Roni Deutch Discusses the 10 Biggest Tax Evaders in US History

Roni Deutch Discusses the 10 Biggest Tax Evaders in US History

10) Sunny Garcia

Famed surfer Sunny Garcia won numerous world surfing championships and starred in numerous television shows before he was found guilty of tax evasion. Garcia was only the second surfer in the world to win a prize of over million, and also earned hundreds of thousands of dollars in other prizes and endorsements. Unfortunately Garcia neglected to pay income taxes to the U.S. government on any of the prize money he received from competitions outside the U.S.

9) Richard Hatch

Most people recognize Richard Hatch as the winner of the first season of Survivor, where he won a million prize. Unfortunately he never paid federal income taxes on that million, or money he was paid for professional appearances totaling nearly 0,000. U.S. prosecutors reportedly offered Hatch an arrangement where he could received a lenient sentence in exchange for a guilty plea. However, he refused this offer claiming that CBS had offered to pay taxes on his prize money. Hatch later acknowledged he was entirely incorrect. In May 2006, he was sentenced for 51 months in prison, and three years of supervised release afterwards.

Edward and Elaine Brown

In January of 2007, a jury found Edward Brown guilty of three federal counts of tax evasion, and a few weeks later his wife Elaine was found guilty on seventeen tax fraud related charges. Combined, the two failed to report over million in taxable income and were each sentenced to five years in prison. The Browns claim they were not shown any legitimate law that required them to pay taxes, therefore they felt they should not be forced to pay.

7) Harry Eugene Claiborne

Claiborne, a United States District Court judge, was found guilty of tax evasion in 1984. He was born in Arkansas and unsuccessfully ran for a seat in the U.S. Senate before President Jimmy Carter appointed him to the District Court of Nevada. Claiborne was indicted for bribery, fraud, and tax evasion by a federal grand jury in 1983. He was tried for all three counts by the federal government in a case that was declared a mistrial. Later, he was tried on just the counts of tax evasion and was found guilty. He was sentenced to two years in prison.

6) Tom Coughlin

Coughlin served as the vice-chairman of Wal-Mart Stores, Inc. and was a close friend of founder Sam Walton until he was convicted of tax evasion, embezzlement, and theft. According to Coughlin, the money he stole from Wal-Mart was to pay bribes to union officials to not organize at Wal-Mart locations. However, U.S. attorneys could not find any evidence to support Coughlin’s claims. Coughlin pled guilty in 2006 to five counts of wire fraud and one count of tax evasion. He was sentenced to 33 months of in-home detention and forced to pay over 0,000 in restitution to Wal-Mart Stores Inc. and the Internal Revenue Service.

5) Al Capone

Capone, known frequently as “Scarface”, was an Italian-American gangster who profited off the illegal bottling and distribution of alcohol during the prohibition. Although he was placed on the Chicago Crime Commission’s “public enemies” list he was never successfully convicted of any racketeering charges. However, his criminal career came to an end in 1931 when he was convicted and found guilty of income tax evasion. Capone was sentenced to eleven years in a federal prison, one year in a county jail, and an ,000 fine. Fortunately his legal representatives paid all of Capone’s past due taxes.

4) Pete Rose

On April 22, 1990, baseball superstar Pete Rose pled guilty to two charges of tax evasion. Rose was a player and manager in Major League Baseball, and was best known for playing for the Cincinnati Reds. As part of his plea, Rose admitted to filling false income tax returns that did not show income from selling autographs, memorabilia, and gambling winnings. Rose was sentenced to five months in prison at the medium security prison camp in the United State Penitentiary in Marion, IL. He was also fined ,000 and forced to pay the Internal Revenue Service over 0,000 in back taxes and interest. Rose paid his fines and was released from prison in January 1991.

3) Reuben Sturman

Sturman ran one of the most successful pornography operations in U.S. history before finding himself in trouble with the IRS. Based in Ohio, he ran numerous businesses that generated an estimated 0 million in just the year 1991. Sturman faced numerous legal charges dating back to 1964, but always avoided prosecution by counter-suits, shady business dealings, and using multiple aliases.

Because of how Sturman hid his assets he, along with five associates, were indicted of tax evasion by the federal government. In 1989, he was convicted and sentenced to ten years in jail. He was also ordered to pay the IRS over .5 million in unpaid taxes and fees. A few months later, Sturman was charged for transporting obscene material. The case was expected to end in a plea bargain, but during the case Sturman was caught trying to bribe a juror. As a result he was charged with extortion and sentenced to nineteen additional years in prison.

2) Wesley Snipes

In October of 2006, actor Wesley Snipes was indicted for committing tax fraud against the federal government. He was accused of owing the federal government over million in unpaid taxes and failing to file tax returns for over six years. In 1997, Snipes tax return reported his adjusted income as , when according to the government his income was over million.

1) Walter Anderson

On February 26th, 2005 the Justice Department arrested Walter Anderson in the largest tax evasion case in U.S. History. Anderson was accused of hiding income and assets by setting-up offshore companies in Panama and the British Virgin Islands. These companies reportedly generated over 0 million in revenue during a five-year period.

Anderson pled guilty to two felony counts of tax evasion and one felony count of defrauding the District of Columbia. He admitted to hiding 5 million in income and was sentenced to nine years in prison. He was also ordered to pay 0 million to the government. However, that figured was later dropped to million by a federal district judge.

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IRS Tax Relief- Choosing IRS Tax Relief Help

IRS Tax Relief- Choosing IRS Tax Relief Help

The companies offering IRS tax debt relief have undergone dramatic growth over the past years. Numerous Americans struggling with tax burdens seek professional help in solving their IRS tax related issues. Lately, numerous of the tax resolution business firms have been featured to be misleading the consumers with shoddy advertising and fraudulent claims. A few of the firms have been exposed for fraudulent action towards people seeking tax assistance. Now experts are advising to consumers to recommend forethought while dealing with firms claiming to extend IRS tax debt help. The question is how the tax debtors distinguish between genuine and fraud companies? Keeping in mind a few of the following tips might help you to choose the right firm to avail your IRS tax help.

A firm’s record of accomplishments is the foremost indicator of how that particular firm will manage your tax related issues. How many successful offers in compromise has the firm accomplished over a period? One should also ask the total amount in dollars, which has been negotiated as settlements. Know what the firm’s actual tax relief success rate. Inquire about how much money has the firm saved for the IRS tax debtors. What kind of IRS tax relief can the firm provide for you? Likewise, you need to require if the company has been deputed a certification for tax resolution. You should also check if the firm has credentials with the Better Business Bureau.

Essentially, trust should work both ways. Be aware of financial commitments that the firm asks for in beforehand. If you have trust in the company to render the services as “promised” in their agreement, they require you to pay their fees. From the debtor’s point of view, it’s very important to research the company’s background offering IRS tax relief welfares before committing to anything or conducting out any financial hands.

There are no dramatic ways to trim your IRS debt liability, and not everyone measures up for the IRS tax relief rewards. If the company offers challenging calls and stunning decrement in tax reductions which don’t seem possible, it’s advisable to invalidate that particular firm. Firms oftentimes tell you what you want to hear of, and it’s a very another issue whether or not that’s actually possible. Firms need to acquire your background data and check your documentation to pass judgment on your position and set your options. A genuine firm will ask many questions before accepting your case.

Be very thorough in chartering tax relief from firms. Always inquire about the firm’s ownership. Any hesitation or avoidance in responding this direct question in relation to the ownership by the representatives is officially tagged as red flag, and it’s advisable to walk out from the firm.

Tax relief scams

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Irs Tax Audits ? By The Numbers

Irs Tax Audits ? By The Numbers

While the IRS is aggressively pursuing taxes overseas, domestically they have been increasing audits for individuals, higher-income taxpayers, as well as the business returns of S-corporations and Partnerships:

1) Audit rates increased in 2007, both for overall individual rates and for higher-income taxpayers.

2) Audits of individuals with incomes of million or more increased from 17,015 during fiscal year 2006 to 31,382 during fiscal year 2007, an increase of 84 percent. One out of 11 individuals with incomes of million or more faced an audit in 2007.

3) Audits of individuals with incomes over 0,000 reached 113,105 returns, up 29.2 percent from the prior year total of 87,885.

4) The IRS increased audits of individual returns with income of 0,000 or more, auditing 293,188 of these returns in 2007, up 13.7 percent from last year’s total of 257,851.

5) Overall, the total individual returns audited increased by 7 percent to 1,384,563 in 2007 from 1,293,681 in 2006. That’s the highest number since 1998.

6) The IRS filed 3.8 million levies and almost 700,000 liens during 2007, an increase from the previous year and a substantial increase from five years earlier.

For businesses, the IRS continued efforts to review more returns of flow-through entities (i.e. Partnerships and S Corporations):

1) Audits of S Corporations increased to 17,681 during 2007, up 26 percent from the prior year’s total of 13,984.

2) Audits of partnerships increased to 12,195 during 2007, up almost 25 percent from the prior year’s total of 9,777.

3) Audits of mid-market corporations increased to 4,473, up 6 percent from last year’s total of 4,218.

4) Audits of businesses in general rose to 59,516, an increase of almost 14 percent from the prior year’s total of 52,223.

Although the audits of large corporations dipped slightly in 2007 to 9,644 audits, the number of audits is up 14 percent from the fiscal year 2002 level.

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Instant Tax Solutions for Help with You Tax Problems

Instant Tax Solutions for Help with You Tax Problems

If you’ve a tax debt from past years, or have already done your taxes for this twelvemonth and anticipate owing money, you can ascertain an answer. The answer is not to brush aside the debt, however. Though the IRS entirely has ten years to gather up a tax debt, it has a lot of very potent instruments at its administration during those ten years. You will be a good deal more euphoric if you deal with it at once.

Allowing a tax attorney to assume your troubles makes sense as their experience and cognition can make your profit go further. However, finding out an adept tax attorney can be hard as you are assigning your monetary resource and personal data into their hands, and entrusting they will take care of you at present, and in the next.

A tax lawyer can stop the IRS through a number of strategies and it’s up to you to determine what incisively to apply. You will be able to explain your berth and you and your attorney can come up with the gustiest resolution for your troubles. The IRS applies numerous processes in order to acquire what they require and they generally come through. Only a seasoned tax lawyer can catch them in their tracks.

Instant Tax Solutions has the tax cognition and IRS negotiation accomplishments to incur an auspicious and low-priced resolution of your IRS tax debt trouble. ITS tax masters are experts in talking terms with the IRS. Taxpayers can be browbeaten by the IRS into taking on a settlement for more than they require paying. Call us at once and let us counsel you of a more low-cost solution. Our experts can promptly ascertain if you measure up for other alternatives accessible with the IRS.

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You would like to adjudicate your hardest to avoid grievous tax issues before they start. IRS Collections processes are inconceivable to annul if you owe the IRS. Call Instant Tax Solutions to resolve your grave tax problems. Brushing aside the financial obligation will event in expanded penalisations and amercements that may double up or triple your master debt. Irs levy

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5 Reasons to File Delinquent Tax Returns: There?s Still Hope if You Haven?t Paid Your Taxes This Year

5 Reasons to File Delinquent Tax Returns: There?s Still Hope if You Haven?t Paid Your Taxes This Year

The April 15 tax deadline has come and gone. For the millions of taxpayers who failed to file legally required tax returns, tax help is available for those who act now! Even taxpayers who received an extension for filing are not granted more time for the payment of taxes owed and may need income tax relief.

The act of not filing your tax returns can lead to more significant financial problems in the long run. Not to mention, failure to file tax returns may be construed as a criminal act by the IRS, punishable by one year in jail and ,000 for each year not filed. Needless to say, it’s one thing to owe the IRS money, but another thing to potentially lose your freedom for failure to file a tax return.

 The longer you put off dealing with overdue taxes, the more serious your IRS problems will be. So I recommend filing any tax returns that are due as soon as possible to avoid additional interest, penalties and potential IRS collection tactics, such as a levy on your bank account.

 With the federal budget deficit for the current year expected to top .8 trillion, Americans can expect more tax audits and increased IRS actions. So anyone who owes back taxes will want to avoid becoming targets of aggressive IRS collection efforts that can financially cripple them for life.

 Here are 5 reasons to file your delinquent tax returns:

 1) You can go to jail for not filing your taxes

Even if you haven’t filed your tax return for one year - it is still considered delinquent and could be construed by the IRS as a criminal offense. Actor Wesley Snipes didn’t report more than million to the IRS and he was convicted of three misdemeanor counts of failing to file a tax return. Richard Hatch, who won the first season of CBS’s hit show Survivor, is in prison for failing to report million in prize money.

The IRS goes after those U.S. taxpayers who try to avoid taxes, and Average Joes as are just as likely as high-profile individuals to be targets of the tax-collecting agency. At every level, the agency has become increasingly aggressive in pursuing tax cheats. Are you willing to lose your freedom because you failed to file your tax returns?

2) You can incur a 25% penalty for not filing your tax returns

In this economic downturn, Americans may opt to not file because they don’t have the funds to pay the taxes owed. The best thing for taxpayers in difficult financial situations to do is file their tax return, pay what they can and work with the IRS to establish a payment plan that will keep them compliant.

Additionally, if there are any delinquent tax returns that are due, they should consider filing these returns as soon as possible to avoid the wrath of any potential IRS action, such as a levy on their bank accounts.

3) You can incur additional penalties for not paying your taxes

If you fail to pay your taxes due, you will incur additional penalties for failure to pay. Taxpayers who request an extension of time to file should keep in mind that this it is not an extension of time to pay. To avoid additional penalties, taxpayers should file by the deadline and pay as much as they can, even if they are unable to pay the entire amount due. You will still have a failure to pay penalty, but it’s much less. Then you can work with a specialized tax resolution expert to help you negotiate a tax settlement.

4) You can be subject to an increased tax bill if the IRS prepares your taxes for you

The IRS may prepare a “Substitute For Return” for delinquent taxpayers, in which they won’t be able to file for all of their personal exceptions or allowable deductions. Because these returns are filed in the best interest of the government, the only deductions they’ll usually see are the standard deduction and one personal exemption, subjecting them to a larger tax liability. So it’s important for individuals to file their 2008 tax return as well as any prior delinquent tax returns as soon as possible to save money and avoid significant long-term consequences.

5) You must have all prior tax returns filed to be eligible for income tax relief

All back tax returns must be filed before the IRS will even entertain any type of tax settlement like an offer in compromise or monthly payment plan arrangement. The good news is the sooner you take care of your delinquent taxes, the less penalties and interest you’ll owe.

I believe there’s a solution to every problem. For delinquent taxpayer, it’s never too late for to resolve your tax debt and avoid IRS penalties.

For more information on receiving income tax relief or help resolving back taxes, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.

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Irs Debt Tax Attorney

Irs Debt Tax Attorney

You may think you don’t need an IRS debt tax attorney at first, but it doesn’t take long to find out that expert assistance is imperative. Anything connected with the Internal Revenue Service and past due taxes can become very complicated quickly. In fact, there are a lot of people who have failed to reach a reasonable agreement with the Internal Revenue Service because they didn’t understand the rules, laws, regulations and procedures.

No Amateurs Allowed

Negotiating with the Internal Revenue Service can be a delicate process in many respects. The process of obtaining an “Offer In Compromise” is a perfect example. An Offer in Compromise is a statement that you create, telling the Internal Revenue Service what you think is a reasonable settlement amount in exchange for eliminating the total debt or closing the past due tax account upon payment.

An Offer in Compromise sounds quite simple by definition, but the process is much more complicated than simply telling the Internal Revenue Service what you think is a fair and reasonable agreement. For one thing, you have to prove your offer makes sense in light of your financial condition. You also have to show how everyone benefits by the Internal Revenue Service accepting your offer.

An Offer In Compromise is only accepted approximately 15% to 50% of the time (depending on which statistics you believe). That’s really not very high odds. The best way to improve your chances of successfully coming to agreement with the Internal Revenue Service is by using the services of a lawyer. An attorney with an expertise in taxes is certified to work as a negotiator with the Internal Revenue Service and so begins the process from an advantage point the average taxpayer doesn’t have.

The Offer In Compromise filing can be complex which means you need an attorney that has experience and can prove success in a variety of tax cases. No two debt situations are alike and it takes knowledge of the laws and regulations to negotiate successfully.

Navigating the System

An IRS debt tax attorney knows and understands the current Internal Revenue Service taxation laws. But even beyond that an attorney specializing in tax negotiations stays current on taxation law changes. This is important when trying to deal with the Internal Revenue Service.

There’s another reason why you need an IRS debt tax attorney when filing an Offer in Compromise. The compromise process is very time consuming and requires frequent communication with the Internal Revenue Service. Most taxpayers are working middle class and can’t take the required amount of time away from their jobs to meet over and over again with the Internal Revenue Service. In addition, staying current on laws for taxation is a job in and of itself.

The Offer In Compromise is just one debt solution that’s available to taxpayers. An attorney can review all of the possible solutions which can solve your Internal Revenue Service problems.

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Tax Refunds, Corporate, Business and Individuals

Tax Refunds, Corporate, Business and Individuals

It is tax time again and most people don’t realize there is a great opportunity to get refunds and generate found cash flow at the corporate, business and individual levels.. Instead of waiting for the dreaded March and April deadlines, it is important to consider getting your tax returns done early this year.

Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund…This could generate a substantial amount of available cash that you may not have anticipated.. You should also consult your tax professional to ascertain where you stand. Additionally, individuals should be talking with their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government….This could generate needed cash either to invest and/or survive debt demands…..

Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund…This could generate a substantial amount of available cash that you may not have anticipated.. You should also consult your tax professional to ascertain where you stand. Additionally, individuals should be talking with their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government….This could generate needed cash either to invest and/or survive debt demands…..

In order to obtain these objectives, it is highly recommended you get your 2008 books, financial statements in order to ascertain where you stand for the calendar year ended 2008. These books can be prepared by either your in house computer system, a bookkeeper and/or outside accountant. Additionally, you should make sure that your bank accounts are reconciled therefore all cash transactions have been accounted for. Depreciation and all other bookkeeping adjustments should be recorded, therefore giving you an accurate 2008 balance sheet and profit and loss statement.

These 2008 financial statements with appropriate tax adjustments should be compared to the 2006 and 2007 federal income tax returns. In order to get carryback refunds from prior years, the current tax return must be filed first making you eligible to get carryback refunds from prior years.

Here is a brief edited example…. Lets assume the C Corporate Tax Return for 2006 generated taxable income of ,000 and 2007 taxable income was ,000. For the current year, the corporation lost 0,000 and paid in estimated taxes of ,000 for 2008… Based upon this example, the corporation would receive its ,000 estimated taxes back and could carryback the 0,000 loss back to 2006 and 2007 and recover those taxes paid in those years. In addition, the remaining ,000 unused losses could be carried forward to year ended 2009 and offset against future taxable incomes….Please consult a tax professional to go over the exact details of your situation…..

Companies that have sole proprietorships or pass thru entities like a S Corporation and/LLC may be able to recover business taxes at the personal level. Once again, obtain all your information for 2008 and sit down with a qualified professional to plan out and execute your situation…

In conclusion, start off 2009 with a quick jump with preparing your tax returns early vs the normal last minute and/or extension type thinking. These tax refund monies could be used for any purpose and get the year off to a good start…

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Late, Past-Due Personal Tax Returns

Late, Past-Due Personal Tax Returns

Do you have overdue or late personal tax returns that still need to be filed with the CRA?

Don’t wait any longer, and contact your local Canadian accountant, as there are many advantages to catching up with the taxman.

This article addresses the top 5 reasons to file your past-due or late tax returns:

1.  Tax refunds by filing personal tax return

In many cases, you may be eligible for a tax refund, which you can only receive by filing your tax return.  A tax refund may result because of RRSP contributions made, child care expenses incurred, large amounts of taxes withheld from your paycheque, and many other reasons.

In the 2009 year, many families are receiving a one-time payment for the Ontario Transition Sales Tax Credit, which is an Ontario tax give-away to compensate tax payers for the increase in sales taxes to 13% as of July 1, 2010 (HST).

So make sure you file your late, past due tax returns to collect your tax refund cheque.

2.  Canada Child Care Benefit and Universal Child Care Benefit

The Universal Child Care Benefit (0 per month per child) and the Canada Child Tax Benefit are only paid to those individuals have filed their tax returns.  Therefore, if you have children and haven’t received any UCCB or CCTB payments thus far, make sure you file your overdue tax returns.  Likewise, CCTB payments may stop being paid to you if you have past due tax returns.

3.  Minimize interest and penalties by filing late tax return

If you owe money to the Canada Revenue Agency, procrastination won’t help to reduce the amount you owe.  In fact, interest will accrue at an annual rate of 5% and penalties can amount to 17% or more.

Therefore, if you owe money, please make sure that you file your past due tax returns to minimize any interest or penalties.

4.  Applying for a mortgage or loan - late tax returns hurt

When applying for a mortgage or loan, the bank will want to see your latest Notice of Assessment to verify your income.  If you don’t have that available, because of overdue tax returns, you may be out of luck for your next home purchase or loan.

5.  Demand notice from the CRA for late, past due tax returns

The CRA will send a demand notice to file your returns, followed by an “Arbitrary Assessment”, if the returns aren’t filed.  An arbitrary assessment means that the CRA will assess your return based on the information they have received, and will not provide for any deductions that you may be entitled to.  In other words, an arbitrary assessment is the worst-case-scenario and results in an overstated tax balance.

Additionally, the Canada Revenue Agency has the power to garnish your wages for overdue tax balances, seize your bank accounts and even seize your property.

To make sure you don’t end up in a situation where the CRA is confiscating your property, it’s advisable to file your late, past due tax returns and seek the advice of an accountant.

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Unfiled Income Tax Returns- Don’t Ever File Them!

Unfiled Income Tax Returns- Don’t Ever File Them!

Never send the IRS your unfiled tax returns. Why? Filing them without knowing your collection and return status could be costly.

If you’ve filed all your previous returns and don’t owe any money, and you can full pay any balance shown on this return, then you can file it now without a problem.

If there are other years not filed and you owe on any of them, or you owe on past years, you should find out your current status with the IRS collection division before filing. You or your power of attorney should get your record of account for many prior years.

The record of account will show the charges and payments to each year. It will also show if you filed or the IRS filed a return for you. If any of the years indicate that you didn’t file, the a return needs to be filed. But… WAIT… Not Yet.

If you have any unfiled returns that show up on your record of account, your payment plan, if you think you have one, is invalid! Make sure you are able to discuss how you will make payments to pay off all of the outstanding balances. The trick is to get all delinquent liability years included under one agreement. This will stop future collection action, assuming you file and pay your taxes, and make your monthly payment on time.

Calling the IRS will also determine if they are in the process of preparing a return for you. If so, they will have a special address for you to send the return to. This will prevent you from having to undo it later. Or worse, the rejection of your newly filed return.

So be prepared to discuss your current financial situation. It’s best to have your income and expenses on a monthly average basis calculated already.

Getting your record of account to verify what is under your social security number will not alert the IRS that you are delinquent. Knowing your current status with the IRS concerning your filings and payment history is essential.

When you are ready to file your unfiled returns and you are missing information, you can request a record of information sent to the IRS from third parties. This includes W-2′S, 1099′S, K-1′S, etc. You are also allowed to estimate amounts that you can’t calculate. There is an art to preparing unfiled returns. Make sure you have help from a tax preparer experienced in this area. I have made corrections to many poorly prepared returns that would probably have caused an IRS audit.

In conclusion… Do not file any unfiled personal income tax returns without first requesting a record of account from the IRS and making sure that you understand what has been filed, if the IRS filed it, and how you are going to present your arguments for paying back the liability.

You probably want to consult an expert advisor before you take any action in thesematters.

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Don’t Delay In Managing IRS Tax Debt

Don’t Delay In Managing IRS Tax Debt

Debt Resolution, IRS Settlements Offer Help for Serious Tax Problems

San Mateo, Calif., - With tax day behind us, consumers and business owners who owe the IRS are not out of the woods. But while death and taxes are the big two inevitabilities, those with serious tax problems should know that it is possible to negotiate with the IRS to reduce past-due tax penalties and payments, according to Bradford G. Stroh, co-founder and CEO of Freedom Financial Network, LLC.

Americans, carrying more debt than ever, are also more likely to have tax problems than in the past. In 2004, the total of uncollected IRS taxes reached upwards of 0 billion. The number of levies (a key enforcement tool in which the IRS takes possession of assets to collect on unpaid taxes) topped 2 million during fiscal year 2004 - a 21 percent increase from 2003 and triple the 2001 number.

According to Stroh, taxpayers with tax debts under ,000 usually can manage the payment on their own or via an installment plan arranged with the IRS. “Tax problems merit professional help when individuals cannot pay tax liabilities of ,000 or more,” Stroh says. “At that point, specialists can negotiate directly with the IRS on behalf of these consumers, helping them obtain settlements.”

Tax relief specialists usually are attorneys or certified public accountants with special training and experience. Stroh explains that these experts can navigate the intricacies of IRS forms and calculations, help consumers understand the criteria the IRS imposes, and then help them get back into good standing with the IRS.

Depending on the severity of an individual’s situation, two types of IRS settlement are available:

An offer in compromise reduces the principal amount owed to the IRS.

An installment agreement is a payment plan for the amount due and often includes reduced penalties.

“Remember that you cannot let overdue taxes languish,” Stroh warns. “The IRS is serious — and increasingly aggressive — about tax collection and evasion. Tax debt can result in a lien on a house or garnished wages.”

Advisors can help consumers with the following steps:

Evaluate the situation and determine the amount of taxes owed to the IRS.

Ascertain whether the situation meets IRS standards for “doubt as to collectability” (i.e., unable to pay the full tax burden), “doubt as to liability” (i.e., consumer might not owe the tax), or “economic hardship.”

Establish the full amount owed, including taxes, penalties and accumulated interest, and understand whether collection limitations or penalty cancellations are possible.

Determine the best method for managing and eliminating the tax debt.

Negotiate with the IRS to settle on an agreed course of action and resolve the debt.

While facing and handling tax debt can be painful, last year’s bankruptcy reform legislation made it even more crucial for consumers to act. Historically, consumers in severe IRS debt might file for Chapter 7 bankruptcy protection or wait for the 10-year statute of limitations on tax liability to expire. Now, people are much more limited in the ability to obtain Chapter 7 filings. The bill’s new “means test” leads many consumers instead to file Chapter 13 bankruptcy, which establishes a repayment plan, rather than wiping out all debt. Consumers with tax debt may find it much less costly and simpler to work with a debt resolution firm’s tax relief service, which allows individuals to set up tax payment plans while avoiding court fees, attorney fees and bankruptcy judgments on their records.

“Whatever means you choose, tax season means it’s time to face the inevitable and manage your tax burdens,” Stroh says. “Fortunately, experts are available to help you along the way.”

Freedom Tax Relief, LLC (http://www.freedomtaxrelief.com) provides consumer debt resolution services through its Freedom Debt Relief and Freedom Tax Relief divisions. The company works for the consumer, negotiating with creditors to lower principal balances due that can often result in savings of up to half the amount owed. Based in San Mateo, Calif., Freedom Financial Network serves more than 5,000 clients nationwide and manages more than 0 million in consumer debt, offering an alternative to bankruptcy, credit counseling, and debt consolidation.

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