by Fresh Start Tax | Jan 10, 2013 | Owe Payroll Taxes, Representation, Tax Help
Owe IRS Trust Fund Taxes – Let Former IRS Agent Resolve, Settle
Call us today and speak directly to Tax Attorneys, CPAs, or former IRS agents. We are tax specialists in the quick resolution of IRS trust fund taxes. If you owe back trust fund taxes or in need of filing in a Appeal we can help.
All initial consultations are free. 1-866-700-1040.
Trust fund taxes are a special breed of taxes are owed to IRS. They are comprised of unpaid payroll taxes. When IRS collects the trust fund penalty IRS is seeking a payment comprising of the withholding tax and one half of the Social Security tax not paid on 941 payroll tax returns. This usually results in a tax saving about 40%.
There are multiple tax defenses to go ahead and defend the assertion of the trust find taxes or civil penalties levied or imposed by Internal Revenue Service.
Trust Fund Recovery Penalty Assessments
The trust fund recovery penalty, applicable to withheld income and employment (social security and railroad retirement) taxes or collected excise taxes, will be used to facilitate the collection of tax and enhance voluntary compliance.
If a business has failed to collect or pay over income and employment taxes ( 941) , or has failed to pay over collected excise taxes, the trust fund recovery penalty may be asserted against those determined to have been responsible and willful in failing to pay over the tax.
A Key Point
Responsibility and willfulness must both be established.
The withheld income and employment taxes or collected excise taxes will be collected only once, whether from the business, or from one or more of its responsible persons.
Collection of the withheld income and employment taxes or collected excise taxes is achieved when the Service’s right to retain the amount collected is established.
Determination of Responsible Persons for the Trust Fund Taxes.
Tax Responsibility is a matter of status, duty, and authority.
Those persons performing ministerial acts without exercising independent judgment will not be deemed responsible.
In general, non-owner employees of the business entity, who act solely under the dominion and control of others, and who are not in a position to make independent decisions on behalf of the business entity, will not be asserted the trust fund recovery penalty.
How IRS determines who is responsible for the trust fund penalty.
1. Who directed or authorized payments of bills to creditors,
2. Who had the right to open and close bank accounts for the business,
3. Good guarantee or cosign loans for the business,
4. Who signed or could cosign checks,
5. Who authorized payroll, who is authorized to make federal tax deposits.
6. Who filled out payroll tax form 941,
7. Who prepared reviewed or signed or transmitted payroll tax returns to the IRS or to the accountant,
8. Who had the right to hire or fire employees,
9. Who made sure other bills were paid other than the IRS,
10. If you were to ask the employees of the company who in fact ran the business who would they point to,
11. Who ran day-to-day operations of the business.
While this is not an all-encompassing list of who is responsible for the trust fund taxes of a company or corporation, this would give the revenue officer out the local office of a good idea to look.
Non Profit Trust Fund Cases Cases
The trust fund penalty shall not be imposed on unpaid, volunteer members of any board of trustees or directors of an organization referred to in section 501 of the Internal Revenue Code to the extent such members are solely serving in an honorary capacity, do not participate in the day-to-day or financial operations of the organization, and/or do not have knowledge of the failure on which such penalty is imposed.
in order to make accurate determinations the IRS will weigh all relevant issues and should be thoroughly investigated.
Non assertion of the Trust Fund Penalty
An individual will not be recommended for assertion if sufficient information is not available to demonstrate he or she was actively involved in the corporation at the time the liability was not being paid.
This shall not apply if the potentially responsible individual intentionally makes information unavailable to impede the investigation.
IRS Field investigations to determine the trust fund recovery penalty liability will be conducted promptly to enhance access to relevant information and reduce burden to taxpayers.
Absent statute considerations, assertion recommendations normally will be withheld in cases of approved and adhered to business installment agreements and bankruptcy payment plans. To the extent necessary, information will be gathered to support a possible assessment in the event the agreement is defaulted.
Application of Payments in Determining Trust Fund Recovery Penalty Assessments
Effective for assessments where notices of TFRP liability are issued on or after June 19, 2000 and for any undesignated payment made on or after January 1, 2003)
Any payment made on the business account is deemed to represent payment of the non trust fund portion of the tax liability (e.g., employer’s share of FICA) unless designated otherwise by the taxpayer.
The taxpayer, of course, has no right of designation of payments resulting from enforced collection measures.
To the extent partial payments exceed the non trust fund portion of the tax liability, they are deemed to be applied against the trust fund portion of the tax liability (e.g., withheld income tax, employee’s share of FICA, collected excise taxes).
Once the non trust fund and trust fund taxes are paid, the remaining payments will be considered to be applied to assessed fees and collection costs, assessed penalty and interest, and accrued penalty and interest to the date of payment.
Small Business Administration regarding Assertions of the Trust Fund.
When employees of the Small Business Administration perform duties in accordance with the regulations of the agency, the Service will not consider assertion of the liability provided by IRC 6672 or 3505 against those Small Business Administration employees in any past, current or future cases arising out of these duties.
A footnote should be added about the assertion of the trust fund penalties.
The local revenue officers have tremendous power in determining who is and who is not responsible for these trust fund taxes. I would tell anybody working on their own case if you do not like the decision from the local revenue officer to make sure you contact the manager in the local office.
IRS will issue a form 2751 if in fact you are held responsible for the trust fund tax.
You have a 60 day right to appeal that starts from the date of the letter from the Revenue Officer.
Call us today for free tax consultation and we will review your case.
by Fresh Start Tax | Nov 28, 2012 | IRS Tax Audit, Representation
IRS Tax Audit Help & Representation – Former IRS Agents – Florida Keys, Miami, Ft. Lauderdale, Boca, Palm Beaches – IRS Tax Audit Experts 954-492-0088
Stop the worry! We have successfully defended thousands of clients before the IRS. Call us for a no sort consult and speak to true tax professionals.
We are comprised of Tax Attorneys, Tax Lawyers, CPA’s and Former IRS agents, managers and instructors.
We have a combined 60 years of direct IRS experience in the local South Florida Offices.
Also on staff a Former IRS Appeal Agent.
If you have received a IRS Tax audit letter or need a opinion call us today for a no cost tax consult.
As Former IRS Agents and Managers we needed to follow guidelines and audit techniques for all IRS tax audits. Listed below are the methods and techniques that can or may be used on a IRS tax audit.
IRS Audit Methods and techniques.
Methods for accumulating evidence include:
Analytical Tests.
Such as analysis of Balance Sheet items to identify large, unusual, or questionable accounts.
Analytical tests use comparisons and relationships to isolate accounts and transactions that should be further examined or determine that further inquiry is not needed.
Documentation.
such as examining the taxpayer’s books and records to determine the content, accuracy, and substantiate items claimed on the tax return.
Inquiry.
such as interviewing the taxpayer or third parties. Information from independent third parties can confirm or verify the accuracy of information presented by the taxpayer.
Inspection.
such as physically examining the taxpayer’s assets, e.g., inventory or securities.
Observation.
IRS can or will conduct a tour of the taxpayer’s business to observe the taxpayer’s daily business operations.
Testing.
IRS can or will trace transactions to determine if they are correctly recorded and summarized in the taxpayer’s books and records.
Factors IRS will use to consider when choosing an examination technique are:
1.Will the examination technique provide the needed evidence?
2.Will the benefits derived from using a particular technique justify the associated costs to both the examiner and the taxpayer?
3. Are there less expensive alternatives that will provide the same evidence?
The following Examination techniques used to gather IRS tax evidence .
a. Conduct face to face interviews with the taxpayer and or the representative,
b. Make tours of Business Sites and Inspection of Residences,
c. Evaluation of the taxpayer’s internal control systems,
d. Examining the taxpayer’s books and tax records,
e. Analyzing Schedules M–1 and M–2,
f. Bank Record reconciliations,
g.Analysis balance sheets,
h. Testing of gross receipts or sales,
i. Testing of expenses: Cost of goods sold,
j. Testing Expenses: operating expenses.
For Business Tax Returns
IRS uses minimum income probes for individual business tax returns. They are a follows:
1. Financial Status Analysis.
Prepare a financial status analysis to estimate whether reported income is sufficient to support the taxpayer’s financial activities.
2. IRS Interview.
Conduct an interview with the taxpayer (or representative) to gain an understanding of the taxpayer’s financial history, identify sources of nontaxable funds, and establish the amount of currency the taxpayer has on hand.
IRS will consider possible bartering income as part of the minimum income probes.
3. IRS will usually take a tour of business .
Tour the business site and review of the Internet website to gain familiarity with the taxpayer’s operations and internal controls, and identify potential sources of unreported income.
However, a tour of the physical business site is not required for office audit cases but may be conducted if appropriate and with manager approval.
4. Internal Control.
IRS can and will evaluate internal controls to determine the reliability of the books and records (including electronic books and records), identify high risk issues, and determine the depth of the examination of income.
5.IRS will conduct a reconciliation of income.
Reconcile the income reported on the tax return to the taxpayer’s books and records.
An analysis of the IRP information in the file should also be completed to ensure all business and/or investment activities reflected on the IRP document are properly accounted for on the tax return.
6. IRS will do a Testing Gross Receipts.
Test the gross receipts by tying the original source documents to the books.
7. Bank Analysis – Prepare an analysis of the taxpayer’s personal and business bank and financial accounts (including investment accounts) to evaluate the accuracy of gross receipts reported on the tax return.
8. Business Ratios.
Prepare an analysis of business ratios to evaluate the reasonableness of the taxpayer’s business operations and identify issues needing a more thorough examination.
9. E-Commerce and/or Internet Use – Determine if there is Internet use and e-comm.
IRS Tax Audit Help & Representation – Former IRS Agents, Tax Attorneys – Florida Keys, Miami, Ft. Lauderdale, Boca, Palm Beaches – IRS Tax Audit Experts
by Fresh Start Tax | Nov 17, 2012 | Representation, Tax Problem Help, Tax Relief
B Notice IRS Form 8822-B Fresh Start Tax LLC – Former IRS Agents – IRS Tax Help
We are Former IRS Agents and Managers. With over 60 years of direct IRS tax experience we can help audit proof your tax return and solve or settle any IRS tax problems you may encounter. 1-866-700-1040.
We have over 206 years of professional tax experience and we are A plus rated by the BBB.
B Notice IRS Form 8822-B Fresh Start Tax L.L.C. – Former IRS Agents – IRS Tax Help
If you are moving or changing your address it is ALWAYS best to notify the IRS in every case. Many people or taxpayers feel just let IRS find me. Bad idea!
The problem with that thinking, according to the IRS code, the IRS is only required to send information to the last known address that they have on file from you.
If you do not notify the IRS, they can be sending you information for tax audits, tax changes and proposals to income and if you you do not respond you lose. There legal requirement is to the last known address.
Also , it is not the job of the IRS to keep up with you.
This IRS provisions clearly state it only has to contact you at your last filed tax return address.
Do yourself a huge favor, keep the IRS in the loop.
Purpose of Form
You can use Form 8822-B to notify the Internal Revenue Service if you changed your business mailing address or your business location.
Also, any organizations that change their address would file Form 8822-B, whether or not they are engaged in a trade or business. If you are a representative signing for the taxpayer, attach to Form 8822-B a copy of your power of attorney.
The use of this form is voluntary.
However, if you fail to provide the Internal Revenue Service with your current mailing address, you may not receive a notice of deficiency or a notice and demand for tax.
Despite the failure to receive such notices, penalties and interest will continue to accrue on the tax deficiencies.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number.
Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law.
Need IRS Tax Help, call us today. 1-866-700-1040.
by Fresh Start Tax | Nov 16, 2012 | Representation, Tax Audit, Tax Lawyer
Fresh Start Tax L.L.C. is a professional tax firm comprised of Tax Attorneys, Tax Lawyers, CPA’s and Former IRS Agents and Managers.
We have over 206 years of professional tax experience and over 60 years of direct IRS experience in local, district and regional offices of the IRS.
We taught Tax Law at the IRS. WE know all the tax policies and tax procedure to get you results.
The IRS Notice of Deficiency You must act within the 90 day window
A taxpayer must be formally notified by certified or registered mail when the Internal Revenue Service (IRS) issues a notice of deficiency.
When taxpayers disagree with a IRS tax determination they may petition the United States Tax Court for a judicial determination of the IRS tax liability after receiving a notice of deficiency, without prior payment in full of the tax at issue.
A IRS Notice of Deficiency is a formal letter from the IRS informing a taxpayer of a tax deficiency and advising them of their appeal rights with the United States Tax Court.
It is required by law and is sent by registered or certified mail to the taxpayer’s last known address.
Although a Notice of Deficiency can be issued when no tax return has been filed, it is most often sent when the tax amount shown on a submitted return is less than the actual amount owed according to IRS calculations.
Notice of Deficiency Definition
A notice of deficiency, also called a “statutory notice of deficiency” or “90-Day Letter,” is a legal notice in which the IRS Commissioner determines the taxpayer’s tax deficiency. The notice of deficiency is a legal determination that is preemptively correct and consists of:
1. A letter explaining the purpose of the notice, the amount of the deficiency, and the taxpayer’s options,
2. A waiver to allow the taxpayer to agree to the additional tax liability,
3. A statement to the taxpayer showing how the deficiency was computed, and
4. An explanation of all the adjustments.
The purpose of a notice of deficiency is:
a. To ensure the taxpayer is formally notified of the IRS’s intention to assess a tax deficiency, and
b. To inform the taxpayer of the opportunity and right to petition the Tax Court to dispute the proposed adjustments.
c. A notice of deficiency is issued for un-agreed deficiencies of income or estate and gift tax liabilities.
Information is provided by an IRS Notice of Deficiency
A Notice of Deficiency must include an explanation for the deficiency together with a statement of the tax, interest and penalties that have been assessed.
Important Date
The IRS tax notice should also include the final date on which the taxpayer can file a petition with the United States Tax Court appealing the assessment. This is a statute requirement and drives the appeal rights.
It should be noted that failure by the IRS to specify the last day on which to file a petition will not invalidate an otherwise valid deficiency notice if the taxpayer was not prejudiced by the omission. From time to time this will happen and an experienced tax firm will validated the paperwork.
Responding to a Notice of Deficiency.
Beware – Within 90 days after a Notice of Deficiency is mailed (or within 150 days after mailing if the notice is addressed to a person outside the United States) the taxpayer must pay the assessed amount or file a petition with the Tax Court to contest the liability. Payment of the IRS assessed amount after the deficiency notice is mailed does not deprive the Tax Court of jurisdiction over the deficiency.
In addition, discussion of the case with the IRS during the 90 day period does not extend the time period during which a petition can be filed. You will find all contact information on the notice itself.
Consequences if a taxpayer does not response in a timely manner
If the taxpayer(s) does not file a Tax Court petition within the required time period, the appeal process is closed and IRS has the authority to collect the tax. IRS will asses the tax on their CADE 2 computers and start the billing and enforcement notices.
Since the Tax Court is the only court that will hear the question of whether a tax liability is really owed, the taxpayers only option after the 90 day deadline has passed is to pay the assessed amount in full and then apply for a refund. It is usually unlikely that the taxpayers will do this because most do not have the funds. Therefore it is imperative to act within that 90 days.
We at Fresh Start Tax LLC has Former IRS agents managers and instructors that can help you through this process worry free. 1-866-700-1040.
Notice of Deficiency – IRS Deficiency Notice Tax Help, Former IRS, Tax Attorneys – Fresh Start Tax LLC
by Fresh Start Tax | Nov 6, 2012 | California Tax, IRS Representation, IRS Tax Problem, Representation, Tax Levy and Wage Garnishments, Tax Relief
IRS Bank Tax Levy, Wage Levy Garnishment – Tax Debt Resolution
We can get you immediate and permanent tax relief from your IRS Bank Levy or Wage Garnishment and settle your case all at one time. Get Tax Debt Resolution from true tax professionals. Do not be scammed.
We are A plus rated by the Better Business Bureau.
Fresh Start Tax LLC 1901 Newport Boulevard
Suite 350
Costa Mesa, CA 92627
866-700-1040
We have over 206 years of professional tax experience and over 60 years with the IRS in the local, district and regional offices of the IRS.
We can get results for Tax Debt Resolution within 48 hours so stop the worry now.
We have worked over 15,000 cases since 1982. Fresh Start Tax L.L.C. is A plus rated by the BBB.
What is a Bank Tax Levy and Wage Tax Levy
A IRS tax levy is a legal seizure of your property to satisfy a tax debt.
Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.
A Bank Levy
A Bank Levy is a freeze on your bank account for 21 days. On the 22nd day if you did not resolve the issue with the IRS, the bank is obligated to forward the money to the IRS. Usually a tax firm can easily get the bank levy released.
A Wage Levy Garnishment
Unlike a bank account, a wage garnishment levy is a immediate seizure of your next paycheck and it will continue until to you call the IRS and get the wage levy released.You are allowed to keep about 10% of your paycheck while a wage levy garnishment is in place.
Releases or Removals
To get the Bank or Wage levy released IRS will want to make sure all your tax returns are filed and you have submitted a financial statement to the IRS.
The financial statement must be verified with documents to prove your income and expenses.
We at Fresh Start Tax LLC can usually get levies releases within days.
If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in.
For instance,
IRS can also seize and sell property that you hold such as your car, boat, or house, or
We could levy property that is yours but is held by someone else such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions.
IRS cannot levy until after three requirements are met:
1. The IRS assessed the tax and sent you a Notice and Demand for Payment;
2. You failed or neglected or refused to pay the tax and,
3. IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy.
IRS must give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.
Note- if the IRS sends a levy your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.
Legal- Method of Delivery
Federal Tax Regulation 301.6331-1(c) authorizes the IRS to provide depositories notices of levy by mail. However, the regulation does not preclude in-person delivery of a levy to a local branch or office by a revenue officer. Additionally, depositories may not designate a specific branch or location for service of hand-delivered levies.
No matter how a levy is received, by mail or hand delivered, depositories are expected to adhere to IRS guidelines by immediately processing the levy and freezing all affected accounts for the 21-day period required by Internal Revenue Code Section 6332(c).
A mailed levy becomes effective the date and time the notice of levy is delivered to the depository. A hand-delivered levy becomes effective the date and time the notice of levy is hand delivered in person by a revenue officer.
Call us today to get immediate tax results, 1-866-700-1040
IRS Bank Tax Levy, Wage Levy Garnishment – Tax Debt Resolution
by Fresh Start Tax | Nov 6, 2012 | California Tax, Offer in Compromise, Representation, Tax Help, Tax Lawyer, Tax Lien, Tax Settlements
Mr. Sullivan is a Former IRS Agent and Teaching Instructor with the Internal Revenue Service.
He not only worked the IRS Tax Debt Settlement Program called the Offer in Compromise he was a Instructor that taught the Program to new IRS agents in the local, district and regional offices of the IRS.
Fresh Start Tax L.L.C. is comprised of Board Certified Tax Attorneys, Tax Lawyers, CPA’s and Former IRS agents.
We have over 206 years of total tax experience and over 60 years of direct work experience with the IRS.
Fresh Start Tax L.L.C. Local California Office
1901 Newport Boulevard
Suite 350
Costa Mesa, CA 92627
866-700-1040
In days past it was almost impossible to get an offer in compromise through to the IRS. IRS Tax Debt Settlement practice was almost obscure because IRS did not want to work the IRS Settlement Program. Thousands of Offers should have been accepted but due to the stubbornness of the IRS it lost millions of dollars in revenue because it failed to help suffering and struggling taxpayers.
The amount of work that goes into an accepted offer in compromise can be upward to 20 hours. It is far easier for an Agent to reject the offer than go through the task of accepting one. They are reviewed and approved to death.
Most practitioners would not even file Offers or tax settlements. The ones that did for the most part were preying on taxpayers claiming pennies on a dollar. Not all companies were part of this but it was sickening to see taxpayers paying thousands of dollars when they really never had a chance of getting a tax settlement given the financial facts of their cases.
The IRS would fight you on everything and the extent of the detail they wanted was outrageous.
With the Feds needing money and money in a hurry it finally decided to start settling back tax cases in which it would get instant dollars into the system.
The Commissioner and the powers to be came up with real guidelines that would help these struggling taxpayers final get some badly needed tax relief in the form of true pennies on a dollars settlement.
There are about 55,000 offers in compromise filed each and every year with about 25% of those offers be accepted. The average settlement on each case is about 14 cents on a dollar.
The New IRS Fresh Start Program is allowing taxpayers to settle there tax debt.
The Press Release sent out by the IRS called the Fresh Start Program. See modified version below.
In its latest effort to help struggling taxpayers, the Internal Revenue Service announced a series of new steps to help people get a Fresh Start with their tax liabilities and back tax debts.
The goal of the IRS is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers.
Understand the process the settlement or offer practice.
While your offer or settlement is being evaluated it is important to know what will, take place:
a. Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
b. A Notice of Federal Tax Lien may be filed;
c. Other collection activities are suspended;
d. The legal assessment and collection period is extended;
e. Make all required payments associated with your offer;
f. You are not required to make payments on an existing installment agreement; and
g. Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
The New Federal Tax Lien Policy
The IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid the filing of the Federal Tax Liens. this alone is a cause for great joy because the filing of a federal tax lien will crush the credit of a business and or an individual.
The IRS is making fundamental changes to our federal lien system and other collection tools that will help taxpayers and give them a fresh start, “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.”
IRS making important changes to its federal tax lien filing practices.
The changes include:
a. Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
b. Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
c. Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
d. Creating easier access to Installment Agreements for more struggling small businesses.
e. Expanding a streamlined Offer in Compromise program to cover more taxpayers.
Call us to see if you qualify for an offer in compromise. Do not file an offer unless you qualify. Free consultations, 1-866-700-1040.
