President Obama is accused of knowing about the latest IRS scandals! It was reported that Obama’s lead lawyer had idea of the IRS scandal long before Obama told media that he had just learned about it in the news.

Not so long after the story broke to the media about how the IRS had been targeting conservative groups, Obama said he was not aware of the situation prior to the story hitting the airwaves. This means that prior to May 10, which was the day that IRS official Lois Lerner had formally apologized on behalf of the IRS, Obama was not aware that anything improper had taken place.

A White House official had admitted to the Wall Street Journal that the head of the Office of the White House Counsel, Kathryn Ruemmler, knew about the incidents as early as April 22. It was presumed that an audit of the IRS would have shown that the organization was seeking out conservative groups who applied for 501(c)(4) status. The IRS was singling out contenders by marking their names with words such as “Tea Party” or “Patriot.”

Many question that if Obama’s lead lawyers were aware of the IRS circumstances weeks prior to it becoming public knowledge, then how come Obama claims he had no clue or if he should have been told?

According to John Podesta, former White House chief of staff (under President Clinton) “The worst thing is if [the White House does] anything that is perceived to be interfering with an independent investigation,” Podesta said. “That gets you in such trouble your head spins.”

Washington D.C. attorney, Lannt Davis, who served Presidnet Clinton as well as George W. Bush respectfully disagrees with that idea stating “I respectfully suggest Ms. Ruemmler is in the wrong job and that she should resign.”

This IRS situation has caused for upcoming hearings to investigate this matter, starting with the first one beginning Wednesday.

Yet another celebrity hits the news with money troubles with the Internal Revenue Service! Just recently it was Lauryn Hill in the news for owing the IRS and today it’s Mary J. Blige, a nine time Grammy winner!

The Internal Revenue Service has contacted the R&B singer with a $3.4 Million tax lien in Bergen County.  This is in addition to a different lien she purportedly owes to New Jersey, where she owns a luxury home in Saddle River. In New Jersey she is reported to owing close to $1 Million.

The IRS reported that the latest lien was due to unpaid income taxes for the past few years. It has been said that she owes in excess of $600,000!

If all this IRS trouble wasn’t enough to deal with she was also recently sued by Bank of America in the New York States Supreme Court.  Bank of America declared that Mary J. Blige took out a loan for $500,000 and only repaid it partially. After interests and penalties the singer still owes in $514,000.

Mary J. Blige and her husband were also sued by Signature Bank in November 2012 for non-payment of a $2.2 million loan!

Although Mary J. Blige is an accomplished singer she has had some detrimental money problems! Sadly, regardless of her fame, it is all catching up with her!

If you haven’t already heard, the upcoming Powerball drawing is expected to be about $600 Million! Sounds great if you ask me! But let’s take a closer look at this….

In the event you win this awesome prize expect the tax man to come knocking! The tax laws vary from state to state but do know that there is no avoiding this!

Lucky for Florida residents, there is no tax for lottery winnings. On the other hand if you reside in New York City you can expect to pay around $197.1 Million (or more than half of the lump sum of $376.9 Million) in a total of federal, city and state taxes.

From the very first day that you go to cash in your ticket, you will soon notice that you will be hit a withholding that is subtracted instantly. Coming next tax season you will be expected to pay out additional taxes depending on what tax bracket you fall in, not to mention state and city taxes!

“These payouts are millions of dollars,” Scott Drenkard, an economist with the Tax Foundation. “So it’s not like taking the payout over a long amount of time would sneak you under a highest tax bracket.”

Now thinking about it, it’s no wonder our state politicians love the lottery! It produces millions if not billions of dollars for the state yearly! Makes you wonder where an how the money is being spent!

Residents of Chicago, Illinois and other parts of Illinois may qualify for tax relief due to the latest storms that began on April 16, 2013.  Victims of this severe storm that caused extreme winds and flooding may qualify for tax relief, according to the Internal Revenue Service.

The President of the United States, Barack Obama, has confirmed Cook, DeKalb, DuPage, Fulton, Grundy, Kane, Kendall, Lake, LaSalle, McHenry and Will counties to be federal disaster area. Residents of these areas including those that do business in these areas may qualify for tax relief.

Based on this declaration, made by the President, the Internal Revenue Service is permitted to postpone certain deadlines for US tax payers who live in or do business in the mentioned disaster areas. For example, certain deadlines that would have fallen on April 16 as well as on or prior to July 1 have been deferred to July 1, 2013. That would include the June 17 deadline for second quarter tax payments.

The IRS is also waiving the penalties that would have been imposed for failing to deposit employment and excise tax deposits that would have been due on April 16, 2013 and those that were due on or before May 1, 2013.

If tax payers that reside in the disaster areas should receive a penalty notice from the IRS, at this time those affected tax payers should phone the IRS for abatement of penalties or interests. Keep in mind that penalties or interests will be removed only for those tax payers who possess an original or extended filing, payment or deposit due date that falls within the deferment period.

If you are an affected tax payer that lives or does business outside of the covered disaster areas and need tax relief you must at this time contact the IRS disaster hotline 866-562-5227.

Today, the US senate approved a bill that would permit states to charge sales taxes on internet purchases. The vote was won by 69 votes. It needed only 51 votes for final approval.

The current law states that in order to collect sales taxes for internet purchases the company selling goods would have had to have a physical existence in the state.  For example, stores like Wal-Mart or Target would be able to collect sales tax for online sales but EBay and Amazon was not required to unless they had an office in that state.

This new law would also affect products sold via radio ads, tv ads, and catalogs. Shoppers would be required to pay the sales tax of the state they reside in.

David French, senior VP of government relations for the National Retail Federation said , “It’s putting pressure on the brick-and-mortar competitors and it’s putting pressure on state and local sales tax revenues,” and “It’s time for Congress to create a level playing field so that all retailers are treated fairly.”

It was reported that states lost $238 billion in 2012 due to not being able to collect out-of-state sales taxes.  Of the $238 billion lost approximately $11.4 billion was lost from sales made on the internet. The rest is from sales made through catalogs, mail orders and telephone sales.

How will this affect you? Comments welcome….

Eight-time Grammy winner Lauryn Hill was due to be sentenced for tax evasion today by a federal judge in New Jersey.  Luckily for her the judge has postponed sentencing. Although, the judge did not let her off without giving Lauryn Hill a piece of his mind!  By now, Lauryn Hill was supposed to pay up on her tax liability according to the agreement she had previously entered.

Last year, Lauryn Hill plead guilty to not paying the Internal Revenue Service taxes on about $2 Million that she had earned between 2005 and 2007. Lauryn Hill’s attorney had promised that she would pay restitution by the time her sentencing came up!

“This is not someone who stands before the court penniless,” Federal Judge Arleo said to Hill’s attorney. “This is a criminal matter. Actions speak louder than words, and there has been no effort here to pay these taxes.”

The total tax liability is up for debate as well.  According to Lauryn Hill’s lawyer she owes a bit less than $1 Million but according to U.S. attorney she owes a little more than $1 Million. Her attorney is accusing the government of adding to the amount owed so that Lauryn Hill would serve a greater sentence.

It is expected that by May 3 Lauryn Hill will pay back all the restitution she owes or she will face jail time.

The Internal Revenue service will be issuing furlough notices to all its employees next week. There was an internal memo sent to all IRS employees including managers and executives stating that everyone will be forced to take days off because of budget cuts.

The furlough days will include May 24, June 14, July 5, July 22, August 30 and possible an additional 2 days sometime in August or September.

During the furlough days all public directed operations will be closed. This includes toll-free help lines and local IRS offices.  Although there was not much mentioned about IT and security personnel, it has been said that those departments may still work on the furlough days but must take alternative days off.

Acting IRS commissioner Steve Miller said that these particular furlough days were chosen so that IRS employees would only lose one full paid day of work within each pay period. “We settled on having uniform furlough dates for everyone and closing down agency operations entirely,” Miller wrote. “This way, the IRS can gain additional cost savings on utilities and other services in our work locations.”

Miller also said “We have also worked to stagger the dates further so that there are some pay periods during the summer with no furlough days.”

The IRS announced that they will in fact grant a three-month extension for tax filing and paying to all Boston area Tax Payers that were affected by the Boston Marathon Bombings.

Tax relief is granted to all tax payers that reside in Suffolk County, Massachusetts. This included the city of Boston. It also includes victims, families of victims, all EMS that were involved, as well as those that were affected by this disaster that live outside Suffolk County. Also those taxpayers that have contracted tax preparers that were unfavorably affected by this calamity.

IRS Acting Commissioner Steven T. Miller said “Our hearts go out to the people affected by this tragic event,” and “We want victims and others affected by this terrible tragedy to have the time they need to finish their individual tax returns.”

The IRS plans on distributing a notice informing all eligible tax payers that they have until July 15, 2013, to file their 2012 tax returns or pay any dues to the IRS that would have been normally due April 15^th. The IRS will also eradicate any penalty that tax payers normally receive when filing late just as long the eligible tax payers file no later than July 15, 2013. Normally there would have been a 3% interest that is compounded daily in addition to a late filing fee.

If you are a tax payer that resides in Suffolk County then there is no further action to be taken. The IRS is automatically granting the extensions for those eligible tax payers. If you reside outside Suffolk County and need to claim this relief you should contact the IRS at 1-866-562-5227 on or after April 23, 2013. The IRS also said that if you should receive notices about penalties you may call that number for penalty abatement.

If you need more time that the July 15, 2013 deadline to file your taxes you should visit the IRS WEBSITE and fill out Form 4868 no later than July 15, 2013.

You can also visit IRS WEBSITE for other tax related questions or call 1-800-829-1040.

You have lost your job and all you do now is job hunt! Well, imagine this, The IRS will allow you to claim your job-hunting related expenses on your next tax return! Job hunting write offs are one of the amazing yet most overlooked tax deductions.  The down side is that not all US tax payers qualify for this deduction, but, the IRS can be generous in other ways. For example, if you did not score the job you wanted in 2013 that doesn’t mean that you do not qualify. Just the fact that you looked for a job qualifies you for the deduction!

Here is a quick way to figure out if you qualify for this deduction, first figure out your expenses versus your total gross income. If your expenses are less than 2% of your total gross income then yes you do qualify for the deduction.  Sadly that same formula can be the reason you disqualify if your last job paid you a large salary. Also if you take a “substantial break” prior to looking for employment then the IRS may disqualify you for that as well. Also, you also can not go into a different career, the IRS frowns upon that and will disqualify you from claiming your job hunting expenses.

While you are job hunting if you should pay to receive employment services like job placement services or employment counseling, you can deduct these expenses as well. But the buck doesn’t stop there. Services like resume preparation or if you travel to support your job hunting the fees associated can also be deducted.

For more information on this matter please visit the IRS website.

Recently the Internal Revenue Service issued a warning to the public about the several different ways that tax payers are being scammed! The IRS is calling the list the “Dirty Dozen.” This list was formulated to remind tax payers that caution should be used to protect themselves from schemes that may result in identity theft or tax fraud.

Every year the IRS issues the “Dirty Dozen” of widespread scams that US tax payers may stumble upon not just during filing season but also throughout the year. Although, most schemes climax during tax filing season as US tax payers prepare tax returns.

IRS Acting Commissioner Steven T. Miller said “This tax season, the IRS has stepped up its efforts to protect taxpayers from a wide range of schemes, including moving aggressively to combat identity theft and refund fraud,” and “The Dirty Dozen list shows that scams come in many forms during filing season. Don’t let a scam artist steal from you or talk you into doing something you will regret later.”

Unlawful scams often lead to considerable fines and interest as well as likely criminal action. The Department of Justice works directly with the Internal Revenue Service’s Criminal Investigation to put an end to scams and take legal action against the delinquents behind them.

Here is the list of the “Dirty Dozen”

1. Identity Theft
2. Phishing
3. Return Preparer Fraud
4. Hiding Income Offshore
5. “Free Money” from the IRS & Tax Scams Involving Social Security
6. Impersonation of Charitable Organizations
7. False/Inflated Income and Expenses
8. False Form 1099 Refund Claims
9. Frivolous Arguments
10. Falsely Claiming Zero Wages
11. Disguised Corporate Ownership
12. Misuse of Trusts

For more information on this matter please visit the IRS website http://www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013