Federal Tax Liens: What You Need To Know

January 18, 2011 by

Nothing in this world is certain but death and taxes – and nothing can strike fear into the average person’s heart like a federal tax lien notice! A federal tax lien is a tool the IRS uses to collect outstanding tax debt. A federal tax lien gives the IRS claim to your property; after some legal proceedings, they can seize and sell your land, vehicles, and other valuables to settle your tax debt.

If you’ve received a notice from the IRS telling you that you are or soon will be subject to a federal tax lien, you may be experiencing feelings of fear and anxiety. Those feelings are natural – but don’t let them stop you from dealing with the situation. Tax problems do not resolve themselves on their own. If you’re receiving federal tax lien notices from the IRS, the time to act is now:

 

Filed Under: In The News Tagged With: , , , , , , , , , , , , , ,

IRS pursues ‘Little Fockers’ star Teri Polo

January 3, 2011 by
Posted by Robert Snell (The Detroit News) on Mon, Jan 3, 2011 at 11:33 AM

“Little Fockers” star Teri Polo has the country’s top-grossing comedy and a doozy of a tax debt. According to public records, she owes more than $458,000 in delinquent federal taxes.

The 41-year-old Delaware native has starred alongside Robert De Niro and Ben Stiller in “Meet the Parents” and two sequels, and was in “West Wing,” among other notable roles. Her tax woes were highlighted here two years ago before the IRS hit her with a new lien in 2010.

What’s owed:

  • The IRS filed an $116,620 lien against her Jan. 25, 2010, with the Los Angeles County Recorder of Deeds. She owes income taxes from 2008.
  • The IRS filed a $114,844 lien against Polo on Aug. 7, 2009, in the Kent County (Del.) Recorder of Deeds office. According to this lien, she owes income taxes from 2007.
  • The state of California filed a $91,748 lien against Polo on April 24, 2008, in the Los Angeles County Recorder of Deeds office. She owed taxes from 2005 and 2006, according to the recorder’s office. The lien was released Dec. 18, 2009.
  • The IRS filed a $227,144 lien against Polo on Feb. 20, 2008, in the Kent County Recorder of Deeds office. She owes income taxes from 2005 and 2006, according to the lien.

Her side:

Manager Bob McGowan previously told The Detroit News that Polo fell behind paying taxes while going through a costly divorce and during an acting hiatus while raising her children.

She has negotiated a payment plan with the IRS, and her multi-million “Little Fockers” pay day should help toward the debt, McGowan said.

Filed Under: In The News Tagged With: , , , , , , , , , , , , , , , , , , ,

IRS Has Problems Identifying Prisoner Tax Fraud

January 3, 2011 by

Washington, D.C. (January 3, 2011)

By Michael Cohn from accountingtoday.com

Significant problems remain with efforts by the Internal Revenue Service to identify and prevent tax refund fraud by prisoners after the passage of a 2008 law aimed at curbing such issues, according to a new government report.
The report, by the Treasury Inspector General for Tax Administration, found that despite the passage of the Inmate Tax Fraud Prevention Act of 2008, refund fraud committed by prisoners is increasing at a significant rate. The number of fraudulent prisoner tax returns identified by the IRS has more than doubled from 18,103 tax returns in calendar year 2004 to 44,944 tax returns in calendar year 2009. Fraudulent refunds claimed rose from $68.1 million to $295.1 million during the same period.

“More than two years ago, Congress gave the IRS the authority to share tax information with the Federal Bureau of Prisons,” said Senate Finance Committee ranking member Chuck Grassley, R-Iowa, in a statement. “The IRS and the Federal Bureau of Prisons still don’t have an agreement in place to share information. Meanwhile, the number of inmates’ false returns and refunds continues to rise. This signals that prisoner tax fraud is a low priority for the federal government. The agencies need to take action and correct that impression. While they wait, taxpayers are picking up a growing tab for prisoner tax fraud.”

TIGTA found that, as of October 2010, the IRS had not completed the required agreements to allow the IRS to disclose prisoner tax return information to prison officials. As a result, no information has been disclosed to either the Federal Bureau of Prisons or State Departments of Corrections.

In addition, the Calendar Year 2009 Report to Congress on prisoner fraud is incomplete. The report stated the IRS identified 44,944 false or fraudulent prisoner tax returns during calendar year 2009. However, the processes the IRS uses to identify prisoner tax returns may result in the IRS understating the amount of prisoner fraud. Finally, TIGTA’s review of the process used by the IRS’s Criminal Investigation Division to compile the 2009 prisoner data file identified a lack of managerial oversight to ensure the accuracy and reliability of this file.

TIGTA recommended that the IRS work with the Treasury Department to seek legislation to extend the period of time the IRS has to disclose prisoner tax return data to the Federal Bureau of Prisons and state prison officials. TIGTA also recommended that the commissioner of the IRS’s Wage and Investment Division revise the annual report to provide Congress with a complete assessment of potential prisoner fraud. TIGTA said the IRS should ensure that all tax returns filed by prisoners are processed through the Electronic Fraud Detection System and receive a prisoner indicator. The report also recommended that the IRS revise prisoner filters to validate the wages and withholding associated with prisoners incarcerated for a year who filed tax returns claiming a refund. The IRS should also develop a process to assess the reliability (accuracy and completeness) of data received from federal and state prisons, TIGTA suggested.

The IRS agreed with two of TIGTA’s five recommendations and partially agreed with two recommendations. The IRS did not indicate its agreement or disagreement with one of the recommendations, on providing Congress with a complete assessment of potential prisoner fraud by revising the annual report to include the total number of tax returns filed by prisoners, number selected for fraud screening, and the number verified as false or fraudulent.

However, the IRS noted hat it would continue to report to Congress all of the prisoner information that is required to be reported by the Inmate Tax Fraud Prevention Act of 2008, such as the number of false and fraudulent returns associated with prisoner filings. In addition, the IRS said it would respond to future Congressional requests pertaining to prisoner- related fraud.

The new report is available here.

TIGTA issued a report last September saying the IRS needs to subject tax returns filed by prisoners to greater scrutiny for fraud. The report was largely about how expanded access to wage and withholding information could improve the identification of fraudulent tax returns, but it noted that the majority of tax returns the IRS identifies as being filed by prisoners are not being sent to screening to assess fraud potential.

TIGTA’s review identified 253,929 (88 percent) of the 287,918 tax returns filed by a prisoner as of March 24, 2010, were not selected for screening. Of those tax returns not screened, 48,887 individuals had no wage information reported to the IRS by employers.

These 48,887 prisoners claimed refunds totaling more than $130 million including Earned Income
Tax Credit claims of $78.5 million. Some of these refunds may have been stopped by other compliance activities. For example, TIGTA determined that the IRS prevented the issuance of nearly $18.1 million in EITC claims for 4,532 of the 48,887 prisoner tax returns.

Filed Under: In The News Tagged With: , , , , , , , , , , , , , , , , , ,

Actor Wesley Snipes reports to prison to begin sentence

December 30, 2010 by
From Michael Martinez, CNN
December 9, 2010 1:28 p.m. EST
(CNN) — Actor Wesley Snipes reported to a medium-security Pennsylvania prison Thursday to begin a three-year sentence for failing to file tax returns.

The 48-year-old actor is now incarcerated in McKean Federal Correctional Institution in Lewis Run, officials said.

Snipes’ attorney said he is appealing his client’s misdemeanor convictions for not filing tax returns in 1999, 2000 and 2001.

Snipes was acquitted of felony charges.

Snipes is nervous, he said, but hopeful that his prayers will be answered.

“We still have prayers out there. We still believe in miracles. So don’t send me up the river yet,” Snipes said in an interview on CNN’s “Larry King Live” Tuesday night.

The actor conceded he was uneasy about losing his freedom if his appeal to the U.S. Supreme Court fails.

“I think any man would be nervous if his liberty is at stake,” Snipes said. “I’m disappointed that the system seems not to be working for me in this situation.”

Prosecutors said Snipes earned $40 million since 1999 but had filed no returns and had been involved in a tax resisters group.

Snipes disputed such involvement and said that the failure to file was his advisers’ fault.

“This is another thing that has been misreported: It has been framed that I was a conspirator and that I was an architect in a scheme by an organization that has been characterized as tax protesters,” Snipes said. “The press hasn’t reported that I was a client of people who I trusted (who) had knowledge and expertise in the areas of tax law that would protect my interests.”

Snipes is best known for his roles in the “Blade” action films, the comedy film “White Men Can’t Jump” and the drama “Jungle Fever.”

In February, a jury convicted Snipes on the misdemeanor charges, but he was acquitted of more serious felony charges of tax fraud and conspiracy. Jurors accepted his argument that he was innocently duped by errant tax advisers.

Defense attorneys in court documents suggested that to sentence Snipes harshly would be to disregard the jury’s verdict.

But prosecutors, in their sentencing recommendation, said the jurors’ decision “has been portrayed in the mainstream media as a ‘victory’ for Snipes. The troubling implication of such coverage for the millions of average citizens who are aware of this case is that the rich and famous Wesley Snipes has ‘gotten away with it.’ In the end the criminal conduct of Snipes must not be seen in such a light.”

Snipes suggested he was unfairly singled out by prosecutors.

“It does seem to be rather unusual and rather bizarre when you had a prosecutor come into the sentencing and say that this is the biggest tax trial in the history of the IRS,” Snipes said. “I think there is a certain amount of selectivity going on here.”

Snipes indicated he was disturbed by some public comments that he was receiving “just punishment.”

“It’s been presented as though I’m worthy of this punishment,” Snipes said. “I’ve been a law-abiding citizen ever since I grew up in the Bronx, New York.”

One juror, Frank Tuttle, gave Larry King Live a written statement that three other jurors had made up their mind that Snipes was guilty before the trial began.

The jury’s verdict was a compromise between those jurors who thought Snipes was guilty and those who didn’t, Tuttle said in the statement.

“That’s when a deal was made to find him guilty on the failure to file taxes and not guilty on the federal tax evasion charges,” Tuttle said in the statement. “We did not think he would go to jail.”

Snipes’ attorney, Daniel R. Meachum, said neither he nor Snipes had any involvement in preparing that juror’s statement to Larry King Live, saying the show’s producers obtained it on their own.

“We on the defense team never suggested that the media reach out to any of the jurors,” Meachum said.

Snipes contended that some media accounts of his trial have distorted public perceptions.

“There have been some egregious and very malicious efforts to report the facts of this case,” Snipes said. “I was never charged with tax evasion. I’ve never been a tax protester.”

Snipes said he has paid his taxes.

“They claimed that there was a certain number that was owed and that number has been all over that place. The press has escalated it and changed it a number of times. But we think we are fully compliant with what was owed,” Snipes said.

CNN’s Jessica Thill contributed to this story.

Filed Under: In The News Tagged With: , , , , , , , , , , , , , , , , , , , , , , , ,

Val Kilmer — Another $500,000 in Tax Problems

December 30, 2010 by

12/28/2010 9:30 AM PST by TMZ Staff  from tmz.com

Val Kilmer is back on Uncle Sam’s bad side — the “Iceman” reportedly left the IRS in the cold … to the tune of $500,000 in unpaid federal taxes — and now it is out to collect.

According to DetNews.com, the Internal Revenue Service filed a $498,165 lien against Kilmer on Nov. 30 in New Mexico … where the actor owns a multi-million dollar ranch.

It’s not the first time Kilmer’s had issues with taxes — the IRS had filed a lien against him for $538k back in 2009 … but Val reportedly settled that debt a few months ago.

So far, no comment from Val’s people.

Filed Under: In The News Tagged With: , , , , , , , , , , , , , ,

EXCLUSIVE: Financial Trouble Cooking For Chef Gordon Ramsey ~~ $ 1 Million in Tax Liens

December 30, 2010 by
Posted on RadarOnline.com on Dec 29, 2010 @ 06:10AM  
 
Gordon Ramsay, the embattled TV chef and restaurateur, has nearly $1 million in tax liens against him, RadarOnline.com has learned exclusively.
According to court documents we uncovered, there are two outstanding New York State tax warrants against Ramsay. The latest one was filed last month and is for a whopping $419,051.

Back in July, another warrant was filed for $513,003. That’s $932,054 if you want an exact count, as we’re sure Ramsay’s creditors do.

Chef Ramsay’s company suffered financial setbacks in the last two years as the recession hit his rapidly expanding restaurant empire and he fired his CEO father-in-law in a bitter family feud.

Ramsay sold his flagship New York Restaurant, The Gordon Ramsay at The London, but remains a consultant.

The very popular TV chef, famous for his hot tempered personality, earned 12 Michelin stars for his many restaurants and was one of only three chefs in the UK to have three Michelin stars at one time.

Filed Under: In The News Tagged With: , , , , , , , , , , , ,

IRS Pressed to Fight Tax Evasion by Business Networks

December 30, 2010 by

Washington, D.C. (October 26, 2010)
By WebCPA Staff from AccountingToday.com

Businesses that have developed complex networks of related trusts and partnerships to evade taxes are making it difficult for the Internal Revenue Service’s efforts to close the tax gap, according to a new government report.

The IRS views network-based tax evasion as a problem but does not have estimates of the associated revenue loss, in part because data does not exist on the full population of the networks, according to a report by the Government Accountability Office. A taxpayer can control a group of related entities — such as trusts, corporations, or partnerships — in a network. These networks can serve a variety of legitimate business purposes, but they also can be used in complex tax evasion schemes that are difficult for the IRS to identify.

The IRS does know that at least 1 million networks existed involving partnerships and similar entities in tax year 2008. The IRS also knows that many questionable tax shelters and abusive transactions rely on the links among commonly owned entities in a network, said the report.

The IRS generally addresses network-related tax evasion through its examination programs. These programs traditionally involve identifying a single return from a single tax year and routing the return to the IRS division that specializes in auditing that type of return. From a single return, examiners may branch out to review other entities if information on the original return appears suspicious.

However, this traditional approach does not align well with how network tax evasion schemes work, the report noted. Such schemes can cross multiple IRS divisions or require time and expertise that IRS may not have allocated at the start of an examination. A case of network tax evasion also may not be evident without looking at multiple tax years.

In reaction to the report, Senate Finance Committee Chairman Max Baucus, D-Mont., called for new tools to help the IRS fight complex tax evasion schemes. Baucus had requested the report from the GAO as part of his ongoing efforts to reduce the estimated $345 billion tax gap.

“When people skirt their tax obligations, it places an undue burden on the hardworking Americans who do pay their taxes,” said Baucus in a statement. “This report makes clear the IRS needs to develop a comprehensive strategy to fight complex tax evasion schemes and that more work is needed to close the tax gap. I intend to closely monitor the IRS’s progress to make sure they have an effective strategy to root out this tax evasion and close the tax gap once and for all.”

The IRS is developing programs and tools that more directly address network tax evasion. One, called Global High Wealth Industry, selects certain high-income individuals and examines their network of entities as a whole to look for tax evasion. Another, yK-1, is a computerized visualization tool that shows the links between entities in a network. These efforts show promise when compared to the GAO’s criteria for assessing network analyses. They represent new analytical approaches, have upper-management support, and cut across divisions and database boundaries. However, there are opportunities for more progress.

For example, the IRS has no agency-wide strategy or goals for coordinating its network efforts. It has not conducted assessments of its network tools, nor has it determined the value of incorporating more data into its network programs and tools or scheduled such additions. Without a strategy and assessments, the IRS risks duplicating efforts and managers will not have information about the effectiveness of the new programs and tools that could inform resource allocation decisions, said the report.

Among other items, the GAO recommends that the IRS establish an IRS-wide strategy that coordinates its network tax evasion efforts. Also, the IRS should assess its network programs and tools and should evaluate adding more data to its current tools. The IRS generally agreed with these recommendations and noted additional organizational changes the agency is making that will address networks.

“In the end, the IRS will always be challenged to find technological, administrative, or auditing approaches to address the tax problems associated with the ever-increasing complexity and variability of both legitimate and abusive entity structures that use tiered flow-through tax reporting,” wrote IRS Deputy Commissioner Steven T. Miller. “We are in the process of studying potential legislative and guidance changes to reduce the tax risks inherent in network structures.”

 

Filed Under: In The News Tagged With: , , , , , , , , , , , , , ,

As the Federal Trade Commission and state Attorney Generals crack down on scam tax relief firms, where can consumers turn to for help with their IRS and state tax problems?

November 2, 2010 by

Just last month, the Federal Trade Commission shut down American Tax Relief, a Beverly Hills, California-based company that guaranteed it could settle tax debts for individuals for a fraction of what they owed. The state of California recently filed suit against Roni Deutch, AKA the “Tax Lady”, for a deceptive ad campaign that offers very little proof that the firm’s clients are getting any real-world benefit and overstates claims of winning against the IRS. Suit was also brought against J.K. Harris of Charleston, South Carolina by the state of Massachusetts in conjunction with the attorney generals from 17 other states for false and deceptive trade practices and nonperformance of work. A $1.5 million judgment against J.K. Harris was awarded to the state of Massachusetts and the other 17 states. Are these three isolated cases? Can you believe any firm that says they can help settle your tax debt for less than what you owe?

“These three firms are just the tip of the iceberg when it comes to companies claiming to be tax debt relief specialists who say they can settle your tax debt for pennies on the dollar,” said Matthew Previte, CPA, of Matthew J. Previte, CPA, PC and TaxProblemsRUs.com. “The sad part is that tax representation firms like these create a genuine distrust of any company who can genuinely help delinquent taxpayers with tax debt owed to the IRS or their state DOR.”

Previte, whose Natick, Mass.-based tax representation firm has specialized exclusively in representing individuals and businesses with IRS and state tax problems since 1997, says the real problem with companies like American Tax Relief, Roni Deutch, and J.K. Harris is that they make promises to clients that they can’t possibly deliver on. Says Previte, “The simple fact remains that approximately 95 percent or more of delinquent taxpayers do not qualify to settle their tax debts through an Offer in Compromise.”

So, what options do Americans who owe the IRS or their state DORs have besides representing themselves? Previte suggests there are plenty of reputable tax representation firms out there but consumers must do their due diligence before selecting a firm, such as:

• Avoid firms that guarantee a settlement – There are four main factors involved in settling your tax debts through an Offer in Compromise. The four factors are: (1) your current financial condition, (2) the tax law and IRS procedure, (3) your cooperation in providing the requested information needed to settle your case, and (4) the competency of the tax representation firm you have chosen. A tax representation firm that guarantees settlement is a major red flag since the first three of these factors are completely outside of their control and can change while in the process of trying to settle your tax debts causing an eligible Offer candidate to become ineligible. Meaning, you could start off as a great Offer candidate but later become ineligible due to changes in your financial condition, tax law and IRS procedures, or your failure to cooperate.
• Use a locally based tax representation firm staffed by licensed tax professionals (CPAs, Enrolled Agents (EAs), or tax attorneys) that practices exclusively in resolving IRS and state tax problems – Negotiating with the IRS or state DOR is a unique skill set unto itself. CPAs, EAs, and tax attorneys, although they perform various tax services such as tax return preparation and tax planning, are rarely well versed in the workings of the IRS or state DORs. It is rare if they handle one tax controversy case a year. You want to work with a licensed tax professional whose firm focuses exclusively in representing individuals and business in trouble with the IRS or state DORs, with a physical, brick-and-mortar location that’s within driving distance to you so you can schedule a face-to-face meeting before engaging them to represent you.
• Ask for references – If you don’t know anything about a particular tax representation firm, ask for references. Most will be more than happy to provide contact information for satisfied clients or conventional tax professionals (CPAs, EAs, tax attorneys) who have referred them clients. You can also research a prospective tax representation firm by going to your state’s society of CPAs web site, state bar association web site, or state society of Enrolled Agents web site. The overwhelming majority of licensed tax professionals working at any reputable tax firm will be members of one of these societies. Also, do a search with your local Better Business Bureau and state licensing board (CPAs, tax attorneys) or IRS Office of Professional Responsibility (EAs) as well as a general Google search. You would be amazed at what you can discover about your prospective tax representative online.
• Work with a smaller firm – When it comes to larger vs. smaller firms, you are most likely to get personal attention when working with a smaller firm. Larger firms tend to assign your case to junior staff and there’s a possibility that a senior staff member might not even review your case. For many larger firms, the focus can be more on selling and collecting retainers than getting actual results. With smaller firms like Matthew J. Previte, CPA PC, the principal reviews every case.

“It makes perfect sense that somebody carrying a huge tax debt would turn to one of these tax representation firms for help with their IRS or state tax problems. What you don’t want is an additional problem, like wasting precious dollars on a tax representation firm that makes promises it can’t keep,” said Previte. “By doing a little research before handing over a retainer fee, you prevent your hole from getting any deeper and can feel rest assured you’re taking a positive step forward in resolving your IRS and state tax problems.”

For more information on Matthew J. Previte CPA PC, please visit www.TaxProblemsRUs.com. To schedule a free confidential consultation, call 877-259-8200.

Filed Under: Tax Problem Resolution Blog Tagged With: , , , , , , , , , , , , , , , , , , ,

Salesman Buys Time And Gets Some Breathing Room

January 4, 2010 by

Joe owed the IRS about $25,000 and was experiencing severe financial hardship. The IRS had levied his paycheck and left almost nothing for his family to live on. The tax bill seemed to keep growing despite payments from his wage levy. It was a never ending problem. Joe needed help fast! Our firm worked to obtain release of the levy so Joe could breathe again financially and have sufficient funds for his family to survive. Next, we worked to have him declared Uncollectable. This meant Joe wouldn’t have to make any payments on his old tax debt for the next year or two. With collection action suspended for a while, Joe had time to review all the available options to end his IRS problem for good.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , ,

Author Gets Short Reprieve From $170,000 Tax Problem

January 4, 2010 by

Chris was at wits end about his IRS problem. The stress and anxiety of having such a massive tax debt hanging over his head gnawed at him night and day causing him many sleepless nights. To make matters worse, the IRS was levying his paycheck leaving him and his family virtually destitute, unable to properly care for his severely ailing child. He just did not know what to do. Our firm negotiated removal of the levy on his paycheck as well as an affordable installment agreement that gave Chris the time he needed to review all the options available to resolve his tax problem.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , , , , , ,
« Previous Page