What is tax fraud, and how does our government control it? That's a really big question to answer, so let's break it apart and answer it in two different paragraphs. Tax fraud is the intentional avoidance of tax due by a taxpayer, corporation, or other legal entity. There is a vast difference between the opportunity to minimize your tax liability and the direct avoidance of any responsibility. The tax laws and regulations of the Internal Revenue Service are there for the benefit of the taxpayer. If there is a way to reduce or minimize the amount of tax due, legally, by all means citizens are encouraged to take the break. There are all sorts of ways to commit tax fraud, and many famous cases have been tried, such as Al Capone and Willy Nelson.
When, as a taxpayer, you seek whatever legal means possible to avoid tax liability, you are guilty of no crime. It is your given right to seek a means to minimize your liability, in order to keep more of your money. However, when companies, individuals, or any other legal entities attempt to avoid their legal responsibility, we as a country suffer. The government operates on tax dollars. Tax dollars that everyone who has been deemed liable must provide, and if not provided, penalizes everyone.
Tax fraud has been a part of society for as long as there have been societies. Even during Roman rule, there were tax collectors, and individuals who evaded their payment of taxes. This country was founded on the precept that England charged an unfair tax on tea (and other various assorted sundry) to the point that the colonists were unfairly taxed, without a voice in the government. The Internal Revenue Service is charged with overseeing the regulation and prosecution of any person or entity that avoids payment of taxes due, and can assess penalties for those who succeed.
What tools does the Internal Revenue Service (IRS) use to control tax fraud? There are actually several means by which the IRS can control tax fraud, once they discover the crime has been committed. How do they detect tax fraud? The IRS has some 2800 special agents that are trained to gather information that is used to detect tax fraud; they have unlimited access to tax returns, the power to issue summons regarding needed financial information, and the right to seize or freeze monies in the attempt to collect the necessary financial information.
Once the tax fraud has been detected, the Internal Revenue Service can levy tax liens, seize assets, freeze money in checking and savings accounts, and garnish wages. Any and all properties held by the individual taxpayer can be seized, and sold at auction if no attempt is made to repay the liability. Everyone that is determined to be involved in an evasive or fraudulent act of tax liability has the opportunity to be heard, to meet with the Internal Revenue Service, and receive a trial to determine if the accused party is guilty. It is generally in the individual's best interest to settle with the Internal Revenue Service if there is any possible doubt as to their innocence.
That's not to say that the Internal Revenue Service has always played fairly, or that they are free from mistakes. This is not so. There have been many instances of improper intelligence access, and errors on the part of the Internal Revenue. But, in the majority of cases, the tax fraud accusation was legitimate, and the individual charged was guilty. Many individual taxpayers rely on accountants and business managers to handle their financial affairs; in fact, many are not even aware of the status of their finances. It is however, ultimately, the individual taxpayer's responsibility to be held accountable for the information provided to the Internal Revenue Service. So, if you're going to be the one in front of the Internal Revenue, you should do yourself a favor and examine your return, understand what you're reading, and check the return for accuracy.
By : Hans Hasselfors
Hans Hasselfors is the founder of http://www.SubmitYourNewArticle.com. You may find varied tax fraud articles in our article directory.
Saturday, December 26, 2009
Saturday, December 19, 2009
Tax Deduction Software - Calculate Your Earnings
We all love computers and the fact that it exists to make our jobs simpler. And they have invaded the field of taxation like never before.
A multitude of tax deduction software is available in the market at dirt cheap prices.
1. for complex tax returns: If you have a huge business or multiple entries, then TurboTax Premier and Complete Tax is the best option available for you.
Both are web-based tax programs though Turbo Tax has a PC-based version too. Turbo Tax premieres an icing on the cake for people with rental income. Complete Tax, a time saver, on the other hand is very good when it comes to importing capital gains entries directly from Gains keeper.
2. For Straight-Forward Tax Returns: this is for people who enjoy bank interest in their accounts or from mutual funds. Tax Act is the best bet available in the market. Calculates returns as well as penalties.
The web version of Tax Act charges $7.95 to e-file a federal return and another $7.95 to file a state return. Good tax software is Snap Tax. It is reliable, quick and fills out Form 1040-EZ in 15 minutes and e-files your returns in half an hour.
3. for unique tax situations: a lot of complexities can occur while filing the returns. To manage such a web of intricacies, you have the Turbo Tax Premier which is near to the professional help that you can get.
4. Free Tax Software: The IRS, in partnership with various software companies, provides easy-to-use, free or almost free software to customers who meet a certain eligibility criteria.
- Complete Tax - offers web-based interface;
-Free File- which can help prepare and e-file your state return for no extra charge;
-Tax Act Online- which has a very good free file version and is one of the fastest;
-Tax Engine - which is free for everyone, ($10 extra to prepare state return) and offers an easy-to-use tax program that features both the interview-style and forms-based input?
-H&R Block Free File - which offers free tax preparation if your adjusted gross income is $34,000 or less. It is recommended only for the simplest tax returns. Preparing a state return costs an extra $19.95 to $29.95.
And the last but not the least, Online Taxes can be used for free if your gross income is less than $150000.
Could calculation of tax be simpler than this? I don't think so. Your tax returns now should be a simple affair and you don't need a consultant to do this either.
About the Author
Find more about Tax Deductions at http://taxdeduct.net
A multitude of tax deduction software is available in the market at dirt cheap prices.
1. for complex tax returns: If you have a huge business or multiple entries, then TurboTax Premier and Complete Tax is the best option available for you.
Both are web-based tax programs though Turbo Tax has a PC-based version too. Turbo Tax premieres an icing on the cake for people with rental income. Complete Tax, a time saver, on the other hand is very good when it comes to importing capital gains entries directly from Gains keeper.
2. For Straight-Forward Tax Returns: this is for people who enjoy bank interest in their accounts or from mutual funds. Tax Act is the best bet available in the market. Calculates returns as well as penalties.
The web version of Tax Act charges $7.95 to e-file a federal return and another $7.95 to file a state return. Good tax software is Snap Tax. It is reliable, quick and fills out Form 1040-EZ in 15 minutes and e-files your returns in half an hour.
3. for unique tax situations: a lot of complexities can occur while filing the returns. To manage such a web of intricacies, you have the Turbo Tax Premier which is near to the professional help that you can get.
4. Free Tax Software: The IRS, in partnership with various software companies, provides easy-to-use, free or almost free software to customers who meet a certain eligibility criteria.
- Complete Tax - offers web-based interface;
-Free File- which can help prepare and e-file your state return for no extra charge;
-Tax Act Online- which has a very good free file version and is one of the fastest;
-Tax Engine - which is free for everyone, ($10 extra to prepare state return) and offers an easy-to-use tax program that features both the interview-style and forms-based input?
-H&R Block Free File - which offers free tax preparation if your adjusted gross income is $34,000 or less. It is recommended only for the simplest tax returns. Preparing a state return costs an extra $19.95 to $29.95.
And the last but not the least, Online Taxes can be used for free if your gross income is less than $150000.
Could calculation of tax be simpler than this? I don't think so. Your tax returns now should be a simple affair and you don't need a consultant to do this either.
About the Author
Find more about Tax Deductions at http://taxdeduct.net
Saturday, December 12, 2009
Child Custody Agreement and Taxes
A child custody agreement can have serious implications on your tax filing and your taxes overall. This issue should be addressed with your attorney or with your accountant while you are going through the process of negotiating or litigating child custody or a divorce agreement. Waiting until after you have finalized a child custody agreement to investigate the tax impact is not adviseable.
State law on child custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with primary residential or sole custody will have all of the tax benefits available through the children. That party will be able to claim the children as deductions, and so forth. This can be a significant issue. There are parents who simply assume that if they are paying thousands of dollars per year in support, they will be able to take the children as deductions. Not so. This is incredibly important when you consider that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent.
Thus, when negotiating your cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax benefits. This negotiation should be a part of an overall financial scheme that encompasses a consideration of all issues, including child custody, child support, property, alimony, and tax impact.
The ability to claim head of household instead of married filing separate or even filing single can be incredibly important to your overall tax scheme. You can claim head of household if you have your children for more than 50% of the time. Thus, a head of household tax filing should be a part of the overall negiating outline in a divorce or separation situation. A child custody that is silent on this issue is really not a well negotiated or written agreement.
Your child custody agreement can address this issue in a number of ways. If your child custody agreement provides for joint shared custody, it must state who has the children for 50% of the time. If you have two children, you can divide that up so that each parent has the possibility of fiing for head of household. If you simply have joint custody and one parent has residential custody, you can still provide a head of household deduction to the other parent by wording the agreement in a way that allows for that filing.
There are other tax benefits available to parents that have to be considered when negotiating a child custody agreement. Many or most of those tax benefits are variable depending upon your income level ad whether or not you can claim the child or children as deductions. If you are really thinking through your child custody agreement, you will negotiate all of these benefits. The objective should be to maximize all available benefits for both parties, thereby providing an overall highly advantageous tax impact for your child custody agreement.
About the Author
Uk divorce law is an informative website that looks into all aspects of divorce law, from money and house sharing all through to children laws. To find out more visit http://www.ukdivorcelaw.com
State law on child custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with primary residential or sole custody will have all of the tax benefits available through the children. That party will be able to claim the children as deductions, and so forth. This can be a significant issue. There are parents who simply assume that if they are paying thousands of dollars per year in support, they will be able to take the children as deductions. Not so. This is incredibly important when you consider that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent.
Thus, when negotiating your cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax benefits. This negotiation should be a part of an overall financial scheme that encompasses a consideration of all issues, including child custody, child support, property, alimony, and tax impact.
The ability to claim head of household instead of married filing separate or even filing single can be incredibly important to your overall tax scheme. You can claim head of household if you have your children for more than 50% of the time. Thus, a head of household tax filing should be a part of the overall negiating outline in a divorce or separation situation. A child custody that is silent on this issue is really not a well negotiated or written agreement.
Your child custody agreement can address this issue in a number of ways. If your child custody agreement provides for joint shared custody, it must state who has the children for 50% of the time. If you have two children, you can divide that up so that each parent has the possibility of fiing for head of household. If you simply have joint custody and one parent has residential custody, you can still provide a head of household deduction to the other parent by wording the agreement in a way that allows for that filing.
There are other tax benefits available to parents that have to be considered when negotiating a child custody agreement. Many or most of those tax benefits are variable depending upon your income level ad whether or not you can claim the child or children as deductions. If you are really thinking through your child custody agreement, you will negotiate all of these benefits. The objective should be to maximize all available benefits for both parties, thereby providing an overall highly advantageous tax impact for your child custody agreement.
About the Author
Uk divorce law is an informative website that looks into all aspects of divorce law, from money and house sharing all through to children laws. To find out more visit http://www.ukdivorcelaw.com
Saturday, December 5, 2009
Top 5 Missed Tax Deductions
How many times have you done your taxes, and a week or a month later realized you forgot a deduction? The tax law is very complicated, so it's easy to miss a deduction or two. In my experience, these are the top 5 missed tax deductions.
1. Non-Cash Donations
Did you clean out your closets this year? Chances are you donated those items to Goodwill or a similar non-profit organization. The value of donated items (clothing, furniture, etc.) is deductible. You will need to get a written receipt and assign a value to these items, but the tax savings are worth the effort.
2. Points on Refinancing
With interest rates so low the past few years, there have been a record-number of houses refinanced. If you refinanced, you may have paid points to get a lower interest rate. These points are deductible over the life of the new loan. In addition, if you incurred points on an old refinancing, any unamortized points are deductible in the year of the new refinancing.
3. Educator Expenses
If you're a qualified educator (teacher, aide, instructor or principal), you can deduct up to $250 for materials you bought for the classroom. Qualified expenses include books, supplies, and computer equipment. This law is set to expire in 2006, so take advantage of it now if you qualify.
4. Investment and Tax Expenses
Expenses for tax planning and investment advice are deductible as a miscellaneous deduction, subject to the 2% Adjusted Gross Income (AGI) limitation. Expenses that qualify include tax preparation fees, safe deposit box fees, fees paid to investment advisors, legal and accounting fees related to tax planning, broker and IRA fees paid directly, investment publications, and more. Many people assume that they won't have enough miscellaneous expenses to exceed the 2% AGI floor, but all of these expenses combined can be substantial, especially if you have unreimbursed employee expenses to add to these expenses.
5. College Savings or 529 Plan Contributions
Depending on which state you live in, contributions to 529 college savings plans may be deductible on your state income tax return. Because this deduction is only available on the state return (no deduction available on your federal return for 529 contributions), many people fail to include this deduction on their state tax return.
By : Kristine A. McKinley
Kristine A. McKinley, CFP, CPA, and founder of Beacon Financial Advisors, offers financial and tax planning on an hourly, fee-only basis. To sign up for free financial planning tips, worksheets, checklists and more, visit http://www.beacon-advisor.com.
1. Non-Cash Donations
Did you clean out your closets this year? Chances are you donated those items to Goodwill or a similar non-profit organization. The value of donated items (clothing, furniture, etc.) is deductible. You will need to get a written receipt and assign a value to these items, but the tax savings are worth the effort.
2. Points on Refinancing
With interest rates so low the past few years, there have been a record-number of houses refinanced. If you refinanced, you may have paid points to get a lower interest rate. These points are deductible over the life of the new loan. In addition, if you incurred points on an old refinancing, any unamortized points are deductible in the year of the new refinancing.
3. Educator Expenses
If you're a qualified educator (teacher, aide, instructor or principal), you can deduct up to $250 for materials you bought for the classroom. Qualified expenses include books, supplies, and computer equipment. This law is set to expire in 2006, so take advantage of it now if you qualify.
4. Investment and Tax Expenses
Expenses for tax planning and investment advice are deductible as a miscellaneous deduction, subject to the 2% Adjusted Gross Income (AGI) limitation. Expenses that qualify include tax preparation fees, safe deposit box fees, fees paid to investment advisors, legal and accounting fees related to tax planning, broker and IRA fees paid directly, investment publications, and more. Many people assume that they won't have enough miscellaneous expenses to exceed the 2% AGI floor, but all of these expenses combined can be substantial, especially if you have unreimbursed employee expenses to add to these expenses.
5. College Savings or 529 Plan Contributions
Depending on which state you live in, contributions to 529 college savings plans may be deductible on your state income tax return. Because this deduction is only available on the state return (no deduction available on your federal return for 529 contributions), many people fail to include this deduction on their state tax return.
By : Kristine A. McKinley
Kristine A. McKinley, CFP, CPA, and founder of Beacon Financial Advisors, offers financial and tax planning on an hourly, fee-only basis. To sign up for free financial planning tips, worksheets, checklists and more, visit http://www.beacon-advisor.com.
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