Patti's Blog - Advocate for Elders, People with Disabilities and Their Families

Unpaid Taxes: Living in Fear of the IRS

Excerpt from: IRS Hitman (click for full article)

 

No matter how large or small the tax debt amount, the IRS has the legal right to place a tax
lien or levy if taxpayers ignore paying their debt. This is why many taxpayers live in fear
of the IRS if they have unpaid taxes. However severe the debt, the IRS does not and cannot
put a lien or a levy before sending preliminary notices regarding the tax debt to taxpayers
explaining the details of the debt and how they can resolve it.

It is only after no effort is made by taxpayers to resolve the tax debt that the IRS sends a
C-90 ‘Final Notice of Intent to Levy’ letter. This is the last IRS notice sent before the IRS
initiates collection actions.
Some of the important facts taxpayers under tax debt must consider are:

• It can take up to a few months before the IRS to place a lien or a levy after the
sending of the first notice regarding tax debt.
• Taxpayers must begin making preparation to pay back the debt after the IRS has taken
notice of the debt and sent a notice to request payment.
• The IRS can and does place a lien or levy if taxpayers ignore or avoid them.

What NOT to Do If You Get an IRS Audit Notice

Excerpt from: US Tax Aid (click for full article)

 

(1) If you get an audit notice, don’t call the IRS, call your CPA.
(2) If you get an audit notice, don’t ignore it. It just gets worse as time goes on.
(3) If your CPA asks you a question, be happy they are paying attention to you. It really is in your best interest, even if it feels annoying at the time.
(4) For me: Make sure our clients understand how we work upfront. We need to know about you and your business. The more we know, the more we can help. If a client isn’t okay with that, it’s not a good fit.

IRS: Just Because We Said We Can Read Your E-mails Without A Warrant Doesn’t Mean We Did It

Excerpt from: Consumerist (click for full article)

 

Last week, the American Civil Liberties Union published a 2009 IRS handbook in which the agency states that Americans “do not have a reasonable expectation of privacy in [e-mail] communications.” Yesterday, the IRS’s acting commissioner appeared before lawmakers to clarify the agency’s actual stance on the issue. 

“The short answer is we are not taking that position,” explained acting commissioner Steven “not Steve” Miller, saying that regardless of what that leaked handbook states, the IRS holds to the 2010 ruling by the Sixth Circuit in U.S. v. Warshak that federal authorities must obtain a warrant in order to read someone’s e-mail.

“In the criminal context we seek a search warrant in advance of going to an ISP for e-mail content,” said Miller. “On the civil side we don’t have a policy that has us going to get [e-mails] anyway. We’re going clarify that in our procedures. In short, we are following Warshak.”

The acting commish added that this clarification will be made within the next 30 days.

Brown: The IRS Should Report on Tax Returns Filed by Members of Congress

Excerpt from: TaxProf Blog (click for full article)

 

On Friday President and Mrs. Obama released their most recent tax return for the entire world to see.  They continued a longstanding tradition of sitting presidents releasing their returns, even though no law requires that they do so. The tradition began under the late President Richard Nixon. ...

Itemized deductions often come with a hefty price tag. The Joint Committee on Taxation has estimated that for 2013 the amount of revenue lost because of the three deductions the Obamas took (which happen to be among the most popular deductions taken) will be: $90 billion for mortgage interest, $47 billion for charitable contributions, and $46 billion for state and local income taxes. ... One part of the minority that benefits from itemized deductions is members of Congress.

Although Presidents have voluntarily released their tax returns for the last several decades, nothing could be further from the truth when it comes to members of Congress. McClatchy newspapers reported last July that of the 535 members asked to release their most recent tax returns, just 17 did. ... I suspect that if we looked at the tax returns of eavery member of Congress we would see something close to a 100% itemization rate. Compare that to only a third of the American public, and the numbers would suggest that repeal is the best way forward.

Given that I do not expect members of Congress to change their ways, one way to move closer to reform would be for the IRS to issue a new kind of report, which I call the “535 Report.” It would provide in summary fashion the information from the tax returns of all members of Congress.  The 535 Report would be similar in concept to what the IRS currently produces for the tax returns of the 400 highest-income individuals.

No law is needed, because no privacy rights would be violated. All the IRS would have to do would be to crunch the numbers. Then we would know what percent of Congress itemized deductions and what the most popular deductions were. We could then compare the information with what the IRS already produces about the American taxpaying public in general, and hopefully encourage voters to demand change.

David Cay Johnston reported in The New York Times in June 2003 that the 400 report was begun in response to a professor asking for it.  Let’s see if lightening can strike twice.

Affordable Care Act Provisions: What you need to know!

Excerpt from: IRS.gov (click for full article)

 

In keeping with the IRS mission of providing America’s taxpayers with top-quality service by helping you understand and meet your tax responsibilities, we will be conducting a phone forum on April 30, 2013 to discuss key provisions of the Affordable Care Act that are currently in effect. These provisions which impact federal, state, and local government employers include:

• W-2 Reporting: Employer Sponsored Health Coverage
• Additional Medicare Tax on High Income Earners

To learn more, we cordially invite you to attend the “ACA Provisions: What you need to know!” Phone Forum.  This forum is tailored for federal, state and local government employers, payroll and benefits administrators.

During this 60 minute presentation we will cover:

• What is included in the cost of coverage (i.e. health, dental/vision, FSA benefits).  
• Additional Medicare Tax: application, calculation, and reporting.

IRS Releases 2012 Data Book

Excerpt from: Wealth Strategies Journal 2.0 (click for full article)

 

The Internal Revenue Service has recently released the 2012 IRS Data Book, which provides an overview of the Service's initiatives for the fiscal year.  The publication examines data from October 1, 2011 - September 30, 2012, providing a source of information about returns filed, taxes collected, refunds issued, examinations conducted, penalties imposed and investigations conducted. To view an electronic version of the publication, visit http://www.irs.gov/pub/irs-soi/12databk.pdf 

See 2012 IRS Data Book, TaxProf Blog (March 26, 2013).

Top Ten Tips on Making IRA Contributions

Excerpt from: IRS.gov (click for full article)

 

The IRS has 10 important tips for you about setting aside money for your retirement in an Individual Retirement Arrangement.

1. You must be under age 70 1/2 at the end of the tax year in order to contribute to a traditional IRA.
   
   
2. You must have taxable compensation to contribute to an IRA. This includes income from wages, salaries, tips, commissions and bonuses. It also includes net income from self-employment. If you file a joint return, generally only one spouse needs to have taxable compensation.
   
   
3. You can contribute to your traditional IRA at any time during the year. You must make all contributions by the due date for filing your tax return. This due date does not include extensions. For most people this means you must contribute for 2012 by April 15, 2013. If you contribute between Jan. 1 and April 15, you should contact your IRA plan sponsor to make sure they apply it to the right year.
   
   
4. For 2012, the most you can contribute to your IRA is the smaller of either your taxable compensation for the year or $5,000. If you were 50 or older at the end of 2012 the maximum amount increases to $6,000.

Wild and wacky tax deductions ... and a few are OK by the IRS!

Excerpt from: Don't Mess with Taxes (click for full article)

 

Sometimes such tax deduction chutzpah pays off for the taxpayer. Other times the Internal Revenue Service laughs all the way to the bank with the tax money it collects after denying crazy claims.

You can check out some of the more daring deductions at Bankrate, Business News Daily and CNN Money.

Some write-offs are legit. Others ... well, let's just say that during tax filing season you can't blame a guy or gal for trying.

But regardless of their tax merits or success in taking on the tax man, all are entertaining.

William Shatner 'appalled' at IRS Star Trek video spoof

Excerpt from: Don't Mess with Taxes (click for full article)

 

Everybody's a critic, even James Tiberius Kirk.

That's right, William Shatner has weighed in on the Internal Revenue Service video parody of the original Star Trek.

Shatner, whose distinctive staccato line delivery is forever connected to the Starfleet captain he brought to life on television and movie screens, is not amused or impressed.

The sci-fi mini remake, which was shown at a 2010 IRS conference, and a Gilligan's Island training video were made at the tax agency's studio in New Carrollton, Md., and cost a combined $60,000. The Star Trek production accounted for most of the cost, according to the IRS.

The IRS also offered a self-critique, saying that the Star Trek video was a mistake.

Don't fall for these Dirty Dozen tax scams of 2013

Excerpt from: Don't Mess with Taxes (click for full article)

 

It's tax-filing season, so you know what that means. It's also peak tax scam season.

In addition to collecting Americans' tax returns (and money) this time of year, the Internal Revenue Service also keeps an eye out for tax scams.

While con artists sometimes do get creative, most tax crooks tend to stick to tried-and-true scams. That's the case with IRS' annual list of tax skulduggery. All 12 scams cited this year made the agency's 2012 top 12 scam list.

The only change is that more fake charitable organizations have popped up, many in the wake of Hurricane Sandy.

After that super storm came ashore last October in New Jersey and New York, con artists took advantage of folks' goodwill to cheat them out of what they thought were much-needed, and tax deductible, charitable gifts.

Those despicable acts moved tax-related charity scams from 10th on the 2012 list to sixth on the 2013 Dirty Dozen tax scams.