All posts by admin

Demand for Tax Services

footerwidget
The demand for tax relief services has reached an all time high.  Business owners whose Companies are struggling have lost their houses and savings.  They can’t pay their employment taxes and they still owe money.  Taxpayers may owe taxes on debt that was forgiven.  Taxpayers may have lost their job or withdrawn money from their retirement accounts and owe early withdrawal penalties in addition to their regular taxes.
The IRS sends a series of notices, each getting more urgent.  When the taxpayer is unresponsive, its easier to push the lien or levy buttons that trying to work with someone to set up a payment plan or debt reduction.
  • Taxpayers often believe they cannot afford tax relief services and try to resolve the problems themselves. 
“The layperson is at a significant disadvantage dealing with the IRS”, says Mitch Helfer, CPA, Managing Partner of CPAMiami™; a Florida Certified Public Accounting Firm.  Taxpayers are not familiar with debt relief programs and ultimately do not know their options or rights in dealing with the IRS.  Too often, this results in paying more than you may actually owe, not applying for penalty relief, not qualifying for payment plans and not exploring settling tax debt or incorrectly applying for settling tax debt for a reduced amount.
“We are a highly-trained, experienced, certified public accounting, who deals with IRS problems on a daily basis”, says Mitch Helfer, CPA.  Hiring a local, licensed CPA firm or licensed tax attorney offers taxpayers a distinct advantage over national, debt relief companies, where your case is assigned to a lower-level marketing specialist; unfamiliar with tax law, IRS policy and procedure, IRS negotiations and taxpayer rights.
In many cases you can reduce your tax debt significantly – whether this is the reduction of the penalties and interest that may have been assessed, a correction of errors or underreporting of deduction that may be available or a negotiated settlement amount of the overall tax debt.  The key is to have the “right” person on your side; handling your account.

Liens and Levies against Taxpayers Rise Sharply

footerwidget
The Internal Revenue Service continues to ramp up the number of tax liens and levies it files against taxpayers, despite a high number of Americans who are unable to pay their taxes.  The government agency filed liens against 1.1 million taxpayers last year, up from 168,000 in 1999.
In the past seven years, it has filed more than 5 million tax liens [Hazard, Carol. “Liens, Levies against Taxpayers Rise Sharply | Richmond Times-Dispatch.”Richmond, VA – News, Weather, Politics, Sports, Entertainment and Business Reports | Richmond Times-Dispatch. 20 Feb. 2011. Web. 02 Mar. 2011].
“The IRS is going after ANYONE who owes money, not just the wealthy”, according to National Taxpayer Advocate Nina E. Olson, who works for an independent arm of the IRS.  “By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer by making it harder for him to get back on his feet when he does get a job”.

IRS Recognizes the Need to Address a Struggling Economy

“Tax collection requires a delicate balancing of the government’s interest in collecting revenue and ensuring that all taxpayers pay their fair share of tax … and protecting financially struggling taxpayers from unnecessary harm,” Olson testified.
The IRS recognizes that many taxpayers are struggling financially and is taking positive steps to settling tax debt through collection delays, payment plans and tax settlements.
The IRS has recently indicated plans to implement new procedures of the availability of payment programs to those taxpayers who may not have previously qualified, the availability of tax settlement programs to those taxpayers who may not have previously qualified, a more expeditious withdrawal of tax liens – just to name a few.

Demand for Tax Services

The demand for tax relief services has reached an all time high.  Business owners whose Companies are struggling have lost their houses and savings.  They can’t pay their employment taxes and they still owe money.  Taxpayers may owe taxes on debt that was forgiven.  Taxpayers may have lost their job or withdrawn money from their retirement accounts and owe early withdrawal penalties in addition to their regular taxes.
The IRS sends a series of notices, each getting more urgent.  When the taxpayer is unresponsive, its easier to push the lien or levy buttons that trying to work with someone to set up a payment plan or debt reduction.
  • Taxpayers often believe they cannot afford tax relief services and try to resolve the problems themselves. 
“The layperson is at a significant disadvantage dealing with the IRS”, says Mitch Helfer, CPA, Managing Partner of CPAMiami™; a Florida Certified Public Accounting Firm.  Taxpayers are not familiar with debt relief programs and ultimately do not know their options or rights in dealing with the IRS.  Too often, this results in paying more than you may actually owe, not applying for penalty relief, not qualifying for payment plans and not exploring settling tax debt or incorrectly applying for settling tax debt for a reduced amount.
“We are a highly-trained, experienced, certified public accounting, who deals with IRS problems on a daily basis”, says Mitch Helfer, CPA.  Hiring a local, licensed CPA firm or licensed tax attorney offers taxpayers a distinct advantage over national, debt relief companies, where your case is assigned to a lower-level marketing specialist; unfamiliar with tax law, IRS policy and procedure, IRS negotiations and taxpayer rights.
In many cases you can reduce your tax debt significantly – whether this is the reduction of the penalties and interest that may have been assessed, a correction of errors or underreporting of deduction that may be available or a negotiated settlement amount of the overall tax debt.  The key is to have the “right” person on your side; handling your account.

Do New Federal Tax Lien Relief Procedures Apply To You?

slider

What Are the Effects of A Federal Tax Lien?

When the IRS files a Federal Tax Lien, it makes a claim to a taxpayer’s property as security or payment for a tax debt.  As this notice becomes public record, it not only serves to secure the IRS’s interest in collecting the tax debt, but informs other creditors of its priority position in collecting the debt and advises new potential creditors to carefully evaluate lending to the taxpayer in consideration of its preferred position.

Why Is This A Problem?

  • The filing of a federal tax lien may prevent the taxpayer from borrowing additional monies from other lenders until such time that the federal tax lien is removed;
  • Once recorded, the lien may damage a taxpayer’s credit score which may prevent the taxpayer from borrowing money that would otherwise have been available;
  • The recording of a tax lien may result in the taxpayer having to borrow money at a higher interest rate;
  • The inability of a business or individual to have available credit may result in missed opportunities that would otherwise have been profitable. Businesses without available credit will often fail in many ways.

Prior IRS Procedures

Prior to the new collection procedures, the IRS would generally not release a filed tax lien until the taxpayer satisfied all tax debt which includes taxes due, penalties and interest.  Once the debt was satisfied, in most cases, the IRS would automatically release the lien within 30 days.

New IRS Procedures

Newer line procedures now require the IRS to withdraw the federal tax lien immediately once full payment of taxes are made if requested by the taxpayer. This is particularly important because the prior automatic release 30 days after the taxpayer paid the debt unfortunately does not always happen.
More importantly, the IRS will now allow lien withdrawals for taxpayers entering into a direct debit installment agreement, or where the taxpayer not only agrees to make periodic payments in full satisfaction of its debt.
Third, the IRS will withdraw liens on existing direct debit installment agreements upon the taxpayer’s request, after the taxpayer can show that the direct debit payments will be honored by the bank.
Fourth, the IRS will soon double the dollar thresholds to $10,000 when liens are generally filed (previously $5,000).

Summary

The new lien procedures were developed in response to the ineffectiveness of the IRS to collect taxes despite the significantly increased filing of tax liens by the government. The filing of tax liens has not only been ineffective, but further hurts the ability to collect as it damages the taxpayer’s ability to borrow from other sources, causes an increase in interest rates when the taxpayer can borrow, damages a taxpayer’s reputation amongst the business community and other creditors.
Even though the filing of a tax lien may be removed, the notification that a tax lien was filed remains for many years thereafter which ultimately hurts the taxpayer’s credit score resulting in more limited borrowing options and higher interest rates.
Taxpayer’s facing liens now have more options to eliminate the filing of these liens by entering into certain agreements that were not previously available.
Taxpayer’s who already have tax liens can help increase their ability to borrow by having existing liens removed even when the tax debt is not fully paid.

Do you have an IRS tax problem and need immediate professional help?

slider

Dealing effectively with the Internal Revenue Service (IRS) or other state or local regulatory authorities requires specialized knowledge and experience. Only licensed tax attorneys, certified public accountants and enrolled agents can represent you before the IRS. Similarly, not all individuals who are licensed representatives have the expertise to represent you effectively and defend your rights. Your tax preparer is most often not your best choice.

Four Steps to Hire the Right Person

Assess qualifications

When hiring a tax problem resolution specialist, inquire about the persons qualifications. Review the educational background specific to resolving your problem. Inquire as to specific professional affiliations your representative may have. Having good marketing advertisement is not acceptable proof that a person is qualified to help you. Check your representative’s background. Is he or she a member of the Bar Association, Institute of Certified Public Accountants, American Society of Tax Problem Solvers?

Assess experience

Know your representative’s limitations. Has he or she dealt with the IRS in the past? When? How often? Did he or she work for the IRS at one time? Does the attorney have experience as a Certified Public Accountant or (at a minimum), a background in accounting? What is the practitioner’s reputation in the industry? Is there a proven track record of helping individuals or businesses with IRS problems? If it is a firm, exactly who in the firm will be handling your case?

Assess the cost

You know you need professional help but can you afford it? Should you hire a CPA, enrolled agent or tax attorney? Most practitioners charge hourly rates. Most will require a retainer and often require full payment up front. Once you’ve found practitioners that meet your requirements, choose several and conduct your assessment, including the cost. They will not hesitate to tell you their pay requirements. Sometimes, you can give them a brief description of the situation over the phone and they will tell you what it will cost to handle your tax problem.

What Can You Expect

Ask what your representative can do for you. Ask exactly what will be done to resolve your tax problems. How long will it take? Get a plan in writing and work with the tax relief practitioner to achieve your best outcome.

IRS Audits On the Rise For International and High Net Worth Taxpayers

slider

The enforcement of tax laws is a chief component of IRS effort to enhance voluntary compliance. Recently, the IRS Commissioner outlined IRS intentions to focus on tax evasion as it relates to international taxes in the forthcoming year with an increased emphasis on high-net worth taxpayers [IR-2010-122, December 9, 2010].

In 2009, IRS examinations were directed to international taxpayers, high-net worth individuals and non-filers.  Overall, IRS examinations have increased by approximately 3% over the prior year and are expected to increase consistently hereafter.  Of particular significance are audits of high-wealth individuals, which have increased 11.2%. Large corporation audits have also increased by approximately 3%.

If you maintain assets off shore, the IRS has not only put increased pressure on disclosure by foreign banks, but has put in place initiatives to form cooperative, joint agreements with foreign countries to share information and raise tax revenues.

With regards to corporations, new legislation includes the Foreign Account Tax Compliance Act (FATCA).  FATCA provides the IRS with better transparency and additional tools that we need to crack down on Americans hiding assets overseas. FATCA will increase information reporting by U.S. taxpayers holding financial assets outside the United States and impose stiff penalties for failure to comply. It will also require reporting of U.S. persons who hold accounts in foreign financial institutions or who own large interests in foreign entities that hold such accounts.

The IRS has placed a series of extremely harsh penalties on taxpayers who fail to report foreign holdings and transactions.  Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions. Continued non-compliance by flagrant or repeat non-filers could result in additional penalties and/or criminal prosecution. Voluntary disclosure of offshore accounts may be a taxpayer’s best defense for mitigating damages that may arise.

GOT A LETTER FROM THE IRS? IRS AUDITS

Uncategorized

So you got the IRS audit letter.  Lucky you!  Once you’ve calmed down you’re going to have to deal with it and we can help. There’s basically two main types of IRS audits – those that you reply by mail and those that ask you to call to schedule an appointment. The first type is called a correspondence exam. The IRS identifies issues that you may have reported incorrectly or simply require clarification. The second type is called an office visit or examination where the IRS is going on a fishing expedition by looking at all items on your tax return and see what pops up. IRS-Audit-Notice+3572[1]

In a correspondence exam, you’re often given a letter (CP-2000) indicating what the IRS believes are the changes needed to correct your return and pay your taxes. You have a chance to agree to all changes, some of the changes or simply disagree with all the changes that have been proposed. If you agree, you simply reply indicating the same. If you disagree, you need to reply indicating why and provide documentation supporting your position.

The office visit is much more comprehensive. This is usually reserved for self employed taxpayers or taxpayers where there are too many items on the return for the IRS to make its best guess what you owe. If your return is selected for an office visit, you are best advised to seek professional representation to protect your interests.

Once the examination is concluded, the proposed changes (Form 4549) are sent to you for your agreement. Shortly thereafter, you will be asked to pay the additional tax. If the audit shows that your income and taxes were under reported, you can pretty much count on your audit being expanded to other tax years (sometimes the year before and sometimes the year after). If you have the same issues in other tax years, you can often expect your taxes to be increased in other years as well.

Audit-Form-4549jpeg-744x1024[1]

But what if you don’t agree!

If you don’t agree, you can first request a supervisory review of your issues. This is your first line of defense. In most cases, you won’t be successful as the results are generally reviewed first before you receive them by this same individual. You can also request an administrative appeal. The appeal gives you the right to bring the case before a brand new IRS person who takes a fresh look at your case and why you disagree. If all else fails, you can also bring your case to tax court. Each of these taxpayer rights is time limited, so its always best to act as quickly as possible where you can.

Can you Do It Yourself?

Sometimes. In correspondence exams this is much easier. You simply reply by letter indicating your agreement and pay your taxes.  If you can’t pay, that’s another story. You can even represent yourself in an office examination – by why would you? You need to be on equal footing with the IRS so they don’t walk all over you. Even the best negotiators know their limitations. You don’t know your rights, you don’t know tax law and you don’t know IRS procedure. The more complex the issues and the greater the tax can be, the more you need professional representation.

HELP! I CAN’T PAY MY TAX BILL -360 DEDREES OF TAXES

Uncategorized

You’re almost done with your federal income tax return, and you’re already thinking of ways to spend your refund. Then, the unthinkable happens–instead of a refund, you find that you owe $3,000. Or perhaps you’ve just received an IRS notice in the mail claiming that you owe $9,000 for the retirement plan distribution you took two years ago. You thought it was tax free at the time. Whatever the reason, you’re now in the unenviable position of owing money to the IRS–and you don’t have the cash. What do you do now? Help! I can’t pay my tax bill – 360 Degrees of Taxes

IRS ENFORCED COLLECTON ACTIONS ON THERISE

Uncategorized

IRSIn 2009, the number of IRS levy notices served on employers and banks rose over 25% to almost 3.5 million, as compares to 2.6 million in 2008.  In other words, the IRS issued a levy or garnishment for 1 out of every 42 people in the U.S. that filed a tax return.  The trend for enforced collection actions on IRS levy or IRS garnishment continues to escalate.

If you receive a Notice of Levy you must act fairly quickly to stop an IRS levy. You can stop an IRS levy by paying back taxes you owe, getting a short-term extension of time to pay, entering into an installment agreement or a variety of other actions you can take to stop the IRS levy.

The IRS takes collection activities very seriously.  And so should you! Be proactive. Seek immediate professional help right away. The longer you delay, the more difficult it is to release or stop the IRS levy.

DO NEW FEDERAL TAX LIEN RELIEF PROCEDURES APPLY TO YOU?

Uncategorized

What Are the Effects of A Federal Tax Lien?

When the IRS files a Federal Tax Lien, it makes a claim to a taxpayer’s property as security or payment for a tax debt. As this notice becomes public record, it not only serves to secure the IRS’s interest in collecting the tax debt, but informs other creditors of its priority position in collecting the debt and advises new potential creditors to carefully evaluate lending to the taxpayer in consideration of its preferred position.

Why Is This A Problem?

  • The filing of a federal tax lien may prevent the taxpayer from borrowing additional monies from other lenders until such time that the federal tax lien is removed;
  • Once recorded, the lien may damage a taxpayer’s credit score which may prevent the taxpayer from borrowing money that would otherwise have been available;
  • The recording of a tax lien may result in the taxpayer having to borrow money at a higher interest rate;
  • The inability of a business or individual to have available credit may result in missed opportunities that would otherwise have been profitable. Businesses without available credit will often fail in many ways.

Prior IRS Procedures

Prior to the new collection procedures, the IRS would generally not release a filed tax lien until the taxpayer satisfied all tax debt which includes taxes due, penalties and interest. Once the debt was satisfied, in most cases, the IRS would automatically release the lien within 30 days.

New IRS Procedures

Newer line procedures now require the IRS to withdraw the federal tax lien immediately once full payment of taxes are made if requested by the taxpayer. This is particularly important because the prior automatic release 30 days after the taxpayer paid the debt unfortunately does not always happen.
More importantly, the IRS will now allow lien withdrawals for taxpayers entering into a direct debit installment agreement, or where the taxpayer not only agrees to make periodic payments in full satisfaction of its debt.
Third, the IRS will withdraw liens on existing direct debit installment agreements upon the taxpayer’s request, after the taxpayer can show that the direct debit payments will be honored by the bank.
Fourth, the IRS will soon double the dollar thresholds to $10,000 when liens are generally filed (previously $5,000).

Summary

The new lien procedures were developed in response to the ineffectiveness of the IRS to collect taxes despite the significantly increased filing of tax liens by the government. The filing of tax liens has not only been ineffective, but further hurts the ability to collect as it damages the taxpayer’s ability to borrow from other sources, causes an increase in interest rates when the taxpayer can borrow, damages a taxpayer’s reputation amongst the business community and other creditors.
Even though the filing of a tax lien may be removed, the notification that a tax lien was filed remains for many years thereafter which ultimately hurts the taxpayer’s credit score resulting in more limited borrowing options and higher interest rates.
Taxpayer’s facing liens now have more options to eliminate the filing of these liens by entering into certain agreements that were not previously available.

Taxpayer’s who already have tax liens can help increase their ability to borrow by having existing liens removed even when the tax debt is not fully paid.