Apr 302012
 
Supreme Court Deals Blow to IRS In Tax Shelter Case

The U.S. Supreme Court ruled against the IRS in a decision that may prevent the collection of $1 billion from people who used a tax shelter that was popular in the late 1990s and early 2000s.  In United States v. Home Concrete & Supply, LLC, the Court found that Section 6501(e)(1)(A) of the Internal Revenue Code, which extends the limitations period for the government to assess a deficiency against a taxpayer, does not apply when a taxpayer overstates the basis in property that he has sold, thereby understating the gain received from the sale. The general rule is that the More…

Apr 272012
 
IRS Files Lien Against Anna Nicole Smith’s Estate For Back Taxes

The Estate of Anna Nicole Smith is finding out the hard way that taxes are as certain as death.  It seems that the IRS has filed a lien against the late Ms. Smith’s estate seeking back taxes in the amount of $289,123.48.  Smith, a former actress, model, and playmate, passed away on February 8, 2007, from an accidental prescription drug overdose.  At that time she had been locked in a longstanding legal battle with the estate of her late husband, Texas oil billionaire J. Howard Marshall.  The Smith estate would ultimately go on to lose this contest. A review of More…

Apr 252012
 
Florida Tax Preparer Pleads Guilty to Identity Theft and Wire Fraud

According to the Justice Department and the IRS, Ernst Pierre, a Florida tax preparer, plead guilty on April 24, 2012, to wire fraud and aggravated identity theft.  Pierre was charged with a scheme to file false federal income tax returns using stolen identity information. Identity theft in relation to tax fraud is a fast-growing crime across the country.  One reason for identity theft’s rise may be the fact that it is relatively easy.  Experts say identity thieves generally need only three pieces of information to file a fraudulent tax return electronically: a name, a Social Security number and a birth More…

Apr 232012
 
Bill Before Congress Would Allow IRS To Suspend Passports For Tax Delinquencies

Previously, we mentioned a bill currently before Congress that would allow the IRS to suspend a person’s passport if they were found to be delinquent in their taxes.  Senate Bill 1813, also known as the Moving Ahead for Progress in the 21st Century Act ,was introduced in November 2011 and has passed the Senate and moved on to the House of Representatives. The bill (starting on page 1447 of the link above) states that any individual who owes $50,000 or more to the IRS may be subject to “action with respect to denial, revocation, or limitation of a passport.”  The More…

Apr 202012
 
Helpful Pointers For Taxpayers Who Missed The Filing Deadline

Inevitably, there will be some taxpayers who were not able to meet the Tuesday, April 17 deadline for filing their income taxes.  Here are some tips for minimizing the damage: File as soon as is practical: People often wonder whether they should file their federal income tax returns if they think that they do not owe anything or if they do not have the money to pay the taxes that are due.  Usually, it is a good idea to file the return in both of these instances.  This is because there are benefits to filing your return, even if you More…

Apr 182012
 
Keeping Up With Tax Obligations Can Present Special Problems For Active Duty Military

Frequent overseas deployment, constant address changes, the added complexity of military tax returns, and confusion over complicated tax provisions such as the combat tax exclusion, are just a few of reasons why active duty military members may have a difficult time maintaining their tax obligations.   Attesting to this fact, recent IRS data shows that approximately 60,000 active duty service members owe a collective $390 million in back taxes. Compounding the issue, many service members do not receive the notices that the IRS sends out in order to alert them to the fact that there is an issue.  The IRS is More…

Apr 162012
 
Last Minute Tips For Tax Filers

Income tax returns are due by the end of Tuesday, April 17.  Here are a few helpful tips to ensure that your filing runs smoothly. Double check all of your numbers, especially when submitting a paper return.  This includes all mathematical calculations as well as any identifying numbers such as your social security number, tax ID, or address and bank account and routing numbers. Make sure you follow the proper submission procedure.  Sign and date the return (both spouses must sign if married filing jointly) and be sure to submit your filing to the proper address if you are mailing More…

Apr 022012
 
TaxMasters Files For Bankruptcy; Hit with $195 Million Judgment

TaxMasters, the tax firm known for late night commercials featuring Patrick Cox, its red-bearded founder, has filed for bankruptcy and lost a huge civil suit, all in the span of nine days! On March 19, TaxMasters filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court in Houston, citing assets of less than $50,000 and liabilities of between $1 million and $10 million.  Nine days later, on March 27, a Texas jury voted to hit both the Company, as well as its founder and CEO with $195 million in civil penalties, including $113 million for customer restitution, $81 million More…