IRS Tax Problems? Get Resolution today – here’s why

March 19, 2008 | Mike Habib, EA

If you owe the IRS, you’re better off resolving your tax debt now. As you know, tax problems do not go away by themselves! Stop IRS wage garnishment today, stop IRS bank levy today, and release IRS tax lien today.

As you can see from the statement below by Mr. Douglas H. Shulman, the new IRS Commissioner, he will first concentrate on Enforcement, then secondly its Service! Are you saying where is the kinder and gentler IRS?

Contact us today to resolve your tax problems.

Statement of Commissioner Douglas H. Shulman

I want to extend my thanks to the members of the Senate and the Senate Finance Committee, especially Chairman Baucus and Senator Grassley. I also want to thank President Bush for nominating me and Treasury Secretary Paulson for his support.

The Internal Revenue Service touches virtually every adult, every business and every non-profit organization in America. It is an honor to assume the leadership of this critical agency. I recognize the great responsibility I have been given and will work to ensure that the IRS is fair, impartial and respects the rights of all taxpayers.

As Commissioner, I will concentrate on both enforcement and service. For the majority of Americans who pay their taxes willingly and on time, there must be clear guidance, accessible education and outstanding service. Our aim should be to make it as easy as possible for citizens to pay the correct amount of taxes in the most efficient and least burdensome manner possible.

Are you being audited? IRS audits you need to know

March 19, 2008 | Mike Habib, EA

What are your chances for being audited? IRS’s 2007 data book provides some clues

Mike Habib, EA

myIRSTaxRelief.com

IRS has issued its annual data book, which provides statistical data on its fiscal year (FY) 2007 activities. As this article explains, the data book provides valuable information about how many tax returns IRS examines (audits), and what categories of returns IRS is focusing its resources on, as well as data on other enforcement activities, such as collections.

What are the chances of being examined? A total of 1,384,563 individual income tax returns were audited during FY 2007 (Oct. 1, 2006 through Sept. 30, 2007) out of a total of 134.5 million individual returns that were filed in the previous year This works out to 1.0% of all individual returns filed (slightly higher than the 0.97% audit rate for the preceding year).

Sub-prime loans tax problem – Investors tax resolution options

March 18, 2008 | Mike Habib, EA

Investors suffered theft loss in connection with company that issued sub-prime loans

Mike Habib, EA

myIRSTaxRelief.com

A Chief Counsel Advice (CCA) has concluded that a theft occurred in connection with investors’ losses on loans to a company engaged in writing sub-prime loans. However, it determined that whether and when a theft occurred for any particular investor, and what losses resulted from the theft, was a question of fact since the company had been engaged in legitimate business for many years before the theft occurred.

IRS 2008 list of notorious tax scams

March 17, 2008 | Mike Habib, EA

IRS unveils 2008 list of notorious tax scams – the “Dirty Dozen”

Mike Habib, EA

myIRSTaxRelief.com

IRS Website Provides Guidance on S Corporation Election Problems

March 17, 2008 | Mike Habib, EA

IRS website provides guidance on S corporation election problems
Filing Requirements for Filing Status Change, on IRS website

Mike Habib, EA
myIRSTaxRelief.com

In a recent posting on its website, IRS explains the steps to be taken and forms to be filed by taxpayers requesting to change their filing status from a C Corporation (filing Form 1120) to an S Corporation (filing Form 1120S). In particular, IRS explains what to do if a taxpayer hasn’t timely filed Form 2553, and either has or hasn’t filed Form 1120S for the first year of the intended S corporation election.

Background. S corporations are incorporated entities with many of the same attributes as traditional C corporations, including limited liability, transferable ownership, and unlimited life. But unlike C corporations, S corporations are generally not subject to income tax. Instead, the business’s profit or loss is passed through to the shareholders, who report it on their individual returns. To qualify, a corporation must elect S corporation status and meet a number of requirements. It can have no more than 100 shareholders, and only certain types of taxpayers can be shareholders. It can have only one class of stock.

House passes Pension Protection Technical Corrections Act

March 17, 2008 | Mike Habib, EA

House passes Pension Protection Technical Corrections Act – final action delayed till after recess

Mike Habib, EA

myIRSTaxRelief.com

Annuity tax problems and issues

March 14, 2008 | Mike Habib, EA

IRS eases rules for partial annuity exchanges

Mike Habib, EA
myIRSTaxRelief.com

In 2003, IRS issued a revenue ruling formally sanctioning partial annuity exchanges as qualifying for tax-free treatment under Code Sec. 1035. At the same time, it issued a notice warning that it would go after taxpayers who use partial exchanges to avoid tax under Code Sec. 72(e)(2). It has adopted the interim guidance as final rules in a new revenue procedures. The final guidance reflects modifications that are mostly pro-taxpayer.

Background. Code Sec. 72(e) governs the federal tax treatment of distributions from an annuity contract that are not received as an annuity. Under Code Sec. 72(e)(2), such amounts generally are taxed on an income-first basis. For this purpose, all annuity contracts issued by the same company to the same policyholder during any calendar year are treated as a single annuity contract. (Code Sec. 72(e)(12)) Code Sec. 72(q)(1) imposes a 10% penalty on withdrawals or surrenders of annuity contracts, unless one of the exceptions in Code Sec. 72(q)(2) applies. No gain or loss is recognized on the exchange of an annuity contract for another annuity contract. (Code Sec. 1035(a))

Partial exchanges. In late ’99, IRS acquiesced to a Tax Court decision holding that the direct transfer of a portion of funds from one annuity contract to another qualifies as a nontaxable exchange under Code Sec. 1035. (Conway v. Comm., 111 TC 350 (1998), acq., 1999-2 CB xvi) See Federal Taxes Weekly Alert 12/2/1999)

Tax Negotiation Buyer Beware Report

March 13, 2008 | Mike Habib, EA

How to compare tax relief and resolution service companies?

Customer…Beware!

How To Keep From Getting Ripped Off?

Many “Tax Negotiation” companies out there will absolutely rip you off. These unscrupulous firms will take your money regardless of whether they can help you or not. They’ll lie to you and tell you they can get all the penalties and interest wiped out. They’ll lie to you and tell you they’ll settle with the IRS for “pennies on the dollar” when they know damn well you don’t possibly qualify for the Offer in Compromise program.

How do they get away with this? Easy, most of the people you talk to at these unscrupulous firms are sales representatives. They have NO license to protect. You don’t actually speak to the EA (Enrolled Agent), the CPA (Certified Public Accountant) or the attorney that these firms claim to have. Nope, you speak to some slimy unlicensed salesman. Some of these firms make up titles like Tax Resolution Specialist, or Tax Consultant. What a scam! In fact, many of these unscrupulous firms aren’t tax firms or law firms at all, they’re just sales organizations!

Securities, stocks, capital assets tax problem resolution

March 12, 2008 | Mike Habib, EA

Final regs clarify treatment of loss from abandoned securities

Mike Habib, EA
myIRSTaxRelief.com

IRS has issued final regs that provide guidance on the availability and character of a loss deduction from abandoned securities under Code Sec. 165. The regs, which adopt proposed regs issued in 2007, apply to securities abandoned after Mar. 12, 2008.