TAX ARTICLES

Dealing with the IRS

There are few things people dread more than dealing with the IRS. They are unyielding and relentless in their pursuit to obtain what they feel is owed to them. Even celebrities like Wesley Snipes can’t avoid their reach. Despite years of challenging them, he eventually was found guilty of failing to file federal income tax returns. This led to him spending three years in prison as a penalty for his tax issues.

While most people don’t end up in prison when taking on the IRS as Snipes did, that doesn’t mean the IRS won’t make life as miserable as possible. Once they have their sights set on someone, they can be ruthless when trying to get their money.

The federal tax code is too complicated for most people to handle on their own

Not only is the IRS willing to try anything possible to get money they think is owed but they also make it extremely complicated and confusing. The federal tax code is now 74,608 pages long! The code has grown a whopping 187 times bigger over the last 100 years. It has almost tripled over the last three decades alone which includes over 3,000 pages being added just as a result of Obamacare. If it continues to grow at this pace it will top 100,000 pages within the next 35 years.

With so many possible complications it’s easy to find yourself on the wrong side of the fence with the IRS. If you find yourself in the unfortunate position of being audited, what is the best way to proceed? There are some basic steps to help you prepare for dealing with the IRS. The first thing you need to do is get prepared. This includes doing a few things. Start with getting everything you could possibly need ready. Get all of your paperwork together and organized as neatly as possible. Once you have that organized, research what rights you have. Knowing what rights are in place to protect you is your responsibility. The IRS is there to get their money, not to inform you of your rights.

Get help from a tax law professional

After this it’s usually time to meet. For the meeting it’s always best to meet off site somewhere. During the meeting make sure not to offer up any information without being prompted. Don’t be deceptive, but make them ask you for the information they are after. While doing this be aware of the situation and how they are acting towards you. If there is an easy resolution that’s great but be prepared for the situation to drag on.

Many times when the IRS either audits you or comes after you it’s critical to handle it correctly from the start. People try to resist bringing an expert tax attorney to save money. What they don’t realize is that this hesitation could end up costing a lot more in the long run. It’s better to look at this as an investment rather than bill or loss. Finding an expert who understands the intricacies of tax laws can save you money, time, and stress. Look for experts that specialize and are certified to work specifically on tax issues. This means they have the training and experience to help you get the best resolution possible. Jordan Wilcox is a Utah-based tax attorney that is also a certified tax resolution specialist through the ASTPS. His training and extensive experience will help you end up with best possible outcome for your situation.

IRS Agent Impersonator Fraud on the Rise

As technology has improved over time, so has the complexity of scams designed to steal from the unwary. Most people have heard about emails of some far-fetched story claiming to be royalty that needs money sent to them. They promise if you send them money that when whatever made up problem is done they will return a large sum of money back. Of course they just take the money sent to them and disappear never to be heard from again.

Another common scam is called phishing. Victims of a phishing scam receive an email that looks to be from your financial institution stating there is a problem with your account. It has you log into your account through the email to resolve the issue. What is actually happening is that the email is a fake and when you think you are logging into your account it’s actually capturing your information. Then they take the info and log into your actual account and take money.

Using the "IRS" to defraud potential scam victims

The scams are going even more in-depth now. People are now even using the IRS to trick people. There are multiple ways people have incorporated the IRS into scams to trick people into giving up money. It has become common enough that the IRS has warned people of what people are trying and how to protect themselves. One of these is that victims are called and told they owe money to the IRS. The person on the other end attempts to convince them that the money must be paid immediately using a prepaid debit card or wire transfer. If they are unwilling to make a payment the scammers threaten them with arrest, deportation, or suspension of either a business or driver’s license.

There are some points the IRS has laid out to help people avoid scams like this. The most important is to know that they will never ask for credit card numbers over the phone. They also never request payment from wire transfers or prepaid debit cards. In addition, their agents should not threaten people with punishments like suspension of licenses or being arrested.

Has your private information gone public?

Another scam that is growing in popularity involves obtaining personal information when a lien is filed against someone by the IRS. Many people might be surprised to know that a lien filed by the IRS is considered public record. The scammers will contact their victims and use this information to imitate an IRS agent. They push the person into meeting them immediately to settle the debt for a lesser amount than what is owed. People are tricked into believing this since they have knowledge that was thought to be private. In an effort to settle the debt while saving money, people are more easily tricked into turning over the money. Unfortunately, once money is given to them it’s gone forever.

Whenever anyone claiming to be from the IRS contacts you, make sure to verify they are who they claim to be. Remember that if you do owe the IRS money, it’s always a good idea to consult with a certified tax attorney to make sure that you are protected and that your best interests are being fought for.

Self-employment and tax laws – what you need to know

Many people dream of being their own boss. They see people running their own companies and look on with envy as they don’t have to deal with office politics and other issues of corporate America. While the benefits of being self-employed are many, there are some major challenges as well.

People think of self-employment and focus on perks like making your own schedule and not having to answer to a boss. However, there are also some major hurdles you may have to face. What many don’t realize is that the self-employed must start wearing a lot of different hats in order to be successful. They now must not only perform their services but also deal with things such as marketing, handling insurance, and all the bookkeeping.

The bookkeeping part can be an area that often turns into the biggest hurdle for anyone that is self-employed. It starts with the challenge of keeping all financial records neat and organized. This means incoming and outgoing bills, estimates, and many other things must be kept so that they are easy to find and handled in a timely matter. Once that happens, then comes the even bigger issue: figuring out taxes.

The IRS pays extra attention to people that file as self-employed

Self-employed people are the most commonly audited group by the IRS. Since many of them act as their own accountants, the IRS watches them even more closely. So if you’re self-employed, or thinking about going that route, how do you take care of your taxes properly? The first thing the IRS looks for is what appears to be drastic cheating or manipulation. Things such as excessive or unreasonable deductions, unrealistically low wages, and paying employees under the table are all major red flags.

While flat-out tax fraud is the most obvious reason for the IRS to look at someone, it’s not the most common. The most common problems in self-employed taxes are a result of the extremely complicated and tricky nature of the tax code. Even the best-intentioned people often make mistakes. The federal tax code is over 74,000 pages long, and anyone that is self-employed will also likely be working with Obamacare which alone contributes to over 3,000 pages of the code. With so many complicated options, it’s easy to see how someone could accidentally make mistakes.

The IRS pays extra attention to people that file as self-employed

Self-employed people are the most commonly audited group by the IRS. Since many of them act as their own accountants, the IRS watches them even more closely. So if you’re self-employed, or thinking about going that route, how do you take care of your taxes properly? The first thing the IRS looks for is what appears to be drastic cheating or manipulation. Things such as excessive or unreasonable deductions, unrealistically low wages, and paying employees under the table are all major red flags.

While flat-out tax fraud is the most obvious reason for the IRS to look at someone, it’s not the most common. The most common problems in self-employed taxes are a result of the extremely complicated and tricky nature of the tax code. Even the best-intentioned people often make mistakes. The federal tax code is over 74,000 pages long, and anyone that is self-employed will also likely be working with Obamacare which alone contributes to over 3,000 pages of the code. With so many complicated options, it’s easy to see how someone could accidentally make mistakes.

Self-employment and tax laws – what you need to know

Many people dream of being their own boss. They see people running their own companies and look on with envy as they don’t have to deal with office politics and other issues of corporate America. While the benefits of being self-employed are many, there are some major challenges as well.

People think of self-employment and focus on perks like making your own schedule and not having to answer to a boss. However, there are also some major hurdles you may have to face. What many don’t realize is that the self-employed must start wearing a lot of different hats in order to be successful. They now must not only perform their services but also deal with things such as marketing, handling insurance, and all the bookkeeping.

The bookkeeping part can be an area that often turns into the biggest hurdle for anyone that is self-employed. It starts with the challenge of keeping all financial records neat and organized. This means incoming and outgoing bills, estimates, and many other things must be kept so that they are easy to find and handled in a timely matter. Once that happens, then comes the even bigger issue: figuring out taxes.

The IRS pays extra attention to people that file as self-employed

Self-employed people are the most commonly audited group by the IRS. Since many of them act as their own accountants, the IRS watches them even more closely. So if you’re self-employed, or thinking about going that route, how do you take care of your taxes properly? The first thing the IRS looks for is what appears to be drastic cheating or manipulation. Things such as excessive or unreasonable deductions, unrealistically low wages, and paying employees under the table are all major red flags.

While flat-out tax fraud is the most obvious reason for the IRS to look at someone, it’s not the most common. The most common problems in self-employed taxes are a result of the extremely complicated and tricky nature of the tax code. Even the best-intentioned people often make mistakes. The federal tax code is over 74,000 pages long, and anyone that is self-employed will also likely be working with Obamacare which alone contributes to over 3,000 pages of the code. With so many complicated options, it’s easy to see how someone could accidentally make mistakes.

The IRS pays extra attention to people that file as self-employed

Self-employed people are the most commonly audited group by the IRS. Since many of them act as their own accountants, the IRS watches them even more closely. So if you’re self-employed, or thinking about going that route, how do you take care of your taxes properly? The first thing the IRS looks for is what appears to be drastic cheating or manipulation. Things such as excessive or unreasonable deductions, unrealistically low wages, and paying employees under the table are all major red flags.

While flat-out tax fraud is the most obvious reason for the IRS to look at someone, it’s not the most common. The most common problems in self-employed taxes are a result of the extremely complicated and tricky nature of the tax code. Even the best-intentioned people often make mistakes. The federal tax code is over 74,000 pages long, and anyone that is self-employed will also likely be working with Obamacare which alone contributes to over 3,000 pages of the code. With so many complicated options, it’s easy to see how someone could accidentally make mistakes.

Fresh Start will help simplify dealing with the IRS, but simpler isn't always better

Finding out that you or your business owes money to the IRS can be a tough pill to swallow. Many people and companies have struggled through audits, liens, and threats trying to come to a resolution. Regardless if it was a harmless error or a direct attempt to mislead, getting a settlement can feel overwhelming.

The IRS has started a program called Fresh Start to try and help make it easier for both sides. This program adjusted some of the guidelines the IRS uses to make compromises or resolutions easier.

One of the adjustments made is that it raised the amount that needs to be owed before a tax lien is implemented to $10,000. While this is a guideline and the IRS can place a lien even if the amount owed is less, the change will decrease how many times that happens. In addition to raising the amount suggested for liens, it also allows taxpayers to qualify to have a lien withdrawn which can be a huge help for many people.

How can the Fresh Start program help you?

Another change that Fresh Start implemented was a streamlined process to access installment agreements. Under the new guidelines, taxpayers can owe up to $50,000 and get an installment agreement for up to 72 months (six years). They can now do this with little to no financial documentation required. This makes it much simpler and faster to work out an agreement for money owed. For money owed in excess of $50,000, taxpayers will need to still follow previous procedures which includes producing financial documentation.

Fresh Start also streamlines the process for Offer in Compromise (OIC). This is an agreement in which the IRS determines that the amount owed is more than the person or company has the ability to pay. They have tried to minimize and streamline the process and what is needed in order to complete IOCs easier and quicker.

While the Fresh Start adjustments have certainly helped to make it easier for both parties, it’s still wise to ensure your best interests are being covered. The Fresh Start process simplifies the process, but it doesn’t change that the primary goal of the IRS is to get as much money as possible from you or your company. The processes are improved and more user friendly, but their primary goal is still collections.

Our team of specialists can help you make the most of Fresh Start

It’s critical that if you are going to use this program that you are educated and prepared. An easier process doesn’t equate to you paying less money. Study your potential options and how it’s best to approach each one. It may not be as critical small amounts, but for large payments, not knowing can cost a lot of money.

It is always best to consult a professional to see what options are available. Attorneys that specialize in tax law will be your best resource. Taking time to meet with one could pay off in a big way. The new Fresh Start changes will make the process go faster, which can save you money with an attorney as well. With the IRS watching out for their own interests, having an attorney looking out for yours definitely worth it.

Don’t let the IRS bully you! Get someone on your side to help.

The IRS has been called a lot of things, but here’s a one that might surprise people: creative. Being creative is certainly a trait that many people strive to have, but unfortunately it’s not a positive when the IRS is using it against you. It’s becoming more and more common for the IRS to use creative tactics to negatively impact people’s lives. Even more unfortunate is that many of these people are innocent.

A classic example of their tactics is how they have used the Civil Asset Forfeiture Reform Act of 2000. In short, this act was created to give the IRS power to attack people or companies that were deliberately bypassing different procedures and policies. Banks are required to report deposits over $10,000 to the IRS, so criminals and people wanting to hide income usually make multiple deposits in lesser amounts. They may go so far as to make numerous deposits every day to avoid being reported. The Civil Asset Forfeiture Reform Act of 2000 gives the IRS the authority to seize the money in accounts where they suspect this is occurring.

How does the Civil Asset Forfeiture Reform Act of 2000 affect me?

It makes sense to give a federal agency the power to stop people deliberately deceiving them. Sadly, the IRS has also found ways to use this as a means to take money from innocent victims. There are countless accounts of the IRS seizing innocent people’s accounts that appear suspicious. There may be cases of completely innocent people inadvertently ending up getting their bank accounts seized.

To make matters worse, the IRS has been accused of refusing to correct these mistaken seizures. There are countless cases where the IRS has acknowledged the money they seized is from innocent people, and yet they refuse to return the funds. There’s the army sergeant who was saving for his daughter’s college fund and the small business making deposits to avoid having large amounts of cash on hand. Both were making deposits for legitimate reasons. The IRS even has the audacity to offer a compromise to return part of the seized money while attempting to keep a portion.

Innocent law-abiding citizens can be victims of IRS policing tactics

These are only a small sample of the tactics the IRS uses. There are countless other examples that are so extreme they are hard to believe. There are cases of agents barging into a home and trying to intimidate people. This is the kind of behavior you’d expect in a cheesy spy movie, not in real life or from the IRS. In another case, a small business owner was forced to deal with issues for five years and ultimately lost his business. The entire issue was caused by errors from the IRS agent. The business owner’s fight resulted in him spending over $100,000 and enlisting a congressman to fight for him. Despite all this, he still lost his business and was forced to declare bankruptcy.

If you find yourself at odds with the IRS, it’s critical to get legal aid as quickly as possible. It might be tempting to try to save money and face them alone, but the IRS has shown they will try anything. You need someone qualified on your side. Getting help from a certified tax attorney early in the process could save you a lot of money in the long run.

Getting the right tax attorney early can save a lot of money down the road.

Why is having a tax lawyer important when the IRS is auditing you?

Facing an audit from the Internal Revenue Service can seem overwhelming. Tariff laws are extremely complicated and filled with loopholes. The challenge is that they are loaded with potential pitfalls that can get you or your business in trouble. The IRS doesn’t care if it was an honest mistake or not. They will come after you and are notorious for using aggressive and unethical tactics to get money. Having an expense attorney on your side will make sure you are protected against these revenue service tactics and that someone is watching out for your best interests against unfair audits. Tariff laws can also vary from state to state so having a tax attorney can help make sure you are following the right rules. If you are living in Utah, hiring an attorney like Jordan Wilcox that knows and understands tax laws can help make sure you pay the lowest possible amount.

What are some common expense pitfalls businesses and individuals commonly make?

Rushing or not paying attention to detail is one of the most common expense pitfalls for both personal and businesses. Simple math errors or inputting the wrong numbers is extremely common, which can lead to big issues and unfair audits. Even if errors are simple, honest mistakes the federal tax will still come after you for payment so take the extra time and double check your work as you go. Overstating deductions is another common error that will catch the IRS’ attention. Failing to hire a tax attorney at the first sign of trouble is another common mistake that can wind up costing you far more in the long run and can cause unnecessary audits. Regardless if they are personal or business taxes, Internal Revenue Service’s closely monitor for signs of excessive deductions on tax returns. It’s also wise to make sure to keep detailed records so if the IRS chooses to audit you it will be easier to prove your case. Hiring an expense lawyer will help you avoid these and other common auditing problems.

What are the tactics of the Internal Revenue Service’s that they will use against you?

The IRS is infamous for using many different techniques to get people to pay what they deem is owed. Intimidation is one of the most common methods used by the IRS. Dealing with intimidation is one reason hiring the right lawyer is extremely important. Tax attorneys are experienced in standing up to the IRS. In some cases, these revenue services will go even farther and try some more unethical methods such as lying and making threats. They can make unfair auditing claims.