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Haven’t received your W-2 or 1099? Incorrect W-2 or 1099? Follow These 3 Important Steps

What if you haven’t received your W-2 or 1099 or you have an incorrect W-2 or 1099? 

You’ve been strategizing all year and compiling all of your tax forms since January.  You waited for most of February for that one missing document…your W-2 or 1099 from your company.  Shouldn’t I have it by now, you ask.  The answer is YES.  What can you do about it?

Under federal law, employers must send employees their W-2’s by January 31st of each year.    Similarly, companies with independent contractors must provide 1099 forms by January 31st.

W-2s or 1099’s are also filed with the IRS.  The purpose for this is to inform of the wages or non-employee compensation a worker has earned and how much Social Security and Medicare taxes were withheld.

If you still have not received your W-2 or 1099 or it needs to be corrected, follow these important steps:

#1: Call your company

There may have been a simple mailing mistake so call your company’s payroll or human resources department.   It could be as simple as getting your new address.  They can also email you or possibly provide your W-2 or 1099 in a secure portal on their website.

If there is an error on the W-2 or 1099 you did receive, contact your company and let them know in detail why it is incorrect.  If they agree with the error, they can issue a corrected W-2 or corrected 1099.  These corrections will go to the IRS and to you so the records all match. Be sure to let your company know the correction is urgent.

#2: Contact the IRS

If your company fails to provide you with your W-2, it is time to get help from the IRS.   They can contact your company (if you haven’t received after February 14th) and inquire as to the missing W-2.  They can be reached at (800) 829-1040. Be sure to have the following information when you call:

company or payer name, address and phone number

dates of employment

federal tax withholding estimate of your W-2. This can be found on the last W-2 pay stub.

Form 1099’s are not necessary for filing, like a W-2 is, so calling the IRS is not necessary.  Just refer to your own records if you have a missing 1099.

#3: File your tax return

If your company provided you with the documentation you requested, obviously file by the April 15 due date.  If you still don’t receive your W-2, the IRS will send you form 4852, IRS substitute to Form W-2.  You will prepare this form and file it with your tax return. To complete Form 4852, You can use your pay stubs to insert the figures necessary.

Tax Resolution

Be aware that you may finally receive the missing or corrected Form W-2 or 1099 after you filed your return.  If you made a mistake on your Form 4852 that you need to correct, or if the 1099 amount you reported is agreed incorrect, you’ll need to file a 1040X amended tax return.  You may face an IRS audit if it isn’t corrected.

Not receiving timely W-2’s or 1099’s are actually a common problem so don’t feel alone. Many companies go out of business, merge or are purchased by another firm or just have terrible bookkeeping.  Some companies are also victims of fraudulent or incompetent payroll employees or payroll companies.

If you unfortunately incur tax debt due to a 1099 you overlooked and receive an underreporter notice, called a CP2000 notice, there are options such as IRS installment agreements and IRS settlements (known as offer in compromise).

Taxpayers needing tax resolution help with missing or incorrect W-2’s or 1099’s should seek the advice of a tax attorney.  The Attorneys at Delia Law have many years of tax relief experience and will competently represent you before the IRS.

Please call for a no-cost tax attorney consultation for tax resolution. Our attorneys are available to serve you in San Diego, Orange County and Los Angeles.  We are also available nationwide.  We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

The post Haven’t received your W-2 or 1099? Incorrect W-2 or 1099? Follow These 3 Important Steps appeared first on Delia Tax Attorneys Southern California IRS tax lawyers.

Source: https://deliataxattorneys.com/havent-received-your-w-2-or-1099-incorrect-w-2-or-1099-follow-these-3-important-steps/

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Know These Top 3 Tips for Acceptance of your IRS Offer in Compromise

Getting an acceptance of your IRS offer in compromise can be quite challenging.  With careful planning and proper preparation however, you can greatly increase your chances of acceptance of your IRS tax settlement.

It is best to hire a tax attorney to get the job done.  Only an experienced tax attorney, knowledgeable of the tax laws and art of IRS negotiation has the skill to analyze and determine if you will qualify for an offer in compromise.  Do not waste your time with tax resolution companies, CPA’s, or enrolled agents.  Get it done right the first time, and settle your IRS tax debt.

Here are some top tips to follow when filing your offer in compromise application:

1. File all unfiled tax returns

To the point, an offer cannot be considered if all required tax returns have not been filed.  No exceptions.

2.  Pay your estimated tax payments for the current year

Estimated tax payments must equal either 100 percent of your total tax from the prior tax year, or 90 percent of the income tax you expect to owe for the current year.  Divide the total by 4 to get your quarterly payment amounts.  All estimated tax payments that are due should be paid prior to filing an offer.  For more information see Publication 505, Tax Withholding and Estimated Tax.

3.  Prepare and file a complete offer in compromise application

Be sure that your application is complete.  The offer in compromise forms can be found in the Offer in Compromise Booklet.

A complete application includes:

Form 433-A or Form 433-B. This is a financial statement the IRS calls the Collection Information Statement for Wage Earners and Self-Employed individuals (433A) or for Businesses (433B).  It gathers your income, assets, liabilities and expenses.  The purpose of it is to determine the reasonable collection potential or RCP.

Form 656-B. This form identifies the tax years and type of tax to be settled or compromises. It also identifies the offer amount and payment terms.

Application fee. The offer in compromise requires a $186 application fee made out to the “United States Treasury.”  There is an exception to this requirement if you meet the low-income certification guidelines found in the offer in compromise application.

Offer amount. You must select a payment option and include the payment (made out to the “United States Treasury” with your application.  This check must be separate from the application fee.  This is where a tax attorney is invaluable.  Knowing how much to offer generally depends on a lot of variables and must be demonstrated in your application.  And just like the application fee, there is an exception to this requirement if you meet the low-income certification guidelines.

Supporting documentation. All information listed in the 433A must have supporting documentation.  Some of the most common include:

wage and income statements (w-2, 1099, k-1)

profit and loss statements if self-employed or own a business (LLC, S-Corp, C-Corp, Partnership)

bank account statements (generally for the last 3 months)

car loan statements

health insurance statements

401(k), IRA or other retirement/investment plan statements

child support, spousal support orders and divorce decrees

mortgage statements/utility bills

lease agreement

loan documentation and statements

child care bills/receipts

If your offer in compromise application does not include the above basic forms and information, the IRS will return your application.  If all documentation is properly included, it will be moved on to assignment to an offer in compromise officer in approximately 6 to 9 months.

The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time.

Taxpayers needing tax resolution help with an offer in compromise should seek the advice of a tax attorney.  The Attorneys at Delia Law have many years of tax relief experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution. Our attorneys are primarily available to serve you in San Diego, Orange County and Los Angeles.  We are also available nationwide.  We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

The post Know These Top 3 Tips for Acceptance of your IRS Offer in Compromise appeared first on Delia Tax Attorneys Southern California IRS tax lawyers.

Source: https://deliataxattorneys.com/top-3-tips-for-acceptance-of-irs-offer-in-compromise/

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IRS Statute of Limitations on IRS Collections

Thinking you will owe the IRS forever?  Many calls pour in to tax attorneys from taxpayers wondering whether the IRS “statute of limitations” will expire on an old IRS tax debt.  For the most part, the IRS has limitations on how many years it has to collect.

IRS tax debt assessment

The IRS generally has three years to assess taxes on a taxpayer from the due date of the return or when it was filed, whichever is later.   If there are unpaid taxes, shortly thereafter, an assessment is made when a certificate of assessment is signed off on stating the amount owed by a taxpayer.  See the IRS Procedures for Assessment of Tax under 25.6.1.9 in their Internal Revenue Manual.

Basics of the IRS Collection Statute Expiration Date (CSED)

As a general rule, there is a ten-year statute of limitations on IRS collections that begins to run from the date of assessment.   Thus, when you fail to pay in full when you file a tax return, the IRS will then mail you written notice of the amount due.  The date on this notice is generally your assessment date.  If you cannot find this first notice, you can find this date of assessment by ordering your tax account transcript.

Be aware, the IRS can prepare a substitute return (SFR) for you if you did not file.  See IRC 6020(b).  From this return, the IRS can make a deficiency assessment, which starts the ten-year period. Thus, not filing a return is the worst thing you can do, especially if you think you will avoid the IRS for ten years.  Check out this article on the consequences of late filing and what you can do about it.

Once the ten-year collection statute expires, the IRS can no longer collect upon your debt.  It essentially “falls off” from your account.  For example, if you filed your 2007 return by the due date of April 15, 2008 and the tax debt was assessed shortly thereafter, the CSED should have expired around April 2018.

If you are counting on the collection statute expiring soon, be sure to watch out.  As the CSED nears, the IRS typically gets very aggressive in its collection activities and often assigns a revenue officer on the case.  A revenue officer is an advanced tax collector that has many powers to quickly garnish wages and seize personal and real property.

For more information on the IRS collection statute, see the IRS Internal Revenue Manual.

Suspension or extension of the ten-year IRS statute of limitations

The ten-year collection period can end up lasting more than ten years because it can be suspended or extended for one or more time periods. Certain actions can suspend the running of time on IRS CSED’s, which also generally suspends the ability of the IRS to collect unpaid tax debt.  Some of the most common include:

Filing for bankruptcy. When you file for bankruptcy, the court issues an automatic stay preventing the IRS from taking collection action.  The suspension lasts for the period of the bankruptcy case plus six months.

Tax resolution determination. The period is also suspended while the IRS is considering your request (plus 30 days following rejection) for an installment agreement, offer in compromise or request for innocent spouse relief.

Partial payment Installment Agreement extension. If you propose a partial payment installment agreement (PPIA), the IRS will likely have you sign form 900 Tax Collection Waiver, waiving the ten-year limitations period. This extension can be no more than six years.  Be sure to carefully consider this extension.  It may be a wiser choice to refuse extending the deadline and let the IRS collect whatever it can before it runs out.

IRS suit in federal court. The IRS can also extend the ten-year period by suing you in federal court; however, it rarely does this.

Taxpayers who reside outside of the United States. The collection statute will be suspended if a taxpayer resides outside of the United States for six months or more.  Thus, the CSED will not expire until six months after the taxpayer comes back to the U.S.

Voluntarily extension of the statute of limitations period. If you agree to extend it, you can.  However, nowadays the IRS has limited powers to coerce taxpayers to do so.  As in the case above, the IRS can offer a reasonable partial payment plan if a taxpayer agrees to extend the statute.

Taxpayers needing tax help with regard to the IRS statute of limitations should seek the advice of a tax attorney.  The Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution. Our attorneys are primarily available to serve you in San Diego, Orange County and Los Angeles.  We are also available nationwide.  We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

The post IRS Statute of Limitations on IRS Collections appeared first on Delia Tax Attorneys Southern California IRS tax lawyers.

Source: https://deliataxattorneys.com/irs-statute-of-limitations-irs-collections/

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IRS Revocation of Your Passport for Seriously Delinquent Federal Tax Debt

Do you owe the IRS and are trying to travel outside of the United States?  There is a ton of fear among taxpayers now who have recently received IRS Notice CP508C, Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the U.S. Department of State.  If you have received this, you may be worried about an IRS revocation of your passport.

The biggest concern for most is that they won’t be able to return to the U.S. if their passport is revoked during their trip. Below is some clarification on this issue.

Requirements for non-issuance/non-renewal or revocation of your passport

On December 4, 2015, Congress enacted Section 7345 of the Internal Revenue Code, requiring the IRS to notify the State Department of taxpayers certified as owing a seriously delinquent tax debt.  The IRS began sending certifications of unpaid tax debt to the State Department in February of 2018.

A seriously delinquent tax debt is tax debt (including penalties and interest) totaling more than $51,000 for which:

1) a Notice of Federal tax lien has been filed OR

2) a levy has been issued to collect upon the debt

If either of these two situations apply, when you go to apply for or renew your passport, the State Department will deny it.

Still, what if you have an existing passport?  The IRS notice states that if you have a valid passport, the State Department may revoke your passport or limit your ability to travel outside the United States.  What can you really expect from this?  How will they “limit your ability” to travel abroad?  Basically, you can use your passport until you are notified by the State Department that it has been “revoked” or “limited.”

If you are outside of the United States when the revocation occurs, the State Department may issue a limited validity passport good for a return to the U.S.  If you must travel and are deemed seriously delinquent, you can call the National Passport Information Center at 877-487-2778 to inquire about your situation.

For more information, the IRS issued Notice 2018-01 dated Jan. 16, 2018, and also has an IRS informational link on their website.

How to avoid being “Seriously Delinquent”

Section 7345(b)(2) provides that a seriously delinquent tax debt does not include the following:

A debt that is being timely paid under an IRS-approved installment agreement under section 6159;

A debt that is being timely paid under an offer in compromise accepted by the IRS under section 7122;

A debt that is being timely paid under the terms of a settlement agreement with the Department of Justice under section 7122;

A debt in connection with a levy for which collection is suspended because of a request for a due process hearing (or because such a request is pending) under section 6330; and

A debt for which collection is suspended because the individual made an innocent spouse election (section 6015(b) or (c)) or the individual requested innocent spouse relief (section 6015(f)).

Additionally, an IRS revocation of your passport will not occur if:

you are in bankruptcy

you are identified by the IRS as a victim of tax-related identity theft

your account the IRS has determined is currently not collectible due to hardship

you are located within a federally declared disaster area

you have a request pending with the IRS for an installment agreement

you have a pending offer in compromise with the IRS

you have an IRS accepted adjustment that will satisfy the debt in full

Also, certification will be postponed while an individual is serving in a designated combat zone or participating in a contingency operation.

Finally, even if the IRS certifies a taxpayer as seriously delinquent, the State Department holds the IRS’s certification application for 90 days to permit the resolution of the tax debt.

In summary, if the following occurs:

The tax debt is fully satisfied or becomes legally unenforceable.

The tax debt is no longer seriously delinquent (see above) or

The certification is erroneous,

The IRS will reverse this certification to the State Department generally within 30 days and provide notification to the State Department as soon as possible.

Tax resolution options for tax debt

IRS tax debt comes about in many different ways such as audit, underreporting of income, or failure to withhold enough over the year.  If it is impossible to pay back the IRS, you may be able to negotiate an Offer in Compromise, settling your IRS tax debt for less than you owe. If the IRS accepts your offer, you can pay the amount agreed upon, and all federal tax liens will be removed (generally after one month of the final settlement payment).

It is highly recommended that you get a tax attorney to help with your offer. An offer in compromise takes much planning, strategy and advanced negotiation skills, not to mention it can take up to six months to a year to get accepted.

If you are not eligible for an offer in compromise, other options include:

Currently Not Collectible (CNC) status—due to your financial hardship, the IRS will suspend collection activity against you. This is just a temporary fix, until your financial condition approves. It is a valuable resolution option because it can allow you time to get your finances in order.

Payment plan/installment agreement– allows you to pay off your tax debt over time. Usual agreements range from three to seven years. You can elect to pay off the entire amount over time or attempt to negotiate a reduced payoff amount (i.e. partial payment installment agreement). With a PPIA, a full set of financials is required to be submitted to the IRS showing you can only pay a reduced amount.

If you are in fear about an IRS revocation of your passport or need assistance with other IRS tax problems, seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

The post IRS Revocation of Your Passport for Seriously Delinquent Federal Tax Debt appeared first on Delia Tax Attorneys Southern California IRS tax lawyers.

Source: https://deliataxattorneys.com/irs-revocation-passport-seriously-delinquent-federal-tax-debt/

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IRS payroll Tax violations – How do I correct IRS payroll tax violations?

IRS Payroll Tax Violations – What Are they and How Do I correct Them 

Employment tax violations occur for many reasons.  Some employers take withheld payroll taxes to fund business operations. Other employers use the withheld employment taxes for their own personal benefit.  Either way, the IRS sees these acts as stealing from the government and treats payroll tax violations very seriously.

What are payroll taxes for the IRS?

Employers are required to withhold income taxes from their employee’s pay.  They must also withhold employee FICA taxes (Federal Insurance Contribution Act), which include social security and Medicare (hospital insurance).  These amounts withheld from an employee’s salary for the Federal income tax and the employee share of FICA taxes and amounts contributed by the employer for the employer share of FICA taxes and unemployment taxes are known as employment taxes.

Additionally, employers are generally required to file employment tax returns, forms 940 and 941 on a quarterly basis. See the IRS website for IRS help on employer filing requirements.

What happens when there is an IRS payroll TAX violation?

Employers or payroll service providers that violate the withholding requirements are subject to civil sanctions for willfully failing to deposit employment taxes.  A delinquent employer will receive a series of notices demanding payment. If no payment is received, a revenue officer is generally assigned to the case fairly quickly.  Revenue officers will then attempt to collect the taxes due using various collection tactics, such as steep penalties, garnishments, levies and tax liens.

A revenue officer may also assess a trust fund recovery penalty (TFRP) against anyone who was responsible for not paying the employment taxes.  The amount of this penalty is for the employee’s portion (not the employer’s portion) of the employment tax not deposited.  This portion is what would have been the withheld and deposited income tax and FICA.  The debt then is attributed to the person responsible and becomes a tax debt on their personal account.

Additionally, non compliant employers or payroll service providers can be subject to criminal investigation which can then be referred to the U.S. Department of Justice (DOJ). If the case is accepted, the DOJ will prosecute the case in Federal District Court.  Under I.R.C. Section 7202, a taxpayer that fails to collect or pay tax can be guilty of a felony punishable by a fine of up to $10,000, up to five years in prison, or both.

How do I correct an IRS payroll tax violation?

The IRS continues to be in hot pursuit of those who violate employment tax laws.  If you are in violation and have payroll tax problems, get compliant as soon as possible by filing all employment tax returns and making deposits to get current.  If this is not possible and you get behind, be sure to file and make deposits for the existing quarter moving forward.

For that one non-compliant quarter or quarters, there may be some options.  Hiring a reputable and competent Los Angeles IRS tax attorney is the first step.  IRS Tax Lawyers are experienced in negotiating potential settlements (called an offer in compromise) or getting the business into an installment agreement that it can afford.  There are also many other options to consider when you have an IRS payroll tax violation.

A tax lawyer can also assist in preventing the trust fund recovery penalty in being assessed against non-responsible parties.  If nothing is done, an IRS revenue officer can move forward and empty all business bank accounts, take business assets and ultimately shut down the business.

Taxpayers needing tax relief help and more information on IRS payroll tax violations, should seek the advice of a Los Angeles tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of IRS tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

  This blog post is not intended as legal advice and should be considered general information only.

Keywords:  IRS Payroll tax violation, payroll taxes, payroll tax problems, employment tax violations, Offer in Compromise, payroll tax debt relief, Tax Attorney

  The post IRS payroll Tax violations – How do I correct IRS payroll tax violations? appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/irs-payroll-tax-violations/

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Late filing for taxes- What If I haven’t filed taxes in years?

Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt?

Putting off preparing all of those unfiled tax returns?  Don’t let them pile up because as time goes by, there is less and less information available to you for preparation.  You also just tend to forget what happened in those years.  Even worse, the IRS, after making demands for those unfiled tax returns, can file a substitute for return (“SFR”) based upon only information reported to them.  You don’t want that so file your back taxes!

Late filing -Gather your documents

If you have a lot of past due tax returns or even one return that is delinquent from many years back, you may have a mental block in getting started due to having to compile the older documentation.  It can be done.

Luckily, you can call or order online, IRS wage and income statements that show all income reported (w-2s, 1099s).  However, you will have to compile personal expenses or business expenses from your bank statements or from any kept receipts.

The important thing is not to stress.  Find a reputable tax preparer that can assist you through the process.

Late filing – Will I get my tax refund?

If you finally file your return and you are expecting a refund, the time limit for receiving your refund is three years from the original filing deadline.  Let’s say the deadline for your 1040 return is April 15, 2016.  You will thus have until April 15, 2019 to file an original return and to claim your refund.

If you do not file within that three-year time frame, the refund expires.  This means that you will not receive the overpaid amount and will not be able to apply that refund to any other years owing.  Essentially, you are giving away money to the IRS so definitely file before the three-year statute of limitation expires.

Late filing – What if I just don’t file?

When you don’t file, you run the risk of the IRS preparing a tax return for you based upon the information reported to them, called a substitute for a tax return (“SFR”). The IRS does this so they can assess tax and begin collection activities.  You can get “account transcripts” from the IRS to see if this was done.

You may be infuriated and ask yourself, can the IRS do this?  Yes, according to IRC §6020 (b), the IRS is authorized to prepare tax returns based upon information available to it in situations where a person has not filed a return.  For more information on SFRs, see the Internal Revenue Manual 4.12.1.

Since they can do this and they have, then why should you bother filing original returns?  Because the IRS does not have all of the tax information you may have and does not include any additional expenses, tax credits or exemptions to which you may be entitled.  As you can see, it may greatly overstate your actual tax liability.

It is generally best to file an original tax return and ask the IRS for “SFR Reconsideration.”  See IRM 5.1.15 for more information on the reconsideration process. If you do not file an original return, the SFR will remain and the IRS will send a letter asking you to consent to the proposed tax.  If you ignore it, they will issue a statutory notice of deficiency (“SND”).  If you do not respond to the SND, the IRS will move forward with collections and may place a levy on your bank accounts and/or garnish your wages.

Late filing – Tax resolution options

If you have a balance due on your original returns or if you agree with the IRS SFR, look to resolve the IRS tax debt with a payment plan, currently not collectible status or offer in compromise.  You must move quickly as active collections are taking place.  It is best to get tax help with an experienced tax relief attorney to get a resolution put in place most advantageous to you and your financial situation.

Taxpayers needing tax help with a late filing and how to file back taxes and tax debt help should seek the advice of a qualified tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax fraud experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

Keywords:  Late Filing, Unfiled tax returns, file back taxes, past due tax returns, how to file back taxes, tax debt help, IRS tax debt, tax relief attorney

The post Late filing for taxes- What If I haven’t filed taxes in years? appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/late-filing-taxes/

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Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt?

Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt?

By Dawn Delia August 31, 2018 Putting off preparing all of those unfiled tax returns? Don’t let them pile up because as time goes by, there is less and less information available to you for preparation. You also just tend to forget what happened in those years. Even worse, the IRS, after making demands for those unfiled tax returns, can file a substitute for return (“SFR”) based upon only information reported to them. You don’t want that so file your back taxes!

Gather your documents If you have a lot of past due tax returns or even one return that is delinquent from many years back, you may have a mental block in getting started due to having to compile the older documentation. It can be done.

Luckily, you can call or order online, IRS wage and income statements that show all income reported (w-2s, 1099s). However, you will have to compile personal expenses or business expenses from your bank statements or from any kept receipts. The important thing is not to stress. Find a reputable tax preparer that can assist you through the process.

Will I get my refund? If you finally file your return and you are expecting a refund, the time limit for receiving your refund is three years from the original filing deadline. Let’s say the deadline for your 1040 return is April 15, 2016. You will thus have until April 15, 2019 to file an original return and to claim your refund.

If you do not file within that three-year time frame, the refund expires. This means that you will not receive the overpaid amount and will not be able to apply that refund to any other years owing. Essentially, you are giving away money to the IRS so definitely file before the three-year statute of limitation expires.

What if I just don’t file? When you don’t file, you run the risk of the IRS preparing a tax return for you based upon the information reported to them, called a substitute for a tax return (“SFR”). The IRS does this so they can assess tax and begin collection activities. You can get “account transcripts” from the IRS to see if this was done.

You may be infuriated and ask yourself, can the IRS do this? Yes, according to IRC §6020 (b), the IRS is authorized to prepare tax returns based upon information available to it in situations where a person has not filed a return. For more information on SFRs, see the Internal Revenue Manual 4.12.1.

Since they can do this and they have, then why should you bother filing original returns? Because the IRS does not have all of the tax information you may have and does not include any additional expenses, tax credits or exemptions to which you may be entitled. As you can see, it may greatly overstate your actual tax liability. It is generally best to file an original tax return and ask the IRS for “SFR Reconsideration.” See IRM 5.1.15 for more information on the reconsideration process. If you do not file an original return, the SFR will remain and the IRS will send a letter asking you to consent to the proposed tax. If you ignore it, they will issue a statutory notice of deficiency (“SND”). If you do not respond to the SND, the IRS will move forward with collections and may place a levy on your bank accounts and/or garnish your wages.

Tax resolution options If you have a balance due on your original returns or if you agree with the IRS SFR, look to resolve the IRS tax debt with a payment plan, currently not collectible status or offer in compromise. You must move quickly as active collections are taking place. It is best to get tax help with an experienced tax relief attorney to get a resolution put in place most advantageous to you and your financial situation.

Taxpayers needing tax help with how to file back taxes and tax debt help should seek the advice of a qualified tax attorney. The Los Angeles Tax Attorneys at Delia Law have many years of tax fraud experience and will competently represent you before the IRS. Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

The post Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt? appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/late-filing-what-if-i-havent-filed-taxes-in-years-and-i-have-irs-tax-debt/

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Los Angeles IRS Tax relief help – 3 signs you need help now

Los Angeles IRS Tax relief help – 3 signs you need help now

Feeling overwhelmed with handling your tax problems on your own?  That is usually the first sign that you need to hire someone to help with IRS tax relief.  An experienced tax relief attorney is by far the best choice.  Tax attorneys have gone to law school and are well-versed with IRS law.  Stay away from tax relief companies, tax resolution companies and others that are not tax attorneys.

Other obvious warning signs that it is time to hire some IRS tax relief help from a licensed tax attorney:

What if I have a Receipt of IRS notices

If you are receiving IRS letters telling you an amount is due, you should be concerned.  If you start receiving a barrage of IRS collection notices threatening to levy your bank accounts and/or wages, it’s time to hire a tax attorney.  The IRS will not go away as some often think and hiding from them only makes matters worse.

Think about it, if you do not feel you owe the tax debt and have proof that you do not, sometimes it is tough to get the IRS to understand your point of view.  It’s even hard to get a hold of the IRS with the long call hold times and frequent hang ups.  When you finally reach the IRS, the documents and argument have to be submitted properly so that the IRS representatives can understand.  And, sometimes, it’s pretty hard to get through to them.   A tax attorney that works with IRS representative’s day in and day out, with expert negotiation skills, can push the argument through and help the IRS representative understand in a calm and skilled manner.

Will the IRS use Wage garnishment and/or bank levy

If you waited too long to work with the IRS and ignored their collection letters, the inevitable conclusion is a wage garnishment and/or bank levy.  Sometimes, these efforts can take some time, especially if you are self-employed and they can’t find an employer for you.  Then they will try to attach your bank account if they can find it.

Once you receive notice a bank levy, you generally have 21 days to prevent it.  Act quickly and find tax relief help with a tax attorney because once they levy your bank account, it is almost impossible to get the money back on your own.  If you are experiencing hardship and you need that money back, find a professional tax lawyer to negotiate on your behalf.  Likewise, it is difficult to remove a garnishment from your paycheck when it finally attaches.  Your tax attorney can work directly with the IRS to get this lifted in a timely manner and can find a resolution such as a non-collectible status or payment plan.

What if you can’t pay your tax debt

IRS tax debt comes up in many ways: like underreporting of income, audit or not withholding enough over the course of the year.  Another way, which is occurring more often, is when a taxpayer gets behind on filing their tax returns.  If this happens, it is a great time to hire a tax relief attorney to guide you in getting compliant.

Once filed, a flood of tax debt may come your way for multiple years of filings for which your tax attorney can prepare you.  Tacked on to your debt are IRS penalties (i.e., failure to pay, failure to file) and interest that can seem more than the debt itself.  Your tax attorney can also assist in getting these removed where appropriate.

Once your tax debt is assessed and you agree to it, you may not be able to pay it all off.  This is a common scenario and it always seems the IRS coming after you happens at the worst possible time.  You may have paid off a large medical bill or are putting a few kids through college.  If this is the case, there are options, so don’t feel the situation is hopeless.  The best thing to do is move fast, hire a tax attorney and face the problem head on.

Some of your IRS tax relief help options include:

Currently Not Collectible (CNC) status—due to your financial hardship, the IRS will suspend collection activity against you. This is just a temporary fix, until your financial condition approves. It is a valuable resolution option because it can allow you time to get your finances in order.

Payment plan/installment agreement— allows you to pay off your tax debt over time. Usual agreements range from three to seven years. You can elect to pay off the entire amount over time or attempt to negotiate a reduced payoff amount (i.e. partial payment installment agreement). With a PPIA, a full set of financials is required to be submitted to the IRS showing you can only pay a reduced amount.

Offer in Compromise—settling your debt for less than you owe. It allows you to settle your tax debt in a lump sum payment or with a short-term payment plan. As with the Installment Agreement, you can attempt to negotiate with the IRS to accept a lesser amount that what you owe to satisfy your tax liability.

Los Angeles tax payers needing IRS tax relief help should seek the advice of a tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of IRS tax resolution help experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

  Keywords:  Tax Relief Help, Help with Tax Relief, Tax Relief Attorney

The post Los Angeles IRS Tax relief help – 3 signs you need help now appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/tax-relief-help/

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FBAR – 3 Top Questions About IRS Tax Penalties and FBAR Foreign Bank and Asset Reporting

FBAR – What is FBAR? How does FBAR effect my taxes?

Are you scared that you may be delinquent in reporting your foreign bank and financial accounts reports (FBAR)?  Questions regarding whether you have to disclose or whether you should disclose?  The best way to answer these questions is to consult with an experienced FBAR attorney.  FBAR issues can be simple and some can be pretty complex.  One universal consensus though is that FBAR requirements are often misunderstood leading to many reporting errors.

FBAR filings are on the rise as FATCA and other international compliance efforts have raised awareness among taxpayers with offshore assets.  The Foreign Account Tax Compliance Act (FATCA), which was passed as part of the HIRE Act, generally requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on payments subject to withholding.  The HIRE Act also contained legislation requiring U.S. persons to report, depending on the value, their foreign financial accounts and foreign assets.

Do I have to report and file FBAR? What are the requirements?

Many U.S. taxpayers have foreign financial accounts (investments, pension, banking, etc.), but know that if you do, you may have to report these accounts to the U.S. Treasury Department’s Financial Crimes and Enforcement Network (FinCEN) or face some hefty penalties.

So, who must file an FBAR?  A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.

Reportable assets include the following:

deposit and custodial accounts held at foreign financial institutions

certain foreign stock and securities

foreign mutual funds

foreign-issued life insurance or annuity contracts with a cash value

other types of offshore assets

There are two forms that taxpayers who have foreign financial accounts or assets may have to submit. The first form is FinCen Form 114, Report of Foreign Bank and Financial Accounts. It is submitted separately from the tax return and can only be electronically filed. It is due April 15 of each calendar year but you can get an automatic extension to October 15.

The second form, is Form 8938, Statement of Foreign Financial Assets, which has been in existence since 2011, as part of the new FATCA legislation and is included in the tax return.

Just be aware of these common mistakes made on FBAR filings:

The $10,000 amount applies to the total of all of your foreign accounts, not just a single account and;

Life insurance policies, pension funds and inherited money are also subject to declaration.

It is important to know that if you have errors on your FBAR filing, you can still correct or file FBAR forms.

How do I file FBAR forms that are delinquent

If you are late, there are three ways to file FBAR forms:

File them yourself online

You can file FinCEN Report 114 online if: (1) you did not know you had to file FBAR forms, or if there was a good reason why you didn’t; (2) you already reported on your US tax returns and paid tax on the income from all of the foreign financial accounts to be named in your FBAR and (3) you are not under civil examination or investigation by the IRS, and you have not been contacted by them about any late FBARs.

Use streamlined filing procedures

If it is determined that your failure to report financial accounts and assets was non-willful, the streamlined procedure is an acceptable option.  Be careful here because if there is any conduct that may show willfulness, it can expose the taxpayer to civil and criminal liabilities if filed in this manner.

To clarify, use streamlined procedures if:

you unknowingly skipped declarations of your foreign assets and accounts.

you have made mistakes with filing FBAR forms in the past.

you have not already reported all your US tax returns and paid tax on the income from all of the foreign financial accounts to be reported in your FBAR declaration.

The streamlined filing procedure allows you to report or amend three years of tax returns and six years of delinquent FBAR statements without incurring a penalty. (See IRS instructions for streamlined filing procedures)

If the IRS has initiated a civil examination of taxpayer’s returns for any taxable year, regardless of whether the examination relates to undisclosed foreign financial assets, the taxpayer will not be eligible to use the streamlined procedures. Similarly, a taxpayer under IRS criminal investigation is also ineligible to use the streamlined procedures.

Enter the Offshore Voluntary Disclosure Program (OVDP)

If your decision not to file was “willful,” then the Offshore Voluntary Disclosure Program is most likely the best option.  In picking this option, the IRS allows you to declare everything that you knew you had to report, but didn’t and in return, the taxpayer will not face IRS criminal prosecution or substantial penalties.

In order to make the OVDP voluntary disclosure, it must be (1) truthful, (2) timely and (3) complete.  You must:

complete Form 14452, Foreign Account or Asset Statement.

review your Offshore Voluntary Disclosure Letter and Attachment.

evaluate and sign the Consent to Extend the Time to Assess Civil Penalties provided by 31 U.S.C. 5321 for FBAR Violations. (see more regarding OVDP forms and procedures on the IRS website)

If you enter this program you must submit the last eight years of tax returns.

*This program is set to end September 28, 2018

Am I subject to tax penalties or criminal penalties for failure to file FBAR?

Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation. But if your violation is found to be willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation.  Each year not filed is a separate violation.  (see IRS guidance and procedures applicable to FBAR cases)

Criminal penalties for FBAR violations can include a fine of $250,000 and five years of imprisonment. If the FBAR violation occurs while violating other laws, the penalties are increased to $500,000 in fines and/or 10 years of imprisonment.

If you decide to opt for the streamlined process, there is a possible five percent penalty on foreign accounts.

If you enter the OVDP program, there is a twenty percent accuracy penalty on all taxes and even worse, there is a mandatory miscellaneous Title 26 offshore penalty of 27.5% on the highest account balance for the prior eight years.

The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.

Taxpayers needing assistance in dealing FBAR and reporting of foreign accounts and should seek the advice of a knowledgeable tax FBAR attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax fraud experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

Keywords, FBAR, FBAR Penalties, Offshore Voluntary Disclosure Program, Streamlined Filing Procedures, Foreign Bank and Financial Accounts, FBAR Attorney

The post FBAR – 3 Top Questions About IRS Tax Penalties and FBAR Foreign Bank and Asset Reporting appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/fbar-irs-tax-penalties-fbar-foreign-bank-and-asset-reporting/

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Tax Fraud – What is tax fraud which the IRS pursues?

Tax Fraud – What are the Types of Tax Fraud the IRS Pursues?

The IRS takes tax fraud very seriously.  If the IRS finds fraudulent activity, generally through an audit, it can mean stiff penalties and even jail time.

Receiving a notice that the IRS is conducting a criminal tax investigation is not something anyone wants to experience. Should such a notification be received, look into hiring a tax fraud lawyer as soon as possible.

What is IRS tax fraud?

Tax fraud involves a conscious decision to falsify tax records and returns. In most cases, the motivation for committing such an act is to avoid paying the rightful amount of taxes due on personal income, business profits, inventories, and other types of financial assets.

Tax evasion is a subset of tax fraud.  Tax evasion usually entails a deliberate act of misrepresentation of taxable income to the IRS (see IRC § 7201).  Both tax fraud and tax evasion are felony charges and they generally have the same level of punishment.

Serious violations of the IRS tax code such as tax fraud may lead to criminal charges. Most of the time though, tax fraud results in civil penalties only.  Criminal charges are reserved for the most severe tax fraud cases, when a taxpayer intentionally evades paying taxes or engages in an illegal act in declaring taxes.

What types of acts constitute tax fraud?

Usually, fraud cases start with an audit of a filed tax return. During the audit investigation, the auditor may find errors that the taxpayer knowingly and willingly committed.  When these errors go on for several years and in large amounts, it is common to find a pattern of willful evasion.

The following are some examples of fraud:

understatement of income. For instance, taking a second job, receiving cash on the side and not reporting it.

claiming exemptions or deductions that are not legitimate, both personal and business

unscrupulous activities by tax return preparers

abusive tax schemes to hide income

altering tax returns and financial reports in order to reduce taxes owed

inadequate records

accounting irregularities (i.e., two sets of books, false entries on documents)

See also,  Cases of General Tax Fraud Investigations.

What are the penalties for tax fraud?

There are civil and criminal penalties associated with a finding of tax fraud. Whether it is potentially criminal or civil depends on the severity and intent of the taxpayer to defraud the IRS.

If fraud is found, but not amounting to criminal activity, a taxpayer may be charged with civil tax fraud penalties.  Civil tax fraud can include a penalty of up to 75% of the underpayment of tax attributable to fraud, in addition to the taxes owed (see IRC § 6663 and the IRS Fraud Handbook—Civil Fraud Section).

A criminal conviction can result in jail time and civil penalties for the following (see IRS Fraud jail time and penalties chart):

Persons who willfully attempt to evade or defeat any tax imposed (tax evasion). Up to five years in prison or penalties of up to $250,000 for individuals and $500,000 for corporations or both, together with the costs of prosecution.

Fraudulent statements or returns. Up to three years in prison or penalties of up to $250,000 for individuals and $500,000 for corporations or both, together with the costs of prosecution.

Persons who willfully aid or assist in fraudulent activity. Up to three years in prison or penalties of up to $250,000 for individuals and $500,000 for corporations or both, together with the costs of prosecution.

What do you do when accused of tax fraud?

First and foremost, taxpayers facing a tax fraud criminal investigation should never represent themselves or allow themselves to be represented by non-attorneys or inexperienced attorneys.

If you have been contacted by IRS Criminal Investigations or you suspect you are under investigation for tax fraud, do not speak to anyone, including your CPA.  Any conversation between you and your CPA is not considered to be protected by any type of privilege, and the IRS can compel your CPA to testify against you.  All evidence you provide is admissible in court and can be used to bring criminal penalties against you.

Only speak to a tax fraud attorney.  That way the communication between your attorney and yourself will be privileged and protected by the attorney client privilege.

Taxpayers needing assistance in dealing with a potential case of tax fraud and other IRS tax problems should seek the advice of a knowledgeable tax fraud attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax fraud experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

  Keywords:  Tax Fraud, best tax fraud lawyer, IRS Criminal Investigation, IRS Tax Fraud Attorney, Tax Fraud Lawyer

The post Tax Fraud – What is tax fraud which the IRS pursues? appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/tax-fraud/

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IRS tax relief help – When to ask for IRS tax relief help?

When to Ask for IRS Tax Relief Help

Dealing with the IRS can be overwhelming.  Many taxpayers get hit with multiple issues with the IRS that they don’t even know where to start.  To compound the problem, the IRS mails many notices, which are a lot of the time terribly confusing.

Many taxpayers think the problem will just go away.  With the IRS…it never does.  Letting time pass without taking action will only make matters worse.

You need the help from an experienced tax relief attorney when you are faced with the following IRS tax problems:

unfiled tax returns

tax liens

wage garnishments

bank levies

tax debt, interest or penalties that you cannot pay off

payroll tax debt

seizure threats of real and personal property

tax audits and underreporter issues

Below are some of the most commonly asked questions by taxpayers needing tax relief help:

Can I get IRS help or IRS tax relief?

Yes.  There are many ways for any taxpayer to obtain tax relief.  Depending on your financial situation, there is a program for almost everyone.  Knowing which one you fit in to can be perplexing so hiring an experienced tax relief attorney is your best bet.

The IRS allows qualified taxpayers to settle their tax debt, obtain hardship status when it is not possible to pay anything due to job loss or other life events, or get into a full pay payment plan or reduced payment plan. The IRS also allows abatement of penalties in appropriate situations.

I have unfiled tax returns, should I file?

Absolutely.  Many taxpayers think that if they start filing, it will wake the IRS monster.  It will definitely put you on the IRS radar, but in doing so, you will reduce penalties and will also prevent the IRS from filing their own return for you called a substitute return.

Additionally, the IRS generally already knows that you need to file and has most likely mailed notices informing you of this.  They obtain your information through employers, contractors, mortgage holders or previous documentation.

So, beware.  The longer you go without filing and paying taxes, the more fines you will have to pay.  At a minimum, just file.  At least you will prevent the failure to file penalty.  After filing, then you can look toward resolution with the many options the IRS has to offer.

What if I don’t have the tax documentation to prepare an unfiled return?

As stated above, the IRS most likely already has much of your tax information from employers, contractors, mortgage holders, unless you are self-employed.  That always presents problems when trying to piece together income for an older unfiled return.

It is best to find that information through bank statements.  Just call the IRS to see what information they have and get a wage and income transcript mailed to you for the appropriate year.  You can also get a transcript online at IRS.gov.

What can I do if I can’t pay the IRS what I owe?

IRS tax debt comes about in many different ways such as audit, underreporting of income, or failure to withhold enough over the year.  If it is impossible to pay back the IRS, you may be able to negotiate an Offer in Compromise, settling your IRS tax debt for less than you owe. If the IRS accepts your offer, you can pay the amount agreed upon, and all federal tax liens will be removed (generally after one month of the final settlement payment).

It is highly recommended that you get a tax attorney to help with your offer. An offer in compromise takes much planning, strategy and advanced negotiation skills, not to mention it can take up to six months to a year to get accepted.

If you are not eligible for an offer in compromise, other options include:

Currently Not Collectible (CNC) status—due to your financial hardship, the IRS will suspend collection activity against you. This is just a temporary fix, until your financial condition approves. It is a valuable resolution option because it can allow you time to get your finances in order.

Payment plan/installment agreement– allows you to pay off your tax debt over time. Usual agreements range from three to seven years. You can elect to pay off the entire amount over time or attempt to negotiate a reduced payoff amount (i.e. partial payment installment agreement). With a PPIA, a full set of financials is required to be submitted to the IRS showing you can only pay a reduced amount.

Taxpayers needing assistance in dealing with an offer in compromise and IRS tax problems should seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

  Keywords:  Tax Relief Help, Help with Tax Relief, Tax Relief Attorney

The post IRS tax relief help – When to ask for IRS tax relief help? appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/irs-tax-relief-help/

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IRS Levy – bank account and wages – Call Delia Tax 310-494-0100

IRS Levy – Can the IRS Levy my Bank Accounts and Wages?

The short answer…Absolutely!  It is hard to believe that taxpayers get notice after notice from the IRS demanding payment, but they just don’t believe anything will really happen.  An IRS Levy notice is serious and you should take action immediately with a tax lawyer.

An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can contact your employer ordering a wage garnishment, take money in your bank or other financial account (bank levy), take your state or federal tax refund and seize and sell your vehicle(s), real estate and other personal property.

When you owe a tax debt to the IRS and you do not pay the amount in full, collection notices generally come in this order, about five weeks apart:

CP-14 Balance Due Notice

CP-501 Reminder Notice of Balance Due

CP-503 Reminder Notice of Balance Due

LT16 You have overdue taxes and /or an overdue tax return

CP-504 Intent to Levy Notice

LT-11, CP-90, CP-1058 Final Notice of Intent to Levy Notice

It’s serious:  Final Notice of Intent to Levy

The one to obviously worry about is the Final Notice.  If you do not receive this letter and the IRS levies your bank account or garnishes your wages, you have recourse against them to stop these collections.  Many times, taxpayers do not open their mail or just plain forget that they received this particular letter.

To ensure that this Final Notice went out (justifying the IRS collection activity), it is important to contact the IRS to get a transcript for the year(s) that you owe tax debt.  This transcript will show, among other things, whether a Final Notice was mailed out and the date.  If this Final Notice was not sent, it is then best to file a Collection Due Process Appeal to stop the levy action.

How do I avoid an IRS levy after I receive a Final Notice

The key is to be proactive and do not ignore these IRS collection notices.

It is probably best to contact a tax attorney when it’s gone this far.  Generally, you can avoid a levy by getting into tax compliance:  filing returns on time and paying your taxes when due.

If you just do not know what to do, immediately call the IRS at the number at the top of the notice.  If you lost the notice, call the IRS at 1-800-829-1040 for individuals and 1-800-829-4933 for businesses.

When you speak with the IRS, see if you can get more time to file if you have unfiled tax returns.  If you need more time and have more returns to do, call and request it.  As long as they see that you are working toward resolving the situation, they will be compromising.  If you get more time and do nothing, they will deny you any more time and will move forward with collections.

Once you have filed all missing tax returns and if you agree that you owe the tax debt assessed, you may stop collection activity with these following tax resolution options:

Installment Agreement (IA)

Partial Payment Installment Agreement (PPIA)

Offer in Compromise (OIC)

Currently Not Collectible (CNC)

Taxpayers needing assistance in dealing with an offer in compromise and IRS tax problems should seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

  Keywords:        IRS levy, IRS bank levy, IRS wage garnishment, IRS Tax debt

The post IRS Levy – bank account and wages – Call Delia Tax 310-494-0100 appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/irs-levy/

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Offer in Compromise qualification- Will I qualify for an offer in compromise?

Offer in Compromise qualification – Will I Qualify for an Offer in Compromise?

If you are contemplating settling your tax debt with the IRS, it is definitely a good time to look into it.  However, not everyone will qualify despite what the barrage of TV ads say from these unethical tax relief companies.  They will take anyone as a client so beware and know the offer in compromise qualification the IRS uses!

Many taxpayers come to the conclusion that they will qualify based upon having nothing left over at the end of each month.  But, that’s not how the IRS sees it.  It really depends upon what you are spending that leaves you with no money.

IRS collection financial standards

To figure out whether you qualify for an offer in compromise (“OIC”), the IRS goes by their Collection Financial Standards to assess your financial condition.  If you go over their standards for certain expenses, they will generally disallow the amount over the standard.

For example, the national food and clothing standard for a family of two is $1,132.  They will only allow this amount, instead of the $1,500 of what you really spend.  This dis allowance unfortunately will show the IRS that you can pay them more than you actually can.  This in turn raises the settlement offer of your OIC or may disqualify you altogether.

Below are IRS links to the Collection Financial Standards to assist you in whether you qualify for an offer in compromise:

National Standards: Food, Clothing and other Items

National Standards: Out-of-Pocket Health Care Expenses

Local Standards: Housing and Utilities

Local Standards: Transportation

IRS considerations of your offer in compromise qualification

The IRS will consider expenses over the allowable amount depending upon the facts and circumstances of a taxpayer’s situation.  A good example is that of child care expenses.  If this is the case, documentation of proof of this expense (receipts, check copies) must be provided.

It is important to understand that when doing an offer in compromise, the IRS really sticks to the standards.  Unfortunately, the standards are generally not enough to live on for most families and is certainly not the real world.  For example, families have kids in college, these college-aged kids are living at home, but the IRS does not see college expenses or the expense of that extra kid at home as allowable.  This seems oppressive and downright unfair to most.

Basically, the IRS is looking to exclude taxpayers with excessive lifestyles when determining whether an offer in compromise should be accepted or not.  The IRS offer in compromise program is a very viable option for the right taxpayer(s) and it does work.  You just have to position yourself properly and know the IRS guidelines.

Lastly, be aware that all taxpayers must be in compliance and have full documentation for an offer in compromise to even be considered.  Refer to this OIC article for a summary checklist.

Taxpayers needing assistance in dealing with an offer in compromise and IRS tax problems should seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

  Keywords:  Offer in Compromise, IRS problems, IRS Collection Financial Standards

The post Offer in Compromise qualification- Will I qualify for an offer in compromise? appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/offer-in-compromise-qualifications/

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Tax Debt Relief – 3 Dangers of Using a Tax Relief Company

Tax Debt Relief – 3 Dangers of Using a Tax Relief Company

You’ve heard them advertising all over the TV and radio.  IRS Tax debt relief companies claiming that they can help you resolve your debt for next to nothing.  But don’t be fooled!

Most tax  debt relief or tax resolution companies are not even run by professionals.  Their goal is to make money off of you and run, leaving you with an even worse tax problem than when you first started.

Be aware of the following 3 dangers when dealing with a tax settlement firm:

Outlandish and hidden fees

It is all too common that huge fees well over $4,000 are charged by a tax relief company, where the client doesn’t even have full access to a tax attorney as commonly promised.  Clients are treated poorly, rarely get timely responses and fall prey to additional fees that were hidden in their original contract.

To make matters worse, tax relief company representatives rarely know what they are doing and certainly don’t know how to deal with IRS representatives or tax law.  Due to the tax debt relief company’s inexperience, taxpayers that have hired tax relief companies have longer resolution times (and many times, no resolution), thus incurring more fees.

Don’t get locked in to their schemes and avoid them at all costs.

Unprofessional, inexperienced and dishonest advice from TAX DEBT RELIEF companies.

Unfortunately, many tax relief company representatives give bad advice.  For example, they consistently lie about taxpayers qualifying for an offer in compromise or settlement of their tax debt.  Also, the way they advertise makes it seem that most taxpayers will qualify when many will not.  This is misleading and causes many vulnerable taxpayers to wrongly believe that they can help them.

Tax relief companies often get a taxpayer’s name from tax lien lists, which are of public county record.  They then harass and use scare tactics such as telling you that if you don’t hire them immediately, you will go to jail or be charged with tax evasion/fraud or that the IRS will take everything they own.   They often manipulate and bully to make the sale. If you start to feel this type of pressure, back away and find someone that is more honest and professional.

These dishonest and deceitful sales practices are common place when dealing with tax relief companies.  Do not be a victim and take your money elsewhere….to a professional tax attorney that can be held accountable.

High employee turnover often going out of business

Tax settlement firms are notorious for having high employee turnover.  The reason is pretty obvious.  Their sales people know how to sell, but know next to nothing about tax law and resolving tax problems.  They are continually replaced and the client-taxpayer suffers.

Due to poor credibility that starts to build up and horrible customer service, tax resolution companies go out of business pretty quickly.  When quantity, not quality is the focus, the result is catastrophic on a business.  Also, it is pretty tough to compete against tax attorneys and tax law firms who are the real tax attorneys best suited to resolve people’s IRS tax problems.

Taxpayers needing assistance in dealing with IRS tax problems should seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This IRS tax relief blog post is not intended as legal advice and should be considered general information only.

  Keywords:  Tax Relief Companies, Tax Resolution Companies, Tax Settlement Firm, IRS tax problems, tax debt

The post Tax Debt Relief – 3 Dangers of Using a Tax Relief Company appeared first on Delia Tax Attorneys.

Source: https://losangeles-tax-attorneys.com/tax-debt-relief-3-dangers-using-tax-relief-company/

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IRS Tax Problems – Get Help Now -Don’t Wait

IRS Fresh Start Program –  get help now with your tax problems.

If you have tax debt and are having a hard time paying off your back taxes, take advantage of the IRS Fresh Start Program.  This program makes it easier for taxpayers to negotiate with the IRS and get out of IRS debt.  It is unknown for how long it will last, so it is a good idea to start the process of resolving your tax debt.

The three main changes to IRS tax laws introduced by the IRS Fresh Start Program include:

Higher thresholds for tax Liens and ability to withdraw tax liens

The IRS agreed to stop issuing tax liens to anyone with under $10,000 in back taxes.  Also, you can now request (through form 12277 Application for Withdrawal) that your tax lien be removed if you fit into one of two scenarios:   (1) you paid your tax lien in full or (2) you enter into a direct debit installment agreement.  See more about Tax Lien Withdrawal requirements on the IRS website.

Expanded access to streamlined installment agreements

Before the IRS Fresh Start Program initiative, the IRS would not allow you to qualify for the installment payment program until you provided detailed financial statements.  With these financials, you would have to show the IRS that you could not afford to pay them in full or that you needed a payment plan.  Now, individual taxpayers who owe up to $50,000 can pay through monthly direct debit payments for up to 72 months (six years) without submitting a financial statement.

There is also a new test program that was extended allowing individual taxpayers owing an assessed balance between $50,001 and $100,000.  The payment terms are over 84 months with financials not required if a direct debit or payroll deduction is put in place.  If not put in place, then a financial statement is required.  See Forms 433F and 433A.

If you owe more than $100,000 or need more than 72 or 84 months to pay off your tax debt, financial statements are required.

Expansion of the Offer in Compromise Program

This IRS Fresh Start program allows you to negotiate your debt with the IRS and offer a settlement amount of less than you actually owe.  The Fresh Start changes make it easier to qualify for an IRS Offer in Compromise giving the IRS additional flexibility in the way they determine whether a taxpayer is qualified.

For anyone struggling with large levels of IRS back taxes debt, it is highly advisable to hire a tax attorney to help you deal with your outstanding debt.  It is becoming increasingly difficult to negotiate with the IRS, even with the IRS Fresh Start Program.

Taxpayers needing assistance in dealing with IRS tax problems should seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

  Keywords:  IRS problems, IRS Fresh Start Program, tax lien withdrawal, back taxes, IRS debt, offer in compromise

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IRS Collection Notices: What do they mean?

IRS Collection Notices: What do they mean?

When an IRS letter or IRS collection notice arrives, many people are unsure what it means and what to do to respond. IRS letters all look the same, and can be intimidating because of what is at stake.

If a person has tax debt due to the IRS, and does nothing about it, then eventually the person’s account will go into IRS collections.The collection process may take some time, up to several months. Each collection notice usually comes five weeks apart.

Different types of IRS Collection letters – What are the different types of IRS Tax Collection letters?

CP14 This notice is for when a person has a balance due

CP501 First reminder notice for the overdue balance due

CP503 2nd notice to remind a person of their balance due

CP504 Final Notice of Intent to Levy. This is when the IRS gets really serious. This notice says if the amount is not paid in full after this 3rd and final notice, then the IRS will levy the person’s state income tax refund.

CP90 This notice represents the IRS intent to seize assets and gives notification of the person’s right to a hearing. Retirement benefits, real estate, salaries, automobiles, bank accounts etc can be included in the levy

CP91/CP298 This notice represents the IRS intent to seize 15% of social security benefits to pay the unpaid balance that is due.

CP297 This notice represents the IRS intent to seize assets and is sent to the subjects business. The IRS will levy assets if no action is taken.

LT11/LT1058 This letter is the Final Notice of Intent to Levy and Notice of Your Right to Hearing. This indicates that the IRS has made numerous attempts to collect the balance. If no further action is taken within 30 days, the IRS has the right to levy or seize assets. The IRS may also place a Federal tax lien on your property.

The most important and serious IRS collection letters

CP90/297 Final Notice of Intent to Levy and Notice of Your Rights to a Hearing

CP91/298 Final Notice Before Levy on Social Security Benefits

These two notices are the only notices that allow the IRS to start proceedings in order to seize your assets, vehicles, bank accounts, real estate and business assets. The other notices can be important and urgent, but they are not threatening any action. Only these final notices gives the IRS these legal rights to start the proceedings.

When a person receives a Final Notice, he/she must realize that it provides important legal rights. These rights include the ability to file an appeal to have a hearing to settle the case and take the results to a U.S. Tax Court if it is not acceptable. The IRS collection action is halted while the appeal is pending, provided it is filed within 30 days from the issuance of the notice.

Actions to take when a person receives an IRS collection letter

Taxpayers are generally extremely anxious when they receive these types of IRS notices. The best thing to do is to stay calm, read the letter and check if it is a Final Notice. Taxpayer assets are in danger if it is a Final Notice.

If a person agrees with the balance due, look to the tax resolution with a payment plan, currently not collectible status or offer in compromise. This decision must be made quickly as active collections are taking place. The best way to get tax help is from a tax attorney who will work to get a resolution that is most favorable to you and your financial situation.

If you do not agree with the balance due, submit the required information to validate your claim.

Remember, when you submit any information to the IRS, to always keep copies for your records.  Please call for a no-cost tax attorney consultation for a tax resolution.  We look forward to helping you.  This blog post is not intended as legal advice and should be considered general information only

Keywords:  IRS collection notices, IRS Collection Problems, IRS Collections, IRS Final Notice, IRS levies and property seizures, IRS Seizures

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TAX COMPLIANCE WITH THE IRS FOR TAX RESOLUTION

TAX COMPLIANCE WITH THE IRS FOR TAX RESOLUTION

Ever wondered if you could sole your tax problems with the IRS? Or maybe you don’t know how to go about it? The first and most important thing you need to do if you want the IRS to favor you in stipulated tax resolutions is; Tax compliancy. You must be tax compliant. The next question that should come to your mind is; what is tax compliance?

WHAT IS TAX COMPLIANCE?

Tax compliance simply means paying your tax as well as providing and submitting accurate information to tax authorities in required formats and on time. IRS tax liabilities aren’t aimed at a set of people, it can happen to anyone. So, don’t think you’re the only one in this situation. Taxpayers on so many occasions call their tax lawyers for help when they are in tax crisis. Tax liabilities can happen for so many reasons such as; economic meltdown, family issues, poor finance management, sickness, inadvertent oversight, etc.

TAX RETURN COMPLIANCE

Getting tax resolution with offer in compromise and installment agreement isn’t quite difficult. All the IRS requires of you is to be tax compliant. You must fill all required fields in the unfiled tax returns. This is actually not difficult, but most taxpayers find it very difficult to do so. In some cases, they are fraudulent in filing their tax returns.

If you decide to do the right thing by filing the tax return properly; all you need do is place a call through to the IRS requesting for a ‘compliance check’. You will get a list of the years that need to be filed from a representative. Make sure you ask if IRS has filed some returns for those years. You will also need the following to assist you in filing; wage and income transcript, and account transcript. You will need these if you don’t have any record of your own for those non-compliant years.

TAX DEPOSIT AND ESTIMATED TAX PAYMENTS

Tax compliance for all federal tax deposits and quarterly estimated deposits applies to self-employed or business men. Wrong calculation or simple deposit error of the above named deposits which can be caused by a bunch of business and personal reasons make taxpayers run into problems. Most taxpayers use the money for these deposits for something else, hoping to make it back within the year, but they always end up with tax debt and damages.

Even if you fall out of compliance, don’t try to run away from it. Face the problem head-on, many people fall victim of this. School yourself on the rules of tax compliance or get the assistance of a tax attorney. This would prove very helpful.

Estimated Tax Payments for Individuals

If you want to get back on track with your tax compliance, you need to update all your estimated quarterly tax. Their due dates are; April 15th, June 15th, and September 15th of the corresponding year and 15th January of the next year. You can easily calculate how much your estimated tax payment should be. Simply check your previous tax return and divide your tax liability by four.

Your CPA can also help in calculating your estimates if you believe your next return to be more than the present one. You can also use the IRS estimated tax payment information at www.IRS.gov to get your estimated payments. This would be very helpful in eliminating liability reoccurrence on your returns to come.

Estimated Tax Deposits for Business

Every business man or taxpayer also needs to be up-to-date with their required 941 employment tax deposits and 940 unemployment tax deposits. This should be in addition to your quarterly tax payment. It can also be of an advantage to make quarterly estimated payments for future return years. This doesn’t really change anything, but you can still do it.

You can pay your 941 employment tax deposits either; semi-weekly, monthly, or quarterly. It all depends on the wage allocated to each quarter. You can check-out the IRS Notice 931 for assistance in filing and payments.

You ca easily avoid tax problems resulting to; wage garnishments, bank levies, and tax liens by simple tax compliance. The IRS uses tax return and estimated tax compliance to checkmate taxpayers, to make sure they don’t incur tax debt at tax times.

Feel free to contact the Los Angeles Tax Attorney at Delia Law for a no-cost tax attorney consultation. The Los Angeles Attorneys have years of experience in tax preparation and tax resolution experience. We are sure of perfectly representing your interest before the IRS. You can reach us on (310) 494-0100. We look forward to hearing from you, and also help you become tax compliant.

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