by Fresh Start Tax | Apr 15, 2014 | Tax Help
Different Ways and Tips for Paying Your Taxes
If you owe taxes with your tax return this year, you should know a few things before you file.
Fresh Start Tax LLC – Here are helpful tips about how to pay your federal taxes.
1. Never send cash.
2. If you e-file, you can file and pay in a single step with an electronic funds withdrawal.
If you e-file on your own, you can use your tax preparation software to make the withdrawal. If you use a tax preparer to e-file, you can ask the preparer to make your tax payment electronically.
3. You can pay taxes electronically 24/7 on IRS.gov.
Just click on the ‘Payments’ tab near the top left of the home page for details.
4. You can also pay by check or money order.
Make your check or money order payable to the “United States Treasury.”
5. Whether you e-file your tax return or file on paper, you can also pay with a credit or debit card.
The company that processes your payment will charge a processing fee.
6. You may be able to deduct the credit or debit card processing fee on next year’s return.
It’s claimed on Schedule A, Itemized Deductions.
The fee is a miscellaneous itemized deduction subject to the 2 percent limit.
7. Be sure to write your name, address and daytime phone number on the front of your payment.
Also, write the tax year, form number you are filing and your Social Security number.
8. Complete Form 1040-V, Payment Voucher, and mail it with your tax return and payment to the IRS.
Make sure you send it to the address listed on the back of Form 1040-V. This will help the IRS process your payment and post it to your account.
You can get the form on IRS.gov.
9. Remember to enclose your payment with your tax return but do not staple it to any tax form.
If you cannot pay your taxes, call us today, 1-866-700-1040. Let us settle your case.
by Fresh Start Tax | Apr 14, 2014 | Tax Help
IRS Intensifies Work on Identity Theft and Refund Fraud; Criminal Investigation Enforcement Actions Underway Across the Nation
As the April 15 tax deadline approaches, the Internal Revenue Service announced today it has started more than 200 new investigations this filing season into identity theft and refund fraud schemes.
IRS Criminal Investigation has started 295 new identity theft investigations since January, pushing the number of active cases to more than 1,800.
The coast-to-coast effort by Criminal Investigation is underway as part of a larger effort at the IRS to combat identity theft and refund fraud by pursuing identity thieves, preventing fraudulent refunds from being issued and helping victims of this crime.
“Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS,” said IRS Commissioner John Koskinen. “The investigative work done by Criminal Investigation (CI) is a part of an aggressive effort by the IRS to combat this issue on all fronts.
We are making substantial progress in refund fraud protection, and the work by CI highlights the important steps we are taking.”
Since the start of 2014, increased activity by CI has led to more prosecution recommendations, indictments and sentencing hearings, which reflect the overall success by the IRS on the increased number and effectiveness of ID theft filters used during the processing of tax returns.
“We remain committed to allocating investigative time and resources to bringing to justice those who steal honest taxpayers’ identities for their own personal gain,” said Richard Weber, Chief of IRS Criminal Investigation.
A new and key component for IRS-CI’s efforts this year is to investigate the misuse of Electronic Filing Identification Number (EFINS). An EFIN is assigned to tax preparers that have completed the IRS e-file Application to become an Authorized IRS e-file Provider. After the provider completes the application and passes a suitability check, the IRS sends an acceptance letter, including the EFIN, to the provider.
IRS Criminal Investigation recognized an increase in the filing of tax returns utilizing stolen or fraudulently acquired EFINs.
Since the start of the fiscal year through March 31, 2014, the IRS has revoked or suspended 395 EFINS based on recommendations from CI, and CI has initiated 60 EFIN source investigations involving EFINS used by individuals involved in refund fraud and identity theft schemes.
By revoking and suspending the EFINs, IRS can prevent the transmission of the fraudulent tax returns, thwarting the criminal attempts to steal refunds.
Over the last several weeks all 25 CI field offices across the nation have or are conducting enforcement operations related to refund fraud investigations.
For example:
This week, the Miami Field Office is conducting 23 enforcement actions, including indictments and arrests.
This is Miami’s second surge of enforcement actions within the last six months.
In the Tampa Field Office, 7 enforcement actions will be conducted.
In the Los Angeles Field Office, 10 tax return preparers were recently indicted for seeking millions of dollars in fraudulent tax refunds.
“Virtually every Criminal Investigation field office is working identity theft and refund fraud cases,” said Weber.
This work reflects the continued high priority being placed on identity theft by the IRS and Criminal Investigation. In Fiscal Year (FY) 2013, the IRS initiated approximately 1,492 identity theft related criminal investigations, an increase of 66 percent over investigations initiated in FY 2012.
Direct investigative time applied to identity theft related investigations has increased 216 percent over the last two years.
Prosecution recommendations, indictments, and those convicted and sentenced for identity theft violations have increased dramatically since FY 2011. Sentences handed down for convictions relating to identity theft have been significant, ranging from two months to 317 months.
by Fresh Start Tax | Apr 14, 2014 | Tax Help
Cannot Pay Your Tax Bill
If you find you owe more than you can pay with your tax return, what ever you do don’t panic.
Fist of all, whatever you do, make sure to file on time.
That way you won’t have a penalty for filing late.
This penalty hurts and can be upwards of 25%of the total tax.
Here is what to do if you can’t pay all your taxes by the due date.
1. File on time and pay as much as you can.
Filing on time avoids a late filing penalty.
Pay as much as you can to reduce interest charges and a late payment penalty. You can pay online, by phone, or by check or money order.
2. Get a loan or use a credit card to pay your tax.
The interest and fees charged by a bank or credit card company may be less than IRS interest and penalties.
For credit card options, see IRS.gov.
3. Use the Online Payment Agreement tool.
You don’t need to wait for IRS to send you a bill before you ask for a payment plan. The best way is to use the Online Payment Agreement tool on IRS.gov.
You can also file Form 9465, Installment Agreement Request, with your tax return. You can even set up a direct debit agreement.
With this type of payment plan, you won’t have to write a check and mail it on time each month. It also means you won’t miss payments that could lead to more penalties.
4. Don’t ignore a tax bill.
If you get a bill, don’t ignore it. The IRS may take collection action if you ignore the bill. Contact the IRS right away to talk about your options.
If you are suffering a financial hardship, the IRS will work with you.
If you Cannot Pay Your Tax Bill, Here is what YOU CAN DO, Fresh Start Tax LLC, Former IRS
by Fresh Start Tax | Apr 14, 2014 | Tax Help
IRS & Frivolous Tax Arguments
The Internal Revenue Service released the 2014 version of “The Truth about Frivolous Tax Arguments.”
The document describes and responds to some of the common frivolous tax arguments made by those who oppose compliance with federal tax laws.
The cases cited demonstrate how frivolous arguments are treated by the IRS and the courts.
The 2014 version includes numerous recently-decided cases that demonstrate that the courts continue to regard such arguments as illegitimate.
Examples of frivolous arguments include contentions that taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment; that the only “employees” subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable.
Frivolous Arguments appeared on the IRS annual “Dirty Dozen” list of tax scams that was released on February 19.
Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe.
While taxpayers have the right to contest their tax liabilities, no one has the right to disobey the law or disregard their responsibility to pay taxes.
The penalty for filing a frivolous tax return is $5,000.
The penalty is applied to anyone who submits a tax return or other specified submission, if any portion of the submission is based on a position the IRS identifies as frivolous.
Those who promote or adopt frivolous positions also risk a variety of other penalties. For example, taxpayers could be responsible for an accuracy-related penalty, a civil fraud penalty, an erroneous refund claim penalty, or a failure to file penalty.
The Tax Court may also impose a penalty against taxpayers who make frivolous arguments in court.
Taxpayers who rely on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or defeat tax.
Similarly, taxpayers may be convicted of a felony for willfully making and signing under penalties of perjury any return, statement, or other document that the person does not believe to be true and correct as to every material matter.
Persons who promote frivolous arguments and those who assist taxpayers in claiming tax benefits based on frivolous arguments may be prosecuted for a criminal felony.
by Fresh Start Tax | Apr 14, 2014 | Tax Help
Those with Foreign Assets of U.S. Tax Obligations
The Internal Revenue Service reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2013, that they may have a U.S. tax liability and a filing requirement in 2014.
KEY FILING DATE – The filing deadline is Monday, June 16, 2014, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return.
Eligible taxpayers get one additional day because the normal June 15 extended due date falls on Sunday this year.
To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies.
Nonresident aliens who received income from U.S. sources in 2013 also must determine whether they have a U.S. tax obligation.
The filing deadline for nonresident aliens can be April 15 or June 16 depending on sources of income.
Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts.
In most cases, affected taxpayers need to fill out and attach Schedule B to their tax return.
Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets.
Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.
U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds.
Taxpayers with foreign accounts
Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2013 must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
This form replaces TD F 90-22.1, the FBAR form used in the past. It is due to the Treasury Department by June 30, 2014, must be filed electronically and is only available online through the BSA E-Filing System website.
For details regarding the FBAR requirements, see Report of Foreign Bank and Financial Accounts (FBAR).
Some Good News
Taxpayers abroad can now use IRS Free File to prepare and electronically file their returns for free.
This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $58,000 or less can use brand-name software to prepare their returns and then e-file them for free.
A second option, Free File Fillable Forms the electronic version of IRS paper forms, has no income limit and is best suited to people who are comfortable preparing their own tax return.
Check out the e-file link on IRS.gov for details on the various electronic filing options.
A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best, view the complete Free File Software list and the services provided.
Both e-file and Free File are available until Oct. 15, 2014, for anyone filing a 2013 return.
Need help if you’re a taxpayer with foreign asset , call fresh start tax llc today and speak with directly to one of our expert tax professionals.
