IRS Tax Help Blog

If you are currently being hounded by the IRS with phone calls and threatening letters before you simply through the letters in the garbage can and hang up the phone on the IRS collections officers you need to be aware of what the IRS can do to collect any tax debt you owe them.

To cut to the chase it's the IRS paycheck levy that you should be most concerned with. Often called wage garnishment, a wage levy is when the IRS has your employer pay up to 75% of your pay check directly to the IRS before you ever get your check leaving you just 25%. Most likely 25% of your check is not nearly enough money to pay your bills or support your family. The IRS will take everything but a bare minimum needed for basic food and shelter.

In fact it is not really how much the IRS can take you should be thinking of it figuring out how much they cannot take that matters. To preserve as much of your... ...read full post

When your business receives a notice that it has an unpaid Form 941, it should regard this as a serious matter. A trust fund recovery penalty allows the IRS to go after the personal assets of the people who are responsible for running the business. The liability that these individuals can face is usually quite serious in nature. The IRS may do everything from collecting on the wages of an individual to seizing the assets that they have.

If you have received a Form 941, then you should get in touch with a qualified tax lawyer as soon as possible. A tax lawyer will be able to help you to avoid incurring a trust fund recovery penalty. You will not have to deal with worried employees or the risk of losing your own personal assets. A tax lawyer will dispute the unpaid notice that you have received, and he or she will know how to plead specific facts that show you were not in the wrong.

In the event that you may have made a mistake... ...read full post

Typically, when spouses sign a tax return they are swearing under oath to the correctness of the return. Additionally by signing a joint return, they are obligating themselves to pay the entire balance owed regardless of which spouse earned more.

Therefore, Congress passed a law which was designed to protect ex-spouses who may find themselves liable for the other spouse's tax debt. There are three types of innocent spouse relief: basic innocent spouse relief; separate liability election; and equitable relief.

Innocent Spouse Relief provides you relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly, or claimed improper deductions or credits. The separate liability election is considerably more liberal than the innocent spouse rule. However, this rule isn't available if you're still married and living with your spouse. You may escape liability in circumstances where you wouldn't otherwise qualify. But you can still be stuck if you signed a return you knew was wrong. What's more, even if you qualify for relief, you may have to pay some of the tax. Equitable relief is unlike innocent spouse relief or separation of liability. You can get equitable relief from an understatement of tax or... ...read full post

U.S. citizens are required to file their taxes every year. However, many people fail to file for a number of different reasons. While it is generally not a huge issue when a person does not file for a single year, they can eventually run into IRS problems if they let their obligation go for too long. Everyone will eventually need to file back taxes for the years that they miss.

The vast majority of Americans pay their taxes as required, but some people run into circumstances that prevent them from fulfilling this obligation. They may simply not have the money required to pay the taxes that they owe to the government. However, they should never put off paying taxes even if they do not have the money they need by April 15th.

Fortunately, there are ways to deal with paying back taxes. Individuals are able to pay taxes that date back decades. However, they may have to... ...read full post

One of the penalties imposed when an individual fails to pay his or her taxes is the garnishment of wages or a lien against any property that person might own. Sometimes an individual doesn't have any assets that may be seized by the IRS, and in such circumstances a "hardship" status might apply to that taxpayer.

To determine whether an individual may qualify for hardship status, a simple examination by the IRS will occur. The taxpayer's monthly gross income will be compared against the expenses that the IRS considers basic necessity. These expenses are referred to as "allowable expenses."

The way in which these allowable expenses are defined is through a national average for basic needs like food, shelter, medical expenses, and insurance. The amount that an individual may claim as allowable expenses depends on the size of his or her household. Some local economic considerations associated with geographic location might come into play.

When attempting to obtain IRS tax relief, a taxpayer will need to prove his or her uncollectible status by submitting Form 433A, which... ...read full post

In 2013 the IRS issued new guidelines for employers regarding how much to withhold from employees paychecks. This was prompted by the new legislation signed by President Obama to avoid the looming fiscal cliff. The changes went into full effect on February 15th.

One of the changes is for social security. Employers are now responsible for withholding 6.2%, up from last year’s 4.2%. Other new developments are the raised tax rate in the higher income brackets. For income at or above $450,000 for couples and $400,000 for singles, the tax rate and capital gains rate has been increased. Read more in this article: http://on.wsj.com/RvO9rf... ...read full post

For those who find themselves in serious issues with the IRS and actually need to pursue a tax debt appeals of IRS tax determinations or audits, it may seem advantageous to use a certified public accountant or an enrolled agent. However, this approach, while it may to at first save on the cost of representation, can ultimately influence a case disposition significantly.

Aside from the fact that CPAs and enrolled agents don’t enjoy the legal protections of attorney-client privilege as attorneys and their clients do, there are other reasons to consider a tax lawyer for an IRS appeal advocacy. Both nonbinding and binding arbitration are now being considered within the Offer in Compromise IRS program. This is the method by which a settlement can be made to the IRS to close out a collection action permanently. However, arbitration is no walk in the park.

A CPA does what he does best by preparing and analyzing documents according to accounting rules. While many of the accounting rules apply in the tax world, the tax world is... ...read full post

Interesting statistic: 1 out of 6 people are out of compliance with the IRS. “Out of compliance” could mean they haven’t filed, haven’t paid, or still owe more. Failing to file a tax return is a federal crime. Failing to do so can result in one year of jail time for every year you don’t file. If you reach this point the IRS has already decided you will be uncooperative. They have no interest in negotiating with you at this point.

The best way to avoid such problems is obviously to simply file your taxes on time each year.  If you are currently out of compliance in any way, it is advisable to take care of that problem now rather than waiting until later. The IRS will eventually notice if you are not filing taxes. It may take a month or a few years, but they WILL notice.

If you don’t file a tax return the IRS might file a Substitute for Return. This is when the IRS files on your behalf. To determine your income, they will use their best estimate. The SFR does not utilize itemized deductions. It can allow all kinds of inaccurate assumptions about your income and expenses.... ...read full post

Have you recently been a victim of identity theft? Has someone already filed your tax return and claimed a refund with your identity? If so, then you are certainly not alone. These days, the unfortunate truth is that identity theft is among the most commonly committed crimes. This has to do, in large part, with how easy it can be for hackers to obtain private information such as bank account usernames and passwords through the web.

If you have been a victim of identity theft, then hopefully you have taken the necessary first steps of notifying your credit bureau and closing your bank accounts so as to ensure that the identity thief is not able to do any more damage to you. You may also want to contact credit card companies and banks as a way of disputing the charges that the thief made to your accounts.

Of course, one further complication that many victims of this crime do not think about until they are faced with the problem head-on is that of tax problems that can... ...read full post

My firm recently released an IRS levy for one of our clients. This client has been with us for several years. They had a lot of debt and we helped them create a long-term deal for their million dollar payroll tax case.

An IRS revenue officer sent out a notice of levy on this client’s wages. But something wasn’t right. The IRS needs to renew the warning before they can place a levy. It’s a due process issue. Anytime the IRS wants to place a levy they have to send out a 1058 letter (a final notice of intent to levy). The client had not received a notice in 6 months. The IRS did not send a new one. So we were able to tell the revenue officer that they had to stop the levy. The levy was released a couple days later.

This is just one case in which it is important to have a knowable tax professional who can spot small due process and other issues that can work to your advantage. There’s no reason that you have to face the IRS on your own and give in to levies or let tax problems ruin your future. My mission is... ...read full post