Tax Resolution Firms

Tax Debt Firm to Pay $1.5M in Restitution  (Click to read article.)

Don't be fooled by these companies!  Contrary to their advertising, the IRS generally resolves less than 1% of tax debts using the Offer in Compromise program.   When applying for this program, the IRS will require detailed financial information from you.  Despite the amount of debt you may have, the IRS debt will supersede all other debt.  They will also compare your living expenses to “national standards”.  In most cases, actual living expenses will exceed the national standards.  Based on this, IRS will determine you have the ability to pay the tax debt.  Depending on the amount you owe, you are probably better off with an installment agreement.  If you owe less than $25K and can repay within 5 years, the IRS will automatically accept your installment offer.  If you owe more than $25K, the IRS will require the same financial information as if you were requesting an Offer in Compromise. 

If you owe the back taxes to the IRS and you want REAL representation before the IRS, please contact The Tax Dude®.

Per Diem Payments

The Tax Dude® has received numerous questions by people wondering if they qualify for per diem payments from their employers.  To be perfectly honest, I dislike questions on this topic. 

For some reason many of these questioners have the impression that per diem payments are a legal method of tax free compensation.  This is a MYTH!  How does a myth like this get started?  Listening to co-workers or your curb-side tax advisor.

Let's clear up this issue.  The purpose of per diem payments is to cover an employee's business related travel expenses.  It is NOT compensation for business travel.  What is business related travel?  It is when you are away overnight from your "tax home" for business purposes.  What is a "tax home"?  Please click on the link below and read a very informative article on the subject.

Location of "Tax Home" Determines Travel Expense Deductibility