Tax Relief Blog

Are you a Victim of Identity Theft?

June 8, 2009 | Mike Habib, EA

In April 2009, the IRS released a new form for taxpayers who have experienced, or are at risk of harm from, identity theft. Form 14039, IRS Identity Theft Affidavit, is used to report identity theft to the IRS. FTB does not have a similar form, FTB do have internal procedures to help victims who contact them. First and foremost, FTB want the taxpayer or their representative to contact them as soon as they think something is wrong with their tax account, regardless of whether it was ID theft or not. When a taxpayer receives an FTB notice e.g., billing, refund reduction, e-file rejection that a taxpayer/victim believes is attributable to identity theft, their contact is given priority handling. We then focus on the following issues for the taxpayer:

Ensure the victim is held harmless, i.e., they get their full and correct refund.
Minimize the burden on the victim in resolving their identity theft-related tax problem.
Minimize the time to resolve the case, usually within two weeks to two months depending on the complexity.

FTB can also flag the account to block the automated processing of tax returns to a victim’s account. Anything that comes in after FTB flags an account would be manually processed for verification. FTB limit use of this specifically designating ID theft contacts flag.

The sooner the ID theft is reported, the easier it is to get the taxpayer’s account back in order. We would like to remind our readers that if they suspect something is wrong with their tax account or if they have been a victim of ID theft to let the IRS know.

If you are a victim of identity theft and have tax problems, such as back taxes, wage garnishment or a bank levy, contact us today for tax relief options.

HI Tax Relief

June 5, 2009 | Mike Habib, EA

Hawaii – Tax Amnesty Program Announced

The State of Hawaii Department of Taxation announced that it is offering a “Tax Fresh Start Program,” running from May 27, 2009 through June 26, 2009.

The program provides an opportunity for eligible taxpayers to pay their back taxes to the state while avoiding penalties and potentially avoiding referral for criminal prosecution. It also offers a 50% reduction in interest from the statutory rate of 8% per annum to 4% per annum.

IRS seeks more regulation

June 5, 2009 | Mike Habib, EA

IRS to seek more regulation of tax preparers

The IRS reported that it is working on new rules that will require paid tax preparers to be licensed. This will improve tax compliance and reduce tax preparer fraud; IRS Commissioner Doug Shulman announced that on June 4, 2009.

A whopping eighty percent of taxpayers get help with their returns, either from paid tax preparers or tax software programs, Shulman told a congressional subcommittee. Surprisingly, tax preparers currently don’t have to be licensed, unless they represent clients in proceedings before the Internal Revenue Service.

Florida Tax Relief

May 24, 2009 | Mike Habib, EA

IRS Disaster Tax Relief

Added Leon, Levy and Wakulla counties, 5/12/09

Added Dixie and Gilchrist counties, 5/4/09

UBS Client Charged – First to Plead Guilty

May 24, 2009 | Mike Habib, EA

UBS CLIENT PLEADS GUILTY TO FILING FALSE TAX RETURN HID ASSETS WORTH $3 MILLION IN SECRET SWISS BANK ACCOUNT

Ft. Lauderdale Yacht Broker Second UBS Client Charged, First to Plead Guilty

WASHINGTON – Robert Moran, of Lighthouse Point, Fla., pleaded guilty on criminal information charging him with filing a false income tax return, the Justice Department and Internal Revenue Service (IRS) announced. Moran appeared today before Judge James I. Cohn in Ft. Lauderdale and accepted responsibility for concealing more than $3 million in assets in a secret bank account at UBS in Switzerland.

Tax Preparer Fraud – Beware!

May 24, 2009 | Mike Habib, EA

U.S. JUDGE BARS TWO CONNECTICUT RESIDENTS FROM PREPARING FEDERAL TAX RETURNS FOR OTHERS

Father and Daughter Prepared Tax Returns That Falsified and Inflated Deductions for Customers

WASHINGTON – A federal district court in Connecticut has permanently barred Wethersfield residents Deowraj Buddhu and his daughter, Sunita Buddhu, from preparing federal tax returns for others. Mr. Buddhu and/or Ms. Buddhu have operated businesses that provide tax return preparation services under the names Paradise Consulting, Phoenix Consulting and Lotus Consulting, in Hartford, and Wethersfield, Connecticut.

Tax Evasion? Resolve!

May 24, 2009 | Mike Habib, EA

TAX SHELTER PROMOTER PLEADS GUILTY TO CONSPIRING TO IMPEDE AND IMPAIR THE IRS

WASHINGTON – Anthony G. Merlo, a former resident of Fort Worth, Texas, and the U.S. Virgin Islands, pleaded guilty to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. Merlo appeared before Magistrate Judge Ellen S. Carmody in Grand Rapids, Mich.

In March 2008, Merlo and five others were indicted by a grand jury in Grand Rapids and charged with conspiring to defraud the United States by promoting, marketing, selling and administering fraudulent tax shelters called loss-of-income insurance policies. These policies were issued through Security Trust Insurance Co., a now-defunct company formerly known as Caduceus Life Insurance Co., that was located in the U.S. Virgin Islands.

IRS Tax Audits on the Rise

May 24, 2009 | Mike Habib, EA

IRS is hiring hundreds of Internal Revenue Agents

The IRS is hiring hundreds of Internal Revenue Agents – It’s a great time to join the agency!

The IRS has begun a major hiring effort to fill hundreds of critical jobs nationwide. Most of these jobs are for internal revenue agent positions (look for series number 0512). At least 30 hours of college-level accounting coursework is required for revenue agent jobs.

IRS TAX HELP – Q1 2009 Tax Update

May 24, 2009 | Mike Habib, EA

IRS TAX HELP – First Quarter 2009 Tax Update

While the new law tax changes in the American Recovery and Reinvestment Act of 2009 were the most significant developments in the first quarter of 2009, many other tax developments may affect you, your family, and your livelihood. These other key developments in the first quarter of 2009 are summarized below. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.

Retirement plan account participants, IRA owners, and their beneficiaries do not have to take required minimum distributions (RMDs) for 2009. The IRS has issued guidance clarifying that:

If you would have been required to make RMDs for 2009 and you do make withdrawals in 2009 (that are not RMDs for 2008): (a) you might be able to roll over the withdrawn amounts into other eligible retirement plans; but (b) you must still include any previously untaxed portion of the withdrawal that you do not roll over in your gross income.
No 2008 RMDs are waived, even for eligible individuals who chose to delay taking their 2008 RMD until Apr. 1, 2009 (e.g., retired employees and IRA owners who turned 70 1/2 in 2008).
The 2009 RMD waiver applies to individuals who may be eligible to postpone taking their 2009 RMD until Apr. 1, 2010 (generally, retired employees and IRA owners who attain age 70 1/2 in 2009). However, the law does not waive any RMDs for 2010.
If a beneficiary is receiving distributions over a 5-year period, he or she can waive the distribution for 2009, effectively permitting the beneficiary to take distributions over a 6-year period.

Getting maximum advantage from the homebuyer credit. In two separate pieces of guidance, the IRS has explained how to take maximum advantage of the credit for first-time homebuyers. The credit is the lesser of 10% of the purchase price or $8,000 for a qualifying 2009 purchase ($7,500 for a qualifying 2008 purchase). The credit is refundable, meaning you get it even if you don’t owe taxes. The credit has to be paid back for a home purchased in 2008 but generally not for one purchased in 2009. A credit for a 2009 purchase can be claimed on the 2008 return. In a news release, the IRS has explained the several different ways that individuals who recently purchased a home or are considering buying one in the next few months can claim the up-to-$8,000 credit for 2009 home purchases including getting an extension, filing now and amending later, amending a previously filed 2008 return or claiming the credit on a 2009 return where higher income in 2008 would reduce the credit under so-called phaseout rules. In separate guidance, the IRS explained how unmarried co-owners can get the maximum credit amount.

First-Time Homebuyer Credit

April 15, 2009 | Mike Habib, EA

IRS Q&As shed some new light on the homebuyer credit

First-Time Homebuyer Credit: Questions and Answers, IRS Web Site

Mike Habib, EA Tax Relief & Tax Problem Resolution Services