Tackling Your Taxes, Avoid Levies, Leins, and Other Tax Problems

Afraid you're going to OWE Taxes and you can't afford to pay Uncle Sam?



This News Story has the goods. This report covers some common questions like, "I owe taxes and I can't pay, what should I do?"

The report also covers the connection between our failing economy and the IRS, as well as some of the best strategies for avoiding tax problems like IRS levies, liens, and seizures.

Extension of Time to File, A Step by Step Guide that gives you more time to File your Taxes

Special IRS Bulletin: I’m interrupting my scheduling programming for this alert. I had a definitive guide on solving tax problems scheduled to go out to the blog today to celebrate my 200th blog post, but I realized that April is only 2 days away.

That’s right, this Wednesday is April first, no fooling. Bad puns aside, I thought it would be a good idea to post some specific instructions on how to EXTEND YOUR DEADLINE FOR FILING TAXES. This is a good idea if you know you won’t be ready by the April 15th deadline. And it sneaks up on you fast. Don’t say I didn’t warn you!

Extension of Time to File, Step by Step Guide

Step One: Pull your head out the sand and get to work. There are more colorful ways to state this, but really, stop putting this off!

Step Two: File Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. (Available at IRS.gov)

Step Three: File this form by April 15, 2009. I’d recommend downloading the form and getting this out of the way NOW before your forget to do it later.

There you have it, three steps and it couldn’t be easier. But how do you know if you qualify? As always, I’ve got you covered:

Qualifying for an Extension of Time to File

To get extra time you must:

1. Properly estimate your 2008 tax liability using the information available to you
2. Enter your total tax liability on line 4 of Form 4868, and
3. File Form 4868 by the regular due date of your return.

Word of Caution: I’m not trying to mislead anyone. An Extension of time to File is not an Extension of Time to PAY taxes owed. No matter what, they’re due April 15th. If you do not pay on time you will be charged penalties and interest. Form 4868 does not extend the time to pay taxes.

If You Owe the IRS and you can’t pay by April 15th, I suggest getting in touch with a reputable tax professional or tax resolution company and discussing possible solutions. It’s vital to do this before you wind up with a huge debt on your hands.

Tax Problem Help: Preventing and Solving IRS Levies, Leins, and Seizures

Tax Problem Help: I've been writing articles on this blog for well over a year now, and I know some of you don't have the time to search through my archives to find the Tax Answers you need. I've done this once before, but I thought it would be helpful to write a quick article that lists solutions to common IRS debt issues. Consider this a sample platter of debt resolution services.

They Sent me Notice of Intent to Levy! What do I do?
Don't panic, your Revenue Office can smell your fear! There are several programs that the IRS and private companies offer to give you help with your tax problems, but they all have requirements that need to be met.

The Installment Agreement: This is a monthly payment plan that you setup with the IRS to pay off your debt. The catch is that the IRS determines what the payment amount will be per month and that can be more than you are able to afford.

The Offer in Compromise: When you hear a late night TV commercial talk about settling your tax debt for pennies on the dollar, this is what they’re talking about. This program sounds almost too good to be true. It is real, but it is also the most difficult to get. Only 2% of applicants for an Offer even get approved.

Currently Non Collectible: If you’re completely broke, or you’re on a fixed income that covers only the most basic living expenses you can qualify for this. Since you have no money or assets the IRS can go after; they temporarily suspend collection activities. The IRS does check up on you every year and if your financial situation changes, they will renew their collection efforts.

Innocent Spouse: Normally if you marry someone you also marry their tax debt. However there are exceptions to this situation and you can get out of a debt created by your ex-spouse. The tax debt has to be your ex’s, you can’t have filed jointly. You have to have not known about the debt. The debt can also be erased if there was abuse. If any of the criteria are met your tax debt can be completely erased.

Penalty Abatement: When you get in debt to the IRS interest and penalties start adding on to your debt immediately. In fact your debt will increase by about 25% each year. If you’ve suffered a catastrophic event in your life you may qualify to have the penalties removed from your debt. This can reduce your debt by up to 30%.

A light at the end of the Tunnel. Being in debt to the IRS makes you feel overwhelmed and alone, but now you know there’s a possibility for hope.

Have a happy weekend everyone. Don't forget, 19 Days until Taxes are Due!

Tabloid Fodder: Rapper Lil' Kim owes $1 Million in Back Taxes

I have to admit, I'm usually too busy to read about all that celebrity gossip crap. But Gossip Magazines pay top dollar for prime real estate, meaning all of the the grocery store check-out lines in America are filled with that garbage! Everyone has to buy food, so everyone is exposed to that journalistic diarrhea. I almost feel guilty about spreading more "gossip," but hey, this has some relevance to my work. So here we go:

Lil' Kim, the Epitome of Grace and Class Owes Back Taxes

I mean, what a class act, this lovely young lady. I had no idea that such a fine, cultured specimen would be cable of this kind of neglectfulness. This just goes to show you that ANYONE can owe the IRS. I mean, she's a contestant on Dancing with the Stars, for goodness sakes. Now there's a respectable, dignified, and intelligent show. Yet Lil' Kim (real name, Kimberly Jones) owes nearly $1 Million to the IRS, how can this be?

In case my sarcastic message was not perceived in writing, I'll have you know that I am being sarcastic. To Continue...

The Stats:

- $12,599 (#9,065) to the state of New York
- $4,089 (#2,940) in a tax lien to California
- $916,982 (#659,700) in various liens to the state of New Jersey

There ya go I gave the people what they wanted. But tomorrow I'll be back with more hard facts or maybe even some real news. Until then, remember, April 15 is only 20 days away!

Is Your Tax Man Cutting it? Ways to Tell if You're Getting Your Money's Worth from a Tax Professional

Getting Burned: You're not a CEO, an Oil Tycoon, and you're not hiding money in off-shore accounts. This doesn't mean your taxes aren't complicated, and it certainly doesn't mean you can't hire a professional to handle your taxes for you. But before you start your search, make sure you know how to steer clear of tax preparers that our just out to take your money and run!

Red Flags

Run the other direction if your Tax Professional/Preparer is guilty of the following:

- Guarantees a refund, Guarantees Debt can be Settled for "Pennies on the Dollar"
- Refuses to answer questions
- Has less than an A rating with the Better Business Bureau
- Acts shifty in general

Questions to Ask

According to the National Society of Accountant's, you need to ask your Tax Preparer the following questions:

- What credentials do you have?
- How long have you been in practice?
- How do you keep current on law changes?
- Have you dealt with tax situations like mine?
- Are you the person who will do my return?
- What organizations do you belong to and do they have a code of ethics?

Don't forget to ask about their experience (looking for 10+ years), licenses, and certifications.

Deadline: The April 15th Deadline is only 22 days away! If you haven't gotten started yet, working with a Tax Professional is a wise choice. But remember, even if your tax preparer is at fault for an error, you'll get the blame as well. Only work with an honest, ethical company or individual.

Warning: The IRS Will Use Suprise Attacks to Keep You In Debt. Learn the Top 5 IRS Suprise Attacks.

Sudden Strike: Suddenly finding yourself in IRS Debt and you don't know why? When I was a Revenue Officer, many of the people I spoke with had no idea why they owed. It was all due to the IRS's "Surprise Attacks," sneaky ways the IRS can make you pay.

1. Prize Winnings

The IRS expects a cut of your prize winnings! If you win cash from Vegas, bingo, raffles, or the lottery, the IRS considers that income. All income is taxable. Thousands of people owe thousands for not paying their taxes on prize winnings.

2. Inheritance

No, not even the money from your dearly departed Aunt or Uncle is safe. If you receive a cash inheritance, this is also considered income, and you have to pay up. Think you're safe if you inherit an estate or property? Think again! If you sell the property or estate, the money you earn will be considered income, and taxes will be owed. This is as sneaky as it gets, but it's all true.

3. Alimony

Your marriage has ended, but your ordeal with the IRS has not. The checks you get from your Ex spouse are completely taxable by the IRS. Child Support recipients, don't despair. Child Support is not taxable by the IRS.

4. Forgiven Debt

Too bad the IRS isn't as generous as your creditors. When credit card debt is too much to handle, you can negotiate with the credit card company and pay your debt off with a low settlement amount. However, the IRS wants you to include the amount you saved by settling your debt as income!

For example, if your debt was originally $10,000 but you settled it for $5,000, you have to report the $5,000 you saved as miscellaneous income.

5. Unemployment Benefits

You need that unemployment guppy check to pay bills and put food on the table ("Ramen noodles again?!"). But the IRS still wants some of that pie. You need to report your unemployment benefits to the IRS as income.

Prevent It: These are the Top 5 Sneaky Tricks the IRS uses to trap people into debt. Prevention is simple. Obtain and fill out IRS Form 1099. There are different forms for each situation. For example, Form 1099-MISC covers a large umbrella of miscellaneous income, while Form 1099C is for Cancellation of Debt. Of course, if this whole thing is still too overwhelming for you, you can always contact a Tax Professional for guidance.

Don't Work Two Jobs Unless You Can Pay the Taxman His Cut

Getting Ahead: We all want to get ahead, and in this economy working one job won't do. Many Americans mow lawns, babysit, tutor the neighbor's kids and do everything they can do stay afloat. But the sad news is, the IRS wants it's cut of that pay! Before you get started on your side-business, learn what to do if you don't want to owe the IRS.

1099 IRS Form 1099-Misc is your best friend. You'll need it to report all income earned from your side gig.

Caught Red-Handed You might be thinking, "Well this is under-the-table, the IRS will never know about this moolah!" If we're talking about a small sum, say $100, then you're right. The IRS has bigger fish to fry and they're not going to nail you for chump change.

But if you're making big bucks from your side job and putting that money in your bank account, you're caught red handed. Why? Because the IRS can look at your bank deposits versus the income you reported. If the numbers are way off, that's an IRS Audit Red-Flag.

Assets Your assets paint a vivid picture about your lifestyle for the IRS. If you're driving a luxury car and you're living in an area out of the range you reported for income, the IRS gets suspicious. It may be your hard-earned money, but Uncle Same wants his cut. And he's mighty persistent about getting it.

Heads Up: So what's the verdict? If you can make good money working a side gig, do it! But don't forget to give the Taxman his cut first. Report all income you make on Form 1099-MISC. You can even take advantage of Small Business Tax Deductions, a big help when you're paying for expensive equipment like photography equipment or landscaping tools.

5 Tax Myths that will Cost You, Overcome Tax Myths and Save Money

I've heard it all... When I was a Revenue Officer I've heard every Tax Myth under the sun. I've compiled and dispelled many myths over the years, and from the looks of the e-mails I receive, it looks like I'll have to compose more to keep you all from making fatal mistakes!

Myth 1: You can Deduct your Sales Tax
You haven't been able to deduct sales tax made on personal purchases since 1986.

Myth 2: You HAVE to File Jointly When Married
You can always file "Married File Separately." Usually this means less money back, but it can't work out to your advantage. Don't inherit your spouse's IRS Debt issues if you don't have to!

Myth 3: Students are Exempt
There is no exemption that excludes students from tax. Don't fall for this trap, students. File your taxes!

Myth 4: You can EASILY settle your Debt and Save Big
For those that even quality, setting IRS Debt with an Offer in Compromise is a grueling journey to the finish line. You have to file forms, provide documents, pay a $150 fee and depending on the payment plan, a percentage of the settlement offered. The money you pay is not refunded if you are not approved. Don't mistake an OIC for an easy way out! It's not.

Myth 5: You cannot claim your Child as a dependent if they are working
This is bogus. You can claim your child as a dependent no matter how much money they earn.

Friendly Reminder Despite press releases stating the IRS was going to play it nice and help people during this financial crisis, I've received a surge of e-mails from people asking for help. They're telling me that the Revenue Officers are as ruthless as ever. Don't let a Tax Myth lead you down the path of destruction. Double check every Tax Decision you make with a professional before proceeding.

Have a happy and safe weekend everyone! I'll be back in the office on Monday to help you with your IRS issues and financial questions.

Offer in Compromise F.A.Q, Don't Pay in Full if you Can Settle Your Debt

Offer in Compromise Review I can never write enough about Offer in Compromise. Every day people e-mail me, telling me that they can't decipher the convoluted Offer forms. Hopefully this brief F.A.Q will help you with your various OIC questions.

What IRS Form(s) do I use to submit an Offer in Compromise?
In order to submit an Offer in Compromise you need the following IRS Forms:

• IRS Form 656-A “Offer in Compromise”
• Form 656-PPV, “Offer in Compromise Payment Voucher”

Is the initial payment with the offer refundable if not accepted?
No, the initial payment made is nonrefundable if your offer is not accepted. For this reason, it’s imperative to ensure everything on Form 656-A is filled out accurately and completely.

Is it possible to settle IRS Tax Debt for Pennies on the Dollar?
In rare cases, the IRS has settled IRS Tax Debt for very low sums or “pennies on the dollar”. However, only a small percentage of people qualify for their IRS Tax Debt to be settled for “Pennies on the Dollar.”

What extra documents are needed for Submitting an Offer in Compromise?
You need documents to prove why you cannot pay your IRS Tax Debt in full. You can include past-due bills, receipts, hospital bills, etc.

What factors determine if my Offer will be approved?

The IRS looks at three main factors.

• Doubt as to Collectibility: You can’t pay your bill now or in the near future.
• Doubt as to Liability: You are not at fault for the IRS Tax Debt.
• Effective Tax Administration: Collecting on the debt in full would cause an economic hardship.

My Offer was not approved. Now what do I do?
The first thing you need to do is double check your application for mistakes. Most forms are returned due to small errors, like forgetting to sign the paperwork. If you know you didn't make a mistake, you should try hiring a professional to resubmit your offer for you.

What are the benefits of hiring a professional to prepare my Offer?
An experienced Tax Professional knows their way around the IRS better than the average Taxpayer. They have a higher chance of getting your Offer approved. Hiring a Remember, the $150 application fee you submit with your offer is nonrefundable.

7 Deadly Debt Sins- avoid IRS Debt Disasters

Branching Out: One debt leads to another and things snowball out on control from there. Follow these 7 Deadly Debt Sins and learn how to avoid making serious debt mistakes and mishaps.

7 Deadly Debt Sins

Debt Sin #1: Not Paying Bills in Order
Yes, there's an order of importance when it comes to paying Bills. Pay the IRS before anything else. Unlike your creditors, the IRS can seize funds from your bank account or paycheck.

Debt Sin #2: Not Building an Emergency Fund
If you're living paycheck to paycheck one car accident can leave you in debt. Get in the habit of keeping an emergency fund.

Debt Sin #3: Credit Cards, One Way Ticket to Debt Hell
If you're a compulsive spender, resist the allure of new credit cards. If you succumb to the evil, don't use the card unless you have the cash to pay the bill with.

Debt Sin #4: Minimum Payments
Don't make the minimum payments on any debt. Interest rates accumulate, especially if you owe the IRS! Pay as much as possible and wipe out debt fast.

Debt Sin #5: Not Budgeting
Keep track of every penny your spend, save all receipts, and pay for everything in cash. Is all of this inconvenient? Of course it is! But it will discourage you from spending money frivolously. (And subsequently not applying that money to your debts!)

Debt Sin #6: Late Payments
Creditors have smaller set fees. The IRS's fees, interest, and penalties will devastate your financial situation. Don't pay more by paying late! Make a habit of paying all bills on time.

Debt Sin #7: Procrastination
I've Levied the Bank Accounts of Doctors, Dentists, Lawyers, and Accountants. Plenty of Rational and Intelligent people think Debt will simply vanish if they ignore it. It won't. Get your head out the sand and pay your bills!

Want More? I've been toying with the idea of writing about general Debt Help and Financial Management. If you want to read more about these kinds of subjects, leave a comment or send me an e-mail to let me know.

Top 5 Tax Filing Blunders, Avoid these Goofs and Get those Taxes Filed

Deadline Approaches: Just a friendly reminder to get your head out the sand while you still can. You have a little less than a month left to file your taxes. Get with it and get your taxes filed today!

Top 5 Tax Filing Blunders:
Avoid these slip ups and keep out of trouble with the IRS.

1. Sign and Date Returns: Yes, scores of people manage to miss this step every year. Both spouses must sign a joint return. If you don't sign you haven't filed.

2. Report all Income: Tips, under-the-table income, unemployment, alimony, raises, all of this counts as income. If you don't report income you'll owe the IRS.

3. Wrong Filing Status: Don't file as Head of Household just because you feel like you're in charge at home. You have to meet the listed requirements for each filing status. Filing the wrong status will hurt your eligibility for tax credits.

4. Leaving out SSI: The IRS will reject credits and deductions if the social security numbers for dependents is incorrect. Double check SSI numbers.

5. IRS Forms: Double check and be sure you are using the right Tax Forms. The IRS Computer System goes through forms before a human being even touches one. When you use the wrong form your chances of being audited increases.

Schedule Time Schedule time to get your taxes out of the way while there's still time.If you're too intimidated to try it on your own, call a professional to help you. Just make sure they're done long before the deadline!

Filing Back Taxes: What to do if you Lost Imporant Tax Forms

Filing Back Taxes is a difficult process. If you have not filed for years, you probably lost important Tax Forms and documentation. But not to worry, a Substitute Return Form will get the job done.

What document needs to be filed?

IRS Form 4852 is a substitute tax form. It can be used as a substitution for Form W-2, Wage and Tax Statement, or Form 1099-R.

When it is appropriate to file a substitute return?

File a Substitute Return if you are missing Tax Files like your W-2. It can be used to report distributions from Pensions, Annuities, Retirement, Profit-Sharing Plans, IRAs, Insurance Contracts, or other related sources.

Substitute For Return
Form 4852 is not to be confused with a Substitute for Return. The IRS may file a Substitute for Return or SFR if you do not file your taxes on time. The IRS uses information returned to them from third parties in order to complete the form. The Tax Owed for a Return the IRS prepares is usually higher than one you would return on your own.

And Remember: If you are having trouble gathering additional Tax Documentation that is needed for completing your Tax Returns, consider working with a Tax Professional. It’s very important to file your returns in a timely manner if you want to avoid trouble with the IRS.

I Can't Pay my Taxes, What Should I Do?

April 15th is one month away.... that's right, after this Sunday you'll have less than one month to get your taxes done. This time of year a lot of people ask me, "What can I do if I can't pay?" First, relax. You're not alone.

Will I go to Jail if I don't pay my Taxes?
You cannot go to jail for not paying your taxes. No one in America can go to jail for owing money! Even if you owe it to the IRS. People have been jailed for not filing their taxes, but not for failure to pay them.

Can I Hide from the IRS?
That's a funny joke! No, you can't. If you don't file and pay in full the IRS computer system (Automated Collection System) will automatically send you a check for the balance due. This is where the interest and penalties start to add up.

But how can I pay if I have no Money!?
Beg and Borrow, or you'll be sorry! As anyone who owes will tell you, IRS interest rates are incredible. Do you have the ability to take out a loan, borrow from friends or family, or even cash in your credit cards? Any of these options are great ways to get those taxes paid on time. The interest on credit cards or loans (or your friend's interest rates if your friends or family are the mob) would be lower than the IRS's.

Remember this: The government ranks at the top of the list of creditors that have to be paid. Any of your assets are fair game if the IRS does not get paid. If you try to hide your assets, that is known as fraud. And you can go to jail for that. Take care of Taxes first and foremost. And if you're scared and need backup, don't hesitate to hire a professional.

Top 5 Quality Standards to Look for When Choosing a Tax Resolution Company

Many of the e-mails I receive are bound by a common thread- people have received professional help before and were burned by an unreliable company or law firm. Don't be fooled again; use these tips to help find the company that offers the best service.

BBB Rating
Choose companies that meet the Better Business Bureau's official standards for accreditation. Make sure they have an A Rating or higher and no unresolved complaints.

Dun & Bradstreet
Make sure the company adheres to Dun & Bradstreet’s highest quality standards. Dun & Bradstreet is the world’s premier source of commercial information and insight on businesses.

Stability
How long has the company been in business? You should look for a company that has been established for at least 10 years.

U.S Chamber of Commerce
Look for companies that are official members of the U.S Chamber of Commerce.

Customer Service is #1
If the Tax Resolution company is not putting you and your needs as their number one priority, go elsewhere. Make sure you know the company treats you like a human being before you simply give away your money to a company that is not interested in giving you results.

Not sure on how to find the answers to some of this information? Ask! If they refuse to answer the question or don't know how to answer it, run the other way! Don't be afraid to shop around before you make your choice.

941 Payroll Taxes - Don't Let the IRS Destroy Your Business

Overwhelmed? Small Business is suffering. In this economic recession, it's hard to stay afloat. I'm receiving an influx of e-mails from veteran Small Business owners that owe big money to the IRS because they neglected their payroll tax obligations. Even if paying the IRS could hurt you financially, the IRS still expects their money, and they might shut you down to get it.

Common Mistake When Business is slow, people stop paying their payroll taxes. They do this because it takes the IRS longer to get to you than say, the utility company. But once the IRS does spot you, it's a done deal. You have to pay what you owe and keep current if you don't want to get shut down.

Am I Too Late? So you want help with your payroll taxes, but you're already on the IRS Hit List. Don't panic. Show the IRS that you're willing to work with them. Whether you've made a mistake filing or missed a quarterly payment, pay any amounts owed immediately! It's never too late to make up for a mistake; but timing is crucial.

Interest and penalties start accruing on the debt as soon as it becomes a debt, causing it to double or even triple. Do whatever it takes to make paying your taxes a priority when you're running a business. No one can bring you down faster than the IRS.

No More Debt Collector Calls on your IRS Debt....

To Review: Back in September 2006 the IRS ignited controversy by outsourcing the collection of taxpayer's debt to third party (or private) debt collection agencies.

So what does that mean? That means if you owe, more eyes are seeing your personal information (e.g., Social Security Number, Phone Number). Additionally, the third party collectors are tempted to use pressure tactics to make people pay so they can fatten their wallets with a commission check. Think of them as hired mercenaries.

Good News: March 7, 2009, the IRS announced their decision to stop using private debt collection agencies. This means less paperwork and less headaches for the IRS and less confusion for taxpayers.

Bad News: It's true, no one can do the Federal Governments job better then the Federal Government. IRS Commissioner Douglas Schulman said he expect to hire more than 1,000 workers this year to increase collections and even encouraged workers from the private collection agencies to apply.

In a nutshell... The IRS is calling for reinforcements to collect on tax debt. They don't have extra agencies to contend with, which should streamline their approach. If you still owe, the IRS is out to get you! So get in compliance, and fast!

An IRS Tax Lien Could Get you Fired

Yesterday I received an interesting question:

“Will having a lien filed against me interfere with my ability to get a job?”

The Answer: Yes, having a Tax Lien can negatively affect your ability to find a job. This doesn’t mean that you won’t find any job at all. But it does mean that having a Tax Lien can greatly limit your possibilities.

Particularly, a Tax Lien will affect your ability to get any of the following jobs:

-Federal or State Job
-Civilian Contractor with the Department of Defense
-Any job with a license requirement (Financial Planner, CPA, etc.)
-Any job that requires background/credit check(s)

Goodbye, Promotion. Many companies require a Credit Check before a promotion. This means a Tax Lien could be keeping you from making more money at work
Reassignment/Retention: Ready to move to an office location closer to home? A lot of companies are requiring credit checks for reassignment or even retention. Having a Tax Lien could mean losing your job!

Lien Removal Review: The IRS knows that Liens make people pay. It’s not easy to remove a Tax Lien. First things first, you have to cooperate with the IRS and discuss a payment arrangement with them. If you’re having trouble negotiating with your Revenue Officer, consider hiring a professional to represent you.

Now you Have the Smoking Gun…Use it!

Filing your Tax Return- Rapid Refund or Rapid Trouble?

Who can you trust? Tax Time grinds on...and if you have a lot of deductions or you have investments and property it can seem very hard to do your own taxes. There are numerous companies both national and local that will offer to file your income taxes for you, for a small fee.

But should you use one of these companies, or try to file on your own? For the sake of argument let's say you want to have someone file your taxes for you. Depending on the company, you may be walking into a trap.

Are they qualified? Many of these tax prep company's employees are not IRS tax experts. They are not IRS enrolled agents. They've had a three week training course at best. When you go to them they're going to make all kinds of promises to get you more money than you've ever gotten back from Uncle Sam. Be very cautious at this point, "easy money" always has a catch.

Reputability Test: Here's a couple of quick tests to see if the company you choose to work with is reputable.

- Better Business Bureau Rating of A or higher
- No Unresolved Complaints with the BBB
- Refund Policy is offered
- The company employs CPAs, Enrolled Agents, and Experienced Tax Preparers

If you're not sure about the answers to any of these questions, ask them! It's your money after all, don't lose it to a skeevy company. Do some research.

They saw you coming a mile away. Do not be taken in by a "rapid refund". If your taxes are filed electronically you'll get the money in one-two weeks. A rapid refund seems great: the tax company pays you right away. But wait, this is actually a loan and your planned tax refund is the collateral. If you get audited, or your refund is denied, you still owe the tax prep company and you don't have your tax return refund or worse, you owe a tax debt to the IRS.

I'm not saying all of these companies are crooked. Many of them can help you with your income taxes if you feel like you're drowning in paperwork and don't know which tax form to use. Just remember to be careful because you don't want an IRS-HItman showing up at your door.

Now you have the smoking gun...Use it!

Rebuking the “Kindler, Gentler” IRS...again

The IRS Wants to Help You: The IRS claims they want to go the extra mile to help taxpayers that owe. Here's what IRS Commissioner Douglas Shulman had to say:

“We need to ensure that we balance our responsibility to enforce the law with the
economic realities facing many American citizens today...We want to
go the extra mile to help taxpayers, especially those who’ve done the right thing in
the past and are facing unusual hardships.”

The Truth: According to the number of e-mails I get daily from citizens asking for Tax Help, it doesn't look like the IRS is going the extra mile to help anybody.

Sorry to burst the proverbial bubble regarding this “IRS-is-out-to-help” issue. (I must just split a seam if I don't die laughing first) But what can I say, I'm a realist.

In fact, the IRS is increasing the enforcement budget for 2009 by the millions. In particular, they are targeting Small Business owners and Self Employed individuals, believing they are the ones evading taxes the most.

FY 2009 Budget Documents: Keep in the know. This official IRS Tax Budget Document will help you get the scoop on what's reallygoing on.

Budget FY 2009

This “Kindler, Gentler” no more big-bad-IRS thing is going to give taxpayers the wrong idea. Don't take a break from your tax obligations just because the IRS issued a couple of well-spun press releases. If you owe the IRS, get to paying them! And of course, don't be afraid to ask for professional help if you need it.

FREE IRS Calendar

Hello, Tuesday. Well it looks like I'm late again. I wrote an entry last month about a FREE IRS Calendar.

It helps Small Business Owners with tax tips and tricks. It even has the days you need to deposit Payroll taxes clearly labeled.

It's too late to order a glossy copy, but you can download a .pdf here:

2009 IRS Calendar

If that's too much hassle, break out your calendar and mark the following dates for March, 2009:

March 1-2: File the following forms for 2008- 1098, 1099, and/or W-2G for certain payments made during 2008.

Farmers and Fishermen: File Form 1040 and pay any tax due.

March 4: Deposit Payroll Tax for payments on Feb 25-27 if the smiweekly deposit rule applies

March 6: Deposit Payroll tax for payments on Feb 28-Mar 3 if the semiweekly deposit rule applies

March 10: Employers: Employees are required to report to you tips of $20 or more earned during Feburary

March 11: Deposit Payroll tax forp ayemtns on March 4-6 if the semiweekly deposit rule applies

March 13: Deposit Payroll tax for payemtns on Feb 28 - Marc 3 if the semiweekly deposit rule applies

March 15: Deadline to return excess 2008 401(k) amounts to highly compensated employees.

March 16-17: Deposit payroll tax for February if the monthly deposit rule applies...

March 18: Deposit Payroll tax for payments on Mar 11-13 if the semiweekly deposit rule applies.

March 20: Deposit Payroll tax for payments on Mar 14-17 if the semiweekly deposit rule applies.

March 25: Deposit Payroll tax for payments on Mar 11-13 if the semiweekly deposit rule applies.

March 27: Deposit Payroll tax for payments on Mar 21-24 if the semiweekly deposit rule applies.

March 31: Electronic filing of Forms W-2, W-2G, 1098, 1099, and 8027, File Form 730 and pay the tax on wages accepted during February. File Form 2290 and the tax vehicles first used in February.

Bankruptcy to Solve IRS Debt? Think Again...

Another Review, Class... Many taxpayers consider Bankruptcy for eliminating their IRS Tax Debt. But generally speaking, Bankruptcy is an ineffective tool for Tax Debt resolution. Taxes are rarely discharged no matter what Chapter you file. If your Tax Debt is not discharged, collections efforts will resume full force.

Why it’s better to seek a resolution other than Bankruptcy
The bankruptcy court is not designed to determine tax issues. In fact, the bankruptcy court does not have the authority to determine the amount or legality of a tax, fine, or penalty (According to IRS Publication 908, Bankruptcy Tax Guide). In most cases, Tax Debt will not be discharged and the Tax Debt will remain.

Three Common Bankruptcy Traps: Why Bankruptcy doesn't work for Tax Debt.

1. Having Money and Assets
If you have plenty of money in the bank to satisfy your debt, your money will be seized to satisfy your IRS Tax Debt.


2. Filed Before?
If you filed under Chapters 7, 11, 12, or 13 and paid your unsecured creditors less than 70% of what you owed them, you cannot earn another discharge.

3. Secured Creditors
If a creditor has a right to take specific property to satisfy a debt, that creditor is secured. That means Tax Liens survive Bankruptcy. You either pay after Bankruptcy, or the IRS can repossess your property.

There are many options for resolving Tax Debt. If you are not sure which route to take, consider contacting a qualified professional for advice or assistance.