Andrew Samaniego | Tax Resolution Blog | CA

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The IRS Is Always Watching: Fix Your Tax Problems Before They Ruin Your Holidays!

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My Tax Family,

It was a crisp evening last night, and as I set up the pack and play for my son Kainalu, with The Godfather playing in the background, I couldn’t help but hear of one of the greatest lessons Don Vito Corleone ever gave us: “A man who doesn’t spend time with his family can never be a real man.”

This line resonates deeper than ever for those of us juggling life, work, and… let’s not forget… IRS troubles. Many people think they can shove their tax problems into a drawer and forget about them until January. But let me tell you something: the IRS is like a silent capo—always watching, waiting for you to make the wrong move.

Why You Should Handle Your IRS Problems Now

Imagine sitting at the Christmas dinner table, the warmth of family surrounding you. Suddenly, your phone buzzes. It’s your bank, and every dollar in your account is frozen. Why? The IRS just issued a levy, and you never saw it coming. That’s the kind of holiday “gift” nobody wants, yet so many risk because they didn’t act in time.

  1. IRS Penalties Compound Faster Than You Think
    Penalties and interest are the IRS’s “offer you can’t refuse.” Every day you wait, the amount you owe grows, turning your $10,000 problem into $15,000 or more.
  2. Your Family Deserves Peace of Mind
    Keeping your tax debt a secret from your spouse is like Fredo going behind Michael’s back—it’s bound to explode sooner or later. Don’t let the IRS come between you and your loved ones.
  3. You Don’t Have to Fight Alone
    Remember how Don Corleone always had his consigliere? That’s what an Enrolled Agent like me is for. I know the ins and outs of IRS negotiations and can help you settle or reduce your debt. Think of me as your Tom Hagen, guiding you through treacherous waters.

Make Your Move Before It’s Too Late

The IRS doesn’t “forget” about you. Even if you haven’t received a letter in months, rest assured they’re gearing up for their next move. But you can flip the script. Fix your tax problems now, and you’ll be able to sit down with your family during the holidays—without that weight on your shoulders.

Ready to take control? Download the “IRS Battle Plan” for free at CrushIRSAnxiety.com. It’s your step-by-step guide to getting ahead of the IRS and securing your family’s financial future.

Because as Don Corleone might say: “A man who solves his tax problems before the holidays… can truly enjoy cannoli with his family.”

Until next time,

Andrew “Sonny” Samaniego, EA, CTRC

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

The Retirement Dilemma: A Tax Tale with a Twist

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Happy Friday, Tax Debt Killers! Today, I’m here to share a success story that sheds light on a common retirement dilemma many folks might face. It’s about Mary (not her real name), a client who faced a staggering tax bill thanks to an all-too-common oversight with her 401(k).

The Problem

Mary, at retirement age, decided it was time to downsize and simplify. She found a reasonably priced condo in sunny Southern California—a perfect spot to enjoy her golden years. Using money from her traditional 401(k) to make the purchase seemed straightforward. After all, there were no early withdrawal penalties at her age. Sounds easy, right?

Well, here comes the curveball: When Mary withdrew from her traditional 401(k), every dollar became taxable income. Come tax season, she was hit with a tax bill over $65,000. Yes, you read that right. $65K due to Uncle Sam. Imagine getting that notice in your mailbox!

The Escalating Tax Cycle

Mary considered dipping further into her retirement savings to settle the tax debt, but that would only trigger more taxes next year—a vicious cycle of tax upon tax. When she attempted to arrange an installment plan with the IRS, they initially demanded over $700 a month. That’s no small sum on a fixed income.

The Solution

That’s when Mary turned to us. Our firm was able to negotiate the payment down to a more manageable $200 per month. And here’s the kicker: when Mary is ready to pay off the balance, we’ve also arranged for the IRS to abate the penalties and interest. A significant victory for Mary!

Lessons Learned

This case underscores a crucial lesson for all of us: the benefits of a Roth account. Unlike traditional 401(k)s, withdrawals from a Roth IRA are tax-free in retirement because you pay taxes upfront. Also, it highlights the importance of professional guidance when navigating complex tax issues, especially with the IRS.

Think About Your Future

Does Mary’s story have you thinking about your retirement plans? Are you potentially sitting on a tax time bomb with your retirement accounts? Don’t wait for the tax bill to find out. Head over to CrushIRSAnxiety.com to download our free e-book on managing tax problems effectively. Our guide can help you understand your options and prepare better for the financial aspects of retirement.

Whether you’re nearing retirement or just planning for the future, it’s crucial to understand how your retirement savings choices can affect your tax situation. If you’re unsure about your strategy or if you find yourself in a bind like Mary, remember, professional help is just a click away. Let’s make sure your retirement savings are working for you, not against you.

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

Why Ignoring Your Bookkeeping Could Be the Worst Financial Mistake of Your Life

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You’ve got a business to run, a life to live, and maybe even a mountain of debt hanging over your head. And what’s sitting on your desk? A mountain of receipts and a pile of unopened letters from the IRS.

Now, I know what you’re thinking. “I’ll deal with it later.” But let me tell you something—later isn’t good enough. Ignoring your bookkeeping isn’t just lazy; it’s a financial disaster waiting to happen.

You see, without proper bookkeeping, you’re flying blind. You don’t know where your money is coming from, where it’s going, or worse—how much you owe the IRS. And if you think the IRS is just going to forget about you, think again. They have a long memory, and they aren’t shy about coming after what they’re owed.

But there’s a silver lining here—a way out if you’re willing to take action.

First things first: Gather every financial document you can find. I don’t care if it’s crumpled in a shoebox or buried under old magazines. You need to know what you’re dealing with.

Then, use some technology to your advantage. Get yourself some good accounting software—QuickBooks, Xero, whatever works for you. These tools can make a world of difference in keeping your finances organized and, more importantly, in keeping you sane.

Now, here’s where it gets interesting. Ever heard of the Cohan Rule? If not, let me introduce you to your new best friend. Named after George M. Cohan, a guy who knew how to play the system, the Cohan Rule lets you estimate your expenses even if you don’t have all the receipts. Yep, you read that right.

But hold on—don’t start celebrating just yet. The Cohan Rule isn’t a free pass to fudge your numbers. You need a reasonable basis for your estimates. That means showing some form of evidence, like bank statements or credit card records, to back up your claims. The IRS might let you slide with a reasonable estimate, but they’re not stupid.

Once you’ve cleaned up your books and know exactly what you owe, set up a system to keep it that way. Dedicate a regular time each week to update your records. Make it a habit, just like brushing your teeth. You wouldn’t go a week without brushing your teeth, right? So why would you go a week without keeping your books in order?

And if this all sounds like too much, or if you’re not sure where to start, get some help. A bookkeeper or an Enrolled Agent can make all the difference. They can ensure your records are accurate, help you stay on top of things, and keep the IRS off your back.

Look, catching up on bookkeeping isn’t glamorous. It’s not fun. But it’s one of the best things you can do for your business and your peace of mind. And trust me, when the IRS comes knocking, you’ll be glad you did.

So roll up your sleeves, dive into those records, and take control of your financial future. Because ignoring your bookkeeping? That’s the worst mistake you could make.

Now get to it! Your future self will thank you.

Want to dive deeper into this topic and get some practical tips on how to catch up on your bookkeeping? Check out my latest YouTube video where I break it all down step by step. Click the link and let’s get those books in order together!

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

Why Tax Transcripts Can Be Your Best Friend in a Tax Battle

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Fresh off a double celebration—my birthday and my son Kainalu’s four-month milestone—we kicked back in sunny Coronado. Nothing like a bit of sun and pool time to recharge, right? And right in the midst of all this, we had our bi-annual board meeting with our business ally, Tax Debt Consultants, discussing big moves like licensing and the launch of my upcoming e-book on Amazon. Exciting times!

Now, let’s dive into something crucial I cover in the first section of my soon-to-be-released book: the power of IRS Transcripts in your tax battle. If you’ve been out of the tax filing loop for over three years, you’re going to want to lean in close for this one.

The Unsung Hero: IRS Transcripts

Think of IRS Transcripts as the all-knowing oracles of your tax history. These documents are records of your past filings, non-filings, payments, and every official interaction that could affect your current tax situation. In the chaos of tax troubles, they’re your beacon of truth. Here’s why they’re indispensable:

1. Uncovering the Unknown

First off, if you haven’t filed taxes in years, there’s a good chance there are some murky waters in your financial history. IRS Transcripts shine a light on these unknowns. They provide a detailed record of what the IRS knows about you—which may be more or less than you expect. Before you can even think about strategizing, you need to know where you stand, and these transcripts lay it all out.

2. Identifying Errors and Opportunities

Errors in IRS records aren’t as rare as you might think. Sometimes, payments are misapplied, or previous filings are inaccurately processed. By reviewing your transcripts, you can spot these discrepancies early, potentially saving you a significant headache and cash. Plus, they can reveal opportunities for claims you might not have considered, like overlooked deductions or credits.

3. Strategic Planning

Armed with knowledge from your transcripts, you can plan your next moves effectively. Whether it’s filing back returns, amending incorrect ones, or negotiating a payment plan, knowing your history allows you to build a compelling case and approach the IRS with confidence.

4. Streamlining Resolutions

When you understand your tax history thoroughly, you streamline the resolution process. This isn’t just about fixing past problems—it’s about paving a smoother road for your financial future. With clear insights, you can quickly decide the best course of action, whether it’s setting up a payment arrangement or challenging an incorrect IRS decision.

Conclusion

As we gear up for the release of my new e-book, remember this: Knowledge is power, especially when it comes to dealing with the IRS. Tax transcripts are a powerful tool in your arsenal, helping illuminate both past mistakes and paths forward. They’re not just pieces of paper—they’re your strategic advantage in the often-intimidating arena of tax resolution.

So, whether you’re a seasoned taxpayer or just getting back on track, make IRS transcripts your first port of call. Stay tuned for more insights from my upcoming book, and let’s turn those tax battles into victories!

Looking to dive deeper into your tax strategy? Keep an eye out for my e-book on Amazon, and visit crushirsanxiety.com for more expert tax advice and tips.

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

Which IRS Installment Agreement Fits You Best?

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Hello, tax warriors! Guess what’s back in San Diego, and it’s not something we’ve missed—yup, the flu. My household’s been in the trenches with it; my wife’s down for the count, and I’ve been juggling dad duties with our little trooper, Kainalu, while keeping our home fortress secure.

Amidst all this chaos, I haven’t let up on battling another formidable beast—the IRS (and let’s not forget the FTB) on behalf of folks like you who haven’t filed taxes in over three years.

Speaking of battles, let’s talk strategy, specifically about navigating the murky waters of IRS installment agreements. Finding the right plan can feel like choosing the right weapon for battle—each has its advantages depending on the fight (or debt) you’re facing.

Understanding IRS Installment Agreements

First off, what exactly is an IRS installment agreement?

Think of it as a peace treaty with the IRS. It allows you to pay your tax debt over time instead of all at once. This can be a lifesaver if you’re drowning in back taxes and can’t cough up the full amount immediately. But not all installment agreements are created equal. There are several types, each with its own set of rules and qualifications.

1. Guaranteed Installment Agreement

This is the lightweight fighter of the bunch—quick, nimble, and easy to handle if you owe $10,000 or less. You can typically set this up without much fuss as long as you agree to pay off your debt within three years. No detailed financial statements required, no disclosures of your spending habits, just a straightforward monthly payment plan.

Best for: Those with relatively low tax debts looking for a quick and easy resolution.

2. Streamlined Installment Agreement

Stepping up in weight class, we have the streamlined installment agreement. This one’s for debts up to $50,000, and you get up to 72 months to pay. You’ll need to have all your tax returns filed, and you must commit to monthly payments, but the IRS won’t poke around in your financial life too much.

Best for: Individuals with moderate tax debts who can handle a steady payment plan over a few years.

3. Non-Streamlined Installment Agreement

Now we’re in heavyweight territory. If you owe more than $50,000, things get a bit more complex with the non-streamlined installment agreement.

Here, you’ll need to provide the IRS with a Collection Information Statement. This document lays bare your financial soul—your income, expenses, assets, debts, the works.

Negotiations might be tougher, and you’ll want to strap on your best armor (aka, possibly get professional help).

Best for: Those with substantial tax debts who need a tailored payment plan and are prepared for some financial disclosure.

4. Partial Payment Installment Agreement

Finally, for the battle-worn, there’s the partial payment installment agreement. This plan acknowledges that you might never pay off the full amount based on your financial situation. You make smaller monthly payments over time, and the IRS might forgive some of your debt at the end of the agreement period.

Best for: Taxpayers who cannot realistically pay off their entire tax debt given their current and projected financial situations.

Choosing Your Battle Plan

Deciding which installment agreement fits best isn’t just about how much you owe; it’s about understanding your financial capacity, your future income prospects, and how much you can handle monthly without capsizing your financial ship.

While I’m over here being super dad and nursing my better half back to health, don’t hesitate to reach out if you need some backup with your IRS issues. Whether it’s setting up the right payment plan or negotiating tougher IRS seas, I’ve got your six.

Stay strong, stay healthy, and let’s keep those tax battles as painless as possible!

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

How to Use State Tax Debt as a Bargaining Chip with the IRS

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What a whirlwind of events this weekend! From the highs of launching my YouTube channel and visiting the Temecula vineyards, to the unsettling news of an attempt on Former President Trump’s life—a figure whose speeches I admired during my time at the US Naval Academy. It’s times like these that remind us to stay resilient and focused, no matter the chaos.

Amidst all, let’s shift gears back to something we can control: navigating the treacherous waters of tax negotiation. Particularly, how you can use your state tax debt as a cunning leverage point in negotiations with the IRS.

The Art of Leverage

In the world of taxes, knowing how to maneuver can make or break your financial health. One less known but effective strategy is using your state tax liabilities as a bargaining chip with the IRS. Here’s why this works and how you can apply it:

Understanding the IRS vs. State Tax Boards

The IRS and state tax authorities, like the California Franchise Tax Board, often seem like they’re cut from the same cloth. However, they operate under different rules and have different levels of flexibility when it comes to debt settlement. States, especially California, are notoriously rigid in their negotiations. They often do not budge much on the amount owed.

Step 1: Assess Your Total Tax Liability

Firstly, get a clear picture of what you owe both to the IRS and your state tax board. This will be your starting point in understanding the scope of your negotiations. Remember, knowledge is power—particularly when it involves figures the IRS might be interested in.

Step 2: Approach the IRS

When you negotiate with the IRS, point out your significant state tax liabilities. Here’s the kicker: since the state is less likely to negotiate down the debt, you can argue that a significant portion of any resources or payments you can muster will need to go towards settling your state tax debts.

Why This Appeals to the IRS

The IRS is keen on collecting as much as possible but understands they are in line with other creditors, including state tax authorities. If they see that the state will take a substantial part of your payment capacity, they might be more willing to negotiate favorable terms on the federal tax debt to ensure they receive something rather than nothing.

Step 3: Propose a Payment Plan

Armed with the knowledge that you have substantial state debts, propose a payment plan to the IRS that considers your total debt load. This plan should aim to balance payments realistically between state and federal liabilities. Demonstrate good faith by proposing a structured payment schedule that prioritizes both debts.

Step 4: Documentation and Professional Help

Back up your negotiation with thorough documentation. Show clear calculations of your income, existing debt obligations, and potential payments. In such complex negotiations, it is prudent to seek the guidance of a tax professional who can strategically present your case to the IRS.

Wrapping Up

While the realm of taxes often feels daunting, strategic approaches like using your state tax liabilities as leverage in IRS negotiations can provide surprising relief. Just as we keep our spirits up and resilience ready in the face of national events, so too should we tackle our financial obligations with strategic foresight.

Remember, navigating these tricky waters doesn’t mean you’re alone. Consult a tax professional who can provide you with the arsenal you need to make the most of every negotiation with the IRS.

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com