2008 IRS Collections: No More Mr. Nice-Guy?

With their latest collections innovation a failure and increasing pressure to meet their goals, are IRS collectors going to be tougher this year than ever before? The scuttlebutt says yes.

The IRS is having trouble. With a recession looming and the inability of third party collectors to perform as they were expected to the tax collecting agency is having trouble meeting its goals. Naturally, the logical solution is to increase pressure on taxpayers to pay in full and on time.

What’s a taxpayer to do? For many the solution is easy: pay up and pay promptly. But for some this isn’t an option. That’s when it’s time to think about hiring an advocate to help deal with the IRS. This is different from hiring an accountant who will simply crunch the numbers and tell you what you owe. An advocate like IRS Problems Resolved will help you deal with the IRS and find a solution to your tax problem.

Ready to talk to someone about your tax problem? Contact us right now or simply call 888-301-0833.

Third Party Tax Collections are Failing

That’s according to National Taxpayer Advocate Nina Olson. (I didn’t even know we taxpayers even HAD an advocate!)

The program called private tax debt collection (PDC) has been being phased in since 2006 and is due to be fully implemented this year. It was expected to bring in $1.5 billion to $2.2 billion in delinquent taxes over the next ten years with a yearly average of around $185 million. The IRS is now projecting that these were overly ambitious projections; they only expect $33 million for FY 2007.

What’s the problem? Olson says that “the IRS has placed the interests of the PDC above the interests of taxpayers and tax administration.” She further criticizes the program for failing to require the private collectors to disclose their training materials, phone scripts and overall collections plan, something that the IRS does have to do. The PDC has also been criticized for costing more and placing a greater risk on taxpayer privacy than if the job were left to IRS workers.

Those opposed to the program see the IRS’s announcement that they will not reach their projections nor show significant improvement in collections under the PDC as vindication and are calling for it to be shut down.

Wesley Snipes – Tax Protestor

Wesley Snipes, yes THAT Wesley Snipes, is one of the growing number of American citizens that claim the income tax is illegal. But rather than just grumble about it, Mr. Snipes has taken the extreme step of not paying any taxes for years.

According to the New York Times, Snipes earned $38 million from 1999 to 2004 and hasn’t paid a dime of that to the IRS. And the IRS most certainly noticed.

His trial started yesterday.

Snipes plans to present a defense known as the 861 position. The argument, which is addressed in the IRS’s The Truth About Frivolous Tax Arguments, says that nothing in the law actually states that income is taxable.

This will be a fun one to watch!

Eleventh Hour Tax Law Changes Causing Trouble for Taxpayers

What happens if you don’t pay your taxes? The IRS comes after you, right? But what happens if you pay too much in taxes by missing some deductions that are due you? Nothing.

Deductions are up to you and your accountant. You can’t really blame the IRS for this reality; they’ve got their hands full with processing on-time taxes and dealing with deadbeats. But what if you don’t know about the deductions? This is what’s happened with some eleventh hour tax bills passed by Congress.

The new tax laws, designed to help the tax payer, are creating their own set of problems because they are getting passed so late in the game. When this happens the IRS doesn’t have time to publish their documents for a given year with the amendments on time. So they have to decide whether to delay the release of these documents or simply issuing them without the amendments. Either scenario is a headache for taxpayers and a nightmare for accountants.

What to do if you think that you might be eligible for one of these last minute deductions? Well, given the nature of the situation it’s difficult for individuals to keep up with the minutia of tax law. But the IRS allows tax payers to amend previous year’s taxes for up to three years. Check out the IRS’s amended tax returns for more information.