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March 2014 Archives

Targeting "white collar" tax crimes

If a tax preparer promises a return that sounds too good to be true, it probably is.  This tax season, the U.S. Attorney is promising a crackdown on unscrupulous tax-preparers. Here is a cautionary tale. Bryan Gardner is serving six-and-a-half years in prison. His brother, Jeremy Lasane, is serving 12 years, and he also has to pay back almost $800,000. They were convicted of income tax fraud and identity theft for ripping off the social security numbers of innocent victims and filing false tax returns. They are just two of the many white-collar criminals the U.S. Attorney's office is targeting this tax season. "What we see a lot of is them making false promises and saying we can get you a larger return than what's warranted. Often times we'll see individuals that will say we'll tie in our fees with your return, which is certainly a red flag," said U.S. Attorney Ed Stanton III, Western District. His office is also going after assets like the Maserati and Mer-cedes-Benz that belonged to one of the brothers. Both sets of wheels are now owned by the government. "What we would say to those individuals and organizations is certainly you may get by in the short run but ultimately you won't get away," said Stanton. Stanton says it's important to guard your social security numbers and be smart about who does your taxes. Remember, if a tax preparer promises a return that sounds too good to be true, then it probably is.

How To Know If You're Eligible For an Appeal

Did you know that you have the power as an individual taxpayer to appeal almost any decision made by the IRS? In fact, you can appeal audit findings, penalties and interest, rejected offers-in-compromise, liens, seizures, garnishments and other collection actions. According to the IRS, "Appeals is not for you if: - Your only concern is that you cannot afford to pay the amount you owe. - The correspondence you received from the IRS was a bill and there was no mention of Appeals." So in these two instances, an appeal would be a premature action to take. If you are concerned that you cannot afford the pay the tax you owe, there are channels to go through before you would begin the appeal process. For instance, you could work with a tax attorney and make your case to the IRS that your situation qualifies for one of these tax debt payment methods: - Non-Collectible Status - Offer-in-Compromise - Installment Payment Plan - Partial Payment Installment Agreement - Tax Bankruptcy If an Offer-in-Compromise is the path that is taken, if it is rejected (85% of all Offer-In-Compromise proposals were rejected in 2006 by the IRS) the decision can be appealed up to 30 days from the date of the rejection. Your chances for a winning an Offer-In-Compromise is increased with the involvement of a competent tax attorney. Since there is only a 15% success rate with the IRS in these cases, it's important that the paperwork is prepared from the standpoint of what the IRS wants to see. In fact, a good tax attorney will know from the start if an Offer-In-Compromise is the direction that you should go, and will certainly know if an appeal to a rejection of an offer is worth pursuing. If you're audited you may disagree with the IRS findings. You have the right as a taxpayer to disagree

Can You Afford a 15% Cut in Your Social Security to Satisfy a Tax

If you owe money to the IRS, and you are receiving Social Security benefits due to: Federal Old-Age and Survivors Trust Fund (or) Disability Insurance Benefits. The IRS can take 15% of your Social Security payments to satisfy your tax debt. Prior to 1996, there was a $750/month "off limits" amount that had to be left for the Social Security recipient. However, that changed with the introduction of the Federal Payment Levy Program, which allowed for 15% of the total monthly payment to be collected - regardless of the amount. However, benefit payments such as lump-sum death benefits, benefits paid to children are not eligible. Additionally, Supplemental Security Income (SSI) payments, under Title XVI, and payments with partial withholding to repay a debt owed to Social Security will not be levied through the Federal Payment Levy Program. The IRS must send you a "Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing" form. At this point, you'll have 30 days to respond. You have a few choices at this point - you can either: - Pay the tax - Negotiate an alternative payment method (payment plan, partial payment plan, Offer-in-Compromise) - Be declared non-collectible (hardship) status - File for an appeal - Ignore the Warning and do nothing If you decide to do nothing and you don't contact the IRS, after 30 days they will submit your levy to the Financial Manage-ment Service (FMS) and 15% of your Social Security will begin to be taken to satisfy your tax debt. The levy will remain in effect until the tax is paid off, or until you make other arrangements. If you're counting on Social Security benefits to live, you can't afford for the IRS just to waltz in and take 15% of your livelihood without a fight. Depending on your situation, you may be able to qualify for an Offer-In-Compromise and end up paying the IRS significantly less than you owe. However, be forewarned - the IRS only accepted 16% of Of-fers-in-Compromise in the year 2006. To increase your chances of having your offer accepted, it would be a very good idea to have your paperwork prepared.

IRS Uses Dead-Horse Law To Argue For Increased Regulations On Tax Preparation Industry

The government recently argued that it has the authority to regulate tax return preparation businesses using a "dead horse" law as precedent. Tax preparers, represented by the Institute for Justice, challenged the ruling in the case Sabina Loving et al v. Internal Revenue Service. At the hearing of the Court of Appeals for the District of Columbia circuit, both sides argued about the applicability and precedent of an 1884 law that applied to loss claims regarding horses dead or missing because of the Civil War. The proposed regulations call for tax preparers to pass a competency test upon opening shop. Tax preparers would also be required to keep up with annually updated continuing education. Though this case is obviously a cause of concern for many tax return preparers, the issue is far from settled. A decision is at least several months away. Government attorneys presented what, in their view, is a justification for regulatory measures. Some background is necessary to clarify the government's perspective. After the Civil War, many people claimed losses against horses that died or disappeared because of the chaos and hardship of war. Soon, advocates for such claims helped prepare their case and collect U.S. government compensation for the dead horse losses. Often, these advocates charged a percentage of amount collected for their services. With such a pay structure and scant reliable records, it was perhaps inevitable that dishonest claims became widespread. The government reacted with regulations to cut down on fraud and ensure that "enrolled agents" were qualified and honest in their dealings with clients and the government. With that historical background, the DOJ claims that today's tax return preparers are much like those advocates. Allegedly, the opportunity for fraud and abuse is large enough to justify regulation. Institute for Justice Attorneys' countered that tax preparer businesses undeniably provide a service that is, in very broad strokes, similar to the "enrolled agents" referred to in the dead-horse law. However, today's tax preparation services are not the same type of business operation since they do not provide clients with legal representation mentioned in the "dead horse" legislation. Thus, argues the Institute for Justice, the alleged legal precedent does not apply.

Success in the New Economy with Steve Forbes

Lance Drury was headlined with Steve Forbes at an event in New York City on June 20 & 21, 2013 called "Success in the New Economy." Leaders in their respective industries and professions were asked to attend the summit in NYC. Lance delivered one of the keynote speeches with Steve Forbes. Lance talked about the challenges of dealing with the IRS and the system he employs to get the results his clients want. On March 27, 2014, Lance's new book with Steve Forbes called "Successonomics" will be released. Watch for the book on Amazon and Barnes and Noble.


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