STEPS TO RESOLVE A TAX DEBT AND POSSIBLE SETTLE YOUR TAXES

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.

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.

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Fix any immediate noncompliance issues:   taxpayers cannot proceed to obtaining 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.  

Evaluate best collection alternative 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.

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).

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.

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.

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 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns 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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USE THESE PRACTICES TO FILE YOUR LATE 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.

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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's approval.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns 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.

#FreshStartInitiative

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WHAT IS UNFILED PAST-DUE TAX RETURNS OR BACK TAX DEBT RETURNS?

Tax Preparation, Tax Debt Returns, Back Tax Returns

Taxpayers who do not file a required tax return can face IRS delinquent return enforcement actions.  These actions can include requests to file and other more serious enforcement activity such as filing a return for the taxpayer and criminal investigations.   

Taxpayers can face serious penalties for late filing, including a 5% per month late filing penalty (up to 25%).  In order to get back into filing compliance, the taxpayer should follow IRS procedures and utilize several best practices to resolve their late filing issue.

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

 

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What do you need to know about IRS enforcement of unfiled past-due returns?

A few important items about unfiled and past-due tax returns:

Taxpayers with a filing requirement need to file a timely, accurate annual tax return:  non-filing can cause serious IRS enforcement action, including both civil and criminal investigations.  

The penalties for late filing can be substantial but can be abated under first-time abatement or for reasonable cause:  for individual returns, late filing penalties only apply if you owe additional tax.  However, the penalties can be significant- 5% per month, up to 25%.  Fraudulent failure to file is 15% per month, up to 75%.  

Taxpayers can request relief for the first year of late filing penalties if they have a clean compliance history for the prior three years using the IRS’ first-time abatement waiver.  If the taxpayer does not qualify for first-time abatement, they can request relief if they can show that they had unforeseen circumstances outside of their control that caused the late filing (reasonable cause argument).

For individuals, the IRS usually only requires that you file the current and last six tax years to be filing compliant:  IRS Policy Statement 5-133 only requires individual taxpayers to file the past six years of returns.  The IRS can deviate from this policy if they believe the taxpayer will owe significant amounts in years prior to the last six tax years, if the taxpayer is a business, or if the taxpayer has a history of significant noncompliance.  Normally, deviations to the policy originate when the taxpayer is assigned to IRS field collection (i.e. a revenue officer).

IRS transcripts can help you file an accurate prior year return:  the IRS can provide you wage and income information by year (called an IRS wage and income transcript) as well as an account transcript to show any payments or credits.

If you do not file a return, the IRS can file one for you – and you will owe taxes, penalties, and interest:  this return is called a “substitute for return” or “SFR.”   The IRS will prepare and process a balance due return that only includes the taxpayer’s income and withholdings – no deductions, preferred filing status, or credits are allowed.  Taxpayers can use special procedures to file an original return to replace the SFR return.

The IRS can freeze future refunds:  taxpayers who do not file a required return can face IRS refund freezes on returns filed in future years.

Late filers may have to use special IRS procedures to file their returns:   some procedures include matching their return to IRS income records and filing their return directly with the enforcement function (Collection, audit, etc.) at the IRS.

Late filing is enforced by IRS Collection employees:   these investigations are called taxpayer delinquency investigations or return delinquency investigations.  IRS Collection employees (revenue officers and Automated Collection staff) are responsible for pursuing non-filers.   However, all IRS enforcement personnel (audit, collection, etc.) can pursue enforcement against a non-filer.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns 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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FIND OUT IF YOU QUALIFY FOR THE EARNED INCOME TAX CREDIT

Earned Income Tax Credit

Tax credits are like “found money” that turns up when you fill out your tax form. Unlike deductions, credits are awarded dollar for dollar. In other words, if you are eligible for a $300 tax credit, you get $300 off your tax bill—kind of like a sale at the grocery store. One particular tax credit is available for low- to moderate-income individuals and families who need the tax break the most.

How Does a Tax Credit Work?

A tax credit works like any credit - it reduces the amount of taxes you owe. A tax credit can even result in a tax refund. 

Here is an example of how a tax credit works:

Say you have a tax bill of $3,000. If you can claim a $500 credit, that amount comes directly off the $3,000, lowering your tax bill to $2,500.

$3,000 - $500 = $2,500

A tax credit does not, however, affect your gross income or adjusted gross income. The credit is strictly applied to your tax bill once it is calculated.

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

 

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CALL (713)300-3965

What Is the EITC?

The Earned Income Tax Credit was passed to keep families out of poverty while also encouraging people to find and maintain work. 

The EITC is available for eligible low- to moderate-income individuals. You must have earned income and meet the requirements without a child who qualifies. Those without a Social Security Number and those who are a qualifying child of another person are not eligible.

If you file married, filing separately, or don't file a tax return at all, you do not qualify. Finally, you cannot file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Income Credit. If you do, you will be ineligible for the credit.

If you are in the military or the clergy or have disability income or children with disabilities, there are special rules for the EITC in these cases, which we go into below.

EITC Benefits for 2021

For the 2021 tax year, the one we are entering now, the EITC ranges from $543 to $6,728 depending on your filing status and the number of children you can claim. Keep this in mind for when you file your taxes in the Spring of 2022.

If you were eligible in the three previous tax years for this credit but did not claim it, the IRS says to let it know so you can receive the money for those credits as well. For 2020, the EITC was $538 to $6,660. If you have not yet filed your 2020 taxes and you qualify, be sure to claim it on April 15 this year.

Here are the maximum credit limits for 2021 regardless of filing status:

With no qualifying children, the max credit is $543.

With one qualifying child, the max credit is $3,618.

With two qualifying children, the max credit is $5,980.

With three or more qualifying children, the max credit is $6,728.

There are income limits on qualifying for the EITC.

Who Qualifies for the EITC?

Single persons without children can claim the EITC, but they must be at least 25 years old and less than 65 years old at the end of the tax year if they do not have a qualifying child. The person must have lived in the US for more than six months and not be qualified as a dependent child on another's tax return.

During the tax year in question, you must have a total earned income from your job or self-employment of at least $1.00. Any investment income must be $3,650 or less for the year.

If you meet the income requirements, you can then claim qualified children if you have them (if not, you are still eligible for a credit, just a smaller one). Each qualifying child up to three increases the amount of the EITC. 

A qualifying child is:

Your son, daughter, adopted child, stepchild, foster child, or grandchild. 

Your brother, sister, half-brother, or half-sister.

Your stepbrother, stepsister, or any of their children (meaning your niece or nephew).

Under the age of 19 at the end of the tax year and younger than you or your spouse when filing jointly, or under 24 if a full-time student.

Any age if the child is totally and permanently disabled.

Living with you or your spouse in the US for more than six months of the tax year.

Each child must have a Social Security Number, and you must supply the birth date.

You must file as single, head of household, or widowed, or married filing jointly. The credit parameters are based on your adjusted gross income. Your AGI is your total income subject to tax minus specific deductions.

Filing single, head of household, or widowed without qualifying children, your 2021 adjusted gross income maximum for the credit is $15,980. To see the limits for 2020, look here. The amounts are slightly lower.

With one qualifying child, your max AGI is $42,158.

With two qualifying children, your max AGI is $47,915.

With three or more qualifying children, your max AGI is $51,464.

If you file married, filing jointly, and have no qualifying children, your max AGI is $21.920.

With one qualifying child, your max AGI is $48,108.

With two qualifying children, your max AGI is $53,865.

With three or more qualifying children, your max AGI is $57,414.

Like so much else in 2020, changes have been made to account for COVID-19.

Special Rules Due to Coronavirus

Because of the potential for lost jobs and income in 2020 due to COVID-19, the IRS allows you to use either your 2019 or your 2020 income to calculate your EITC for your 2020 taxes. You can use whichever income amount provides the larger credit. If you qualify for the Child Tax Credit, this change applies to that, too.

How to Claim the EITC

To claim the EITC on your 2021 taxes (or your 2020 taxes if you have yet to file them), file Form 1040, US Individual Tax Return, or Form 1040 SR, US Tax Return for Seniors. If you have one or more qualifying children, also file Schedule EIC for Form 1040 or 1040 SR.

If you wish to apply for your EITC for any of the three previous tax years, follow these instructions for claiming the EITC for prior years 

The Earned Income Tax Credit is a boon to lower-income individuals and families struggling to pay the bills. Whatever your final tax bill, the EITC lowers it. What’s not to like about a lower tax bill? You might even get a refund if the credit is more than the taxes withheld. 

The EITC and other credits are available to eligible taxpayers. Remember to look for them as you prepare your taxes. If you have questions, contact Advance Tax Relief so we can help you scope out the credits you deserve.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns 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.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

UNDERSTANDING YOUR IRS TAX DEBT NOTICE

The IRS has automated notice streams that provide a series of notices that are used in most of the major compliance enforcement activities. These notices provide for the sequence and timing of enforcement actions. Some notices provide appeal rights that may be critical to resolving the tax issue.

IRS BACK TAX AUDITS

Audit notice stream: it begins with a notification to the taxpayer of an audit and concludes with the tax being assessed (if any). The notice stream provides for critical appeal rights when the IRS auditor proposes an adjustment to the return (called a 30-day letter). Here is the normal notice stream for audits:

Audit notification letter – Letter 566/566-S or Notice CP 75 (mail audits), Letter 2205/3253 (office/field audits): this letter notifies the taxpayer of the years and forms under audit and the audit issues.

30-day letter – Letter 525: this letter provides the taxpayer 30-days to appeal the determination with the IRS Independent Office of Appeals.

90-day letter (Statutory Notice of Deficiency) – Letter 3219: this letter starts the taxpayer’s 90-day deadline to appeal the determination with the US Tax Court.

Tax assessment notice – Letter CP22E: this letter notifies the taxpayer that the tax, penalties, and interest have been assessed.

No change letter – Letter 590: if the audit concludes with the IRS accepting the return as filed, the taxpayer will receive a no-change letter indicating the conclusion of the audit.

CP2000 Underreporter notice stream: underreporter inquiries often begin with the CP2000 notice. However, in certain circumstances, this notice stream can begin with a CP2501 (for example, high underreporting from substantial stock sales or income from a partnership/S corporation). Here is the normal notice stream for underreporter inquiries:

Underreporter inquiry and proposed adjustment notice – Letter CP2000: this notice provides the analysis of the IRS matching of information returns (Forms W-2, 1099, etc.) with your return and shows the omitted items. The notice proposes additional taxes (and potentially penalties) and provides the taxpayer 30-days to respond. If the taxpayer does not respond, this letter serves as the taxpayer’s 30-day letter.

Letter considering taxpayer’s response – Letter CP2000 (recomputed) or Letter 2625/2626/2627/1802C: recomputes tax and/or penalties based on the taxpayer’s response to the original CP2000 notice. Taxpayer has 30-days to respond. This letter also serves as a 30-day letter (i.e. 30-days to request an appeal).

90-day letter (Statutory Notice of Deficiency) – Letter CP 3219: this letter starts the taxpayer’s 90-day deadline to appeal the determination with the US Tax Court.

No change letter – Letter CP 2005: if the audit concludes with the IRS accepting the return as filed, the taxpayer will receive a no-change letter indicating the conclusion of the underreporter inquiry.

IRS COLLECTIONS

Collection notice stream: the collection notice stream starts with the assessment of the tax (CP 14 for a filed return with a balance owed) and concludes with a Final Notice of Intent to Levy (usually IRS notice LT11 or L1058). The collection notice stream is usually 5 IRS notices, but the IRS can omit the 2nd and 3rd notice if the taxpayer has other issues (i.e. owes for other years, has unfiled returns). The full 5 notice collection notice stream for a balance due filer who does not pay:

Balance due notice – Letter CP 14: notifies the taxpayer that the tax has been assessed and the balance owed.

Balance due – 1st reminder notice – Letter CP 501: payment has not been received and the taxpayer is requested to pay.

Balance due – 2nd reminder notice – Letter CP 503: payment has not been received and the taxpayer is again requested to pay.

Intent to levy notice – Letter CP 504: payment has not been received and the taxpayer is again requested to pay.

Final notice of intent to levy – Letter LT11 or L1058: the taxpayer is notified that the IRS will garnish wages or levy other sources of income/assets if the taxpayer does not pay or enter into a collection alternative. This is usually the last notice before a levy is issued. It also provides the taxpayer an opportunity for a Collection Due Process hearing to appeal any collection alternative disagreement or to contest the tax and/or penalties assessed.

Notice of Federal Tax Lien (Letter 3172) and Passport Restrictions (CP 508): IRS tax lien filings usually occur if the taxpayer does not respond during the collection notice stream. Also, if the taxpayer does not enter into an agreement to get in good standing and owes more than $53,000 (adjusted annually), the IRS can start passport restrictions by certifying the amount owed as “seriously delinquent tax debt.” This certification notifies the State Department who can restrict the use of the taxpayer’s passport for travel.

UNFILED TAX RETURNS

Delinquent return notice stream: if a taxpayer does not file a required return, the IRS may request the taxpayer to file. IF the taxpayer does not file, the IRS can proceed with a delinquent return investigation and ultimately file a return for the taxpayer if the taxpayer refuses to file (called a substitute for return). The typical delinquent return notice stream:

Request for return – Letter CP 59: after the return due date has passed, the IRS may send a request to file. If you do not file or respond with a reason that you are not required to file (or have filed already), the IRS may proceed to the next letter and a delinquent return investigation.

Request for return – 2nd reminder notice (optional) – Letter CP 516: this optional letter may be sent as another reminder to file.

Request for return – Final notice – Letter CP 518: this is a final warning before the IRS proceeds to file a return for you (called a substitute for return).

Substitute for return proposed assessment – Letter 2566: this letter proposes additional taxes and penalties owed as a result of the IRS filing a return for the taxpayer. The taxpayer can appeal the decision within 30 days.

90-day letter (Statutory Notice of Deficiency) – Letter CP 3219: this letter is your final letter to appeal the substitute for return filing before the tax is assessed. Taxpayers must appeal to the US Tax Court to contest the return filing.

Tax assessed – Letter CP 22: the IRS has assessed the tax, penalties, and interest due from the SFR.

Taxpayers can file an original return at any time during this process and the delinquent return investigation notices will terminate.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company that 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 as one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation

#TaxAttorneys

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THE IRS STEPPING UP EFFORTS TO PROSECUTE TAX FRAUD - 2021

Over the past several years, the IRS has put tax fraud investigations on the back burner.  Statistics show a drop in criminal investigations and prosecutions in the past several years:

Recent developments at the IRS show that the days of ignoring tax fraud are over.  In March 2020, the IRS declared that prosecuting tax fraud is now a high priority to the IRS. The agency established its Fraud Enforcement Office  (FEO) – a new department at the IRS focused on seeking out tax cheats and abusive tax scheme promoters.  

The FEO is the next big step by the IRS to increase the criminal prosecution of tax fraudsters.  Most IRS enforcement actions originate form of the Small Business/Self-employed division who has both automated and local enforcement personnel focusing on audits, collection, and non-filing enforcement. SB/SE is currently led by the former IRS Criminal Investigation deputy chief, emphasizing the IRS priority to chase fraud.

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

 

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***TAXPAYER OF INTEREST TO THE IRS FRAUD UNIT 

The new emphasis on fraud is not a concern to most taxpayers who are in good standing with the IRS and their taxes.  However, the FEO has identified a focus on certain noncompliance groups of taxpayers involved in certain questionable transactions as taxpayers that are clearly on their early radar.   For example, the IRS FEO has picked up the focus on certain targeted taxpayers, such as schemes related to syndicated conservation easements and micro-captive insurance arrangements.  But most taxpayers are not involved in these traditional high wealth-related transactions.

The FEO has also identified more mainstream taxpayers and transactions that they are focusing on.  These include:

High wealth taxpayers:   The IRS has always audited high-wealth taxpayers more than other taxpayers, even during periods when the IRS’ audit resources were limited.  Now, the IRS is looking closely at the rich taxpayers who have other businesses, like a related S corporation.  Time will tell if the IRS finds more fraud patterns in these situations.

Non-filers:  after years of not pursuing non-filers, both for civil and criminal enforcement, the IRS has refocused on the taxpayer who fails to file a required return.  Several studies show taxpayers deliberating not filing a return.   One study showed significant tax revenue lost, and potential tax fraud involved, for taxpayers who filed an extension to file (indicating they knew they needed to file) but never filed the required return.  Non-filers beware- you are a target.

International taxpayers:  years of asking taxpayers to voluntarily come back into the tax system and file all required returns and report foreign bank accounts are over.  International taxpayers now face scrutiny and possible fraud investigations when they come back into the system or make a voluntary disclosure to the IRS.  The moral of this story:  international taxpayers should see their tax attorney before filing back returns or reporting past non-compliance to the IRS.

Questionable refunds:  the IRS is focused on tax preparers and taxpayers involved in fraudulent methods to obtain refunds such as tax identity theft and earned income tax credit fraud.  This has been an ongoing effort – with no end in sight.

Offer in compromise :  the IRS recently put the OIC again on its “dirty dozen” tax scams  list.   The IRS will go after taxpayers and their representatives who make false financial disclosures in an attempt to settle their tax liability.

Employers not paying required employment taxes:  non-payment of withheld federal payroll taxes has always been priority #1 for IRS Collection agents.  The IRS is seeking more criminal prosecution of taxpayers who repeatedly withhold from their employees and evade payment of the taxes to the IRS.  The IRS has also expanded their fraud investigations in this area to taxpayers who do not file required payroll returns.

Although IRS resources and compliance enforcement may be at an all-time low, the stakes are much higher for noncompliance.  The IRS is now clearly focused on pursuing taxpayers for fraud- and this means the ultimate cost of noncompliance to the taxpayer can be severe.  The days of the IRS looking the other way on fraud is over – agents will not be kinder and gentler if they decide to pursue fraud on a taxpayer.

In most cases, the taxpayer will not know if the IRS is pursuing fraud on a taxpayer.  However, if you fall into one of the targeted taxpayers or transactions, or you are willfully attempting to evade reporting and paying your taxes, you should stand up and take notice – and get back into compliance before the IRS pursues you for tax fraud.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company that 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 as one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief