by steve | Jan 11, 2010 | Tax Help, Uncategorized
Many taxpayers get a tax refund from the IRS each year. However, if you owe tax, here are 10 free tips to deal with your problem.
Tip #1 – If you get a bill for late taxes, you are expected to promptly pay all the taxes owed including any additional penalties and interest. If you are unable to pay the amount due, it is often in your best interest to get a loan or borrow the funds to pay the bill in full rather than to make installment payments to the IRS.
Tip #2 – You can pay the the IRS with your credit card. Plus you get points by using your credit card. To pay by credit card contact either Official Payments Corporation at 800-2PAYTAX , www.officialpayments.com, Link2Gov, 888-PAY-1040 or www.pay1040.com. It is usually cheaper to owe the credit card company than Uncle Sam.
Tip #3 – The interest rate on a credit card or bank loan may be lower than the combination of interest and penalties imposed by the Internal Revenue Service. The IRS charges a failure to pay penalties which is in addition to the interest which makes paying the tax even tougher.
Tip #4 – You can also pay the balance owed by electronic funds transfer (EFT), check, money order, cashier’s check or cash. The IRS loves cash.(do not send cash by mail). To pay by using the Electronic Federal Tax Payment System call 800-555-4477 or 800-945-8400 or go online at www.eftps.gov.
Tip #5 – An installment agreement may be requested if you cannot pay the liability in full. This is an agreement between you and the IRS for the collection of the amount due in equal monthly payments. To be eligible for an installment agreement, you must be current with the filing of all your tax returns and be current with estimated tax payments, if you do not have withholding. If the tax debt is over $25.000, the IRS will require a documented financial statement, Form 433-F, to be sent in and reviewed by an agent at one of the Service Centers.
Tip #6 – If you owe $25,000 or less in combined tax, penalties and interest, you can request an installment agreement using the web-based application called Online Payment Agreement found at IRS.gov. This is very simple and painless.
Tip #7. – You can also complete and mail an IRS Form 9465, Installment Agreement Request, along with your bill in the envelope that you have received from the IRS. The IRS will inform you usually within 30 -45 days whether your request is approved, denied, or if additional information is needed. If the amount you owe is $25,000 or less, provide the monthly amount you wish to pay with your request. If the monthly amount you request will pay the IRS debt in full within 60 months it will probably be allowed without completing a Collection Information Statement, Form 433A or F. IRS will require additional information if the debt takes over 60 months to pay off.
You may still qualify for an installment agreement if you owe the IRS more than $25,000, but a Form 433-F, Collection Information Statement, is required to be completed before an installment agreement can be considered. The 433-F is used by ACS Unit to determine your financial ability to pay. If your balance is over $25,000, the IRS will consider your financial situation and propose the highest amount possible. Fresh Start Tax can help negotiate your installment agreement, we will fight to get you the lowest payment possible based on your financial information.
Tip#8 – If an agreement is approved, a one-time user fee will be charged. The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account. For eligible individuals with incomes at or below certain levels, a reduced fee of $43 will be charged. The reduced fee is automatically figured based on your income.
Tip #9 – Make sure your withholding is adjusted so you do not have the same problem in future years.
Tip #10 – Fresh Start Tax can answer any question you have regarding all your IRS issues.
by steve | Jan 11, 2010 | Tax Help, Uncategorized
Fresh Start Tax solutions to get your IRS Tax Levy released on wages and/or assets.
The IRS TAX LEVY ON WAGES, 668(W) or the levy on BANK ACCOUNTS 668(A) is the ultimate collection tool of the IRS. This is the IRS’s enforced collection mechanism where they will seize your wages and/or your assets for unpaid back taxes. Below are 10 ways you can legally release a tax levy with the IRS.
1. Pay the tax amount in full. If you can afford it, this is the easiest way of settling back taxes and getting a levy released. If you pay the tax amount owed in full, the IRS will immediately stop all collection actions against you or your company and the levy will be released or removed.
2. Let the Statute of Limitations Expire. The IRS has 10 years to collect taxes from the initial date of assessment. Once the 10 year period is up, they can no longer collect these taxes from you. Keep in mind that the IRS will try to extend this statute of limitations, so be aware of any papers they want you to sign. Also be aware that certain actions extend the statue of limitations, such as bankruptcy or the filing of an offer. If you have not paid the amount owed in 9 years, it is unlikely they will be able to collect from you in the last year. Certain factors influence when cases are sent back to the field. You can read our blogs to find out those factors.
3. Set up an installment agreement. An installment agreement is a payment plan with the IRS. This plan will allow you to pay off the IRS tax amounts owed over time. It usually is a 5 year period of time. It is important to make timely payments once the installment agreement is in place or the IRS can reissue the tax levy or levies.
4. Set up a partial payment agreement. This is similar to the installment agreement, but if you show you can legitimately not make the payments required for an installment agreement, the IRS will allow for smaller payments that may equal less than the original amount of tax owed. These are usually hardship type cases.
5. File an Offer in Compromise. If you meet the strict requirements for this type of relief, the IRS will release the levy. This is one of the hardest types of relief to receive from the IRS because it allows you to settle for far less than you owe.
6. Prove you have no equity in assets. If the assets the IRS are trying to levy have no equity in them, you must prove to the them that there would be no point for them to levy those assets. The IRS will gain nothing from levying them and it will not help pay anything towards your back taxes owed.
7. Prove you have a Financial Hardship. If you can prove to the IRS that the levy creates economic hardship. Some examples of a hardship could be that you are being evicted or have a medical problem that takes most of your wages or assets. If you qualify as a hardship it is likely the IRS will release or remove the federal tax levy.
8. Post a Surety Bond. If you post a surety bond, the levy will no longer be in effect. If a levy is in place, and you cannot pay your taxes, it is highly unlikely you will qualify for a bond. If you do qualify for a bond, you may be better off paying the tax amount owed in full. Your federal tax lien gets released as well.
9. Appeal the Levy. You can appeal an IRS levy and you will have a review if the Internal Revenue Service did not follow correct procedures.
10. File a bankruptcy. Bankruptcy settlement can release a tax levy by court order and return seized assets to you. This should be considered as a last resort. Your taxes must be 3 years or older, assessed for 240 days, and the returns must be filed for a two year period of time.
Fastest and easiest way to release a Levy is to call Fresh Start Tax today. We can get your situation taken care of FAST and get your life back in order, 1.866.700.1040.
by steve | Jan 8, 2010 | Tax Help, Uncategorized
So which is best for you? Thousands ask every year so here is the definitive answer.
The first thing you need to know. If you file electronically, the software automatically selects which is right for your individual case. Whether you use e-file or prepare on paper, using the simplest form will help avoid costly errors or processing delays. Remember, if you file electronically, it speeds up the processing of your tax return and the delivery of your refund. At some point everything will be electronic.
So here are your choices:
Use the 1040 EZ when:
Your taxable income is below $100,000
Your filing status is Single or Married Filing Jointly
You and your spouse ? if married — are under age 65 and not blind
You are not claiming any dependents
Your interest income is $1,500 or less
You are not claiming the additional standard deduction for real estate taxes, taxes on the purchase of a new motor vehicle, or disaster losses
You can use the 1040A if
Your taxable income is below $100,000
You have capital gain distributions
You claim certain tax credits
You claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees
If you cannot use the 1040EZ or the 1040A, you?ll probably need to file using the 1040. You must use the 1040 if:
Your taxable income is $100,000 or more
You claim itemized deductions
You are reporting self-employment income
You are reporting income from sale of property
All IRS forms, instructions and information about e-file can be found on IRS.gov.
Remember, should you have any questions, please call Fresh Start Tax. We’re here to help you.
by steve | Jan 7, 2010 | Tax Help, Uncategorized
http://business.wbztv.com/cbslocal/?Account=wbztv&GUID=11377176&Page=ediaViewer
This major news release is indicative of the climate of the Federal government taking stepped up enforced collection activity on everyone owing the FEDS tax.
by steve | Jan 7, 2010 | Tax Help, Uncategorized
Here are some tips on this year’s tax laws.
When you prepare to file your income tax return for 2009, here are two factors regarding your tax situation: Dependents and Exemptions.
If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and, any advance Earned Income Tax Credit payments you received.
Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, depending on your filing status. If you are a dependent, you may not claim an exemption. If someone else ? such as your parent ? claims you as a dependent, you may not claim your personal exemption on your own tax return.
Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you?re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.
Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.
Sometimes taxpayers are unsure of their status. Call us and we will be more than happy to help.
by steve | Jan 6, 2010 | Tax Help, Uncategorized
Collection Issues. From the National Tax Payers Advocates Office.
The report contains a detailed assessment of the IRS examination and collection practices, concluding that many practices have been developed piecemeal and that the IRS lacks an effective overarching strategy to maximize voluntary compliance. The report also concludes that IRS collection practices often harm taxpayers without producing revenue.
In particular, the report cites the IRS lien filing policies as the second most serious problem facing taxpayers. The IRS uses automated systems to file liens against taxpayers in a variety of situations, even when the taxpayer possesses minimal or no property and the lien will do little more than damage the taxpayers financial viability and access to credit. A study conducted by Olson?s office found no obvious causal relationship between the number of lien notices filed and the amount of overall revenue collected. Over the past decade, the IRS increased its lien filings by nearly 475 percent ? from about 168,000 in FY 1999 to nearly 966,000 in FY 2009, yet overall inflation-adjusted collection revenue declined by 7.4 percent during this period.
A second study found that the IRS procedures for determining a taxpayers ability to pay outstanding tax liabilities may be driving some taxpayers into long-term noncompliance because the IRS fails to consider other debts such as credit card balances, school loans, and actual hospital or medical bills. Other tax systems, including Sweden’s, consider the taxpayers overall financial picture.
?Any taxpayer with these debts will tell you that these creditors don’t go away,? Olson said. Taxpayers are placed in the intolerable position of agreeing to pay the IRS more than they can actually afford (given their other debts) and then defaulting on the IRS payment arrangements when they channel payments to unsecured creditors in order to get some peace. Thus, the IRS itself fosters noncompliance by its failure to take a holistic approach to the taxpayers debt situation.?
“The National Taxpayer Advocate recommends that Congress require the IRS, before imposing a lien, to make a determination that the benefits of filing the lien outweigh the harm to the taxpayer and will not jeopardize the taxpayers ability to comply with future tax obligations”.
The report of this practice has been going on for years and it is about time the IRS fixes it. What do you think?
