Posts Tagged ‘collection’

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Three Timely Tips for Couples in Crisis

Monday, April 12th, 2010

Numerous studies show that the money problems are the #1 source of arguments in marriage. Credit debt, loss of a job, unforeseen expenses – you name it…all can be stressful on a marriage.  But if you toss IRS problem into the mix, you may have a recipe for disaster.

The IRS has more far-reaching power than any collection agency could ever have.  No other entity has the power to dip into a bank account, garnish wages, seize property, put a lien on a house…and possibly put those found of tax evasion in jail.  So if money problems cause arguments, IRS problems can cause absolute fallout.

Of course, if divorce follows as a result, it introduces another whole host of problems emotionally and financially.  Not to mention the damaging effects that marital problems and divorce has on children.

Here are 3 Timely Tips for Couples in Crises:

1. If you can’t afford to pay your taxes, file anyway: it’s not a crime to owe the IRS money.  However, failing to file is considered tax evasion and is punishable by jail time.

2. Choose the right professional to help you: accountants are trained in tax preparation, not IRS problems.  An experienced attorney who deals with IRS Problems can negotiate a lessening of IRS penalties, negotiate payment agreements and will represent clients before the IRS without their presence.

3. Know Your Options: there are legal ways to negotiate with the IRS, including being declared Non-Collectible, an Offer-In-Compromise, a monthly installment agreement plan, a partial installment agreement and bankruptcy.  All of these options have their pros and cons.

If you are in trouble with the IRS, you owe it to yourself, your spouse, and your children to put and end to the worry and stress and get on with your life.

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Posted in IRS Education | 3 Comments »

What to Do If the IRS Starts Garnishing Your Paycheck

Monday, April 5th, 2010

The most financially-catastrophic IRS debt collection method is on the rise. In 2006, the IRS reported 3,742,276 levies (garnishments), 629,813 liens, and 590 seizures. Garnishments show a 36% increase over the years 2005 and an 84% increase over 2004.

As opposed to liens and seizures – which are limited in their effectiveness – garnishing future income virtually guarantees that the IRS will get their money. While this is a “safe bet” for the IRS, it can be a financial nightmare for anyone who is unlucky enough to be at the receiving end.

The IRS will leave you very little in your paycheck to survive, and there’s a good chance that it won’t be enough to pay your bills. You may not be able to pay your car payment, house payment, minimum credit card payments, or other important monthly commitments.

There are 3 specific steps that must occur before a wage garnishment goes into place…

1) The IRS will send you a “Notice and Demand for Payment”

2) You neglect or refuse to pay the tax

3) The IRS sends you a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing” (levy notice) at least 30 days before the levy. They may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.

If you don’t act during this time, you’ll be headed straight into a potential financial disaster.

Remember, in the end, the IRS just wants their money. It makes more sense for them to come to a satisfactory installment agreement than to risk driving you into financial ruin through a garnishment.

By acting quickly, I may be able to get the IRS to drop the levy proceedings and work on an equitable solution.

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Posted in IRS Education | 3 Comments »

Temp Service In Jackson, TN Gets Rude Awakening

Wednesday, March 31st, 2010

If you think the worst thing the IRS can do is audit your business, you’re sadly mistaken.

Just ask Ethel Brooks, owner of Temp Owned Temporary Service in Jackson, TN.  On Tuesday 1/8/08, at 8:10 in the morning, IRS “CI” (Criminal Investigation) Agents jumped out of their black cars and SUV’s and blocked the front of her business.

Agents armed with guns and bullet-proof vests entered through both the back door and the front and removed two women from the building. One was immediately let go and the other had her car searched before being let go.

The business was closed for the day and by noon, agents were removing large plastic bags containing files.

Most people don’t know that the IRS has a special Criminal Investigation Unit and one of their main functions is to act as a fear tactic. I call them the “Men in Black”.

There are over 2,800 CI Agents worldwide who are trained to investigate criminal violations of the Internal Revenue Code.  CI’s Conviction Rate is one of the highest in federal law enforcement. In the fiscal year 2006, of the 2,720 people that CI recommended for jail time, 82% were sent to prison.

As you can see, if the “Men in Black” show up at your door, they mean business.

If you own a business and you haven’t filed your taxes, you’re tempting the IRS to place you under criminal investigation status and you’re risking a visit from the “Men in Black”.

If you believe you are at risk, the first thing you need to do is file your taxes, regardless of how much you owe.  Call a tax professional to help you.  Even if it’s been years since you’ve filed – it doesn’t matter.

Regardless of how bad you think your situation is, things can be worked out. By working with an IRS Relief Specialist, there’s a good chance that you’ll never even have to talk to the IRS and we may be able to negotiate a lowering of the taxes and/or the penalties that you owe.

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Posted in Newsworthy | 5 Comments »

What You Never Want To Have In Common With Will Smith

Monday, March 15th, 2010

In 2006, Will Smith starred in a movie called “The Pursuit of Happyness” – a true story about Chris Gardner, a man with a 5-year old son who ends up homeless on the streets of San Francisco.

Smith was nominated for an Academy Award and a Golden Globe Award for his part in this inspiring film, which tells with an unblinking eye the real-life story of a man’s struggle with a string of back luck coupled with questionable decisions.

One of the most poignant moments in the film is when Gardner (played by Smith), after being evicted from his apartment, finally sells one of the expensive pieces of medical equipment for which he and his former girlfriend had spent their life savings.

This breakthrough sale allows him to continue to pay for the hotel room where he and his son had been living…or so he thought. His joy quickly turns to horror as he realizes that the IRS has levied his bank account to satisfy a tax debt from the previous year.

As Smith’s character scrambles to call the IRS from a pay phone, he exclaims incredulously “You Can’t Do That!” Those are words that I hope you never have to say to the IRS.

You can hear the utter disbelief in his voice that any government agency could actually “hijack” a person’s bank account and take their money at will.

But that’s exactly what the IRS has the power to do – legally…

According to the IRS website,

“We usually levy only after these three requirements are met:

  • We assessed the tax and sent you a Notice and Demand for Payment;
  • You neglected or refused to pay the tax; and
  • We sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. We may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.”

The last thing you want to do is just sit there “frozen”, not knowing what to do once you receive a “Notice and Demand for Payment” or worse, a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing”. If you’ve received either of these notices, the clock is ticking.

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Posted in IRS Education | No Comments »

Couple Sentenced on Conspiracy and Tax Evasion Charges

Saturday, March 13th, 2010

On November 16, 2006, in Erie, PA, Ronald J. and Carol A. Kapala were sentenced for conspiring to defraud the United States by impeding and impairing the lawful functions of the Internal Revenue Service.  Ronald Kapala was sentenced to 30 months in prison to be followed by three years of supervised release and ordered to pay a $100 assessment.   Carol Kapala was sentenced to three years probation and ordered to pay a $300 assessment.  According to the indictment, the Kapalas failed to file income tax returns from 1990 through 1998 and 2002 through 2004; attempted to conceal their construction business activity through the use of nominee names; disguised ownership of assets by transferring them out of their names; formed a bogus tax-exempt religious organization for the construction business in the name “Mission Builders,” and made fraudulent claims with the IRS concerning their obligation to pay federal income taxes.

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Posted in Collection Nightmares | No Comments »

The Secret to Overcoming Fear of the IRS

Tuesday, March 9th, 2010

Ambrose Redmoon once said:

“Courage is not the absence of fear, but rather the judgment that something else is more important than fear.”

I understand that the IRS scares the pants off most people. That’s by design. The government wants you to fear the IRS and not be tempted to be lazy in paying your taxes.

But you cannot let fear of the IRS cause you to procrastinate or take the “head in the sand” approach.

The IRS is fully prepared and willing to use every collection method in the book to get their money once they’ve figured out that you owe them, including:

- Liens

- Wage Garnishment

- Seizure of bank accounts

- Seizure (and auctioning off) personal property

- Imprisonment

When you have the courage to stand up and face your problem, you have made the judgment that something else is more important than fear, like:

- Living a normal life where you are able to breathe easy, sleep at night, and not spend it looking over your shoulder wondering when the IRS is going to “jump out of the bushes”

- Knowing that you have the freedom to pursue your personal dreams & goals without the pressure hanging over your head that someday you’re going to have to “pay the piper”

- Keeping your marriage together without the burden of wondering if “today’s going to be the day” when the IRS finally catches up to you and throws a major wrench into your life

- Saving for the kid’s college, retirement, and other long-term goals without the worry that the IRS is going to come in and take it all out from under you

I’m not going to paint some rosy picture that facing up to your IRS problem and working out a solution is going to be pleasant.

But you must consider the alternative…

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Posted in IRS Education | No Comments »

How much can the IRS actually take out of my paycheck?

Tuesday, March 2nd, 2010

In wage garnishment situations, the IRS has a table that they refer to (IRS Publication 1494) – that determines how much money they will leave in your paycheck per week. Many people believe that the IRS takes a certain percentage of your pay, which is simply not true.

The only factors that determine how much of your paycheck is left over for you and your family after a garnishment is your marital status, the number of exemptions that you claim and whether you’re 65 years old and/or blind.

For example, if you’re married and you file a joint return and claim 2 tax exemptions, the IRS will allow you to keep $336.54, regardless of how much you earn. It makes no difference if you make $500/week or $5000/week. You take home $336.54 and the IRS keeps the rest until your tax debt is paid off.

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Posted in Common Questions | 4 Comments »

IRS Creates New Task Force to Target the Super-Rich

Sunday, February 28th, 2010

IRS Commissioner Doug Shulman announced Monday, October 26th, 2009, that a new “task force” has now been setup to help the Internal Revenue Service decode the complex offshore trusts, partnerships, and other complicated techniques used by the super-wealthy to evade taxes.

The “Global High Wealth Industry Group” will first set out to audit individuals with net assets or income in the tens of millions of dollars, says Shulman.

“You cannot assess compliance among the nation’s wealthiest individuals by looking only at their 1040s [tax returns],” Mr. Shulman said.

“Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise.”

This comes on the heels of Congress’ announcement of the  Foreign Account Tax Compliance Act, aimed to force overseas finance companies to divulge   information about U.S. account holders.

President Obama and Treasury Secretary Timothy Geithner both spoke in support of the measure, “For too long, individuals have taken advantage of the system by hiding money in accounts overseas, while millions of families and small businesses here at home pay the price,” Geithner said in a prepared statement.

“This legislation will reduce the amount of taxes lost through the illegal use of hidden accounts and is the next step in making sure that everyone pays their fair share.”

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Posted in Newsworthy | 15 Comments »

Is it Possible to be Declared “Non-Collectible” Indefinitely?

Friday, February 26th, 2010

Being declared “Currently Non-Collectible” means that the IRS considers that your current financial situation makes it impossible for you to pay your taxes and they determine that they cannot collect the money from you…at least not for now.

So, in other words, being declared CNC is a potential short-term fix to your IRS problem. But, in the end, you may still have to pay the taxes you owe (plus penalties and interest) once you start making more money.

This assumes that someday you’ll be making more money than you’re making now…

The interesting thing about being declared Currently Non-Collectible is that it can last indefinitely.

If the IRS monitors your future W-2’s and sees that your income has not increased by 15%-20%, your Non-Collectible Status stays “current”.

The IRS usually gives you some breathing room and reevaluates your situation after 18-24 months. If by that time you’re showing positive cash flow, you may be put on a payment plan.

However, if you are declared CNC, it doesn’t get you off the hook for paying your taxes in future years. In other words, if you’re declared to be Currently Non-Collectible for the taxes due for years 2004-2006, you will still owe the taxes due for the year 2007, 2008 and so on.

In fact, you must pay these future taxes in full and on time or you’ll blow it big time. If you neglect to pay your taxes for future years, or worse – you don’t file…the whole CNC deal is off.

If this happens, the IRS will come after all of the money you owe them, and they may use garnishments, levies, seizures, liens and all of the “nasty” tactics at their disposal to get their money.

If you’re thinking “man, that sounds like it’s for me…I’m so broke it’s a joke. Surely I’ll be declared non-collectible”…don’t rush to the phone to call the IRS just yet.

You see, what you list to the IRS as being “ordinary and necessary living expenses” – causing you not to be able to pay…may not jive with what the IRS considers “ordinary and necessary”.

And guess who has the last word? The IRS, of course.

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Posted in Common Questions | 31 Comments »

Wesley Snipes Roams Free As 3-Year Tax Evasion Sentence Appealed

Tuesday, February 23rd, 2010

Know where your favorite tax evading actors are hanging out these days?  In Wesley Snipes case, you might think after being sentenced to 3 years for tax evasion, Snipes might be wearing stripes behind bars.

But that’s certainly not the case.

Snipes was seen September 9, 2009, attending a screening featuring his latest starring role—playing opposite Richard Gere, Don Cheadle and Ethan Hawke in a movie called “Brooklyn’s Finest”.

He looked quite chipper—quite a different look than he had back in April when he was convicted of three counts of willfully failing to file tax returns, and was sentenced to 3 years in prison, and ordered to pay restitution of $17 Million plus interest. So far, Snipes has avoided jail time by appealing to the 11th Circuit Court of Appeals.

His attorney is arguing the trial was improper and the sentence too long. Snipes claims he was an innocent bystander of a pure trust scam, not a participant.

So far he hasn’t shown much remorse about his situation and has claimed that he’s been “scapegoated” somehow by the U.S. government “because there’s more public interest in ‘celebrities gone bad’ than ‘rich people being taken advantage of ‘”.

He says it “has more to do with a few individuals with access to power, making moves; trying to move up; and less with some alleged crime against the whole population of the United States of America”.

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Posted in Newsworthy | No Comments »

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