Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Oct 31

    Being self-employed has several advantages: you control your own destiny, you take the risk – and reap the rewards, and you set your own work schedule. One disadvantage that many despise is having their business tax burdens placed solely on them. So let’s look at a few ways to help ease that burden:

     

    • You will make the time to organize and record your business activity in a systematic fashion throughout the year. Don’t wait till the last minute to gather your business documents (including income and expenses). A sure fire way to create stress at the end of the year, or at the tax-filing deadline, is to put-off gathering all the information for someone to prepare your business and personal returns until the last minute. Waiting until the last minute makes it easy to leave out or overlook pertinent information that could potentially help save you money.
    • You will review your gross income and expenses to-date on a regular basis. If you failed to follow the first commandment, then estimate your income using last year’s income as a baseline and adjust up or down accordingly. When estimating expenses don’t forget business meals and entertainment, gifts, equipment, supplies, taxes, licenses, etc. Also, make a separate folder to retain documentation of your home office expenses which may include utilities, rent or mortgage interest paid, insurance, etc. These documents will come in handy when deciding if you should make quarterly tax estimates.
    • You will set aside money to cover your tax obligations. Self-Employed individuals often ask, “How much should I set aside for taxes?” Each tax situation is different, but as a rule-of-thumb we suggest setting aside approximately 30% of your income to cover federal, state, and self-employment taxes. The best way to do this is to create a separate bank account and deposit the money for taxes in this account. This can be used as a safe guard; out of sight, out of mind.

     

    The keys to easing this tax burden are good record keeping, staying organized, and periodically setting some time aside throughout the year for tax planning. Remember, we are always here to help answer any of your tax planning questions.

  • Oct 17

    Have you heard the saying, “if it sounds too good to be true it probably is.”? Have you seen the ads on television telling you that you can pay the IRS a fraction of what you really owe in taxes? Does that sound too good to be true? Guess what. It is! The Federal Trade Commission has shut down several of these “IRS tax resolution service” companies including American Tax Relief, LLC; TaxMasters; and JK Harris. You may have seen the ads on television yourself. The FTC froze millions of dollars in assets held by American Tax Relief, LLC and its owners. The company allegedly made false claims to thousands of consumers telling them that the company could reduce their tax debt.

    The recent settlement between the FTC and American Tax Relief, LLC will allow the FTC to mail more than $16 million to 18,571 consumers who had paid money to the company in hopes of reducing tax debt. That is approximately $862 to each consumer. This represents, according to the Federal Trade Commission, 16% of the amount they lost. To put it another way, we can also say that each consumer paid about $5,400 to this company in an effort to reduce tax debt.

    If you owe the IRS money and need help, a reputable attorney or certified public account is the best, dare I say only, solution. You do have options and we can work out installment agreements that are manageable and keep the IRS from levying property or earnings. An offer-in-compromise may be another option. This is an offer to pay an amount to the IRS to satisfy the entire tax debt. This is a great option, however the paperwork is difficult and recently the IRS has not been accepting as many of these offer-in- compromises as we would like. We can help you decide what option is best for you, given your financial circumstances.

  • Oct 3

    My day started off like any other work day would… I woke up, got ready for work, said good-bye to my wife and walked out the door. Little did I know that I was about to receive a couple of phone calls that would spoil my day.

    The first time my phone rang, I did not recognize the number, therefore I did not answer it. However, the caller proceeded to leave me a voice message stating:

    “Hey, my name is Special Agent Harris with the IRS and this is an important phone call and it should not be ignored! You need to return my phone call as soon as possible!”

    It wasn’t even fifteen minutes later that I received a second phone call, from the same number. This time I answered the phone and a man with a strong foreign accent proceeded to tell me in a threatening/hostile voice:

    “My name is Special Agent Harris and I work for the Treasury Department. I am calling you about your outstanding tax liability. If you disconnect this phone call at anytime, I will have a warrant placed for your arrest. You owe $2,550 for your 2012 tax return and this must be paid by the end of the day. We have contacted your CPA and they have yet to help us solve this issue. If this balance goes unpaid we will have you arrested and placed in jail for up to a year. If you notify anyone about this phone call you will be detained for three years. If you are currently employed, we will be contacting your employer to notify them of your criminal activity. This payment needs to be made to the Treasury Department in Washington D.C. and you will need to notify me when you have the funds ready.”

    After hanging up the phone, I immediately called my daughter. I remember telling my daughter, “You cannot tell anyone what I am about to tell you, but I need your advice.” She told me to contact the IRS immediately and gave me a fraud reporting tip phone number and the local IRS office phone number.

    After staying on hold with the fraud reporting hotline, for what seemed forever, I hung up and decided I needed a new plan. I knew I had to get this problem solved immediately. What if this was a valid phone call, what if I do owe this money, am I going to get arrested today, what has this moment come to… My head filled with all these uneasy thoughts and I knew I needed answers NOW!

    I called my boss and told him that I needed to take off from work, something urgent had come up and it had to be settled as soon as possible. I am thankful that my boss did not give me any trouble, and I decided to head straight to the local IRS office to get my answers.

    At the local IRS office I was told that it was a scam and that several people in the Mobile area have been victims of these phone scams. The IRS personnel assured me that the IRS would contact me via mail if I had an outstanding tax liability. The local IRS personnel also gave me a number to report the scam and stated if the impersonator was persistent in his harassing to contact the local FBI. However, when calling this number I got an automated message stating that due to the high call volume of reporting the IRS impersonator scam, the voice mail box is full and to report this scam I could visit www.tigta.gov.

    I visited the tigta.gov website and reported the IRS imperator phone scam. However, the website did not ask me any specifics about the conversation that took place or the phone number of the impersonator. Therefore, I wonder how this problem is really being handled, who is really handling it, and how many other people are being scammed by this same individual.

    The World Wide Web is full of information, so I decided to do a reverse phone number look up. I mean this so called “Special Agent” did give me his number to call him back when I got the funds together, so why not see what I can find out with this little piece of information. When researching the phone number, the information I received from the white pages was shocking. This number was from a Broadvox landline in Los Angeles, CA and was reported as having moderate phone scam activity. Also listed on this page were other individuals and their stories about how they were victims of this same IRS impersonator from this same phone line. So why can’t this IRS impersonator be stopped?

    This IRS impersonator phone scam really put a damper on my day. This created a horrible headache from stressing about the situation to having to leave work abruptly. Once hearing this was a scam, I wanted to go through the phone and wring the guy’s neck, say a few choice words, and press criminal charges against him… However, I am left wondering if this phone scam is being dealt with, if anyone is pursuing the issue, and if this impersonator is going to threaten me again.

    According to recent articles and the latest numbers, based on 90,000 complaints received by the TIGTA there has been close to 1,100 victims who have lost approximately $5 million from these scams. The articles state that some of these impersonators will use fake names and badge numbers, some can even recite the last four digits of your social security number, and some spoof the IRS toll-free number on caller ID to make it appear it’s really the IRS calling you. But the IRS warns the taxpayers to not fall victim of this ongoing phone scam, but to be aware of how you should handle the situation. First you should hang up the phone, there is no reason to listen to the harassing threats they are going to make… don’t waste your time! Next, if you know you owe taxes or think you might, call the IRS at 1-800-829-1040 and an IRS employee with help you with setting up a payment plan. What should you do if you know for a fact that you do not owe the IRS? Well, the IRS advises the taxpayers to report the phone call to the Treasury Inspector General For Tax Administration (TIGTA) at 1-800-366-4484 and to the Federal Trade Commission at www.FTC.gov (add “IRS Telephone Scam” to the comments of your complaint).