The horrible epidemic of identity theft is running rampant in the US. Experienced hackers make their way into a database and quickly steal your information. Everyone from small doctor’s offices to large corporations like Target and Home Depot have been hacked. Well, these “hackers” have made headlines again. This time, they broke into the IRS’ website to obtain taxpayers transcripts. This most recent occurrence is estimated to have impacted 100,000 taxpayers and their private data. Read more
In our office we have become accustomed to the long hold times at the IRS. It is no surprise when a taxpayer walks in and wants to know, why they have to wait two hours on the phone. We are not shocked when refunds and processing are late. Why? Because it has become the norm with the Internal Revenue. We ourselves as tax professionals still have to wait on hold, sometimes for hours. Only to be hung up on while waiting in the cue. Read more
If I haven’t filed in years and the IRS did nothing, I’m flying under the radar!
The worst thing you can do is assume the IRS is clueless about your non filing status and your income. There is a complete history sent from employers, mortgage companies, and other financial institutions. The IRS knows way more than you may be giving them credit for. Just because you are not in jail at the moment doesn’t mean you slipped through the cracks. Read more
An offer in compromise is an agreement between a taxpayer and the IRS. The agreement settles the taxpayer’s liabilities for less than the full amount owed. An OIC is generally not accepted if the IRS believes the debt can be paid in full or in instalments. The IRS will look at your income and assets and decide your “reasonable collection potential.” To come up with this figure the IRS takes your assets and also ability to pay in the future. The combined figure creates what they call “Reasonable Collection Potential”(RCP).
There have been a lot of changes in the last few years. Now under the new Fresh Start Program when the IRS calculates RCP, they must follow new guidelines. Read more
Occasionally clients will come into my office. They have tried by themselves or the help of someone else to set up payment arrangements. Sometimes they have their family attorney try and set up an installment agreement only to get denied. Other times they try to file their own OIC or Offer in Compromise. I cannot stress enough what a bad idea this is. Would you let your plumber fill a cavity? Would you perform open heart surgery on a friend? No, of course you wouldn’t. Read more
Maryland Get Ready for Tax Amnesty!
The amnesty application (AM-15) is scheduled to be available on August 28th. Applications will start being accepted on September 1st.
The Tax Amnesty Program applies to: Read more
Many clients come to our office who haven’t filed in many years. Sometimes it is only 2-3 years, other times they haven’t filed in 10 years or more. However many years it has been, filing past due returns can seem like a daunting task. All that paperwork and often times you are reliving a financially difficult situation. Things are not hopeless though, with an experienced tax team by your side you are in good hands.
It is a headache to try and look for all those documents. Read more
In the past two years I have noticed an increase in calls from taxpayers frightened by the IRS. They receive a threatening phone call where the “IRS” advises them they have missed previous notices and this is their last chance to pay before being hauled away to prison. Yelling, Screaming, and threatening is not how the Internal Revenue does business. Don’t be fooled by these scams, don’t give up your personal information, and do not send money to these thieves. The IRS estimates over $14 million has been paid to these con artists in the last two years alone.
We see this time and time again in our practice. Taxpayers come in with high or unrealistic expectations. Of course all taxpayers want their penalties and interest abated. Who wouldn’t love to settle for pennies on the dollar? Yes these programs do exist, but no not everyone qualifies for them. The hard truth that we have to break to our clients’ every day is that often times program they want and the program they qualify for may not be the same thing. Read more
Big stuff happening in Maryland! The Supreme Court has ruled Maryland’s income tax law unconstitutional. For years many Maryland residents and businesses were being double taxed on their out of state earnings. The State’s previous practice of withholding a credit on each county’s portion of state income tax harms some residents and businesses with out of state income. The Justices found that this law previously affirmed in 2013 would dissuade Maryland taxpayers from doing business across state lines.
In most states, income from outside that state is taxed in the state in which it was made. To protect against double dipping those states tend to give their residents and businesses a full credit for the income paid on out of state earnings.
Previously, Maryland residents and businesses were only permitted to deduct income taxes paid in other states from what they pay in Maryland, they were not afforded to the same deduction on piggyback tax collected for each of the 23 counties and Baltimore City.
Taxpayers who previously tried to claim the credit but were denied are now eligible for refunds. The years considered will be from 2006-2014. Early estimates say these refunds could cost the state $200 million plus interest. Going forward the loss of revenue for Maryland State is estimated around $42 million a year.
The Office of the Comptroller is set to review over 8,000 cases starting as far back as 2006. The money for the refunds will have to come from Maryland’s income tax reserve fund. The implications of these findings we are yet to find. If you were a small business in operation between 2006 and 2014, with out of state income, it may be in your best interest to contact a tax attorney regarding a possibly claim to refund. If you or someone you know would like us to review a possibly appeal or amendment, feel free to contact our firm at 410-727-6006.
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