You have just learned that you do, in fact, owe the Internal Revenue Service thousands of dollars. You received a letter pointing out a discrepancy, and you went back through the return and all of your tax records for that year. When you realized that the IRS was right, you got that tight feeling in your chest, or a headache took hold or you; you may even have blacked out.
Many taxpayers may have heard of a tax lien before, but they don't understand what the lien actually entails, such as the consequences of it being associated with your record. So what is a tax lien, and what does it mean for a taxpayer that is unfortunate enough to have it stuck to his or her record? Let's investigate further.
A friend of ours was floored recently when she received a letter from the IRS. Her first thought was our own first rule of IRS correspondence: Do not panic. In fact, "Do not panic" is also our second and third rule. Our friend's second thought was, "Good luck with that." It took her an hour to start breathing normally, she said -- and that was before she opened the letter.
Many people believe that television and movie stars live on virtually unlimited incomes. Unfortunately, for some of those entertainers, they act as if that were a true statement, and sometimes run into problems from the taxman.
A tax-related blog can hopefully be forgiven this time of year for recurrent reference to a theme that is playing out in a broad-based way and with strong relevance for a large number of American taxpayers.
There once was a time when wealthy Americans with money stockpiled abroad in Swiss banks could sleep easily at night, knowing that their account details would be kept shielded from the prying eyes of United States Internal Revenue Service agents.
Here's the bottom-line take from the Internal Revenue Service regarding money held abroad in foreign banks by Americans: You can have your cake, but we want our slice.
Well, here’s a bit of an irony and slippery slope that is presented immediately for any taxpayer in Minnesota or elsewhere who is seeking to take purposeful action regarding a tax matter.
Many individuals who owe a substantial amount in back taxes are also facing significant financial difficulties, as financial troubles are one of the more common reasons for a person to initially fall into a tax debt. Facing both a large federal tax debt and financial struggles at the same time can be remarkably stressful on a person and can leave them very worried about the future. Such individuals may feel like their financial struggles will make it impossible to address the debt and impossible to avoid the wrath of the Internal Revenue Service.
If it doesn’t automatically qualify as a Minnesota business owner’s worst nightmare, it’s got to be a ranking contender.