by Fresh Start Tax | Jun 22, 2016 | Tax Help
We are composed of former IRS agents and managers with over 95 years of direct IRS work experience. Since 1982, A plus Rated.
We have been in practice since 1982. we have worked out of the local Miami and Fort Lauderdale IRS offices as agents, supervisors, and teaching instructors. We know all the inside systems of Internal Revenue Service and we are one of your best sources if you are undergoing an IRS tax audit.
We are true experts and IRS audits and appeals hearings.
Call us today for a free initial tax consultation.
How far back can the IRS go to audit my return?
Generally, the IRS can include returns filed within the last three years in an audit.
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 not resolved, you may be asked to extend the statute of limitations for assessment tax.
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. Extending the statute 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 auditor will be forced to make a determination based upon the information provided.
IRS Tax Audit Experts + Miami, Ft Lauderdale + How Far Back Can IRS Audit
by Fresh Start Tax | Jun 22, 2016 | Tax Help
How Long Does IRS Have To Collect My Tax Debt, Former IRS Agent Explains
The general rule, there is a ten year statute of limitations on IRS collections.
For 90% of all taxpayers the statute of limitation of 10 years will probably be the rule of thumb. But like everything there are exceptions. The only way to officially find out is to pull an IRS transcript.
The main the exceptions to the rule that extend the statute of limitations you will find below.
We have over 65 years of professional IRS work experience and are experts in determining the dates of assessment and the point in time in which IRS will forgive a tax debt.
This 10 year period begins from the date of the assessment.
THE IRS DATE OF ASSESSMENT
It is important to know the date of assessment begins when the IRS accepts your tax return in prices that on their computerized system.
Technically, the assessment is the statutorily required recording of the tax liability.
Section 6203.
Assessment is made by recording the taxpayer’s name, address, and tax liability.
The assessment date is the 23C date or the TC 150 date.
The 23C date is the recording of assessment and other adjustments are made in summary manner on Form 23C and signed by a Service Center officer.
As a general rule, it can be anywhere from five days to six weeks from from the day you actually filed your tax return.
A lot is dependent whether you e-file or send it in manually by snail mail to the Internal Revenue Service.
To find out what your date of assessment is it will be necessary to pull an IRS tax transcript to officially verify the date.
Without an official IRS tax transcript is impossible to determine your assessment date. as clients a fresh start tax we can provide all this necessary information to you and help determine the official date of assessment to find out if the statute of limitations has expired on your IRS tax debt.
Exceptions to the ten-year statute of limitations.
Bankruptcy
The CSED, in a case under the Bankruptcy Code, is suspended while the Service is prohibited by reason of the case from collecting, and for six months thereafter.
Judgment/Litigation
Per IRC 6502(a), a court action brought against the taxpayer prior to the expiration of the collection statute extends the period to collect until the tax liability or judgment against the taxpayer is satisfied or becomes unenforceable.
Suit to Reduce Assessments to Judgment
In order for a suit to reduce the assessments to judgment and suspend the collection period, it must be filed prior to the CSED. The filing of a suit will suspend the collection statute during litigation
Collection Due Process (CDP)
The CSED is suspended from the date the Service receives a timely filed request for a CDP hearing to the date the taxpayer withdraws their request for a CDP hearing or the date the determination from Appeals becomes final, including any court appeals.
If 90 days is not remaining on the statute of limitations when the determination becomes final, the statute of limitations is extended to equal 90 days.
The collection statute is not extended for equivalency hearings.
Offer In Compromise
For offers pending prior to January 1, 2000, the CSED extension was affected by Treasury Regulation § 301.7122–1(f) (1960). Under this regulation the practice of the Service generally was to obtain from the taxpayer a waiver of the CSED for the period the offer in compromise was pending, while any installment of an accepted offer remained unpaid, and for one additional year thereafter.
For offers pending prior to January 1, 2000, a waiver of the CSED cannot extend the CSED beyond either December 31, 2002, or the original CSED, whichever is later, pursuant to section 3461(c)(2) of the IRS Restructuring and Reform Act of 1998 (RRA 98).
For offers pending on or made after December 31, 1999, suspensions of the running of the CSED in the offer in compromise context are governed by statute, specifically by IRC 6331(k)(1) and (3).
Under these provisions, the Service is prohibited from levying, and the CSED is suspended
While an offer is pending with the Service,
For 30 days immediately following rejection of the offer, and
For the period that a timely filed appeal of a rejection is being considered in Appeals.
CSED extensions for the period of time “while any installment remains unpaid” and “for one additional year thereafter” are eliminated.
Installment Agreements – Partial Payment Installment Agreements With Form 900, Tax Collection Waiver
Form 900, Tax Collection Waiver, is only executed in connection with the granting a partial payment installment agreement and only in certain situations.
Waiver Procedures for Partial Payment Installment Agreements. IRS policy dictates that a Form 900 be limited to no more than five years, plus up to one year to account for changes in the agreement. Note: Prior to July 2005, IRS policy permitted CSED extensions in conjunction with all installment agreements.
Effective March 9, 2002, the CSED is suspended during:
The time the proposed installment agreement is pending,
Thirty days following the rejection of a proposed installment agreement,
Thirty days following termination of an installment agreement, and,
Any appeal of the termination or rejection of the installment agreement.
Note:
This change is not retroactive. The suspension of the running of the collection statute is during the time that a levy is prohibited. The CSED is not suspended while an installment agreement is in effect.
Relief From Joint And Several Liability On Joint Returns/Innocent Spouse
Collection by levy or a proceeding in court against a spouse is suspended for the requesting spouse when he or she makes a qualifying request under IRC 6015(b), and/or IRC 6015(c).
Collection is suspended for claims filed under IRC 6015(f) if the liability was unpaid as of December 20, 2006, or the liability did not arise until after December 20, 2006.
The collection period is suspended from the filing of the claim until the earlier of the date a waiver is filed, or until the expiration of the 90 day period for petitioning the Tax Court, or if a Tax Court petition is filed, when the Tax Court decision becomes final, plus, in each instance, 60 days.
If a request for relief is made in response to collection due process procedures, there is also suspension of collection activity and the collection period provided for by IRC 6330(e) for the period during which any administrative hearings, and appeals therein, regarding the levy are pending.
The rules for suspension under IRC 6330 differ from IRC 6015.
In general, the latest suspension of collection and the collection period should control, which may require analyzing the suspension under both IRC 6015 and IRC 6330 where relief from joint and several liability is requested as part of an IRC 6330 hearing.
If the requesting spouse signs a waiver of the restrictions on collection, the suspension of the period of limitations on collection against the requesting spouse will terminate 60 days after the waiver is filed with the Service, limiting the CSED extension to the period from when the claim was filed to the time the waiver was signed, plus 60 days.
A request for reconsideration is not a qualified request for relief for purposes of Treasury Regulation §1.6015-1(h)(5), and does not trigger the restrictions on collection pursuant to section 6015(e)(1)(B) or the suspension of the collection period of limitation under section 6015(e)(2).
Taxpayer Living Outside the U.S.
The period of limitations on collection after assessment is suspended while the taxpayer is outside the United States if the absence is for a continuous period of at least six months per IRC 6503(c) .
To make certain that the Government has an opportunity to collect the tax after the taxpayer’s return, the period does not expire (where the taxpayer has been out of the country for six months or more) until six months after the taxpayer’s return to the country.
As the application of this provision can result in the CSED being suspended for a very long time, policies for the administration of this code section are now established.
We are former IRS agents in teaching instructors and can assist you with any statutory problems you may have on your case.
by Fresh Start Tax | Jun 21, 2016 | Tax Help
We’re the affordable professional local tax firm that are specialists and experts in IRS tax audits and appeals.
We have 205 years of direct tax experience, 95 years of working for the IRS in the local, district and regional offices. We have worked on the Miami, North Miami and Fort Lauderdale tax offices.
Being former IRS agent managers and supervisors in the audit division gives us a unique advantage & can change the result of an IRS tax audit.
We worked as IRS Agents, IRS Instructors and in IRS Management.
We know the settlement techniques and formulas to save your money.
Be worry free, call us today.
It only makes sense to have Former IRS Agents and IRS Tax Audit Managers handle your IRS tax audit and give you the most experienced and successful IRS Tax Audit Help.
IRS audits less than 1% of all taxpayers nationwide.
Facts about IRS Tax Audits:
The IRS audits a total of 1,391,581 tax returns a year.
The IRS field agents complete more than 310,000 audits by office or business visits a year.
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
IRS collected over $10 billion dollars a year from IRS tax audits.
IRS employs over 13,000 IRS auditors.
$5.2 billion dollars are collected through the IRS document matching program.
For truly professional IRS Tax Audit help contact former IRS Agents and Managers.
The IRS Tax Audit Examination Plan
The plan that is used by the IRS is based on long-range coverage planning, and objectives on the resources requested in the Congressional Budget.
From this, there is an established plan where staff years are allocated to all area IRS offices using resource allocation and a prescribed methodology.
Each Area Manager of the IRS is responsible for preparing an area response following instructions from the National Headquarters.
Employee Staffing for the IRS Tax Audit
Staffing is based on the examination priorities that differs from office to office and region to region, front loaded programs set up before hand, historic examination rates adjusted to yield sure ended results and audits that match experience of the personnel.
Each region is excepted to produce tax audits and money from tax audits. IRS is funded thru results.
Why the IRS Audits Tax Returns
a. Front Loaded Programs
Front Loaded programs are those tax audits that IRS DC headquarters has determined are very important and a considerable amount of time must be spent on these programs and activities.
Each area has discussions within management as to what the programs should be for each region, district, and office.
Some of the programs are:
Special enforcement programs – An example of this may be compliance of all flea market vendors, a program I was involved with
High Income non-filers – The IRS would get their information from a match program of w-2’s and 1099’s and match up social security numbers against filed returns
Abusive Tax Avoidance – This could be in the area of offshore activities
Offshore credit card program
National Research programs – Those set forth by management after doing a trends project
FBAR filing – IRS is currently targeting those with overseas bank accounts
Non- filers – IRS is presently forming a task force to seek non-filers though aggressive means.
b. The IRS makes sure there is balanced coverage.
The National Office makes sure there is a balanced approach for audit return delivery and tax compliance.
Resources and inventory and the size of personnel all go into this formula.
The focus is blended into these areas:
Individual returns less than $100,000.
Individual returns greater than $100,000 but less than $200,000.
Individual returns greater than $ 200,000.
Small Business Corporations.
Small Business Flow-Through Entities – S Corporations, Fiduciaries and Partnerships.
c. Classification Plan
The IRS will prepare a plan, which is classified. A National DIF score indicator is placed on all Federal Income tax returns that are filed. Each tax return has certain factors that contribute to its score such as Gross Income, Adjusted Gross Income and line item expense.
There are several classified secrets that go into the DIF score.
Each tax return is processed through the IRS computer line item by line item.
A DIF score label is placed on every tax return with its DIF number. A tax examiner or Revenue Agent manually eyeballs each and every tax return with a high DIF score. The examiner then determine which return has the highest probability of tax audit success.
d. DIF Cutoff Score
The IRS will calculate the Area DIF cutoff score for each activity code, giving consideration to the selection rate. This is the lowest DIF score necessary to secure the number of returns required for audit.
For example, if the return plan shows 225 returns for an activity code and the selection rate is 70%, the IRS will need to order 321 returns (225/70%).
The DIF Cut off Score is 500.
The number of returns with DIF scores greater than 550 is 280, which is less than the number of returns required, so the lowest DIF score on an ordered return will be in the range of 500 to 550 and the DIF cutoff score is 500.
This is the IRS example as found in the IRS IRM section 4.
e. Where your case is worked
Examination inventory is assigned to IRS offices based on ZIP codes, using the Look up Tables at Martinsburg Computing Center.
f. High Assault Risk Areas
Certain ZIP code areas are identified as High Assault Risk Areas. There are special instructions the IRS has regarding these audits. These returns will be audited.
Survey of Examination Cases.
The IRS can look over your case and close it with an eyeball look.
While cases should be selected and started in accordance with all guidelines, in a limited number of circumstances, there may be returns that appear in the “judgment of the examiner and manager” to warrant survey without taxpayer contact.
That is to not even contact the taxpayer.
Cases delivered to the IRS area manager will generally fall into one of three categories: mandatory work, strategic (priority program) work, and non-strategic work.
Mandatory work includes nationally coordinated research projects such as NRP and employee audits (excludes “new” IRS employee audits)
Strategic work is identified annually in the Exam Program Letter which can be found at http://sbse.web.irs.gov/Exam/. The procedures to survey strategic work and referrals from other business units, “new” employee audits and cases with previous taxpayer contact require an explanation for the rationale for the survey.
Cases that are not mandatory work, strategic work, a referral from another business unit, and are not part of an employee examination or research study may be surveyed based upon the professional judgment of the examiner with concurrence of the immediate supervisor.
Here are some factors to consider when determining whether to survey strategic work:
Taxpayer is in bankruptcy
Taxpayer has suffered an extreme hardship or illness
Taxpayer is deceased, or
Examiner has additional information that was not available during classification
This is in the complete judgment of the IRS tax auditor
From year to year the IRS changes their programs to keep everyone honest. However, after years of experience, a trained eye can know what tax returns will be pulled for audit.
Why use former IRS agents for IRS tax audit help
Being former IRS agents we know all the protocols, all the theories, all the settlement formulas and all the tax procedures the IRS will use for a IRS tax audit.
While most tax professionals learn their IRS Audit skill during on-the-job training, former IRS agents and managers actually know the insider programs and insider secrets to successful tax audits.
The team of tax professionals we have at fresh start tax not only were former IRS agents and managers but were former instructors with the Internal Revenue Service not only taught a local office but also taught in the district and regional IRS offices as well.
We are one of the most experienced tax firms when it comes to IRS tax audit help.
If you’re got to hire a professional tax firm it is wise to hire tax attorneys, certified public accountant or former IRS agents and managers who can provide you the very best IRS tax audit help.
There are many excellent tax firms to help you through this problem make sure you check on their experience and their Better Business Bureau rating.
IRS Tax Audit in Miami + Former IRS Agents + Audit Specialists and Experts
by Fresh Start Tax | Jun 21, 2016 | Tax Help
Hire local former IRS Agents who worked out the local South Florida IRS offices.
We’re the affordable professional local tax firm that are specialists and experts in IRS tax audits and appeals.
We have 205 years of direct tax experience, 95 years of working for the IRS in the local, district and regional offices.
Being former IRS agent managers and supervisors in the audit division gives us a unique advantage & can change the result of an IRS tax audit.
We worked as Agents, Instructors and in Management. We know the settlement techniques and formulas to save your money.
Be worry free, call us today.
It only makes sense to have Former IRS Agents and IRS Tax Audit Managers handle your IRS tax audit and give you the most experienced and successful IRS Tax Audit Help.
IRS audits less than 1% of all taxpayers nationwide.
Facts about IRS Tax Audits:
- The IRS audits a total of 1,391,581 tax returns a year.
- The IRS field agents complete more than 310,000 audits by office or business visits a year.
- 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
- IRS collected over $10 billion dollars a year from IRS tax audits.
- IRS employs over 13,000 IRS auditors.
- $5.2 billion dollars are collected through the IRS document matching program.
- For truly professional IRS Tax Audit help contact former IRS Agents and Managers.
IRS Policy Statement P-4-21. It states “The primary objective in selecting returns for examination is to promote the highest degree of voluntary compliance on the part of taxpayers.”
The IRS Tax Audit Examination Plan
The plan that is used by the IRS is based on long-range coverage planning, and objectives on the resources requested in the Congressional Budget. From this, there is an established plan where staff years are allocated to all area IRS offices using resource allocation and a prescribed methodology. Each Area Manager of the IRS is responsible for preparing an area response following instructions from the National Headquarters.
Employee Staffing for the IRS Tax Audit
Staffing is based on the examination priorities that differs from office to office and region to region, front loaded programs set up before hand, historic examination rates adjusted to yield sure ended results and audits that match experience of the personnel. Each region is excepted to produce tax audits and money from tax audits. IRS is funded thru results.
Why the IRS Audits Tax Returns
a. Front Loaded Programs
Front Loaded programs are those tax audits that IRS DC headquarters has determined are very important and a considerable amount of time must be spent on these programs and activities. Each area has discussions within management as to what the programs should be for each region, district, and office.
Some of the programs are:
- Special enforcement programs – An example of this may be compliance of all flea market vendors, a program I was involved with
- High Income non-filers – The IRS would get their information from a match program of w-2’s and 1099’s and match up social security numbers against filed returns
- Abusive Tax Avoidance – This could be in the area of offshore activities
- Offshore credit card program
- National Research programs – Those set forth by management after doing a trends project
- FBAR filing – IRS is currently targeting those with overseas bank accounts
- Non- filers – IRS is presently forming a task force to seek non-filers though aggressive means.
b. The IRS makes sure there is balanced coverage.
The National Office makes sure there is a balanced approach for audit return delivery and tax compliance. Resources and inventory and the size of personnel all go into this formula. The focus is blended into these areas:
- individual returns less than $100,000.
- individual returns greater than $100,000 but less than $200,000.
- individual returns greater than $ 200,000.
- Small Business Corporations.
- Small Business Flow-Through Entities – S Corporations, Fiduciaries and Partnerships.
c. Classification Plan
The IRS will prepare a plan, which is classified. A National DIF score indicator is placed on all Federal Income tax returns that are filed. Each tax return has certain factors that contribute to its score such as Gross Income, Adjusted Gross Income and line item expense.
There are several classified secrets that go into the DIF score.
Each tax return is processed through the IRS computer line item by line item.
A DIF score label is placed on every tax return with its DIF number. A tax examiner or Revenue Agent manually eyeballs each and every tax return with a high DIF score. The examiner then determine which return has the highest probability of tax audit success.
d. DIF Cutoff Score
The IRS will calculate the Area DIF cutoff score for each activity code, giving consideration to the selection rate. This is the lowest DIF score necessary to secure the number of returns required for audit. for example, if the return plan shows 225 returns for an activity code and the selection rate is 70%, the IRS will need to order 321 returns (225/70%).
The DIF Cut off Score is 500. The number of returns with DIF scores greater than 550 is 280, which is less than the number of returns required, so the lowest DIF score on an ordered return will be in the range of 500 to 550 and the DIF cutoff score is 500. This is the IRS example as found in the IRS IRM section 4.
e. Where your case is worked
Examination inventory is assigned to IRS offices based on ZIP codes, using the Look up Tables at Martinsburg Computing Center.
f. High Assault Risk Areas
Certain ZIP code areas are identified as High Assault Risk Areas. There are special instructions the IRS has regarding these audits. These returns will be audited.
Survey of Examination Cases.
The IRS can look over your case and close it with an eyeball look.
- While cases should be selected and started in accordance with all guidelines, in a limited number of circumstances, there may be returns that appear in the “judgment of the examiner and manager” to warrant survey without taxpayer contact. That is to not even contact the taxpayer.
- Cases delivered to the IRS area manager will generally fall into one of three categories: mandatory work, strategic (priority program) work, and non-strategic work.
- Mandatory work includes nationally coordinated research projects such as NRP and employee audits (excludes “new” IRS employee audits)
- Strategic work is identified annually in the Exam Program Letter which can be found at http://sbse.web.irs.gov/Exam/. The procedures to survey strategic work and referrals from other business units, “new” employee audits and cases with previous taxpayer contact require an explanation for the rationale for the survey.
- Cases that are not mandatory work, strategic work, a referral from another business unit, and are not part of an employee examination or research study may be surveyed based upon the professional judgment of the examiner with concurrence of the immediate supervisor.
- Here are some factors to consider when determining whether to survey strategic work:
- Taxpayer is in bankruptcy
- Taxpayer has suffered an extreme hardship or illness
- Taxpayer is deceased, or
- Examiner has additional information that was not available during classification
- This is in the complete judgment of the IRS tax auditor
From year to year the IRS changes their programs to keep everyone honest. However, after years of experience, a trained eye can know what tax returns will be pulled for audit.
Why use former IRS agents for IRS tax audit help
Being former IRS agents we know all the protocols, all the theories, all the settlement formulas and all the tax procedures the IRS will use for a IRS tax audit.
While most tax professionals learn their IRS Audit skill during on-the-job training, former IRS agents and managers actually know the insider programs and insider secrets to successful tax audits.
The team of tax professionals we have at fresh start tax not only were former IRS agents and managers but were former instructors with the Internal Revenue Service not only taught a local office but also taught in the district and regional IRS offices as well.
We are one of the most experienced tax firms when it comes to IRS tax audit help.
If you’re got to hire a professional tax firm it is wise to hire tax attorneys, certified public accountant or former IRS agents and managers who can provide you the very best IRS tax audit help.
There are many excellent tax firms to help you through this problem make sure you check on their experience and their Better Business Bureau rating.
by Fresh Start Tax | Jun 21, 2016 | Tax Help
Being a former IRS agent I have found that many taxpayers receive an IRS notice or letter and like an ostrich, buries the head in the sand.
You should know right from the beginning that you should never ignore an IRS correspondence.
The Internal Revenue Service systemically generates all IRS notices and as a general rule not a human hand ever touches them.
Most letters that you get require follow-up action must be taken.
If the letter is stating further action may take place whether it be enforcement or assessment or something else, IRS fully plans to engage in following up on that IRS letters or notices.
there are too many IRS notices or letters to comment about on this blog.
make sure you contact the IRS or send a letter at the address or telephone number and keep documentation so if IRS furthers up with other letters you have kept your file in order.
I suggest all information sent to IRS sent certified so you have a verified receipt that you try to make contact with them.
If the matter is serious, I would recommend you contact a tax professional to handle a matter.
We are available for free initial tax consultation to help you through any IRS problem that you have.
We have over 65 years of professional tax experience working directly for the Internal Revenue Service’s as former agents.
Most importantly, if you have an IRS collection notice that you owe money, it is critical you follow up on that notice or letter because at the end of the day IRS can wind up seizing your bank account garnishing your wages or may file a federal tax lien.
IRS Letter/Notice + Never Ignore Correspondence + Always Follow Up
