by steve | Mar 2, 2012 | IRS Penalties, IRS Tax Problem
IRS Penalties – Get Rid of them – Receive Bad Advice – IRS will remove Penalties – Former IRS – Tax Experts
The following deals with the abatement of IRS penalties and interest due to receiving bad advice.
There are several methods of getting rid of IRS penalties, call us today to find out more.
If you have been a victim of bad advice, this will help you rid yourself of IRS penalties
From the IRS IRM 20.1.1.3.3.4 (12-11-2009)
Bad Tax Advice
This section discusses the three basic types of advice that may qualify for statutory, regulatory, or administrative penalty relief from the Internal Revenue Service:
1. Written advice provided by IRS,
2. Oral advice provided by IRS,
3. Advice provided by a tax professional,
Information the IRS will consider when evaluating your request for abatement or non-assertion of a penalty due to reliance on advice includes, but is not limited for the following reasons:
1. Was the advice in response to a specific request and was the advice received related to the facts contained in that request? Can that be proved?
2. Did the taxpayer reasonably rely on the advice?
3. Did you pay for that advice?
4. Was the person a professional tax preparer?
5. Is this a one time event?
In the following instances address some situations where penalty relief may not be appropriate even though the taxpayer relied on written advice from the IRS regarding an item on a filed return:
1. The taxpayer did not reasonably rely on the advice regarding an item included on a return if the advice was received after the date the return was filed,
2. A taxpayer may be considered to have reasonably relied on advice received after the return was filed if they then filed an amended return that conformed with such written advice.
3. A taxpayer may not be considered to have reasonably relied on written advice unrelated to an item included on a return, such as advice on the payment of estimated taxes, if the advice is received after the estimated tax payment was due.
4. Did the taxpayer, or their authorized representative, provide the IRS or the tax professional with adequate and accurate information? The taxpayer is entitled to penalty relief for the period during which they relied on the advice.
The period continues until the taxpayer is placed on notice that the advice is no longer correct or no longer represents the Service’s position.
5. The taxpayer is placed on notice as the result of any of the following events that present a contrary position and occur after the issuance of the written advice:
6. Written correspondence from the IRS that its advice is no longer correct or no longer represents the IRS’s position,
7. Enactment of tax legislation or ratification of a tax treaty,
8. A U.S. Supreme Court decision,
9. The issuance of temporary or final regulations,
10. The publication of a IRS revenue ruling, IRS revenue procedure, or other statement in the Internal Revenue Bulletin.
Tax Form 843, Claim for Refund and Request for Abatement, is required to be filed to request penalty abatement based on erroneous written advice by the IRS.
However, if Form 843 is not filed and the information provided demonstrates that abatement of the penalty is warranted, the penalty should be abated, whether or not a Form 843 is provided.
The information required to be provided includes:
1. The taxpayer’s written request for advice,
2. The erroneous written advice furnished by the Service to the taxpayer and relied on by the taxpayer, and
3. The report (if any) of tax adjustments that identifies the penalty or addition to tax and the item relating to the erroneous written advice.
Getting penalties and interest abated is a specialty. As Former IRS agents we know the exact requirements to give these cases there very best shot.
These cases require documentation and a great deal of expertise.
by steve | Mar 2, 2012 | IRS Tax Advice, IRS Tax Problem
If you are a Adoptive Parent you may find these IRS tax tips very helpful.
We are former IRS agents that can help and assist you in IRS tax filing and tax representation.
These tax tips are for our clients of Fresh Start Tax LLC.
Tax Tips for Adoptive Parents
If you have paid expenses to adopt an eligible child in 2011, you may be eligible to claim a tax credit of up to $13,360. Not a bad tax credit.
The expanded adoption credit.
The Affordable Care Act increased the amount of the credit and made it refundable, which means you can get the credit as a tax refund even after your tax liability has been reduced to zero. This can offer you a large tax refund.
For tax year 2011, you must file a paper tax return, Form 8839, Qualified Adoption Expenses, and attach documents supporting the adoption.
Taxpayers that are claiming the tax credit will still be able to use IRS Free File or other software to prepare their returns, but the returns must be printed and mailed to the IRS, along with all required documentation.
Documents can include a final adoption decree, placement agreement from an authorized agency, court documents or the State’s determination for special needs children. The documentation is an absolute must.
The Qualified Adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child. These expenses may include but are not limited adoption fees, court costs, attorney fees and necessary travel expenses.
The eligible child must be under 18 years old, or physically or mentally incapable of caring for himself or herself. Make sure your adoption qualifies for the tax credit
If your modified adjusted gross income is more than $185,210, your credit is reduced. If your modified AGI is $225,210 or more, you cannot take the credit.
Should you have any question regarding this credit or need professional tax prep call to hear more today.
by steve | Mar 1, 2012 | IRS Tax Debt, IRS Tax Problem
Statute of Limitations on IRS Collections – Has your Statute run out – IRS cannot collect tax – IRS Tax Experts – Former IRS
Yes even the IRS has a certain amount of time to collect the tax.
As a Former IRS Agent, I carefully watched all statutes within my working inventory. Should I ever let a statute expire it could mean my job and a demotion of my Group Manager.
With that said, let’s review the IRS statute of limitations on IRS collection cases.
Generally, IRS has 10 years to collect the money from a taxpayer. That ten years starts when the case is processed through the IRS C.A.D.E. computer.
For an example, if you were to file your tax return on April 15th, it would normally take 6 weeks to post on the IRS computer system. In the given scenario, the date of assessment that IRS would create would be around June 1st.
In the aforementioned example, June 1st begins the running of the ten year statue of limitations. This is called in IRS terms the TC 150 date. You can finds out your statute date by calling the IRS or asking for a transcript.
If a Federal Tax Lien has been filed, you can find that date of assessment right on the tax lien.
There are events, filings and rules that extend the Statute of Limitations.
The filing of a Offer in Compromise.
The filing of an Offer in Compromise will extend the statute of limitations on collection by the time it is pending OIC plus 30 days. The IRS can take four to twelve months to work your offer and sometimes longer.
You sign a voluntary Waiver- Form 900.
If you has volunteered to extend the statute of limitations you did so on a Form 900. The date of the extension is found on the top of the waiver form. You should never be pressured to sign this Form and if asked by the IRS, consult a tax expert.
The filing of a Collection Due Process Appeal.
Timely responding to an IRS Final Notice of Intent to Levy also known as a Collection Due Process hearing ( lumped together ) will extend the time the IRS has to collect while your hearing is pending. It is extended for the time that the case was in Appeals.
Filing of any Bankruptcy.
Bankruptcy extends the statute of limitations on collection by the time you were in bankruptcy plus (6 ) six months. If you filed bankruptcy but did not eliminate all of your tax liabilities, the IRS will have more time to collect the non-discharged taxes from you. Sometimes not all taxes are discharged in the bankruptcy. Consult a tax expert.
Filing for Innocent Spouse Relief.
The collection period for the innocent spouse is suspended from the filing of the request for Innocent Spouse Relief until the 90 day period for petitioning the Tax Court expires. If a Tax Court petition is filed on an IRS denial, time is tolled until the Tax Court decision becomes final, plus 60 days.
The filing of a Taxpayer Assistance Order Form (911).
If you needing a Taxpayer Assistance Order ( TAO ) to stop the IRS in there tracks, the filing of Form 911 will suspend the statute of limitations on collection while your case is pending for review. This is a great IRS stop measure!
Installment agreements. ( defaulted Appeals )
If the IRS refuses or defaults an installment agreement, you have the right to appeal that decision. If you do, the collection time frame is extended during the Appeal.
If you are at the end of your statutory time for IRS to collect, always consult a tax professional.
If you call the IRS they have the right to reactivate your case and return it to the field for enforced collections. Tax Professionals have special telephone numbers to call that will not reactivate your case.
