IRS - Hitman

IRS Seeks to Return $123.5 Million in Undeliverable Refunds- Could you Be One of Them?

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Wed, 11 Nov 2009 15:21:00 +0000

Breaking News: The IRS is looking for taxpayers who are due to recieve a combined $123.5 million in refund checks (107,831 return checks!) that were returned to the IRS by the U.S. Postal service due to mailling errors.

Here's what IRS Commissioner Doug Shulman has to say:

“We are eager to get this money into the hands of taxpayers, so don’t delay if you think you are missing a refund,” said IRS Commissioner Doug Shulman. “The sooner you update your address information, the quicker you can get your refund.”

The undeliverable refund checks averaged at $1,148 this year, and some taxpayers are due more than one check. If you're owed money, don't hesitate to do everything possible to retrieve your funds!

The rate of undeliverable refunds increased by 16% this year, which lines up with the 15% rise in average refunds. This is all likely due to several changes in tax law, like the First-Time Homebuyer's Credit.

The vast majority of checks mailed out by the IRS each year reach their rightful owner. Only a very small percent are returned by the U.S. Postal Service as undeliverable. But if the refund check is returned to the IRS as undeliverable, the steps to retrieve your check are relatively simple.

Owed a Check? Here's what to do:

- Use the "Where's My Refund" tool on IRS.gov. this tool will enable you to check the status of your refunds. You'll be required to submit your social security number, filing status, and amount of the refund shown on your 2008 return. The tool will provide the status of your refund and may provide instructions on how to resolve any delivery problems.

- You can also access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.You'll be given instructions on how to update your billing address.

- The IRS encourages taxpayers to choose direct deposit when they file their returns because it puts an end to lost, stolen or undeliverable checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct deposit is available for filers of both paper and electronic returns.

- The IRS also encourages taxpayers to file their tax returns electronically because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds.

Stay up to date: When you move, keep the IRS informed. You don't want to miss out on $1,000 or more simply because you didn't notify the IRS when you changed your address.

I’m Richard Close and I was a “Hitman” for the IRS. I was a second generation revenue officer. I took out anyone who owed the IRS money as my father had before me. Now I help thousands of Americans beat Uncle Sam and save thousands of dollars. Tax problems? Contact me and get free tips and techniques to deal with wage and bank seizures and slash tax debt: email me at IRS-Hitman@taxdefensenetork.com or call 1-888-248-9058. Visit me http://irs-hitman.blogspot.com or www.taxdefensenetwork.com

IRS Tax Issues: New Tax Law Lets Small Business Owners Get a Tax Break.

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Tue, 10 Nov 2009 16:53:00 +0000

Even the Odds: It's hard to get ahead. Sometimes you need a side business. Most independent workers don't have just one business. Hairdressers also own nail salons, photographers own frame shops and journalists may offer resumé building services. The possibilities are endless. But you have to watch out. No matter how many businesses you operate, the IRS needs to know how much money you're making from each. You have to watch your back and make sure you report everything correctly.

Grouping Together: If it's easier, combine your businesses into one. Instead of having a separate nail and hair salon, have one salon that offers both or combine your web design and photography business. This keeps you from having to file two Schedule Cs.

The Catch: Your businesses need to be related. You cannot combine your dog walking business with your computer repair gig. But it makes sense to combine your essay writing and resume writing services. Be creative, but don't try to stretch your limits too far.

Hobby vs. Business: The IRS can classify your venture two ways. They may see one business as a “hobby,” which means less tax deductions for you! The IRS can classify your venture as a “hobby” if you lose money for 2 years consecutively or if you cannot provide proof that you are operating with business sense. If your business is classified as a hobby, you can only receive deductions up to the amount of money you've earned with the hobby.

Word of Caution: If you received tax deductions on your work tools for two years before your business was classified as a hobby, you'll owe that money back! And if you don't pay it back, you'll end up in debt with the IRS. And you may already know how that goes. You risk Tax Levies, Liens, and Seizures. So it's important to do your research and classify your businesses correctly.

Do Your Research Before You Start a Small Business

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Mon, 09 Nov 2009 15:01:00 +0000

I need to write the book on Small Business Tax Help already. The more cases I handle at the office, the more I realize that the vast majority of business owners don't have any idea how to run a business! They mess up in every way they can- and end up owing the IRS big time. Here's a few basic pointers.

Before You Start, Read Up Starting your own business can be a massive undertaking. Even if it's a side job. It's a drain on time (friends? what friends?), money (start-up hurts), and it's stressful to boot. But even if you combine all of those factors, you still don't get the amount of frustration the IRS brings to the table. The IRS makes things ridiculously hard for Small Business. Here's some things to read up on before you even consider taking the plunge:

-IRS Tax Information for Business: Straight from the source, and intimidating online handbook of rules and regulations.

-Business.gov: Find loans and grants, get business licenses and permits, register your business name, and even a discussion forum.

-Circular E: Thinking of hiring employees? Here's Circular E, the Employer's Tax Guide. Reading this entire guide in one sitting is recommended only for my most masochistic of readers.

Does all of this seem like "too much"? Run while you still can. Starting a business might not be for you.

Expect to Report Income The IRS wants you to report all income, no matter if it's your side job mowing lawns or a bigger 20 man landscaping operation. A lot of people think self-employment is their path to untaxed income. Think again.

Keep All Records We talk with dozens of people daily that don't have any files or bills. The IRS requires this information. Otherwise, how can you prove the deduction? You need to keep receipts, copies of bills, and invoices in a safe place.

Final Tip If you can afford it, hire a third party or an experienced staff accountant to handle your tax issues for you. This will free you up to do what's important, run your business.

Somebody's Watching You...and it's the IRS. Watch out for IRS Debt

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Fri, 06 Nov 2009 16:11:00 +0000

Ever have the feeling... that you're being watched? It could all be in your head. Or is it? Sorry to give you the bad news, but you actually are being watched. The IRS doesn't have spies out there peeking through your blinds. But they do watch what you claim as deductions very carefully.

Somebody's watching me! So is it time to panic if you already claimed false deductions on prior tax returns? That all depends on the time frame. The IRS can audit a tax return up to 6 years after it has been filed. So if you made false deductions in that period, maybe you should be a little wary.

What do I do? If you already made the big mistake of lying to the IRS, it's not too late. First, find all your old records. Gather anything you can use to prove your case to the IRS. The IRS loves documents. But if years have passed, it's going to be hard to find all of that old paperwork.

If worse comes to worse... So you can't hunt down those files from years ago? You can either say your prayers and hope the IRS doesn't levy your bank account and garnish your wages to make up for past mistakes, or you can consult with a Tax Professional that can give you advice about your specific situation.

Prevention is Key: Times are tough, and the IRS knows this. They know with sky high gas and food prices, people with families to support are desperate to save a buck. They know people are going to be claiming false deductions more than ever, and they have already officially announced that they are doubling their efforts to catch those who commit fraud. So don't get tempted! And keep all receipts and files that support all deductions you take.

Taxpayers Strike Back: Fight Back and Beat the IRS

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Thu, 05 Nov 2009 15:42:00 +0000

Finally Caught: You may have found the way to beat the system for a little while. But no one escapes Uncle Sam or his team of IRS Hitmen for long. The IRS has many weapons they use to make you pay. Know the enemy. Then when the IRS strikes, you can fight back.

Bank Robbery: One of the most dreaded methods the IRS uses to collect on taxes is the Bank Levy. The IRS locks you out of you own bank account. Then they seize everything you have in it. This may seem illegal, but it's not. You or your bank has no say in this matter, it's a legal weapon they use to collect the IRS debt.

- Fight Back: When a Bank Levy is issued, you have 21 days before the IRS seizes your funds for good. This is your window of opportunity to act fast and contact the IRS and negotiate a solution. But let me tell you from experience, I rarely see Bank Levies lifted. The IRS can practically taste that money and they don't want to let it go.

Credit Attack: Another way the IRS collects on back taxes is implementing a lien on your credit. This is the kiss of death for your credit. Forget getting a loan, buying a new car, opening a new credit card account, or even signing a lease with one of these bad boys looming over your credit report.

- Fight Back: If you can prove to the IRS that the levy is preventing you from paying off your debt, they will consider the levy. A good way to do this is by letting them know you want to get a bank loan to pay off your debt.

Goodbye, Paycheck! My favorite way to collect debt was issuing a Wage Levy. This is when the IRS contacts your employer and lets them know they will take a percentage of your paycheck. They can legally garnish up to 75% of your check. I liked the 75% Garnishment because it really grabbed the attention of the taxpayer. And the worst part, Wage Garnishment can go on forever if you don't set up a payment arrangement.

- Fight Back: There are two good ways to prevent the IRS from Levying your Wages. The first would require you to round up documents to prove you'll be living without basic needs if the IRS levies your wages. The second way is to come up with some kind of payment solution. As long as you pay the IRS monthly, they will lift the Garnishment.

It's not over yet... I've provided some ways you can fight back against the IRS and their weapons. But this is only the start of the battle. You ignored the debt, and now the IRS wants their money.

IRS Tax Issues: The Top 3 Most Requested IRS Forms and How They Save You Money

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Wed, 04 Nov 2009 15:16:00 +0000

Knowledge is Power it sounds corny, but it's true. Most people don't have a clue when it comes to IRS rules and regulations. And naturally, few people have knowledge of the countless forms and documents the IRS requires taxpayers to fill out. So get out your pen and take notes, the more you know about the IRS the better.

The Top 3 Forms: These are the top 3 most requested IRS Forms according to the IRS

Form W-9 Request for Taxpayer Identification Number and Certification
Form Purpose: Use this to retrieve your Taxpayer Identification Number (ITIN)

How it Saves You $$$: Failure to Furnish your correct ITIN to a requester can result in a $50 penalty.
If you provide a false ITIN number with no reasonable basis to back you up, you may receive a whopping $500 penalty! Misuse of ITINs or falsifying information can result in civil and criminal penalties.

Form W-4
Form Purpose: This form lets your employer withhold the correct Federal Income Tax from your pay.

How it Saves You $$$: Be honest with yourself. If your employer doesn't withhold your taxes, will you take the initiative and withhold the taxes from your income? Probably not. And if the IRS doesn't get their cut, you could end up with a massive debt. If you have not filled out a W-4 form yet, let your boss know you need one A.S.A.P!

Form 1040 U.S Individual Income Tax Return
Form Purpose: Use this form to report your annual income to the IRS, as well as your annual deductions.

How it Saves You $$$: You need Form 1040 to receive your tax returns and itemize deductions. If you do not turn in Form 1040 and/or Form 1040 A annually you will be fined and penalized. This is one of the most important IRS Forms.

Why it's important: The IRS has to handle thousands of taxpayer's issues annually. The IRS is not designed for “customer service,” they are not going to patiently handle your issue for you. That means it's your responsibility to request information and handle your account. Knowing what forms to request is a huge step in the right direction.

IRS Tax Lien- 3 Ways to Remove an IRS Tax Lien

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Tue, 03 Nov 2009 14:06:00 +0000

An IRS Tax Lien can have a devastating effect on your financial life. Your credit is ruined, and you assets are in constant danger of being seized the longer you wait to pay the IRS. So what should you do? There are three ways you may be able to remove your Tax Lien. No effort is guaranteed, but it doesn't hurt to try them.

1. Appeal the Lien Filing
The IRS has five business days after filing the lien to provide you with written notice. The written notice must include notice of the right to request a hearing within 30 days from the sixth day after the Lien filing. If you win the appeal, the lien will be withdrawn. However, the lien being filed on you will still appear on your credit report. Because of that, this method would not be ideal for those out to protect their credit.

2. Request Partial Discharge
You may own several assets that are encumbered by the tax lien. You can use one to pay off the IRS. If you want to do this ask for a discharge from the Tax Lien. The IRS will likely do this. You will need to send a detailed letter to the IRS. There is no preprinted form for you to fill out. IRS Publication 784, “Application for Subordination of Federal Tax Lien” lists all the information you will need to include in your letter.

3. What to do if the IRS Files a Tax Lien in Error
The IRS occasionally files a tax lien notice when you don't owe anything. Perhaps you paid your bill late, and the IRS neglected to update your account. If this happens, under the Taxpayer's Bill of Rights you are entitled to a “Certificate of Release”. The “Certificate of Release” will state that the Lien was filed in error. It will then be your job to mail or deliver photocopies of the release to the three credit bureaus- Experian, TransUnion and Equifax. This will minimize the damage to your credit rating caused by the IRS error.

4. Avoid Bankruptcy
Contrary to popular belief, filing Bankruptcy will not wipe out a Tax Lien. If your Tax Debts qualify for a discharge under any type of bankruptcy, the Lien will remain. If you owned any property going into bankruptcy, the property is still subject to a Tax Lien. The IRS could seize the property after your bankruptcy is over.

Be careful when you perform any of the above tasks to get the IRS to release your Lien. You risk having your Lien remain until the statute of limitations expires if you make even a small mistake. You also greatly increase your chances of having the Lien removed if you file your back taxes.

IRS Tax Debt- What Do IRS Notices Mean, And How Do I Respond

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Mon, 02 Nov 2009 13:52:00 +0000

Threatening Letters If you have a problem with the IRS, they automatically send you a notice. A common notice is “Notice of Tax Due and Demand for Payment”. When you pull something like that out of your mailbox, most people panic and then ignore the letter. Bad idea! If you follow the steps below, you can resolve the notice quickly.

- Read, Read, Read: It looks like I'm stating the obvious, but I'm not. Most of the people I called didn't even read the notices the IRS sent them. Sometimes the IRS Notice is simply asking for more information from you, or is letting you know there was a discrepancy on your tax return. All notices have a code containing “CP” and number. Research that code to find detailed information on the purpose of your specific notice.

- Call the IRS: The Notice will have a phone number for you to call, as well as the name of your IRS Agent. You can use this information to ask for an explanation of the notice and how you can resolve the problem. But I'll be honest with you. When I was an IRS Hit-Man I only wanted to discuss one thing, and that was how fast they could give me their money.

- Write Back: If you choose to mail a response to the IRS, it's important to use Certified Mail. The IRS get millions of pieces of mail a month. Not surprisingly some mail slips through the cracks and gets lost. Using certified mail with a return receipt requested will let you know that the IRS received your response.

Keep Copies: Be smart and keep copies of the original letter and your responses with the IRS for your records. Also make sure you keep copies of any postal receipts. This will be important if you end up in dispute with the IRS and they claim you didn't get back with them.

Eye of the Storm: So now you know what that letter means. But remember, making contact with the IRS is just the first step. If you owe the IRS, it won't be easy to find a solution. Do you homework, and do things right the first time.

Tax Defense Network Presents: The Tax Kids

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Fri, 30 Oct 2009 12:31:00 +0000

The official video for "The Tax Kids" is now online.

It's been fun to participate in this project. The Tax Kids is a light-hearted project that brings humor to serious issues like tax debt. We Developed this in hopes of spreading awareness of serious issues like Tax Debt, and perhaps make it easier for children to understand the issues their parents are going through.

Since it's Halloween, I thought I'd feature the Trick Or Treat feature again as well:

Have a Happy and Safe Halloween!

5 Basic Options for Resolving IRS Tax Debt

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Thu, 29 Oct 2009 13:16:00 +0000

Get the Facts: There's a lot of ludicrous ideas out there about Tax Debt. So you need to know the cold hard facts. Don't let unreliable people tell you that settling tax debt is “Easy” or that there's “tons” of ways to pay off the IRS. Because it's not true. Working with the IRS is hard. Filling out IRS paperwork is daunting. And there are only 5 real options for handling your IRS Debt.

1. Wait for Statues to Expire: Bad idea! The statue of limitations on your debt will not expire for 10 years. And sometimes, the statues are extended (like if you file for an “Offer in Compromise.”) And while your waiting for the time limit to expire the IRS can collect on your debt by force with Tax Liens, Levies, and seizures. Don't give them the opportunity to do this. It will not pay to ignore your debt.

2. Pay in Full: If there is any way you can actually pay in full, do it! Do not submit an “Offer in Compromise” if your have money in the bank to pay for your IRS Debt. Your IRS Hitman has access to your bank account. If they see you have the money to pay, they will tell you to pay in full.

3.Settle It: The IRS gives you the chance to submit an “Offer in Compromise.” You're are basically settling your debt for a lower amount. Very few people are actually accepted for this program. And barely anyone has their offer accepted for “Pennies on the Dollar.” But if you are in a truly desperate situation, you might want to see if an “Offer in Compromise” is an option for you.

4. Suspend Collections: If you are in a situation displaying true Financial Hardship, prove it. The IRS might stop the collections process for a limited amount of time so you can get your finances back in order. They will determine the amount of time based on your situation, and check up on you periodically to see if your situation has changed yet.

5. Pay Monthly: You can pay the IRS monthly. You have to enter into an “Installment Agreement” with the IRS to do this. The IRS will take a close look at all your finances and assets. If you're approved to pay monthly, they choose the amount you pay each month. Then you are locked into a binding contract, stating that you must pay a certain amount monthly. And defaulting can have harsh results.

Still Hope: Sorry if I'm making things seem hopeless. Yes, paying off your IRS Debt is hard. The IRS's system of ruthless Hitmen doesn't help the matter. But there are ways to get your debt taken care of. None of the options I have described are easy to do. But you have to do them if you don't want to remain in debt to the IRS forever.

IRS Tax Debt: How to Pay the IRS with Easy Monthly Payments

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Wed, 28 Oct 2009 13:10:00 +0000

Catch it Early: You usually file your taxes on time. But this year, you're scared to. You know this you owe the IRS, but this time, you can't pay it. So what should you do? Don't ignore your IRS Tax Debt. Find a solution to pay it off. The IRS actually offers a program that lets you pay your debt in monthly payments.

Paying Monthly: The IRS has a program that allows taxpayers to make simple monthly payments. It's called an “Installment Agreement.” It's a good option if you cannot pay your IRS Debt in full.

Installment Plan Criteria:
-You paid all your taxes for the past 5 years and on time, too
-You can provide documents to prove you can't pay your taxes in full on time
-You agree to pay the full amount owed in 3 years maximum
-You agree to comply with all tax laws during the plan
So you think you qualify? Next, is the hard part.

How To Apply:
-Fill out Form 9465 (You may be asked to fill out form 433-A as well)
-Include detailed evidence showing why you cannot pay your bills on time.
-If you are approved, pay the fee and then your first payment as soon as you get the IRS's letter

Pay on Time! If You don't, you'll be risking Tax Lien and Levies. And you won't be able to apply for an Installment Agreement for another 5 years if you mess up and don't pay.

Hurtles to Jump: The IRS wants their money as soon as possible. They don't want to give you an installment agreement. You will have to fight hard to get your Installment Agreement approved. If you are not accepted the first time, try again!

How to File for Innocent Spouse Relief

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Tue, 27 Oct 2009 12:20:00 +0000

You just received the IRS's dreaded “Notice of Intent to Levy,” but there's a big problem. This isn't your IRS Tax Debt! This is your spouse or ex spouse's problem. So what can you do when the IRS has its sights set on your bank account? Innocent Spouse Relief may solve your problems.

Innocent Spouse Relief 101: Most married couples file jointly to save money. But with the savings comes a big disadvantage. When taxpayers file jointly they are held liable for their spouse's taxes. So if your spouse underreports their income, you'll get the blame too! And if they can't pay, guess who gets the bill…you!
Where do I start?

To request Innocent Spouse Relief, file Form 8857, “Request for Innocent Spouse Relief”.

Will my ex spouse know if I Request Innocent Spouse Relief?
The IRS is requi
red by law to inform your ex or current spouse when you file for Innocent Spouse Relief. There are no exceptions, not even for victims of spousal abuse. But don't fret, your current address, employer, new name and other personal information will not be disclosed.

What else should I include with my form?

The IRS encourages you to file Form 8857 even if you don't have any documentation. But it's a good idea to provide all of the physical evidence you possibly can, they'll increase your odds of winning. If you have bookkeeping documents, sales receipts, or anything else that proves you were unaware of your spouse's debt, include it when you mail the form.

Will I still receive my Tax Returns while my request is being processed?
As long as you don't owe the IRS, you will receive your Tax Returns.

How long will it take for the IRS to get back to me?

The IRS will carefully review the forms. It could take them as long as four months to get back to you. If you hear no word from the IRS after four months, consider resubmitting or hiring a tax professional to help you with your case.

Denied: Many Innocent Spouse Relief claims are denied. So you must make sure you provide plenty of documentation to back up your case. Basically, you need to prove you didn't know anything about your spouse's debt. Because you file and sign the papers, you're automatically liable. If you were already denied relief and have new information to provide, you can resubmit your form with your new documents.

The IRS Hitman features in Tax Defense Network's "The Tax Kids"

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Mon, 26 Oct 2009 18:15:00 +0000

I hinted at a new project last week; now is the time to reveal it. I participated in a new video for "The Tax Kids" (www.thetaxkids.com) . The Tax Kids is intended to be a fun, light hearted approach spreading Tax Debt awareness. Take a load off and enjoy the fun video, but remember, if you ignore IRS issues you'll be in for a true horror story once they catch up with you.

The IRS Hitman Films another video with Tax Defense Network

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Fri, 23 Oct 2009 12:40:00 +0000

I'm ready for my close-up again... late last night we finished up production for another Tax Defense Network video. (Like my hat?) I finally got permission from Tax Defense Network to share some pictures and details.

We're always working hard behind the scenes thinking of ways to spread awareness of tax debt issues, and ultimately help more people in need. It's been hard for me to catch up, writing blog posts in the morning, participating in morning meetings, going through hundreds of e-mails, then filming at night. It's hard work, but it's rewarding.

In my past videos I've mostly earnestly discussed my decision to leave the IRS and join the Good Fight as the IRS Hitman. This time, I get to stretch my acting skills.

Expect more videos and updates in the near future. I'll share out latest video on the blog as soon as it's available.

IRS Tax Issues: Medical Deduction Myths to Avoid, Stay out of Trouble With the IRS

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Thu, 22 Oct 2009 13:26:00 +0000

Stop Right There: Don't make a claim unless you know the facts. There are plenty of rumors swirling around about what you can and cannot claim as medical deductions. But the IRS's official list in Publication 502 says otherwise. Watch out, don't fall for the myths and get into trouble.

You can include ALL of your insurance premiums in your medical deductions.
Wrong. The IRS actually has a list of insurance premiums that you cannot include as medical deductions. These include:

- Life insurance policies
- Policies providing payment for loss of earnings
- Policies for loss of life, limb, sight, etc
- Policies that pay you a guaranteed amount each if you are hospitalized for sickness or injury
- Health or long-term care insurance if you elected to pay these premiums with tax-free distributions
- The part of your car insurance premiums that provides medical insurance coverage for all persons injured in or by your car because the part of the premium for you, your spouse, and your dependents is not stated separately from the part of the premium for medical care for others

You can include your Weight-Loss Program in your medical deductions.
Wrong again! You can ONLY include a weight-loss program in your medical deductions if the program is vital and you have a serious medical illness. This includes issues like obesity and heart disease. But remember, even if you do qualify to use your weight-loss program as a deduction, you cannot include membership dues in a gym, health club, or spa as medical expenses. You can only include separate fees charged at the gym or health club for weight loss activities.

You Can Include Cosmetic Medical Procedures in your Medical Deductions.
No. This is almost never true. You cannot include procedures like teeth whitening, plastic surgery, or hair removal in your medical deductions. Some people think you can claim things because they may help your overall health, but you cannot claim ANYTHING that is better for your overall health. (Like Vitamins, Herbal Supplements, and Vacations!) However, if the cosmetic surgery is to help repair disfigurement from birth defects or injuries, you may be able to claim the procedure as a medical deduction.

Fair Warning: If you claim a medical deduction that is not considered to be appropriate, the IRS may label it as Tax Fraud. Tax Fraud is a crime that carries civil penalties and criminal charges. So don't try to get creative on your Tax Returns!

Beware ALL E-mails Claiming to be from the IRS

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Wed, 21 Oct 2009 13:17:00 +0000

Many of my clients, coworkers, and friends are receiving e-mails claiming to be from the IRS. The subject line usually reads "Regarding Underreported Income." I've been receiving dozens of these messages myself, and I warn everyone I can about the danger of these fishing scams. The IRS does not directly send messages to everyone. In fact, here's information directly from the IRS's official website:

The IRS does not initiate taxpayer contact via unsolicited e-mail or ask for personal identifying or financial information via e-mail. If you receive a suspicious e-mail claiming to come from the IRS, take the following steps:

• Do not open any attachments to the e-mail, in case they contain malicious code that will infect your computer.

• Do not click on any links, for the same reason. Also, be aware that the links often connect to a phony IRS Web site that appears authentic and then prompts the victim for personal identifiers, bank or credit card account numbers or PINs. The phony Web sites appear legitimate because the appearance and much of the content are directly copied from an actual page on the IRS Web site and then modified by the scammers for their own purposes.

• Contact the IRS at 1.800.829.1040 to determine whether the IRS is trying to contact you.

• Forward the suspicious e-mail or url address to the IRS mailbox phishing@irs.gov, then delete the e-mail from your inbox.

If you have additional questions, please contact your LBA professional at 904.396.4015.

Conclusion: Don't trust any e-mail you receive that's from "The IRS"- the IRS will not send unsolicited E-mail messages.

IRS Tax Debt: Common Tax Problems and Their Solutions. Keep Your Head Above Water

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Tue, 20 Oct 2009 13:21:00 +0000

It's Your Turn: Most people experience a problem with the IRS at least once in their lives. Think about it, the IRS is the biggest collections agency in the world. It touches everyone you know. So make sure you know some common Tax Problems people experience. That way, you can stay one step ahead of the game and avoid IRS Debt.

Underreporting: A lot of people think it's completely legal to underreport your income on your tax returns. But this couldn't be further from the truth. If you were not already in debt, getting caught underreporting on your tax returns can easily land you in debt. You'll not only owe back taxes, but penalties and interest as well.

Solution: Report your income as accurately as possible on your Tax Returns. Do this by filing “Profit or Loss from Business.” Remember, the IRS has access to your bank account. They can see the amount of deposits you made and compare it to the amount of income your reported. If things don't add up, you'll be in hot water with the IRS.

Payroll Taxes: If you own small business, filing your payroll taxes on time is crucial. The IRS can make you pay back 100% of the payroll taxes not filed, plus interest (Internal Revenue Code 6672).

Solution: Hire an Accountant or CPA who can handle this issue for you. There are also banks out there that will file your payroll taxes on time for you. Consider any of these options if you're strapped for time and can't report on your own.

Unable to Pay: Many people cannot afford to pay their IRS debt in full. Some people have lost their jobs, become ill, had a loved one become ill, or have become disabled. There's still hope if that is the case for you.

Solution: The IRS may suspend collections activity and allow you to get back on your feet. This a “Grace Period” or “Suspended Collections” You have to prove that paying the IRS would create an economic hardship for you. It's hard to make the IRS relent. So you have to provide your complete financial information along with supporting documentation.

Stay on Top: It only takes one small error to wind up in debt with the IRS. It's a monster of a system, and not even IRS personnel understand all of the rules. If you have a problem that you cannot solve on your own, try to look for professional help.

How to Resolve Unpaid Payroll Taxes With the IRS

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Mon, 19 Oct 2009 13:18:00 +0000

Resolving the issues that arise from being delinquent on Business Payroll Taxes is no easy task. However, in the mid 90s provisions were added to the Taxpayer’s Bill of Rights. They were designed to help Small Businesses that were just starting out. Don’t be intimidated by daunting Tax Laws. You still have your Taxpayer Rights.

You can Appeal: Many Business Owners are unaware that they still have rights as Taxpayers. You have 60 days from when you get notice from the IRS to file an appeal. Appealing will buy you time, but it's not a permanent solution. However, the extra time will allow you to consult with a Tax Professional or seek Professional advice.

First-Time Offenders: There’s a law in the Taxpayer’s Bill of Rights designed to help fledgling Small Businesses. According to this law, the IRS can forgive the harsh penalties imposed when Small Business owners fail to deposit payroll taxes on time. But this only applies if you are a first time offender. The IRS can also abate penalties applied for sending the payments directly to the IRS instead of depositing it to the correct bank.

Paying Tax Debt: The truth of the matter is, Appeals rarely work. And even if you’re a first-time offender, penalties and debt imposed by the IRS may not be forgiven. When this is the case, it is important to pay off the Tax Debt as soon as possible. If the debt is not paid off in a timely manner, the interest accrued every month can double or even triple the debt. If the option of paying off the Tax Debt in full exists, it’s imperative to act on it and pay it off as a priority.

There are many land mines that come with the otherwise relative independence of being a business owner. It’s a good idea to hire Bookkeepers and Accountants to help relieve the stress and burden of dealing with IRS Issues. And if all else fails, you can seek advice from a professional.

Amending a Tax Return that Was Filed Incorrectly to Reduce Tax Debt

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Fri, 16 Oct 2009 12:38:00 +0000

Mistakes Happen: The IRS encounters thousands annually. The IRS’s complicated Tax Laws are overwhelming for the average Taxpayer. Every Tax season something is bound to go wrong. In light of all the errors that inevitably occur, the IRS has created ways for Taxpayers to Amend Tax Returns that were Filed Incorrectly.

The IRS usually corrects math errors on Tax Returns. In addition to that, they usually request forms that are missing when they process original returns. If the IRS has done this bit of work on your behalf, it will not be necessary to file an Amended Tax Return. However, there are a few instances when filing an Amended Tax Return is necessary. If any of the following was reported incorrectly, you should file an Amended Return:

• Your filing status
• Your dependents
• Your total income
• Your deductions or credits

Steps to Take for Filing an Amended Tax Return:

1. Use Form 1040X, “Amended U.S. Individual Income Tax Return.” You can use this to correct previously filed Forms 1040, 1040A, and 1040 EZ

2. Write the year of the Return you are Amending at the top of Form 1040X. You cannot use one Form 1040X to correct two tax returns. You must prepare a separate 1040X form for each Tax Return. You must also mail them in separate envelopes.

3. Mail the envelope containing the Amended Tax Form to your area’s IRS processing center. The Form 1040X instructions list the addresses for your area’s IRS processing center.

As long as you act swiftly you can still receive your Tax Return. However, making sure you fill out all of the correct columns of Form 1040X can be a bit tricky. If you are not sure about the details of your Tax Situation or you’re unsure of some specific Tax Laws, consider contacting a professional to help you with this step of the process.

Man Sentenced to 5 Years For Filing False Tax Returns

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Thu, 15 Oct 2009 14:02:00 +0000

Marcel J. Toto-Ngosso, age 50, was convicted of 17 counts of aiding and assisting in the preparation and filing of false tax returns and was sentenced to 70 months in prison for preparing and filing false Tax Returns.

According to the U.S. Justice Department and the IRS, Marcel J. Toto-Ngosso took part in a scheme to generate fraudulent tax returns for clients. According to trial evidence, Toto-Ngosso obtained the names and social security numbers of idividuals, which he later sold to his clients for $500 to $800 each. He then used the names and social security numbers on his clients' tax returns so they could secure larger refunds by claiming fraudulent deductions and income adjustments. He did this all through a home base business for 9 years before the IRS finally caught up to him.

His offenses, prosecutors said, took place over nine years through 2007 from a business based at his home.

“As today’s sentence shows, fraudulent tax return preparers face serious consequences, including jail time,” said John A. DiCicco, Acting Assistant Attorney General of the Tax Division. “This case also demonstrates why taxpayers should carefully review their individual income tax returns before signing and filing their returns with the IRS.”

“Tax return preparers help Americans with one of their biggest financial transactions each year. We must ensure that all preparers are ethical and provide good service,” said IRS Criminal Investigation Chief Eileen Mayer. “Today’s sentence signals our determination to ensure the tax preparation industry is on board with our overall goals to strengthen the tax system.”

Cracking Down: The judge ordered Marcel Toto-Ngosso to pay $238,788.25 in restitution for his crime. Two of his associates were sentenced along with him. Even if the IRS doesn't catch up with you at first, they will eventually. Face your IRS responsibilities before the IRS brings the hammer down on you!

Tax Filing Deadline Approaches for Extension Filers- 5 Last Minute Tips

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Wed, 14 Oct 2009 12:29:00 +0000

Filed an extension for filing your Tax Returns back in April? Taxes are due tomorrow! Still working on your Tax Return? Get with it and get the thing done! Taxes are due Wednesday of next week. To kick off the last week before taxes are due, I'm offering some Last-Second Tax Filing Tips. Get to work, procrastinators!

Tips for Last-Second Tax Filers All the Tax Filing Help you need

1. Double-Check everything
Particularly if you’re filing a paper return, it’s important to double check all of your figures to make sure your calculations are correct.

2. Mailing to the Right Place
Your tax package should include a coded envelope for mailing your return. If it doesn’t, check a section called “Where Do You File?” in the tax instruction booklet.

3. Sign Your Form
I know you must be tired of reading this, but it’s an easy step that so many taxpayers forget. If you’re filing jointly, you and your spouse must sign. Additionally, anyone paid to prepare your return must sign the form as well.
4. Electronic Filing
Filing electronically is a quick option. If you choose direct deposit, your refund could be deposited in as little as 10 days. However, you still have to double check your electronic form to make sure everything is filed correctly. You cannot blame tax filing software for any errors that may occur!

5. Hire a Professional
Let’s face it; you’re almost out of time. At this point, hiring a Tax Professional is a wise investment. A Tax Resolution company or reputable CPA can handle complicated returns with ease, keeping you out of trouble with the IRS.

Still Need Help? I’m mentoring on taxes and tax debt every day this week, but I should have a window of time in the afternoon to check my e-mail. If you have any questions, e-mail me. I’ll point you in the right direction.

Tax Defense Network : Real People, Real Solutions

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Tue, 13 Oct 2009 12:24:00 +0000

Finally, here's the first preview from my Million Mile Journey. We introduce you to Lynch Kentucky City Council members, business owners, retirees, and people just like you. We provided Real Solutions for Real People. Take a Look.

Dealing With IRS Debt: You have 5 Options For Giving IRS Debt the Boot

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Mon, 12 Oct 2009 12:44:00 +0000

The IRS Offices are closed today, but there's no rest for the IRS-Hitman. If you have any Tax Questions, drop me a line here. I'll be in the office all day.

Get the Facts: There's a lot of ludicrous ideas out there about Tax Debt. So you need to know the cold hard facts. Don't let unreliable people tell you that settling tax debt is “Easy” or that there's “tons” of ways to pay off the IRS. Because it's not true. Working with the IRS is hard. Filling out IRS paperwork is daunting. And there are only 5 real options for handling your IRS Debt.

1. Wait for Statues to Expire:
Bad idea! The statue of limitations on your debt will not expire for 10 years. And sometimes, the statues are extended (like if you file for an “Offer in Compromise.”) And while your waiting for the time limit to expire the IRS can collect on your debt by force with Tax Liens, Levies, and seizures. Don't give them the opportunity to do this. It will not pay to ignore your debt.

2. Pay in Full:
If there is any way you can actually pay in full, do it! Do not submit an “Offer in Compromise” if your have money in the bank to pay for your IRS Debt. Your IRS Hitman has access to your bank account. If they see you have the money to pay, they will tell you to pay in full.

3.Settle It:
The IRS gives you the chance to submit an “Offer in Compromise.” You're are basically settling your debt for a lower amount. Very few people are actually accepted for this program. And barely anyone has their offer accepted for “Pennies on the Dollar.” But if you are in a truly desperate situation, you might want to see if an “Offer in Compromise” is an option for you.

4. Suspend Collections:
If you are in a situation displaying true Financial Hardship, prove it. The IRS might stop the collections process for a limited amount of time so you can get your finances back in order. They will determine the amount of time based on your situation, and check up on you periodically to see if your situation has changed yet.

5. Pay Monthly:
You can pay the IRS monthly. You have to enter into an “Installment Agreement” with the IRS to do this. The IRS will take a close look at all your finances and assets. If you're approved to pay monthly, they choose the amount you pay each month. Then you are locked into a binding contract, stating that you must pay a certain amount monthly. And defaulting can have harsh results.

Still Hope: Sorry if I'm making things seem hopeless. Yes, paying off your IRS Debt is hard. The IRS's system of ruthless Hitmen doesn't help the matter. But there are ways to get your debt taken care of. None of the options I have described are easy to do. But you have to do them if you don't want to remain in debt to the IRS forever

5 Tax Debt Myths: Time for a Reality Check

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Fri, 09 Oct 2009 18:37:00 +0000

Be Nimble: There's lots of Myths about the IRS out there. As an IRS hit-man, I've heard them all. And if you took any of these listed Myths as advise you'd be drowning in debt. Read these Myths vs. Realities and arm yourself with a powerful weapon...Knowledge.

Myth #1 If You Never File Your Taxes the IRS Can't Find You!
Reality Check: They IRS will stalk you down like The Terminator stalked Sarah Connor. The IRS is a machine built to hunt you down and they WILL catch you. Your employer is sending your information to the IRS. Your Bank is sending your information to the IRS. And if you work from home and have no Bank Account, there's a Revenue Officer near you ready to hunt you down and seize your assets!

Myth #2 The IRS can't do Anything to you!
Reality Check: Think again. It's foolish not to take threats from the IRS seriously. They're loaded Time Bombs and they'll only deactivate if you efficiently and quickly deal with them. Remember, the IRS is their own Judge & Jury. They don't have to go through a court system before they act on seizing money or assets from you.

Myth #3 Just ignore your IRS debt to make it go away.
Reality Check: “Out of sight out of mind” does NOT apply to the IRS. Procrastination will cost you big time. I've seen debts churn out of control and go from being $2,500 to $10,000 thanks to interest and penalty fees. Ignoring debt will not make it vanish, it will make it grow.

Myth #4 Your Debt can be settled for Pennies on the Dollar.
Reality Check: If it sounds too good to be true, it is. The infamous “Pennies on the Dollar” saying stems from a program called an Offer in Compromise (OIC) by the IRS. The guidelines for this program are rigid and few people qualify. This doesn't stop many companies from telling you that you're 100% Guaranteed to be qualified before they even review your case! If you go with a tax care professional- do your research and choose a business you can trust.

Myth #5 The IRS can't touch your Paycheck or Bank Account, that's Illegal!
Reality Check: Kiss your paycheck goodbye! The IRS can indeed “touch” you bank account and your paycheck with their dreaded Bank Levies and Wage Garnishments. The Bank Levy freezes your account and you get a mere 21 days to settle things with the IRS before they take all of your money. When the IRS Garnishes your wages they take a big percent of your Bank Account leaving you with barely enough to live on. The powers granted to the IRS in the Internal Revenue Code make it entirely LEGAL for the IRS to Garnish your Paycheck and Access your Bank Account.

IRS Tax Debt: Common IRS Tax Problems, IRS Tax Levy, IRS Tax Lien, IRS Asset Seizure

irs-hitman@taxdefensenetwork.com (The IRS Hitman) — Thu, 08 Oct 2009 12:30:00 +0000

Believe it or not: The IRS has more power than you think. Refuse to pay, and you run the risk of forcing the Tax Man to resort to brutal weapons: The IRS Tax Levy, IRS Tax Lien, and IRS Asset Seizure.

IRS Tax Levy: What to Expect, and How to Stop it

There are two types of IRS Tax Levy, the IRS Wage Levy and the IRS Bank Levy. The IRS will access the debt owed, then send notice of your Tax Debt and a demand for payment. If you ignore this letter, the next letter sent out will be "Final Notice and Intent to Levy". From here, the IRS can yield whichever IRS Tax Levy weapon it desires. The IRS can seize all the funds from you bank account with an IRS Bank Levy, and they can take funds directly from your salary with an IRS Wage Levy (Or IRS Wage Garnishment).

Stop an IRS Levy: The IRS only enacted the Tax Levy because you refused to pay your Tax Debt. If you voluntarily comply and work with the IRS to make a payment arrangement, the IRS should work with you. It won't be easy, and you likely won't get the payment arrangement you want, but it's better than the constant fear of wage levies or garnishments.

IRS Tax Lien: What to Expect, and How to Stop it

IRS Tax Liens are a default when you owe Tax Debt. When you owe a Tax Debt, you have a Tax Lien by definition. Tax Liens simply don't become an issue (or even known to the taxpayer) until the IRS notifies your creditors about the Tax Debt. Suddenly your credit is shot and you can't do anything involving credit.

Stop an IRS Tax Lien: An IRS Tax Lien is there until your tax debt is paid in full. Even when you're making payments, the Lien remains. The IRS does not want to remove a Tax Lien, it's an excellent incentive for you to pay your tax debt. However, you can have a Tax Lien temporarily lifted if you can prove that the Tax Lien is stopping you from paying your tax debt. Show the IRS that the Tax Lien is preventing you from selling your home or getting loan to obtain money to pay off your tax debt.

IRS Asset Seizure What to Expect, and How to Stop it

IRS Asset Seizure: IRS Asset Seizure is the IRS' last resort for collecting on Tax Debt. The IRS sends armed agents to your home with trucks, then they proceed to seize everything of value. They'll take the extra cars, antiques, family heirlooms, anything that can be liquidated to pay for your tax debt. They won't take your only home and they'll leave the clothes on your back, and that's about it.

Stop an IRS Asset Seizure: You have an advantage, the IRS does not want to seize your assets. They do this because you refuse to pay them and they can't reach an agreement otherwise. They seize assets you bought with "Stolen Money" from the government (that's how they see it) and now they want it back. The best was to stop an IRS Asset Seizure is prevention, don't let it get this far. Find any way to pay on the tax debt.

It's hard to get your head out of the sand and face the IRS. But picking up the phone and giving them a call is better than inviting the worst case scenario. If you've received an IRS notice, don't hesitate. Resolve the issue today.