WHAT TO KNOW ABOUT IRS AUDIT RECONSIDERATIONS - BACK TAX RELIEF

Did you get a notice from the IRS saying your tax return was audited (or the IRS created a return for you) and you owe taxes, and you disagree with the tax the IRS says you owe?

In any of the four situations below, you can request an Audit Reconsideration – a process that reopens your IRS audit.

You have new information to show the IRS about the audit of your income or expenses.
You disagree with the tax the IRS says you owe.
You never appeared for the audit appointment or sent the IRS your information.
You moved and never got the IRS's audit report.

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YOU CAN’T REQUEST RECONSIDERATION IF:

You’ve already paid the full amount you owe. In that case, you must file a formal claim for refund with an IRS Form 1040X, Amended U.S. Individual Income Tax Return.


You previously agreed to pay the amount you owe by signing an agreement such as an IRS Form 906, Closing Agreement; an offer in compromise agreement; or an agreement on IRS Form 870-AD, Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Over assessment, with the Office of Appeals.


The United States Tax Court, or another court, has issued a final determination that you owe the tax.


For partnerships, you can’t request audit reconsideration on an issue that has been finally determined through an IRS administrative adjustment or under an agreement with the IRS.

WHAT SHOULD I DO?

The IRS typically mails an audit report (sometimes called an examination report) to you within a few weeks after conducting an audit. This report explains any proposed changes to your tax return. You should review the complete audit report, including the report's attachments to figure out which changes you think may be incorrect.

If you don't have this report or can't locate the report you received, you may either call the IRS toll-free help line (800) 829-1040 to request a copy of the report or you may set up an appointment at your local Taxpayer Assistance Center for assistance.

You can hire an attorney, certified public accountant (CPA), or enrolled agent to represent you before the IRS. You may be eligible for free representation (or representation for a nominal fee) through a Low Income Taxpayer Clinic.

Gather documentation to support your position
Make sure the documentation is new information that wasn’t part of the original audit, and that it’s for the tax year the IRS audited.
Send your request for audit reconsideration to the office that last corresponded with you

You don’t need to complete a special form – just a letter explaining your request for audit reconsideration. Be clear about which changes you want the IRS to consider. You should provide:

A copy of your audit report (IRS Form 4549, Income Tax Examination Changes), if available.
Copies of the new documentation that supports your position. Don't send original documents. Send copies.
NOTE: If you have an installment agreement, keep making payments during the reconsideration process.


WATCH FOR A RESPONSE FROM THE IRS

You should expect to hear from the IRS about your reconsideration request within 30 days. The IRS will send you a letter, if it needs more information.

You’ll be notified once the IRS reviews all your information. The IRS may:

Accept your information and abate (remove) the tax it previously assessed;
Accept your information in part and partially reduce the tax; or
Find that your information didn’t support your claim and the prior assessment stands.
If you agree with the reconsideration results, pay the remaining balance you owe, if any. If you can’t pay in full, consider your payment options.

If you disagree with the reconsideration results, you can request a conference with the Office of Appeals. You can be represented by an attorney, certified public accountant (CPA), or enrolled agent at this conference.

You can also pay the balance due in full and then file a claim for refund with an Amended Return (IRS Form 1040X, Amended U.S. Individual Income Tax Return).

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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.

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WAYS TO MAXIMIZE YOUR TAX REFUND - TAX RELIEF HELP

Whether you fear a large tax bill or want to maximize your refund, there are several actions you can do in a relatively short amount of time and improve your tax situation for 2018.  Here are a few of the tax breaks available to throughout the year or even in the last weeks of the year.

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CONTRIBUTE TO A HEALTH SAVINGS ACCOUNT

If you participate in a certain type of health plan, you may be eligible to contribute the following amounts into a health savings account (HSA) in 2018:

Up to $3,450 if you have self-only coverage ($4,450 if age 55 or over)
$6,900 if you have family coverage ($7,900 if age 55 or over)
This contribution can be made up until the due date for your return, so you can decide to make a contribution for 2018 as late as April 16, 2019.

If you have not reached this contribution limit for the year, it may be a good idea to contribute. Contributions are deductible even if you do not itemize your deductions. In addition, HSA funds can remain in the account and do not expire at the end of the year. So, placing money into the HSA may enable you to cover potential out-of-pocket expenses in the future. If an HSA distribution is used to pay medical expenses, the distribution is not taxed.


BUNDLE MEDICAL EXPENSES

Medical expenses are deductible for certain people. However, this deduction is limited; it only applies when both of the following are true:

You decide to itemize your deductions (instead of taking the standard deduction), and
Total qualified medical expenses paid exceed 7.5% of your adjusted gross income for 2017 or 2018
For many, these restrictions will prevent any qualified medical expenses paid out-of-pocket during the year from being deducted on their return.

If you do qualify for this deduction, it’s ideal to bunch medical payments into a single year. Since the deduction applies when the expense was paid, if your medical provider allows it, you can arrange to pay medical expenses from prior years or future years in the current year. This allows you to increase your total medical expenses for the year.


MAKE CHARITABLE CONTRIBUTIONS

This is another sometimes-overlooked deduction. Charitable contributions can both decrease your tax liability and allow you to give back to your favorite cause. Contributions can be made in cash or property to any qualified charitable organization, although special rules and restrictions may apply for non-cash contributions.

As with medical expenses, this deduction is only available for those who itemize. There is generally no restriction on the amount you may give to a qualified charity. However, if your income exceeds certain levels, the amount you can deduct may be phased out or eliminated. Contributions are deductible in the year they are made. So, by giving more to a qualified charitable organization before the end of the year, you could increase your tax deduction.


MAXIMIZE YOUR RETIREMENT PLANS CONTRIBUTIONS

Retirement savings can also help reduce your tax bill. For individual taxpayers, the best way to accomplish immediate tax savings is by setting up a traditional individual retirement account (IRA).

Depending on your income, filing status, and retirement plan coverage through work, you may be able to deduct up to $5,500 in 2018 ($6,500 if age 50 or over). Like with HSAs, you do not need to itemize to deduct IRA contributions. Another bonus is that contributions can be made until the tax due date of the following year (April 16, 2019, in this case).

There are also less common ways a retirement plan can be a good last-minute tool to lower your tax. Making contributions to an IRA or employer-sponsored plan (like a 401(k) plan) may allow you to claim a credit for retirement savings. For small-business owners, setting up a retirement plan in connection with that business can reduce your net self-employment income and, by extension, your self-employment taxes. Assets held within these retirement plans will also grow tax-deferred over time.


MAKE EDUCATION SAVINGS PLAN CONTRIBUTIONS FOR STATE-LEVEL DEDUCTIONS

Contributing to an education plan like qualified tuition programs (QTPs, or 529 plans) and Coverdell Education Savings Accounts (ESAs) will not qualify you for a deduction on your federal return. However, many states will allow a deduction on the tax return for these contributions. Furthermore, in many cases there are no limits placed on how many such accounts may be set up.

PREPAY YOUR MORTGAGE OR PROPERTY TAX

Another pair of common itemized deductions, especially for homeowners, is for mortgage interest and real property tax payments. Often, it is possible to arrange your billing for these expenses so that interest and tax payments for the following year can be assessed before the end of the current year. For example, you may be able to pay assessed mortgage interest for January 2019 prior to December 2018, which would allow you to deduct the mortgage interest paid on your 2018 return.

By taking advantage of one – or more – of these tax strategies before the end of the year, you put yourself in a great position for tax time. If you need any additional help, you can always consult with one of our tax professionals, too.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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.

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FOUR TYPES OF IRS TAX PENALTY RELIEF AND HOW TO KNOW WHICH ONE IS GOOD FOR YOUR BACK TAX SITUATION

The IRS charges (or, assesses) millions of penalties every year. What many taxpayers don’t always know is that the IRS also provides four broad categories of penalty relief for people who qualify and request relief.

Here’s more about each category of IRS penalty relief and how to get started finding out what may be best for your situation.

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ADMINISTRATIVE WAIVERS PROVIDE RELIEF UNDER SPECIFIC CONDITIONS

When the IRS grants an administrative waiver, the IRS provides relief from a penalty it would otherwise assess – if your circumstances fit.

For example, in 2012, when many taxpayers were experiencing economic hardship, the IRS provided relief for the failure to pay penalty for taxpayers who qualified.

The most widely available administrative waiver is often overlooked and misunderstood: first-time penalty abatement (FTA). The IRS grants FTA for people (and, in some cases, businesses) with a clean compliance history.


REASONABLE CAUSE RELIEF IS USUALLY FOR SITUATION OUTSIDE OF YOUR CONTROL

The IRS grants reasonable cause penalty relief when your facts and circumstances demonstrate that you exercised “ordinary business care and prudence” in determining your tax obligation, but nevertheless failed to comply.

Depending on the penalty, you might also have to prove that you acted in good faith or that your failure to comply with the law was not due to willful neglect.

The IRS determines reasonable cause abatement on a case-by-case basis, treating each tax form and year separately. The IRS often abates penalties based on reasonable cause because of circumstances beyond your control, such as illness, natural disasters, or destruction of your tax records (as long as you didn’t destroy them intentionally!).


STATUTORY EXCEPTIONS ARE FOR SPECIFIC CIRCUMSTANCES

The IRS waives or abates penalties because of specific exceptions. For example, the IRS won’t assess penalties for people in combat zones. In another example, the IRS will grant exceptions to the estimated tax penalty when:

The tax is less than $1,000.
There’s no tax liability in the preceding year.
You’re newly retired or disabled.


IF THERE’S A DOCUMENTED IRS ERROR, THE IRS WILL ABATE PENALTIES

The IRS waives penalties when the IRS makes an error. For example, if the IRS incorrectly posted a filing extension, resulting in a failure to file penalty, the IRS would waive the penalty.

This category can also include erroneous written or oral advice from the IRS that you relied on using ordinary business care and prudence.

So, how do you know which one is best?

This is where the expertise of a tax professional comes in. An experienced tax professional can help you understand how your specific facts and circumstances apply to the tax law governing each penalty abatement option.

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HOW TO FILE BUSINESS BACK TAX RETURNS WITH THE IRS

Business back tax returns, at a glance:

Not filing a required return is a serious issue with the IRS.
If your business doesn’t file, the IRS can file a return for you — with taxes and penalties.
You should take special care when preparing and filing late returns, because the IRS gives them extra scrutiny.
You can get expert help filing business back tax returns with the IRS.

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What you need to know about business back tax returns

Most businesses are required to file a tax return every year. The IRS keeps a record of businesses that are required to file but don’t – and the IRS can pursue those returns. That can mean stiff consequences and increasing complications. If you haven’t filed your business taxes, the IRS can charge expensive penalties and even file a return for the business without any credits or deductions in your favor (called a substitute for return).

Whether you have one or many returns to file, you or your tax pro should start taking steps right away to file an accurate and complete tax return that will get your business back in good standing with the IRS.

Here’s what to do.

How to file business back tax returns

GATHER ALL THE INFORMATION TO FILE THE PAST-DUE RETURNS - NEED HELP CALL US (713)300-3965 FOR ASSISTANCE

Start by requesting transcripts from the IRS. You can also order your business’s account transcript to see any payments or other credits that posted to the IRS account for that tax year.

Gather information from your records to complete the return. This can be an extensive process, depending on your records. For a business income tax return, you’ll need to have a profit and loss statement, as well as a balance sheet. For employment tax returns, you’ll need to have information about employees, their wages, withholding and other items to be reported.
If necessary, ask the IRS for more time to file the late return, to avoid any enforcement actions (such as a substitute for return, levy, or lien).
Identify any special processing needed for your late-filed return (such as date-stamping or filing with an IRS compliance unit).

If you have several past-due returns to file, the IRS normally requires that you file returns for the current year and past six years. But your specific facts and IRS rules will determine how far back you should file.

COMPLETE THE RETURN AND SUBMIT IT TO THE APPROPRIATE IRS UNIT

Complete your business tax returns accurately. It’s best to double check your return against your IRS transcripts to make sure that you included all income as it was reported to the IRS, and that you included any tax payments.

Businesses sometimes can receive a Form 1099 reporting their income to the IRS. You can call the IRS to get the income reporting under your business’s Employer Identification Number (EIN).  Ask the IRS for your “IRP” document (for Income Reporting Program). This will show your income reported to the IRS under the EIN. The filed return should reflect this income.
If you owe and can’t pay the full amount, consider requesting a payment arrangement with the filed return.

Attach a penalty relief request to the return, if applicable. If you have one past-due return to file, you may qualify for penalty relief on any failure to file and failure to pay penalties. If you have multiple returns to file, it’s more difficult to process the return and manage the resulting penalties and balances owed. You’ll need to investigate your penalty relief options further in these complex situations. If you’re filing a late S corporation (Form 1120S) or partnership (1065) return, you’ll need to wait until the IRS assesses the penalties for late filing before you can request penalty relief. This is called asking for penalty abatement.
Send your return to the right IRS location.

Make sure you get proof that you filed, in case the IRS doesn’t process your return or you experience related compliance activity (like IRS collection notices, a lien, a levy, or an unfiled return investigation).

MONITOR RETURN PROCESSING AND OTHER COMPLIANCE ACTIVITIES

Periodically request your business’s account transcripts or contact the appropriate IRS unit to make sure that the IRS processed your business tax return. It should take about two to three months before the IRS accepts the return. It can take up to six months if the IRS has filed a return for you in the past (called a substitute for return).
If the IRS took prior actions on the unfiled return (such as filing a substitute for return), follow up to ensure that the IRS closed the case with no matters outstanding.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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.

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FILING YOUR SMALL BUSINESS TAXES

As a small business owner with employees, you must withhold certain taxes from your employees’ wages. These include several local, state, and federal taxes.

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Federal employment taxes include:

Federal income tax withholding
Social Security and Medicare taxes
Federal unemployment tax
Benefits that workers and families receive under the Federal Insurance Contributions Act are paid for by:

Social Security taxes
Medicare taxes
You withhold part of these taxes from your employees’ wages. You also pay a matching amount yourself.

The federal unemployment tax pays unemployment wages to workers who lose their jobs. You report and pay this tax separately from these taxes:

Social Security
Medicare
Withheld income
You pay federal unemployment tax only from your own funds. Employees don’t pay this tax or have it withheld from their pay.

Depositing taxes
You usually must deposit both of these via the Electronic Federal Tax Payment System (EFTPS):

Income tax withheld
The employer and employee Social Security and Medicare taxes
EFTPS is a tax payment system provided free by the U.S. Department of Treasury. It allows businesses to pay federal taxes electronically via the Internet or phone anytime.

Preparing and filing a W-2
At the end of the year, you must complete a W-2, which reports wages, tips, and other compensation paid to each employee. The form includes the employee’s:

Withheld income tax
Social Security and Medicare taxes
You must give a copy of this form to each employee by Jan. 31 of the year after the calendar year when you paid the wages.

You must also send a copy of the W-2 to the Social Security Administration (SSA). You summarize the W-2 using Form W-3. You should file these forms in a timely manner. This ensures that your employees have the correct Social Security amounts for retirement.

You can prepare and file up to 50 W-2s at a time, free of charge, at www.ssa.gov. Using SSA’s online W-2 filing, you can also print out all the copies of the W-2 for your employees, state taxing agencies, and others.

Due dates for filing the W-2s with the SSA are:

Paper forms — last day of February
E-file — March 31
Credits
You might be able to claim a credit for a portion of the wages you pay to an employee who’s one of these:

American Indian
Long-term family-assistance recipient


GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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.

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PRESENTING A GOOD OFFER IN COMPROMISE TO SETTLE YOUR BACK TAXES

IRS Fresh Start Initiative

When you owe a debt to the IRS, you might wonder what your options are for satisfying it. Rather than pay a tax debt that you cannot afford, you could settle it for less by making an Offer in Compromise to the IRS. By using these strategies, you better the chances of your IRS Offer in Compromise being accepted the first time you submit it for consideration.

LOOKING TO SETTLE YOUR TAX DEBT WITH AN OFFER IN COMPROMISE?

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Determine Your Reasonable Collection Potential

Your reasonable collection potential is the amount of money that the IRS believes that it can collect from you over a reasonable amount of time. To determine this amount, the IRS uses a specific formula. Depending on what that amount is, you should offer the same sum of money or perhaps a little more when submitting your Offer in Compromise or OIC to the government.

If you fail to offer an amount that is equal to or more than your reasonable collection potential, you stand a good chance of your OIC being turned down by the IRS. It will believe it can collect more money from you to settle your tax debt.

You can figure out what your reasonable collection potential is by using the same formula employed by the IRS. This formula is based on two different factors: The liquidation value of your assets and any extra monthly income you will receive over the next four to five years.

To begin calculating your reasonable collection potential, you first should add up the cash you have on hand and in your bank accounts. You should then add that sum to the value of investments and liquid assets including your:

Vehicles
Homes
Real estate
Retirement accounts like Roth IRAs
You should then multiply the fair market value of these assets by 80 and subtract the amount of any outstanding loans you have against them. The amount you have left over is asset liquidation value.

To determine your extra monthly income, you should figure out what money you have over after you pay for your basic living expenses. Deduct expenses like rent or mortgage payments, utilities, and groceries from your monthly income that you earn from your job, self-employment, retirement or pension, or investments. Multiply that amount by 48 or 60 to determine the amount of money you would have left over the next four to five years.

Your next step is to add your total disposable income, cash on hand, investments, and the liquidation value of your assets to get your reasonable collection potential. You should use this number to determine how much to offer the IRS when making an Offer in Compromise.

What is an Offer in Compromise?

So, what exactly is an Offer in Compromise or OIC? It is a way to settle your tax debt for less than what you actually owe.

An OIC can be a legitimate option for settling the debt when you cannot pay the debt in its entirety. It also is a solution for when paying back the tax debt would create an extreme financial hardship for you.

When the IRS considers an OIC from a taxpayer, it looks at criteria like the person’s:

Ability to pay the tax debt
Income
Regular living expenses
Asset equity
It may approve the OIC if the amount offered equals or is close to the amount that the IRS can expect to collect in a reasonable amount of time.

That being said, you should look at your other tax debt payment options before submitting an OIC. This form of payment is not for everyone. You should also hire a tax professional to make sure you meet all of the criteria for making an OIC.

Using the OIC Pre-qualifier
If you want a preliminary look at whether or not you might qualify for an OIC, you can use the free pre-qualifier on IRS.gov. This tool asks questions like:

Are you in an open bankruptcy?
Have you filed all of your required tax returns?
Have you made all of your estimated tax payments?
If you are self-employed and have employees, have you submitted all required federal tax deposits?
Based on the answers you give to these questions, you can learn quickly if you might qualify to have your OIC approved by the IRS.

IRS collections can be extremely stressful.

Submitting an OIC

To submit an OIC, you must use the required forms found on IRS.gov. The first form is Form 656-A, which is the income certification form for an OIC. This form must be filled out and submitted in order for the IRS to waive the processing fee and the 20 percent down payment for an OIC if you qualify.

The next form, 433-A, is used to gather income information for wage earners and people who are self-employed. This form will reveal whether or not you experience financial hardships because of your tax debt. You must disclose details like your income, assets, and expenses before the OIC can be completed.

Why Hire Advance Tax Relief before Making an OIC?

The IRS outlines the process for applying for and getting an OIC on its website. Even so, you may find the process to be complex and confusing. You do not want to jeopardize your chances of having your OIC accepted the first time you submit it to the IRS.

You also may not like the idea of approaching or negotiating with the IRS on your own. You may not know what the tax codes are or how they apply to your tax debt situation.

Advance Tax Relief LLC has an experienced and knowledgeable staff who can help you make an OIC successfully. We have represented clients like you in the past and know what it takes to get an OIC accepted the first time you submit it to the IRS.

If your OIC is denied, we also can help you appeal the decision. Our staff knows what documents to submit and what kind of proof the IRS is looking for to reconsider its denial of your OIC.

An Offer in Compromise could be your best option for settling your tax debt satisfactorily. Making this offer requires you to follow an exact process outlined by the IRS. You can better your chances of having your OIC accepted the first time by hiring our tax professionals at Advance Tax Relief today.

CHANCES THAT YOUR INCOME 2018 TAX RETURN WILL BE AUDITED?

For the vast majority of taxpayers, there is not much need to worry that you will be audited. In 2016, only 0.6% of individual income tax returns were audited according to the IRS 2017 Data Book. Why? For starters, the IRS budget has been cut resulting in more than 2,200 fewer agents available to audit returns.

However, the “real” audit rate is closer to 7.o% as the IRS does not include the over 9.2 million notices that are questioning items on your client’s tax returns such as forgetting to include  a 1099-Misc form.  The IRS is relying more and more on technology  to uncover under reporting and underpayment of taxes. Also, certain taxpayer groups are more susceptible to catching the attention of auditors.

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

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If you’re in the middle of an audit or owe back taxes, contact us to schedule a free consultation. Call our office at 713-300-3965!

Returns that report more than $10 million in income or report no income

Sixteen percent of individuals who reported over $10 million in income were audited in 2014. Surprisingly, those returns that reported no income were audited at a higher rate than the average person. In 2014, 5.3% of tax returns with no income reported were audited. If your income is $25,000 – $200,000, you’re highly unlikely to be singled out for an audit.

Estate Tax Returns of more than $5 million

In 2014 the IRS did an audit on 8.5% of estate tax returns which was well above the .9% of individual returns. Even larger estate tax returns, 21% of those between $5 million to $10 million were audited, while 27% of those over $10 million received an audit.

Individual filing of international returns raises a red flag

The IRS is focusing more attention on international returns. Statements made by experts in the field, strongly emphasized the practice of offshore tax evasion as being fundamentally unfair. Wealthy people evading the law by stashing their money overseas and not paying their share of tax is forcing the bulk of lower income citizens to foot the bill to fund the government. In 2014 only 4.8% of the international returns were audited.

Errors in information entered

Simple careless mistakes in filling out income tax forms are made which send up red flags to the tax auditors. Filers neglect to get all report forms and statements together and forget to report dependents and exemptions correctly.

The automated systems recognize these discrepancies, but can’t tell if they are actual mistakes or intentional. Neglecting to report all your income and other figures could result in an audit especially at higher incomes. Those who contribute to more charities and other organizations open up the possibility for fraud.

Reports of itemized deductions that is unrealistic

If an individual or small business claims itemized deductions that are clearly out of line, they could be signaled out for an audit. Filers need to know what a legitimate deduction entails.

Carefully reading directions for completing forms and checking for accuracy and honesty will reduce the chances of an audit. Hiring a tax professional, specifically someone with tax resolution experience like our firm, can help you stay out of tax trouble.

If you need an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Call our office at 713-300-3965.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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.

DO YOU OWE BACK TAXES? REAL REASONS YOU NEED A TAX RELIEF COMPANY

Owing money to the IRS or State can be daunting, intimidating and throw your life out of whack. You might be tempted to just hide your head under a pillow, but ignoring your back taxes will only make the situation worse. Penalties and interest alone can bury you deeper so it’s important to take immediate action.

But where do you start? How do you go about tackling the behemoth that is the IRS and start getting your life back? A qualified Tax Resolution firm can help. Here are some real reasons to at least have a conversation with our tax firm. If you’re ready, you can contact us here Give us a call at 713-300-3965!

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

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

PENALTIES AND INTEREST - DON’T LET THEM UP!

The IRS has over 148 different types of penalties they can hit you with.

And the worst part is that the IRS can also charge interest on the interest (called “compounding”) and on the original penalties.

Penalties can be such a high percentage of the total amount owed to the IRS, it usually makes sense to consider requesting the IRS to reduce all penalties to ZERO.

IRS penalties can often be reduced to ZERO if you have REASONABLE CAUSE.  What makes up REASONABLE CAUSE you ask?  Well, in our experience in negotiations with the IRS, anything may qualify as long as it’s reasonable.

We’ve had the IRS abate penalties for medical reasons, bad accountants, and ignorance of the tax laws, ex-spouses, helping to provide care for a loved one, military call-ups, fires, floods, alcoholism, drug abuse, death and even for relying on IRS advice.

YOU MAY BE PLEASANTLY SURPRISED. YOU HAVE NOTHING TO LOSE AND THE SAVINGS COULD BE HUGE!


YOU DO NOT HAVE TO TALK TO THE IRS

As a matter of fact, going or talking to the IRS yourself could be the worst thing you can do. The taxpayer Bill of Rights allows you to be represented by a qualified practitioner who can answer questions for you and provide documentation and a resolution to the IRS. Many taxpayers attempt to handle things on their own or hire the person who prepared the tax return to handle it for them.  This does not usually work out because most tax return preparers do not handle IRS tax problems on a daily basis.  The IRS can easily intimidate them, which usually results in an unfavorable outcome.

YOU HAVE OPTION TO GET OUT OF TAX TROUBLE AND STAY OUT OF TAX TROUBLE

The IRS has multiple options for troubled taxpayers, including cutting deals that can drastically reduce your total amount owed, often referred to as the Office in Compromise Program. To see if that’s an option for you, contact us so that our tax resolution firm can fully assess your individual financial situation and make a recommendation for resolution.

Remember, doing nothing not only doesn’t fix the problem but the longer you do nothing the problem only gets worse.

We’ll contact the IRS on your behalf, get you compliant by helping you file all your past tax returns if needed, then work on an individualized tax debt resolution plan which we present to the IRS that will permanently solve your tax problem and keep you out of trouble. Give us a call at 713-300-3965!

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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.

AUDITED BY THE IRS AND YOU CAN’T FIND YOUR RECEIPTS?

AUDITED BY THE IRS AND YOU CAN’T FIND YOUR RECEIPTS?

Receiving an IRS tax audit is scary even if you keep detailed financial records – but if you haven’t kept your receipts, it can be absolutely paralyzing. If you find yourself in this situation it’s critical to create a strategy for how you’ll prove your income without incurring penalties. Remember, your financial integrity is on trial during on audit so it’s important to treat it as a serious allegation, especially if you don’t have records.

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

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

Need tax audit help? Use the links below to answer all your questions:

What Exactly is a Tax Audit?
Tax Audit by Mail
Tax Audit in Person
Does an IRS Audit Always Mena I’m in Trouble?
How Far Back Can a Tax Audit Go?
What Happens if You Don’t Have Receipts for an IRS Audit?
What is the Cohan Rule?
What Can I Use in Place of Receipts to Prove My Income?
What Happens If I’m Found Guilty After an IRS Audit?
How Can I Avoid an IRS Tax Audit?
How Can I Keep Organized Records of my Income and Deductions?
Can I Get Help With an IRS Tax Audit?
What Exactly is a Tax Audit?

When the Internal Revenue Service looks at your tax returns, they might issue an audit if they believe your reported income or deductions that are inaccurate. The main reason you would receive an audit is if they suspect you are earning a higher income from sources you haven’t reported on your returns.


TAX AUDITS BY MAIL

Typically, you’d receive an IRS audit letter in the mail informing you of the items on your return that they are questioning. Oftentimes they want to see further evidence of your income or deductions and will request for you to send documentation to prove it. Make sure to only ever send copies and always keep the original document for your records.

TAX AUDIT IN PERSON

If further information is needed beyond a mailed audit, you may have to attend an in-person interview at an IRS office. Before the meeting you will receive a written request for the documents you need to provide. It’s important to note that you will never be contacted by phone for an audit – if you receive a call claiming to be an IRS audit, it is a scam and should be reported to police.

DOES AN IRS AUDIT ALWAYS MEAN I’M IN TROUBLE


Receiving a tax audit doesn’t automatically mean the IRS believes you’ve done something wrong. Tax returns are sometimes randomly selected for research purposes that look at statistical norms. It’s also possible that your return might be audited if you are connected financially to someone who is being investigated, such as a business partner or investor.


HOW FAR BACK CAN A TAX AUDIT GO?

An IRS audit can include your tax returns from the past three years. It is possible that older returns could be included if they think they’ve found a substantial problem. The statute of limitations for a tax return to be assessed by the IRS is typically three years, but in some cases it can be extended if an audit hasn’t been answered or resolved.

What Happens If You Don’t Have Receipts for an IRS Audit?
Step number one: don’t panic. Not having all the receipts to prove your income does not mean you will automatically be punished. Most people don’t keep perfect records of their finances, so there are plenty of ways to resolve an audit even if you don’t meet IRS receipt requirements.


WHAT IS THE COHAN RULE?

The Cohan rule is the saving grace for many taxpayers who have been audited. It’s named after the Broadway star George M. Cohan who was heavily audited in the 1990s for business expenses he didn’t have proof of. Cohan took the IRS to court, and they came to the decision that the IRS had to accept the estimates of his expenses.


While this rule isn’t a miracle cure for every taxpayer who is audited, it can certainly still be invoked. Business owners can use it to deduct some of their business expenses that don’t have receipts. You will still likely be asked to show some sort of evidence of the transactions such as calendar notes, photographs, canceled checks, etc.


WHAT CAN I USE IN PLACE OF RECEIPTS TO PROVE MY INCOME?

Whether you lost your receipts, they were damaged, or you simply don’t have them, there are several documents you could use as evidence to answer an IRS audit when you have no receipts:

Calendar logs of meetings/travel/daily tasks
Canceled checks
Credit/debit card statements
Mileage records
Photographs of events/individual items
Emails
being-audited-by-irs-and -no-receipts
Even if you can use the Cohan rule to your advantage in your audit, you’ll need some of the above items to prove your claims. It’s a smart idea to keep a detailed financial journal whether or not you run a business.


WHAT HAPPENS IF I’M FOUND GUILTY AFTER AN IRS AUDIT?


After a tax audit is complete, you’ll get a notification of the result within 30 days stating your charges, if any. You then have 30 days to either appeal or accept the result. If you appeal, you will take your case to an IRS appeals agent who will then make a decision based on the facts of your case.

If your appeal is denied and you are charged with owing money, there are various levels of penalties and fines depending on what the IRS found on your tax return. If you are found guilty of tax fraud, you could face severe fines and jail time.

HOW CAN I AVOID AN IRS TAX AUDIT?


First thing’s first: never avoid an IRS audit letter. If you receive an IRS audit and realize you have no receipts, it’s important to get your financial habits back on track. The only way to truly avoid an IRS tax audit is to submit an accurate tax return year after year. Additionally, make sure you understand the IRS receipt requirements so you can keep detailed records.

How Can I Keep Organized Records of My Income and Deductions?
There’s nothing like being audited by the IRS and realizing you have no receipts to scare you into better money management habits. Be sure to write down notes for all of your receipts so you can look back and remember exactly what the money was spent on. This is particularly important for business-related expenses since treating a major client to a day at the golf course might not come across as a necessary expense on a printed receipt.

The digital revolution has made keeping track of your receipts easier than ever – since 1997, the IRS has accepted digital receipts. Scan any paper receipts you have and save them in a folder on your computer so they’re organized in one place. It’s typically a good idea to save receipts from the past six years. In addition to scanning paper receipts, put any digital receipts that may have been sent to your email or phone in this folder as well.


Pro tip: Don’t use cash to pay for expenses. It’s much harder to prove a transaction occurred, especially if it’s with another person and not an established business. A good rule of thumb is if the expense is over $75, you should get a physical receipt for it.

CAN I GET HELP WITH AN IRS TAX AUDIT?

If you want help resolving an IRS audit when you have no receipts, there are plenty of qualified professionals that can manage your case. Audit representation can come from an attorney, certified public accountants, or an enrolled agent. This individual will then stand in on your behalf during an audit to use their professional knowledge of the IRS to help you resolve the audit.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018 tax return and 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