The Internal Revenue Service has filed a federal tax lien against Gov. Arnold Schwarzenegger for nearly $80,000, public records show… Update.  (Hmmm… maybe Arnie saw Aaron Russo’s documentary ‘Freedom to Fascism’… ~ S.I.A.)

The lien was filed May 11 at the Los Angeles County recorder’s office for $79,064, according to a record in an electronic database that includes lien filings. The record does not indicate what property the lien was placed on, but it lists the debtor as Arnold Schwarzenegger with the governor’s home address in Brentwood.

[Updated at 11:42 a.m.: A federal tax lien would be attached to all of the governor’s properties, according to the IRS.]

The lien was reported this morning by TMZ.com, which posted a copy of a lien document that says it is from the county recorder’s office. That document shows that Schwarzenegger owes $39,047.20 from 2004 and $40,016.80 from 2005. The document also lists a section of the IRS code that suggests the debt may be penalties for a failure to report certain business transactions.

Schwarzenegger’s spokesman, Aaron McLear, said in a statement that the “governor has paid his taxes in full and on time.”

“No one, including the IRS, has notified the governor of any issues whatsoever with his taxes,” McLear said. “We are contacting the IRS to determine if the document in question, which appears to be a penalty for missing info and not for unpaid taxes, is legitimate and if there is any discrepancy to resolve.”

Michael Rothfeld – November 27, 2009 – source LATimesBlog

If you are a commerce student and looking for a carrier in the industry of tax, there are thousands of opportunities waiting for you. This article explores the current situation of the tax industry and the opportunities that are for the young talent.

Current situation: The tax market has many employees that are above the age of 40. The aged people have a limit to work and so they can not pay more time to the work as compared to the young employees. The efficiency of the aged employees is also low. The growing market needs the people who can work efficiently and earn more money for the tax organizations.

Opportunity for young employees: The young employees can gather a good opportunity to work in the tax market. The current time is the best for anyone to have a job in market. The profession of the tax consultant has many carriers in the specified area in the market. The specialization is the most important requirement. If you are specialized with one or more areas of tax, you can easily make money in the field of taxation.

Different tax areas: There are many areas in which one can be specialized and get a chance to make money. The position of the Chief tax officer is highly responsible. The chief tax officer has to manage and balance the tax requirement of the companies having a large amount of turnover. The individuals in this position must thing high and plan the best arrangement of the tax. Any company wants to save tax and increase the profit. If you are planning to be a chief tax officer, you need a several years of experience in the field of tax and you must have high skills so that you can effectively work for the company.

The highly financial and accounting skills in you can make your money dream come true. Any company will look for the employees who can work efficiently for them and can make money for them.

Money reward: If you are a professional in the wide market of tax, you can easily get more money. The amount of money given to you as salary will be dependable on the skills and regional laws.  The minimum reward to the professional of taxation having some experience would be $50000 per year.

]]> http://www.bankruptcylegals.com/taxdebtsettlement/66/tax-lien/king-county-wa-tax-deed-sale-december-2006-foreclosure-section-phone-206-296-4184/feed/ 4 http://www.bankruptcylegals.com/taxdebtsettlement/48/tax/the-importance-of-your-tax-return/ http://www.bankruptcylegals.com/taxdebtsettlement/48/tax/the-importance-of-your-tax-return/#comments Tue, 09 Feb 2010 04:23:37 +0000 DaveW http://www.bankruptcylegals.com/taxdebtsettlement/48/tax/the-importance-of-your-tax-return/ A tax return is a form that must be filled in for the Inland Revenue ( now HM revenue and Customs) with details of things like your income. From the tax return, the amount of tax you are liable for is calculated.

If a tax return is issued you have a legal liability to fill the thing in. If not you will have a 100 penalty issued. Those individuals who complete returns using software are sent a notice advising them that a tax return is due. If a taxpayer is not issued with a tax return but has tax due they should notify HMRC who may then issue a return.Preparing a tax return is one of those things we tend to build up in our minds as a big deal, when it doesn’t have to be. It’s like painting the living room. Prepare and lodge your own tax return electronically.

A tax return is sometimes required for other reasons, for example to check if the correct tax has been paid overall. So if you are sent a tax return, you must fill it in and send it back even if you believe that you have no extra tax to pay. A tax return is a document filed with HMRC that declares a taxpayers liability for being taxed, based on their yearly income. Three outcomes are possible from filing a tax return: either the taxpayer has either been charged too much or too little for their income, or they have been charged the correct amount. A tax return is a form on which you are asked to report your income and capital gains, and give details of reliefs and allowances claimed, for a particular tax year. The tax year runs from 6 April to 5 April, and the tax return covering the year ended 5 April 2008 is sometimes called the 2008 tax return’, or the return for 2007/08.It applies to taxpayers who are identified as requiring a tax return and who are issued with a notice to file or a paper self assessment tax Return incorporating a notice to file. It also applies to people who make a claim outside a tax return. If you are newly self-employed it is not enough simply to file a tax return by October 31 for the tax year in which you became self-employed. You must tell HMRC that you have started to work for yourself within three months of doing so – you face a fine of 100 if you don’t. Further, at death, the executor of your estate must also file an Estate Tax return.

HMRC have 12 months from the date of filing the return in which to open an enquiry, provided that the tax return is submitted by the applicable deadline for the method used. If a return is submitted after the deadline for that method, HMRC have up to and until the quarter day following the first anniversary of the date the return was filed, in which to open an enquiry. HMRC may sometimes refer to such cases as investigations, in order to distinguish them from enquiries pursued under the S9A powers. In such cases HMRC have to rely on the information powers in TMA70/S20 to support the investigation or seek a Regulation 10 notice (General Commissioners (Jurisdiction and Procedure) Regulations 1994 SI1994/1812) from the Commissioners in an appeal hearing. HMRC’s local office structure has been dismantled but the new structures do not appear to provide adequate support mechanisms. There is little doubt that this issue is the biggest single cause for concern among tax technicians and accountants, who represent the largest number of qualified tax advisers in the UK, many of whom deal with HMRC on a very regular basis.

Remember that if you do file your tax return on time and do not breach rules you are far less likely to attract the attention of the HMRC investigators.

Congress’ New Year resolution: finish work on tax bills

Although the Senate approved its massive health care reform bill, the Patient Protection and Affordable Care Act, Congress begins 2010 with a mountain of unfinished tax legislation from 2009. The unfinished tax bills mean practitioners and taxpayers face uncertainty, at least for the immediate future, over important issues such as estate tax, the alternative minimum tax (AMT), health care reform, and more. Some of these bills are on the fast-track for approval in early 2010; others will wait for Congress to finish work on higher priority items.

Estate tax

Effective for decedents dying on or after January 1, 2009, the traditional federal estate tax with its stepped-up basis at death rules no longer apply. New carryover basis at death rules apply. In addition, the generation skipping transfer (GST) tax does not apply to generation skipping transfers made after December 31, 2009. The federal give tax, however, does continue, albeit in modified form from 2009.

All of these changes were set in motion by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which abolished the federal estate tax for 2010 but only for 2010. At that time, supporters expected the temporary elimination of the federal estate tax to be made permanent before 2010. They lacked sufficient support in Congress to make that happen. During 2009, many lawmakers in Congress proposed an extension of the 2009 estate tax rules with a $3.5 million exclusion ($7 million for married couples) and a top tax rate of 35 percent. In fact, the House passed such a bill. The Senate, however, did not approve the House bill before the end of 2009. Consequently, the rules put in place in 2001 have come into effect in 2010.

What does this mean? The flux in the estate tax adds to uncertainty in estate planning. However, Congress is expected remedy the situation shortly. Congress will enact retroactive legislation in January or early in 2010 to extend the 2009 estate tax regime with its $3.5 million exclusion and 35 percent top tax rate for 2010. Carryover basis at death is expected to be short-lived.

Please contact our office if you have any questions about your estate plan. Congress’ inaction at the end of 2009 has caused confusion. We will review your plan and make sure you are well prepared for Congress’ expected extension of the 2009 estate tax treatment.

AMT

Another area of uncertainty is the AMT. The AMT was designed to ensure that very wealthy individuals did not evade federal taxes. However, Congress did not index the AMT for inflation. Consequently, the AMT has encroached on more middle income taxpayers, especially two income couples in high tax states.

In recent years, Congress has passed an AMT “patch” to help middle income taxpayers avoid the AMT. The patch provides higher exemption amounts and other relief. Congress enacted a patch for 2009 but recessed for the December holidays before passing a patch for 2010. One stumbling block is the cost of a patch and disagreements in the House and Senate whether the cost should be offset by revenue raisers. We will keep you updated of developments.

Health care

House and Senate Democrats are drafting a final health care reform bill for passage by both chambers, possibly in January. In December, the House and Senate passed similar health care reform bills but with important differences in revenue raisers. The Senate passed, by a vote of 60-39, the Patient Protection and Affordable Care Act late on Christmas Eve. The chief revenue raiser in the House bill is a proposed surtax on higher income individuals (individuals with incomes over $200,000 and families with incomes over $250,000). The Senate rejected the House surtax and instead approved a new excise tax on high-dollar insurance plans. Other revenue raisers under negotiation include new limits on health flexible spending arrangements and health savings accounts, a new excise tax on indoor tanning, an additional Medicare tax for higher-income individuals, and more.

The final conference bill is expected to require employers to provide health insurance to their employees. Employers that do not will be subject to an additional tax with an exception for small employers. The final bill could classify a small employer as one with 50 or fewer full time employees or use a lower threshold; for example, 25 full-time employees. The conference bill is also expected to provide tax credits to help small businesses purchase health insurance for their employees. Individuals without coverage generally would be liable for an additional tax unless covered by Medicare or other qualified coverage.

The conference bill will change the fundamental landscape of health care in the U.S. The tax-related provisions in themselves are monumental. To complicate matters, some provisions go into force immediately and some are delayed for up to three years. Please contact our office if you have any questions about this important legislation.

COBRA

COBRA continuation coverage provides eligible individuals the opportunity to continue their employer-provided health insurance coverage after a layoff or other qualified event. However, COBRA requires individuals to 100 percent self-pay their premiums. The cost makes COBRA out of reach for many individuals.

In the American Recovery and Reinvestment Act of 2009, Congress created a temporary subsidy to help eligible individuals pay for COBRA coverage. Eligible individuals pay 35 percent of the premium cost and the former employer pays 65 percent, which it recovers through a payroll tax credit. Under the 2009 Recovery Act, eligibility for COBRA premium assistance expired after December 31, 2009.

Congress provided a temporary extension in the FY 2010 Defense Appropriations Bill. This bill extends eligibility for COBRA premium assistance through February 28, 2010.

COBRA premium assistance is limited to eligible individuals (and certain beneficiaries) who are involuntarily terminated from employment. Generally, this means a lay-off or furlough but other separations from employment may also qualify. If you have experienced a separation from employment, please contact our office. You may qualify for COBRA premium assistance.

Jobs bill

Just before recessing for the December holidays, the House approved the Jobs for Main Street Act. The House jobs bill would extend eligibility for COBRA premium assistance through June 30, 2010. The House bill would also extend unemployment benefits and make the child tax credit available to more taxpayers.

The Senate did not take up the House jobs bill in December. Democrats in the Senate are drafting their own jobs bill, the details of which are expected to be revealed early this year. The Senate bill may include some tax incentives for businesses, such as an extension of bonus depreciation and enhanced Code Sec. 179 expensing. These incentives expired after December 31, 2009.

More bills

On January 1, 2010, the state and local sales tax deduction, the higher education tuition deduction and many other tax deductions and credits expired. These popular incentives are temporary and are known as extenders because Congress usually extends that every year. The House voted to extend these provisions through 2010 but the Senate recessed in December without taking up the House bill. The extenders bill could be put on the back burner until spring.

Congress is also debating whether to impose tougher rules on the reporting of foreign bank accounts owned by U.S. taxpayers. In December, the House passed a bill that would impose new penalties on taxpayers that fail to disclose certain foreign accounts on their tax returns. The House bill would also encourage foreign banks to enter into agreements with the IRS to voluntarily disclose the existence of certain accounts. The Senate did not vote on the House bill before its December recess. The provisions are popular in the Senate, which in the past has promised to crack down on so-called tax havens and Americans who hide money and assets offshore.

Planning

As 2010 unfolds, we’ll have a clearer picture of when these and other tax bills will be enacted. In the meantime, please contact our office if you have any questions about the bills we have discussed or any others.

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When you owe the IRS back taxes you need to have an idea of the total amount. Remember to add up your total from every year. Many people find themselves owing back taxes from several years because they did not file annually, as they were supposed to. It is important to know the total liability that you are facing as opposed to only one years worth of problems.

Now that you know your total liability you can decide how you are going to pay the IRS. Most tax professionals will suggest that you pay a lump sum if this is affordable to you. This depends on how much you owe in back taxes, and how much money you have in your possession. If you do not owe a lot you can pay all at once as a way of avoiding interest and further penalties.

I don’t have enough money to pay a lump sum! This situation calls for an installment agreement. This agreement allows you to pay the IRS back taxes in monthly payments instead of a lump sum. The downside of paying a little bit each month is that the IRS will charge you interest. But if this is the only way for you to pay your back taxes it is something you have to deal with for the present time.

If you owe the IRS back taxes you need to pay them or setup an installment agreement without further delay. They will get their money soon enough, and you want to cooperate along the way to ensure that your situation does not spiral out of control.

Let’s start with your situation…

The fact that you have high credit scores and have not fallen behind means you have something to lose (your perfect payment history) if you choose debt settlement.

While debt settlement has a negative impact on your payment history (more so if you’ve never been late, not so much if you’ve already fallen behind), debt settlement also has a POSITIVE AFFECT on your debt-to-income ratio and utilization because the accounts are paid to a zero balance on your credit report. You can also do credit repair and credit rebuilding (usually within 6-12 months) after you complete debt settlement.

Let’s first get clear about exactly how your credit will be affected. The other two important areas of your credit are your debt-to-income ratio and utilization and both are greatly improved through debt settlement.

How Important Is Your Credit Score?

Remember, credit “score” is not everything… Credit “worthiness” (your ability to get a loan) is more important, especially long term.

A question to consider is this: What do you need your credit for? Most keep their credit in good shape so they can get into deeper and deeper debt, only to pay more and more interest.

But Is Your Credit Really Even “Good” Right Now?

Having a perfect payment history (about 35% of your credit) and a good credit score is nice, but other factors could be crippling you.

Let’s take a look

Debt-to-income ratio (DTI) is the amount of money that you’re obligated to pay each month towards your debt. Take the payment due on every bill you have and divide it by your net income. Example:

Mortgage – $1450, Utilities – $300, Credit Cards – $600, Autos (payments and insurance) – $1200, Student Loans – $300. The total is $3850. If this person’s net income (after taxes) is $6,000, his DTI is approximately 64%, and he is in very bad shape if he needs to borrow money. If, on the other hand, his monthly net income is $24,000, his DTI is only 16%. This is a great place to be!

If you can keep your DTI ratio at or under a third (33%) you will be in a great spot with lenders. Over 45-50%is crippling to your credit, regardless of credit score, because you simply cannot afford any more debt. This means you are not “credit worthy.”

If your debt-to-income ratio is too high now, then you’re basically crippled, and concerns about debt settlement affecting your credit simply don’t make any sense because your good payment history has only gotten you into so much debt that lenders will no longer extend you any more credit. Many people find themselves in this exact situation.

Credit Limit vs. Current Balance – The least known factor in Credit

The third area of your credit to consider is your “utilization” or “debt-to-credit-limit ratio”. The way this works is very interesting. This is probably the least known factor that affects your credit, but is just as important as payment history to your score.

Each account you have has a credit limit and a current balance. If that current balance is less than 50% of your credit limit, that’s a positive factor. If you have an account that’s over 50% “utilized” (balance over 50% of the limit), then it’s a negative factor and bad for your credit worthiness. If your balances get to the limit, or over the limit, then this is a crippling factor to your credit.

Take a look at your accounts… is any balance over 50% of the limit?

Keep these three factors in mind when evaluating your credit worthiness: payment history, debt-to-income ratio and utilization

What’s The Big Idea?

Most of the time, worrying about your credit rating when you’re drowning in debt is like worrying about how your front yard looks when you house has just burned to the ground.

I don’t know how much debt you have or what your interest rates are. These are critical factors in your decision.

Most important is this, the “BIG IDEA”: STOP paying interest and START EARNING interest, ASAP! This is critically important if you ever want to retire, and makes all the difference between a life of wealth or a life of slavery (seriously).

Why Credit May Be important, But CASH Is King

You mentioned paying minimums for the next five years. If you could pay off your debt in 5 years with minimum payments, then:

a) you have a small amount of debt and low interest rates, and b) you don’t have enough debt for debt settlement.

Take a look at the cost and time it takes to pay off debt with minimum payments if you are paying what the average American pays in credit card interest…

Debt (Pay Off Amount, Principle & Interest, making Minimum Payments) Number of years to pay off making minimums at 19%:

$10,000 ($26,276.59) 42 years, 9 months $20,000 ($74,464.22) 53 years, 3 months $30,000 ($112,651.77) 59 years, 4 months $40,000 ( $150,839.39) 63 years, 6 months $50,000 ($189,027.02) 67 years, 1 month $70,000 ($265,402.22) 72 years, 2 months $100,000 ($379,965.06) 77 years, 7 months $150,000 ($570,903.04) 83 years, 8 months

Credit may be important, but cash is king. It is your cash flow that makes you wealthy, not your credit rating. So for you to make the best choice, you and your husband must decide what’s most important: credit or cash flow.

Consider your goals:

What To Do If Credit Scores Matter More Than Debt Relief

If credit is ultimately most important to you, then you must cut your expenses to the bare minimum and put EVERY DOLLAR you can towards paying off your debt. Consider using an accelerated pay off plan to get out of debt ASAP.

Debt Settlement, The Fastest Way To Pay Off Debt, Might Also Be Good For Your Credit

Debt settlement can most likely get you debt-free fastest. My average client is completely out of debt in 28 months.

Usually, debts are cut in half, and often payments are cut in half as well. Payments are almost always significantly reduced during the program.

While debt settlement has a negative impact on your payment history (more so if you’ve never been late, not so much if you’ve already fallen behind), debt settlement also has a POSITIVE AFFECT on your debt-to-income ratio and utilization because the accounts are paid to a zero balance on your credit report. You can also do credit repair and credit rebuilding (usually within 6-12 months) after you complete debt settlement.

Of course, all that money you’re currently paying in minimum payments will be back in your pocket, usually within 24-36 months. What would you do with all that extra cash flow? Investing these savings to EARN INTEREST can make all the difference for your financial future… and that’s the BIG IDEA!

If you are shopping around for a debt settlement program, BE CAREFUL! The industry is filled with ignorant sales people who will steer you into a “bad program” for their own gain. They don’t always have your best interests in mind.

I’m serious, watch out…

The IRS currently does not know how much I owe them or how much I
have? I’m looking at paying down my mortgage before I file. So if I
have zero cash and more home equity when I file will the IRS settle for more like $10K cash instead of the $50K?