Reality Star Jax Taylor at Odds With IRS and California Franchise Tax Board

Reality Star Jax Taylor at Odds With IRS and California Franchise Tax Board

Virtually any tax attorney in San Francisco would agree that reality stars appear to have frequent problems with taxes. It seems like every time we turn around, another high-profile reality star is facing a tax audit or even being charged with tax evasion. Obviously, filing taxes is a source of aggravation for so many, let alone the rich and famous who sometimes have to keep track of multiple businesses, expenses, and assets. They also stand to lose a lot to Big Brother if they don’t make sure they use a good accountant or tax attorney to take care of this task.

According to Daily Mail, former Vanderpump Rules star, Jax Taylor, owes over $1.2 million to both the IRS and his home state tax agency. The controversial television personality allegedly owes about $300,000 to the state of California and a whopping $800,000 in federal taxes. It is unclear whether or not he has hired a Franchise Tax Board attorney to help him with his troubles.

Jax Taxylor Tax Problems

Tax Lien Placed Against Former Reality Star

According to The Sun, the reality star–born Jason Cauchi–has had a tax lien placed against him by the state of California. The lien was filed on March 27 and totals more than $300,000. Taylor also allegedly owes over $316,000 to the California Franchise Tax Board from the 2018-2019 tax season. On March 10, 2021, a state tax lien was filed, with interest and fees continuing to accrue until the balance is paid in full. Last Thursday, The Sun confirmed with LA County clerk officials that Taylor’s state taxes have not yet been paid. It is not known if a federal tax lien is also in Taylor’s future.

Tax Troubles Date Back to 2014

According to documents obtained by The Sun, this is not the first time Taylor has found himself in tax trouble. The bartender- turned- reality star has allegedly been at odds with the IRS since 2014, a year for which he still has an outstanding tax bill of $23,000. In 2018, Taylor allegedly found himself in additional trouble with the Agency. That year, somewhere in the neighborhood of $200,000 was added to the balance he already owed the IRS.

Taylor Purchases New Home Despite Tax Debt

Although Taylor purchased a new home with Britney Cartwright for almost $2 million in 2019, an even higher amount was added to his unpaid tax bill that same year; a whopping $650,000. Most people would agree that the timing of their troubles is very bad, considering Jax and Britney have a baby on the way and Taylor is not working at the moment.

Jax Taylors House and Property Tax Lien

Photo Credit – Realtor.com

Taylor Once the Highest Paid Pump Rules Cast Member

According to Celebrity Worth, at one time, Jax Taylor was Pump Rules’ highest paid cast member. He earned up to $25,000 for each episode and his net worth mostly stemmed from his ties with Bravo and his time on the reality show. However, he was let go by Bravo, the latter of which cited “problematic behavior” as the reason for the termination. Although Taylor has hinted that another big project is coming, this has not been confirmed. Not surprisingly, the former reality star declined to comment on his IRS troubles. Anyone who owes money to Big Brother or who needs to stop IRS harassment should contact a tax attorney in San Francisco as soon as possible.

 

Proposal to Increase IRS Oversight of Tax Preparers

Proposal to Increase IRS Oversight of Tax Preparers

Many tax attorneys are keeping their eye on the Biden administration's proposal to increase the Internal Revenue Service budget, giving it more resources to catch tax cheats while reducing the number of audits completed on a regular basis. According to Biden’s...

Four New Tax Breaks from American Rescue Plan Act and $1.9 Trillion Stimulus Plan

$1.9 Trillion American Rescue Plan Act Gives Taxpayers Four New Tax Breaks

Last week, the American Rescue Plan Act, a $1.9 trillion stimulus package, was passed by both the House and Senate, and the bill was signed by President Joe Biden on Thursday. In addition to stimulus checks and other benefits, it includes helpful tax breaks for numerous taxpayers. These tax credits were designed to lift a certain portion of the financial burden caused by last year’s economic shutdowns, a direct result of the Covid-19 pandemic. Whether or not you are planning to consult a tax attorney in San Francisco, below are the four tax breaks you should know about:

Earned Income Tax Credit. The stimulus package expanded the Earned Income Tax Credit (“EITC”) for the 2021 tax year, increasing the age requirements and providing bigger benefits to taxpayers who do not have children. Childless taxpayers are allowed to claim the credit beginning at age 19, with the exception of certain full-time students. The 65-year age limit was also eliminated. Such taxpayers can expect to receive about three times more from the credit, an increase from $530 to approximately $1,500. Pandemic job losses have affected low earners disproportionately, but the expansion of this credit will benefit them.

Internal Revenue Service federal building Washington DC

Child Tax Credit

Once the package was passed, the previous Child Tax Credit was enhanced for the 2021 tax year as well. This credit is now $3,000 for each child under the age of 18, and $3,600 for each child under the age of six. The former child tax credit was $2,000 for each child 17 years of age or younger.

In addition, the credit is fully refundable for 2021. That means that taxpayers will get a refund for the credit, even if the total is higher than the amount of their owed taxes. This credit was designed to help the bottom 20 percent of taxpayers who have children in the home.

Child Care Tax Credit

President Biden has also expanded the Child Care Tax Credit for one year on an emergency basis. This means that families with children will receive a tax credit equal to half of their expenses for child care for minors in their household who are 13 years of age and under. The specific amounts are $4,000 for one child and as much as $8,000 for multiple children. It is a refundable credit. Additionally, families will receive a partial credit if they earn between $125,000 and $400,000 annually. According to the Tax Policy Center, this credit helps middle- and higher-income households.

Unemployment Benefits Tax Exemption

Most tax lawyers would agree that unemployment compensation benefits are virtually always considered taxable income. However, an amendment to the stimulus bill by the Senate has resulted in the first $10,200 of unemployment benefits being tax free. This benefit applies to individuals who earned $150,000 or less last year and will benefit the tens of millions of taxpayers who were forced to survive on unemployment compensation throughout one or more periods during last year’s pandemic. To learn more about these tax breaks, or for help with filing your return, contact a tax attorney in San Francisco to get additional information.

 

 

Proposal to Increase IRS Oversight of Tax Preparers

Proposal to Increase IRS Oversight of Tax Preparers

Many tax attorneys are keeping their eye on the Biden administration's proposal to increase the Internal Revenue Service budget, giving it more resources to catch tax cheats while reducing the number of audits completed on a regular basis. According to Biden’s...

Tax Rates for Wealthy Americans Continue to Fluctuate

Top 1 Percent Paying Higher Share of All U.S. Taxes

Recent data shows that the percentage of the country’s individual income taxes being paid by the nation’s top earners has increased over the past few decades. Additionally, the adjusted gross income of this demographic has similarly increased. Our tax attorneys have learned that the top 1 percent of taxpayers, those earning more than $540,000 annually, paid just over 40 percent of all federal income taxes in 2018. This information came from the Tax Foundation, which went on to say that America’s wealthiest households paid approximately $615 billion in income taxes that year, which is more than the combined total of the bottom 90 percent, who, together, paid $440 billion.

Rich guy

The nation’s richest individuals, who shoulder the lion’s share of the country’s taxes, have paid increasingly higher amounts over time. For instance, in 2001, the top 1 percent paid over 33 percent of the country’s individual income taxes, while the share paid by the bottom 50 percent of filers fell from 4.9 percent to 3 percent, according to FoxBusiness.

Statistics Explained

The statistics mentioned above indicate that the rich are paying more taxes as time goes on, but, during that same period, the average gross adjusted income of the wealthiest citizens rose simultaneously from 17.4 percent to 20.9 percent. Most tax attorneys would agree that this accounts for the rise in the amount of taxes owed. At the same time, the bottom 50 percent of taxpayers experienced a decrease in income.

Impact of the Tax Cuts and Jobs Act 

According to the Tax Foundation, the new tax laws that went into effect in 2018 resulted in a small decrease in taxes across the board.

In 2018, the top 1 percent of taxpayers paid approximately 25.4 percent in taxes, which is roughly seven times the amount paid by those in the bottom 50 percent. However, once the Tax Cuts and Jobs Act went into effect, the average rate at which all individuals are taxed decreased from 14.7 percent to 13.3 percent from the previous year. The top 1 percent of earners saw their average rate fall from 26.8 percent to 25.4 percent.

Elizabeth Warren’s Proposed Wealth Tax

Senator Elizabeth Warren (D-Mass) proposed a new tax targeting the country’s wealthiest households. Warren, who is joining the Senate Finance Committee, plans to introduce a bill that calls for a wealth tax on fortunes worth over $50 million.

As opposed to a tax levy on payrolls and income, the objective of Warren’s proposal is to tax the net worth of the accumulated assets of the richest Americans. She stated that her plan will combat income inequality and ultimately create a more level playing field for middle-class Americans.

Sometimes called the “ultra-millionaire tax,” Warren’s proposed tax would apply to those with assets valued at over $50 million. Equal to 2 percent, the tax would rise to 3 percent for those with assets valued in excess of $1 billion.

Our tax attorneys have estimated that the tax would apply to less than 0.1 percent of the population and raise approximately $2.75 trillion over a 10-year period.

Proposal to Increase IRS Oversight of Tax Preparers

Proposal to Increase IRS Oversight of Tax Preparers

Many tax attorneys are keeping their eye on the Biden administration's proposal to increase the Internal Revenue Service budget, giving it more resources to catch tax cheats while reducing the number of audits completed on a regular basis. According to Biden’s...

IRS to Restart In-Person Visits to Collect Back Taxes

IRS Set to Restart In-Person Visits to Collect Back Taxes

Our tax attorneys have learned that on Monday, two IRS officials stated that the Internal Revenue Service plans to resume in-person visits to individuals who have not filed or owe back taxes.  Agents plan to once again knock on doors of high-income earners who may have failed to file. The agency appears to believe that certain taxpayers who have been non-compliant have been using the chaos of the pandemic in an effort to “fall through the cracks.” Deputy Chief of IRS Criminal Investigations James Robnett said on Monday that they will be knocking on doors in the coming months and asking questions to ensure the compliance of high-income non-filers and those who owe back taxes.

Investigations Once Delayed Are Now Underway Again

Since February, IRS agents have been following up on taxpayers earning $100,000 per year or more, but who have failed to file a return. Certain efforts were paused or delayed due to the Covid-19 crisis, but according to tax lawyers who have been following the story, those efforts will once again be resumed and expanded. Those with tax problems and individuals who owe back taxes should be aware that the pandemic will no longer stop the aforementioned efforts of the IRS.

At an American Institute of CPAs event, Darren Guillot confirmed that wealthy individuals attempting to avoid their tax bills will once again be contacted in person by IRS agents. Guillot is an IRS Deputy Commissioner for Operations and Collections.  However, it must be noted that $100,000 in Gross Income does not make you wealthy in the San Francisco Bay Area.  $100,000 is hardly enough income to manage the sky high cost living in San Jose and around Silicon Valley.

IRS Man

Several Hundred Inquiries Launched by the IRS in Fiscal Year 2020

In the 2020 fiscal year, the IRS began 279 investigations regarding individual taxpayers who failed to file returns. This effort resulted in 96 indictments and 146 cases being recommended for prosecution. Of the indictments, 80 people were convicted and sentenced to an average of three years in prison.

The IRS has directed its efforts toward identifying an estimated nine million people who failed to file a tax return in 2020. It is not clear how many taxpayers would have filed if the pandemic had not occurred. Nevertheless, person-to-person contact is usually the final step taken by the IRS before its agents pursue more serious action, such as launching criminal investigations. For this reason, filing back taxes is important, as certain criminal consequences may be avoided, even if the return is filed late. Not filing at all can result in more serious charges.  Although the IRS agents will approach with certain level of professionalism and courtesy, they are not there to help you.  IRS Revenue Officers are tax collectors, and the process is still adversarial, and must be approached with great care.  It is prudent to speak with a tax professional as soon as you hear from the IRS, or ideally before you are even contacted.

Relief Offered to Certain Filers Depending on Circumstances

The IRS is willing to work with certain individuals who owe back taxes or who haven’t filed a return, provided they file the appropriate documents prior to a visit from the IRS. Even if the amount owed is beyond the person’s ability to pay at the moment, payment arrangements can sometimes be worked out, resulting in fewer penalties and no legal action.  IRS Fresh Start Initiative also offers various options for resolving the tax bill.

In the opinion of many tax experts, the simple message from agent James Robnett is “file now.” Those facing tax problems, people who owe back taxes, or individuals who need to stop IRS harassment should contact one of our tax attorneys as soon as possible for expert advice.

Proposal to Increase IRS Oversight of Tax Preparers

Proposal to Increase IRS Oversight of Tax Preparers

Many tax attorneys are keeping their eye on the Biden administration's proposal to increase the Internal Revenue Service budget, giving it more resources to catch tax cheats while reducing the number of audits completed on a regular basis. According to Biden’s...

Famous Cybersecurity Entrepreneur John McAfee Indicted on Federal Tax Evasion Charges

Famous Cybersecurity Entrepreneur John McAfee Indicted on Federal-Tax Evasion Charges

In a recent statement, the U.S. Justice Department announced that John McAfee, cybersecurity executive and millionaire, has been indicted on federal-tax evasion charges. According to our tax lawyers, the indictment was filed this past summer and was unsealed on Monday. It alleges that the millionaire failed to file tax returns from 2014 to 2018. The Justice Department’s announcement states that the document was unsealed following McAfee’s arrest in Spain, where he is awaiting extradition.

John McAfee Smoking

Antivirus Company Founder Faces up to 10 Counts of Tax Evasion

McAfee, who founded an antivirus company he named after himself, faces up to 10 counts of tax evasion. The document is vague regarding whether or not McAfee earned income from his cybersecurity business during the years he failed to file tax returns. However, according to the indictment, McAfee earned taxable income throughout those years from consulting work, speaking engagements, and the promotion of cryptocurrency. It is also alleged that he sold the rights to his life story in 2016 for use in a documentary.

The Justice Department stated that there was a willful attempt at tax evasion on the part of McAfee, and that a yacht, a car, real property, and other assets belonging to him were concealed under the names of other individuals. The Justice Department also made it clear in the statement that, if convicted, McAfee could face up to five years in federal prison for each count of tax evasion, as well as an additional year for each count of deliberately failing to file a return. Monetary penalties, restitution, and a period of supervised release may also be part of his sentence if he is found guilty.

McAfee Gun

Previous Troubles for McAfee

Earlier this year, the United States Securities and Exchange Commission targeted McAfee with a lawsuit that alleged he earned over $23 million by using Twitter to recommend multiple cryptocurrency offers that, according to a Reuters report, were misleading and false.

McAfee has long been a controversial figure in the world of technology. He first became prominent in the 1980s when McAfee VirusScan, the country’s first commercial antivirus-software program, was released by a corporation he founded. It was the release of this software that helped spark the multi-billion-dollar virus-and-malware-protection industry.

john-mcafee-hiding

That business was ultimately sold to Intel, but McAfee continued to develop additional cybersecurity products independently. No one knows if McAfee will also consult a cryptocurrency tax attorney for help with the lawsuit concerning the offers he made on Twitter, but he will almost certainly seek the advice of tax lawyers in the coming weeks to help him navigate through his indictments.

 

Proposal to Increase IRS Oversight of Tax Preparers

Proposal to Increase IRS Oversight of Tax Preparers

Many tax attorneys are keeping their eye on the Biden administration's proposal to increase the Internal Revenue Service budget, giving it more resources to catch tax cheats while reducing the number of audits completed on a regular basis. According to Biden’s...