by Jim Magary | Nov 16, 2015 | Tax Help
Many taxpayers who have not filed to file multiple years back tax returns often come in my office and ask “how far back do I have to file if they have not filed for some while? ”
Many of these taxpayers have a fear of filing back tax returns thinking the IRS’s is going come out and put them in jail.
The fact is, they already know you have not filed your tax returns and because of heavy inventories they have not had time to work your case.
But IRS will at some time knock on your door or send you a letter.The letter will be the CP59.
As a former IRS agent and teaching instructor I have worked hundreds if not thousands of cases both as a former agent and being in private practice.
You’ll hear advice from all sorts of tax professionals on the issue of “how far back should I file my on file for back tax years.”
The good news is, as a general rule you do not have to go back that far.
As a matter of fact IRS has a policy statement regarding delinquent tax returns.
1.2.14.1.18 (08-04-2006)
Policy Statement 5-133
1. Delinquent returns—enforcement of filing requirements
2. Taxpayers failing to file tax returns will be requested to prepare and file all such returns except in instances where there is an indication that the taxpayer’s failure to file the required return or returns was willful or if there is any other indication of fraud.
All delinquent returns submitted by a taxpayer, whether upon his/her own initiative or at the request of a Service representative, will be accepted. However, if indications of wilfulness or fraud exist, the special procedures for handling such returns must be followed.
3. Where it is determined that required returns have not been filed, the extent to which compliance for prior years will be enforced will be determined by reference to factors ensuring compliance and evenhanded administration of staffing and other Service resources.
4. Factors to be taken into account include, but are not limited to: prior history of noncompliance, existence of income from illegal sources, effect upon voluntary compliance, anticipated revenue, and collectibility, in relation to the time and effort required to determine tax due.
Consideration will also be given any special circumstances existing in the case of a particular taxpayer, class of taxpayer, or industry, or which may be peculiar to the class of tax involved.
5. Normally, application of the above criteria will result in enforcement of delinquency procedures for not more than six (6) years.
Enforcement beyond such period will not be undertaken without prior managerial approval.
Also, if delinquency procedures are not to be enforced for the full six-year period of delinquency, prior managerial approval must be secured.
Some Bad News
The bad news is many taxpayers who had withholding taken out have lost a refund checks. You can file and claim refunds however for the last three years.
Also if you not filed your W-2s and tax returns you can lose valuable Social Security credit.
What happens if you have lost your tax records
If you have back tax returns to prepare IRS has income transcripts available to prepare your tax returns. The IRS keeps all back W-2s and 1099’s on record for the past seven years. For those of you who need to file back tax returns you can simply call us and we can help reconstruct your tax returns from little or no records.
As former IRS agents we have learned to prepare tax returns under reconstructive methods.
Why does IRS only do back 6 years?
The answer is very simple,manpower.
As a general rule, the only time IRS will go past six years is if a person has significant assets or can pay all the back years. In those types of cases IRS may ask you to file all your tax returns. But as a general rule, there are so many outstanding cases, so much money to be collected and so many back tax returns that have to be filed, the IRS has put boundaries on past-due tax years is six.
What Happens if you Owe Back Taxes
Do not be afraid if you owe back taxes.
The Internal Revenue Service will simply take a financial statement on form 433F or 433A and make a determination how they will want the back taxes paid.
As a general rule, after IRS reviews your financial statement they will either place your case into a currently not collectible status if your expenses exceed your income, ask you to make a monthly installment payment after they apply the national standards or they may suggest that you consider an offer in compromise to settle your case.
Will IRS go After me criminally If I do not File
The general rule of thumb is to contact IRS before IRS knocks on the door.
Once you have come forth on a voluntary basis it is extremely doubtful that IRS will ever go after any taxpayer criminally unless there is fraud involved.
Remember the IRS wants voluntary compliance and our tax system is based on that principle.
Unless unique situations exist do not be stuck in criminal fear. In the entire United States, and abroad, the IRS as a general rule convicts a total of 3300 taxpayers for a variety of criminal charges per year.
Therefore the best advice we give taxpayers is to contact IRS before they contact you.
Call us today for a free tax consult.
by Jim Magary | Nov 10, 2015 | Tax Help
An “Affordable Professional Tax Firm” that specializes in IRS and state tax resolution.
We are former IRS Agents & Managers who know the system, since 1982.
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If you owe the Internal Revenue Service back taxes or back tax debt, it only makes sense to hire former IRS agents and managers who know the system inside and out.
We understand all the IRS systems protocols and procedures to get you immediate and permanent IRS tax relief.
We have over 60 years of direct work experience at the Internal Revenue Service in the local, district, and regional tax offices of the IRS.
If you owe back taxes whether it be individual, business/corporate, back payroll taxes contact us today and we can review with you different tax solutions to go ahead and permanently and immediately remedy your problem from the Internal Revenue Service.
It is important to understand, those who will owe back taxes that your current financial statement will usually determine the outcome of your case. Therefore the preparation and the completion of your financial statement is the key to success and negotiation with the IRS is critical. Knowing the system is critical for success on all cases.
Please be advised that the Internal Revenue Service will used the national standardized list of expenses.
The Filing of Past Due or Unfiled IRS Tax Returns
If you have not file tax returns, our former IRS agents can prepare your back tax returns with little or no records and settle your tax debt at all at the same time.
Make sure you file your back tax returns because IRS enjoys the privilege of filing your back tax returns under 6020 B of the code if you fail to file back taxes.
They will file your return to make sure you pay the highest amount allowed by law. If this is happened to you, you can file for an IRS audit reconsideration.
IRS keeps all your income records for seven years. if you need to file a back tax year that have no tax record you can simply pull the IRS income transcript.
You will find on their all income sources reported to Internal Revenue Service. Exceptions of course if you are self-employed with no third-party reporting to the Internal Revenue Service.
The IRS Required Financials Statements
If you owe back taxes and as a general rule your financial statement will determine how IRS will close your settle your case.
If you owe individual, business or payroll taxes, we will take a current financial statement contact the IRS and work out an affordable individual or business payment plan and/or file and settle the tax if applicable.
Your last 3 to 6 months of your financial condition is IRS’s determining factor on your case resolution.
IRS has the option to determine the period of time and wish they can review your financial records. 3 to 6 months is generally the time periods they choose and is a good reflection of your ability to pay or inability not to pay.
As a general rule, when taxpayers or businesses owe back individual or payroll taxes, IRS closes case out by putting them into hardships, asking for payments or the settlement through the offer in compromise.
These are the 3 most common ways that IRS close cases off their enforcement computer.
1. 40% of all taxpayers that owe back taxes to the IRS get put in the tax hardships,
2. 6.5 million people get put into payment plans and ,
3. 40,000 people get offers in compromise accepted.
Call us today for a free initial tax consultation.
We are the fast, friendly, and affordable professional tax firm.
End IRS Tax Problems + IRS Levies Garnishment + Audits + Payroll Tax Debt + Past Due Back Tax Returns + Settlements + Tax Liens + Payment Options + Mountain View, Morgan Hill, Newark, Palo Alto, Redwood City
by Jim Magary | Nov 10, 2015 | Tax Help
Independent Contractor vs. Employee
For federal employment tax purposes, the usual common law rules are applicable to determine if a worker is an independent contractor or an employee.
Under the common law, you must examine the relationship between the worker and the business.
You should consider all evidence of the degree of control and independence in this relationship.
The facts that provide this evidence fall into three categories
1.Behavioral Control,
2.Financial Control and,
3. the Relationship of the Parties.
Behavioral Control covers facts that show if the business has a right to direct and control what work is accomplished and how the work is done, through instructions, training or other means.
Financial Control covers facts that show if the business has a right to direct or control the financial and business aspects of the worker’s job.
This includes:
• The extent to which the worker has unreimbursed business expenses
• The extent of the worker’s investment in the facilities or tools used in performing services
• The extent to which the worker makes his or her services available to the relevant market
• How the business pays the worker, and
• The extent to which the worker can realize a profit or incur a loss
Relationship of the Parties covers facts that show the type of relationship the parties had.
This includes:
• Written contracts describing the relationship the parties intended to create
• Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay
• The permanency of the relationship, and
• The extent to which services performed by the worker are a key aspect of the regular business of the company
For more information, refer to Publication 15-A (PDF), Employer’s Supplemental Tax Guide, or Publication 1779 (PDF), Independent Contractor or Employee.
If you want the IRS to determine if a specific individual is an independent contractor or an employee, file Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
For information on eligibility for a voluntary program to reclassify your workers as employees with partial relief from federal employment taxes, visit Voluntary Classification Settlement Program (VCSP) on IRS.gov.
by Jim Magary | Nov 10, 2015 | Tax Help
I am a former IRS revenue officer and teaching instructor of the IRS offer in compromise, tax debt settlement program.
I know the system inside and out I will let you know if you qualify to settle or you reduce your IRS tax debt. Free Consults
We are AFFORDABLE IRS specialist experts for the Offer in Compromise for those wishing to settle their IRS tax debt.
We are composed of former IRS agents and managers who were former employees of the Internal Revenue Service.
We have over 60 years of direct work experience in the local, district, and regional tax offices of the Internal Revenue Service. We are true IRS experts who understand the IRS collection system.
Due to the IRS new fresh start initiative set out by the Internal Revenue Service many more taxpayers are eligible for the tax debt settlement.
Before a taxpayer or client thinks about the filing of an offer in compromise they should check out the IRS offer in compromise pre-qualifier tool first.
You can walk to the pre-qualifier tool on our site or call us today to learn more about it.
We will not file an offer in compromise or accept any fee for any client unless we know they are qualified for the program.
So if we send in your offer in compromise, you probably do have a pretty good chance of getting it accepted.
It is important to know you will that all back tax returns will have to be filed, up-to-date and current on the IRS computer system before the Internal Revenue Service will accept an offer in compromise.
IRS Tax Statistics for the OIC
Last year there were 78,000 offers in compromise were filed with the Internal Revenue Service, 38% of those were accepted for an average of $6500 per case.
Keep in mind this is a national average and varies from case to case is completely dependent on your current financial statement.
About 20% of all offers in compromise go to the Appellate Division for settlement. Most offers that are accepted by the Internal Revenue Service are done through true tax professional firms.
You should know that not everyone is an offer in compromise candidate to settle their tax debt.
Making sure you are eligible for the OIC.
Before IRS 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.
Submitting your offer or OIC to the Internal Revenue Service.
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 must and will include:
• Form 433-A (OIC) (individuals) or 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;
• $186 application fee (non-refundable); and
• Initial payment (non-refundable) for each Form 656.
Selecting a payment option for the offer in compromise program through the IRS:
Your initial payment will vary based on your offer and the payment option you choose:
1• IRS 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.
2• IRS 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, you must continue to pay monthly until it is paid in full.
While your offer in compromise is being evaluated by the IRS you should know;
• Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
• 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.
As a side note, taxpayers should be aware that all tax returns must be filed before they can have an approved offer in compromise.
If you submitted an offer in compromise and IRS finds your tax returns are not file they will return the offer to you.
We could prepare all back returns for you with little or no records.
Call us today to find out more how you can settle your tax debt for pennies on the dollar. We are a true professional tax firm.
IRS Offer in Compromise + Tax Debt Settlements + Settle & Reduce IRS Tax Debt + Unfiled Back Tax Returns + Former IRS
by Jim Magary | Nov 10, 2015 | Tax Help
We are an “AFFORDABLE” PROFESSIONAL ” Expert IRS Tax Firm.
24 hours after receiving your current financial statement we can get an IRS Tax Levy, IRS Bank Levy, IRS Wage Garnishment levy released and your case closed by the IRS.
We have worked out of the local, district, and regional tax offices of the Internal Revenue Service.
We have over 65 years of direct IRS work experience.
We are composed of tax attorneys, CPAs and former IRS & State agents who know the system inside and out. We have worked as IRS supervisors, managers and teaching instructors.
Because of our years of experience working at Internal Revenue Service we know the system to get immediate releases of an IRS tax levy, IRS bank levy or IRS wage garnishment. Not only can we get your tax levy released or removed we can also settle your case at the same time.
There is a very specific process to get these levees released and we can save you time and money because of our streamlined process of levy release.
All work is done in-house. We are a full-service professional IRS and State tax firm.
IRS Tax Levies: Bank Levies & Wage Garnishments
As a general rule, if taxpayers do not respond to final notices that are sent by IRS, the Internal Revenue Service is required to send out a tax levy.
It is important to respond to all IRS requests by mail because IRS’s computer will do so.
As a general rule, no human hand touches IRS mail, it is all set out systemically by the IRS Cade 2 computer. It sends out close to 150 million pieces of mail a year.
IRS generally sends out five billing notices and then the important 1058 that lets you know an IRS tax levy is to follow.
IRS has the right to shorten the period of time depending on your tax situation and history.If you had compliance issues in the past expect IRS to go right to a final notice.
IRS Billing Notices
The Internal Revenue Service sends out notices out notices on five-week billing cycles. Many times in the last notice IRS sends out a certified or registered mail.
To find out where you are in the system, look on the top right corner, it’ll let you know a code number and experienced tax professional can let you know where you are in the IRS billing system.
As a general rule, IRS sends out close to 1.9 million tax levies/garnishments each year.
There is a difference be between an IRS federal tax levy in the federal tax lien. A federal tax levy is a seizure a federal tax lien is a document to get placed at your courthouse.
A federal tax lien can stay on public court records for 10 years. they are generally released by full payment, statute expiration or accepted offer in compromise.
The IRS filed 700,000 federal tax liens last year. If at all possible you want to stop the filing of the federal tax lien because it will certainly room and destroy your credit.
To get your IRS tax levy or wage garnishment released it will be necessary for you to give IRS a current documented financial statement along with making sure all your tax returns are filed in on IRS’s computer system.
It will be necessary for you to fully complete an IRS form 433F (an IRS financial statement) that you can find on our website along with supplying IRS with bank statements, pay stubs and copy of all monthly expenses.
The Internal Revenue Service does a thorough review of your current financial statement before closing your case. The internal revenue service will compare your expenses against that of the national, geographical, and localized standards that IRS has on their website. you can also find the national standards on our homepage, click on the tabs and says IRS forms, and go to the national standards.
When you call our office we were thoroughly review your case, give you a free tax assessment and let you know the necessary steps to completely remove your IRS problem including releasing an IRS tax levy, or wage levy garnishment and settling your case all at the same time.
IRS will generally close your case by putting it into a tax hardship or asking for a monthly payment plan.
40% of all cases are put in the tax hardship and 6.5 million cases are put into monthly installment agreements.
Please keep in mind that your current financial statement will dictate how IRS will close case.
IRS Back Taxes + Offer in Compromise, IRS Tax Settlements, Pennies on a Dollar Settlements
Last year IRS accepted 38,000 offers in compromise for average settlement of $6500 per case. Please keep in mind that is only an average.
Unfiled Tax Returns
Please keep in mind if you have unfiled or back to tax returns, the IRS has the option of not releasing a federal tax levy because you are not in full compliance with tax laws. IRS also has the right to prepare your tax return under 6020 B of the Internal Revenue Code.
FST can prepare any and all back tax returns with little or no records. we are experts in tax reconstruction because of methods learned at the Internal Revenue Service.
If you do not prepare your back tax returns, the IRS can prepare them and make sure you pay the most amount allowed by law under code section 6020B.
If you’ve lost your tax records we can reconstruct them through methods we have learned at the Internal Revenue Service.
Don’t be in fear or panic if you have not filed back tax returns, we can get you back into the system worry free.
Remove IRS Tax Levy NOW + IRS Bank Levy + Wage Garnishment + Settle Back Tax Debt + Unfiled + Past Due Tax Returns + Offer in Compromise
