The Blog

Government Employees Have Delinquent Tax Balances – Various government workers have been in the news recently for their delinquent taxes. One article reported that over 1100 IRS employees who owed back taxes and had other tax related problems had, in fact, received bonuses. Another recent report divulged that, as of September 2013, various federal government employees and government retirees owed over three million dollars in unpaid taxes. In a nutshell, it appears that government employees are no different than the general population of taxpayers. Some do not pay their tax bills. A recent audit of the IRS revealed that over 1000 IRS employees who were in violation of one or more of the tax guidelines set by the  very agency they work had received bonus … Continue reading →

The Tax Debt Debate – One interesting provision of the Tax Extenders Bill that is currently stalled in the United States Senate is the privatization of tax debt collection activities. The Tax Extenders Bill, which is unlikely to be voted on again this month, contains a clause that suggests turning delinquent tax accounts over to private collection agencies. This idea, which has actually been tried before, is the subject of much debate. While proponents believe that private companies specializing in debt collection will be better equipped to collect outstanding tax liabilities, opponents believe that their tactics may be unfair, especially to those taxpayers who are unable to pay their tax debt. The tax gap, which is the difference between the dollar amount of taxes owed to the … Continue reading →

Foreign Tax Compliance in the News – In response to the global financial crisis, many countries have stepped up their surveillance of the tax obligations of companies within their tax jurisdiction, especially those that have multinational subsidiaries. In fact, tax compliance and tax avoidance were two of the key issues discussed at the G8 summit held last year in Northern Ireland. Since that time, multinational companies such as Google, Starbucks and McDonalds, among others, have come under increased scrutiny for tax practices that may have resulted in reduced tax bills. Dolce and Gabbana Last week the owners of clothing company Dolce and Gabbana were convicted of tax evasion for failing to pay taxes on over $1.3 billion in royalties concealed in a Luxembourg holding company. The … Continue reading →

Tax Fraud Phone Scams on the Rise! – Although the 2014 tax season is officially over, it appears that tax scams are actually on the rise. In fact, just days after April 15th tax filing deadline, the IRS issued a warning alerting taxpayers of a phone scam that is the largest one of its kind on record. At the time the announcement was made, taxpayers had already lost over $1 million as the result of scammers impersonating members of the Internal Revenue Service Department over the phone. This recent tax phone scam is not pocketed in in a certain area, but rather has been reported in almost every state in the country! It appears that these recent scammers have been so successful because they are … Continue reading →

Taxes Are Due – Better Late Than Never: The old saying “Better late Than Never!” applies to the filing tax of returns just as it does to most other aspects of life. With the April 15th tax deadline on the horizon, many taxpayers are rushing to file either a completed tax return or a request for an automatic six-month extension. Failure to do so will subject the delinquent taxpayer to late filing penalties that will begin to accumulate along with interest that will be charged on any overdue tax balances. Although late filing penalties can be abated in certain specific instances when there is a valid reason for filing late, the reasons for the delay must be well documented. Even when these conditions are met, … Continue reading →

Avoiding an IRS Tax Audit: It is important to realize that receipt of an IRS Notice announcing that a tax return has been selected for an audit does not necessarily mean that there is an error on the return or that the IRS suspects the taxpayer or business submitting the return has done something dishonest. An IRS Audit is simply the process used by the IRS to verify the accuracy of a tax return by confirming specific items reported on the return. The audit process is always announced by an official IRS Notice which includes a list of the specific items of documentation being requested and a statement of the deadline by which these items must be provided. Although the IRS selects tax returns for audit … Continue reading →

Celebrities who Ignored Tax Deadlines – Ignoring tax deadlines and failing to pay outstanding tax balances can have severe consequences. Interest and penalties accumulate over time and can amount to a significant financial burden. In addition, the IRS has the authority to use more aggressive collection techniques such as tax levies, tax liens and wage garnishments when outstanding tax balances are not paid in full. The following examples illustrate the consequences suffered by some well known individuals who ignored their tax responsibilities. This celebrity was slapped with a $6.2 million tax lien. Although actor Nicolas Cage earned over $40 million in 2009, the IRS slapped him with a $6.2 million tax lien in that same year. He was apparently spending more money than he earned … Continue reading →

Taxpayers Have Rights Too! – The IRS is a powerful collection agency and has the right to collect any tax amounts which are owed. However, taxpayers also have certain guaranteed rights and tax time is a good time to be reminded of what those rights are. In addition to the obvious guaranty of privacy, confidentiality and courteous, professional service, the IRS has numerous policies and procedures in place that are designed to protect the taxpayer. Some of these policies and procedures are discussed below. Right to Apply for Help With Back Taxes The IRS offers numerous tax settlement options for taxpayers who have outstanding tax liabilities or are unable to pay the entire balance of their current tax bill. Provided they meet the qualification criteria, taxpayers … Continue reading →

Where is My Tax Refund? Waiting for a Tax Refund? It is tax time and many taxpayers who have already submitted their 2013 tax returns are now anxiously awaiting a refund. If you are one of those individuals, the good news is that you can check the status of your refund using the Get Your Refund Status tab on the home page of the IRS website. This tool will give you an update on your refund status within four weeks from the time a paper return was mailed or within 24 hours after a return has been e-filed. You can also call the IRS for a refund update but phone updates take longer to become available. Refund information is only accessible by phone if it has … Continue reading →

Tax Time – A Good Time to Resolve Back Tax Balances: Tax time is as good a time as any to resolve back taxes issues. Paying or settling back tax balances at the same time as filing current returns starts the new tax year off with a clean slate and avoids the escalating consequences that back tax balances can cause. The worst choice a taxpayer can make is to ignore outstanding tax liabilities and hope they will vanish. As always, the best course of action is to face the problem head on and pay the balance in full. If the necessary resources are lacking, as is often the case, there are numerous tax settlement options available. That being said, tax time is now and now … Continue reading →