Need IRS Help?

Do You Qualify For AConditional Installment Agreement?

noreply@blogger.com (Anonymous) — Thu, 02 Jul 2009 00:52:00 +0000

When you have tax liability and you are unsure about negotiating with the IRS yourself, contact a tax professional that can assist you getting this tax debt behind you. What the average taxpayer is uncertain about when negotating with the IRS themselves are the types of installment agreements in which you may qualify for. There are several types of resolutions that could be applicable to you, but being uneducated about those resolutions would prevent you from getting into a resolution that might be less of a financial burden each month.
One resolution that comes to mind is a conditional installment agreement. This past week I had a client get approved for a conditional IA. Conditional Installment Agreement's are however to get approved by the IRS. The perfect candidate for a conditional IA would be a taxpayer that after factoring in all their income and expenses, still has a large monthly disposable income. Say for instance, a montly disposable income of $2000/month would cause a hardship on most people. However, with a conditional installment agreement, the IRS will consider the actuals (actual expenses, not the IRS standards), if it will payoff the liability in full in 60 months.

How you calculate the monthly payment on a conditional installment agreement:
Take your Net Income minus the difference in the actual expenses and the IRS standards, minus the Total Allowable Expenses = the monthly payment

This payment times 60 months ( or five years) will give you the total payoff to the IRS. This should more than cover the total liability owing.

Conditional Installment Agreements normally consist of taxpayers that generate a substantial amount of income on a monthly basis, but in turn require some changes in lifestyle. Having a conditional installment agreement approved prevents taxpayers from possibly losing their homes and vehicles if they can live up to the payment arrangement till the liability is paid in full.

This is just one type of resolution that a professional tax resolution firm can assist a taxpayer in getting their tax debt behind them. If you have federal or state tax debt, don't hesitate to contact a reputable tax firm for help today.

Are You Missing Your Federal Tax Refund for 2008?

noreply@blogger.com (Anonymous) — Wed, 01 Jul 2009 01:04:00 +0000

If you have just filed your 2008 federal tax return, and you have yet to receive your rebate, you can log onto the irs.gov website to find out if the return has been processed. Whether you opted for direct deposit or asked the IRS to mail your refund check, you still have the option of tracking your refund on the irs.gov website.

You can generally get information about your refund 72 hours after IRS acknowledges receipt of your e-filed return, or three to four weeks after mailing a paper return.
Have a copy of your tax return handy. You will need to provide the following information from your return:

*Your Social Security Number (or Individual Taxpayer Identification Number);
*Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er))
*The exact whole dollar amount of your refund

It's a good indicator that if you have not received your refund within 28 days, from the original IRS mailing date shown, then you are able to trace your refund by changing your address online.
Begin your search at"Where's My Refund" Here you will enter your SSN, Filing Status, and Refund Amount, and hit submit.

As always, please be aware of emails and phising scams. It is important to keep in mind that the IRS never sends out emails falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

IRS Speeds Lien For Homeowner's Trying To Refinance Or Sell

noreply@blogger.com (Anonymous) — Fri, 26 Jun 2009 04:39:00 +0000

The Internal Revenue Service announced earlier in the year an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.If taxpayers are looking to refinance or sell a home and there is a federal tax lien filed, there are options. Taxpayers or their representatives, such as their lenders, may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan. Taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.“We don’t want the IRS to be a barrier to people saving or selling their homes. We want to raise awareness of these lien options and to speed our decision-making process so people can refinance their mortgages or sell their homes,” said Doug Shulman, IRS commissioner. “We realize these are difficult times for many Americans,” Shulman said. “We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions.”Filing a Notice of Federal Tax Lien is a formal process by which the government makes a legal claim to property as security or payment for a tax debt. It serves as a public notice to other creditors that the government has a claim on the property.In some cases, a federal tax lien can be made secondary to another lien, such as a lending institution’s, if the IRS determines that taking a secondary position ultimately will help with collection of the tax debt. That process is called subordination. Taxpayers or their representatives may apply for a subordination of a federal tax lien if they are refinancing or restructuring their mortgage. Without lien subordination, taxpayers may be unable to borrow funds or reduce their payments. Lending institutions generally want their lien to have priority on the home being used as collateral.

Do You Have Tax Debt & You Are Looking To Buy A New Home?

noreply@blogger.com (Anonymous) — Fri, 26 Jun 2009 03:13:00 +0000

We all know that with the rising issues with the economy and the number of declined loans, it is becoming increasingly harder to purchase a home these days. Not to mention if you are in tax debt, there are implied liens placed on your property until that lien has been satisfied.

Recently I have been asked to supply mortgage lenders with a letter declaring that the lien has been satisfied because the debt was paid in full. At this time, the mortgage lenders will not grant a loan to a taxpayer until they know that there is no liens attached to the properties.

On the flip side, if you are selling your home, you will need to apply for a loan discharge. You do not want to purchase a property with a lien attached to it. This is particularly why title searches are ran before a homeowner makes the final decision.

Discharge of a Federal Tax Lien :

If you are giving up ownership of property, such as when you sell your home, you may apply for a Certificate of Discharge. Each application for a discharge of a tax lien releases the effects of the lien against one piece of property. Note that when certain conditions exist, a third party may also request a Certificate of Discharge. If you're selling your primary residence, you may apply for a taxpayer relocation expense allowance.

Withdrawing Liens
By law, a filed notice of tax lien can be withdrawn if:
*The notice was filed too soon or not according to IRS procedures,
*You entered into an installment agreement to pay the debt on the notice of lien (unless the agreement provides otherwise),
*Withdrawal will speed collecting the tax, or
*Withdrawal would be in your best interest (as determined by the Taxpayer Advocate), and in the best interest of the government.

If you have tax debt, and you need someone to help get you in a resolution so that you can move forward with the purchase of a new home, don't hesitate to call a tax professional today.

Can The IRS Abate Interest Owed On Valid Tax Liability?

noreply@blogger.com (Anonymous) — Fri, 19 Jun 2009 03:21:00 +0000

So many taxpayers are convinced that the IRS will abate interest. Unfortunately the only reason why the IRS would abate interest, would be due to their error or neglagance. If an error occured on the taxpayers part, then in no instance would they be accountable for the error. The IRS takes great pride on not making mistakes and where they are mistakes made, the IRS will do a proctological exam on the emplied error ( depending on the value of the error) before issuing a refund. On the other hand, penalty abatement is more feeseable but it to has its miticulous requirements before abating. Reason's would be as followed:*Incarceration*Severe medical condition that would prevent a taxpayer from filing their returnUnfortunately, penalties are difficult to get abated as well, but the IRS will consider a reasonable cause that would benefit a taxpayer in granted. Requesting Abatement or Refund of Interest Due to IRS Error or DelayThe IRS can abate interest if the interest is caused by IRS errors or delays.The IRS will abate the interest only if there was an unreasonable error or delay in performing a managerial or ministerial act (defined on this page).
The taxpayer cannot have caused any significant aspect of the error or delay. In addition, the interest can be abated only if it relates to taxes for which a notice of deficiency is required. This includes income taxes, generation-skipping transfer taxes, estate and gift taxes, and certain excise taxes. Interest related to employment taxes or other excise taxes cannot be abated. The term “managerial act” means an administrative act that occurs during the processing of your case involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel.

Myth: Wages,Tips & Other Compensation Are Not Considered Income

noreply@blogger.com (Anonymous) — Fri, 19 Jun 2009 03:16:00 +0000

This argument asserts that wages, tips, and other compensation received for personal services are not income, because there is allegedly no taxable gain when a person “exchanges” labor for money. Under this theory, wages are not taxable income because people have basis in theirlabor equal to the fair market value of the wages they receive; thus, there is no gain to be taxed.
A variation of this argument misconstrues section 1341, which deals with computations of tax where a taxpayer restores a substantial amount held under claim of right, to somehow allow adeduction claim for personal services rendered.Another similar argument asserts that wages are not subject to taxation where a person has obtained funds in exchange for their time. Under this theory, wages are not taxable because the Code does not specifically tax these so-called “time reimbursement transactions.” Some take a different approach and argue that the Sixteenth Amendment to the United States Constitution did not authorize a tax on wages and salaries, but only on gain or profit.
For federal income tax purposes, “gross income” means all income from whatever source derived and includes compensation for services. Any income, from whatever source, is presumed to be income under section 61, unless the taxpayer can establish that it is specifically exempted or excluded.
In 1994,the court stated, “an abiding principle of federal tax law is that, absent an enumerated exception, gross income means all income from whatever source derived.” The IRS issued Revenue Ruling 2007-19, advising taxpayers that wages and other compensation received in exchange for personal services are taxable income and warning of the consequences of making frivolous argumentsto the contrary.

Can You Prevent Levies/Liens ?

noreply@blogger.com (Anonymous) — Thu, 04 Jun 2009 03:06:00 +0000

Many of our clients are all consumed with having liens/levies filed. Once this happens, consider yourself in collections status. However to get here, one would have to be a perpetual late filer or have debt liability, causing them to react (to important notices)later than than they should have. It's always important to take care of the issue at hand versus waiting to the last minute which in turn will cause undo stress and increased penalties and interest that are extremely difficult to get abated. Keep in mind that there are several notices (about 11 to be exact) the Internal Revenue Service will send you before you get assigned to the collection department. Unfortunately, some taxpayers are naturally procrastinators which invariably continue to get themselves in deeper debt with the IRS, if not addressed as soon as the notice is received.

It's apparant that taxpayers don't take the IRS serious when these notices are sent. But after the following subsequent notices are sent, the IRS will not be so lenient with a taxpayer after trying to worn them time after time. For all tense and purposes, the IRS gives a delinquent taxpayer ample opportunity to get in compliance. These eleven notices could delay the collections process for years.

Here are the notices the IRS will send to a delinquent taxpayer before sending them to the collections department: CP-501CP-502CP-503CP-504L-1058. After you have been sent the CP-504, the IRS considers you in "collections". Immediate action to levy your bank account or wage will take place in about 40 days from the time you are sent the CP-504. If issued a bank levy, the financial institution has to place a hold on the available funds for 21 days before being levied. About 30 days from when the 504 is sent , the taxpayer will be issued an L1058. This is the final notice that confirms the levy implementation on ones bank or wage. If a taxpayer tries to call and rectify their tax debt, they will be unsuccessful due to the requirement of a Power Of Attorney. POA's are the only individuals with enough authority to have a Stay On Collection granted.

In terms of a lien filing, there is always an implied federal tax lien when you have tax liability. Most of the time this tax lien is not filed unless you owe over $25,000. If you owe less than this amount, you can get into an affordable payment plan based on the assessed balance. If you get into the installment agreement before the lien is applied then you are secured with no future levies,liens. However, if you let the issue persist then levies/liens will be issued and not liens are never lifted until the debt is paid in full.

It is imperative that you take care of your tax debt and file your returns on time. Once entering in the collection process, there is no turning back. The IRS will continue this daunting process with hopes the client pays their debt owed in full.There are reputable companies out there that can help with the filing of your taxes and your tax liability where you don't have to pay your debt in full. If you find yourself currently in the collection department, don't wait. Its better to be proactive instead of trying to catch up.

How Could You Get Your Tax Penalties Abated?

noreply@blogger.com (Anonymous) — Thu, 04 Jun 2009 02:55:00 +0000

So many taxpayers are convinced that the IRS will abate interest. Unfortunately the only reason why the IRS would abate interest, would be due to their error or neglagance. If an error occured on the taxpayers part, then in no instance would they be accountable for the error. The IRS takes great pride on not making mistakes and where they are mistakes made, the IRS will do a proctological exam on the implied error ( depending on the value of the error) before issuing a refund. On the other hand, penalty abatement is more feeseable but it to has its miticulous requirements before abating. Reason's would be as followed:

*Incarceration*Severe medical condition that would prevent a taxpayer from filing their return. Unfortunately, penalties are difficult to get abated as well, but the IRS will consider a reasonable cause that would benefit a taxpayer in granted.Requesting Abatement or Refund of Interest Due to IRS Error or DelayThe IRS can abate interest if the interest is caused by IRS errors or delays.The IRS will abate the interest only if there was an unreasonable error or delay in performing a managerial or ministerial act (defined on this page). The taxpayer cannot have caused any significant aspect of the error or delay. In addition, the interest can be abated only if it relates to taxes for which a notice of deficiency is required. This includes income taxes, generation-skipping transfer taxes, estate and gift taxes, and certain excise taxes. Interest related to employment taxes or other excise taxes cannot be abated. See Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund, for more information.Managerial act. The term “managerial act” means an administrative act that occurs during the processing of your case involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel.

A decision regarding the proper application of federal tax law is not a managerial act.Ministerial act. The term “ministerial act” means a procedural or mechanical act that does not involve the exercise of judgment or discretion and that occurs during the processing of your case after all prerequisites of the act, such as conferences and review by supervisors, have taken place.

A Resolution To Relieve You From Your Current Tax Liability

noreply@blogger.com (Anonymous) — Wed, 03 Jun 2009 02:26:00 +0000

I had a client email me ask me what Currently Not Collectible actually meant. So many taxpayers with outstanding tax liability have no idea that IRS can stop collections on your liability. However, CNC Status is not as easy to obtain as it used to be. The IRS is cracking down on the qualifications for CNC. The IRS's decision is predicated on the following requirements:

1. The IRS has to deem you as having less than $25/month in MDI (Monthly Disposable Income) which is your income less your monthly expenses (IRS allowable expenses),
2. No liquid assets to pay yout liability
3. Automatic CNC will be approved if the taxpayer is deceased with no collection potential from the deceadent estate or no collection potential for estate taxes
4. CNC approved a corporation or LLC is classified as a partnership or association taxable as a corporation remains in business and is current but is unable to pay back taxes. Also when a corporate income tax liability owed by a financial institution certified as insolvent by the Officer of the Controller of the Currency or the Office of Thrift Supervision
5. A taxpayer is deployed to a combat zone
6. When collection of the liabiltiy would create an undue hardship for taxpayers by leaving them unable to meet necessary living expenses.

According to the IRS approval, they will cease payments of taxes for at least 12-18 months, when they will review your current financial stability for re-approval of CNC or the induction back into collections for ability to pay (closing code).When the time comes to re-evaluate your case, the IRS will default your CNC status if they can't locate you, and could possibly levy you. The IRS will annually send you a statement balance (CP 89) around 12-18 for case review. They basically want to see if anything has changed about your current financial state. Finally, a tax lien will always be filed with CNC status. This is a public notice filed with the county courthouse against your property. Therefore, if you were to go try to sell your property, the lender would first be paid off, then the IRS and any left over proceeds would be for your gain.

Are You In Tax Compliance?

noreply@blogger.com (Anonymous) — Wed, 03 Jun 2009 02:21:00 +0000

What does being tax compliant mean?- Filing all required tax returns (Business or Individual) for the years 2001-2006-Paying your taxes (Business-income,payroll,excise) (Individual-income,payroll,excise)-Being current on your tax payments (Business -estimated and federal tax deposits) (Individual -estimated taxes)

What does "Due Process"mean? Following legal procedures set forth in the IRS for assessing additional tax liability. Notice (i.e. CP 2000 or an Audit Report) (Form 4549).*30 Day letter (for to exercise internal appeal rights)*90 Day letter (for Taxpayer to exercise appeal to the US Tax Court)- Certified Mail!!!!A Tax Consultant can help you better understand the nuances of the collection process.

Will The IRS Interest Rates Stay The Same ?

noreply@blogger.com (Anonymous) — Sat, 30 May 2009 03:44:00 +0000

Just when you thought the interest rate might decrease, it stays the same for the Third Quarter of 2009 ! Out of Washington, the Internal Revenue Service has announced that the interest rate remain the same starting July 1-2009. The rates will be as followed:

*Four percent for overpayment's and three percent in case of a corporation
*Four percent for underpayments
*Six percent for large corporate underpayments and
*One and a half percent for the portion of a corporate overpayment's exceeding $10,000

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 during April 2009 to take effect May 1, 2009, based on daily compounding.

If you have an outstanding liability with the IRS or you are unsure and need a compliance evaluation, don't hesitate to call a tax liability specialists for help today. Don't let compounding interest grow your tax debt exponentially without getting help today!

I have 2008 tax liability! Will the IRS factor this in with all other years?

noreply@blogger.com (Anonymous) — Mon, 25 May 2009 02:43:00 +0000

I recently had a client to ask me they could include their tax liability for 2008 in with the other outstanding liability owed to the IRS? First of all, you need to make sure you filed your return on time, to show the IRS that you will continue to stay in compliance going forward. By compliance, I mean filing your returns on time and paying any outstanding liability.

There is a possibility that the Internal Revenue Service will factor in the liability. However, there is no guarantee that this will happen. The IRS is very reluctant to factor in this liability because it conveys to them the inability to stay in compliance.

Recently I had a taxpayer that I worked to get them into Currently Non Collectible as their resolution with the IRS, to find out they were going to owe $50,000 for 2008. If we are talking about a small liability to consider, then the IRS would be more accommodating. When we are talking about liability of this caliber, they will not only factor this amount in, but default their resolution as CNC.

In order to achieve CNC, your monthly disposable income cannot be over $ 25.00 a month. While their current financials supported this, the IRS will see an inconsistency with the income. They will question the adjusted gross income. How is that they basically have no income but they incurred a liability like this. They will become suspicious of where the income went during the 2008 tax year.

This is a perfect example of why the IRS will not factor in the current liability with the current liability. Don't let this be you, contact a reputable resolution firm to handle your tax debt today !

Is It A Federal Offense To NOT File Your Returns?

noreply@blogger.com (Anonymous) — Wed, 20 May 2009 02:24:00 +0000

Another proposal would make repeated failure to file a tax return a felony. Current law provides that willful failure to file a tax return is a misdemeanor punishable by a term of imprisonment for not more than one year, a fine of not more than $25,000 ($100,000 in the case of a corporation), or both. A taxpayer who fails to file returns for multiple years commits a separate misdemeanor offense for each year.
Under the administration’s proposal, any person who willfully fails to file tax returns in any three years within any five-consecutive-year period, if the aggregated tax liability for such period is at least $50,000, would be subject to a new aggravated failure-to-file criminal penalty. The proposal would classify such a failure as a felony and, upon conviction, impose a fine of not more than $250,000 ($500,000 in the case of a corporation) or imprisonment for not more than five years, or both. The proposal would be effective for returns required to be filed after Dec. 31, 2009.
The administration also proposes to revise the offer-in-compromise application rules to eliminate the requirements that an initial offer-in-compromise include a nonrefundable payment of any portion of the taxpayer’s offer.

Don't let this be your outcome, contact a tax professional today to help properly prepare your tax returns today !

The Misconception: 2009 Stimulus and Does It Apply To Me?

noreply@blogger.com (Anonymous) — Mon, 18 May 2009 03:41:00 +0000

A lot of taxpayers are under the impression/misconception that we are entitled to (under the Obama Administration) that taxpayers will receive a stimulus refund for those who made at least $3000 in income for the 2oo8 tax year. Truth is that there is no stimulus refund for 2008, at least not in a cash out. However, there are other opportunities where certain taxpayers will be the recipient of tax benefits if the following applied to you:

* First Time Homwbuyer-What is the credit?
A. The first-time homebuyer credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.
The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.
Q. How much is the credit?
A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more.
Q. Which home purchases qualify for the first-time homebuyer credit?
A. Any home purchased as the taxpayer’s principal residence and located in the United States qualifies. You must buy the home after April 8, 2008, and before Dec. 1, 2009, to qualify for the credit. For a home that you construct, the purchase date is considered to be the first date you occupy the home.

When Do I have to pay the credit for the home of the purchase?
When must I pay back the credit for the home I purchased in 2009?
A: Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009. The obligation to repay the credit on a home purchased in 2009 arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.

*Purchase of a vehicle-
In 2009, you can deduct the state or local sales and excise taxes imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before January 1, 2010. A qualified motor vehicle includes a passenger automobile, light truck, or motorcycle, the original use of which begins with that purchaser and that has a gross vehicle weight rating of 8,500 pounds or less. A qualified motor vehicle also includes a motor home, the original use of which begins with that purchaser. The amount of tax you are able to deduct is limited to the tax that is imposed on the first $49,500 of the purchase price of the vehicle. The deduction is phased out over a $10,000 range that begins when modified adjusted gross income is more than $125,000 ($250,000 if married filing a joint return).

*Tax Credit For Energy Savors-
ARRA provides for a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The new law replaces the old law combination available in 2007 of a 10-percent credit for certain property and a credit equal to cost up to a specified amount for other property.The new law also raised the limit on the amount that can be claimed for improvements placed in service during 2009 and 2010 to $1,500, instead of the $500 lifetime limit under the old law.
In addition, the new law has increased the energy efficiency standards for building insulation, exterior windows, doors, and skylights, certain central air conditioners, and natural gas, propane or oil water heaters placed in service after Feb. 17, 2009.

Is It True That Your Tax Debt Can Just Go Away For Good?

noreply@blogger.com (Anonymous) — Wed, 13 May 2009 04:10:00 +0000

So what equals the removal of tax debt ? Its called CSED dates (Collection Statutory Expiration Dates). What exactly is a CSED date, and what does this mean for taxpayers have tax debt? D you know that the Internal Revenue Service, can't collect on your debt forever? This is true, the IRS only has ten years to collect on your debt. Technically, if you have tax debt stemming from the 2000 tax year, more than likely the CSED date has expired and the IRS can no longer collect this tax liability.However, if you have undergone a Audit, Bankruptcy, or are currently in Offer

In Compromise Examination review, then your CSED dates have been extended. Other than these examples, the IRS will cease collection on tax debt that has expired. There is a resolution called partial pay installment agreement, where the CSED dates play an important role on the total liability the client would have paid for. In a partial pay installment agreement, the CSED will always run, leaving the taxpayer only paying a portion of the total tax liability owed. Keep in mind the IRS approves only a small portion of these every year, and a taxpayer should be ecstatic to have gotten this as a resolution.

I've seen where reputable tax resolution firms were able to save taxpayers thousands of dollars by establishing partial pay installment agreements, and buying time for other CSED dates to expire.If you have tax debt, and you want to know more about CSED dates and whether or not you would qualify for partial pay installment agreement, don't hesitate to contact a tax professional today, and get this tax debt behind you for good.

The Rules Of The 10% Penalty Fee From Taking Early Distribution. Has This Happened To You?

noreply@blogger.com (Anonymous) — Tue, 12 May 2009 02:24:00 +0000

Generally, if you are under age 59 1/2, you must pay the 10% additional tax on the distribution of any assets (money or property) from your traditional IRA, distributions before you are age 59 1/2 are called early distributions. The 10% additional tax applies to the part of the distributions that you have to include in gross income. It is in addition to any regular income tax on the amount.

After 59 1/2 and before age 70 1/2 After you reach age 59 1/2 you can receive distributions after you reach age 59 1/2 , distributions are not required until you reach age 70 1/2. There are several exceptions to the age 59 1/2 rule. Even if you receive distribution before you are age 59 1/2, you may not have to pay the 10 % additional tax if you are in one of the following situations:

* You have un-reimbursed medical expenses that are more than 7.5 % of your adjusted gross income

*The distributions are not more than the cost of your medical insurance
*You are disabled
*You are the beneficiary of the deceased IRA owner
*You are receiving distributions in the form of an annuity
*The distributions are not more than your qualified plan
*The distribution is due to an IRS buy of the qualified plan
*The distribution is due to ab IRS levy of the qualified plan
*The distribution is a qualified reservist distribution

If you have withdrew from an IRA that will consequently cause potential tax liability, call a professional tax consultant today for help beyond your expertise.

A Credit For First Time Homebuyers? Part of the 2008 Stimulus Package

noreply@blogger.com (Anonymous) — Sun, 03 May 2009 02:00:00 +0000

Who does not qualify for the first time home buyer credit ? If you answer yes to the following questions, you would not qualify for the credit !

*Your modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly).
*You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. See Form 8859. This rule does not apply for a home purchased in 2009.
*Your home financing comes from tax-exempt mortgage revenue bonds. This rule does not apply for a home purchased in 2009.
*You are a nonresident alien
*Your home is located outside the United States
*You sell the home, or it ceases to be your main home, before the end of 2008
*You acquired your home by gift or inheritance
*You acquired your home from a related person. A related person includes:
*Your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc.)
*A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock of the corporation
*A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest.

First Time Homebuyer Credit is part of the Obama stimulus package for 2008. The credit of $8000 (if you purchased the house in 2009), or 10% of the purchase of your home will be credited to you.

Homes purchased in 2009. You must repay the credit only if the home ceases to be your main home within the 36-month period beginning on the purchase date. This includes situations where you sell the home, you convert it to business or rental property, or the home is destroyed, condemned, or disposed of under threat of condemnation. You repay the credit by including it as additional tax on the return for the year the home ceases to be your main home. If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit.

How Do I Know If I Qualify For CNC For My Tax Debt?

noreply@blogger.com (Anonymous) — Sat, 02 May 2009 21:25:00 +0000

How do you know if you qualify for Currently Non Collectible status with the IRS? This is not an easy resolution to obtain with the IRS. There are many restrictions,that prevent the average taxpayer from being considered for CNC. So often in resolution, we see where our everyday expenses often not considered an allowable expense with the IRS. The IRS will only consider necessary living expenses count.

Expenses such as tuition expenses for your children, expenses above the standard (factored by the county you live in), private school expense, over the standard car payments. If there are two people working in the household, the IRS will allot for two car payments. However, if there are more than two people lieving in the household, paying for their childs vehicle, the IRS will not deem this as an allowable expense.

So often, we think the IRS will allow such expenses, but they don't. I had a client this week that would have been considered CNC if they would accept her tuition payments for her children's college. The IRS will view this as an opportunity for the child to get a job and help pay on this type of expense.

In order for the IRS to even consider you to be Currently Non Collectible, your Monthly Disposable Income cannot be over $25 a month. What I mean by Monthly Disposable Income is your income less your allowable expenses (determined by the IRS). As you can see, financially you are strapped ( for lack of a better word) and need relief from your tax debt.

If the IRS considers you as Currently Non Collectible, you will placed in this resolution for at least a year (if not longer) , then the IRS will review your financials to determine whether or not you have the ability to pay the IRS on a monthly installment agreement. While in CNC, the CSED dates still run (how long the IRS has to collect on your debt) but interest will still accrue.

If you have tax debt, and you need help determining whether or not you would be a good candidate for CNC, contact a professional resolution firm today for relief of this continuous burden.

Is It Finally Here? A Tax Credit For Energy Savors?

noreply@blogger.com (Anonymous) — Thu, 30 Apr 2009 02:36:00 +0000

The Internal Revenue Service today reminded individual and business taxpayers that many energy-saving steps taken this year may result in bigger tax savings next year

Homeowners can get bigger tax credits for making energy efficiency improvements or installing alternative energy equipment.
The IRS also announced homeowners seeking these tax credits can temporarily rely on existing manufacturer certifications or appropriate Energy Star labels for purchasing qualifying products until updated certification guidelines are announced later this spring.

“These new, expanded credits encourage homeowners to make improvements that will make their homes more energy efficient,” said IRS Commissioner Doug Shulman. “People can improve their homes and save money over the long run.”

ARRA provides for a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The new law replaces the old law combination available in 2007 of a 10-percent credit for certain property and a credit equal to cost up to a specified amount for other property.

The new law also raised the limit on the amount that can be claimed for improvements placed in service during 2009 and 2010 to $1,500, instead of the $500 lifetime limit under the old law.
In addition, the new law has increased the energy efficiency standards for building insulation, exterior windows, doors, and skylights, certain central air conditioners, and natural gas, propane or oil water heaters placed in service after Feb. 17, 2009.

If you are avid energy savor and need help on the preparation of your return, contact a professional tax rep today.

Can The IRS Take Property Willed To Me ?

noreply@blogger.com (Anonymous) — Tue, 28 Apr 2009 02:06:00 +0000

I had an interesting conversation with a client today with regards to liens. The question was, after a resolution has been established, and a taxpayer has been willed property, does the IRS have the rights to seize these assets?
I explained to the client that in their case, when the CSED (Collection Statutory Expiration Dates) expires, the Internal Revenue Service legally does not have the rights to any property. The only way the IRS would have the rights to this property (after the CSED date expires), is if a judgment has been placed up the liability; this will extend the CSED dates, given the IRS the ability to collect on this liability.
Consequently a lien would be placed upon this property enabling the IRS the ability to collect on the lien attached to the property. However, if property has not been willed in the name of the taxpayer (or taxpayer's owing the tax if they file married filing joint), there would nothing for the IRS to collect on.
This is all contingent upon whether or not the CSED dates have expired. Obviously, if the property has been willed before the expiration dates expire, then the IRS has full rights to the proceeds administered to the taxpayer where the lien has been filed.

Did You Miss Out On Your 2008 Stimulus Payout?

noreply@blogger.com (Anonymous) — Fri, 24 Apr 2009 01:57:00 +0000

If you didn't file for an economic stimulus payment in 2008 because you weren't sure you were eligible, you may be able to file for a payment in 2009

The IRS and Treasury are working closely with the Social Security Administration to ensure that all eligible individuals know what to do to receive a stimulus payment.
Normally, certain Social Security payments are not subject to income tax. However, the economic stimulus law passed in February contains a special provision allowing Social Security recipients to count those benefits toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.

The following are requirements you must meet or there is no need to file for the stimulus:

*You have, or your family has, at least $3,000 in qualifying income from, or in combination with, Social Security benefits, certain Veterans Affairs benefits, Railroad Retirement benefits and earned income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.
*You and any family members listed on your tax return have valid Social Security numbers.
*You are not a dependent or eligible to be a dependent on someone else’s federal

What is the Stimulus Worth:

Eligible individuals — between $300 and $600
Joint filers — between $600 and $1,200
With eligible children — an additional $300 for each qualifying child

All of the above applies to those who receive social security,veteran affairs,railroad retirement or low-wage workers.

Do You Need Outside Assistance With Your Taxes?Need To See Someone Locally?

noreply@blogger.com (Anonymous) — Tue, 21 Apr 2009 03:27:00 +0000

Though I feel it is best to contact a reputable tax resolution firm for tax preparation and tax resolution matters, it is not always needed for when you need to visit a tax assistance center in person. If you can't seem to find a reputable tax resolution firm, you may want to contact or personally visit your local Taxpayer Assistance Center.

At the Taxpayer's Assistance Center, you will find no appointment necessary, just walk in for assistance. If you find yourself culturally challenged with language barriers, don't be alarmed because they are multilingual services in over 150 languages. The Taxpayer Assistance Center will also help you prepare your tax return for free for those whose income is less than $42 k. The center is also a place for those who are currently in an installment agreement or who would just like to make voluntary payments. The only information you need present with you is the tax period and the type of payment it is for.

If you have received an IRS notice, please bring it to the center as well, as they can see what tax years and the current tax liability owing, as well as assessment issues and auditing purposes.The center will also have tax returns and account transcripts as well as tax forms for those that may (say for instance) want to prepare their return themselves, or file for extensions on tax returns.

Do You Want More $$ In Your Pocket On Your Tax Returns?

noreply@blogger.com (Anonymous) — Fri, 17 Apr 2009 02:18:00 +0000

If you just filed your 2008 1040 Federal Tax Return and six months dowu cnn the road you need yo make some changes, you can amend a return by filing out a form 1040X. If you need to make changes to your filing status, dependants, total income, deduction or credits. Below are some facts you need to know when amending a return:

*Generally, you do not need to file an amended return for math errors as the IRS will be ale to make the correction for you.
*You also do not usually need to file an amended return because you forgot to include forms – such as W-2s or schedules – when you filed; the IRS normally requests those forms from you.
*Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
*If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS processing center for the area in which you live. The 1040X instructions list the addresses for the centers.
*If the changes involve another schedule or form, attach it to the 1040X.
*If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
*If you owe additional tax for 2008, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges.
Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

If there are changes that need to be made to your return, don't neglect to make those changes when they could mean more tax deductions or more of a refund !

Who Else Wants Their Levy Released ?

noreply@blogger.com (Anonymous) — Thu, 16 Apr 2009 02:05:00 +0000

A levy, is a mandatory garnishment against a taxpayers bank,social security,wage sources. There are a series of collection notices, elevem to be exact that are sent before a levy is even put into action. Where bank levies are one time, wage levies are continuous and will not be released until either the tax is paid in full, a resoliution has been made (i.e. installment agreement, Offer In Compromise,Currently Non Collectible ) or it prevents a hardship on the taxpayer,

Internal Revenue Service requires levies to be released in the following circumstances.
*The liability is satisfied by full payment, i.e., is no longer owed
*The statutory collection period has run out

Note:
*Generally, a levy served prior to the expiration of the collection period is good and should not be released. In addition, a levy served after reducing a tax liability to a judgment is valid.

Example:

*One week before the statutory collection period runs out, a notice of levy is served at the taxpayer's bank. The bank does not have to send the levy proceeds until the 21 day holding period on bank levies expires, and this will be after the period for collection runs out. This levy does not have to be released when the collection period runs out, because it was served timely.

Exception:
*A continuous wage levy served before the expiration of the collection statute must be released after the expiration of the collection statute.

Example:

*When a notice of levy is served on a taxpayer's right to property, sometimes that includes the right to receive future payments, e.g., pension benefits. If there is a fixed and determinable right to receive those future payments, the levy will attach them when they would have been paid to the taxpayer, even though it is not actually a "continuous" levy. As long as the right to property has been levied before the period for collection runs out, the notice of levy does not have to be released.

How Does Filing Late for 2008 Affect My Current IRS Resolution?

noreply@blogger.com (Anonymous) — Mon, 13 Apr 2009 02:35:00 +0000

If you are currently in an Installment Agreement with the Internal Revenue Service, and you have not filed your 2008 return, then this will default your agreement if you owe. The best advice I can give you ( if this is the case for you), is to borrow the money to pay this off. If you can't borrow from a lender, then I would apply it to a credit card or borrow from friends or family.

In working for a tax resolution firm, I have recently seen the impact having 2008 tax liability has on the current resolution agreements. Whether its currently non collectible, or partial pay installment agreements, the IRS will not have empathy if you file your return late and you owe. The Internal Revenue Service wants to see that you are in compliance and not continuing to be habitual late filers. Furthermore, the IRS can sometimes send your employer lock in letter requiring the change to be made on your withholdings (W-4); this change will be for "0" instead of the number of dependants you legitimately qualify to take as exemptions.

Consequently, once your installment agreement has been defaulted, it is very difficult to get yourself back in an agreement with the same terms. Therefore, I encourage you to keep yourself compliant and pay the tax owed at the time of filing to prevent such action from taking place !