SOME TAX DEDUCTIONS, CREDITS & BENEFITS KEPT WITH THE NEW TAX REFORM

So much has been examined, analyzed, and written about changes in the new tax law – the Tax Cuts and Jobs Act, or TCJA – but little mention has been made to popular tax provisions that have not changed.

The TCJA has left many popular tax deductions, credits and benefits unchanged. We provide an overview of some of them here.

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Highlights of Popular Tax Deductions Remaining After Tax Reform
The IRA deduction – One of the most well-known tax deductions is the deduction for traditional IRAs. Taxpayers may reduce their gross income for 2018 up to $5,500 (taxpayers under age 50), or $6,500 (taxpayers age 50 or over) for IRA contributions. IRA contributions for the 2018 tax year can be made as late as the tax filing deadline in April 2019. This tax deduction is limited for taxpayers whose income is above certain thresholds if they participate in a retirement plan at work, such as a 401(k) plan.

ABOVE-THE-LINE DEDUCTIONS FOR THE SELF EMPLOYED

The deductible portion of self-employment tax, retirement plan contributions made by the self-employed to their own plans, and the self-employed health insurance deduction remain the same.

EDUCATION-RELATED DEDUCTIONS

The $250 above-the-line deduction for teachers, instructors, principals, and other qualified K-12 educators remains intact, as well as the popular above-the-line tax deduction for interest paid on qualified student loans.

HEALTH SAVINGS ACCOUNTS (HSAs)  

While this benefit was created in the early 2000s, it has since become a popular tax deduction. Like the IRA deduction, contributions to an HSA may also be deducted to reduce gross income. Alternatively, taxpayers may still make pre-tax contributions to HSAs through employer plans. The limit for 2018 is $3,450 (for individual coverage) or $6,900 (for family coverage). These contribution limits can be increased by $1,000 if the taxpayer is at least age 55. HSAs require that the taxpayer have a high-deductible health plan.

THE EARNED INCOME TAX CREDIT (EITC)

A popular tax credit with lower-income taxpayers, this credit can be worth up to $6,431 in 2018 (MFJ with three or more children). The credit begins to phase out once a taxpayer’s earned income rises above certain thresholds, based on filing status. Besides the higher credit and income phaseout ranges in 2018 compared to 2017, nothing else about the EITC has changed in 2018.

DEPENDENT CARE CREDIT

Taxpayers who must pay daycare expenses so they can work may qualify for this popular tax credit. The credit ranges from 20% to 35% of eligible expenses, up to $3,000 of expenses for one qualifying person (child under 13 or other eligible dependent) and $6,000 of expenses for two or more qualifying people.

THE EDUCATION CREDITS

The American Opportunity Credit and the Lifetime Learning Credit, two highly popular education tax credits, ultimately emerged from Congressional debate with no changes. The American Opportunity Credit is a credit up to $2,500 available for students during their first four years of post-secondary school education. Up to $1,000 of this credit remains refundable. Similarly, the Lifetime Learning Credit, which is limited to $2,000 per tax return (not per student), is available to any taxpayer who takes qualifying coursework.

TAXABILITY OF SOCIAL SECURITY BENEFITS

A common tax break that benefits many, recipients of Social Security benefits do not need to pay tax on these benefits unless their “provisional” income exceeds a certain amount (the “base”), which depends on filing status. Once the base is reached, an increasing percentage of Social Security is taxable, up to 85% of Social Security benefits. None of a taxpayer’s Social Security benefits are included in income if provisional income doesn’t exceed the base amount.

THE SAVER’S CREDIT

This credit is at least 10% and up to 50% of eligible contributions to IRAs and qualified retirement plans, up to a maximum credit of $1,000 ($2,000 for married taxpayers filing jointly). This popular tax credit varies based on the taxpayer’s modified adjusted gross income. Taxpayers who contribute to an IRA for 2018 by the tax filing date in 2019 may also claim the Saver’s Credit for 2018, if they qualify.

Want to Know What Common Tax Breaks Can You Take This Year? We Can Help.

You may be happy to hear that so many popular tax deduction and credits remain available after tax reform, especially if you’ve taken advantage of them in the past. However, it’s important to remember that as your life changes so does your eligibility for certain tax breaks.

Our knowledgeable Tax Pros can ensure you receive every last credit and deduction available to you.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

THE IRS IS AUDITING YOUR TAX RETURN AND WHAT IF YOU DON’T HAVE RECEIPTS?

Each year, there are about 6 million taxpayers who have their tax return questioned by the IRS, either by audit or by a verification notice from the IRS.

If you are faced with proving items reported on your tax return, you may find it difficult or impossible to find proof for every item the IRS is questioning. It may be smarter to hire a professional to sort out the details and work directly with the IRS.

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But what happens if you don’t have all the information to prove items on your return?

For example, if you deducted medical expenses and no longer have receipts or even the list of medical providers, prescriptions, and other medical costs – what should you do? Well, you could retrace your steps. Determine your medical expenses for the year and get receipts from doctors and pharmacies. Your bank statements and cancelled checks are a good starting point, if you still have access to these documents.

If you’re a business that deducted expenses and you no longer have receipts, it may be logical that you would have expenses that the IRS should allow even though you don’t have a receipt. The IRS provides some flexibility and can take your word that you had allowable expenses. (This is known as the Cohan Rule based on a tax court case that may give you flexibility with your records when proving expenses to the IRS.)

Items you probably can’t recreate
The tax code requires some expenses to be documented at the same time the expense occurs, such as:

Travel/entertainment expenses: These expenses are required to be recorded by receipts made at the time the expense is incurred.
Charitable contributions: All charitable contributions need receipts that accurately reflect the value of the contribution.
Mileage records: You are required to record the mileage, date, place, and business purpose.
Gambling losses: If you are going to deduct gambling losses, you must have receipts, tickets, statements and documentation such as a diary or similar record of your losses and winnings.
Technically, if you do not have these records, the IRS can disallow your deduction. Practically, IRS auditors may allow some reconstruction of these expenses if it seems reasonable. Learn more about handling an IRS audit.

Reconstructing records for the IRS
Most importantly, get to work immediately to reconstruct the items. It can take awhile to put all or part of the pieces together, so start right away to meet your IRS response deadline.

You may have to reconstruct your records or just simply provide a valid explanation of a deduction instead of the original receipts to support the expense. If the IRS disagrees, you can appeal the decision. You may also have to argue against penalties during the audit by providing facts on how you made your best effort to comply. Lack of records often leads to a 20% IRS negligence penalty.

Tips to reconstruct your records:
Review bank statements and credit card statements. They are usually a good list of what you paid. They may also be a good substitute if you don’t have a receipt.
Vendors and suppliers may have duplicate records. Reach out to them if you need a copy.
Appointment books can provide back-up information about travel, number of clients and frequency of service.
Cell phone records can help establish dates of service or assist in reconstructing expenses.
You may be able to reconstruct a reasonable mileage argument with online map tools. Don’t just estimate miles per week x 52 = miles to deduct. Consider periods of no travel.
If you reconstruct or estimate expenses in a way other than what the IRS requires, create a declaration, and sign it under penalty of perjury.

A tax pro can help
Filing taxes is difficult. Dealing with tax problems can be very difficult. Tax professionals can help when you can’t get access to all the records the IRS may be asking for.

Experienced tax pros know your options and the likelihood of an IRS agent accepting your reconstructions. They can also get you back on track and get your record-keeping in tip-top shape.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

HOW MANY YEARS DO I HAVE TO FILE AMENDED TAX RETURNS?

Most taxpayers know an amended return is possible for a current year tax return – especially if it’s just been a short while since you filed. But what if you discovered something missing on an older return? You may be wondering how many years you have to file an amended return. Don’t worry – we can help you understand your options.

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Maybe you found a tax form behind your desk or maybe you receive an adjustment to a 1099 form from your bank – whatever the reason for having new information, you can generally go back three years to file an amended tax return in order to claim a credit or refund.

Said differently, that means the calendar years 2015 through 2018 are available to amend. If you discover a substantial mistake that results in a liability you should consider filing an amended return whether or not you are within the time frame above in order to avoid risking an audit.

If you are amending your return due to a new schedule or form, be sure to attach that schedule or form to your amended return.


WHEN CAN I AMEND MY TAX RETURN FOR THIS YEAR


If you need to amend your filing for the current tax year, there are some considerations for when you can amend your tax return. Once you’ve been notified that the IRS received and accepted your 2018 return, you can prepare an amended return using Form 1040X.

If you’re filing an amendment to claim an additional refund, the IRS recommends that you wait until you’ve received the original refund before filing Form 1040X.

If your amendment means you’ll owe more in taxes, you should file the amendment and pay what you owe as quickly as possible to minimize potential interest and penalties.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

SMALL BUSINESS TAXES: WHAT YOU SHOULD KNOW TO STAY COMPLIANT

For business owners everywhere, the end of the year means that it is time to get ready to file their businesses’ tax returns. Rather than wait until the last possible minute, you can get ready now for tax filing season with some common sense advance planning. These strategies could help you maximize your deductions, lower your taxable income, and possibly increase the amount of your tax refund.

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DECIDING WHICH TAX DEDUCTIONS TO USE?

Choose an Appropriate Business Structure


If you have not already, you need to choose the best business structure for your company. Depending on your business, you can choose from one of four structures. These are:

Sole proprietorship
S or C corporation
Limited liability company or LLC
Partnership
All of these business structures carry different implications for your company’s tax returns. For example, a sole proprietorship is generally reserved for people who are business novices or just learning how to run their own company. If you are not sure of what structure to choose for your company, you should consult with a tax professional who can help you identify the best one to use for your business’s tax filing purposes.



Obtain an EIN


Another important tip that you need to take care of as early as possible involves getting an Employee Identification Number or EIN. An EIN takes the place on your tax returns of your Social Security number.

According to tax experts, it also reduces the likelihood of you becoming a victim of identity theft since your Social Security number will not be used on your business’s tax return. Moreover, an EIN is required for all business structures except for sole proprietorships that have no employees.

Look Over Your Books


One of the costliest and most troublesome mistakes that business owners make is forgetting to keep up their books throughout the year. As the end of the year approaches, you might need to scramble to get your books in order and find receipts to back up any deductions you plan to take on your taxes next year.

You can avoid this dilemma by using a high-quality and reliable
bookkeeping program or outsourcing your bookkeeping to an accountant or CPA. You should also periodically review your books so you know how much income you are bringing in, what your expenditures are, and how much you might need to pay when you file your business’s tax returns.

This tip can be especially vital when you consider that the IRS tends to audit small business owners more often than private taxpayers. Failing to keep good records could trigger an IRS investigation of your business. Rather than scramble to find receipts and account for deductions, you can get ready to file your taxes and prepare for a possible audit by reviewing and updating your books now.

Make Quarterly Tax Payments

The IRS will require you to pay your taxes on a quarterly basis if you structure your business as a sole proprietorship, partnership, or S-corporation and you expect to make more than $1000 in income. If you are not sure of how much you should pay this quarter as the end of the year approaches, you are advised to review your company’s last year’s income, deductions, and tax credits. This information could help you figure out how much you need to pay for your quarterly taxes.

It is important that you pay at least 90 percent of what you owe this quarter if you want to avoid expensive IRS tax penalties. If you are not sure of how much you should pay or you do not know how to figure out your quarterly taxes, you should consult with a tax professional before filing your return.

Pay Your Self-employment Taxes


When you own your own company, you do not have the luxury of having an employer withhold your taxes for you. Instead, the IRS expects you to withhold and pay self-employment taxes for Medicare, Social Security, and other federal taxes.

When you file your business’s tax return, you should make sure you include these self-employment taxes before submitting it to the IRS. Failing to pay these taxes could result in you being audited and heavily penalized.

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Hold Off on Receiving Payments


If possible, you should avoid receiving any cash payments as the end of the year approaches. According to the cash basis of accounting, you do not have to count payments as income until you actually receive them. You do not have to include them as income at the time of earning them.

With that, you could postpone receiving some payments especially those that are not vital to your business’s immediate survival until after the new year. By avoiding these payments as part of this year’s income, you reduce the amount of money on which the IRS will tax you. You also lower your tax liability this year.

Take Advantage of Last Minute Deductions


Before the end of the year, you have the opportunity to claim eligible deductions that will lower your tax liability to the IRS. Some of these last minute deductions to claim if your business qualifies include:

Health care tax credit
Deductions for self-employment health insurance
Section 179 depreciation deduction
Annual deduction for bonus depreciation
Auto depreciation
General business credit
You also can claim expenditures for your small business like:

Office supplies
Office furniture
Equipment like computers and fax machines
Startup costs
Business-related expenses for meals, entertainment, business travel, auto repair and upkeep
If you plan on claiming any of these deductions, you should provide receipts and other documentation for them to avoid being audited or investigated by the IRS.

Increase Your Retirement Contributions


The IRS allows business owners to claim deductions on their tax returns for limited amounts of contributions they make to qualified retirement accounts like an IRA, 401 (k), or an SEP. If you do not have a retirement account, you can still open and contribute to one in December to qualify for these retirement contribution deductions.

Further, if you plan on filing a joint return with your spouse, you can also make a contribution on his or her behalf to get the credit. The IRS allows both spouses to claim separate retirement contributions on their joint tax return.

Choose the Right Tax Forms for Your Business


Finally, you need to choose the right tax forms to file with your business’s return. A sole proprietorship, for example, will most often use a Schedule C or Schedule C-EZ that is then attached to the business owner’s personal 1040.

If your business is structured as a partnership or LLC, you will need to fill out a separate information return for your business and then include part of your earnings in your personal earnings for the year. If you are not sure of what tax forms to use for your business’s return, you should consult with a skilled tax professional before you file.

These tips can help you get a head start on filing your business's tax returns. You also can maximize your deductions, increase your tax refund, and lower your tax liability to the IRS.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

UNFILED TAX RETURNS: ADVICE ON FILING TAX RETURNS LATE

Every year millions of Americans finish the year with an unfiled tax return. Some don’t need to file, but many others forget and ignore the process. Some get confused as to whether they need to file.

Filing requirements vary based on your income and several other factors.

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As of the tax year 2016, you must file a return if you fall into any of the following categories:

Single, under age 65, and gross income exceeds $10,350.
Single, 65 or older, and income exceeds $11,900.
Married filing jointly, under age 65, and income exceeds $20,700.
Married filing jointly, at age 65, and income exceeds $21,950.
You earned more than $400 from self-employment, after expenses.
Sold your home during the tax year.
Owe taxes on your retirement account.
Owe Social Security or Medicare taxes on tips from your employer.


The IRS updates these numbers annually, and there are different income thresholds for widows with dependent children and people who are married filing separately. Therefore, to double check if you have a filing requirement, consult the IRS’s instructions for the 1040 form for the year in question.

Regarding state taxes, every start has different rules, and some states don’t even have an income tax. Therefore, visit the website for your state’s department of revenue to find out if you need to file. In the meantime, here are some useful links for additional information.



CONSEQUENCES FOR NOT FILING IRS TAX RETURNS OR FILING LATE

If you are supposed to file a federal tax return, but you don’t, you face penalties, interest, and other collection activity. Moreover, the consequences can be severe and financially debilitating.

Consequences for not filing your state return vary based on where you live, but states often use the same collection methods as the IRS. That includes tax liens, wage garnishments, and asset seizures. Furthermore, some states suspend driver’s licenses, real estate licenses and so forth. This link takes a closer look at the consequences of not filing your Federal tax return or filing it late.


HOW TO FILE UNFILED IRS OR OLD STATE TAX RETURNS

If you have not filed a return, eventually the IRS may create a Substitute for Return (SFR) for you. In other words, the IRS files for you. The IRS usually sends you a letter how they assessed the taxes and a form to consent to their assessment. Hence, you may not want to sign it because the IRS will give you only the standard deduction, one exemption, and no dependents. If you do not sign it, eventually they will assess the balance against you anyway.

Therefore, file a tax return yourself, and send it to the IRS as a reconsideration request. This link explains how to file a tax return if you have not done so. The advice applies whether you’ve received an SFR or not.


IRS FAILURE-TO-FILE PENALTY: PENALTIES FOR NOT FILING A TAX RETURN

The IRS has a significant penalty for not filing a tax return. Consequently, the IRS assesses a penalty of 5% of your balance for every month your tax return is late. Also, this fine maxes out at 25% of your total tax liability. Take a look at how the IRS calculates this penalty and learn how you can get it erased.


UNFILED IRS TAX RETURNS:

Find out answers to commonly asked questions about filing tax returns. Review specifics related to filing your tax return late.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

IRS FRESH START TAX FORGIVENESS, BACK TAX RELIEF AND TAX PENALTY ABATEMENTS

One of the most common things we hear new clients ask is something along the lines of, "Can't you just have the IRS remove my penalties? I don't mind paying my taxes, but I don't want to pay the penalties or interest." It's incredibly important that you get this idea out of your mind, because it almost never happens to the extent that people are hoping for. It can definitely happen, but only under specific situations. What we can do is set our sights on something more plausible - finding a way to knock off a portion of the accrued penalties and interest.

DO YOU NEED HELP WITH IRS BACK TAXES AND SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
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CALL (713)300-3965

The IRS Fresh Start Program has fooled a number of taxpayers with its claims to penalty relief. The IRS Fresh Start Program offers zero penalty relief. There is no such thing as IRS Fresh Start Penalty Relief. When seeking penalty relief, you're required to fit the same requirements and go through the same processes that have always been in place. It's a shiny new name, but there's nothing new for taxpayers. So, what we need to do is look at the circumstantial penalty reliefs that have been in place for some time.

FIRST TIME PENALTY ABATEMENT 


There are a number of ways to get penalty relief; the first being an unspoken agreement on the part of the IRS to give first-time offenders a freebie. If it's the first time that you've filed or paid your return late, you're more than likely able to pay your tax liability in full and request to have the penalty removed. The IRS, for the most part, will honor such requests and waive the acquired penalties and interest. However, you absolutely have to be in current compliance for filing your tax returns and -- if applicable -- paying your estimated tax payments. You can have other tax liabilities, but you must not have had any penalties imposed in the three years prior to the year for which you're requesting the penalties to be waived.



For example, if you have eight years of owed taxes, you can request for the first year of penalties to be waived. However, as we just saw, this can only happen if the three years of prior returns (prior to the first year of non-compliance) were filed and paid on time. It's important to note that first-time penalty abatement applies to most types of tax penalties, but does not apply to any failure to pay your taxes by the EFTPS (Electronic Federal Tax Payment System) and also does not apply to one-time filing for items such as gift or state tax returns.


REASONABLE CAUSE

The second most common reason for penalty relief is reasonable cause. It's very difficult to navigate reasonable cause and requires a persuasive argument for your inability to pay your taxes. In this course of action, you have to prove that you were doing everything right and taking care of your obligations to the best of your ability at the time. But, despite your best efforts, you were unable to comply. This mostly happens with issues like serious illness or a death in the family that required your time and energy. You need to prove that the situation was beyond your control and kept you from filing your taxes in a timely manner.


STATUTORY EXCEPTIONS

Statutory exceptions are predicated on not what you have done, but on what external factors are doing. When Congress passes a law stating a type of penalty to be imposed, they give reasons for circumstances where the law would not be comprehensive. The most common exception is the understanding that mailing your tax return before the deadline counts as filing your return on time, even if the IRS does not receive the return by their deadline.



Due to external factors -- think government slowdown, natural disasters affecting the post, and a variety of other possibilities -- exceptions make sure that you're not being penalized for something out of your control. Being able to prove that you had mailed your returns on time is reason enough to remove the penalties and interest placed on your tax bill.

ADMINISTRATIVE WAIVERS

Administrative waivers are made up by the IRS as is necessary. Whenever a rule or filing requirement changes, the IRS might say that they will not impose penalties for a specific amount of time. This gives taxpayers a chance to adapt without being in noncompliance. For example, when EFTPS was first implemented, the IRS allowed a period of time during which penalties would not be asserted for failing to use EFTPS.

This form of penalty relief is put in place to make sure that people have sufficient time to make sure that they are in compliance. You can think of administrative waivers more as a preventative measure than a suitable reason for failure to file your returns.


IRS ERRORS AND MISTAKES

You heard it right! Last, but definitely not least, is acknowledging that the IRS makes mistakes. Penalties can absolutely be removed if they were never supposed to be there in the first place. It's not entirely uncommon for people to mail their returns or extensions to the IRS and get charged with a late filing penalty due to the return/extension getting lost and never being processed. So, if you get a late-filing penalty and can prove that you filed on time and that it was their mistake, you can get the penalty removed.

While there may not be such a thing as IRS Fresh Start Penalty Relief, you better believe that there are ways to get penalties and interest waived. There's no magic wand, but with the right situation and proper application of knowledge, perhaps there is a greater relief that you imagined that is possible!

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

UNFILED TAX RETURNS: ADVICE FOR TAXPAYERS AND SMALL BUSINESS WITH BACK TAX RETURN ISSUES

Many of my IRS clients are “Nonfilers,” they have unfiled tax returns. Some of my clients have not filed for multiple years – some, for many prior years. Sometimes, they take action because they (or a friend) heard my radio show or commercial. Most, however, wait until the IRS sends a Notice of Intent to Levy, or worse, Notice of Levy to their employer or bank. If you have unfiled tax returns there are four things you need to know.

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First, you need to know that not filing your tax returns is a crime, punishable by up to one year in prison for each year of unfiled tax return. Fortunately, the IRS doesn’t put a lot of taxpayers in jail for not filing tax returns. But, they do put some in jail. For example, Wesley Snipes was recently released after serving 3 years for failure to file. There is a statute of limitations for unfiled tax returns.

The IRS will not be able to bring criminal charges after 6 years from the date the taxes are due. So, 2007 taxes that came due on April 15, 2008 are now beyond the statute, and the IRS can’t bring criminal action against you for unfiled tax returns 2007 and before. But, they still can collect any tax due.

Second, you should know that the IRS may complete your tax returns for you if you fail to file your tax return (it’s a penalty not a service). These are known as Substitute for Returns (SFR). When the IRS prepares your SFR, they will not include any deductions or exemptions. The result will be an inflated tax obligation. Penalties and interest are calculated based on the tax obligation. So, if the tax obligation is greatly inflated, so too will the penalties and interest. Don’t forget, the interest is calculated from the date the tax was due. So, the penalties and interest can add up to amount greater than the inflated tax obligation.

Third, the IRS will only allow you to recover any tax refund for 3 years. So, if you have any refund older than 3 years, the IRS will not refund OR credit your tax obligation for those years. For example, suppose a taxpayer hasn’t filed a return for years 2009 – 2014.

Further, suppose, once the returns are complete, the taxpayer is due a refund for the years 2009 – 2011, but incurs an obligation for the most recent years 2012 – 2014. The refunds from the first three years will not be used to set off the tax obligations of the past three years. Those refunds are gone.

Finally, you need to know that, should the IRS levy your bank account or garnish your wages, it will be difficult to stop the levy before real damage is done. This is true because, generally, in order to stop a levy, the taxpayer must be in compliance. Compliance requires the taxpayer to have previous tax returns filed BEFORE the IRS will agree to stop taking your assets. If there are years of unfiled tax returns, it will take some time to get into compliance. Finding the records to prepare older returns can be a real problem.

There is some good news. Because the statute of limitations is six years, a taxpayer may not have to file all of their unfiled tax tax returns. In fact, it may be the worst thing you can do, because you may be creating a greater tax obligation then necessary. Remember, these are the older returns, so if a tax obligation is created, they will bring along a large penalty and interest burden as well.

More good news – if the IRS filed your tax returns for you (SFR) you can file the proper return to decrease you tax obligation. I have helped clients with more than $100,000.00 in tax obligations that disappeared when the corrected tax returns were filed and the SFR’s nullified.

So, if you have unfiled tax returns – Take action today!

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

WHY IS THE IRS SELECTING ME FOR A TAX AUDIT?

An IRS audit is a review/examination of an organization's or individual's accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.

Selection for an audit does not always suggest there’s a problem. The IRS uses several different methods:

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RANDOM SELECTION AND COMPUTER SCREENING - sometimes returns are selected based solely on a statistical formula. We compare your tax return against “norms” for similar returns. We develop these “norms” from audits of a statistically valid random sample of returns, as part of the National Research Program the IRS conducts.

The IRS uses this program to update return selection information.

Related examinations – we may select your returns when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.

Next, an experienced auditor reviews the return. They may accept it; or if the auditor notes something questionable, they will identify the items noted and forward the return for assignment to an examining group.


Note: filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit. Additionally, a refund is not necessarily a trigger for an audit.

HOW ARE YOU NOTIFIED?

Should your account be selected for audit, we will notify you by mail. We won’t initiate an audit by telephone.

HOW DOES THE IRS CONDUCT THE IRS?

The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or at the taxpayer's home, place of business, or accountant's office (field audit). Remember, you will be contacted initially by mail. The IRS will provide all contact information and instructions in the letter you will receive.

If we conduct your audit by mail, our letter will request additional information about certain items shown on the tax return such as income, expenses, and itemized deductions. If you have too many books or records to mail, you can request a face-to-face audit. The IRS will provide contact information and instructions in the letter you receive.

WHAT DO YOU NEED TO PROVIDE?

The IRS will provide you with a written request for the specific documents we want to see. Here’s a listing of records the IRS may request.

The IRS accepts some electronic records that are produced by tax software. The IRS may request those in lieu of or in addition to other types of records. Contact your auditor to determine what we can accept.

The law requires you to keep all records you used to prepare your tax return – for at least three years from the date the tax return was filed.

HOW WILL I KNOW IF THE IRS RECEIVED MY RESPONSE?

For any delivery service you may use, always request confirmation that the IRS has received it. For example, if you use the US Postal Service, you can request one of their additional services to ensure delivery confirmation.

WHAT IF YOU NEED MORE TIME TO RESPOND?

For audits conducted by mail - fax your written request to the number shown on the IRS letter you received. If you are unable to submit the request by fax, mail your request to the address shown on the IRS letter. We can ordinarily grant you a one-time automatic 30-day extension. We will contact you if we are unable to grant your extension request.

However, if you received a “Notice of Deficiency” by certified mail, we cannot grant additional time for you to submit supporting documentation. You may continue to work with us to resolve your tax matter, but we cannot extend the time you have to petition the U.S. Tax Court beyond the original 90 days.

For audits conducted by in-person interview – If your audit is being conducted in person, contact the auditor assigned to your audit to request an extension. If necessary, you may contact the auditor’s manager.

HOW FAR BACK CAN THE IRS GO TO AUDIT MY TAX RETURN?

Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don’t go back more than the last six years.

The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years.

If an audit is not resolved, we may request extending the statute of limitations for assessment tax. The statute of limitations limits the time allowed to assess additional tax. It is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds. Extending the statute gives you more time to provide further documentation to support your position; request an appeal if you do not agree with the audit results; or to claim a tax refund or credit. It also gives the IRS time to complete the audit and provides time to process the audit results.

You don’t have to agree to extend the statute of limitations date. However if you don’t agree, the auditor will be forced to make a determination based upon the information provided.

You can find more information about extending a statute of limitations in Publication 1035, Extending the Tax Assessment Period, or from your auditor.

HOW LONG DOES AN AUDIT TAKE?

The length varies depending on the type of audit; the complexity of the issues; the availability of information requested; the availability of both parties for scheduling meetings; and your agreement or disagreement with the findings.

WHAT ARE YOUR RIGHTS?

Publication 1, Your Rights as a Taxpayer, explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes. These rights include:

A right to professional and courteous treatment by IRS employees.
A right to privacy and confidentiality about tax matters.
A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
A right to representation, by oneself or an authorized representative.
A right to appeal disagreements, both within the IRS and before the courts.
How does the IRS conclude an audit?
An audit can be concluded in three ways:

No change: an audit in which you have substantiated all of the items being reviewed and results in no changes.
Agreed: an audit where the IRS proposed changes and you understand and agree with the changes.
Disagreed: an audit where the IRS has proposed changes and you understand but disagree with the changes.
What happens when you agree with the audit findings?
If you agree with the audit findings, you will be asked to sign the examination report or a similar form depending upon the type of audit conducted.

If you owe money, there are several payment options available. Publication 594, The IRS Collection Process, explains the collection process in detail.

WHAT HAPPENS WHEN YOU DISAGREE WITH THE AUDIT FINDINGS?

You can request a conference with an IRS manager. The IRS also offers mediation or you can file an appeal if there is enough time remaining on the statute of limitations.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017/2018 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization