In 2011, Maryland passed a law that if you have unpaid taxes you will prevented from renewing your license and/or registration. This applies to both business and personal vehicles and licenses. Some time has passed and we are starting to see a large occurrence of these holds. Every day our firm gets frantic calls from taxpayers who need to drive to get to and to perform their jobs.
What can you do? Read more
The IRS has over 148 different penalty types that can be assessed on a taxpayer or business. What’s even worse is interest and additional penalties can continue to grow from the original penalty. That’s just on the federal level. Maryland has a whopping 13% interest, not to mention they are not as forgiving when it comes to old tax returns. I have seen the State go after clients for taxes from the early 90’s! These penalties and interest charges continue to rack up a bill that sometimes is larger than the original infraction. As bad as they seem, IRS penalties can often times be reduced or even wiped out completely, but you have to know what you are doing. And you must have a justifiable reason to ask for them to be removed. Read more
The IRS Mission
Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.
This mission statement describes our role and the public’s expectation about how we should perform that role.
http://www.irs.gov/uac/The-Agency,-its-Mission-and-Statutory-Authority Read more
I heard an advertisement while driving into work today. “Call us if you can’t afford to pay the IRS…The new CNC program can help”. Many taxpayers are calling and may not even know what the CNC program stands for. I thought that an explanation would make for a good post.
CNC or Currently Not Collectible Status is a program used to temporarily resolve tax problems for low income individuals. This means the IRS must stop collection tactics and leave your case alone for a while. However, if your income changes or your file comes up for review, the IRS can come back to collect. CNC is a good program when used as a tool along with other legal measures to resolve past due taxes. I feel it is unfair to let taxpayers think CNC is a permanent fix and works for everyone. Like Offer in Compromise, only a small number of people actually qualify for CNC. Read more
I received a 1099-C: what is this?
In the last ten years Americans have had a tough time between lack of employment and the credit crunch, many of us were hit hard. Citizens caught in subprime mortgages that they could no longer afford and were unable to refinance due to home price or new credit restrictions. Good credit individuals woke up to find their lines of credit slashed. Regularly employed people were slowly pushed out of the work force. Millions of good honest people fell on hard times.
What does this mean for taxes? Read more
What is an audit?
*1 As defined by the IRS: An IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is substantially correct.
What are your rights as a taxpayer? Read more
In our training for tax resolution we have always been told that tax returns usually take 4-6 weeks to post. Today I was shocked when a representative from Taxpayer Advocates alerted me that tax returns are taking up to a YEAR to post! The reason given was they are very busy this time of year. How can this be? Why does IRS not hire more people? The simplest answer: Because they can’t. The IRS agency has had extreme financial cutbacks; their workforce is dwindling, their funds are stretched, and their training seems to be subpar.
Why is this important? Read more
The IRS has recently made updates to its Innocent Spouse rules. Now more taxpayers will be considered to receive Innocent Spouse Relief from their joint tax returns. When a married couple files a joint tax return they are both responsible for all taxes. In some instances one of the partners misrepresents their tax situation. This misrepresentation causes a tax debt for both parties. The debt could have occurred due to not reporting income, misrepresentation of key facts, under reporting, or under paying. Often time’s finances and marriage are difficult. For whatever reason one spouse neglects to inform the other about tax debt, and now the innocent party is on the hook. Well that’s not always the case. There is help out there. If there was a misrepresentation on your joint tax return that you were unaware of, you may be eligible for relief through an Innocent Spouse Program. Read more
All businesses need to keep records. To be successful, you need to have a business plan or model, appropriate business type, appropriate accounting method, a good bookkeeper, and the ability to use all this information to your advantage. Part of this process includes the retention of receipts.
Transcripts are like your secret file with the IRS. They show us what the IRS knows about you. There are three basic steps to IRS Resolution. The first is Power of Attorney & Investigation. The second is preparing all necessary returns. The third step is Resolution. Transcripts play a very important part in the first step, investigating a taxpayer’s case. Below is some information about IRS transcripts.
What do they include? Read more
