Category Archives: IRS

An Audit Reconsideration Success Story – A $26,000 Mistake Corrected Results in Zero Tax Liability

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Professional Tax Resolution has successfully helped many clients find tax relief. Here is the story of a client who came to us in March of 2011.

Mr. and Mrs. M lived, worked and paid taxes in the United States from 2008-2010. In early 2010 both Mr. and Mrs. M moved out of the country and despite leaving a forwarding address, never received a notice from the IRS asking for supplemental documentation related to a 2008 tax return. Unfortunately more than a year passed before the taxpayers became aware of the problem and once they were informed, the IRS had moved on from their initial request for supplemental information and had both audited their return and disallowed more than $26,000 in deductions taken on their 2008 taxes. The result of the audit was a notice of deficiency for a sizable tax liability.

Now aware of their problem, Mr. and Mrs. M came to us asking how we could help. By examining the tax code, we determined that the original deductions were legitimate and we developed a tax settlement action plan. Professional tax resolution was able to request an audit re-consideration with the IRS directly. The IRS granted our request and re-opened the audit. During the re-examination period, Professional Tax Resolution Inc. was able to defend Mr. and Mrs. M successfully by providing all of the necessary documentation and evidence of the legitimate deductions in question.

In April 2011, just a few weeks after Mr. and Mrs. M hired Professional Tax Resolution; the client received final notice from the IRS that all adjustments and balances owed were reversed. No petition to the US tax court was required and a final “No Change” letter was issued closing the case.

Not only was their audit re-considered but by providing the correct paperwork and documentation, their entire liability has been eliminated. Professional tax resolution has another satisfied client and achieved an amazing 100% reduction in tax debt liability.

IRS Goes After Race Car Champ for Tax Debt

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Three-time Indianapolis 500 champion, Helio Castroneves was acquitted in 2009 of six counts of tax evasion after the IRS claimed he owed back taxes on earnings between 1999 and 2004. Now they claim that Castroneves owes an additional $3.6 million in taxes and $2.7 million in fraud penalties on the same income that was in dispute in the earlier case.

The IRS accused Castroneves, his sister, and his attorney of hiding income through a Panamanian shell company created by them. Just two days before winning the Indianapolis 500 for the third time, Castroneves’ charges were dismissed.

Helio Castroneves allegedly owed the IRS $15 million in tax debt. He gave them a $5 million dollar check after the trial. The new case is being tried in a civil court which gives the IRS a lighter burden of proof.

If you owe the IRS money due to a tax debt, Professional Tax Resolution can help. We can help determine which option for tax settlements is right for you. Call now to see what our licensed professionals can do to provide tax debt help.

Potential Tax Debt for Los Angeles Religious Center

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The tax-exempt Kabbalah Centre and many of its charities is being investigated by the Internal Revenue Service for financial improprieties. Many of the charities are backed and supported by celebrities. Madonna had even replaced the CEO of one of the charities, Raising Malawi. The singer later moved the charity out of the Kabbalah Centre’s office after learning plans of building a girl’s school in Malawi were abandoned despite raising millions of dollars for that purpose.
The former CFO has accused the Centre of financial improprieties and plans on coordinating with the IRS in bringing the group down. Several instances of tax fraud had been uncovered that could potentially bankrupt several directors due to tax debt and penalties. (buildersmerchant.com)
If you have incurred business tax debt, Professional Tax Resolution can help. Talk with one of our licensed tax professionals and see what options you have for tax settlements. We can provide tax debt help.

Increased Funding for IRS Enforcement Means Avoiding the IRS Is Harder Than Ever

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More Funding on the Way to Collect Outstanding Tax Debt

If you have an outstanding tax liability and have managed to stay under the IRS radar so far, your time may very well be running out. The Obama administration has submitted a $13.3 billion budget request for the Internal Revenue Service for fiscal year 2012, a $1.1 billion increase over the agency’s 2010 budget. The largest portion of this increase ($339 million) and almost half (approximately $6 billion) of the total 2012 budget will go toward enforcement.

Although recently the overall goal of the government has been to cut spending, the reasoning behind requesting increased funds for the IRS is that the extra expenditure will more than pay for itself. Because the IRS is the government’s primary source of revenue, analysts project that increasing the IRS budget will actually reduce the budget deficit by increasing tax enforcement revenues. Economists generally agree that every dollar invested in tax enforcement nets three or four times that in revenue. This would mean that the proposed 2012 budget increase for enforcement initiatives will net over a billion dollars in revenue.

Although enforcement is not the only focus of the proposed IRS budget for fiscal year 2012, all of the recommended changes are aimed at beefing up and streamlining the tax collection process in one way or another. The main budget items in the 2012 budget are outlined below.

  • Enforcement The budget proposes to strengthen enforcement efforts by addressing offshore tax evasion, improving tax debt collection processes and enforcing the information reporting requirements for businesses that were approved by Congress in 2008.
  • Preparer Oversight The budget allocates funds for increasing the examination requirements for tax preparers, enforcing preparer compliance with IRS rules and procedures and pursuing those preparers who engage in unethical conduct or fraudulent behavior.
  • Taxpayer Service The budget requests resources to improve the IRS website and provide new and improved online services. It also requests funds to add additional staff to improve the level of telephone service.
  • System Modernization The budget allocates funds for continuing the implementation of the taxpayer account database and modernizing electronic filing and payment options.

Although the funding requested by the proposed 2012 budget may meet some resistance in Congress, the handwriting is on the wall. With more and more resources bring allocated to the IRS for enforcement and modernization, it is going to become more and more difficult for taxpayers who have not filed or already have an outstanding tax debt to remain under the IRS radar. Since it is always better to approach the IRS before they approach you, the clear message in all this for taxpayers is that they should take whatever steps are necessary to become income tax compliant.

If you have an outstanding tax liability, we can help you resolve it. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years of experience, we have a thorough understanding of tax law together with the experience to know which tax settlement option will best fit with your specific set of circumstances. Contact us today at (949)-596-4143 or info@protaxres.com to receive a free, no obligation consultation.

Is the IRS Finally Easing Up On Taxpayers? For Tax Liens, the Answer is Yes.

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The number of tax liens levied by the IRS has increased dramatically over the past several years. Lien filings increased from 168,000 in 1999 to 1.1 million in 2010, a gain of over 550 percent. While it can be argued that tax liens are a necessary part of collecting tax revenue and promoting tax compliance, there is also a concern that they place an excessive burden on taxpayers who are already financially strapped. In an attempt to relieve taxpayer stress in the current economic environment, the IRS has announced that it will initiate a series of new policies and programs to help taxpayers pay their back taxes and avoid getting a tax lien. These changes are outlined below.

  • The dollar threshold for issuing a tax lien is being lifted from $5000 to $10,000.
  • The IRS will agree to withdraw a tax lien when the taxpayer signs up for a direct debit installment agreement or switches from an existing installment agreement to a direct debit agreement. However, the lien will only be withdrawn after a probationary period to insure that the taxpayer’s direct debit agreement is in place and working as planned.
  • The IRS is promising to streamline the process for withdrawing a tax lien once the balance of the outstanding tax debt has been paid in full. As has previously been the case, the taxpayer will still have to submit a formal written request that the lien be removed once the tax debt is paid.
  • New Offer in Compromise guidelines have been instituted to make this tax settlement option available to a much larger group of taxpayers. The maximum tax debt ceiling allowed for qualification has been raised from $25,000 to $50,000 and taxpayers with annual incomes up to $100,000 can now qualify for an Offer in Compromise.
  • Small business with as much as $25,000 in tax debt will now be eligible to apply for an installment agreement where previously the maximum tax liability allowed to qualify for an installment option was $10,000.

These changes should address some of the concerns highlighted by national taxpayer advocate Nina E. Olsen in her annual reports to Congress. She has argued that tax lien filings have ruined the credit of millions of Americans and as a result, have made it even more difficult for them to pay the debt they owe the IRS. A tax lien is picked up by all three credit-rating agencies and can lower a credit score by as much as 100 points. Since credit reports are often used by employers, landlords, car dealerships, credit card issuers and mortgage lenders, a tax lien can effectively make someone unemployable and unable to obtain housing and transportation for the seven years it remains on the credit file after the tax debt is cleared and the tax lien is lifted. The recent changes to IRS policy outlined above should help to relieve taxpayers of some of these financial hardships. IRS Commissioner Doug Schulman has said that it is his aim “to promote tax compliance while minimizing the burden on taxpayers.” He further maintains that the IRS must continually revise and update its policies in order to fulfill this mission.

If you have an outstanding tax debt and are facing a possible tax lien or wage garnishment, we can help you select the tax settlement option that will best meet your needs. For more information about our services, visit us today at www.professionaltaxresolution.com. Contact us today at (949)-596-4143 or info@protaxres.com to receive a free, no obligation consultation.