Tax Deadline, April 17th, Is Just A Few Days Away…….

The last day to file your tax return is just a few days away. Traditionally the last day to file your tax return is April 15^th.  This year’s filing deadline has been extended because the traditional April 15 filing deadline falls on Sunday and the following Monday is a legal holiday in Washington, D.C.

If you do not have enough time to file your tax return by the deadline, you can request a 6 month extension. The extension does not extend your time to pay any federal or state income taxes owed by the April 17 filing deadline to avoid penalties and interest for late payments.

California provides an automatic six-month filing extension.

Here are seven important things you need to know about filing an extension:

1. File on time even if you can’t pay If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to the IRS website at http://www.irs.gov and click “Apply for an Online Payment Agreement (OPA)” at the left side of the home page under Online Services. If you are unable to make payments, call the IRS at 800-829-1040 to discuss your options.

2. Extra time to file An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 17 deadline, plus you may owe penalties.

3. Form to file Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to the IRS by April 17, 2012, or make an extension-related electronic credit card payment. For more information about extension-related credit card payments, see Form 4868.

4. E-file extension You can e-file an extension request using tax preparation software with your own computer or by going to a tax preparer who has the software. The IRS will acknowledge receipt of the extension request if you file by computer.

5. Traditional Free File and Free File Fillable Forms You can use both Free File options to file an extension. Access the Free File page at http://www.irs.gov.

6. Electronic funds withdrawal If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers. For information about these and other methods of payment, visit the IRS website at http://www.irs.gov or call 800-TAX-1040 (800-829-1040).

7. How to get forms Form 4868 is available for download from the IRS website or may be ordered by calling 800-TAX-FORM (800-829-3676).You can also obtain the form at your local IRS office. Telephone requests normally take 7 - 15 days to process and ship.

For more information about last-minute help with federal income taxes, go to www.irs.gov or call 1-800-829-1040. Last-minute assistance with state income tax returns is available at www.ftb.ca.gov or by calling 1-800-338-0505.

How to Choose a Tax Preparer

Tax return preparer fraud involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients. Preparers may, for example, manipulate income figures to fraudulently obtain tax credits, such as the Earned Income Tax Credit.

In some situations, the client, or taxpayer, may not know of the false expenses, deductions, exemptions and/or credits shown on his or her tax return.  When you sign your tax return, you are stating that under penalties of perjury you have examined your tax return and all the information that is reported is true, correct, and complete. When the IRS audits your tax returns and detects a fraudulent return, you the taxpayer — not the return preparer — must pay the additional taxes and interest and may be subject to penalties. 

The IRS has enhanced compliance in the return-preparer community by investigating and referring criminal activity by return preparers to the Department of Justice for prosecution. The IRS can also assert appropriate civil penalties against unscrupulous return preparers.

While most preparers provide honest service to their clients, the IRS urges taxpayers to be careful when choosing a preparer –– as careful as they would be choosing a doctor or lawyer. Even if someone else prepares a tax return, the taxpayer is ultimately responsible for all the information on the return. For that reason, taxpayers should never sign a blank tax form. And they should review the return before signing it and ask questions on entries they don't understand.

Helpful Hints When Choosing a Return Preparer

·         Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.

·         Avoid preparers who base their fee on a percentage of the refund.

·         Use a reputable tax professional who signs the tax return and provides a copy.

·         Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.

·         Check the person’s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents (EAs) can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.

·         Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.

·         Ask friends and family whether they know anyone who has used the tax professional and whether they were satisfied with the service they received.

Reputable preparers will ask to see receipts and will ask multiple questions to determine whether expenses, deductions and other items qualify. By doing so, they are trying to help their clients avoid penalties, interest or additional taxes that could result from an IRS examination.

Tax evasion is a risky crime, a felony, punishable by five years imprisonment and a $250,000 fine.

Top 10 Celebrities with Tax Problems

Celebrities, some of us love them and some of us hate them.  They are rich, famous, and have everything!  But guess what, celebrities have tax problems too and really big ones.  Here my list of top 10 celebs with tax problems.

10.  Flavor Flav $183,000

This rapper-turned-reality star has been listed by the California Franchise Tax Board as owing over $183,000 to the state of California. 

Looks like your giant clock has ran out of time and it's time to pay up.












9. Jaime Pressly $376,000

This famous actress has been on hot show "My Name is Earl" and in popular movies such as "I Love You Man" and "Not Another Teen Movie,"  Now the IRS and CA FTB have filed tax liens against her in LA County. IRS for $281,699 and FTB for $95,080.














8. Xzibit $502,000

Rapper/Pimp My Ride host have run into various financial debts which include $501,840 in taxes to the IRS.

Looks like he wont be pimping anything until he pays up.















7. Val Kilmer $539,000

This actor had a tax lien filed in New Jersey on an address in the town of Old Tappan.

Not so smooth after all Val.















6. Aaron Carter $1,000,000

The pop star who once stole the hearts of many little girls has now stolen a lot of money from Uncle Sam. At least that's what a lien that was filed by the IRS in LA county says.  The lien was filed for about $1,000,000 dating back to 2003.














5. Al Capone $80,000 ($1,073,039 today's value according to inflation rates)

Ah yes, Al Capone.  The famous Chicago gangster who once made jokes about taxes and how the feds could not collect legal taxes on illegal money.  The feds tried many strategies to bring him down and put him away but failed until in 1931 the IRS charged him with tax evasion and was sentenced to 11 years in jail.













4. Pamela Anderson $1,952,000

This sexy Baywatch babe has been listed on the Franchise Tax Board website as top 250 delinquent taxpayers.  Liens have been filed against her in LA county by the IRS for $1,700,173 and Franchise Tax Board for $252,360.















3. Heidi Montag & Spencer Pratt $2,000,000

MTV famous couple, who love attention from the press, have now caught the eyes of the IRS.  The couple is said to be bankrupt, homeless living with Spencer's dad, and owing about $2,000,000 in back taxes. 














2. Chris Tucker $3,600,000

Comedian/Actor famous for his role in "Rush Hour" is also in trouble with CA FTB.  Tucker owes taxes to the state of California for 2001-2002 and 2004-2007.

1. Joe Francis $33,800,000

Famous for his Girls Gone Wild videos, Joe was in trouble with the IRS and had a lien filed against him for $33,800,000.  Papers say that he sued the IRS and won.  No news on the lien being released.



So what can we all learn from this?  Know what's going on with your finances and taxes. Hire a professional before it's to late.