Jeffrey B. Kahn, Esq. Discusses Taxes, the IRS and Repaying Student Loans On ESPN Radio – July 24, 2015 Show

Topics Covered:

1.  Beware IRS Scam Calls Are Still Going On.

2.  Proposed Changes To Student Loan Repayments

3.  IRS Summertime Tax Tips

• Don’t Overlook the Child and Dependent Care Tax Credit this Summer.
• Tips to Help You Pay Your Tax Bill this Summer

4.  Questions from our listeners:

• I listen to your show all the time and hear you say that you are Board Certified in Tax – what does that mean?
• I am getting ready to file my 2014 which will have a balance due that I cannot pay in full. What can I do?
• Why does the IRS file tax liens?

************************************************************************************************

Yes we are all working for the tax man!

Good afternoon! Welcome to the KahnTaxLaw Radio Show

This is your host Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

You are listening to my weekly radio show where we talk everything about taxes from the ESPN 1700 AM Studio in San Diego, California.

When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

It is my objective to make you smarter so that you legally pay the least tax as possible, avoid tax problems and be aware of the strategies and solutions if you are being targeted by the IRS or any State tax agency.

Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into our website at www.kahntaxlaw.com.

I have a lot to cover today in the world of taxes and helping me out will be my associate attorney Amy Spivey who will be calling in later.

And in the studio with me I have a special guest.  I want to introduce you to Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Chit chat with Windus.

Beware IRS Scam Calls Are Still Going On.

Jeff states: So today’s top story is:

Learning you are a victim of identity theft can be a stressful event. Identity theft is also a challenge to businesses, organizations and government agencies, including the IRS. Upon getting your personal information and social security number, scam artists may file a tax return under your social security number claiming a fraudulent refund or contact you pretending to be the IRS and extorting money from you.

Windus have you come across this situation in your practice?

Jeff continues, being a tax law firm we do get calls on this which is why I felt it important that I talk about this problem.

Listen to the story of Arati who works in New York City and immigrated to the U.S. from India.  Arati received a call from a Brian Cruz who called her house early in the morning before Arati left for work. He left his telephone number, name and noted he was calling from the IRS.  Arati put the number in her cell phone without searching for it online first.  After all it had a 202 area code which is Washington D.C. so she figured it had to be official.  Once she got into her car she called, and the man who picked up the call answered that this was the investigations bureau for the IRS. Arati asked for Cruz, but he wasn’t available. The man who picked up the call told Arati to give him the telephone number where Cruz left the message. She did, and then it began.

After the man confirmed Arati’s home telephone number, he stated that she attempted to defraud the IRS, and that the government was now taking legal action against her including issuing a warrant for her arrest within the next hour. When Arati asked what this was all about, he asked if she aware of an investigation against her. Arati replied “I have no clue about an investigation. This is the first time I’m hearing about any of this”.  Arati started to panic.  The man asked if Arati had a lawyer, and then told her about the investigation ordering her not to interrupt him while he speaks.  He then recited the last four digits of Arati’s social security number and recited where she worked. He seemed to know all of Arati’s personal information.  He told Arati that she failed to declare all of her income and engaged in tax fraud. He then told Arati that the government was seizing all property and all assets in her name that it had already froze her bank and credit card accounts, suspended her driver’s license as well as her passport. Furthermore, there would be a massive penalty, plus possible jail-time and that her social security number was now blacklisted.

Arati listened with fear to this man who went on to tell her someone would be waiting at her office to arrest her. Arati asked why this was the first time she was hearing about it. His reply: “This isn’t our first attempt to make you aware. We came to your house but you were not home.” Arati then asked what she owed the government. He replied approximately $4,900.  Arati then asked why she couldn’t just pay him the amount owed. He told her that the investigation was beyond the point of payment–it was too late.

The man then asked Arati questions like: Have you been part of any previous tax fraud cases? Are there currently any judgments against you? Are there any lawsuits pending against you? The man then stated she could wire the amount owed or deliver a check to him.

Now at this point Arati was starting to think that something was wrong. Being an IRS agent, wouldn’t he already have records showing that she has a clean record? Wouldn’t she have been audited if the IRS believed she owed taxes? Why would the IRS look to take such drastic action for only a $4,900 liability?  Arati started to doubt the man and when she pressed him to independently confirm that he works for the IRS, he replied: “How would you even find me using the IRS 1-800 number? This is my direct line. Do you want to find out if I’m a real IRS agent? You’ll see in an hour when the arrest warrant is issued.” Then, he hung up.  Arati then showed up at work and no agents were waiting for her.

I tell you this true story so you can get an idea on how far these scam artists are willing to go even if it is just to collect $4,900!

Windus comments?

Scam artists are now concentrating on Indian Americans and other South Asian Americans which are predominately located in California as part of our state’s huge and lucrative technology industry.  Scam artists pretending to be Internal Revenue Service officials threaten to send out an arrest warrant if money is not paid to them immediately over the phone.

This has been a big problem for the IRS and despite issuing multiple consumer alerts, the bogus emails, the bogus IRS letters and the bogus telephone calls continue and unfortunately taxpayers are still falling for this.  The government estimates that taxpayers have lost roughly $5 million to scammers.

Well I do not want you to become the next victim of any such scam nor do we want to ignore true IRS inquiries.  It is important to know that the IRS will not call you to demand immediate payment, nor will it call about taxes owed without first mailing you a bill or a notice.

Well it’s time for a break but stay tuned because if you have outstanding student loans my guest Windus A. Fernandez Brinkkord has some important information for you that can save you some money.

You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back.  This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And in the studio with me I have as my special guest Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

New Federal Student Loan Repayment Program is a Bad Deal for Borrowers

Jeff states: With the increasing costs of college more students are struggling to repay their loans and the new repayment plan proposed by the department of education will not bring the relief that is so desperately needed. This proposal was discussed in an article that was published in examiner.com about proposed changes in the Federal Student Loan Repayment Program [http://www.examiner.com/article/new-federal-student-loan-repayment-program-is-a-bad-deal-for-borrowers].

Jeff asks Windus: First tell us about the current system for repaying Federal student loans.

Windus to discuss the current plans, IBR & PAYE.

Jeff states:  By the way, Windus is a licensed financial planner who can help you plan for financial success and she is offering a special offer to our listeners.  Her firm Trilogy Financial Services will provide you with an Investment Audit which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. The number to call is 858.314.5169. That is 858.314.5169 for your free investment audit by Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Jeff asks: So what is the new plan all about?

Windus to discuss: The new plan was supposed to open up PAYE to essentially everyone instead of having people who had loans before October 2007 be exposed to a less favorable program. However, the new program REPAY would require you to 100% disclose your spouse’s income.  So if you were to take on these loans and be in the program and then at year 15 of the program, get married it could put you in a very BAD situation to have to make much larger payments on the student loans. This almost encourages people not to get married.

Jeff states:  Windus is offering a special offer to our listeners.  Her firm Trilogy Financial Services will provide you with an Investment Audit which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. The number to call is 858.314.5169. That is 858.314.5169 for your free investment audit by Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Stay tuned because after the break we are going to tell you some important summertime tax tips that can help you avoid tax problems with IRS.

You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back.  This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And in the studio with me I have as my special guest Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

IRS Summertime Tax Tips

Starting July 1^st, the IRS began offering its Summertime Tax Tip series which include useful information in English and Spanish. Tax Tip subscribers receive a new Tip via email three times a week during July and August. They also get a Tax Tip each weekday during the tax filing season. The IRS also issues Special Edition Tax Tips on important tax topics throughout the year.  Taxpayers can sign up for the IRS Tax Tips subscription through a free service on www.irs.gov. For this segment we have pulled some of these tips which we want to share with you and add our comments to them.

Don’t Overlook the Child and Dependent Care Tax Credit this Summer. IRS Special Edition Tax Tip 2015-12, June 15, 2015

Jeff states: Day camps are common during the summer months. Many parents pay for them for their children while they work or look for work. If this applies to you, your costs may qualify for a federal tax credit that can lower your taxes.

Amy states: Here are some tips to know about the Child and Dependent Care Credit.

1. Care for Qualifying Persons.  Your expenses must be for the care of one or more qualifying persons. Your dependent child or children under age 13 usually qualify.
2. Work-related Expenses.  Your expenses for care must be work-related. This means that you must pay for the care so you can work or look for work. This rule also applies to your spouse if you file a joint return. Your spouse meets this rule during any month they are a full-time student. They also meet it if they’re physically or mentally incapable of self-care.
3. Earned Income Required.  You must have earned income, such as from wages, salaries and tips. It also includes net earnings from self-employment. Your spouse must also have earned income if you file jointly. Your spouse is treated as having earned income for any month that they are a full-time student or incapable of self-care. This rule also applies to you if you file a joint return.
4. Joint Return if Married.  Generally, married couples must file a joint return. You can still take the credit, however, if you are legally separated or living apart from your spouse.
5. Type of Care.  You may qualify for it whether you pay for care at home, at a daycare facility or at a day camp.
6. Credit Amount.  The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on the amount of your income.
7. Expense Limits.  The total expense that you can use in a year is limited. The limit is $3,000 for one qualifying person or $6,000 for two or more.
8. Certain Care Does Not Qualify.  You may not include the cost of certain types of care for the tax credit, including:
   • Overnight camps or summer school tutoring costs.
   • Care provided by your spouse or your child who is under age 19 at the end of the year.
   • Care given by a person you can claim as your dependent.
9. Keep Records and Receipts.  Keep all your receipts and records for when you file your tax return next year. You will need the name, address and taxpayer identification number of the care provider. You must report this information when you claim the credit on Form 2441, Child and Dependent Care Expenses.

Jeff states: Remember that this credit is not just a summer tax benefit. You may be able to claim it for qualifying care that you pay for at any time during the year.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment.  Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Tips to Help You Pay Your Tax Bill this Summer.  IRS Special Edition Tax Tip 2015-15, June 30, 2015

Jeff states: If you get a tax bill from the IRS, don’t ignore it. The longer you wait the more interest and penalties you will have to pay.

Amy states: Here are some tips to help you pay your tax debt and avoid extra charges:

1. Reply promptly.  After tax season, the IRS typically sends out millions of notices. Read it carefully and follow the instructions. If you owe, the notice will tell you how much and give you a due date. You should respond to the notice promptly and pay the bill to avoid additional interest and penalties.
2. Pay online.  Using an IRS electronic payment method to pay your tax is quick, accurate and safe. You also get a record of your payment. Go to IRS.gov which will direct you to these services.  The options of Direct Pay and EFTPS are free services. If you pay by credit or debit card, the payment processing company will charge a fee.
3. Apply online to make payments.  If you are not able to pay your tax in full, some taxpayers are eligible to apply for an installment agreement using the Online Payment Agreement Application on IRS.gov. However, for taxpayers who are self-employed and do not have a steady source of income or taxpayers who have special cirumstances, this option may not be appropriate and you should consider consulting with a tax professional.
4. Check out a direct debit plan.  Regardless of who requests an installment agreement with IRS, a direct debit installment agreement is the lower-cost hassle-free way to pay. The set-up fee is less than half of the fee for other plans. The direct debit fee is $52 instead of the regular fee of $120. With a direct debit plan, you pay automatically from your bank account on a day you set each month. There is no need for you to write a check and make a trip to the post office. There are no reminder notices from the IRS and no missed payments.
5. Pay by check or money order.  Make your check or money order payable to the U.S. Treasury. NOT TO THE IRS! Be sure to include:
   • Your name, address and daytime phone number
   • Your Social Security number or employer ID number for business taxes
   • The tax period and related tax form, such as “2014 Form 1040”

Mail it to the address listed on your notice. Do not send cash in the mail.

Jeff states: And as Amy said if you are self-employed and do not have a steady source of income or you have special circumstances or you just need help in reaching a resolution on your unpaid taxes you need to contact us.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment.  Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show.  Amy says Thanks for having me.

Stay tuned as we will be taking some of your questions. You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back.  This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And in the studio with me I have as my special guest Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Jeff states: If you would like to post a question for me to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”.  You can then enter your question and maybe it will be selected for a future show.

OK Windus, so you have the honors of reading off this weeks questions for me to answer?

1. Carlos from Chula Vista asks: Hi Jeff I listen to your show all the time and hear you say that you are Board Certified in Tax – what does that mean?

An attorney who is Board Certified by the California Board of Legal Specialization in Tax Law must have demonstrated a broad based knowledge of statutes (primarily federal) dealing with the imposition and collection of taxes. The attorney must also have advised clients concerning their rights and responsibilities regarding taxes, the proper taxation transactions, and the procedure for contesting proposed and assessed taxes

To become Board Certified in Tax Law, an attorney must have:

1. Been licensed to practice law for at least five (5) years;
2. Devoted a required percentage of practice to tax law for at least five (5) years;
3. Handled a wide variety of tax law matters to demonstrate experience and involvement;
4. Attended tax law continuing education seminars regularly to keep legal training up to date;
5. Been evaluated by fellow lawyers and judges;

Passed a day-long written examination.

Initial certification is valid for a period of five (5) years. To remain certified, an attorney must apply for recertification every five years and meet practice, peer review and continuing legal education requirements for the specialty field.

The consumer can identify a Tax Law Board Certified attorney in one of many ways. A Tax Law Certified attorney is entitled to indicate certification on business cards and letterhead by stating “Board Certified-Tax Law”. The attorney may also display the certification in legal directories and telephone listings under “Attorneys-Board Certified.”

The California Board of Legal Specialization was created by, and operates under the authority of, the State Bar of California.

2. Barbara from Los Angeles asks: I am getting ready to file my 2014 which will have a balance due that I cannot pay in full. What can I do?

Here are four alternative options you may want to consider:

1. Additional Time to Pay Based on your circumstances, you may be granted a short additional time to pay your tax in full – usually 60 to 120 days. Taxpayers are granted this relief will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time.
2. Installment Agreement You can apply for an IRS installment agreement before your current tax liabilities are actually assessed. Remember that the sooner you start making payments, the less in penalties and interest you will be paying to the IRS.
3. Pay by Credit or Debit Card You can pay your Federal taxes by credit or debit card. IRS accepts all major cards (American Express, Discover, MasterCard, or Visa). Keep in mind that there is no IRS fee for credit or debit card payments, but the third-party processing companies charge a convenience fee or flat fee. If you are paying by credit card, the service providers charge a convenience fee based on the amount you are paying. If you are paying by debit card, the service providers charge a flat fee of $3.89 to $3.95. If following this option, do not add the convenience fee or flat fee to your tax payment.
4. Offer In Compromise An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. The IRS will consider your unique set of facts and circumstances:

• Ability to pay;
• Income;
• Expenses; and
• Asset equity.

Beware that not everyone will qualify for an Offer in Compromise program so you will want to check first with a tax professional.

3. John from San Francisco asks: Why does the IRS file tax liens?

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment.  Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Windus for joining me today.  Windus says Thanks for having me.

Well we are reaching the end of our show.

You can reach out to me on Twitter at kahntaxlaw.  You can also send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.  That’s k-a-h-n tax law.com.

Have a great day everyone!