The IRS And The Tax System:

Integrity And Fairness For Whom? (by Christopher Bergin , contributor at f Forbes)

There are many people who no doubt would like to harm the IRS. Some of that comes with the territory –- after all, most taxpayers dislike the tax collector. But right now, the one hurting the IRS the most is the IRS itself. In the latest bonehead maneuver from the IRS, the Treasury Inspector General for Tax Administration issued a report this week that revealed that agency employees with conduct and tax compliance problems received bonuses and awards.

According to a news story from Tax Analysts:

Among employees who received awards between October 1, 2010, and December 31, 2012, 1,100 with federal tax compliance problems received $1 million in cash awards, 10,000 hours in time-off awards, and 69 quality step increases within a year after the IRS substantiated their tax compliance problems. Also, 2,800 employees with conduct issues requiring disciplinary action received more than $2.8 million in monetary awards, 27,000 hours in time-off awards, and 175 quality step increases.

Are you kidding me?! 

Wait, because it gets even worse. These awards are not prohibited under our government’s rules.

Are you kidding me?!

As Tax Analysts reported, the TIGTA report addressed that in this way:

Although awards for employees with conduct and tax issues are not prohibited, TIGTA said that providing awards to those employees, especially those who fail to pay federal taxes, “appears to create a conflict of interest with the IRS’s charge of ensuring the integrity of the system of tax administration.”

That’s classic understatement for you. There’s really no “appears” about this anymore. This is now an agency that is rapidly losing its way under an administration and a Congress that apparently could care less.

The IRS’s mission statement couldn’t be clearer:

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

If some of the tax cops aren’t playing by the rules – and getting bonuses for it – how does that provide us taxpayers “top quality service” and help us understand and meet our tax responsibilities? The two most important words in this mission statement are “integrity” and “fairness.” The one thing largely missing from our tax code is fairness. And the one thing now beginning to disappear from the agency charged with administering that tax code is integrity.

The Credit Bureaus Love Bad Credit - And Here’s Why

Not only are the Big Three credit reporting agencies (Equifax, Experian and Trans Union) making a killing selling personal information, what most don’t realize is that they've also got an actual financial stake in gathering as many poor credit scores as possible.

Some data is more valuable than other data, which allows the credit bureaus to charge more for it. As sick as it sounds, there is more money to be made in people with problem credit, because they can be taken greater advantage of.

Consider a credit card company that charges outrageous fees, and inflated interest rates to high-risk consumers. They want to market to people with less-than-average credit.  The methodology is that these consumers will be willing to pay more to have a credit card because their credit is poor.

People with harmed, bruised, or sub-prime credit are the people who make the banks the most amount of money in fees and interest. Banks don’t get rich on consumers who get approved for 0% interest credit cards. Instead their biggest profits come from their customers who are getting charged interest rates of 25% and higher.

The only trick is that the lender doesn't want too many borrowers defaulting.

Now consider the sales department at one of the Big Three credit bureaus. Their sole job is maximizing the income they can generate off their data.  When it comes to making the most money off a credit report, sub-prime customer data is worth more than good credit consumers. So the bureaus can easily sell this data and make a lot more money.

The problem with this is that predatory lenders are the best customers that the credit reporting agencies could ask for. This is because they’re willing to pay top dollar prices in order to get access to the bottom-of-the-barrel FICO scores.

All of this means one important thing; damaged credit consumers are more valuable to the credit reporting agencies than those with good credit. This actually gives the bureaus an incentive to try and NOT fix damaged credit - since the better the credit, the less money they can make on the data.

original message from (George Wisniewski of Dispute Suite)

HAPPY INDEPENDENCE DAY OR UNHAPPY 4TH OF JULY?

I would like to wish everyone a happy 4th of July, and please let’s not wish each other happy independence day.  No, I am not anti- government nor am I anti- America. I love this country and have no plans on leaving (unless I have no other choice). I am however, anti ignorance.

We are ignoring the fact that we celebrate something most of us do not have. INDEPENDENCE.

 I have a question.  Why do we celebrate Independence Day when so many of us are not independent? In fact we are more dependent now than we have ever been.

Many of us will disagree and state we are in a better situation than we were over 237 years ago. Again I understand why an individual would say that. The challenge that I have with that is we were convinced we were independent; actually it is often stated this way “America celebrates her independence with the observance of the 4^th of July.” America is independent, but many of the Americans are not. We are led to believe we are independent. The worst kind of dependence is a hidden in plane site. What do I mean?

If we as a nation think that we are independent because we're constantly convinced while ignoring the facts , the forces we depend on (Government, Corporate America & Media) need to do little to control us. If we were to ever wake up and accept the fact that we are not independent but, totally dependent,  we can only blame ourselves because the information was there for us to see the whole time.

How did we get this way?

There are two types of control most widely used in history.

Control by force

Control by deception

 Control by force (when America was under British rule) is easy to see and difficult to overcome but, it can be overcome (thus why we celebrate Independence Day).

 Control by deception (the form of control we experience today) is easy to overcome but difficult to recognize. Why? We really believe we are independent. We cannot accept the fact that we are dependent even though the truth is staring us right in the face.

We have traded one form of control (forced) for another form of control (deception). We went from knowing we were dependent to accepting we are independent while depending on the individuals telling us we are Independent (Government, Corporations and Media). No one or ethnic group are exempt.

 This happened to the original americans (Native Americans) now living on reservations. This happened to the original immigrants (going from settlers to British rule to Corporate america). This happened to the Original Slaves (imported from many nations, forced into slavery, gained emancipation demanded acceptance into Corporate America). We can continue with the examples but I think you get the point.

Independence is true freedom. Freedom from prejudice, injustice and control. (you don't have to believe me but, ask yourself this question, why do we hear no news on some of the most wealthy families on the planet? (Rothschilds, Duponts and the Rockefellers plus many others).  

Have you ever wondered how there are more people that are not born in America living in America experiencing more Independence than those of us born in America?

The answer is quite simple. Most of the people coming from other countries to America left a Government  controlled by force. When they get to America, many of them don't trust anything or anyone, learn the rules, do the research and do what the Independent people do thus achieving their independence.  After their independence is achieved they, in many instances appear to look down on the Americans that were born here. Why?  They know we are not independent, and wonder why we don’t know it.

If you disagree that is fine and I understand but, answer this question? What is independence?  According to dictionary .com independence is ….freedom from the control, influence, support, aid, or the like, of others.

• We must ask ourselves are we free from control? I don’t know but, do you control how much income you generate thus controlling your outcome? If the answer is no then you are not free from control of others.
• Are we free from influence? I don't know but, do you go to the nearest news or web outlet and get your information and treat that one unproven source as gospel or do you look for the source of the information, compare and contrast multiple resources as we were taught in school?  If the answer is the first one then you are not free from influence.
• Are we free from support or aid? I don't know but, do you expect an entity, group, or individual to assist you in any way shape or form with your retirement, health care, schooling or…(you fill in the blank). If the answer is yes then you are not free from support or aid of others.
• Do we have financial independence? I don't know but, Can you maintain or increase the amount of income without working? if the answer is no then you do not have financial independence.

 why is this important? Because financial independence is the only form of independence that will lend itself to total independence.

Whoever has control of your income, influence, support and aid has total control of your outcome. This is something to think about while enjoying the 4^th of July festivities.

Happy Independence day to America and Happy 4^th of July to us Americans, the dependents that blindly believe we are Independent.

You discovered your reason why and it is not big enough, now what?

In the blog titled” Is your reason “Why”, big enough……………..”

We discussed key points to focus on to ensure we would do the necessary work after the W2 day ended. 

We all realize that many times our reason why is big enough to start but, it may not be big enough to allow us to overcome our subconscious mind. As my mentor says “your reason why has to be bigger than your excuse for why not”. 

How do we win the battle to overcome the excuses for why not? Let’s take a look at some legitimate excuses.        

                                                                                                    

• Not enough time.
• Work life balance
• Not enough energy

Before the problem can be solved, the cause of the problem needs to be addressed.

Why don't we have enough time? What are we doing with our time? Is there time we are wasting on non productive activities, ie watching TV, playing games on our favorite social media, conducting non productive phone calls (gossiping and catching up on the TV shows we did not record).  Once the cause of the problem is addressed, we can work toward a solution.

Schedule time to commit to working on our business and when we are done for the day we can reward ourselves with the non productive activities.

Work life balance is a tough one (so I will apologize in advance); there is no easy solution without sacrifice.

One of the biggest challenges facing many of my clients is being the driver for their children. Sports, recitals and numerous activities are monopolizing the parents time. The children are in multiple activities spanning 5 to 6 days a week, not leaving much time for anything.

Let’s have our children pick one activity and stick with it for a season. This will teach them discipline and responsibility. My children remember our family activities more vividly than me attending an event they were participating in. Let’s schedule time to do things with our children vs. running them all over town watching someone else interact with them.

Planning date nights are crucial as well. With proper planning we can have our cake, eat it and sale it too.

“I am tired” is a common reason we use for not working on our business. 

Here is the million dollar question. If we are tired now, how tired will we be 10 years from now?  The simple solution is to suck it up and do it anyway; however the problem may not be so simple. If the fatigue is chronic then going the see a doctor is the first suggestion.

What are we eating and at what time are we eating it? Are we getting adequate rest, are we exercising?  Who are we hanging around? Do they give us energy or do they suck the energy out of us.

 Associate with people who are in life where we want to be. People that are heading in the same entrepreneurial direction are up lifters and this is a great energy boost.

Once we find the reason for being tired we can then work toward a solution to grow our business.  

Many of our excuses can be overcome with evaluation and proper planning. There are many excuses in addition to the ones listed. What are some of the excuses you have encountered and how have you overcome them? Thanks for sharing. 

Is your reason why big enough to effectively operate a business while maintain a full time job?

Simple yet effective solutions to a complicated question.

There are many great blogs about the” how too”, in starting and working a business while having full time employment.  We are aware of the many general reason(s) why it’s a good idea. The aspect I would like to touch on is the mind set behind our personal reason why.

I recently attended a business workshop in DC and there were many useful tips and great incite on what the government representatives and contractors where looking for from business owners wanting to get into the contracting industry. The one constant theme emphasized was the fact that after the sequestration deadline, there were going to be more cuts.  Government as well as commercial entities were going to be affected.

 So what does this mean for us? It means more layoffs and more people cashing in 401 Ks to start businesses.

There is some advice for those individuals fortunate enough to survive sequestration and the cuts to follow, while maintaining a side business. The mindset needs to shift.

Why does the mindset need to shift? If our mindset does not shift, we will end up like many of our fellow co-workers and counterparts, unemployed, competing against thousands looking for work. 

The mindset also needs to change because in every great economic downturn, opportunities were created and wealth was generated. From the great depression of the 30’s to the rescission's of the 80’s and yes even today, there are many examples of how seizing the moment instead of running for shelter have changed the lives of thousands of business owners. If we are to carry on the great tradition of "game changers movers and shakers" we will need to focus on creating employment and not searching for employment. If everyone is looking for work and no one is creating jobs, sequestration will be the least of our worries. 

We need a mindset that speaks to innovation, creation and resolution. We need the entrepreneur mindset.

Entrepreneur -  a person who organizes and manages any enterprise, especially a business, usually 

with considerable initiative and risk.

2. an employer of productive labor; contractor.

I was taught successful entrepreneurs had many things in common but, the one thing they all had in common was definiteness of purpose.

Definite - clearly defined or determined; not vague or general; fixed; precise; exact:

                   a definite quantity; definite directions.

 Purpose - the reason for which something exists or is done, made, used, etc.

                    2. an intended or desired result; end; aim; goal.

                    3.determination; resoluteness.

A definiteness of purpose brings us to our personal reason why.

Why after working 40, 50 and in many cases 60 hours a week for an employer, would we subject ourselves to rigors of running a business? There are many reason why we would take on such a task. Each reason as unique as the individual claiming it.

Once we answer our personal reason why, then and only then can we begin to have a definiteness of  purpose. 

Our reason why, will be the spark or catalyst that cause us to want to make a decision. That decision will come about because we want a change. Change in opportunity, change in income, or change in lifestyle. 

After the reason why is determined, we need to test the reason. Test the reason?  Yes, test the reason.

The question to test our reason why, is as follows: 

"Is my reason why, bigger than my excuse why not".

While most reasons why, will cause us to make a decision very few reasons why, will drive us to action.

We all have reasons for eating healthy and exercising and many of us have decided to change our eating habits and start exercising but, over 85% of us have done nothing to change our diet or start exercising.(remember the new year’s resolution).

Will our reason why, pass the test?  Most of us go to work at our job because of need. After the work day on the job is done, a daily commitment to operate and run a successful business will have to take place.

There will be many legitimate reasons, distractions and excuses to just go home and not work on or in our business.  Is our reason why, strong enough to overcome those reasons, distractions and excuses not to work on or in our business? If the answer is no, then our reason why is not big enough.

Our reason has to turn the want to be an entrepreneur in to a need to be an entrepreneur. My mentor told me “when a want becomes a need that is when we will succeed. If our reason why does not cause us to need to run our business we will in effect have a hobby and thus treat it as such.

So what do we need to do again?

• Have the mindset an entrepreneur. 
• have definiteness of purpose. 
• Have a reason why 
• Test our reason why

Did I mention this happens in addition to working a job and living our lives. 

My reasons why are listed below:

• To leave legacy for my family
• To help others realize and reach their dreams.
• To have control, capitol and creativity (things my job did not give me).

So the Trillion dollar question is ?

Is your reason(s) why big enough? If so, what are they?

There are two ways to look at the new tax law changes.

A time to forfeit from fright or forge ahead with fight.  

 The American Tax Payer Relief Act (ATPRA) was passed and there remain many unanswered questions. One answer we all know for sure is most everyone’s taxes will increase.  Small business are not exempted from the revenue taxing arm of Congress. We will scramble to get into tax compliance, with what seems to be a retroactive tax increase. Good, bad, right or wrong there is enough blame to pass around.

 This is not a discussion on the specific tax hikes or employees taxes vs. the business taxes. This is not a discussion of which side is correct. Those topics plus many others have been discussed at nauseum and they're circumstances we cannot control. It would be in our best interest (and the interest of our businesses) to discuss the one thing we do have control of and that is how we react to the American Tax Payer Relief Act (ATPRA)

Neither Congress nor the IRS cares how we feel about the subject (if any of us  disagree with their decision). The decision was made based on what seemed to be in the best interest of “we the people”.  

How we choose to respond to ATPRA can have a major impact on everything we do from now on in our businesses. 

We are fortunate enough to have choices (no matter how limited they may seem). Below are some possible reactions:

• Not start a business because it appears to be a waste of time.
• Shutdown existing business for fear of audits and complain about how the IRS put us out of business.
• Run our business according to the IRS regulations and complain, not focusing on growing our business.
• Run our business according to the IRS regulations and realize the opportunity and excel in business.

Not start a business.......

It is understandable to see how business ownership would be looked at as a waste of time with all the rules, regulations and apparent obstacles to keep us from reaching the prize if you will. I have heard my mentor say this many times. “you are going to work anyway, it might as well be towards your dream” and I agree.

Shutdown existing business for fear of audits........ 

fear is a natural reaction to the unknown or being removed from ones comfort zone. Fear can be instrumental in saving one’s life and fear may also be detrimental to ones future. The acronym I associate with fear is False Evidence Appearing Real. 

Run our business according to the IRS regulations and complain….

In many respects this one is worse than quitting. It’s like going through the motions but not really working toward a goal. The focus is in the wrong place. The focus should be on the growth of the business and not the road blocks. A divided focus creates fragmented results at best.

Run our business according to the IRS regulations (realize the opportunity and excel in business).

Yes there is an opportunity for massive success. It is all in the way we look at it.

• Stumbling block or Stepping stone
• Crisis or Challenge
• Roadblock or Raised pedestal
• Obstacle or Opportunity

The ATPRA could play a role in reducing our competition to half the numbers. There are many business owners choosing alternative points of view other than seeing and seizing the opportunity, creating room to expand our businesses. These are the times where business owners over come the perceived obstacles and persevere, offering more proof that even during difficult times entrepreneurs rise to the occasion and defy odds. We can look at this as a time to make and be a part of history, or we can look at is a time to be victimized by events in history, either way we have a choice. 

The goal is not to create a false reality but to offer a alternative perspective. There are not many things that we may know for certain concerning the ATPRA until the damage is done, however we can be certain that our reaction of choice will determine if we forfeit from fright or forge ahead with fight. Can you think of any additional advantages for us as business owners with the passing of the (ATPRA)?