Author Archives: Kursti Nakagawa

States Offer Short Sale Assistance to Taxpayers

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When assisting clients with complicated tax settlements, taxpayers often find that the IRS and States have filed tax liens to protect their interests in back taxes owed. Tax liens can cause numerous problems, including damage to credit reports and also make the sale of property more difficult.

Many people, who are facing financial difficulties, are trying to sell their distressed homes for less than the loan balance in short sales. Often, during these transactions, there may not be enough value to pay the recorded state tax lien in full. This may delay, or even prevent, the sale of the home. (inboundrem.com) The State of California is one of many states that may be able to assist the taxpayer with a partial release of a tax lien.

A partial release of lien releases a specific piece of property from a recorded state tax lien, but does not release the lien in its entirety. The lien remains in effect against the taxpayer and continues to encumber other property the taxpayer owns or acquires in the future. The State of California estimates it can take up to 21 working days due to processing increased requests.

Clients seeking a resolution to complicated and large tax debts often face a variety of obstacles. The IRS and States, in recognition of the need to assist taxpayers, have begun to assist taxpayers in resolving these issues.  Complicated tax settlements require a tax professional that is aware of the various tax settlement options available from tax agencies.  Professional Tax Resolution can assist taxpayers in resolving even the most complicated tax settlements.

Prison Inmate Scams IRS by Preparing False Tax Returns for Other Prisoners

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An inmate held at Riverfront State Prison in Camden, New Jersey pleaded guilty to aiding and assisting in the preparation of false and fraudulent tax returns on June 27. The inmate faces three additional years in prison and a $250,000 fine at sentencing, which is scheduled for October. He admitted that he helped other inmates prepare and file false tax returns designed to trigger tax refunds for several tax years, to which they were not entitled.

The prisoner told inmates that employment taxes were held from the wages they earned while working in the prison, and they were entitled to claim refunds. However, the prisoners were paid no more than $5 per day, from which no taxes were withheld.

The fraud scheme resulted in a $215,000 loss for the IRS. The inmate admitted to preparing and filing approximately 110 tax returns for more than 60 inmates.

IRS Violates Taxpayers’ Tax Lien Rights Regarding Tax Debt

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Do you have unfiled taxes, or unpaid tax debt? If so, there’s a chance the IRS has, or will file a tax lien or wage garnishment for any uncollected tax debt. However, there are legal requirements the IRS must follow before doing so.

According to a new government report, nearly 33,000 taxpayers have been harmed due to the IRS not following legal requirements to notify them and their representatives of their rights related to tax liens in a timely manner.

The report was written by the Treasury Inspector General for Tax Administration. The TIGTA recommended that IRS officials ensure tax lien procedures are properly enforced and consistent with IRS procedures. Even though the IRS agreed with this recommendation, it doesn’t mean mistakes can’t still occur. If you are struggling with a tax lien or tax debt contact one of the licensed experts at Professional Tax Resolution to discover your options for tax settlements.

Tax Preparation is Key in Claiming Your Adoption Credit; Thousands Have Yet to Receive Refund.

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Thousands of Americans are still waiting on large refunds from the IRS due to their adoption credit. This is partly due to the fact that this is the first year the credit is refundable. This means the money goes directly to the taxpayer, and not applied to future taxes owed. This would be especially helpful to families who incur high costs for adoption, if they ever receive their money.

By the end of April, 2011, the Treasury Inspector for Tax Administration found that the IRS had received returns for over 72,000 taxpayers claiming nearly $900 million in adoption credits. More than half of those returns have been sent for further review and will be audited to verify proper documentation and claims.

According to the IRS, the problem is that many taxpayers do not submit proper returns, lacking documentation.

Get your tax return prepared the right way. Don’t think your past returns were done correctly? Contact one of the licensed experts at Professional Tax Resolution today!

He Owed the IRS $80,000 in Back Taxes. We Reduced His Tax Debt to Zero!

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Steve H. came to Professional Tax Resolution after receiving notice of a wage garnishment from his largest customer.  Steve, a technology consultant, had failed to file tax returns for six years and, according to IRS calculations, owed over $80,000 in back taxes, penalties and interest.  Tax settlement plans for taxpayers with numerous un-filed tax returns always begin with gathering the records necessary to prepare the un-filed tax returns. In this case, the taxpayer was able to gather some information from banking records and some from customers for which he had provided services. Fortunately for this taxpayer, his wife had worked for several years and had had federal and state taxes deducted from her paycheck. We were able to obtain and verify additional tax information by obtaining IRS wage and income transcripts.

After gathering all possible relevant information, we were able to prepare all of the outstanding tax returns.  While balances were due in some years, refunds were owed in others. We were able to request that the IRS apply refunds owed to years where balances were due such that the net result was an outstanding tax liability of zero. It is never advisable to wait for a wage garnishment, tax lien or tax levy to resolve an outstanding tax issue. However, even when a tax issue seems practically unsolvable, there are tax resolution options available.  Professional Tax Resolution always looks at all available tax settlement options and provides a tax debt resolution plan for even the most complicated cases.