Today TaxMama® hears from Kelly in the TaxQuips Forum who cares about her friend. “A friend’s home will soon be going into foreclosure. He’s owned the home for 2.5 years and we’re trying to figure out if he’ll have to repay the $8,000 tax credit he received as a first time homebuyer. I’ve read that if the house sells and there’s no gain you’ll owe nothing. If the home is in foreclosure how is a gain calculated? Would it be of any benefit to try to do a short sale on the home versus the foreclosure? He’s planning to file for bankruptcy as well. I’m just wondering if there’s any legal way around the $8,000 repayment?”

Today TaxMama wants to ask you. “What is your most terrifying tax tale? What is the worst thing that IRS or your state tax agency ever did to you? Or the most embarrassing thing? Did your ex-spouse or ex-lover get you in trouble? Or did your tax professional mess up big time?” Please tell us your stories.

I’d like to gather your stories in time for a special Halloween issue to supplement the special Halloween segment of Bob McCormick’s Money 101 show on KFWB. TaxMama will be joining him from 9-11 am Pacific on Halloween morning to discuss ghoulish tax tales of terror.  Of course, you’re also welcome to call in on Monday morning! 888-KFWB-980 (888-539-2980)

Courtesy of IRS.

[TaxMama note: Owing money can be really frightening. However, they generally do NOT put in you in jail. And IRS is trying hard to help you find ways to pay, without spending $3,000 or more for a professional tax debt negotiator. So, please, use the help offered.]

While the majority of Americans get a tax refund from the Internal Revenue Service each year, there are many taxpayers who owe and some who can’t pay the tax all at once.   The IRS has a number of ways for people to pay their tax bill.

The IRS has announced an effort to help struggling taxpayers get a fresh start with their tax liabilities. The goal of this effort is to help individuals and small business meet their tax obligations, without adding unnecessary burden.  Specifically, the IRS has announced new policies and programs to help taxpayers pay back taxes and avoid tax liens.

Today TaxMama hears from Judy in the TaxQuips Forum who needs help.  “I am struggling to maintain my household, have four years of back taxes to file and settle and my home was just foreclosed on. I was contacted by someone claiming that they can help negotiate a reduction in tax liability and stop any further collection by the IRS. They wanted $3,500 for this service.  I went on the Internet and found other so-called businesses advertising the same service. Can anyone help with these negotiations with the IRS and how can I know whom to trust?”

Today TaxMama hears from Bruce in the TaxQuips Forum who needs to make a decision. “My business failed last year and my wife and I are mulling over whether to declare personal bankruptcy due to this.  Towards the end of the life of the business, I put a lot of money on my credit cards, which I’m paying down.  We also have some back taxes as well.”

Today TaxMama hears from Steve in the TaxQuips Forum with a reminder. He says, “After finding a true tax professional through one of the associations you suggested on this site, we feel much more confident, moving forward. We are now making voluntary payments with no installment agreement but designating the payments specifically to the Trust Fund Penalty. This is something that no other tax consultant explained to us.”