Having Tax Trouble Does Not Make You A Bad Person!

You don’t often hear about the emotional side of dealing with the IRS or state tax authorities — yet the truth is that our emotions play a huge role in creating and resolving tax issues! There are any number of reasons that people get into difficulties — from not understanding what has to be filed or paid, to not knowing that someone you trusted failed to perform tasks they said they were going to, to plain old human error.

Guess what? None of that makes you a bad person. Many times, it’s the burden of shame, guilt, or distress that keeps us from acting — yet these emotional roadblocks actually make the problem worse, not better. Every day we don’t act to resolve a tax situation is a day that the IRS or state tax departments counts against us.

At Matthew J. Previte CPA PC, we’re not going to judge you. We aren’t going to tell you you’re a bad person because you didn’t file your taxes on time. It happens. A very, very small percentage of tax issues are caused by people who willfully intended to deceive the tax authorities or avoid paying — the vast majority of individuals find themselves handling situations that got out of control, one simple mistake snowballing into the next until they can’t see the way out.

We know the way out. We’ll work with you to find a way to resolve your tax issues with the IRS. We understand that life happens and that the important thing is NOT assigning blame — it’s fixing the problem in the fastest, most efficient way possible to give you peace of mind and remove a huge stress from your life.

Put down that guilt. Put down the shame. You don’t need to keep carrying it anymore: you can call us and start solving your tax problems today!

Do You Have Unfiled Tax Returns?

Gain Peace of Mind – No Matter How Late You Are

People fail to file their tax returns for all sorts of reasons. Regardless, failing to file your tax returns is a criminal offense. Citizens who do not file can be prosecuted and punished with potential jail time, one year for each year not filed. Why risk potentially losing your freedom for failing to file your tax returns!
Sometimes the IRS will file returns for you after they have repeatedly requested you file your returns. When the IRS files your returns for you, they are filed in the best interest of the government, usually with little or none of the deductions you are entitled to. You have the right to file an original return no matter how late it is! If you haven’t filed in a few years or many years, we can help, no matter how late your returns are. Let us give you the peace of mind you deserve by helping you get in compliance with the law.

Call us today at (508) 655-1500 to schedule an appointment with one of our licensed tax professionals and soon you will be sleeping like a baby!

Unfiled Tax Returns: Getting Help When You Don’t Know Where To Start

“I got a notice from the IRS about my unfiled taxes. It says I need to file immediately. But I don’t even know where to start,” Joanne, who lives in West Roxbury, MA, said. “I don’t know where my W-2s are; the restaurant I worked at then is out of business now. What am I going to do?”

Unfiled Tax Returns: Time is of the Essence

“The one thing you don’t want to do when you have unfiled tax returns is wait,” said Matthew J. Previte, a Massachusetts CPA who specializes in tax problems. “The longer you wait, the harder it becomes for someone like me to help you. After 10 years, it becomes impossible to get certain information from the IRS. But if you’re in that window, it’s still possible for a tax professional to get the information you need from the IRS.”

“Filing your return is important,” Previte notes, “because if you don’t file, the IRS will file a return for you. When the IRS creates what is known as a Substitute For Return (SFR), they’re not acting in your best interest. They don’t look for the deductions you’re eligible for, or identify the most favorable filing status for your situation. They’re just after their money!”

Unfiled Tax Returns: You Deserve Help

Don’t try filing your late tax returns on your own. You deserve the help of an experienced tax professional who will prepare an accurate return that helps you minimize your tax obligation. Why pay more taxes than you have to?

IRS deadlines are nothing to trifle with! When you receive a notice from the IRS, you need to act on it right away. Get help from a qualified MA tax professional. Getting your tax problems solved will stop the stress. Call right away. It doesn’t matter if you don’t know where to start or don’t have your W-2s or 1099s. We can help you!

What Happens If I Don’t File My Taxes for 3 Years?

“Back in 2010, I had a rough year. My Dad died, work was nuts – it just wasn’t a good time,” Glenn , who lives in Southborough, MA, shook his head. “Did I do everything I was supposed to? No.  I didn’t file my income tax that year. Was I intentionally doing something wrong? No – but the fact I didn’t file in 2010 prevented me from filing in 2011 or 2012. What’s going to happen to me?”

Unfiled Tax Returns: Your Questions Answered

Not filing a tax return on time is one of the most common tax problems.  The IRS estimates that 10 million people fail to file their taxes in any given year: if you have unfiled tax returns, you’re not alone.

“I thought the IRS was going to catch up with me right away,” Glenn said. “I expected a knock on my door way back in May 2010. But nothing happened. Now I’m not sure if I slipped through the cracks or if the IRS is going to come after me tomorrow. It’s very stressful.”

Having unfiled tax returns is like walking across a minefield – without any minesweeping equipment! You never know when the whole situation is going to blow up in your face. The truth is that it’s very difficult to predict exactly when the IRS is going to come after you. The IRS’ enforcement capabilities have increased with advances in technology: they’re pursuing unfiled returns much faster than was previously the case. If you haven’t filed your taxes, you should know it’s only a matter of time until you’ll hear from the IRS.

Turn the Situation Around: Get Help Now

Choose an experienced tax problem solver to handle your unfiled tax return situation. It’s always better to file your tax returns before the IRS contacts you!

That way you’ll have an accurate understanding of what your financial situation is. Working with an experienced MA tax professional, you may discover that you owe less taxes than you thought – or that you’re actually entitled to a tax refund! It happens more often than you might think.

Being proactive about your unfiled tax returns buys you time to act strategically. Having more time to find deductions, gather bank statements, and handle all of the other paperwork associated with filing late tax returns is always advantageous to the taxpayer.

Finally, having your MA tax problem solver handle your unfiled tax returns helps you avoid criminal prosecution.  “I really didn’t want to go to jail for criminal failure to file,” Glenn said. “I’m just starting to get my life turned around and back on the right track! Going to jail is not part of my plan.”

While criminal prosecution against taxpayers who fail to file is relatively rare, it’s important to know that IRS policy is generally not to pursue action against taxpayers who voluntarily file late tax returns.  Avoid expensive fines and penalties, as well as the stress and anxiety that comes from living with unpaid tax returns, by getting help now. It’s never too late to file a tax return!

Owe Back Taxes? You Should Know A Wage Levy Can Cost You More Than Your Paycheck

If you have unpaid back taxes, you should know that the IRS and MA DOR can collect the money you owe from the money you earn from your job. This is known as a wage levy, and it can really disrupt your life. Instead of getting the paycheck you expected, you get a few dollars – with the remainder going directly to the IRS or MA DOR to settle your back tax debt.

The Impact of a Wage Levy on Your Life

The first is fairly obvious: when the IRS or MA DOR issues a wage levy, suddenly, you have a lot less money coming into the household. How are you going to pay your bills, buy groceries, or put gas in the car when you have no money?

The situation can spiral out of control quickly. If you, like many people, have your bills automatically taken out of your bank account, an IRS or MA DOR wage levy can create a situation where you have insufficient funds in your account. This can quickly create an expensive nightmare of overdraft fees, late payment charges, and other financial penalties imposed by your creditors and your bank.

That’s not all. An IRS or MA DOR wage levy can really hurt your relationship with your employer. Depending on the type of work you do, the fact that you have significant tax trouble can even be cause for termination. Massachusetts is an at-will employment state, so if your employer feels that your tax wage levy reflects badly on the company, creates an incentive for embezzlement, or is simply too much paperwork for them to deal with, they can legally let you go. Even if you keep your job, your relationship with your employer can be damaged by a wage levy.

People who are self-employed aren’t exempt from income levies, either. The IRS and MA DOR have been known to reach out directly to the people you do business with to collect delinquent taxes. This can really have a negative impact on your business – and your life!

Finally, wage levies can really wreak havoc in your personal life. Money is the number one reason couples fight – and suddenly having less money in the household budget due to a tax wage levy is almost guaranteed to cause disruption. If your partner was unaware of your unpaid tax problems, a wage levy is really not the best way for them to find out!

What Can Be Done About A Wage Levy?

Wage levies can cause real hardship in your life. Working with a Massachusetts tax professional who specializes in tax problem resolutions is the best way to get the stress and financial burden of a wage levy to stop. 

There are several routes to having a wage levy released, including settling your back taxes through an offer in compromise, entering a qualified payment plan, by filing bankruptcy (which may or may not discharge some or all of your tax debts), being declared uncollectible by the IRS or MA DOR, or paying off your back taxes in full. Working with a tax problem solving expert, you’ll learn which option is best for you, considering your individual circumstances.  Help is available!

If you’ve been struggling with a wage levy, call us today. We’re here to help you find an answer to your tax problems. It’s never too late to turn your life around.

Where’d My Paycheck Go? Understanding IRS Wage and Income Levies

When Tom S. got a call from HR, he knew it wasn’t good news. “They wanted me to go down there, so I went down there and they told me that they’d gotten a notice from the IRS. Because I had unpaid taxes, the IRS was levying my paycheck. I’d have 125 dollars left after the levy was taken out from each paycheck until all my back taxes were paid off – so I was looking at the next 3 months with hardly no money to live on!”

IRS Wage and Income Levies: Your Employer Has To Comply!

“I asked HR if there was some way they could let things slide, just for a week or two, so I could get prepared for the financial hit,” Tom said. “But they told me no way. If a company doesn’t do what the IRS tells them, they could get hit with huge penalties and fines.” Tom sighed. “By the time that conversation was over, it was pretty clear to me that I was lucky to have a job at all.”

Many people don’t know that it’s perfectly legal for your employer to terminate your employment if you have tax trouble with the IRS or MA DOR.  Having tax problems can be seen as a motivation to commit embezzlement – and no one wants to have a potential criminal working for them!

Types of Wage and Income Levies

There are two types of IRS wage and income levies. A continuous levy is generally brought against someone who has an employer and receives a regular paycheck. A non-continuous levy is generally brought against someone who receives a form 1099-MISC, and is considered self-employed. If you’re self-employed, you can imagine how embarrassing and stressful it would be to have the IRS contacting the people you do business with directly trying to collect your tax debts. It’s the type of thing that can ruin your business reputation.

What Can Be Done About Wage and Income Levies

If you receive notice that the IRS is going to levy your wages or other income, you want to get help right away. An experienced tax professional can work with the IRS on your behalf to resolve your tax issues and have the wage or income levy released. This can mean setting up a payment plan with the IRS, making an offer in compromise, or taking advantage of other legal means to solve your tax problems.

You have to take action! A wage or income levy won’t go away on its own, and every day it’s in place is a day that’s damaging your reputation with your employer or customers. If you’re dealing with a wage or income levy now, and you want the pain to stop, give us a call. We’re here to help!

Fixing Your Tax Problems to Repair Your Credit: What You Need To Know

“They say love makes the world go round, but that’s not true,” Sal M., who lives in Spencer, MA, said. “It’s money – or more correctly, credit! – that matters. If you don’t have good credit, you can’t do anything in this world. You can’t buy a house, you can’t start a business, you can’t go to school – I can’t even get a car that runs halfway decent because my credit’s all screwed up!”

Tax Liens Can Hurt Your Credit

Many people don’t realize that their tax problems can hurt their credit. When you owe money to the IRS or MA DOR (or both!), and you don’t pay your tax debt, you can wind up with tax liens. Tax liens are public record, which means anyone can find out about them. All of the credit rating agencies use tax lien information against you when determining your credit score.

A good credit score is, as Sal discovered, essential to the way we live our lives today. Even the US Government seems to have figured that out. That’s why there are special incentive programs in place to encourage delinquent taxpayers to resolve their tax issues and repair their credit.

Don’t Try To Fix Your Tax Problems On Your Own!

Working with a skilled, experienced firm that specializes in solving tax problems gives you the widest range of options when it comes to having your tax liens released or withdrawn. The IRS and MA DOR are not in the business of advising tax payers how to best solve their tax problems and restore their credit – they’re focused on collecting the maximum amount they can from you.

You May Qualify for a Fresh Start to Fix Your Credit

The Fresh Start Initiative allows delinquent tax payers who meet specific qualifications to take steps to repair their credit. If you owe the IRS less than $25,000 and can comply with a direct debit payment plan, after you’ve made 3 payments, you can request a lien withdrawal from the IRS.

This is only one of the ways you may qualify for the Fresh Start Initiative. Your experienced tax problem solver will fill you in on other available options to obtain a lien withdrawal. All tax lien withdrawals have a very positive impact on your credit rating. Be aware that you’re required to remain in full compliance with the tax laws going forward, and it’s an opportunity that’s only available once.

Is the Fresh Start Initiative right for you? The best way to get an answer to that question is to consult with an experienced tax professional. Schedule your free, no-obligation consultation today to discover how you can fix your credit and get your life back on track!

JK Harris Locks Doors

By David Slade, December 29, 2011, Post & Courier, Charleston SC

GOOSE CREEK — Bankrupt tax-preparation firm JK Harris suspended all operations late this afternoon and is bracing for a likely liquidation of the firm’s assets, according to founder and Chief Operating Officer John K. Harris.

As of the end of November, the company still employed about 135 people in Goose Creek. They were told late today that they would be locked out of the building at 5 p.m. and could return Friday to pack up their personal belongings.

The company was unable to secure additional funding after filing for Chapter 11 bankruptcy protection in October, and will ask the court to convert the case to a Chapter 7, Harris said, which means that instead of restructuring, the company could be shut down and its assets sold.

“This is truly the most devastating event I have been forced to deal with in my 58 years on this earth,” Harris said in an email to employees. “I am not sure it will reach that level for all of you, but I know that for some of you it will be as personally devastating for you as it is for me.”

JK Harris & Co. once advertised that it could resolve people’s tax debts for “pennies on the dollar,” but the nationwide company was dogged by cash-flow problems and the cost of large settlements related to multiple claims that it misled consumers

The company sought bankruptcy protection in October to head off an attempt by the Texas attorney general’s office, related to consumer claims, to force the company into receivership. Harris, in emails to employees, vendors and clients, blamed today’s shutdown on the refusal of the company’s largest creditor, RAI Credit of New Jersey, to provide additional financing.

Employees who were previously laid off are among the creditors owed wages. Money is also owed to vendors, and to consumers who were to get millions of dollars in compensation from previously agreed-upon settlements, from a class-action suit and from complaints by multiple attorneys general.

 

All IRS Payment Agreements Are Not Equal

By Matthew J. Previte CPA MST
www.taxproblemsrus.com
July 7, 2011

If you owe back taxes to the IRS, you have undoubtedly wondered how on earth you’re going to get a mountain of back IRS taxes off your back so you won’t have to live in fear anymore. Living with IRS tax problems is stressful and can cause many problems in your life. One of these IRS tax problems is having an IRS tax levy placed on your wages or bank accounts which leaves you with little to no money to live on. An IRS tax lien can also be filed against you in the public record (usually the county recorder or registry of deeds) which not only lets the world know about your IRS tax problems but severely damages your credit rating by a good 100 points or more, leaving you unable to get a loan. So what can you do to resolve your IRS tax problems?

Although Offer In Compromise is advertised heavily on late night TV, it is rarely an option for most people with back IRS tax debts. Roughly 95% of delinquent taxpayers with IRS tax debts do not qualify for the IRS Offer In Compromise program. Unfortunately, these late night TV hucksters tout the OIC as the magical cure-all for your IRS tax debt woes. There is an old saying, if it sounds too good to be true, it probably is. And so it is with the Offer In Compromise program. Although my tax resolution firm has filed many Offers In Compromise over the last 16 years, most of our clients who owe large back taxes to the IRS do not qualify. Simply put, they have too much equity in assets (bank accounts, houses, retirement accounts, etc) and/or cash flow (what’s left over after what the IRS allows for basic living expenses) to qualify. So that begs the question, what are my options?

While bankruptcy can sometimes be a good option, we will leave that discussion for another article (see archives for February 2011). Short of running out the statute of limitations on collection, which is generally ten years, or hitting the lottery or inheriting a boatload of money and paying off the IRS tax debts in full, the only option left is an installment agreement. However, not all installment agreements are equal.

The IRS has two different types of installment agreements to pay off back taxes. The first type is a Full Pay Installment Agreement. In this type of IRS installment agreement, the monthly payments are sufficient to pay off the back taxes (plus any penalties and interest that accrues) until it is paid off in full. With this type of IRS installment agreement, your payments will full pay the back IRS tax debts, as well as all penalties and interest accruing on the debt, within the statute of limitations on collection. The statute of limitations on collection is generally 10 years. However, there are numerous actions that can extend the time the IRS has to pursue collection action (liens, levies, seizures, etc). We will leave that to another article to discuss.

The second type of IRS installment agreement is called a Partial Pay Installment Agreement. Under this type of IRS installment agreement, the monthly payment is insufficient to pay off the back taxes plus accruing penalties and interest by the collection statute expiration date. What does this mean in plain English? Well, it means that you make payments until the statute of limitations on collection (in IRS speak the “CSED”) runs out. So if at the collection statute expiration date there is $10,000 of unpaid back tax debt, it expires to zero and you do not owe it anymore. Nice huh? There is one catch however. As part of the terms of the Partial Pay Installment Agreement, the IRS will review your financial condition every two years to see whether or not your financial condition (i.e. your ability to pay more) has improved. If it has, they will require a higher payment if your financial condition shows you can afford to pay more towards the back tax debt. The downside of this type of installment agreement is it is possible that in the future your financial condition improves and the new monthly payment required becomes sufficient to full pay the back taxes, penalties, and interest by the collection statute expiration date. In other words, it’s possible to start out with a Partial Pay Installment Agreement and end up with a Full Pay Installment Agreement. The positive aspect of a Partial Pay Installment Agreement is that if your financial condition does not improve enough or at all, you could still end up paying less than the full amount owed and end up with a large balance of unpaid back taxes expiring to zero at the collection statute expiration date.

With all IRS Installment Payment Agreements, your financial condition is reviewed via a Form 433-A and/or 433-B depending on whether your tax issues are personal or business tax debts. Individuals and sole proprietorships use the Form 433-A while corporations, partnerships, and LLCs use a Form 433-B. If you owe personal taxes and have income on your personal tax return from a flow through entity (S corporation, partnership, or LLC treated as an S corporation or partnership), you may have to submit both the Form 433-A and the Form 433-B to get your installment payment agreement approved.

There are strategies to minimize your monthly payment amount but that will be discussed in a future article. Also, just because the IRS initially denies your IRS installment payment agreement does not mean you should give up. Many initially rejected IRS installment payment agreements were later accepted upon filing an Appeal to the IRS Appeals Division. Persistence and perseverance are key to obtaining a fair IRS installment agreement that you can live with.

‘Tax Lady’ Roni Deutch Pleads Not Guilty

Sacramento, Calif. (June 20, 2011)
By Michael Cohn, Accounting Today

Roni Deutch, the tax attorney who heavily advertised her IRS tax resolution services before she was forced out of business, has pleaded not guilty to contempt of court charges.

Deutch billed herself as the “Tax Lady” in her infomercials before she closed down her law firm and surrendered her law license last month (see ‘Tax Lady’ Roni Deutch Closes Firm amid Allegations). She was sued for $34 million last August by the California Attorney General’s Office, which accused her of swindling clients who had gone to her firm seeking help resolving their outstanding tax debts with the IRS (see California AG Sues ‘Tax Lady’ Roni Deutch for $34M). In April, a California judge froze her assets after the Attorney General asked the court to hold her in contempt for shredding millions of documents and diverting hundreds of thousands of dollars in funds from her clients (see ‘Tax Lady’ Roni Deutch’s Assets Frozen by Judge).

During her arraignment Friday in Sacramento Superior Court, Deutch’s attorney registered a not guilty plea on her behalf to the contempt of court charges, according to The Sacramento Bee.

Deutch herself did not speak during the court hearing. Outside the courthouse, a small group of supporters, including several of her relatives, demonstrated on her behalf, holding up signs and yelling, “Justice for Deutch.”