The IRS announced a new enforcement group that will focus on targeting the rich. They will do so to stop any illegal trusts or offshore trading. They are focusing on them that do hide income.
The IRS calls this group the Global High Wealth Industry group. The group will focus on auditing those who report an income or assets of 10 million dollars or more. The IRS says they will start this work in February of 2009.
The IRS group GHWI will be stationed out of the high and mid-dollar collection centers for the IRS.
In Justification for this new group IRS commissioner Doug Shulmen said, "You cannot assess compliance among the nations wealthiest individuals by looking only at the 1040's. Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise."
Lawrence Edwards thinks it is going to be hard and a long process not only for the IRS agents but also to the taxpayer that will be audited. If you have ever been involved with an IRS audit you would know that the simplest of audits can be treacherous.
The IRS is forming this unit in efforts to comply with an agency wide mandate to crackdown on tax evasion by the wealthy.
Tuesday, October 27, 2009
Friday, October 23, 2009
Touble with the New Housing Tax Credit
I came across this story on Covuto. He was talking about how up to 53 IRS agents used the credit fraudulently. Kind of crazy. This is what happens with handouts. Here is a article in the wall street Journal today:
News Hub: Flaws in the Home Tax-Break Program
2:23
Amid alleged fraud and administrative problems in the first-time homebuyers tax-credit program, the News Hub panel discusses whether it should be extended.
.The Treasury tax-oversight office said at least 19,000 filers who hadn't bought homes claimed $139 million in tax credits and were reimbursed, raising new worries about the housing stimulus as lawmakers consider extending the credit.
Treasury oversight officials said they have found an additional 74,000 tax-credit claims, valued at $500 million, where evidence of previous homeownership could make their claims invalid.
More than 500 people under the age of 18, including a 4-year-old child, also had their names on applications for the credit, which has no minimum-age requirement, federal officials said at a hearing on abuses of the program. Most of the claims involving children were made by parents who purchased a home but were ineligible for the credit because their incomes were too high, said J. Russell George, the Treasury inspector general for tax administration. The tax-oversight office doesn't answer to the Treasury secretary.
The problems are potentially troublesome for backers of the credit -- including real-estate agents, home builders and mortgage bankers. They want Congress to extend and expand it to all home buyers, not just first-time buyers. The credit, which is valued at as much as $8,000 for new-home buyers, is set to expire Nov. 30.
Rep. Charles Boustany Jr. (R., La.) said the problems show the dangers in creating refundable tax credits that give money to filers even if they didn't owe any taxes. "Every time Congress creates a new refundable credit...the incentive for fraud is magnified," he said.
The credit's main sponsor, Sen. Johnny Isakson (R., Ga.), said he is "cautiously optimistic" that an extension -- with procedural safeguards added -- can move in the Senate next week. "Just because someone used fraud [to claim the credit] doesn't mean the credit is a bad idea, it means there are some bad folks running around," he said.
The Internal Revenue Service and Justice Department are investigating more than 100 suspected criminal schemes involving the credit. This week, a Jacksonville, Fla., tax-return preparer, James Otto Price III, was sentenced to 30 months in prison after pleading guilty to willfully preparing false tax returns. Authorities said he prepared at least 15 tax returns that falsely claimed the home-buyer credit, according to a Justice news release.
While individuals who knowingly filed false claims also could be subject to prosecution, criminal-fraud charges would be more likely against tax preparers. The IRS also is conducting more than 100,000 examinations that could require filers to give back the credit and pay civil penalties.
The authorities blamed a lack of safeguards, including lack of documentation requirements, for the extent of the problems. Many of the apparently bogus claims occurred before the IRS updated its computer programs to automatically check claims against other available information.
Rep. John Lewis (D., Ga.), chairman of the House Ways and Means oversight subcommittee, introduced legislation Thursday aimed at making it more difficult for would-be scammers to receive the credit. His bill adds a minimum age of 18 to claim the credit and requires filers to document their claims by submitting the standard disclosure form used in home-sale closings, the HUD-1 form.
The credit, adopted as part of the February stimulus bill, modified and expanded on a tax credit that was first passed by Congress in 2008. The current credit is available only to first-time buyers who purchased a primary residence since April 9, 2008. The full credit is available to individuals with incomes of less than $75,000 and $150,000 for married couples.
News Hub: Flaws in the Home Tax-Break Program
2:23
Amid alleged fraud and administrative problems in the first-time homebuyers tax-credit program, the News Hub panel discusses whether it should be extended.
.The Treasury tax-oversight office said at least 19,000 filers who hadn't bought homes claimed $139 million in tax credits and were reimbursed, raising new worries about the housing stimulus as lawmakers consider extending the credit.
Treasury oversight officials said they have found an additional 74,000 tax-credit claims, valued at $500 million, where evidence of previous homeownership could make their claims invalid.
More than 500 people under the age of 18, including a 4-year-old child, also had their names on applications for the credit, which has no minimum-age requirement, federal officials said at a hearing on abuses of the program. Most of the claims involving children were made by parents who purchased a home but were ineligible for the credit because their incomes were too high, said J. Russell George, the Treasury inspector general for tax administration. The tax-oversight office doesn't answer to the Treasury secretary.
The problems are potentially troublesome for backers of the credit -- including real-estate agents, home builders and mortgage bankers. They want Congress to extend and expand it to all home buyers, not just first-time buyers. The credit, which is valued at as much as $8,000 for new-home buyers, is set to expire Nov. 30.
Rep. Charles Boustany Jr. (R., La.) said the problems show the dangers in creating refundable tax credits that give money to filers even if they didn't owe any taxes. "Every time Congress creates a new refundable credit...the incentive for fraud is magnified," he said.
The credit's main sponsor, Sen. Johnny Isakson (R., Ga.), said he is "cautiously optimistic" that an extension -- with procedural safeguards added -- can move in the Senate next week. "Just because someone used fraud [to claim the credit] doesn't mean the credit is a bad idea, it means there are some bad folks running around," he said.
The Internal Revenue Service and Justice Department are investigating more than 100 suspected criminal schemes involving the credit. This week, a Jacksonville, Fla., tax-return preparer, James Otto Price III, was sentenced to 30 months in prison after pleading guilty to willfully preparing false tax returns. Authorities said he prepared at least 15 tax returns that falsely claimed the home-buyer credit, according to a Justice news release.
While individuals who knowingly filed false claims also could be subject to prosecution, criminal-fraud charges would be more likely against tax preparers. The IRS also is conducting more than 100,000 examinations that could require filers to give back the credit and pay civil penalties.
The authorities blamed a lack of safeguards, including lack of documentation requirements, for the extent of the problems. Many of the apparently bogus claims occurred before the IRS updated its computer programs to automatically check claims against other available information.
Rep. John Lewis (D., Ga.), chairman of the House Ways and Means oversight subcommittee, introduced legislation Thursday aimed at making it more difficult for would-be scammers to receive the credit. His bill adds a minimum age of 18 to claim the credit and requires filers to document their claims by submitting the standard disclosure form used in home-sale closings, the HUD-1 form.
The credit, adopted as part of the February stimulus bill, modified and expanded on a tax credit that was first passed by Congress in 2008. The current credit is available only to first-time buyers who purchased a primary residence since April 9, 2008. The full credit is available to individuals with incomes of less than $75,000 and $150,000 for married couples.
Thursday, October 22, 2009
Press Release about Lawrence Edwards furthering Knowledge of Tax Resolution
Press Release
For Immediate Distribution
To: All Media Date: October 22, 2009
Contact: Brandon Metcalfe, Nathan Carr, Richard Pew, “D” Pew,
of Lawrence Edwards Tax Advocates
Phone: 877-298-0890
Fax: 888-326-6260
Lawrence Edwards Tax Advocates
Furthers Education, Attends Tax Seminar
On October 15-17, 2009, the staff of Lawrence Edwards Tax Advocates increased their knowledge to better assist clients dealing with IRS problems by attending a Super Advanced Tax Problem Resolution Seminar in Las Vegas, NV.
The program was held by the American Society of Tax Problem Solvers (ASTPS), which is a national, not-for-profit organization of professionals who specialize in representing taxpayers before the IRS.
By completing this program, Lawrence Edwards tax Advocates further added to their high level of skills, knowledge, and professionalism in the area of tax problem resolution.
Please feel free to contact Brandon Metcalfe with any questions you may have. Lawrence Edwards Tax Advocates is located in Utah and Arizona and can be reached at 801-513-0898 or at bmetcalfe@mytaxrep.com.
####
For Immediate Distribution
To: All Media Date: October 22, 2009
Contact: Brandon Metcalfe, Nathan Carr, Richard Pew, “D” Pew,
of Lawrence Edwards Tax Advocates
Phone: 877-298-0890
Fax: 888-326-6260
Lawrence Edwards Tax Advocates
Furthers Education, Attends Tax Seminar
On October 15-17, 2009, the staff of Lawrence Edwards Tax Advocates increased their knowledge to better assist clients dealing with IRS problems by attending a Super Advanced Tax Problem Resolution Seminar in Las Vegas, NV.
The program was held by the American Society of Tax Problem Solvers (ASTPS), which is a national, not-for-profit organization of professionals who specialize in representing taxpayers before the IRS.
By completing this program, Lawrence Edwards tax Advocates further added to their high level of skills, knowledge, and professionalism in the area of tax problem resolution.
Please feel free to contact Brandon Metcalfe with any questions you may have. Lawrence Edwards Tax Advocates is located in Utah and Arizona and can be reached at 801-513-0898 or at bmetcalfe@mytaxrep.com.
####
Tuesday, October 20, 2009
Effectur Closes its doors due to Bankruptcy
Effectur a California based tax resolution firm has closed its doors due to bankruptcy. Due to a rough and slow economy it has been effecting everyone. Below is the article from the Business Journal:
"Effectur, a firm that had reached a national scale offering to help financially pressed clients settle debts to the IRS, has closed its doors for good.
A notice on Effectur’s Web site posted this week says its lender repossessed all company assets including money paid by customers on their accounts “due to difficult economic times.” No money appears to be available for unsecured creditors, the notice said.
Efforts to reach Effectur founder and CEO Kenneth Johnson were not successful. Premier Commercial Bank, Effectur’s lender, declined comment.
Effectur, which was founded in 2003, was a private company and did not publicly report earnings. But it placed No. 20 on The Business Journal’s “Fast 50” list of fastest-growing Triad private firms in 2008 and by some reports employed as many as 100 people before it began shrinking late last year. One person familiar with the firm said it had “a couple dozen” remaining employees when it closed."
That is too bad for those clients that have poored out a lot of money to this company. Hopefully but dougtfully they took care of the taxpayers problems before closing.
"Effectur, a firm that had reached a national scale offering to help financially pressed clients settle debts to the IRS, has closed its doors for good.
A notice on Effectur’s Web site posted this week says its lender repossessed all company assets including money paid by customers on their accounts “due to difficult economic times.” No money appears to be available for unsecured creditors, the notice said.
Efforts to reach Effectur founder and CEO Kenneth Johnson were not successful. Premier Commercial Bank, Effectur’s lender, declined comment.
Effectur, which was founded in 2003, was a private company and did not publicly report earnings. But it placed No. 20 on The Business Journal’s “Fast 50” list of fastest-growing Triad private firms in 2008 and by some reports employed as many as 100 people before it began shrinking late last year. One person familiar with the firm said it had “a couple dozen” remaining employees when it closed."
That is too bad for those clients that have poored out a lot of money to this company. Hopefully but dougtfully they took care of the taxpayers problems before closing.
Monday, September 28, 2009
What is an Offer In Compromise
There are a lot of companies that advertise these settlement plans with the IRS. What we want to do is spell out in Layman Terms what an Offer in Compromise (OIC) is and how it works.
An OIC is a settlement on your back tax debt that is owed to the IRS or to a State Tax Agency. Some states do not accept OIC's. A lot of times I get the response from clients that an OIC is too good to be true. A lot of times it really is. The latest statistic is that the IRS accepts about 20% of all OIC's. This means that 80% are not being accepted for many different reasons. One of the reasons is the people didn't qualify for one in the first place. Other reasons would include, not being done right and plainly just being denied for no reason at all.
So how do you qualify? According to the IRS (www.irs.gov) an OIC is a settlement depending on three different things. The first is your monthly disposable income (income-expenses). The second is your future income (monthly disposable income x 48). The third is your assets. The IRS includes things like 401k's, IRA's and all other deposit accounts in the asset equation. Also in your monthly expenses they will not include credit card debt or any other unsecured debt. One of the biggest problems with OIC's being done is the person does not qualify and due to a false sales pitch the tax payer signs up with the company and they do a OIC so they can earn the money. DO NOT LISTEN TO ANY GUARANTEES!!
One way to protect yourself is to find a company that will do an OIC and if it does not go through will do all they can to get other results. Make sure it does not come with an additional fee.
You can go to our website and email us or call us for any questions on an OIC. www.mytaxrep.com
An OIC is a settlement on your back tax debt that is owed to the IRS or to a State Tax Agency. Some states do not accept OIC's. A lot of times I get the response from clients that an OIC is too good to be true. A lot of times it really is. The latest statistic is that the IRS accepts about 20% of all OIC's. This means that 80% are not being accepted for many different reasons. One of the reasons is the people didn't qualify for one in the first place. Other reasons would include, not being done right and plainly just being denied for no reason at all.
So how do you qualify? According to the IRS (www.irs.gov) an OIC is a settlement depending on three different things. The first is your monthly disposable income (income-expenses). The second is your future income (monthly disposable income x 48). The third is your assets. The IRS includes things like 401k's, IRA's and all other deposit accounts in the asset equation. Also in your monthly expenses they will not include credit card debt or any other unsecured debt. One of the biggest problems with OIC's being done is the person does not qualify and due to a false sales pitch the tax payer signs up with the company and they do a OIC so they can earn the money. DO NOT LISTEN TO ANY GUARANTEES!!
One way to protect yourself is to find a company that will do an OIC and if it does not go through will do all they can to get other results. Make sure it does not come with an additional fee.
You can go to our website and email us or call us for any questions on an OIC. www.mytaxrep.com
Tuesday, September 22, 2009
Mileage Deductions and Preparing for Audits
If you are a 1099 employee, self employed or W2 employee that travels a lot, a big above the line write off on your tax returns are your mileage and/or automobile expenses. One thing that is highly scrutinized in the IRS Audit Process are these expenses when claimed.
In order to prepare for an audit or the chances of being audited, one of the best things that can be done is the tracking and computing of these expenses. First you need to understand the rules associated with these expenses and what you can and can not claim as an expense.
First if your main office is a home office than you can claim all miles used for business purpose. You can keep track of the mileage used by having a log book and keeping the miles used daily or weekly. Sometimes the IRS will take the year beginning mileage and the year ending mileage. If this is done you will have to take the total mileage and times it by the percentage the car is used for business purposes.
Second, if you have an office but travel to different work places than you must not count the travel from your home to your office. If you start the day off by heading to a work site other than your main office, you have to subtract the round trip from your home to your main office. Also if you have two jobs you can deduct the mileage that you travel to get to your second place of employment.
If you don't have a main office and for example are a sales rep that you solely travel from customer to customer you can deduct all travel expenses.
It is important to understand these rules when you are using this deduction. Also please remember that you have to keep good logs. In an audit that can mean all from getting all your deduction or none of your deductions to count, as it is up to the IRS Auditor.
Additional questions please call 877-298-0890 or visit www.mytaxrep.com
In order to prepare for an audit or the chances of being audited, one of the best things that can be done is the tracking and computing of these expenses. First you need to understand the rules associated with these expenses and what you can and can not claim as an expense.
First if your main office is a home office than you can claim all miles used for business purpose. You can keep track of the mileage used by having a log book and keeping the miles used daily or weekly. Sometimes the IRS will take the year beginning mileage and the year ending mileage. If this is done you will have to take the total mileage and times it by the percentage the car is used for business purposes.
Second, if you have an office but travel to different work places than you must not count the travel from your home to your office. If you start the day off by heading to a work site other than your main office, you have to subtract the round trip from your home to your main office. Also if you have two jobs you can deduct the mileage that you travel to get to your second place of employment.
If you don't have a main office and for example are a sales rep that you solely travel from customer to customer you can deduct all travel expenses.
It is important to understand these rules when you are using this deduction. Also please remember that you have to keep good logs. In an audit that can mean all from getting all your deduction or none of your deductions to count, as it is up to the IRS Auditor.
Additional questions please call 877-298-0890 or visit www.mytaxrep.com
Friday, September 18, 2009
Why You Should Pick up the Letter Waiting for you at the Post Office
So many people come in to us with a Levy on their bank account or with a Garnishment on their wages. They tell us that they did not have any idea they were about to get this. We ask them where the letters are they received from the IRS. Majority of times they say they haven't received any. Then they tell us that the post office told them they had certified letters waiting for them to pick up.
This is why it is so important to take care of this when you get your first notice. You should know that even if you do not receive these letters the IRS still may execute any actions they are telling you they are going to do. The IRS only has to send the letter to a residence that you have lived in within the last five years. Ignoring will only make worse.
The benefit of receiving these letters as soon as you can is the fact the majority of these letters are 30-day notices. When you are given this notice it means that you have thirty days to do something about it. Any tax professional will know that this is enough time to get a levy or garnishment stopped.
Do not let the time lapse. Or you will be trying to get help for a tax professional without any income because of the levy or without your bank account. It is not fun and can send you into a downward spiral.
This is why it is so important to take care of this when you get your first notice. You should know that even if you do not receive these letters the IRS still may execute any actions they are telling you they are going to do. The IRS only has to send the letter to a residence that you have lived in within the last five years. Ignoring will only make worse.
The benefit of receiving these letters as soon as you can is the fact the majority of these letters are 30-day notices. When you are given this notice it means that you have thirty days to do something about it. Any tax professional will know that this is enough time to get a levy or garnishment stopped.
Do not let the time lapse. Or you will be trying to get help for a tax professional without any income because of the levy or without your bank account. It is not fun and can send you into a downward spiral.
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