The IRS Installment Agreement

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Most open IRS cases are closed in one of two ways, via a hardship or an installment agreement. How does the IRS determine how they are going to close your case?  By simply taking a Form 443-A or Form 433-F financial statement from you, the taxpayer. Based on that financial statement and the documentation that goes along with that statement, the IRS will make a determination on your case.

If your case does not fall under the hardship rules, the installment agreement will be a payment plan that allows you to pay over a period of time. The IRS has the right to review the payment agreement from time to time, but most agreements end with the statute of limitations expiring on the case. So, unless your AGI (Adjusted Gross Income) increases significantly, these cases will die slowly throughout the years of the statute.

Why it is important to get a payment agreement as soon as possible:

1. It stops collection action against you for a long period of time;
2. It allows you to make affordable monthly payment to the IRS;
3. It gets your life back in order without the threat of IRS collection;
4. The IRS will release any levy they filed during the time they were working your case.

The IRS offers two types of installment agreements, streamlined and long term. After that, the Revenue Officer Agreement comes into play.

The Streamline Agreement

The streamline agreement can be obtained quickly. The rules for the streamline agreement come into play if the tax due is under $25,000, including all penalties and interest. You must have all your tax returns filed and have current withholding tax taken out or estimated tax paid. Under the streamline agreement the balance must be paid within 60 months or before the statute of limitation ends. Fresh Start Tax can get these cases resolved immediately. We can usually get a streamline process set-up within a one hour time period. One benefit of a streamline agreement is that no  financial statement is required.

The Long Term Agreement

The long term agreement has several names, installment agreement or part pay agreement are the most common.  The IRS requires a completed Form 433-A or Form 433-F, financial statement, depending on which division is working the case. The ACS unit requires a 433-F and the local or high dollar unit requires a 433-A. These cases are looked over more carefully and require a lot of documentation. The IRS will require bank statements, pay stubs, copies of all bills and possibly even cancelled checks. The IRS will also follow the National Standards Program which allows a limited amount of expenses per category. It is not recommended that you begin this process yourself with the IRS. It can be difficult to determine what they allow and what they do not. A professional can negotiate a better deal. The key to getting a good part pay agreement is packaging. At Fresh Start Tax we are the best at handling this process.

Revenue Officer Agreement

Should your case not be closed by the Automated Collection System, your case will head out to the local field branch of the IRS. A Revenue Officer is assigned the case. Their job, if it involves  an installment agreement, is to secure a 433-A, a very long detailed financial statement complete with all documentation. If it gets to this point, you want IRS representation by trained professionals or you will be taken to the cleaners.

Fresh Start Tax is here for you.

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10 Things You Should Know About An IRS Tax Levy, 668a And 668w

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    Get your IRS Tax Levy Released today by using former IRS agents and managers who know the system. Since 1982.   Within 24 hours of receiving  your current financial statement you will have your levy released and your case settled. STOP YOUR LEVY NOW!   1. The IRS has a list of levy information for all taxpayers on their master computer that goes back seven years. 2. The IRS gets the levy information from your 1040 tax return and attached documents, the W-2’s, 1099’s and various other sources such as interest or dividend income information. 3. The IRS has a record of all bank checks you have sent them and they keep this bank information on file. 4. The IRS will send a federal levy 668(a) or 668(W) out 6 weeks after you have received your CP-504, Notice of Intent to Levy. The 6 week period starts from the date on the IRS letter or notice. 5. Whether you sign for the certified notice letter that IRS sends out or not, the 6 weeks still runs from the … Continue reading

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Why The IRS Audits Tax Returns

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The mystery of how the IRS selects tax returns for the IRS is not so complicated. There are certain factors that enter in the mix. The  IRS can only audit so many tax returns. President B. Obama has ordered the IRS to intensify its efforts to close the tax gap. Some returns are selected based on information obtained by the IRS through efforts to identify promoters and participants of abusive tax avoidance transactions. Some returns are selected for examination on the basis of computer scoring. Computer programs give each return numeric ?scores?. The Discriminant Function System (DIF) score rates the potential for change based on the IRS?s experience with similar returns. This has been going on for 60 years. The IRS has specially trained personnel that review the highest scored returns and choose those they believe should be audited. They are very experienced personnel. Large Corporation Annual Audits. These are audited by special groups within the IRS. Dollar amounts are usually over 5 million in sales. Because of the large size of some corporations and the complexity of their returns … Continue reading

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Why Does Your Tax Return Get Audited By The IRS?

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There are many reasons why tax returns get audited by the IRS. The DIF score has a lot to do with the reasons. Here are some tips that you need to know to stay away from an IRS audit. Your chances of being audited by the IRS will be much are greater under the following circumstances: You have very large amounts of itemized deductions on your tax return that exceed IRS targets. These targets are based on the DIF scores. You claim tax shelter investment losses on your tax return. These are all reviewed and based on whether or not the shelter even makes sense. You have complex investment or business expenses on your tax return. Sometimes putting an explanation on the return makes a lot of sense. You own or work in a business which receives cash in the ordinary course of business. Your business expenses are large in relation to your income on your tax return. This is based on Gross income and Adjusted Gross income. A prior IRS audit resulted in a tax deficiency. It has been … Continue reading

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How To Stop an IRS Notice of Federal Wage Levy, 668w.

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  How To Stop an IRS Notice of Federal Wage Levy, 668w. 1-866-700-1040   Former IRS agents and managers can stop the IRS, we know the process! Has the IRS just sent a Notice of Federal Wage Levy, (Form 668 W) or tax garnishment to your employer? Now you have a huge IRS tax problem. The IRS collection process allows for the IRS to levy wages for uncollected back taxes. These IRS garnishments will not go away until you take the proper steps to take care of this situation. Your employer must comply with the federal rules for this IRS wage levy or your employer will be imposed sanctions by the Internal Revenue Service. It is possible, within days, to get this federal tax levy or garnishment removed and released and your case closed.   HERE IS HOW SIMPLE THE PROCESS IS   * Immediately contact your boss and let them know you have hired a professional company to take care of this IRS problem; * Make sure all your back IRS tax returns have been filed with IRS, (we … Continue reading

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The IRS National Standards Program for 433-A and 433-F.

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The National Standards Program The Internal Revenue Service has set up Collection Standards to help determine the taxpayer’s ability to pay back taxes in a timely, reasonable and efficient manner. The IRS has set up major category items that each taxpayer will use nationwide. These Standards will change from time to time and will be yearly updated by the IRS. You may directly contact us for these updates. The necessary expense tests is defined as  “expenses that are necessary to provide for a taxpayer and their families health, welfare and production of income.” The National Standards for food, clothing and other items apply nationwide no matter the region. The National Standards amounts account for their family size without at all questioning the amount spent. No documentation is required. The National Standards allowances for housing and utilities and transportation, are all known as LOCAL STANDARDS. These vary from location to location. In most cases the taxpayer will be given the amount actually spent or the LOCAL STANDARD, whichever is less. Generally the total number of persons allowed for the necessary living … Continue reading

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Consumer Alert From The IRS On Current Frauds.

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Fresh Start Tax lets all our blog friends know about the latest scams they should be made aware of.  Here is an alert brought to you by the IRS. The IRS and Fresh Start Tax warns taxpayers, businesses and individuals to be on the alert for e-mails and phone calls they may receive which claim to come from the IRS or other federal agency and which mention their tax refund or economic stimulus payment.  These are almost certainly a scam from scam artists whose purpose is to obtain personal and financial information such as name, social security number, bank account and credit card or even PIN numbers from taxpayers which can be used by the scammers to commit identity theft. The e-mails and calls usually state that the IRS needs the information to process a refund or stimulus payment or deposit it into the taxpayer’s bank account. The e-mails often contain links or attachments to what appears to be the IRS Web site or an IRS “refund application form.”  However genuine in appearance, these phonies are designed to elicit the … Continue reading

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Offers in Compromise. Effective Tax Administration, a Program Rarely Used, But Very Effective in Settling Back IRS Taxes.

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Thousands of individuals that owe back IRS taxes have an option open to them called the “Offer in Compromise”.  Most people have not heard of the “Offer in Compromise” and it is underutilized as a form of IRS tax relief. One reason the “offer in compromise” option is not often used is that most individuals and professionals have not worked these type of cases with the IRS on a regular basis.  Having former employees of the IRS is a huge advantage that Fresh Start Tax has for all taxpayers who owe money on back IRS taxes and want to settle their case. There are three types of  “Offers in Compromise” available to taxpayers: (1) Inability to pay the tax  (2) Doubt as to the liability  (3) Special circumstances exist, this option, Effective Tax Administration.  Qualifying for any of these three types of “Offer in Compromise” could reduce your tax significantly. The Effective Tax Administration program exists for all those who agree that the tax liability is correct, and there is potential to collect the full amount of the tax owed, … Continue reading

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Tax Break On New Car Purchases.

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Fresh Start Tax wants to remind car shoppers about a 2009 tax break. Take  advantage of this if you can afford it . Fresh Start Tax reminds individual taxpayers who are considering buying a new car that they have until Dec. 31, 2009 to take advantage of a tax break that may not be around in 2010. Do not forget this date. Taxpayers or individuals who buy a qualifying “new motor vehicle this year”, after Feb. 16th,  can deduct the state or local sales or excise taxes they paid on the first $49,500 of the purchase price. Why this start date, who knows? Qualifying motor vehicles include new passenger automobiles, light trucks, motorcycles and motor homes. Individuals who itemize, as well as those who take the standard deduction can benefit from this tax break. In states without a sales tax, other taxes or fees can qualify if they are assessed on the purchase of the vehicle and are based on the vehicle?s sales price or as a per unit fee. The deduction for taxpayers is reduced for joint filers with … Continue reading

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Is Cancellation of Mortgage Debt taxable?

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This is a question we get many times, especially during the economic downturn. The IRS is actually here to help the taxpayer and here is their ruling: Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was $2 million or less. The limit is $1 million for a married person filing a separate return. Details are on Form 982 along with its instructions, available now at  irs.gov. This is great news during this down economy, otherwise,  all this cancelled debt would be taxable.

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