Archives for March 2011

Los Angeles Camera and Lighting Equipment Rental Company Has Payroll Tax Crisis Resolved

Rental companies often find themselves in cash crunches when business becomes difficult, often leading to payroll tax problems and the need for tax resolution help. Since the film and television industries are based in Los Angeles, a major business for many decades has been the rental of camera, grip and lighting equipment for independent productions. Such companies seem to often experience payroll tax problems.

Los Angeles Lighting, Grip & Camera Rental Company Tax Crisis

Los Angeles Lighting, Grip, Camera Rental Company

Working with Unit Production Managers, a major production ren tal company located in the San Fernando Valley rents out millions of dollars worth of equipment to independent productions every year. In the last year, when several production entities moved their business out of state due to the rising costs of shooting in Los Angeles, the rental company found themselves in trouble. With the economy taking a downturn and capital wrapped up in their inventory, what could they do?

The old adage – when it rains, it pours – unfortunately seems to become a negative reality in business. When the rental company was facing this financial crisis, they had a bevy of equipment stolen from them by a questionable client. Although the equipment was covered under their insurance, it raised their rates and led to expensive legal fees as well.

Rental Companies Often Experience Payroll tax problems

Rental Companies Often Experience Payroll tax problems

Suddenly unable to cover their basic costs, the owners made the mistake of dipping their hands in the trust fund portion of their payroll taxes taken from the paychecks of employees. Believing they would be able to cover the difference in the coming months, they decided to steal from Peter to pay Paul and not pay their IRS payroll taxes. Peter, however, is the IRS, and the Internal Revenue Service takes payroll tax problems very seriously. In fact, they have hired many new regional Revenue Officers to go after delinquent payroll tax accounts. After all, the trust fund recovery penalty is called the 100% penalty because the federal government does not appreciate their trust fund being violated by business owners.

When an IRS Revenue Officer contacted the business owners, they realized that they had made a grave mistake. Wanting to keep their doors open, believing that the former prosperity of their business was just on the horizon, the owners contacted Peter Stephan and the Tax Experts at the Tax Resolution Institute. Examining the case against them, Peter Stephan came up with a strategy to keep the business viable. After all, in these tough economic times, the IRS wants businesses with a track record of success to keep their doors open as well. You can’t collect an unpaid payroll tax debt from a business that is forever closed. As a result, the IRS often is willing to negotiate a positive Installment Agreement or Offer in Compromise to cover a payroll tax debt.

Cutting down both the interest and the penalties, Peter Stephan was able to negotiate with the IRS Revenue Officer an Installment Agreement for the Camera, Grip and Lighting Equipment Rental Company that provided real tax resolution to their unpaid payroll tax crisis. If you own a business in Los Angeles, the San Fernando Valley or any other part of Southern California and you need help with a payroll tax problem, contact the Tax Resolution Institute. Our goal is to keep your doors open by finding a workable solution to your unpaid payroll taxes.

No Income Tax Goodfella: Director Martin Scorsese Hit With $2.85 Million Tax Lien By the Raging Bulls at the IRS

Traditional news media and online sources reported that Oscar-winning director Martin Scorsese has been hit with a $2.85 million back-tax bill and tax lien by the Internal Revenue Service. The IRS believes that Scorsese owes the huge IRS tax bill for back income taxes and related interest and penalties. Don’t forget that the interest on IRS delinquent tax debts are compounded daily. If you have been hit with a similar tax bill, contact the tax resolution services experts at the Tax Resolution Institute for help. Clearly, Martin Scorsese needs the very best in tax resolution services if he owes that much to the IRS.

Is the IRS talkin' to me about that income tax debt?

Is the IRS talkin' to me about that income tax debt?

According to an IRS tax lien notice delivered on Feb. 14, 2011 and recorded by the New York City’s finance department 11 days later, the IRS has first claim if the director sells any of his real estate holdings. What is frustrating is that Scorsese’s latest run-in with the taxman could stem from his prior business relationship with convicted fraudster Kenneth Starr, a financial adviser who stole money from a bevy of celebrity clients. The 68-year-old Goodfella dropped Starr as his money manager early last year, less than five months before Starr was busted for running a $33 million Ponzi scheme. Starr was sentenced last week to seven and a half years in federal prison.

The Taxi Driver director, who won an Academy Award for The Departed, lives in a $12 million Manhattan townhouse. Despite his personal success, Scorsese has had a series of IRS tax liens since 2002. For six months between 2002 and 2003, the IRS hit him with three tax liens that totaled nearly $1.9 million. The next year, New York State obtained a $149,437 tax judgment against him. According to his representatives, every past tax debt has been paid in full. Scorsese’s spokeswoman Leslee Dart said that the IRS tax lien is “a complete mistake” because the cinematic legend has resolved his delinquent income tax debt and no longer owes anything to the IRS or any state taxing agencies.

The IRS: Pay Your Income Taxes or Else!

The IRS: Pay Your Income Taxes or Else!

What is ironic is that the Los Angeles County Recorder’s Office recently recorded an $188,283.50 IRS tax lien against fellow Academy Award-winner Al Pacino for back income taxes dating from 2009 and 2008. Like Scorsese, Pacino’s official spokesperson claimed that the actor did not mean to overlook his income taxes and blamed former business manager Starr for the mistake.

As the biggest collection agency in the world, the IRS won’t take any excuses. It does not matter if you are a famous actor, a prominent director or a well-connected citizen.  If you owe a substantial tax debt to the Internal Revenue Service and you have had an IRS tax lien filed against you, they’ll do everything possible to collect it. Whether you live in California or New York, if you need tax resolution services, please contact the Tax Resolution Institute at 800-401-5926 or fill out our tax resolution form.

The Tax Resolution Institute Helps Orange County Staffing Agency Keep Doors Open After Payroll Tax Crisis

With the expansion into Orange County, the Tax Resolution Institute has encountered a number of companies experiencing severe payroll tax problems in a challenging economy that need tax resolution services. Stealing from Peter to pay Paul, these companies often dip into their employee’s Trust Fund in order to cover payroll and a variety of unexpected expenses. Such a choice is often disastrous because the IRS considers the Trust Fund to be a legal responsibility of an employer, and they react to payroll tax cases with alarming swiftness and vigorous enforcement of penalties. Since the Trust Fund Recovery Penalty also is known as the 100% penalty, it can lead directly to an economic tidal wave that overwhelms a company and leads to their doors being forever closed. A perfect recent example of such an unpaid payroll tax problem came when the principals of a local Orange County staffing agency found themselves pressed by tough economic times.

Orange County Staffing Agency

Orange County Staffing Agency With Payroll Tax Crisis

Since the Orange County staffing agency has to pay their employees every week even though they often do not receive payment for their services and the services of the temps until the end of the month, they often find themselves in tough economic territory. Although this staffing company is doing well and their services were in demand, they discovered that the more temps they sent out into the workforce, the higher their bills seemed to be. In addition, their employer clients were not quite paying their bills at the end of the month, but rather putting them off until later. Sometimes payment for services would not arrive until 45 days after the fact or even longer in the most egregious cases. However, since the temps are contract employees at a relatively low hourly wage, they need to be paid on time in order to keep working and stay available. As a result, the temp agency began dipping into the trust fund, putting off the payroll tax deposits to the IRS, in order to cover the differences.

Believing they would make up the difference when the next deposit was due, the principals of the Orange County staffing agency believed that everything would be okay. When they were hit by unexpected costs, they realized that they could not cover the amount taken from the previous trust fund deposit. In addition, caught between a rock and a hard place, they were forced to take money from the next trust fund deposit as well, making a bad payroll tax problem even worse. When they came to understand that they were caught in what was quickly becoming a vicious circle, they had no choice but to take proactive action. Luckily, they stopped the storm that could destroy the future of their successful business in its tracks by making a smart choice — they contacted Peter Stephan and the Tax Resolution Institute to access the very best in tax resolution services.

The Best in Orange County Tax Resolution Services

The Best in Orange County Tax Resolution Services

Realizing how serious the situation had become, the TRI tax experts brought the principals of the staffing agency into the office and went over the recent books with them. They were informed that if they had money saved up for a rainy day, it was time to access those funds because it was pouring. Coming up with a workable game plan, Peter Stephan approached the IRS with a major payment to cover a majority of the depleted Trust Fund. By coming to the IRS with a plan of action and an initial payment, Peter Stephan was able to have the majority of the Trust Fund Recovery Penalty waived. In these difficult economic times, IRS Revenue Officers tend to react well to proactive action when a tax problem is brought to them before it is discovered. Negotiating a workable installment plan, Peter Stephan was able to put the Orange County staffing agency back on track while keeping their doors open.

The Tax Resolution Institute has opened an office in Orange County in order to help business owners across that part of Southern California from Irvine to Newport Beach, from Tustin to Anaheim. If your company is in an economic crisis and it ha sled to a problem with unpaid payroll taxes, please do not hesitate any longer. It is essential to take action today. If you need tax resolution services, feel free to contact the Tax Resolution Institute at 800-401-5926 or fill out our  tax resolution form.

IRS to Help Struggling Taxpayers, Making it Easier to Pay Delinquent Tax Debts and Avoid Tax Liens and Levies

In the past, the Tax Resolution Institute has referred to the Internal Revenue Service as the largest collection agency in the world that will go after your delinquent income tax debts without blinking. What is a positive development is that sometimes even mammoth bureaucracies recognize the signs of the times and offer help in a recession. Seeing the how many American taxpayers are truly struggling, the Internal Revenue Service has announced new policies designed to help them meet their tax obligations, pay back taxes, and avoid tax liens and wage garnishments. The IRS also plans to forgive the back tax debts of small taxpayers and make tax liens less damaging to a taxpayer’s credit rating.

Although the economy has rebounded from its worst point, many American taxpayers and small to mid-size businesses are still battling to pay the bills and make proverbial ends meet. When a taxpayer has a delinquent tax debt and has avoided notices regarding the need to begin a payment plan, the IRS will issue a tax lien against the taxpayer’s property. The IRS describes this process as follows: “A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer.” In other words, an IRS tax lien makes a taxpayers personal problems a public affair.

IRS Commissioner Doug Shulman Ponders the Struggles of Taxpayers

IRS Commissioner Doug Shulman Ponders the Struggles of the American Taxpayer

In addition, an IRS tax lien can have a devastating effect on a taxpayer’s credit rating. Realizing the difficulty faced by so many well-meaning taxpayers, the IRS has shifted policies. The new policies that are in the process of being instituted by the IRS include increased tax lien thresholds. As it presently stands, IRS tax liens are automatically filed at various dollar amounts for individuals with past due tax accounts. Since the interest on IRS tax debts is compounded daily, these thresholds have been reached with alarming speed.  IRS commissioner Doug Shulman explained the change of policy at a recent press conference: “Raising the lien threshold keeps pace with inflation and makes sense for the tax system. These changes mean tens of thousands of people won’t be burdened by liens, and this step will take place without significantly increasing the financial risk to the government.”

Focusing in the needs of lower-income Americans, the IRS has also expanded its Direct Debit Installment Agreement (DDIA) to help taxpayers who owe $25,000 or less in taxes. When taxpayers enter into a DDIA, the IRS will withdraw their lien. In addition, they will withdraw a lien if a taxpayer currently participating in a regular Installment Agreement converts to a DDIA or if the taxpayer is already participating in a DDIA and requests that the lien be withdrawn. It is important to point out that withdrawals will occur only after a taxpayer has completed a probationary period that proves that they will actually be making the direct debit payments. Without question, entering in a DDIA will be easier as well now that the IRS has set up the new Online Payment Agreement application on its website. Besides being easier to use, the online access will also mean lower user fees.

Increased Burden of Income Taxes in Recession

The American Taxpayer has felt the Increased Burden of Income Taxes in Recession

Currently, small businesses with under $10,000 in unpaid back taxes are able to participate in the IRS’s Installment Agreement program. This program helps businesses pay their taxes over 24 months as a last ditch alternative to a lien. Under the new policy, small businesses will be able to participate as long as they have less than $25,000 in unpaid tax liabilities. If a small business has over $25,000 in unpaid tax liabilities or payroll tax problems, they should contact the Tax Resolution Institute for help. TRI has extensive experience helping small businesses keep their doors open.

Middle and lower class taxpayers struggling to make payments are a large population. To help them, the IRS has expanded their Offer In Compromise (OIC) program. Currently taxpayers can only participate if they have a tax liability of less than $25,000. Taxpayers with annual incomes of $100,000 or less and tax liabilities of $50,000 or less can participate in this program that allows the IRS and the taxpayer to come to an agreement that settles the tax liability for less than the full amount owed.

Nina Olsson, the National Taxpayer Advocate tapped by Congress to monitor the IRS, was less than enthusiastic in her response. Although she called the changes “a significant step in the right direction,” she added, “They are not sufficient to address the problems we have seen.” The new rules generally prohibit the IRS from filing a tax lien unless the delinquent tax debt exceed $10,000, doubling the previous limit. The IRS also will ease the damage to taxpayers’ credit scores after the full amount of the back tax debt is paid.

National Taxpayer Advocate Nina Olson Is Not Satisfied

National Taxpayer Advocate Nina Olson Is Not Satisfied

In an important technical move, the IRS will grant more taxpayers “lien withdrawals”—a higher level of forgiveness than the current “lien release.” According to Ms. Olson, full withdrawal is often better for credit ratings because it expunges the lien from the taxpayer’s record immediately. In contrast, a tax lien release leaves the damage on the taxpayer’s credit record for at least seven years. An IRS tax lien can easily knock 100 points off a person’s credit score. The highest credit score is 850 at FICO, a leading credit scorer. Borrowers often need a score in the 700s to qualify for the best rates on loans.

In another key shift, if a taxpayer has no hope of paying their tax debts, the IRS has expanded its Offer in Compromise program. The program allows taxpayers to settle their debt by paying a significantly lesser amount than they actually owe. Taxpayers with incomes of as much as $100,000 may now be eligible for the Offer in Compromise program if their total tax liability is $50,000 or less. The change doubles the limits of $50,000 of income and $25,000 of total tax due. If you need to find out whether you qualify for the new Offer in Compromise program, please contact the Tax Resolution Institute. Not only can we tell you whether or not you qualify, we can make sure that the IRS accepts an Offer in Compromise by making sure you are in full compliance. If you have unfiled tax returns, we will file them and bring you up-to-date.

The IRS said the new rules will reduce liens by “tens of thousands” but declined to be more specific. Criticizing the decision, Ms. Olson said the IRS’s changes don’t go far enough. The agency is often too quick to impose liens on people without checking their resources, she said, adding that the number of IRS tax liens surged to 1.1 million last year from 168,000 in 1999. Ms. Olson capped her criticism of the new program by pointing out that, “Such filings do not generate significant revenue compared with the financial devastation they visit on taxpayers.”

Most importantly, if you have a significant tax debt with the IRS, it is essential to take action sooner rather than later. As we pointed out, IRS tax debts are compounded daily so a bad situation quickly goes to worse and worse until it is a living financial nightmare. If you are experiencing this horrible state of affairs, whether it is unfiled tax returns or an IRS tax lien, a wage garnishment or an IRS tax levy, we can help restore the harmony back to your life. By contacting the Tax Resolution Institute, you are taking the first step in redeeming your tax nightmare and restoring the dream of your life. In addition, if you have severe payroll tax problems, TRI can help you keep your doors open and your business viable. If you need tax resolution services, feel free to contact the Tax Resolution Institute at 800-401-5926 or fill out our  tax resolution form.