Now That You’ve Hired a Licensed Tax Professional,
Here’s How to Optimize Your Relationship
1. Be accurate and specific when asked to provide financial and other information.
Be detailed and accurate when you provide financial and other information.
Don’t leave anything out.
Let the tax pro determine whether a given fact is relevant.
Bear in mind that the forms you submit to the IRS must generally be signed under penalties of perjury.
2. Be punctual.
Your representative will be working under deadlines.
Provide all requested information in a timely manner. Read more…
Agency Warns of 12 Common Scams
In an update of an annual consumer alert, the Internal Revenue Service urged taxpayers to avoid falling victim to one of the “Dirty Dozen” tax scams. In the new rankings, several new scams have reached the top of the consumer watch list, including offshore banking and identity theft schemes.
The IRS and other federal agencies are aggressively pursuing and prosecuting promoters of these schemes and many of their clients for fraud and tax evasion. These can result in imprisonment, fines and repayment of taxes owed with interest and penalties. Even innocent taxpayers involved in these schemes can face a staggering amount of back interest and penalties. Taxpayers who suspect tax fraud can report it to the IRS at 1-800-829-0433.
The IRS urges people to avoid these common schemes:
Offshore Transactions
Some people use offshore transactions to avoid paying United States income tax. Use of an offshore credit card, trust or other arrangement to hide or under-report income or to claim false deductions on a federal tax return is illegal.
A taxpayer involved in these schemes may be subject to payment of taxes, interest, penalties and potential criminal prosecution. Read more…
Many of my clients voice a fear that many people with tax problems have – that the IRS will put them in jail for not filing their tax returns or for owing back taxes.
Based upon the amount of raw power the IRS has, and their reputation for having the willingness to use that power – fear of the IRS and of being put in jail is certainly not unreasonable. The facts speak for themselves, the IRS has put taxpayers in jail. The IRS even put a man who I was acquainted with into federal prison.
They always have a jail cell ready for wise guys
This man was not a client of mine, and he had not sought me out for legal advice. If he had done so, there are no facts I am aware of which lead me to believe that he would have been sent to jail. Unfortunately he chose not to hire a tax attorney. He also had another mark against him, he was a smart aleck. He defiantly refused to cooperate in any way with the IRS Collection Officers. He conducted himself in an arrogant manner toward them, and they finally got tired of it. He was given the opportunity to learn humility – all expenses paid by Uncle Sam.
Most taxpayers are their own worst enemies when dealing with the IRS. What I mean is that they either act like scared rabbits with the IRS and never really seek to know what their options to solve their problem. Or they refuse to comply on any meaningful manner and thus irritate the IRS personnel.
A tax professional may help move you toward being in tax compliance
– and away from jail
Having an experienced tax professional to represent you may be your best defense to avoid jail time. What a tax attorney offers a taxpayer is the ability to assist them to know all of their options are in dealing with the tax problem (including ones that other tax professionals can legally discuss). We can help calm down irrate Collection Officers, and get the case moving forward again. We move our clients toward actually solving their problem, through the use of strategies which are best for our clients, not for the IRS. We can often get our clients a valuable commodity – a little more time. Read more…
And you think you have problems. Just when common folks thought they had it rough, we find out that Microsoft founder Bill Gates, the world’s richest man, has tax problems too. But probably not the kind of tax problems you’re thinking.
Gates said the tax office in the US has to store his financial data on a special computer because his fortune is so vast. Say what?
“My tax return in the United States has to be kept on a special computer because their normal computers can’t deal with the numbers,” he said at a Microsoft conference held in Lisbon.
Maybe so, maybe not. Maybe its just his big head that needs its own special computer. But Gates goes on to state a problem which is all too common among the common folk as well. Read more…
The US had few taxes in its beginning, and was generally an unregulated republic.
From 1791 to 1802, the United States government had limited internal taxes on vices and specialty including distilled spirits, carriages, refined sugar, tobacco and snuff. Additional taxed items were property sold at auction, corporate bonds, and slaves. The War of 1812 brought the nation’s first sales taxes on these additional items: gold, silverware, jewelry, and watches.
In 1817 Congress disbanded all internal taxes, relying on tariffs on imported goods to provide funds for running the federal government.
In 1862, during the Civil War effort, Congress enacted the nation’s first income tax law. It was based on the principles of graduated, or progressive, taxation and of withholding income at the source. During the Civil War, a person earning from $600 to $10,000 per year paid tax at the rate of 3%. Those with incomes of more than $10,000 paid taxes at a higher rate. Additional sales and excise taxes were added, and an “inheritance” tax was created. Read more…