audit Archives - 914 Tax

Do You Owe Back Taxes? Why You Should Stop Panicking & Start Planning

May 19, 2022

If you owe back taxes to the IRS, some amount of panic is understandable. After all, the Internal Revenue Service has the power of the federal government in its corner, something no other debt collector can claim. They are considered the most brutal collection agency on the planet.

It is easy to freeze up and just do nothing when you owe back taxes to the IRS, but hiding from, or doing nothing about your tax debt will not make it go away. In fact, ignoring the taxes you owe will only make the situation worse, since interest and penalties can really add up. You also risk having your paycheck garnished (the IRS does not need a court order to do this) or your bank account levied. The IRS can also file a Notice of Federal Tax Lien making it all but impossible to obtain financing for a car or home.

So instead of panicking about your tax debt and hoping the problem will go away, you need to take some proactive steps. Now is not the time to panic and hide – now is the time to start taking action.

Some of these steps you can do on your own if you’d like, while others will likely require the intervention of an experienced tax resolution expert. Here are some proactive steps you can take to get a handle on your tax debt. If you need help resolving your IRS tax problem, contact us here Get help from Ron Friedman, CPA. We help people with IRS problems every day.

Confirm the Amount Owed

When you owe back taxes, one of the first things you should do is make sure you really owe the money. The IRS has been known to make mistakes, a lot of mistakes, and the agency is far from foolproof. Contact the IRS or have us do an IRS transcript analysis to determine the amount the IRS claims you owe.

Seek Out Deductions You May Have Missed

At the very least, you may not owe as much as you think you do, and every dollar you can remove from the bill is one more dollar in your favor. Now is the time to scour your past and current tax returns, looking for deductions and tax credits you might have missed.

Unless you are a seasoned tax expert, you will probably need some professional assistance to make this happen. If you are already working with a CPA or tax expert, you can ask them to look at your past tax returns but only a tax resolution expert, who helps people like you for a living, can protect your income and assets as you go through the process.

If you missed a few deductions and tax credits along the way, your tax professional can file amended returns on your behalf, lowering the amount of tax debt you owe – and possibly eliminating it altogether. However, you usually can’t go back more than 3 years to amend returns.

Look for Special Programs You May Qualify For

The bad news is the IRS wants its money and has the power to collect it.

The good news is the tax agency also offers several programs tax filers can use to make the repayment process easier. In some cases, the IRS may even be willing to settle for less, possibly much less, than the total amount of back taxes you owe.

These programs are not available to everyone, and if you have the resources needed to pay your back taxes, the IRS is unlikely to give you much of a break. But if your resources are limited, the tax agency may decide that a small amount of tax repayment is better than none at all.

The first step in the process is finding the programs for which you might qualify, and that will probably require the help of an experienced tax resolution expert. Most CPAs do not have this experience. Negotiating with the IRS is not an easy thing to do, and you may need help to drive the best bargain and reduce your back taxes. In the end, it may be well worth paying a tax relief expert to negotiate on your behalf, especially if you end up with a much lower tax bill.

It is easy to panic when you owe back taxes, but you should not let fear get in your way. The longer you ignore the problem, the worse it is likely to get, and the sooner you act, the better off you, and your finances, will be. There is a solution to every IRS problem. Let us see what IRS tax debt settlement programs you qualify for today. Get help from Ron Friedman, CPA.

8 Ways to Get Ready for Tax Season and Avoid a Back Tax Problem

November 30, 2021

The holidays are here. Not to be a Grinch but, right around the corner is a less fondly anticipated time of year. Before you know it, you will be taking down the Christmas tree, pulling down the holiday lights and getting ready for the tax season to come.

Tax season is decidedly less fun than holiday season, but the two times of year do have one thing in common. Just like the holidays, tax season requires lots of preparation and planning, and if you want to be ready, you need to start early.

Why am I writing this article? It’s not to spoil your holiday cheer, it’s because we’ve seen what it’s like when you’re not prepared. We help people who fall behind on their taxes and owe the IRS tens of thousands of dollars in back taxes, and it’s often because they simply failed to prepare and they procrastinate on their taxes.

If you do get in trouble with the IRS and they claim you owe $10,000 or more, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem Get help from Ron Friedman, CPA,

So if you don’t want to end up owing the IRS a ton of money, Here are 10 ways to get ready for tax season and reduce your stress level as this annual ritual approaches.

#1 Organize your records.

Now is the time to drag out last year’s tax return, pull out your most recent pay stub and get organized before the season starts.

#2 Settle any back taxes you might owe.

If you have years of unfiled returns or have a tax issue for anything besides the current year, you should get this handled now, before the upcoming tax season. When April 15th comes around, your tax professional is likely swamped with returns and they’ll pay less attention to your back tax debt. We recommend reaching out to a specialized tax relief firm like ours who handles complicated tax debt cases all year round.

#3 Defer bonuses and incentive pay.

If you’re going to owe taxes, it might make sense to defer getting paid so you can lower your taxable income. If you can, you might want to defer any bonuses and incentive payments. You can also defer payments from retirement accounts and IRAs to save on current-year taxes.

#4 Look for additional deductions.

Now is the time to make those last-minute donations to charity, so start writing those checks and gathering up those household goods. Be sure to get a receipt and save your cancelled checks so you can substantiate your charitable giving if a question should arise later.

#5 Expand your education.

Not only can taking a class improve your business or career prospects and help you get ahead, but that additional education could also lower your tax bill. You might qualify for a generous tax credit or take a good tax deduction for investing in your future.

#6 Up your retirement savings.

The end of the year is the perfect time to increase your 401(k) contributions and make your annual IRA investment. Maxing out your 401(k) and IRA contributions is one of the best ways to reduce your tax bill while saving for the future.

#7 Sell your losers and let your winners run.

if you have substantial capital gains in your stock portfolio or crypto portfolio, selling your losers could lower your tax bill. You can use those losses to offset your capital gains and save money on your taxes.

#8 Estimate your income for tax planning.

You will not know the exact amount of income you received until all your documents are in, but you can estimate your compensation and start doing some advance tax planning. This can be key in preventing back tax debt since you wont be blindsided by a large tax bill come April 15th.

Tax season will be here before you know it, and now is the time to get ready. You do not have to wait until April to start your tax planning, and the sooner you get started, the sooner you can put this unpleasant task behind you.

Need Tax Relief?

If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem Get help from Ron Friedman, CPA.

Tips for Finding a Qualified Tax Resolution Firm

October 22, 2021

Given how high the stakes are, it is surprising how little thought many people give to their taxes. All too often, individuals simply walk into a neighborhood storefront, hand over their most personal information and trust the person on the other side of the desk to do the right thing and prepare their taxes properly.

In many cases that trust is well placed, and the individual preparing the taxes is indeed the honest and trustworthy professional they claim to be. In other cases, however, the trust is misplaced, and the tax preparer will end up making mistakes that could cost the individual a great deal. If an audit is triggered by a deliberate misrepresentation or unintentional mistake, you will still be on the hook for any additional taxes, interest and penalties.

If you’re in tax trouble because you trusted the wrong tax preparer, then you will need a qualified tax resolution firm to help you resolve your tax problem. However, you don’t want to repeat the same mistake twice! So, it is important to do your homework and know what to look for in a tax resolution firm. Here are 4 quick tips to help you find a qualified tax resolution firm.

#1 Read Their Reviews Online

By reading online reviews you can quickly see if the tax resolution firm is reputable and stands by their clients. A lot of the big national firms will have terrible reviews but they market themselves heavily, so consumers don’t think twice about their reputation.

If you owe back taxes, waiting can cost you a lot of money and if the tax resolution firm disappears on you or doesn’t return your call, that wasted time could cost you dearly. This can easily be snuffed out by seeing if they have good online reviews about their services.

#2 Make Sure the Tax Resolution Firm Has Experience and A Proven Track Record

Negotiating with the IRS to settle your tax debt is a specialized skill that not all tax attorneys or tax professionals have. It’s important to ask about their recent case settlements and success stories. A true tax resolution professional will have proof they’ve done this before and successfully helped resolve back tax problems.

#3 What Does Their Communication Look Like Once You Sign On?

A professional and experienced firm will have systems in place to make sure you’re updated regularly on your tax resolution case. The IRS moves slow and there will likely be big gaps in time in between updates from the IRS. That doesn’t mean the tax relief firm should also have gaps in communication.

Ask how long they think it’ll take to resolve your tax problem, and how you’ll be updated even if they don’t have any news from the IRS.

#4 Avoid Big National Firms With Salespeople Who Promise The Moon But Don’t Deliver

You’ve heard their ads on the radio or TV. If you call a big national firm, you’ll likely get a salesperson who knows very little about taxes or how to settle your tax debt.

Not every taxpayer qualifies for all the IRS tax debt settlement programs. However, these salespeople will promise you the moon but will fail to deliver because they didn’t take the time to understand your specific situation and they’re not actually licensed tax resolution professionals.

Make sure to ask who will be responsible for your case and try to speak with them directly before signing up. A true tax resolution expert will be happy to speak with you to make sure they can understand your case and offer you the right solution.

Need Tax Relief?