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Your Tax Problem and the National Debate over Tax Increase


The Obama team won. The Republicans lost the elections because they are confused. They have a good economic cause but they fail to articulate a social agenda that serves both the country and its citizens. They have drowned their message with immature nonsense and even a message of, shall we say, hate. People are not stupid; they pick up on euphemisms. And it is bad.

Which Rich Are We Raising Taxes on?

Now the President is going to try to raise taxes on what he claims to be "the rich." I think he is misguided. The ones that the Obama guys call rich are a couple of engineers who happen to both work and each one makes over a hundred thousand dollars. Is this the nouveau rich that Obama calls rich? Hardly!!

Begin at the Beginning

The nation does need both the increase of revenue and reduction of expenses. But raising revenue should not necessarily increase taxes. The reduction of expenses does not mean that we throw the poor under the bus. The poor that were absent from the campaign of both the Democratic and the Republican Party.

The country needs fundamental original thinking that accommodates the few such as the elderly and the disabled that cannot fend for themselves and at the same time fanatically balances its income and expenses which we call the budget. In a family with children, you balance the budget but you feed your children and send them to the doctor. It is a matter of an honest dialogue and smart allocation of resources. With three trillion dollars annually America can do a lot.

IRS and Collection Actions Are Here to Stay

No matter where we end up with the struggle of the Democrats and the Republicans against each other, we know for sure that we have an agency in charge of collecting the government revenue which we call the IRS and it will remain. God bless it and give it the strength to continue the collection and the aggressive actions that it is armed with against those with tax debts.

Some of these actions may be legitimate and the IRS has to follow. Some are outright intrusion on the right of the citizens. So do not expect a new tax relief because of the negotiations that may be under way between the two Leviathans.

If you owe the IRS back taxes they operate under the assumption that business is as usual. You owe the money, you need to pay. You did not file the tax return, you must then file it. You need to settle with the IRS, you must consider some of the tax resolutions that are currently available with the IRS. By the way I must give Kudos to the outgoing IRS commissioner. He was a thinker and he did many good things among which are the offer in compromise and improvement of tax lien filing in favor of the taxpayers.

Tax Resolution Channels Remain the Same

In order to obtain a tax resolution to your problem you still have to go to the installment agreement and the offer in compromise. We still have to face the tax lien and possibly the seizing of assets. Can you imagine the terror of the tax audits? Can you imagine that you will never fear an IRS audit?

The only respite or the real tax help we will ever get is when we do away with IRS code completely. When we close the IRS in lieu of another taxing system that collects tax as we buy things from the store. Call this the sales tax or the value added tax.

No matter what you want to call it, you would end up getting rid of April 15 filing. No more income tax returns to be filed. Can you imagine life without a tax return to file? Can you imagine how liberating this would be? Many people went to jail on account of income tax. That brings to mind the Berlin wall. Those who wanted to climb the wall to go to the other side (West Germany) were shot dead. Now the new generation walks freely; one nation, through in the very place that was a wall. That is what I think will happen when the IRS is gone and people don’t have to beg for lien release, installment agreement or an offer in compromise. Farfetched? But every great accomplishment starts on the drawing board of a dream.

Summary: The national tax negotiation will not change what taxpayers are facing in IRS collection actions such as bank levies. Tax liens, installment agreements and offers in compromise are still well and alive.