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The Truth About Tax Problems

BY KEN GROSS

Tax problems are no different than the myriad of problems we face. Some problems cannot be managed; health problems, when there are no solutions, are far worse. Tax problems present a manageable problem. Solving a problem requires you to face it, identify the plan and then execute. Do this, and the problem and anxiety it causes vanishes.

The most common tax problems are (1) Un iled Returns and (2) Collection Actions for unpaid taxes. Un iled Returns are the easiest to ix. Many times, several years are un iled because paralysis arises over concerns as to how to pay and gather the records. A reputable tax advisor will obtain transcripts from IRS as to the information they already have on you and then prepare the returns. If there are valid deductions, but you don’t have the records – they will estimate. They make reasonable assumptions. For example, we know a trucker has fuel and maintenance expenses, so we will not forego the deduction for lack of records –we will estimate and get the returns iled. Failing to ile a return on time boosts the tax bill by 25%. Even if you can’t pay – you should always ile by the extension deadline. Income taxes can also be discharged in bankruptcy (something few professionals know) but to do so – you must have iled your own return. The IRS will ile a substitute return (called an SFR) for a taxpayer when the return has not been iled. SFR tax bills, however, cannot be discharged in bankruptcy.

Here is the great news. There are several solutions when you can’t afford to pay the tax bill – including an Offer in Compromise to settle for pennies on the dollar (if you qualify), discharge of the taxes in bankruptcy, payment plans based on what you can afford and even payment plans that require no payment at all (IRS calls this “currently not collectable”). The key is to know the rules. There is an anomaly with IRS. There are many laws and rules that protect you as the taxpayer, but IRS collection staff will not help you – you must have a professional who knows the rules and how to make them work to your advantage. Do this, and the tax problem is no more.

Ken Gross is the founder and managing shareholder of THAV GROSS PC. Formed in 1982, the Metro Detroit Firm has been assisting Metro Detroiters with tax, inancial and business problems for 40 years. Watch Ken and his co-host Brian Small host the Law and Reality TV Show – Sundays at 10:30 on TV 20. You can contact them at 888.235.HELP (4357). the shores17