Beware of Phishing Scam, Says IRS

The Internal Revenue Service warns that Department of Defense military members, retirees and civilian employees need to be cautious of a new phishing scam that many have received through email. The email, according to reports, appears to come from the Finances and Accounting division of the Department. The IRS warns the public not to be fooled by the .mil address that the emails displays, nor by the claim that those receiving benefits from Veteran’s Affairs (VA) may be eligible for additional benefits from the IRS.

The emails are said to request various forms of documentation from the VA and the IRS such as VA Award information or income tax returns. The individuals are then asked to send that information to an address in Florida. The information requested is more than enough to steal identities, empty out bank accounts, and defraud unsuspecting individuals tied to the Department of Defense.

The IRS spokesperson Michael Devine firmly reminded the public that “the IRS does not send unsolicited emails to taxpayers and never asks for personal and financial information such as PIN numbers, passwords, or similar secret information for financial accounts.” The IRS does not send unsolicited emails to taxpayers and never asks for personal and financial information such as PIN numbers, passwords or similar secret information for financial accountsThe IRS does not send unsolicited emails to taxpayers and never asks for personal and financial information such as PIN numbers, passwords or similar secret information for financial accountsThe IRS does not send unsolicited emails to taxpayers and never asks for personal and financial information such as PIN numbers, passwords or similar secret information for financial accountsThe IRS does not send unsolicited emails to taxpayers and never asks for personal and financial information such as PIN numbers, passwords or similar secret information for financial accounts

As always, if you are debating the legitimacy of any communications from the IRS, please contact your knowledgeable tax professional.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Tax Man Cometh for NFL Stars, Grammy Winners, and Ordinary Citizens

Unfortunately, for both ex-NFL star Jamal Anderson and Grammy winner Lauryn Hill, the Tax Man cometh this year with a vengeance. According to published reports, both of these public figures are going through some very public tax problems. Earlier in the month of May, former Atlanta Falcons running back Jamal Anderson found himself in trouble with the IRS, with the government agency placing a tax lien of more than $1 million dollars on his property. According to documents uncovered by TMZ, the ex-NFL star failed to pay income taxes in 2007 and 2008. The failure to pay these back taxes left Mr. Anderson with a large tax liability for his delinquency.

In the case of Lauryn Hill, the singer reportedly did not pay income taxes for 2005-2007 on estimated earnings of $1.8 million dollars. If “[she] did this in order to build a community of people, like-minded in their desire for freedom and the right to pursue their goals and lives without being manipulated and controlled by a media protected military industrial complex with a completely different agenda,” or if she merely neglected to pay her taxes, the IRS is demanding that the award-winning artist answer for her tax evasion.

A pragmatic lesson to learn from the very public tax situations of Mr. Anderson and Ms. Hill is that whether you are a public figure or an ordinary citizen, the tax man eventually cometh. If you are having IRS troubles, there are a few reasons behind the demanding of the Tax Man for back taxes. First of all, it could be the result of a failure to file returns for a number of years, which was apparently the case with Ms. Hill. If you fail to file your returns during a period of time, the IRS will file them for you and assess a tax. An assessment of back taxes can also occur if the IRS, during the course of an audit, determines that the taxpayer owes more than was previously assessed. Finally, an inability to pay the taxes tied to a filed return could prompt the IRS to assess back taxes.

If you find yourself in any of these situations regarding back taxes, there are a few things you can do to ameliorate the problems, as back taxes can be reduced by a variety of actions. An offer in compromise with the IRS could reduce the back taxes, as the settlement could be more beneficial to the IRS than an attempt to collect years of unpaid taxes. Back taxes can also be reduced or eliminated by filing for Chapter 7 bankruptcy. These are more complex matters though, as special rules apply. Also, back taxes expire under operation of law after 10 years from the date they became due. In rare cases, back taxes can be assessed further than 10 years in the past.

The truth of the matter is, whether the back taxes assessed are for $1 million dollars or $1,000, it is always best to resolve the issue with a tax attorney as your advocate with the Tax Man.

 

Read more: http://www.rollingstone.com/music/news/lauryn-hill-responds-to-tax-evasion-charges-20120611#ixzz1xb6teHaw

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

The IRS, With Common Sense in Mind, Makes Changes to OIC Program

There may be a light at the end of the metaphorical IRS tunnel for some of the most financially distressed taxpayers currently seeking an end to their tax problems. The days of garnishments, tax liens and levies may be over for those who qualify under changes made to the Offer in Compromise Program as part of the “Fresh Start Initiative,” an initiative that has enabled several changes in favor of the taxpayer since 2008. With this timely revision to the program, the IRS acknowledges that many are struggling to resolve their tax issues while also dealing with a difficult financial climate, saying that it is putting into place “common sense changes to the OIC program to more closely reflect real-world situations.”

According to the IRS website, there are two main areas of the OIC that are affected by this revision: the  financial analysis used to determine which taxpayers qualify for the program, and the amount of time it takes to resolve the tax issue. It was once common for a resolution to come after 4 or 5 years; however, the new streamlined program allows for a resolution in as little as two years.

In certain circumstances, the changes include:

  • Revising the calculation for the taxpayer’s future income
  • Allowing taxpayers to repay their student loans
  • Allowing taxpayers to pay state and delinquent local taxes.
  • Expanding the Allowable Living Expense allowance category and amount.

The Offer in Compromise, an agreement between the IRS and the taxpayer that settles the taxpayer’s liabilities for less than the full amount owed, has been more challenging to obtain in the past. If the IRS believes that the liability can be paid in full through a payment agreement or all at once as a lump sum, an OIC is generally not accepted. The determination of eligibility for an OIC comes after a financial analysis, the process of calculating the taxpayer’s reasonable collection potential. It is this analysis that is receiving the brunt of the changes in this phase of revisions.

According to the revised  OIC program, the IRS will now only look at one year of future income for offers paid in five months or less, as opposed to four years, and two years of future income in offers paid in six to twelve months, as opposed to five years.

With the revised financial analysis, along with the expansion of the Allowed Living Expense and the concessions made for student loans and local taxes, the IRS is working to move struggling taxpayers toward a fresh start.

For help navigating the revised Offer in Compromise program, as well as for assistance in finding the best solution for you, please contact your experienced IRS tax attorney.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999