Sep 112017
 

Houston, Tx.

The Internal Revenue Service has decided to offer tax help and penalty abatement help, to victims of Hurricane Harvey, as long as they were in the designated FEMA disaster zone. As the most powerfull rainstorm to ever land on American soil recedes into memory, the agony of a long, drawn out recovery will slowly begin. Tens of thousands of individuals, families, and business owners lives have been uprooted and impacted, and the road to recovery will take time. Congress did their part, passing a nearly $8 billion tax relief measure, designed to speed money for reconstruction and supplies.

The American people did their part as well. As millions of dollars in donations, in the form of food, medical supplies, bedding and furniture, came in from all parts of the country. Financial donations were set up across the country, wiht both individuals, and businesses donating millions of dollars nationwide. Churches became donation centers, as did local gyms, and community gathering locations. It was even reported that during the hieght of the crisis, an army of individuals with boats were going up and down streets, looking to help rescue people trapped byflood waters.

The Internal Revenue Service announced on August 28th, 2017, in Internal Revenue news publication IR-2017-135, that individuals and business owners impacted by the storm will not have to file tax returns until January 31st, 2018. This also applies to making self employedment estimated payments. The IRS is offering this and penelty abatement help for those who live in a FEMA designated area. If you need tax help, you may want to refer to the IRS publication for that tax help. The penalty abatement information is also available in that same publication.

To establish a case for penalty abatement, you must show one of several things. A typical situation eligible for penalty abatement is osmething that is out of your control, such as a natural disaster (Hurricane Harvery), inability to obtain records, death or serious illness, or anther reason that would establish that you used all ordinary business care to file or pay on time.

We have witnessed over 28 years penalty abatement cases that went through, that probably should not have, so if you have questions, please feel free to call and ask for help.

National Society of Tax Professionals

  •  09/11
Aug 152017
 

U.S.A.

The tax resolution services history started nearly 30 years ago when a few individuals in the United States found and researched the IRS Revenue Code, and realized that tax relief options existed for both individuals and business owners who owed back tax debts. It was an eye opener for them, as they realized that millions of Americans were not aware that these options existed, neither was the tax industry, including most CPA’s, Enrolled Agents, and even few Tax Attorney’s. In fact, most IRS Revenue Agent’s didn’t even know these options existed, because the IRS Revenue Code is thousands of pages in length, and few went to the trouble of reading all of it. Thus, tax resolution services history started.

So for decades, millions of Americans languished in the fact that they were paying more in tax that they had to, unbeknownst to them. Not having that information could have been the difference to those taxpayers of savings for a child’s education or having the ability to put a down payment on a home. But without that knowledge, the ability to do  that never occurred. So the tax resolution services industry was born to solve such problems and provide solutions for both individual taxpayers and business owners, who need options for certain tax situations.

The problem at this particular point in time in tax resolution services history, was their were very few tax resolution services companies to hire. The company I started for was an Offer in Compromise mill, and I left after I figured out what they were doing was unethical. It was a sale, whether or not people actually qualified didn’t matter. The other main companies at that time did the same thing and are also out of business. These companies all operated under the same principles, charge the entire fee upfront, sale the Offer in Compromise, then deal with complaints down the road. When the complaints became so large that the word got out, they simply formed a new company, and the regulatory agencies and Better Business Bureau would wipe the slate clean.

In fact, at this point in time, the IRS website didn’t even exist. So no one had the ability to look up the information regarding IRS options for dealing with back tax debts. Getting tax relief seemed like a distant dream to most individuals who owed the IRS back taxes. yet tax relief was possible, if you had the knowledge. At that point in time, the only way to obtain it, was to find the IRS Revenue Code and look it up. That could be a daunting task, as the Internal Revenue Code has over 80,000 pages of Revenue Code. So simply finding what you would need could take you months, if you didn’t know what you were doing, or where to look.

In the tax resolution services history point of time that the IRS website actually came about, two things happened to dramatically help taxpayers across the United States. Knowledge of tax relief options began to make its way into the heartland of America thru two avenues of distribution. The first was the IRS website, irs.gov , and the second was the increase in tax resolution companies, many started by individuals disillusioned with the original companies who were “Offer in Compromise Mills”, and not real Professional Tax Companies. Between these two channels of information, the needed knowledge was funneled, slowly across the 50 States to eager taxpayers, fulfilling a need for tax relief options.

Unfortunately, several of these companies were started by individuals who decided to use the same business model as the original founders of the industry, becoming “Offer in Compromise Mills”, instead of Professional Tax Companies. American Tax was one such company. I actually called this company and pretended to be a taxpayer looking for help, suggested to them that my assets were more than my tax debt, and the response was, You Qualify for an Offer in Compromise, just send us $4000 upfront today !

Which brings us to where the tax resolution services history is today. Tax resolution services history exist because taxpayers have life situations that take the best made plans and turn them upside down. Recovering from the financial wreck of those situations can take years. Having options for getting back on your feet makes sense for those individuals and for the economy as a whole, and for our nation as we would rather have them eventually paying taxes again, as opposed to needing welfare. How to secure your financial future, by cutting the number of years you have to deal with a back tax debt. That is what the future of tax resolution services history should look like.

As time goes on, as the good companies that are trying to set the standard in this industry gain more and more traction, the memories of the old “Offer in Compromise Mills” can finally vanish, and hopefully, even the newer companies will see the light and realize that having a business model built solely on profit, without the corresponding customer service that should go along with it, is not the way to go. Then our industry can grow even further, and our tax resolution services history can become what it should have been from day one.  Those companies that changed from one company to another due to the number of complaints in the beginning of the industry, unfortunately have a few followers today. Call us and we will let you know who they are.

Federal Tax Resolution has never wiped the slate clean. We have been in business for 27 years and like our tax resolution history. We were one of the first three companies to charge a small retainer fee, then accept payments from clients, confident that our work would earn our customers trust. By doing that, the business model of charging the entire fee upfront was changed, allowing thousands to obtain tax resolution services, who otherwise could not afford to.

Douglas Myser, Owner

 

  •  08/15
Aug 092017
 

U.S.A. Douglas Myser, CEO, Federal Tax Resolution

National Tax Reform

National Society of Tax Professionals

was one of the cornerstones of President Trump’s promises and pledges during the Presidential campaign, that a major overhaul would occur of both personal and corporate national tax reform. He re-iterated those sentiments during the Presidential Debates, alluding to the fact that the United States was failing in the world, to some degree, due to tax structure, which made us less competitive. He cited statistics that assured us that if we lowered the corporate rate, we would see an influx of jobs coming into the United States, and that large corporations that had parked sizable amounts of money from the profits of those companies, would reinvest those very same profits back into the United States, if given an amnesty period without severe penalties. National tax reform it seemed was finally going to happen, and was going to have a positive impact upon our economy. Most everyone thought those ideas would be good.

Several ideas were mentioned, including the “border adjustment” tax idea. This idea was meant to put tariffs on goods coming into the country, making it easier to produce and sell those goods here in America. But after looking at it closer, and realizing that the cost would be borne primarily by lower income individuals, and getting push back by importers including Wal Mart, it seems the idea went into the dumpster.  So where did tax reform go after that idea went downhill. Nowhere. The reason for that was the debacle over the Affordable Care Act. Since the Republican controlled Congress could not come up with a alternative to Obamacare, the taxes attached to Obamacare remain intact. That changed the outlook and dynamic of national tax reform substantially going forward.

So it seems at this point that a grand, all encompassing tax reform program will not happen in this administration. Without substantial tax cuts from Obamacare, that is simply impossible. The real question for America is, can this Administration muster enough votes to pass a meaningful national tax reform package for both individuals and businesses, that will propel our economy forward with increased international competition ?

 

 

  •  08/09
Jul 272017
 

Vancouver, Wa. NSTP

The IRS has created a special new page on www.irs.gov to help taxpayers determine if a person visiting their home or place of business claiming to be from the IRS is a legitimate IRS revenue officer or an imposter. With continuing phone scams and inn person scams taking place across the country, the IRS reminds taxpayers that IRS employees do make official, sometimes unannounced, visits to taxpayers as part of their routine casework. Taxpayers should keep in mind the reasons these visits occur and understand how to verify if it is the IRS knocking at their door. Visits fall into three categories.

An IRS revenue officer will sometimes make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed or tax returns due. IRS revenue officers are IRS civil enforcement employees whose role involves education, investigation, and when necessary, appropriate enforcement. IRS revenue agents will sometimes visit a taxpayer who is being audited. That taxpayer would have first been notified by ail about the audit and set an agreed upon appointment time with the revenue agent. Also, after mailing an initial appointment letter to a taxpayer, an auditor may call to confirm and discuss items pertaining to the scheduled audit appointment.

IRS criminal investigators may visit a taxpayer’s home or place of business unannounced while conducting an investigation. However, these are federal law enforcement agents, and they will not demand any sort of payment. Criminal investigators also, carry law enforcement credentials, including a badge. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, as outlined above, there are special circumstances in which the IRS will call or come to a home or business. Even then, taxpayers will generally first receive several letters from the IRS in the mail.

If an IRS Revenue Officer does visit a taxpayer, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government wide standard for secure and reliable forms of identification for federal employees and contractors. A taxpayer has the right to see these credentials when an IRS employee visits a taxpayer in person.

  •  07/27
Jul 182017
 

Hartford, Ct. msn.com

Per Capita income, Connecticut’s taxes is a mess. It’s pensions are woefully under funded. It’s deficit is projected to surpass $2 billion, or 12% of its total annual revenue. Hartford is approaching bankruptcy. Conservatives look at Connecticut and see a liberal dystopia, where high taxes have ruined the economy. Liberals, on the other hand, see a capitalist horror show, where the rich dwell in gilded mansions, ensconced in sylvan cul-de-sac, while nearby towns face rising poverty and bankruptcy. Why is America’s richest state floundering ?

The first answer is: Corporations are leaving because of Connecticut’s taxes. Aetna, the insurance giant, is leaving Hartford, where it was founded 150 years ago. In early 2016, General Electric announced that it would move its global headquarters from Fairfield, Connecticut, to Boston. Caterpillar, Motorola, and Kraft-Heinz have all moved offices or employees out of the state, as well. The second answer is: People are leaving because of Connecticut’s taxes. It’s rare for any state to actually shrink, but Connecticut’s population has been falling for three straight years. Meanwhile, only Michigan, Ohio, and Mississippi had slower job growth than Connecticut did over the last two decades, according to Jed Kolko, the chief economist at Indeed, a job site.

For Conservatives, the culprit is just as simple: It’s big government run amook. The Wall Street Journal’s editorial board holds up Connecticut as a poster child of the costs of high taxes. “Connecticut’s progressive tax experiment has hit a wall,” they wrote in April. Conservatives argue that Connecticut’s income, property, and sales taxes have reached an altitude that cannot support economic life. But Connecticut’s taxes and budget shortfall isn’t just about tax rates. It’s about who  is paying the taxes. The richest 0.02 percent of Connecticut households make more money than the bottom 48 percent, according to state reports. This 0.02 percent cluster along the Gold Coast and tends to work in finance.

In the last decade, Connecticut’s millionaire’s have accounted for as much as 30 percent of the state’s income tax-revenue. This is a problem, because the investment income of financiers is volatile. When hedge funds earnings falter, as they have in the last few years, Connecticut’s taxes feel the pain.

  •  07/18
Jul 152017
 

Wash. D.C. TheHill.com

The Trump administration and congressional Republicans are working toward unifying around a single GOP tax reform bill, aiming to pass the legislationthis year. But there are still some key differences between the priorities of the White House and the Senate that need to be ironed out. Speaker Paul Ryan (R.-Wis.) and House and Ways and Means Committee Chairman Kevin Brady (R-Texas0 have said that Republicans agree on about 80 percent of a tax reform package. But working through that final 20 percent could take some time. Here are five GOP tax reform issues that Republicans need to resolve.

How long should tax changes last ?  House GOP leaders on tax reform are pushing for the changes to be permanent, but some senators and administration officials have expressed openness to temporary tax changes. Procedural rules play into this debate. If Republicans want to pass a tax reform bill under “reconcilation” to bypass a Democratic filibuster in the Senate the lefislation can’t increase the deficit outsie of the budget window. As a result, a tax bill either needs to be revenue neutral–meaning that it won’t increase the deficit–or make the tax cuts on only a temporary basis.

But some GOP Senators are more interested in producing legislation with a net tax cut, which could  mean making the cut temporary under reconciliation. Sen. Pat Toomey (R-Pa.) suggested in a Bloomberg View op-ed earlier this month that Congress could extend the budget window from the traditional 10 years to 20 or 30 years to enact longer lasting tax cuts. Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney have said they are willing to consider lengthening the budget window. And Mnunchin has said that short term tax cuts are preferable to no tax cuts at all. “Permanent is better than temporary and temporary is better than nothing,” he said at a hearingon Wednesday.

Republicans agree that they want to lower tax rates. But GOP tax reform put forward by House Republicans and the White House diverge on howlow to set tax rates for both individuals and businesses.

  •  07/15
Jul 142017
 

Wash. D.C. IR-2017-113

National Taxpayer Advocate Nina Olson today released her statutorily mandated mid-year report to Congress that presents a review of the 2017 Filing Season, reviews taxpayer service, identifies the priority issues the Taxpayer Advocate Service will address during the upcoming fiscal year, and contains the IRS’s responses to each of the 93 administrative recommendations the Advocate made in her 2016 Annual Report to Congress.

In her preface to the report, Ms. Olson praises the IRS for running a generally successful filing season, including reducing the incidence of identity theft, implementing new accelerated Form W-2 reporting requirements, and matching Forms W-2 against tax returns claiming refunds. But Ms. Olson says taxpayers who require assistance from the IRS are continuing to face significant challenges obtaining it. She attributes part of the problem to resource constraints, saying that IRS funding has been reduced by nearly 20 percent since fiscal year 2010, after adjusting for inflation.

While taxpayer service and enforcement activities are both essential for effective tax administration, Ms. Olson says taxpayer service requires more emphasis than they are currently receiving. She points out that more than 60 percent of the IRS budget is allocated to enforcement activitities while only about 4 percent is allocated for taxpayer outreach and education. The report elaborates on taxpayer service limitations, particularly involving outreach and education. Ms. Olson recommends that the IRS expand its outreach and education activities and improve its telephone service and that Congress provide the IRS with sufficient funding to do so.

The report says the IRS delivered a generally successful filing season in 2017. The IRS processed nearly 130 million returns, about 90 percent of which were filed electronically. Seventy five percent of the returns resulted in refunds, and the average refund amount was $2,783. The IRS successfully implemented several provisions of the Protecting Americans from Tax Hikes Act of 2015, which directed the IRS to delay paying refunds until February 15 to taxpayers claiming either the Earned Income Credit or the Additional Child Tax Credit and required the IRS to deactivate Individual Taxpayer Identification Numbers based on age of issuance and non-use.

  •  07/14
Jul 112017
 

Arizona, U.S.A. The Arizona Republic

So you have a house to rent—or maybe just a room, in the sharing economy. Or perhaps you’d like to pick up passengers in your car working for Uber or Lyft. Pursuing these types of business activities can be great sources of additional income. But there are drawbacks too, including those involving taxes for the shared economy. There are several trickly tax rules to beware, especially if you want to lease your home or part of it: A guide prepared for Airbrib landlords by accounting firm Ernst and Yound runs 28 pages. yet plenty of the more than 2.5 million people now estimated to be part of the “shared economy” aren’t familiar with the rules, especially when they involve renting out part of a home.

“Many individuals might take on these new jobs completely unaware (of the tax obligations), ” said Nina Olson, the National taxpayer Advocate, in Congressional Testimony last year. The rules can be more confusing for people such as part time, secondary sources of income, she said. In a poll conducted by the National Association of the Self-Employed, roughly one-third of survey participants didn’t realize they might need to file quarterly estimated payments, and roughly one third didn’t know what types of tax records to maintain. Yet more people are engaging in the sharing economy. In one recent example, Airbrib said the nearly 4,700 Phoenix area residents who opened their homes to Spring Training guests thies eyar and used the company’s services earned $2350 on average over the six week exhibition baseball season.

The money you earn from the sharing economy pursuits typically is taxable and must be reported, even if you’re running things as a part time or sideline business. Income also is taxable, even if you collect the proceeds in cash and don’t receive any Form 1099’s. One exception involves income from renting your personal residence for fewer than 15 days each year–that money isn’t taxable. While the income usually is taxable, you similarly may qulaify for various deductions to lower the tax bite. The list of deductible expenses can include mortgage interest, property taxes, utilities, repairs, insurance and advertising.

 

 

  •  07/11
Jul 092017
 

Wash. D.C. msn.com

The new hot thing in tax avoidance has a boring old name: insurance dedicated funds. Introduced in the 2000s, IDFs have become so mainstream that banks such as JPMorgan Chase and Co. and Goldman Sachs Group Co. are offering them. Hedge funds like Paulson & Co. and Israel Englander’s Millennium Partner’s LP have been managing them for years. For investors, the products provide a legal way to avoid taxes. For investment firms, the premiums are “sticky”–they make for stable, long term sources of capital that act as a bulwark agasint client redemptions at a time when clients just puled $75.6 billion from hedge funds in the five quarters through March, according to Hedge Fund Research.

Here’s howit works: The client buys a private placement life insurance policy. The insurance company invests in alternative assets such as hedge funds. Profits, if any would be ordinarialy taxed as capital gains, but because it involves an insurance policy, which must abide by certain restrictions, the money can grow tax free. Beneficiaries get their money when the insured person dies. Many IDFs are life insurance policies, but they alsocome in the form of annuities, which have different tax implications. There’s no official accounting of how much money has been invested, but according to Aaron Hodari, who keeps tabs for Birmingham, Michigan based Schechter Wealth, it’s at least $15 billion, triple what it was a decade ago.

Tax status makes a clear difference. If a 45 year old, non smoking man were to contribute $2.5 million to an IDF for four years, the investment would be worth $113 million within 40 years with a 6.5% internal rate of return, according to a presentation by wealth planning law firm Giordani, Swanger, Ripp & Jetel. The account value would be $48.8 million if the investor paid taxes, the document shows. The rising use of an insurance policy among the wealthy widens the gap between the rich and pool, said Gabriel Zucman, an economics Professor at the University of California at Berkley.

  •  07/09
Jul 082017
 

Wash. D.C. msn.com

The American Health Care Act, AKA, Trumpcare, affects much more than just health insurance. Trumpcare would repeal many provisions of Obamacare that relate to insurance coverage, but it would also substantially change the amount of revenue the federal government collects. In other words, it’s not just health insurance reform, it’s tax reform, too.

The COngressional Budget Office estimated that if the version of Trumpcare passed by the U.S. House of Representatives became law, it would reduce revenue by $992 billion. In other words, Trumpcare is effectively a $1 trillion tax cut. The big questions are: Whose taxes are being cut, and what kinds of tax reform are being ushered in by this healthcare bill ?  Trump’s plan would cut taxes largely by repealing many of the taxes put into place by Obamacare to fund the original health insurance law, including individual mandate taxes:Obamacare imposes a tax penalty on Americans who donot have qualifying health insurance coverage.The penalty amount is the greater of 2.5% of household income or $695 per adult and $374.50 per child without coverage, up to a maximum of $2,085.

Employer mandate taxes: Obamacare also contains an employer mandate that imposes taxes up to $3,390 per full time worker if larger employers fail to provide affordable comprehensive insurance coverage. Enforcement of the employer mandate has already been delayed. Tax increases on HSA’s and FSA’s: Obamacare increased the penalty on HSA and FSA withdrawals that are spent on anything other than qualifying medical care. Obamacare also put a limit on the amount of pre-tax money taxpayers could put into a flexible spending account.

By 2022, when all the changes proposed by Trump’s plan would become fully effective, households in the lowest income tax brackets would receive a tax cut of around $150 of their average after tax income. Families with incomes in the top 1% with household incomes of $3.9 million or greater, would save an average of $207,000 boosting their after tax incomes by 2.6%.

 

  •  07/08