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March 2012 Archives

Certain tax returns more likely to be audited by IRS

At this time of year, taxpayers in California and around the country are hoping to avoid the dreaded tax audit letter. The good news is that the Internal Revenue Service only audits a small percentage of the overall population--currently about 1 percent. The bad news is that audit rates are much higher among certain groups of taxpayers, whose returns single them out for additional IRS scrutiny.

Jury finds California man guilty in tax fraud case

According to the famous quip, taxes are one of the two things you can be certain of in life. But sometimes tax fraud schemes seem to be nearly as ubiquitous as taxes themselves. Earlier this month, a federal jury handed down a guilty verdict against an Orange County man whom prosecutors accused of filing false tax documents on behalf of customers.

Suffering complaints, national tax service declares bankruptcy

Many California taxpayers have undoubtedly seen the television advertisements for large-scale tax firms that promise aggressive representation in tax cases with the Internal Revenue Service. Two of those firms, however, have already gone bankrupt, and a third sought bankruptcy protection this week.

California man faces fraud, witness tampering charges in tax case

A few prior blog posts have warned taxpayers to protect their identities and to beware of unscrupulous return preparers promising unrealistic refunds this tax season. But a story from Southern California involves a tax preparer facing charges far afield from anything we have discussed up to this point.

IRS adds to Fresh Start program to help people pay taxes, Part 2

In our last post, we discussed how some California taxpayers can benefit from a six-month extension to pay taxes this year. But some taxpayers have large debts to the IRS that may take them a significant amount of time to pay off. There are other options that can help these taxpayers, such as installment agreements and offers in compromise. Under the Fresh Start program, the IRS has also announced changes to these options with the goal of helping struggling taxpayers.

IRS adds to Fresh Start program to help people pay taxes, Part 1

The deadline to file taxes with the IRS is just over one month away. People can face significant penalties and interest for failing to file returns and failing to pay taxes by the appropriate deadline. But Orange County taxpayers should know that the IRS has initiated new developments this year under its "Fresh Start" program that could ease the burden on those having difficulty filing and paying their taxes.

Additional taxes may apply to early withdrawals from IRAs

The economic downturn of the past few years has caused many people in California and across the country to tighten their belts and watch their budgets carefully. For some people, wages and savings were not enough to cover costs and they unfortunately had to withdraw money from retirement accounts. Under certain conditions, taking funds out of an IRA account can have tax consequences.

IRS warns of fraudulent preparers offering large tax refunds

Many Orange County taxpayers may be anticipating a refund from the IRS this spring. Californians use their refunds for any number of things, including home improvement, paying down debts or making the big purchase they have had their eyes on for a while. Unfortunately, scam artists also look forward to tax season because they hope to defraud honest people out of their hard-earned tax refund.

Complex tax rules await some California taxpayers this year

The legendary complexity of the Tax Code is common knowledge among Californians. While the IRS has taken steps to simplify the tax return process, arcane and difficult rules can come into play for many taxpayers, and mistakes made on returns can lead to contact from the IRS. In addition, the differences between California's tax laws and the federal government's can be enough to confound even the savviest taxpayers.