IRS Tax Debt Who Has it? Tax Lien Statistics Give Some Clues

Posted on October 28, 2011 by Kursti Nakagawa

Feel like you are the only one with a tax debt problem? Ever wonder where in the US more people have the tax debt issues? Is this a problem of the rich or is the problem of incurring Tax Debt affecting everyone?
A recent 2010-2011 analysis of tax liens from across the U.S. found that New York City, which happens to have some of the wealthiest neighborhoods in the nation, was actually the country’s leading geographic area for federal tax liens. According to the data,New York City accounts for nine, or 18 percent, of the top 50 U.S. zip codes with the most liens recorded over the past 12 months ending in September.

Is this a problem of the rich of New York trying to skirt their fare share payments to the IRS? The economy has hit everyone so perhaps this is not the full story. Taking a harder look, four of theNew York City zip codes include some of Manhattan’s most affluent neighborhoods, including the Upper West Side (10025 and 10023), Chelsea(10011), and Murray Hill (10016), but the remaining five New York City zip codes are in more typically minority and working-class areas of Brooklyn, Queens, and the Bronx. To really understand how much richer these neighborhoods are, if you break down the differences in the New York Zip Code demographics by using recent U.S. Census data, those Manhattan’s four zip code tax debtors earned a whopping 250 percent more than those in the city’s less affluent areas. Of course with more income, comes the potential for bigger tax burden and the average IRS debt of Manhattan’s wealthier tax debtors is much higher than the amount owed by their working-class neighbors. It turns out the tax debt of the wealthy NYC zip codes averages $58,592 or about 86 times more than the boroughs. So, while the rich owe a lot more per capita the problem of owing tax debt in the NYC area is affecting both the rich and working class.

What about the rest of the country? Virtually all of the remaining nationwide zip codes in the top 50 are located in minority and economically depressed neighborhoods. Perhaps not coincidentally six of these neighborhoods are in areas hit hard by the economy including Las Vegas, Washington, D.C., and Detroit all of which have high unemployment, short sales and foreclosures which can lead to high levels of tax debt.

All that said, New Yorkhas been a high ranking tax debtors location for some time but this may be due to population density. Taking a second analysis of prior year nationwide tax liens, this time from July 2009 to July 2010, reveals that at that time New York City accounted for 16, or 32 percent, of the top 50 U.S. zip codes with the most tax liens and six of those New York zip codes were located in Manhattan.

Why did the NYC area drop in 2010-2011 to just 18 percent from a 2009-2010 amount of 32 percent? Seems the nationwide recession has caused more working-class Americans to lack the means to pay their tax debts. The problem is more widespread, so perhaps the number of individuals affected in New York is simply a smaller percentage to the growing nationwide issue.

If you are in need of tax settlement help, probably the most important decision you will make is the selection of a qualified tax professional. The CPAs and Enrolled Agents at Professional Tax Resolution have many years of experience providing tax settlement help. We encourage our customers to check our memberships, reviews and affiliations for verification of our credentials and our past successes. For more information about the tax settlement services we can provide, visit us today at www.professionaltaxresolution.com. Contact us by phone at (877) 889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation

Tax Liens – How to Remove an IRS or State Tax Lien From Your Credit Report

Posted on September 19, 2011 by Kursti Nakagawa

The most effective tool the IRS has for collecting tax debt are tax liens. What’s worse is that they are very difficult to get removed. Even after you pay off the tax debt, the tax lien will stay on your credit report for up to seven years. Only after they have expired will they be removed from your credit report. These five steps show how to get expired tax liens off of your credit report.

1. Get Your Credit Report: Each year you’re allowed one free copy of your credit report. There are many sites out there that offer this service, such as AnnualCreditReport.com. Use one of these sites to get a copy of your Equifax, Experian, and TransUnion reports.

2. Check for Errors: Yes, even the credit agencies can make mistakes. Carefully check your credit report. If a tax lien that has been paid for over seven years ago, and it hasn’t been removed, you are able to dispute the information with the credit reporting agencies.

3. Dispute: Sometimes, if you view your credit report online, you can dispute an erroneous item through the website. Otherwise, you may send an email or letter to the agencies with your dispute.

4. Send Backup to Prove Your Dispute: When you send your letter of dispute, make sure you attach documents that prove the tax debt was paid, and when.

5. Check Your New Report: The Credit Reporting Agency will reply with a new copy of your credit report after 30 days. The new report should reflect the changes.

Back tax issues can be overwhelming, but there is hope. A good tax settlement professional has the knowledge and experience to help you overcome these types of problems. If you need help with a tax debt issue, or just want to see what options are available to you, talk to one of the licensed experts at Professional Tax Resolution. We specialize in tax settlements and you won’t talk to a salesperson. Call us toll free at (877) 889-6527 or visit us at www.professionaltaxresolution.com today.

Tax Liens – How to Avoid Your Information Being Published

Posted on September 2, 2011 by Kursti Nakagawa

In order to encourage compliance in the payment of outstanding tax debts, the California Franchise Tax Board is authorized to publish a list of the 250 largest state tax delinquencies in excess of $100,000. The list only includes amounts for which official tax liens have been recorded. Since the list is a matter of public record, the Tax Board is required to provide a written notice to the taxpayer before publishing their name on the list. Once an official notice has been issued, the taxpayer’s name will be posted on the list if the tax debt has not been resolved within 30 days.
As with all other official correspondence from the IRS or any State Tax Agency, a notice such as the one described above should not be ignored. Tax agencies are the most powerful collection agencies in existence and publishing a list of delinquencies is just one method they use to enforce compliance. Since there are always steps that a taxpayer can take to resolve any tax debt issue, the worst possible course of action is to ignore the problem. In the case of the California Franchise Tax Board’s tax delinquency list, a taxpayer’s name will not be included provided they contact the Board in an attempt to resolve the tax debt within 30 days of receiving official notification of the impending publication of their name. The list will also not include the name of a taxpayer who has either initiated or completed a verifiable bankruptcy petition, entered into an installment agreement with the collecting agency or had their tax debt officially identified as “not collectible.”

Click the “Learn More Link” or Call (949) 596-4143 to have one of our CPA’s provide a Free IRS or State Tax Lien Notice Review and Consultation.