Cincinnati Tax Resolution - March 2020

Cincinnati Tax Resolution - March 2020

MARCH/APRIL 2020 VOLUME 4, ISSUE 3

T O P H ’ S TAX RESOLUT ION T I M E S

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AND START LOOKING FOR THE SOLUTION Stop Looking at the Problem

Many of my clients come to my office with mounting tax problems and a lot of stress and anxiety. On top of that, many of them are suffering from paralysis by analysis. They’ve looked at their situation and are afraid to take action. They don’t want to make a mistake or find themselves in a worse situation, or they just don’t know what to do. Of course, when they call me or schedule an appointment, they’re taking a step to fix their problem, but there is often still a long way to go.

more information I have, the better. I can build a case and go to the IRS and make that case on behalf of the client. When things go wrong, you can get stuck in a rut. You might find yourself living in denial or dwelling on the problem— it’s all you can think about. You might not even be able to get a good night’s sleep because of it. But over time, the problem can get worse, and the result is more stress and anxiety. When you stop looking at the problem and start looking for a solution, that’s when the stress starts to go away.

I’ve worked with clients who were married and had joint tax problems.

It’s not uncommon for one spouse to place the blame on the other. If one spouse works and the other doesn’t, on paper it might appear that one spouse is to blame. But marriages are partnerships. Spouses should be on the same page when it comes to filing joint taxes, but when it becomes a blame game, that’s what becomes the focus. It can be hard to start the search for a solution when all they can see is the problem. When they’re in my office, I try to get to the point. I tell them that in order to solve their tax problem, they can’t go around pointing fingers. It doesn’t do any good. And to complicate things, getting stuck on the problem can have an impact on the resolution. Facts might be missing. Key information may be skipped over.

I know because I’ve been there. Before I was a CPA for the self-employed, I went through my own financial challenges. I’ve talked about them in past newsletters. I was stressing myself out thinking about them, but I wasn’t thinking about what I should do about them. I had a constant cloud hanging over my head. That changed when I changed my mindset. I had a breakthrough and started to find success when I focused on solving my problems. I stopped dwelling on what was going wrong and instead, I asked myself, “How do I fix this?” I got proactive and I was persistent. I set my sights on the solution, and I got there. Years later, I’m helping people do the very same thing. When you’re facing something as big as the IRS, it’s hard to pull yourself up and say, “I have to take care of this.” But when you do, as I learned, it’s like having the whole world lifted from your shoulders.

–Toph Sheldon

People can get so worried about who’s to blame that it gets in the way of a proper investigation. Part of what I do is putting together the whole tax story. The

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Is That Picture Worth $1,000?

One Man Escapes an Incredible $400,000 Tax Burden

The client’s name and personal details in this story have been changed to protect the identity of those involved. However, the tax results are 100% factual.

By the timeWes Dolcourt hired me, he was in deep with the IRS. The IRS claimed that Wes owed them a staggering $400,000. To make matters worse, Wes had been dealing with an unreasonable revenue officer who was practically breathing downWes’s neck. The officer was coming toWes’s house, pestering him and adding to what was already an incredibly stressful situation. Wes’s tax nightmare began in 2010. This was the year he was audited. For many people, audits don’t get blown out of proportion. Wes, however, received exceptionally poor treatment from the IRS. The auditor made critical mistakes and didn’t follow the law to the letter. In the end, Wes was hit with an initial $200,000 tax bill. Over the next seven years, it snowballed into $400,000. During those seven years, Wes hired someone on theWest Coast to represent him. Wes, being in Ohio, had some distance between himself and his representation. As Wes’s tax nightmare got worse, it was clear his representative was not doing a good job. Finally, Wes made the call and met with me. I looked at his situation and immediately saw the problem: Wes was being treated unfairly by the IRS, and it was absurd that his representation was not protecting him.

How to Avoid Copyright Infringement for Your Business

We’ve all heard the saying, “A picture is worth a thousand words,” and for businesses, this is especially true. Images used on a website and in marketing materials contribute to a specific vision and encourage customers to buy into a service or product. However, obtaining and using those images requires much more than a quick search on Google. To make the biggest splash while avoiding heavy penalties that can tank your business, follow these tips when searching for images. Presume all images are protected by copyright. Never assume that an image you find while browsing the internet is free to use. It may be easy to download one you like and use it on your website, social media account, or blog, but it can have devastating consequences. Someone who wrongfully uses copyright material worth at least $2,500 may face up to five years in prison and up to $250,000 in fines according to federal statute. Play it safe by assuming every image or photograph you find online is protected by copyright law. Always ask permission for use. Even if an image isn’t under copyright, you still might not have permission to use it. Find the source of the image, and inquire about using it for your own business. The image itself may have certain conditions you need to meet before you can use it. For instance, a licensing agreement may require you to pay a fee, give credit to the original creator, or guarantee the image’s use as-is without further alteration. In other instances, ask the photographer, designer, or artist for permission to use the image and agree to include a watermark or a link to their website. Find and use free images instead. Several websites, such as Pexels, Pixabay, and Morguefile, provide hundreds of photos for businesses to use for free and without worry of copyright infringement. Creative Commons is also a great resource to consult. This nonprofit provides free licenses and tools that make copyright material easy to understand. You may need to meet some agreements under a Creative Commons license, but afterwards, you can access and use numerous photos.

I went to work. I got the IRS to back off and hadWes’s case moved to a different revenue officer, someone who was reasonable and wouldn’t houndWes all the time.

After combing through the details of Wes’s situation, I decided to make an offer to the IRS: $10,000 to settle. The IRS came back with a firm no, so I appealed. After some time, the IRS said they were willing to settle for $75,000. It wasn’t a bad offer, considering the initial $400,000 tax bill, but Wes didn’t have $75,000. So, I continued negotiating with the appeals office, because there were some things that just weren’t adding up. After about a year and a half of negotiations, the IRS finally came back with a reasonable offer: $15,000 to settle.

I was able to shave off $385,000 of Wes’s IRS liability. Finally, after several years, Wes’s tax nightmare was over! Wes was ecstatic and very relieved.

–Toph Sheldon

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Getting Ready for a New Kind of March Madness!

With a new baby on the way (in just a few weeks!), the best way to describe the Sheldon household is “controlled chaos.” Every year, I mentally prepare myself for Toph’s busiest month. As peak tax season hits in March, I know Toph is going to be working longer hours and will be more stressed. This year, things are a little different with the baby arriving right in the middle of it all. But we’re doing the best we can to find balance. I try to make things as easy as possible for Toph while planning for the birth and the weeks afterward. We’ve

Of course, as we all know, there are never enough hours in the day. This is why we’re doing everything we can to plan ahead. We know there are going to be bumps in the road and we may need to adapt our plan, but we have a road map to guide us, and that’s the most important part. They say it takes a village to raise a child, and that is so true. We’ve reached out to our family and friends for help along the way. Toph has family in the area we can ask for help, and my mom will be in town when the baby arrives. With all this help, it gives Toph a chance to be present and involved while still working hard.

Some days, March Madness takes on a whole new meaning. It seems like we have such a big to-do list to get through before the

been talking a lot about schedules and how to best achieve a healthy work-life balance. Toph needs time to get everything done for his clients while still finding time to be there for our family.

baby arrives — and before Tax Day — but we know we’ll get through it. I’ve had to accept that our house isn’t always going to be spotless and that we may be ordering more pizza in March and April (the kids certainly don’t mind). It just comes down to planning and being as prepared as we possibly can be and adapting along the way.

To de-stress, I try to plan a date night at least once a month, but we try to get in a few more when we can. I’m hoping to get a few in the mix. Toph also likes to work out, so we try to make sure he has time to do that as well. It’s another great way to de-stress during this busy time of year — or any time of year really.

– Ashley Sheldon

Easy Irish Soda Bread

TAKE A BREAK

Ingredients

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4 cups all-purpose flour 4 tbsp white sugar 1 tsp baking soda 1 tbsp baking powder

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1/2 tsp salt

1/2 cup margarine

1 1/4 cups buttermilk, divided

1 egg

1/4 cup butter, melted

Directions

1.

Heat oven to 375 F, and lightly grease a large baking sheet. In a large bowl, combine flour, sugar, baking soda, baking powder, salt, and margarine. Stir in 1 cup buttermilk and egg, and mix until dough comes together. Knead dough on a lightly floured surface. Form dough into a round before placing it on baking sheet.

5.

In a small bowl, combine melted butter and remaining 1/4 cup buttermilk. Brush the raw loaf with this mixture and cut an “X” into the top. Bake loaf for 45–50 minutes, or until a toothpick comes out clean after being inserted into center of loaf. You may need to continue brushing the loaf with the butter mixture while it bakes.

2.

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3.

Solution on Page 4

4.

Inspired by AllRecipes.com

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Cincinnati Tax Resolution Powered by Toph Sheldon 9200 Montgomery Rd., Ste. 7B Cincinnati, OH 45242

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

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INSIDE 1

Are You Focusing on the Problem or the Solution?

2

Avoiding Copyright Infringement for Your Business

The IRS Plays Hardball — and Loses!

3

A New Kind of March Madness

Easy Irish Soda Bread

4

A Baldwin Brother Becomes a

} Usual Suspect

Toph’s Tax Nightmares

Stephen Baldwin Listens to Bad Advice

Stephen Baldwin’s film and television career goes back to the late 1980s. While he never found the same level of success as his brother, Alec Baldwin, he’s had a steady career in Hollywood. But despite his success, he still found himself in serious tax trouble. In 2013, Baldwin pleaded guilty to not paying New York income taxes over from 2008–2010. He owed $400,000, which included interest and various penalties. The court told him to get his act together or he would face jail time. He was ordered to pay his back taxes in full within one year. Baldwin went on record to say it was a mistake. His owed taxes were the result of bad information from accountants and attorneys he had previously hired to handle that part of his life. However, the court had given him time to get his taxes in order, and he used the time productively. Over the course of the year, he did pay what he owed: $300,000. The court decided to waive $50,000 in interest and penalties and a further $50,000 as part of Baldwin’s repayment agreement. The court also agreed to take the charge off of his record if the back taxes were paid within the year. He was successful.

But in 2015, he was back in tax trouble again, this time with the IRS and the state of New York. He was hit with a tax lien of $90,000. He owed New York $30,000 and the federal government $60,000, so he was back to square one. However, he once again paid what he owned and moved on. It once again goes to show if you listen to poor tax advice, you’ll get poor tax results.

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WHEN THE IRS COMES KNOCKIN’ ... LET US ANSWER THE DOOR!