Hip Hop Icon Doug E. Fresh Owes 2 Million to IRS

According to Hip Hop RX, music icon Doug E. Fresh (known as The Human Beat Box) is in debt to the IRS for more than $2 million. He has reportedly been dealing with financial problems for over two decades. Just one more in the long list of celebs with tax problems…

Doug E. Fresh, real name Douglas E. Davis, 44, has a lien against him for $2,276,848 dollars, according to the Detroit News. The tax lien against Doug E. Fresh was reportedly filed on October 20th.

This is not the first time Doug E. Fresh has had trouble with the IRS, as back in December of 2008, New York Post reported that the IRS filed a $367,000 tax lien against the hip hop pioneer plus over $40,000 in state taxes.

Read more here

Five Things to Look for in a Tax Resolution Company

My law firm’s blog recently posted a new article explaining five essential things to look for in a tax resolution company. You can read a snippet of the post below, or read the full entry at the RoniDeutch.com Tax Relief Blog.

1. Professional and Useful Website

You would be surprised how much you can learn about a business using the Internet. Before hiring a tax resolution company, you should always spend a few minutes reviewing their website. Look for informative testimonials and information about any chambers of commerce, or professional organizations the company is aligned with.

In addition to information about the business on their website, you should also see if they offer information on topics related to tax debt resolution. If the company employs experts knowledgeable about the various IRS tax resolution programs, then the company should have useful information such as informative articles, a glossary of tax related keywords, newsletters and a blog (that is updated regularly) for you to review.

2. Successful Track Record

A quality tax resolution company will be able to provide evidence of a successful track record of resolving delinquent accounts with the IRS. If you cannot find information on a company’s website about recent resolutions that is has achieved for its clients, then you should consider asking a representative of the company for this information. If you do speak with a tax resolution company, you should also inquire as to whether the company has experience in resolving cases similar to yours.

Thousands of Businesses Need to File State Tax Returns

From Business Wire.com:

The Franchise Tax Board (FTB) today announced it has begun contacting more than 35,000 companies that did business in California in 2007 but failed to file a state tax return for that year.

The FTB annually reviews more than 5 million income records from government agencies and financial institutions and matches them against tax records filed to determine whether some businesses have yet to file. As part of this annual effort, FTB collected approximately $31 million last year from businesses that failed to file tax returns.

Businesses contacted by FTB will have 30 days to file their delinquent tax return or show why one is not due. If no action is taken, the FTB will issue a tax assessment that may include penalties and fees. With the state`s automatic seven-month extension, companies doing business in California are provided up to 10 and one half months to timely file their California state tax return.

The failure to file tax returns is one part of the tax gap that is defined as the difference between taxes owed and taxes paid. California estimates its annual tax gap to be $6.5 billion per year.

For those receiving notices, information is available by calling 866.204.7902. Callers should be prepared to provide the 15 digit notice number.

Making Work Pay Tax Credit May Cause Tax Debt

Everybody loves getting a little extra money, and the new Making Work Pay stimulus package is designed to give everybody a refundable tax credit spread out over every paycheck. The amount for 2009 and 2010 is up to $400 a year for individual taxpayers and up to $800 for married couples filing a joint return. Sounds great right? Well for some it is, but for seniors whose only income is a pension it may actually create a tax bill for them at the end of the year.

Seniors whose sole income is a private pension or annuity are not eligible for the credit. However, since the new tax tables change the amount being withheld for everyone regardless of their individual situations, many seniors may end up having to pay the credit back! This could mean a reduced tax refund come April 2010 or even a tax debt. Yikes!

So how do you know if you are at risk? All taxpayers should review and adjust their W4 each year to ensure that they have the correct amount withheld and adjusted for the credit. If you have not already done so, take ten minutes and check your withholdings. Additional at-risk taxpayers who are no eligible for the credit include: younger wage earners who are claimed as dependents by their parents, workers with multiple jobs, and Social Security recipients who also have other sources of income.

In addition, the IRS website, www.IRS.gov, provides a withholding calculator you can access on-line to ensure that enough tax is being withheld. You can also request Publication 919 for guidance on tax withholding. Doing so now will ensure that you nip this problem in the bud before it becomes a tax headache next April.

Snoop Dogg's Tax Debts Unveiled

Famed rapper Snoop Dogg is the most recent celebrity to have his name added to California’s delinquent taxpayers list. Check out the following article on the new development from ABC15.com.

Rap superstar Snoop Dogg has been named and shamed as the latest celebrity indebted to the state of California - he's failed to pay more than $284,000 in back taxes.

The Drop It Like It's Hot hitmaker, real name Calvin Broadus, had a tax lien filed against him last month, which accused the rapper of owing $284,053.59, reports TMZ.com.

He's not the only musician not up to date with his taxes.

Soul star Dionne Warwick was recently listed in California's top 10 worst offenders, while rappers Xzibit, Method Man and Lil' Kim have also run into trouble with the Internal Revenue Service (IRS).

More Information on Fielder’s Tax Problem

The Milwaukee Online Journal posted this article with slightly more information on the story I posted about yesterday, Milwaukee Brewers First Baseman Owes the IRS $409,149.

Many people in the professional sports industry refuse to comment on financial issues, and this case is no exception. However, the author does bring up a few interesting points. For example, Fielder recently turned down a new contract valued at around $60 million, so it seems likely that he will be able to repay the liability. However, there are no court records to support the idea that he has already settled the liability, meaning it could still be in IRS collections.