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Concerns with Taking the First Step onto the Ctc Path
Concern 1: Currently on an Installment Agreement with the IRS
Concern 2: What would happen with our Social Security Benefits
Concern 3: What to do when the IRS freezes our bank accounts
I’ve been doing a lot of reading, research, and studying the Ctc book, the related links on LostHorizons.com, the victories, tax codes, and reviewing challenge letters…all to prepare for taking that first step down the Ctc path. I have my own consulting business and have always been overwhelmed by all the taxes that have to be paid, and I feel like I’m just working for the Man, because that is where my profit is going – just being eaten up in taxes.
Concern 1: My wife and I have concerns about taking the Ctc path, due to the experience we have had with the IRS and their tactics in the past. I am currently paying an installment agreement (IA) for back taxes, due to an audit back in 2011, an audit I’m now realizing should never have happened, because I have never been engaged in a “trade or business”. Our concern is what would happen with the IA when we start down the CtC path? Is the IRS going to retaliate and cancel the IA and demand payment in full? Is anyone else in this group currently paying or have paid back taxes? If so, sharing your experience with us would be extremely helpful!
Concern 2: We are also concerned about our current social security and what would happen to that? Will we forfeit our right to draw SS when the time comes, based on what we have paid in so far, or will we be denied? Can we choose to still pay into social security and Medicare, if we want, so the amount keeps growing, even though we are no longer paying income tax?
Concern 3: We have had bank accounts frozen in the past and it is not a pleasant experience. How can we avoid that? I have a business where my clients send money directly into my account thru an ACH, and we discussed possibly changing that to send payments via a hardcopy check instead, which I could cash by paying a small transaction fee – small compared to getting all the funds confiscated by the IRS if the bank account is frozen. We simply would not keep money in the bank at all. That’s the best we could come up with at the moment, so if anyone else has any experience with this, sharing that with us would be extremely helpful!
Your experience and ideas/thoughts/advice/tips, all would be appreciated! And I’m not against sending someone a bottle (or 2 or 3), of 100% additive-free, organically grown deep farm wine, for any ideas that help us in our new adventure 😍!
We have prayed about what to do and are trusting God that He is directing us down this path. We are trusting that He will be with us every step of the way and will carry us when we are faint and console us and strengthen us when we are discouraged! We recognize that we would not be able to do this without His help…to God be the glory…Amen!
3 Comments-
Hi Michael, I understand your concerns and the abuses you have suffered at the hands of the IRS. What the CTC is really good at is amending previously filed returns and recovering income tax that was unlawfully withheld or paid through improper filing of a 1040. What it does not fix is past income tax non-payments and agreements entered into with the IRS. Those are contracts entered into and a CTC filing will not correct. In fact filing a CTC return in those situations can lead to aggressive IRS action such as liens. – These are the facts and while the IRS code is clear about what Trade or Business income is, the code is very deceptive and must be studied to understand who should file a tax return or a withholding certificate. Understand if you give your SSN and sign a W-4 (Employee) or W-9 (Taxpayer) you are swearing under penalty of perjury that you are an employee as defined in the IRS code or a taxpayer as defined in the IRS code. Either way you are saying you are involved in actions that are subject to Federal Income tax and therefore must file a return. Failure to do so can result in Criminal failure to file charges.
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Thanks for the reply Kury! Can you share with me, the place on the W4/W9, where one is swearing they are an employee/taxpayer as defined by the IRS code, and give an indication of the specific IRS code you are referencing?
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It lies in the definition of the words. Title of the W-4 “Employee’s Withholding Certificate – Definition of Employee for withholding purposes – 26 USC § 3401(c) — For payroll withholding: The term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. It also includes an officer of a corporation. By signing under penalty of perjury you are telling them you are in this taxable class.
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