Why We Solve Tax Problems—Patrick Cox, TaxMasters

I’ve been asked by a friend to go back to the beginning and explain a bit about how TaxMasters got its start. I guess you could say it started way before I even thought about it, back in 1998. Honestly, I didn’t set out to create a business that helps people solve tax problems and fight tax penalties. When I graduated from Texas A&M University in 1986, having already passed the CPA exam, I was just hungry to find a decent job and get my life started. I worked at a couple of different accounting firms in Houston, Texas over the next years and then got hired on with Kemper in the early 90s. I worked for Kemper Insurance Companies in various US locations and advanced through their ranks over the next decade, finally winding up in a role as Vice President of Finance. When my division was relocated to Florida, I decided to bow out and go see if I could make a go of it on my own. I moved back to Houston and opened a CPA firm shortly thereafter.

I started out just trying to help people prepare good tax returns, and I was pretty good at that. Like everyone in my line of work, I had watched closely as the IRS hearings of the mid ‘90s unfolded. And like most other CPAs, I had plenty of anecdotal evidence of IRS abuses. Then came RRA ’98.

RRA ‘98

In direct response to congressional hearings where IRS abuses were revealed through testimony, congress and President Clinton enacted the IRS Restructuring and Reform Act of 1998 (RRA ‘98). RRA ‘98 changed the way the IRS is allowed by law to treat taxpayers. Considering all I knew about the IRS, I remember thinking that this new law, while full of good intentions, would never be enough to truly protect taxpayers.

Solving a Single Tax Problem Opened the Door

After reviewing RRA ’98 and going through the next few tax cycles, it became abundantly clear to me that the IRS was not holding up their end of the new bargain. No surprise there. Old habits die hard. IRS agents were still harassing, still assessing unwarranted tax penalties, and still using many of their same old tactics to collect revenue. Only after I fought for and earned a sizeable reduction in taxes owed for a dear friend and client, did I realize that RRA ’98 might just give us the leverage we would need to help others successfully fight the IRS. I was still skeptical, but as we took on more cases—and won more favorable outcomes—we quickly learned how to use the IRS’ rules to combat an ever-increasing list of specific tax problems. By the end of 2003, we knew there was no tax problem or tax penalty too great to take on.

TaxMasters—A Way to Help People in Trouble with the IRS

Thus began TaxMasters, a new entity unrelated to the old firm, which I sold off shortly thereafter. Since our meager start, TaxMasters has grown from being a local small business into a nationally recognized tax representation firm. We have grown tremendously in just a few short years. We hire the best tax consultants we can find and back them up with ex-IRS agents, tax attorneys, and incredibly sharp tax preparers and case coordinators to get as fair a deal as we can for our valued customers. TaxMasters will employ over 200 people in the Houston area by the end of this year, all of whom are dedicated to assisting the hundreds of taxpayers who contact us monthly in their effort to fight unfair tactics used by the IRS.

Call TaxMasters if You Think You Might Have a Tax Problem

As always, if the IRS has contacted you, even by correspondence, call us immediately. The tax professionals at TaxMasters are here to help. Call us at (866) 694-4018 or go to www.txmstr.com.

Until you need us,

Pat Cox

The Back Tax Trap

We had a call today from a nice enough fellow. We got to talking about his tax problems and about the fact that the IRS was sending him letters about the remaining money he owed for 2006. As we talked, I was disheartened to find out that he had fallen into the classic back tax trap. Because of the fact that he still owed the IRS money from 2006, he has now failed to file for 2007. His logic is sound enough. If I can’t pay what I already owe, why file this year to let the IRS know I owe them even more that I can’t pay? But what the IRS sees is yet another violation for which they can tack on even more penalties and interest. What that means is that he now has the old problem with delinquent tax payments and a new, potentially larger problem with an unfiled tax return.

Don’t Let the IRS Bully You into Not Filing Your Tax Return

No matter how much you owe in back taxes, never let IRS tactics scare you away from filing your current tax return. Not filing can become a trend that digs you deeper and deeper into a hole. This is also a problem that will not go away on its own. Even more important, the IRS will not deal with you until you are current with all tax returns, regardless of what you owe. The lesson here is to file your return whether you can pay or not. No matter what the situation, always file a tax return.

What to Do From Here

So you’re saying, great Pat. I read this too late. What do I do if currently have past-due tax returns that I haven’t filed? The answer is easy. I’ll tell you exactly what we told the gentleman on the phone earlier. You have to get all those past-due returns in order before you can do anything else with the IRS.

TaxMasters Can Help

We see people regularly with three to five years of tax returns that haven’t been filed. Even up to ten or so years isn’t that unusual. One of our strengths is that we’re really good at getting people with past-due returns back into compliance. We have even successfully helped one specific taxpayer who had almost 40 years of unfiled returns.As always, TaxMasters is here to help. Call our tax professionals today at (866) 694-4018 or go to www.txmstr.com and let us get between you and the IRS. We can help you file past-due returns and help you find ways to pay delinquent taxes with fewer penalties. We are here to help.

Until you need us,

Pat Cox

IRS Audits Increasing

The $290 billion tax gap looks even worse than it did just a month ago. There’s nothing like the threat of economic disaster to put everyone on edge. Congress gets fidgety when there’s no money in the till and the IRS feels an increasing pressure to collect, collect, collect. Even before the recent economic troubles, everyone expected the number of IRS audits to continue to increase. It’s clear to us that the efforts to collect more revenue will reach even new heights over the next months.

Trending Upward

The number of tax returns being reviewed by the IRS has more than doubled in the last 7 years. In 2000, the IRS examined 1 out of every 202 returns. Last year, they looked at 1 out of every 97. In October alone, the IRS is expected to send more than 30,000 so-called soft notices by mail. Most of these notices will be prompted by inconsistencies in returns that cause the IRS to suspect you have somehow under reported your income.

So if you’re one of the unlucky, what do you do?

An IRS Letter is an IRS Audit

Make no mistake. Any communication from the IRS asking for clarification or more information about your tax return is an audit. This is dangerous territory. First things first. Take a breath. Realize you’re being audited by the Internal Revenue Service. Then act appropriately.

Use Your Head

If you receive any communication from the IRS requesting information or alteration to your tax return, I strongly encourage you to seek help. Talk to your tax or financial professional about the situation immediately. If you don’t have one or you are not sure of their competence level on this, contact a firm that specializes in IRS matters such as TaxMasters. We handle more audits in a year than most firms do in a lifetime.

The audit experience can be incredibly complex, particularly when trying to handle the matter yourself. With the increased pressure to find more revenue, IRS agents are up to many of their old tricks and are not above taking advantage of the unsuspecting. Don’t let the IRS turn a simple mistake into a costly nightmare.

As always, TaxMasters is here to help. Call our tax professionals today at (866) 694-4018 or go to www.txmstr.com and let us get between you and the IRS.

We are here to help.

Until you need us,

Pat Cox