FIX THESE TAX PROBLEMS BEFORE THE NEW YEAR

IRS notices, audits and penalties – really any tax problem, can send anyone into a panic attack. Here’s the truth: they are even more stressful if you ignore them. As 2020 wraps up, take some important steps to make sure you don’t bring tax problems into a new year.

Americans Face a Range of Tax Problems

Every year, millions of taxpayers face tax issues. So, what qualifies as a tax issue?

1 – IRS Penalties: 

Tax penalties are sent if a tax payment – whether from an individual or business entity – is delayed. In fact, the IRS charges more than 40 million penalties every year.

2 – IRS Audits: 

There are about 1.4 million IRS audits each year. There are multiple incidents that trigger an audit, like questionable deductions and credits, underreported income, home office and hobby claims, offshore earnings, over-reported losses, and even working in a high-fraud field.

3 – IRS Underreporting Notices: 

The IRS sends underreporting notices to 4 million taxpayers each year. IRS systems automatically send them when income reported on tax returns doesn’t match information the IRS gets from employers and other payers. The mismatch triggers a notice that asks for explanation and proposes additional taxes.

4 – IRS Bills: 

Currently, more than 17 million taxpayers owe the IRS and can’t pay.

5 – Tax Identity Theft: 

Millions of taxpayers have had their personal information stolen during the past couple years. These taxpayers are at an increased risk that fraudsters will file a false return under their name next year.

6 – Unfiled Tax Returns: 

The IRS has information showing that more than 7 million taxpayers don’t file their required return every year. There are multiple types of Unfiled Return notices sent by the IRS, like a:

CP59 Notice

The IRS has no record that you filed your prior personal tax return.

CP63 Notice

The IRS is holding your refund because you have not filed one or more tax returns and believe you owe tax.

CP515 Individuals Notice

The IRS sends this notice saying they have no record that you filed your prior tax return or returns.

It’s true that many IRS issues can take months to resolve. But that should not stop you from taking steps to put any tax issues behind you in the upcoming year.

Action for YOU

So, if you have experienced one of the above tax problems, try not to drag the issues into the new year. Here are some good actions to take:

1 – Understand the issue:

When you investigate your issue with the IRS, you’ll need to get to the underlying cause. For example, what seems to be an underreporting issue could really be caused by identity theft. Understanding exactly what caused your tax problem will help you prevent it from happening again.

2 – Be solution-oriented:

Determine the potential solutions to resolve your issue and pick the best one. For example, if you have an IRS penalty, you’d have to take a look at the five ways to get penalties removed and decide which ones apply to your situation.

3 – Don’t wait another moment:

Once you’re moving forward with a solution, make sure to send the IRS a complete request or response. This will allow the IRS to make a determination with all of your facts. 

It will also avoid miscommunication that can lead to a prolonged interaction with the IRS. Meeting IRS deadlines is essential to avoiding a premature IRS decision on your situation. If you’ve already missed the deadline, don’t let that deter you from trying to solve your problem.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 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.

 

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HOW LONG DOES THE IRS HAVE TO AUDIT YOUR TAX RETURNS?

Tax Audits, Back Taxes 

There are two answers to this question: the legal answer and the practical answer.

First, the legal answer is in tax law. Technically, except in cases of fraud or a back tax return, the IRS has three years from the date you filed your return (or April 15, whichever is later) to charge you (or, “assess”) additional taxes. This three-year timeframe is called the assessment statute of limitations.

Additional taxes usually come in the form of an audit or an underreporter notice (called a CP2000). Even though the IRS can legally audit you until the three-year assessment statute ends, in practice, it rarely works this way.

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Practical answer: 26 months

The practical answer lies in a procedural policy at the IRS called the “examination cycle.” The Internal Revenue Manual (basically, the IRS training guide) says that IRS agents must open and close an audit within 26 months after the return was filed or due (whichever is later).

The IRM also says that IRS agents should “strictly adhere to” this guideline, to make sure that the audit and other processing needs are complete within the three-year timeframe.

Most audits start a few months after you file your return

For these audits, the IRS is often freezing refunds. Because the IRS has to pay interest on refunds it pays late, the IRS tries to start and finish these audits quickly. They are usually done by mail. Once you answer the IRS’ questions about the accuracy of your return, the IRS will release your refund.

Audits that start soon after filing usually focus on tax credits, such as the earned income tax credit and the child tax credit. The IRS often wants to verify filing status, dependents, and other return items before sending your refund.

Other IRS audits generally start within a year after you file

These are often mail and office audits related to questionable items on your return.

The most comprehensive IRS audits can start later. These are called field audits, when the IRS visits you or your business.

However, as a rule of thumb, if the IRS hasn’t audited your return within two years after you filed it, the IRS generally won’t audit your return unless there’s something egregious.

How do you know if you’re selected for audit?

If the IRS audits you, you’ll get a notice telling you that the IRS selected your return for examination.

Dealing with the IRS in an audit can be difficult. The best course of action is to respond on time, thoroughly, and advocate your tax return position. One complete response, sent on time to the IRS, will avoid confusion and lead to the best results.

Learn how to handle an IRS audit, or get help from a trusted IRS expert.

If the IRS asks you to meet in person or go to an IRS office, you should consider hiring a professional to represent you

IRS audit procedures can be complicated and almost impossible to navigate successfully. An experienced tax professional that can “speak IRS” will likely produce a better outcome with less stress and anxiety for taxpayers under audit.

Look for a tax professional who is licensed to practice before the IRS (usually a CPA, enrolled agent, or attorney) and has experience in dealing with the IRS.

You should expect to pay a few hundred dollars for a mail or office audit for a tax pro to represent you. Field audit representation is likely more expensive because your tax professional will be spending a lot of time with the IRS.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 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.

 

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STEPS TO RESOLVE BACK TAX DEBT ISSUES

Advance Tax Relief is dedicated to helping taxpayers file back tax returns and resolve tax debt issues. 

1)

Get your IRS account information and collection status from the IRS:   there are 3 items to get from the IRS:  balance owed information, collection enforcement status and deadlines, and compliance status.  It helps to obtain your IRS account transcripts which show the assessments, penalties assessed, balances owed, and some account activity.  However, it is usually necessary to contact the IRS and get specific information about enforcement activity and deadlines. Also, if you are not sure that you have filed all of your required past year’s tax returns, you will need to ask the IRS.

2)

Evaluate whether you have enough time to avoid collection enforcement:   if enforcement is imminent, it may be best to request an extension if there are other time-consuming steps involved in obtaining a collection agreement (like filing past due returns or evaluating options to pay).   You can contact the IRS directly and request a collection hold or an extension to pay. If the taxpayer is already under a levy or garnishment, they will want to ask for a levy release in exchange for a deadline to comply.  If enforcement relief is denied, the taxpayer will want to consider appealing the decision or moving quickly to get into an agreement so that the levy is released.

Fix any immediate non-compliance issues:   taxpayers cannot proceed to obtain a collection agreement without being both in filing and payment compliance.  Filing compliance means that you have filed all required tax returns (for individuals, that is usually the current and past 6 years of returns).  For payment compliance, the taxpayer will need to have enough withholding and/or estimated tax payments so that they will not owe again for the next filed tax return.  The taxpayer will need to correct any compliance deficiencies before moving forward to a collection agreement. 

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3)

Evaluate best collection alternatives based on your circumstances:   several factors come into consideration including the taxpayer’s ability to pay, the amount owed (which will determine which options may not be available), and avoidance of collection enforcement.  Taxpayers will need to evaluate their financial information in relation to the alternatives available.

4)

Select your collection alternative – and complete the steps to obtaining the agreement:  simple agreements like the extension to pay, SLIA, and 84-month plan can be executed quickly with very few IRS forms to complete.  In many circumstances, the extension to pay and SLIA can be done online in less than 30 minutes. Ability to pay alternatives such as the ability to pay installment agreement, currently not collectible, and the offer in compromise require financial disclosure to the IRS.   The taxpayer will need to prepare Collection Information Statements (Form 433 series) and other required documents to request these solutions. Likely, there will be multiple interactions with the IRS to answer questions and negotiate the final terms. Taxpayers will need to respond timely in this step to avoid enforced collection (I.e. a levy).

5)

Finalize terms of the agreement and appeal any disagreements:  the taxpayer will need to confirm (by IRS notice or by reviewing their IRS account transcripts) that the agreement was reached.  If there are disagreements with the terms of the agreement, collection enforcement actions, or rejected OIC, the taxpayer may need to appeal to get a second review of their circumstances and proposed solution terms.

6)

Complete the terms of the agreement:  if the agreement is an extension to pay- pay before the due date or get into another collection alternative.  If the agreement is a payment plan, make the payments each month. If the agreement is an OIC, complete the terms of payment and stay in compliance for the next five years.  CNC status requires no further activity. If you had a levy in place, make sure the levy was released if that was in the terms of the agreement.

7)

Stay in compliance and monitor future notices for action:  be sure not to file/owe/not pay in future years.  Any new unpaid balance will default an existing installment agreement.  Unpaid balances in the next five years will also default any approved OIC.  Taxpayers who owe will always get an annual notice from the IRS outlining payments made and the outstanding balance owed.  Any other notices will need to be addressed immediately to avoid default and possible enforced collection activity.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 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.

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MISSED THE TAX DEADLINE EXTENSION?? LETS HELP YOU FILE YOUR BACK TAX RETURNS

You could be forgiven for missing your tax extension deadline. After all, it's 2020. You could be, but unfortunately, you won't. The IRS wants your return and your tax payment. They waited three extra months, and now they want Uncle Sam's cut.

This year, with the pandemic and all, Tax Day was delayed from April 15 to July 15. Everybody had an extra three months to get their taxes together. Some needed even more time than that. In a typical, non-2020 year, you would get six extra months to file when requesting an extension. This year, well, you only got three. 

If you filed IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, you have until the middle of October to file and pay your 2019 taxes.

Yep, the deadline for filing your taxes if you had an extension was October 15. And you missed it. Now what?

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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FAILURE TO FILE VS. FAILURE TO PAY 

There are penalties for both failure to file your taxes and a failure to pay your taxes. One is harsher than the other. 

Failure to pay taxes means you get to pay an extra 0.5% on the unpaid balance of your taxes.

Failure to file has a penalty of 4.5% on the unpaid balance.

The upper limit on both is when interest reaches 25% of the amount due.

On top of that, you accrue interest on your tax balance.

If you filed for an extension and then didn’t file by October 15, you will get hit with a failure to file. If you filed for an extension, filed your return on October 15, and then didn’t pay anything, that half-percent penalty may be raised. If you were able to pay a little bit towards your taxes on July 15, you might have saved yourself some interest at least, but that will be rapidly eaten up by the failure to file penalty.

Did You Get a Premium Tax Credit?

The premium tax credit is to help pay for insurance. When you file for one, you need to file and pay as soon as possible, or you may lose it. You don’t have as much time as you do to file to get a tax refund. 

What If You Are Due a Refund?

If you’re due a refund, that's great. It means there is no failure to file a penalty because it doesn't apply in this case. The IRS is happy to keep your money if you don't want it back. Just don't file.

If, however, you do want your refund, you need to file your return. You won’t earn any added interest on your refund by letting the IRS keep it. And if you don’t file within three years, you won’t get that refund back at all.

What If You Owe Taxes?

If you filed for an extension in July then missed filing by October 15, not only will interest continue to accrue on your tax debt, you will get hit with a failure to file penalty. As mentioned above, that one is more expensive than a failure to pay. 

The best thing to do is to file as soon as possible, although that won't eliminate the penalty. If you can pay something, anything, toward your tax debt, so much the better. At the least, you can reduce the tax burden, which then accrues less interest and penalties.

Until you pay off the balance, interest, and penalties will continue to accrue. If you know you cannot pay your entire tax debt at once, the IRS offers payment agreements, both short and long-term. Contact the IRS as soon as possible to get one arranged. 

You can take as little as 120 days to pay off the balance or as much as 72 months (5 years). Just remember that as long as there is a balance pending, it will continue to accrue interest and penalties. The failure to file penalty maxes out at 25% of your balance, but the lower you can make your balance, the better.

There are eligibility requirements, and you must be completely current on past tax return filings and payment.

If you know you cannot possibly pay the entire amount, you may be able to arrange an Offer in Compromise, which allows you to pay a lower amount. 

Special Circumstances

Believe it or not, the IRS does realize doing your taxes in a war zone or natural disaster is pretty impossible.

If you are a member of the military who has served or is currently serving in a combat zone, you get an additional extension of at least 180 days to file and pay taxes. Support personnel in combat zones or a contingency operation in support of the military may also be eligible for an added 180 days or more.

2020 has seen its share of disasters. Those in disaster situations from the California wildfires to the hurricanes in Louisiana qualify for more time to file and pay.

If you are out of the country at tax time, you may qualify and get two to four additional months to file. 

2020 TAX YEAR

So you don’t find yourself in this spot in April 2021, start planning now. The federal government is unlikely to delay tax day again, so you need to get your next round of tax files ready within the next six months. That sounds like a lot, but, you know, we have HallowThanksMas to get through, so the rest of 2020 will fly by (we hope). 

If you haven’t been setting aside documents and money, start now. Find all the documents you may need to file next Spring and put them in a folder or scan them into your computer. Then check your withholding at work to make sure it’s enough. If you work for yourself, keep up with your estimated tax payments.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 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.

 

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HOW TO GET RID OF A BACK TAX FEDERAL LIEN

Settle your tax debt, tax lien help, past-due tax preparation

Paying your tax debt - in full - is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt.

When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exist.

Discharge of property

A "discharge" removes the lien from specific property. There are several Internal Revenue Code (IRC) provisions that determine eligibility. For more information, refer to Publication 783, Instructions on How to Apply for Certificate of Discharge From Federal Tax Lien PDF and the video Selling or Refinancing when there is an IRS Lien.

Subordination

"Subordination" does not remove the lien, but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. To determine eligibility, refer to Publication 784, Instructions on How to Apply for a Certificate of Subordination of Federal Tax Lien PDF and the video Selling or Refinancing when there is an IRS Lien.

Withdrawal

A "withdrawal" removes the public Notice of Federal Tax Lien and assures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due. For eligibility, refer to Form 12277, Application for the Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (Internal Revenue Code Section 6323(j)) PDF and the video Lien Notice Withdrawal.

Two additional Withdrawal options resulted from the Commissioner’s 2011 Fresh Start initiative.

One option may allow withdrawal of your Notice of Federal Tax Lien after the lien’s release. General eligibility includes:

Your tax liability has been satisfied and your lien has been released; and also:

You are in compliance for the past three years in filing - all individual returns, business returns, and information returns;

You are current on your estimated tax payments and federal tax deposits, as applicable.

The other option may allow withdrawal of your Notice of Federal Tax Lien if you have entered in or converted your regular installment agreement to a Direct Debit installment agreement. General eligibility includes:

You are a qualifying taxpayer (i.e. individuals, businesses with income tax liability only, and out of business entities with any type of tax debt)

You owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien)

Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier

You are in full compliance with other filing and payment requirements

You have made three consecutive direct debit payments

You can’t have defaulted on your current, or any previous, Direct Debit Installment agreement.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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www.advancetaxrelief.com

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CALL (713)300-3965

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

 

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#TaxLien

HOW A TAX LIEN AFFECTS YOU WHEN YOU OWE BACK TAXES

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property, and financial assets. A federal tax lien exists after:

The IRS:

Puts your balance due on the books (assesses your liability);

Sends you a bill that explains how much you owe (Notice and Demand for Payment); and

You: Neglect or refuse to fully pay the debt in time.

Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.

Credit — Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.

Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.

Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

Avoid a Lien

You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.

Lien vs. Levy

A lien is not a levy. A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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CALL (713)300-3965

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

 

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#TaxLien

WHAT TO DO WHEN YOU FILE YOUR BACK TAXES AND CAN’T PAY?

Each year, about 30 million taxpayers file a return with a balance due.

Most pay with the return.  But what if a taxpayer cannot pay?  What are their options?

Here are the options and a few tips:

Make sure you file on time: not filing because you owe is a major mistake.   Within 5 months, you will add 25% to your tax bill due to the failure to file penalty.  Don’t make things worse- file on time.

You have payment options: you can set up a payment plan with the IRS or get an extension to pay up to 120 days.  IRS interest rates are fairly low (for example, 5% interest rate as of the first quarter of 2020).

You can’t avoid a late payment penalty by filing an extension: if a taxpayer files an extension and does not pay 90% of their final tax bill, they will get a failure to pay penalty of 0.5% per month when they file before the extended due date.  This penalty is not a lot, but it can add up over time.

If you have a hardship, there are other options: if a taxpayer is experiencing a hardship that is affecting their income or ability to meet necessary living expenses, like unemployment, there are other options such a payment deferral (not collectible status) or an offer in compromise that will settle the tax debt.   Beware that the taxpayer must qualify to receive these hardship relief provisions.

Act quickly to avoid a federal tax lien filing: if a taxpayer ignores the IRS notices for too long and owes more than $10,000, they can expect a federal tax lien to be filed.  If they obtain currently not collectible status and owe more than $10,000, the IRS will also likely file a tax lien.

If this is your first time owing, request first-time penalty abatement relief: if you have to pay by an IRS payment plan and you did not have a penalty in the three years prior to that year (except for the estimated tax penalty), you can get the penalties waived.  Taxpayers should request penalty abatement at the end of the payment plan to maximize the amount abated.

Under no conditions should you file late, not file at all, or not take action to request a payment option or collection alternative with the IRS.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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WHAT IS THE IRS FRESH START INITIATIVE?

Back Tax Debt, Tax Liens, Offer In Compromise, Tax Returns 

Many taxpayers who owe back taxes to the IRS still hear about the IRS “Fresh Start” Initiative on the airwaves.   Many advertisements use the Fresh Start Initiative as an opportunity to settle back taxes with the IRS.

The Fresh Start Initiative began as a series of significant IRS collection policy changes in 2011 and 2012 to help taxpayers who were struggling to pay their back taxes owed.  There were two major announcements of changes made to IRS collection policy.  All of these policy changes are still in effect today.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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2011:  Relaxing lien filing criteria and installment agreement terms

In 2011, the IRS made several changes that provided relief from federal tax liens and allowed more taxpayers to get favorable payment terms with the IRS.

Relaxed lien-filing criteria: the IRS reduced the threshold to file a tax lien for taxpayers who were not in a qualifying installment agreement and owed the IRS.  The threshold increased from $5,000 to $10,000.

Ability to request lien withdrawal: taxpayers were given the opportunity to have their tax lien withdrawn if they met certain criteria.

Expansion of payment terms: the IRS expanded its streamlined payment plans by increasing the streamlined installment agreement threshold from $25,000 to $50,000. The IRS also increased the time to pay the balance owed from 60 to 72 months.  Streamlined installment agreements have always allowed taxpayers to easily obtain an installment agreement, get more favorable payment terms, and importantly – avoid the filing of a federal tax lien.   Taxpayers who obtained a streamlined installment agreement were now able to avoid a tax lien if they paid by direct debit on balances between $25,000 and $50,000.

In 2011, the IRS also emphasized to its employees that taxpayers who owed any amount should be able to pay over 6-years on their current budget.  Previously, IRS collection agents tried to maximize the monthly payments made by taxpayers by limiting discretionary monthly expenses paid in determining their monthly payment plan amount.  Fresh Start made it clear:  if a taxpayer can pay within 6-years (or the collection statute, whichever is shorter), the IRS can allow for a taxpayer’s discretionary expenses (the IRS calls these expenses “conditional” expenses – that is, taxpayers can have them on the condition that they pay within 6 years).

2012:  Changes to the Offer in Compromise Program

In 2012, the IRS made more changes.  Most of these changes allowed more taxpayers access to the Offer in Compromise (OIC) program.

The IRS made the OIC program more attractive because it allowed additional expenses and reduced the assets that needed to be included in an OIC.  The most significant change was to reduce the amount of the offer for those who qualified for an OIC.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 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.

 

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HOW TO FIX YOUR BACK TAX RETURN PROBLEMS

Per IRS estimates, more than 7.5 million taxpayers do not file a required return each year. This estimate doesn’t include taxpayers who don’t receive information statements, such as small-business owners. Add to that the growing number of taxpayers who still must file returns to continue receiving advance payments of the premium tax credit to pay for their health insurance. In all, there are likely more than 12 million people who must file back tax returns each year.

If you have unfiled returns, what does it take to get back in good standing with the IRS?   There are five actions you should take to get back into the good graces of the IRS and limit the damage due to the unfiled returns:

IRS Enforcement Impact:  determine IRS delinquent return enforcement history and necessary actions (if the IRS has started or completed a delinquent return investigation, you will request time to file or take actions to reverse prior IRS actions)

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Years to file:  determine which years you are required to file (stay tuned, it may be less than you think)

Back records:  gather the documents needed to file an accurate return (hint:  the IRS can help you here)

Special filing procedures:  follow any special filing procedures to file an accurate return with the IRS and your State Department of Revenue (if applicable) (careful:  you may have to use special filing procedures)

Limit the damages:  seek to lower penalties and get into a collection alternative if you owe can cannot pay (help with penalties are found here and collection alternative here)

The first step:  Contacting the IRS

You’re committed to getting back on track with all your tax filings.  Your scary first step is contacting the IRS to see what the IRS is doing on your account.  Have they begun a delinquent return investigation?  Who is your case assigned to (a Service Center who will send notices or a local Revenue Officer who will visit you and ask why you have not filed)?   Has the IRS already filed a return for you (called a substitute for return or “SFR”).

These questions will need answers.   By the way, when you are in contact with the IRS, order your Wage and Income Transcripts for the years you must file.  The IRS will send your W-2s and 1099s under your SSN for each year (remember to order your spouse’s too if you are filing married filing jointly).

If the IRS has already assessed tax (i.e. filed an SFR or if you had a balance due), ask for more time to file the returns.   The IRS will usually grant you a “stay” up to 21 days to file the returns.

Next: Determine how many years you must file

The most common mistake made by people who have not filed in a very long time is to file too far back.  How many years back are you required to be filed to be good standing?

The answer lies in a little-known IRS rule.

IRS Policy Statement 5-133, Delinquent Returns – Enforcement of Filing Requirements, provides a general rule that taxpayers must file six years of back tax returns to be in good standing with the IRS. The policy also states that IRS management would have to approve any deviation from that rule.

Sometimes, IRS managers will require tax returns from even further back than six years, depending on:

The degree of flagrancy

A history of noncompliance

The impact on future voluntary compliance

The existence of income from illegal sources

Whether there is minimal or no tax due

IRS costs to secure the return, versus anticipated tax revenue

When you contact the IRS, you can ask them how many returns must be filed – if they say more than 6 years, ask them why and remind them of Policy Statement 5-133.

Back to enforcement, the IRS is most likely to divert from the Policy Statement if the IRS has assigned a local Revenue Officer to enforce the filing of the back returns, there is a large potential liability (i.e. asset sales, income without withholding, no estimated tax payments), or if there is a business involved.

Next: File accurate returns to the right place at the IRS

One important note:  the IRS does not pay old refunds.  You can recoup refunds only for returns filed within three years of the due date of the return. Refunds for prior years are lost and can’t offset any balances due.

It’s essential to prepare an accurate return that matches IRS records. With back tax returns, you should trace your income history.   Without this match, the IRS can question the accuracy of your client’s return.   Also, if you made estimated tax payments that can be credited to any balances owed, get your account transcripts to verify the amounts your client paid.

You also must file the return with the proper IRS unit.  Returns without prior enforcement go to the regular filing location.   Returns that have SFR activity must be filed with the IRS SFR Unit who will put the return through special processing before accepting.  Sending to the wrong unit can delay processing for several months.

Last Step:  Address penalties and any balances owed

There can be substantial penalties on balance-due returns:

Failure to file penalty (5 percent per month, max of 25 percent).

Failure to pay penalty (0.5 percent per month, max of 25 percent); combined with failure to file penalty, together they can reach a maximum of 47.5 percent.

Fraudulent failure to file penalties triple the normal failure to file penalty – increasing the maximum penalty from 25 percent to 75 percent.

You should request penalty abatement if you qualify.  With most late filed tax returns, you can request that the IRS not assert applicable failure to file or pay penalties on balance-due returns. There are two reasons primarily used for non-assertion or abatement:  first-time abatement for the first year if you have a clean compliance history in the prior three years or reasonable cause arguments for late filing and payment.

Remember, if you cannot pay, there are several types of agreements, depending on your circumstances.   If you don’t address the outstanding amounts owed and establish some type of payment plan or collection alternative with the IRS, a second wave of IRS enforcement will follow:  the IRS attempting to collect on the debt owed.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 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.

 

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes

THE BEST PRACTICES FOR FILING PAST-DUE BACK TAX RETURNS

A taxpayer should use these best practices to resolve a late filed return:

Use IRS wage and income transcripts to file an accurate return.  Late filed prior year returns are closely screened by IRS tax examiners before acceptance to make sure that all income items reported to the IRS (Forms W-2 and 1099) are included on the return.  Taxpayers can pre-screen their returns for accuracy by obtaining their IRS wage and income transcripts directly from the IRS and confirming these items were reported accurately on their return.  This will speed up the acceptance of the return as well as reduce the likelihood of an audit or discrepancy notice.

Monitor processing and acceptance. The IRS can take 4-6 months to accept a return as filed – especially if the return is paper filed or if the IRS has current or prior SFR enforcement activity.  Taxpayers should periodically contact the IRS (i.e. every month) to check on the status of the filed return.

Request a collection hold to allow to process a return when an SFR has been filed.    Taxpayers with an SFR filing will have a balance owed to the IRS.  The taxpayer should request a collection hold to avoid collection enforcement during the time period in which the IRS is reviewing and determining acceptance of the late return.

Only the current and past six years are

 required to be filing compliant.  The IRS usually only requests individual taxpayers to file the current and six prior years’ returns to be compliant.  However, the taxpayer should file any prior tax year in which the IRS filed an SFR.   Taxes owed from an SFR can usually be lowered by filing an original return that claims additional deductions and credits not allowed in an SFR.  Taxpayers who want to know how many years the IRS requires should ask the IRS.  If the IRS requests more than the prior six years, the taxpayer should confirm that the IRS has made a deviation from their normal six-year policy.   Deviations from the six-year policy rule require an IRS manager approval.

Advance Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

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

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WHY ARE YOU BEING AUDITED BY THE IRS?

Here are some common triggers:

Failure to report income

A large number of itemized deductions (that may look excessive)

When business deductions are claimed as personal deductions and vice versa

When your income doesn’t appear to support your lifestyle

Unreported foreign accounts

Claiming children who aren’t the taxpayer’s dependents

Remember, your tax return must accurately reflect your income during the year. If there’s anything about your tax return that gives the appearance you’re not accurately reporting your income or deductions, you could be subject to audit.

It’s important to remember that not all of these triggers may be intentional. Filing taxes is a complicated process and it’s easy to make a mistake or two that could lead to a tax audit. Also know that audits may happen at random. The IRS randomly selects a small portion of taxpayers for audit each year.

Advance Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

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

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RESPONDING TO YOUR IRS CP2000 NOTICE

Tax Debt Relief, CP2000 Notice, Tax Relief Help

An IRS CP2000 notice is issued by the IRS when they receive information from third parties that does not match the information you provided on your return. For example, the income you listed on your return might not match the income on your W-2 that was provided to the IRS by your employer.

The IRS issues a CP2000 notice to reflect the changes they propose to make to your return. The notice provides you with a brief summary of the changes, as well as for instructions on what to do if you disagree. One of the most common reasons that taxpayers receive an IRS CP2000 notice is because they omitted income information on their tax return, including omitted side income, rental income, or investment dividends.

Understanding Your CP2000 Notice

The IRS CP2000 is not a bill. In fact, the notice might even show that you’re entitled to a larger refund than you expected. However, the IRS might determine that you still have some owed taxes, and you’ll be given a deadline by which to pay them.

The IRS determines the changes that need to be made to your return by comparing all of the income, payments, credits, and deductions you reported on your tax return with items reported to the IRS by employers, banks, businesses, and other players. The IRS will then make corrections if both sets of data do not match.

The IRS CP2000 will give you an opportunity to examine the changes the IRS is proposing and to either dispute the proposed changes or agree with them.

How to Respond to a CP2000 Notice

Generally, it takes the IRS at least 12 months to review a tax return in conjunction with other information reported on behalf of the Taxpayer. Therefore, the CP2000 notice will usually be for a prior-year tax return.

Once you receive an IRS CP2000 notice, you will need to look at the proposed changes and respond before the due date that’s indicated on the notice. If you do not respond to the notice by the due date, the IRS will assess the balances they proposed and issue a final bill that reflects the changes.

You should always read and review all correspondence you receive from the IRS so that you are able to respond in a timely manner. The key to resolving the issue quickly is reading the notice and making sure a response is tendered by the due date on the notice.

Advance Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

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

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I RECEIVED AN IRS NOTICE, WHAT SHOULD I DO?

As a taxpayer, one of the most frightening things you could receive in the mail is an IRS letter. Depending on the notice that you receive from the IRS, it can cause anxiety and fear, and you may even feel unsure about what your next move will be or what tax solutions may be available to you. The IRS does have tools available that taxpayers can utilize for IRS tax help, even if they received a notice that makes it unclear what their next steps would be. Below are some of the most common collection notices sent out to taxpayers every year. 

CP501/502

If you’ve received a CP501 notice, it means that the IRS is attempting to notify you of a past balance due. The IRS will request that you take action in order to resolve your outstanding balance. A CP502 notice also doubles as a reminder that the IRS sends about your tax balance. Typically, each notice indicates the interest and penalties that have accrued in addition to what you owe to the IRS. 

If you receive these types of notices, the IRS is letting you know of what the current balance, including interest and penalties, is owed. Once you confirm that the balance is accurate, you can either pay the balance for the tax year in question or contact the IRS to get set up on a payment plan. 

CP504

A CP504 notice is a secondary notice that the IRS will send to alert you of your tax debt if you owe a tax balance. This notice is to also notify you that they’re preparing to start collection action and to seize any tax refund you may have received. The IRS will continue their collection action against a taxpayer until their balance is paid in full. 

To avoid the IRS sending you into collections, it is important to stay compliant. You can do this by paying off your balance in full with the IRS or asking to be placed on a payment plan. It is also paramount that you continue to monitor your mail to ensure that you don’t receive any further notices from the IRS.

LT11/CP90

An LT11 is a notice to remind a taxpayer that they have an overdue payment for overdue taxes.

The IRS will send a CP90 notice if they have attempted to reach out to a taxpayer multiple times about their tax balance and have yet to receive a response. The letter states that the IRS has the intent to seize a taxpayer’s property or rights to their property if they fail to resolve their outstanding balance. 

Both these notices are a warning that the IRS will begin to take collection action against the taxpayer and it is up to the taxpayer to either continue to stay in collections with the IRS or settle their debt and get compliant. At this point in time, it is vital that you attempt to rectify the situation and get help with IRS debt by contacting them immediately to resolve your liability in addition to any interest and penalties that you have accrued.

Regardless of what notice you have received, it is important to review the notice and resolve the situation if needed. The IRS typically sends written communication to taxpayers to notify them of their tax balance and to reconcile their liability as soon as possible. If you need tax help and don’t know the first step to resolving your balance with the IRS, a tax relief company may be your best bet. A tax relief company will work with the IRS on your behalf to address your tax issues so you can be compliant moving forward.    

Advance Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

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

#UnfiledTaxReturns #BackTaxes #TaxPreparation #SmallBusinessTaxHelp #TaxRelief #TaxResolution #TaxDebtHelp #TaxAttorneys