Archives for January 2010

IRS Blueprint for Tax Preparation: Registration for Paid Preparers + Competency Tests for Unenrolled Preparers

After a six-month intensive study, the IRS presented a sweeping reform of and a new blueprint for tax return preparation oversight. Regardless of credentials or licenses, all preparers who sign returns and receive compensation for their accounting work will have to register with the IRS. In addition, although unenrolled preparers will now be required to complete competency testing, they also will have to take continuing education. The registration process for preparers will be conducted online and the tentative start date is September 1, 2010.

IRS Logo

Although the new requirements will not affect the 2010 filing season in theory, the IRS has instituted plans to immediately increase its internal oversight of preparers across the board. Since the new reforms will be expensive, a fee will be charged to preparers for both initial registration and ongoing renewal in the future. Unenrolled preparers also will be required to pay for their own competency testing.  Since interested members of Congress want the new requirements to include all tax preparers with no loopholes, legislation is being introduced to require universal registration.

In theory, the new blueprint will not increase the cost of tax preparation for taxpayers. Still, it remains unclear how these new fees will impact the prices of tax preparation. As the IRS tax code has increased in complexity, the number of Americans choosing professional assistance with their tax preparation has increased dramatically. In 2008, the IRS reported that professional tax return preparers processed over 87 million individual federal tax returns. In addition, there are over 1 million tax preparers working in America.

When it comes to the regulation of preparers, the federal government’s role traditionally has been limited. Rather than have IRS oversight, tax attorneys, CPAS and enrolled agents have been licensed by individual states. Luckily, from the perspective of Peter Stephan and the Tax Resolution Institute, California has been considered a model of tax preparation oversight on the national level for years. Unlike most states, California requires 60 hours of education from approved providers and for registered tax preparers to carry a $5,000 preparer surety bond.

As an indirect result, Peter Stephan’s advanced course on tax resolution has been such a success with tax professionals since it counts towards the education credit and continuing education hours. Since unenrolled preparers will be required to complete 15 hours of continuing education annually, there is no question that there will be a significant jump in the registration numbers for Peter Stephan’s Tax Resolution seminar.

Finally, the IRS plans to assemble a top-flight team to examine the role and influence of software in the process of tax preparation. Questions to be raised in relation to such software will include the following: the accuracy of such tax returns, issues of security and privacy in relation to proprietary financial information, and the overall reliability of computer filing. Since the tax preparation software industry remains unregulated, industry standards have not been firmly established.

Proper Tax Preparation Remains a Challenge

Proper Tax Preparation Remains a Challenge

It looks as if the new IRS tax preparation blueprint is just the beginning of the changes that are to come. The overall implication is that a taxpayer should stick with trusted tax professionals who can demonstrate a history of reliability when it comes to the intricacies and challenges of modern tax preparation. Without question, when it comes to this implication, Peter Stephan and the Tax Resolution Institute perfectly fit the bill.

Pamela Anderson Drowns in over $1.7 Million of IRS Tax Liens

Drowning in a huge financial sinkhole, Pamela Anderson is desperately looking for a rescuer to throw her a life preserver. But no amount of press coverage or public adoration can save the desperate star. The former Baywatch babe, Playboy model and celebrity girlfriend had two huge tax liens filed against her in Los Angeles in 2009. The IRS has filed a $1,700,173 lien against Anderson with the Los Angeles County Recorder of Deeds in October. Earlier in the year, the state of California filed a $252,360 tax lien against her in Los Angeles.

Despite the liens and rumors about a possible bankruptcy, the 42-year-old mother of two, who was named by the Guinness experts as the world record holder for being the “most downloaded star” ever, continues to insist that she’ll be fine. If Pamela Anderson is going to be fine, she should contact a tax professional like Peter Stephan at the Tax Resolution Institute.

With extensive experience negotiating Installment Agreements and Offers In Compromise in huge tax cases with both the IRS and the State of California, Peter Stephan has the kind of experience Pamela truly needs in her hour of crisis. Once liens have been filed, remedial action has to be taken, or a levy and the eventual seizure of assets and property will follow.

A federal tax lien can only be filed by the IRS after the tax is assessed; a Notice and Demand for Payment is mailed; and the taxpayer neglects or refuses to fully pay the debt. If payment isn’t made after 10 days of receipt of the notice, the IRS files a tax lien for the amount of the debt. The lien attaches to property (such as Pam’s house) and puts other creditors on notice. State tax liens generally operate in the same manner.

Pamela Anderson owes over $1.7 Million Dollars to the IRS in Back Taxes

Pamela Anderson owes over $1.7 Million Dollars to the IRS in Back Taxes

Pamela Anderson has survived personal storms before, including several divorces, spousal abuse and a hepatitis C diagnosis. Anderson admits that, “Mistakes may have been made in calculating taxes owed and we are now in the process of ensuring that any taxes owed are paid.” In addition to the taxes, the actress is reportedly $4.8 million in debt on account of expensive renovations on her Malibu dream home.

The original price tag for the property was a modest $1.3 million and change. But renovations have led to Anderson being sued by five contractors for not paying her bills. In an interview, Anderson said she had been hit by the recession and let down by a string of investments. “I’m a little girl with two kids – how could you screw me?” she asked of her contractors. Construction projects easily can destroy relationships: “It rips your heart out” she claimed in the emotional interview.

The former wife of Motley Crue drummer Tommy Lee and singer Kid Rock continues to put on a brave and deny that she is in real trouble. In a press statement, Pamela declared: “I am actually touched at how much concern has been expressed for me over this. It is true that I am in a dispute with some of the contractors working on my home.”

What Pamela does not realize is that there is a big difference between being sued by private contractors and having the IRS and the California Franchise Tax Board come after her with official tax liens. Rather than rely on her managers and lawyers, Pamela Anderson should look for help from an accomplished tax professional like Peter Stephan and the tax experts at the Tax Resolution Institute.