initiated to increase tax revenues for the government, there’s a good chance that it won’t have much effect.  If you consider the increased need for professional tax services that a change like this will cause; and the fact that tax services are eligible business expenses and are deducted at tax time – it seems that the change will result in more paperwork but not much more in tax revenues for the government.

Related posts:

1. How the New Healthcare Bill Expands IRS Authority
2. Why the State Corporate Income Tax Should Be Eliminated
3. Tax Relief for Disaster Victims

1. Method Man- Or, more formally, Clifford Smith, has been all the talk this past week. What’s the big fuss? First off, he was arrested in October on felony charges, and accused of declining to pay $32,799 in personal income tax along with state income tax. Method Man pled guilty to the charges, and surrendered $106,000 in back taxes, penalties and interest over to the IRS. While the arrest could have guaranteed him four years in prison, our Man got off with a mere ‘conditional charge’- basically a spot in time out, with all charges cleared as long as he could stay out of trouble.
2. Swizz Beatz- Celebrated producer and acclaimed artist ‘Swizzy’ owes an even larger chunk of change to the IRS. Apparently, Beatz was recently served a $652,727 tax lien for unpaid federal taxes from 2008. What’s worse, this isn’t the first time. Swizz’s history shows a total of almost $2.2 million in back tax debt. I guess all of his ‘money in the bank’ could only last for so long…
3. Fat Joe- We should have known when his two million dollar Florida estate went on the market. Owing over $71,000 to cover the lost judgment against Florida Sun Trust, Fat Joe takes the third and final position on our list. And, it turns out that Florida may be the least of this rapper’s worries. Fat Joe reportedly owes back taxes amounting to $139,000 from previous liens such as the $105,000 claim from the state of New Jersey in 2008.

So will our rappers clean up their acts? My opinion? They should focus less on rapping about money and more on taking charge of it and maybe, just maybe, they could have a lasting chance.

Related posts:

1. Wait, There’s More- Four Additional Rappers to Add to Our Back Tax List
2. Teresa Not The Only Housewife with Real Money Issues
3. Florida Introduces Amnesty Program to Provide Back Tax Relief

In Florida’s case, because the state has no income tax, the amnesty period proves less intense. Regardless, the tax period still helps everyone. For the state, more unpaid taxes are returned- bringing valuable money back to public use.  For the individual, more money is saved, because less money goes to tax penalties and interest.  It becomes a win-win situation for all.

Which taxes, or actually, unpaid taxes, are eligible? All Department of Revenue administered taxes due before the starting date of the program (July 1, 2010) are entitled to relief.  However, unemployment taxes and the Miami-Dade County Lake Belt fees are not included in the arrangement. Furthermore, there are a few guidelines. For one, your tax liability must not already be covered by an existing settlement. And two, you must not be convicted or under criminal investigation for violating a Florida revenue law. If you meet the requirements, and of course owe back taxes to the state of Florida, visit www.myflorida.com/dor/amnesty to fill out a Tax Amnesty Agreement form asap. If you cannot pay your taxes by Sept 30, 2010 (the end of the program) an installment agreement may be your best option.

What if you owe money that has not yet been identified? It’s in your best interest to own up and participate in the program, as the interest required on the amount will be cut in half. If your liability has already been identified, the interest amount will still reduced, but by one fourth. As for penalties- they will be completely waived, regardless of situation.

Related posts:

1. Pennsylvania Tax Amnesty: Remove 100% of Penalties & 50% Interest
2. Massachusetts Tax Amnesty: Waive MA Tax Penalties 4/1/10 to 6/30/10
3. Oregon State Tax Amnesty for Back Taxes Ends 11/19

Concern now is that the Internet has changed the way things are being done. The Web has been providing consumers information in a way never before done and is essentially strong-arming the media companies to follow suit. News organizations now must work to adapt to the changing market through experimentation. Reports show there is doubt the market will survive on its current course and thus the government needs to step in and save the day.

Varieties of ideas are being thrown into the mix to help save the industry but most are not to the consumer’s benefit. Some proposals include taxation on news websites that can be collected and divided up between newspapers. The tax would also affect sites like Digg and Reddit. These sites gather news links from around the world and give readers a forum to discuss news issues hence their popularity.

In addition to the taxing of news websites, proposals also offer the possibility of tax exemptions to news organizations. Thoughts about establishing a national fund for news organizations have also been discussed. Those funds would be created from monies coming from the new taxes. There has even been talk of an extra tax being placed on electronic devices people use to read the news, like the Apple iPad or Amazon Kindle. Even laptops and desktop PCs may see the added tax.

Should the government step in, the conflict of interest that would be created is apparent. Government contributions to the salaries of reporters and news workers would hardly create unbiased results. There would be no incentives for telling a story like it is. Consumers would suffer the most if it is decided that the government is the only saving grace. It would become only more difficult for them to read about or share various viewpoints on newsworthy subjects.

Some of the proposed taxes include:

Broadcast taxes – since commercial radio and television broadcasters are given rights to a profitable spectrum for free, it is essentially a public subsidy. When taxed at a rate o 7%, a fund of up to $6 billion dollars could be collected. In return, commercial broadcasters would not be obligated to provide public-interest programming estimated to cost broadcasters $10 billion each year.

Electronic device tax –If a 5% tax is added to consumer electronics, the amount collected is estimated to be around $4 billion each year.

Taxes on advertising – a 2% tax on commercial advertising would bring in about $6 billion a year. If the tax write-off on ad costs for businesses where changed from a write-off every year to one covering a 5-year period, another $2 billion could be collected.

Cell phone taxes – if consumers were to pay a small tax on their cell phone bills for the content they access digitally, $6 billion could be collected each year of taxed at 3% of the monthly fees.

Related posts:

1. IRS Phishing Emails – Do Not Reply With Sensitive Info

Danielle Staub, the reality show’s “cast out” often attacked for viscous and rude behavior, has also been targeted by a group a little different than her fellow Housewives- The IRS. In March of 2006, Danielle reportedly had a $111,161 tax lien filed against her. And, just one year later in 2007, faced yet another lien. Perhaps Danielle should concentrate more on paying the IRS, rather than her plastic surgeon.

Caroline Manzo, contrasting Danielle as the sweet, mother-like figure of the wives, has also shown signs of monetary issues. On the surface, Caroline appears to be one of the most well off of the bunch, owning Jersey’s prestigious Brownstone event facility among other valuable assets. However, Caroline’s assets, including the infamous  Brownstone, have faced numerous judgments and liens against them, with the number currently standing at over thirty, since 1990.

For Housewife Dina Manzo, excessive spending on the Real Housewives series apparently was just not good enough. Thomas Manzo, Dina Manzo’s hubby, was allegedly sued by American Express for $12,599, following the couples lavish wedding featured on VH1′s ‘My Big Fat Fabulous Wedding’ show.

Finally, housewife Jacqueline Laurita has demonstrated an inability ward off financial issues, too. Jacqueline and husband Chris have been unable to pay off their loans, recently filing  for liquidation under Chapter Seven in a U.S. Bankruptcy Court. Hey, at this rate, the court could be the wives’ all new hangout.

So, there you have it, five for five of the New Jersey housewives, famous for their extravagant and excessive lifestyles, may actually be less well off than the average Joe- or Josephine, if we are trying to stay in wife theme here. So what happens next? Perhaps the show will undergo a dramatic transformation and name change- The Real Workingwives of New Jersey? Doesn’t seem to have quite the ring to it. But who knows, anything seems to be possible with this bunch.

Related posts:

1. Three Artists Who Cannot Seem To Rap Up Their Back Tax Issues
2. IRS to ‘strip’ Hatch of Survivor Earnings, and Then Some
3. Darryl Strawberry Owes More Than 500k In Back Taxes

While the application seems quite selective, companies that demonstrate true potential and need could be significantly rewarded. This means grants covering up to 50% of biomedical research, credits of up to $5 million per firm, and $1 billion overall, available and ready to be distributed to investments made in 2009 and 2010. The belief  is that the money could significantly improve US health potential and competitiveness while also creating jobs and interest.

So, exactly how selective is the application? While we already mentioned that the initiative is targeted towards small firms, less than 250 employees to be exact, there are several other standards revolving around the nature of medical research in which the firms partake that must be met. For example, firms must prove their potential to either; a) produce new therapies to treat or prevent diseases, b) reduce long term US health care costs, or c) considerably advance the goal of curing cancer within the next 30 years. The Department of Health and Human Services is set to evaluate each application on an individual basis for its likelihood to meet such requirements.

Think the Qualifying Therapeutic Discovery Project Program could benefit your company? Start the application ASAP, as claims must be postmarked by July 21, 2010- less than month away! Form 8942, Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program, is now available, and can be found along with detailed instructions, on IRS website.

Related posts:

1. Tax Credits To Keep In Mind for 2010 Taxes
2. North Carolina’s Plan to Negotiate Back Taxes With Firms Pays Off
3. How the New Healthcare Bill Expands IRS Authority

Before appearing on Survivor, Hatch lived a modest lifestyle, holding jobs from car sales to bartending to pay off the bills. Hatch even served in the military for five years, but apparently his proclaimed self discipline and restraint skills only served him well for so long. Reportedly, The IRS filed a $1,742,711 tax lien against Hatch earlier this year, with tax debts reaching as far back as 2000; the very year he won the title of ‘Survivor.’

And this isn’t the first time. In January of 2005, the US Attorney’s Office filed a claim against the Survivor for failing to report his winnings received on the final show- perhaps he thought they missed that episode? As if this wasn’t bad enough, Hatch continued to inaccurately record even more post show earnings, such as the $321,000 he received from his appearance on the WQSX-FM radio show in Boston later that year.

Initial charges against Hatch were lenient, with agreements arranged after a guilty plea on his behalf.  However, Hatch shortly thereafter pulled out of the arrangement, only to stir up more trouble.

For some reason, I don’t think that the IRS will be so prone to allowing Hatch to run away with the money as his fellow contestants were, but I guess we’ll just have to wait and see.

Related posts:

1. Teresa Not The Only Housewife with Real Money Issues
2. Floyd Mayweather Agrees to Pay His Back Taxes, Over $5M
3. Chrysler Group’s CEO Jim Press Owes About $1M in IRS Back Taxes

• Helio Castroneves
• Aaron Carter
• Toni Braxton
• Lil Kim
• Shannen Doherty
• Debi Mazar

Macy Gray With Her Hit Song “I Try”

Related posts:

1. Aaron Carter Owes Over $1 Million in IRS Back Taxes
2. Sinbad Owes Over $8 Million in Back Taxes

Right now the city of Philadelphia has about $1 billion in back taxes and tax amnesty programs in general have helped many state and city governments recoup taxes they may have never received. In December of last year, Keith Richardson, the Philadelphia Revenue Commissioner stated the city would most likely give delinquent taxpayers 45 days to pay their taxes without penalties and only half the interest that has accrued. What happened is that Philadelphia decided to give a longer tax amnesty than 45 days. The program started on May 3rd and ends June 25th, 2010.

Whether you have City, State, or Federal tax debt or unfiled taxes, it is in your best interest during these economic times to come into compliance with tax authorities as interest and penalties will only increase your balance and make things worse.  To find more information about this tax amnesty, visit www.phillytaxamnesty.com today.

Related posts:

1. Oregon State Tax Amnesty for Back Taxes Ends 11/19
2. Maryland Tax Amnesty Will Last For 2 Months
3. Massachusetts Tax Amnesty: Waive MA Tax Penalties 4/1/10 to 6/30/10

The amnesty program works by allowing business tax payers a break on tax penalties if they pay their tax bill, including interest, in full by June 30, 2010. If your bill is paid in full during the amnesty time period, your penalties will be waived. Tax periods that will qualify for the amnesty include all of those ending on or before December 31, 2010.

Taxes that qualify for amnesty include:

• Sales/use taxes
• Sales tax on telecommunication services
• Meals tax including the local option
• Materialman sales tax
• Payroll withholding tax
• Pass-through entity withholding
• Lottery annuity withholding
• Room occupancy excise including the local option
• Convention center financing fees on room occupancy in Boston, Cambridge, Chicopee, Springfield, West Springfield and Worcester
• Convention Center Financing surcharge for sightseeing tours
• Convention center financing surcharge on vehicle rentals in Boston
• Convention center financing surcharge on parking in Boston, Springfield and Worcester
• Deeds excise
• Cigarette excise
• Cigars and smoking tobacco excise
• Club alcohol beverage excise,
• Gasoline and special fuels excise including the local option
• Boat/recreational vehicles sales tax

If you did not receive an amnesty notice, most likely the reason is you did not meet the qualifications of the program. Businesses do not qualify for the program is they have already paid their tax bill in full, including interest, and now only owe penalty fees. Businesses also do not qualify if they have entered into and signed a tax settlement agreement on or before the program began on April 1, 2010. Finally, you will not qualify if you are under a criminal investigation on a tax related issue.

If you feel you should have received a letter to qualify you for the program and did not you can call the Massachusetts Department of Revenue at 617-887-6367 and ask for assistance.

If you have received an amnesty letter and are ready to pay your bill you have a couple of options. You can log onto the Massachusetts Department of Revenue website and pay your bill electronically. You can pay this way by either using your bank account or a credit card. You can also mail in a check with the amount due. If you choose this option your envelope must be postmarked by June 30, 2010 in order for your payment to qualify.

You should also know that while your penalties will be waived during the amnesty period, your interest will not. Your payment must include all back taxes and any accumulated interest. June 30, 2010 is the deadline and no exceptions will be made. If you decide not to pay the bill by this date, amnesty will not be granted on your penalties and the Department of Revenue will continue collection procedures. If you can only pay a portion of your bill it is important to note that you can still benefit. Penalties will be waived for any tax periods that are paid in full. Any periods not paid by the amnesty deadline will still carry penalty fees.

Related posts:

1. Pennsylvania Tax Amnesty: Remove 100% of Penalties & 50% Interest
2. Philadelphia Tax Amnesty Ends June 25th – Act Now!
3. Oregon State Tax Amnesty for Back Taxes Ends 11/19

In an interesting statistic, it is noted that about half of taxpayers paid no federal income tax last year. While that sounds like a very high percentage of people not required to pay Uncle Sam, the statistic does not mean that these same people paid no taxes at all. Many still had to pay out for Social Security and Medicare payroll taxes. Property taxes were also paid plus a variety of sales tax had to be paid out as well.

Who’s Not Paying?

Those quick to criticize this statistical statement also claim that only the hard working Americans are paying taxes and those who are on welfare or even the mega-wealthy folks don’t pay out a dime. This is serious misconception. In reality, those people who pay no federal income tax are typically the elderly and those who do not make much money at all. Those families earning incomes of less that $20,000 will likely not pay out in federal taxes.

As we are still struggling to beat back the recession, it should be noted that there was a tremendous amount of job loss during the last few years. Along with no income or less income after taking a new job, the amount of income tax due also goes down. As time goes by, the number of Americans not paying federal income taxes will also decrease. As jobs become more plentiful and wages increase, so will tax responsibilities.

Tax Relief Measures

One of the biggest reason people have not had to pay out much, if at all, in federal income taxes is due to the Earned Income Tax Credit. This credit was brought about in 1975 and over the years has been expanded under different Presidents. People who are working at low wages can use the credit from low wages to cancel out their liability for income taxes. The Earned Income Tax Credit and the child care credit were established to encourage people to keep working.

Not a New Concept

Historically, not owing federal income taxes is not a new concept. Before World War II, rarely did an American pay income tax. In the 1950’s, most only paid a very small percentage in Social Security tax. Medicare taxes were not yet established then. Today, workers are actually paying more in payroll taxes than they are in federal income taxes.

While the 50% statistic can be startling to people at first glance, the percentage certainly dwindles down to near nothing when you consider all of the other taxes being paid out by both working and non-working individuals. It is easy for some to feed off the notion they are being cheated in the tax arena but for decades, the government has been making decisions based on removing low-income working families from the income tax lists. Right now the policy is working as it was meant to work. As income levels pick back up, the percentage of those not paying federal taxes will begin to decline rather quickly.

Related posts:

1. Federal Employees Owe Over 3 Billion In IRS Back Taxes
2. Why the State Corporate Income Tax Should Be Eliminated
3. Making Work Pay Credit Will Most Likely Cause IRS Back Taxes

Under the new law, most people are required to buy health insurance. If they don’t, they will face harsh penalties. By 2016, those who do not purchase coverage could be hit with fines of as much as two percent of their income.

Anybody who does not comply would be subject to a penalty. If they don’t pay, the penalties could then be taken out of their tax refunds.

The new law does not allow the IRS to levy fines or seize assets. So, it makes most sense to target refunds as a collection option.

Last month, President Obama signed the legislation that is meant to help more than 32 million Americans secure health insurance.

Of course, not everybody likes the direction that this law is headed. For instance, Representative Dave Camp said, “The individual mandate would create millions of captive customers for health insurance companies, with the IRS acting as the enforcement agency for those companies.”

IRS Commissioner Douglas Shulman has been busy shooting down the idea that the government will have to hire as many as 16,500 agents to enforce the new laws and regulations. He said, “That is a made up number. The only official numbers come from the IRS, which I have to sign off on. We don’t have a number yet.”

Republicans claim that the number is based on an estimate that $10 billion would be needed to implement the new law over the course of the next 10 years – less $1 billion for related administration costs.

While this is a major concern, it is not one that will come to the forefront just yet. None of the provisions will be active in 2010, with the majority of them coming in 2013 and beyond.

Related posts:

1. How the New Healthcare Bill Expands IRS Authority
2. IRS Offers Taxpayers Ability to Use Refunds to Buy Savings Bonds
3. IRS Accepting Tax Credits for Firms Investing In Therapeutic Research

The IRS will have the authority to collect additional taxes from Americans whose health insurance covered is assessed as insufficient for meeting the definition of minimum coverage required to be purchases, as have been defined by the federal bureaucrats. The IRS would now have the task of verifying that each American taxpayer has obtained and maintained acceptable health coverage for all 12 months of a year. Should the IRS find that a taxpayer lacks the acceptable insurance for even one month, they would impose a new tax. The IRS will even go so far as to audits the taxpayer and assess interest and penalty fees in addition to the tax.

Other examples of the IRS’s new power in the health care system include:

• Confiscation of your tax refund in regard to unacceptable health insurance coverage

• Authority to assess fines up to $2,250, or 2% of your income, (whichever figure is greater) for failure to prove you have purchased the minimum essential coverage.

• The likely increase of IRS audits on American taxpayers

• The additional hiring of as many as 16,500 auditors, agents, and employees to conduct investigations, collect new taxes, and conduct audits

• The necessity of up to $10 billion dollars to make administrative changes to the health care program

In addition to all the changes of new IRS power, it is estimated that nearly half of the new mandate taxes will be paid by individuals who are earning less than 300% of poverty ($66,150 for a family of four).

Individual Mandate Tax

The bill added a new section to the Internal Revenue Code. This section, 5000A, would require that practically every American obtain the minimum essential health care coverage. The subsection defines this as one of the following types of health insurance:

• Medicare
• Medicaid
• SCHIP
• TRICARE for Life
• Veterans health care
• Eligible employer-sponsored plans
• Individual market plans offered through sTate Exchanges
• Grandfathered health plans
• Health program for Peace Corps volunteers
• Other types of eligible insurance as accepted by the Secretary of Health and Human Services and the Secretary of the Treasury.

Any taxpayer that fails to prove to the Internal Revenue Service they have obtained minimum essential coverage during any month of the year will be required to pay a new Individual Mandate Tax (IMT) when they file their federal income tax returns. The IMT will go into full effect in 2016 and gradually be phased in up to that point over the preceding several years.

The IRS will be responsible for enforcing the IMT and will be the entity that assesses interest and penalties as well as auditing taxpayers when it is determined taxpayers do not have adequate coverage during a 12 month period. In 2016, the Individual Mandate Tax would be the greater of $750 per person with a maximum of $2.250 per household or 2% of household income. These amounts would be indexed for inflation after 2016. There will be certain applicable exceptions such as hardship exemptions would be provided to a taxpayer who would not have to pay if the health insurance premium exceeded 8% of their income. There would also be exceptions for religious conscience, those below the poverty line, members of a health care sharing ministry, Indian tribe members, incarcerated individuals, and illegal aliens.

Related posts:

1. Healthcare Bill Disaster- Send 1099s to Everyone
2. IRS Could Take Refunds for Health Insurance Penalties
3. IRS Accepting Tax Credits for Firms Investing In Therapeutic Research

Why More Offers In Compromise Should Be Accepted

Offers In Compromise are rarely accepted (10-15%) but now with the IRS offering more flexibility we should see an increase in acceptances.  Before this announcement yesterday, the IRS would consider an Offer In Compromise using a taxpayer’s previous income history. However, now the IRS will be placing higher emphasis on a taxpayer’s current and future income as well as their job status.  Many taxpayers who are struggling financially or unemployed will get offers accepted if they agree to adjust their agreement when their financial situation improves. It is important to understand that the IRS will not accept an Offer In Compromise or an offer to pay less than what you owe unless the IRS feels that you will not be able to pay in full. Other acceptable reasons include proof that amount assessed is incorrect or that if the IRS collected the full amount from you it would cause economic hardship.

Schulman did state in an interview though that if you ignore the IRS, or you fail to file a tax return that you will not be eligible for an Offer In Compromise or any other tax settlements. In general, always file a tax return as the consequences are stiff.

This recent announcement is part of a greater IRS effort to help taxpayers during these difficult economic times. The IRS has stated publicly, that for taxpayers facing financial hardship, the IRS is ready to help. Doug Schulman, the IRS commissioner stated, “Times are tough for many people, and the IRS wants to do everything it can to help people who have lost their job or face financial strain.” This includes taxpayers who missed Installment Agreement payments, taxpayers facing tax liens that are preventing them from selling their home or refinancing, and taxpayers who need levies released (e.g. IRS wage garnishment).

Related posts:

1. Spotting Tax Settlement Scams
2. More than 50% of Americans Pay Taxes – Just Not Federal Income Tax
3. When to Settle Taxes With an Offer in Compromise

It was reported today by USA Today that Crow Creek Sioux Tribe (CCST) in South Dakota has settled with the IRS and has obtained a loan to buy back 11.1 square miles of land the IRS seized and auctioned off last December when the CCST failed to pay about $3 million in employment taxes, penalties and interest.

It was confirmed last December that the sale of the land would not be finalized until a trial was held after the tribe’s attorneys filed a formal notice to prevent the completion of the sales until the trial was completed.  The trial, that was scheduled for 5/4, has been canceled because a settlement has been reached.

When the land was auctioned last December, the IRS gave them 180 days to buy the land back at 20% more than the winning bidder. The winning bid was $2.58 million which means the tribe could purchase back the land for 3.09 million within a 180 days. Brandon Sazue, the tribal chairman, said he has received a loan for 3 million from another tribe in Minnesota.

The CCST plans to withdraw taxes from employee paychecks going forward. The reason why this whole case started was because CCST states that the Bureau of Indians affairs told them they were tax exempt.  It turns out that Federally recognized tribes are, but not corporations affiliated and formed as separate entities.

Related posts:

1. IRS Seizes & Auctions Crow Creek Sioux Land to Recoup Back Taxes
2. Philadelphia Tax Amnesty Ends June 25th – Act Now!

Joe apparently had a history of problems with the IRS where he forgot to file a tax return and was audited because he and his wife forgot to report about $12,700 in income.

The IRS has a few offices on the first floor of the 9400 Block of Research Blvd, N. Austin, TX that Joe flew into. Specifically, it has its civil enforcement and criminal investigation units on the 1st floor with the total building holding about 200 IRS employees.

Right now, all individuals from the criminal division seem to be fine with no word yet regarding employees from the civil unit. Later reports today stated that thirteen individuals were injured with two casualties.

Initially, the Homeland Security Spokesman Matt Chandler confirmed, “At this time we have no reason to believe there is a nexus to criminal or terrorist activity,” but with the suicide letter update it seems that the Homeland Security Department will have to reclassify it as a criminal activity.

Related posts:

1. Many Philadelphians Who Work for the City Owe Back Taxes
2. IRS Wants Quotes for Remington Model 870 Shotguns

Being a tax criminal is a white collar crime. Does this mean it is OK to hire people with shotguns to go enforce proper trading of stocks and that and proper handling of other finances? What is next for this country.

Anyways, if you are a shotgun dealer and would like to submit a quote to the IRS then send your best price and delivery capabilities to the following address:

Internal Revenue Service OS: A:P:B:W
Office of Business Operations
1301 Clay Street, Suite 810S
Oakland, CA 94612-5217

For those individuals that are reading this and have committed tax fraud or anything else that would consider you a tax criminal, we can help. You better request help now before the IRS gets those shotguns, your life depends on it. Free Consultation.

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1. Joe Stack Tries to Kamikaze the IRS – Owed Back Taxes on $12.7k
2. Past Due Taxes: Consequences & What to Do
3. How the New Healthcare Bill Expands IRS Authority

The way it works is you can request up to $5,000 in savings bonds which will dealt in multiples of $50. So if your refund is $4010 dollars say, then the remaining $10 dollars will need to be put into a bank account (anything left after dividing your refund by $50).

To elect to receive savings bonds, you will select this option on Form 8888 which has instructions for you to follow. Now the big question is this a good investment? Well, the answer is it depends. US I Savings bonds typically have a low return on investment but are indexed with inflation. Therefore, if the massive Federal spending and borrowing starts to  push up inflation, then your savings bonds will be a good hedge against inflation. However, if inflation remains calm, you might find better uses of your money in terms of an investment. For advice it is best to speak with your investment adviser.

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2. New York’s “PAID” Saves Taxpayers Up to 80% in Penalties & Interest
3. How Does the IRS Attack Deadbeat Taxpayers?

• Save 80% on NY back tax penalties and interest for tax bills issued on 12/31/03 or before
• Save 50% on NY back tax penalties and interest for tax bills issued after 12/31/03 but on or before 12/31/06

With NY running deficits, not only will compliant taxpayers help the state but they will also help themselves by preventing any further negative consequences of inaction like tax levies, tax liens, and continual accrual of interest.  If you are interested in reading more about the program that expires March 15th visit this link.

If you have already entered into an Installment Agreement before the start of PAID, you can still take advantage of this program’s savings but you will need to make full payment of the total remaining balance.  If you have questions or need a tax professional on your side feel free to request a free quote or give us a call.

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Last summer the North Carolina tax office put into effect a plan to collect money that was overdue. Fortunately, the effort went much better than planned and the state now has enough money to make up for a revenue shortfall. By going after corporate entities that owed back taxes and tax penalties, Revenue Secretary Kenneth Lay said that more than $427 million was collected from 236 entities.

The department originally thought that they would be able to bring in at least $150 million. It is safe to say that this number was met and surpassed without any problem. The extra money is coming at a good time as the state is attempting to manage a shortfall of approximately $400 million. Governor Bev Perdue said, “The General Assembly should be pleased with the results we’ve achieved. The people of North Carolina should be pleased.”

To get started, the state contacted 389 corporate taxpayers to see if they would be willing to negotiate the money that they owed. Out of these, 300 agreed to do so. These taxpayers had been fighting with the state over state franchise tax as well as other related sticking points.

Before this plan was put into effect the state had brought in $110 million in five months. As you can see, once the N.C. Department of Revenue moved forward with this effort more and more money began to flow in. If you an individual or business that owes north carolina back taxes give us a call today to file, pay, or settle taxes owed.

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Everybody has to pay their fair share of taxes while living by the tax code. This holds true for all Americans, even those who work for the government. There are thousands of Philadelphians with unpaid taxes.  Among them are roughly 400 city employees and this is not uncommon as we reported in December how 276,000 federal employees owed back taxes. While they may think they are getting off easy because they work for the city, nothing could be further from the truth. Starting at the beginning of January 2010 these employees will have money taken from their paycheck to satisfy the debt — also known as tax wage garnishment.

Do you think this is an unfair practice? Well, during the fall of 2009 approximately 900 employees were told that they either have to pay their back taxes or risk having the money taken from their paychecks starting in 2010. Although more than 50% complied, the rest missed the boat and are now paying the price.

Alan Butkovitz, City Controller stated that most tax deadbeats will experience wage garnishment between ten and fifteen percent of their salary.  As you can see, this is no small amount. Of course, once the debt is satisfied no more money will be withheld from their paycheck.

Believe it or not, this plan is set to bring in close to $2.6 million. If you currently owe the IRS, State, or city back taxes or you are experiencing wage garnishment, give us a call and we can begin the process of have your wage garnishment stopped.

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Sinbad has had several tax liens placed on his assets for taxes he has owed since 1998. The IRS wants to begin to levy Sinbad’s assets but it seems he is doing a good job at keeping assets out of his name in order to prevent this. One example is a $1.5 million home in California that is registered under his brother’s name, but all payments made towards the home are made by Sinbad’s company or his own personal checks.

Look for more updates on this actor because there seems to be some fishy situations going on here and owing this much in federal back taxes will not be overlooked or taken lightly. The IRS is known for making examples out of famous people in order to scare others into paying their taxes. This possibly could be one of those cases.

Sinbad Stand-up Comedy

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The IRS released some data on the matter and about 276,000 “federal employees and retirees owe $3,042,200,000.” In looking though the data,  the Federal Mediation and Conciliation and the Treasury department had a low percentage of delinquent taxpayers whereas the Advisory Council on Historic Preservation and US Office of Special Counsel ranked among the worse departments to pay taxes owed with 50+ employees. The IRS is within the dept of Treasury and has the lowest tax delinquency rate as IRS employees can get fired for not paying taxes. In terms of the total taxpayers who were delinquent, the US Postal service and active military members (understandable especially if you are fighting in Afghanistan or IRAQ) ranked among the worst.

Here are few interesting agencies and their respective delinquent taxpayer count with total balance:

• US Senate has 231 Delinquent Taxpayers who owe roughly $2.5 million
• US House of Representatives has about 447 employees who owe a combined $5.8 million

As the IRS expands operations, begins to target foreign account  holders, businesses and high wealth individuals, it should probably get Federal employees into compliance first as $3 Billion can go a long way during these tough economic times when government revenues are plunging.

If you would like to read the report you can find it from Scribd.com.

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