by steve | Oct 28, 2009 | Tax Help, Uncategorized
Many years ago, the IRS came out with this little slogan, “a kinder, gentler IRS”. The question is, “are they”? A grizzly bear is soft and gentle at times, yet other times kills. Which one is the IRS? Ever since this slogan came out I laughed at the kinder gentler IRS. The truth be told, it all depends on the agent and what type of day they are having. Like any business or job, when a case is worked by an agent, it has a certain personality to it just like a grizzly.
Some of the factors that determine how your case is going to be worked are based on the type of day the agent is having and their current life circumstances. Did they just have a review? Is management pressing new issues? This all may affect your case. Management comes out with different programs throughout the years and if it is a program your case falls under, out comes the bear. There are too many factors that determine which side of the bear will show. It is important to remember first and foremost:
The IRS is a collection agency, imposing tax liens and tax levies to secure the national interest. They are interested in getting paid. That is their goal.
The bear is always happy when you you keep his belly full, i.e., you are current on tax deposits and are responsive to appointments and requests.
The reason you hire a true tax professional is to navigate your way through the process. The professional does not owe the tax and the IRS is in a less combative mode with them. As a general rule, once the professional is involved, your lien and levy chances are much diminished.
When I was an agent, I loved working with the professional because they helped me keep my deadlines.
by steve | Oct 27, 2009 | Tax Help, Uncategorized
What do I do when the IRS is not listening? If the IRS is working your case and YOU know there is an impasse or a problem, is what they say gospel? No, you have a friend called the Taxpayer Advocate.
So how does this process work? The LTA is a Local Taxpayer Advocate that works in the area that you live. This person becomes the go between of the agent and you if there is a reason and an impasse is reached. A 911 form must be filled out and given to the agent working the case. That form is immediately sent to the local taxpayer’s advocate office. The LTA are a good go between for you and the agent, but you MUST have a legitimate reason, no bogus stuff like you don’t like the color of the agent’s hair or the agent is unpleasant.
The 911 form is designed to indicate that hardship exists and that there are causes that someone should understand. It keeps the agent on their toes if the reason is legitimate. The Advocate’s Office does the following:
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Ensuring taxpayer problems which are not resolved through normal IRS channels are promptly and impartially handled;
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Assisting taxpayers who are facing hardship;
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Identifying issues that compromise taxpayer rights, increase taxpayer burden or create problems; and bringing these issues to the attention of IRS management;
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Recommending administrative and legislative changes through the National Taxpayer Advocate’s Annual Report to Congress.
The Advocate Office really does keep everyone on their toes, especially if the revenue officer is going to file a levy of federal tax lien or even take enforcement action. They are there to help you. |
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by steve | Oct 27, 2009 | Tax Help, Uncategorized
This is big! The IRS is actually helping the taxpayers understand their audit techniques. This was such a mystery over the years for so many people on the question, ” what does the IRS do during an audit”? This is IRS’s way to become more people friendly. The IRS has a new program called TaxWise, a TV feature that is a guide to help navigate you through the IRS audit process. Its purpose is to show you how the IRS conducts an audit and will help the taxpayer prepare for the audit. The IRS will show you their examination techniques that are common to unique industry standards, business practices, industry terminology and give you other information to assist you and the IRS examiner during the audit. This program is very beneficial to everyone who will ever go through an audit. To learn about this and more, go to the IRS.gov.
Basically, if you want to limit your potential liability during an audit and not have your money exposed to a potential IRS lien or levy, this will help minimize your risk.
by steve | Oct 21, 2009 | Tax Help, Uncategorized
New Form Aids Processing of Mortgage Applications, Makes Ordering Tax Transcripts Simpler
WASHINGTON ? The Internal Revenue Service today issued a new form to aid the processing of mortgage applications under the Home Affordable Modification Program (HAMP) as part of the Making Home Affordable Program. The new form will make it simpler for people, especially homeowners trying to modify or refinance their mortgages, to order copies of their tax return transcripts.
Taxpayers often need copies of their tax return information, especially when they are obtaining a new mortgage or when they are refinancing or modifying an existing mortgage. Taxpayers can use Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript, to order a Form 1040 series tax return transcript free of charge.
A transcript is a computer print-out that includes most lines on the original return. A transcript often is an acceptable substitute for a copy of the original tax return for purposes of verifying income.
Form 4506T-EZ is a streamlined version of the Form 4506T, Request for Transcript of Tax Return. The Form 4506T-EZ is only for individuals who filed a Form 1040 series. Businesses, partnerships and individuals who need transcript information from other forms must still use the Form 4506T.
Transcripts ordered through the Form 4506T-EZ can be mailed to a third party, such as a financial institution. The IRS cautions taxpayers that they should complete all required fields, especially the requested years, before signing and dating the form.
Taxpayers can obtain Form 4506T-EZ at IRS.gov. It is a fillable form so people can complete the form online and print a copy. They can mail it or fax it to the addresses and numbers listed in the instructions. It generally takes 10 days to process the request.
The IRS also recommends that people retain copies of their original tax returns in a safe, secure place. Exact copies of tax returns are available by filing Form 4506, Request for Copy of Tax Return, but each copy costs $57 and can take 60 days to process.
This is directly from the irs.gov site.
by steve | Oct 7, 2009 | Tax Help, Uncategorized
RS manual provisions state the following regarding the estimate tax penalty:
Estimated Tax Penalty and Reasonable Cause
- The penalty for underpayment of estimated tax cannot be removed or waived for reasonable cause alone. The IRS is tough on this penalty.
- The penalty for underpayment of estimated tax generally is not waived as a result of disaster. However, in the case of a Federally declared disaster area, “the Secretary may specify a period of up to 1 year that may be disregarded” in determining whether or not estimated tax payments were paid on time. In these cases the IRS will issue a memo with specific instructions regarding the payment of estimated tax in the affected area. The sire instructions and areas of relief are found on their web site. irs.gov.
- Programming generally takes all special disaster area rules into consideration when computing the penalty for underpayment of estimated tax. Even when the taxpayers books and records are kept within the disaster area, while the taxpayers official address of record is not, manual adjustment of the penalty should not be required for taxpayers affected by a widespread disaster. See IRM 20.1.3.1.3.2.1.
The estimate tax penalty is almost not abateable . It usually takes an act of nature to make this happen.
