WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
January 27, 2009 by THE WANDERING TAX PRO
Filed under Articles
* Fellow twit, and fellow tax blogger, Michael Rozbruch “turned me on” to an article from the Washington Post titled, “Don’t Wait for Obama to Cut Your Taxes”. It provides some good advice and resources.
* The TAXGIRL does not take week-ends off (actually none of “us” do this time of the year). Last Saturday she provided a good answer to a common question in “Ask the taxgirl: 1099 for Closed Business”.
* Kelly answers another oft asked question in “Ask the taxgirl: Running As Fast As I Can”. Her correct answer points up another inequity in the Tax Code – another instance where the taxpayer must bend over. Income is reported on Page 1, increasing AGI, but related deductions claimed on Schedule A (lost to non-itemizers) as “miscellaneous” subject to the 2% of AGI exclusion. To be fair only excess hobby income should be reported on Page 1.
* From the “I couldn’t have said it better” file – Kay Bell said it all when she pointed out “From the get-go, the lack of oversight in administering the Troubled Asset Relief Program (TARP) has made every bailout handout a very unfunny, and egregiously costly, joke. And since Congress opened up the bailout door so wide, then who’s to stop any legal business form seeking relief?” in her post “Next In Bailout Line: Porn” at DON’T MESS WITH TAXES.
* Kay has also provides a good basic overview of the many educational tax benefits that are available in her post “Rags, Riches and College Costs”
* TAXPROF Paul Caron quotes from the Wall Street Journal to tell us “Obama Plans to Keep Estate Tax” -
“President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010.
Under the Obama plan detailed during the campaign, the estate tax would be locked in permanently at the rate and exemption levels that took effect this year. That would exempt estates of $3.5 million — $7 million for couples — from any taxation.”
*Jeff Rose provides a good answer to ”Reader Question #4- Can I Take a Tax Loss on My Kids 529 Plans?” over at GOOD FINANCIAL CENTS (Helping you make “cents” of your investments).
Jeff smartly ends his answer with, “be sure to speak with your tax advisor just to make sure”.
* An AccountantsWorld.com article reports “Americans Failing Taxes 101”.
A survey by of all people The Tax Institute at H&R Block indicates that “most can’t answer even the most basic tax questions correctly . . . the majority doesn’t know a credit from a deduction”. Duh! Hey – it seems that many Americans have something in common with H+R Block tax preparers!
*WebCPA reports that “IRS May Expand Enforcement During Tax Processing” and pay closer attention to returns claiming the Child and Dependent Care Credit and Earned Income Credit while in the course of the initial processing of returns.
* The weekly NATP member email newsletter reports-
“The IRS has announced that victims of the severe storms and flooding on December 10, 2008, in the city and county of Honolulu, have more time to make tax payments and file returns. As a result, the IRS is postponing certain deadlines for taxpayers who reside or have a business in the disaster area until February 9, 2009. The postponement applies to return filing, tax payment, and certain other time-sensitive acts otherwise due between December 10, 2008, and February 9, 2009.”
* We have a winner – actually two. Peter Pappas of THE TAX LAWYER’S BLOG reports the results of his online poll in “Worst Tax Cheat Poll Results Final: Kiss Your Sister, We Have a Tie”.
* It appears that BO’s proposed economic “stimulus” package will include some individual tax breaks – Among them, according to the press release by Charles Rangel for the House Ways & Means Committee, the following:
· refundable tax credit of $500 per worker/$1000 per couple (up to $200,000 income)
· expansion of EITC
· expansion of child tax credit
· simplification of education credits and making the credit partially refundable
· turning the $7,500 loan for first time home buyers during 2008 into a subsidy (no repayment requirement)
· increased expensing for businesses
· increased bonus depreciation for businesses
· increased (5-year) carryback of net operating losses for businesses
· “prospective” repeal of Treasury’s illegal section 382 ruling (Notice 2008-83).
· annual one-year AMT fix {I added this to list – rdf}
More and expanded refundable credits – great! The mouths of tax-fraud scammers are most certainly watering.
I will provide more information when available.
TTFN
This post is from THE WANDERING TAX PRO
IRS Program for Taxpayers Experiencing Financial Hardship
Tax expert Michael Rozbruch discusses an IRS program that helps taxpayers who are experiencing financial hardship. Rozbruch is the founder and CEO of Tax Resolution Services, www.taxresolution.com
The nation’s weak economy could mean that a lot more taxpayers won’t have the money to shell out what they owe to Uncle Sam. If that’s the case, you should call the IRS and let them know.
The IRS has a program called “currently not collectible.” You have to prove that you are in a financial hardship and they will put you into this status called currently not collectible.
For more advice and information on reducing your IRS debt, visit http://www.taxresolution.com/ for a free tax relief consultation or call 866-477-7762.
Michael Rozbruch is one of the nation’s leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/), he helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.
Tips for Filing Your Tax Returns from the Tax Expert
Tax relief expert Michael Rozbruch shares tips on extended tax breaks and deduction opportunities to help make the most of slow economy on KVEC morning news with Kings Harris. Also includes great advice on what to do (and what not to do!) if you have been audited by the IRS. Tax Resolution Services is dedicated to providing affordable solutions to businesses and individuals who find themselves in trouble with the IRS. Their team of expert tax attorneys, enrolled agents and CPAs has a success rate of 90% – second to none in the industry – and an Offer in Compromise Settlement Rate of $0.13 on the dollar. Visit the Tax Resolution Services web site at www.taxresolution.com for a free tax relief consultation or call 866-477-7762.
How to Hire a Tax Resolution Company You Can Trust -7 Ways to Ensure That Your Irs Tax Problems are in Good Hands
Tax-burdened Americans seeking professional help in solving their IRS problems have more options today than ever before. The tax debt relief industry has seen dramatic growth over the past 5 years as many companies have entered the arena to offer help to taxpayers impacted by a sharp increase in IRS tax compliance enforcement.
But lately, many of these so-called tax resolution firms have been making headlines for misleading consumers with deceptive advertising and false claims that they can settle taxpayers’ debt for “pennies on the dollar.” Consequently, many firms have been exposed for taking advantage of people seeking tax assistance. For a fee, they promise to help taxpayers, but instead leave them with their original tax debt, plus additional interest and penalties.
Now consumers are being urged to use caution when dealing with firms that claim they can help taxpayers reduce their back taxes. But how do consumers choose from the large number of companies out there that offer tax relief assistance? And more importantly, how do they know they won’t end up getting ripped off?
When selecting a firm, remember that these are the people who will represent you before the IRS. Therefore it is important that you hire a professional who is well versed in tax law and IRS procedures. IRS representation is a complicated field with many different laws to interpret. While any Attorney, CPA or Enrolled Agent can represent clients before the IRS, few are truly qualified to provide the knowledge, experience and negotiating skills needed to successfully represent a taxpayer before the IRS.
When hiring a tax resolution company, keep in mind the following:
1. As a rule, the firm’s track record is the best objective indicator of how that firm will manage your case. What is the firm’s success rate? How many Offers in Compromise has the firm successfully settled? What is the total dollars negotiated in settlements divided by total dollars in tax, interest and penalties owed? Additionally, the credentials should be substantiated by an independent third party, like the Better Business Bureau. You can also ask the firm if they have been designated a Certified Tax Resolution Specialist.
2. Be leery of demands that the company be paid in full upfront. Trust is a two-way street. If you can trust that the company will provide the services as promised in their agreement, they in turn must trust that you will pay them and begin working 100% for you upon receiving a “good faith” retainer.
3. A taxpayer with a troubling problem should turn and run the other way if a company “guarantees” specific results. They are telling you what you want to hear, whether or not it’s really possible. Know that there are no sure fire ways to reduce your liability and that contrary to some companies’ claims, not everyone qualifies for the IRS Offer In Compromise program. Companies must obtain your background information and proper documentation before evaluating your situation and determining your options. An honest company will ask you lots of questions upfront in your initial consultation in order to understand the precise needs and specifics of your case.
4. Don’t be afraid to ask for the names of the owners of the company. Any hesitation by their representatives is a definite cautionary red flag that they don’t want you to know who is behind the company and ultimately responsible for your case.
5. Be sure to ask, “How long has your company been in business?” Most new companies (no matter what the business is) never make it due to a wide variety of reasons. In today’s difficult financial climate you don’t want to get stuck with a company that hasn’t been in business for at least five years. Otherwise, they might not even be in business six months from now.
6. Be especially cautious when dealing with high-pressure sales people. They are usually working in a “boiler room” where they’ve been trained to prey upon a taxpayer’s fears.
7. Always ask about the people who will be doing the work on your behalf. When will you be contacted once you retain their services? Will your phone calls and emails be returned promptly? Will your case be assigned to someone in particular so that there is real accountability? That’s another reason to never give a firm 100% of your hard-earned money upfront. Once they have your full payment, you have no recourse.