Thursday 14th of December 2017 8:03:15 AM

Tax Problems

  • IRS Opens Online Registration for FATCA

    Wednesday 21st of August 2013 4:45:39 PM


    The IRS has officially opened the online registration for the Foreign Account Tax Compliance Act (FATCA).

    The system was designed for financial institutes that are required to register with the IRS to meet FATCA responsibilities.

    The application is a web based service with 24 hour accessibility.

    Starting in January 2014 the IRS expects all financial institutions to be registered with this application.

    For the full story you can visit

  • Mary J. Blige Served with $3.4M IRS Tax Lien

    Monday 20th of May 2013 1:44:02 PM


    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!

  • Write Off Your Porsche?

    Wednesday 06th of February 2013 10:18:47 AM


    Wouldn’t it be nice to buy a brand new Porsche and receive a 100% write off? Yes it would! Well, according to the transitory tax cut deal (100% Bonus Depreciation), President Barack Obama and Republicans agreed to last December, now you can. Of course there are some stipulations.

    You can now write off the full purchasing price of NEW vehicles, even if it is a luxury vehicle, as long as the vehicle is being used 100% for business purposes and the vehicle’s gross weight is over 6000lbs. Vehicles used less than 100% of the time for business purposes may have a lower depreciation value.

    Eligible 2011 models include the Porsche Cayenne Turbo (MSRP: $106,000), the BMW X6 M (MSRP: $89,200) and the Ford Lincoln Navigator (MSRP: $62,635). For a more thorough list of which vehicles fall under these parameters it is advised to take this up with a tax professional.

    For more information on this matter please visit the IRS website and look up Section 179 of the tax code.

  • I Can’t Pay My Tax Bill, What Do I Do?

    Monday 04th of February 2013 11:14:16 AM


    So you have filed your taxes and you realize that you can’t afford to pay your tax debt, what do you do? The IRS has different programs set up to help with you paying your tax liability. One would be an installment agreement. Through installment agreements you can make monthly payments to the IRS. The only way you can qualify for this is if the IRS deems that you are not financially able to settle your tax liability. The downside to installment agreements is that the IRS will impose both penalties and interest on your current tax liability. Prior to applying for an installment agreement you must file all required tax returns, determine the largest monthly payment you can make with $25 being the minimum, be aware that all future refunds are forfeited until your liability is paid off and you must be able to show that you do not have alternative ways to pay off your liability like taking a loan or using credit cards.

    Another alternative is applying for an offer in compromise. An offer in compromise will allow you to settle your tax liability less than the full amount that you owe to the IRS. The IRS will consider many factors prior to accepting or denying this request. For instance they will look into your ability to pay, how much income you net, what your expenses are and if you have asset equity that will help pay off your liability to the IRS. For this option you must also be current with all your tax returns and you are not in an open bankruptcy.

    It is generally advised to go through a professional when trying to set up an installment agreement or applying for an offer in compromise. For more information or to speak to a tax expert please visit

  • I Can Deduct What?

    Friday 01st of February 2013 11:34:25 AM


    The United States tax code consists of more than 73,000 pages and it grows constantly. In fact 10,000 additional pages have been added in just the last five years according to Bob Meighan, the vice president of customer advocacy for Turbo Tax.

    According to Meighan there are countless abnormal yet acceptable deductions. Here are just a few:

    Convention in the Tropics: You are fully capable of deducting your travel costs if you are traveling to places like Bermuda, Barbados or Grenada for a business convention, even Mexico, Canada and the US are acceptable. However let’s say you try to deduct a business trip you had in Moscow or Paris, well you better be able to prove the reason why because the IRS will frown upon this circumstance.

    Clarinets and music lessons essential thereto: If your child’s orthodontist prescribes him/her to play the clarinet as an attempt to correct his/her overbite then the clarinet and music lessons can also be deducted.

    A criminal’s defense: A criminal can deduct his lawyer’s fees on his income tax return on the argument that while the criminal is in court he is unable to make money from his primary source of income, ie shoplifting.

    Bad Debts: If you lend someone money and they fail to repay you can also deduct this from you taxes. The only stipulation is the debt must be 100% uncollectable in order to write it off.

    Swimming pools: Your MD must prescribe the use of swimming pools in order for that to be written off. For instance, if you have emphysema and must swim to improve your breathing, then yes you can deduct it.


  • Free to File Taxes

    Wednesday 30th of January 2013 10:27:05 AM


    Tax season is finally open! The IRS has announced that today, January 30, 2013 tax payers are free to file their income taxes. But, that’s not all that’s free! Most tax payers are not aware that the Internal Revenue Service (IRS) has made it so that the public can file their taxes for FREE! Yes you heard that right! Now I know some of you may be thinking that since this is coming from the IRS it can’t be true or it’s some scam, well, you are wrong!

    As part as of an agreement the IRS made with “Free File Alliance,” tax preparation software is available for FREE from about 15 different commercial tax software providers including H&R Block and Intuit.

    Now there are some qualifications you must meet to be eligible for the free software and that usually depends on the actual amount of your income. If you made $57,000 or less and your income didn’t change dramatically last year, then yes you may file for free. You can also file for free in 22 states including the District of Columbia. For more information you can visit to see which tax preparation software include Free State returns.


    Monday 28th of January 2013 11:14:00 AM


    As mentioned last week, Judge James Boasberg of the US District Court for the District of Columbia had ruled that the Internal Revenue Service does not have the power to standardize tax preparers. This ruling has made it impossible for the Internal Revenue Service to implement tax preparer registrations and competency testing systems. Well, the IRS is not taking this lying down. They are fighting back.

    Federal lawyers are arguing that the IRS does indeed have “reasonable likelihood” of winning the appeal. It has also been said that the public will have “irreparable harm” if Judge James Boasberg’s ruling is not suspended. The IRS’ lawyers say “substantial disruption to tax administration” and “massive confusion” for both tax preparers and the public.

    How does all this legal battles affect the average taxpayer? Well, it probably won’t affect them much unless they are paying a professional tax preparer to file their returns because preparer can’t renew or obtain their Preparer Tax Identification Numbers (PTIN). Without a PTIN a tax preparer absolutely can’t  file tax returns for their customers.

    Luckily, a majority of tax preparers obtained or renewed their PTINs prior to the end of 2012 according to Cindy Hockenberry, a manager with National Association of Tax Professionals. Those that have dragged their feet are just out of luck right now, as are their customers.

  • Do You Suspect Tax Fraud?

    Thursday 24th of January 2013 10:41:55 AM


    In the event that you suspect tax fraud there are steps you can take. Be prepared to fill out necessary forms provided by the IRS. The IRS website explains all of this.

    If for instance you know of an individual or business that is not abiding by with the tax law on issue such as:

    • Reporting false documentation
    • Administering bribes
    • Failing to pay taxes
    • Not reporting income
    • Part of organized crime
    • Failing to withhold taxes

    In these cases you can visit and fill out FORM 3949-A and send it to the address listed on the IRS website.

    In this day and age of technology we all worry time to time that our identities remain secure. If you feel that your identity was stolen to obtain a job or for other tax purposes you can fill out FORM 14039.

    Let’s say that the tax preparer has fraudulently reported your taxes, there is a form for this too (FORM 14157).

    There are many different types of tax fraud activity. Don’t let yourself be a victim of activities like this. Prior to having your taxes done by a professional make sure they are reputable. Do yourself a favor and look them up, see who they are. You can even look them up with the Better Business Bureau. Safe guard yourself with information.

    For more information on Suspected Tax Fraud visit

  • IRS does NOT have the Power

    Monday 21st of January 2013 11:23:12 AM


    U.S. District Judge James Boasberg ruled the Internal Revenue Service does NOT have the power to license thousands of tax preparers. This ruling threw out an authoritarian system that the Internal Revenue Service was introducing in phases.

    The Internal Revenue Service had expanded a law that would allow them to regulate people who “advise and assist persons in presenting their cases” before the agency, making the licensing rules void.

    Boasberg said “Filing a tax return would never, in normal usage, be described as ‘presenting a case’.”

    The regulations, supposed to take place over the next several years, mandated that tax return preparers pass an aptitude test and meet the continuing education requirements.

    According to a statement from senior attorney Scott Bullock at the Institute for Justice (a non-profit advocacy group) “Congress never gave the IRS the power to license tax preparers…If the IRS wants this to happen, it has to come from Congress.” Bullock also said that the Internal Revenue Service preserves the right to scrutinize and prosecute tax preparers for violations under existing laws.

    The IRS spokesman Dean Patterson declined to comment on the ruling.

  • Plans to Open Tax Season on Jan. 30

    Tuesday 15th of January 2013 10:32:01 AM


    Today, the Internal Revenue Service has announced that the tax season is planned to be opened on January 30 for individual income tax returns. This comes after the recent tax law changes made by Congress under the American Taxpayer Relief Act (ATRA).

    The IRS has decided that they plan on January 30 because they need time to update forms and also complete programming and testing of all processing systems. The updates will in fact reflect the changes made on January 2.

    If you are not filing an individual income tax return then you will be able to file your taxes sometime late February or early March. This is because the changes to those forms and processing systems are more extensive. This includes those that claim residential energy credits, general business credits or depreciation of property. Usually those in these groups file closer to April 15 or obtain extensions.

    IRS acting commissioner Steven T. Miller said “We have worked hard to open tax season as soon as possible… This date ensures we have the time we need to update and test our processing systems.” He also said “The best option for taxpayers is to file electronically.”

    Although the Internal Revenue Service did anticipate the late tax change, the concluding law required that the Internal Revenue Service revise forms and instructions along with the vital processing system adjustments prior to accepting tax returns.

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