National Standards as applies on the 433A
The National Standard is a fixed set of expense. It is a figure set by the IRS and the Department of Labor. If you go to our website to the home page, click the toolbar marked IRS forms, see the National Standards, you will find the applicable chart.Call us if you have problems finding the landing page.
You will find the Standard that fits your situation. National Standards: Food, Clothing and Other Items include the following expenses:
Apparel and services. Includes shoes and clothing, laundry and dry cleaning, and shoe repair. Food. Includes all meals, home and away. Housekeeping supplies. Includes laundry and cleaning supplies; other household products such as cleaning and toilet tissue, paper towels and napkins; lawn and garden supplies; postage and stationary; and other miscellaneous household supplies.
Personal care products and services. Includes hair care products, haircuts and beautician services, oral hygiene products and articles, shaving needs, cosmetics, perfume, bath preparations, deodorants, feminine hygiene products, electric personal care appliances, personal care services, and repair of personal care appliances.
Miscellaneous.
IRS allows taxpayers the total national standard amount for their family size without questioning the amount actually spent. Other rules apply but you will need a tax professional for help in this area. Local Standards set forth by the IRS and the Department of Labor
Local standards include the following expenses: Housing and Utilities. Housing expenses include: mortgage (including interest) or rent, property taxes, necessary maintenance and repair, homeowner’s or renter’s insurance, homeowner dues and condominium fees. The utilities include gas, electricity, water, heating oil, bottled gas, trash and garbage collection, wood and other fuels, septic cleaning, telephone and cell phone. Usually, these expenses are considered necessary only for the primary place of residence. Any other housing expenses should be allowed only if, based on a taxpayer’s individual facts and circumstances, disallowance will cause the taxpayer economic hardship.
Generally the total number of persons allowed for determining family size should be the same as those allowed as exemptions on the taxpayer’s most recent year tax return. There may be reasonable exceptions, such as foster children or children for whom adoption is pending.
An allowance for cell phone expenses has been included in the Housing and Utility standards. If a taxpayer claims a separate cell phone expense on the financial statement, the amount would be added to the housing and utility expense claimed and subject to the allowable amount for the Housing and Utility standards. Ensure the taxpayer is not duplicating this expense.
Taxpayers are allowed the standard amount for housing and utilities or the amount actually spent, whichever is less. If the amount claimed is more than the total allowed by housing and utilities standards, the taxpayer must provide documentation to substantiate those expenses are necessary.
When deciding if a deviation is appropriate, consider the cost of moving to a new residence; the increased cost of transportation to work and school that will result from moving to lower-cost housing and the tax consequences. The tax consequence is the difference between the benefit the taxpayer currently derives from the interest and property tax deductions on Schedule A to the benefit the taxpayer would derive without the same or adjusted expense.
All deviations from the housing and utilities standards must be verified, reasonable and documented in the case history. Transportation.
This includes vehicle insurance, vehicle payment (lease or purchase), maintenance, fuel, state and local registration, required inspection, parking fees, tolls, driver’s license and public transportation. Public transportation includes mass transit fares for a train, bus, taxi, etc., both within and between cities.
Transportation expenses are considered necessary when they are used by taxpayers and their families to provide for their health and welfare and/or the production of income. Employees are expected to exercise appropriate judgment in determining whether claimed transportation expenses meet these standards. Expenses that appear to be excessive should be questioned and, in appropriate situations, disallowed
When determining the allowable amounts, allow the full ownership standard amount, or the amount actually claimed and verified by the taxpayer, whichever is less. Allow the full operating standard amount, or the amount actually claimed by the taxpayer, whichever is less. Substantiation for the operating allowance is not required unless the amount claimed exceeds the standard.
There is a single nationwide allowance for public transportation. This allowance is established as a floor for individuals with no vehicle. Taxpayers with no vehicle are allowed the standard, per household, without questioning the amount actually spent. The taxpayer is not required to provide documentation unless the amount claimed exceeds the standard.
If a taxpayer owns a vehicle and uses public transportation, expenses may be allowed for both, provided they are needed for the health and welfare of the individual or family, or for the production of income. However, the expenses allowed would be actual expenses incurred. Documentation would not be required unless the amount claimed exceeded the standards.
Consider availability of public transportation if car payments (purchase or lease) will prevent the tax liability from being paid in part or full. Public transportation could be an option if it does not significantly increase commuting time and its use is not unrealistic. You should also consider the age, health and needs of minor children when requesting the taxpayer use public transportation in lieu of vehicle expenses
If a taxpayer has a car, but no car payment, only the operating costs portion of the transportation standard is used to figure the allowable transportation expense.
A single taxpayer is normally allowed ownership and operating costs for one vehicle. The taxpayer is allowed the standard for ownership and operating costs, or the amounts actually spent, whichever is less.
Please see the below link for the National Standards http://www.irs.gov/individuals/article/0,,id=96543,00.html
Did you get a tax bill from the IRS?
Call Fresh Start Tax to help you resolve your tax problem today. 1-866-700-1040.
We are former IRS Agents, Managers and Instructors. For the best possible settlement possible.
Fresh Start Tax Client Education. Call us today. Facts IRS want you to know IRS Tax Notice CP 14 Frequently Asked Questions
Why did I receive this notice from the IRS?
The first thing you should know about Notice CP 14 is that it isn’t a math error notice. It just shows you the amount of underpaid tax according to our records. The middle section of the notice shows the tax you reported on the return, the credits we applied, and the underpayment.
What do I need to do? Let Fresh Start Tax help work out a great deal for you.
Check the list of payments we applied to your account. Many times, a misapplied payment is the reason for the balance due.
If that’s the case, or if the amount of your payment differs from the one we show, you’ll need to give us information about the payment so we can look for it.
Once we find the payment and apply it, we’ll remove or reduce any penalties and interest caused by the underpayment.
If the payments shown in your records agree with the amounts listed on CP 14, you should pay the total amount due by the date shown on the notice.
If you don’t pay the amount due by that date, we’ll have to charge additional penalties and interest. If you can’t pay the amount due, you may be able to request an installment agreement that allows you to pay what you owe in smaller, more manageable amounts.
What should I do if I do not agree with the notice. Should I call or mail my response?
The action you take to depends on the reason for the underpayment. In most cases, though, you can call us at the number printed at the top of the notice to resolve the account.
The following paragraphs describe some of the more common reasons for disagreeing with the notice.
If you received the notice because of a missing payment, call us at the number printed at the top of the notice and have your canceled check handy.
Tell us the amount of the missing payment and we’ll see if we can find it while you wait. If we can’t find the payment right away, we may ask you to read the encoding information that’s printed on the back of most checks.
We’ll record the information and suspend any collection activity while we look for it. If we still can’t find the payment, we’ll send you a letter asking for a clear photocopy of both sides of the canceled check.
If you received the notice because the money amount of your payment doesn’t agree with amount shown on the notice, send us a photocopy of both sides of the canceled check along with a copy of your bank statement showing the amount that was deducted from your account.
This may take more time than finding a missing payment, but we’ll suspend all collection activity until it’s resolved. If you received the notice because we haven’t processed your amended return, 1040x showing a tax decrease, call us to see if we processed the return after we issued the notice.
If the notice shows a total tax amount that’s different from the tax you reported, call us and let us know. Pre-printed name and address labels contain a code showing the tax period for the return.
If you received this notice after you paid the amount you owe, give us a call to make sure we received it.
Is there anything else I should know about this notice?
You need to respond to the IRS if the notice is incorrect. If you need to work out a settlement call Fresh Start Tax today.
Fresh Start Tax is one of the premier tax resolutions firms in the country. We deal with all types of civil cases including individuals, businesses, corporate and defunct corporations. We have staff that specializes in every facet of the Internal Revenue Service. We know all the IRS strategies. Some of our many specialties include the following:
Immediate Tax Representation
Offers in Compromise/Settlements
Back Tax Relief
Bank Garnishments or Tax Levies
Wages Garnishments or Levies
IRS Notices of Intent to Levy or Final Notices
IRS Tax Audits
Hardships Cases, Payment Plans
Innocent Spouse
Abatement of Penalties and Interest
State Sales Tax Cases
Our Company Resume:
Our staff has over 110 years of professional tax representation experience
On staff, Board Certified Tax Attorney’s, Certified Public Accounts, Enrolled Agents, Former IRS Manager, Instructor and Trainers
Highest Rating by the Better Business Bureau ” A “
Hiring former IRS Agents who worked, taught and administered the trust fund penalty program is the very best way to fight the IRS Trust Fund Recovery Penalty .
I was a former IRS Revenue Officer who worked these cases at the IRS. My job at the time was to get as many people as I can set up with the trust fund penalty. The more the merrier. There are hard fast rules to be set up for this penalty.
First of all you should be represented by professional tax council. It is easier for me to make you look innocent than you. I know all the questions IRS will ask and have a defense and a good answer for all the questions. We know how to make others responsible. We were trained for that by the IRS. We have the highest BBB rating in the industry. What is IRS looking for as to responsibility:
IRS is looking to “Establishing Responsibility” Responsibility is a matter of status, duty, and authority. A determination of responsibility is dependent on the facts and circumstances of each case.
Potential responsible persons include: 1.Officer or employee of a corporation
2.Partner or employee of a partnership
3.Corporate director or shareholder
4.Another corporation
5.Employee of a sole proprietorship
6. Can also include a Surety lender
Marks of a responsible person as defined by the IRS include
A responsible person has: 1.Duty to perform
2.Power to direct the act of collecting trust fund taxes
3.Accountability for and authority to pay trust fund taxes
4.Authority to determine which creditors will or will not be paid
To determine whether a person has the status, duty and authority to ensure that the trust fund taxes are paid, consider the duties of the officers as set forth in the corporate by-laws as well as the ability of the individual(s) to sign checks. In addition, determine the identity of the individuals who:
1.Are officers, directors, or shareholders of the corporation
2.Hire and fire employees
3.Exercise authority to determine which creditors to pay
4.Sign and file the excise tax or employment tax returns, such as Form 941, Employer’s Quarterly Federal Tax Return
5.Control payroll/disbursements
6.Control the corporation’s voting stock
7.Make federal tax deposits Fresh Start Tax is one of the premier tax resolutions firms in the country. We deal with all types of civil cases including individuals, businesses, corporate and defunct corporations. We have staff that specializes in every facet of the Internal Revenue Service. We know all the IRS strategies. Some of our many specialties include the following:
Immediate Tax Representation
Offers in Compromise/Settlements
Back Tax Relief
Bank Garnishments or Tax Levies
Wages Garnishments or Levies
IRS Notices of Intent to Levy or Final Notices
IRS Tax Audits
Hardships Cases, Payment Plans
Innocent Spouse
Abatement of Penalties and Interest
State Sales Tax Cases
Our Company Resume:
Our staff has over 110 years of professional tax representation experience
On staff, Board Certified Tax Attorney’s, Certified Public Accounts, Enrolled Agents, Former IRS Manager, Instructor and Trainers
Highest Rating by the Better Business Bureau ” A ”
The 4180 is a form used by the IRS to determine who is responsible for unpaid trust fund taxes belonging to a corporate entity. A Revenue Officer out of the local IRS office is usually in charge of this process. The 4180 is one of the determining factors along with bank records to determine who is responsible.
The assessment of this tax will have damaging effects on those set up with this penalty.
If the IRS is asking you to fill out a 4180 form to determine whether you are a responsible person for the trust fund taxes, do not do it. 90% of all individuals who fill out this form are held responsible for the trust fund tax.
I know this because I was a former IRS Agent and Instructor with the IRS.
There are many tricks that taxpayers are unaware of on this form. Being able to just answer the questions makes the IRS wonder just how much you were involved with the Corporate entity. The Revenue Officers job is to set up as many individuals as possible so the tax can be collected.
Fresh Start Tax client education:
Most individuals are very surprised that the IRS has the right to collect the trust fund recovery penalty (TFRP) against individuals of corporations who failed to pay their payroll taxes. The penalties are set up to encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes or collected excise taxes. Congress passed a law that provides for the so called trust fund taxes. These taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount. The (TFRP) may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business. The business does not have to have stopped operating in order for the TFRP to be assessed.
Who Can Be Responsible for the Trust Fund Taxes, code section 6672
The trust fund recovery penalty may be assessed against any person who:
· Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes; and
· Willfully fails to collect or pay them.
A responsible person is a person or group of people who have the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes. This person may be or had some of the following powers:
· An officer or an employee of a corporation;
· A member or employee of a partnership;
· A corporate director or shareholder or member;
· A member of a board of trustees of a nonprofit organization, or anyone deemed to be responsible;
· Another person with authority and control over funds to direct their disbursement.
For willfulness to exist, the responsible person:
· Must have been, or should have been, aware of the outstanding taxes; and
· Either intentionally disregarded the law or was plainly indifferent to its requirements (no fraudulent intent or bad motive is required).
Using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of willfulness.
You may be asked to complete an interview in order to determine the full scope of your duties and responsibilities. Responsibility is based on whether an individual exercised independent judgment with respect to the financial affairs of the business. An employee is not a responsible person if the employee’s function was solely to pay the bills as directed by a superior, rather than to determine which creditors would or would not be paid.
How does the IRS figure out what the penalty will be?
The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on:
· The unpaid income taxes withheld; plus
· The employee’s portion of the withheld FICA taxes;
· Any timely payments will be subtracted from the amounts owed;
· Any taxes designated to “trust fund only” will be subtracted from the total owed.
Fresh Start Tax is one of the premier tax resolutions firms in the country. We deal with all types of civil cases including individuals, businesses, corporate and defunct corporations. We have staff that specializes in every facet of the Internal Revenue Service. We know all the IRS strategies. Some of our many specialties include the following:
· Immediate Tax Representation
· Offers in Compromise/Settlements
· Back Tax Relief
· Bank Garnishments or Tax Levies
· Wages Garnishments or Levies
· IRS Notices of Intent to Levy or Final Notices
· IRS Tax Audits
· Hardships Cases, Payment Plans
· Innocent Spouse
· Abatement of Penalties and Interest
· State Sales Tax Cases
Our Company Resume:
· Our staff has over 110 years of professional tax representation experience
· On staff, Board Certified Tax Attorney’s, Certified Public Accounts, Enrolled Agents, Former IRS Manager, Instructor and Trainers
· Highest Rating by the Better Business Bureau ” A “
The IRS has just hired 50 new agents in the South Florida and they are being let loose within the district. Tax Audits are really expected to spike. We have already seen an increase in our office. If you have received an audit letter or need representation help, call Fresh Start Tax. 1-866-700-1040. We are former IRS Agents, Managers and Instructors. We worked in the South Florida District Offices. We have the highest BBB rating. Fresh Start Tax client Education about tax audits.
The IRS examines tax returns to verify that the tax reported is correct.
Selecting a return for examination does not always suggest that the taxpayer has either made an error or been dishonest. In fact, some examinations result in a refund to the taxpayer or acceptance of the return without change.
The overwhelming majority of taxpayers files returns and make payments timely and accurately. Taxpayers have a right to expect fair and efficient tax administration from the IRS, including verification that taxes are correctly reported and paid with enforcement actions against those who fail to comply voluntarily. Taxpayer Rights during a IRS tax audit.
The IRS trains its tax audit employees to explain and protect taxpayers’ rights throughout their contacts with taxpayers. These rights include:
A right to professional and courteous treatment by IRS employees.
A right to privacy and confidentiality about tax matters.
A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
A right to representation, by oneself or an authorized representative. This is your POA.
A right to appeal disagreements, both within the IRS and before the courts. How Tax Returns Are Selected fora Tax Examination by the IRS.
The IRS selects returns using a variety of methods, including: Computer Scoring — the most common method. Some returns are selected for tax 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 past IRS experience with similar returns.
The Unreported Income DIF (UIDIF) score rates the return for the potential of unreported income. IRS personnel screen the highest-scoring returns, selecting some for audit and identifying the items on these returns that are most likely to need review. Large Corporations — The IRS examines many large corporate returns annually.
Information Matching — Some returns are examined because payer reports, such as Forms W-2 from employers or Form 1099 interest statements from banks, do not match the income reported on the tax return. Related Examinations — Returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for examination
. Other Reasons — Area offices may identify returns for examination in connection with local compliance projects. These projects require higher level management approval and deal with areas such as local compliance initiatives, return preparers or specific market segments. Fresh Start Tax is one of the premier tax resolutions firms in the country. We deal with all types of civil cases including individuals, businesses, corporate and defunct corporations. We have staff that specializes in every facet of the Internal Revenue Service. We know all the IRS strategies. Some of our many specialties include the following:
Immediate Tax Representation
Offers in Compromise/Settlements
Back Tax Relief
Bank Garnishments or Tax Levies
Wages Garnishments or Levies
IRS Notices of Intent to Levy or Final Notices
IRS Tax Audits
Hardships Cases, Payment Plans
Innocent Spouse
Abatement of Penalties and Interest
State Sales Tax Cases
Our Company Resume:
Our staff has over 110 years of professional tax representation experience
On staff, Board Certified Tax Attorney’s, Certified Public Accounts, Enrolled Agents, Former IRS Manager, Instructor and Trainers
Highest Rating by the Better Business Bureau ” A ”
