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- Progressive Tax Group Announces the Ten Costliest Mistakes Taxpayers Make When Nailed by the IRS
- IRS Strengthens Withholding Compliance Program
- Progressive Tax Group Helps the Rich and Famous Save Face When Tagged by the Internal Revenue Service for Back Taxes
Progressive Tax Group has been working with the IRS on a daily basis for more than 25 years to classify its accounts receivable. Before they begin the process of negotiating a settlement with the IRS, the Travelers Tax team of lawyers, accountants and federally licensed enrolled agents often must first undo the damage their client has already done.
According to the Internal Revenue Service: 1.Fifteen percent of all taxpayers owe back taxes. 2. In 2005, an estimated $120 billion in taxes went uncollected. 3. An estimated 76,686 taxpayers had delinquent tax bills of more than $100,000 (as of Fiscal Year 2004). 4. The number of levies (a key enforcement tool in which the IRS takes possession of assets to collect on unpaid taxes) topped 2 million during fiscal year 2005. These figures are a 21 percent increase from 2003 and triple the 2001 number.
First and foremost, the IRS is never - never - on your side, Here's just one example: The IRS will tell a taxpayer to go ahead and file an offer in compromise. The taxpayer thinks great, I can negotiate a settlement myself. Well, one of the reasons they do that is so you will divulge all of your financial information. It essentially gives them a road map to all of your assets.
Getting nailed for back taxes by the Internal Revenue Service is tough enough, but many taxpayers make a bad situation even worse by fumbling one of life's most delicate situations, according to Progressive Tax.
See below for Progressive Tax's Ten Costliest Taxpayer Mistakes.
The IRS works hard to collect full back taxes, penalties and interest. Progressive Tax Group specializes in pre-settlement planning using the IRS guidelines in order to get the client's disposable income as low as possible prior to submitting an offer in compromise. The goal: a settlement the taxpayer can carry.
Progressive Tax Group often starts by getting the IRS to release the levies on a client's bank accounts. If you lock up a person's bank account, they can't do business, they can't pay their employees and they are forced to shut down, that's not in anyone's interest.
The next step is to assess the damage already wrought by the client and/or their previous representative. If a client has represented themselves or has used an accountant or lawyer who is not deeply experienced in working with the collection arm of the IRS, there are usually some fences to mend and false starts to undo. Usually what the revenue officer will do it try to force them into a balloon payment which will cause the taxpayer to default, shutting down their business.
We stop that from happening. We'll set up a balance where they make the minimum payment so that in the rough months they still remain in compliance, and they can double up in the good months so they don't fall out of compliance.
Here are the ten costliest mistakes taxpayers make when nailed by the IRS for back taxes:
1. Ignoring letters and collection notices from the IRS: A notice from the IRS is the first step in a legal procedure to secure the right to seize your assets. An effective tax team can halt the collection process until a permanent solution can be found.
2. Failure to hire an attorney: An experienced tax attorney has ready access to the strict IRS guidelines used in negotiating a settlement. Hiring an experienced tax team is viewed very favorably as a sign of good faith and resolve by the IRS.
3. Failure to hire effective counsel: As comfortable as you may be with your family lawyer or accountant, they probably don't have the qualifications and experience to negotiate effectively on your behalf before the collection arm of the IRS.
4. Failure to file a return: It is a crime not to file a tax return if tax is owed. It is not a crime, however, to file your taxes and not pay them.
5. Failure to contest a tax levy: The IRS has become more aggressive in wage garnishment and seizure of bank accounts, IRAs and even residences. These can be legally contested, or even better, prevented.
6. Failure to pay payroll taxes: Employers who fail to file or pay 941 employee withholding taxes are viewed very seriously by the IRS; they not only pocket tax money, but the IRS has in turn already paid returns on that money to employees. Penalties and interest are very steep, and there is no relief, even in bankruptcy.
7. Paying your full bill: Taxpayers who pay their tax liability without demanding relief from penalties and interest may overpay by thousands of dollars. Many taxpayers qualify to have them reduced, removed, or even refunded.
8. Allowing the IRS to file your tax return for you: Yes, it is an option, through a process called Substitute for Return, or SFR. Don't do it! The IRS will disallow any deductions and tax you at the highest possible rate (did you really think otherwise?).
9. Filing bankruptcy: Bankruptcy won't apply to any tax liability owed for the past three years, and may even extend collection time and add penalties and interest.
10. Failure to remove a federal tax lien from your record: When the IRS accepts an offer in compromise; it is generally required to remove all tax liens within 30 days.
WASHINGTON - Employers will no longer be required to send copies of potentially questionable W-4 withholding forms to the Internal Revenue Service, the IRS announced today.
At the same time, the IRS will step up its withholding compliance program by making more effective use of information reported on W-2 wage statements to ensure that employees have enough federal income tax withheld from their paychecks.
"We can eliminate this reporting requirement without hurting our enforcement efforts," said IRS Commissioner Mark W. Everson. "Wherever we can, we try to reduce burden."
Temporary and proposed regulations, issued today by the Treasury Department, eliminate the requirement that employers send copies of potentially questionable Forms W-4, Employee's Withholding Allowance Certificate, to the IRS. The new regulations take effect on April 14, 2005.
In the past, employers had to send to the IRS any Form W-4 claiming more than 10 allowances or claiming complete exemption from withholding if $200 or more in weekly wages was expected.
Forms W-4 are still subject to review by the IRS. However, employers will no longer have to submit them to the tax agency, unless directed to do so in a written notice to the employer or pursuant to specified criteria set forth in future published guidance, the IRS said.
This change follows a comprehensive review of the withholding compliance program conducted recently by the IRS, which found that withholding noncompliance remains a problem with some employees.
Subsequently, the IRS has developed a process to use information already reported on Forms W-2 to more effectively identify workers with withholding compliance problems. In some cases where a serious under-withholding problem is found to exist for a particular employee, the IRS will notify the employer to withhold income tax from that employee at a more appropriate rate. The new process will also enable the IRS to more effectively address situations in which employees fail to file a federal income tax return.
Progressive Tax Group Helps the Rich and Famous Save Face When Tagged by the Internal Revenue Service for Back Taxes
Unlike other tax services, Progressive Tax Group works with the IRS on a daily basis to classify its accounts receivable. In most cases, they present a settlement offer (called an offer in compromise) that satisfies the collection needs of the IRS while saving their clients thousands of dollars in back taxes, penalties and fees.
Los Angeles CA (PRWEB) August 23, 2004... When bad things happen to famous people... IRS tax problems can be a potential career-ender for high profile, high-income individuals whose only fault may have been taking bad financial advice. Just ask Pete Rose, Willie Nelson or John Travolta.
In fact, the focus and concentration it takes to succeed as an entertainer, doctor, lawyer even a Certified Public Accountant often leaves little time to devote to overseeing the bookkeeper.
The IRS takes out a lot of people. Willie Nelson, Pete Rose, Mike Tyson, a lot of actors and boxers, we have a lot of lawyers and doctors and dentists who are clients because they can be terrible about keeping track of the books; they are tops in their profession because of what they do, not because they know how to manage their finances.
When celebrities fall behind on taxes, Progressive Tax specializes in working out a settlement with the IRS that benefits everyone.
High-profile high earners often prefer to contact by phone his national team of lawyers, accountants and federally licensed enrolled agents at their offices in San Francisco, rather than face the shame of tax trouble in their own circle.
Tax problems aren't something you talk about at cocktail parties, it's an embarrassment. They want to be able to call somebody across the country that they know is competent to handle it for them directly with the IRS. They want to deal with it by phone; they don't want to have to walk into an office and feel self-conscious.
The one thing the government has to balance is, if you are a profitable person, you're going to add to the economy, if they throw you into a black hole of debt by coming after your liabilities, it's going to hurt the economy.
Progressive Tax Group has even represented CPAs caught in the IRS net. Yes, even CPAs can get into trouble. We've had CPA clients. That's a pride thing there.
Progressive Tax Group provides effective solutions to the challenges that the IRS presents, as well as an extraordinary library of knowledge in all areas of tax resolution relief from wage garnishment or levy to helping to construct a solid case for a clients' Offer In Compromise settlement.