Tag Archives: #IRS

It’s Not the Welcome Wagon Knocking on Your Door

There is now an increase in IRS physical visits for those taxpayers who are considered high-income (those receiving over $100,000 in a tax year), who not only have not filed tax returns in the past consistently, nor have they actually been making good on their installment agreements should they have been prepared to satisfy their obligations.  Paul Mamo, Director of Collection Operations, Small Business/Self-Employed Division, states “These visits focusing on high-income taxpayers will be taking place across the country.  We want to ensure taxpayers know their options to get right with their taxes and avoid bigger issues later.”

So many people fail to realize the severity of this situation, and may consider this just another tax scam, but if you hadn’t been receiving numerous notices for failure to follow through on your obligations and chosen to ignore them, assumed that they were taken care of by your tax preparer but wasn’t sure if you had actually reviewed and signed them, or were just too busy to be worried about them, then that’s not a plausible excuse as to why you may consider getting that visit from a Revenue Officer.

There’s every excuse in the book that these people have heard, and whether or not you can afford to pay them or not, that doesn’t refute the fact that you need to address the situation and focus on making sure that your obligations are being met, even on a minimal basis.  It’s something that will not be going away, just like when I have had clients try to ignore my bills after I’ve prepared their tax return, which can lead to my own bad debt court filings, as well as notification to the IRS to be removed as their paid preparer.  Yes it may seem extreme in 2020, but you do expect your invoices to be paid when you bill a client, and the IRS expects the same.

What can you do before you get a visit from a Revenue Officer?  Contact the Service, speak with a representative regarding your situation, and determine what options are available to you so that you can avoid the worst-case scenarios.  This may include avoid civil enforcements, credit report filings, as well as criminal cases against you.

In the worst-case scenario that you do receive an unannounced visit:

– they will provide you with two forms of official credentials to include a serial number and photo so be sure to review both

– the officer will explain the entire situation regarding the liabilities and obligations, as well as the consequences of failing to comply with the law

– there will NEVER be a request for funds such as gift cards, threats given, etc.

– you should have been in receipt of numerous notices before an actual visit

– cash will never be accepted, and any payments will be made payable to the United States Treasury ONLY

Dwayne J. Briscoe

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Wrath Can Be Detrimental to Any Businesses Involving the IRS

Forbes.com recently reported IRS Reports Ten-Fold Increase in Tax Whistleblower Awards: $312 Million in the 2018 Fiscal Year, which amounted to over $1.441 billion in taxes, penalties and interest that were recovered.  It’s interesting that Dean Zerbe mentioned “For all the talk that fills Washington about making sure people pay their fair share…” all goes back to a previous post I wrote, in which many tax payers have made this their mantra and although it’s an open-ended statement because it’s unclear as to what that amount actually is.

Now this doesn’t mean that everyone is going to rush out and become a whistleblower to the IRS because there’s a significant amount of denials when the information is submitted because there’s a rigorous process someone needs to go through in order to get to the point of being rewarded for their collection efforts.  As well there’s many issues of retaliation that have occurred on behalf of the company target that are sprouting up burgeoning law practices to fight for the protection of the whistleblowers and it’s working in their favor.  This is why we have the False Claims Act which is geared towards entities that defraud the federal government, the Dodd-Frank Act which focuses on protecting consumers against abuses related to credit cards, mortgages, or other financial products.

The Whistleblowers Act of 2017 was designed specifically for tax dodgers and included in the Tax Protection Act of 2016.  From this, it’s helped propel the increase in awards and tax collections because it’s ultimately how the IRS collects its paycheck for the government to help support the services that everyone who lives in America sometimes takes for granted, and it’s vital that we remind ourselves of why we need to pay taxes.

The Census Bureau’s Annual Survey of Entrepreneurs have estimated that in 2016, businesses with less than 0-19 employees accounted for 89% which is a significant amount, allowing a much bigger target for challenging IRS audits and general tax reporting.  Although there’s no statistical data on how many businesses are behind in filing their tax returns, there’s no time limit on collecting these taxes for having not filed your returns.

What does that mean for you and how does this all tie together?  There’s the opportunity of being charged with a crime, either from tax evasion or failing to file tax returns.  There’s also the challenge of fighting what may be misunderstood deductions or receiving advice from well-meaning friends or family to something you read on the internet that wasn’t from the IRS web site as legitimate.  People bet the odds that they won’t be caught, and a lot of people likely will never be challenged.  I met someone some years ago who hadn’t filed in 22 years, lived receiving only 1099s and W2s during this time, and their excuse was that the IRS had taken monies owed to them from a bank account without their knowledge.  Since then they never had a bank account again because it was their distrust on why they chose to live in their current state.

They consulted me after they started receiving notices from the IRS, and I explained to them the safest option was physically meeting with a representative to determine what the best course of action after due diligence preparation as to why they failed to file after so many years.  I explained to them the amounts would be significant, penalties and interest would be significant, and an Offer in Compromise could potentially become a resolution to the problem.

What happened to them?  They chose to ignore it and we parted ways.  Ben Franklin said “…in this world nothing can be said to be certain, except death and taxes” back in 1789.  After 230 years, it’s not going to be changing any time soon.

Dwayne J. Briscoe

Where’s the Pride in that IRS Check You Wrote?

The definition of pride is a sense of feeling of pleasure and satisfaction from your own achievements or those accomplished from around you.  Parents often feel that with their children, employers feel that with their employees, pet owners feel it with their furry household members.  Everyone has felt it at once in their life, and hopefully every possible moment that it is humanly possible.  Obviously, it’s always a challenge and approval seem to be what everyone seeks, but why is it that no one sees pride when it comes to the IRS?

The latest IRS cumulative statistics comparing the 4/13/18 to the 4/12/19 tax filing season is down by $7.617 billion, which is substantial, equating to a drop of 3.1%, but is not hugely significant that people may think.  However, I’ve heard it from numerous clients and non-clients how they don’t feel that they got a fair shake, what could they have done differently, or this is monies they were counting on to take care of other things because this was their one big bonus of the year they expect to get.

First and foremost, people should not only realize that the IRS doesn’t make the laws but simply enforce them.  They are open for interpretation at times, which is why people feel that it’s not fair in which people who have more wealth are able to follow through on better tax shelters, better ways of hiding it, and better challenges to the system that seems like it’s always changing.  Secondly, being created back in 1862 in response to raising funds for the American Civil War, over the decades it’s brought most of the revenue needed to fund the U.S. Federal Government which is what helps keep our way of life much better than what we often take for granted.

The one statement I’ve heard more times than I can count is “I want to pay my fair share” but when I ask what this means, they have no answer for it.  Does it mean I’m asked not to have them pay next to nothing, or if they have a huge debt they’re going to blame me for it (even though they only want to see me once a year after-the-fact when there’s nothing that can be done), or they are just trying to make themselves feel better.  I also remind them that I have my “fair share” I pay every year because I want them to understand they’re not alone, like most other tax payers.

No not everyone pays the same amount, which is never going to make it fair, and yes there are a groups of people who cheat, find work-arounds from people they hire to find the loopholes to minimizing the liability, or people who just ignore the option of filing their taxes altogether.  Yes, there are many people who do that as well and I’ve met a lot of them too.  You may ask how they can do that, and it’s their choice – however not getting a business loan, not being able to buy a house, being found out and having to make huge amounts of restitution including interest and penalties, are just a few of the consequences people face but it’s their choice to take the risk and hope they don’t get found out.

Personally I take pride in that I do the best I can for the people’s businesses I work with because they understand, like I do, this is something we need to do in order to live a good life that the IRS has helped provide for us.  Just imagine if they weren’t around, how would we have any type of infrastructure of government.  There’s always room for improvement, it’ll never be fair, and no one can ever get something for nothing legitimately.  However, it doesn’t matter what you did during the day but what you did at the end of it, and hopefully with pride.

Dwayne J. Briscoe