All Articles Tagged "IRS"
Word on the street is that self-proclaimed “King of the South” a.k.a T.I. and the IRS have some unfinished business to settle.
According to documents obtained by the Daily Mail, the Atlanta rapper born Clifford Harris has two tax liens that were filed against him on Aug. 10 for unpaid taxes dating back to 2012 ($1,397,283.47) and 2013 ($3,173,476.39), totaling just over 4.5 million. “Mr. Harris and his team are working with the appropriate parties to resolve this matter,” his rep told Us Weekly.
It has also been reported by the Daily Mail that the Grand Hustle Records founder’s worth is an estimated $215 million, so should he have to pay up, he’s got more than enough money in the bank to do so.
Solange may have been able to laugh off her tax lien misunderstanding. But Solange isn’t the only celebrity the IRS has been after recently. Uncle Sam has been cleaning serious house. And these celebrities have found themselves seriously in debt.
thought she was getting a whopping $94 million tax refund. What she got was arrested. Jackson had put in a fraudulent tax return claiming she made $99 million in wages and thus she claimed she was due a refund worth $94,323,148.
So Georgia State revenue agents actually cut Jackson a fake refund check and told her to go to a Cobb County bank inside a local supermarket to cash it, reports The New York Daily News.
Of course, when Jackson came and tried to cash the “check,” she was arrested, reported WSB-TV.
“It doesn’t matter if it’s $94 or $94 million,” Special Investigations Chief Josh Waites told the station. “We’re going to go after you and hold you accountable.”
Now Jackson faces five charges, including attempted theft by taking and conspiracy to defraud the state. It turns out one of Jackson’s relatives, Darrius White, tried the same scheme. According to Waites, White also reported $99 million in income, and attempted to claim a huge refund. White too faces the same charges, reports WSB-TV.
Authorities set up the sting after they went to what turned out to be a former address and could not locate White, who was already on felony probation.
It looks like Busta Rhymes is in trouble with Uncle Sam. According to TMZ, the “Gimme Some More” rapper owes the IRS nearly $800,000 in unpaid taxes.
He has reportedly been hit with two tax liens issued by the Federal Treasury Department. The first one was from the year 2008, from which he is said to owe over $611,000 in taxes. The second lien is from 2012, which adds an additional $178,000 to his rising tax bill. In total, the rap star owes $789,577.90.
So far, representatives for Busta have not released comment on the liens and to be honest, there’s a great chance that they won’t. Celebrities and tax troubles are not a rare coupling these days. They seem to go together like peanut butter and jelly. Hopefully, Busta can find a way to put up the cash and get this issue resolved. We’d hate to see him thrown in prison.
This might be the perfect time for Sheree Whitfield to stop faking the funk and rejoin Real Housewives of Atlanta. If not, she’s going to need to hustle like a subway performer in New York City to pay back the $111,226.58 she reportedly owes the IRS.
According to Radar Online, The IRS recently hit Whitfield with a large tax lien as a last warning for her to pay her past due taxes. If you need a little more clarity, investopedia.com defines a tax lien as this:
“If the taxes remain unpaid, the tax authority can then use a tax levy to legally seize the taxpayer’s assets (such as bank accounts, investment accounts, automobiles and real property) in order to collect the money it is owed. Tax liens are publicly recorded and may be reported to credit agencies. These two features of tax liens effectively prevent the sale or refinancing of assets to which liens have been attached, and prevent the delinquent taxpayer from borrowing money.”
Got it? Good. Don’t find yourself in a similar situation.
Radar Online has uncovered that the federal government put this new lien on Whitfield in December because she still hasn’t paid her taxes for the year 2011, which is the $111, 226.58 we told you about in the first paragraph. Radar also claims that Whitfield is still dealing with a tax lien she was hit with in early 2013 for $41,752.83 over unpaid taxes from 2009 and 2010.
From 2009 to 2011, Whitfield was on the hit Bravo show, but yet and still, she reportedly had issues paying her taxes. Not sure what that’s all about, but we hope she can get this monetary issue resolved soon, because we all know the IRS plays no games with famous folks these days.
According to the CDC, 3.6 per 1,000 marriages end in divorce. And many of those divorces result in alimony agreements. People paying alimony to their ex-spouses can deduct the amount from their income. And the person receiving the alimony must claim those payments. But the numbers, in nearly half the cases, don’t match.
According to a report released by the IRS inspector general, in 2010 more than 560,000 people reported paying a total of $10 billion in alimony. Their ex-spouses only reported getting less than $8 billion. This equals an incredible $2.3 billion gap.
And there were discrepancies in 47 percent of the returns claiming the alimony deduction. “In many cases, the spouse who supposedly received the alimony didn’t report any. In other cases, they told the IRS they got less than their ex-spouses claimed to have paid,” reports the Associated Press.
Inspector General J. Russell George admits the IRS needs to do more to resolve the discrepancies, but right now the IRS generally has no procedures to address the compliance gap. And budget cuts have caused compliance improvement progress to be slow.
“Since 2010, the IRS budget has been reduced nearly $850 million,” the IRS said in a statement. “At the same time, we have 10,000 fewer employees today than we did in 2010 even as our responsibilities have continued to expand.”
No one likes paying their taxes. So no one like the Internal Revenue Service. In recent years the IRS’ reputation has suffered due to allegations the agency was targeting Tea Party groups for higher scrutiny. If their suspect reputation could not go down the drain further, it did this week.
The Treasury Inspector General reported that between the dates of October 1, 2010 and December 31, 2012, the IRS paid $2.8 million in employee bonuses. However, some of the employees who received a bonus have been accused of “drug use, making violent threats, fraudulently claiming unemployment benefits, misusing government credit cards and failing to pay their taxes,” The Washington Post reports. “The report said more than 1,100 employees who failed to pay their taxes received discretionary awards of more than $1 million in cash bonuses and more than 10,000 hours in extra paid vacation.”
Over 2,800 employees out of 98,000 were reviewed for performance-based awards despite their conduct issues. The Treasury report also noted: “While not specifically prohibited by IRS policies, providing awards to employees with conduct issues, especially the failure to pay taxes owed to the Federal Government, appears to be in conflict with the IRS’s charge of ensuring the integrity of the system of tax administration. In addition, awards provided to these employees could be put to better use by providing employees who are compliant additional opportunities for awards.”
Although the government does not require the IRS to change their human resources policies, the tax agency verified they will do so as it pertains to bonuses (a suggestion noted by the Treasury Inspector General). In a statement, the IRS claimed, “We strive to protect the integrity of the tax system, and we recognize the need for proper personnel policies.”
What do you think of their response? We are not buying what they are selling.
We can all use a little good news with tax day on the horizon right?
One of the reasons to fear the IRS is the prospect of getting an audit. However, steep budget cuts since 2010 — $1 billion in budget cuts, to be exact — mean that the agency simply doesn’t have enough money to conduct a ton of audits. And the audits they are doing are more likely to be conducted on someone in a higher tax bracket. This might be the only time you’re happy that you’re not making a ton of cash.
One wealthy woman who isn’t happy about the IRS’ current state of affairs is Giselle Bundchen. Word is she made the Forbes list of wealthiest people for seven years in a row and ended up getting audited as a result. Named the richest supermodel in the world by raking in $42 million between June 2012 and June 2013, she says that figure is inaccurate and it brought unnecessary attention to her financial affairs. So the threat to rich people is very real. (I’m sure no one is crying crocodile tears over this.)
The only problem with this is that the budget cuts have also impacted the IRS’ ability to take your call. They’re responding to far fewer requests and call wait times have reached an average of more than 17 minutes in the last few years. If you need help (or know someone who does) and they make less than $52,000, are elderly, speak another language or have other extenuating circumstances, the Volunteer Income Tax Assistance program (VITA) might be able to help. But be warned: There will probably be a wait on that as well.
Watch who you talk to on the phone! Scam artists are calling unsuspecting folks and acting like Internal Revenue Service agents. So far, the con game has cost thousands of taxpayers more than $1 million. In fact, it’s the largest such phone scam the IRS has ever experienced, revealed the agency’s watchdog.
According to J. Russell George, Treasury inspector general for tax administration, more than 20,000 victims have been targeted by fake tax agents who tell taxpayers they owe taxes. They then demand that they pay using a prepaid debit card or via wire transfer, reports USA Today.
Victims are told they could be arrested, deported or lose their business or driver’s license if they do not pay, George said in a news release.
The IRS generally notifies taxpayers via mail first. Also real IRS agents would never demand a payment by debit card or wire transfer. Actually IRS agents don’t even ask for credit card numbers over the phone.
This scam, which has hit residents in almost every state, has been going on since last March, but will probably escalate while we’re in tax season. Sometimes the scam artists even know the last four digits of the Social Security number of the person they’re swindling. “They also use common names, fake badge numbers and follow up with official-looking e-mails,” reports USA Today.
You’d be crazy not to dread a tax audit. One of the reasons for all the anxiety is IRS doesn’t let the general public know the details of the auditing process. “For understandable reasons, the IRS insists on keeping the ins and outs of its auditing process on the murky side. How will you catch the bad guys if you give them the rule book first?” reports Yahoo! News.
The biggest myth is that only the wealthy get audited. Okay the rich do sometimes come under extra scrutiny, but low- and middle-income workers also get audited. “The agency is increasingly relying on data mining and robo-audit systems to detect errors in tax returns, which has actually made it easier to go after small-fish taxpayers,” reports Yahoo!
More than 6.5 million taxpayers who had an adjusted gross income of less than $1 million were audited last year. But the IRS audited fewer than 40,000 taxpayers with an income of $1 million or more. Actually, the IRS has reduced the rate of millionaire audits more than other income brackets. “Auditing rates for the under-$200,000 income club fell by only 0.14 percent between 2011 and 2013, compared with a 1.63 percent decrease in the rate of audits of those making $1 million or more…” reports Yahoo! Keep in mind: you can also be audited even after you get your tax refund.
Another myth is that once you get an audit notice from the IRS someone will come knocking on your door, hunting you down for financial info. Out of 6.5 million audits done in 2013, only 362,500 (or 5.5 percent), involved a visit from an IRS agent. Usually you’ll just get a letter requesting additional information.
The third major myth is that if you owe money, the IRS will demand it right away. It may take the IRS three to six years to follow up on questionable tax returns. As we recently reported, the IRS is underfunded and understaffed so they don’t have the manpower to act quickly.
Many people think that if they file for too many deductions and tax credits, they will get red flagged for an audited. This is myth #4. Not so, as long as the tax credits and deductions are justifiable. So take advantage of the Earned Income Tax Credit if you are eligible. As many as one-fifth do not. And be sure to take those home-office deductions. With more than 42 million Americans working as freelancers and independent contractors, the IRS expects these deductions.
If you are audited, there are various types of audits.
-Correspondence Audit: This is done via mail and usually involves small-dollar amounts. The most common errors that will lead to a correspondence audit are: missing forms and schedules, illegible entries and mathematical errors. So make sure you have copies of all your receipts.
-Field Audit: “In a field audit, the examiner visits your home or business to verify the information on your tax return. For example, if you write off a massive amount of printer ink, a field examiner might want to know why you go through so much ink,” reports How Stuff Works.
-Office Audit: You will have to go to an IRS office. Bring all your documentation with you.
Following any type of audit, you will be given a 30-day letter that explains the agency’s findings and an explanation of your right to appeal. You must respond within 30 days. If you appeal, it could take a year or more. After an appeal, the IRS will send you a 90-day letter, giving you that time period to request that your case go to tax court.