It all started with the Tea Party in Boston, when American colonists protested British taxes levied “without representation.” The IRS didn’t come into being until 1862, to handle our first national income tax, 3% of income, levied to fund the Civil War. That tax expired in 1872, but again in the early twentieth century, just before World War I, Congress passed the Sixteenth Amendment, which imposed income taxes again. They haven’t expired since.
In a 1935 Supreme Court decision, a judge ruled that, “Anyone may so arrange his affairs that his taxes shall be as low as possible…There is no patriotic duty to increase one’s taxes.” Most Americans think that people who cheat on their taxes are morally reprehensible and not good citizens, but they try to reduce their own tax bills legally.
Today, federal, state and local taxes add up to nearly 25% of the US Gross National Product, so they’re pretty adamant that you pay up. You have to pay taxes on income, payroll, sales, capital gains, property you own, dividends, goods you import, estates and gifts, and some fees. Even non-resident citizens are taxed on worldwide income.
With all these taxes to pay, it’s no wonder that sometimes people fall behind.
Back Taxes Help
Oops. Do you owe the IRS back taxes? Maybe you filed your tax return last year but weren’t able to pay what you owed. Or maybe you forgot to report some income, your side job, the money you made walking neighborhood cats, and the IRS found out. Maybe you didn’t file any tax return at all last year, or in years past.
Oh well, it’s only the IRS, right? What could they do to you?
They could send you a letter and issue you a penalty of $135. That doesn’t sound so bad. But they’d expect you to pay your Back Taxes—with interest and penalties—within 60 days. You have payment options like installment agreements, partial pay agreements and settlements. But if you still don’t pay, the IRS could summon you: not a pleasant experience. Maybe you’ve heard the term Audit.
It gets worse. They could ruin your credit score, seize your assets, and put you in jail for tax evasion.
But, you protest, you paid off all your federal taxes and only owe State! Sorry, penalties and interest may still apply.
Are you scared straight? Then let Brightisde Tax Relief help you get straight with the IRS and State, and get back to your happy life. Call us at 800-730-4313 to get your back tax problems resolved.
Let’s take a look at a couple of Back Taxes scenarios:
You didn’t file your returns.
You’re facing Tax Liens or Levies.
Your Payroll Taxes are late.
The IRS or State wants to Audit
Unfiled Tax Returns
The Valentine’s decorations are barely put away, and the four-leafed clovers from Saint Patrick’s Day are wilting. Next holiday? Tax Day!
How does it get to be April 15 so quickly after New Year’s every year?
It has to do with the tilt of the earth’s axis and length of the night, but that’s not important here. If you couldn’t file your tax return by the springtime deadline last year, stop procrastinating. Filing now will hurt less than the consequences of not filing at all. The penalties on Unfiled Tax Returns are a lot higher than penalties on unpaid taxes, so even if you can’t pay all you owe right now, file your late return at once. We will help you do this properly and promptly. Call us at 800-730-4313.
If the IRS finds that you deliberately didn’t file, they can fine you $10,000 to $25,000 and sentence you to a year in prison, the penalties for Failure to Pay. If you owe $51,000 or more in Back Taxes and haven’t responded to IRS communications, the IRS could even revoke your passport!
Avoid all of this. If you haven’t filed tax returns for three to ten years or more, Brightside can go back in time, collect the information you need and get it filed.
A Tax Lien is a legal document that secures the government’s claim upon your property when you don’t—or can’t—pay your Back Taxes. The IRS may file a Lien against your personal property, real estate and any financial assets you own, like bank accounts. They’ll file a Notice of Federal Tax Lien, which gives them first dibs on your stuff, before other creditors.
We recommend that when you get notice of a Tax Lien, you take immediate action and pay your Back Taxes in full. When that’s not possible, we can negotiate reduction in the Lien.
Bank Account Levies
The Fifth Amendment to the US Constitution forbids the government to seize property without due process. So what’s due process in IRS lingo? It means notifying you that they intend to enforce a Tax Levy, like a wage garnishment or bank levy, and allowing you to present your case before them.
An IRS Levy can seize your property, garnish your wages, take cash out of your bank account, and sell your car, your house and your personal property. Now that’s some heavy Levies. And they don’t even have to go to court to do it. The US Tax Code gives the Tax Levy, “the power of seizure by any means.”
If the IRS sends you a letter threatening to Levy your bank account, do not file this letter in the circular folder. The IRS doesn’t play nice. A Bank Account Levy will freeze your money so you can’t use it for 21 days. Then, they’ll withdraw the amount you owe, or as much of that amount as they can get, out of your money markets and IRAs, and your savings and checking accounts. They can also levy your Social Security payments, accounts receivable, and even insurance proceeds.
You won’t get a Bank Account Levy letter unless the IRS has mailed you multiple bills for the Back Taxes you owe, and you haven’t responded. But what if you do get such a letter? Call us right away for a free consultation on your problem.
Late Payroll Taxes Relief
Are delinquent 941/940 payroll taxes threatening your peace of mind? Whether your trouble is with the IRS or with the State, let us get your Late Payroll Taxes cleared up ASAP.
Payroll Taxes are IRS bread and butter, contributing over 70% of all the money they collect, so they don’t take kindly to businesses skipping or skimping on these. “Employers know that they must deposit and report employment tax accurately—this is non-negotiable,” says Chief of IRS Criminal Investigation, Don Fort. Businesses must deposit withheld federal income taxes as well as employer and employee Social Security and Medicare taxes. Filing your 941, 940 and 1099 forms is mandatory. The process isn’t straightforward or easy. Failure to file will result in a $75 fine for each missing form.
If you calculate your own Payroll Taxes, great, except when you make an innocent error: then you’re facing 0.5% monthly penalty on unpaid taxes. Why not hire us and get your Payroll Taxes handled professionally in the first place? If you’re already in a bit of trouble, we will appear before the IRS or the State and represent you. Call us at 800-730-4313.
Why would the IRS or State Audit your returns? A few reasons. Number one: math errors. Yes, just like Mrs. Magillicutty taught you in second grade, always double-check your subtraction. Too many miscalculations, and your return is in for an Audit.
If you forget to include some bit of income on your return, and the IRS finds out about the income—they usually do—you will get Audited. Giving away too much to charity—or at least claiming that you did—will also get you red-flagged and Audited. Be sure you have documentary evidence for all of your charitable deductions.
If you want to write off losses against your tax debt, don’t claim a single loss without an invoice and receipts. If the IRS or State questions your loss claims and orders an Audit, we will represent you and explain each item on your return.
Lucky enough to work from home? You can claim home office expenses, but be reasonable. Don’t claim pet food, bedsheets, or anything else that isn’t an iron-clad business expense. Inappropriate home office deductions will trigger an Audit.
Round down. When you put a dollars-and-cents number in a box on your tax form, never round up the change. Round down. Really, the IRS does care about such minutia.
If you take only one important message from this article, take this: never disregard an IRS notice. Never. This is especially true when you’re notified of an IRS Tax Audit. Why? Because if you don’t cooperate with the Audit, you lose the chance to present your side of the deductions, and you must then accept or appeal the IRS ruling.
Don’t let this happen to you! Open that IRS notice, and call us at once. We will preserve your rights and represent you at your IRS Tax Audit.
IRS Tax Audits come in many flavors. The most delicious audit is the IRS Correspondence Audit, in which you simply supply missing documents through the mail. Easy-peasy. If your return is simple, this may be the type of Audit you face. It’s a piece of cake, but an Audit is an Audit, and it would be best to invite Mus to the table.
A harder-to-swallow Tax Audit is the IRS Office Audit. We will go to the IRS office with requested documents, and defend your deductions. Best of all, you might not even have to go into the IRS with us. He can represent you while you kick back in your hammock with your Mai Tai, not even worrying about the Audit, because we’ve got your back
In order of tastiness, the Home Office Audit is the least palatable. It’s even more serious than an IRS Office Audit. For the Home Office Audit, the IRS sends its most highly trained revenue agents. You don’t want to face a top-notch Revenuer of that caliber. Get us to represent you and avoid costly mistakes.
An Audit notice is not proof of guilt. Your return may be perfect, and it just came up at random in an IRS lottery. But what if they find an inaccuracy, or worse, an omission? What happens is penalties. Any Rounding Up or understatement of taxes owed carries penalties between 20% and 40% of your tax bill. Always check your accuracy.
If the IRS decides your return shows evidence of fraud, the penalty could be 75% of your tax bill, and possible misdemeanor or felony charges.
You could represent yourself at your Tax Audit, if you’re the type of person who likes to do your own dental work. Better to call us. We will help you understand your Audit notice and gather the evidence you need to defend line items on your tax return. We’ll talk to the IRS for you, negotiate your tax bill and lobby for reduction of penalties.
Only an IRS Enrolled Agent, CPA or Tax Attorney is allowed to represent you before the IRS. Our mission is to facilitate IRS tax relief and State tax relief for individuals and businesses. Consult with us ASAP on a free phone call at 800.730.4313, 23 hours per day, 7 days a week.