Taxes

We’ve all seen the ads. They promise to settle your tax debt for pennies on the dollar. They don’t tell you how many pennies (one hundred, more than likely). And, they all want their fees up front.

The secret word starts wit an “S” for “stupid,” followed by a “C” for “crazy,”  “A” for “are you out of your,” and ends with “M” for “mind.”

These companies are playing the Offer in Compromise (OIC) game. Yes, it’s true that you can settle your tax debt for less than full value. But, there are hoops that you have to jump through that keep getting smaller, and not everybody qualifies.

This news article is by Laura Saunders at partner The Wall Street Journal:

Will you cheat on your taxes again this year?

Time was when it was easy for citizens to avoid paying sales taxes on some purchases made online or out of state. Ebay and Craigslist wouldn't be as fun otherwise.

But skirting the law is getting more difficult. Now 24 states, plus D.C., are pricking shoppers' consciences with a special line on the tax return that requests a payment for sales taxes on any goods bought out of state, including those from online retailers -- up from 20 states in 2008.

It hurts enough to pay taxes. Let’s not add to the pain with the additional agony of penalties.

Taxes are what you pay the IRS if you follow their rules.

Penalties are non-deductible fines the IRS imposes on you if you don’t follow their rules.

The New York Times reports that this year the Social Security system will pay out more in benefits than it receives in payroll taxes.

That wasn't supposed to happen, per government estimators, until 2016.  

Stephen C. Goss, chief actuary of the Social Security Administration, tells the paper that the economy is a big reason for the earlier-than-expected arrival of this crucial tipping point.

By Bill Hardekopf, TheStreet

The tax deadline is more than two weeks away and consumers will soon be bombarded with messages encouraging them to pay with a credit card.

While this may sound appealing to consumers struggling to find ways to pay taxes in this turbulent economy, it should be avoided at all costs.

The Internal Revenue Service and some credit card issuers promote the benefits of paying taxes with a credit card. Payment with a credit card is easy and can be made via phone or online. It delays the pain of payment for another month. Consumers can even earn reward points on some cards.

Don’t incorporate!

Only the lawyers and accountants make money when you incorporate.

Your attorney and CPA aren’t giving you the full story.

Decades ago, you could put aside and deduct more pension money for retirement if you were incorporated. That’s no longer so.

Incorporating and electing Subchapter S status may reduce your taxes. A Subchapter S corporation is treated like a partnership as a flow-through entity. But, all corporate income, after deducting any salary paid to you, is taxable as dividends, not subject to payroll taxes. Had you not incorporated, all income, both what you took as salary and the income of the corporation after the salary deduction, could be subject to payroll taxes. The difference escapes payroll taxation.

Former Sen. Edward V. Long of Missouri called it an American “Gestapo,” but we know it now as the Internal Revenue Service.

I understand the “Internal” part because these financial vampires suck the monetary blood from your system.

• Video: Federal workers who are tax cheats

I even understand the “Revenue” part because they want your money.

But, what happened to the “Service” part?

This news article comes from Martin Vaughan at partner site The Wall Street Journal:

The U.S. Internal Revenue Service for the moment has one person charged with investigating tax crimes stationed in Hong Kong, a jurisdiction that has played a prominent role in recent U.S. tax evasion cases.

That may be about to change. The IRS is in the process of hiring and training hundreds of agents world-wide to pursue U.S. tax dodgers who have hidden cash overseas. Tax attorneys and advisers in Hong Kong say they have been told the IRS plans to add several enforcement positions at the U.S. consulate here, though it isn't clear how soon.

IRS officials in Washington and Beijing, where the IRS senior attache for Asia is stationed, didn't immediately respond to inquiries about staffing levels.