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Back Taxes Could Cost You Your Passport

Posted by on 7:10 pm in IRS | Comments Off on Back Taxes Could Cost You Your Passport

Way back in 2012, the Government Accountability Office reported that the IRS was toying with the idea of using passports to ensure people paid their delinquent back taxes. Now that idea, which many felt was silly, has become a reality. The five year infrastructure bill Obama recently signed includes a section titled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.”

Despite the controversial nature of the new law, it managed to get passed, along with a bill to increase funding for highways. If you only owe a few hundred in back taxes, you don’t have anything to worry about. The way the new law has been written only allows the State Department to deny a passport application or passport renewal application if the outstanding back tax bill exceeds $50,000.

This will be a huge problem for anyone who does a great deal of international travel, especially if the travel is a direct result of their professional life. And there’s another problem. Starting in 2016, some people may be required to have their passports on them if they’re going to be traveling domestically.

States that could require passports even for domestic states, include:

  • Minnesota
  • New Hampshire
  • Louisiana

New York was another state that considered requiring passports, but has signed a waiver so that for the moment, a driver’s license will be enough for you to board a domestic flight.

The reason some states may require a passport for domestic flights stems from the Real ID Act.

It’s likely that most people think they have nothing to worry about. After all, even if they owe back taxes and don’t realize it, there’s no way the amount they owe could come close to $50,000. The problem is that the $50,000 figure includes fees, penalties, and interest all of which add up quickly, so you could end up owing a great deal more than you realize.

The truth of the matter is that a back tax bill of more than $50,000 is more common than some people might realize. The amount of back taxes owed, combined with the fact that the IRS has filed a notice of lien is all it takes for the IRS to make arrangements to have your passport revoked. If you’ve received a Notice and Demand for Payment, you’re expected to resolve the matter and pay the amount, in full, in 10 days or less.

A passport really isn’t something you shouldn’t be without, so if you’ve discovered that you owe the IRS $50,000 or more, the best thing you can do is to contact a tax attorney and explain your situation. The tax attorney will do everything in their power to help you resolve the matter in a timely fashion. With a good tax attorney on your side and handling the communication between you and the IRS, there’s every reason to believe that the tax attorney will help you keep your passport, work out a payment plan, and possibly even get the fees and interest attached to your back taxes removed, drastically reducing the amount you owe.1

27 Cases of Tax Fraud in Michigan

Posted by on 7:08 pm in IRS | Comments Off on 27 Cases of Tax Fraud in Michigan

In a case that rocked Kalamazoo, Michigan, a local woman who helped people file their tax returns, has been found guilt of 27 individual cases of felony tax fraud. It took the U.S. District Court in Grand Rapids to hear the case.

The court decided that 39 year old Fontrice Lenee Charles knowingly entered false information into tax returns which insured that her clients received larger reimbursements from the IRS than they would have if the paperwork had been filed properly. She ran this scam from 2011 through 2014. Make sure you visit: https://www.irsmedic.com/.

At the time, Charles was operating a tax preparation company called #1 Tax Lady.

Each of Charles 27 convictions carries a 5 year maximum in prison though so far the judge who oversaw the case hasn’t handled the sentencing.

During the trial, the prosecution explained to the jury that Charles managed to file 967 different tax returns with inaccurate information which resulted in her collecting $4 million in improper refunds for herself and her clients.

The Justice Department issued a press release stating, “the jury also found Charles guilty of filing her own false tax returns for 2010 and 2011. These returns were false because they did not report the income that Charles earned as a result of her fraudulent tax preparation activity, and because she claimed a deceased person as a dependent.”

The trouble that some Americans encounter is that they trust their tax preparer is doing things properly and they fail to take the time to read over the return before it’s been filed, or simply don’t realize that some of the information is wrong. The government recently launched a study where they sent secret shoppers to different tax preparers. Only 11% of the completed tax returns contained accurate information. The mistakes on the rest of the tax returns were as low a $52 and as high as $3,718. Maybe you will need tax lawyers ct!

In the case of Fontrice Lenee Charles, the fraud was knowin
gly committed, but there have also been many situations where the preparer simply made a mistake. In many instances, the IRS doesn’t notice the mistake, while in others, a red flag is raised and the tax payer finds themselves being audited.

Don’t assume that just because the person who prepared your taxes made a mistake that it means you don’t have to worry about the IRS. As far as the IRS is concerned, it’s your problem so they’re going to come after you.

If you had your taxes professionally prepared and have learned that the IRS is now stating that you suddenly owe back taxes, the best thing you can do for yourself is to contact an experienced tax attorney and explain the situation. Don’t try to correct the issue yourself. Not only will the tax attorney make communicating with the IRS smoother, but the tax attorney will also prove that it was the preparer who made the error and that you knew nothing about it, and help negotiate a settlement with the IRS. Also see this website!

 

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Understanding the IRS

Posted by on 11:02 am in IRS | Comments Off on Understanding the IRS

Understanding the IRS

Generally we only think about the IRS during Tax Season, but they work hard year round. Here’s more information about the Internal Revenue Service so you can better understand what they do and why.

History

The IRS was created in 1862 during the Civil War. President Abraham Lincoln, along with Congress, formed the office of Commissioner of Internal Revenue. At the time, the commissioner was charged with collecting a temporary income tax that was enacted to help pay for the increasing war expenses. This was the first time income was taxed in the United States.

Declared Unconstitutional

Many of us don’t like sending our hard-earned cash to Uncle Sam, but we participate in the system knowing that it helps pay for our our government and numerous services we utilize every day. While our views on taxation have evolved after a hundred years, it is not surprising that there was initially resistance. Afterall, we’re talking about the country that dumped tea in Boston Harbor to protest taxation without representation.

In 1894, the Supreme Court heard the case of Pollock v. Farmers’ Loan & Trust Co. and declared that the Income Tax of 1894 was unconstitutional because it didn’t apportion taxes, effectively making income tax function more like a direct tax. However, in 1913, the 16th Amendment was enacted as a sort of work around, exempting income tax from certain rules and making it a more permanent part of our lives.

Since then, we’ve seen taxes become a political football. Politicians have argued for a flat income tax, as well as a more progressive system that taxed the rich more heavily. Some candidates base large chunks of their campaigns on their tax stances (everyone read Bush Sr.’s lips: No New Taxes).

Responsibilities

The IRS is charged with collecting taxes from US citizens and those whose primary income is from a US source. It is their responsibility to publish the tax forms we see every January. The IRS also has the distinct responsibility of pursuing those individuals and organizations that don’t pay their taxes or file fraudulent returns. This role of the Internal Revenue Service is part of what makes it an intimidating organization. Not only do they provide us with confusing literature regarding how to fill out what can feel like endless forms, but they are also responsible for sifting through the paperwork and identifying errors and fraud.

What This Means For You

The IRS has a lot of paper to sift through—and they generate even more. If the IRS finds an issue with a tax return, or if they discover they haven’t received a tax return from a citizen in while, they’ll typically send out a letter. This is where knowing of a good tax law attorney or tax relief law firm can come in handy.
There are many different types of letters that the IRS mails out in their attempts to investigate fraud or collect taxes due. It is important that if you receive one of these missives, you read it carefully. There is often a deadline for response that must be adhered to. If any part of the letter seems confusing, contacting a knowledgeable tax law attorney can help you decipher IRS-speak and set you on the right path.

If you find you require legal help due to missed tax returns, issues with offshore holdings, or a large tax bill, it is important that you seek advice from a tax relief law firm immediately. As previously stated, the IRS loves a good deadline.


The IRS is not a paper-only organization, they do have the ability to take their issues to court in order to collect what is due. The best way to protect yourself is garner a deeper understanding of your case with a reputable tax law attorney who specializes in IRS issues.

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