Grace Forms Blog

Back Tax Help With Audits

The thing that usually gets people looking for back tax help is the dreaded audit.  But what exactly do you do when you get audited?  We have all heard the horror stories of the tax man wreaking havoc in people’s lives, so how do you prepare adequately for something like this?  Luckily, aside from our fantastic guide, we also thought we would provide a few tips for those who are facing this arduous process.

First of all, do not lie.  These people sniff out lies for a living, so what makes you think that you are going to get one by them?  All lying does is make things worse, just like mom always said.  What she did not tell you is that, if you lie, the IRS may use such unpleasant words as “fraud” when you meet with them, and then you need far more than back tax help–you need back tax representation.  Speaking of meeting with the IRS, do not invite them into your house or business.  Instead, go to their office and conduct the audit there.  This is not because they are bad people (at least, in theory), but because you do not want to give them any more information than is necessary.

The fact that you are reading this is a good sign that you like to get prepared, and that is good, because you are going to be doing a lot of that in preparation for your audit.  Contact the person who did your return and have them prepare records that justify the things they put on your return, and also to find out if they already sent you back anything.  Back tax help can be as simple as having these things prepared ahead of time.  However, we know that not everyone who receives an audit is going to end up in the super-organized category.

What you should never, ever, under any circumstances do, though, is ignore the tax notice.  Putting your head in the sand is not going to make the tax man go away, and when your head finally pops out, Uncle Sam will be standing there with his money bags looking way more angry than before.  The best back tax help we can offer is to at least do something constructive when presented with the issue at hand.  In some cases that may mean hiring a tax specialist, but many times this can be resolved with just a little knowledge and elbow grease.

In either event, and in some part related to being prepared, knowing your rights is one of the most important things you can do, and falls just underneath “for the love of all that is good in the world, do not ignore the notice!” in terms of importance.  Knowing your rights is one of the best back tax help tips that we can offer.  If you know your rights, you have a lot more power during the audit process, even if you have representation.  After all, it is hard to invoke your rights if you don’t know what they are.

Back Tax Guide and Ebook; Your Back Tax 101

Today, we want to give you some insight into some misconceptions you may not find in every back tax guide.  These are tips that many may find obvious, but sometimes the fundamentals trip up even the most seasoned taxpayer.  Since this is graduation season, it seems appropriate that we cover these tips now so that those heading into the job market can get used to wrapping their heads around some of these esoteric guidelines before crunch time arrives next year.  And, not to be Negative Nancys, but hopefully you will find a job with a taxable income by this time next year.

One important key to remember is that “tax credits” and “tax deductions” are not the same thing.  Would you rather have an amount deducted from a dollar, or would you rather have a credit for a dollar?  This is an easy thing to forget, but a back tax guide is doing a disservice to those who do not make note of this important distinction.  Deductions are based upon your income bracket, and thus when multiplying the percentage of your tax bracket to the value of your deduction, you get the worth of the deduction.  And you wondered why people hate doing their taxes so much…

Speaking of things people hate about their taxes, there are ways in which you can avoid getting audited.  Frankly, the best way of avoiding an audit is to be honest on your taxes.  Honesty should always be the first step in a back tax guide, but we realize that is not usually the case.  When the IRS notices consistent trends in your income history, number of dependents, etc, then there is little cause for concern from their standpoint, as everything looks as it should.  When you start suddenly earning a fourth of your income and add 12 new dependents, that’s when Uncle Sam starts to get a little worried you might not be playing by the rules.

Dependents, since we are on the subject, are a temptation for some.  Although we know you’d never do this (right…?), some people go so far as to list pets as dependents, and although your pets may be dependent upon you for survival, the IRS does not consider them dependents.  This might seem a little obvious, but what good is a back tax guide if it only tells you the obvious.  What might not be so obvious, though, is that your girlfriend or boyfriend who crashes at your place half the time cannot be claimed as a dependent if her/his parents are doing so as well.  Be aware that this also pertains to children as well.

These may not be news for some, but they are the kind of questions that many people are afraid to ask because they are so basic.  Needless to say, our back tax guide is a lot more comprehensive and deep than this, but we can’t offer golden advice for free.  That said, though, our guide is affordable, and can also save you tons of money in IRS fees.  It’s a win-win.

Celebrities Need Back Tax Help too

It’s a cliché, but completely true:  “The bigger they are, the harder they fall.”  Just because celebrities make a lot more than the average American does not mean that they know how to manage that money better.  In fact, some celebrities have lost as much as 280 times the average American household’s income.  When the tax man comes knockin’, though, then finding a good back tax guide would certainly be helpful for some of these top stars.  Even if you have not lost the amount that some of these A-thru-C list names have, our guides are perfectly attuned to helping you solve your tax issues.

When your spending habits are more out of hand that Lindsay Lohan, or Pamela Anderson, chances are, you could probably use some back tax help too.  Some of the names that should have realized that even celebrities have to pay back taxes range from Ozzy Osbourne (who owed $1.7 million in back taxes) to Chris Tucker (who owes a staggering $12 million in unpaid taxes).  How someone “forgets” or is unaware that they owe millions of dollars in taxes is more than a little bit perplexing.  Are not these the same people who buy Swarovski crystal iPhone cases?

Not everyone gets away scot-free, though, as some celebrities have actually been arrested for their failure to pay back taxes.  Rapper Method Man was arrested for failing to pay $33,000, but this is nothing by comparison to some other bogus-tax alumni.  And who might that be?  Why, none other than Wesley Snipes, who received a three-year prison sentence for failing to pay $17 million in back taxes.  Apparently, the threshold for going to prison for years like Snipes, and slipping through the cracks like Chris Tucker lies somewhere between his $12 million and the $17 million that the daywalker owed.

No, having tons of money does not come with the ability manage that amount of money.  Perhaps it should be a requirement that the IRS send those owing these amounts a back tax guide, but then again, part of the reason most of these people are being so persistently sought (well, more specifically, their money) is that the government is too broke.  Without getting political, it is no mystery that governments are looking to collect where ever they are able.

Back Tax Help, Facebook, & US Citizenship

Eduardo Saverin is in hot water with some of the political big dogs on Capitol Hill.  Senators Chuck Shumer and Bob Casey announced that they will be pushing a bill that keeps highly-successful expats from re-entering the US if they renounce their citizenship, since it will be assumed that it was done for tax reasons.  After all, a person does not need back tax help if they are not citizens.  Unless they can prove to the IRS that, no, they are not dodging taxes, but are like every other person who renounces their citizenship who is not wildly wealthy, then they will face not just prevention from entering the US, but also be subject to a 30% capital gains tax on any US investments made after renouncing their citizenship.

There’s only one problem:  Saverin does not have to pay back taxes, since he is current for the time in which he was a citizen, and has agreed to pay “hundreds of millions of dollars in taxes to the United States government…on everything I earned while a U.S. citizen,” to use his own words.  That means, even if the reasoning behind the two senators’ bill was valid (which it is not), they are still not going to be any piece of that big Facebook pie.  Some have wondered if this bill would mean that his Facebook fortune is subject to those taxes, but since Saverin renounced his citizenship prior to Facebook’s IPO, the government has no claim to any part of that.  Therein lays the problem for the senator.  Lots of money that they feel they could have had, but it slipped through their fingers.

And one has to pause and wonder, does the fact that wealthy producers are fleeing the United States serve to benefit anyone and does a high ranking member of the Senate demonizing such actions going to hasten the swift exit? With so many people looking for a quality back tax guide, it makes little sense for the senators to be so committed to getting this one person, who renounced his citizenship in January 2011, well before any talk of Facebook’s IPO were even considered.  One question to ponder is what rate would be high enough to take in revenue and at the same time low enough for those in the high income to stay in the country?

Making matters worse are those who think of countries with low tax rates as somehow undercutting the US and using the phrase “off shore tax haven” as a negative connotation. The facts are we are now a global society and never before has it been as easy to shop around to see which countries are most advantageous for maximizing one’s personal finances. Throw in those who can now do business via the internet and not locked into one geographical area and this flight is understandable. If someone in need of back tax help can do the math and see that the country of Singapore will fill their pockets at a higher rate than if they lived in Santa Monica, California and it is not a mystery as to why and how successful people make the decision to leave the US.  Particularly for those who have no emotional attachment to a state or a country, picking the best country in which to live is almost as blasé of choice as what toppings to order on your pizza.   We can either demonize and punish those seeking greener pastures-or make our own greener pasture right here at home.