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Tax Resolutions Podcast with Tom Scott

Tom Scott

If you have tax problems, or if you'd like to know more, these are just a few things I may be able to resolve for you: How to handle a notice from the IRS, What to do if you haven’t filed your taxes yet, and How to handle debt collection programs. Join me for two programs a month as I tackle these issues and more!

  • The No. 1 Mistake People Make When Dealing With the IRS
    If you get a tax notice from the IRS, don’t put your head in the sand. Instead, call your tax advisor or a tax resolution specialist.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library 
    Dealing with the IRS is usually a scary subject for most people. If they receive a piece of mail from the IRS, they might look at it a while before opening the envelope...if they open the envelope at all. They don’t want to know what’s inside because it’s almost always bad news. They know they owe the IRS and think that if they just don’t open the envelope, the problem will go away! This is the No. 1 problem people have when dealing with the IRS: putting your head in the sand. This is no good, and it will only result in another piece of mail from the IRS in about a month, right about the time you forget about the first letter. Perhaps you finally open the second envelope and find that you owe the IRS a ton of money. You have no idea what to do, so you call the phone number on the tax notice and get put on hold for about an hour before you talk to someone. The IRS agent then talks to you about how you messed up and didn’t report some income, or how you’re getting audited and better pay up or be prepared to defend yourself. They tell you to pay now or you will have more penalties and interest or you could get your bank accounts and property levied. You might not know what “levied” means, but you know that it’s a very bad thing and understand that you could lose your property to the IRS. 
    If you have a problem with the IRS, it won’t go away if you just stick your head in the sand.
    We have all heard stories about the big bad IRS taking people’s bank accounts and homes. So what do most people do? They panic and hang up, of course. The problem will go away if they ignore it. Again, this is not good. What should you do instead? If you receive a tax notice from the IRS, open it immediately. If it’s not just a little amount for interest, call your tax advisor or a tax resolutions specialist. We are equipped to work with the IRS for you. By the way, if you ever receive a call from the IRS, whether it’s from a human or it’s a robocall, immediately hang up. This is a scam. The IRS never calls—they only send mail through the US post office. Additionally, you should sometimes beware of those mail items, because they can occasionally be scams too. It’s a scary world, so call your tax resolutions specialist if in doubt. If you have any type of tax problem, you should protect yourself by hiring a qualified tax problem specialist. We’re experienced in negotiating with the IRS to get you the lowest amount that you have to pay. If you have any other questions about this topic, you have a tax problem, or you know someone with a tax problem, don’t hesitate to reach out to me. I look forward to hearing from you.
    4 June 2018, 9:22 pm
  • The Truth About Being a 1099 Employee
    What tax-related issues can arise for self-employed people and 1099 employees? Let’s discuss this critical subject today.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library 
    Today we’re going to talk about the 1099 self-employed and their growing tax problems. This is a subject I deal with all the time when speaking with clients. Many of the people I have conversations with have no idea how to get into business, and make a lot of tax mistakes that end up costing them dearly. While, by definition, a person getting paid as an independent contractor, such as a Realtor, is self-employed, many employers try to pay their “employees” as independent contractors. They do this to selfishly save on costs like payroll taxes, worker compensation insurance, and benefits. As a result, this creates serious tax problems for 1099 employees, because they generally don’t understand the costs they’re agreeing to pick up. This includes expenses such as the IRS Self-Employment tax, Federal and State tax, insurance, and more. Many times, the unsuspecting 1099 employee is lured in by the prospect of earning more than a regular employee. The prospect of being able to work for more than one employer is attractive, as it suggests the possibility of increased income and independence. Being self-employed, though, equates to a huge cost and responsibility, as you will be required to pay 15.3% in Self-Employment tax on your profits. 1099 employees must also put aside estimated tax payments for this cost, as well as their federal and state income tax. Most who start out with this responsibility simply don’t understand the full financial ramifications and penalties associated with neglecting these payments. Instead, most 1099 employees simply receive their “paychecks” from their employees and spend the funds without regard these expenses. Personally, I would guess that 90% of newly self-employed people get surprised with a huge tax bill in their first year.
    Being self-employed, though, equates to a huge cost and responsibility.
    This lack of preparation puts them into a terrible and terrifying pattern of not paying, getting an installment agreement with the IRS, etc. They simply don’t have the money to get out of this cycle and also don’t want to compromise the spending that supports their personal lifestyle. Year after year, this problem will only grow. For example, I’m currently working with a young man who is a 1099 employee. This man’s wife is a regular employee, but under-withholds on her income taxes. For the past five years they’ve been accruing close to $10,000 each year. Now, they’ve accumulated a debt of $50,000 and are in the middle of getting divorced, while still facing this huge tax problem. Now, their only solution is to sell their home and use the proceeds to pay part of their taxes, as well as either using Installment Agreements to pay the remaining past taxes or an “Offer in Compromise” to decrease their debt. The young man is still a 1099 employee, but I am currently helping him sort through the prospect of becoming a regular employee. This transition would lead him to technically receive lesser pay, but, as I explained to him, the offer of lesser pay in this case is actually more than he’s currently earning as a 1099 employee. So, moving on from this situation, I’d like to address an important question: When should a newly self-employed person consult with a tax advisor? Actually, the answer is as soon as possible. Any delay in this consultation will cause issues. It’s easy to get in over your head, but hard to know what to do once you are. Once people reach this point, it’s critical for them to reach out to a tax professional who can help them work through their circumstances. And I don’t know of any tax professional that provides specific mentoring and guidance 1099 employees and self-employed people the way I do. So, if you are facing this problem, please give me a call or send me an email. I would be happy to guide you. And, as always, if you have any other questions or would like more information, feel free to get in touch. I look forward to hearing from you soon.
    22 May 2018, 7:26 pm
  • Don’t Ignore Inheritance Assets When Filing Your Taxes
    Taxpayers often make the mistake of ignoring inheritance assets on their tax return. I’ll explain how to avoid and fix this mistake today.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library 
    A frequent error taxpayers make is ignoring inheritance assets. When a person inherits stocks or other assets, they often believe that they are not taxed. This is partially correct; the assets are not taxed when received. But when the assets are sold later on, you must report the sale on your tax return. I’ve had many cases where ignoring these sales caused tax notices with huge taxes, penalties, and interest that surprised and scared the taxpayer. Since inherited assets receive a step up in basis (or tax cost), there is often very little gain or loss. There would be little, if any, effect if a sale occurs quickly after inheriting these assets and the sale is reported correctly.
    When the assets are sold later on, you must report the sale on your tax return.
    To correct this problem and eliminate surprise taxes, we must amend the original tax return that ignored the sale and provide evidence of the death of the person receiving the stocks, stock ownership statements showing the history of previous ownership, and receipt and eventual sale. I have had several cases where, in the end, there is very little tax effect. The time and fees paid to a professional to amend a tax return are expensive. A taxpayer can save themselves a lot of grief and money by understanding that any asset they inherit and later sell must be reported on their tax return. If you have tax problems, you should protect yourself by hiring a qualified tax problem specialist. We have experience in and strategies for negotiating with the IRS to get you the lowest amount that you have to pay. If you have any questions, just give me a call or send me an email. I would be happy to help you!
    6 April 2018, 5:13 pm
  • What Is Wage Garnishment and How Could It Impact You?
    What are tax liens and levies? I’m going into detail about both today.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library



    If you don’t pay your debts, the IRS can use wage garnishment to take most of your paycheck away.

    Ignoring your taxes can lead to the IRS collecting them instead. A wage garnishment or levy will only occur after you have received many notices and had many opportunities to handle your taxes on your own accord.
    If a wage garnishment does proceed, the IRS will decide how much to take. This could be up to 75% of your entire check, leaving you nowhere near enough money if you live paycheck to paycheck like most Americans.
    Ignoring your taxes can lead to the IRS collecting them instead.
    However, there are ways to negotiate with the IRS to avoid a wage garnishment. Tax professionals can help put forward an installment plan or settlement offer. As professionals, we can take into account your living costs to keep your payments to the IRS under control and within your budget.

    Our team gives you a voice in what you can pay the IRS. We can get wage garnishments removed or greatly reduced. So, if you have tax problems, you must protect yourself by hiring a professional.
    If you have any other questions, would like more information, or would like to have a consultation at no charge, feel free to give me a call or send me an email. I look forward to hearing from you soon.
    28 February 2018, 5:57 pm
  • What Are Tax Liens and Levies?
    What are tax liens and levies? I’m going into detail about both today.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library


    Welcome back to another edition of our series exploring various tax problems you can run into. Today, we’re talking about tax liens and levies.
    When the IRS issues a lien, it’s a lien on all of your property. It doesn’t matter if it was recorded in your county or not. This results in your inability to sell your home, car, or anything else without paying the IRS first.
    These liens can elevate to a levy on your bank account. Yes, the IRS will take money directly from your bank accounts. They’ll take money from all of them if necessary. These liens also give the IRS the right to dip into your retirement accounts.
    “
    These liens can turn into levies quickly.

    ” When the IRS files a federal tax lien to the county clerk in your area, it’s a public notice that you owe the IRS and must pay them first before you sell your home or anything else. A bank levy is sent to your bank saying that they must freeze the cash in your accounts up to the amount that you owe the IRS and send it to them. The freeze can last for 21 days, then the bank must send the cash to the IRS.
    Bank levies are a result of ignoring multiple notices that you have been sent by the IRS. While it might be too late already, the best chance you have at removing the levy is by reaching out to an experienced tax problem specialist like myself. We can help you negotiate the amount that you owe to the IRS. We’ve had great success in the past negotiating with them. We have years of experience negotiating with the IRS in order to get our clients the lowest bill possible. There are many solutions that we can come up with, but time is of the essence.

    Once you get that notice of levy, you only have 21 days to respond before they start taking your money. If you have any questions for me about how I can help you with a problem like this, give me a call or send me an email. I look forward to hearing from you.
    8 February 2018, 8:23 pm
  • Solutions to Your Tax Debt Problems
    Do you have tax debt? If so, here are some solutions.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library


    One of the most common tax problems we see people running into is simply not being able to pay their tax debt. It can be hard to stay calm when you’re worried about how you’ll live when the IRS is after you. Problems like this can deteriorate marriages and decimate bank accounts and paychecks.

     It’s a bad situation to be in. However, there are solutions. The first and most popular is the offer and compromise. This is where you negotiate with the IRS to pay less than what is owed. There are specific formulas and processes to accomplish this strategy. It doesn’t get done overnight or on a phone call. The entire process can take anywhere from six months to a year to complete.
    You’ve likely seen advertisements on T.V. for places like Taxbuster or the Tax Relief Center. However, most of these heavy advertisers simply take your money and don’t accomplish anything. They may stave off the IRS temporarily, but they are so concerned with sales and getting money that this is where they spend all their resources, not on getting your case done.
    “
    There are solutions to this problem.

    ”
    You should hire a local professional who is a CPA or attorney and does this kind of work every day. It should be someone you know by name and someone you can get in contact with regularly.
    Dealing with the IRS is intimidating. To get the best deal with them, you should really hire a tax problems specialist such as myself. Someone who knows the ins and outs of the process and has years of experience in the business.

     If you have any questions for us or want to learn more about how we can help you with your tax problems, don’t hesitate to reach out and give us a call or send us an email. We would love to hear from you soon.
    19 January 2018, 7:27 pm
  • You Should Know About These Serious Tax Problems
    You don’t want to run into trouble with the IRS. Here’s what will happen if you do.
    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library


    There are a number of serious tax problems you can fall victim to out there, and each one has different solutions.The IRS takes these seriously and if you simply ignore them, the consequences get increasingly harsh over time. These consequences include:
    • The IRS can take up to 80% of your paychecks until the debt is paid.
    • Penalties can grow to 25% and beyond on the original tax.
    • Interest will add up every day until paid.
    • Tax liens filed against you can stop you from buying a house or borrowing money.
    • Your bank accounts, retirement plan accounts can get levied by the IRS.
    • Civil penalties can be levied if you are an owner or officer of a business that does not pay their payroll taxes.
    “
    If you don’t take action now, your problems will only get worse.

    ” Once you get a notice of taxes due, they usually have some penalties and interest already calculated, but this is just the beginning. If you don’t take action now, your problems with the IRS will only get worse! In my next few posts, I will discuss each of the common tax problems and how to deal with them so stay tuned. If you know you have tax problems, you should protect yourself by hiring a qualified tax problem specialist. We have experience in strategies in negotiating with the IRS to get you the lowest amount that you have to pay. If you know someone with a tax problem, don’t hesitate to reach out. You can give me a call or send me an email. I look forward to hearing from you soon.
    28 December 2017, 4:39 pm
  • Should You Rethink Your Position on the Cloud?
    You are already on the cloud (whether you know it or not),
    so how can you use it to improve your business?

    Click here for a FREE tax relief consultation
    Check out our FREE tax resource library


    I’ve run into many business owners who say that they don’t want to put their accounting on the cloud. They don’t trust the cloud. They are afraid of being hacked. Some people even say, “I don’t want any part of the cloud!”
    Well, I have some news for you: you are already on the cloud.
    If you have a utility bill, a bank account, credit score, or do anything online, then you are already on the cloud. I cannot tell you that the cloud cannot be hacked because just about everything can be hacked. However, the point is that the cloud and the companies that support the cloud spend your annual budget hundreds of times over to protect the cloud and their clients.
    “
    You are on the cloud already,
    whether you like it or not.

    ” In other words, the security on the cloud is of a much higher grade than anything you have on your business or on your desktop computer. We all operate on the cloud. The only way to completely escape the cloud is to get off the grid completely and go live in a cave somewhere.

     The train has already left the station, so how can you use the cloud to improve your business? We will help you explore what the cloud can do for you.
    The cloud is the business of the present and the business of the future. We all need to utilize it to the maximum degree. Just give me a call or send me an email and I would be happy to help you do just that.
    11 April 2017, 8:12 pm
  • Let Us Help You With the Parts of Your Business You Don't Love
    Many entrepreneurs find something they love and turn it into a business, but eventually wind up running a business instead of focusing on the thing they loved in the first place. Here's how we can help get you back to doing what you love.
    We work closely with many small businesses and find that people have become entrepreneurs by circumstance. After all, not many children say that they want to be an entrepreneur when they grow up.

     So how does one become an entrepreneur?

     Most of us started working just to make a living. Many of us worked a lot of different jobs because we didn't enjoy what we were doing to make a living, but then we finally found something we really enjoyed—and it paid.

     We weren't always the best at these things, but we stuck with them and got better. Before we knew it, we were pretty good at something. Then, we became recognized by the people we worked with as being pretty good. We made progress in pay grade and other areas, and really set out on a career.

     Somewhere along the line, however, we found ourselves getting frustrated at the people we worked for. Maybe we didn't like the way they ran their business or how they treated their employees. At some point, we reached a point where we thought, "You know what? I can do this better than these bozos that I'm working for." That's when many of us entrepreneurs decided to go into business for ourselves.

     Then, we scraped up a little bit of cash, a ton of courage and opened our own businesses. Sure enough, many of us found that we could do it better than the bozos we used to work for. We expanded our businesses to the point where we needed to hire employees, buy equipment, and do other things to stay on a successful path.
    “
    Running your business isn't always the same
    as doing the thing you loved in the first place.

    ”
    At that point, many of us realized that we were no longer doing what we liked—we were running a business.

     Running a painting contractor business is not the same as being a painter. Running a plumbing business is not the same as being a plumber. Eventually, we found that the business forced us to get involved with things we didn't know very much about and weren't very good at, and we spent more and more time away from the things we really like doing.

     That's where I can help.

     Accounting is generally one of those things that entrepreneurs generally don't like to do. As a recovering accountant, I certainly know how that works. That's why we encourage entrepreneurs to hire people who actually enjoy the parts of the business that you don't like or don't have expertise in. It frees you up to go back to doing what you like best: taking care of your customers, making sure your crews do things right, and doing a good job for your business.

     We perform all the services that help you grow to your full potential, and we can do that remotely with online technology and the cloud. We don't have to take up your time and space. We've even approached business on the basis of eliminating their offices completely!

     If you have any questions at all about how we can help you grow and increase your business, don't hesitate to call or email us today. We'd love to help!
    20 March 2017, 4:51 pm
  • Where Is All Your Cash?


    If you only study your profit and loss statement, you aren't getting
    the full picture of your business finances.
    “My financial statements show I’m making money, but I don’t have any cash.” We hear this statement all the time from entrepreneurs like yourself. Most assume they should just drastically cut expenses and they’ll be OK. Here’s what you should do instead.

     If all you are looking at is the income and expense portions of your financial statement, you are only seeing part of the picture. Your financial statement consists of two parts, the profit and loss and a balance sheet of assets, liabilities, and equity.

     The profit and loss portion reports your income and expenses, which all flows into the balance sheet. The balance sheet tracks the changes in the assets, liabilities, and equity. These two separate documents arithmetically prove each other by being in balance. Each is useless without the other. To see the entire picture of your business, you must be able to read and understand both.

     Now, where does the cash go? The answer is revealed by the balance sheet. Let’s say that last month you made a profit of $49,000 but your cash went down by $35,000 and you’re feeling broke. What happened?
    “
    We want you to understand
    your company’s full financial picture.

    ”
    Well, the inventory went up by $18,000, you bought a piece of equipment for $13,000 in cash, your receivables went up by $26,000, and your payables went down by $27,000. This is where the cash went. The activity is revealed to you in the balance sheet if you read it or hidden in there if you don’t. That’s where the cash goes to hide.

     We aim to teach you how to read the complete financial report on your business. We can also help prepare a simple supplementary piece called “The source and use of cash statement,” which highlights the cash activity for you.

     This is just one of the reasons why you need much more than just bookkeeping from an accountant to protect and maximize your business’s performance. You need a qualified, experienced accountant on your team. You worked too hard to not hire the best, you deserve it.

     If you have any questions for us at all, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.
    7 March 2017, 7:11 pm
  • How Do You Know If Your Business Is Healthy?


    As you will see today, measuring the health of your business is not much different
    than measuring your own personal health.
    Is your business healthy? How can you determine if it is or not?

     The process mimics how you determine your own personal health. When you see your own personal physician for your annual checkup, they start with some basic information. In the medical field, these are called “vital signs.” Your blood pressure, body temperature, height, weight, etc., are captured before the doctor even sees you. The doctor then listens to your heart and lung palpitations and asks you how you feel. Based on this simple process, the doctor determines whether further tests are necessary.

     Your business has vital signs that can be measured and monitored, as well. They aren’t physical signs, though—they’re accounting signs produced as a part of the accounting process. Naturally, you have to have accurate and up-to-date information to determine the relative health of your business.
    “
    Your business has vital signs
    that can be measured, too.
    ”
    If we were the ones screening your business through this process, we would then look at some basic measurements. If there are symptoms of underlying issues, we can initiate further tests to identify and treat them. We’d then quickly compare your business ratios to those of your industry and identify areas in need of improvement. We have years and years of experience to propose and implement strategies to make your business healthier.

     Our goal is to put you in a position to maximize the potential of your business as well as your own personal development. You’ve worked relentlessly to get to where you are, but hard work can’t be the only strategy you employ to take your business to the next level and beyond. We will help you determine other strategies to reach and exceed your dreams.

     If you have any questions about determining the health of your business, please don’t hesitate to reach out to me by phone or email. I’d be happy to help!
    15 February 2017, 5:17 pm
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