Don't Let the IRS Grinch Steal Halloween

In tough times it's hard to enjoy even the simple pleasures. The IRS doesn't make it any easier. They're taxing your candy, shutting down your kid's pumpkin stands, and haunting your life with tax debt that just won't ago away.

Jr. IRS Agent Halloween Costume from Target

Are You Haunted by the Ghost of Tax Debt Past: The Tax Debt that Just Won't Go Away

The IRS Will Get You- And Your Little Rabbit Too: I guest star in a Halloween Special

The IRS Taxing Your Pumpkin Stands? Good Grief! The IRS authorities had nothing better to do, so they swooped in and shut down a 4 and 6 year old's pumpkin stand.

Get IRS "Candy Tax" Facts and Save Your Halloween- What will be taxed and what will not? Save yourself from the Halloween Candy Tax!

Have a Happy Halloween! Don't let the IRS scare you. I'm here if you have any IRS questions, simply send me an e-mail.

IRS Taxing Your Pumpkin Stands? Good Grief!

First the IRS taxes your candy. Now your kids can't get a break. Like a big bully, the IRS swooped in and closed down a Pumpkin Stand run by two entrepreneurial youngsters. Good Grief!

The Story: Two officials from the Idaho State Tax Commission forced two children, ages 4 and 6, to close a stand in front of their home they were using to sell pumpkins. The kids were selling the pumpkins to raise money for school sports, but the IRS didn't care. All they saw as a violation of Federal law.

The IRS Shuts Them Down: An anonymous tax official said that roadside stands must obtain proper permits in order to business in Idaho. According to the IRS, the 4 and 6 year old kids must charge customers sales tax and forward that cash to the state.

What's Next, Lemonade Stands? Actually, government authorities have closed down lemonade stands before. But there is a silver lining, she did receive an apology from the county.

Really, don't tax authorities have better things to do than shut down kid's pumpkin stands? If they were looking for good PR, this isn't the way to get it...

What the IRS Plain Writing Act Looks Like: And What it Means for YOU

Early October President Obama signed the "Plain Writing Act", requiring the Federal Government to write documents, like tax forms, in easy-to-understand English.

How it works: Under the new law, every Federal Agency will appoint a "plain writing official" to supervise implementation of the act. They will train employees how to write in plain, simple English. This means if things go according to plan, a plan-writing page will be accessible from the home page of Federal websites like IRS.gov.

Why I'm Leary: This isn't the first time that legal jargon in governemnt documents has been debated. Government officials have lobbied to simplify government language for years. During the Clinton administration, Vice President Al Gore enacted the Plain Language Action Network.

On their website PlainLanguage.gov you can see a before and after of an IRS letter from 2002. The "After" is supposed to be easier to understand, but it's still confusing for the average citizen. The layout improved from the "before", but the language needs some work:

Plain Writing Act Facts

The Plain Writing Act only applies to documents that meet the following criteria:

• the document is used for communications withthe public
• the document is one necessary for obtaining government benefit or service
• the document is used for filing taxes
• the document provides information about any federal government benefit or service
• the document describes how to comply with a requirement that the government administers or enforces

 This means the IRS's complex tax rules and regulations will not become easier to decipher, don't expect those thousand-page stacks of documents to become easier to read than they are today any time soon.

You Can Request an IRS Appeal- Here's How:

Don't like the IRS's rulings? Don't think you owe? Believe it or not, if you have a conflict with a notice sent to you by the IRS, you have the right to appeal.

Are you confident? If you are certain you're right then you can always appeal your case with the IRS to have your tax return looked at again and possibly get the tax debt removed.

But you have to be careful,this warning comes directly from the IRS:

"If the Tax Court determines that your case is intended primarily to cause a delay, or that your position is frivolous or groundless, the Tax Court may award a penalty of up to $25,000 to the United States in its decision."

What to do? So how do you go about getting your tax debt appealed? The IRS will send you a letter stating how much you owe them and that they expect payment immediately. Once you receive that letter you have 90 days to petition, in writing, a letter of protest requesting an appeal hearing.

The Evidence: Of course since you are appealing the IRS decision you better have some very good evidence to dispute their claim. So I hope you've saved all of your receipts, documents, bank statements, employer statements, and other necessary documents to prove your case.

You can Represent Yourself: You do not need legal representation to file an appeal; in fact you don't even have to go to court. If you owe less than $25,000 you can claim a small case request and just go through the office of appeals where you will discuss the case with an IRS appeals representative. And before you think you would be walking into the lion's den the appeals office is separate and independent from the IRS.

You can also take your case to tax court. Again you can represent yourself, but this is the big leagues so you may need the services of a tax attorney, an enrolled agent, or a CPA to help represent you.


Applying for an IRS AppealOnce all of the evidence has been reviewed and the case heard a decision is made. This isn't your average court hearing, in fact you are guilty until proven innocent, and the burden of proof is on you, even if you have a tax professional helping your case.

If you're able to prove the debt was wrong then it is erased and you don't owe it. In fact you can even recoup some of your litigation costs for the tax hearing.

If, however, you weren't able to approve your case then you still owe the balance, plus penalties and interest, plus the fees of the tax attorney.

Use form 9423 Collection Appeal Request and read the attached Collection Appeal rights when you’re ready.

How the Government Spends YOUR Tax Dollars

Taxes: we hate them, but we all have to pay them. Given that fact, it's important to know where out hard-earned money is going. This handy guide from MyBankTracker shows the information from the Whitehouse 2009 Budget in a visual format, better helping you understand how your money is being spent.

Click the image to see a larger version on MyBankTracker.

The October 15 Tax Filing Deadline is NOW

It's the terrible day of three deadlines.

Get to work and get things filed if you don't want to owe the IRS a huge Tax Debt:





Tax Filing Deadline: First, today is the last day for you 1040 if you got a filing extension a few months back. Get proactive or you'll end up in tax debt!

IRA Recharacterization Deadline: Today is your very last chance to recharacterize your retirement account and reap some tax money.

Nonprofit Filings Deadline: If you don't want to lose your tax exempt status, get busy! If you didn't file returns for 2007, 2008, 0r 2009 you have to file by today or you could lose your tax-exempt status.

The list of the organizations with their tax-exempt status revoked will be official early 2011, so get to work before it's too late.

If you need help, I'm only an e-mail away. Drop me a line if you have any questions, on this deadly day of three deadlines I'll respond immediately.

Tax Lien Secrets THEY Don't Want You to Know

When I was a Revenue Officer my sinister weapon of choice was The Tax Lien. I used it and attacked with deadly accuracy. But now that I'm on your side, I'll let you in on some Tax Lien Secrets the IRS doesn't want you to know.

1) Liens Can Strike At Any Time
Tax Liens are a knee jerk reaction with the IRS. The trouble starts with the IRS sends out Notice of your Tax Lien to your credit bureau. Then your Tax Lien is public record.

Solution: Work with a professional to take care of your tax debt as quickly as possible and you may avoid tax lien problems altogether.

2) Liens Can Be Lifted
If you can prove your Tax Lien will prevent you from earning money to repay your tax debt or prevent you from obtaining a loan to repay your tax debt, the Tax Lien may be temporarily lifted.

Solution: The IRS will require letters are detailed records which prove why you need the Tax Lien lifted. You can do it, but it will be difficult to lift your Tax Lien.

3) Liens Might Be Here to Stay
If you make a misstep your Tax Lien may stick around longer than you anticipated.

Solution: After your Tax Debt is repaid in full, double check with your credit bureau and ask what steps need to be taken to remove the Tax Lien for good.

When a Tax Lien strikes, don't panic. It's painful, but it won't automatically ruin your business, your finances, or your life. Don't give it the chance, get help or get busy ASAP and stop the Tax Lien from doing further harm.

Expert Tips to Protect Your Cash and Assets from IRS Seizures and Levies

The IRS Collections Division has your assets and money forever in their cross-hairs when you owe them back taxes, so don't give them a reason to pull the trigger!


Make the Choice: Protect your assets by paying the IRS voluntarily. Really, your first step is to get proactive and face your debt before the IRS forces you to!

Pay the IRS Monthly: If you can't pay in full but can pay the IRS monthly, an Installment Agreement is the best plan for you. There are several types that vary according to your debt level and situation.

You Can't Pay the IRS: Those in serious financial trouble might be able to settle their tax debt with an Offer in Compromise. It's incredibly difficult to settle tax debt, so check with an expert before you attempt it.

Don't Slip Up: Once you're making monthly payments you cannot miss a single payment if you want to protect the funds in your bank and your assets!

The IRS Loophole: The IRS will try to set the monthly payments as high as possible, if you can't work it down to an affordable amount you should consider hiring a professional to represent your case before the IRS.

What about my Refunds?: If you are still paying down a debt from back taxes, any money coming to you via refund will be applied as payment on the debt. You won't see returns until your debt is repaid in full.

Depending on how serious your financial hardship may be, you may qualify for Currently Not Collectible status with the IRS. This will temporarily stop IRS collections while you get your finances back in order. It's not a permanent solution, but it will buy you time to find a professional that will help you remove your tax debt for good.

The IRS Will Get You..and Your Little Rabbit, Too!

The IRS is no laughing matter, but that doesn't mean spreading awareness of the IRS and the devastating effects of tax debt has to be painful.

Right in time for Halloween I present The IRS Hitman vs. The Giant Halloween Rabbit!



Speaking of scary, if you requested an extension of time to file back in April- the deadline approaches. You have to have your taxes filed by October 15, Friday of this week! Get to work!

The FTC Protects You From Tax Scams: American Tax Relief Shut Down for Good

Last week American Tax Relief was finally shut down by the federal government for taking nearly $100 million in fees without delivering promises.

American Tax Relief promises taxpayers they could settle their taxes, but the reality is that very few tax settlements are approved by the IRS. The IRS wants their money repaid in FULL, they are not letting go of one red cent unless the circumstances are extreme!

I'm glad to see another lying company exposed. Here's the rub on the FTC bust on American Tax Relief and their Nation-wide scam:

- Hahn was convicted of mail fraud back in 2006, sentenced to 5 years probation, and paid nearly $1.3 million in restitution, proceeds paid in part from income made from American Tax Relief
- Company owners were living big, with muli-million dollar homes and seven luxury cars in the garage. This raises some red flags...

- A federal judge in Chicago ordered the company to stop making deceptive claims and the company's assets and the assets of it's owners, Alex Hahn, and his wife Joo Hyun Park, were frozen.

- An estimated 20,000 taxpayers paid outlandish upfront fees for services that were not delivered.

-The company charged credit cards with authorization and gave few refunds

A new FTC law will prevent companies that sell tax debt settlement services from collecting or charging fees before they reduce the amount taxpayers owe, making it a safer landscape to hire a professional for tax help. David Vladeck, director of the Federal Trade Commission's Bureau of Consumer Protection says it best, "Their scam is over, closed down."

Attention Senior Citizens: Get the IRS Off Your Back for Good!

Senior Citizens have to safeguard themselves from IRS attacks more than other citizens. The IRS sees you as an easy target, so don't let yourself be one! Follow these tips and come out on top with the IRS.

File Your Taxes Every Single Year

You may only be receiving social security checks or pension, but your must file your taxes every single year. Fail to file and you could be slapped with a tax evasion charge, which comes with jail time and a fine of up to $300,000 if you're convicted.

Take Advantage of Tax Credit and Tax Deductions

Take advantage of every possible deduction you qualify for when you file your taxes to lower your tax liability. There are many deductions and credits to use that target senior citizens, so use them to reduce the amount you owe the IRS.

Taxes on Social Security income

The IRS has guidelines in place to help you determine if your social security income is taxable. Check your benefit statement next time you receive your social security check to see if taxes are being withheld. If taxes are not being withheld from your social security income and you have other income sources, you could owe the IRS next tax season. Have a tax professional review your finances and see if you need to report your social security income or not.


Pension Problems

How much you withhold from your pension pay will depend on a variety of factors, like your filing status, the number of dependents you have, personal exemptions, the amount of retirement payments you earn and additional sources of income. If you don't withhold enough, you could owe back taxes by the end of the year. Again, consulting with a professional is a good choice.

Early Distributions

When you're under 60 and must take an early distribution from a retirement account, you need to make sure that you have the proper amount of taxes taken out of your withdrawal. All too often, I speak with people that were told to take out an incorrect amount and suffered the consequences. If you want to find out what you should withhold for taxes, consult with a professional before making a withdrawal.

Prevention is the Key

The cure for Senior Citizen tax debt is obvious. File your taxes. Always have your taxes reviewed for accuracy by a professional as it's tricky when pension and social security come into play. If you are ever unsure of something, contact a professional instead of ignoring the problem or you could end up owing the IRS thousands!

File Your Taxes, or You'll Get Caught for Tax Evasion Like Beanie Sigel!

Yet another gagster rapper is facing scrutiny from the tax authorities. Beanie Sigel, known to the IRS as Dwight Grant, is being charged with Tax Evasion.

The Crime: This Wednesday the federal government leveled counts against Beanie Sigel for failing to file income taxes 2003, 2004, and 2005 according to U.S. Attorney Zane David Memeger.

Big Money: During this time he earned $1.54 million, and he's sold millions of records with hits like The Truth (1999) and The Reason (2001). With that kind of cash the IRS isn't going to go easy on him.

Trouble with the Law: This isn't Dwight "Beanie Sigel" Grant's first run in with the law, far from it. Beanie Sigel was convicted in 2004 on federal weapons charges and sentenced to one year in prison. After being released he was jailed again for parole violations after failing five drug tests.

In 2008, he was back behind bars for one day, and given six months in a halfway house after traveling to an Atlantic City casino without permission and consorting with a known felon.

Words from his Attorney: His lawyer, Fortunato N. Perri Jr., has stated, "I don't think he's being targeted. He just needs to get his personal business and tax affairs cleaned up...While he was in prison, other individuals were handling his finances."

"Some of the business relationships he had with some of the players involved makes it more difficult...We're trying to resolve the issues as quick as we can."

The Punishment: Like rapper Young Buck earlier this year, Beanie Sigel is facing the wrath of the IRS because he let others handle his finances blindly. If convicted, Sigel faces up to three years in prison and a fine of $300,000; tax evasion is no joke!

Do You have Unfiled Tax Years? If you have unfiled tax years, this is Tax Evasion. The IRS will hunt you down and find you just like they found Beanie Sigel and thousands before him. Don't let the IRS "catch you", it's easier when you're proactive and take the steps to solve your problem, immediately!

Bar Owner Caught for Tax Evasion: How YOU Can Avoid His Mistakes

The former owner of Bullies Sports Bar and Grill was sentenced to 5 years' probation and 6 months of house arrest for not withholding employee taxes.

An investigation of the business was held by treasury inspector general agents, after investigating they discovered $49,916 was owed in back employee withholding taxes.

What happened? The business owner sold his restaurant October, 2006. Instead of paying the employee withholding taxes as required by law, he deposited profit he made from the sale of his business into his wife's checking account. That was only the first bad move.

Strike Two: When the IRS filed tax levied against his wife's account and a second account in the restaurant owner's name, the owner obtained a release of the levy on the second account, then used that to create his own fraudulent release of levy for his wife's account. When the bank received the fake release, the did release the fund. The restaurant owner then had his wife liquidate the funds in cash and bank checks.

The Law Catches Up: Of course, he was caught. Held guilty to one count of corrupt endeavor to impede an employee of the United States acting in an official capacity under IRS laws.

The Punishment: In addition to probation and home confinement, U.S. District Judge Thomas Rose ordered the owner to pay restitution of $49,916 to the IRS.
Here are three important take-aways to remember if you don't want to get caught by the IRS:

1) NEVER allow someone to transfer funds to your account for "Safekeeping" so they can avoid the IRS. Like the wife in this story, you'll go down with the tax evader!

2) DON'T think you'll get away with it. It may take a while, but you WILL get caught!

3) BEWARE! If you own a small business, you are a prime target for the IRS. The IRS believes small business owners evade tax laws the most, and take extra time to scan small business cases carefully.

If you try to fool the IRS they'll take your money, your business, even your freedom if necessary to prove their point.

Tax Fraud: Top 3 Ways You'll Go Straight to Jail!

Can you go to jail if you don't pay your taxes? The short answer is "Yes", not filing your taxes and committing tax fraud are Federal Offenses. You may have dodged the IRS for now, but eventually, you will get caught.


The Top Three Tax Crimes That Mean Jail Time

Tax Crime #1, Under-reporting: You have to list ALL income you receive each tax year. Not reporting all of your income sources or reporting your income as less than you earned is known as under-reporting, and it's a serious crime.

Tax Crime #2, False Claims: A common example are people claim a spouse or children that they don't have. I encountered this so often that people must be convinced it's legal. But trust me, it's not!

Tax Crime #3, Never Filing Tax Returns: What riles up the IRS the most are people who simply never file tax returns. They consider these people tax protestors, and will take very aggressive steps toward penalizing these people.

The IRS "Badges of Fraud" Get Caught & It's Straight to Jail

IRS Agents and Auditors search for these "Badges of Fraud" when they analyze suspicious tax cases.

Badge of Fraud #1: No income sources

Badge of Fraud #2: Overstated Deductions

Badge of Fraud #3: Personal expenses as business expenses

Badge of Fraud #4: Sudden transfer of ALL funds and property

Badge of Fraud #5: Property transferred to close friends or family

Badge of Fraud #6: Keeping two sets of books, or no books


Go Straight to Jail: Jail time for Tax Fraud is not the most common punishment used by the IRS, but it is still a possibility. Tax Evasion carries the punishment of five years. Filing false statements can land you in jail for three years. In both cases, you can also be fined up to $250,000 (plus court costs)! Fraud doesn't pay!

New Tax Breaks- And What They Mean for You!

The Small Business Jobs Act of 2010 was enacted this past week. Learn what this means for you!

The IRS Pays your Cell Phone Bill: Remember the hell that was logging personal use of work cell phones, PDAs, or "simular equipment"? According to the new Small Business Jobs Act of 2010, this is no longer a requirement.

The New Depreciation This new rule for depreciation will definitely keep more cash in your pockets if you use it right.

First, you smaller businesses have the potential to deduct up to 10% of the cost of up to $5000,000 of new or used equipment.

But Wait, There's More: "Bonus" depreciation is available to any business of any size. For 2010 and 2011, this new rule allows for immediate write-offs for up to half the remaining cost of qualified new (but not used) equipment.

Bonus depreciation may also be used to claim a refund if a firm is losing money, whereas Section 179 deductions help only to reduce taxable income.

Tax-Free 401 (k): You can now transfer 401 (k) savings into Roth 401 (k) plans. You will have to pay taxes on the transfer, but the Roth accounts will allow tax-fee withdrawals along with other benefits up until you've withdrawn all your regular contribution. Always consult with a professional or your company's benefits specialists before making a move!

Bad News for Landlords: With new laws you have to take the bad with the good. This law adds a requirement for landlords. Beginning next year, most recipients of rental income must prepare IRS 1099 information returns if they pay a service provider $600 or more a year.

This means if your hire groundskeepers, plumbers, and other workers you must provide 1099 forms stating the payments to the workers and the IRS. Workers must be of legal age to work with social security numbers.

Are You Haunted by the Ghost of Tax Debt Past?

There are many ways the Ghost of Tax Debt Past can haunt you even if you though it was gone for good. When you're haunted by the IRS not even the Ghostbusters can't help you, so get the facts from the Hitman.

The Tax Lien Ghost: Even if you're approved for Currently Not Collectible status, you can't stop the Ghost of a Tax Lien. It will linger, and cling to your financial life like a curse.

The Deadly Bankruptcy Loophole:  If you've filed two bankruptcies within a year, even if it's discharged, the IRS can ignore the Automatic Stay of Collections and continue to collect from your while your debt should be dismissed!

The IRS Haunting Continues: The IRS won't be able to collect from you after your bankruptcy has successfully been discharged, but they won't go quietly into the night. They can still do the following:

- Perform an Audit to determine tax debt amounts
- Send you an annual notice stating your debt amount
- Take any tax refund you have due and apply it to your debt (or it may go to a trustee handling your bankruptcy)

Breaking the Rules: The IRS has a 10 Year Statute of Limitations to collect on your tax debt. But this doesn't always stop the curse of the Ghost of Tax Debt Past.

First of all, sometimes IRS Agents will peruse a debt even after the statutes have expired. More dangerous is the fact that ANY action that stops the clock on the statute of limitations (applying for offer in compromise or a bankruptcy, for example) extends the statute of limitations, giving the IRS more time to collect from you!

No Guarantees: To tell the truth, there's no guarantee that the IRS will not try to collect on your debt after the bankruptcy is discharged and every afterward.

If there's a loophole, and there are several, the IRS is going to take it. I've encountered many taxpayers with debts that doubled or tripled after bankruptcy because penalties and interest were still running in the background!

Break the IRS Curse: Remember, the IRS is out for their best interests. They will haunt you and try to take as much from you as possible. The best way to ensure you're not snared by the IRS is to get the second opinion of a professional before making a move.

Need IRS Help Now? Fill out the form below or call 1-888-415-1337. Do not pay the IRS a penny until you talk to me, The IRS Hitman! I will help you. You have my word.

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