IRS Secret Agent

Quote of the week:

"The purse of the people is the real seat of sensibility. Let it be drawn upon largely, and they will then listen to truths which could not excite them through any other organ."

-Thomas Jefferson

IRS Secret Agent

Quote of the Week:

"Any tax is a discouragement and therefore a regulation as far as it goes."

-Oliver Wendell Holmes

Is Your Social Security Secure?

So you are retired and it's time to relax and live life at a more relaxed pace. This is the life you have been waiting on. You can finally live life with no worries. You have a retirement nest egg and of course you have your Social Security Income. But wait...you also have some lingering tax issues you did not get cleared up before you retired. Most might fear that the IRS can gather up your nest egg and leave you with an empty "coop." This is true but there IS another concern...the IRS can also levy your Social Security Check. Let me say that again...

The IRS can levy your Social Security Check!

The IRS can levy up to 15% of your Social Security Income in order to retrieve the money you owe the IRS for past due taxes. I know what you are thinking...I don't make enough in my social security check now...how am I going to pay my bills if they take even more money out of it? There are solutions that can be reached so if you want to know what your options are before this happens to you please contact a professional tax resolution company.

IRS Secret Agent

Quote of the Week:

"The Congress will push me to raise taxes, and I'll say no, and they'll push and I'll say no, and they'll push again. And all I can say to them is read my lips: No New Taxes."

-George Herbert Walker Bush

Tax Challenges for Business Income - Part I

Understated business income...the IRS says this is becoming more and more prevalent especially in small businesses. Are more and more small business owners trying to cheat the IRS out of tax dollars? The IRS thinks it is more likely to be the lack of knowledge on the part of small business owners of just how to calculate and document gross business income. Here are some helpful tips from the IRS to help out those who struggle with this on their tax returns.

First of all, what is business income? Business income is any and all income associated with a business. If there is any connection between the income and a business it is business income. You can answer that question with another one...if the business did not exist would the income have been received? If you can answer that with "yes," then put it in the business income column. As a business owner you are legally required to report ALL income that is derived from your business.

There are numerous ways to receive business income. Typically, the income is from simple forms of payment such as cash, checks or credit cards. However, trades, bartering, exchanging of services, exchanging of property are additional ways of paying for the goods and services provided by a company. All of these are considered taxable as sources of income. This leads us into Cost Of Goods Sold (COGS) where businesses will sell products in order to trade for services needed. This is where a lot of things are not as "black and white" on the business income spreadsheet. Next week we will continue with this topic and get into how to actually calculate gross business income though these types of sources.

Tax Resolution Integrity

So you find yourself being the subject of the IRS collections process. You have a tax liability with the IRS. You have unfiled returns for past tax years. Maybe you even owe money to the state for same reason. How are YOU going to get it resolved?

The answer is fairly simple. Most taxpayers cannot get their tax liabilities resolved on their own. Mostly because of a lack of knowledge of how the IRS works or because they simply don't have the time to spend hours, days and weeks on the phone negotiating the tax debt they have accrued. If it is simply tax returns from years past the taxpayer can usually file these as long as they understand the guidelines of what can be deducted or included on the tax return for that particular year, have access to all of their financial information, and can access the correct years tax return forms. Simple right? Tax returns are the easy one. If it is a tax debt owed of substantial amounts the IRS would love for all taxpayers to handle this on their own without any representation whatsoever...this is the easiest way for them to get all of their money.

OK, so you need a tax advisor who can handle filing past due returns and negotiate your past due tax liability. How do you find one? Even more important...how do you find the right one? Here are some important tips to consider:

• Make sure they are a member in good standing with the Better Business Bureau. Also look to see how many complaints they have had each year. Some companies may have a satisfactory rating but have a high number of customer complaints.
• Make sure they are licensed for both preparation of tax returns and tax resolution.
• Make sure they are licensed to operate in the state for which you have tax issues...there are several who do not or cannot operate in all 50 states due to improper business practices.
• Make sure you are dealing with a company who is financially strong...in today's economy there are a lot of "fly-by-night" companies who simply do not have the financial structure to make it through tough times and you may find out the company you sent money to yesterday is out of business today. Make sure they have been in business for at least four years...most new businesses fail financially in the first three years so if you have a business in year four you probably have a strong company financially.
• Make sure they do not have any pending litigation from civil lawsuits from unsatisfied clients.
• How long does the average resolution take? Anything outside of 180 days is unsatisfactory.
• Do they simply submit all clients under one program (Offer in Compromise) or do they have multiple options for resolution.
• Do they have a good reputation on the industry? This can be done online through a google search. Keep in mind most companies (good and bad) have varying reports. Not all customers who get tax resolution get the resolution they wanted so there will always be complaints with just about every company but look at the reasons and more specifically the number of complaints. Ask the company you are talking with to furnish customer testimonies on services rendered.
• Are they a member of the Net Promoter Score Program which is designed to identify companies who have excellent customer service. (Here's a hint: review the program guidelines and see what the company's score actually is.)

I hope this helps you in your search but keep in mind...this is something in my opinion the average taxpayer cannot handle themselves. Make sure you get the right help with your tax situation and hire a professional tax resolution company.

IRS Secret Agent

Quote of the Week:

"Friends and neighbors complain that taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay we might the more easily discharge them; but we have many others, and much more grievous to some of us. We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly."

-Benjamin Franklin