Month: June 2011

The IRS Provides Offshore Account Disclosure

As we complete the strenuous task of paying our incomes taxes for 2010, we have to deal with the unleashed financial monster i.e. IRS tax audits.

Many taxpayers do everything possible to try the nearly impossible feat of evading the burden of taxes by using the measures as per the Internal Revenue Code to dodge their tax burden. Thus, they cause financial problems and auditing issues for the government, which in turn has doubled the auditing of tax returns for the richest USA citizens this tax season.

IRS professionals have definitely pulled up their socks with audits being increased 8% for the richest USA citizens in 2010 over the past tax season. Also the data released by the Internal Revenue Service shows that IRS audits have increased from 10.6% to 18.4% for the taxpayers with gross incomes above $10 million. Even audits for taxed adults within the income range of $5 million and $10 million have seen audit increases from 7.5% to 11.6%, which is a 55% increase.

Offshore accounts and tax evasions are the new catch with Global High Wealth groups being established in 2010 for improved strategies for high magnitude capital individuals.
As per Doug Shulman, IRS commissioner, the federal agency is looking for leverage points through which many tax evaders can be caught. Two of them are financial institutions and evasion scheme promoters.

The initiative of an Offshore Voluntary Disclosure process for the native and non-native English speaking taxpayers, provides information in 8 different languages. For tax evader’s benefit, they can now disclose their offshore accounts and come clean with the taxing authority, since evading taxes is a criminal offense and largely against the US’ interest.

 

The New Jersey Millionaires Tax Bill

New Jersey Democrats are slated to introduce a new “millionaires” tax bill. Senator Ray Lesniak (D-NJ) and other representatives seem to want all their constituents, including the extremely wealthy, to shill out more money to help stabilize New Jersey’s economy.

Governor Chris Christie, however, has promised to veto any proposed tax increases, which pundits interpret to be symbolic efforts made by Democratic legislators to rally the troops. The party wants to repair its blue-collar credentials by appealing to working-class voters, a demographic that is angrily responding to legislation that curtails employee benefits and rights.

Lesniak has said that he wants all constituents to share the “sacrifice” needed to stabilize the fragile economy of his state. The additional revenue that would hopefully come from this legislation could be spent on schools, tax rebates for older citizens, and police departments that have had to lay off employees due to budget cuts.

Gov. Christie has been asked before why he refuses to tax New Jersey millionaires to do, among other things, restore cuts to such socially beneficiary programs such as Medicaid. Christie’s response, that New Jersey is the most highly-taxed state in the country, means he does not want to raise taxes 2010 anymore.

Gov. Christie vetoed a similar “millionaires” tax a year ago. Democratic representatives could not muster enough votes to override it. The alternative for Gov. Christie being, of course, cuts to pensions and other workers’ benefits. Despite protests numbering thousands of participants at the state capitol, such bills have mostly been successful.

Former Clients Feel Betrayed By “Tax Lady” Roni Deutch

Thousands of dollars are owed to the IRS by individuals who are looking to anyone for assistance in lowering that debt. Some of those people have looked to the aid of a woman from their TV, who has made assurances that for pennies on the dollar she would get the IRS out of their lives.

For anyone who is looking at a tax debt, Roni Deutch is just the ticket they are looking for. Calling herself the “Tax Lady”, Ms. Deutch can be hard for people to resist. Finding himself embroiled within a dark hole after his divorce, a contractor from the Central Coast became one of the many to fall for her ads. Others have been a Missouri father about to deploy, a woman from Indianapolis in need to sell her home, and a Florida plumber about to lose his plumbing business.

But those are just a handful of the people who have been desperate enough to make that call. Along with countless others, those individuals became clients of the law firm that promised to aid their tax debt problems. Ms. Deutch’s firm based in North Highlands promised to many, but failed to bring them any closer to being out of their troubles with the IRS.

A lawsuit for over 30 million dollars was filed in 2010 by the attorney general for her state, which helped to crumble the firm which was bringing in to each of the partners more than 24 million per year income. That fraud case, as well as some contempt accusations was filed due to clients’ claims that Ms. Deutch failed to do any work for them. The firm is also charged with creating statements of bills that were bogus in the clients’ eyes only as another way to cheat them.

On the 12 of May, Ms. Deutch shut the doors to her firm, while giving a defensive statement outside the offices. Her claims stated that the firm was broke, actually claiming that they owed around 15 million themselves. Still stating in her words that she was everything she had claimed to be.

The state of California continue to make their allegations in echoing support of the Sacremento clients’  as well as numerous people from other states. Those people have contacted the Sacremento Bee in the following days after Ms. Deutch closed the doors of the law firm.

In the courtroom on Friday, Deutch continued her plea that she never committed any type of contempt of court. While the AG’s office went on with their accusations that the firm shredded papers and never paid the refunds to her clients’. With those accusations and alleged violations, neither her attorney nor Ms. Deutch wished to make a statement.

IRS Tax Relief For Natural Disaster Area Victims and Businesses

When a business or individual is hit by a natural disaster such as a flood, storm, or tornado filing or paying taxes becomes a low priority. For this reason, the IRS offers natural disaster tax breaks in the form of extensions so that businesses and individuals living in federal disaster areas can get back on their feet before dealing with their tax issues.

The IRS offers extensions in both filing of returns and paying taxes 2010 due to those that have homes or businesses in areas declared a disaster area by the federal government. This also applies to businesses who have financial records stored in a disaster area, regardless of whether their business is located in the area impacted by the disaster. In these situations late payment penalties are also often times waived.

In some cases, the government will allow you to amend your previous year’s taxes to file a casualty loss, although the disaster is in the current year.  This enables the taxpayer to receive their refund, which they are in desperate need of, quicker.

In most cases, the extensions are made available automatically such as in North Carolina, which was given tax extensions until June 30 of this year when their state was declared a disaster area due to tornados and flooding on April 16. Parts of Illinois also received an automatic extension date of June 30 when they experienced flooding and storms.

If you are unsure what is available to you, it is in your best interest to contact the IRS.  They do have a disaster line of 866-562-5227 for your help.  You will also find resources at www.irs.gov.

H&R Block Faces Opposition Over The Acquisition Of TaxACT: Federal Antitrust Suit Filed.

While most people are focused on their 2010 tax returns, there is tension in the market. An antitrust lawsuit was filed on Monday by the U.S. Department of Justice in a move to prevent the acquisition of TaxACT by H&R Block. Talk of the $287.5 million deal has led to fears of increased costs and an obstruction of improvements in the market without a third major player to drive competition.

These fears surfaced after H&R Block (Kansas City) revealed its intention in October to merge TaxACT and H&R Block AT Home, creating a division that would be headed by the team from TaxACT.

The Antitrust Division’s assistant attorney general, Christine Varney, issued a release charging that the deal would result in millions of citizens being charged higher costs for digital tax products classified as “do-it-yourself”. Varney further argued that the merger would wipe out advancements made in areas such as free federal filling which is currently a strong suit for TaxACT.

Requests for a response to Varney’s assertions  were not immediately met by H&R Block .

In his contribution to the debate, former H&R block CEO Alan Bennett argued that H&R Block would continue offering free filing for most basic federal returns. He further added that on the one hand this was good since the model is cost effective, efficient and  useful however, the approach is ultimately geared towards getting users of the simple free software to  pay for more complex filing.

Citing that 90 percent of the tax market is currently controlled by H&R Block, TaxACT and Intuit, Varney stressed that permitting the merger would phase out the aggressive competition between the two companies leaving Intuit as the only other large competitor.