IRS News Archives

Avoid the April 15 Blues – Take a Step-by-Step Approach to Your Taxes This Year

February 14, 2022

It is no wonder so many Americans dread the April 15 tax filing deadline, (April 18th this year). The U.S. tax code already contains more words than the Bible, and hundreds of pages of new rules and regulations are often added.

With so much complexity, it is no wonder so many of us put off filing our taxes until the last possible minute, but taking that approach introduces its own stresses and can potentially land you in hot water with the IRS. What if you do not get it done on time? You can file for an extension, but you are still required to pay the taxes you owe plus penalties and interest. How do you know you didn’t make a mistake with your last-minute tax filing? Something as simple as a mathematical error could increase the odds of an audit and put you in the crosshairs of the IRS.

We specialize in helping people who owe $10,000 or more to the IRS or have years of unfiled tax returns, so we’ve seen our fair share of mistakes made by innocent taxpayers. If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief Get help from Ron Friedman, CPA.

That said, we recommend taking a methodical and step-by-step approach to preparing and filing your taxes and avoid burying your head in the sand on April 15th. As with any unpleasant and complicated task, breaking your taxes down into smaller and more manageable chunks can make things easier. This year, vow to take a step-by-step approach to your tax return. If you follow these simple steps, you could be done with your taxes before you know it.

Step 1 – Set Up a Command Center

Chances are you will start receiving tax documents in early January, and you may still be receiving those documents in March. That means you need a convenient place to keep all those documents. Setting up a command center in your home makes it easier to store those documents and keep them at hand.

If you have a home scanner, take a few minutes to image each document as it arrives. Set up a special folder on your computer or cloud storage service to hold all those documents. Those electronic copies can be invaluable if the originals are damaged or destroyed.

Step 2 – Choose A Good Tax Preparation Service (But Use A Tax Resolution Service For More Complicated IRS Issues)

While they cannot make the task totally painless, tax preparation professionals do make the process a great deal easier.

Keep in mind, if you owe multiple years of taxes and have multiple years of unfiled returns, we recommend reaching out to a tax resolution firm that will understand your unique situation and find the tax relief you need. Most tax preparers aren’t trained in complex tax resolution, so find the right firm to help you with your case.

Step 3 – Enter Your Tax Documents As You Get Them

One of the great things about technology is that you organize and file each tax document as you get it, often you can download all your tax documents from various online services. For example, your direct deposit payroll service will give you your W2 and different vendors provide statements and 1099’s online. If the mailman brings you a 1099-INT or a W-2, you can simply scan things as they come in.

Just open each document, scan it to create an electronic backup and log on to your favorite secure cloud storage to file your documents. Whether you get five tax documents a day or just one, entering the information now can save you time later on.

Step 4 – Review Your Documents and Final Tax Return

After you think you have all your documents organized and your tax return is ready to file, the next step is to review everything and make sure there aren’t any obvious issues. Go through the paper and electronic copies and check each one off on your tax return. If any of those documents are missing or anything is wrong, go back and enter them right away.

Step 5 – Bring It All Together

Now that the final review is complete and all the documents have been entered, it is time to bring it all together and actually file your return. Your tax prep professional should include a series of checks designed to catch common errors and point out audit flags. Be sure to ask questions and correct any problems you might find. Be sure to print off a copy of your tax return and save an electronic version to your computer.

Nothing can make filing taxes fun, and this annual chore will never be a pleasant one. Even so, you can make the task less taxing by breaking tax filing down into its component parts. Following the steps outlined above can help you deal more effectively with your tax bill and all the complexities of the tax code.

OWE BACK TAXES?

Our firm specializes in tax resolution and helping people who owe the IRS or state $10,000 or more. We’ve seen taxpayers get blindsided every year by a huge tax bill and often falling behind on their taxes for years on end. If that’s you, we can help. Contact our firm today to discuss your tax debt settlement options Get help from Ron Friedman, CPA.

Common Tax Relief Programs the IRS Offers

January 11, 2022

The old saying that nothing is certain in life except death and taxes has never been truer, or more frightening. In the current environment, fear of the IRS is creeping in, and nothing will get your heart racing quite as fast as opening the mailbox and finding a letter from the tax agency.

When the IRS comes calling, you might think that there is nothing you can do. You may worry that you will have to liquidate your assets, sell your car or even put your home on the market to afford what the IRS says you owe.

The good news is that you may not have to pay that total amount, and before you write that big check you should check out the alternatives first.

The IRS actually understands taxpayers fall behind on their taxes, and they have programs in place that can reduce the amount you owe or at least make paying the tab a little easier.

Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate with the IRS on your behalf. If you owe back taxes, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about. Get help from Ron Friedman, CPA.

With that said, here are some of the most common tax relief programs the IRS has to offer – and how you can access them.

Payment Plans

Otherwise known as installment agreements, one of the most common ways taxpayers approach the repayment of their back taxes is by setting up a payment plan. This type of program is a popular one, and for good reason – it can greatly reduce the stress you feel as you deal with an unexpected tax bill.

There are pros and cons to this approach, and it is important to explore your other options very carefully. With a payment plan you will need to pay the entire amount you owe, but you can stretch the repayment out over months or even years. Keep in mind, however, that the IRS will continue to charge interest on the remaining balance, so this option will require you to pay more than the amount you owe.

Offer in Compromise

Another program the IRS offers is known as the offer in compromise, or OIC. This option allows eligible taxpayers to settle their tax debts for less than the IRS says they owe, and that means you could save money if you qualify for this program.

The offer in compromise is not right for everyone, and it is important to work with a tax relief expert or tax resolution specialist if you are exploring this kind of compromise. If you have significant assets, the IRS may not be willing to settle, but if you are strapped for cash the offer in compromise arrangement could be the way out of the trouble you find yourself in.

IRS Hardship Program – Currently Non-Collectable

The IRS hardship program is another option for taxpayers who are financially unable to pay what they owe to the tax agency. If you are truly strapped for cash and worrying about your tax debt, you should definitely check out the hardship program, but you should not try to work with the IRS on your own.

The hardship program has some very specific requirements, and if you make a mistake when applying you could find yourself locked out of the process. By working with a tax resolution specialist, you can increase your odds of success and possibly save yourself a lot of money in the process.

What is the best option?

As you can see, the IRS does offer a number of programs that can reduce the amount you owe – or even forgive your tax debt altogether. If you are eligible for one of these tax relief programs, you could find yourself breathing a lot easier, but the IRS is not likely to give you the information if they do not have to.

As a taxing authority and agency, the IRS has an interest in keeping these relief and resolution programs under wrap. Their goal, after all, is to collect as much money as possible and telling taxpayers that they can pay less is simply not in their interest.

For all of those reasons and more, it is important to work with a tax resolution professional whenever you are dealing with an IRS problem. Whether the debt is the result of years of unfiled taxes, a discrepancy in the amount reported and what the IRS says you owe or anything else, specific expertise can make a huge difference – and save you a lot of money in the process.

Knowing about the tax relief and favorable resolution options the IRS offers is the first start, and that education can be a huge point in your favor. Now that you know what types of programs are available, it is time to take the next step, so pick up the phone and call us, your tax resolution specialist, today. Get help from Ron Friedman, CPA.

Operation Hidden Treasure: Cryptocurrency And Your Taxes

November 30, 2021

Cryptocurrency has become an incredibly popular way to invest, but the tax side of this virtual coin can be difficult to navigate. The IRS has gone back and forth over the years on it’s stance on cryptocurrency, making it confusing even for the most diligent investors.

In March of 2021, the IRS announced Operation Hidden Treasure in order to crack down on cryptocurrency reporting. If you’ve bought and/or sold cryptocurrency recently, it’s important to declare your crypto correctly on your tax forms in order to avoid fraud and evasion charges.

Here’s what you need to know:

Before we jump into it, if you know you owe IRS back taxes on your crypto gains, it’s important to reach out to a tax resolution firm like ours who is skilled in negotiating back tax debt with the IRS. We can help you file amended returns and get you back in compliance, while potentially negotiating with the IRS on your behalf. Contact us today for a consultation. Get help from Ron Friedman, CPA.

What Is Operation Hidden Treasure?

Operation Hidden Treasure is a joint effort by the IRS Civil Office of Fraud Enforcement and its Criminal Investigation Unit. This operation is designed to search for unreported income from cryptocurrency.

Operation Hidden Treasure has trained agents to examine the blockchain in order to find signs of tax evasion. Blockchain is the digital ledger that tracks your cryptocurrency mining and transactions. The signs that IRS agents look for are marked as signatures that make it easier to detect further fraudulent activity.

Crypto users have found ways to skirt reporting requirements by sending multiple transactions under a certain dollar amount, or pouring their virtual currency into shell corporations, different countries, and cold storage. The IRS is also collaborating with European law enforcement agencies to tackle international fraud.

How To Protect Your Assets

The IRS considers virtual currency to be property akin to gold, rather than money, and is taxed accordingly. If your only crypto transaction this year was purchasing crypto with US dollars, then that does not need to be reported, according to the IRS FAQ on their website. However, if you sold your crypto or you traded your crypto for any goods or services, then that does need to be reported.

When you sell your crypto, keep track of its value when you purchased it, and its value when you sold it. While crypto and the IRS can both be murky subjects, your transparency is the key to protecting your financial assets from future tax audits.

To get ready for the upcoming tax season, it’s important to get your portfolio organized. If you have bought, sold, or traded crypto in the past year, contact a tax lawyer or a tax resolution firm like ours for advice on how to report your cryptocurrency transactions.

Need Tax Relief?

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.

Avoid These 5 Common Tax Filing Mistakes That Can Get You In Tax Trouble

October 2, 2020

Whether you file the simple 1040EZ or a complex 1040 and a raft of schedules, making a mistake on your tax form could lead to big tax trouble. Something as simple as a math error or unsigned form could invite extra attention from the IRS.

The tax agency sees those mistakes every year, and IRS representatives warn taxpayers to be careful when filling out their forms. Even if you think you have everything filled out perfectly, it never hurts to double-check and look for these common tax day errors.

#1 – Assuming Your Tax Pro Prepared Your Taxes Properly

Blindly trusting your accountant or tax preparer to file your taxes correctly can be costly. Of course you want to assume they do a great job, and most tax professionals do, but letting them file without your thorough review is a mistake.

We resolve back tax problems for people, and often what gets people in trouble is a simple mistake; like forgetting to report income, missing deductions, or taking too many deductions.

These are sometimes honest mistakes that if not caught early, can trigger red flags and have the IRS sending you letters of balances due.

No one knows your financial situation better than you do so it’s important you double check your return so you’re not blindsided with an unwanted surprise.

#2 – Waiting Until the Last Minute

Filing taxes is stressful enough. You do not need to make things worse by waiting until midnight on April 15 to get your return in the mail. Give yourself plenty of time to gather all the necessary documents and complete your return.

Keep in mind that unexpected problems could interfere with your last-minute tax filing plans. Getting your taxes done early is the only way to protect yourself from unforeseen circumstances that can delay your tax filing.

#3 – Failing to File on Time

If you cannot file your return on time, you can ask for an extension by filling out a single form. Even if your documents are in disarray, there is no excuse for not filing on time. Filing an extension gives you six more months to get everything in order and complete your return.

Keep in mind that you will still need to estimate the tax you owe and make your payment, even if you file an extension. Filing an extension extends the amount of time you have to get your return to the IRS, but it does not provide a reprieve from your tax debt. If you wait to make your tax payment, you will get hit with penalties and interest.

#4 – Not Making a Backup or Keeping Good Records

Making backup copies of your tax returns, income documents and schedules is an essential part of tax planning and preparation. Set up a folder or file box and use it to store your tax documents as they come in, and then scan each one before you put it away.

Once you have completed your return, be sure to make copies of every document, including your W-2 form and tax schedules, before sending the return to the IRS. If you file electronically, be sure to save a PDF copy of your return before completing the final step. Save all of those electronic tax documents on your computer or cloud storage device. Ordering a lost copy of a past year’s return from the IRS is time-consuming and expensive. You can save time and money by making your own backup copies. If the IRS audits you or requests more information from you, all your records will be extremely helpful in the process.

#5 – Ignoring Letters From The IRS After You File Your Taxes.

Sometimes the IRS will send follow up correspondence, especially if you owe money to the IRS. It can be easy to ignore the first few letters. Even if you have the intention of paying your taxes soon you should still take action and either get on an installment agreement or reach out to a tax relief firm if your financial situation requires it.

OWE BACK TAXES?

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out. 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. https://www.914tax.com/contact-us/

What is a Levy? IRS and Other Asset Levies Explained

Falling behind on your debts is never a fun place to be. It’s less fun when a levy is placed on your assets. In this article, we take a look at what an IRS levy is, why it happens, and what you can do about it.

Note: If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief https://www.914tax.com/contact-us/. Often, we can resolve your IRS levy without you having to talk to the IRS. Call today.

What is an IRS Levy?

Simply put, if you owe back taxes and you ignore the IRS, the IRS can seize your property, take money from your bank accounts, or sell your assets in order to satisfy the balance due.

The IRS will give you plenty of notices via mail before they take this step. If you do not satisfy the debt or make payment arrangements by the specified date, the IRS will attempt to take the amount of the levy directly out of your bank account.

Other types of levies

Private creditors may issue a levy against your bank account with a court order. Court orders are not required for levies by government agencies. The creditor must notify you of the upcoming levy at least 21 days before removing any funds from your account. You may not withdraw money or close the account during this waiting period.

Funds earned from child support, social security, unemployment, workers’ compensation settlements and certain other types of government agency payments are exempt from levy. You must request the exemption and offer proof of the source of the funds.

Wage Garnishments

Government agencies may also garnish an employee’s wages for back taxes, child support and other delinquent payments required by law.

The IRS has the authority to levy up to 85 percent of the employee’s paycheck. The levy notice will be sent to your company’s payroll or human resources department. You must then withhold the appropriate amount of money from the employee’s paycheck and send it to the IRS or state tax board. The employee must provide a wage garnishment release if he is able to work out a payment arrangement.

If you are behind on your taxes, the IRS may levy most payments from federal agencies. This includes railroad retirement benefits, Medicare supplier and provider payments, payments on contracts between your company and a government agency, federal retirement annuities and travel reimbursements.

You may apply for a hardship exemption if the levy will cause your company undue financial distress. Companies going through bankruptcy proceedings are automatically exempt from IRS levies.

Seizing Your Assets

The IRS may also seize your real estate and personal property such as a car or boat. You will receive a 30-day notice indicating that seizures will follow if you do not pay your outstanding taxes or contact the IRS to make payment arrangements. This authority also extends to property and money you own that are being held by another party, such as life insurance cash value. The government sells its seized property at auction to recover some of the funds owed by delinquent taxpayers.

What To Do If You Have An IRS Levy

Back taxes don’t just disappear if you ignore them long enough. Putting your head in the sand will cause the problem to get worse.

If you have back tax debt, we highly recommend you reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation. https://www.914tax.com/contact-us/

IRS Launches Debt Collection Program with Private Collectors

September 26, 2016

The IRS announced today it will launch private collection of certain overdue federal tax debts next spring and has selected several contractors to implement the problem. See full announcement. Here are ten things you should know about this new program: First, the private collector usually will contact the taxpayer by letter. If the taxpayer’s last … Read More…

The IRS announced today it will launch private collection of certain overdue federal tax debts next spring and has selected several contractors to implement the problem. See full announcement.

Here are ten things you should know about this new program:

First, the private collector usually will contact the taxpayer by letter.
If the taxpayer’s last known address is incorrect, the private collector searches for the correct address. Next, the private collector will telephone the taxpayer to request full payment.
If the taxpayer cannot pay in full right away, the private collector offers an installment deal for up to five years.
If the taxpayer is unable to pay even over five years, the collector asks for taxpayer financial information to see what sort of deal the taxpayer should get. There are controls on financial data, but there is considerable worry about having taxpayer data in private hands.
Private collectors cannot accept payments. Do not pay them directly!
The Fair Debt Collection Practices Act applies to private collectors. This is the same law that applies to collectors in other circumstances.
There are many reports required under the law. Congress and the Treasury Department are trying to determine if private collection is efficient and how well it works.
In some cases, the IRS is actually required to use private collectors, where:
- The tax bill is not being collected because of a lack of IRS resources or the IRS’ inability to locate the taxpayer.
- More than 1/3 of the statute of limitations has expired, and no IRS employee has been assigned to collect it; and
- The tax bill has been assigned for collection, but more than a year has passed without any interaction.
Some tax bills cannot go to private collectors, as where:
- There is a pending or active offer-in-compromise or installment agreement;
- It is an innocent spouse case;
- The taxpayer is deceased, under age 18, in a designated combat zone, or is a victim of identity theft;
- The taxpayer is under IRS audit, in litigation, criminal investigation, or levy; or
- The taxpayer has gone to IRS Appeals.
If you have a large tax debt, you might also have trouble traveling, since the IRS power to revoke passports was also signed into law. It is also part of the FAST Act. We think of passports as being needed only for international travel, but some people may find that passports are also required for domestic travel in 2016.

Overall, the IRS can still be scary for many taxpayers. That’s why it’s crucial for you to do your homework and find a qualified IRS tax relief professional like Ron Friedman Tax Relief Pro. All tax resolution matters require IRS forms, documentation and situational analysis. At Ron Friedman Tax Relief Pro, we’ve proven our expertise and have gotten taxpayers to settle their debts in a convenient and affordable manner.

We encourage you to contact us for your FREE no-obligation confidential consultation.

Till next time,

Ron

Founder and President of Ron Friedman Tax Relief Pro
taxreliefprowestchester.com
ron@taxreliefprowestchester.com
Stop IRS Hotline: 1-800-TAX-FIX0 (829-3490)

As the best tax resolution and relief company in Westchester County, NY, and the tri-state area, Ron Friedman Tax Relief Pro has specialists to stop the IRS and help troubled tax payers get out of IRS debt. If you have back taxes owed, unfiled tax returns, IRS levies, liens, seizures or wage garnishments, we at Ron Friedman Tax Relief Pro can help you settle for a fraction of what you owe. As trusted, credible tax resolution specialists, we are vested in our client’s well-being and financial security.