Sign of the times: Most popular topic by FAR at IRS forum? “Tax aspects of bankruptcy”

I’m currently attending a 3-day IRS Tax Forum for professional preparers, and here’s a few quick hits.

Clearest lesson so far: The effects of the economic downturn that began over two years ago are still being powerfully felt. Over 40 different workshops are available to choose from at this conference, and by far the most-attended workshop was on the topic of assisting taxpayers with the tax aspects of bankruptcy. The room was barely able to hold everybody and the session had to start late because of all the time it took for hundreds of preparers to file in. The consensus opinion among all preparers was we’re seeing many, many more clients either going through or considering entering bankruptcy than at any time in anybody’s memory.

The IRS letter you absolutely must respond to ASAP: “Notice & Demand” of tax due. After the IRS has made several collection attempts, they’ll issue this nasty letter. The letter itself isn’t so bad, it’s the fact that as little as 10 days after sending this letter, the IRS will place a Notice of Federal Tax Lien on your public credit record. Your credit score generally drops 100 points that very day, and potential employers, landlords, lenders, etc. will all get the message loud and clear that you can’t handle your affairs. This particular session was also very useful in learning some of the most effective courses of action for getting this removed as soon as possible once the debt has been settled.

Wills & Trusts are just pieces of paper if you don’t title your assets properly. One of the workshops provided the most concise and useful explanations of how to properly approach trust and estate issues. The importance of checking the titles for all assets was driven home. While some cases are obvious (if grandma sold the farm two years before she died, it doesn’t matter if it still says in her will that you get it), many times people run into issues with assets thought to be held in one way (jointly, in a trust, etc.) but not actually titled correctly.

Believe it or not, the IRS is actually a pretty efficient organization :-). As a tax preparer, I’m well aware of the difficulties in administering the tax code. And the IRS doesn’t make the crazy rules (thank your elected representatives for that), they just have to try to enforce them…a job that grows more difficult every year as legislators have delegated responsibility for more and more issues to the IRS, and continue to wait until later and later in the year to enact the final tax provisions for each tax year. None of that is news to me, but what actually has impressed me so far is how well organized the event is. Two thousand people  have multiple different sessions or activities they can attend all throughout the day in a relatively small space (for 2000 people). The layout is clearly well-thought. Even when nearly 1000 people showed up for a topic that normally only draws maybe a hundred, the program was only delayed for a few minutes by the time it took to get everybody checked-in and seated.

More fleshed-out posts will be going up in the weeks to come on topics from the Forum.

Advertisements

Comments are closed.

%d bloggers like this: