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Payroll Tax Problems 941 / 940 – Unpaid employment tax relief

The 941 Payroll Tax problem is businesses’ tax problem concerning their payroll. Before understanding what a 941 payroll tax problem is, it is important to know what it is. There are three (3) main types of taxes falling under the category of payroll taxes. First is the regular income tax that must be withheld from the business’ employees’ wages or salaries. Second is the Federal Insurance Contribution Act (FICA), which is a contribution to the Social Security and Medicare. The third is the Federal Unemployment Tax (FUTA).

The first is commonly known as the withholding taxes from employees which will appear in their individual pay vouchers or pay slips. The amount of taxes withheld is dependent upon the earnings of an individual employee, exemptions and deductions and basically based on their individual returns and calculation. An error in the deduction is considered a 941 payroll tax problem. On the second tax, Employers are required to withhold from the employees 7.65 percent of the first $62,700 income and match that amount so that the total FICA contribution will be equivalent to 15.3 percent. Again erroneous calculation of the percentage amount will fall as a 941 payroll tax problem. If you are a Self-employed persons, you have to should both or the entire FICA tax. The FUTA tax is solely paid by the employer equivalent to approximately 1 percent of the first $7,000 wages of an employee.

So aside from withholding payroll taxes for employees, employers must remit these taxes to the IRS on prescribed periods and manner, failure on their part to remit or errors in the manner of remittance is another payroll tax problem. The income taxes withheld from employees payroll and the employees’ portion of the FICA taxes that are also withheld from their pay every pay period must be remitted to the IRS monthly together with the Federal Tax Deposit Coupon (Form 8109-B). However, if the total amount withheld is less than $500, the employer taxpayer may make the payments quarterly. Employers must also file four different reports regarding payroll taxes. The first report is the Employer’s Quarterly Federal Tax Return made under Form 941 providing thereon the number of employees in the payroll, the amount of wages they were paid, and the amount of taxes that were withheld for the quarter. Therefore, the business-taxpayer had to prepare a payroll, deduct employees’ taxes, remit the deduction to the IRS and make a report of these facts in Form 941. All tax problems arising and related to Form 941 is what we refer to as the 941 payroll tax problem.

On top of the monthly and quarterly activities explained above, the employer taxpayer must file the other three reports annually. Form W-2 which is the Annual Statement of Taxes Withheld must also be sent to the Social Security Administration. The third report under Form W-3 which must be sent to the IRS by February 28 of the following year provides a formal reconciliation of the quarterly tax payments under Form 941 and the annual totals reported on Form W-2 for all employees. The fourth and last report which is the Federal Unemployment Tax Return, Form 940, outlines the total FUTA taxes owed and paid for the year.

The money involved which are in the possession of the employer’s taxpayer are in reality not their money but the money of the IRS, FICA and FUTA mostly coming from the employees in the form of withholding tax. They are in possession of the tax money they are holding in trust or as they call it Trust Tax, or Trust Funds. Failure to remit the collected FICA and the IRS is considered as theft as it is the taking of somebody else’s money. In other countries, this is considered as Estafa which is considered also as a Criminal Offense and for this reason, the IRS speeds up the process in running after and recovering from the employer taxpayer the money robbed and stolen. Payroll Tax problems are not only about non-remittance to the IRS of the deducted taxes, it also includes erroneous deduction of withholding tax, erroneous reporting of the amount, the IRS number, the employees’ name and anything and everything about payroll. Payroll tax problems are often causes of business collapse or what usually brings down a profitable newly established business as well as small and medium size businesses, the very reason why a department is usually created in a company or business just to deal with Payroll Tax Reporting.

Mike Habib, EA is a tax relief expert and represents employers with payroll tax problems before all administrative levels of the IRS. We are A+ Rated by the Better Business Bureau, and licensed to represent employers in all 50 states. Call us today at 1-877-78-TAXES (877-788-2937).

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Tax Relief – Get tax debt relief today

Reasonable Cause/Good Faith Defense: Even if the taxpayer did not have substantial authority for a position and failed to make adequate disclosure, the substantial understatement penalty does not apply if the taxpayer had reasonable cause for the tax underpayment and acted in good faith [IRC Sec. 6664(c); Reg. 1.6664-4]. This defense is applied on a “facts and circumstances” basis [Reg. 1.6664-4(b)]. However, the key factor seems to be whether the taxpayer made a reasonably energetic attempt to determine the correct tax liability. For example, an honest misunderstanding of fact or law, an isolated computational error, reliance on professional tax advice, or reliance on information returns all indicate reasonable cause/good faith. However, if the taxpayer should have known better, the defense will not apply.
Observation: According to IRM 20.1.5.6, the most important factor in determining whether the taxpayer has reasonable cause and acted in good faith is the extent of the taxpayer’s effort to report the proper tax liability. For example, reliance on erroneous information reported on an information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. Similarly, an isolated computational or transcription error may indicate reasonable cause and good faith. Other factors to consider are the taxpayer’s experience, knowledge, sophistication, education, mental and physical condition, and reliance on the advice of a tax advisor.

Reg. 1.6664-4(c) discusses when a taxpayer is considered to have reasonably relied in good faith upon someone else’s advice (including that of a professional tax advisor). According to the regulation, meeting the following requirements, while not guaranteeing that the accuracy-related penalty will be avoided, tends to indicate that the “reasonable reliance” and “good faith” aspects have been met:
a. The advice must be based on all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayer’s purposes (and the relative weight of such purposes) for entering into a transaction and for structuring a transaction in a particular manner.
b. The taxpayer must inform the adviser of all facts that are known, or should be known, to be relevant to the proper tax treatment of an item.
c. The advice must not be based on unreasonable factual or legal assumptions (including assumptions about future events) and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption that the taxpayer knows, or has reason to know, is unlikely to be true, such as the taxpayer’s purposes for entering into a transaction.
d. Reliance on the adviser may not be reasonable or in good faith if the taxpayer knew, or should have known, that the adviser lacked knowledge in the relevant aspects of federal tax law.

When taxpayers reasonably relied on the advice of an expert concerning a sham investment, the 5th Circuit Court held that the reasonable cause defense applied and stated that the taxpayers were not required to challenge the expert, seek a second opinion, or try to monitor the expert on the provisions of the Code. To require otherwise would nullify the purpose of seeking expert advice (Chamberlain).

Our firm represents taxpayers before all administrative levels of the IRS in all 50 states, get tax relief today by calling 1-877-78-TAXES (877-788-2937). Also online at http://www.myirstaxrelief.com

We provide tax relief services in all 50 states including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.

Keywords: tax relief, tax problems, tax attorney, tax debt, tax lawyer, tax problem, tax resolution, irs tax problem, irs tax problems, irs tax relief, tax debt relief, payroll tax problems, tax problem resolution, irs tax audit, resolving tax problems, irs tax audit penalty abatement, tax resolution firm, payroll tax problem, irs tax help

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CALIFORNIA FRANCHISE TAX BOARD

CA RESIDENCY RULES & AUDIT

RESIDENCY LAWS, TERMS, AND RESIDENCY CONCEPTS

DEFINITION OF RESIDENT

R&TC Section 17014(a) defines “resident” as:

  • Every individual who is in this state for other than a temporary or transitory purpose;
  • Every individual domiciled in this state who is outside the state for a temporary or transitory purpose.

Under this definition, an individual may be a resident of California although not domiciled in California, and, conversely, may be domiciled in California without being a resident of California. Residency determines what income is taxable by California (CCR Section 17014).

The theory behind California residency law is to define the class of individuals who should contribute to the support of this state (CCR Section 17014).

R&TC Section 17014(b) provides a special rule for certain United States Government
officials and their spouses. If those individuals have a California domicile, we will consider their absences from this state as temporary or transitory. They remain California residents.

This rule applies to the following persons:

  • Any elected U.S. official.
  • Anyone on the staff of a member of the U.S. Congress.
  • Any presidential appointee, subject to Senate confirmation, other than military and Foreign Service career appointees.

R&TC Section 17014(c) provides that any individual who is a resident of California remains a resident even though temporarily absent.

TEMPORARY OR TRANSITORY PURPOSE

CCR Section 17014(b) provides a detailed discussion of the meaning of “temporary or
transitory purpose.” According to this regulation, the determination of whether or not an
individual is in this state for temporary or transitory purposes depends to a large extent upon the facts and circumstances of each particular case. Generally, we consider an individual to be in California for a temporary or transitory purpose, and therefore a nonresident of California, if he or she is:

  • Simply passing through this state.
  • Here for a brief rest.
  • Here for a vacation.
  • Here for a short period to complete a particular transaction, perform a particular contract, or perform a particular engagement.

Example 1

James and Janice are domiciled in Minnesota where they have maintained their family home for seven years. James works for a state agency in Minnesota. In October 2005, James took a six-month leave of absence to become a temporary consultant for a California company. James and Janice moved to Los Angeles, CA in October 2005, where they rented an apartment and opened a checking account. Their home in Minnesota was left vacant and they retained their Minnesota bank accounts. They stayed in California from October 2005, to April 2006, and returned to Minnesota in April 2006.

Determination:

James and Janice were in California for a short period in order for James to complete a
particular engagement as a temporary consultant. James and Janice are nonresidents of
California because they were in California for a temporary or transitory purpose.

An individual will be considered to be in California for other than temporary or transitory
purposes, and therefore a California resident, if he or she is in this state:

  • To recuperate from injury or illness for a relatively long or indefinite period.
  • For a business purpose which will require a long or indefinite period to accomplish.
  • For employment in a position that may last permanently or indefinitely.
  • For retirement with no definite intention of leaving shortly.

Example 2

Bob is domiciled in Ohio and has lived there for 50 years. Two years ago Bob developed a serious medical condition. His doctor told him to live in California until he recovers. The illness may last for several years. Bob took his doctor’s advice and moved to California two years ago.

Determination:

Bob is in California for an indefinite period in order to recuperate from an illness. He is a
California resident because his stay in California is not for a temporary or transitory purpose.

CCR Section 17014(b) provides that the state with which a person has the closest
connections during the taxable year is the person’s state of residence. In the Appeal of
Richard L. and Kathleen K. Hardman, 1975-SBE-052, August 19, 1975, the Board of
Equalization held that the connections which a taxpayer maintains in this and other states are important objective indications of whether presence in or absence from California is for a temporary or transitory purpose.

In the Appeal of Stephen D. Bragg 2003-SBE-002, May 28, 2003, the Board of Equalization included the following list of factors which, while not exhaustive, inform taxpayers of the type and nature of connections the Board of Equalization and the Franchise Tax Board find informative when determining residency:

  • The location of all of the taxpayer’s residential real property, and the approximate sizes and values of each of the residences.
  • The state wherein the taxpayer’s spouse and children reside.
  • The state wherein the taxpayer’s children attend school.
  • The state wherein the taxpayer claims the homeowner’s property tax exemption on a residence.
  • The taxpayer’s telephone records (i.e., the origination point of taxpayer’s telephone calls).
  • The number of days the taxpayer spends in California versus the number of days the
  • taxpayer spends in other states, and the general purpose of such days (i.e., vacation, business, etc.).
  • The location where the taxpayer files his tax returns, both federal and state, and the state of residence claimed by the taxpayer on such returns.
  • The location of the taxpayer’s bank and savings accounts.
  • The origination point of the taxpayer’s checking account transactions and credit card transactions.
  • The state wherein the taxpayer maintains memberships in social, religious, and professional organizations.
  • The state wherein the taxpayer registers his automobiles.
  • The state wherein the taxpayer maintains a driver’s license.
  • The state wherein the taxpayer maintains voter registration and the taxpayer’s voting participation history.
  • The state wherein the taxpayer obtains professional services, such as doctors, dentists, accountants, and attorneys.
  • The state wherein the taxpayer is employed.
  • The state wherein the taxpayer maintains or owns business interests.
  • The state wherein the taxpayer holds a professional license or licenses.
  • The state wherein the taxpayer owns investment real property.
  • The indications in affidavits from various individuals discussing the taxpayer’s residency.

It is particularly relevant to determine whether the taxpayer substantially severed his or her California connections upon departure and took steps to establish significant connections with the new place of abode. It is also necessary to determine whether the connections in California were maintained in readiness for his or her return. See the Appeal of Richard L. and Kathleen K. Hardman, supra.

Whether a person was in California for other than a temporary or transitory purpose must be determined by examining all of the facts. Mere formalisms such as changing voting registration to another state or statements to the effect that the taxpayer intended to be a resident of another state are not controlling. See the Appeal of Tyrus R. Cobb, 1959-SBE-014, March 26, 1959.

Note that retention of some contacts such as bank accounts and a driver’s license may only be a reflection of the taxpayer’s past and may not be inconsistent with an absence for other than temporary or transitory purposes. See the Appeal of Richard L. and Kathleen K. Hardman, supra.

SEASONAL VISITORS, TOURISTS, AND GUESTS

CCR Section 17014(b) provides that an individual whose presence in California does not
exceed an aggregate of six months within a taxable year and who is domiciled without the state and maintains a permanent abode at the place of his domicile will be considered as being in this state for temporary or transitory purposes. However, he or she must not engage in any activity or conduct within this state other than that of a seasonal visitor, tourist, or guest.

The following connections with California will not, by themselves, cause a seasonal visitor, tourist, or guest to lose his or her status as such:

  • Owning or maintaining a home.
  • Opening a bank account for paying personal expenses.
  • Having membership in local social clubs.

Example 1

Bill and Sue lived and worked in North Dakota for 20 years until their retirement in the
summer of 2005. Beginning the winter of 2005, Bill and Sue spend four months each year in California. They spend the remaining eight months in North Dakota. While in North Dakota, they live in a home they have owned since 1995. They hold valid North Dakota driver’s licenses, are registered to vote in North Dakota, and maintain North Dakota bank accounts.

Bill and Sue also own a California home, which they use while in California. They also
opened a California checking account for their personal expenses and are members of a
California country club. While in California, they do not engage in any California business
activities.

Determination:

Bill and Sue are considered to be seasonal visitors, in California for temporary or transitory purposes. Therefore, they are nonresidents of California.

PRESUMPTION OF RESIDENCE

R&TC Section 17016 states: “Every individual who spends in the aggregate more than nine months of the taxable year within this state shall be presumed to be a resident. The presumption may be overcome by satisfactory evidence that the individual is in the state for a temporary or transitory purpose.”

Note that R&TC Section 17016 merely provides a presumption of residence. The
presumption can be overcome. For example, in the Appeal of Edgar Montillion Woolley,
1951-SBE-005, July 19, 1951, the Board of Equalization ruled that the taxpayer was in
California for a temporary or transitory purpose even though he was in California for more that nine months during the year. The decision was based on the fact that during his stay in California, Mr. Woolley lived in a hotel on a weekly basis and his departure was delayed because of illness and a studio strike.

CCR Section 17016 provides that presence within California for less than nine months does not constitute a presumption of nonresidency. On the contrary, a person may be a California resident even though not in this state during any portion of the year.

DEFINITION OF DOMICILE

Domicile is an integral part of the definition of resident. An individual domiciled in California and absent from the state for a temporary or transitory purpose is considered to be a California resident. An individual’s domicile also determines whether income received by a husband or wife is community or separate income.

CCR Regulations Section 17014(c) defines the term “domicile” as the place where an
individual has his or her true, fixed, permanent home and principal establishment. It is the place to which, whenever absent, he or she has the intention of returning. It is the place in which a person has voluntarily fixed his or her habitation and the habitation of his or her family. It is the place where a person has the present intention of making a permanent home, until some unexpected event shall occur to induce him or her to adopt another. It is not a place where a person is living for a mere special or limited purpose.

As stated by the California Court of Appeal, “domicile” is the one location with which, for
legal purposes, a person is considered to have the most settled and permanent connection.

It is the place where they intend to remain and to which, whenever they are absent, they have the intention of returning. See Whittell v. Franchise Tax Board, 231 Cal.App.2d 278 (1964).

An individual can have only one domicile at a time. If an individual has acquired a domicile at one place, the individual retains that domicile until another is acquired elsewhere.

A California domiciliary leaving the state retains his or her California domicile as long as he or she has the definite intention of returning here. This is true regardless of the length or reason of the absence. An individual domiciled in California who leaves the state loses his or her California domicile at the moment he or she abandons any intention of returning to California and locates elsewhere with the intention of remaining there indefinitely.

The concept of domicile involves not only physical presence in a particular place, but also the intention to make that place one’s home. See the Appeal of Anthony J. and Ann S. D’Eustachio, 1985-SBE-040, May 8, 1985.

In order to change one’s domicile, a person must actually move to a new residence and
intend to remain there permanently or indefinitely. See Noble v. Franchise Tax Board 118 Cal.App. 4th 560 (2004).

The burden of proving the acquisition of a new domicile is on the person asserting that
domicile has been changed. See the Appeal of Frank J. Milos, 1984-SBE-042, February 28, 1984.

Adam, who is domiciled in Illinois, comes to California on business, but intends to return to Illinois as soon as his business in California is completed. He maintains a California home while in California and stays in California for 11 months.

Determination:

Adam retains his Illinois domicile. His stay in California is for a limited purpose.

Example 2

Mark moved from Alaska to California in October 2000, to begin a permanent job. He sold his home in Alaska and purchased a home in California. He moved all his personal
belongings to California, opened a California bank account, and obtained a California driver’s license. He has no intention of returning to Alaska.

Determination:

Mark became a California domiciliary in October 2000, when he moved to California. He
came to California with the intention to remain here indefinitely with no fixed intention of
returning to Alaska.

Example 3

Allen and his wife Ellen were both born and raised in California. Upon graduation from a
California college, Allen obtained employment in Los Angeles, CA. In 1999, Allen was sent to France for a one-year assignment. Ellen remained at their home in California with their two children. While in France, Allen rented an apartment and joined a local soccer league. He returned to California in 2000.

Determination:

Allen remained a California domiciliary during his absence. He did not sever his ties with
California and the ties established with France did not show that he intended to remain
there permanently.

DOMICILE V RESIDENCY

Domicile and residency are not synonymous. California distinguishes them as two separate concepts. For income tax purposes, residency determines what income is taxable to California. Domicile is an important component of residency and determines whether income is split between spouses.

Domicile is the place where an individual has his or her true, fixed, permanent home and
principal establishment (CCR Regulations Section 17014(c)). Domicile requires both physical presence in a particular locality and the intent to make this locality one’s permanent abode.

Residence is any factual place of abode of some permanency that is more than a mere
temporary sojourn. See Whittell v. Franchise Tax Board, 231 Cal.App.2d 278 (1964).
An individual can have only one domicile at any given time, but can have several
residences. See Whittell v. Franchise Tax Board, supra.

The key distinction between domicile and residency is intent. A new domicile is acquired by the actual change of residence in a new place of abode, coupled with the intention to remain there either permanently or indefinitely without any fixed or certain purpose to return to the former place of abode. (Appeal of Robert J. and Kyung Y. Olsen, 1908-SBE-134, October 28, 1980.) A determination of residence cannot be based solely upon the declared intention of the parties, but must have its basis in objective facts. (Appeal of Nathan H. and Julia M. Juran, 1968-SBE-004, January 8, 1968.) In determining residency, voluntary physical presence is a factor of greater significance than the mental intent or outward formalities of ties to another state. See Whittell v. Franchise Tax Board, supra.

Frequently, a person’s domicile and residence are the same physical location. See Whittell v. Franchise Tax Board supra. However, a person’s domicile and residence may not be the same. See the Appeal of Warren L. and Marlys Christianson, 1972-SBE-022, July 31, 1972.

An individual may be a resident although not domiciled in this state and, conversely, may be domiciled in this state without being a resident. (CCR Section 17014 and the Appeal of Terance and Brenda Harrison, 1985-SBE-059, June 25, 1985.)

Keywords: CA FTB Tax Help, CA Residency rules, CA residency audit, CA non residency, CA FTB Audit, CA FTB Appeal
Mike Habib, EA represents individuals and businesses before the State of California in all tax matters. You can reach Mike at 1-877-78-TAXES (877-788-2937).

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Having Unfiled Tax Returns and need Help?

Taxpayers with unfiled tax returns can invite a lot of problems. The famous IRS has coined ten years for the collection of taxes that are owed. If the return for owed taxes was filed ten years ago, the IRS will probably use the last address known to them. The government will not be able to maintain any contact if you have already left the country. But if by any chance, you return back within the ten years limit, this can be a big problem. If you start earning or start with any job, it will be very easy for the IRS to contact you and then you are in big trouble. They not only claim the unfiled tax returns but all of the fines interest and penalties that have accrued over the original payment are also asked for. If you have somehow not at all bothered to file the tax returns, it is very important for you to have all the documents necessary to file your tax returns. Having lower income or lots of medical bills will not make any difference. It could simply lead to the conclusion that you probably are left with no money at all to pay for the mortgages or even the regular bills.

If anyone finds himself stuck in such serious circumstances it is strongly suggested that services of an experienced tax relief professional be asked. Only they will be able to guide you properly as to what is required to be done. They will be able to sort through all of the back taxes of past years and negotiate with the IRS to make some reasonable solution. The help of tax relief expert can invite many days of annoyance, severe deadlines or some difficult and confusing forms to be handled on your own. The tax relief specialist, as a professional will do his best to help you deal with the situation and come out of it successfully. He will be spending most of his time to sort out the best interest of the client and find a solution.

The IRS keeps sending reminders to the clients if the tax returns are not filed on time. When unfiled returns become delinquent they will start becoming harsh. In severe cases they can even claim to levy the wages and assets of the taxpayers in the notices. In such situation the first thing that is required is to immediately file for your unfiled tax returns, regardless of the fact that you are not in a position to afford it. If you are unable to find the record of the returns of past years, such as W2’s. 1099’s, a098, etc., you can always count on your tax relief representative to obtain the detailed of your IRS record. There are not many individuals working in this sector and a lot of calls are received at their end, so it is expected that one may have to wait for their representative to get free for you. This may take up to few days in some cases.

By not filing your tax returns in time, the fault is at your part. It is strongly recommended that you should seek proper representation and get your life back in order.

Call today 1-877-78-Taxes (877-788-2937).

We represent taxpayers with back taxes and unfiled tax returns in all of the following states, counties, and metro cities, Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington D.C.. West Virginia Wisconsin Wyoming. AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY New York, Los Angeles, Orange County, Riverside, San Bernardino, San Francisco, Ventura, Lancaster, Palmdale, Santa Barbara, Chicago, Washington D. C., Silicon Valley, Philadelphia, Boston, Detroit, Dallas, Houston, Atlanta, Miami, Seattle, Phoenix, Minneapolis, Cleveland, San Diego, St Louis, Denver, San Juan, Tampa, Pittsburgh, Portland, Cincinnati, Sacramento, Kansas City, Milwaukee, Orlando, Indianapolis, San Antonio, Norfolk & VB, Las Vegas, Columbus, Charlotte, New Orleans, Salt Lake City, Greensboro, Austin, Nashville, Providence, Raleigh, Hartford, Buffalo, Memphis, West Palm Beach, Jacksonville, Rochester, Grand Rapids, Reno, Oklahoma City, Louisville, Richmond, Greenville, Dayton, Fresno, Birmingham, Honolulu, Albany, Tucson, Tulsa, Tempe, Syracuse, Omaha, Albuquerque, Knoxville, El Paso, Bakersfield, Allentown, Harrisburg, Scranton, Toledo, Baton Rouge, Youngstown, Springfield, Sarasota, Little Rock, Orlando, McAllen, Stockton, Charleston, Wichita, Mobile, Columbia, Colorado Springs, Fort Wayne, Daytona Beach, Lakeland, Johnson City, Lexington, Augusta, Melbourne, Lancaster, Chattanooga, Des Moines, Kalamazoo, Lansing, Modesto, Fort Myers, Jackson, Boise, Billings, Madison, Spokane, Montgomery, and Pensacola

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Back Taxes – How to get tax resolution

When one is undergoing financial problems and above all a number of tax bills that are due, the first thing that crosses ones mind is how to settle back taxes. Burden of tax debt is a complicated issue. This is so because if one does not pay the past due tax bills the amount keeps on doubling with time. Moreover, more interest and penalties are added to it. In the end, the rights of the taxpayer are no longer protected because then the tax collectors start intruding into person’s bank accounts and seizing all the property he has in his name. As each and every move is interlinked with the previous one which makes these back tax debts a complicated one. Thus, there is a dire need to settle back taxes and get peace of mind.

In order to settle tax debt a proper channel is required, that is, a legal tax relief representative such as an experienced Enrolled Agent can do a fine job in corresponding and negotiating with the IRS, or any tax agency. As it is seen, for every problem one needs to discuss the matter openly. Both parties look at their positive and negative points for each alternative resolution. Then a modified tax resolution is formulated which would be acceptable to both parties. This is how to settle back taxes.

Whenever a tax problem occurs both parties are eager for a resolution. Thus, settlement of taxes is easy to come by if negotiation is properly conducted. Once tax bills have piled up the first thing a taxpayer should do is hire a licensed tax relief representative as power of attorney. In the time being, the IRS notifications that the taxpayer is receiving, should not be ignored. It is essential for the taxpayer to keep the IRS informed that he is ready for a reasonable settlement. Otherwise, the time period for settlement would elapse, and major actions will be taken by the IRS like seizing the taxpayer’s property, levying their paycheck and levying all bank accounts. Thus, one should keep this always in mind as to how to settle back taxes because there is always a lot of margin for the taxpayer if one wants to look at it. There are a number of ways to settle back taxes which are as follows:

  • One way for settling IRS back taxes is to ask for a compromise, that is the original amount to be reduced to such which could be acceptable to both parties. The main objective of the taxpayer is to make the tax agency believe that a compromise is necessary otherwise his cost would be more than his savings so with compromised amount more can be paid.
  • Another popular method is of installment agreement. In this a small amount is paid every month on tax, interest and penalty which eventually totals into more bigger the amount with interest but this method is more convenient for taxpayers so they prefer this method.
  • A delay in payment can also be asked in how to settle back taxes. When the notifications are coming to the taxpayer he should respond by writing a letter or fax to the IRS and ask for extended time period for like 60 days. If more time is required the same procedure is followed.

Thus, the problem of back tax can be solved. An experienced Enrolled Agent tax relief professional is of great help during taxpayer representation and handling the settlement deal. Moreover, they can provide the taxpayer with better settlement than they could achieve on their own.

Mike Habib is a tax relief professional, an IRS licensed Enrolled Agent and represent taxpayers regarding back taxes in the following metro areas: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa

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Common Plan Mistakes – Hardship Distributions in a 401(k) Plan
The Problem

A 401(k) plan permits participants to receive hardship distributions. The distributions, however, do not satisfy the plan provisions relating to hardship distributions.

Example: George is the 100% owner of the George Company. The company sponsors a 401(k) plan which provides that a participant may take a distribution on account of hardship. The plan document requires that a participant may only receive a hardship distribution for the following reasons:

(1) to purchase a principal residence;
(2) to prevent eviction from, or foreclosure on, the principal residence;
(3) to pay certain medical expenses incurred by the participant, participant’s spouse, or dependents; and
(4) to pay certain educational expenses incurred by the participant, participant’s spouse, or dependents.

In addition, the plan document requires that the participant use all other sources of financing including proceeds from insurance, liquidation of other assets, and loans from other commercial sources before applying for a hardship distribution. Jim, a plan participant, asked for and received a hardship distribution of $20,000 from the plan. He did not provide a reason for the distribution and did not establish that he had used other sources of financing before applying for the hardship distribution.

Finding the Mistake

In order to find the mistake, review:

(a) the plan document to determine when distributions may occur;
(b) each plan distribution and its related documentation showing the reason for the distribution (e.g., distribution form signed by the participant indicating the reason for the distribution); and
(c) whether distributions designated as “hardship distributions” were made in accordance with the terms of the plan.

In the example above, Jim did not complete any distribution forms. The only documentation in the file was a note requesting a hardship distribution for $20,000. It was found that Jim used the money to buy a car. There was no evidence that he investigated other sources of financing.

This was an isolated instance. For each of the other hardship distribution requests, the participant was required to complete a distribution form. The distribution form required the participant to specify the purpose for the distribution (e.g., medical expense, education expense, purchase of residence) and to certify that other sources of financing (including insurance proceeds, disposition of other assets, or other loans) were not available to the participant. The distribution form was then submitted to the employer’s accountant, who evaluated the form before approving the hardship distribution to the participant. When Jim applied for a distribution, however, he went directly to George, who authorized payment without requiring Jim to complete the distribution form. Also, George was not familiar with the terms of the plan. As a result, he approved a distribution that did not comply with those terms.

Fixing the Mistake

The company should take reasonable steps to ensure that Jim returns the erroneously distributed amounts to the plan. Jim should also be advised that to the extent any amounts are not returned, they are not eligible for tax favored treatment (i.e., the amounts are not eligible for rollover to an IRA or other retirement plan). In addition, the plan’s administrative procedures should be revised to ensure that the error does not occur again. (See “Avoiding the Mistake” below.)

Correction Program(s) Available

The plan may use the correction programs described in Revenue Procedure 2006-27 to correct the mistake. If the plan is not the subject of an IRS examination, then the plan will generally be able to correct the mistake using either the Self-Correction Program (SCP) or the Voluntary Correction Program (VCP). If the plan is under IRS examination, then mistakes are generally corrected pursuant to a closing agreement under the Audit Closing Agreement Program (Audit CAP). However, if the mistake is an isolated instance (as is the case in this example), the mistake may still be eligible for correction under SCP.

Avoiding the Mistake

George should be familiar with the terms of the plan. A formal approval process had been installed to ensure that hardship distributions comply with the terms of the plan, including documenting the reason for the hardship and certification of the unavailability of other sources of money. George should be aware of the purpose of such a process, and understand the risks of approving distributions without following it. George should not approve distributions based on verbal or informal written requests, but instead, should follow the formal approval process before authorizing a hardship distribution. For more details on how to find, fix, and avoid this mistake, you may also refer to the online 401(k) Fix-It Guide.

We offer solutions to tax problems. Contact our firm today and speak directly with Mike Habib at 1-877-78-TAXES, 1-877-788-2937, or online at myirstaxrelief.com

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Tax Lien – How to handle an IRS federal tax Lien

A tax lien is a civil action filed in court of the county where a person resides or a business operates by a government agency particularly the Internal Revenue Service. IRS is seeking a legal claim – attachment against that person’s or business’ property or money owing to taxes. In normal situation, once the claim is proved, the court will then make an order of attachment or lien against the said property or money and published on public records. But in the case of the IRS, because of its federal power and the quasi-judicial status, it need not go to court for this process and issues directly a tax lien on the tax payer’s property. This means that it announces to the world that you owe the IRS taxes for which the property is being secured. The property that maybe subject of the tax lien can either be real which is most preferred, or personal. Once there is a tax lien on record, it becomes difficult or impossible for a taxpayer to dispose of the same and it will likewise affect the taxpayer’s credit standing. For example, the taxpayer cannot sell a parcel of land or a car subject of the tax lien nor can the taxpayer secure a financing to purchase a parcel of land or a car for that matter, unless of course, you satisfy the tax lien or until final payment is made on your liabilities or in short, the tax lien is released, discharged, withdrawn or removed.

Tax Liens are effective for a period of ten years and are generally self-releasing after that period unless refiled by the IRS in which case, it shall be effective for another 10 years. The government’s tax lien on a taxpayer’s property is priority over his other creditors and thus, the government is first on the list of creditors to be satisfied in the case of attachment and liquidation.

The most common question as regards the tax lien is: whether the IRS can make a tax lien against your home. The answer is yes. However, consideration is being made in case the person wants to sell his home as there are a number of options to satisfy the tax lien thereon. If you have equity in your home, the tax lien is paid out of the sales proceeds at the time of closing. If the home is being sold for less than the tax lien amount, the taxpayer can request the IRS to discharge the tax lien in order to allow the sale or, better yet ask that the tax lien be made secondary to the lending institution’s lien to allow for a refinancing or restructuring of the mortgage.

In simple terms, just imagine that a tax lien is like a notice or a piece of paper attached to any of your property and written thereon is a sentence saying nobody should get this because the government has priority interest and will take this property to answer and made as payment for unpaid taxes of the owner. While it is as simple as it seems, there is a real need to seek professional tax advice or assistance from a tax relief expert to clear and discharge a tax lien on any property especially considering that this involves unpaid back taxes were a tax professional can really be handy to go through the resolution aspects of the tax matter.

Release your IRS tax lien and resolve your tax matters today 1-877-78-TAXES (877-788-2937).

Mike Habib is an IRS licensed Enrolled Agent and represent taxpayers regarding tax liens in the following metro areas: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa

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Up to 1.2M Tax Returns May Have Used Stolen IDs

SOURCE: WebCPA

An estimated 1.2 million tax returns filed in 2007 reported wages earned by taxpayers who used another taxpayer’s Social Security number, according to a new government report.

Many tax returns are filed by individuals who have used another person’s name and Social Security number at work, but then filed federal tax returns using their own names and assigned Individual Taxpayer Identification Numbers. This often occurs with illegal immigrants. But when collection actions are taken on the account of the legitimate holder of the Social Security number, tax complications can occur for both the legitimate holder of the Social Security number, and the individual who used another person’s Social Security number at work.

A new report, by the Treasury Department’s Inspector General for Tax Administration, found that the Internal Revenue Service cannot currently identify such identity theft cases.

TIGTA conducted a review when it learned that individuals using another person’s Social Security number at work had their wages attached by the IRS to satisfy a tax debt associated with the tax accounts of the legitimate holders of the Social Security number.

ITINs are intended to provide tax identification numbers to resident and nonresident alien individuals who may have U.S. tax reporting or filing obligations but do not qualify for Social Security numbers, which generally are only issued to U.S. citizens and individuals legally admitted to the U.S. The issuance of an ITIN, however, does not change an individual’s immigration status, nor does it entitle the individual to work in the U.S. or receive Social Security benefits.

TIGTA assessed whether the IRS has procedures to effectively handle collection issues related to ITINs. It found that the IRS lacks internal guidelines for its employees to follow to assist either the taxpayer whose wages are being attached or the legitimate holder of the Social Security number (who may unknowingly be the victim of identity theft).

“This report reveals a very troubling situation,” said TIGTA Inspector General J. Russell George in a statement. “The IRS must take steps to ensure that innocent taxpayers are notified when there is evidence that their identity has been compromised. When the IRS is in a position to notify victims of the theft of their identity, it should do so without fail.”

TIGTA recommended that the IRS alert taxpayers that their identity may have been compromised, match ITIN returns with their related reporting returns, such as Wage and Tax Statements (Form W-2), and update guidelines to handle collection issues associated with ITINs. The IRS generally agreed with TIGTA’s recommendations.

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About Mike Habib, EA

We represent taxpayers with identity theft tax problems.

Mike Habib is an IRS licensed Enrolled Agent who concentrates his tax practice on helping individuals and businesses solve their IRS tax problems. Mike has over 20 years experience in taxation and financial advisory to individuals, small businesses and fortune 500 companies.

IRS problems do not go away unless you take some action! Get IRS Tax Relief today by calling me at 1-877-78-TAXES ( 1-877-788-2937). You can reach me from 8:00 am to 8:00 pm, 7 days a week.

Licensed to represent taxpayers in all 50 states

Also online at http://www.myirstaxrelief.com/

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IRS Examples of Tax Nonfiler Investigations – Fiscal Year 2010

Mike Habib, EA 1-877-788-2937

The following examples of Nonfiler investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Back taxes, unfiled tax returns, tax debt settlement, tax problem, tax help, payment plans, wage garnishment, tax levy, tax lien

West Virginia Attorney Sentenced for Failing to Pay Over $405,000 in Taxes

On April 14, 2010, in Charleston, W.Va., Richard A. Hayhurst, of Parkersburg, was sentenced to 21 months in prison and ordered to pay over $400,000 in restitution for failure to pay employment taxes for employees. According to court documents, Hayhurst practiced law in Parkersburg and operated his firm as a sole proprietorship. From early 2000 through late 2006, Hayhurst withheld federal income and FICA taxes from his four employees’ paychecks in the amount of $216,767. However, Hayhurst failed to pay over taxes as reflected on the IRS Form 941. Further, Hayhurst failed to pay the employer portion of his employees’ Social Security and Medicare taxes totaling $44,557 from the second quarter of 2003 through the third quarter of 2006. Finally, Hayhurst failed to pay his own personal income taxes for the years 2003, 2004, and 2005 totaling $134,965 in unpaid tax liability. In total, the charged tax liability and relevant conduct attributed to Hayhurst is $405,082.

West Virginia Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Ohio Man Failed to File Tax Returns for Three Years

On April 13, 2010, in Toledo, Ohio, Mark J. Zokle, of Sandusky, Ohio, was sentenced to 15 months in prison for failing to file income tax returns for three years. Zokle pleaded guilty in May 2009 to willfully failing to file his federal individual income tax returns for 2001, 2002, and 2003. According to court documents, Zokle admitted he worked as an independent sales representative for TEMO Sunrooms, Inc., of Clinton Township, Michigan. He earned commission income of $862,463, $756,980, and $794,067, respectively, in those three. Zokle further admitted he failed to pay the Internal Revenue Service (IRS) $425,652 in individual income taxes for these three years combined.

Ohio Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

California Man Sentenced for His Participation in Mortgage Fraud Scheme

On April 5, 2010, in Los Angeles, Calif., Lorenzo Espinoza, a Newport Coast man, was sentenced to 60 months in prison for defrauding the Department of Housing and Urban Development (HUD) by fraudulently obtaining mortgage loans that went into default. Espinoza was ordered to pay more than $614,000 in restitution to HUD. In December 2006, Espinoza pleaded guilty to conspiracy to defraud HUD, bankruptcy fraud, money laundering, and willful failure to pay tax to the Internal Revenue Service (IRS). In pleading guilty, Espinoza admitted that he engaged in a scheme that ran from April 1995 until approximately May 2001 and caused HUD to suffer losses when he and his associates fraudulently purchased nearly 100 residential properties. The properties were sold at inflated market values to “straw buyers” who were unable to make payments on the homes. Espinoza and his associates supplied the down payments for the straw buyers and in some cases obtained bogus tax forms and paycheck stubs that were submitted with the loan applications. The lenders relied on the false documents when they approved the loans, and HUD relied on the false documents in insuring the home loans. When the straw buyers defaulted on the home loans and the lenders foreclosed on the properties, HUD reimbursed the lenders for their costs and took possession of the properties. HUD ultimately suffered losses of more than $2 million when it sold the properties for far less than the fraudulent purchase prices of the homes. In addition to defrauding lenders and HUD, Espinoza committed bankruptcy fraud in 1999 when he filed for bankruptcy and failed to tell the United States Trustee that he owned a Rolex Daytona watch, two Ferraris and a Lamborghini. In late 2002, Espinoza laundered the proceeds of his bankruptcy fraud when he sold the Ferrari automobiles for $127,500. Espinoza also pleaded guilty to willfully failing to pay income tax, admitting that he did not pay $199,053 due for the 1996 tax year. In court papers filed in relation to the sentencing, prosecutors pointed out that Espinoza had not filed tax returns for well over 10 years and owes the Internal Revenue Service more than $5 million in taxes, interest and penalties.

California Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Utah Man Sentenced for Mortgage Fraud

On March 30, 2010, in Salt Lake City, Utah, Jerry Huff was sentenced to 12 months and one day in federal prison, to be followed by five years of supervised release, and ordered to pay $264,050 in restitution. In June 2009, Huff was convicted by a jury on charges of wire fraud, money laundering, and failure to file a federal income tax return. According to the indictment, Huff, the owner of a construction business known as High Caliber Construction Company, fraudulently obtained $250,000 from First Greensboro Home Equity (FGHE), a mortgage bank headquartered in Greensboro, North Carolina, by making false statements to obtain a second mortgage on his house in Moab, Utah. Huff’s loan application package reflected false statements of personal income and ability to repay the second mortgage, while at the same time omitting mentions of financial problems and non-payment of taxes. Huff also submitted a fictitious appraisal of the property and altered photos that gave the impression the house was completed both inside; fully landscaped; inhabited; and well appointed inside. Huff also provided personal tax return forms for the years 2001 and 2002 when in fact, the defendant did not file tax returns for those years. Once Huff obtained the second mortgage in the approximate amount of $250,000, he failed to make loan payments to FGHE.

Utah Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Ohio Man Sentenced for Income Tax Evasion

On March 19, 2010, in Columbus, Ohio, Rudolph Joseph Fox, Jr. was sentenced to 12 months in prison, followed by three years of supervised release, ordered to pay $23,765 in restitution to the Internal Revenue Service (IRS), and fined $3,000. Fox was convicted by a jury in November 2009, of three counts of income tax evasion and one count of willful failure to file a federal income tax return with the IRS. According to court documents, during 2002 and 2003, Fox demanded that his employer not withhold federal income taxes from his salary or wages. During 2005, Fox stated his taxable income was zero even though he received a salary or wages as an employee of a medical company. As a result of the unreported income for tax years 2002, 2003, and 2005, the tax loss was $23,765. In addition, Fox willfully failed to file a 2004 federal income tax return, even though he received income for the year.

Ohio Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Owners of East St. Louis Day Care Center Sentenced on Fraud Schemes

On March 18, 2010, in East St. Louis, Ill., Monica M. Owens and Robby L. Owens, both of Clayton, Missouri, and formerly of Fairview Heights, Illinois, and Great Kids, Inc., an East St. Louis Day Care Center, were sentenced on charges relating to evasion of taxes, theft of federal program funds, and food stamp benefit fraud. Monica Owens was sentenced to 25 months in prison, three years of supervised release, and ordered to pay a special assessment of $300. Robby Owens was sentenced to 25 months in prison, three years of supervised release, and ordered to pay a special assessment of $100. The defendants were also ordered to pay $203,057 in restitution to the Illinois Department of Human Services (DHS) and $249,197 in restitution to the Internal Revenue Service (IRS). In addition, Great Kids, Inc. was sentenced to five years probation and ordered it to pay criminal restitution to the DHS on its conviction for theft of federal program funds. According to court documents, Monica and Robby Owens solely owned and operated Great Kids, Inc. The couple controlled all the business accounts and received all profits earned through Great Kids, Inc. Monica and Robby Owens, however, attempted to evade or defeat the assessment of income taxes and failed to file a tax return for 2005 and failed to pay income taxes. Monica Owens and Great Kids, Inc. further obtained payments by fraud by submitting false child care claims to the DHS, claims for child care of children who did not attend or were not present in the child care center. Monica Owens also falsely applied for food stamp benefits by denying that she was receiving a monthly household income from employment.

Illinois Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Chicago Businessman Sentenced to Five Years for Cheating on Federal Taxes Over Ten Years

On March 4, 2010, in Chicago, Ill, Jon Darmstadter was sentenced to 60 months in prison and ordered to pay nearly $2.3 million in restitution for tax evasion. According to court documents, in the late 1990s and early 2000s Darmstadter was an executive of the Children’s Beverage Group, Inc. (CBG), a publicly-traded company in Northbrook, Ill. He admitted using brokerage accounts in Canada to hold stocks and execute trades and then hiding the income from those stock sales in off-shore bank accounts in the Turks and Caicos Islands. He also admitted failing to report income from the sale of stock and capital gains from stock sales involving both CBG and another company he operated, Zkid Network Company, a media content company that developed and marketed software to protect children using the internet. Darmstadter also admitted that he made false statements on multiple occasions in U.S. Securities and Exchange Commission filings relating to Zkid, where he illegally generated more than $427,000 in over-the-counter sales of Zkid stock in 2003. Darmstadter filed false tax returns for all six years from 1998 through 2003, and that he failed to file tax returns for the years 2004 through 2007.

Illinois Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Former Corporate Executive Sentenced for Failing to File Tax Returns

On February 24, 2010, in Springfield, Mo, Ronald Kirkland was sentenced to 24 months in prison for failing to file income tax returns on millions of dollars of income. According to court documents, Kirkland was a sales representative and independent contractor for American Family Life Assurance Company (AFLAC) serving as AFLAC’s Missouri sales manager. During that time he was paid as an independent contractor rather than an employee. In 2004, Kirkland was promoted to senior vice-president and director of sales, which was a salaried position at the company’s headquarters in Columbus, Ga. Kirkland admitted that he failed to file tax returns for the years 2002 thru 2005. During that four-year period, Kirkland received total gross income of approximately $6,326,000. In each of those years, Kirkland filed for extensions of his deadline, but never filed returns.

Missouri Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Chicago Area Man Sentenced in Scheme that Utilized Defunct Business to Evade Taxes

On January 7, 2010, in Chicago, Ill., Rudy Fratto was sentenced to 12 months and a day in prison, to be followed by three years of supervised release, and ordered to pay more than $141,000 in restitution. According to court documents, Fratto was charged, in September 2009, with one count of income tax evasion for failing to file a 2005 tax return reporting $199,595 in gross income. Fratto admitted to the same offense for tax years 2001, 2002, 2003, 2004, 2006 and 2007. According to the Information, from January 1, 2005 and continuing through about April 17, 2006, Fratto utilized a bank account in the name of J.J.F. Inc, a corporation that was dissolved in November 1997, in order to conceal and avoid reporting his income to the IRS. Fratto instructed businesses and others to issue checks in payment of wages, compensation and other income to J.J.F. Inc. Fratto used the J.J.F. Inc. account to pay personal expenses and to withdraw cash. Fratto made his mortgage payments in cash and paid other bills with money orders, in order to conceal and avoid reporting his income to the IRS. The total unreported gross income for the seven year period was nearly $836,000.

Illinois Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Professional Golfer Sentenced for Failing to Pay More Than $2 Million in Taxes

On January 22, 2010, in Orlando, Fla., Jimmy L. Thorpe, aka Jim Thorpe, was sentenced to 12 months in prison, to be followed by two years of supervised release and 200 hours of community service for failing to pay more than $2 million in income taxes. Thorpe was also ordered to repay all taxes due and owing. According to court documents, Thorpe is a professional golfer on the Professional Golf Association (PGA) Champions Tour, formerly known as the PGA Senior Tour. During the years 2002, 2003, and 2004, Thorpe earned income playing in PGA events and from various endorsements, including Foxwoods Casino. JLT, Inc. (Foxwoods). Foxwoods was a Florida corporation incorporated in September 1998, in which Thorpe was the sole officer and director. Although he filed with the Internal Revenue Service extensions of time in which to file his personal income tax returns and corporate income tax returns for the tax years 2002, 2003, and 2004, Thorpe did not make any payments for personal income taxes with the extensions. In addition, Thorpe did not make any estimated tax payments for those tax years and had approximately $2,991 taxes withheld. For the calendar years 2002, 2003, and 2004, Thorpe received approximately $5,365,154 in gross income with an estimated tax due of over $2 million.

Florida Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

South Carolina Couple Sentenced on Failure to File Tax Returns

On January 19, 2010, in Greenville, S.C., Robert M. “Mark” Ledford, and Cheryl H. Ledford, of the Glenn Springs area were sentenced for income tax evasion. Robert Ledford was sentenced to 30 months in prison to be followed by three years of supervised release. Cheryl Ledford received a sentence of three years probation, including a requirement that she serve five months of house arrest. Both Ledfords were ordered to cooperate with the Internal Revenue Service (IRS) in filing tax returns and payment of back taxes estimated in excess of $875,000, as well as penalties and interest. According to court documents, the Ledfords had not filed U.S. individual income tax returns since 1991. Between 1992 and 1995, Robert Ledford owned and operated a nursery business in Spartanburg from which he derived substantial income upon which no income taxes were paid. In 1997, the IRS assessed him federal taxes, exclusive of penalties and interest, in the amount of $822,065. Robert Ledford, aided by Cheryl Ledford, took steps to avoid the payment of those taxes by, among other things, placing income, funds, and property into the names of nominee organizations, some of which were controlled by the Ledfords and by converting assets into cash. In 2005, Robert Ledford purchased and operated a garden center from which taxable income was derived. Again, no taxes were paid and nominee organizations were utilized to receive money from the garden center. Money from the nominee organizations was deposited into Cheryl Ledford’s personal bank account, which she used to pay personal expenses.

South Carolina Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Former San Francisco Investment Fund Manager Sentenced

On January 15, 2010, in San Francisco, Calif., Edward S. Ehee, of Walnut Creek, Calif., was sentenced to 51 months in prison, to be followed by three years of supervised release, and ordered to pay restitution for committing wire fraud, tax evasion and making and subscribing a false partnership return. In his guilty plea on March 13, 2009, Ehee admitted that between 2001 and 2006 he defrauded investors in investment funds of more than $4 million. Ehee represented to investors that he would invest their funds in the securities markets and employ complex trading strategies to earn high returns with less risk than is ordinarily associated with such returns. Instead of investing the funds as promised, he diverted most of the funds for improper purposes, including the payment of existing investor distribution obligations using new contributions from other investors, and payments for the benefit of himself and his family. Ehee also admitted that although he had approximately $240,500 in taxable income in 2005, he did not file a tax return or pay any income tax for 2005. Ehee also admitted that he made and subscribed, under the penalties of perjury, a false partnership return for the tax year 2005 for one of his investment funds. Ehee intentionally inflated the assets reported on the balance sheet of the return to match the amount of money that he was supposed to have invested on behalf of his clients, when he knew that he had not invested any of their money in that fund in 2005.

California Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Arizona Asphalt Paver Sentenced to Prison for Tax Evasion

On January 7, 2010, in Phoenix, Ariz., John Stacey was sentenced to 77 months in prison and ordered to pay $1.5 million in restitution for tax evasion. According to court documents, Stacey was convicted on charges of income tax evasion, corrupt interference with the due administration of the IRS, and multiple counts of fraudulent use of a social security number. According to the evidence presented at trial, Stacey operated a sole proprietorship asphalt paving company that did business under various names, including A to Z Paving, Triple A Paving, Texas Paving, Pave Your Way Construction and A to Z Paving Engineering, among others. Stacey earned gross income in excess of $4 million from his business during the years 2000 to 2003, but he has never filed an individual income tax return with the IRS. Since at least February 2002, Stacey knew that he owed taxes, penalties and interest for tax years 1995, 1996 and 1997. Stacey has made no payments to the IRS towards this tax debt. In addition to not paying his outstanding tax debt, Stacey took numerous steps to frustrate the IRS’s efforts to both investigate the case and collect tax that he owed.

Arizona Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Texas Couple Sentenced on Tax Evasion Charges

On December 11, 2009, in Sherman, Texas, Phillip G. Kellar and Michelle G. Kellar were each sentenced to 41 months in prison to be followed by three years of supervised release, and ordered to pay $312,825 in restitution to the Internal Revenue Service (IRS). According to court documents, from 2001 to 2008, the Kellars willfully attempted to evade payment of their income taxes by filing false Forms W-4 and attachments and filing false “Withholding Exemption Certificates.” Additionally, during that time period they failed to file a tax return for tax year 2000 and filed returns for tax years 2001, 2002, and 2003 in January 2006. They submitted correspondence intended to obstruct the collection of taxes to the IRS, and also submitted checks designated for payment of taxes to the IRS that were drawn on accounts that contained insufficient funds.

Texas Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Ohio Man Sentenced for Role in Mortgage Fraud Scheme

On December 10, 2009, in Cincinnati, Ohio, Julian M. Hickman was sentenced to 33 months in prison, to be followed by three years of supervised release, and ordered to pay a $12,500 fine. Hickman pleaded guilty in December 2008 to two counts of conspiracy and three counts of willful failure to file income tax returns. In a statement of facts filed with his plea, Hickman admitted that, between March 2002 and June 2008, he and others recruited unsuspecting individuals to buy residential properties, the majority of which were low income, dilapidated and otherwise depressed residential properties, at prices artificially inflated above legitimate fair-market values. Hickman admitted that he participated in 107 separate fraudulent real estate closings between March 2002 and June 2006. Hickman and his co-conspirators netted more than $3.8 million from the deals. Although he received in over $1.7 million in gross income in 2003, 2004, and 2005, he failed to file federal income tax returns. According to court documents, scheme led to foreclosure against owners of more than 90 percent of the properties.

Ohio Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Pennsylvania Man Sentenced to Four Years on Fraud and Tax Evasion Charges

On December 11, 2009, in Philadelphia, Pa., Lawrence Paul Cowan, of Boothwyn, Pa., was sentenced to 48 months in prison and ordered to pay a $5,000 fine and to pay $308,000 in restitution to the Internal Revenue Service (IRS), which includes back taxes and interest. According to court documents, Cowan worked under his deceased father’s social security number as an insurance agent from 1998 through 2004, making hundreds of thousands of dollars, yet he filed no federal tax returns during that period. Between 2002 and 2004, Cowan evaded more than $73,000 in federal income tax.

Pennsylvania Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Mississippi Businessman Sentenced for Failing to File Tax Returns and Criminal Contempt

On November 30, 2009, in Jackson, Miss., Wiley Randolph “Randy” Kuyrkendall of Pearl, Mississippi, was sentenced to 46 months in prison, followed by one year of supervised release, for failure to file federal income tax returns and fleeing from his criminal trial. Kuyrkendall was also ordered to pay $443,806 in restitution to the Internal Revenue Service (IRS) and $3,113 to the U.S. District Court. According to court documents, Kuyrkendall, formerly a State Farm insurance salesman, was found guilty by a jury in August 2009 of failing to file income tax returns for the years 2002 through 2005, although he received almost $800,000 in gross income during those four years. The evidence during trial disclosed that Kuyrkendall had filed a federal civil lawsuit against the IRS seeking $1.1 billion and claiming that Congress did not have authority to tax. The court scheduled a pre-trial conference in the case for August 14, 2009, and the trial was set to begin on August 17, 2009. Kuyrkendall failed to appear on both dates and was arrested shortly thereafter by the U.S. Marshal Service. Based on these actions, the court charged Kuyrkendall with two counts of criminal contempt for fleeing and failing to appear for those two court-scheduled events.

Mississippi Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Detroit Area Businessman Goes to Jail for Tax Evasion

On November 25, 2009, in Detroit, Mich., Marc Bruce was sentenced to 16 months imprisonment, followed by three years of supervised release, and ordered to pay $328,085 in restitution to the Internal Revenue Service (IRS) and to file accurate back tax returns. According to court records, during the 2001 through 2004 tax years, Bruce received over $890,000 in taxable income from his business M&C Trucking, Inc., and willfully failed to file tax returns with the IRS. Bruce also attempted to conceal his true and correct income from the IRS and failed to pay over $244,000 in tax due and owing. He also conducted business in cash and transferred his assets to nominees.

Michigan Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Florida Man Sentenced on Tax Evasion Charges

On November 23, 2009, in West Palm Beach, Fla., Carl Libertino, of Sebastian, Florida, was sentenced to 30 months in prison, to be followed by three years of supervised release, and ordered to pay $202,160 in restitution for unpaid taxes. Libertino pleaded guilty in July 2009 to tax evasion charges. According to stipulated facts read in open court at the guilty plea, Libertino did not file personal income tax returns from 2004 through 2007. During these years, Libertino received substantial income, in large part, from persons who believed they were investing their money through Libertino. To further conceal his income and evade taxes, Libertino operated mostly in cash, withdrawing amounts small enough to evade federal currency transaction reporting (CTR) requirements.

Florida Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Rhode Island Couple Sentenced for Tax Evasion

On November 18, 2009, in Providence, R.I., Albert Martin and his wife, Lorraine Martin, were sentenced for committing tax evasion and conspiring to defraud the United States. Albert Martin was sentenced to 51 months in prison and three years of supervised release. Lorraine Martin was sentenced to 12 months and a day in prison and three years of supervised release. In addition to the prison terms, Albert and Lorraine Martin were ordered to pay $463,988 in restitution to the U.S. Treasury. According to the indictment and evidence introduced during their trial, Albert Martin and co-conspirator, Bruce Lapierre owned and operated a Woonsocket-based machine shop from which they earned substantial income. From 1997 to 2004, the defendants engaged in an elaborate scheme to conceal from the Internal Revenue Service (IRS) income that they earned through Classic Machine, and thus avoid paying taxes on that income. Rather than open business accounts for depositing business receipts and income, they allegedly used Lorraine Martin’s personal account to conceal business receipts, as well as an anonymous “private” banking service designed to conceal income from the IRS. The evidence also showed that the defendants, in order to further conceal their assets and income from the IRS, used multiple business names, such as Banner Technologies, Circle Machine, Preferred Enterprises and Royal Enterprises. The defendants also made extensive use of cash and money orders. In October 2009, Lapierre was sentenced to 51 months in prison for his role in the scheme.

Rhode Island Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Las Vegas Business Owner Sentenced To 15 Years in Prison for Tax Fraud Scheme

On November 16, 2009, in Las Vegas, Nev., Robert Kahre and his sister, Lori Kahre, were sentenced to 190 months and 72 months in prison, respectively. Both were found guilty in August 2009 of conspiring to defraud the federal government for the purpose of impeding the Internal Revenue Service (IRS) in its collection of income and employment taxes. According to information presented in court, between 1997 and 2003, Robert Kahre owned and operated six construction-related businesses in Las Vegas and paid employees over $100 million in cash wages. Additionally, Kahre provided a payroll service to approximately 35 other construction contractors who employed thousands of employees. Robert and Lori Kahre devised and used a payroll scheme that concealed and disguised the true amount of income received by his employees and the employees of the companies for which he provided payroll services. Robert Kahre claimed to pay employees in gold or silver coins, but which were actually immediately exchanged for pre-determined envelopes of cash. The face amount of the coins was one-eighth the amount of pay that the employee actually earned and received in the cash envelope. The defendants told the employees that the income was either not taxable or that they should falsely report their income to the IRS at the face amount of the gold and silver coins. During the course of the scheme, cash wage payments of at least $25 million were paid to Robert Kahre’s employees and cash payments of approximately $95 million were paid to the employees of the other contractors. No federal tax withholdings were made from the paychecks, and the wages were not reported to the IRS. The defendants took steps to hide the correct amount of income paid to the employees by using false invoices, keeping two sets of books, using false names on payroll records, making false statements on mortgage applications, and using nominees to conceal assets. In addition to the payroll scheme, Robert Kahre was convicted of evading personal income tax on approximately $12 million in income for the years 1999 through 2002; Lori Kahre was convicted of evading personal income tax on approximately $242,882 in income for the years 1998 and 2000 through 2005.

Nevada Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Maine Man Sentenced on Federal Tax Evasion Charges

On November 16, 2009, in Bangor, Maine, Richard J. Thomas was sentenced to 24 months in prison, three years of supervised release, and ordered to pay $15,082 in restitution and a $100 special assessment. The supervised release conditions required, among other things, that Thomas report to the Internal Revenue Service (IRS) true and accurate tax returns for the years 1995 through 2008. On January 11, 2006, Richard Thomas, a local chiropractor, was indicted on six counts of tax evasion from 1995 through 2001 (excluding 1997). Thomas pleaded guilty on February 2, 2009 to tax evasion for tax year 2001. According to court documents, Thomas owed substantial income tax for the year in question, but he willfully attempted to evade tax assessment for that year. Prior to 1995, Thomas had filed tax returns, which indicated he was aware of his duty to file tax returns.

Maine Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Former Connecticut Resident Sentenced to Prison for Evading Taxes; Structuring Cash Deposits

On October 23, 2009, in Hartford, Conn., Eugene Cappello was sentenced to 24 months in prison, to be followed by two years of supervised release, for failing to pay more than $237,000 in federal taxes and structuring cash deposits. Cappello was also ordered to pay a $5,000 fine and to pay approximately $403,000 in back taxes, penalties and interest. In addition, Cappello was ordered to forfeit $39,500. According to court documents and statements made in court, in August 2000, Cappello was contacted by the Collection Division of the Internal Revenue Service (IRS) for non-payment of taxes related to his 1997, 1998 and 1999 individual income tax returns. After that Cappello made only nominal payments toward his total balance due and, in May 2004, he submitted a signed document to the IRS documenting his purported inability to pay the more than $237,000 in taxes and interest that he owed for his 1997 through 2003 tax returns. During this period, Cappello hid cash from the IRS and made significant personal expenditures, including $34,781 for a country club membership and $91,000 for a yacht. In addition, Cappello had a house built by making more than $350,000 in cash payments to building contractors. To help hide his assets from the IRS, Cappello had his paychecks issued in the name of another individual. Further, he directed this person to structure cash deposits into two different bank accounts.

Connecticut Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

South Carolina Man Gets Prison for Income Tax Evasion

On October 22, 2009 in Columbia, S.C., Barry Lusk was sentenced to 33 months in prison and three years supervised release for failing to pay income tax. According to court documents, Lusk was the sole operator of two businesses that he sold for nearly $1.5 million in 2000. Lusk used the proceeds to buy houses, real estate and purchase an airplane instead of paying the taxes due on the sale of the businesses. Lusk was part of a movement advocating income tax was not applicable to him and sent a letter to the Internal Revenue Service (IRS) detailing his beliefs. In 2002 the IRS began a civil audit of Lusk and an IRS representative attempted to contact Lusk regarding his responsibility to file an individual tax return for the year 2000. In 2003, Lusk filed a joint 1040 return for 2000 and claimed that he and his spouse had no income and that there was no tax due or owed. However, he asked for a refund of an estimated tax which had been paid in 2000. Lusk also filed amended tax returns for two prior tax years attempting to get refunds claiming the original returns were filed in error. Luck’s income was estimated at more than $843,000, with a tax debt of more than $183,000.

South Carolina Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Anchorage Man And Wife Sentenced for Conspiracy to Defraud the IRS

On October 16, 2009, in Anchorage, Alaska, Eugene and Lorna Warner, of Anchorage, were sentenced in federal court for their convictions of conspiracy to defraud the Internal Revenue Service (IRS). Eugene Warner was sentenced to 37 months in prison, three years of supervised release and fined $15,000. Lorna Warner was sentenced to five years probation, including ten months of home confinement, and fined $8,000. Both defendants were ordered to file accurate tax returns from 1991, through present, make a good faith attempt to pay all back taxes, interest, and penalties to IRS, and comply with the tax laws. According to information presented to the court, the defendants were charged in a 37-count indictment with conspiracy to defraud the IRS, obstruction of the IRS, filing false tax returns, mail fraud, and making false claims against the United States. Eugene Warner was also charged with bankruptcy fraud. On July 30, 2009, both defendants entered guilty pleas to the charge of conspiring to defraud the United States. Both defendants were previously convicted in 1997 of obstructing the IRS and sentenced to 18-month prison terms. According to the indictment, the defendants engaged in a course of conduct intended to evade the payment of lawful debts, conceal assets from creditors, and obstruct collection activities by those creditors. The defendants attempted to evade these debts by concealing assets in nominee entities, so that their names did not appear as the owners of the property. They then failed to disclose his ownership of the property in documents filed with the United States District Court, the United States Bankruptcy Court, and the IRS. They were also accused of mailing worthless “International Bills of Exchange” to the IRS and other creditors in an unsuccessful attempt to pay off their debts. In their plea agreement and in open court, the Warners admitted that, as a part of the conspiracy, they both made false statements to the IRS about his assets, omitting real property and bank accounts held in the name of bogus nominee “trusts.” They also admitted sending to the IRS a sworn “commercial affidavit” that falsely claimed that the IRS owed them $1.5 million. Eugene Warner further admitted that he testified falsely before the U.S. Bankruptcy Court about his assets in a 2003 hearing.

Alaska Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Washington State Man Sentenced in Fraudulent $3.2 Million Consumer Debt Discharge Program

On October 15, 2009, in Spokane, Wash., Jason Paul Christensen, formerly of Pasco, Washington, was sentenced to 109 months of imprisonment, to be followed by three years of supervised release. Christensen was ordered to pay $3,238,997 in restitution to the victims of his scheme. According to court documents, Christensen fraudulently obtained $3.2 million from over 1,300 victims across the country through a Ponzi-type scheme advertised as a debt elimination program. Christensen pleaded guilty on April 16, 2008, to mail fraud and money laundering charges relating to the scheme he engaged in over a period of about three years through the Internet and a post office box business address in Richland, Washington. In his plea agreement, Christensen admitted that between approximately October 15, 2003, and December 31, 2005, he solicited his victims via websites on which he advertised that his company employed a team of federal attorneys who used loopholes in the law to discharge consumer debts. When in fact, he did not employ any team of attorneys and no such legal loopholes existed. Christensen promised his customers that his company would fully discharge their debts, his program was 100 percent successful, and customers were guaranteed success or would receive their money back. Customers, however, were required to pay Christensen’s companies amounts of at least $2,500 and as much as $20,970 in advance. He obtained the large number of victims by paying off the loans of some of his “clients” with other victims’ money and then recruiting his satisfied “clients” to become his “consultants” to whom commissions were paid for recruiting their family and friends into the program. After paying his “consultants” their commissions to promote the scheme, Christensen pocketed the rest of the proceeds for his personal use. In total, the scheme netted over $3.2 million from victims seeking debt elimination and located all over the United States.

Washington Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Rhode Island Machine Shop Owner Sentenced to 51 Months for Tax Crimes

On October 7, 2009, in Providence, R.I., Bruce Lapierre of Pascoag, R.I., was sentenced to 51 months in prison and ordered to pay $463,988 in restitution. In March 2009, Lapierre and his co-defendants, Albert and Lorraine Martin, were convicted of conspiracy to defraud the United States and tax evasion. According to the indictment and evidence introduced at trial, Lapierre and Albert Martin owned and operated Classic Machine, machine shop based in Woonsocket, R.I. From 1997 to 2004, the defendants engaged in an elaborate scheme to conceal income from the Internal Revenue Service (IRS). Rather than open business accounts for depositing business receipts and income, they used Lorraine Martin’s personal account to conceal business receipts, as well as an anonymous “private” banking service. Trial evidence showed that the defendants, in order to further conceal their assets and income from the IRS, used multiple business names, such as Banner Technologies, Circle Machine, Preferred Enterprises and Royal Enterprises. The defendants also made extensive use of cash and money orders. Additionally, evidence presented at trial showed that Lapierre tried to obstruct an IRS investigation of the machine shop’s income by renaming business assets, by sending false and frivolous letters to the IRS claiming he was not required to file tax returns or pay taxes, and by directing a financial institution not to comply with an IRS summons for records. Sentencing for Albert and Lorraine Martin is scheduled for a later date.

Rhode Island Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

Kentucky Chiropractor Sentenced to 21 Months for Failing to File Tax Returns

On October 1, 2009 in Paducah, Ky., Charles Boulton was sentenced to 21 months in prison, one year of supervised release, and ordered to pay nearly $95,000 in restitution for failing to file personal income tax from 2001 to 2006. According to court documents, Boulton, a provider of drug and alcohol tests to truck driving schools and transportation companies in Western Kentucky, earned nearly $496,000 from 2001 to 2006 and did not file tax returns.

Kentucky Tax Relief, IRS Tax Help, IRS Tax Audit, Tax Settlements, and Tax Resolution call 1-877-78-TAXES

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How To Choose A Tax Relief Company

By Mike Habib, EA at 1-877-788-2937

Choosing a reliable and reputable tax relief company is a daunting task. The reality is that many tax problems are better handled and resolved with a tax professional who knows what he is doing. Many tax relief and tax resolution companies advertise that they can wipe out all your penalties, interest and settle your tax debt for few pennies!

Buyer beware! The reality is very different than what these unscrupulous companies are promising! And as the saying goes: when it’s too good to be true, it is not true. But of course, you must know how to choose a tax relief company. Here are some guidelines that will help you on how to choose a tax relief company.

First and foremost, you must be sure that they have the specialized tax knowledge and experience in dealing with different kinds of tax problems. If you want to be sure that you are choosing a tax relief company that is right for you and will be able to help you with your tax matters, it is also important to know the background of the principals of the firm and the character of the different persons involved in the tax relief company. So how to choose a tax relief company depends mostly on the person or persons involved and working therein. These people must be licensed (only Enrolled Agents, CPAs and Attorneys are licensed to represent taxpayers before the IRS), trustworthy, honest and open or that the company itself is transparent in all its dealings.

It is a must for you to check the company and the persons therein and their BBB, Better Business Bureau, rating and record. It’s not just the amount of clients or the number of tax problems and cases they handled, but most importantly, a very helpful tip on how to choose a tax relief company is that particular company’s principal representative, the person who will actually be your power of attorney and negotiate with the IRS on your behalf. So in choosing a tax relief company, they should also have an extensive experience in the tax controversy field and know the ins and outs of the complicated IRS tax matters.

When choosing a tax relief company, you’ll notice from day one when you call them, if they let you speak to a sales person, an unlicensed tax consultant, then you should just hang up and save your time & money. Only experienced and licensed tax professionals can effectively analyze your particular tax situation and recommend a remedy accordingly. If this is the case, they can and should also help you understand all possible settlement options available to you and most of all, they can and should help you understand the best settlement option from among the available options.

I hope that I shed some light on how to choose a tax relief company, and prevented you from falling into unscrupulous tax relief scams.

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About Mike Habib, EA

Mike Habib is an IRS licensed Enrolled Agent who concentrates his tax practice on helping individuals and businesses solve their IRS tax problems. Mike has over 20 years experience in taxation and financial advisory to individuals, small businesses and fortune 500 companies.

IRS problems do not go away unless you take some action! Get IRS Tax Relief today by calling me at 1-877-78-TAXES. You can reach me from 8:00 am to 8:00 pm, 7 days a week.

Licensed to represent taxpayers in all 50 states

Also online at http://www.myirstaxrelief.com/