11/4/25 Newsletter

This Thursday is National Cash Back Day, aka a tax return with better marketing. Deductions and credits are the ultimate cash back program.

This week’s lineup:

• 💼 Should your business be an S-Corp? Here’s how to decide

• 🏦 The ultimate bank levy survival guide

• 👔 The IRS just hired a Fortune 500 CEO to modernize the agency

• 💎 Why paying taxes today is your smartest retirement move

• 🌈 Judy Garland's comeback tour, crashed by the IRS

Business & Gigs

💼 To S-Corp or Not S-Corp? That Is the (Tax) Question

The only thing more confusing than your Spotify Wrapped algorithm is deciding when (or if) to elect S-Corp status for your business.

If your side hustle is pulling in real money, you've probably heard whispers about the magical tax savings of becoming an S-Corp. And the hype is real—but so are the headaches that come with it.

As a sole proprietor or standard LLC, you're paying 15.3% self-employment tax on every dollar of profit. Make $100k? That's $15,300 gone before you even touch regular income tax. Ouch.

S-Corps offer an elegant workaround. You split your income into two buckets: a "reasonable salary" (which gets hit with that 15.3%) and profit distributions (which don't). Pay yourself a $60k salary and take $40k as distributions? You just saved over $6,000 in taxes.

But here's the catch:

• You'll need a payroll service to run your own payroll

• You'll file a separate business tax return by March 15 (hello, Form 1120-S)

• You'll definitely need a CPA—this isn't TurboTax territory

• The IRS requires your salary be "reasonable" for your industry, or they'll reclassify everything and bill you for back taxes plus penalties

Most tax pros agree the S-Corp math only works once you're clearing $80k+ in profit. Below that, the extra costs eat up any savings.

The good news? You can start simple with an LLC and upgrade later. The S-Corp offers a clever, legal way to save thousands on your tax bill, but there’s one big, expensive catch you absolutely need to know about before you make the switch.

Want the full breakdown on sole props, LLCs, and S-Corps? We've got a detailed guide on our website. Check it out now →

If your finances are a dumpster fire and the IRS just showed up with a gas can, it might be time to call for backup.

TaxQuotes is the emergency service for your worst tax nightmares. Whether you're facing down unfiled taxes, trying to stop garnishments, or just tired of unreliable tax pros, they've seen it all.

Click here for a free consultation and let them put out the fire.

IRS Survival Guide

🏦 When the IRS Empties Your Bank Account (And How to Stop Them)

You tap your debit card for your morning coffee and get that look from the barista. The "sorry, it's been declined" look. You check your bank app, expecting to see your paycheck, but instead find a balance that would make a tumbleweed roll by.

Meet the bank levy—the IRS's legal power move where they reach directly into your account and help themselves to whatever they think you owe them. Unlike wage garnishment, which nibbles at your paycheck over time, a bank levy is a one-time smash-and-grab for everything in your account that day.

The good news? This doesn't happen overnight. The IRS has to jump through hoops first: assess your tax, send you a bill, mail increasingly angry letters with scary acronyms, and finally send a "Final Notice of Intent to Levy and Notice of Your Right to a Hearing." That's when you know they're serious.

Once they contact your bank, your funds get frozen for 21 days before being sent to the IRS. This 21-day window is your last chance to act.

Your options during the freeze:

• Pay the full debt (levy gets released immediately)

• Set up an Installment Agreement (they'll usually release the levy)

• Submit an Offer in Compromise to settle for less

• Prove economic hardship if the levy prevents you from covering basic living expenses

There's one silver lining. Federal law protects two months' worth of directly deposited federal benefits like Social Security and veterans' benefits from bank levies. But don't get comfortable—the IRS can still intercept up to 15% of those benefits before they even hit your account through their Federal Payment Levy Program.

Tax News

👔 The IRS Just Hired a CEO. Yes, Really.

Here’s a sentence nobody expected to write in 2025: the Internal Revenue Service now has a Chief Executive Officer.

Treasury Secretary Scott Bessent created the brand-new position and filled it with Frank Bisignano, a financial tech heavyweight who's currently also running the Social Security Administration.

That's right—one guy is now overseeing benefits for 70 million Americans and tax returns for 160 million more. If nothing else, his calendar management must be impressive.

Before joining the government, Bisignano spent 40 years running massive financial institutions. He was CEO of Fiserv (the world's largest financial services tech company), ran First Data, and served as co-COO at JPMorgan Chase during the 2008 financial crisis. The guy knows technology, customer service, and how to run organizations that touch millions of lives daily.

Why does the IRS need a CEO?

Because for decades, the agency has been running on systems that still use COBOL—a programming language that predates the moon landing. Customer service has been a disaster (good luck reaching a human on the phone), and the whole operation has felt more like navigating a Kafka novel than filing taxes.

The Treasury Department wants to run the IRS more like a modern company and less like a government bureaucracy stuck in 1975.

What this means for you:

• Better tech: Expect smoother e-filing, better online tools, and maybe—just maybe—you'll reach an actual person when you call

• Sharper collections: The IRS has lacked resources to pursue tax cheats effectively. That's about to change. If you've been playing fast and loose with your returns, reconsider your strategy

• Customer service that exists: Bisignano comes from industries where customer satisfaction actually matters, not the traditional IRS approach of "we're the government and you'll deal with us"

Not everyone's thrilled. Critics point out the new CEO role sidesteps Senate confirmation, and Bisignano's track record at Social Security includes customer service complaints and data security concerns. There's also the obvious question: Can you run a federal tax agency like a Fortune 500 company?

We're about to find out.

There's a lot more to this story. Get the complete picture in our deep dive on Bisignano right on our website. Read the article now →

Tax Strategies

💎 Pay Taxes Now, Never Pay Them Again: The Roth Conversion

Here's a question that sounds insane: want to voluntarily pay the IRS a huge tax bill today?

Before you close this email, hear us out. A Roth conversion lets you take money from a Traditional IRA (where you'll owe taxes on every withdrawal in retirement) and move it to a Roth IRA (where qualified withdrawals are 100% tax-free forever). The catch? You pay income taxes on the entire converted amount right now. Convert $50k, your taxable income jumps by $50k.

Why anyone would do this:

• All future growth is tax-free. Once it's in the Roth, every dollar of growth never gets taxed again. Ever.

• No Required Minimum Distributions. Traditional IRAs force you to start withdrawing (and paying taxes) in your 70s. Roths don't. Your money can grow tax-free for your entire life.

• You're betting tax rates go up. Given the national debt, this feels like a safe bet. Lock in today's rate before tomorrow's rate kicks in.

• Better inheritance. Leave your kids a Traditional IRA and they inherit a tax bill. Leave them a Roth and they inherit tax-free money.

The best times to convert: Low-income years (job change, new business not profitable yet), market downturns (convert the smaller amount, capture the rebound tax-free), or early in your career when you're in your lowest tax bracket.

One warning about the pro-rata rule: if you have both pre-tax and after-tax money in Traditional IRAs, the IRS won't let you cherry-pick what to convert. They force you to convert a proportional mix, which can create surprise tax bills.

This is a big, irreversible move that requires paying the tax bill with cash from outside your retirement account. Run the numbers first.

Celeb Tax Cases

🌈 Judy Garland's Standing Ovation—Interrupted by the IRS

In July 1967, Judy Garland swept back onto the stage at New York's Palace Theatre for a 27-night comeback that had critics raving and crowds roaring. She still had it.

Until closing night, when the IRS allegedly showed up and collected most of the evening's earnings.

Garland's tax troubles traced back to 1951 and 1952, when mismanagement and alleged embezzlement by her agents left her with massive back tax debts. Poor management, suspect accounting, and a talent for trusting the wrong people meant her liabilities kept climbing while she changed managers more often than costumes.

The IRS stopped waiting and started filing liens on everything—her recording income, her residuals, and most painfully, her home in Brentwood, California, which was sold under pressure at a steep discount.

She kept performing because she had to. According to biographers, her creditors knew her tour schedule better than her publicist.

The 1967 Palace Theatre run was supposed to be the comeback. Glowing reviews. Rabid crowds. But even that couldn't buy her a reprieve—the feds allegedly seized the closing night earnings.

Garland died two years later in 1969 at age 47 from an accidental overdose, after years of bouncing between hotels and living out of suitcases. Friends and family helped settle the debts she left behind by auctioning off mementos of a life that burned bright and fast.

The quick (and slightly prickly) stories we didn’t have time to get to:

• 💼 Leaving your job? Don't leave your 401(k) match behind with it.

• 🚫 Scammers are getting tricky. Here's how to spot a fake IRS agent.

• 🕵️ The IRS is pushing back as ICE seeks tax data to track immigrants.

• 🌭 This furloughed IRS employee is now slinging hot dogs.

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