Tax Man, Tax Relief Podcast

Why Do Successful Business Owners Owe A Lot in Back Taxes? This is primarily due to the habit of putting off the obligation to keep their books up to date, planning for due dates, and anticipating what is necessary to keep up with employment and sales taxes, especially the most common issue, income taxes. So if you're not taking out enough for estimated taxes, you're not maximizing deductions, or...

When you owe the IRS back taxes and fail to arrange payments, you risk the seizure of your property. The bureau typically collects payment through a levy or taking the money in your bank account, doing wage garnishments, levy retirement accounts, or Social Security benefits. The tax bureau can also seize your assets, including your home, in the worst circumstances.   The possibility of losing one'...

Do You Owe the IRS over $100,000?!?  A six-figure debt usually causes panic, especially for small business owners. With the IRS, the longer you wait, the more interest, penalties, and potential for collections for actions against you. There are three things you should do. First, get a collection hold on your account. See if there's an agent assigned to your case. Get their information. Second, get...

Will new IRS agents target small businesses?  With an array of taxes that businesses have to pay, whether local, state, or federal —these can be pretty daunting for the busy and overwhelmed entrepreneur! 😱 What's more concerning is the expected increased crackdown of the Internal Revenue Service on small businesses. The IRS is poised to come after more non-compliant individuals and companies with...

Will new IRS agents target the middle class?   With recent development that the IRS will receive increased funding of $80 billion over ten years, $45 billion will go towards enforcement of tax laws with a focus on adding human resources and modernizing technology.  Enforcement can mean more audits of businesses and more collection agents pursuing people who owe taxes or think that they owe taxes. ...

As an entrepreneur, understand that tax representation and tax resolution are two entirely different aspects of services you need to ensure the sustainability of your business. Tax preparers look at your financials and keep your books in order. If someone is limited to preparing taxes, they can represent you when problems with the Internal Revenue Service arise, but usually, they will not get you...

Offer In Compromise vs. Partial Pay Installment Agreement It's time to settle your tax debt with the IRS, and you have main options for resolution: Offer In Compromise (OIC) and Partial Pay Installment Agreement (PPIA). Which method should you choose? We regularly get people that call us wanting to file for an Offer In Compromise (OIC) as an option to settle unpaid taxes. The truth is that most pe...

The IRS is Mailing Millions of Underpayment Reporting Letters The IRS is finally catching up post-COVID and expanding enforcement. Now, they are sending automated notices to individuals that did not report all of their income on their tax returns. The most common notice is the CP2000, which is sent if they see that you had a 1099 from sales of a home, stock, cryptocurrency, a type of dividend, or...

Is income tax debt dischargeable in bankruptcy? Should you file for bankruptcy or work out your taxes separately? Before you make any decision, you need to determine two things. First, you need to know what type of tax debt it is. Trust fund taxes, payroll taxes, and sales taxes are not dischargeable in bankruptcy. Second, determine when your tax return was filed. This includes the year and the co...

A Form 433-A is required if a revenue officer is assigned to your case to determine how much you can pay the IRS every month. It is also used if you are applying for an offer in compromise, a CNC (currently not collectible), or any type of IRS settlement arrangement. The IRS can file a criminal case if you provide false information.  In the form, you have to list key information. First, the people...

Why do so many professional athletes have tax problems?  We are currently working with NBA players with various tax issues in different states. These professional athletes are challenged with multi-state tax reporting and filing, having to pay taxes in places where they live and where they work. Having all their focus on the sport they participate in, it can be daunting to be knowledgeable of thei...

Why do so many celebrities have tax problems?  On a podcast, Steve Harvey recently made a tell-all about how he owed the Internal Revenue Service a whopping $22 million. The comedian, author, and Miss Universe Pageant host shared his harrowing experience and how he worked out a payment arrangement with the IRS.  Steve is one of the many celebrities the agency loves to go after. The IRS wants to ma...

What is IRS Form 5471?  If you are an officer, director, or shareholder of a foreign corporation, you may need to file Form 5471 to report the company's income, shares, and shareholder information. Not filing this form and not reporting your interest can lead to significant penalties. The penalties can be $30,000 a year, and hundreds of thousands, depending on how many years you have been filed, t...

What happens if you are not reporting your foreign bank accounts to the IRS?  If you have a bank account in a foreign country, you must report it by filing a Report of Foreign Bank and Financial Accounts (FBAR). The US government created FBAR to discover tax cheats hiding money in offshore accounts.  If you haven't filed your FBAR or submitted it late, there are violations with potentially high pe...

What happens if you don't file your New Jersey sales tax returns?  Like most states, New Jersey relies heavily on their sales tax revenue for funding. If you don't file sales tax, New Jersey will assess the amount that can be wildly higher than your liability, and you can go back and file the returns and reduce that amount. Sometimes it can be lower than what the actual liability is. They can add...

Innocent Spouse Relief: How do you qualify, and when to apply?  When married taxpayers sign a joint tax return, they attest that all the information provided is correct and are equally responsible for their declared income, potential taxes, and penalties to be owed. In cases where one party needs to prove that they didn't sign the return, signed under duress, or were unaware of the fraud, the Inno...

Did you make a mistake on your tax return? Have you forgotten to claim a credit or deduction? If you left out information on your original return or forgot to include income and made errors, fix your returns with Form 1040X with the corrected version. Don't forget that it must be within three years from the date you filed your original return. You want to do this before the IRS realizes you need t...

What happens if you fail to file Form 941 and fail to pay your payroll taxes?  Not paying employment taxes can be the most harmful thing a business can do. The IRS considers payroll tax a trust fund penalty, and it is what the government goes after most. They deem that organizations that fail to pay payroll tax are similar to committing the act of stealing. Employers can face huge penalties and in...

How Do You Stop An IRS Wage Garnishment? In dealing with tax debt, you must be responsive to the IRS when they send you letters instead of freezing in shock and causing prolonged inaction. Normally a wage garnishment happens when an IRS revenue officer is assigned to your case and finds you unresponsive in giving them options to resolve your IRS issues.  You can pay in full if it is workable, set...

How many years of filed tax returns do you need to be considered in compliance? Taxpayers who have not filed tax returns for a long time ask us this most common question: How many years back should they file to comply with the IRS? The general rule provided by IRS Policy Statement 5-133 states that taxpayers must file six years of back tax returns to be in good standing with the IRS. Sometimes the...

What formula does the Internal Revenue Service use to determine whether or not they will accept your Offer in Compromise to settle your tax bill?  The IRS looks at your current income, assets, and liabilities and wants to see if you can pay them in full within the collection statute expiration date. If they determine that you can pay them in full, they will reject your Offer in Compromise.  It's i...

Importance of Dealing with IRS Issues If you leave tax issues unmonitored or unresolved, dealing with the IRS is like facing the force of a bowling ball ready to hit the pins in your life and knock them over. ✔️ First, there's the emotional toll. Many of you probably can't sleep because you're worried. You can never really forget your tax problems because they can keep you up at night and keep you...

I'm Jonathan Donenfeld, CPA and Certified Tax Resolution Specialist. Many of you are asking if the state of New Jersey has an Offer In Compromise Program. For your information, they do not have an OIC program similar to the Federal Government's, but what they have is a Closing Agreement.  The Closing Agreement is where the taxpayer can ask the state to accept a lesser payment than the total amount...

When you owe back taxes, you're often up at night, so worried that you can't sleep. You're embarrassed to tell your family, friends or even your significant other. You're afraid to pursue a relationship. You're scared to tell someone about this problem that you're having. So even though it's hurting you financially, what it does is hurt you mentally. Because you're not resting, you're thinking abo...

Why do so many successful business owners have tax issues? Entrepreneurs at the beginning wear so many hats. They are doing the actual work, getting the clients, doing the sales and marketing, hiring people, serving as the HR department, doing inventory, getting supplies, materials and MANY MORE. With all these tasks at hand, one thing that can easily fall behind is their taxes.  Keeping books up...