Have you found ALL the skeletons in the closet that can put you out of business? For most business owners the answer, sadly, is a resounding “no.” One skeleton most business owners overlook is taxes. The host of The Deep Wealth Podcast and post-exit entrepreneur Jeffrey Feldberg speaks with Carlos Samaniego, known far and wide as "the godfather of tax resolution." Carlos dives deep into his journey from being an EMT to becoming a renowned tax expert. His story is a powerful lesson on overcoming financial mistakes and using them to help others.
When you hear the word “IRS,” does it make your heart race with fear? You’re not alone. Many people feel anxious when dealing with taxes. But don't worry! This post is here to help you understand and tackle IRS issues with ease. We learned how to do that from an expert who knows all about resolving tax problems.
Meet Carlos Samaniego. He is the founder of Tax Debt Consultants, LLC, and the author of *How to Make the IRS an Offer They Can't Refuse*. He is known as the "Godfather of Tax Resolution." Carlos helps people, especially business owners, manage their tax issues. He shared his story on the Deep Wealth Podcast, hosted by Jeffrey Feldberg. Here's what Carlos had to say about handling tax issues and the common mistakes that people make.
Carlos didn’t start out as a tax expert. His first career was as an EMT and paramedic. He says, "I didn't wake up one day thinking I'd fight the IRS for a living." The path that led him into the world of taxes was accidental and personal.
Carlos recalls getting some bad financial advice early on. He explains, "I was told to claim 10 exemptions on my paycheck to get more money." This advice led him into deep financial trouble with the IRS, as he quickly found himself with a huge tax bill he couldn't pay.
This situation spiraled as Carlos failed to file his tax returns for eight long years. "It became a six-figure tax bill," he shares. His struggles grew until the government finally caught up with him. This was a pivotal moment in Carlos's life and career.
Facing The Taxes
What happened next was key. Carlos met Ernie, an enrolled agent and CPA, who helped him resolve his tax issues. With support, Carlos managed to sort out his woes, and he didn’t stop there. Inspired to help others like himself, Carlos became a licensed enrolled agent, specializing in tax resolution.
Carlos explains to the audience, "My wife reminded me that if I wanted a career change, I should help people with tax problems like mine." And that's just what he did. His journey is a testament to transforming adversity into opportunity.
Carlos didn’t start out as a tax expert. He was once an EMT and a paramedic. Like many young people, Carlos wanted to earn more money and made a big mistake. He was given bad advice to increase his exemptions to avoid paying taxes. This led to Carlos not paying his taxes and ended up in trouble with the IRS. Over eight years, his small tax problem snowballed into nearly a six-figure debt.
Carlos explained, “That went on for eight years. I was in a situation where I had a big tax bill, and thought I did what was the worst thing, I didn’t file the return.” His story is a reminder of how small mistakes can grow into big problems if they aren’t addressed.
Tax Mistakes and Common Pitfalls
Carlos talks about the common mistakes business owners make, starting with not having the right financial foundation. "The unwillingness to get the right start with your finances is a big mistake," says Carlos.
Many treat taxes as a once-a-year chore, which can lead to surprises and big tax bills. Carlos warns, "Without regular tax planning, businesses dig themselves into a hole when April comes."
He also advises that not filing returns when you owe tax is the worst mistake. Penalties for not filing are much steeper than those for not paying. He urges everyone to get experts on their team to guide them through the complexities of taxes.
According to Carlos, one of the biggest mistakes business owners make is not keeping track of their income and expenses. He calls this the "avalanche effect." If you don’t track your finances, you might be hit with a big surprise at tax time.
Carlos says, “Top mistakes I see, especially with entrepreneurs, is their unwillingness to get immediate, to really start their business on the right financial footing.” This means setting up a solid bookkeeping system and keeping it updated. If you don’t, you could face big tax bills or even penalties.
Steps to Resolve Tax Issues
Carlos simplified tax resolution into three major steps. Firstly, "Investigation and Power of Attorney" where you find out exactly what you owe and sort out unfiled returns. Secondly, Carlos emphasizes becoming compliant by filing the necessary returns and ensuring future taxes are paid on time. Lastly, resolving the tax debt varies depending on the individual's situation.
He reassures listeners, "Any tax problem can be resolved." Whether through installment agreements or offers in compromise where you settle for less than owed, solutions exist.
Carlos simplifies tax resolution into three steps:
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Investigation and Power of Attorney: Just like a doctor wouldn’t operate without understanding your medical issue, a tax pro needs to understand your tax problem before fixing it. Carlos explains, “We investigate to know how much the government claims that you owe, what tax returns were filed or not filed, and when your tax debt expires.”
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Become Compliant: You need to file any missing tax returns. Carlos says, “The government typically wants six years of returns to get you fully compliant.” This means you won’t have any more missing returns, and you’ll stop future problems by making sure you are paying taxes correctly moving forward.
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Resolve the Debt: Once the IRS knows you are compliant, you can discuss how to pay off any debt. Carlos mentions, “You can afford to pay it in full or in parts, ask to settle for less, or be marked as currently not collectible if payment isn’t possible.”
Understanding IRS Letters
Carlos cautions against ignoring IRS letters. "Open them," he urges. They contain crucial information about your tax situation. He highlights the importance of addressing certified letters especially, as they often signal impending actions like bank levies.
Describing the IRS's Letter 11, Carlos notes it as a critical one. This letter can authorize the IRS to start significant collection actions against you unless you respond promptly within a set timeframe.
Business Expenses and Tax Audits
Carlos also addresses the issue of business expenses and ensuring they are legitimate. With increasing audits, he warns against taking advice from unverified sources on social media. Instead, rely on qualified tax professionals to ensure compliance.
"Write-offs should be legitimate business needs," says Carlos. Trying to deduct personal expenses as business ones can lead to trouble, especially with tightening scrutiny from tax authorities.
For business owners, it’s crucial to be honest about your expenses. Carlos warns against turning personal expenses into business ones. He advises, “Make sure you have your CPA or enrolled agent to check whether expenses are legitimate business write-offs.” The rules are changing, and proper bookkeeping can keep you out of trouble.
The Importance of Having an Expert
Jeffrey highlights the need for specialists in dealing with taxes. As Carlos affirms, "Work with a professional." His advice is based on experience, as he frequently helps people navigate through their tax predicaments successfully.
Carlos stresses the importance of working with licensed professionals if you have IRS issues. Not everyone with an accounting or law degree specializes in tax resolution. He advises, “Find someone who does this work daily. A specialist is key.”
In summary, handling tax issues doesn't have to be scary or overwhelming if you follow these steps from Carlos, the Godfather of Tax Resolution. Be honest and keep track of your finances. File all necessary tax returns, and deal with IRS letters promptly. If trouble does arise, work with a tax specialist. They'll help resolve your issues while advising you on the best way to stay compliant in the future.
Final Thoughts
Carlos’s story is a lesson in resilience and transformation, showing how setbacks can turn into platforms for success and change. As you consider your own business finances, remember Carlos's advice, and avoid shortcuts. Stay compliant, and consult with professionals to make informed decisions for the future.
Remember, the goal is to prevent problems before they grow out of control. Stay informed and proactive, and you'll be able to sleep soundly, knowing your tax issues are handled properly.
As always, remember that the path to financial freedom is one where you stay proactive and informed.
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