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If you have to call TAS, at least dial the right number

Posted by Wetenkamp on July 3, 2012 with 0 Comment

switchboard — photo via gretachristina.typepad.com

The Taxpayer Advocate Service (TAS) has two main phone numbers.

877-ASK-TAS1 (established in 2004)
877-777-4778 (NTA toll-free line, established in 1998)

The NTA toll-free line is the more prominent number on the TAS website. It is the number found under the “contact us” link. And this is the same number listed on the IRS website. However, the primary difference between these two numbers may surprise you. ASK-TAS1 is staffed by TAS personnel, but the NTA toll-free line is actually staffed by IRS customer service personnel! See the latest TIGTA report for more information. These representatives are charged with vetting out the cases that they believe will “qualify” for TAS help.

TAS describes itself as an “independent organization within the IRS” — really an oxymoron, don’t you think? Tax professionals have long questioned their independence. When you call TAS, you are literally talking with the IRS (unless you dial the right number). I do not recommend calling TAS for help with your tax problems. For high-quality tax relief, it is important to select an experienced tax attorney that can give objective, unbiased attention to your tax matter.

What does the Individual Mandate Mean to the IRS?

Posted by Wetenkamp on July 2, 2012 with 0 Comment

The Supreme Court’s recent decision to characterize the ObamaCare individual mandate as a tax will have significant repurcussions on efforts to simplify the tax code and the tax collection “business.” In other words, it’s just going to complicate things. That’s what happens when domestic policy initiatives are enacted through this nation’s tax laws. And just as the tax code tends to be the “catch all” for implementing new policy, the IRS has consequently become that agency we constantly turn to for help with enforcing it. It must be like achieving a new position at work with new responsibilities, but no pay raise!

Under Obama’s health care reform initiative, if you do not purchase health insurance, you will be charged a “tax” that will be enforced by none other than the Internal Revenue Service. Besides adding complexity to the tax code, this new tax will be adding work to an already overburdened federal agency. The IRS has been asked to take on new responsibilities before, so there should be no question as to whether or not it will be up for the task. However, the costs will be staggering. The IRS will have to implement new procedures, hire new staff, train old staff, and otherwise do what is necessary to enforce the new health care tax.

With more and more people piling up tax debts that they can’t afford to pay, the private tax relief firms may be the only ones that stand to benefit from all this.

Supreme Court Expands Congressional Tax Power

Posted by Wetenkamp on June 29, 2012 with 0 Comment

supreme court seal — image via lawprofessors.typepad.com

Tax relief for people who buy certain things? — sure (like real property). A tax imposed on people who buy certain items? — sure (like cigarettes). But a tax imposed on people who do not buying something? That’s definitely new! Apparently penalizing citizens for not purchasing health insurance now passes constitutional muster as a “tax,” or so says the Supreme Court.

Roberts recast the [health care] mandate as a tax, a rationale that was not in the law or the government’s case. He rewrote the administration’s position, baptized it, and then blessed it. Roberts’ defenders argue that he did so to avoid a constitutional crisis, but he may have created another by judicially re-legislating policy, a policy paid for and enforced by what could be essentially the largest tax increase in American history.

~William J. Bennett, CNN Contributor

I guess it’s true what they say about the government’s taxing power. It’s sort of a “catch-all” for federal programs that seem unconstitutional in all other respects.

IRS Still Not Giving Proper Notice of Liens

Posted by Wetenkamp on June 28, 2012 with 0 Comment

Three years ago the Treasury Inspector General for Tax Administration (TIGTA) recommended that the IRS change its practices regarding tax lien notices, and from the looks of this year’s lien notice audit, it does not appear that the IRS has any intentions of doing so.

Today TIGTA released its 2012 lien notice audit to the public and some of the same problems they identified in 2009 still linger. The issue that the IRS has swept under the rug and ignored for the past 3 years has to do with notifying taxpayers’ representatives of a lien filing. Specifically, they’re not consistently doing it. The IRS promptly notifies taxpayers by mail when it registers a lien against them, and it is supposed to send the same notice to their attorney, CPA, or other representative with a Form 2848 Power of Attorney on file.

[A]s noted in previous audits, the IRS did not always follow its own internal guidelines for notifying taxpayer representatives of the filing of the NFTL. Therefore, the rights of some taxpayers may have been violated when the IRS did not notify their representatives of lien filings.

~ J. Russell George, TIGTA

Furthermore, the IRS does not always send lien notices to the taxpayers’ last known address. According to the report, there are instances in which returned lien notices with bad addresses could be resent to the correct addresses, but nothing is done about it. Just another instance of TIGTA needing more teeth to actually enforce rather than recommend.

www.mwattorneys.com

Your 2012 and 2013 Federal Tax Returns Are At Risk!

Posted by Montgomery on June 27, 2012 with 0 Comment

Today, National Taxpayer Advocate Nina E. Olson reported to Congress the issues that the Taxpayer Advocate Service (TAS) will focus on during the upcoming fiscal year. Olson, expressed particular concern, among other issues, about the taxpayer impact of expired and expiring tax provisions.

“The continual enactment of significant tax law and extender provisions late in the year has led to IRS delays in handling millions of taxpayers’ returns and caused many taxpayers to underclaim benefits because they did not know what the law was … Because of the magnitude of these challenges and the uncertainty about such a large number of important provisions, the 2013 filing season is already at risk. The 2013 filing season is likely to pose problems for many (if not most) taxpayers and the IRS if Congress does not address the many provisions that have already expired or soon will.” Wrote Olson.

You may be asking, “How does this affect me?” Well, if Congress doesn’t act soon you may need to hire an experienced tax attorney to fight for tax relief. As my Federal Income Tax professor repeatedly ordered in law school: “Read on, read on, read on…”.

The following provisions are among the tax provisions that expired at the end of 2011:

The so-called “Alternative Minimum Tax patch.” As result, an estimated 27 million more taxpayers are subject to the Alternative Minimum Tax this year.
The deduction for state and local sales taxes. About 11 million taxpayers claimed this deduction last year.
The deduction for mortgage insurance premiums. About four million taxpayers recently claimed this deduction.
A provision allowing persons over age 70-1/2 to make tax-free withdrawals from their Individual Retirement Accounts (IRAs) to make charitable contributions.

According to the IRS website, Congress is likely to extend many of these and other expired provisions retroactive to January 1, 2012, but neither taxpayers nor the IRS know for sure what will happen and taxpayers, therefore, cannot make educated tax planning decisions now.

In addition to the provisions that expired at the end of tax year 2011, an even larger number of provisions are set to expire at the end of 2012. Such rules include the Bush-era cuts in marginal tax rates, reduced tax rates on dividends and long-term capital gains, various marriage penalty relief provisions, certain components of the child tax credit, the earned income tax credit, and the adoption credit, and the moratoria on the phase-outs of itemized deductions and personal exemptions.

It’s All Star Election Season – Vote Early and Often…. With Your Validation Code

Posted by Montgomery on June 26, 2012 with 0 Comment

It’s almost July…. This means that it’s time to get the BBQ ready, buy some fireworks, and get your votes in for the MLB All Star Game. Although I’m an experienced tax attorney, I’m not THAT old… but old enough to remember using the punch cards at the ballpark to cast my All Star vote. Now, eligible voters (fans) can cast their votes for starters up to 25 times at MLB.com or via your mobile device until Thursday at 11:59 p.m. ET. So get your votes in for the National Leaguers who will play the Yankees, Red Sox, and Josh Hamilton.

Online voting is nothing new. It’s been around since… well the answer is actually not as easy to find as I thought it would be…. but it’s been around for some time. While stuffing the online ballot box today with various San Francisco Giants, under my various email addresses, completing a validation code for each vote; I began to ponder, is this another MLB annoyance similar to the Designated Hitter or Astro Turf, or do some people only cast one vote. Or, do people really change their votes. Really? More specifically, if MLB is going to give me 25 votes per email address to stuff the ballot, why make me spend 15 minutes to do it 25 times. Just give me the option to submit 25 votes one time per address. Alternatively, just give me the punch card at the ballpark.

As a side note, I know most San Francisco Giants fans want Matt Cain to start the All Star game. I’m never a fan of the Giant’s All Star game pitcher, ala Vida Blue, Atlee Hammaker, Rick Reuschel, Jeff Brantley, and Shawn Estes. On the other hand, in more recent years, with the exception of Tim Lincecum, there have been some decent All Star pitching performances. But why risk a pitcher from your own team? As a leaving note on Giants All Star Pitchers, the National League would have won the 2008 All Star game if Clint Hurdle would not have replaced Brian Wilson for New York’s lame arm extraordinaire Billy Wagner. Four years later, and it still bugs me.

IRS Promises to Start Showing Whistleblowers Some Love

Posted by Wetenkamp on June 23, 2012 with 0 Comment

HC-Taylor-Swift08 — photo courtesy of blogs.courant.com

The IRS appreciates getting tips that help them catch people who seek tax relief illegally, but they haven’t done a very good job of showing it over the years. The relationship between the IRS and whistleblowers has been strained, to say the least.

The IRS Whistleblower Office was established in 2007, and for all we know it was set up in an empty warehouse staffed by crickets. The Whistleblower Office is notorious for dragging out cases far too long, failing to communicate with whistleblowers to obtain key information, not reaching the correct decision on cases, and not paying out when the decision is favorable for the whistleblower.

However, in a June 20th memorandum, the IRS declared that it would make some concrete improvements to the Whistleblower Program (outlined below).

“Let’s Kiss & Make up”:

Improve communication with whistleblowers by debriefing in most cases
Act on cases in a timely manner
Comprehensive review of Whistleblower Office procedures
Established interim guidelines imposing 90-day deadlines at key stages of the review process

AND, if you happen to be an “external stakeholder,” (whoever that might be) then the IRS says it will be working with you to establish more permanent guidelines.

www.mwattorneys.com

AMA Supports Soda Tax, On One Condition

Posted by Wetenkamp on June 21, 2012 with 0 Comment

Sodas_blog — image via mealsformilesblog.com

While there is no silver bullet that will alone reverse the meteoric rise of obesity, there are many things we can do to fight this epidemic and improve the health of our nation. Improved consumer education on the adverse health effects of excessive consumption of beverages containing added sweeteners should be a key part of any multifaceted campaign to combat obesity.

Where taxes are implemented on sugar-sweetened beverages, using revenue for anti-obesity programs and educational campaigns explaining the adverse effects of excessive consumption of these beverages will help to reduce the consumption of these caloric beverages and improve public health.

~ Dr. Alexander Ding, AMA board member

Its clear from this statement that the AMA is not fully embracing a soda tax. The emphasis should be on educating the public about the health risks of chugging sugary soda day after day, and the benefits of replacing soda with water.

The AMA is saying that a soda tax may be effective as part of a comprehensive plan to reduce obesity in our nation, and it would not go very far on its own. Also, if Dr. Ding’s statement is representative of the AMA’s position, the focus is not on whether or not a soda tax should be implemented, but what to do with the funds should that be the case. Nobody believes that a soda tax would curb consumption to the point that we no longer have a problem with sugar and obesity. The real value in a soda tax would be the projects and programs that could be funded if the money is spent responsibly.

IRS Lien Subordination & Federal Tax Lien

Posted by Wetenkamp on June 20, 2012 with 0 Comment

jumping_line — image via panasianbiz.com

A Federal Tax Lien (FTL) is the government’s legal claim against a taxpayer’s real and personal property that arises by operation of law (automatically) when a taxpayer incurs a tax debt and fails to pay. The taxpayer, other creditors, credit reporting entities, and the general public may only become aware of the tax lien when the IRS files a “Notice of Federal Tax Lien” — and it’s at that point that it can damage one’s credit.

Previously the only sure-fire way to get a FTL removed was to pay the liability in full. However, under the government’s Fresh Start program the IRS will agree to withdraw a lien notice if certain requirements are met. But even if you meet the criteria, you still have to request withdrawal of the lien by completing Form 12277.

If a taxpayer cannot pay the tax debt in full and does not meet the criteria for withdrawal of the lien, the taxpayer may want to consider requesting a “lien subordination.” This does not remove the lien, but it allows other creditors to “cut” in front of the IRS in line and it is normally required before a lender will refinance a home loan. Of course, if the IRS is allowing others to cut, then it is on their terms and with their permission. You must either be willing to make a big payment — sometimes up to the amount of the lien — or you must be able to show that it would be in the IRS’ best interest to subordinate their lien. From the IRS’ perspective, the only way it would be in their best interest is if it would result in them collecting more money from you.

The Soda Tax

Posted by Wetenkamp on June 19, 2012 with 0 Comment

It doesn’t rank all that high on our list of tax problems. Maybe you don’t even know you’re paying it. But at least 35 states already impose taxes on sugar-sweetened sodas. Soda is believed to be one of the reasons we’re so fat here in the United States.

Tu can eat todos los donuts you quiero, pero tu better not wash it dowño con un 16oz beveragado!

~ Miguel Bloombito (via Twitter)

Until now, the American Medical Association (AMA) hasn’t taken any official position in the soda tax debate. However, they are expected to put it to a vote this week at their annual meeting in Chicago. Is there even any question which side they will take on the issue? My mom never let me eat dessert before dinner, and I don’t think the AMA would pass up an opportunity to take a stand against soda.

If a soda tax is effective, it won’t be in its direct deterrence of soda drinkers. At a rate of one or two cents per ounce, it would hardly make a difference to most soda addicts. The effectiveness of a soda tax depends on how soda tax revenue is spent. If the revenue is spent on programs aimed at curbing obesity, then it could make a significant difference.

One particular obesity program that I think makes sense involves improving access to good cold drinking water at schools and in public places. Sometimes people are just thirsty and need something cold to drink. If you put soda in front of them, they’ll drink it. But if there’s water, they’ll drink that too. Why is it that public water fountains (the kind typically found in schools and parks) usually produce either warm water or none at all. And when they do work, the water pressure is normally so weak that you can get little more than a sip. We should have the technology to build high-quality water fountains these days; ones that actually work. And maybe a soda tax could help fund this sort of thing.

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