Financial Articles

I would love to pay a lot of taxes, A LOT! Crazy you say, well the reality is unless I am going to dodge the law and take my chances I am going to have to pay taxes. I know so many people worried about how much tax they are going to have to pay. Well my dad taught me something that I will always remember. I would rather pay a lot of tax than a little because it means I am making a lot of money. I never think of taxes, I think of ways to make a ton of money. Through research I found a great tax accountant and he thinks of how to legally keep my tax burden at a minimum. We each do what we are good at and my bank account thanks me for it.

There are all these laws of making money. One is you get what you focus on. That is why I focus on making lots and lots of money and I let someone else worry about how to keep the government out of my money. It keeps me open to possibilities, I have seen it so many times people saying I don’t want to work that shift because it will bump me into the next tax bracket. So I go and do the shift, meet someone and we do a huge deal together in land. With that kind of money being made the tax bracket just does not matter much anymore. You will also find out when you make a lot of money, that the rich really pay a much lower tax rate than you think. While it publicly is 40-50%, in reality it can be much, much, much lower. It does pay to find a good tax person, they are normally strange people that like reading government documents that don’t make sense to the average guy.

When you have made a bunch of money for a while you also will start to learn the bigger pictures of paying less tax. You will start to find investments or business arrangements that offer better protection from taxation and of course you will take advantage of them. A warning, unless you are the worlds largest cola company do not purposefully avoid paying tax. Having the government on your case for 5-10 years is not a fun place to be. Worry about making more money and let the system take its share. Is it fair, no? Is it right, no. Is it easier to make more money than to change the system, YES!

Like all games there are rules no one likes, the rules of living in one of the greatest countries in the world is you pay tax. We could move to some third world banana republic where we have to hire the army to surround us if we wanted to go shopping. But we choose to live here and there is a cost and taxes sure are one of them.

The bottom line is wrap your mind around what is the best use of your time. Make a lot of money and give the tax department their share or only make a modest amount of money so you don’t have to pay too much tax. I promise you when you start to make a lot of money there are tax smart people out there that will dramatically lower your tax bill, legally. So remember your goal is to be wealthy and debt free, it isn’t to be so poor that you aren’t required to pay taxes!

The IRS has set its eyes on a new source of revenue — online business.

The agency is discussing creating new tax reporting requirements that will help crack down on under-reporting by individuals and businesses that sell goods online.

No details have been announced as of yet, but new reporting requirements could change the Web for stand-alone retailers as well as individuals who sell items through online auction sites, such as Ebay.

Sales continue to see rapid growth in e-commerce. Retailers generated $87 billion in online sales in 2005, according to the Commerce Department. The IRS has long thrown around the idea of looking towards the Web as a source of revenue to narrow the tax gap.

Currently, if you sell an item online and make more money than the purchased value, you have to report that money as income on your tax return. If the original purchase value cannot be determined, it is often valued at $0 under the current law.

Many individuals are not aware that they must report their earnings, said Tom Ochsenschlager, vice president of taxation for the American Institute of CPAs.

“They don’t understand where they have crossed the line between a business and a hobby run out of their garage,” explained Ochsenschlager.

The IRS is currently considering third-party reporting from the auction sites to the IRS. Representatives for Ebay say that they will turn over information if issued a subpoena, but that they maintain client privacy as a high priority.

In 2004, the IRS was given the authority to use third party debt collectors to hunt down taxes owed by delinquent taxpayers. Scam artists knew an opportunity when they saw one.

Dealing with Scam Artist Pretending To Be IRS Debt Collectors

In an effort to track down delinquent taxpayers, the federal government gave the IRS the right to hire private debt collectors in 2004. You know, those annoying people that call during dinner. The reason for this change in policy actually made some sense. With as much information as the IRS is forced to deal with, it simply took forever for the IRS to start collection actions. By using the third parties, the IRS would be able to get the process moving without taking up employee time.

As you might imagine, the private tax debt collector program sounded like a good idea, but proved to be problematic. There were two primary problems. First, the legitimate debt collectors were threatening taxpayers. Second, scam artists started posing as debt collectors to collect money from naïve tax collectors or perform identify theft on them. It is this second problem that we focus on here.

The central problem with the new debt collector program is how does a taxpayer know if they are dealing with a legitimate company or a scam artist trying to rip them off? Well, the IRS has instituted a new program in an effort to clarify matters. Here are the highlights:

1. If the IRS is going to use a private debt collector to come after you, the agency will first send you a letter indicating as much. The name of the company handling the debt collection will be included in the letter. If you do not receive this letter, ignore or report any parties claiming to be debt collectors to the IRS immediately. Play along and get their contact information so the IRS can hammer them.

2. When dealing with the debt collector, you will eventually reach a point where you write a check. The check should be written to the United States Treasury. If the debt collector instructs you to write it to any other name, they are scam artists and you should report them immediately. There is no exception to this rule. All payments are made to the United States Treasury, just like if you had actually paid your taxes on time!

Scam artists are very creative when it comes to thinking up schemes for ripping people off. Understand and stick to the following guidelines and you can foil them.