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Tax Debt Relief In 2014

January 6th

If you owe back taxes to the IRS, you are not alone. With the decline of the economy over the last few years, Americans in all tax brackets have found themselves owing the government significant amounts of back taxes. What are your options? The good news is that there are a few different methods for getting rid of your tax debt. Here is a look at three options that you should discuss with a tax debt attorney:

Offer in Compromise

You must be careful about this option, but an offer in compromise can be a fantastic way to pay back taxes. The OIC program works by reducing a person’s tax debt through a settlement. This settlement is based off of the amount of back taxes owed by the person and their income, assets, expenses, etc. These deals are often times too good to be true, but if you find one that works, it may be your best option. Be prepared to pay a high initial payment.

Installment Agreement

This tax debt relief option should always be considered. Unless another option is perfect for your situation, this will likely be your best option for paying off back taxes. The benefits of an installment agreement are easier payments, reduction in IRS letters and calls, and availability. Just remember that interest will continue to accrue over the life of your installment agreement.

Filing or Amending Past Tax Returns

If your liability was overstated on your original tax return, filing an amendment may be a good way to reduce that liability. This is a strategic option that must apply to your specific situation. You will likely need to speak to a tax code expert to understand how it could work for you.

 

Celebrity Starletts Owe Back Taxes

December 19th

If you read online Hollywood gossip columns, you undoubtedly saw the news this month that the IRS had seized Lindsay Lohan’s bank accounts for unpaid taxes the actress still owes. According to reports, Ms. Lohan apparently has $233,904 in owed federal back taxes from the years 2009 and 2010, and also owes money for 2011.  Pamela Anderson has also had financial trouble reported this month, owing both Federal and state taxes.

Working To Resolve Quickly

Fellow “Scary Movie 5” actor Charlie Sheen, reportedly has loaned Lohan $100,000 to help take care of her mounting debt. But the “Liz & Dick” star is still allegedly distraught over the latest blow to her stalled comeback. The New York Post quotes a source that said “Lindsay…says she didn’t know anything about it … she’s broke and it’s not her fault.” Lohan’s managers have stated they are on track to address her tax debts swiftly. And, they have hired the proper tax debt lawyers in an attempt to resolve the issues by the end of the year.

Pamela Anderson’s debt is from two tax liens. The first is for unpaid taxes in 2011 and the IRS says the “DWTS” star owes them $259,395. The second lien has been filed by the State of California for $112,118. This one is also for money she owes from 2011. Anderson’s rep isn’t commenting at this point. The star reported tax problems back in 2009 as well.

Anderson didn’t fare well on the “Dancing With the Stars: All-Stars” this past season as she was the first one to be sent home. She is said to have signed up for a new British show called “Dancing on Ice,” hoping extra revenue from that show will make a dent in her tax liens.

 

Tax Hike Would Impact Consumer Economy

November 30th

Faced with the pending tax hikes next year, Americans could see an increase in their tax debt liability of upto $5,700 annually. This means overall, Americans would spend nearly $200 billion less on consumer goods than they otherwise would have in 2013, according to President Obama’s team of economists.

Tax Breaks Fiscal Cliff

This reduction of $200 billion is about four times the total amount that 226 million shoppers spent on Black Friday weekend this year. The growth of real consumer spending could dip by 1.7 percentage points in 2013, according to the National Economic Council and a report released this week by the White House.

The spending reductions and tax debt increases are known as the “fiscal cliff “, an economic phrase coined in Washington.  The report indicates if middle-class tax rates are allowed to expire this would add an additional speed bump to the economic recovery.  Congress has to the end of the year to settle the 2013 tax breaks.

The report primarily focused on the impact of Bush-era tax cuts and deductions expiring for middle-income Americans who make less than $250,000 per year. If you think you will owe more than expected for your 2012 taxes, consult with a qualified tax debt attorney before end of the year to review your repayment options.

 

Nicolas Cage Pays Off 600,000 Tax Debt

November 21st

Nicolas Cage recently paid another $600,000 installment agreement and chipped further away at his massive tax debt. The actor is slowly paying back the original $13 million owed in back taxes after splurges on elaborate purchases and gifts between 2004 and 2009.

Half Way There

He still owes an approximate $6 million thanks to his love of expensive gadgets, despite already having paid off over half of the original amount by April 2012. The actor filed a lawsuit against his former business manager Sam Levin in 2009 claiming he had led him ”down a path of financial ruin”. Nicolas once splashed out $276,000 on a 67-million-year-old dinosaur skull, outbidding Leonardo DiCaprio.

Cage’s assets still include a jet, two yachts, three castles and several mansions. The 48-year-old had already been forced to sell his extensive comic book collection in 1997 for $1.6 million. The ‘National Treasure’ star confessed in 2010: ”Over the course of my career I have paid at least $70 million in taxes. Unfortunately, due to a recent legal situation, another approximate $14 million is owed to the Internal Revenue Service (IRS), however, I am under new business management and am happy to say that I am current for 2009.” Cage is fairly confident about his monetary situation. The actor has taken on dozens of roles recently to generate income to continue  his tax repayment.

 

Taxes On Winning An Olympic Gold Medal

August 15th

We are already aware that lottery and casino winnings are subject to taxation at the end of the year, but what about winning an Olympic gold medal? Even though medals are not considered income, there are taxable items that come with winning.

Winning A Tax Bill

Olympic medalists are now returning home and will be in high demand for interviews by big name media outlets. As many of our country’s winning team members begin sorting out their schedule to accommodate their new found popularity, they are also finding a new tax bill.

Medalists are required to pay taxes for their winning efforts. From their time standing on the platform, the costs to make the medal and the prize money for winning, our Olympic athletes will be required to file taxes on these items come next tax season.  A gold medal brings $25,000 in prize money, while athletes receive $15,000 for silver and $10,000 for bronze.  Of these amounts, the IRS charges $8,986 for winning a gold medal, $5,386 for silver and $3,500 for the bronze.

Unfortunately, many athletes are unaware of the tax implications of winning and many have been subject to tax debt problems after their awards.  Four time Olympic medalist, Missy Franklin, owes $14,000 in back taxes from previous wins and could be facing additional fines if she doesn’t resolve her unpaid tax bill soon.

 

 

 

Ohio Approves Back Tax Program

May 16th

The city of Athens, Ohio has a new plan to help resolve resident back taxes. After working tireless to develop a strategy to encourage delinquent taxpayers to pay their debts, the City Council has finally approved a resolution.

Working Together

The Athens City Council unanimously approved a plan last week to give delinquent taxpayers a grace period to resolve their back taxes. The local auditor’s office will participate in the program, assisting taxpayers in a repayment plan they can afford. The program developers are hoping that by extending the offer to work with taxpayers, more delinquent residents will come forward and make good on their tax debts.

The City Council is also preparing to pass an ordinance that will allow the state’s Central Collection Agency to target delinquent income taxpayers. The ordinance, once in effect, will empower CCA to contact and manage city residents who fail to file their city income tax returns. Both efforts are aimed at collecting what is owed to the city in a cost effective way to ensure they city can continue to function on a financially healthy level.

 

 

Another Tax Bill Extension Debate

February 29th

Another tax bill is set to expire at the end of this year, which could lead to steep consequences for homeowners suffering mortgage debt troubles. The Mortgage Forgiveness Debt Relief Act of 2007 has helped homeowners in debt with their mortgage avoid tax liability over any restructured or forgiven deficiency balances. If the bill isn’t extended before the end of the year, homeowners facing foreclosure could also end up with a steep tax debt bill.

Forgiving Debts

Prior to the 2007 tax bill, homeowners who sold their home through a short sale or avoided foreclosure through a deed in lieu were held liable for paying taxes on any amount of forgiven debt. Any amount of mortgage debt that was forgiven or waived through a short sale or other mortgage debt solution was to be claimed as income according to the IRS. Since the bill has been in place homeowners have been able to avoid liability on nearly $2 million worth of forgiven debts.

Critics of the bill say the $2 million savings over the last several years is much needed revenue for helping to boost the economy. Those in favor of renewing the tax bill suggest the continued financial relief the bill will provide already struggling Americans will help the housing market recovery efforts. The current issue seems to be whether taking from one source to help another debt problem is really worth it in the end.

 

 

 

Historic New Jersey Gas Station Up For Auction

December 20th

After sitting empty for nearly a decade, a historic Gulf gas station went up for auction for unpaid taxes. Located in Upper Pittsgrove Township the old gas station at Pole Tavern Circle has been in jeopardy of foreclosure for quite some time. After local officials agreed to pursue more serious tax debt collection efforts, the gas station faced its debut on the auction block last week.

Up For Grabs

According to tax records, the Gulf gas station owner currently owes around $100,000 in back taxes. It is reported that $60,000 is attributed to the actual tax debt with the remaining $40,000 attributed to tax penalties and interest fees. With no payment for over five years, previous collection efforts proved unsuccessful.

Mayor Jack Cimprich said, ” They have not been paying taxes for quite some time. It’s just not fair to the rest of the township. We need to get that property back on the books.” The city approved the foreclosure proceedings in order to resolve the unpaid tax debt balance. After being questioned about the motive behind the foreclosure, Mayor Cimprich said, ” “We have no interest in the real estate business — recouping our back taxes is our primary goal.”

 

Year End Tax Issues

December 14th

As 2011 comes to a close, it is evident that this past year has had its fair share of fiscal ups and downs. One of the big topics of discussion has been the national debt and budget crisis and how it affects taxes.

The tax policy has been the center of much debate among politicians and whether possible changes would help alleviate our debt woes. Despite these discussions failing to lead to an agreement, some of the current tax cuts could come to end after the New Year.

Tax Reform

The issue that has many people concerned about the New Year is the payroll tax cut deadline. If no extension is granted, the payroll tax cuts currently offered will be terminated starting January 1st, 2012. The payroll tax cut has played a key role in sparking the job market by motivating employers and small business owners, which were eligible to lower payroll taxes from 6.2% to 4.2%. It is anticipated that Congress will extend this program for another year because it would be detrimental to raise takes on workers in a soft economy.

Another issue facing political leaders in the New Year is whether or not to raise taxes for certain income brackets. Democrats are looking to apply a 1.9% increase in taxes on those whose annual income exceeds $1,000,000. They are also hoping to repeal the Bush tax cuts for the wealthy. Meanwhile, some Republicans are pushing for a flat tax, or universal decrease in taxes so as to not cause a ripple of tax debt.  Further, Republicans want more tax deductions to help lower tax liabilities for all taxpayers and many businesses.

Currently, there are no plans for any changes to take effect by the year’s end. However, it is clear that some policy change is on the horizon, whether that means through tax increases or more cuts.

 

 

Hollywood Star Vows To Settle Tax Debts

December 6th

It seems as though no one is immune from the effects of back taxes. From movie stars to pro-athletes, many well  known Americans have faced serious IRS consequences for their unpaid taxes. Recently, actress Christie Brinkley experienced her own share of IRS trouble when she found out she had nearly $500,000 in IRS back tax.

Lifestyles Of The Rich

Christie Brinkley reports that she had no idea she owed the IRS money until she received a tax lien notification. With her house and bank accounts at risk of seizure, Brinkley has acted quickly to resolve her tax debts.

Reportedly the cause of an accounting error, Christie’s half a million tax bill has put a rush on her tax debt payments. She has vowed that her debts will be paid in full by Wednesday, December 7th.  Brinkley has never had any trouble with the IRS or paying her taxes in the past and says she regrets “not paying closer attention to (her) finances.”

 
 
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