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WIN OF THE MONTH Turning a Costly State Tax Nightmare Into a 99% Victory
Failing to Keep Good Records Receipts tucked away in a shoebox aren’t a great strategy. If you ever get audited (knock on wood), you’ll need solid proof of expenses. Use an app, spreadsheet, or accounting software to track everything. Your future self will thank you. Missing Out on Deductions You’d be surprised at how many things you are able to legally deduct: home office expenses, internet, phone bills, and even some travel expenses. Don’t leave money on the table! But remember, if you’re claiming it, you need to be able to prove it. Misclassifying Yourself or Others If you’re hiring contractors, make sure they’re actually independent contractors and not employees. Misclassifying workers can lead to huge IRS penalties, and that’s not exactly the kind of surprise you want. Failing to Save for Self-Employment Taxes When you work for yourself, you don’t just pay income tax; you also owe self-employment Avoid These Tax d Cost You Big Time
CASE SNAPSHOT
Client: School Teacher Type of IRS Issue: Personal Income Tax Tax Year in Question: 2021
IRS Claimed Liability: $88,829
Savings Secured: $88,294 (99.4%!)
tax, which covers Social Security and Medicare. If you don’t plan ahead, you might end up writing a check to the IRS.
At IRS Trouble Solvers, we take pride in delivering real solutions for taxpayers facing overwhelming tax liabilities. This month, we’re highlighting a client who came to us in distress, burdened with a massive tax assessment — one that was never supposed to exist in the first place. The Challenge Our client, a dedicated schoolteacher with a small side business selling educational materials online, was blindsided by a state audit. Due to incorrect tax filings by a previous preparer, the state assessed her with a $88,829 tax liability for General Excise (GE) taxes — a tax similar to a sales tax. To make matters worse, delays in gathering and submitting documentation resulted in multiple levies on her account. Our Strategy Our team conducted a deep dive into her records, meticulously analyzing the taxability of her sales. We identified that the vast majority of her revenue was not subject to GE taxes. However, proving this to the state required patience, persistence, and extensive documentation. The Result Through careful audit reconsideration and strategic advocacy, we successfully reduced her liability by 99% — saving her $88,294! Even better, she was able to recover previously levied funds, turning what once seemed like a financial catastrophe into a major win. The Takeaway This case highlights the importance of working with experienced professionals who understand state and federal tax complexities. If you or your clients are facing unexpected tax issues, let IRS Trouble Solvers help navigate the process and fight for the best possible outcome.
INGREDIENTS
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1 (4 lb) corned beef brisket with spice packet
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3 celery stalks, cut into 2-inch pieces
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3 qts water
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1 tsp salt
1 onion, quartered
2 lbs red potatoes, halved 1 small head of cabbage, cut into eighths
3 carrots, cut into large chunks
1. In a large pot or Dutch oven over medium-high heat, combine corned beef, spice packet contents, water, onions, carrots, celery, and salt. Bring to a simmer (skimming off any foam on top). 2. Cover pot, reduce to low heat, and let simmer for 3 hours until meat is fork tender. 3. Add potatoes to the pot and let simmer uncovered for 30 minutes or until potatoes are al dente. 4. Add cabbage along the edges of the meat and on top. Cover and let simmer until cabbage is tender, 20–30 minutes. 5. Place meat on a cutting board and let rest for 10–15 minutes. After meat has cooled, slice against the grain. 6. Add to a large serving bowl, ladle vegetables and broth over top, and serve. DIRECTIONS
Have a tax problem that needs solving? We’re just a call away.
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