by Fresh Start Tax | Oct 30, 2013 | Back Taxes
How to File Back Tax Returns and Settle with the IRS
Yes, you can file all your back tax returns and settle with the IRS all at one time.
There is a process and system.
Being Former IRS agents, managers and IRS tax instructors we know the systems and process.
Millions of taxpayers have not filed back tax returns there is an easy way to get back into the system and settle your case with the Internal Revenue Service.
Do not let fear control the situation, you can move through this process by using former IRS agents, managers and tax instructors who know the system to get you permanent tax relief.
How to File Back Tax Returns (if you have your tax records )
If you have all your back tax documents just go ahead and file all back tax returns at one time with the Internal Revenue Service. There is nothing wrong with putting them all in the same envelope in forwarding to the service center closest to your location.
How the file back tax returns ( if you have no tax records)
If you do not have your back tax records or have scattered records you should know that the Internal Revenue Service keeps on their computer system the last seven years worth of income documents they have received from third parties.
These documents include W-2s, 1099s, and reports from other third parties showing the income you have received through them. Through the process of tax reconstruction, being former IRS agents we can reconstruct your back tax returns. We simply will average your past expenses and come up with the duplication or approximation of your back tax returns. This is a very simple process and we have internal forms that can help you through this.
If you do not file your back tax return IRS can file for you
Many people are unaware that under 6020 B of the Internal Revenue Code, IRS can prepare your back tax returns. It is not in your best interest for this to happen.
IRS will give you no deductions, no expenses only figure out raw income with the standard deduction, you will pay the highest amount allowed by law. If IRS’ has already done this to you understand that you can file for audit reconsideration.
The General Process of Settlement
In all cases in which monies are owed to the Internal Revenue Service, the IRS will want a current financial statement. You will have to complete tax form 433-F, 433-A depending where your case is within the IRS system.
The Internal Revenue Service will then analyze your current financial statement and apply the national standardized expenses along with that and come up with a proposed way of settling your case.
IRS settlements can be in the form of your case being currently not collectible, or economic tax hardship. It could be the IRS will insist on a monthly installment or payment arrangement, or the IRS will let you know that your suitable candidate for an offer in compromise or a tax debt settlement.
IRS accepts 38% of all offers and compromised filed
Settle with the IRS
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.IRS consider your unique set of facts and circumstances:
1. Ability to pay;
2. Income;
3. Expenses; and
4. Asset equity.
The 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.
If you hire a tax professional to help you file an offer, be sure to check his or her
qualifications.
Are you eligible to settle with the IRS
Before we 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.
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:
1. Form 433-A (OIC) (individuals) or
2. 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;
- $150 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Select a payment option to settle with the IRS
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:
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. See your application package for details.
Understand the process of settlements
While your offer is being evaluated:
Your non-refundable payments and fees will be applied to the tax liability. designate
- 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.
Contact us today to learn more about filing your back tax returns and settling with the IRS all at one time. We are a national tax firm that specializes in all IRS and state tax matters, problems and resolutions. We are A+ rated by the Better Business Bureau.
by Fresh Start Tax | Oct 29, 2013 | Tax Help
IRS Levy on Checking, Saving Account – How to get Levy Release, Former IRS Get Immediate Releases, Free Consult
The Internal Revenue Service issues close to 2.8 million IRS levies on checking accounts, savings accounts and on wages of taxpayers.
If you did not respond to the IRS final notice the Internal Revenue Service is obligated to send you a nasty gram by seizing or garnishing your checking, savings or your payroll check.
The process of getting your levy release is very simple.
The Internal Revenue Service does not want to levy your paycheck, your checking account, or your savings account. They are simply complying with their internal revenue manual in following up on their last notice which indicated that they would send enforcement action your way if you did not comply with the notice or letter.
The IRS levy is the common enforcement tool and it works.
So get started getting you money back
Simply call the telephone number on your letter and be prepared to give IRS a current financial statement.
That will be in form 433-F. You can find on our website.
Be prepared to send IRS all the documentation to support the financial statement including banks statements, copies of pay stubs and copies of all expenses.
The Internal Revenue Service will interpret your expenses against the national standard expenses and come up with one of three methods to go ahead and release your levy.
IRS will either place you into an economic tax hardship called currently uncollectible, enter you into a monthly or installment plan, or let you know you’re a suitable candidate for an offer in compromise.
Call us today for free initial consultation and learn more and get fast and affordable tax relief on IRS levies on checking, savings and wage garnishment
What is a IRS Levy
A levy is a legal seizure of your property to satisfy a tax debt.
Levies are different from liens.
A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.
IRS can seize and sell property that you hold such as your car, boat, or house, or
they could levy property that is yours but is held by someone else such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions.
IRS levies only after these three requirements are met:
1. IRS assessed the tax and sent you a Notice and Demand for Payment;
2. You neglected or refused to pay the tax; and
3. IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy.
IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.
Please note: if we levy your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.
A levy release
A levy release does not mean you are exempt from paying the balance.
The IRS will work with you to establish payment plans or take other steps to help you pay off the balance. To help ensure quick action, please have the fax number available for the bank or employer office that is processing the levy.
Employers
Employers generally have at least one full pay period after receiving a Form 668-W, Notice of Levy on Wages, Salary and Other Income before they are required to send any funds from their employee’s wages.
Employers should encourage your employees that have a levy placed on their wages to contact the IRS as soon as possible to discuss a release of levy and resolution of their tax liability.
You may ask an IRS manager to review your case, or you may request a Collection Due Process hearing with the Office of Appeals by filing a request for a Collection Due Process hearing with the IRS office listed on your notice.
You must file your request within 30 days of the date on your notice.
Some of the issues you may discuss include:
1. You paid all you owed before we sent the levy notice,
2. We assessed the tax and sent the levy notice when you were in bankruptcy, and subject to the automatic stay during bankruptcy,
3.IRS made a procedural error in an assessment,
4. The time to collect the tax (called the statute of limitations) expired before we sent the levy notice,
5. You did not have an opportunity to dispute the assessed liability,
6. You wish to discuss the collection options, or
7. You wish to make a spousal defense.
Levy – Checking, Saving Account – How to get IRS Levy Release – Miami, Ft.Lauderdale, Tampa Jacksonville – Florida
by Fresh Start Tax | Oct 29, 2013 | Tax Help
How far back can the IRS go to audit my return?
Answer – Generally, the IRS can include returns filed within the last three years in an audit.
However, additional years can be added if a substantial error is identified.
Generally, if a substantial error is identified, the IRS will not go back more than the last six years.
The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years.
If an audit is for an older year, you may be requested to extend the statute of limitations for assessment of your tax return. The statute of limitations limits the time allowed to assess additional tax. The statute of limitations is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds.
If the audit is not resolved and the statute of limitations date is nearing, you may be asked to extend the statute of limitations date. This will allow you additional time to provide further documentation to support your position, request an appeal if you do not agree with the audit results, or to claim a tax refund or credit.
It also allows the IRS time to complete the audit and provides time to process the audit results.
You do not have to agree to extend the statute of limitations date.
However, if you do not agree, the examiner will be forced to make a determination based upon the information they currently have.
Therefore, the examiner may not be able to consider additional adjustments, such as expenses, that could lower the amount of tax due.
IRS Mail Correspondence Audits
The Internal Revenue Service (IRS) estimates that $235 billion of the $450 billion in taxes that should have been reported and paid on time but were not is caused by individuals under reporting their income tax liabilities.
An audit is one of the primary enforcement tools the IRS uses to address the noncompliance that contributes to the Tax Gap, and the cornerstone of the IRS audit efforts is the correspondence audit program.
In Fiscal Years 2008 through 2012, IRS statistics show it conducted almost 5.7 million correspondence audits and recommended approximately $40.4 billion in additional taxes.
In Fiscal Years 2008 through 2012, IRS statistics show that it conducted almost 5.7 million correspondence audits and, in the process, recommended approximately $40.4 billion in additional taxes.
Have questions about IRS tax audits, call Fresh Start Tax LLC the specialty firm.
Audited by the IRS – How far Back can they Go – Former IRS agent
by Fresh Start Tax | Oct 29, 2013 | IRS Tax Audit
The Internal Revenue Service (IRS) estimates that $235 billion of the $450 billion in taxes that should have been reported and paid on time but were not is caused by individuals underreporting their income tax liabilities.
An audit is one of the primary enforcement tools the IRS uses to address the noncompliance that contributes to the Tax Gap, and the cornerstone of the IRS audit efforts is the correspondence audit program.
In Fiscal Years 2008 through 2012, IRS statistics show it conducted almost 5.7 million correspondence audits and recommended approximately $40.4 billion in additional taxes.
In Fiscal Years 2008 through 2012, IRS statistics show that it conducted almost 5.7 million correspondence audits and, in the process, recommended approximately $40.4 billion in additional taxes.
This represents about 77 percent of all audits the IRS conducted of individual income tax returns and about 56 percent of the estimated $72.4 billion in recommended additional taxes resulting from those audits.
The responsibility for conducting correspondence audits rests largely with the IRS’s Small Business/Self‑Employed (SB/SE) Division, which handles complex individual tax returns, and its Wage and Investment Division, which handles simple tax returns filed by individuals reporting wages, interest, dividends, and other investment income.
In contrast to the more detailed and lengthy face-to-face audit at an IRS office or in the field at a taxpayer’s place of business, the correspondence audit process is less intrusive, more automated, and conducted by examiners who are trained to deal with less complex tax issues.
Because of its automated features and less complex tax issues, the correspondence audit process enables the IRS to reach more taxpayers at a lower cost.
The IRS currently conducts correspondence audits in approximately 37 program areas.
Regardless of the program, the audit process typically begins with the IRS mailing a computer‑generated letter from one of its campuses to a taxpayer.
The letter outlines the examination process, identifies;
- one or more items on the tax return being questioned, and
- requests supporting information to resolve the questionable items.
Once the requested information is returned, examiners review it to determine whether it resolves the questions.
If the questions can be sufficiently answered by the information provided, the audit is generally closed without any changes to the tax; if not, the taxpayer is sent a letter requesting more information or indicating a recommended change to the tax.
The taxpayer at this point can do one of the following:
· Agree with the examiner.
· Provide the examiner with clarifying information.
· Appeal the decision to the IRS’s Office of Appeals.
In instances where the taxpayer does not respond to IRS letters, the examiner’s recommended tax changes are assessed by default and the taxpayer will generally have to petition the court system to contest the assessment.
If you need help regarding an IRS mail audit situation contact us today and you can speak directly to tax attorneys, certified Public accounts, former IRS agents managers and tax instructors.
We are a nationwide tax firm with an A+ rating by the Better Business Bureau and have been in practice since 1982.
IRS Mail Audits Facts – Representation by Former IRS – Audited by the IRS
by Fresh Start Tax | Oct 24, 2013 | IRS Tax Audit
IRS Process for a Tax Audit Selection
The Internal Revenue Service examines (audits) tax returns to verify that the tax reported on the tax return is correct.
There is a very specific process to make sure tax returns that need to be audited get to specific IRS audit agents.They will either go to the office auditor or to the IRS revenue Agent.
Agents are taken from various local offices and sent to the Service Center for this audit grading detail. These IRS audit agents spend a week to two weeks on this detail. They come from various offices.
Each tax return that is filed with the Internal Revenue Service is graded by the IRS Cade 2 computer.
Tax Returns are selected for examination on the basis of the Discriminant Function System (DIF) score.
Each return is given a (DIF) score by a complex computer program based on past information obtained by the IRS from specific examination programs.
The higher the score, the more likely that the tax return will be subject to audit.
The specifics of the DIF score program is not public, but certain items appear to cause a return to be selected for examination, such as participating in a tax shelter, large charitable contributions, home office deductions, casualty losses, large travel and entertainment expenses, and Offshore,FBAR banking issues.
These are the tax deductions most likely subject to abuse by taxpayers. IRS knows exactly where to look.
Other returns are selected under the Unreported Income DIF (UIDIF) score.
This type of computer selection is based on the potential of the IRS finding unreported income on this type of selected tax return. The specifics of this method of selecting a tax return for unreported income are not public, but certain information appear to cause a return to be selected for examination.
Such information would include the occupation of the taxpayer and the type of business activity. potential exists as to omitted income.
After the tax return has been has been selected under the DIF and UIDIF program, the tax returns are manually screened by an IRS employee known as a “audit classifier “ in the Classification Section of an IRS Service Center.
This IRS tax audit classifier is usually an experienced office auditor or revenue agent.
When the auditor arrives to the IRS campus or Service Center they go to an appointed desk to process tax returns for audit consideration. There are two piles of tax returns that await.
One pile is for office audits ( simpler cases ) the other pile for revenue agents for field audits.( complex cases, businesses, partnerships, corporations )
For office audits, the selecting agent at the service center will circle the issues that the IRS auditor needs to address, if the case is going to a revenue agent (field agent) they will point out the one issue that is sticking out like a sore thumb. A lot of the cases that go to field agents are the issues of gross receipts. From there the cases go out to each local office.
Each IRS audit agent receiving the case can also chose other issues.
They also will review any attachments to the return and consider other data that a computer cannot detect.
Tax Return Selection – Other Information
Some tax returns are selected at random as part of tax compliance studies to update and reformulate its basis for audit selection formulas (DIF score) and is called the TCMP (taxpayer compliance measurement program).
This is in-depth audit where every item on the tax return is examined and the examiner must fill out an extensive questionnaire concerning each audit and the results. Based on these findings, the audit selection formula is adjusted to make it better in selecting tax returns for examination.
Still other tax returns are selected because payer reports of income, such as W-2’s or Form 1099’s do not mach the income reported on the tax return.
Some returns are selected based on information obtained by the IRS through efforts to identify promoters and participants of abusive tax avoidance transactions.
Examples include information received from “John Doe” summonses issued to credit card companies and businesses and participant lists from promoters ordered by the courts to be turned over to the IRS. From this information, the IRS will perform third party requests to obtain additional information before starting the audit.
This type of audit will include the disclosure of foreign bank accounts and other sources of foreign income.
Other 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.
If a partnership is examined, the partners will also be examined if the partnership is adjusted or the IRS wants to determine whether the partners are allowed the flow-thru losses. If a corporation is examined, the shareholders would also be examined to determine whether they received any distributions from the corporation.
Still other tax returns may be selected for examination based on newspaper articles, police arrests and grand jury investigations.
Newspaper articles might include information on an individual who embezzled funds from a client.
The embezzled funds are taxable income and more likely these funds were not included as income on the tax return.
A person may be arrested for narcotics and the police find cash on him.
Many times a state agency may report to the Internal Revenue Service.
This cash more likely than not represents omitted income. Finally, a person may be selected for audit because of an informant.
There is a federal program known as the IRS Whistle blower Office which pays money to people who blow the whistle on persons who fail to pay the tax that they owe.
If the IRS uses information provided by the whistle blower, it can award the whistle blower up to 30 percent of the additional tax, penalty and other amounts it collects. Thus, a person could be audited based on the information provided by a business acquaintance, relative or even your former spouse!
If you are to undergo an IRS tax audit and need help contact us today.
We are a full service tax firm that specializes in IRS tax audits.
We are comprised of tax attorneys, certified public accountants, and former IRS agents.
Call us for free initial tax consultation.
