Do You Owe The IRS Money?
Possible IRS Tax Resolution Strategies to Set Your Mind at Ease
Even for honest taxpayers, the IRS can be frightening. Unlike most other government agencies, it has the power to attach your wages, freeze your bank account and even confiscate your property, and that is enough to send a chill up the spine of any taxpayer.
If you receive a letter from the IRS saying that you owe additional taxes, it is important not to panic. It may be a frightening situation, but there are things you can do to settle your tax debt and get back on the good side of the agency.
Taxpayers have options when resolving tax disputes and paying additional taxes due and knowing what those options are can set your mind at ease.
As an expert Tax Resolution Firm, we encourage all readers facing a tax problem to contact us for a free consultation!
Regardless, it’s important to an educated taxpayer so here are three strategies you can use to resolve your tax debt and get on with the rest of your life. Not all of these options will be right for everyone, but it is important to be informed as a taxpayer.
The IRS may be frightening, but they can be surprisingly reasonable - if you know what to say and how to approach the situation.
Review the Amount Owed to the IRS and Your Tax Return in Question
If the IRS says you owe money, you should not assume they are right. The tax agency makes mistakes, as do tax prepares and ordinary taxpayers.
Whether you filed your taxes on your own or hired someone else to do it for you, it is important to examine your return and compare what you find with what they are claiming.
It pays to seek professional help for this tax review, even if you filed your own taxes.
A professional with IRS experience may uncover errors and inconsistencies you would have missed on your own, and that could end up saving you money.
There is no guarantee this review will eliminate the extra taxes they say you owe, but it never hurts to be sure. There have been many cases in which taxpayers who thought they owed money to the IRS ended up owing nothing - or even being owed a refund from the IRS.
Set Up a Payment Plan
Getting a notice of additional tax due from the IRS is frightening if you cannot afford to pay what the agency says you owe. Keep in mind, however, that you do not have to pay the bill all at once.
The IRS is often willing to set up payment plans with taxpayers, and those payment plans could make paying what you owe easier and less stressful. Once again, seek professional help and guidance here - the IRS can drive a hard bargain, and you do not want to end up with a payment plan you cannot afford.
If you fall behind on the payment plan you agreed to, you could be subject to additional enforcement action, including the tax agency garnering your paycheck or even freezing your bank accounts. Getting the help of a tax resolution professional upfront can help you avoid these serious consequences.
Explore an Offer in Compromise Settlement
If you truly cannot pay the money the IRS claims you owe, you may work out a smaller payment. The IRS may not advertise this program, but the tax agency is often willing to work with taxpayers by accepting lesser amounts if those taxpayers have few assets and a limited income. Sometimes these can be for a fraction of what’s owed if you qualify. We offer a free no obligation consultation to find out if you qualify.
If you plan to explore this last option, I advise you to work with a tax resolution expert. These compromise offers can be complicated, with legalese and language that can be difficult to understand.
You do not want to make a misstep here, and you want to ensure that paying the compromised account will result in a complete settlement of your tax bill.
Few things are as frightening as getting a letter from the IRS. That official-looking letterhead is bad enough, but what the letter says is even worse.
If you receive such a letter, you need to take positive steps right away. Ignoring the situation will not make it go away, and the sooner you start exploring your tax resolution options the better off you will be.
If you want the help of an expert tax resolution professional 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 resolve your tax problem.
Call #TheCPATaxProblemSolver toll-free at 844-888-1040 TODAY and SLEEP MUCH MUCH BETTER TONIGHT!
If you have workers in your company you are expected to owe payroll tax. Based on the size of your payroll you can need to make tax deposits with the IRS as soon as you pay your workers on the day after.
Whenever taxes are not paid on time then the IRS imposes interest and fines. If you let things go too long the fines and interest can surpass the payroll taxes.
HOW PAYROLL TAX ISSUES AND PROBLEMS OCCUR
Payroll tax issues occur in a variety of ways. When a business is short on cash and they are not paying your vendors or landlord, they are going to be out of business very soon.
In comparison, the IRS works slowly. It can be months before the IRS gets serious. Many company owners hope they will have enough money to fix their payroll problems by the time the IRS calls or visits.
Unfortunately, it does not normally happen. Instead, the issues with payroll taxes increase quarter after quarter, and interest and fines continue to accrue. By the time IRS appears things got so bad that the IRS threatens to shut down the company.
In certain cases, failure to pay payroll taxes can be a criminal offense subject to incarceration or a fine penalty. With my professional help, I may be able to prevent the IRS from making the owner taking personal responsibility for these payroll tax debts.
Under the IRS rules and regulations, there are tools that you are entitled to include the ability to contact a CPA to help you get tax relief. As a CPA with expertise in IRS tax cases, I will help you address your tax problems.
SOLUTIONS FOR PAYROLL TAX ISSUES & PROBLEMS
Solutions for your problems may include:
-Send an Offer In Compromise deal to reduce the tax debt
-Get a short-term deferral of your tax liability to give you time to get back on track
-Negotiate an Installment Payment Plan to settle your tax obligation
-Check your records to find if the IRS has determined your taxes correctly
-Determine if the IRS has expired or will expire early to recover your payroll tax debt
-Negotiate waivers of federal tax obligations so you can get a loan to cover your taxes
-Getting your tax debt ruled noncollectable so you can get a tax break from your old payroll tax debts
-Seeking relief from payroll tax levies
-Filing interest and penalty waiver charges
Each case is of course different and you need an experienced tax professional to advise you about the best approach to your situation.
BANKRUPTCY FOR PAYROLL TAX ISSUES & PROBLEMS
Insolvency filing isn't going to fix the payroll tax issues. Even if the company is a corporation, the IRS may be entitled to obtain from the owners, officers, and often even independent contractors and workers a portion of the payroll tax debt. This is defined as a penalty for the trust fund, a penalty for the recovery of trust assets, a penalty of 100 percent, a criminal penalty, or a penalty under Code Section 6672.
As a tax expert, I will help you decide whether you are responsible for the reclamation penalty for the trust fund. If we agree you are not a responsible officer subject to the penalty for the recovery of the trust fund we will negotiate with the IRS tax officers and IRS Appeals Officers to make them withdraw the penalty for the trust fund.
I would also inform you on the best way to make any partial payments to the IRS to will your personal responsibility for the fiduciary fund tax. Many company owners make hundreds of thousands of dollars of payments to the IRS only to find later that the payments have not reduced their personal IRS payroll tax debt.
When having overwhelming tax problems, a majority of taxpayers are not comfortable calling the IRS for answers and that's where I can help.
I know what it takes to get you qualified for the best tax relief possible.
Call 844-888-1040 for information.
Would you rather have financial luck or be good with money? Most financial challenges aren't just because of unfortunate events. They 're usually founded on poor financial habits. Some may call it financial luck, but most money challenges can be dealt with with using effective habits. Even a minor unforeseen cost can be crippling, with unsuitable financial practices.
While there are many negative financial habits that one might be guilty of committing, there are a couple that are particularly damaging.
Be careful not to acquire those poor financial habits:
- A failure to keep saving money. Consistently free from financial challenges, people have a consistent saving habit. There's always money to handle the inevitable financial emergencies if you save a portion of your paycheck every time you get paid.
- Make yourself a guarantee that you'll save a certain amount of each paycheck.
- Over-spending. The more you invest, the less you need to save. That is so plain. Over-spending leaves you vulnerable and more likely to face financial difficulties. Very excessive spending results in debt accumulation which is the ultimate financial curse.
- Look for other opportunities to have fun other than wasting money that you just don't need to spend.
- Set a tough cap on how much you can spend per month.
- Credit card overuse and other forms of debt. Debt poses a huge challenge to financial safety and stability. Debt can be cumbersome to eliminate and most debt comes with costly terms that make debt a particularly expensive way to spend money.
- Guard against debt. If you have to use debt to buy something, particularly something that is not necessary, then it's a safe bet you can't afford.
- Ignore the bills. No one enjoys paying bills. Period. Bills, though, have a tendency to pile up and have to be paid eventually. You're also wasting money during the time that should go toward your bills. That is an incredible error.
- Every week, spend a few minutes paying your bills. Make it a ritual that you execute one day a week.
- Charge fines, fees, and over-interest daily. Knew that credit card companies earn more revenue from late fees than they earn from interest? The penalties for ATMs are high. These interest-free loans have enormous interest penalties unless you pay them off on time.
- Pay the bills in due time. Using ATMs that do not claim a fee.
For information on tax debt relief go here!
- Raiding your savings, retirement and investment accounts. There may be times when you might be justified to dip into your savings or other accounts, just be sure it's for a good reason.
- Cashing out part of your 401(k) for a trip to Disney World is not a good reason for that. Wiping out your savings for a vintage car is probably not even a smart idea.
- Retirement accounts are used to invest. Investment and retirement plans are built to invest and create wealth. When you take money out of them they don't work well.
- No budget. And no budget. We just need a budget. Just one billionaire will have to have a budget. Financial limits are set in budgets, and financial limits help avoid financial problems.
- Too much dining out. Is difficult to eat out. Even fast food is more costly than a homemade meal. Homemade meals often prove to be safer.
Were you guilty of any of those attitudes?
Think of someone you know who does have a good career but who appears to be struggling financially. Count how many of the negative habits that person commits is guilty of. Then imagine someone you know, who never seems to be financially struggling. So many of these horrible habits have they?
The findings will come as no surprise!
Positive habits result in positive outcomes. Make sure your financial activities take you to a position you want to be in.
TFRP or Trust Fund Recovery Penalty
What does TFRP mean? Trust Fund Recovery Penalty also known as TFRP, basically means you can be held personally liable for a penalty for not properly managing the employment taxes of a business. This is known as the “trust fund recovery penalty” (TFRP).
The TFRP is not a penalty in the traditional sense of being an amount added to a deficiency in tax due by an individual, corporation, or another taxpayer. Rather, the TFRP is a collection device that permits the IRS to impose liability on a “responsible person” who “willfully” failed to remit the employment taxes that were held in trust for the government.
TFRP cases rely heavily upon the fact pattern, and your success in defeating the penalty depends on the presentation of the evidence and knowledge of the IRS’s TFRP procedures.
The Two Prongs of the Trust Fund Recovery Penalty
There are two statutory components that must be established under IRC section 6672(a) before a person can be held liable for the TFRP.
First, the individual must be a “responsible person” for withholding and paying employment taxes to the IRS. Second, the person must have “willfully” failed to collect and remit the employment taxes due.
For purposes of IRC section 6672(a), the liability of a responsible person who has acted willfully is equal to the federal income taxes withheld from the employees’ wages and the employees’ share of the Social Security and Medicare (i.e., FICA) taxes.
These are the taxes that the employer is required by law to hold “in trust” and pay over to the government, hence the term “trust fund recovery.”
Under IRC section 6671(b), a “responsible person” includes any officer or employee of a corporation, or member or employee of a partnership, who has the duty to collect or pay employment taxes.
The mere holding of a corporate title, or the lack thereof, is not controlling on the issue of a person’s liability; the test is one of substance that asks whether the person had the status, duty, and authority to control the company’s financial affairs [Godfrey v. U.S., 748 F.2d 1568, 1575-76 (Fed. Cir. 1984)].
IRC section 6672 requires significant control over the business's financial operations and the ability to decide which creditors will and will not be paid; therefore, if a person’s financial authority is circumscribed by, for example, a senior officer who has the final say on which creditors will be paid, TFRP liability will not apply.
The principal factor that the IRS considers when examining which individuals may or may not be liable for the TFRP is who signs company checks. The IRS also investigates whether the person is an owner, officer, or director of the company; has the right to hire and fire employees; signs contracts with lessors/vendors or otherwise is active to the day-to-day affairs of the business; makes payroll tax deposits; or is responsible for the disbursement of payroll.
In defending putatively responsible persons, it is crucial to demonstrate that they lacked the requisite financial control exhibited by the foregoing factors through such things as company business records, e-mails, court pleadings in litigation involving the business, and affidavits from third parties, combined with effective written and oral advocacy.
An individual who qualifies as a “responsible person” is not necessarily liable for the TFRP; it must also be established that the responsible person acted “willfully” in failing to collect, account for, or pay the employment taxes. Under IRC section 6672, willfulness has been defined as a “voluntary, intentional, and conscious decision” to pay other creditors rather than remit the trust fund taxes to the government (Godfrey).
Courts have held that a reckless disregard of the duty to collect and pay employment taxes satisfies the willfulness prong, but mere negligence is never a sufficient basis for liability.
An advisor must be prepared to prove with evidence and arguments that even if a client was a responsible person, she did not have knowledge that the taxes were not paid, did not have the authority to decide the priority of payments to creditors, or otherwise was not willful with respect to the nonpayment of the employment taxes.
The Trust Fund Recovery Penalty Investigation
The TFRP investigation is conducted by a revenue officer from the IRS’s collection function. The revenue officer typically requests bank signature cards, canceled checks, and other business records to identify potentially responsible persons. If the company does not provide these documents voluntarily, an administrative summons will be used to demand the records from the business or from third parties.
The revenue officer will examine the records and then schedule interviews with persons who may be responsible for the failure to pay the employment taxes. If a potentially responsible person does not voluntarily agree to appear before the revenue officer, he is likely to receive a summons to command his presence for an interview. The individual will be told that he can bring an IRS-authorized representative to the meeting.
The purpose of this interview is to secure from the individual Form 4180, Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes. Form 4180 is a critically important document, and it can be perilous if an individual attends the interview or completes Form 4180 without legal representation and thorough preparation by counsel.
The document contains direct questions specifically designed to elicit responses that show whether the individual was a responsible person and whether she acted willfully. It is often necessary for the individual and her counsel to provide the revenue officer with a full description of the individual’s limited role and responsibilities in the business and to resist responding to questions in the “yes” or “no” format established by the interview form.
The individual should also make certain that Form 4180 includes an accurate written statement of the individual’s defense to the TFRP. When the interview has been completed, the revenue officer will ask the individual to sign Form 4180.
Challenging a Proposed Trust Fund Recovery Penalty Assessment
At the conclusion of the investigation, the revenue officer will decide which individuals will receive notices of their potential liability for the TFRP. Revenue officers are notoriously overbroad in their TFRP determinations, often including persons with marginal liability exposure. The revenue officer will mail Letter 1153(DO) and Form 5471, Proposed Assessment of Trust Fund Recovery Penalty, to the individuals determined to be liable for the TFRP. The TFRP notice must be sent to the individual’s “last known address” to be enforceable [IRC section 6672(a)(2)].
An individual who qualifies as a “responsible person” is not necessarily liable for the TFRP; it must also be established that the responsible person acted “willfully.”
An individual receiving Letter 1153(DO) and Form 5471 has 60 days to file a written protest with the IRS Appeals Office to challenge the TFRP determination. The protest should contain a complete discussion of the facts and legal authorities that show that the individual was not a responsible person for the company’s employment taxes or that he did not act willfully. The protest, or subsequent submission to the Appeals Office, should include documentary evidence, such as business records and affidavits, that supports the individual’s case. At the conference, an authorized representative will present arguments that the individual should not be held liable for the TFRP or that the penalty should be compromised on the basis of hazards of litigation.
Trust Fund Recovery Penalty Post-Assessment Procedures
If the Appeals Office upholds the TFRP, the IRS will assess the penalty against the individual and issue notice and demand for payment of the trust fund taxes. The individual can dispute the IRS’s decision in court, but first must pay a “divisible” portion of the penalty for each quarter of the employment tax assessment and file a claim for refund with the IRS.
The divisible amount of the tax is equal to the withholding taxes attributable to a single employee for each payroll tax quarter covered by the penalty assessment. If the IRS issues a Notice of Disallowance of the refund claim or takes no action on the claim for a period of six months, the individual can commence a refund suit. The lawsuit must be initiated within two years of the date that the divisible tax was paid, or two years from the date that a Notice of Disallowance was issued. The action can be filed in the local United States District Court or the Court of Federal Claims.
Fighting the Law and Winning-Trust Fund Recovery Penalty
Preparation is crucial to winning a TFRP case. A professional advisor must exhaustively develop the facts and review company business records, correspondence, and e-mails. These documents, together with affidavits from third parties, should be used to show the limitations on the authority and the lack of willfulness of the potentially responsible person.
If you are facing a TFRP, and need more information, you can get expert Advice from TheCPATaxPRoblemSolver for free. 844-888-1040.
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We’ve all heard of tax credits and tax deductions. And we know that tax credits and tax deductions are good things. And that they can save you money come tax time. But have you ever considered how they work? And if there’s a difference between them? In this post, we’ll take a closer look at these credits and deductions and explain how they work with examples.
What’s a Tax Credit?
A tax credit is an amount that’s subtracted from your tax liability. leaving you the total tax you owe for the tax year. Tax credits give you a dollar-for-dollar reduction in your tax liability. Say, for example, you owe $1,000 in taxes and you have a $600 tax credit. Your liability would go down by $600, making your total tax liability $400.
Tax credits can be very valuable, so knowing whether or not you qualify for one is advantageous. Here are some common tax credits (this information is up to date as of 2020):
Child Tax Credit:
This is a very common tax credit that depends on your income to determine what you qualify for, You can get a credit of up to $2,000 per child and up to $500 for any non-child dependents.
Child and Dependent Care Credit:
If you pay for child care or dependent care, you may qualify for the child and dependent care credit. This credit can range from 20% to 35% of up to $3,000 in care expenses for a single child or dependent or 20% to 35% of up to $6,000 for two or more dependents. Why the range? The percentage you can claim as your credit depends on your income.
Earned Income Credit:
The earned income credit is a benefit for working people who have low to moderate income. For those with a qualifying child and an AGI of around $55,000 or less, this credit can be a big help at tax time. For these taxpayers, this credit can range from $3,461 to $6,431, depending on marital status, income, and how many children they have. Lower-income taxpayers can also qualify for this credit. Even if they don’t have children. Those who make less than $15,270 as a single filer or $20,950 filing jointly can get up to $519.
The Saver’s Credit:
This is a credit that allows you to deduct money put into retirement savings accounts. Qualifying taxpayers can deduct 10% to 50% of up to $2,000 (or up to $4,000 for joint filers) contributed to certain types of savings accounts. This is a must for tax planning which you can learn more about here.
Other common tax credits include:
- The adoption credit
- The American Opportunity credit,
- The Lifetime Learning credit,
- The residential energy tax credit
- the plug-in electric motor vehicle credit.
What’s a Tax Deduction?
A tax deduction is an amount that’s subtracted from your total taxable income, which is the part of your income that’s subject to tax. For your tax deductions, you can either take the standard deduction or do itemized deductions. To give an example of how tax deductions work, let’s consider the standard deduction for single filers, which was $12,000 last filing year. If you made $45,000 in 2018, you could have taken the standard deduction of $12,000, making your taxable income $33,000.
The standard deduction is a set deduction amount that almost everyone qualifies to take. For this past filing season, the standard deduction for single filers was $12,000. For those married filing jointly, it was $24,000.
Those who qualify for the standard deduction (which, again, is almost everyone) have a choice: Either take the standard deduction amount or opt for itemizing their deductions if that amount is higher.
Itemized deductions work like standard deductions to reduce your taxable income. However, you have to list them individually on your tax return and you must have a total itemized deduction amount that is higher than your available standard deduction amount to take your itemized deduction amount.
Tax Credits and Tax Deductions
Here are the current National Standards as outlined by the IRS.
If your itemized deductions added up to $13,000 and you qualify for the $12,000 standard deduction for single filers, you could (and should) take your itemized deduction amount instead, which would reduce your taxable income by $1,000 more than the standard deduction.
There are many, many itemized deductions one can take. Some examples of common itemized deductions include state income taxes, property taxes, charitable contributions, mortgage interest, certain medical expenses that exceed a certain percentage of your AGI, and the home office deduction.
How are Tax Credits and Tax Deductions Different? Is One Better?
It’s easy to confuse tax credits and tax deductions, since they can both help you save money when you file your taxes, but they are quite different. Additionally, if you were able to pick between the two (assuming the credit or deduction dollar amount was the same), you would want to choose a tax credit.
Tax credits give you a dollar-for-dollar credit off your tax liability, while tax deductions reduce your taxable income. A $300 tax credit would reduce your owed taxes by $300. On the other hand, a $300 tax deduction would reduce your taxable income by $300, which would affect how much tax you owe, yet by a much smaller margin.
Of course, you want to claim all the credits and deductions that you’re legally able to. But know that, generally, credits tend to be very valuable and should not be missed.
Choosing the IRS tax relief professional can be confusing. Here are some tips on finding the best tax expert to help fix IRS problems and save you money.
Not Every IRS Tax Relief Professional is Alike
Choosing the IRS tax relief professional for your tax needs can be confusing. Here are some tips on finding the best to help you with your tax concerns.
When you are ready to use successful and valuable methods of resolving your problematic tax matter, hire a tax professional to advocate and guide you. You can use these tactics to find the best tax resolution service for your needs today.
DO YOU NEED IRS TAX HELP? SCHEDULE A FREE CONSULTATION WITH OUR TAX EXPERTS
As you search for an IRS Tax Relief Professional to take your case, you want to look for those that have years' worth of experience in the industry. You do not want a novice firm or tax professional to gain experience at the expense of your case. You need a tax expert who has been in the industry for several years if not longer.
This amount of experience benefits you because you get a tax professional who has more than likely handled cases just like yours or perhaps even cases that were more complicated. This individual also will know how the current tax laws apply to your case and will use them to your advantage when dealing with the IRS.
Length of Time in Business
We tie the experience that a tax resolution firm can offer to you to how long it has been in business. The industry standard for determining whether a firm has experience is if it has been in business for at least five years. Depending on the experience you are looking for, hire a company that has been in business for longer than five years.
The time an IRS tax relief professional has been in business also correlates with how experienced the staff is to assist clients like you with their tax matters. You may ask the firm you are interested in hiring, how long it has operated. A newer company may lack the experience needed to resolve your complex tax case to your satisfaction.
As a client, you want the staff of an IRS tax relief professional to assist you to your satisfaction. You should look for tax resolution companies that use people who are Certified Public Accountants (CPA) or licensed as an Enrolled Agent (EA) or certified as tax attorneys.
They should also belong to professional organizations like the American Society of Tax Problem Solvers or the American Institute of Certified Public Accountants. Tax attorneys should be members of their state bar.
As a client, you may ask an IRS tax relief professional for references before you keep its services. It should offer you the names and contact details of people who have used its services in the past. If it refuses to give you references, take this as a warning sign that the company may not operate with a higher level of scruples.
Once you have the list of references, contact those individuals and ask them about:
-Their overall experience with the company
-If the company disclosed prices and fees
-Any unexpected surprises that arose in their cases
-Were the terms of agreement and services explained well
-How professional and helpful the staff was.
Based on the answers you receive, you can decide if you would like to retain the tax professionals or choose another company to consider.
A good tax resolution firm will be clear with its pricing and tell you upfront how much you can expect to pay for its services. You want to avoid firms that say they charge flat rates for their services. In reality, they could hide fees you have to pay later after your case is underway.
You should ask how much the IRS tax relief professional will charge per hour, what the retainer fee is, and if the firm charges for expenses like courier costs, documents preparation, and other miscellaneous fees.
It should provide pricing details in writing and not be subject to change without advanced notice in writing.
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Some firms offer guaranteed satisfaction. In reality, a tax resolution company cannot guarantee the outcome of your case or that you will get the resolution you want from the IRS.
A good firm will tell you upfront that the outcome of your case will depend on factors like:
-How much you owe to the IRS
-The age of your debt
-Any penalties and interest you owe
-If the IRS has moved to garnish your wages or seize your assets
-Whether the case is resolvable with an Offer in Compromise, installment agreement, or other payment option.
These factors make it challenging for any firm to guarantee how your case will be solved.
As a client, you want to hire a tax professional who will offer you personalized service. You want to say informed and in charge of your case as it unfolds.
Personalized service allows you to meet face-to-face with the person handling your tax situation, so you know the most intimate details of it well before you meet with the IRS in an audit or court hearing. You also want to know that the tax professional handling your case will answer your phone calls and emails whenever you have questions or concerns.
Your Role in the Tax Resolution Case
Finally, you want to find out what your role will be in your own tax resolution case. You should find out what the company expects from you from Day One so you can act and prepare accordingly.
You can find out these details by insisting on speaking with the professional representing you before you put him or her on retainer. You should ask how you can say proactive in your IRS tax debt case and how you can say informed as the case gets underway.
These criteria allow you to search for and find a tax professional or tax resolution firm that is qualified to handle your tax debt case. You will retain representation to guide and advise you as you approach the IRS. You also may get the desired outcome of your tax debt situation.
The Top Myths regarding Tax Pros can be found here myths.
For more information regarding IRS tax relief visit KeithJonesCPA.com.
A Step-by-Step Guide on How to Apply for an SBA Disaster Loan
If your business is struggling in the wake of COVID-19, these steps will help guide you through the application process of an SBA disaster loan.
In early March, the Small Business Administration’s disaster loan program was extended to all small businesses affected by the coronavirus. Applying is as simple as visiting the organization’s website and following these steps.
Step 1: Visit the SBA disaster loan website.
You can find a link to the website here to get started.
Step 2: Read through the site and download the application.
Take note of distinctions regarding
application forms, supporting documentation forms, and home and sole proprietor
For everything you need to know about applying
for a small business loan, see the U.S. Chamber’s
Small Business Loan Guide.
Step 3: Print out the application and fill it out.
Check “Economic Injury (EIDL)” on the form.
You’ll have to provide information like organization type, a Federal EIN,
contact information, and personal information related to business owners.
If you have questions about the application,
you can call customer service at 1-800-659-2955 or send an email to email@example.com to bring you the best resources and information to help you navigate this challenging time.
Step 4: Take note of the filing requirements on page 3.
This is a list of supporting documentation
that you will also need to submit with your application. The list includes
documents like tax information authorization forms, tax returns, a personal
financial statement, and a schedule of liabilities listing all fixed debts.
Non-profit organizations have a separate list of documents to include.
It’s also important to also review the
Additional Information section. While you don’t have to initially submit these
documents to apply, you may be asked to provide it later on.
Read our full story on the federal government's small business stimulus package.
Step 5: Scan your application and submit it online with your
If you don’t have a scanner, you can follow
the instructions at the bottom of the website to mail your application. You may
also be able to take a picture of the document and upload it on the site.
Once your application is submitted, a
representative from the SBA will reach out to you to discuss funding options
and other next steps. This may take time, especially because of an increase in
applications related to COVID-19. If you want to check your application
status, you can do so by visiting the SBA disaster loan website and contacting the organization
via email or phone.
For more resources from the U.S. Chamber of
- Check out the U.S. Chamber's Small Business Loan
- To help you manage your
business through the coronavirus crisis, the U.S. Chamber of Commerce has
created a toolkit for businesses and
a customizable flyer for businesses to
communicate their coronavirus efforts to customers.
- For more information
pertaining to your specific location, you can find your local Chamber of
Getting a disaster loan or disaster loan assistance can be the difference between your small business surviving or not. The SBA provides low-interest disaster loans to help businesses and homeowners recover from declared disasters.
If you are a small business, non-profit organization of any size, or a U.S. agricultural business with 500 or fewer employees that have suffered substantial economic injury as a result of the Coronavirus (COVID-19) pandemic, you can apply for the COVID-19 EIDL.
This loan applies to all businesses based in any U.S. state, territory, or the District of Columbia.
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“In this world, nothing can be said to be certain, except death and taxes.” -Benjamin Franklin
I learned that a tax relief program exists for every IRS tax problem, giving back more taxpayers their financial freedom. In this post, I provide you information about 5 IRS tax relief programs that can provide you a Fresh Start for 2020.
Most people don’t go around bragging about their IRS problems. But that doesn’t mean they don’t exist.
Owing back taxes is way more common than you think with the number of delinquencies continues to go up while the ability to pay is decreasing.
According to Michael Rozbruch, a recognized entrepreneur and the founder of Michael Rozbruch’s Tax and Business Solutions Academy, more taxpayers have IRS tax debt right now than ever!
14 million taxpayers are in the IRS’s collection division that has a tax debt large enough to call for professional representation. 19 million people owe the IRS $391 billion right now.
It is very important that you don’t ignore an IRS issue and hope it will go away. The IRS will catch up with you and the penalties, interest, and fines will have only grown bigger!
If you are one of the 19 million people who owe the IRS back taxes, check out these 5 IRS tax debt relief programs aimed at resolving various tax problems (without hiring an IRS tax lawyer).
Grab one of a few NO COST consultations with TheCPATaxProblemSolver to see if you qualify for any of these IRS tax help programs Book Your Free Consultation.
This is one of the IRS tax relief programs that gets the most attention because it really gives you the best chance at a Fresh Start. An Offer In Compromise is an agreement between you and the IRS and the settling for an amount less than the full amount owed. It is an option for those who are not able to pay the past due amount in full, or if paying the full amount will cause financial hardship or leave you in a state of financial distress.
To qualify for an OIC, you must have filed all past tax returns & must be current with federal tax withholding or estimated tax payments for the present year.
The IRS will take the following facts into consideration once you file for an OIC:
- Ability to pay
- Total monthly/yearly expenses
- Assets and equity
When an OIC is approved by the IRS, there are two payment methods available. The first is a “Lump Sum” in which you pay the offer amount in one lump sum or in a payment installment of 5 or fewer payments within a set period of months. The second is a Periodic Payment Offer in which payments are made in 6 or more monthly installments and must be paid within 24 months.
If the IRS agrees to the OIC, you are required to timely file and pay all future taxes over the subsequent five years. If you do not abide with the set terms of the OIC, the IRS may consider the OIC to be in default. In this event, the OIC is null and void and the IRS will demand immediate full payment of the original tax balance plus penalties and interest.
When you cannot pay your tax debt in full immediately, you might be able to set up a monthly payment plan or Installment Agreement (IA). If you agree to pay the full amount, you may be able to reduce the interest owed and any other fees.
Folks may be eligible for an online payment plan if they owe less than $50,000 in combined individual taxes, interest, and penalties. You must have filed all of the necessary tax returns. You must also make the minimum required payment by the set due date. Any future tax refunds will be applied to your debt until it is paid in full.
A penalty abatement may be granted for the following penalties:
- Filing Late
- Paying Late
- Failure to deposit
Requests for penalty waivers may be filed if you meet the following criteria:
- Before the penalty has been assessed by the IRS, you can file a “penalty non-assertion request”
- After the penalty has been assessed, you can request a penalty abatement via a written letter to the IRS.
- Once the penalty has been paid, you can request a refund using Form 843. However, you must file this request within 3 years of the return date or within 2 years of paying the penalty.
You may request penalty abatement for the following reasons:
- Reasonable cause
- Statutory exceptions
- Administrative waivers
- Correction of an error on the behalf of the IRS
As many married taxpayers opt to file a joint return, this filing status leaves both partners liable for any taxes, penalties, and interest due in the event of a divorce. However, the spouse who feels they are being wrongly held liable may file for “Innocent Spouse Relief” in the event that one of the involved parties failed to report any income or claimed false credits or deductions.
Innocent Spouse Relief may be granted if you meet the following criteria:
- There are erroneous items on your joint return.
- You can prove that you did not know there was an error on the form at the time it was filed.
- You were coerced into signing a joint return or were unaware of the joint filing
Currently-Not-Collectible (CNC)/ Financial Hardship
Should you and the IRS agree that you do owe the amount in question, but you are unable to pay in full due to your financial situation, you may be able to apply for Currently-Not-Collective (CNC) or Financial Hardship status. In order to qualify, the IRS must determine that you cannot pay your cost of living expenses and your taxes at the same time.
When your necessary living expenses exceed your monthly income, the IRS will approve your CNC request and will not try to collect any past debts or issue any levies against you while you are in CNC status. However, the IRS has the power to add interest and penalties during that time, as well as to withhold any pending tax refunds and apply them to the amount owed.
Call Keith Jones, CPA TheCPATaxProblemSolver toll-free TODAY at 844-888-1040 to determine if you are eligible for a Fresh Start and get on the road to financial freedom! You Will Sleep MUCH BETTER TONIGHT!