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Posts Tagged ‘Income Tax’
Friday, July 30th, 2010
About 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.
Tags: celebrity tax problems, conrad murray, Income Tax, IRS, Tax Lien, tax owing, unpaid taxes Posted in IRS, Tax Lien, Tax Problems | No Comments »
Monday, July 19th, 2010
In zombie movies, the dead rise from the graves and shuffle around the neighborhood looking to feast on human flesh. This past year, life imitated art (and I use the term “art” loosely), and the dead rose to file tax forms.
Yes, you read that correctly. This past year, 16 accountants in the Bronx and Manhattan were charged with filing numerous income tax returns of a dubious nature. These tax returns included making claims on dependents that were not actually dependent (or even related), and filing the tax forms of deceased people to get tax credits.
You can read the article here.
Fortunately, they were caught by undercover IRS agents who recorded these accountants offering a variety of illegal services.
This is truly a frustrating news story for me because it makes it harder for regular, honest, tax-paying citizens like you and I to get the tax solutions we deserve to our tax problems. For the 16 who were caught, I imagine far more have gone unnoticed and our current “redistribution of wealth” system is taking money from hard workers and funneling to people who would rather file tax returns for dead people than do real work.
[Image source: DanHollisterDuck]
Tags: Income Tax, income tax filing, IRS, tax crime, Tax Crimes, taxes Posted in IRS, Income Tax, Tax Crimes | No Comments »
Saturday, July 17th, 2010
Our country was founded on certain inalienable rights and millions of people flocked to the United States of America because we enabled opportunity. We were a land where, if you worked hard, you could prosper and avoid excessive taxation by the King. Our history books may not be as long as other, older countries, but our history books are filled with the names of people who have come to America with nothing and built personal fortunes from hard work, perseverance and ingenuity.
And let’s not forget the millions more, like my forebears, who never got rich, but have been able to provide a decent living for their families through honest work.
My hat goes off to those who have dreamed the American Dream and have achieved it. Unfortunately, for many of those who have worked hard to become financially successful or provide more for their families, the American Dream has turned into a tax nightmare: A bad dream where you work hard while others take your hard-earned money. We’ve turned into a nation that redistributes wealth, with the IRS taxing the higher income earners a disproportionately high amount while writing a check to those who have not worked and sacrificed for their income.
Now, let me say this: I believe America should be a land of equal opportunity, but not a land of equality. I believe people should be treated fairly regardless of their skin color, national origin, religion, etc. I think that’s something that makes America great. But we aren’t helping by heavily taxing what one person has honestly earned and giving to others. By this we are teaching them that wage theft, in the name of being “fair”, is permissable.
A society that offers its citizens an equal opportunity to work hard and advance themselves is all that can be expected of “fairness”. A society that forcibly takes earned income away from one person to give to another person is actually discouraging hard work. Entrepreneurs work unhuman hours to create the future, while undertaking significant risks. Entrepreneurs and successful businesspeople should not have to pay more to the Internal Revenue Service if their risks pay off, just as they would not receive an award if their startup venture failed.
We want to encourage every American to stand on their own two feet and to push forward, not enable them to continue lying down and not contribute to society.
We have become a nation of takers and givers, as Sherman Frederick points out in his article Tax Man Comes For Half of Us. We have become a nation of that says “wealthy” people (however the takers want to define it at any given moment) should be forced to give their income away to others.
Those receiving the handouts from massive taxes should rise up in revulsion and say they don’t want what they didn’t produce, and that they don’t want to treated like a charity case.
Have we reached the point where receiving free handouts is no longer shameful, and considered a “right”?
If we create a nation of people who expect a “hand out”, then we’ve fallen so far from our founding ideals that we may not recover.
Who’s to blame? Sherman Frederick points to Obama and Democrats in general (and a few Republicans). I think it’s easy to blame Obama, and he certainly deserves to shoulder a large share of the blame, but I believe it extends far beyond the current President. From eroding values to disengaged parenting, there are a lot of reasons that we’ve become a country of people seeking instant, selfish gratification without lifting a finger.
Let’s initiate change: Work harder. Seek the pride and satisfaction of a job well done. Sacrifice to get a better education. Save money and spend it less frivoulously.
Contact your government representatives at all levels and demand fairer taxation and aggressive government representation. Commit to working to change things in your own circumstances through hard work, a determined will, and guidance from your core beliefs.
And remember – pay your taxes, but take every legal tax-minimizing break you can to avoid redistributing more of your wealth than is necessary.
Through social change there may be a day when our tax debts decrease instead of the current increasing trend.
Tags: Income Tax, obama tax programs, redistribution of wealth, tax burden, taxing entrepreneurs, unfair taxation Posted in IRS, Income Tax, Tax Collection, Tax Reform | No Comments »
Sunday, July 11th, 2010
Our neighbors to the north have their own version of the IRS, called the “Canada Revenue Agency” (CRA). Recently, a news item came to my attention that may not have an immediate impact on US taxpayers but should be a warning sign that immoral behavior by revenue agency officials can happen anywhere!
The CRA, which is staffed by 40,000 people and serves a similar function to the IRS, recently uncovered a shocking number of cases in which CRA employees used government information inappropriately: It seems that sometimes they snooped on spouses or friends and other times they accessed income tax data to give their family and friends preferable tax treatment. In fact, the article reported that in one office alone 13 employees accessed tax records and confidential information inappropriately, with 10 of them providing preferential treatment to people.
(Read the article here)
What does that mean for Americans?
There are about 120,000 IRS employees. If it can happen in Canada’s CRA with only one-third of staff that the IRS has, it can certainly happen in the IRS. In fact, I’d suggest that the size of our highly bureaucratic system could make it even more susceptible to such nefarious usage simply because the bigger things are, the more complex they tend to be.
So, while you might be suffering with a tax problem and hopeful of a resolution, you need to wonder if those exact same people that are knocking on your door demanding money are not also extending preferential treatment to their friends and family!
Even the current Treasury Secretary Timothy Geithner admitted to tax problems due to “irregularities” in past 1040 tax returns.
We can only hope that periodic tax audits and careful watchdogging will keep this from happening… but we can never be completely sure. The IRS is the largest collection agency in the world, and they have nearly unlimited power to enforce tax collection.
[image credit: scazon]
Tags: canada income tax, Canada Revenue Agency, CRA, immoral tax agents, Income Tax, preferential tax treatment Posted in IRS, Income Tax, Tax Crimes | No Comments »
Saturday, July 10th, 2010

The IRS wants taxpayers to pay their outstanding taxes. If those taxes aren’t paid, the IRS has a growing arsenal of actions it can take, from garnishing wages to seizing assets.
That’s right, the IRS can and will seize your assets in lieu of your tax payments. Now, don’t think of them as a giant pawnshop where you can get your favorite chair or your mother’s wedding ring back once you’ve paid. The IRS will put your stuff up for auction! Airplanes, boats, vehicles, homes, property, the list goes on and on. (Check out the IRS Auction Site… if you don’t see something you like today, new items are listed regularly, all “donated” by tax payers who are unable to pay their taxes).
Now, more than ever, people with tax problems need to take an active approach to fighting the IRS to clear up their tax issues and their good name. Leaving your tax problem and hoping it will go away could mean that you’ll get a knock at your door and they’ll be asking for the clothes on your back (figuratively speaking)! Wishing that the IRS won’t come after you isn’t much of a game plan, and it isn’t going to work. If you have tax problems, they’re looking for you so they can look through your stuff like a kid with a catalog at Christmas.
[image source: bsabarnowl]
Tags: Income Tax, IRS, Tax Collection, tax owing, unpaid taxes Posted in IRS, Tax Collection, Tax Problems | No Comments »
Tuesday, June 22nd, 2010
In poker, the term “grinder” refers to a player who spends their days playing poker. Grinders treat poker like a business, sitting down for 8 hours to play, grinding it out like everyone else might grind out their work at a day job.
Michael Mizrachi’s nickname is “The Grinder” and he does exactly that, “working” at poker in a way that others might work at picking up garbage or running a cash register. And, like the rest of us, he has taxes to pay.
Unfortunately for Mr. Mizrachi, the IRS has recently put a lien on his home for $340,000 in unpaid taxes.
Over the course of his poker-playing career, the young Mizrachi has earned a whopping $6.9 million but, though poor money management and accounting practices, he owes $339,711, and he is facing foreclosure.
For many taxpayers, especially younger ones who begin to make a lot of money quickly in business, sports, Hollywood, or poker, taxes come as a nasty shock. People expect to pay taxes but making a lot of money can bump you up into a higher tax bracket very quickly, resulting in taxes owed that are far greater than you expected. It’s even more difficult to estimate the amount of tax you will owe when you don’t make a regular wage but rather earn your money in fits and starts (as a poker player might win a few times a year or a movie star might earn a few checks a year). Lots of my self-employed clients have this problem.
In Mizrachi’s case, it’s not simply a matter of putting in overtime or asking the boss for a raise. If he plans to continue “running his poker business”, he needs to play… And he needs to win… And he must develop the discipline to pay his taxes – on time.
This is a cautionary tale for those who want to play professional poker, professional sports, get into acting, or be a normal self-employed person: With every single paycheck, estimate the amount of taxes you owe and set that money aside (or pay quarterly) to avoid tax problems down the road.
(Read the full article here)
(Photo credit: plutor)
Tags: Income Tax, IRS, michael mizrachi, poker, poker player, Tax Problems, unpaid taxes Posted in IRS, Income Tax, Tax Problems | 1 Comment »
Wednesday, June 16th, 2010
People are in for a wake-up call: Non-profit organizations (excluding churches) that report less than $25,000 in income in 2010 might discover in 2011 that the donations they received through 2010 were not tax exempt.
Here’s what’s happening: The IRS is requiring non-profit organizations (except for churches) whose reported income is less than $25,000 to fill out an additional form. The due-date for that form was the middle of May but nearly 214,000 non-profits had not filled out the form.
No one will realize their error and they will continue taking donations through the year. Then, when it comes time to issue donation receipts, here’s what will happen:
The organization will discover that it has lost its non-profit status and the generous donations throughout the year will not be tax deductible.
The organization itself will have to report for-profit income, which could be financially devastating to the organization. Meanwhile, the people who have given throughout the year with the full expectation of the tax-deductible benefits of their donation will suddenly discover that they paid money and are receiving no tax deduction in return.
Here is another occasion where the IRS is biting the hand that feeds it. In an attempt to collect every dollar it feels it is owed (and to leave no stone unturned to find more of those “owed” dollars), it will leave in its wake many important organizations that will no longer be able to function, including historical societies, community theater, and community outreach programs. That’s right, the IRS isn’t going after tax cheats, they’re trying to squeeze money from organizations that can barely afford to survive.
You can read more about it in this Associated Press article.
Photo credit: cesarastudillo
Tags: Income Tax, non-profit, tax deadlines, tax owing, taxes Posted in IRS | No Comments »
Wednesday, May 12th, 2010
Your taxes have been filed. You sit back and relax, and maybe even wait for an overpayment refund. All seems right with the world. But then you get something strange in the mail. A letter from the IRS but you think there must be some mistake: You owe them MORE; or, you get back less than you were expecting.
What should you do? Some might accept it as their unlucky situation, as if their tax return was a slot machine and it came up as three different symbols instead of the 3 lemons you were expecting. I suspect the IRS is banking on this. After all, they are the faceless, bureaucratic giant and you are the lowly person afraid that you’ll open Pandora’s Box of Audits if you say anything.
But you do have options if you don’t like what the IRS is dishing out. The IRS has a system in place for taxpayers to file appeals. It’s with the IRS Appeals office, which is a separate and independent office so you don’t have to deal directly with the people who worked on your return.
When appealing an IRS decision (including your refunds or other things like penalties, interest, trust fund recovery penalties, offers in compromise, liens and levies), you should pull together as much information as you can in order to support your case. And, when appealing, you can represent yourself or have representation from a tax attorney.
For more information about filing an appeal with the IRS, download this IRS-created PDF called
“Your Appeal Rights and How to Prepare a Protest if You Don’t Agree“.
The IRS is a tough, hard organization, but if it has a softer side at all, it’s the folks who work for the Appeals Division.
Tags: appeal, Income Tax, income tax filing, IRS, protest, tax owing, tax refund Posted in IRS, Income Tax, Tax Problems | 1 Comment »
Monday, May 10th, 2010
In a recent article by Robert Samuelson at RealClearPolitics.com called “How Big a Government Do We Want?“, Samuelson talks about a proposed Value-Added Tax (VAT) which its proponents suggest would relieve the US of its disproportionate tax burden and help to pay the deficit.
While a sales tax SEEMS like a good way to redistribute taxes to everyone who buys (instead of charging higher income taxes to people who earn more money), it is not a good solution. Implementing a VAT is complicated and, as Samuelson suggests, will only increase government.
And that is what concerns me more. Of course I don’t want higher taxes, but a bigger government is even more worrisome – because they create unnecessary spending (case in point: More of our income taxes go towards the federal pension than to education).
What’s the perfect size of government? I want it to be no larger than it was approximately 100 years ago. It want it small, the way it was before the big government era when we thought “the bigger, the better.”
Here’s why: The government is killing us while it benevolently attempts to provide us with a cradle-to-grave safety net:
- It’s killing us with taxes
- It’s killing our spirit of independence and non-government dependence
- It’s killing our “can-do” spirit
The US was founded on liberty and opportunity and both of those things are quickly disappearing as we become overtaxed and then enslaved to debt.
Large groups of Americans now wait eagerly for their government check:
- Farmers
- Corporations
- Earned Income Credit recipients
- Seniors who obtain more in benefits/insurance value than their tax contributions would have ever bought on the open market
The government, through its hand-outs, is creating class warfare, age warfare, and warfare between small business and large business.
- Those that earn more are encouraged to dislike those that earn less.
- Those that earn less are encouraged to be suspicious of those that earn more.
- Those that are older are encouraged to be hyper sensitive to younger folks who don’t want to pay for their benefits.
- Those that are younger are beginning to begrudge the payments they must make to seniors who are better off than they are, or already have their homes paid off, while they also receive extra tax deductions, and in some instances may be excluded from paying property tax on the local level.
- Small businesses looks askance at corporate welfare.
- Large businesses seek to gain preferential tax treatment over smaller competitors.
Everyone SAYS they don’t like taxes and big government, but they’ve already been “bought”. They want everybody else’s government check be reduced or stopped – but they don’t want their government benefits or preferential treatment touched.
Do we have the guts to have a smaller government? Do we have the will to fight for reduced government that may actually cause our own governmental benefits to be cut? As I survey the present landscape, I don’t see much reason to be optimistic.
Tags: Income Tax, IRS, IRS reform, problems with tax, redistribution of wealth, sales tax, smaller government, Tax Reform, taxes, taxes owning, value added tax, VAT Posted in IRS, Income Tax, Tax Reform | No Comments »
Tuesday, May 4th, 2010
When you don’t pay your taxes, the IRS is on you like ants to a picnic. I know that because everyday I work with people whose tax problems are exacerbated by strong arm IRS tax collection techniques.
But what about people who overpay their taxes? It might seem hard to believe but the IRS had $1.3 billion sitting owed to 1.4 million people who did not file a tax return for tax year 2006. (You can read more about it at this IRS press release). This outstanding amount owed back to taxpayers happens because someone might pre-pay their tax based on quarterly estimates but then they fail to file a tax return at tax filing time.
The problem is, if you didn’t file your income tax within three years you generally forfeit your right to receive that refund. That means the money will not be leaving the U.S. Treasury, and Congress will be able spend it for its many “important” projects.
It doesn’t seem fair does it. The IRS gets a much longer time period to collect any money you owe them, but you get a much shorter time period to collect money from the the IRS that they owe you.
I guess Congress, who makes up these screwy rules thinks it’s fair, but that because it benefits them.
They fix the rules in their favor.
Tags: Income Tax, income tax filing, IRS, irs filing date, Tax Collection, tax owing, tax payments, tax refund, taxes Posted in IRS, Income Tax, Tax Collection | 1 Comment »
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