Final Thoughts For 2011 Tax Returns on Deadline Day

Today is April 17th: Tax day. I’m sure that it will be discussed during the day’s talk shows and news broadcasts, and there will be long lines at the post offices that stay open until midnight. There will be reminders aplenty around you today that this is the day, the final day, the deadline, the “do it or go to jail” day.

In reality, that’s all hogwash.

In all actuality, there is only one firm, hard deadline today for most taxpayers: Today is the last day the IRS will accept e-files. If you file tomorrow, you have to mail it in.

What about an extension? Yes, if you want to file an extension, it’s a good idea to do so. But NOT filing an extension doesn’t have any real consequences.

If you owe the IRS money for 2011, then yes, today is theoretically the deadline to pay it. But for most people reading this particular article, the reason they’re reading this info in the first place is because they don’t have the cash on hand to pay their tax bills. So what really happens if you don’t file and pay on time?

Really, nothing of non-monetary consequence.

Yes, you’re going to pay some interest and penalties if you owe. There are both late filing penalties AND failure to pay penalties, and yes, they’re steep. These penalties are a percentage of what you owe, as are interest charges. Interest is compounded daily, which starts to add up.

If you’re able to pay your taxes with cash, a credit card, or borrowing the money from relatives, then do so, and do it on time. Even if you owe several thousand dollars and have room on a credit card to pay it, then do so, and do it on time — the finance charges on the card are going to be a lot lower than what the IRS will charge you over the course of 6 months to a year.

If you owe the IRS so much money that you simply can’t pay it no matter what, then don’t fret too much. If this is the first time you’ve accrued a tax liability, then the IRS has special rules that allow for the forgiveness of penalties for first time offenders.

If you have previous tax liabilities, then this will get added on to your total. As your total grows, so does your eligibility for certain tax resolution … Continue reading

Jury Awards TaxMasters Victims $113 Million

TaxMasters, a tax resolution firm based out of Houston, TX, had been under investigation by the Texas Attorney General since 2010 for unethical sales practices. After finally going to trial earlier this year, a jury has passed down a verdict of $195 million against the firm. This amount includes $113 million in restitution to the firm’s customers, $81 million in civil penalties, and $1 million in attorney fees. The company was found guilty of 110,000 violations of Texas consumer protection laws.

Founder and CEO Patrick Cox himself must pay well over $40 million of the award from his own personal fortune.

The firm was primarily accused of failing to disclose it’s no-refund policy, and for failing to immediately start work on a client’s case, but rather waiting until fees were fully paid before even doing anything to protect clients.

The firm recently filed for Chapter 11 bankruptcy protection during the course of the trial.

If you were a TaxMasters client, however, don’t expect to get any money. In it’s bankruptcy filing, the company only listed $50,000 in assets, and it is unlikely that Patrick Cox possesses the $40 million assessed against himself.

So, what can you do if you are a victim of TaxMasters, or any other company? Here are some quick tips:

  1. Contact your Revenue Officer immediately, to find out the status of your case in the collections process.
  2. If you have tax returns that are overdue, get them filed immediately.
  3. Assemble any financial information requested by your Revenue Officer.
  4. Request a 120 day collections hold in order to give you time to put everything together and prepare a plan of attack, particularly if you can’t pay your tax debt in full.
  5. If your tax situation is more complex than you are comfortable handling, then seek professional assistance from a licensed taxpayer representative (Enrolled Agent, CPA, or tax attorney).

It’s a travesty that unscrupulous companies such as TaxMasters, American Tax Relief (shut down by the FTC with a $105 million judgement), Roni Deutsch (shut down by the California AG), and JK Harris (went bankrupt in 2011) have been stealing from hardworking taxpayers for years (TaxMasters complaints ran back to 2005). Always conduct proper due diligence before hiring any tax resolution firm.

Even if you already have representation, if you want a second opinion about your case, be sure to contact a local tax firm in our directory.… Continue reading

47 Ways To Market Your Tax Practice

In the spirit of getting ready for the end of tax season, and planning for the rest of the year and the Great Big, Scary Marketing Things we’re going to be discussing (and implementing!) over the coming weeks, I wanted to start with a brainstorming exercise. This is a list of things I came up with in a span of about 10 minutes for marketing a tax practice. Go through this list yourself, and think about how you could use these ideas in your own practice.

Heck, just go ahead and print this out (paper…they still make that, right?) and jot down a short note to the right of each idea about how you could use this in your own business. For example, can you use a particular media for getting new clients? For keeping in touch with existing clients? For promoting a seminar? How can you interlink multiple ideas together?

Then, I challenge you to add AT LEAST five things to this list of your own. Keep in mind that while most of what I’ve written here are actually marketing media, don’t limit yourself to just the various media. What marketing message can you think of to use for a particular media? What about different target markets you could go after, and what you could say to them?

1. Craigslist
2. Facebook
3. Twitter
4. Squidoo
5. StumbleUpon
6. Digg.com
7. Internet discussion boards
8. Public bulletin boards
9. Door hangars
10. Post-It Notes
11. Commenting on blogs
12. Direct mail postcards
13. Direct mail newsletters
14. Referral request letters
15. Local newspaper classified ads
16. Classified ads in trade publications
17. Your own blog
18. Your own email newsletter
19. Local seminars
20. Press releases
21. Meetup.com meetups
22. Presenting at local organizations (Kiwanis, Chamber of Commerce, Board of Realtors, etc).
23. Business cards
24. Ebay (service section)
25. Kijiji (eBay classifieds)
26. Network on LinkedIn.com
27. Post vides on YouTube, Vimeo, etc.
28. Host a live weekly web show on UStream
29. Reactivation letters to former clients
30. Radio interviews
31. Flyer inserts in local newspapers
32. Bandit signs
33. Street corner sign wavers
34. Trade shows (collect people’s contact info!)
35. Customer appreciation parties
36. Write articles on EzineArticles.com
37. Join a mastermind group
38. Participate as a speaker at other people’s workshops
39. Write a book
40. Create an email signature
41. Put brochure boxes at other businesses
42. Hold … Continue reading