Stop your Tax Debt from Spinning out of Control!

$3.5 Million!? Yes, she saved a lot of 0000′s. 

Owing the IRS is very stressful. Whether you owe a few thousand or much more, the letters demanding repayment start stacking up, and pretty soon what started out as a small obligation has spun out of control into something completely unmanageable.

Take Penny S. from Michigan for example. She owed a massive 3.6 million, she hadn’t filed her returns in years, and the threats from the IRS revenue agents were getting more and more aggressive, with possible criminal prosecution. Thankfully, Penny called our firm to intercede, and the results were impressive.

The IRS had assessed the taxpayer over $3.6M in tax liability. StopIRSDebt.com completed years 1999-2006 US and State of MI individual income tax returns to bring the taxpayer’s account into compliance with the IRS. At the same time, we released a wage garnishment and placed the taxpayer on an affordable installment agreement to pay off the balance. All told, the tax debt was mitigated all the way down to $60,000. That’s less than 2% of the total tax debt owed!

At the end of the day, every individual and business is required to file a tax return. If this is not done for three successive years, the IRS can file criminal charges and attach assets at will. Penny S. had ignored this mandate, and her years and years of un-filed returns finally caught up with her and snowballed into a wall of IRS debt. Thankfully, the filed returns were quite the lifeboat, and allowed us to seriously knock down the amount owed.

Penny S. was given quite the second chance, but not everyone will float out of harm’s way. If you owe the IRS back taxes, remember to accurately file your returns. They are your first step towards preventing tax debt altogether, and can help you avoid stormy run-ins with the IRS that can sink your finances.

IRS Targeting Actress for Back Taxes

Lindsay Lohan may have performed a few hours of community service at the Coroner’s office for breaking the law, but it looks like the law’s not done with her.

The actress who recently bore all for Playboy magazine is being targeted by other types of Mean Girls: IRS agents. Looks like she’ll be having another Freaky Friday when she answers to claims that she owes the IRS $140,000 in back taxes for 2010.

While Lohan’s known for her run-ins with the law, she’s no stranger to the IRS. The IRS filed a lien against her for more than $93,000 for failing to pay her 2009 income taxes.

Uncle Sam is out to collect, and it looks like they’ll be waiving a Machete at her flubbing of the IRS. How she’ll pay the more than $233,000 tax liability remains unknown. Her only acting gigs in 2009 were reported to be a made for TV movie and a couple TV appearances. Her sole 2010 gig was a small role in the modestly budgeted movie “Machete.”

With the lien, the IRS will get their hands on whatever Lohan earns. That will include $1 million she was reportedly receiving for her Playboy spread.

But you don’t have to be a Hollywood actress to be targeted by IRS agents. If you owe back tax debt to the IRS, hiring a tax attorney is the best way to increase your chances of avoiding a run-in with revenue agents and protecting your income, which is a lesson Lindsey Lohan can take to heart.

Number of State’s Upper Earners Drop Sharply

They call California the Golden State, but some of the richest Californians are heading for a place less golden.

State officials released a new report on taxpayers in California and the results don’t look good. The number of Californians earning more than $500,000 declined dramatically from 2007 to 2009 as the economy stalled, leaving fewer wealthy to tax in a state that focuses more and more on taxing them.

In the 2009 tax year, 98,610 Californians had an adjusted gross income of $500,000 or more, down roughly a third from just more than 146,000 in 2007. The 2009 figure represents just over a half-percent of the 14.6 million returns filed to the state’s Franchise Tax Board in 2009. Altogether, they paid 32 percent of income taxes.

It’s likely bad news for Gov. Jerry Brown, who’s pitching a tax plan to voters that targets the state’s wealthiest, along with an increase in the sales tax.

Whether the report is due to an exodus of the wealthy is hard to determine, but 2009 saw a drop in incomes. California’s top individual tax rate of 10.3 percent is the third-highest in the nation behind Hawaii and Oregon.

If you’re in the “1 percent” and are seeing your taxes rise, not paying them isn’t an option. The IRS and State authorities always keeps tabs on the big fish, so if you owe back tax debt make sure to hire a tax attorney to help you avoid a wage garnishment or bank levy and have a ‘golden’ outcome.

Major Tax Implications to Arise

With 800 million users across the world, Facebook is perhaps one of the most successful websites the Internet has ever seen.

And when the Menlo Park-based company goes public, the site borne in a dorm room is set to have major tax implications after its initial public offering (IPO) is released.

For starters, founder Mark Zuckerberg’s taxes are set to rise to $1.5 billion in May after the company’s shares begin their public trading. Zuckerberg was granted stock options in 2005 as part of his compensation, and once they’re exercised after the IPO he’ll get to buy them for the 2005 price. The difference between that and the post-IPO price is considered taxable income and is likely to be worth billions.

Sacramento politicians have also gotten into the mix. With a ballpark figure of $500 million in state tax revenue from Facebook’s IPO, Republicans in the legislature used the expected windfall as an excuse to defriend the governor’s proposal to raise some taxes.

It’s no surprise Facebook’s IPO has become political football. The popular website sees major activity, with about half its users logging on every day. That’s a lot of potential eyeballs viewing its internet ads, which generate a lot of income and a lot of taxes to pay.

After Facebooks shares start selling on the stock market, more people in Silicon Valley will rise to the top tax bracket. But you don’t have to be a Silicon Valley millionaire to owe back tax debt to the IRS.

The IRS’ collection action is the extreme opposite of a friend request. If you owe back tax debt, hiring a tax attorney can increase your chances of avoiding a wage garnishment or tax lien and obtaining a tax settlement that works in your favor.

Tennis Superstar Caught Creating Companies to Avoid Taxman

Everyone hates paying taxes, and even the world’s No. 2 tennis player is no exception.

Rafael Nadal, the 25-year old Spanish tennis sensation, offered a mea culpa after a Spanish website reported that the Australian Open finalist had set up several companies in an effort to lower his tax bill.

They were allegedly created in the Basque region of Spain, and a local tax rule would have given Nadal a different kind of advantage on his income tax bills. But when tax authorities in the region started investigating, Nadal tried backhanding the issue by admitting that he no benefit from creating the companies and that they had no tax debt.

Known as the “King of Clay” for his superb performance on clay, he’s also known for the litany of titles he’s won including the French and US opens.

But he’s also known for his criticism of the United Kingdom’s tax system, which led him to skip out on the Queen’s Club tournament, a warm up for Wimbledon. He said he’d lose money by playing in England due to the taxes on prize money, appearance fees and a portion of his worldwide earnings.

But you don’t have to be an international tennis superstar to be investigated by tax authorities. If you owe back tax debt to the IRS, it’s a good bet they’ll try and poke into your files and receipts. Make sure to hire a tax attorney to help you win the game, set and match against the IRS.