Tax professionals can easily determine a taxpayer’s eligibility when provided with the right information.  If an individual can prove that there are no assets, whether financial or personal property, that would satisfy even a portion of their tax balance, then they may be eligible for this program.  Like other tax debt resolution plans, it begins with an investigation of a taxpayer’s financial state.  This is made up of income, expense data and debt history.  IRS Form 433 is the file that needs to be filled out to inform any tax attorneys and the federal government of the debtor’s Reasonable Collection Potential.

Once a tax professional determines that their client is eligible for Currently Not Collectible status, they begin submitting the appropriate information to the IRS.  The tax agency will confirm that the tax balance in question can be resolved in this matter.  The next step is for the individual to submit information on all of their finances, any legal proceedings they have encountered, their last income tax return and expense reports for the last 3 months.

The IRS stops all collection efforts as soon as CNC status is awarded.  Tax liens, interest and penalties are still applied to the unpaid taxes in case the taxpayer’s financial situation changes for the better.  In addition, the individual has to submit financial information to the IRS approximately every two years.  Tax debt experts are trained to determine the best method of IRS debt resolution for each client and help them negotiate with the IRS to achieve the best results.  If you’re facing tax debt and cannot afford the balance, call a local tax professional today.

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Experts seem to think that the move was more of an opportunity for aging Pacquiao to expand his global brand than a move for tax breaks.  However, Manny Pacquiao’s manager Michael Koncz stated controversially that his boxer would be seeking to fight in Asia because of the tax rate hikes that began this year.  The rate in the U.S. for the top bracket increased from 35% to 39.6% this year.

The fight will take place on November 24^th.  Pacquiao is fighting Brandon Rios because his other options to fight in the ring, including Juan Manuel Marquez, elected not to travel to China and fight in order to avoid paying taxes in their home countries as well as China.  For U.S. based boxers, the fight in China would have been a 39.6% U.S. tax on their foreign income, plus the 12.1% tax from China.

Some critics have questioned whether Pacquiao is using China’s tax policies to hide his diminishing boxing abilities.  While once considered one of the best in the world, Pacquiao was knocked out by a brutal right hand in his last fight against Juan Marquez.  Manny Pacquiao is a Filipino boxer, politician and occasional actor.

Regardless of an individual’s personal income, paying tax agencies is incredibly important.  Many celebrities, public figures and ordinary U.S. citizens have experienced problems with the IRS stemming from unpaid income taxes.  Anyone concerned about this issue can reach out to a local tax debt specialist to find resolution options.

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So far, the British government has received the largest amount of data in its history about foreign tax evasion schemes.  The file size was over 400 gigabytes of foreign financial information.  Current cases that are being investigated by British tax officials are already using the data.  Much of the large file includes information about foreign accounts in Singapore, the Cayman and Cook Islands, the British Virgin Islands, Australia, the United States and Great Britain.

The point of the information sharing is to combat offshore tax evasion.  U.S. taxpayers that have accounts in foreign banking institutions are required by law to report those assets and any income earned in foreign countries.  Failing to report assets or income is seen as tax evasion by the IRS.  To avoid tax debt problems for negligent taxpayers, the IRS has implemented the Offshore Voluntary Disclosure Program to allow more taxpayers to report their income without the threat of serious criminal prosecution.  Of course, even taxpayers who take advantage of the Voluntary Disclosure Program will face penalties and interest for assets and income that they failed to report.  The benefit of participating in the voluntary program is the lessened possibility that a taxpayer will face serious criminal tax evasion charges.

The message from the three governments who have started sharing information this month is not that it is illegal for taxpayers to have assets in multiple countries, only that if they attempt to hide it from the governments, they will be prosecuted for doing so.  Foreign tax evasion took a hit in 2012 when the Swiss government agreed to cooperate with the IRS and order notoriously tight-lipped Swiss banking institutions to hand over information about U.S. citizen accounts.  The new information sharing practice will increase efforts to end foreign tax evasion practices.

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The consequences of non-compliance when it comes to taxes are widely varied and depend on the specific circumstances.  If income tax returns are missed or the resulting tax returns are not paid, the first penalty comes in the form of interest charges.  For tax returns that are not submitted on time, the interest is charged at 5% of the balance due per month up to 25%.  For unpaid income taxes, the interest rate is ½% of the balance each month up to 25%.  Taxpayers that receive refunds are still encouraged to turn in their returns on time, despite lesser penalties.

As life goes on, tax returns can become more complicated.  With factors like mortgages, deductions, medical payments and other expenses, taxpayers may find themselves making errors or omitting information from their returns.  Hiring a tax preparer to handle all personal documents and finances can help avoid other tax issues like audits, in addition to interest and the resulting tax debt that can come from non-payment.

There are many resources available to anyone struggling with tax problems relating to non-compliance.  Local tax professionals can settle IRS or state tax debt, ensure that income tax returns are prepared properly and perform bookkeeping services.  All of these programs exist to make sure taxpayers can get answers to their concerns and stay in compliance to the IRS.  Anyone with questions about how to stay compliant when it comes to taxes should reach out to their nearby tax experts.

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When the IRS determines that an individual is not likely to settle their unpaid tax debt, the collection process begins.  Tax levies are not instituted unless the IRS has not received payment after issuing a “Notice and Demand for Payment” and the final levy notice.  From there, a taxpayer has 30 days until the levy actually takes place.

In addition to the seizure and subsequent sale of property, the IRS can be reimbursed from multiple other sources.  Bank accounts that are levied are first frozen for 21 days.  If the balance is still not resolved at this point, the money in the accounts is sent to the IRS.  The federal government can also seize funds from retirement accounts, income tax refunds and money earned from investments.  Another common IRS levy is a wage garnishment.  Wage garnishment, in which the IRS takes all or a portion of an individual’s paycheck until the tax debt is satisfied, can make managing other finances difficult, as living without the paychecks a taxpayer depends on reduces the money available for necessities.

Solving a tax debt that has gone to collections is best handled by trained tax professionals.  Local tax debt experts can perform an investigation of a client’s finances and determine what the best course of action is to resolve the debt quickly.  With the thorough analysis performed by these specialists, each taxpayer can receive a personalized solution that will work within their budget.  By contacting a tax expert, an individual can find their way out of IRS debt and into financial freedom.

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In two of the last three tax years, Detroit’s Masonic Temple racked up a bill totaling over $150,000.  According to the president of the Association, the unpaid taxes resulted from a deal that went poorly and left the group owing approximately $500,000.  The government initially decided that foreclosure was due, as some of the taxes are from 2010.  The auction that would have taken place would settle the entire balance.  However, the Masonic Temple Association settled tax debt with a $10,000 initial payment and the promise of another $36,000 that will be paid within the next month.

Unpaid back taxes can lead to multiple actions, depending on the severity of the tax debt and the length of the non-payment period.  Tax levies, like those that were impacting the future of the Masonic Temple in Detroit, can include seizure of property, finances and other assets.  Tax agencies are interested in recovering the money owed to them and can use these means to earn back the income taxes through sales and other activities.  Local tax professionals have the training and skill to negotiate with the IRS and state tax agencies and find a settlement plan that works for any individual or organization.  Thanks to a reasonable agreement between the two parties, the almost-100-year-old Detroit Masonic Temple will continue to stand tall and entertain the citizens of the Motor City for years to come.

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An Offer In Compromise is a form of tax debt resolution that allows a taxpayer to settle their unpaid back taxes at a percentage of the full balance.  To be eligible for this option, an individual has to be unable to pay their full balance, especially if financial hardship would result from the payments.  Anyone looking to get an Offer In Compromise accepted must also not be in an open bankruptcy case and must be current on all tax return filing and payment requirements.

If a taxpayer fits all of these criteria, the best course of action is to hire a tax expert with experience in negotiating IRS debts.  On the IRS website, there is a list of all of the items that must be included in every Offer In Compromise application.  There are fees and forms that have to be filled out and submitted for an offer to be considered.  Then the type of payment must be selected.  In the Lump Sum option, an individual can pay off their balance in as many as five installments.  Otherwise a monthly installment agreement will be defined in the offer and must be followed to maintain the terms of the contract.

During the evaluation process, collection actions other than tax liens (legal holds on personal assets) are put on hold.  Any payments and fees made during this period are applied to the total balance owed.  Payments required by the agreement must be made on time, but any payments on previous Installment Agreements are not mandatory during this period.  If the IRS hasn’t made a decision within two years of receiving an offer, it is automatically approved.  Any further questions can be answered by contacting local tax attorneys.

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The first step in handling a tax balance that cannot be paid is to file any late tax returns (or extensions).  The penalty for not filing is 5% of the balance owed per month, whereas the penalty for late payments is only 0.5% per month. Taxpayers who missed the April 15th deadline should still file their return even if they cannot pay to avoid further failure to file.

Once taxes have been filed, an individual can use loans or credit cards to pay their tax balance or request an extension from the IRS or state.  Another option is to contact the government to determine if there is a tax resolution plan like an Installment Agreement that will settle the balance.

Some taxpayers may end up with larger tax debt problems than they previously planned.  These individuals may benefit from a free consultation with a tax debt relief company such as Community Tax Relief, to find out if they have further options with the IRS to settle their debts.

A tax relief company will investigate a taxpayer’s debt liability, financial history, credit history and more to determine what the IRS will see as the person’s “reasonable collection potential”.  Using that figure, a tax debt relief company will be able to inform the individual of their tax resolution options.  In some cases, the IRS may grant a tax resolution if it appears that paying back the tax debt obligation will cause undue financial stress for the individual.  Contact us CTR today for free and receive more information about your options for tax debt relief.

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The actor appealed, but eventually his appeals ran out and he was ordered to report to prison.  The actor’s financial advisors and co-defendants were given harsher punishment.  Eddie Ray Kahn and Douglas Rosile were found to have committed tax fraud and conspiracy to defraud the IRS by the jury.  The two were banned from practicing in Florida and Ohio.  In addition, Eddie Ray Kahn was given a 10 year sentence and Douglas Rosile was given four and a half years.

It was widely believed before the trial that Wesley Snipes was given bad financial advice and was a victim and that going to court would be to the actor’s benefit.  The IRS holds taxpayers responsible for filing their own returns and the information that is on that return.  In some cases of tax fraud, if a taxpayer works with the federal government, it is possible for the individual to “show good faith” and avoid maximum sentencing.  In Wesley Snipes’ case, the actor pleaded not-guilty and was publically vocal about his issues.  Wesley Snipes was released on April 2^nd and will be under house arrest until July 19^th.

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The IRS Fresh Start Program has expanded access to streamlined IRS installment agreements.  A streamlined installment agreement is an automatic direct debit payment plan that allows an individual to pay back the IRS quickly.  The streamlined installment agreement usually takes anywhere from two years to six years.

Some installment agreement plans that are negotiated for by tax debt professionals or other individuals require the submission of financial documentation.  The IRS uses the financial documentation to determine the amounts that the taxpayer owes and the approximate amount that the federal government will be able to collect.  That amount is also known as the reasonable collection potential.  With the changes to the Fresh Start Program, taxpayers who owe back taxes totaling up to $50,000 will be able to enter into a monthly direct debit payment plan that is no more than 72 months long without needing to submit financial documentation.  This is important because previously limits were at $25,000.  The IRS still requires some taxpayers to submit financial documentation if the installment agreement will last longer than six years or if the tax debt is greater than the $50,000 limit.

Taxpayers considering an IRS installment agreement should also consider the penalties and interest involved.  Some taxpayers that enter into a tax installment agreement end up paying a year longer than expected because while the agreement is in place, the IRS does not stop additional penalties and interest from accruing.  This means that longer installment agreement plans will end up with more tax penalties and interest.

Tax relief company Community Tax Relief helps individuals considering IRS installment agreements get an individualized tax resolution plan.  Tax resolution professionals can negotiate with the IRS to obtain tax resolution plans for their clients in which the taxpayer pays back less than they owe based on their income and expenses each month.  This is done after a very thorough investigation of the individual’s financial obligations and income.  For more information, contact Community Tax Relief for a free consultation.

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