by Fresh Start Tax | Oct 25, 2016 | Tax Help
Office of Audit
Examination Collectibility Procedures Need to Be Clarified and Applied Consistently
Final Report Issued on September 7, 2016
Highlights
Highlights of Reference Number: 2016-30-070 to the Internal Revenue Service Commissioner for the Small Business/Self-Employed Division.
IMPACT ON TAXPAYERS
Throughout an examination, examiners are expected to follow Internal Revenue Manual procedures to consider the taxpayer’s ability to pay a potential assessment.
Taxpayers who have financial difficulties and cannot afford to make tax payments may be further burdened if the IRS audits them for additional assessments that they cannot pay. Further, taxpayers may be treated inconsistently when examiners do not follow procedures to consider a taxpayer’s ability to make payments.
WHY TIGTA DID THE AUDIT
In Fiscal Year 2015, 50 percent of all Field Collection closures and 19 percent of all Automated Collection System closures of taxpayer delinquent accounts resulting from an examination were closed currently not collectible.
This audit was initiated to determine whether the Small Business/Self-Employed Division Examination function is properly and accurately performing collectibility determinations before and during Field and Office examinations.
WHAT TIGTA FOUND
Examiners did not follow collectibility procedures in 62 (56 percent) of 110 sampled cases, which involved 101 separate instances in which procedures were not followed.
Specifically, examiners did not always consider collectibility, document their collectibility evaluations, or discuss collectibility issues with their managers.
Additionally, examiners did not always contact the Collection function when Examination function procedures required them to do so, refer required cases to the Collection function, or complete financial information needed to assist in future collection efforts.
TIGTA estimates there were 1,731 Office examination cases and 1,445 Field examination cases in which employees did not follow established collectibility procedures and the case was later worked and closed by the Collection function as currently not collectible—with the IRS having received no taxpayer payments.
Further, while examiners survey cases (i.e., close the case without conducting an examination) for some reasons, examiners rarely survey cases due to collectibility concerns.
Following collectibility procedures and coordinating with the Collection function helps ensure that both Examination and Collection function personnel are using their limited resources efficiently.
TIGTA also determined the Examination function has no reports or measurement systems related to the collectibility of examiner assessments. Without this information, IRS management does not have complete information to make changes or improvements to meet goals.
The ultimate goal of considering collectibility during an examination is to decrease accounts receivable and increase the quality of assessments.
Meanwhile, from Fiscal Years 2010 to 2015, gross accounts receivable increased from $138 billion to $171 billion (24 percent), while the amount written off as uncollectible receivables increased from $103 billion to $130 billion (26 percent).
Examination management informed us they were not aware that the Enforcement Revenue Information System allowed them to track collectibility data, so it was not being used for that purpose.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS take several corrective actions to improve collectibility determinations and communication between the Examination and Collection functions and use available data resources to measure and track collectibility as it relates to examination assessments.
by Fresh Start Tax | Oct 12, 2016 | Tax Help
New Procedure Helps People Making IRA and Retirement Plan Rollovers
IR-2016-113, Aug. 24, 2016
The Internal Revenue Service today provided a self-certification procedure designed to help recipients of retirement plan distributions who inadvertently miss the 60-day time limit for properly rolling these amounts into another retirement plan or individual retirement arrangement (IRA).
In Revenue Procedure 2016-47, posted today on IRS.gov, the IRS explained how eligible taxpayers, encountering a variety of mitigating circumstances, can qualify for a waiver of the 60-day time limit and avoid possible early distribution taxes.
In addition, the revenue procedure includes a sample self-certification letter that a taxpayer can use to notify the administrator or trustee of the retirement plan or IRA receiving the rollover that they qualify for the waiver.
Normally, an eligible distribution from an IRA or workplace retirement plan can only qualify for tax-free rollover treatment if it is contributed to another IRA or workplace plan by the 60th day after it was received. In most cases, taxpayers who fail to meet the time limit could only obtain a waiver by requesting a private letter ruling from the IRS.
A taxpayer who missed the time limit will now ordinarily qualify for a waiver if one or more of 11 circumstances, listed in the revenue procedure, apply to them.
They include a distribution check that was misplaced and never cashed, the taxpayer’s home was severely damaged, a family member died, the taxpayer or a family member was seriously ill, the taxpayer was incarcerated or restrictions were imposed by a foreign country.
Ordinarily, the IRS and plan administrators and trustees will honor a taxpayer’s truthful self-certification that they qualify for a waiver under these circumstances. Moreover, even if a taxpayer does not self-certify, the IRS now has the authority to grant a waiver during a subsequent examination. Other requirements, along with a copy of a sample self-certification letter, can be found in the revenue procedure.
The IRS encourages eligible taxpayers wishing to transfer retirement plan or IRA distributions to another retirement plan or IRA to consider requesting that the administrator or trustee make a direct trustee-to-trustee transfer, rather than doing a rollover.
Doing so can avoid some of the delays and restrictions that often arise during the rollover process.
Waiver of 60-Day Rollover Requirement Rev. Proc. 2016-47
SECTION 1. PURPOSE
This revenue procedure provides guidance concerning waivers of the 60-day rollover requirement contained in §§ 402(c)(3) and 408(d)(3) of the Internal Revenue Code (“Code”). Specifically, it provides for a self-certification procedure (subject to verification on audit) that may be used by a taxpayer claiming eligibility for a waiver under §§ 402(c)(3)(B) or 408(d)(3)(I) with respect to a rollover into a plan or individual retirement arrangement (“IRA”).
It provides that a plan administrator, or an IRA trustee, custodian, or issuer (“IRA trustee”), may rely on the certification in accepting and reporting receipt of a rollover contribution. It also modifies Rev. Proc. 2003-16, 2003-4 I.R.B. 359, by providing that the Internal Revenue Service may grant a waiver during an examination of the taxpayer’s income tax return. An appendix contains a model letter that may be used for self-certification.
SECTION 2. BACKGROUND
.
01 Sections 402(c)(3) and 408(d)(3) provide that any amount distributed from a qualified plan or IRA will be excluded from income if it is transferred to an eligible retirement plan no later than the 60th day following the day of receipt. A similar rule applies to § 403(a) annuity plans, § 403(b) tax sheltered annuities, and § 457 eligible governmental plans. See §§ 403(a)(4)(B), 403(b)(8)(B), and 457(e)(16)(B).
.02 Section 401(a)(31) requires that a plan qualified under § 401(a) provide for the direct transfer of eligible rollover distributions. A similar rule applies to § 403(a) annuity plans, § 403(b) tax-sheltered annuities, and § 457 eligible governmental plans. See §§ 403(a)(1), 403(b)(10), and 457(d)(1)(C). Section 1.401(a)(31)-1, Q&A-14, provides examples of situations in which a plan administrator may reasonably conclude that a contribution, whether made via a direct transfer or a 60-day rollover, is a valid rollover contribution to a § 401(a) or 403(a) plan.
Several of the examples illustrate circumstances under which a plan administrator may rely on certain certifications and documentation that a rollover contribution that is not a direct transfer is being made no later than 60 days following receipt.
.03 An IRA trustee reports a rollover contribution received during a year on a Form 5498, IRA Contribution Information, for that year.
.04 Sections 402(c)(3)(B) and 408(d)(3)(I) provide that the Secretary may waive the 60-day rollover requirement “where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.”
.05 Under §§ 7508 and 7508A, the time for making a rollover may be postponed in
the event of service in a combat zone or in the case of a Presidentially declared disaster or a terroristic or military action. See § 301.7508-1 and Rev. Proc. 2007-56, 2007-34 I.R.B. 388.
.06 Rev. Proc. 2003-16 establishes a letter-ruling procedure for taxpayers to apply to the IRS for a waiver of the 60-day rollover requirement under § 402(c)(3)(B) or 408(d)(3)(I). Section 3.03 of Rev. Proc. 2003-16 also provides for automatic approval for a waiver of the 60-day rollover requirement in certain circumstances in which a rollover is not made timely due to an error on the part of a financial institution.
.07 Rev. Proc. 2016-4, 2016-1 I.R.B. 142, provides the procedures for issuing letter rulings on matters under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division.
SECTION 3. SELF-CERTIFICATION
.01 Written self-certification. A taxpayer may make a written certification to a plan administrator or an IRA trustee that a contribution satisfies the conditions in Section 3.02 of this revenue procedure. This self-certification has the effects described in Section 3.04 of this revenue procedure. Taxpayers may make the certification by using the model letter in the appendix on a word-for-word basis or by using a letter that is substantially similar in all material respects. A copy of the certification should be kept in the taxpayer’s files and be available if requested on audit.
.02 Conditions for self-certification.
(1) No prior denial by the IRS. The IRS must not have previously denied a waiver request with respect to a rollover of all or part of the distribution to which the contribution relates.
(2) Reason for missing 60-day deadline. The taxpayer must have missed the 60- day deadline because of the taxpayer’s inability to complete a rollover due to one or more of the following reasons:
(a) an error was committed by the financial institution receiving the contribution or making the distribution to which the contribution relates;
(b) the distribution, having been made in the form of a check, was misplaced and never cashed;
(c) the distribution was deposited into and remained in an account that the taxpayer mistakenly thought was an eligible retirement plan;
(d) the taxpayer’s principal residence was severely damaged; (e) a member of the taxpayer’s family died;
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(f) the taxpayer or a member of the taxpayer’s family was seriously ill; (g) the taxpayer was incarcerated;
(h) restrictions were imposed by a foreign country;
(i) a postal error occurred;
(j) the distribution was made on account of a levy under § 6331 and the proceeds of the levy have been returned to the taxpayer; or
(k) the party making the distribution to which the rollover relates delayed providing information that the receiving plan or IRA required to complete the rollover despite the taxpayer’s reasonable efforts to obtain the information.
(3) Contribution as soon as practicable; 30-day safe harbor. The contribution must be made to the plan or IRA as soon as practicable after the reason or reasons listed in the preceding paragraph no longer prevent the taxpayer from making the contribution. This requirement is deemed to be satisfied if the contribution is made within 30 days after the reason or reasons no longer prevent the taxpayer from making the contribution.
.03 Reporting on Form 5498. The IRS intends to modify the instructions to Form 5498 to require that an IRA trustee that accepts a rollover contribution after the 60-day deadline report that the contribution was accepted after the 60-day deadline.
.04 Effect of self-certification.
(1) Effect on plan administrator or IRA trustee. For purposes of accepting and reporting a rollover contribution into a plan or IRA, a plan administrator or IRA trustee may rely on a taxpayer’s self-certification described in this Section 3 in determining whether the taxpayer has satisfied the conditions for a waiver of the 60-day rollover requirement under § 402(c)(3)(B) or 408(d)(3)(I). However, a plan administrator or an IRA trustee may not rely on the self-certification for other purposes or if the plan administrator or IRA trustee has actual knowledge that is contrary to the self-certification.
(2) Effect on taxpayer. A self-certification is not a waiver by the IRS of the 60-day rollover requirement. However, a taxpayer may report the contribution as a valid rollover unless later informed otherwise by the IRS. The IRS, in the course of an examination, may consider whether a taxpayer’s contribution meets the requirements for a waiver. For example, the IRS may determine that the requirements for a waiver were not met because of a material misstatement in the self-certification, the reason or reasons claimed by the taxpayer for missing the 60-day deadline did not prevent the taxpayer from completing the rollover within 60 days following receipt, or the taxpayer failed to make the contribution as soon as practicable after the reason or reasons no longer prevented the taxpayer from making the contribution. In such a case, the taxpayer may be subject to
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additions to income and penalties, such as the penalty for failure to pay the proper amount of tax under § 6651.
SECTION 4. ADDITIONAL WAIVERS DURING EXAM
In addition to automatic waivers and waivers through application to the IRS under Section 3 of Rev. Proc. 2003-16, the IRS, in the course of examining a taxpayer’s individual income tax return, may determine that the taxpayer qualifies for a waiver of the 60-day rollover requirement under § 402(c)(3)(B) or 408(d)(3)(I).
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective on August 24, 2016.
SECTION 6. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 2003-16 is modified by Section 4 of this revenue procedure.
SECTION 7. PAPERWORK REDUCTION ACT
The collections of information contained in this revenue procedure have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507) under control number 1545-2269.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.
The collections of information in this revenue procedure are in Section 3.01. The collection of information relates to a certification by taxpayers wanting a waiver of the 60- day requirement for rollovers of distributions from plans or IRAs. The collections of information are required to obtain a benefit.
The likely recordkeepers are individuals. Estimates of the annualized cost to respondents are not relevant, because each collection of information in this revenue procedure is a one-time collection.
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by § 6103.
DRAFTING INFORMATION
The principal author of this revenue procedure is Roger Kuehnle of the Office of Associate Chief Counsel (Tax Exempt and Government Entities).
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Plan Administrator/Financial Institution Address
City, State, ZIP Code
Dear Sir or Madam:
Appendix
Certification for Late Rollover Contribution
Pursuant to Internal Revenue Service Revenue Procedure 2016-47, I certify that my contribution of $ [ENTER AMOUNT] missed the 60-day rollover deadline for the reason(s) listed below under Reasons for Late Contribution. I am making this contribution as soon as practicable after the reason or reasons listed below no longer prevent me from making the contribution. I understand that this certification concerns only the 60-day requirement for a rollover and that, to complete the rollover, I must comply with all other tax law requirements for a valid rollover and with your rollover procedures.
Pursuant to Revenue Procedure 2016-47, unless you have actual knowledge to the contrary, you may rely on this certification to show that I have satisfied the conditions for a waiver of the 60-day rollover requirement for the amount identified above. You may not rely on this certification in determining whether the contribution satisfies other requirements for a valid rollover.
Reasons for Late Contribution
I intended to make the rollover within 60 days after receiving the distribution but was unable to do so for the following reason(s) (check all that apply):
___ An error was committed by the financial institution making the distribution or receiving the contribution.
___ The distribution was in the form of a check and the check was misplaced and never cashed.
___ The distribution was deposited into and remained in an account that I mistakenly thought was a retirement plan or IRA.
___ My principal residence was severely damaged.
___ One of my family members died.
___ I or one of my family members was seriously ill.
___ I was incarcerated.
___ Restrictions were imposed by a foreign country.
___ A postal error occurred.
Name
Address
City, State, ZIP Code
Date: ______________________
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___ The distribution was made on account of an IRS levy and the proceeds of the levy have been returned to me.
___ The party making the distribution delayed providing information that the receiving plan or IRA required to complete the rollover despite my reasonable efforts to obtain the information.
Signature
I declare that the representations made in this document are true and that the IRS has not previously denied a request for a waiver of the 60-day rollover requirement with respect to a rollover of all or part of the distribution to which this contribution relates. I understand that in the event I am audited and the IRS does not grant a waiver for this contribution, I may be subject to income and excise taxes, interest, and penalties. If the contribution is made to an IRA, I understand you will be required to report the contribution to the IRS. I also understand that I should retain a copy of this signed certification with my tax records.
Signature: ________________________________
by Fresh Start Tax | Oct 12, 2016 | Tax Help
There are different Ways to Solve Old Tax Debt Problems if you owe back taxes, Since 1982, Former IRS Agents who Know the System. Get Free Advice.
We will walk through all the programs to see what programs you can qualify.Since 1982, Former IRS.
If you have balance due on back taxes and are looking to set up a payment agreement, file firm offer in compromise to settle your back tax debt or you need to file back tax returns call us today for a free initial tax consultation.
We have over 95 years of direct IRS work experience.
The Staff of FST, IRS Experience:
We have worked out of the local, district, and regional tax offices of the Internal Revenue Service. We are true IRS experts in the area of IRS tax settlement services.
The 5 ways or programs for IRS for Old Tax Debt
1. By Payment in full,
2. By Monthly Payments,
3. By the Acceptance of an offer in compromise, (this is how your completely eliminate the tax debt)
4. By statue expiration. (this is how your completely eliminate the tax debt)
5. For those who cannot pay their debt IRS has a non-collectible or hardship program.
Upon your initial free tax consultation we will walk through the various programs and let you know the easiest way to resolve your old back tax debt.
The most important aspect of working tax debt cases is completely dependent on the individual or business financial statements.It is the most important factor.
Your current documented financial statement determines all. IRS uses a very simple formula to determine their settlement process.
It is all about your assets and your income and your current necessary living expenses. There is a very specific formula.
IRS only allows certain expenses that are considered necessary living expenses.
There are charts available on what IRS allows. Anything not on those charts are disallowed and this is what trips out most taxpayers.
A simple review of your current financial statement and we can let you know the different programs you may be eligible for.
You will need to complete form 433F or form 433A for us to make a current determination. IRS will only use their financial statements.
It is critically important to know that you cannot pay less taxes unless you qualify for the offer in compromise program.
IRS has a very specific formula that they use to compute the offer in compromise.
The only way you can pay less tax is through the offer in compromise program. There is also an IRS pre-qualifier form.
I have over 40 years in this industry and it is critical if you want to settle your tax debt for the lowest possible amount you should go to true tax professionals.
Important information
All your tax returns will have to be filed before IRS will work your offer in compromise.
If you need help with your tax preparation call us and we can have a staff of experts accountants and tax preparers complete all returns with or without records.
Also beware that many times the Internal Revenue Service want to make sure you are current in your withholding tax or your estimate tax payments are they will not close your work your case until you become fully compliant.
Beware of IRS tax settlement services companies.
We have been in this industry a long time there are many good companies in as many bad tax settlement service companies. For you to evaluate in IRS tax settlement service company you must ask to speak directly to the person who will be working your case.
Generally, when you call a tax services company, you are speaking to what is called a closer. That person is a salesman and will actually bill you and charge you for the services then your case gets passed down the line.
When you call fresh start tax, you will speak directly to the person who works your case and that person can give you a true evaluation on how and if IRS will accept an IRS tax settlement.
All IRS tax settlement service firms and companies are different.
Check out the BBB rating and make sure you have a true tax professional working your case.
I suggest you always hire someone who’s worked at the IRS because they are aware of the methodologies required to get your offer in compromise through the system.
Ways to Solve Old/Back IRS Taxes Debt or tax problems
As a general rule, you may apply for hardships, payment agreements or settle for an offer in compromise to settle your debt for pennies on the dollar.
We will review with you your financial statement and let you know what the lowest possible settlement IRS will accept. 40% of all persons that owe back taxes are placed into a hardship or are currently not collectible status and 6.5 million taxpayers enter into annual payment agreements.
With these programs you will not pay less tax. These programs are designed to keep IRS off your back.
The other way to pay less tax is for the ten-year statute of limitation to run out and your debt will be written off by the Internal Revenue Service.
If you want to file an offer in compromise I thought you’d like to know what the statistics are.
Last year over 78,000 offers in compromise/IRS tax debt settlement were filed by taxpayers and over 38% of those were accepted for average of $6500 per case. Approximately 40,000 taxpayers last year paid less tax.
At the current time there are 7500 cases in the offer queue. The average wait time is nine months. There are not enough IRS employees to work the current inventory.
Keep in mind this is a national average in your case is completely dependent on your individual financial statement.
We will not file for an offer in compromise unless you are a true candidate for the program.
There is a pre qualifier tool to find out if you are a settlement candidate for income or business tax debt.
Upon your initial tax consultation we’ll let you know if you are eligible to have an accepted offer in compromise by the Internal Revenue Service.
Due to the new fresh start tax initiative Internal Revenue Service had made it easier to file for the program. However this program is not for everybody.
Everyone wants to settle with IRS but there is a very specific format and methodology that must be followed.
There are many myths about the pennies on the dollar program so you need to hear the truth before spending any money.
There are many firms that take your money and then let you know after the fact you are not qualified. you need to know before hand whether you have a fighting chance. Being a former IRS agent employee gives you a huge advantage of having the review your offer in compromise to settle your tax debt.
At our firm we will take no clients money until we are no they are a true candidate for the settlement program.
There are many myths about the offer in compromise so IRS in their great wisdom provides a pre-qualifier tool to find out if taxpayers are eligible for the offer in compromise program so taxpayers do not give their hard-earned money to unsuspecting tax firms promising tax settlements.
The Offer in Compromise + The New Fresh Start Tax Initiative
If you have any questions or issues about the offer in compromise program to settle or negotiate your debt for pennies on the dollar, call us today and we will review your case to let you know if you are a qualified and suitable candidate.
The IRS spends a lot of due diligence before they accept an offer in compromise.
It is possible for the IRS to spend over 20-40 hours working an offer in compromise.
IRS uses the Accuriant search engine, Google in a variety of other searches to check on assets and histories of taxpayers and businesses.
You want to make sure you are accurate and truthful on your financial statement.
The higher the dollar case the greater the due diligence. Many people ask why is this process not that simple. The answer is this, all accepted offers in compromise are a matter of public record for one year in the regional office where the offer was accepted.
The Internal Revenue Service does all that it can to make sure there is a matter of consistency within the offer in compromise program if not still be a tremendous public outcry.
One base rule for the offer in compromise program. IRS is only concerned about your income and assets. this includes your equity in your home, pension plans are IRA’s.
One nice thing about the IRS accepting your offer in compromise is that once you meet the terms of the settlement they will release your federal tax lien.
Below you will find out what you need to know about the offer in compromise program.
Beginning immediately FROM THE IRS :
The IRS will return any newly filed Offer in Compromise application where the taxpayer has not filed all required tax returns. The internal revenue service will immediately reject your offer in compromise. Any fees included with the OIC will also be returned.
This new policy does not apply to current year tax returns if there is a valid extension on file.
When IRS determines that they will settle with you, IRS will consider your unique set of facts and circumstances:
• Ability to pay;
• Income;
• Expenses; and
• Asset equity.
IRS will generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Right now that is appox. 9 months
Make sure you are eligible for the offer in compromise to settle your back IRS tax debt.
Before IRS can consider your offer, you must be current with all filing and payment requirements.
You are not eligible if you are in an open bankruptcy proceeding.
Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.
Submit your offer in compromise to settle your tax debt on back IRS taxes.
You’ll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF). Your completed offer package will include:
• Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
• Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
• $186 application fee (non-refundable); and
• Initial payment (non-refundable) for each Form 656.
Select a payment option on an IRS offer settlement
Your initial payment will vary based on your offer and the payment option you choose:
• Lump Sum Cash:
Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
• Periodic Payment:(most common)
Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer.
Understand the process to settle your tax debt
While your offer to pay less taxes is being evaluated:
• Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
• A Notice of Federal Tax Lien may be filed;
• Other collection activities are suspended;
• The legal assessment and collection period is extended;
• Make all required payments associated with your offer;
• You are not required to make payments on an existing installment agreement; and
• Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
Call us today for free initial tax consultation and speak to a true IRS tax expert who will walk you through the process of how to negotiate with IRS over back taxes and see if you qualify to pay less taxes for an IRS tax settlement.
How To Take Care Of OLD TAX DEBT + Former IRS, Free Advice
by Fresh Start Tax | Oct 12, 2016 | Tax Help
Didn’t File Your Tax Returns, Former IRS Agent. Free Tax Advice, Since 1982
If you do not file your tax returns IRS have the option of three basic things.
IRS has the option to:
1. Enforce the tax laws by going after any taxpayer for criminal non-filing,
2. Send out an IRS Agent to investigate, or,
3. Prepare your tax return.
A. Failure to file tax returns is a crime punishable by up to one year in prison for each year a return is not filed and a fine of up to $25,000.
Under the appropriate statue of limitations, the IRS has up to six years to prosecute you for the crime and it normally does not pursue prosecution after the statute of limitations time period has expired. In some cases, Fraud has no statute.
26 U.S. CODE & 7203
Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution.
In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting “felony” for “misdemeanor” and “5 years” for “1 year”.
If you are ultimately contacted by a special agent of the IRS regarding failure to file an income tax return, you can be sure that you are the subject of a criminal investigation. you should never speak to a criminal agent without your tax attorney being present.
B. To pursue non-filers, the IRS will launch a Taxpayer Delinquency Investigation.
The IRS will contact the non-filer in one of four ways:
1. by phone,
2. letter,
3. formal notice or,
4. a visit from an IRS agent.
If the IRS cannot make contact with you in any of these ways, it will set a deadline for you to file a return through written notice and again have an agent attempt to visit you.
If you did file a return but did not pay any taxes due, you will not be charged with a crime but will be assessed penalties and interest with respect to the total amount due. Penalties differ based on several factors, but it is expensive not to file.
3. IRS can prepare your tax return under 6020 B of the Internal Revenue Code.
6020B IRC
(b) Execution of a tax return by Secretary
(1) Authority of Secretary to execute return.
If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
(2) Status of returns – Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.
Helpful tax tip.
For those of you who file correct inaccurate tax returns this tip will have no bearing on you whatsoever.
However some of you or my guess many of your clients need to file back tax returns.
The IRS computers continue to run searches every day for non-filers. The tax gap between those who have not filed to what should be collected and in the system right now is approximately $450 billion, so IRS is actively seeking non-filers.
At some point in time the Internal Revenue Service will catch up to non-filers.
The number one source that IRS uses to catch up the people are, W-2s, 1099 s and other associated documents that are produced by third parties in given to or reported to the Internal Revenue Service.
The Internal Revenue Service has a matching program which collects billions of dollars a year by matching up the W-2s, 1099s, and other associated documents with Social Security numbers.
At some point in time if the 1099’s, W-2 or other associated match reporting document does not match up with a given Social Security /Tax Return, IRS will start a civil or criminal investigation.
Keep in mind we can prepare tax returns with or without tax records.
Didn’t File a Tax Return + Free Tax Advice, Former IRS
by Fresh Start Tax | Oct 12, 2016 | Tax Help
What happens if you do not file your Tax Return, Former Christian IRS Agent.We can get you back in the system worry free.
If you need to file back tax returns contact us today and we will give you a free initial tax consultation and walk you through the process. We are a true Christian tax for the deals with unfiled returns and resolving tax debt at the same time.
If you do not file your tax returns IRS have the option of three basic things.
IRS has the option to:
1. Enforce the tax laws by going after any taxpayer for criminal non-filing,
2. Send out an IRS Agent to investigate, or,
3. Prepare your tax return.
I have been involved with all aspects of the above.
A. Failure to file tax returns is a crime punishable by up to one year in prison for each year a return is not filed and a fine of up to $25,000.
Under the appropriate statue of limitations, the IRS has up to six years to prosecute you for the crime and it normally does not pursue prosecution after the statute of limitations time period has expired. In some cases, Fraud has no statute.
26 U.S. CODE & 7203
Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution.
In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting “felony” for “misdemeanor” and “5 years” for “1 year”.
If you are ultimately contacted by a special agent of the IRS regarding failure to file an income tax return, you can be sure that you are the subject of a criminal investigation.
B. To pursue non-filers, the IRS will launch a Taxpayer Delinquency Investigation.
The IRS will contact the non-filer in one of four ways:
1. by phone,
2. letter,
3. formal notice or,
4. a visit from an IRS agent.
If the IRS cannot make contact with you in any of these ways, it will set a deadline for you to file a return through written notice and again have an agent attempt to visit you.
If you did file a return but did not pay any taxes due, you will not be charged with a crime but will be assessed penalties and interest with respect to the total amount due. Penalties differ based on several factors, but it is expensive not to file.
3. IRS can prepare your tax return under 6020 B of the Internal Revenue Code.
6020B IRC
(b) Execution of a tax return by Secretary
(1) Authority of Secretary to execute return.
If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
(2) Status of returns – Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.
Helpful tax tip.
For those of you who file correct inaccurate tax returns this tip will have no bearing on you whatsoever.
However some of you or my guess many of your clients need to file back tax returns.
The IRS computers continue to run searches every day for non-filers. The tax gap between those who have not filed to what should be collected and in the system right now is approximately $450 billion, so IRS is actively seeking non-filers.
At some point in time the Internal Revenue Service will catch up to non-filers.
The number one source that IRS uses to catch up the people are, W-2s, 1099 s and other associated documents that are produced by third parties in given to or reported to the Internal Revenue Service.
The Internal Revenue Service has a matching program which collects billions of dollars a year by matching up the W-2s, 1099s, and other associated documents with Social Security numbers.
At some point in time if the 1099’s, W-2 or other associated match reporting document does not match up with a given Social Security /Tax Return, IRS will start a civil or criminal investigation.
If you have any questions please feel free to call me or email me directly.
Keep in mind we can prepare tax returns with or without tax records.
Contact us today and speak to a true IRS tax experts. Your Christian tax firm employing true Christian values.
