by Fresh Start Tax | Dec 25, 2012 | Offer in Compromise
Offer in Compromise – New Rules, Settle for Less – Former IRS Agents
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I am a Former IRS agent and teaching instructor with the IRS. I taught tax policy to new IRS agents. I know all the rules, settlement policies and tax procedures to make a offer work if you are a qualified candidate.
We are comprised of Tax Attorneys, CPA’s and Former IRS agents, managers and instructors. We have over 205 years of total tax experience and over 60 years of direct work experience with the IRS.
We know all the settlement policies and tax strategies of the offer in compromise.
The settlement game has changed.
The Internal Revenue Service is now in the business of accepting offers in compromise. Even though IRS has been accepting them for years they now “really” want the offers to settle cases simply because the FEDS need money.
As a Former IRS agents I can tell you first hand in the past the IRS agents did not like working offers in compromise. They took to much time and they were a lot of work and they were reviewed by the higher ups. Management would criticize your work so it was easier to find a reason to reject the Offer. In day pasts the motto was,” reject immediately”. The culture has changed and we are starting to see a major shift in settlement policy.
Expanded Offer in Compromise Program
The IRS has expanded its “Fresh Start” initiative by offering more flexible terms to its Offer-in-Compromise Program. These newest rules enable some financially distressed taxpayers to clear up their tax problems even quicker.
An offer-in-compromise is an legal and enforceable agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement.
The IRS primarily looks at the taxpayer’s income and assets to determine the reasonable collection potential. They generally add the assets of the taxpayer with the net disposable monthly income times 12 to arrive at the settlement formula.
This expansion of the “Fresh Start” initiative focuses on the financial analysis used to determine which taxpayers qualify for an OIC.
Here are the BIG OIC changes:
Revising the calculation for a taxpayer’s future income
The IRS will now look at only one year instead of four years of future income for offers paid in five or fewer months and two years instead of five years of future income for offers paid in six to 24 months.
All OICs must be paid in full within 24 months of the date the offer is accepted. This is the very best way of getting an offer accepted.
IRS is now allowing taxpayers to repay their student loans.
Minimum payments on student loans guaranteed by the federal government will be allowed for the taxpayer’s post-high school education.
Proof of payment must be provided.
Allowing taxpayers to pay state and local delinquent taxes.
When a taxpayer owes delinquent federal and state or local taxes, and does not have the ability to fully pay the liabilities, monthly payments to state taxing authorities may be allowed in certain circumstances.
Expanding the Allowable Living Expense.
Allowance standard allowances incorporate average expenses for basic necessities for citizens in similar geographic areas. These standards are used when evaluating installment agreement and offer-in-compromise requests.
The National Standard miscellaneous allowance has been expanded. Taxpayers can use the allowance to cover expenses such as credit card payments and bank fees and charges.
Call us today to see if qualify for a offer in compromise, free tax consults.
Offer in Compromise – New Offer Rules, Settle for Less – Former IRS Agents
by Fresh Start Tax | Dec 25, 2012 | IRS Tax Audit
IRS Tax Audit – Most Common Types of Tax Audits – Former IRS Managers, Agents – Fresh Start Tax LLC – Tax Audit Representation
We are comprised of Tax Attorneys, IRS Tax Lawyers, CPA’s and Former IRS agents and managers. We are a local New Jersey Firm. The Affordable Firm.
We have worked hundreds and hundreds of IRS and Sales Tax audits. We are tax experts in Tax Audit Representation. 1-866-700-1040.
We are over 205 years of total tax experience and over 60 years of direct IRS work experience. We know all the policies and procedures for tax audits due to our extensive background with the IRS.
Should have any questions regarding an IRS tax audit contact us for a no cost professional consultation 1-866-700-1040.
Facts about IRS Tax Audits:
- The IRS audits a total of 1,391,581 tax returns a year,
- IRS is hiring 15,000 new IRS Agents under the new IRS budget,
- The IRS field agents complete more than 310,000 audits by office or business visits a year,
- IRS prosecutes over 3000 taxpayers a year for tax crimes,
- The IRS completes over 1,081,152 correspondence audits a year,
- IRS has installed new software tracking systems with the development of the CADE 2 computer to spot and recognize tax audits more proficiently.
The most common type of IRS Tax Audits
1. Front End Loaded Planning Time ( see below for a explanation )
The planned direct examination staff years and the number of return closures are front end loaded into the plan. These resources are allocated, after consideration of work in process, prior to committing resources available to other compliance initiatives.
The planned direct examination staff years and the number of case closures are front loaded into the plan. The objectives and time allocated may change from fiscal year to fiscal year.
Examples of front end loaded time are as follows:
1. Abusive Tax Avoidance Transactions,
2. Coordinated Industry Case (CIC) time,
3. Compliance Assurance Process (CAP) time,
4. Joint Committee,
5. National Research Program ,
6. Protection of Revenue Base ,
7. Compliance Initiative Projects,
8. Outreach Programs.
The most common of all tax audits is the DIF Audit.
Each tax return that is filed with the IRS is graded with a DIF number. A DIF score is a grade that your tax return receives when compared to other tax returns which is similar to yours. The higher the DIF and high your chance for a IRS tax audit.
You will never know your DIF, it is reserved for IRS personal only. A label with a DIF score is placed on your return by machine.
Discriminant Index Function (DIF) Overview
DIF as referenced in IRM 4.19.11.1.4, Sources of Returns for Classification, is a mathematical technique used to score income tax returns for examination potential.
These formulas were developed based on available NRP data. Each return measured under DIF receives a DIF score.
Generally, the higher the score, the greater the audit potential. The highest scored returns are made available to Examination upon request.
DIF mathematical formulas are confidential and for official use only. The DIF score assigned to a return should not be disclosed.
Types of DIF Returns Scored by the CADE 2 Computer of the IRS.
The following types of returns are computer scored under the DIF System:
a. Individual,
b. Corporation,
c. S Corporation,
d. Partnership,
e. Fiduciary.
Call us today to have the very best chance for a tax audit defense. 1-866-700-1040.
IRS Tax Audit – Former IRS Agents, Managers – Essex, Morris, Bergen, Passaic, Union – New Jersey – Tax Audit Representation
by Fresh Start Tax | Dec 23, 2012 | Expatriate Tax
Expatriation Problems – Tax & IRS Problems – Attorneys, Former IRS
We are comprised of IRS Tax Lawyers, Board Certified Tax Attorneys, CPA’s, Former IRS Agents with over 60 years of combined IRS experience.
Call us for a no cost consultation if you have any Tax or IRS problems.
Expatriation Tax
The expatriation tax provisions under Internal Revenue Code (IRC) sections 877 and 877A apply to US citizens who have renounced their citizenship and long-term residents (as defined in IRC 877(e)) who have ended their US resident status for federal tax purposes. Different rules apply according to the date upon which you expatriated.
Definition – What is a Expatriate
In its broadest sense, an expatriate is any person living in a different country from where he is a citizen. In common usage, the term is often used in the context of professionals sent abroad by their companies, as opposed to locally hired staff.
There is no set definition and usage does vary depending on context and individual preferences and prejudices.” per Wikipedia”
Have not filed an Income Tax Return(s)
Among the various new requirements contained in IRC 877 and 877A, individuals that renounced their US citizenship or terminated their long-term resident status for tax purposes after June 3, 2004 are required to certify to the IRS that they have satisfied all federal tax requirements for the 5 years prior to expatriation.
If all federal tax requirements have not been satisfied for the 5 years prior to expatriation, even if the individual does not meet the monetary thresholds in IRC 877 or 877A, the individual will be subject to the IRC 877 and 877A expatriation tax provisions.
Individuals that have expatriated should file all tax returns that are due, regardless of whether or not full payment can be made with the return.
Call us today to hear more about your individual situation. 1-866-700-1040.
Depending on an individual’s tax circumstances, a taxpayer filing late may qualify for a payment plan.
All payment plans will require continued compliance with all filing and payment responsibilities after the plan is approved.
Expatriation on or after June 16, 2008
If you expatriated after June 16, 2008, the new IRC 877A expatriation rules apply to you if any of the following statements apply.
1. Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than a specified amount that is adjusted for inflation ($145,000 for 2009 and 2010, $147,000 for 2011, and $151,000 for 2012).
2. The taxpayers net worth is $2 million or more on the date of your expatriation or termination of residency,
3. You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency.
Relinquishing citizenship
IRC 877A(g)(4) provides that a citizen will be treated as relinquishing his or her U.S. citizenship on the earliest of four possible dates:
1. the date the individual renounces his or her U.S. nationality before a diplomatic or consular officer of the U.S., provided the renunciation is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the U.S. Department of State,
2. the date the individual furnishes to the U.S. Department of State a signed statement of voluntary relinquishment of U.S. nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)), provided the voluntary relinquishmentt is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the U.S. Department of State,
3. the date the U.S. Department of State issues to the individual a certificate of loss of nationality or,
4. the date a U.S. court cancels a naturalized citizen’s certificate of naturalization.
Expatriation Problems – Tax & IRS Problems – Attorneys, Former IRS
Call us today for a no cost professional tax consultation. 1-866-700-1040
by Fresh Start Tax | Dec 22, 2012 | Tax Help
Foreign Trusts – IRS Tax Help – Filing & Representation
Foreign Trust Reporting
Form 3520-A reporting information on Foreign Trust activities is required to be filed by the 15th day of the third month following the end of the trust’s tax year.
Form 3520-A for a foreign trust with a tax year ending December 31, 2011 is due on March 15, 2012.
Each United States persons treated as an owner of the Foreign Trust is responsible for ensuring that the foreign trust files the Form 3520-A and that the trust annually furnishes copies of the Foreign Grantor Trust Owner Statement and the Foreign Grantor Trust Beneficiary Statement to the U.S. owners and U.S. beneficiaries.
Extensions of time to file Foreign Trusts – Form 2758
If an extension of time to file is needed, a Form 2758, Application for Extension of Time to File Certain Excise, Income, Information, and Other Returns, must be filed with the IRS by the due date of Form 3520-A in order for it to be considered for approval.
Employer Id Numbers – A mandatory Requirement
Every foreign trust is required to have its own Employer Identification Number (EIN) to place in Part 1, Line 1b of Form 3520-A.
Obtaining a EIN
You can obtain an EIN by filing Form SS-4, Application for Employer Identification Number, with the IRS.
To receive an EIN by telephone, complete Form SS-4, then:
1. Call the Tele-TIN unit at 267-941-1099 (not toll free).
2. Forms SS-4, 3520-A and 2758 are to be mailed to the following address. Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409
In addition, a filing requirement may exist for Form 3520 “Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts”.
Foreign Trusts – IRS Tax Help – Filing & Representation
by Fresh Start Tax | Dec 22, 2012 | Tax Lien
Tax Lien on your House and You need to Sell – Get Tax Advice on Federal Tax Liens
We are comprised of Attorneys, CPA’s and Former IRS Agents who can assist you in getting your Federal Tax Lien released is you are trying to sell your house.
Call us today and we can review your case and instruct you on the cheapest and fastest way to remove your Federal Tax Lien.
So if you have a Federal Tax Lien Tax on your house and your and to need to sell call us right now and get the information you need. 1-866-700-1040.
There are several way to remove a Federal Tax Lien whether you can pay the IRS in full or whether you cannot pay the IRS in full.
You will find the comprehensive list below.
If you do not have the money to full pay the IRS and you can get or have a contact on your house you can ask for a Application of Discharge of the Federal Tax Lien.
The Application if Discharge
The Application for Certificate of Discharge of Property from Federal Tax Lien is found on Form 14135.
The application will ask for several documents relative for the IRS to make a decision to release the Federal Tax Lien on the said property. The will ask for a closing statement, appraisal, pay off amounts ……etc. You can find this form on our web site
We have very affordable fees to handle this process for you.
Other ways to get the Federal Tax Liens Released.
You want to make sure you truly owe the tax and that the assessed tax is the correct amount. Do not assume that what the IRS says you owe is correct.
Make sure to compare your tax records with the actual IRS notice. If you did not file your own tax return, the IRS may have filed a substitute for return, a SFR.
Generally, the amount the IRS assesses is much higher because they only give you the standard deductions. When this happens, complete a correct tax return and send it to:
IRS
Fresno Campus ASFR
Unit Stop 81304
PO Box 24015
Fresno, California 93779
This tax unit of the IRS processes the all SRF tax returns now filed by the taxpayer. In the filing of the new tax return, send a cover letter asking for a “Reconsideration”.
This could take up to 3-5 months, so be very patient.
You can pay the tax in full as soon as possible.
This is the quickest way to release the Federal Tax Lien. If you pay with a cashier’s check, the IRS will immediately release the Federal Tax Lien if you walk into a local office.
Make sure you get a copy of the lien release and find out when the IRS will send a copy to your local courthouse. You will also want to check with the credit agencies within 30 days to make sure they posted the satisfaction of release on your credit report.
You can file an Offer in Compromise under Doubt as to Collect ability. Pay off the terms of the Offer in Compromise and the IRS will release the Federal Tax Lien once the Offer is paid in full and all the terms are fully met.
You can find out if the statute of limitations has expired on the tax years involved. The IRS has a 10 year period of time in which they must collect the taxes.
The 10 year period starts when the IRS makes on assessment on the IRS computer. This is usually 6 weeks after the returns are filed. If the statute period has expired, the lien is automatically released by statute, but a release will not be sent out by the IRS. You will have to formally ask them for a copy of the release.
If you want a hard copy of the release of federal tax lien after the statute has expired, fax your request to:
IRS Centralized Lien Releases
Fax # 859-669-3805
Another option is to apply for a Surety Bond.
The cost of the bond is very expensive, but the IRS will release the Federal Tax Lien once the bond is given to them. A bond is usually as much as the payoff of the federal tax lien.
If there are special circumstances that would cause a hardship because of the filing of the Federal Tax Lien, let the IRS know of the situation. Hardship situations can change the circumstances of most cases. The IRS will give due consideration for certain conditions.
You can contact the Taxpayer’s Advocates Office if you believe there is something wrong with the filing and you want the IRS to look into the situation. The Taxpayer’s Advocates Office is there for you. Go to IRS.gov for the nearest office.
9. If you realized you made a mistake on your own tax return and the liability is incorrect, file an amended tax return so the IRS can correct the issuance of the Federal Tax Lien.
Get payoff amounts for your Federal Tax Liens
Call the IRS at 1-800-913-6050 to get a payoff amount for your tax debt.
You can also go to the nearest IRS office or contact the IRS officer assigned to your case to get your payoff amount. If the amount from the sale of your property is enough to pay off your tax liability, the IRS will not approve a discharge.
Tax Lien on your House and You Need to Sell – Get Tax Advice on Federal Tax Liens
