Below you will find a recent article from CNN that shows no matter who you are, the IRS can and will enforce the law. It also re-enforces why you don’t want to believe the stories you hear about not having to pay taxes. There are not arguments you can offer that the IRS hasn’t heard before and already proved in court. If you are in trouble with the IRS you can contact someone who can help you solve your problems–within the law. You can visit www.irs.govto find a list of frivolous arguments to avoid. Effectur has a staff that can assist you in finding the best resolution possible for your situation. Don;t avoid your tax problems, find someone to help you solve them…legally or you could end up like Wesley Snipes.

http://www.cnn.com/2008/CRIME/01/29/snipes.trial.ap/index.html

Timing of Snipes trial couldn’t be better for IRS

OCALA, Florida (AP) — Even Hollywood couldn’t have written a more ideal script for the Internal Revenue Service than actor Wesley Snipes‘ tax-fraud trial.

At a time when millions of Americans are buckling down to prepare their taxes, Snipes is being cast as a villainous example of the dangers of joining with Internet-fueled activists who claim the IRS has no authority to collect taxes.

Snipes, the star of the “Blade” films and “White Men Can’t Jump,” is on trial with two tax protesters in one of the biggest criminal cases in IRS history, and the agency hopes the media attention on the matter will dissuade others in the “tax avoidance” movement from trying to outwit the government.

“People who do it openly and notoriously, you’ve got to go after them,” said Sheldon Cohen, who was IRS commissioner and general counsel in the 1960s. “Not because he’s that important or the amount of money is that important, but because there are others who may be foolish enough to follow.”

Snipes, 45, could get up to 16 years in prison if convicted on all counts, although sentences that long are unusual.

His two co-defendants are an anti-tax ideologue who refuses to defend himself in court and an accountant who lost his licenses. The trio rested their defense Monday without calling any witnesses, saying they didn’t need to.

“Nobody likes paying taxes, but paying taxes is the price we pay to live in a civilized society,” Assistant U.S. Attorney M. Scotland Morris said Tuesday in closing arguments. “And it’s the law, and that’s what this case is about. It’s about three men who felt they were above the law.”

Defense attorney Robert Barnes conceded Snipes’ arguments may have been crazy, but insisted that didn’t make them criminal.

“Disagreement with the IRS is not fraud of the IRS, is not deception,” Barnes said. “It was an attempt to engage the IRS, to go through the IRS procedures and processes and see who’s right.”

In lengthy filings to the IRS, the three defendants claimed they did not legally have to pay taxes, citing an obscure section of the tax code that establishes that foreign sources of income for U.S. citizens are taxable. Protesters take that to mean only foreign sources are taxable, and wages made in this country are not.

“They string unconnected things together in a way that they’re just not intended to be strung together,” said Chris Rizek, a former Treasury Department lawyer who specialized in tax policy. “And the courts have repeatedly said ‘No, that’s the wrong interpretation, listen to this.’ And they just don’t listen.”

Snipes, who is free on $1 million bond, was paying millions in federal income taxes until 2000 when, according to prosecutors, he accepted the arguments of his two co-defendants. Snipes then began seeking nearly $12 million in illegal refunds for taxes he already paid.

Snipes, alleged ringleader Eddie Ray Kahn and former CPA Douglas P. Rosile were indicted on eight counts alleging tax fraud, conspiracy and willful failure to file returns. Kahn now refuses to leave his jail cell because he believes the court has no jurisdiction to prosecute him.

The government says Kahn founded a group in the 1990s, American Rights Litigators, and a successor group, Guiding Lightof God Ministries, that purported to help members legally avoid paying taxes. Rosile, a former accountant who lost his licenses in Ohio and Florida , prepared the paperwork. Snipes joined their group in 2000.

Witnesses for the prosecution have said up to 4,000 people refused to pay taxes based on the group’s arguments.

The three men claimed the IRS is not a legitimate government agency. Snipes also argued in long, bizarre letters that he was a nonresident alien; that the IRS terrorizes and deceives citizens; and that efforts to prosecute him would cause “increased collateral risk.”

Most tax cases are handled in civil court, because the IRS does not have enough agents or time to pursue criminal charges against ordinary taxpayers who fudge a deduction or a decimal place on their tax returns.

But pursuing the matter in criminal court carries other risks — the burden of proof is higher, and an acquittal would instantly galvanize the tax-avoidance movement, which already enjoys boundless exposure on the Internet.

The IRS has been successful in pursuing criminal cases against the movement’s followers.

Last year, for example, a New Hampshire tax protester vowed to die fighting rather than be apprehended following criminal conviction on several tax charges. Several people were arrested trying to help Ed Brown and his wife avoid capture, and almost all of them were from other states.

Brown and his wife were taken peacefully, but only after agents tricked the couple into surrender.

But there are exceptions. In 2003, FedEx pilot and tax protester Vernice Kuglin was acquitted because the jury found she sincerely believed she didn’t have to pay taxes.

Kuglin’s assets were seized, and the government got its tax money. Despite that, her case is held by some protesters as proof that the IRS is a sham, and citizens really don’t have to pay taxes.

Cohen, the former IRS commissioner, said trials like Snipes’ are important to discourage potential tax scofflaws from defying the government.

“Locks are important on windows to keep honest men from becoming thieves,” Cohen said. “Because a thief can get into a window even if it’s locked, right? But you do that as a deterrent.”

If, during the tax year you were robbed, or had other destruction of property from an unexpected event such as a flood, hurricane, fire, earthquake, you may be able to take a casualty loss deduction. Be sure you have good records of the loss including police reports, insurance investigations…etc. The amount of loss is determined by the fair market value of the item lost or destroyed. Be sure to subtract any reimbursement you receive from insurance from your loss before you begin your calculations.

For any personal property loss you incur, subtract $100 off the top and then reduce the amount by 10% of you adjusted gross income. IRS Publication 547 has more information about this deduction. You need to report this loss on Form 4684 and then move the totals to Schedule A.

It is important to note that if you are in a Presidentially declared disaster area, you can choose to deduct the loss on your tax year immediately preceding the year of the disaster. If you have already filed your return for that year, you can file a 1040X—Amended return. This decision must be made by the April 15^th deadline.

If you have to amend a previous year return contact your tax consultant. A qualifed tax professional can advise you if this deduction is available to you.

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Another item you can deduct on Schedule A, is certain taxes you pay. Such as:

· State, local and foreign income taxes

· Real Estate Taxes

· Personal property taxes

· State and local sales taxes

The taxes must be imposed on you by the taxing authority and must be paid by you in the tax year you deduct them. Be aware that if you claim state income deduction one year, and you get a state income tax refund, that item will be taxable to you in the following year.

Real Estate taxes are any state, local or foreign taxes on real property. Taxes imposed by local governments for improvements such as adding side walks…etc are not deductible. These amount will however, increase your basis in your property.

Personal Property Taxes are those assessed on items such as cars or boats.

You can never deduct federal income tax, social security taxes, stamp taxes, transfer of property taxes, homeowner’s association fees, estate or inheritance taxes or service charges for water, sewer or trash collection.

Sales tax deductions are only allowed during the tax years of 2005-2007. You can only take this deduction if you do not take the State Income Tax deduction. To take this deduction, you can either take the standard amount and use the Sales Deduction Calculator at www.irs.gov or if you saved all your receipts, you can take the actual amount spent. Your tax consultant can assist you in determining which option is best for you.

If you and your spouse choose to file your returns married filing separately, there are several important items you need to know:

• If one person itemizes, you both must do so, or if one person takes all the itemized deductions, the other must take a standard deduction of 0.
• If you are both itemizing, you determine who takes which deductions based on who paid them. If you have separate checking accounts, this should be simple, if you only have a joint account you will have to agree on who takes which deductions. Note: rules are different if you live in a community property state. See IRS Publication 555.
• You will have to determine which person will take the children as deductions or if you have 2 each could take one.
• You lose a number of credits or deductions if you choose MFS as a filing status—such as the Hope credit or Lifetime Learning deduction. You also cannot take the Earned Income credit if you file MFS. IRS Publication 501 can help you determine what you may deduct.

If you are separated, have children and file MFS, who can deduct the children is a complicated issue. Go to www.irs.gov or contact your tax consultant for advice.

At this time of year, most tax payers are starting to think about that April 15^th deadline and what can I deduct to reduce my taxes. Contrary to popular belief, the IRS wants you to have all the deductions to which you are entitled. The last 4 words of that sentence being the most important. You are entitled to deductions if you meet the qualifications, and have records to prove that you paid them.

If you itemize deductions you need to know what you can and cannot deduct. If you are going to itemize Charitable Contributions, here are some things you need to know.

• They must be made to qualified organization. See IRS Publication 526.
• For any contribution of $250 or more, you must obtain a written acknowledgement from the organization.
• For contributions less than $250, you must have a record of the contribution—such as bank statement or written communication from the qualified organization.
• For property you donate-such as to Goodwill—you can deduct the fair market value of items you donate—be realistic about what you could actually get for the item if you sold it.
• If your non cash contributions exceed $500 you must complete a Form 8283.
• If you contribute an item worth more than $5000, you must have an appraisal of the item done. This is also shown on Form 8283.
• If you make a contribution that entitles you to merchandise or services including admission to a performance, concert or ball, you can only deduct the amount you paid that exceeds the fair market value of the benefit received.

If you need assistance with you tax deductions contact your tax consultant.

If you case is under $25,000 the process is fairly simple. You just send a letter requesting Appeals consideration and indicate what you do not agree with and the reasons for that disagreement.

If your case is over $25,000, the request is in regards to a Partnership, S Corporation, or Employee plan or exempt organization, you must prepare a formal written request. Your formal request must include the following:

• Name, address, SSN, and daytime phone number
• Statement that you want to appeal the IRS decision to the Appeals Office
• A copy of the letter you received showing the decision you don’t agree with.
• Tax periods or years involved
• List of all items you disagree with and why you don’t agree
• Indicate the facts supporting your position on those issues
• State the law or authority, if any on which you are relying
• Sign the request under penalties of perjury.

You can represent yourself during these hearings or you can be represented by a CPA, Attorney or Enrolled Agent. You will be required to complete a Form 2848 to authorize that person to represent you before the IRS. If you need IRS help, contact a tax consultant at Effectur. We have Enrolled Agents on staff that can represent you and an entire team who will provide peace of mind throughout this process.

This process is available :

• Before or after the IRS field a Notice of Federal Tax Lien
• Before or after the IRS levies or seizes your property
• At the termination of an Installment Agreement
• At the rejection of an Installment Agreement

One of the main differences in a CDP hearing versus a CAP hearing is that with the CAP hearing you do not have the right to appeal the decision to the US Tax Court.

If your case has been transferred to a Revenue Officer and you disagree with the decision made, you must first appeal the decision with that person’s manager. If you still disagree, you may submit a written request for Appeals consideration. If you are appealing a seizure of property, you only have 10 days from the date the Notice of Seizure is given to you or left on your property. Your request for appeal of the decision of a Collection Manager must be postmarked 2 days after the date of your conference with the Manager or the IRS will resume collection action.

If you have questions about this process visit www.irs.gov or contact your tax consultant.

If you receive a:

• Notice of Federal Tax Lien
• Final Notice of Intent to Levy
• Notice of Jeopardy Levy and Right to Appeal
• Notice of Levy on your State Tax Refund

You may appeal this IRS collection action. To request this appeal you need to complete a Form 12153. You must file this form within the time allotted on the notice you received. If you do not respond to it in the amount of time indicated on the notice, you waive your right to go to court. If you miss the deadline, you can request an equivalency hearing, but will not have the right to appeal that decision if you disagree with it.

You also must indicate the reason you disagree with this decision. Once you request this hearing, you will receive a phone call to set up either a telephone or in person conference. At the conclusion of the hearing, the Appeals Officer will issue a determination letter. If you still don’t agree with the decision, you may request judicial review before the US Tax Court within 30 days of the Appeals decision. For more information on this process, go to www.irs.gov or contact your tax consultant.

If you have received a decision from an IRS employee that you disagree with, you have a right to appeal that decision to their manager. If you do so and the manager cannot speak to you right away, he or she must call you back by the end of the business day. If you still do not agree with the manager’s decision, you have the right to file an appeal under the Collection Appeals Program.

You can appeal many decisions including, the filing of a lien, a levy that was placed on your wages or bank account, or the seizing of your property. You also will have an opportunity to request a Collection Due Process hearing after the initial filing of the Notice of Federal Tax Lien or initial levy action—unless the IRS feels the collection of the tax is in jeopardy or the levy is against your state refund.

Both the Collection Appeals Program and Collection Due Process hearing are lengthy procedures. The IRS allows you to have a Licensed Taxpayer Representative to represent. A CPA, Attorney or Enrolled Agent can assist you with either of these processes.

My next blog will go into more details about these processes.

Normally, both you and your spouse are responsible, jointly and individually for any liability you incur from a tax return filed Married Filing Jointly. In some instances one spouse may be relieved of that liability by filing an Innocent Spouse Claim on Form 8857. You must file this form within 2 years after the first date the IRS attempted to collect the tax. (after 7/22/98)

You must meet the following conditions to qualify for innocent spouse relief.

• You filed a joint return which has an understatement of tax due to erroneous items of your former spouse
• You can establish that at the time you signed the return you did not know, and had no reason to know, that there was an understatement of tax. Meaning it was something “a reasonable person in similar circumstances would not have known.”
• Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.
• A request will not be granted if it can be proven that you or your spouse transferred property to one another as a part of a scheme to defraud the IRS.
• You must not have benefited in any way beyond normal support from this underreported tax.

They will look at a variety of items and if the situation meets their criteria relief from the taxes may be given. This process can be lengthy and confusing. If you need IRS help, a tax consultant would be able to help you through the process.