Are you aware that the IRS has certain Audit Techniques that target certain industries? The IRS has gotten very sophisticated over the years and have developed program guides for certain industries. The IRS has used all their resources and have complied ways to make sure you are paying your fair share of tax. They have trained auditors for particular market segments. Read below and you will find some of the Market Specialization Programs. It would be in your very best interest to hire Former IRS Agents to represent you in your audit. We know all the ins and outs and can minimize your damages. Collectively, we have over 100 years of direct tax experience. Do not go into these audits alone!
IRS Audit Techniques Guides
The Audit Techniques Guides focus on developing highly trained examiners for particular market segments. These Guides contain examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations. Audit Techniques Guides are available in Adobe PDF, or as HTML Web pages, or both. The PDF versions must be viewed with the Acrobat Reader.
Aerospace Industry
The Service has prepared a comprehensive audit technique guide to assist examiners in evaluating research credit in the aerospace industry. The guide focuses on the particular unique aspects of the industry and provides examiners tools and tests to utilize in evaluating and auditing research credit.
Air Transportation Audit Technique Guide
Overview of excise tax paid for transportation of persons or property by air.
Cash Intensive Businesses Audit Techniques Guide
Businesses that have substantial cash transactions are included in the consolidated Cash Intensive Businesses Audit Techniques Guide. Some of these businesses include bail bonds, beauty shops, car washes, check cashing establishments, coin operated amusements, laundromats, scrap metal, and some convenience stores. Guidance is also provided on examination of income, interview techniques, and evaluation of evidence. Child Care Provider Audit Technique Guide
The Child Care Provider Audit Technique Guide is intended to provide guidance to the examiner who is auditing a taxpayer in this industry and to provide tax related guidance to taxpayers and other professionals in this industry.
Provides excise tax agents with specific tools to examine issues relating to domestically produced coal.
Commercial Banking
Overview of the industry. Discusses potential issues and terminology unique to banking.
Construction Industry
Overview of the industry including a glossary. Discusses types of contracts; types of contractors; methods of accounting; and joint ventures. This updated guide includes the filing locations for Rev. Proc. 92-29 elections (Chpt 7); includes contractor square footage costs (Chpt. 11); and common errors in look-back interest filings (Chpt. 5).
Cost Segregation Audit Techniques Guide
The Service has prepared a comprehensive audit techniques guide to assist examiners in evaluating cost segregation studies submitted by taxpayers in support of depreciation deductions. The guide is also beneficial for taxpayers and practitioners in preparing these studies.
This Audit Techniques Guide sets forth the Research Credit Technical Advisory’ suggested guidelines for auditing research credit issues.
Corporate executives often receive extraordinary fringe benefits that are not provided to other corporate employees. Any property or service that an executive receives in lieu of or in addition to regular taxable wages is a fringe benefit that may be subject to taxation.
This audit techniques guide focuses on a strategy in which multinational corporations use factoring of accounts receivable among related parties to avoid U.S. taxation by shifting income offshore and reducing U.S. income by deducting expenses related to the same income.
]Farmers Audit Techniques Guide
The Agriculture Industry Audit Techniques Guide (ATG) focuses on developing highly trained examiners for the Agricultural market segment. The Guide contains examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations.
This audit techniques guide was designed to assist the examiner in conducting audits where Excise Tax of Foreign Insurance transactions may be due.
Golden Parachutes Audit Techniques Guide
The Service has prepared a comprehensive audit techniques guide to assist examiners in evaluating parachute examinations. The parachute examination can occur during the examination of either the corporation’s or the individual’s return.
Hardwood Timber Industry
Provides general and technical information useful to examiners in classifying, pre-planning and examining returns relating to this industry.
Inland Waterways
This audit technique guide is intended to provide assistance to the examiner who is auditing a taxpayer for which the use of the Inland Waterways is an issue.
IRC 162(m) Salary Deduction Limitation Audit Techniques Guide
Every publicly held corporation maintains its executive compensation records differently. Likewise, every publicly held corporation maintains different methods for compensating its executives. As the examining agent, you must first learn the identity of the individual(s) within the corporation who are most familiar with how the executive compensation records are maintained.
IRC § 183: Activities Not Engaged in For Profit Audit Techniques Guide
This audit technique guide (ATG) has been developed to provide guidance to Revenue Agents and Tax Compliance Officers in pursuing the application of IRC § 183, Activities Not Engaged in for Profit (sometimes referred to as the “hobby loss rule”).
The Laundromat Industry
Provides an explanation of water consumption analysis for reconstructing unreported income from the operation of a laundromat. This method is to be used only when there is a reasonable indication of unreported income.
Lawsuit Awards and Settlements
This guide focuses on tax-ability of law suit awards and settlements.
Ministers Audit Technique Guide
The Ministers Audit Technique Guide is intended to provide guidance to the examiner who is auditing a taxpayer who is a minister and to provide tax related guidance to taxpayers and other professionals in this industry.
New Markets Tax Credit
The New Markets Tax Credit (NMTC) Program, enacted by Congress as part of the Community Renewal Tax Relief Act of 2000, is incorporated as section 45D of the Internal Revenue Code. This Code section permits individual and corporate taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments (QEIs) in qualified community development entities (CDEs).
New Vehicle Dealership Audit Technique Guide
This guide will give you the key to a quick and competent closure of any new vehicle dealership examination which hinges on narrowing the scope of the examination to items that may prove productive.
Non-Qualified Deferred Compensation Audit Technique Guide
The Service has prepared a comprehensive audit techniques guide to assist examiners in evaluating non-qualified deferred compensation. A non-qualified deferred compensation (NQDC) plan is any elective or non elective plan, agreement, method, or arrangement between an employer and an employee (or service recipient and service provider) to pay the employee compensation some time in the future.
Oil and Gas Industry
Provides information on basic operations and common terminology. Includes reference to royalty owners and an introduction to financial products.
Ozone Depleting Chemicals (ODC) Excise Tax Audit Techniques Guide
This is the Audit Techniques Guide for Ozone Depleting Chemicals (ODC).
Partnerships
Publication Date: See Table of Contents for Publication/Revision Date of the individual Chapters
The focus is on issues that fall within sections 701 through 761 of the Code (Sub-chapter K). Sub-chapter K deals primarily with the formation, operation, and termination of partnerships. Many issues arise during the initial or final year of the partnership.
Passive Activity Losses
Provides examiners with specific guidance on potential audit issues, issue identification and lead sheets and other job aids.
Placer Mining
Provides guidelines for the examination of taxpayers in this industry. Focuses on small mining operations represented as sole proprietorships on Schedule C, but can be adapted for partnership and corporate returns.
The Port Project
Provides examiners assistance in auditing industries related to coastal and inland waterways.
Poultry Industry
The purpose of this guide is to highlight issues that are specific to or have a large impact on the poultry industry. Most of the issues in this guide relate directly to the major companies rather than the individual farmers. However, one chapter has been devoted to the issues normally found in conjunction with a poultry grower audit.
Reforestation Industry
Overview of the industry. Discusses some issues that may be encountered – including employment taxes; poor accounting records; etc.
Rehabilitation Tax Credit
Provides examiners with audit aids (i.e. issue check sheet, pro forma Information Document Request, and standardized audit reports, etc.) which assist in identifying and addressing common rehab tax credit issues.
Research Credit Claims Audit Techniques Guide : Credit for Increasing Research Activities § 41
Publication Date: See table of contents for publication/revision date for the individual chapters, exhibits, and letters & forms. This guide provides guidance on the handling and evaluation of research credit claims. Retail Industry
Publication Date: 2/2009 Overview of the Retail Industry.
Purposes of § 38 for any taxable year is the sum of the credits listed in § 46. Section 1307(a) of the Energy Tax Incentives Act of 2005, Pub. L. 109-58, 119 Stat. 594 (August 8, 2005), amended § 46 to add two new credits to that list:The qualifying advanced coal project credit, (section 48A) and the qualifying classification project credit, (section 48B).
Split Dollar Life Insurance Audit Techniques Guide
Split-dollar life insurance arrangements can be a key feature of executive compensation packages. Over the years, the Service has provided limited guidance regarding the taxation of these arrangements. Beginning in 2001, transitional guidance on the valuation of split-dollar life insurance arrangements was provided in the form of notices and proposed regulations in anticipation of final regulations.
Sports Franchises
Focuses on major league franchises. Potential issues may include revenue (sponsorship, broadcast, season tickets), strike fund payments, stadium issues, player contracts, purchase/sale of franchise, league expansion, etc.
Stock Based Compensation Audit Techniques Guide
Audit techniques guide to assist examiners in evaluating stock-based compensation. Stock-based compensation generally consists of either the transferring of stock or the issuance of stock options to an employee or independent contractor.
Swine Farm Industry
Overview of the industry includes methods of accounting (accrual vs. cash), farm price inventory, unit livestock price, prepaid feed, income from discharge of indebtedness, selection fees, depreciation, grower issues, penalties, research credits, employment taxes, and excise taxes.
Tobacco Industry
Focuses on techniques for examining tobacco farmers, dealers and warehouse operations. Veterinary Medicine
Overview of industry includes discussion of types of business entities (especially personal service corporation); cash vs. accrual method of accounting; and inventory vs. supplies.
Offers In Compromise. Fresh Start Tax wants to give you a comprehensive look at OIC’s and the different acceptance possibilities. Honestly, do not try this by yourself. I worked OIC’s for the IRS as an Agent and have been filing them as a practitioner for 28 years. If you want your OIC to go through, hire our company. 12,000 OIC’s are accepted each year. The IRS has a 25% rate of acceptance. The average wait time from filing to acceptance is about 5-6 months. An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed. If the liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC.
In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential . The RCP is how the IRS measures the taxpayer’s ability to pay. The RCP includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.
The IRS may accept an OIC based on three grounds.
First, acceptance is permitted if there is doubt as to liability. This ground is only met when genuine doubt exists that the IRS has correctly determined the amount owed. Second, acceptance is permitted if there is doubt that the amount owed is collectible. This means that doubt exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability. Third, acceptance is permitted based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.
When submitting an OIC, taxpayers must use the most current version of Form 656 (PDF), Offer in Compromise. Except when an OIC is submitted based on doubt as to liability, taxpayers must also submit Form 433-A (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or Form 433-B (PDF), Collection Information Statement for Businesses. A taxpayer filing an OIC based on doubt as to liability must file a Form 656-L, Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433–A and/or Form 433–B.
In general, a taxpayer must submit a $150 application fee along with the Form 656. There are two exceptions to this requirement. First, no application fee is required if the offer is based on doubt as to liability. Second, the fee is not required if the taxpayer is an individual (not a corporation, partnership, or other entity) who qualifies for the low-income exception. This means that the taxpayer’s total monthly income falls at or below 250 percent of the poverty guidelines published by the Department of Health and Human Services. If the total monthly income falls at or below the poverty guidelines, the taxpayer may submit a Form 656-A (PDF), Income Certification for Offer in Compromise Application Fee and Payment, instead of the $150 application fee. The Form 656 package contains a worksheet and the IRS OIC Low Income Guidelines table to assist taxpayers in determining whether they qualify for the low-income exception. The Form 656-A and the worksheet must be submitted with the Form 656.
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments. The tax law provides rules for “lump sum offers” and “periodic payment offers” submitted on or after July 16, 2006. A lump sum offer is defined as an offer payable in 5 or fewer installments. If a taxpayer submits a lump sum offer, the taxpayer must include with the Form 656 a nonrefundable payment equal to 20 percent of the offer amount. This payment is required in addition to the $150 application fee. The 20 percent amount is called “nonrefundable” because it cannot be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance. The 20 percent amount will be applied to the taxpayer’s tax liability. The taxpayer has a right to specify the particular tax liability to which the IRS will apply the 20 percent amount.
The next offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more installments. When submitting a periodic payment offer, the taxpayer must include the first proposed installment payment along with the Form 656. This payment is required in addition to the $150 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum offer. Also, while the IRS is evaluating a periodic payment offer, the taxpayer must continue to make the installment payments provided for under the terms of the offer. These amounts are also nonrefundable. These amounts are applied to the tax liabilities and the taxpayer has a right to specify the particular tax liabilities to which the periodic payments will be applied.
Ordinarily, the statutory time within which the IRS may engage in collection activities is suspended during the period that the OIC is under consideration and is further suspended if the OIC is rejected by the IRS and the taxpayer appeals the rejection to the IRS Office of Appeals within 30 days from the date of the notice of rejection.
If the IRS accepts the taxpayer’s offer, the IRS expects that the taxpayer will have no further delinquencies and will fully comply with the tax laws. If the taxpayer does not abide by all the terms and conditions of the OIC, the IRS may determine that the OIC is in default. To avoid a default, the taxpayer must timely file all tax returns and timely pay all taxes for 5 years or until the offered amount is paid in full, whichever period is longer. When an OIC is declared to be in default, the agreement is no longer in effect and the IRS may then collect the amounts originally owed, plus interest and penalties.
If the IRS rejects an OIC, then the taxpayer will be notified by mail. The letter will explain the reason that the IRS rejected the offer and will provide detailed instructions on how the taxpayer may appeal the decision to the IRS Office of Appeals. The appeal must be made within 30 days from the date of the letter. In some cases, an OIC is returned to the taxpayer, rather than rejected, because the taxpayer has not submitted necessary information, has filed for bankruptcy, has failed to include a required application fee or nonrefundable payment with the offer, or has failed to file tax returns or pay current tax liabilities while the offer is under consideration. A return is different from a rejection because there is no right to appeal the IRS’s decision to return the offer.
Amended Returns & Form 1040X to fix your IRS Problem. Have a tax professional prepare your 1040x to stay away from audit possibilities. Question: What should I do if I made a mistake on my federal return that I have already filed? Answer: It depends on the type of mistake that you made:
Many mathematical errors are caught in the processing of the tax return itself. Do not file the 1040 until IRS send you a bill.
If you did not attach a required schedule, the IRS will contact you and ask for the missing information.
If you did not report all your income or did not claim a credit, you should file an amended or corrected return using Form 1040X (PDF), Amended U.S. Individual Income Tax Return. When filing an amended or corrected return: 1040x
Include copies of any schedules that have been changed or any Form W-2 (PDF) you did not include.
Generally, to claim a refund, the Form 1040X (PDF) must be received within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later.
Please allow the IRS 8-12 weeks to process an amended return.
As a former IRS Agent I am asked so many times, do I have a chance for an Offer in Compromise?
What is an Offer In Compromise?
* Do You Qualify for an Offer in Compromise
* How to File an Offer in Compromise
All Taxpayers Do Not Qualify for an Offer in Compromise
Absent special circumstances, if you have the ability to fully pay your tax liability in a lump sum or via an installment agreement, an offer in compromise will not be accepted.
Offer in Compromise Payments are Non-refundable
20% of your total offer must be paid when the offer is submitted. The IRS considers this payment for a lump sum offer and any periodic payments as “payments on tax” and they are not refundable, regardless of whether the offer is declared not-processable or is later returned, withdrawn, rejected or terminated by the IRS.
Federal Tax Liens are Not Released Immediately
If there is a Notice of Federal Tax Lien on record prior to acceptance of the offer, the lien is not released until the OIC terms are satisfied or until the liability is paid, whichever comes first. A Notice of Federal Tax Lien may be filed during the course of the OIC investigation.
Payments May be Designated
You may designate in writing how the IRS should apply payments made with the filing of the offer and while an offer is under investigation. Without a written designation, payments will be applied to the tax liability and in the government’s best interest. The $150 application fee cannot be designated, but is applied to the tax liability and in the government’s best interest.
Refunds
The IRS will keep any refund, including interest due, because of an overpayment of any tax or other liability, for tax periods extending through the calendar year the IRS accepts the OIC.
Exception: Offers submitted under the basis of doubt as to liability.
Levies
The IRS will keep all payments and credits made, received or applied to the total original tax liability before the OIC was submitted. The IRS may also keep any proceeds from a levy that was served prior to the submission of an OIC, but which were not received at the time the OIC was submitted.
Statutory Period for Collection Suspended
The statutory period for collection is suspended during the period that the OIC is under consideration (pending) and is further suspended if the OIC is rejected by the IRS and you appeal the rejection.
Five Year Compliance
If your offer is accepted, you must timely file all tax returns and timely pay all tax for five years or until the offered amount is paid in full, whichever period is longer. Failure to adhere to these terms will result in default of the offer and the IRS may then collect the amounts originally owed plus penalties and interest.
OIC Payment and Application Fee Exceptions
If you qualify for a low-income exception waiver or you submit a doubt as to liability offer you are exempt from the $150 application fee and any OIC payments due upon submission of the OIC or during the course of the investigation. The low income waiver does not apply to businesses.
Appeal
If your OIC is rejected, you will have the opportunity to file an appeal which will be heard by the IRS Office of Appeals. There are no appeal rights associated with offers that are returned, withdrawn or terminated.
Approved Installment Agreement
If you have an approved installment agreement and submit a periodic payment offer, you are not required to continue to make the installment agreement payments while the offer is being investigated. You will, however, be required to make the OIC periodic payments as they become due.
Mandatory Acceptance
Per IRC 7122(f), the IRS will deem an offer “accepted” if it is not withdrawn, returned or rejected within 24 months of the IRS receipt date. If a liability included in the offer amount is disputed in any judicial proceeding, that time period is omitted from calculating the 24-month time frame.
Public Inspection Files
The law requires the IRS to make certain information from accepted Offers in Compromise available for public inspection and review. These public inspection file locations are located in designated IRS Area Offices.
References/Related Topics
* Consumer Alert – Check Carefully Before Applying for Offers in Compromise
* Filing Late and/or Paying Late
* Installment Agreement
* IRS Policy Statement P-5-100
* Offer in Compromise Payment Options
Do you want to pay off your IRS debt with an affordable payment plan? Did you know that 30 million individuals in the US have tax problems? This number does not even count the businesses that owe money as well.
IRS tax payment plans are available to you, and Fresh Start Tax is here to help you set that plan up with the IRS for the lowest possible amount. We can guarantee to you the lowest, more manageable monthly payments that fit better into your budget and your finances instead of paying one large amount.
The form 433-F is available on our website. Simply complete the 433-F found under our home page toolbar. Go to IRS Forms, click on 433-F, complete it and send it to us. We will review it and let you know what we can do to help you. The consultation is free of charge.
Fresh Start Tax is one of the premier tax resolution firms in the country. We deal with all types of cases, individuals, business and high dollar corporate entities. We have a staff that specializes in every type of case. Some of our specialties include the following:
Immediate Tax Resolution and Representation
Offers in Compromise and Settlement
Back Taxes/ Unfiled or Never filed tax returns
Bank or Wage Levy Garnishments
Letters of Intent of Notice to Levy
IRS Tax Audits
Hardship, part pay agreements
State Sales Tax problems and Resolution
Our company resume
Our staff has over 140 years of professional tax representation experience collectively.
On staff are Board Certified Tax Attorney’s, CPA’s, former IRS Agents, Managers and Instructors.
Former State Department of Revenue Manager and Instructor.
We are extremely moral and ethical in all of our business dealings.
We have the highest rating by the Better business Bureau.
We are former IRS Agents who worked in the local Ft. Lauderdale and Miami Office. We can get any Levy released. We can get your Social Security Benefits restored and given back to you. 1-866-700-1040.
Social Security Benefits can be levied by the Internal Revenue Service. There is a 15% cap. If you have been levied call us today. Rule of Law:
Social Security Benefits Eligible for the Federal Payment Levy Program
Through the Federal Payment Levy Program (FPLP), Social Security benefit payments outlined in Title II of the Social Security Act, Federal Old-Age, Survivors, and Disability Insurance Benefits, are subject to the 15-percent levy, to pay your delinquent tax debt.
However, benefit payments, such as lump sum death benefits and benefits paid to children, will not be included in the FPLP. Additionally, Supplemental Security Income (SSI) payments, under Title XVI, and payments with partial withholding to repay a debt owed to Social Security will not be levied through the FPLP.
Before your Social Security benefits are included in the FPLP, we will send you a final notice of our intent to levy, with appeal rights, if one has not already been issued. If we don’t hear from you, or if you have already received this notice, we will send you an additional notice CP 91 or CP 298, Final Notice Before Levy on Social Security Benefits, explaining that your Social Security benefits may be levied
About Fresh Start Tax:
Fresh Start Tax is one of the premier tax resolution firms in the country. We deal with all types of cases, individuals, business and high dollar corporate entities. We have a staff that specializes in every type of case. Some of our specialties include the following:
Immediate Tax Resolution and Representation
Offers in Compromise and Settlement
Back Taxes/ Unfiled or Never filed tax returns
Bank or Wage Levy Garnishments
Letters of Intent of Notice to Levy
IRS Tax Audits
Hardship, part pay agreements
State Sales Tax problems and Resolution
Our company resume:
Our staff has over 140 years of professional tax representation experience
On staff are Board Certified Tax Attorney’s, CPA’S, former IRS Agents, Managers and Instructors.
Former STATE Department of Revenue Manager and Instructor.
We are extremely moral and ethical in ALL our business dealings
We have the highest rating by the Better business Bureau
