by Fresh Start Tax | Jul 17, 2013 | IRS Tax Audit
Being former IRS agents and managers I can tell you that many taxpayers and tax preparers do not understand there is a valuable tool that is available to them for tax audits and it is called the fast-track settlement.
It is a valuable tool for IRS tax audit help.
This tool can save the taxpayer loads of money and tax representation fees.
We are a tax firm comprised of tax attorneys, tax lawyers, certified public accountants, and former IRS agents and managers who have over 60 years of working directly for the Internal Revenue Service and the local, district, and regional tax offices of the IRS. You should call us today for a free initial tax consultation to see if you qualify for the use of fast track settlement help. Not everyone is a qualified or suitable candidate that’s why it is important for us to review your case to find out if it is the right situation for you.
The bottom line to fast-track settlement is that it reduces the time of the final decision for your IRS tax audit. We also have on staff former IRS appellate agents who can help with these determinations to find out if this stuff is right for you.
Being a former IRS agent I would absolutely make sure you contact an experienced tax professional and receiving advice on IRS tax audits.
There is a world of difference in a true tax firm versus the volumes of Internet advertising firms that is suggesting taxpayers can settle these cases by using these various Internet companies who are not owned and operated by true tax professionals.
Fast Track Settlements
Fast Track Settlement (FTS) offers Large Business and International Division (LB&I) taxpayers a way to resolve audit issues during the examination process in less than 120-days.
Working with LB&I and Appeals, taxpayers can use the settlement authority and mediation skills of Appeals to shorten their overall experience with the Internal Revenue Service.
FTS reduces the combined LB&I-Appeals process time by two years.
Fast Track Settlement (Small Business and Self-Employed Taxpayers)
Small Business/Self-Employed and Appeals have designed an alternative dispute resolution strategy for small business and self-employed taxpayers, called the SB/SE Appeals Fast Track Settlement.
The FTS program was designed to resolve audit issues during the examination process within a goal of 60 days from acceptance of the application in Appeals.
A taxpayer who is interested in participating in the SB/SE FTS, or who has questions about the program and its suitability for the taxpayer’s case, may contact the Examination or Specialty Program group manager.
To apply for the SB/SE FTS program, the taxpayer and the group manager need to submit Form 14017, Application for Fast Track Settlement, and the taxpayer’s brief, concise and soundly written.
Fast Track Settlement (Large Business and International Division Taxpayers)
Fast Track Settlement (FTS) offers Large Business and International Division (LB&I) taxpayers a way to resolve audit issues during the examination process in less than 120-days.
Working with LB&I and Appeals, taxpayers can use the settlement authority and mediation skills of Appeals to shorten their overall experience with the Internal Revenue Service. FTS reduces the combined LB&I-Appeals process time by two years.
Post Appeals Mediation
Mediation is available for certain cases that are already in the Appeals process only after Appeals settlement discussions are unsuccessful and, generally, when all other issues are resolved but for the issues for which mediation is being requested.
Mediation is a non-binding process that uses the services of a mediator, as a neutral third party, to help Appeals and the taxpayer reach their own negotiated settlement.
To accomplish this goal, the mediator will act as a facilitator; assist in defining the issues; and promote settlement negotiations between Appeals and the taxpayer.
The mediator will not have settlement authority in the mediation process and will not render a decision regarding any issue in dispute.
Tax Arbitration
Arbitration is available for certain cases within Appeals jurisdiction that meet the operational requirements of the program.
Generally, this program is available for cases in which a limited number of factual issues remain unresolved following settlement discussions in Appeals.
Appeals and the taxpayer will be bound by the arbitrator’s findings. The arbitration procedure uses the services of an arbitrator either from Appeals or from an outside organization.
Tax Audit Help – IRS Tax Audit – Use Fast Track Settlement to Help – Former IRS, Tax Audit Experts
by Fresh Start Tax | Jul 17, 2013 | IRS Tax Audit
For inquiring minds that want to know what your chances for an IRS audit you can read below and find out what your chances are of an IRS tax audit.
Please note that these figures change from year to year but by very miniscule amounts.
IRS audits 1.1% of all personal income tax returns.
If you won the IRS audit lottery you should never go into IRS unrepresented for an IRS audit.
As a former IRS agent seeking good professional tax will in the long run save you aggravation, grief, stress and keep money in your pocket in the long run.
If you have received an IRS letter or notice that you are going to undergo an IRS tax audit is in your best interest to call former IRS agents and managers who know all of the protocols, techniques and tax defenses to best defend your tax return that is undergoing an IRS tax audit.
So , What are your odds/chances of a IRS Tax Audit
No adjusted gross income 3.43%
$1- $25,000 1.22
$25,000-$50,000 .73%
$50,000-$75,000 .83%
$75,000-$100,000 .82%
$100,000-$200,000 1.1%
$200,000-$500,000 2.67%
$500,000-$1,000,000 5.32%
1,000,000-$5,000,000 5.38%
$5,000,000-$10,000,000 20.95%
over $10,000,000
Total IRS Collections for the year
The IRS collected $2.5 trillion in total tax dollars in 2012, broken down as follows:
- From individuals: $2.1 trillion.
- From businesses: $285 billion.
- From other sources: $115 billion.
It is important to remember that IRS audits tax returns keeping in mind their budget For the current year and their available personnel to actually on a tax return.
If you have any questions regarding IRS tax audits call us today and you’ll speak to experienced IRS tax professionals to answer all your questions.
by Fresh Start Tax | Jul 17, 2013 | IRS Tax Audit
If you have received an IRS nasty gram you are not alone.
Millions of taxpayers every year receive an IRS tax audit notice letting him know that a tax audit is about to take place. Most people get scared to death of what will happen next but being former IRS agents and managers most people do not need to worry themselves into anxiety and panic attacks. All this will pass.
The best way to defend yourself against an IRS tax audit is by contacting former IRS agents and managers who understand the scope of the length and the complete details of what will take place.
Our firm has a A+ rating by the Better Business Bureau and we have been in private practice since 1982.
We are tax experts in IRS tax audits. We completely understand the what, the who, the why, and the complete scope of your IRS tax audit. Being former IRS agents and managers we have conducted audits and have represented taxpayers that are going through on its. We know every single process there is in the system as well of all the appellate protocols.
Besides having former IRS agents and IRS audit managers we also have on staff former IRS appeals agents and tax attorneys for more difficult and complicated cases.
We are a full service tax firm and all our work is conducted by our in-house tax professionals and IRS specialty tax audit experts.
Odds of a IRS Tax Audit
No adjusted gross income 3.42%
$1- $25,000 1.22
$25,000-$50,000 .73%
$50,000-$75,000 .83%
$75,000-$100,000 .82%
$100,000-$200,000 1%
$200,000-$500,000 2.66%
$500,000-$1,000,000 5.32%
1,000,000-$5,000,000 5.38%
$5,000,000-$10,000,000 20.75%
over $10,000,000
What is an IRS audit?
An IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is accurate.
You can find more information on Publication 556, Examination of Returns, Appeal Rights and Claims for Refund explains the audit process in more detail.
The IRS Tax Audit Selection Process
Selecting a income or business tax return for a IRS audit does not always suggest that an error has been made. Tax Returns are selected using a variety of methods, including:
- Random selection and computer screening – sometimes returns are selected based solely on a statistical formula. These are very difficult tax audits
- Document matching – when payor records, such as Forms W-2 or Form 1099, don’t match the information reported. 1.6 million taxpayers go through these audits every year.
- Related examinations – returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit. These are usually high dollar cases.
IRS Tax Audit Methods
An audit may be conducted by mail or through an in-person interview and review of the taxpayer’s records.
The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit).
The IRS will tell you what records are needed. Audits can result in no changes or changes. Any proposed changes to your return will be explained.
IRS Tax Audit Notification
Should your account be selected for audit, you will be notified in two ways:
In the case of a telephone contact, the IRS will ALWAYS send a letter confirming the audit. E-mail notification is not used by the IRS. If you ever receive an email notice from the Internal Revenue Service you can be sure of one thing is a scam.
Your Rights During an Audit
Publication 1, Your Rights as a Taxpayer, explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes.
These audit rights include:
- A right to professional and courteous treatment by IRS employees.
- A right to privacy and confidentiality about tax matters.
- A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
- A right to representation, by oneself or an authorized representative.
- A right to appeal disagreements, both within the IRS and before the courts.
IRS Tax Audit Length
The length of each audit varies depending on the type of audit, the complexity of items being reviewed, the availability of information being requested, the availability of both parties for scheduling of meetings and your agreement or disagreement with the findings. Office audits are relatively simple and you are required to go into the local IRS office while field audits can last anywhere from 30 days to two years.
Tax Records that will be needed
You will be provided with a written request for specific documents needed. If you don’t have all the requested documentation you can provide reconstructive records. To do this you should contact us today and we can walk you through the process of tax reconstruction.
The law requires you to retain records used to prepare your return.
Record keeping requirement
Those records generally should be kept for three years from the date the tax return was filed.
The IRS does accept some electronic records. Most revenue agents or field audits generally accept electronic records.
If records are kept electronically, the IRS may request those in lieu of or in addition to other types of records. Contact your auditor to determine what can be accepted to ensure a software program is compatible with the IRS’s.
Audit Determinations
An audit can be concluded in three ways:
1. No change: an audit in which you have substantiated all of the items being reviewed and results in no changes. This is obviously the greatest news you will ever have for a tax audit.
2. Agreed: an audit where the IRS proposed changes and the taxpayer understands and agrees with the changes. The next step will be how to pay the tax deficiency.
3. Disagreed: an audit where the IRS has proposed changes and the taxpayer understands, but disagrees with the changes.
Agreed tax audit cases
If you agree with the audit findings, you will be asked to sign the examination report or a similar form depending upon the type of audit conducted.
If money is owed, there are several payment options available. Publication 594, The IRS Collection process, explains the collection process in detail.
What happens if you disagree with the IRS tax audit findings?
A conference with a manager may be requested for further review of the issue or issues. In addition, Fast Track Mediation or an Appeal request may be filed.
Fast Track Settlement (Large Business and International Division Taxpayers)
Fast Track Settlement (FTS) offers Large Business and International Division (LB&I) taxpayers a way to resolve audit issues during the examination process in less than 120-days.
Working with LB&I and Appeals, taxpayers can use the settlement authority and mediation skills of Appeals to shorten their overall experience with the Internal Revenue Service.
FTS reduces the combined LB&I-Appeals process time by two years.
Fast Track Settlement (Small Business and Self-Employed Taxpayers)
Small Business/Self-Employed and Appeals have designed an alternative dispute resolution strategy for small business and self-employed taxpayers, called the SB/SE Appeals Fast Track Settlement.
The FTS program was designed to resolve audit issues during the examination process within a goal of 60 days from acceptance of the application in Appeals.
The process uses the settlement authority and mediation skills of Appeals. We’ve successfully tested the program in Chicago; St. Paul, Minn.; Houston; central New Jersey; Philadelphia; San Diego; Laguna Niguel and Riverside, Calif.
SB/SE and Appeals will continue to offer FTS in these locations and has now expanded the program to include Atlanta, Detroit, New York City, Phoenix, Tampa and Seattle. FTS will be offered nationwide later in 2013.
To apply for the SB/SE FTS program, the taxpayer and the group manager need to submit Form 14017, Application for Fast Track Settlement, and the taxpayer’s brief, concise and soundly written response to the Service’s position.
IRS Tax Audits – What, Who, Why, Scope of a IRS Tax Audit, Former IRS Agents
by Fresh Start Tax | Jun 26, 2013 | IRS Tax Audit
We are comprised of tax attorneys, certified public accountants, and former IRS agents, managers and tax instructors.
We are A+ rated by the Better Business Bureau and have been in private practice right here in South Florida since 1982.
We have over 206 years of professional tax experience. We have over 60 years of working in the local, district, and regional tax offices of the Internal Revenue Service. We are tax experts for payroll tax audits
If you are undergoing a Payroll or Employment Tax Audit you better hire a professional tax firm because this is not a situation you want to lose.
Being a Former IRS Agent you should know these are dangerous tax audits.
Make sure you get tax representation for this type of tax audit.I am not telling you this to scare you but there is a huge downside to these tax audits. Not only can the business wind up owing money but the individual can wind up with a personal tax assessment as well.
Once the IRS sets up a tax deficiency for payroll or employment taxes the IRS has the right to file federal tax liens and control the amount of money you can make as a result of owing back payroll taxes. IRS will control your individual and business spending.
Do not let the IRS bully you during a payroll or employment tax audit!
Call Fresh Start Tax LLC 1-866-700-1040, home of former IRS agents.
Payroll Tax Audits
IRS does not take lightly the business owing payroll taxes because this is really not a tax but monies held on trust for the IRS and the FEDS.
The process works like this:
The IRS will pull a case from the CADE 2 computer for a tax audit and then notify the taxpayer / business of a payroll or employment tax audit.
The Agent will schedule a date for a meting usually at your place of business. It is better to have the audit at your representatives office.
The IRS can and will ask for back records generally for the past three years.
The IRS Agent when finished, will issue a tax report in which you have the right to appeal. If the IRS feels there was a criminal element involved they have the right to refer the case to criminal division.
Most cases simply end up with a tax deficiency, IRS will then send you a bill and the IRS will be expecting full payment.
WHAT IRS LOOKS FOR DURING THE TAX AUDIT.
The IRS agent will be targeting employees to see whether or not they are true employees or self employed agents.
There are common law tests to determine which classification a employee may fall under. This battery of questions you will find below will help the IRS agent determine in which category a employee may fall.
It is very important to remember there is not one factor used to make this determination but where the preponderance of evidence falls. If the IRS determines these workers are actually employees you will have problems because the IRS wants all of the back taxes plus penalties and interest.
Common law test for payroll tax audits or employment tax audits use by the IRS agent:
What was the:
Level of instruction. If the company directs when, where, and how work is done, this control indicates a possible employment relationship. The IRS will look for training manuals and policies the companies use. The IRS can use former employees to answer these questions as well.
Amount of training. Requesting workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which work is accomplished. The more training, the Service takes the position that the individual is an employer.
Degree of business integration. Workers whose services are integrated into business operations or significantly affect business success are likely to be considered employees. Those whose services are for the production of income to a great level are scrutinized more closely.
Extent of personal services. Companies that insist on a particular person performing the work assert a degree of control that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to anyone. Once again this goes to control.
Control of assistants. If a company hires, supervises, and pays a worker’s assistant, this control indicates a possible employment relationship. If the worker retains control over hiring, supervising, and paying helpers, this arrangement suggests an independent contractor relationship. There are exceptions to this.
Continuity of relationship. A continuous relationship between a company and a worker indicates a possible employment relationship. However, an independent contractor arrangement can involve an ongoing relationship for multiple, sequential projects. Also, does the individual have another job or is this the sole source of their income. Is their license available to everyone?
Flexibility of schedule. People whose hours or days of work are dictated by a company are apt to qualify as its employees. Does the individual punch a time clock or is the employee free to come and go? Does the person have a key to the facility?
Demands for full-time work. Full-time work gives a company control over most of a person’s time, which supports a finding of an employment relationship. The IRS will look to see if the individual has other W-2 income.
Need for on-site services. Requiring someone to work on company premises—particularly if the work can be performed elsewhere—indicates a possible employment relationship. Are name badges and uniforms required?
Sequence of work. If the company requires work to be performed in specific order or sequence, this control suggests an employment relationship. Does the employee do the same thing every day?
Requirements for reports. If a worker regularly provides written or oral reports on their the status of a project, this arrangement indicates a possible employment relationship. Is there an evaluation given?
Method of payment. Hourly, weekly, or monthly pay schedules are characteristic of employment relationships, unless the payments simply are a convenient way of distributing a lump-sum fee. Payment on commission or project completion is more characteristic of independent contractor relationships. Time clocks tend to look like hourly employees. What does the tax return of the individual look like?
Payment of business or travel expenses. Independent contractors typically bear the cost of travel or business expenses, and most contractors set their fees high enough to cover these costs. Direct reimbursement of travel and other business costs by a company suggests an employment relationship. Does the individual have a company credit card or expense account, how about a possible credit card of the company?
Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding. The checking of the individual 1040 for a schedule C expense form is a good cross check for the IRS.
Investment in facilities. Independent contractors typically invest in and maintain their own work facilities. In contrast, most employees rely on their employer to provide work facilities. Are there incentive programs for the individuals?
Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant profit or loss through their work generally are employees. Is the individual on a pension system or health insurance?
Work for multiple companies. People who simultaneously provide services for several unrelated companies are likely to qualify as independent contractors. That is why the individual tax returns may be checked.
Availability to public. If a worker regularly makes services available to the general public, this supports an independent contractor determination. Does the individual have other business cards and is their business open to the public? Does the person have other work going on at the same time?
Control over discharge or firing. A company’s right to discharge a worker suggests an employment relationship. In contrast, a company’s ability to terminate or fire the independent contractor relationships generally depends on contract terms. Is there a contract between both parties. does it contain accurate details? You will find below a sample of a contract.
Right of termination. Most employees unilaterally can terminate their work for a company without liability. Independent contractors cannot terminate services without liability, except as allowed under their contracts.
Remember, do not take payroll tax audit lightly. It is best to hire a tax professional. Call us today for a free initial tax consultation.
Payroll Tax Audits – Ft.Lauderdale, Miami, Palm Beach – Affordable Former IRS Agents
by Fresh Start Tax | Jun 5, 2013 | IRS Tax Audit
What are your Chances of a IRS Tax Audit
If you have received an IRS notice of tax audit or you are going through a current tax audit or may even have appeal issues contact us today for a free initial tax consultation and speak directly a former IRS agents, managers, and tax instructors.
As former IRS agents and managers we conducted our fair share of IRS tax audits right now the local South Florida offices.
We know all the protocols and settlement technique formulas to settle your case and limit your exposure with the Internal Revenue Service
Many taxpayers and clients ask us a common question in that is” what are your chances for an IRS tax audit”?
Here’s a breakdown by income of the percentage of individual returns audited by the IRS in 2011:
Adjusted Gross Income Audit Rate
- No adjusted gross income 3.42%
- $500,000-$1,000,000 5.32%
- 1,000,000-$5,000,000 5.38%
- $5,000,000-$10,000,000 20.75%
Contact us today for a free initial tax consultation if you are a need of an IRS tax audit specialist.
We’ve been practicing right here in South Florida since 1982 in are A+ rated by the Better Business Bureau. We are friendly and affordable.
What are your Chances of a IRS Tax Audit – Ft.Lauderdale, Miami – Broward, Dade County – Tax Audit Specialists
by Fresh Start Tax | Jun 4, 2013 | IRS Tax Audit
Tax Audits – IRS & State Audit Defense
We are a local tax firm that specializes in Affordable IRS Tax Defense.
You can hire Former Local IRS agents, managers and appellate agents who worked out of the local South Florida IRS offices for a combined 60 years.
We have worked as agents, managers, teaching instructors, appellate agents and have even taught tax law at the Internal Revenue Service.
If you are undergoing a tax audit in West Palm Beach it only makes sense to hire former government employees who know all the solutions, all the remedies, and all the different tax defenses to use for undergoing an IRS or State of Florida tax audit.
Also on staff are tax attorneys, tax lawyers, certified public accountants, enrolled agents and former appeals agents with the Internal Revenue Service.
We have been in private practice right here in South Florida since 1982 and we are A+ rated by the Better Business Bureau.
IRS Facts for Tax Audits of Income and Business Audits
The IRS audits about 1 percent of the individual tax returns.
143.4 million – Individual federal tax returns filed in 2011.
1.4 million – Individual tax returns examined by the IRS, resulting in notices being mailed or in-person audits.
90 percent – Tax returns audited in person resulting in a recommended change in taxes.
85 percent – Tax returns audited via mail resulting in a recommended change.
$15.1 billion – Amount of recommended additional taxes from the audits.
$16,851 – Average recommended additional taxes per in-person audit.
$8,241 – Average recommended additional taxes per mail audit.
This Source material is from the 2012 Internal Revenue Service Data Book.
The public has a right to look at any information regarding IRS statistics. Simply go online to IRS.gov and you will find a wealth of information.
Did you win the IRS Audit Lottery, fight Back
If you won the IRS audit lottery you should never go into IRS unrepresented for an IRS audit. As a former IRS agent seeking good professional tax will in the long run save you aggravation, grief, stress and keep money in your pocket in the long run.
If you have received an IRS letter or notice that you are going to undergo an IRS tax audit is in your best interest to call former IRS agents and managers who know all of the protocols, techniques and tax defenses to best defend your tax return that is undergoing an IRS tax audit.
Some of the Reasons why IRS selected your tax return for an IRS audit – IRS Tax Audit Flags
1. High income, big trigger.
If your income is $200,000.00 and over; the audit rate will be one-in-twenty seven of being audited. If your income is $1,000,000.00 or more, the audit rate will be one-in-eight of being audited. This is just a fact of life.
2. Failing to report all of your taxable income.
The IRS receives copies of all 1099′s, W-2′s, W-2G’s and K-1′s that you receive. If the income from the 1099′s, W-2′s, W2G’s and K-1′s are not shown on the tax return, the tax return will be audited.
3. Deducting the home office deduction. Even those these deductions are allowed IRS scrutinizes office in the home deductions.
The space used in your home must be used “exclusively and regularly” as your principal place of business. “Exclusive use” means that a specific area of the home is used only for trade or business. If you can prove the home office deduction, then take it. If you can’t prove it, don’t take it.
4. Deducting large charitable contributions. If you’re been to take a huge charitable deduction many times it is a good idea attaching a copy of the check to your tax return to prove the tax the deduction.
If your charitable deductions are large compared with your income, the return will be audited. The IRS is aware of what the average charitable donation is for a given income level. If you have donated and deducted a conservation easement to a charity, chances are good that you will be audited.
5. Deducting rental losses.
Normally, the passive loss rules prevent rental losses from being deducted. There are two exceptions, if you actively participate in the renting of your property, you can deduct up to $25,000.00 of the loss against your other income; but this $25,000.00 limitation phases out as adjusted gross income exceeds $100,000.00.
The second exception applies to real estate professionals who spend more that 50% of their working hours and 750 or more hours each year materially participating in reals as a developer, broker, landlord or the like. The IRS will be requesting that you prove the required hours, especially if are a full time employee.
6. Deducting business meals, travel and entertainment in excess.
The IRS has specific record keeping requirements for these type of deductions. The IRS is aware that many taxpayers overstate these type of deductions.
7. Deducting losses from a hobby activity.Check with us regarding hobby losses.
If you treat your favorite hobby as a business on your tax return with a net loss, you have a good chance of being audited. If you are audited, you will need to prove that your activity is a profit making activity and not a costly hobby.
So make sure that you run your activity in a businesslike manner and can substantiate your expenses with supporting documents.
8. Running a cash business, huge red flag!!!
If you are in a cash-intensive business, like taxis, car washes, bars , hair salons, restaurants, you will be audited. The IRS is aware that individuals who primarily receive cash, don’t report all of their taxable income. The IRS has various audit techniques to determine unreported cash income.
9. Failing to report a foreign bank account. FBAR Accounts, a new target for the IRS.
If you fail to report a foreign bank, you will be assessed large penalties. If you have any signature authority over a foreign bank account, you will need to consult with a tax professional to determine the correct reporting requirements for that account.
10. Engaging in currency transactions.CTR’s.
If you are engaged in cash transactions in excess of $10,000.00, the IRS will receive reports of these transactions from the financial institutions. Further, if you engage in suspicious cash activities, the IRS will receive a “suspicious-activity report” from the various financial institutions.
These transactions usually indicate that the the taxpayer is trying to hide income from the IRS. Try to avoid these type of transactions.
If you live in the South Florida area contact us today for a free initial tax consultation about an IRS or State tax audit.
We are A+ rated by the Better Business Bureau and are without complaint.
West Palm Beach – Tax Audits – IRS & State Audit Defense – Former IRS, CPA’s, Attorneys
