Your IRS Questions Answered Here…

Question: I’ve been getting letters from the IRS saying I owe back taxes for 2017 – 2020. This is taking over my personal life and don’t know where to start. What should I do?

Answer:  Owing money to the IRS or State can be intimidating and throw your life out of balance but ignoring these notices will only make things worse. It’s important to take immediate action.  The IRS has over 148 types of penalties they can assess, and the worst part is they can also charge interest on the original penalties. Penalties can be a high percentage of the total amount owed to the IRS.

The IRS has 10 years to collect from the date you filed your return, and they won’t go away.  Not only can they freeze your bank account and take the money, but they can garnish your wages and legally take as much as 90% of your net paycheck, without a court order! They can also garnish Social Security Income.

You need a professional expert to help you deal with the IRS.  You can’t do this on your own. You will get run over by the IRS. As a matter of fact, going or talking to the IRS without expert representation could be the worst thing you can do.  The taxpayer Bill of Rights allows you to be represented by a Tax Resolution Specialist who can negotiate a resolution with the IRS in your best interest.

McCauley Law Offices, P.C. are experts in IRS tax problem resolution and help taxpayers with their IRS Problems every day.  There is a solution to EVERY problem. Generally, you’ll never have to meet or speak with the IRS once you bring us into the picture. Contact us today for a FREE confidential consultation.

Tax Relief Options for Small Business Owners

If you are running a small business, you have one unwanted partner that will dig into your pocket every year, it’s the IRS. The IRS wants to know what you are doing, how much you are earning and most importantly how much you are paying in taxes, and the tax agency is becoming increasingly aggressive in this regard. While the audit rate for individual returns has been hovering at far less than 1%, the audit rate for small businesses can be as much as 10 times higher.

It does not matter if you operate as a sole proprietor and use Schedule C to claim your income or if you are set up as a C-corp, S-corp or LLC – the IRS is watching what you do, and if they think you are not paying your fair share they will certainly come calling. When that demand letter from the IRS arrives, knowing what to do next can make all the difference, and the more you educate yourself the easier it will be to deal with, and eliminate, the tax debt.

Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate and defend you against the IRS on your behalf. If you owe back taxes or are under audit, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about.

Small business owners are increasingly the target of enforcement efforts by the IRS, but the IRS does have some programs in place to make paying what those business owners owe easier. In some cases those small business tax relief and tax resolution programs let you settle for less than what you owe but qualifying is not as straightforward as you might think.

For businesses that may be eligible, the assistance of a tax resolution specialist is absolutely critical. These experts can help guide you through the process and make sure you qualify, so you can rest a little easier and get back to building your business.

Payment Plans/Installment Agreements

If the amount your small business owes to the IRS is relatively small and you do not want to deal with additional hassles, it may make sense to pay the entire bill in full. If paying in full would be a hardship, the IRS does offer payment plans, and setting one up can make paying back what you owe easier and more financially palatable.

Keep in mind that interest will continue to accrue while the debt remains outstanding, and that is something to think about.

Offer In Compromise

If you’re under a lot of financial hardship, it may make more sense to try for

an offer in compromise (OIC), a special IRS program that could allow you to pay back less than you owe.

The offer in compromise program is a popular one with individual taxpayers and small business owners. If paying the entire amount would create a financial hardship for you, your family or your business, a tax resolution specialist can help you make the case to the IRS that you deserve a break.

What’s the best option?

Each of these options has its pros and cons, and it is important to understand how these programs work and who qualifies to use them. If your small business is in trouble with the IRS, taking the right action right away could reduce the amount you owe, give you some breathing room and allow you to focus on your clients – not on your taxes.

Running a small business has its challenges, but those difficulties are nothing compared to the stress and anxiety small business owners feel when dealing with the IRS. With so many small business owners now in IRS crosshairs, it has never been more important for freelancers, gig workers and the self-employed to have an advocate in their corner.

If you find yourself on the wrong end of an audit, a tax bill or an enforcement action from the IRS, the steps you take next are absolutely critical. Trying to take on the IRS on your own is a dangerous, and potentially expensive, thing to do, and you should always contact a tax resolution firm.

By working with an expert, you can gain access to vital information about small business settlement programs the IRS offers. You can gain access to the expertise you will need to settle your tax bill for less than you owe and get back in the good graces of the IRS. Time is of the essence when the IRS comes calling, and with the interest and penalty clock ticking you do not have one second to waste. So call us, your tax resolution expert, for a case evaluation.

Tax Withholdings Withheld Illegally from IRS

Mark Carlson pleaded guilty to filing a false tax return and failing to pay over payroll taxes, including Medicare and social security taxes, that were withheld from employee paychecks.

Carlson managed the finances for the Leo Byrnes Trust and was the business manager for two companies, American Pride Insulation and Atlantic Abatement Construction. He failed to pay over the payroll taxes, totaling $1,086,816.50, from all three entities from 2015 to 2018.

In 2019 Carlson filed a tax return using a W2 form he had created that claimed $8,946 had been withheld in employment taxes on his behalf and paid to the IRS, when no money had been paid to the IRS.

Carlson faces a sentence of up to five years in prison and a fine of up to $10,000.

Crooked Tax Preparer Goes Nationwide To Defraud Thousands of Customers

Fessum Ogbazion was found guilty of fraud and tax crimes in connection with a national tax return preparation company he owned and managed.

Ogbazion founded Instant Tax Service, and was so successful he franchised the companies through ITS Financial LLC. It was through ITS where he began advertising tax refund anticipation loans through a third party lender, despite the fact that ITS had no such lender to fund the loans. Ogbazion used the false ads to entice customers to apply for a loan they never qualified for, and then used the loan applications to prepare and file income tax returns, often without the customer’s permission. Between 2006 and 2011 ITS defrauded thousands and collected more than 70 million dollars in fees.

During 2009 and 2010 he failed to pay 1.3 million dollars in payroll taxes he collected from ITS employees. He evaded IRS attempts to collect these funds by directing business revenue to nominee accounts, placing assets in the names of nominee entities and making false statements to an IRS revenue officer.

Ogbazion was sentenced to one year and one day in prison and ordered to pay $933,708 in restitution to the United States.

Taxation Chief Does a Questionable Job Upholding the Law

George Martinez, a Bureau Chief of the Questionable Refund Unit at the New Mexico Taxation and Revenue Department, pleaded guilty to wire fraud, aggravated identity theft and money laundering.

Martinez copied tax returns that had already been processed and altered information such as social security numbers and bank account numbers. He then changed the income and withholding amounts in order to increase the refund amounts. In some instances he created new tax returns using taxpayers’ information he had access to.

The fraud began in 2011 and continued through 2018, and generated $689,797 in refunds that were deposited into Martinez’ personal bank accounts.

Martinez faces a maximum of 32 years in prison, along with restitution.

Ex Police Officer Finds Himself on the Dark Side of the Law

A former California police officer and his wife have been convicted of tax and insurance fraud, exploiting workers, and money laundering to the tune of 18 million dollars in connection with a private security company they owned.

Robert Foster and his wife pocketed millions of dollars by paying employees off the books, underreporting employee injuries, failing to pay employees for overtime and reporting false payroll. Investigators discovered that the Fosters hid about eight million dollars in payroll over three years, avoiding $578,716.56 in taxes and $560,293 in insurance premiums.

The couple dissuaded employees from reporting on the job injuries, and went as far as denying to their insurance company that one of their security guards was their employee after he was severely injured in a car accident, even though the guard was driving a company car and wearing a company uniform at the time of the accident.

Foster was sentenced to three years in prison and his wife to one year. They were ordered to pay $1 million dollars to an insurance company and to the state’s Employee Development Department, and face an order of restitution to pay the affected employees.

Manager Shows Herself Compassion; Funnels Company’s Money to Her Accounts

The business manager for Compassion at Home, Alicia Raynor, was sentenced to 18 months in prison, and was ordered to pay $799,625.27 in restitution for wire fraud and filing a false tax return. Raynor funneled payments from the company into an account she opened in her name with Intuit, a payroll and payment processing service. She disguised the payments to make it appear as if they were made to Bank of America, Capital One or Compassion at Home employees. In less than a year she stole $238,871.58 from the company.

From 2013 to 2016 Raynor received $1,214,444 in payments from her employer and did not report the income on her tax returns, causing the IRS a loss of $370,005.

Avoid the April 15 Blues – Take a Step-by-Step Approach to Your Taxes This Year

It is no wonder so many Americans dread the tax filing deadline. The U.S. tax code already contains more words than the Bible, and hundreds of pages of new rules and regulations are often added.

With so much complexity, it is no wonder so many of us put off filing our taxes until the last possible minute, but taking that approach introduces its own stresses and can potentially land you in hot water with the IRS. What if you do not get it done on time? You can file for an extension, but you are still required to pay the taxes you owe plus penalties and interest. How do you know you didn’t make a mistake with your last minute tax filing? Something as simple as a mathematical error could increase the odds of an audit and put you in the crosshairs of the IRS.

We specialize in helping people who owe $10,000 or more to the IRS or have years of unfiled tax returns, so we’ve seen our fair share of mistakes made by innocent taxpayers. If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief.

That said, we recommend taking a methodical and step-by-step approach to preparing and filing your taxes and avoid burying your head in the sand. As with any unpleasant and complicated task, breaking your taxes down into smaller and more manageable chunks can make things easier. This year, vow to take a step-by-step approach to your tax return. If you follow these simple steps, you could be done with your taxes before you know it.

Step 1 – Set Up a Command Center

Chances are you will start receiving tax documents in early January, and you may still be receiving those documents in March. That means you need a convenient place to keep all those documents. Setting up a command center in your home makes it easier to store those documents and keep them at hand.

If you have a home scanner, take a few minutes to image each document as it arrives. Set up a special folder on your computer or cloud storage service to hold all those documents. Those electronic copies can be invaluable if the originals are damaged or destroyed.

Step 2 – Choose A Good Tax Preparation Service (But Use A Tax Resolution Service For More Complicated IRS Issues)

While they cannot make the task totally painless, tax preparation professionals do make the process a great deal easier.

Keep in mind, if you owe multiple years of taxes and have multiple years of unfiled returns, we recommend reaching out to a tax resolution firm that will understand your unique situation and find the tax relief you need. Most tax preparers aren’t trained in complex tax resolution, so find the right firm to help you with your case.

Step 3 – Enter Your Tax Documents As You Get Them

One of the great things about technology is that you organize and file each tax document as you get it, often you can download all your tax documents from various online services. For example, your direct deposit payroll service will give you your W2 and different vendors provide statements and 1099’s online.  If the mailman brings you a 1099-INT or a W-2, you can simply scan things as they come in.

Just open each document, scan it to create an electronic backup and log on to your favorite secure cloud storage to file your documents. Whether you get five tax documents a day or just one, entering the information now can save you time later on.

Step 4 – Review Your Documents and Final Tax Return

After you think you have all your documents organized and your tax return is ready to file, the next step is to review everything and make sure there aren’t any obvious issues. Go through the paper and electronic copies and check each one off on your tax return. If any of those documents are missing or anything is wrong, go back and enter them right away.

Step 5 – Bring It All Together

Now that the final review is complete and all the documents have been entered, it is time to bring it all together and actually file your return. Your tax prep professional should include a series of checks designed to catch common errors and point out audit flags. Be sure to ask questions and correct any problems you might find. Be sure to print off a copy of your tax return and save an electronic version to your computer.

Nothing can make filing taxes fun, and this annual chore will never be a pleasant one. Even so, you can make the task less taxing by breaking tax filing down into its component parts. Following the steps outlined above can help you deal more effectively with your tax bill and all the complexities of the tax code.

OWE BACK TAXES?

Our firm specializes in tax resolution and helping people who owe the IRS or state $10,000 or more. We’ve seen taxpayers get blindsided every year by a huge tax bill and often falling behind on their taxes for years on end. If that’s you, we can help. Contact our firm today to discuss your tax debt settlement options.

Little is His Name, Big Tax Cheat is His Game, Long Time He’ll Be in Prison!

Third time’s the charm for Michael Dexter Little, who was convicted of tax fraud in 1999, 2003 and again in 2022. This time, Little also added conspiracy to commit wire fraud, money laundering and identity theft to his already extensive record.

From 2019 to 2021, Little filed a number of false tax returns claiming large, bogus fuel tax credits. The returns were filed in his name, those of co-conspirators and identity theft victims.

Little and his co-conspirators received 12.3 million dollars in false refunds and were attempting to collect another 27 million dollars when they were caught. Little laundered a large portion of the money, paid for almost everything in cash, and used a significant amount to purchase real estate and other assets.

In addition to the $12.3 million plus, he has to pay back in restitution, Little was sentenced to 19 years and six months in federal prison.

Your IRS Questions Answered Here…

Question: I haven’t filed my tax returns for several years and the IRS keeps sending me notices that I owe them 39,000. How can that be? What should I do?

Answer:  When a legally required income tax return isn’t filed on time, the IRS can file an income tax return on your behalf.  It’s called a “substitute for return” or “SFR”.  Most of the time the ensuing tax liability is much greater than if you filed your own return. This is because the IRS doesn’t give you credit for proper exemptions, credits nor (business) deductions. In addition, it’s a misdemeanor, punishable by up to one year in prison and a $10,000 fine, for each year not filed.

The good news: Your Tax Resolution Specialist can prevent this from happening, but you must act fast. Once retained we can replace all “SFRs” with originally filed returns, reducing in most cases, what you owe.  Once these returns have been filed, the next step is to negotiate a resolution with the IRS on the remaining amount owed.  You will most likely be looking at one of two options – the Offer in Compromise or a properly structured Installment Agreement.

The Offer in Compromise (OIC) was created for people who owe the IRS but who, for whatever reason, are unable to pay their tax debt off, even over time. The Offer in Compromise allows taxpayers to negotiate a settlement amount that will take care of the entire tax debt once and for all. This settlement agreement can lower the tax debt by a significant amount, however there are strict eligibility requirements.

If you do not qualify for the OIC then you may consider the Installment Agreement, which if properly structured, allows you to pay off your debt over time by making manageable monthly payments, much like a commercial installment loan.