JK Harris Employees Rally to Help Local Food Pantry for Thanksgiving

For the second year in a row, JK Harris employees participated in a food drive to help local charity, Helping Hands of Goose Creek. Helping Hands is a local food pantry that provides emergency food to families in crisis situations. All families are assessed to determine if they meet the requirements of emergency aid.

Over the recent months, the charity has seen donations drop while demand has increased.Helping Hands is located in Berkeley County, which currently has the highest unemployment rate in South Carolina at over 12%.

Last year, JK Harris held its first food drive for the charity and donated 378 pounds of food. This year, the goal was to exceed that number.

Executive director Michelle Maynard was very happy and more than a little emotional when she called to let us know late last week that JK Harris’ donations weighed in at 591 pounds this year. She was thrilled she would be able to provide all of her families with a holiday turkey this year.

A big thank you goes out to our generous employees at JK Harris.

If you would like more information on Helping Hands of Goose Creek, visit their website at www.helpinghandsofgoosecreek.net.

Obama Seeks to Extend Middle Class Tax Cuts

On Tuesday, President Obama stated the United States must extend the middle class tax cuts to help an economy he says is on the mend. His position remains that the U.S. cannot afford to also cut taxes for the wealthy. Congress has been at odds over whether or not to let Bush-era tax cuts expire or to extend them. Obama’s Making Work Pay credit is set to expire at the end of the year also, resulting in “pay cuts” for many who benefited from the credit. For details, read the full article below, published by Caren Bohan of Reuters.com.
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Obama, who also told hard-hit Americans the U.S. economy was on the mend, said extending the middle-class tax cuts was critical to keeping the economic recovery on track.

“If we allow these taxes to go up, the result would be that a lot of people most likely would spend less. That means that the economy will grow less,” he told workers at an auto plant.

Republicans, who won control of the House of Representatives in November 2 elections as voters punished Obama’s Democrats for a sluggish economy and high unemployment, want to make the tax cuts permanent for all Americans.

Touting the success of his government rescue of the U.S. auto industry in a campaign-style rally, Obama welcomed news that U.S. economic growth was picking up.

He warned it had a way to go before it was out of the woods and said that meant government must not take money away from households likely to spend it.

“Next year, taxes are set to go up for middle-class families unless Congress acts,” Obama said. “If we don’t act by the end of the year, a typical middle-class family will wake up on January 1 to a tax increase of $3,000 per year.”

Data released earlier on Tuesday showed that U.S. output grew at a 2.5 percent annual pace in the third quarter, up from a previously estimated 2 percent, reflecting stronger spending and export earnings than initially thought.

MEETING NEXT WEEK WITH REPUBLICANS

The president meets Republican and Democratic congressional leaders on November 30 to work out what to do about the Bush-era tax cuts and other pressing legislation to complete before a new Congress begins in January.

Obama says taxes should rise for families making more than $250,000 a year, but he has made extending cuts for middle-class families a top policy priority.

“This is actually an area where Democrats and Republicans agree,” he said. “The only place where we disagree is whether we can afford to also borrow $700 billion to pay for an extra tax cut for the wealthiest Americans — millionaires and billionaires. I don’t think we can afford (that) right now.”

Obama used his visit to highlight U.S. jobs saved by his multibillion-dollar taxpayer bailout of the auto industry, after a successful stock float by General Motors last week underscored renewed investor demand.

The bailouts were unpopular with many Americans. Obama wants to persuade the public they were worth the money, and used his visit to the Midwest, critical to his re-election chances in 2012, to sell that message.

“We’re coming back. We’re on the move. All three American (auto) companies are profitable, and they are growing,” he said. “I want everybody to be absolutely clear, we are moving in the right direction.”

Posted by JK Harris

Rep. Charles Rangel Seeks Fairness, Mercy in Punishment for Ethical Wrongdoings

On Thursday November 18, the House ethics committee recommended censure for New York Representative Charles Rangel. The committee suggested he needed to “suffer the embarrassment of standing before his colleagues” while receiving an oral rebuke for financial and fundraising misconduct, to include back tax debt.

The committee determined with a 9-1 vote that Rangel should be censured, as well as pay back taxes owed on a vacation villa in the Dominican Republic.

Rangel, a 20 term congressman apologized for his conduct but claims he was not out for personal gain or to “go beyond” what was given to him as a salary. Rangel went on to address the committee stating, “I apologize for any embarrassment I’ve cause you individually and collectively as a member of the greatest institution in the world.”

Republican Michael McCaul questioned Rangel’s claims that he was not corrupt asking how a failure to pay taxes for 17 years was not corrupt. Rangel was the former chairman of the House Ways and Means Committee – the very committee that writes taxes.

Other charges Rangel faced involved improperly using official resources. Rangel was found to have used congressional letterheads and staff to raise money for the Rangel center. Donations to the center were poor until Rangel rose to head the Ways and Means Committee.

Rangel was found guilty on 11 of the 13 charges he was facing on November 16th.

Source: Huffington Post

Posted by JK Harris

Wesley Snipes Ordered to Report to Bureau of Prisons; Found Guilty of Tax Crimes

Today, a federal judge rejected actor Wesley Snipes’ request for a new trial and ordered him to report to the Bureau of Prisons to begin serving a three year sentence on tax related crimes. Although his attorneys presented evidence of two jurors claiming members of the jury were prejudiced in the case from the beginning. Prosecutors have accused Snipes of obstructing the IRS and attempting to avoid paying millions of dollars in taxes. For details, read the full article below, written by Stephen Hudak of the Orlando Sentinel.
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OCALA — A federal judge today rejected movie star Wesley Snipes’ demand for a new trial and ordered the actor to surrender to the U.S. Bureau of Prisons to begin serving a 36-month prison sentence for tax-related crimes.

In a 17-page order, U.S. District Court Judge William Terrell Hodges said, “The Defendant Snipes had a fair trial; he has had a full, fair and thorough review of his conviction and sentence by the Court of Appeals; and he has had a full, fair and thorough review of his present claims, during all of which he has remained at liberty. The time has come for the judgment to be enforced.”

Snipes, 48, an Orlando-born star of “Jungle Fever,” “White Men Can’t Jump,” and “The Fugitive” sequel “U.S. Marshals,” was convicted in 2008 of three misdemeanor counts of willfully failing to file federal tax returns.

Prosecutors contend he obstructed the IRS and attempted to avoid paying millions of dollars in federal taxes.

“It is just shocking,” Snipes’ Atlanta-based lawyer Daniel Meachum said in an e-mail to the Orlando Sentinel. “Wesley is very disappointed but staying strong and positive.”

The actor’s defense team had hoped the judge would grant Snipes a new trial after receiving e-mails from two jurors who claimed that other members of the panel had concluded the actor was guilty before the trial began.

Meachum also argued that a key government witness, Kenneth Starr, provided “tainted” testimony against Snipes. Starr, a New York financial adviser with a stable of celebrity clients, pleaded guilty recently to fraud.

“We were hopeful that we had convinced Judge Hodges that the government’s witness, Ken Starr, had perjured himself and that the government knew of his criminal activities and the predetermined minds of three jurors, but we obviously fell short in accomplishing that,” Meachum said.

He said the defense team was “determined to exhaust all plausible avenues in this matter.”

While Snipes could challenge Hodges’ latest ruling and ask the U.S. Supreme Court to review his case, he would likely await the ruling from a federal prison cell.

The judge’s order requires Snipes to “surrender himself” upon receipt of notice from the U.S. Marshal Service or from the federal Bureau of Prisons. It is unclear in the order where and when he must turn himself in.

Best known as the vampire-killing hero in the science-fiction trilogy “Blade,” Snipes was accused of conspiring with Eddie Ray Kahn of Lake County to avoid paying more than $15 million in taxes from 1999 to 2004.

The conspiracy charge accused Snipes of seeking a fraudulent refund of $7.3 million.

Kahn, who founded American Rights Litigators in Mount Dora, sold illegal tax-dodging schemes and convinced the actor that he had no obligation to pay federal income taxes. Kahn was sentenced to 10 years in prison.

Snipes’ defense team provided Hodges with an unsolicited e-mail from a juror whose identity was redacted from public documents and who suggested that other members of the panel were not fair to the actor.

The e-mail read: “I served on the jury in Ocala that found him guilty on 3 counts of failing to file taxes. It was a deal that had to be made because of certain jurors that had already presumed he was guilty before the trail (sic) started and we only found this out in the last few days of deliberation. We thought we were making the right deal because we did not think he would go to jail for not filing taxes. There were 3 on the jury that felt this way and told us he was guilty before they even heard the first piece of evidence going against what the judge had said.”

Jurors take an oath pledging to obey the principle that a defendant is innocent until proven guilty.

In his ruling, Hodges noted the e-mail “presents, to be sure, a troubling set of circumstances,” which would be contrary to the jury’s oath and his repeated instructions before and during the two-week length of the trial.

U.S. law also prohibits courts from prying into jury deliberations without evidence of outside influence.

Hodges pointed out, “It is also worthy of note…that the veracity of the claim of juror misconduct in this case is undermined by the fact that (Snipes) was acquitted of the most serious charges; that the complaining juror waited two and a half years before bringing the alleged misconduct to light; and the fact that the jurors’ complaint was expressly motivated by the Defendant’s sentence — a consideration that, in itself, the jury was expressly instructed to disregard in arriving at its verdict.”

Posted by JK Harris

Check out our previous blogs regarding Wesley Snipes here:

Wesley Snipes’ Lake County tax guru gets more prison time

Frivolous tax arguments do not sit well with IRS

JK Harris Helps Albuquerque Client Save ‘A Bundle’

We recently received an enthusiastic testimonial from a client in Albuquerque, New Mexico. Tina Driver came to JK Harris for help after cashing out a 401K when she lost her job. Although she specifically asked the investment firm to withhold all taxes and penalties, she later found out they only withheld the penalties. When she saw the size of her tax bill, she knew without a job, she did not have the means to pay her back tax debt.

“Needless to say, I owed a bundle,” said Driver. “The penalties and interest alone were close to $60,000. I had no hope of ever repaying that amount.”

Our tax team went to work analyzing Ms. Driver’s situation to determine what she would be able to pay and which IRS resolution programs she might qualify for. The team determined she was a likely candidate for the Offer in Compromise (OIC) program. This program allows a taxpayer to resolve their tax liability by paying less than they owe, although they must meet the IRS’ rigid criteria to qualify for the program.

JK Harris was able to negotiate a deal for Ms. Driver, saving her over $48,000 in penalties and interest.

“JK Harris held my hand through the whole ordeal,” said Driver. “Thanks to JK Harris, I got my life back. I have and will continue to recommend JK Harris!”

IRS Has $164.6 Million in Unclaimed Refunds Belonging to 111,893 Taxpayers

In a news release issued yesterday, the IRS stated they have an overabundance of unclaimed tax refunds, which have gone unclaimed by nearly 112,000 taxpayers. If you think (or know) you are missing a tax refund, you need to contact the IRS and provide them with your new address. Some taxpayers are missing out on not one – but multiple – tax refunds. According to the press release, the average refund check weighs in at $1,471.

If you think you may be owed a refund but have not received it, be sure you have updated your address with the IRS. You only need to update your address once to receive your refund(s). Updating an address is easy. You can file Form 8822 or go online to www.irs.gov and using the “Where’s My Refund?” tool. This tool allows taxpayers to check the status of their refunds and will allow them to change their address online if their tax refund has been returned to the IRS.

If you prefer to check on your refund over the phone, you can use the telephone version of “Where’s My Refund?” by calling 1-800-829-1954. The IRS will provide information over the phone on how to update your address.

If you would prefer not to risk having your check lost, stolen or undelivered, you can choose to have your tax refund electronically deposited to your bank account, divided into two to three separate accounts, or you can choose to buy a savings bond with it. For more information, check out the IRS’ newsroom.

JK Harris Warns Taxpayers to Protect Their Taxpayer Identification Number (TIN)

In past blogs, we have discussed the importance of protecting your identity from identity theft. Multiple use of Taxpayer Identification Numbers (TINs) has been on the rise. Your TIN is in most cases, your Social Security number. The IRS has – and continues to identify the use and abuse of TINs by persons who do not own these numbers. According to TIGTA, the Treasury Inspector General of Tax Administration, the abuse of these numbers has resulted in millions of dollars in erroneous refunds. According to TIGTA, the amount could exceed $1.9 billion over five years if something is not done soon to prevent the theft of these numbers. For more information, read the full report by TIGTA here.

Posted by JK Harris

Expanded Recovery Act Tax Credits Help Homeowners Winterize their Homes

According to the IRS, homeowners making energy-saving improvements this fall can cut their winter heating bills while lowering their 2010 tax bill. Read the full IRS release below for more details.
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WASHINGTON — People can now weatherize their homes and be rewarded for their efforts. According to the Internal Revenue Service, homeowners making energy-saving improvements this fall can cut their winter heating bills and lower their 2010 tax bill as well.

Last year’s Recovery Act expanded two home energy tax credits: the nonbusiness energy property credit and the residential energy efficient property credit.

Nonbusiness Energy Property Credit

This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count.

By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2010 federal income tax return. Due to limits based on tax liability, amounts spent on eligible energy-saving improvements in 2009, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result.

Residential Energy Efficient Property Credit

Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when figuring this credit. Also, except for fuel cell property, no cap exists on the amount of credit available.

Not all energy-efficient improvements qualify for these tax credits. For that reason, homeowners should check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer’s website or with the product packaging. Normally, a homeowner can rely on this certification.
The IRS cautions that the manufacturer’s certification is different from the Department of Energy’s Energy Star label, and not all Energy Star labeled products qualify for the tax credits.

Eligible homeowners can claim both of these credits when they file their 2010 federal income tax return. Because these are credits, not deductions, they increase a taxpayer’s refund or reduce the tax owed. An eligible taxpayer can claim these credits, regardless of whether he or she itemizes deductions on Schedule A . Use Form 5695, Residential Energy Credits, to figure and claim these credits.

Posted by JK Harris

Our Tax Rates, Deductions and Credits Could Vanish

According to William Perez of About.com, unless Congress decides on new tax policies, many of our tax rates, deductions and credits will soon vanish. Read the articles below from his Tax Planning Blog.
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Tax Agenda after the Elections

The central issue is over tax rates that apply to ordinary income, dividends and long-term capital gains. If Congress cannot agree on new tax rates, our existing six tax rates will disappear and be replaced by pre-2001 tax rates ranging from 15% to 39.6%. And it’s not just the Bush-era tax cuts that will expire. There’s also a handful of temporary tax breaks passed under the Obama administration for higher education and unemployment that will expire too…read more

Potential Tax Withholding Turmoil

Remember back in February 2009 when the IRS lowered payroll withholding for most Americans because of the newly legislated Making Work Pay credit? We are still waiting for the IRS to release the 2011 withholding tables. If Congress decides not to pass new legislation, withholding will increase both because of the higher tax rates and because of the expiration of the Making Work Pay credit. Susan Heathfield (About Human Resources) explains…read more

Election Day Results for Tax-Related State Ballot Measures

There were several tax-related measures on various states’ ballots in 2010. Two of the most publicized measures were initiative 1098 in Washington state (which would have instituted a tax on higher income individuals in a state that otherwise does not have an income tax) and Proposition 19 in California (which would have legalized and taxed marijuana for recreational consumption). Both measures failed on election day. Tonya Moreno, CPA, summarizes election-day results for tax-related ballot measures in six states.

What Tax Provisions are Expiring?

A wide variety of tax breaks either already have expired (at the end of 2009) or are about to expire (at the end of 2010). Many of these are very popular incentives, such as the deduction for college tuition, a tax-free exclusion of $2,400 on unemployment benefits, and the preferential rate applied to qualified dividends.

Posted by JK Harris

Are you having enough tax withheld from your paycheck?

One reason people get into trouble with the IRS and end up coming to JK Harris is not withholding enough taxes from their paycheck. What happens? Tax season rolls around, they’re hit with a big tax bill and they do not have enough money to pay up.

What do they do? Usually, they fall out of the system. They stop filing tax returns because they are unable to pay their ever-growing back tax debt. And, when the IRS doesn’t catch up with them for the first year or two, they start to relax. Just when the taxpayer thinks they won’t be found out, they start receiving notices from the IRS.

Don’t let it get to this point! The IRS offers a withholding calculator on their website. This tool allows you to submit your information to determine if you are having enough tax withheld from your pay. It can also tell you if you are having too much taken out – after all, who wants to loan their money to the government for 0% interest?

You can find the withholding calculator on the IRS’ website here. Be sure to have your most recent pay stubs and your most recent tax return handy. You may estimate if necessary, but having the most accurate numbers will provide you with the most accurate information.