Since Tax Revenue Fell 14% in 2009, the California Franchise Tax Board Is Going After Delinquent Tax Bills

In 2009, California state tax revenue was down $16.4 billion or 14% when compared to the previous year. Even though the state legislature in Sacramento and Governor Arnold Schwarzenegger approved the largest tax increase in state history, including a major hike in income taxes, the overall tax revenue declined by over $100 million dollars. These declines included a 20.4% decline in individual income tax revenue and a 19.5% decline in corporate tax revenue.

California Tax Revenue Drop

California Tax Revenue Drop

As a direct result of the decline in tax revenue, the Collections Officers for the California Franchise Tax Board have been directed to go after delinquent tax bills with vigor and focus. If you or your business owe back taxes to the state of California, it is essential that you take action before a dire situation grows even worse.

Why have the California Collections Officers been directed to go after back taxes with such renewed vigor? To begin with, California already was experiencing a budget crisis before the new tax deficits arose. In addition, as Lisa Blumerman, chief of the Census Bureau’s Governments Division noted, “The 2009 state tax collection data is the first component of government finance data released each fiscal year and provides an important indicator of the fiscal condition of state governments.”

California Franchise Tax Board

California Franchise Tax Board

With the ongoing recession combined with the lack of tax revenue, California’s 2010 budget has a $6.6 billion shortfall and faces a total $19.9 billion deficit through next year. The California Revenue Officers will be scouring the books to find both individuals and businesses with significant back tax bills to go after in order to make up the gap. Before you get the knock on the door that signifies a major threat to your future financial security, contact the Tax Resolution Institute. We can transform a tax crisis into a program of true tax relief. If you need tax resolution services, feel free to call the Tax Resolution Institute at 800-401-5926 or fill out our  tax resolution form.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

The California Franchise Tax Board Tries To Jump Start Housing Market With A $10,000 Tax Credit

The California Franchise Tax Board is setting into motion a new plan to extend a $10,000 tax credit to first-time buyers purchasing new homes. The goal is to help the state’s lagging housing market. With a huge backlog of abandoned and foreclosed homes, California has to take action. With one of the country’s highest foreclosure ratings and business owners struggling to get new projects off the ground, California needs a tax benefit to counteract the rising pessimism of both sellers and buyers. At this point, tax revenue is secondary to stimulating the economy. Recognizing this situation, the Tax Resolution Institute can help you settle past tax bills from both a personal and business perspective in order to provide you with the financial flexibility to take positive action.

First Time Home Buyers Tax Credit

First Time Home Buyers Tax Credit

Signed into law by Gov. Arnold Schwarzenegger this week, the new bill provides $200 million for homes purchased between May 1 and Dec. 31, 2010 and between Dec. 31 and Aug. 1, 2011. The total amount provided to the California Franchise Tax Board to offer such tax credits to homebuyers is twice as much as a similar measure signed in 2009.

Builders and real estate business owners blamed a sharp downturn in construction last summer on a discontinuation of the tax credit after funds were exhausted in only five months. With a Fresno subdivision as a backdrop, Schwarzenegger said at a press conference, “I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy.”

Gov. Schwarzenegger Announces Homebuyer Tax Credit in California

Gov. Schwarzenegger Announces Homebuyer Tax Credit in California

Given the popularity of last year’s program, California taxpayers should ready themselves to apply for the new funds as soon as they become available from the California Franchise Tax Board. This is why it is essential to settle past tax difficulties, both personal and business related, in order to take advantage of this new opportunity. The funds will be allocated on a first-come-first-served basis.

Unlike a federal incentive program for first-time homebuyers that ends next month, the credit is not a refund, but will result in a reduction or elimination of state taxes over a three-year period. There are no income limitations, but the new buyers, however, must reside in the home for at least two years.

Tax Credit from California Franchise Tax Board

Tax Credit from California Franchise Tax Board

If last year’s tax credit program in California is any indication of the need in the current economy for this tax credit, the new funds are sure to be exhausted quickly. The state’s Franchise Tax Board stopped accepting applications for the first $100 million tax credit program for first-time homebuyers last July after it received 12,000 requests in only five months.

To see if you qualify for the tax credit, state officials suggest that potential buyers visit the Franchise Tax Board’s Web site to familiarize themselves with the program’s requirements. The California Franchise Tax Board expects to have “a significant amount of information and guidance” on its Web site about the new program by Tuesday, said Brenda Voet, an agency spokeswoman. The address isn’t yet available, but to find the site she suggested that people go to www.ftb.ca.gov and type “new home credit” in the search box on the front page.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

Your Tax Crisis Is Fair Game: Huge Increase in the Number of IRS Tax Liens Filed In 2009

Over the past couple of years, as the economic crisis has continued and even deepened in certain places, countless American citizens have found themselves caught between a rock and a hard place when it comes to paying their taxes. When you do not have the cash to cover your tax bill, most likely it will go unpaid. As a direct result, rather than show understanding to people caught in such a bind, the IRS is cracking down by filing tax liens and increasing the pressure to pay. If you find yourself in trouble with the IRS with a personal income tax lien of over $20,000 against you or a payroll tax lien of over $50,000 against your business, please contact the Tax Resolution Institute before the bad turns to worse.

Since the Internal revenue Service automatically slaps tax liens on taxpayers with more than $5,000 in “currently not collectible” debt, regardless of their circumstances, there has been a huge increase in the number of IRS Tax Liens issued. In 2009, the IRS issued over 966,000 tax liens as compared to 168,000 issued in 1999 when the IRS temporarily took it easy on taxpayers due to a Congressional mandate. Such mercy has not been shown during the current recession. In fact, the opposite is true.

Chart of the Increase in IRS Tax Liens

Chart of the Increase in IRS Tax Liens

The problem, however, is that publicly filed tax liens can destroy credit and potentially shipwreck careers and businesses. How are you supposed to pay your tax debt when everyone knows a tax lien has been filed publicly against you? In addition, since the IRS tax lien becomes attached to all of your personal property, you cannot not use effectively what resources you have to settle the tax debt. The point to freezing assets is to put the government ahead of other creditors in case an asset is sold or the taxpayer goes bankrupt. Often, such a safety device turns out to be part of the problem and not part of the solution, creating even more financial problems.

As the IRS employment of tax liens has climbed, the amount its collection efforts bring in, adjusted for inflation, has declined by 7.4% to $27.2 billion. The IRS declares that such a decline is in part due to the weak economy. In truth, it very well may represent a tendency of draconian collection techniques to backfire. As National Taxpayer Advocate Nina E. Olson asks, “Why is the IRS destroying the credit of so many taxpayers if doing so isn’t furthering revenue collection?”

What is even worse is that once a taxpayer pays their tax bill, the tax lien stays in his credit file for seven years. Moreover, the IRS is reluctant to use a power Congress gave it to withdraw a tax lien so it does not damage a taxpayer’s financial record. Can we look to Congress to rescue these decent Americans caught in such a tough tax bind? Unfortunately, as history teaches us, Congress only picks on the IRS when the government coffers are overflowing.  Since the American government is going through a tough economic downturn and our Chinese debt continues to rise, Congress most likely will ignore extreme tax collection actions taken by the IRS.

As a direct result, if you or your business are in trouble with over $20,000 in income tax debt or over $50,000 in payroll tax debt respectively, it is time to contact a tax professional. Peter Stephan and the Tax Resolution Institute specialize in relieving serious tax problems by employing the most effective tax resolution techniques. If the IRS has filed a tax lien against you and the dogs are closing in, please do not hesitate to contact us.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

The IRS Takes a Sacramento Business Owner For a Financial Wash Over a Delinquent Tax Debt

Without question, the sudden arrival of the IRS at your place of business is every businessperson’s nightmare. Naturally, such a nightmare would not become a reality unless you or your business owes a huge tax debt to the IRS. As the owner of a car wash in Sacramento learned last week, this common sense belief does not always reflect the absurd truths of reality.

Beware IRS Tax Problems

Beware IRS Tax Problems

On Wednesday afternoon (March 10, 2010), two dark-suited IRS agents, right out of a bad Hollywood movie, arrived at Harv’s Metro Car Wash in midtown Sacramento and demanded payment of delinquent taxes. “They were deadly serious, very aggressive, very condescending,” recalled Harv’s owner, Aaron Zeff. But their hardcore attitudes were only the beginning of this strange occurrence. What was utterly bizarre was that the official IRS tax debt notification letter, which was hand-delivered to Zeff’s on-site manager showed the amount of money owed, amounted to a total of 4 cents.

Yes, 4 pennies was the amount that Zeff owed to the IRS. Since the tax debt dated back to 2006, the penalties and taxes accruing on the debt were listed as $202.31, leaving Harv’s debt inflated to the unbelievable size of $202.35. Not a lot of money, mind you, but a striking amount to pay in light of the original 4 cents owed. Imagine having to pay over 5,000 times the amount owed on a bill due to penalties and interest. The very idea reeks of absurdity.

IRS Tax Debt

IRS Tax Debt

The Tax Resolution Institute is raising awareness of this issue so decent taxpayers will realize how quickly IRS penalties and interest can accrue on a tax bill. If you are behind on your taxes and you need help, it is essential that you do not become stuck. Take the appropriate action and contact a tax professional. The tax experts at the Tax Resolution Institute can help to wipe away a vast majority of interest and penalties when it comes to most tax bills.

When it comes down to the bottom line, like any collection agency, the IRS really is just looking to get paid what they were originally owed. The number focus of the IRS Revenue Agents and Officers is to settle past tax debts and remove them from their books. Interest and penalties are not nearly as important as zeroing out a tax debt.

As for the Sacramento case, Zeff, who is the president of the Midtown Business Association, finds the situation a bit comical. “It’s hilarious,” he says, “that two people hopped in a car and came down here for just 4 cents. I think (the IRS) may have a problem with priorities.” Zeff provided the original reporter with an Oct. 22, 2009, letter from the IRS that states Harv’s “has filed all required returns and addressed any balances due.”

IRS spokesman Jesse Weller refused to comment “due to privacy and disclosure laws.” Zeff says he was as offended as much as anything else by what he considers rude behavior by the IRS officials. While at Harv’s, he laughed, “They didn’t even get a car wash.” What is essential for all taxpayers to realize is that if they fail to take the appropriate action and contact a tax professional, a tax debt can take them and their future for a permanent wash. Protect yourself, your family and your business today by contacting the tax experts at the Tax Resolution Institute.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

Actor Ving Rhames Owes Over Half A Million To The IRS and the California Franchise Tax Board

Uncle Sam is about to go medieval on Ving Rhames if the “Pulp Fiction” star fails to pay almost half a million dollars in unpaid taxes. In November 2009, the IRS filed a tax case against Ving Rhames and his wife Deborah in L.A. County Superior Court. Ving failed to make good on a $491,588.06 Federal tax bill that dates back to 2007. Since skipping his payments to the United States Government, Ving Rhames and his team have ignored dozens of letters and calls from the IRS Revenue Agents, leading to the necessity of filing a tax lien against the actor and starting official court proceedings. What the 50-year old actor truly needs are the services of an experienced tax professional. The Tax Resolution Institute could have negotiated a tax settlement for the actor before the case became an Internet flood of negative publicity.

IRS Files A Tax Lien Against Ving Rhames

IRS Files A Tax Lien Against Ving Rhames

In addition to the Federal Case, the state of California is joining in on the fun, filing a state tax case against Ving Rhames in Los Angeles County as well. The tough guy character actor owes the California Franchise Tax Board a total of $191,828.71, including penalties, interest and collection fees. If you have both a state and federal case filed against you like Ving Rhames, it is essential to take a positive step before the tax liens become tax levies, resulting in the seizure of assets and the wage garnishment.

By working with the Tax Resolution Institute, Ving Rhames could negotiate separate deals with the IRS and the California Franchise Tax Board, greatly reducing the cost of paying off his tax debt. By negotiating an Offer in Compromise, the Tax Resolution Institute could help to do away with most of the fees and penalties, leaving the actor only the necessity of paying off the original debt.

Ving Rhames and his Wife Need Tax Relief

Ving Rhames and his Wife Need Tax Relief

Although Ving Rhames certainly has the cash to cover the tax debt, if he did happen to be in a financial bind, the tax experts at TRI could protect his wife if she was unaware of the tax debt. In fact, the tax debt, both federal and state, possibly could be declared Currently Not Collectible in certain cases of economic hardship and spouses can be protected through Innocent Spouse Relief. Most likely, Ving Rhames will not have to employ such measures, but his tax problems could have been avoided through the application of decent business management. In addition, his present tax crisis, both with the IRS and the Franchise Tax Board, can be resolved and put to bed through the expertise of real tax resolution at work.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

The Truth About Payroll Taxes: The IRS Always Comes First

In a difficult economy when profits dwindle and bills pile up, it is all too easy for a business owner to “borrow” the payroll taxes withheld from the paychecks of employees. After all, the loan is only temporary and will be covered in between payday and the future date when the funds are transferred to the IRS. As Joseph F. Gelband pointed out in a “Taxing Subject” piece in Barrons, such a decision is nothing less than an utter business disaster in the making, a desperate gamble that often results in dire results. In utter agreement with Gelband, the Tax Resolution Institute believes that any business owner in such a bind with their payroll taxes needs to take immediate action to find a solution. And the best action to take is to contact a tax professional for help.

The Payroll Tax Trust Fund

The Payroll Tax Trust Fund

To begin with, when you withhold payroll taxes as a business owner, you literally become a government trustee. As a result, when you willfully fail to perform your duties and properly remit the payroll taxes, you commit a serious felony. Since you are holding the payroll taxes in trust for the government as a trustee, you become responsible for the payroll taxes and the complete recovery by the IRS of the entire Trust Fund.

Yes, the Trust Fund Recovery Penalty comprises 100% the total amount owed, including penalties and late fees, which could very quickly place you and your business into a state of virtual bankruptcy. If you willfully fail to collect the tax and you are the appointed person responsible for collection and payment, the government will consider you to be personally responsible for the entire amount. As a direct consequence, not only can the business go bankrupt, but your personal finances can be threatened to the extreme as well.

In addition, you do not have to be the Chief Executive of the company to be deemed liable. If you are a bookkeeper who signs off on the payroll taxes and is in charge of the transfer of funds to the IRS, you are just as responsible as your boss. And you cannot hide behind state laws or city codes because there are no smokescreens to ward off the power of the Internal Revenue Service.

Payroll Taxes & the IRS

Payroll Taxes & the IRS

As the largest and most powerful collection company in the world, the IRS comes first. If you have forgotten this undeniable truth and you have been taking the payroll tax withholdings to cover other expenses, do not wait for the axe to fall. And it is going to fall. Please contact the Tax Resolution Institute today, and we will strategize a way to stop the financial hemorrhage from becoming a fatal wound. As a business, you must never forget the essential truth about Payroll Taxes — the IRS always comes first.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

The Potential Price of Failing to Pay Payroll Taxes: Orange County Hair Salon Owners Imprisoned

Why do Peter Stephan and the Tax Resolution Institute take the issue of unpaid payroll taxes so seriously? The consequences of not paying your payroll taxes and willfully withholding payment to the IRS can be severe. In the criminal case of a husband & wife hair salon owners in Orange County, the criminal withholding of payroll taxes led to stiff prison sentences. Such an outcome does not have to happen to you and your business if your payroll tax problems have just begun. We understand that meeting payroll taxes can be a challenge in a difficult economy. But if such a challenge arises, it must be addressed.

Paying Payroll Taxes

Paying Payroll Taxes

Laguna Niguel residents John D. Pham and Anna A. Nguyen were more than your average married couple. Since 1985, the couple operated numerous hair salons under the Fantastic Sams franchise name in cities across Orange County. By failing to pay their payroll taxes and defrauding the Franchise Tax Board of California and the Internal Revenue Service, the couple received stiff prison sentences.

On October 1, 2009, Pham was sentenced to over three years in prison after pleading guilty to willfully failing to account for and pay income and Social Security taxes withheld from the wages his employees. Although Pham and his wife had incorporated 10 companies from 1996 to 2004, all of which failed to pay payroll taxes, the main charge involved the employees of the Fantastic Sams franchises.

Hair Cutting Franchises in Orange County

Hair Cutting Franchises in Orange County

Anna A. Nguyen, Pham’s estranged wife, was sentenced to five months in prison after pleading guilty to conspiring with Pham to defraud the United States by preventing the Internal Revenue Service from collecting taxes owed. Lasting almost a decade, the couple’s conspiracy added up to a loss of over $770,000 of payroll taxes that were never paid to the government.

In addition, the couple avoided paying their income taxes as well, and Nguyen pleaded guilty to owing more than $80,000 in federal income tax liabilities.  They diverted assets from the corporations they controlled for their own personal benefit. As a result, they will have to pay joint restitution in the future of over $620,000 to the IRS.

It is clear that the couple were part of an ongoing criminal conspiracy. If you are having payroll tax problems with your business, it does not mean that you are part of such a conspiracy. Instead, you simply could be experiencing the challenges of a tough economy. As a direct result, Peter Stephan and the Tax Resolution Institute are here to make sure the consequences do not threaten your financial security and the future of your company. Rather than wait for a miracle to happen, take a positive action today to find a resolution and avoid such drastic consequences.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

Man Sells Business to Bank and Settles IRS Tax Liens after Bulldozing His Own Home…

Terry Hoskins bulldozed his home in Moscow, Ohio, after his bank began foreclosure proceedings. IRS tax liens on business properties owned by Hoskins were responsible. Hoskins had never missed a mortgage payment. The decision by the bank to foreclose on his home in response to the IRS tax liens enraged the homeowner. “When I see I owe $160,000 on a home valued at $350,000, and someone decides they want to take it — no, I wasn’t going to stand for that, so I took it down,” he told a local news station.

T-Shirts Made By Supporters of Tax Protester Terry Hoskins

T-Shirts Made By Supporters of Tax Protester Terry Hoskins

With the amount owed to the IRS, Terry Hoskins could have avoided such craziness if he had consulted with a tax professional like Peter Stephan in the beginning. Business owners in a tax crisis often become stuck and do nothing. By taking action and working out a settlement with the IRS, business owners can avoid the horror that Terry Hoskins experienced.

The struggle between the Internal Revenue Service and Terry Hoskins was resolved when the RiverHills Bank purchased his Amelia carpet business for the opening bid of $666,666.67 at a sheriff’s auction. The deal had the bank clear all debts, including money owed to the IRS. Daughter Miranda Hoskins commented: “We’ve reached an agreement that both parties are happy with at this point.” Hoskins said that he hopes to rebuild the house that he tore down with the bulldozer. “I’ve actually hung my keys up for the dozer,” Hoskins said.

When asked about the Terry Hoskins case, tax professional Peter Stephan of the Tax Resolution Institute pointed out that such extreme emotional reactions never need reach such a point of volatility. It is like shaking up a coke bottle and being surprised when the carbonated soda shoots out when it’s opened. By not dealing directly with IRS tax problems, a taxpayer shakes up the financial security of their future. As Peter Stephan clearly explained, “If Terry Hoskins had called the Tax Resolution Institute when his tax crisis first arose, he never would have had needed the bulldozer in the first place.” If you need tax resolution services, feel free to call the Tax Resolution Institute at 800-401-5926 or fill out our  tax resolution form.

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.

Taking It Down: Man Facing IRS Tax Liens Bulldozes His Own Home…

Documenting his actions on video, Terry Hoskins bulldozed his home in Moscow, Ohio, after his local bank began foreclosure proceedings. IRS tax liens on business properties owned by Hoskins were filed on his home. Hoskins had never missed a mortgage payment. In fact, he was never even late on a payment on his home. The decision by the bank to foreclose on his house in response to the IRS tax liens enraged him. “When I see I owe $160,000 on a home valued at $350,000, and someone decides they want to take it — no, I wasn’t going to stand for that, so I took it down,” he told a local news station.

In a Tax Protest, Terry Hoskins Bulldozing His Own Home

In a Tax Protest, Terry Hoskins Bulldozes His Own Home

The bank moved to foreclose on the home, even though Hoskins claimed he had received a $170,000 offer on the property from an interested buyer. “As far as what the bank is going to get, I plan on giving them back what was on this hill exactly [as] it was,” he said. “I brought it out of the ground and I plan on putting it back in the ground.” There is no question that the reaction of Terry Hoskins to possibly losing his home and his property was extreme to say the least.

With the amount owed to the IRS, Terry Hoskins could have avoided such insanity if he had consulted with a tax professional like Peter Stephan. Business owners in a tax crisis often become stuck and do nothing. By taking action and having a skilled professional like the Tax Experts at the Tax Resolution Institute work out a settlement with the IRS when the crisis first arises, business owners can avoid the horror that Terry Hoskins experienced. And the story only gets worse…

Hoskins is now facing outstanding tax liens on his carpet business, and he is considering the option of continuing his demolition derby and taking out his business before the authorities can seize it. The IRS filed the tax liens against the business and his commercial property after his brother sued him as a former business partner. He leveled the home with a bulldozer, and Hoskins is threatening to do the same with the business before it goes up for auction next month.

When asked about the Terry Hoskins case, tax professional Peter Stephan of the Tax Resolution Institute pointed out that such extreme emotional reactions never need reach such a point of volatility. It is like shaking up a coke bottle and being surprised when the carbonated soda shoots out when it’s opened. By avoiding IRS tax problems, a taxpayer shakes up the financial security of their future. As Peter Stephan clearly explained, “If Terry Hoskins had called the Tax Resolution Institute when his tax crisis first arose, he never would have had needed the bulldozer in the first place.”

Peter Y. Stephan

About Peter Y. Stephan

Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.