People around the country and here in California often see news stories about celebrities that are in trouble with the IRS. When celebrities fail to pay their taxes, the amount of back taxes they owe tends to run in the hundreds of thousands, if not millions of dollars. Songstress Kelis is no exception.
There may be many people in California who don't know that the IRS only has so much time to collect taxes. The statute of limitations on collecting back taxes is 10 years. After that time, taxpayers are no longer liable for the taxes, but getting to the 10 year mark can be difficult.
According to the IRS, singer Mary J. Blige hasn't paid her federal income taxes for 2009 through 2011. That amounts to more than $3.4 million in back taxes it says she owes. The IRS filed a tax lien was filed against Blige back in February of this year.
For decades now local businesses say they have been losing sales to online companies that aren't required to collect sales tax. Now, the U.S. Senate has passed a bill that would collect tax debt on internet purchases at the time the purchase is made. Not only would this possibly help increase sales for local California businesses, but it may also help governmental agencies collect sales taxes to which they previously had to access.
Back in 1972, a man by the name of Sumner Redstone gave his son and daughter stock in National Amusements, Inc., a family business. The IRS is just now saying that Redstone failed to file a gift tax return on that transaction. People in California that make similar gifts may be interested to know that the IRS is just now coming after him for the 41-year-old tax debt.
As tax season rapidly speeds by, it's probably a good time for those with tax problems from prior years to take some action to try and resolve those issues. A person who struggles with tax debt often falls into a deep cycle of self-perpetuating procrastination. In California and throughout the country, there are some options open to a person who faces intimidating back tax debt.
There are circumstances that arise which may put an individual in a financial hole with the IRS. This can often lead to a California resident owing back taxes to the state and federal government, which can amass quickly if left unresolved. Although the fear of an IRS collection effort may be prominent in many individual's minds when their tax debt continues to rise, there may be a way to satisfy such debt by making an offer to the IRS.
A bill that recently passed the House of Representatives calls for federal employees to be fired if they owe too much in back taxes. The proposed law, which is now scheduled to go before Senate, would affect California federal employees who were facing substantial tax debt. However, the bill provided that those trying to work out their problems with the IRS would not be included in the law
Our readers in the Sacramento area may be interested in a recent survey regarding tax deficiencies. (For those who don't know, the IRS will send a notice of deficiency if the amount reported by a taxpayer is less than the amount the IRS determines is owed.) The Public Company Accounting Oversight Board analyzed the results of the survey, and the analysis was published on June 6 by Acuitas, Inc.