Title: "Tax This! An Insider’s Guide to Standing Up to the IRS — 2010 Edition"
Author: Scott M. Estill
Publisher: Self Counsel Press, 2009; 264 pages; $22.95
As this housing market debacle unfolds, our understanding of all the ramifications of short sales and foreclosures is also maturing.
This week, the big "news" in my neck of the woods focused on the many short-sale sellers who have gotten a big old tax bill for their "canceled debt income" — not from Uncle Sam (the federal exemption for taxes on most "forgiven" mortgage debt is good through 2012), but from the State of California’s Franchise Tax Board. The hue and cry from both homeowner and industry quarters was deafening.
You see, in almost all other real estate matters and relationships these days, everything is negotiable. Buyers, sellers and even, to some extent, banks are all operating with much more flexibility and transparency than ever before (even though there’s still room to grow).
The one party in the real estate mix that seems about as forgiving and negotiable as a rebar-ridden brick wall is — you guessed it — the tax (wo)man. And that makes tax matters especially scary to the average Joe (and Josephine).
Tax attorney and former Internal Revenue Service senior trial counsel Scott M. Estill, with his seventh edition of "Tax This! An Insider’s Guide to Standing Up to the IRS," hopes to elevate the taxpayer end of dramatically imbalanced IRS and taxpayer faceoffs.
With an approach that is both comprehensive and clear, Estill empowers readers to get — and stay — in good standing with the IRS, wisely and aggressively protect their rights (and their wallets) through an adversarial audit or court case, and negotiate outstanding tax liabilities effectively.
Does Estill follow the current trend in personal finance titles by trying to make taxes sexy, cute, intriguing or funny? No! He does one (a big one) better — he makes them understandable, and provides concrete answers, actions and exemplars taxpayers can follow in a large number of real-life tax dilemmas — down to what to include on certain forms, what to write in certain letters, and what not to do (like letting the IRS conduct your field-audit examination at your home — a no-no, according to Estill).
At the outset of the book, Estill provides a primer on the income tax, the IRS and some very insightful ground rules for "How to Play with the IRS," including a detailed model for carrying out and tracking your communications with the agency in a way that positions you to win your tax battles.
Next, Estill covers the IRS record-keeping system, empowering readers to get an awareness of what the IRS does and doesn’t know about them. This knowledge, Estill explains, is power.
Estill then covers the process of filing tax returns and indoctrinates readers on the uber-importance of filing on time. Moving forward, tax advantages, implications and obligations of various business entities are explored.
In the next section of the book, Estill jumps into the odds, process, rules and successful defense strategies for both business and personal audits. He then explains and explores IRS penalties, notices and collection processes — as well as how to fight all of the above and/or settle tax debt through offers-in-compromise or bankruptcy.
Finally, Estill touches on defending oneself in a civil or criminal court case vs. the IRS, and educates readers about the role the Taxpayer Advocate and members of Congress can play in resolving tax issues.
Throughout the book, readers will find flowcharts of various processes, sample letters, checklists of common issues and errors, and sidebars with powerful "Tax Points" summarizing the critical points of every chapter.
If you have a very simple tax situation or have never had a problem with the IRS, this book just isn’t written for you. However, for people with tax issues or angst, anyone with a more complicated tax situation (e.g., business owners, chronic non-filers, those in professions with a high risk of audit, etc.), and those who simply have a perverse curiosity into how the IRS trains its agents to think, communicate with and respond to taxpayers, "Tax This!" is an absolute must for your library.
Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.
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