The Internal Revenue Service was reprimanded by the Treasury Inspector General for Tax Administration for failing to follow statutory requirements in notifying taxpayers when it files tax liens against them. TIGTA also found that the IRS does not always follow federal regulations for notifying taxpayers’ representatives while filing of lien notices.
Archive for the ‘Tax Lien’ Category
IRS Failed To Properly Protect Taxpayers While Assessing Tax Liens
Tuesday, October 18th, 2011Even if the IRS is Wrong – They Can Still Crush You.
Friday, October 8th, 2010
Have you ever tried to reason with a someone who is emotionally convinced they are right? No amount of logic or evidence can convince them they might be wrong. They remain firmly entrenched in their beliefs.
Some good folks believe that the IRS may be unconstitutional. But it doesn’t matter that they may be incorrect in their views. They’re convinced they are right and it is very difficult to convince them to the contrary.
Even Idaho’s Republican lawmaker Phil Hart believes the IRS is unconstitutional. As a result, he stopped paying his taxes to protest the IRS. Not surprisingly, the IRS wasn’t convinced by his position and they slapped a $300,000 tax lien on him. One would hope that an elected US government official would choose a different method to express his feelings than stop paying taxes, increasing the tax burden on his constituents.
Apparently Mr. Hart felt that it was alright for the people who elected him to pay his salary, benefits and social programs and he should not contribute. (Read the article at KHQ.com)
What’s the lesson here? Taxpayers are free to believe that the IRS and the current system of taxation is unconstitutional, but believing that doesn’t make the IRS go away. The best way to change a system is to work to change the system using legal means, not by breaking the law, or causing the government to come after you.
It doesn’t help you, or change the tax laws, if you damage your financial life by having the IRS come collecting.
If you owe back taxes, you should strongly consider dealing with the IRS – sooner rather than later.
[Image source: Phil Hart Constitutional Income Book]
Is the IRS easing up on tax liens? No.
Thursday, September 30th, 2010
Every day I work with people who face tremendous tax problems: They owe taxes and are exploring what options they have to deal with it. It’s something I do every day so I was surprised to read an article that said the IRS is becoming “soft” on tax liens. You can read the article yourself here but I’ll summarize it for you:
The IRS can legally file tax liens any time a taxpayer owes money and has not fully paid it off. There are usually only limited circumstances when the IRS won’t file tax liens, including when the tax debt is for a small amount, or perhaps when the tax liability is for a deceased person who died without any assets, or when the taxpayer is in an active bankruptcy.
In the old days, the IRS would often not file a tax lien, but today, with the federal government needing revenue so badly, IRS collection folks are much more likely to file a tax lien and to to file it faster.
Of course this makes sense for the IRS: If someone owes tax money the IRS wants paid, and filing a tax lien is a a way to put pressure on the taxpayer. A tax lien also helps the IRS protect their position and increasing the odds that they will eventually get paid. Nowadays they try to file the lien as soon as they are legally allowed to do so.
We all know the IRS is a very large bureaucracy, and they make mistakes all the time, so it wasn’t a great surprise that when the IRS recently “audited” themselves that they discovered there were 210 files at two field offices that never had any contact or follow-up and accounted for a potential $6.4 million in collectible taxes. Basically, 210 files were just sitting there, being ignored. In addition to that, tax officers closed over 2,700 files and called them “uncollectable” but never gave a reason. In total, between 2002 and 2008, it was discovered that $1.4 billion in delinquent taxes were shelved rather than followed up on.
Are they getting lazy at the IRS offices? How are IRS officers deciding which files to pursue and which ones to ignore? How can we as taxpayers ever know if we are receiving fair treatment if we are hit with a tax lien while someone else who gets shelved?
The most likely answer is that there are so many “taxpayers” who are delinquent in paying their taxes or in filing their tax returns that the IRS doesn’t have the resources to deal with them all.
The IRS hasn’t gotten soft, in fact they’ve gotten much more aggressive, and busier. If you owe back taxes, you should still sleep with one eye open because the tax man will eventually come looking for you.
[Image source: austinevan]
Celebrity Tax Problems: Arnold Schwarzenegger
Saturday, August 7th, 2010
About Arnold Schwarzenegger
Arnold Schwarzenegger rose to fame as an Austrian body-builder, then a B-list movie actor, and finally a headlining star. No one goes to see an “Arnie” movie because of his acting ability but we all pay a lot of money to see his movies anyway. As the result of movie earnings, plus other business endeavors, Schwarzenegger’s net worth is measured in the hundreds of millions.
Of course, this story wouldn’t be complete without the step from acting to politics and now Arnold is the governor of California, a state that is teetering on the verge of financial collapse.
Californians can rest assured that their government officials will pay their federal taxes, as long as they are continuously reminded by the IRS.
Arnold Schwarzenegger tax problems
On May 11, 2009, the IRS filed a $79,000 tax lien against Arnold Schwarzenegger. (Source: The Los Angeles Times). While this is more than many people make in a year, Arnold’s people quickly dismissed it as an error and said the governor paid his tax debt right away.
[Image source: Nate Mandos]
Celebrity Tax Problems: Conrad Murray
Friday, July 30th, 2010About Conrad Murray
Some celebrities are famous for their skill in acting or singing, but not Conrad Murray. Murray is famous for being the doctor to The King of Pop, Michael Jackson, and is now embattled with legal problems for the alleged role he played in Jackson’s death.
It is said that Conrad Murray has a history of owing people money: According to the Huffington Post, Murray’s medical practice owed thousands of dollars in fines and judgments and overdue fees on loans and credit cards. To top of the “nice guy” image, he also owes thousands in child support and even had a fine of nearly $1,000 for driving with an expired license plate and no proof of insurance.
Conrad Murray tax problem
The Huffington Post also reported that Murray owed back taxes so we went hunting for them and found a tax lien of over $23,000 owing in back taxes in 1993, 1996, and 2003.
