Today we have launched a new website, Larson Tax Relief, to better serve the needs of our customers who needed a better mobile experience.
Information on Tax Resolution Services
In the course of our daily tax resolution services work, we are continually fighting to protect the assets and rights of our tax resolution clients. So it’s with applause to the IRS in their recent unveiling of an updated Taxpayer Bill of Rights.
This Bill of Rights takes the various existing rights embedded in the tax code and simplifies them into ten categories, in an effort to make them easier for taxpayers to understand and easier for use.
“The Taxpayer Bill of Rights contains fundamental information to help taxpayers,” said Internal Revenue Service Commissioner John A. Koskinen.
The IRS released the Taxpayer Bill of Rights was impacted by the Taxpayer Advocate Service, which is an independent office inside the IRS that strives to represent taxpayer interests. We often deal with the Taxpayer Advocate Service in the course of executing tax resolution services on the behalf of clients, when, for example, a revenue agent has strayed from proper procedure.
The tax code includes numerous taxpayer rights, but they are unorganized, making it difficult for people to find and comprehend. Similar to the U.S. Constitution’s Bill of Rights, the Taxpayer Bill of Rights contains 10 provisions. They are:
The rights have been incorporated into a redesigned version of Publication 1, a document that is routinely included in IRS correspondence with taxpayers. Millions of these mailings go out each year. The new version has been added to IRS.gov, and print copies will start being included in IRS correspondence in the near future.
In summary, this taxpayer bill of rights is a boon to the tax payer and will allow us to be even more effective in our communication to clients about their rights and options in the course of providing tax resolution services.
IRS Offer in Compromise Help and Qualification
Everyday we get questions from people who have visited our Offer in Compromise Help page, asking for further and individualized help with the IRS’s “OIC” program. Taxpayers under strain ask if they can settle their debt for “pennies on the dollar” as they’ve seen on TV or heard on the radio. The Offer in Compromise is an excellent option for reducing a tax debt if you qualify. And that’s the big if. The IRS is not known for giving people a break, especially when the IRS smells money. The key considerations are:
The IRS has taken recent actions to make the program even more comprehensible and less prohibitive. Among the major changes to the Offer in Compromise program, the IRS has unrolled a user-friendly Pre-Qualifier Tool to aid taxpayers in determining if they may be eligible for an Offer in Compromise. The webform guides you though a series of questions about your financial condition, and it determines whether an OIC is right for you. It will ask questions such as:
Before you submit an Offer in Compromise, you must be current and compliant with filing and ongoing tax obligations for the current quarter/year. Missing returns and/or delinquencies in estimated tax payments or tax deposits will disqualify you from an Offer in Compromise.
It is important to remember that each determination is made based on the completed Offer in Compromise paperwork (and its substantiating documentation) and the associated examination. Submitting an application does not guarantee that the IRS will accept your Offer. Submitting and OIC is the beginning of a long process. As a general rule of thumb, the IRS will not accept an Offer if you exhibits an ability to pay the tax debt in full by way of an Installment Agreement or a one-time payment, and the IRS will generally approve an Offer when the amount offered represents the most they can expect to collect within a reasonable period of time.
Your non-refundable payments are applied to your taxes due
In recap, the Offer in Compromise is a complex proposal. If you have questions about if it’s right for you or know it’s right for you but want help executing it correctly, contact us for a free consultation today.
The IRS announced statistics for its Criminal Investigation division for the fiscal year 2013. There was a 12% increase in investigations initiated compared to the prior year and over a 17% increase in prosecution recommendations. Specifically, the IRS began 5,314 cases and recommended 4,364 cases for prosecution.
These numbers are ominous, but the most chilling statistic is the IRS’s conviction rate of 93%.
What does this mean for the average taxpayer? If you cheat on your taxes and get caught, don’t expect to get away with it. This is why we work so hard in the course of our tax resolution services work to make sure that we go to the IRS first with any mistakes that may have been made in our client filings, so they do not end up erroneously in a criminal investigation.
If you think or know errors were made in the past on your filings, seek professional advice because your chances of liking the IRS’s process are about 7%.
Larson Tax Problem Solvers
When you sell a ’capital asset,’ the sale usually results in a capital gain or loss. A ‘capital asset’ includes most property you own and use for personal or investment purposes. Here are 10 facts from the IRS on capital gains and losses:1. Capital assets include property such as your home or car. They also include investment property such as stocks and bonds.
2. A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.
3. You must include all capital gains in your income. Beginning in 2013, you may be subject to the Net Investment Income Tax. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts. For details seeIRS.gov/aca.
4. You can deduct capital losses on the sale of investment property. Youcan’t deduct losses on the sale of personal-use property.
5. Capital gains and losses are either long-term or short-term, depending on how long you held the property. If you held the property for more than one year, your gain or loss is long-term. If you held it one year or less, the gain or loss is short-term.
6. If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a ‘net capital gain.’
7. The tax rates that apply to net capital gains will usually depend on your income. For lower-income individuals, the rate may be zero percent on some or all of their net capital gains. In 2013, the maximum net capital gain tax rate increased from 15 to 20 percent. A 25 or 28 percent tax rate can also apply to special types of net capital gains.
8. If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.
9. If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they happened that year.
10. You must file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses. You also need to file Schedule D, Capital Gains and Losses with your return.
The IRS has a free filing services available here: IRS Free File. It is the quickest way to get your refund is to combine e-file with direct deposit.
You may use the service if you made less than $58,000, and you can use Free File tax software to e-file your tax return. We have not confirmed this but the IRS says that the software is easy to use and will guide you through the steps of filing your taxes. If your income is more than $58,000 and you’re comfortable doing your own taxes, you can use Free File Fillable Forms. This program is the electronic version of IRS paper forms.
~Tax Resolution Services tips~
We often see Tax Resolution services clients get tagged with a tax bill because they received debt relief in connection with real estate or other debts. This is often the uncalculated and not-advertised side of getting a break on debt. The IRS, however, has issued a revenue procedure to help taxpayers with so-called “mezzanine” financing in workouts and similar circumstances when they have debts that have been discharged in connection with real property, but most do not know about this.
So, if you have had a debt forgiven or written down/off by a creditor, you may owe taxes on the margin. It’s best to seek tax advice about if you will owe taxes on debt relief rather than hoping you don’t and ending up needing tax resolution services to get things straight later.
~Tax Resolution Services and Tax Advice~
According to a report from the Transactional Records Access Clearinghouse, the number of people referred by the IRS for criminal prosecution has grown substantially in the last several years. In the report, they detailed that between 2009 and 2013, Criminal Prosecutions on Rise at the IRS. The number of new IRS cases prosecuted last year was 2,010, 30.6% more than in 2012 and the most since 1997. The average annual number of criminal prosecutions since 2009 is about 20% higher 2000-2008. TRAC also described the upward trend occurring even though the number of IRS full-time criminal investigators has not grown. The average of 2,758 IRS criminal investigators during the Bush years has shrunk to 2,705 (a 2% drop) during the Obama administration.
We occasionally come across a Tax Resolution services client that ends up in the criminal division of the IRS, and when this happens, it’s not pretty. So, don’t be that guy, and play by the rules.
~Tax Resolution Services and Tax Advice~
As we have written before, we often get money back to our tax resolution services clients because they missed deductions on their tax filings. One often overlooked category is education.
~Tax Resolution Services and Tax Advice~
Here is a fun fact (not so fun for the Olympian): the IRS taxes the winner of an Olympic medal, based on an income value of $25,000 for gold, $15,000 for silver, and $10,000 for bronze. How did the IRS come up with these values in the first place? It certainly isn’t on the base cost of the commodity, which were priced per ounce as follows today:
So, according to the IRS’s logic, the bronze has the most added value, and the gold medal winner is getting totally ripped off. I’d love to hear the IRS’s logic on this one.
~Tax Resolution Services Pro~
One little understood area of our tax code is the ATM, and we are not referring to a banking machine. This is the Alternative Minimum Tax, which attempts to ensure that some individuals who claim certain tax benefits pay a minimum amount of tax. You may have to pay this tax if your income is above a certain amount. Failure to do so could get in trouble with the IRS and in need of Tax Resolution services.
Here are some things from the IRS that you should know about AMT:
1. You may have to pay the tax if your taxable income, plus certain adjustments, is more than the AMT exemption amount for your filing status. If your income is below this amount, you usually will not owe AMT.
2. The 2013 AMT exemption amounts for each filing status are:
• Single and Head of Household = $51,900
• Married Filing Joint and Qualifying Widow(er) = $80,800
• Married Filing Separate = $40,400
3. The rules for AMT are more complex than the rules for regular income tax. The best way to make it easy on yourself is to use IRS e-file to prepare and file your tax return. E-file tax software will figure AMT for you if you owe it.
4. If you file a paper return, use the AMT Assistant tool on IRS.gov to find out if you may need to pay the tax.
Small business owners are often so busy running their business that they forget to account for the deductions that they can take. We see this in our tax resolution work quite often. They are getting assessed for a tax but they had expenses to offset the money that the IRS is claiming is owed. With the Affordable Care Act, there has been much confusion about all things health care. Here is what you need to know for this tax season.
If you were self-employed and paid for health insurance, you may be able to deduct premiums you paid to cover your child under the Affordable Care Act. It applies to children under age 27 at the end of the year, even if not your dependent.
~Tax Resolution and Tax Advice
In our day-to-day tax resolution battles with the IRS, We often find that clients have not deducted all the expenses that were legal and justified. Why does this happen? Often it’s because they just didn’t file their taxes, or if they did, they used a computer program that didn’t properly capture the scope of their financial situation. For businesses, it’s often a matter of the business owner is so busy that he or she just falls behind on the business of running the business. This is one place that we often gat money back, in the course of our tax resolution services work.
Child related deductions should not be overlooked, but you also need to make sure you’re eligible to take the deduction. Here are several things to consider.
1. In most cases, you can claim your child as a dependent. This applies even if your child was born anytime in 2013.
2. Child Tax Credit. You may be able to claim the Child Tax Credit for each of your qualifying children under the age of 17 at the end of 2013. The maximum credit is $1,000 per child. If you get less than the full amount of the credit, you may be eligible for the Additional Child Tax Credit.
3. Child and Dependent Care Credit. You may be able to claim this credit if you paid someone to care for one or more qualifying persons. Your dependent child or children under age 13 are among those who are qualified. You must have paid for care so you could work or look for work.
Now, let’s all get to filing our taxes!
~Tax Resolution Services and Tax Advice~
The IRS says their workload has increased over the past decade, and since 2010, funding and staffing have been cut by 8 percent. Impacts of this included:
The IRS also recently announced it will only answer “basic” tax law questions on its telephone lines and it will not answer any tax law questions after the filing season, including questions from the millions of taxpayers who obtain filing extensions and prepare their returns later in the year.
Have you rolled into 2014 with an open checkbox next to an item labeled get “Tax Resolution Help?” If so, now is the time to act.
Getting tax resolution services help is often the best way to deal with a tax problem that has not gone away and has likely grown. If you continue to do the same thing, you can usually expect the same result. So, why delay when help is just a phone call away? Are you worried that you cannot afford help? Often times we save our clients thousands of dollars. At minimum we allow you to get back to your business and family, while we win the tax resolution fight for you. And what is that worth?
Please call us today for a free consultation about how your family or business can benefit from tax resolution services. 303-554-0778.
~ The Tax Resolution Pros
IRS Direct Pay was recently established to allow you to make installment agreement payments, 1040ES payments, or balance due payments. This is an additional way to make payments without having to navigate EFTPS and without risk of lost or stolen US Mail. Please use the following internet address for more information and to complete a direct payment with the IRS:
As always, should you have any questions, please do not hesitate to contact me or my team at 888-589-0955.
Larson Financial, Inc.
Was your New Year’s tax resolution to files your taxes earlier than last year? Well too bad because the IRS has shortened the upcoming tax filing season by 10 days, as a problems continue as a result of the government shutdown in October. The IRS says it needs more time to program it’s tax return processing computers because they fell behind during the 16-day government closure.
The deadline of April 15 will remain in place but the filing period will begin on Jan. 31.
IRS commissioner Daniel Werfel said, “It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”
What does this mean for the average taxpayer? Probably not much since so many wait until the last minute. Those people who were planning on filing early and trying to get their refund early will be the ones most disappointed.
- Tax Resolution Services Pro
In the course of helping taxpayers in tax resolution services, we often deal with statutes of limitations for taxes. Now we learn the IRS may have issues calculating these time-frames for collections.
The Collection Statute Expiration Date (CSED) ends the Government’s right to pursue collection of a tax liability and is generally 10 years from the tax assessment date. Some situations require the CSED to be recalculated. However, the CSED is not always recalculated accurately. A CSED incorrectly calculated beyond the actual statute of limitations may result in unlawful collection activity and violate a taxpayer’s rights. Conversely, the IRS could potentially lose revenue if an inaccurate CSED appears to have expired when the debt is still collectible.
WHY TIGTA DID THE AUDIT
Over the years, the IRS has taken steps in an attempt to improve CSED accuracy. However, the National Taxpayer Advocate has reported miscalculated CSEDs as one of the most serious problems encountered by taxpayers. This audit was initiated to determine whether CSED recalculations were properly and accurately completed to effectively protect taxpayers’ rights and the Government’s interest.
WHAT TIGTA FOUND
Test results of a statistical sample of 75 tax modules from a population of 1,085 with manually recalculated CSEDs showed that 29 (39 percent) of the 75 tax modules contained errors. Twenty-one had inaccurate CSEDs and eight were missing the required documentation to support the CSEDs. Based on the results of our case review from a population of 1,085 tax modules that were manually recalculated between July 1, 2011, and June 30, 2012, we estimate that CSEDs for 260 tax modules were extended longer than they should have been, 43 tax modules were not extended as long as they should have been, and 116 tax modules were unverifiable.
Most errors were made by employees. These employees generally request CSED recalculations through the Integrated Collection System, and the request is systemically sent to the requesting employee’s manager for approval. Managerial approval is required when CSEDs are extended or updated for any reason. However, the current internal controls requiring managerial approval are not effectively ensuring the accuracy of manually recalculated CSEDs.
An IRS computer system recalculates most CSEDs systemically. Random samples from eight separate activities that trigger systemic CSED recalculations showed that all CSEDs were accurate for six of the eight activities. However, the CSED recalculations were not always accurate for modules involving bankruptcies or estates.
TIGTA also identified nine taxpayers who received an annual balance due reminder notice after the CSED expired.
WHAT TIGTA RECOMMENDED
To improve the accuracy of CSED recalculations, TIGTA recommended that the IRS: 1) strengthen controls to ensure that manual CSED recalculations are accurate and properly reviewed and approved; 2) ensure that pending programming corrections are implemented for bankruptcy recalculations; and 3) determine what action is necessary to mitigate the potential burden on taxpayers who received reminder notices after the CSED expired.
In their response to the report, the IRS agreed with all of TIGTA’s recommendations and has taken or plans to take corrective actions. Specifically, the IRS plans to: 1) revise the Internal Revenue Manual to require employees to include the manual CSED computation steps in the case history for the group manager to review for accuracy and appropriateness when approving a CSED update; 2) determine the appropriate programming correction(s) needed for bankruptcy recalculations; and 3) explore options to mitigate the potential burden on taxpayers who received the annual reminder notice in error and determine which option(s), if any, to pursue.
Tax Resolution Services
WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following:
Special Tax-Free Charitable Distributions for Certain IRA Owners
This provision, currently scheduled to expire at the end of 2013, offers older owners of individual retirement arrangements (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, first available in 2006, can be used for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.
To qualify, the funds must be transferred directly by the IRA trustee to the eligible charity. Distributed amounts may be excluded from the IRA owner’s income – resulting in lower taxable income for the IRA owner. However, if the IRA owner excludes the distribution from income, no deduction, such as a charitable contribution deduction onSchedule A, may be taken for the distributed amount.
Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.
Amounts transferred to a charity from an IRA are counted in determining whether the owner has met the IRA’s required minimum distribution. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats amounts distributed to charities as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.
Rules for Charitable Contributions of Clothing and Household Items
To be tax-deductible, clothing and household items donated to charity generally must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return.
Donors must get a written acknowledgement from the charity for all gifts worth $250 or more that includes, among other things, a description of the items contributed. Household items include furniture, furnishings, electronics, appliances and linens.
Guidelines for Monetary Donations
To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.
Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.
These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements.
Wouldn’t it be ironic if the government hired a tax resolution firm to help the IRS’s own vendors get tax resolution services on back tax debt? According to the Treasury, some 1,100 IRS vendors owe over half a billion dollars in back taxes and federal law generally prohibits agencies from contracting with businesses that have unpaid Federal tax liabilities.
The Treasury reviewed the IRS’s controls over the integrity and validity of vendors receiving payments from the IRS, including the vendor’s tax compliance and suspension and debarment status. TIGTA also reviewed controls over the IRS’s Vendor Master File , which contains information about vendors that enables them to do business with the IRS.
The vast majority of vendors that conduct business with the IRS meet their Federal tax obligations. However, TIGTA found that 1,168 IRS vendors (7 percent) had a combined $589 million of Federal tax debt as of July 2012, the most recent data for which information was available at the time TIGTA conducted the review. Few of the vendors had a current tax payment plan.
“When the IRS conducts business with vendors that do not comply with Federal tax laws, it conveys a contradictory message in relation to its mission to ensure compliance with the tax laws,” said J. Russell George, Treasury Inspector General for Tax Administration.
In reports issued in September 2011 and September 2010, TIGTA recommended that the IRS require an annual tax check for all IRS contractors. The IRS disagreed with the recommendations at the time, since there was no Federal law or regulation authorizing a Contracting Office to complete an annual responsibility determination, and as a result, no justification to obtain an annual tax check. TIGTA continues to believe the IRS should establish procedures requiring annual tax compliance checks for all contractors.
TIGTA’s current report also found that the IRS’s efforts to prevent suspended and debarred vendors from receiving IRS contracts generally appeared effective. However, TIGTA found that the IRS improperly awarded four new contracts or exercised additional option years on existing contracts, valued at $2.6 million, to three vendors that were excluded (suspended) from doing business with the Federal Government.
Further, the IRS could improve its overall control of the IRS Vendor Master File (VMF). TIGTA found insufficient oversight and a lack of monitoring over operation and maintenance of the file, which contains information about vendors that enables them to engage in contracts, purchase orders, and other noncontract acquisition methods for the purpose of providing goods and services to the IRS and receiving payment for goods and services delivered.
TIGTA recommended that the IRS determine why it did not identify the suspended vendors within the General Services Administration’s Excluded Parties List System . In addition, TIGTA made several recommendations to improve the controls over VMF maintenance and operation. IRS management agreed with TIGTA’s recommendations and plans to take corrective actions.
- Tax Resolution Services
The IRS has updated the 2014 mileage deduction rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
The business, medical, and moving expense rates decrease one-half cent from the 2013 rates. The charitable rate is based on statute.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate determined during Oct. 2013 to take effect Nov. 1, 2013, based on daily compounding.
The IRS warns consumers not to fall for bogus charity scams. They often occur in the wake of major disasters like the recent tornadoes in the Midwest or the typhoon in the Philippines. Thieves play on the goodwill of people who want to help disaster victims. They pose as a real charity in order to steal money or get private information to commit identity theft.
The scams use different tactics. Offering charity relief, criminals often:
The IRS offers the following tips to help taxpayers who wish to donate to victims:
Get more information about tax scams and schemes at IRS.gov. Click on ‘Tax Fraud & Abuse’ at the bottom of the home page. You can also get Publication 526 at IRS.gov or call 800-TAX-FORM (800-829-3676).
Victims of severe storms, straight-line winds and tornadoes that began on Nov. 17, 2013 in parts of Illinois may qualify for tax relief from the Internal Revenue Service.
Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Illinois will receive tax relief, and other locations may be added in coming days based on additional damage assessments by FEMA.
The President has declared the counties of Champaign, Douglas, Fayette, Grundy, Jasper, La Salle, Massac, Pope, Tazewell, Vermilion, Wabash, Washington, Wayne, Will and Woodford a federal disaster area. Individuals who reside or have a business in thesecounties may qualify for tax relief.
The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Nov. 17, and on or before Feb. 28, 2014, have been postponed to Feb. 28, 2014.
The IRS is also waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Nov. 17, and on or before Dec. 2, as long as the deposits are made by Dec. 2, 2013.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.
The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.
We see a lot of tax resolution need as a result of IRS audits. Often the taxpayer is left owing thousands and without the money to pay up. Tax resolution services are good to have when you cannot pay what the IRS wants, and now there is additional good news to small businesses under audit. The Internal Revenue Service today announced the nationwide rollout of a streamlined program designed to enable small businesses under audit to more quickly settle their differences with the IRS.
The Fast Track Settlement (FTS) program is designed to help small businesses and self-employed individuals who are under examination by the Small Business/Self Employed SB/SE Division of the IRS. Modeled on a similar program long available to large and mid-size businesses (those with more than $10 million in assets), FTS uses alternative dispute resolution techniques to help taxpayers save time and avoid a formal administrative appeal or lengthy litigation. As a result, audit issues can usually be resolved within 60 days, rather than months or years. Plus, taxpayers choosing this option lose none of their rights because they still have the right to appeal even if the FTS process is unsuccessful.
If you are under audit by the IRS or state, it may be a good idea to reach out for some tax resolution help. We offer free consultations and are just a call away at 888-589-0955.
- Tax Resolution Services
A Treasury Inspector General for Tax Administration (TIGTA) analysis of Tax Year 2011 tax returns identified approximately 1.1 million undetected tax returns filed using SSNs that have the same characteristics of IRS-confirmed identity theft tax returns. Potentially fraudulent tax refunds issued total approximately $3.6 billion. Although these tax returns met the characteristics of IRS-confirmed identity theft cases involving the use of an SSN, some potentially fraudulent tax returns identified could also be the result of non-reporting of income and withholding by the employer or an individual using his or her own SSN to file a fraudulent tax return. The amount of undetected potentially fraudulent refunds is down by $1.6 billion from the $5.2 billion reported for Tax Year 2010. Despite the increased efforts, billions of dollars in potentially fraudulent tax refunds continue to be issued without detection.
Identity theft and bogus IRS filings for bogs refunds is growing very, very fast according to a recent Reuters story. This is significant because people often inquire about tax resolution service due to identity theft. The story says:
[...] that tax refund fraud have exploded in recent years. Scammers typically use stolen names and Social Security numbers to file phony electronic tax forms for IRS refunds.
About 1.6 million Americans were victims of ID theft/tax refund crimes this year through June, up from 1.2 million taxpayers in all of 2012, the Treasury Inspector General for Tax Administration (TIGTA) said in a report.
“Identity theft is a growing epidemic,” said J. Russell George, TIGTA’s chief.
Democratic Senator Bill Nelson of Florida, a hot spot for these crimes, said in a statement that TIGTA’s analysis shows the IRS is making progress, but much remains to be done.
TIGTA said that while the number of frauds has risen, the amount of federal revenue lost to these crimes has decreased. In 2011, the government lost $3.6 billion in potentially fraudulent tax refunds, down from $5.2 billion in 2010.
The thieves are increasingly working from abroad, TIGTA found. In 2011, someone using a single mailing address in Lithuania made more tax filings with fraudulent Social Security numbers than any single U.S. address, TIGTA said.
The Lithuanian address received $220,489 in fraudulent IRS refunds; an address in Shanghai received $156,533.
“The constantly evolving tactics used by scammers to commit identity theft continues to be one of the biggest challenges facing the IRS,” the IRS said in a statement on Thursday.
TIGTA said the IRS must do more to spot red flags signaling potential fraud in tax filings, such as multiple filings from the same address, and to help victims more quickly.
The IRS said it agreed with TIGTA’s recommendations. (Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh, Bernard Orr)
Tax resolution services can encompass many strategies and services to best fit the client’s needs with the options available in the tax code. For example, taxes can have a statute of limitations, which means the taxing authorities have a limited time to collect the debt before the government loses its ability to collect the taxes. Depending upon the type of tax and various other factors, this can range in time frame. But, if you sign a payment plan with the government and that payment plan exceeds in time frame the statute of limitations, it is possible that you may not pay all the taxes assessed. This is known as a partial pay installment agreement.
We had a client that owned a hair salon and was facing a debt of $105,000 to the Internal Revenue Service. After providing full financial information for the business, the client’s tax resolution team at Larson Financial was able to establish a partial pay agreement with the IRS for $500 per month. We also conducted the trust fund interview with the Revenue Officer for the owner of this business and were successful in negotiating the assessment of the trust fund of nearly $50K and having it placed into a hold status and cross referenced to the business installment agreement.
Larson Financial has been an industry leader in achieving tax resolution arrangements with the government that allow our clients to pay what they can afford on a monthly basis until the statute of limitations runs out on their debt. As always, Larson Financial is the place to turn when you are in need of tax resolution services. We provide honest, personalized resolutions for tax debt. Collection division representation is our specialty and we take the guesswork out of dealing with the collections divisions, allowing our clients to concentrate on running their businesses. Contact the tax resolution specialists at Larson Financial today at 888-589-0955 or online at www.larson-financial.com.
Perhaps we have found a new group of people who are in need of tax resolution service: IRS contractors and employees. Apparently there are plenty of people who work for the IRS owe substantial back taxes. A report by the Government Accountability Office found that IRS contractors owed over $5 million in federal taxes and that half of them had no arrangement with the IRS for paying it back.
We at Larson Financial look forward to working with these people in need of tax resolution services, who ironically owe their employer.
Tax Resolution Service Pro
Your checklist when you have an audit, to bring it to a speedy and stress free resolution.
> If relevant, report all your tips. The IRS knows how much is reasonable (and the rules are extensive for restaurants). Make sure your figures are in the ballpark, given your type of work.
> Explain suspicious items in your tax return. If you know that something in your return may raise some eyebrows, consider attaching a note to explain the situation. This could satisfy the IRS agent who has been assigned your file, and he could skip notifying you altogether.
> Be consistent with other tax returns and other years. If you are a member of a partnership, make sure your figures agree with the figures in the partnership return. If you claimed the once-in-a-lifetime exclusion on gain from the sale of a home several years back, don’t claim it again. If you sold depreciated property, make sure your capital gain or loss is consistent with the previous year’s write-offs.
> Report job-related expenses properly. You can’t deduct them if you were reimbursed by your employer.
> Have records and receipts for your deductions. If you are audited, you may be called on to prove the deductions you claimed. Records and receipts are the best way. Keep these records for at least three years. After that, it’s unlikely you ever will be asked for them.
> Don’t itemize if it doesn’t really benefit you. You know not to itemize if your deductions don’t exceed the standard deduction. But what if your itemized deductions only slightly exceed the standard deduction? Don’t itemize. You’re not really saving any money, because you get the standard deduction anyway. But you are adding audit bait to your return.
> Don’t mix business and personal expenses. Don’t use the business to buy yourself a car or pay for a vacation or put your children through school or anything that is personal.
If you owe taxes after a tax audit, call Larson Financial Tax Resolution for a free consultation about your rights and options for tax resolution services. 888-589-0955.
We have a tax resolution client that runs a Comedy Club. Prior to hiring us for the outstanding State of New York tax issues they had a third party come in and purchase the assets, goodwill, and inventory from our client. However, they conducted this transaction without regard to the State Tax Liens in place covering over $82,000 in sales tax and withholding liability. The State of New York was attempting to assess the buyer with the entirety of the liability owed!
We had to go back and recreate the transaction by showing the State of New York the purchase agreement, sales documents, and have the client cut a check to the State in the amount of $6,000 and another $1,000 or $2,000 to cover the sales tax in relation to the transaction. Yes, the State of New York charges sales tax on the resale of assets, licensing, inventory, and goodwill in a business transaction. Unbelievable. We had to go through the Bulk Sale Unit, which by State law a buyer and seller have only 15 days to report the transaction and pay either the liability owed by the seller in full, or pay for the value of the assets along with the applicable tax. If they do not abide by this rule the buyer can be assessed the liability.
After negotiations with the bulk sale unit and the filing of an appeal with the State of New York they agreed to allow us a conciliation conference to discuss the issues with the transaction. We provided all of the sales documents and a copy of the payment that was made to the State when we went back to correct the problem.
Last week we heard back from the State of New York and they decided not to assess the new business with the $82,000 and accept the payment made, with penalty and interest totaling $3,000 to settle the issue. We saved the new business from lien filings, levies, and other collection action the State might take with regard to the debt, and we saved them over $70,000.
Larson Financial Tax Resolution
The federal government finally came to a resolution on the budget and debt ceiling, albeit for only a couple months. But, the federal government is back to business and just because the government shutdown and took with it the IRS for 16 days, doesn’t mean we can delay filing our taxes. Or can we? It depends on when the IRS actually opens the chute and begins letting in tax return.
The IRS announced a delay of approximately one to two weeks to the start of the 2014 filing season to allow adequate time to program and test tax processing systems following the 16-day federal government closure. The original start date of the 2014 filing season was Jan. 21, and with a one- to two-week delay, the IRS would start accepting and processing 2013 individual tax returns no earlier than Jan. 28 and no later than Feb. 4.
Because about 90 percent of IRS operations were closed during the shutdown, the delay is needed. “Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right,” Acting IRS Commissioner Werfel said. “The adjustment to the start of the filing season provides us the necessary time to program, test and validate our systems so that we can provide a smooth filing and refund process for the nation’s taxpayers. We want the public and tax professionals to know about the delay well in advance so they can prepare for a later start of the filing season.”
The IRS will not process paper tax returns before the start date, which will be announced in December. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit. The April 15 tax deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.
“In the days ahead, we will continue assessing the impact of the shutdown on IRS operations, and we will do everything we can to work through the backlog and pent-up demand,” Werfel said. “We greatly appreciate the patience of taxpayers and the tax professional community during this period.”
Most State Authorities operate without efficiency, they are understaffed, underpaid, and overworked. Therefore, their objective is to collect the outstanding amount owed as quickly as possible by way of levy, garnishment, and seizure and sale of business or personal assets.
We recently had a client come on board with a State of Colorado tax liability (withholding taxes) totaling over $50,000. We called the representative on file, after a few weeks of messages left, the State of Colorado went out to my client’s business location and left a 3 day notice to seize and sell the assets of the business if the liability went unpaid. We immediately got on the phone with the representative and started discussing strategy. At first she mentioned the State of Colorado would only extend a 3 month agreement. We kindly informed her this would not work for the client. We decided to take a look at other agreements that had been set up over time with other associates in our office. With this being said, we found the State has extended a 12 month agreement, 6 month agreement, 8 month agreement, and a 15 month agreement, all with a 25% down payment to accompany each agreement. So we ran these options by the client and we decided on 25% down with payments over the next 8 months. As soon as we could we sent a proposal in writing to the Group Manager, as well as the State Revenue Officer to avoid potential collection action. The State Revenue Officer emailed us back and indicated the agreement would be reviewed by a higher authority and she would get back to us by next week.
Long story short, we secured the agreement we wanted by virtue of patience and hard work. We saved the client from being seized and arranged a payment plan that would work for both the State of Colorado and the client. It is important to remember when dealing with any State Tax Agency to stay in touch, put everything in writing, and follow up promptly with the Revenue Officer and the Group Manager. Otherwise, you could be left holding the ball for a client in desperate need of resolution, when a resolution could have been obtained without unnecessary collection action.
If you have questions about taxes, tax debt or tax resolution services, call Larson Financial today at 888-589-0955 for a free consultation.
LFI Tax Resolution
A client came on board with a $23,000 liability to CA EDD (California Employment Development Department), and was missing returns. There was a bank levy that was sent a few days before we were hired that hit his account the day after we did the initial. The levy captured the entire amount due to the State, but I was able to get the levy release based on his future payroll obligations. The EDD does not usually release levies for future payroll obligations, but nonetheless we were successful in negotiating a full release of the levy. Needless to say, this resolution saved the client’s business and he was ecstatic.
Tax resolution can come in many forms and combinations. It depends upon the type of taxes owed, amount owed, and ability to pay. Depending upon your unique situation, there may be one or more options available for resolving your tax issue. At Larson Financial, we pride ourselves in giving clients the individual attention necessary to find the right solution for their tax needs. We are committed to providing an atmosphere of honesty, integrity and superior service. Contact us now at 888-589-0955.
If you’re planning on selling or refinancing property this summer a federal tax lien can make the process difficult to say the least. But there are several options available that can help you. First and foremost, verify the lien to make sure the tax is still owed. If the tax has been paid or is no longer due, you can request that the IRS issue a Certificate of Release. Options that are available if the tax has not been paid and is still a valid liability include:
Larson Financial Tax Resolution can help you resolve back taxes and tax lien issues. We strive to save our clients money, time and stress. Just as there are many different tax related problems, there are many options for tax resolution. Call us at 888-902-0778 for a free consultation. In a few minutes we will help you to better assess what options are best for your unique situation. Visit our website to learn more about federal tax liens.
LFI Tax Resolution
Disaster Relief Payments Are Not Subject to Federal Taxation
Disaster relief payments received from damages during this year’s flood disaster are not taxable. The IRS says that “qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement.
“These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare and federal unemployment taxes). No withholding applies to these payments.”
The IRS statements on the taxability of disaster grants instruct taxpayers not to “include post-disaster relief grants received under the disaster relief and emergency assistance act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants.”
However, the website does note that “unemployment assistance payments under the act are taxable unemployment compensation.”
According to the IRS, qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses:
In New York, Governor Andrew M. Cuomo is getting aggressive in his ideas about how to encourage compliance with taxes. People who owe more than $10,000 will run the risk of losing their New York State driver licenses. Really. If there was ever a good time for getting a tax resolution services intervention, this is it. Here is what the Governor of New York had to say:
“Our message is simple: tax scofflaws who don’t abide by the same rules as everyone else are not entitled to the same privileges as everyone else,” said Cuomo. “These worst offenders are putting an unfair burden on the overwhelming majority of New Yorkers who are hardworking, law-abiding taxpayers. By enacting these additional consequences, we’re providing additional incentives for the state to receive the money it is owed and we’re keeping scofflaws off the very roads they refuse to pay their fair share to maintain.”
First the New York State Department of Taxation and Finance will send suspension notices to delinquent taxpayers, who then have 60 days pay up. There is one 15 day follow up letter but if the tax payer fails to pay their New York taxes they will have their license suspended.
If you are behind taxes to the state of New York do not let this happen to you. Call Larson Financial for a free tax resolution consultation.
Tax Resolution Services Help Blog
Beware of a new IRS scam out there. Starting last week we saw some of our tax resolution clients getting phone calls from someone who saying he’s an IRS employee. The alleged IRS agent told our clients that they needed to make an immediate payment – or else… Besides the timing with the government and IRS shutdown, one clue that something fishy is going on is that the callers seem to all have distinct foreign accents.
We are now hearing about this scam occurring on a large scale, not an isolated incident. This scam is purposely timed with the shut down, so that the target victim cannot call the IRS to verify the veracity of the caller’s claim and demand for immediate payment. By the numbers, some people will be scared enough of the IRS that they will fork over their credit card or bank numbers to the offshore scammers.
If you get a call like this, the best thing to do is simply take a message and be sure to get both a call back number as well as the caller’s IRS badge number. That gives you the ability to contact the IRS on a published phone number and verify the veracity of the call. Of course you will have to wait until the IRS is back up and running…
Tax Resolution Services
How Do I Know If I Am Eligible for an Offer in Compromise with the IRS?
Many of our clients approach us with questions about the IRS program called the Offer in Compromise, wondering if they truly could settle with Uncle Sam for “pennies on the dollar” as they’ve heard on the radio or seen on billboards. The program is an excellent option for resolution for qualifying taxpayer accounts …. “qualifying” being the fundamental word. Believe it or not, the IRS is not typically eager to cut the common taxpayer a break unless they recognize that the ability to pay the full amount owed is simply not there. So while settlement offers may not constitute the majority of resolutions reached with the IRS, they are a prime solution for many Americans.
Before a taxpayer submits an Offer in Compromise, the taxpayer must be current and compliant with filing and ongoing tax obligations for the current quarter/year. Missing returns and/or delinquencies in estimated tax payments or tax deposits will disqualify the taxpayer from an Offer in Compromise.
Fortunately, the IRS has taken recent actions to make the program even more comprehensible and less prohibitive. Among the major changes to the Offer in Compromise program, the IRS has unrolled a user-friendly Pre-Qualifier Tool to aid taxpayers in determining if they may be eligible for an Offer in Compromise. The tool guides the taxpayer though a series of queries about the taxpayer’s financial condition, and it determines whether the taxpayer is an Offer candidate in a matter of minutes. If the taxpayer is determined to be eligible for an Offer in Compromise with the IRS, the tool even provides estimated payment amounts for both short-term and long-term settlements. Check out the Pre-Qualifier Tool here at http://irs.treasury.gov/oic_pre_qualifier/ to see if you may be eligible for an Offer in Compromise with the Internal Revenue Service.
It is important to remember that each determination is made based on the completed Offer in Compromise paperwork (and its substantiating documentation) and the associated examination. Submitting an application does not guarantee that the IRS will accept your Offer; it simply begins a progression of review and corroboration by the Service, considering any unique conditions that may affect the taxpayer’s ability to pay. As a general rule of thumb, the IRS will not accept an Offer if the taxpayer exhibits an ability to pay the tax debt in full by way of an Installment Agreement or a one-time payment, and the IRS will generally approve an Offer when the amount offered represents the most they can expect to collect within a reasonable period of time. Follow up with your associate team to discuss whether you may be a candidate for an Offer in Compromise on your IRS liabilities.
P.S. For further research, explore these resources:
If you have questions about if you may be eligible for an Offer in Compromise, call us for a free consultation at 888-589-0955.
“?” – Is this the question you are asking yourself? This is one of the most common questions clients ask me when they begin services.
In a word, yes.
In general, my relationship with you as my new client involves you putting together some forms and a few paperwork pieces for me at the beginning. We usually have more calls together at the beginning as I work to get protection in place and discuss the best resolution options for you to choose from. Gradually, as the dust settles with the taxing authorities, we have a clear picture of how things will play out. At that point, I can generally give you an end date for the problem (assuming no new problems arise), when the entire problem will go away and finally be behind you.
Lisa Geyer, Esq.
Senior Associate, Larson Financial Tax Resolution Services
After working with so many clients over the years, common themes develop. The vast majority of clients I have had the pleasure of representing are stressed out beyond measure at the beginning of our relationship. Many have been keeping a tax problem a secret from friends and family for a long time. Some have begun experiencing medical problems as a result. There is something about having a liability with the government that puts pressure on someone like nothing else. I have had clients tell me that they were afraid to spend the money to hire me at the beginning because they felt guilty about owing in the first place.
Rest assured, another common theme I see is that most clients I have worked with experience a deep sense of relief once we get the problem out on the table and attack it using the best strategies experience can teach. This sense of relief can happen anywhere from a day to months into our relationship.
I encourage you to explore options toward getting to that point sooner, rather than later, as tax stress can rob you of the enjoyment you deserve in life.
Lisa Geyer, Esq.
Senior Associate, Larson Financial Tax Resolution Services
A common question from my new clients: “I am an honest business owner, but things got tight and I was unable to make 941 deposits for a period of time. Now I am unsure what to do. The IRS sends me bills and I try to pay them, but I am on a treadmill because I pay the old taxes and then cannot afford the current taxes. Sometimes, I am concerned about filing my current 941 form with a balance due. I keep thinking I will make a lump sum payment once my AR pays and take some of the heat off. I’ve always relied upon myself to get through times like these, that’s why my business has survived. Can Larson help?”
You can’t afford NOT to hire me at this point. Your expertise is business. Many of the rules of the taxing authorities are counter-intuitive and don’t make logical sense for business owners. You need a partner by your side that knows the rules of the game. I’d encourage you to talk with a Larson Financial Consultant to help match you to one of our competent Associates and build a successful partnership.
Lisa Geyer, Esq.
Associate, Larson Financial Tax Resolution Services
Much of the IRS is on a temporary vacation, but we still need to do the following to stay compliant with our taxes:
If you filed for an extension on your 2012 taxes, the deadline is still October 15, 2013. If you have a refund due, you’ll have to wait for that.
You have to make any and all scheduled tax deposits and filings. Even though the government may not process it in real time, they will be checking to see who has played by the rules.
If you receive a lien or levy notice that was filed before the shutdown, take this opportunity to discuss if you can benefit from tax resolution services. Here at Larson Financial, we are working through the government’s vacation, and are available to discuss your situation. Call us for a free consultation at 888-589-0955.
Tax Resolution Services
The IRS has shut its doors, sort of… Though many low level employees are on a furlough, nearly 9000 IRS employees are still showing up to do the good work of collecting the money that the government has spend but cannot agree how to afford.
What does this mean for you? It means that you still have to file and pay your taxes on time of course, but you cannot call the IRS to ask them a question. Also, the Criminal Investigation Division is still operational, so that’s bad news if you are in deep to the IRS.
The IRS isn’t shut down but they are slowed down. So, if you are behind on your taxes, this is a good time to get professional IRS tax resolution advice. Call us at 888-589-0955 for a free consultation about your rights and options.
A tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. If you have received a tax lien, you may need tax resolution services help because this is an important step that allows the government to enforced collection, such as with a bank levy. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets. Most states file tax liens but some call them tax warrants instead. They operate the same. The IRS files tax liens after the IRS:
The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property. This is a good reason to engage in tax resolution services. Avoiding or reversing a tax lien can help your credit from being severely damaged.
Paying your tax debt – in full – is the best way to get rid of a federal tax lien. This is not always possible, however. Tax resolution services oriented to removing a tax lien may include the following:
For more information about tax liens and tax resolution services, contact Larson Financial Tax Resolution Services at 888-589-0955.
The Treasury Department has issued new regulations that require all taxpayers who have been issued an EIN (employer identification number) to provide the IRS with additional information starting January 1, 2014. The IRS wants to be able to identify a true responsible person to be associated with each EIN in order to be able to contact the correct person regarding tax matters related to the entity. These regulations may create difficulties for organizations such as law, accounting and business management firms that keep track of legal entities for hundreds or even thousands of clients.
A levy is a legal seizure of your property to satisfy a tax debt and is the number one tax problem that requires tax resolution services help. A bank levy is a very aggressive enforced collection action and may continue repeatedly until all taxes that are claimed to be owed to the IRS are paid in full.
Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property in resolution of the tax debt.
If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. For instance,
The IRS usually levies after:
If a levy on your wages, bank account or other property is causing a hardship you should consider tax resolution services. Contact Larson Financial immediately for help. We can often get a levy released or reversed within 24 hours of engaging our tax resolution services. As always, it’s easier to prevent that reverse a bank levy. Contact us if you have concern that a bank levy is possible. 888-589-0955
In January the IRS will start rules that are likely going to increase the need for tax resolution services, as more taxes yield more tax debt.
The change by the IRS is causing restaurants to rethink the practice of adding automatic tips to the tabs of large parties. This is because restaurants are required to report to the IRS what its employees report receiving for tips and to pay Medicare and Social Security taxes on those amounts.
Starting in January, the Internal Revenue Service will begin classifying those as service charges—which it treats as regular wages, subject to payroll tax withholding—instead of tips, which restaurants leave up to the employees to report as income. Also, restaurants with 50 or more full-time workers will be required to offer health coverage to employees working 30 or more hours a week, though penalties don’t begin until 2015.
This will mean additional paperwork and expense for restaurants. The biggest hit, however, will be for servers who rely on tips.
We already see a lot of tax debt issues in the restaurant industry and speculate that this will expand the number of food service workers or owners that need tax resolution services.
Americans living outside the United States and giving up their citizenship is up year because of a new tax law. The Foreign Account Tax Compliance Act, which is supposed to rout out tax evasion, has complicated the filing of U.S. tax returns. The law requires foreign institutions to report all assets owned by Americans. This has help prompt over 1800 people to surrendered their passports (or green cards). In 2012, 932 Americans renounced their citizenship, and in the first and second quarters of 2013 a total of 1,130 names appear on the IRS’ Q2 list.
If you are among those considering giving up your citizenship due to taxes that you may have off shore and/or owe the IRS or state taxing authorities, you may want to talk to a tax resolution services expert about your other, less dramatic, options. Tax resolution services can be helpful to those living outside the US, but who owe taxes and wish to remain on good grounds with the IRS. You have rights and options.
The Internal Revenue Service announced stats for summer 2013.
The Statistics of Income (SOI) Division produces the SOI Bulletin on a quarterly basis. Articles included in the publication provide the most recent data available from various tax and information returns filed by U.S. taxpayers. This issue of the SOI Bulletin also includes articles on the following topics:
Data on enforced collections, bank levies, garnishments, and tax liens was not available in this data set. If you are dealing with any of those tax debt related issues and may be in need of tax resolution services, contact Larson Financial directly at 888-589-0955.
Fall is fast approaching and that mean tax extensions for 2012 taxes are coming due.
Millions of taxpayers requested an automatic 6-month extension to file taxes, giving them until October 15th, 2013 to get their tax returns filed. While back in April it may have seemed like six more months was enough time to get things in order it appears that many have yet to make the looming deadline. If you owed money to the IRS and did not file by the April deadline, you have actually been accruing penalties and interest on the amount you owe. The extension was merely an extension of time to FILE, not time to PAY. So if you still have not gotten your 2011 taxes filed and will not be making the deadline next week, your mailbox may soon be getting some unwelcome deliveries from the IRS in the form of notices, tax liens or levies.
Larson Financial Tax Resolution Service is also a great resource if you owe more than $10,000 in back taxes. The professionals at LFI specialize in helping taxpayers resolve back tax issues, handle wage garnishments, levies and liens. We can help with installment agreements, offers in compromise, partial pay installment agreements and more. We strive to save our clients money, time and stress. Just as there are many different tax related problems, there are many options for tax resolution. Call us at 888-589-0855 for a free consultation.
You can claim only one type of education credit per student on your federal tax return each year. If you pay college expenses for more than one student in the same year, you can claim credits on a per-student, per-year basis. For example, you can claim the AOTC for one student and the LLC for the other student.
You can use the IRS’s Interactive Tax Assistant tool to help determine if you’re eligible for these credits. The tool is available at IRS.gov.
These education benefits are subject to income limitations and may be reduced or eliminated depending on your income.
For more information, visit the Tax Benefits for Education Information Center at IRS.gov. Also, check Publication 970, Tax Benefits for Education. The booklet’s also available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
One tax avoidance scheme we see in the course of our tax resolution service day job is the abusive Foreign Trust Scheme. Such schemes usually start off as a series of domestic trusts layered upon one another, to give the appearance that the taxpayer has turned his/her business and assets over to a trust and is no longer in control of the business or its assets. Once transferred to the domestic trust, the income and expenses are passed to one or more foreign trusts, typically in tax haven countries.
As an example, a taxpayer’s business is split into two trusts. One trust would be the business trust that is in charge of the daily operations. The other trust is an equipment trust formed to hold the business’s equipment that is leased back to the business trust at inflated rates to nullify any income reported on the business trust tax return (Form 1041). Next the income from the equipment trust is distributed to foreign trust-one, again, which nullifies any tax due on the equipment trust tax return. Foreign trust-one then distributes all or most of its income to foreign trust-two. Since all of foreign trust-two’s income is foreign based there is no filing requirement.
Once the assets are in foreign trust-two, a bank account is opened either under the trust name or an International Business Corporation (IBC). The trust documentation and business records of this scheme all make it appear that the taxpayer is no longer in control of his/her business or its assets. The reality is that nothing ever changed. The taxpayer still exercises full control over his/her business and assets. There can be many different variations to the scheme.
If you have done this, you probably will need tax resolution services help – and possible a criminal defense lawyer if it’s gone on too long or is on a large scale.
For truckers, the federal highway use tax return is due on Tuesday, Sept. 3, 2013. Returns must be filed and tax payments made by Sept. 3 for vehicles first used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.
Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically and paying any tax due electronically. Taxpayers reporting 25 or more vehicles must e-file.
The IRS reports that due to facility maintenance taking place over the Labor Day weekend, the IRS will be unable to accept or acknowledge receipt of any electronically-filed returns from 10 p.m. Eastern Time on Saturday, Aug. 31, to 5:30 a.m. ET on Tuesday, Sept. 3 and should be available for all users at noon on Sept. 3. The IRS asks taxpayers to e-file Form 2290 before 10 p.m. ET on Aug. 31. Paper returns must be mailed and postmarked by midnight on Sept. 3. IRS offices will be closed on Labor Day, Monday, Sept. 2.
The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck tractors and buses. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions to Form 2290.
Stay tuned to the Tax Resolution Services Blog for more IRS news and tax information.
The IRS has alerted taxpayers and tax professionals about an errors made in calculating interest on certain CP2000 notices mailed the the first two weeks of July 2013. The notices contained an incorrect calculation on the interest owed on proposed taxes from under reported income. The interest figures were lower than they should be. The IRS has corrected the issue for future mailings.
A CP2000 notice shows proposed changes to income tax returns based on a comparison of the income, payments, credits and deductions reported on a tax return with information reported by employers, banks, businesses and other payers. The CP2000 also reflects any corrections made to an original tax return during processing.
The good news is that you will not be needing tax resolution services as a result of these errors made by the IRS.
I took on representation for Larry and Carol S. of Ohio regarding a tax liability of approximately $100,000 for an old business they owned. The Revenue Officer was threatening to make a successorship determination and hold their new business liable for the entire amount. She was also threatening to hold them personally responsible for the Trust Fund portion of approximately $50,000, and force them to drain their retirement nest egg to pay that balance due.
Upon investigation, the new business was clearly not a successor entity, and I was able to negotiate with the IRS to avoid the transfer of the tax liability to the new business. I was also able to determine that the statute of limitations had expired on a personal assessment, so the IRS was not able to pursue them personally for the $50,000. In the end, the account was put in non-collectable status, and the client walked away without having to pay anything toward the tax balance due.
Managing Associate, Larson Financial Inc
This is the story of a client that owns three businesses and owed the IRS debt totals just over $415,000 between the three entities, and came to Larson Financial for tax resolution services help. The taxpayer had tried to resolve their issues themselves with their Revenue Officer. Unfortunately, the taxpayer had missed several deadlines to supply a great deal of information to the Revenue Officer and she levied all of their accounts. The levy captured approximately $50,000 in funds needed for operations.
The IRS was disinterested in reversing the levy and were unsympathetic in our discussions to say the least since the taxpayer had missed several deadlines. we immediately filed a Collection Appeal Request in order to argue the case with a neutral, objective appeals officer. We were able to schedule a hearing with the appeals officer the day before the levy proceeds from the bank were going to be turned over to the IRS. Banks are required to hold taxpayers’ funds captured in a levy for 21 calendar days before turning it over to the IRS.
We discussed with the appeals officer all of the pertinent facts surrounding the taxpayer’s case and what we were planning to do in order to address the debt after the levy issue was addressed. She agreed to release $46,000 of the $50,000 held and apply the rest of the proceeds towards the overall debt. The formal releases were waiting for the taxpayer as he walked into his bank. He was able to use the available funds for his operations immediately. We are now in the process of reviewing all of the taxpayer’s financial information so that an affordable payment plan can be negotiated, thus addressing the liability in a manner that works with the clients’ condition, and not on the timetable imposed by the IRS.
In some situations, it is possible for the IRS to stop collections and put your debt on hold. The IRS essentially puts you in the filing cabinet but will check in from time to time. The debt remains – as do penalties and interest, which keep growing – but the IRS agrees to refrain from collection activities for a set period of time. Getting a client into a CNC status is just one of the tax resolution services that we perform on a daily basis.
The following reasons my affect the IRS’s decision to classify you as uncollectible:
|Currently Not Collectible Closing Codes|
|1||Inability to locate the taxpayer or taxpayer’s assets.|
|2||Partial expiration of the assessment prior to issuance.|
|3||Complete expiration of the statutory period for collection or suit initiated to reduce tax claim to judgment.|
|4||You can can pay but the IRS is unable to collect a liability because the you reside in a foreign country.|
|5||A corporation, exempt organization, or Limited Liability Company (LLC), where the LLC is identified as the liable taxpayer, liquidated in bankruptcy.|
|6||The death of an individual with no collection potential from the decedent/decedent estate.|
|7||Corporations, certain limited liability partnerships, exempt organizations, or LLCs, where the LLC is identified as the liable taxpayer, which are inactive and defunct with no assets.|
|8||Inability to contact a taxpayer although the address is known and there is no means to enforce collection.|
|9||A corporation, exempt organization, limited partnership, or LLC, where the LLC is identified as the liable taxpayer, remains in business and is current but is unable to pay back taxes.|
|10||When suspending collection of BMF balance due accounts when the key individual is deployed to a combat zone.|
|11||obsolete – this was formerly used for corporate income tax liabilities owed by a financial institution certified as insolvent by the Office of the Controller of the Currency or the Office of Thrift Supervision|
|12||inability to locate the Single Member Owner (SMO) or assets of the SMO who is liable for taxes assessed under an LLC Employer Identification Number (EIN).|
|13||inability to contact a Single Member Owner (SMO) who is liable for taxes assessed under an LLC EIN when the SMO address is known, and there are no means to enforce collection.|
|14||Collection of the liability would create a hardship for taxpayers by leaving them unable to meet necessary living expenses.|
With a debt-ridden federal budget and an economy that is still faltering, the IRS has a vigorous set of rules in place to enforce collection of tax liabilities from businesses and individuals. The IRS has many tools to collect past-due taxes. We tax resolution services experts see this every day and can help.
If you have recently received a notice or bill from the Internal Revenue Service, you should respond right away or choose to have someone represent you before the IRS regarding your tax issue. When dealing with the IRS you have the options of representing yourself or appointing an attorney, CPA, enrolled agent or other person enrolled to practice before the IRS, to represent you.
The IRS will always contact you and give you an opportunity to voluntarily pay your tax debt before taking enforced action. However, if you don’t respond to notices and bills from the IRS, your liability will continue to grow due to interest and penalty charges and you may be subject to wage garnishments, liens, levies or other forms of collection enforcement. Even if you are unable to pay your bill in full it is important that you get assistance.
Jack Larson, President of Larson Financial, Inc., offers the following guidance for those facing tax liabilities with either federal or state taxes:
1. Don’t delay in taking action regarding your issue. While dealing with tax authorities may be intimidating, it is important not to ignore the issue and let it grow.
2. If you have less than $10,000 in tax debt it is likely that you can work out a solution by contacting the IRS directly at 1-800-829-1040 (individuals) or 1-800-829- 4933 (businesses).
3. Tax law is a complicated field with constantly changing programs and requirements. It may be wise to have an experienced and proven professional assist or represent you to help get you back on track.
Larson Financial, Inc. is a nationwide tax resolution services company, assisting businesses and individuals who have state and federal tax liabilities. The team of experienced professionals at Larson Financial is committed to providing superior customer service with honest answers and real solutions. To find the right solution to your tax issues contact Larson Financial, Inc today at 888-902-0778.
An audit notice from the IRS is a scary thing. Many questions may run through your mind. Who do you turn to for help: a tax resolution services expert or a tax preparer, or an audit specialist? What do they want and where are you going to find the time to gather everything required are common first thoughts. And why did you get targeted after all? The IRS looks for certain things when deciding who or way to audit your taxes. The following some of the most common.
You may or may not need tax resolution services if you are the subject of an audit. You may owe a lot of money at the end, none at all, or the IRS may even owe you money.
You know you are having a bad day when you receive mail from the IRS which reads, “Notice of Federal Tax Lien” from the IRS (or state revenue department). If this has happened to you, take a deep breath then read on about liens and if you should be considering tax resolution services today.
What is a tax lien, anyway?
A Tax Lien gives the IRS (or state) a legal claim to your property as security or payment for your tax debt, whether real or assessed. A Notice of Federal Tax Lien may be filed only after:
Tax liens are filed with the county court house and are thus considered “public records.” The lien attaches to all your property (such as your house or car) and to all your rights to property (such as your accounts receivable, if you are a business). Public records are open for anyone to see, and creditors are able to see that the government has a claim against all your property, including property you acquire after the lien is filed. Also, you may expect to get mail and perhaps calls from various professional tax firms, such as Larson Financial, who are collection division experts.
Once a lien is filed, your credit rating may be harmed, and your ability to get a loan or any type of credit approval will be severely compromised. It is easier to avoid getting a lien that to remove a lien. But, once you have a lien you need a strategy to get it released as soon as possible.
The full amount of your lien will remain a matter of public record until it is paid in full, including all accruals and additions.
What do do?
You may wish to talk to a Tax Resolution Services expert about your options. Call us today at 888-589-0955 for a fee consultation on your rights and options.
Many issues with the IRS may be dealt with easily by the taxpayer. When the situation has reached the point of enforced collections, it may be time for the taxpayer to put hand off the tax issue to a Tax Resolution Services company that deals with these issues every day.
What is a bank levy?
An IRS (or state taxing authority) bank levy is an enforced collection, where money is taken out of your bank account. Before the IRS or state can levy your bank account they must send a Notice of Intent to Levy to your last known mailing address.
If you do not pay your taxes (or make other arrangements with the government):
If an IRS bank levy is placed on your account, the levy attaches funds that have cleared and are available for withdrawal, up to the amount of the levy. By law, the bank must wait until 21 days after a levy is received before sending the money. The holding period allows you time to resolve any dispute about account ownership, or get professional advice on your situation. After 21 days, the bank must send the money, plus, if applicable, any interest earned on that amount.
To cease enforced collection, the taxpayer must work with the taxing authority, by presenting a reasonable resolution and working toward fixing the tax problems.
If you have been levied or a levy has been threatened, you should speak with a tax resolution services specialist. We handle these issues every day and can save you time and maybe money in resolving the tax issue.
Before the levy occurs you will get IRS CP504 Final Notice – Balance Due letter
The CP504 notice is telling you that the IRS intends to enforce collections on a balance due. The IRS they can seize (levy) your state tax refund, and other property or your rights to property, including:
Below is what an IRS CP504 Final Levy Notice looks like:
Notice Of Intent To Levy And Notice Of Your Right To A Hearing
Please Respond Immediately
We previously asked you to pay the federal tax shown on the next page, but we haven’t received your payment. This letter is your notice of our intent to levy under Internal Revenue Code (IRC) Section 6331 and your right to appeal under IRC Section 6330.
We may also file a Notice of Federal Tax Lien at any time to protect the government’s interest. A lien is a public notice to your creditors that the government has a right to your current assets, including any assets you acquire after we file the lien.
If you don’t pay the amount you owe, make alternative arrangements to pay, or request an appeals hearing within 30 days from the date of this letter, we may take your property, or rights to property. Property includes real estate, automobiles, business assets, bank accounts, wages, commissions, social security benefits, and other income. We’ve enclosed Publication 594, which has more information about our collection process; Publication 1660, which explains your appeal rights; and Form 12153, which you can use to request a Collection Due Process hearing with our Appeals Office.
To prevent collection action, please send your full payment today.
* Make your check or money order payable to United States Treasury.
* Write your Social Security Number on your payment.
* Send your payment and the attached payment stub to us in the enclosed envelope. The amount you owe is shown on the next page.
If you have recently paid this tax or you can’t pay it, call us immediately at the above telephone number and let us know.
The assessed balance may include tax, penalties, and interest you still owe. It also includes any credits and payments we’ve received since we sent our last notice to you. Penalty and interest charges continue to accrue until you pay the total amount in full. We detail these charges, known as Statutory Additions, on the following pages.
Copy of this notice
Pub 594, IRS Collection Process
Pub 1660, Collection Appeal Rights
Form 12153, Request for a Collection Due Process Hearing
If you have any needs or questions regarding IRS or state bank levies or enforced collections, contact Larson Financial for a free consultation at 888-589-0955.
In an act that will no doubt force more small business owners into requiring tax resolution services help, the IRS is sending letters regarding “Notification of Possible Income Under reporting,” to small businesses, asking that they review and confirm that they accurately reported their income on the previous year’s tax returns.
About 20,000 of these letters have been sent to businesses, which were targeted based on information the IRS has collected about credit and charge card transactions. The IRS is looking for companies that reported a large number of receipts from card transactions, and then are questioning whether they left out some harder-to-track cash payments, which are more often under reported.
A form attached to the notice requires companies to “explain why the portion of your gross receipts from non-card payments appears unusually low for your type of business.” Not responding “may result in further compliance action,” officials warned.
IRS officials say that not responding “may result in further compliance action.”
Tax Resolution Services Blog
The tax resolution services experts at Larson Financial had a client come for help after she had received a letter called a CP2000. A CP2000 indicates a taxpayer owes a tax because due to a difference in the calculation on a return versus what the IRS has on record for the tax year. Most of the time the additional tax is in direct relation to cancellation of debt, a 1099 that wasn’t received, interest paid by a bank, early withdrawal tax and penalty on a retirement distribution not originally included on the return but reported to the IRS. I think you get my point.
We read through the letter and compared it to his tax return. The increase in tax was correct and she was going to owe an additional $10,000 for the tax year. A year in which she owed nothing. The additional penalty was $2,000.
The client was able to pay the tax in full and sent it in to the IRS prior to the expiration on the letter for assessment of the additional tax (very important to pay by the deadline date on the letter in order to save additional interest accruals). We also asked the IRS to abate the penalty under the first time abatement criteria whereby a taxpayer qualifies if they have never owed previously. After a few follow up phone calls, the IRS agreed to abate the penalty in full and he simply had to pay the remaining interest (we asked for the interest to be abated, doesn’t hurt to try, but it was the interest calculated since the original tax return would have been due, along with the original payment date of April 15th, 2009. Interest in relation to the tax cannot be abated).
Our client was very happy with the outcome and it all was resolved in approximately 90 days or so.
So check twice when you receive a CP2000 or additional tax assessment letter, it may be to your benefit to do a little homework!
If you get a notice from the IRS for back taxes or unfiled returns it is extremely important that you take action and not ignore or neglect to face the issue. If you can afford to pay the taxes, you should do so as soon as possible. If you cannot pay your taxes you should contact the revenue officer or consider getting help via tax resolution services.
You may be able to resolve some simple tax problems on your own, but many tax problems are very complex and may have more than one solution. Liens, wage garnishments, property seizures and visits or phone calls from IRS agents or collection agencies can be extremely stressful and may be more than you can handle on your own. Finding reliable and honest tax resolution help can be beneficial to any tax debt situation. Enrolled Agents, tax attorneys and CPAs stay up to date on the latest changes in tax laws and have knowledge of the most advantageous solutions to your unique circumstances. Tax resolution services are a specialty. Having the practical knowledge of someone who works exclusively with the collection divisions of the IRS and state tax agencies can help you understand your state of affairs and decide on an appropriate strategy.
With increasing numbers of people who are behind on both state and federal taxes, there are numerous companies to choose from to represent you. It is as important to pick the right representation, as it is to deal with your issues promptly. Before hiring anyone, carefully consider these key factors:
o Avoid companies that claim a success rate or try to mislead you with unrealistic promises of savings. If it sounds too good to be true, it probably is.
o Use reliable resources such as the Better Business Bureau or the Attorney General’s Office of the firm’s home state to research an organization you are considering using. While blog sites and chat boards can contain accurate and useful information they should not be the only deciding source used for dependable information.
o Read contracts carefully before you sign. All tax resolution companies that employ attorneys and CPA’s bill by the hour. Is the contract clear and easy to understand or does it contain vague language? If they are offering you a flat fee, be sure to read the contract from top to bottom. Typically flat fee contracts will have a disclaimer for a change in the scope of work or a lack of contact. Unfortunately, there simply is not a way to accurately estimate the scope of work needed to resolve a tax debt case until all the facts are gathered from both the client and the taxing authority.
o Be cautious of companies that claim they can waive penalties, interest and tax before they even have all the facts.
o “Pennies on the Dollar” claims should send up red flags. Many companies will tell you that they can settle your debt for less, however, this is not true most of the time and should not be used as false enticement. Although the Offer In Compromise program is real and we implement it successfully in some extreme cases, it is not a viable solution for most people.
The tax resolution services experts at Larson Financial, Inc. pride themselves in giving their clients the individual attention necessary to find the right solution for their tax needs and are committed to providing an atmosphere of honesty, integrity and superior service. Voted one of the Top 50 Family Owned Companies by ColoradoBiz Magazine, Larson Financial has thousands of successful resolutions and assists clients in all 50 states with both state and federal tax issues. Larson Financial is an A rated member of the BBB and a member of National Association of Enrolled Agents as well as the National Association of Tax Professionals. For the best service and representation available, contact the team of trusted professionals at Larson Financial at 888-589-0855 or visit them online at www.larson-financial.com.
Bank levies might be a good time to consider employing tax resolution services. Bank levies are usually issued under a circumstance whereby the client is not current with tax deposits or compliant with tax filings, missing a deadline, or missing a payment on an installment agreement. Bank levies are issued most often against bank accounts, but they may also be against accounts receivables, wages (wage garnishments), and other sources of income when there is a delinquent tax liability. When a person or business is levied, it is usually against a bank account. This can severely damage a household or businesses.
Take the story of a client who missed a deadline regarding financials. The IRS sent out a levy about 3 to 4 business days following the actual deadline. The client was levied for approximately $3,500.
In order to expedite a release of levy one should always follow these steps below:
- Provide the information asked for
- Provide information concerning what expenses will not clear (especially payroll)
- Provide reasonable cause as to why the levy should be released
Once these items are remitted, the IRS will entertain a release. We followed the steps above and were able to work with the Revenue Officer who issued the levy to satisfy all of her requests. We were able to secure a levy release for $3,250 to cover all the necessary payroll expenses. We are now moving forward on the next stage of the case which is resolution. We were lucky to obtain the release of levy. Had the client met the deadline originally issued, the levy would have never taken place. To sum it up, meet all deadlines, stay current with Federal Tax Deposits and Returns and do not miss any installment payments once an agreement is reached!
Unless it is a refund check, receiving a letter from the Internal Revenue Service is usually bad news but doesn’t necessarily mean you need tax resolution services. The IRS sends millions of letters and notices to taxpayers each year, but there are a few things you should keep in mind if you are one of the recipients.
If you have a tax issue stemming from past due taxes to the state and/or the IRS, you may want to seek tax resolution services. Larson Financial specializes in resolving taxpayer issues with the IRS and with state taxing authorities. Depending upon your unique situation, there may be one or more options available for resolving your tax issue. Contact Larson Financial today to begin your journey to a fresh start! You may reach us toll-free at 888-554-0778. We are a family owned and operated firm with an A+ rating with the BBB and we assist clients in all 50 states.
Providing tax resolution services is about helping businesses and individuals resolve tax problems and getting back on track with their lives and business. We find clients long term and sustainable resolutions every day and we are continually making a difference in the lives of those who hire us. When do people need tax resolution services though?
It often starts when someone receives a warning letter from the IRS. These notices cause anxiety, making the taxpayer afraid to check the mail, wondering what will come next and how severe the consequences of not paying will become. Taxpayers often have no idea where to start when it comes to dealing with the IRS and since they are not specialists in tax code, they often do not know what their options might be. Larson Financial steps in and makes it easier for the client to breathe, answering questions, and taking over all of the necessary contact with Revenue Officers. The client is once again able to focus on their businesses and lives, while Larson Financial handles the tax issues.
In one recent situation, a client had a $50,000 payment due to the state immediately (in fact, in less than 3 hours from the time they hired us, or they were going to be subject to account seizures). Our team of licensed specialists got right to work on helping the client and we were successful negotiating with the taxing agency, resulting in a $20,000 reduction in the necessary payment the very next day! Imagine the relief the taxpayer felt knowing that they were in the right hands and that their situation was getting the individual attention it needed right away!
Whether know you owe taxes but have not been notified by the IRS or state, or your equipment is about to be seized, let Larson Financial come to the rescue! We know how much difficulty garnishments can cause an individual or family. Trust us, we can help. Call us at 888-589-0955 today – now – if you’ve experienced or suspect a wage garnishment possible.
Here is a tax resolution services success story about a client that came to Larson Financial with a disaster-recovery business that ha a substantial tax problem stemming from corporate income taxes. At the time, they owed over $74,000 in penalties and interest for their 2008 tax year, after satisfying all of their taxes owed through voluntary payments and a Corporate Income Tax Loss-Carryback. We went to work immediately and reviewed their account history in detail.
Our first review uncovered an over-assessment of interest on the accounts, and I immediately submitted a proposal to have this reduced. This saved the client over $14,000, and was processed within about 60 days.
Our second effort was to address the penalties accrued on the account. The taxpayer, it turns out, was due over $3 Million in overdue and unpaid Accounts Receivable. The Internal Revenue Service, at times, has taken varying stances on unpaid receivables as grounds for abatement of penalties, but with such a large dollar amount, and such a significant disturbance to the taxpayer’s business operations, we felt it was a strong case. My proposal addressed several of the areas where we knew the Internal Revenue Service would push back, as they often assumed that Accounts Receivable collection issues are a product of negligence. Instead, we verified with documents and supporting evidence, that the taxpayer made outstanding efforts to collect on what was owed by filing lawsuits, issuing liens, and taking other actions.
Our Revenue Officer, after a few weeks of review and research, agreed wholeheartedly with our proposal and offered a complete abatement of penalties. This not only eliminated the $60,000 balance owed, but allowed for an $87,531.17 refund. Combined with the interest abatement, this taxpayer received benefits of over $160,000 in only 4 months as a client. We are currently seeking similar relief from several state taxing authorities.
Larson Financial, Inc.
We often are asked, “What is Tax Resolution?” Tax Resolution is a niche that helps businesses and individuals come to an affordable agreement with the IRS or state taxing authorities. There are companies (like ours) that specialize in this service, though some CPAs, Enrolled Agents, and attorneys may offer this to their clientele.
A second often asked question is, “Why can’t I just contact the IRS and do it myself?” You can, and many people do this successfully, especially when the amount owed is on the low side and they are current and compliant with their tax filings and deposits. Hiring a Tax Resolution specialist makes increasing sense when the size, age, or complexity of the tax issue are high, and the tax code is notoriously complex.
If you are uncertain if you need an Tax Resolution Specialist, contact us today for a free evaluation about your situation and options.
The IRS announced that interest rates will remain the same for the calendar quarter beginning July 1, 2013, as in the prior quarter. The rates will be: