by Fresh Start Tax | May 25, 2016 | Tax Help
The Best Expert IRS Tax Audit Defense + Local Affordable Tax Audit Specialists. We are an affordable South Florida team of IRS tax audit experts, former IRS agents and managers, since 1982.
A + Rated BBB, Covering Jupiter, Florida,
We know the IRS audit and appeals system inside and out.
Not only were we former IRS agents we were teaching instructors and supervisors within the IRS audit system. We have over 65 years working the system.
We were former teaching instructors with the LOCAL Internal Revenue Service.
We worked both in audit and collection divisions. Since 1982, we have been representing people in the South Florida, Fort Lauderdale and Miami area.
You want to hire IRS agents because of their knowledge of the working system of Internal Revenue Service.
There a lot of methodologies to working IRS cases , all our experiences can collaborate into the very best tax result possible.
Many profess to be experts in the area of IRS tax audits but unless you have handled thousands of cases and been involved in the system on a daily basis you do not know the complete working system of Internal Revenue Service.
When you are involved in an IRS tax audit you also want to be able to fix the problem so IRS does not come after you in the future. We can help audit proof your tax return.
When you call for your initial tax consultation we will fully review the scope of your case give you an expert opinion on the likelihood of settlement in different options.
What are the chances of an IRS Audit? Less than one percent, that’s it . Because of budget cuts you can expect that number to sink each and every year.
If you got an audit letter, you are very unlucky. Nasty grams are no fun.
And the chances are, there’s a very specific reason why you got in IRS audit letter.
At Fresh Start Tax LLC you will be represented by a CPA or former IRS agent who knows the system and can provide your very best tax audit defense.
If we cannot settle your case at the local office will take your case to the Appellate Division or settlements and the best deals are usually made.
We know this from our years of IRS experience.
It only makes sense to have Former IRS Agents and IRS Tax Audit Managers handle your IRS tax audit and give you the most experienced and successful expert IRS Tax Audit Help.
We can also tell you how to help audit proof your return in the future.
IRS audits are very predictable and after reviewing thousands of tax returns over the years we can tell you which cases are going to be subject for IRS tax audits.
ALERT : Facts about IRS Tax Audits: These facts are based from last year.
• The IRS audits a total of 1,391,581 tax returns a year. This number goes up or down depending on the IRS budgets for tax audits. with current budgetary cuts that number continues to shrink each and every year.
• The IRS field agents complete more than 310,000 audits by office or business visits a year,
• The IRS completes over 1,081,152 correspondence audits a year. IRS collects a little over $5 million a year from his correspondence audits,
• IRS has installed new software tracking systems with the development of the CADE 2 computer to spot and recognize tax audits more proficiently,
• IRS employs over 13,000 IRS auditors.
• $5.2 billion dollars are collected through the IRS document matching program. These programs are W-2 and 1099 oriented.
• For truly professional IRS Tax Audit help contact former IRS Agents and Managers.
The Secret Formula: How The IRS Picks Audits
The IRS uses a quantitative method called discriminate Analysis to identify the ‘underreporters’ from the normal returns, driven largely by the following details.
• Schedule A Ratio: They’ll audit you if your schedule A (Itemized) deductions are more than 44% of your income.
• Schedule C Ratio: They’ll audit you if your ratio of schedule C (Business) deductions is more than 63% of income.
• Schedule F Ratio: They’ll audit you if your ratio of schedule F (Farm) deductions is more than 67% of income.
• Audits are 4x more likely if you own a business and 2x if you own a farm.
• The Obama administration has always focused on high earners:
◦ Audits 5x more likely if your income is above $100,000.
◦ 20% chance of audit if you make $10+ million. (20x the average audit rate)
◦ 12% chance of audit if you make $5-10 million. (12x the average audit rate)
• Occupation affects your audit likelihood
◦ 22% of business and personal services companies are audited every year.
◦ 16% of building contractors are audited every year.
ALERT : The IRS Tax Audit Examination Plan:
What you Need to Know about the IRS
The IRS audit plan that is used by the IRS is based on long-range coverage planning, and objectives on the resources requested in the Congressional Budget.
From this, there is an established plan where staff years are allocated to all area IRS offices using resource allocation and a prescribed methodology.
Each Area Manager of the IRS is responsible for preparing an area response following instructions from the National Headquarters.
Why the IRS Audits Tax Returns
IRS Tax Audits : Although there are a variety of reasons listed below some are the most common.
a. Front Loaded Programs
Front Loaded programs are those tax audits that IRS DC headquarters has determined are very important and a considerable amount of time must be spent on these programs and activities. Each area has discussions within management as to what the programs should be for each region, district, and office.
Some of the programs are:
• Special enforcement programs – An example of this may be compliance of all flee market vendors, a program I was involved with
• High Income non-filers – The IRS would get their information from a match program of w-2’s and 1099’s and match up social security numbers against filed returns
• Abusive Tax Avoidance – This could be in the area of offshore activities
• Offshore credit card program
• National Research programs – Those set forth by management after doing a trends project
• FBAR filing – IRS is currently targeting those with overseas bank accounts
• Non- filers – IRS is presently forming a task force to seek non-filers though aggressive means.
b. The IRS makes sure there is balanced coverage.
The National Office makes sure there is a balanced approach for audit return delivery and tax compliance. Resources and inventory and the size of personnel all go into this formula.
IRS focuses are blended into these areas:
1. individual returns less than $100,000.
2. individual returns greater than $100,000 but less than $200,000.
3. individual returns greater than $ 200,000.
4. Small Business Corporations.
5. Small Business Flow-Through Entities – S Corporations, Fiduciaries and Partnerships.
c. Classification Plan
The IRS will prepare a plan, which is classified. A National DIF score indicator is placed on all Federal Income tax returns that are filed.
Each tax return has certain factors that contribute to its score such as Gross Income, Adjusted Gross Income and line item expense.
There are several classified secrets that go into the DIF score.
Each tax return is processed through the IRS computer line item by line item.
A DIF score label is placed on every tax return with its DIF number.
A tax examiner or Revenue Agent manually eyeballs each and every tax return with a high DIF score.
The examiner then determine which return has the highest probability of tax audit success.
d. DIF Cutoff Score, this is the most common reason for audit. each and every tax return has a DIF score, this stands for discriminatory index function.
The IRS will calculate the Area DIF cutoff score for each activity code, giving consideration to the selection rate.
This is the lowest DIF score necessary to secure the number of returns required for audit. for example, if the return plan shows 225 returns for an activity code and the selection rate is 70%, the IRS will need to order 321 returns (225/70%).
The DIF Cut off Score is 500. The number of returns with DIF scores greater than 550 is 280, which is less than the number of returns required, so the lowest DIF score on an ordered return will be in the range of 500 to 550 and the DIF cutoff score is 500.
All tax returns are graded by the Internal Revenue Service. That’s right, each and every tax return has a DIF score.
There is a label placed on the back of every tax return that grades audit potential.
Much of the audit numbers are predicated on the budget that Congress gives to the IRS.
Over the last couple years the number of audits are going down by small percentages simply because they do not have working staff to handle all the IRS audits that are truly needed. It is not wise to play the audit lottery.
Call us today for a free initial tax consultation and we will review your tax returns, go over best case scenarios and talk about your IRS tax defense for an IRS audit.
IRS Tax Audit Help & Experts + Appeals Specialists + Affordable Former IRS + Jupiter, FL + 33458, 33469, 33477, 33478
by Fresh Start Tax | May 25, 2016 | Tax Help
We are former AFFORDABLE LOCAL IRS agents and managers who know the system. We get the job done right.
Since 1982, Tax Firm in South Florida. Covering Jupiter. We are a full-service firm that specialize in IRS tax debt relief.
We are an IRS problems service business that can help you in any facet of an IRS or state tax problem.
We are experts in all IRS tax matters. Since 1982 we have been handling IRS 1982 we have been handling IRS Tax Debt Matters.
Our tax debt relief services range from immediate tax debt relief to stopping IRS levies and garnishments to provide efficient IRS audit defense, the settling of tax debt, payment plans in placing people into hardship.
Our 65 years of direct IRS work experience puts us in a category all by ourself. We are uniquely qualified to handle any IRS audit, collections or appellate matter as well as any state agencies deficiency problems.
Being former IRS agents we are experts in the settlement, immediate IRS levy releases, IRS payment plans, IRS tax defense for audits and any back payroll tax debt.
If you have received an IRS levy or wage garnishment within 24 hours of receiving your current financial statement we can get a full release, we can represent you during an IRS tax audit, if you owe back taxes we can settle your tax debt get you in a hardship or set up a payment plan depending on your current financial statement.
We will explain to you all your options and remedies on your initial call.
We have over 65 years of working directly for the local IRS offices. We have worked to supervisors, managers and teaching instructors. there is no firm in South Florida with more direct experience working for IRS.
We know the system inside and out.
After your first initial tax consultation we can provide an exit strategy for all cases. Let our years of experience be your best ally.
If the IRS has found you a responsible person for the trust fund penalty, call us today for free initial tax consultation and we will walk you through the process of resolving this tax at once and for all.
There are various options you have for IRS tax debt relief: And We Know them All
Before the Internal Revenue Service makes determinations on open collections accounts they need to have a universal way to make decisions.
As a general rule, they take a current financial statement on form 433F, you can find those our website.
1. hardships, or currently not collectible,
2. payments plan, and
3. the offer in compromise, if you are a qualified and suitable candidate.
4. bankruptcy is another option.
The Process of Getting IRS Tax Debt Relief on Trust Fund Tax Debt + Payroll Tax Debt
We need to look to find out if you were truly responsible under 6672 of the IRS code. many time IRS ram rods these penalties to people who truly were not responsible for trust fund taxes.
I’ve work so many cases and being a former IRS agent IRS just tries to set these penalties up against everybody and many people do not have proper representation to fight IRS.
We will carefully review your case to find out if you were truly responsible for the trust fund penalty.
We will conduct a review to find out if there is any way that we can appeal for change the assessment of this trust fund tax.
If we feel we would’ve beat this assessment through the appellate process we can go ahead and file an offer in compromise as to doubt as to liability and appeal this assessment.
If you are responsible for the tax, IRS will take a current financial statement and make a determination based on the collectibility of the tax.
How the Internal Revenue Service will work your case if you owe the IRS tax debt.
IRS will require a 433A or 433F, an individual financial statement.
You can find that form directly on our website.
Many times the IRS uses 433F, depending were the cases in the system. Cases worked in the ACS system uses shorter version of the financial statement.
If the case is worked in the local office the revenue officer will use form 433.A
That financial statement will need to be fully documented along with bank statements, copies of checks and monthly expenses.
We will walk you through the process of how the IRS will work your case in the collection action that can possibly taken.
Will also review with you the IRS national standards program on all cases for those who owe back taxes.
Once IRS reviews your current financial statement they will make a determination and generally put you in one of two categories with the option of filing an offer in compromise.
OPTIONS: IRS has the option to:
1.IRS determines on 40% of the cases that taxpayers are put into hardship which means they can’t pay the tax at this time. Sometimes it is called currently not collectible. Cases that are placed at currently not collectible or hardship stay in there for a period of 2 to 3 years and come back out to the field at a later time.
2. 6.5 million people enter monthly payment plans and pay a certain amount based on their current documented financial statement.
Other taxpayers file an offer in compromise to settle their case for pennies on the dollar. The offer in compromise requires a lot of skill and expertise to have accepted by the Internal Revenue Service.
What is an offer in compromise? OIC
It 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.
Taxpayers who can fully pay the liabilities through an installment agreement or other means, will not be eligible for a OIC in most cases.
In order to be eligible for a OIC, the taxpayer must have filed all tax returns, made all required estimated tax payments for the current year and made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
In most cases, the IRS will not accept a OIC unless the amount offered by a taxpayer is equal to or greater than the reasonable collection potential (the RCP).
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.
IRS Tax Settlements + The IRS may accept a OIC based on three grounds:
• First, the IRS can accept a compromise if there is doubt as to liability. A compromise meets this only when there is a genuine dispute as to the existence or amount of the correct tax debt under the law.
• Second, the IRS can accept a compromise if there is doubt that the amount owed is fully collectible.
Doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
• Third, the IRS can accept a compromise based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and 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 a OIC based on doubt as to collectibility or based on effective tax administration, taxpayers must use the most current version of:
1. Form 656, Offer in Compromise, and also submit Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or,
2. Form 433-B (OIC), Collection Information Statement for Businesses. A taxpayer submitting a OIC based on doubt as to liability must file a Form 656-L (PDF), Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433-A (OIC) and/or Form 433-B (OIC).
Form 656 and referenced collection information statements are available in the Offer in Compromise Booklet, Form 656-B (PDF).
In general, a taxpayer must submit a $186 application fee with the Form 656. Do not combine this fee with any other tax payments.
However, there are two exceptions to this requirement:
• First, no application fee is required if the OIC 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 exception applies if 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. Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception.
A taxpayer who claims the low-income exception must complete section 4 of Form 656 and check the certification box.
Options: Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A “lump sum cash offer” is defined as an offer payable in 5 or fewer installments within 5 or fewer months after the offer is accepted. If a taxpayer submits a lump sum cash 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 $186 application fee.
The 20 percent payment is “nonrefundable” meaning it will not be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance.
Instead, the 20 percent payment 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 payment.
An offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more monthly installments and within 24 months after the offer is accepted.
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 $186 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum cash 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.
Upon acceptance of a OIC, the taxpayer may no longer designate offer payments to any specific tax liability covered in the offer agreement.
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 where 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.
The offer in compromise requires a lot of skill because reviewed by several layers of Internal Revenue Service. I should know, I am former IRS agent and teaching instructor of the offer in compromise.
Call us today for a free initial tax consultation. We are a full service tax firm.
When you call our office you will speak to true IRS tax experts. We are the fast, friendly, and affordable professional tax firm. Since 1982 A+ rated by the BBB.
IRS Tax Debt Relief Services + Stop IRS Levy & Wage Garnishments + Payment Plan + Settle Taxes + File Back Taxes + Jupiter, FL + 33458, 33469, 33477, 33478
by Fresh Start Tax | May 24, 2016 | Tax Help
We are affordable professional LOCAL tax firm that can stop an IRS tax levy garnishment immediately. Since 1982 A+ rated by the BBB. We guarantee all of our work.
We are your best course of action for IRS tax levy help.
We are the affordable local professional firm that knows the system inside and out.
Not only can we stop the levy we can settle your case at the same time. Covering all of Jupiter.
We are composed of CPAs and former IRS agents who have over 65 years of working directly for the Internal Revenue Service in the local, district, and regional South Florid tax offices of the Internal Revenue Service.
We are a local tax firm practicing in South Florida since 1982. We are one of your very best courses for IRS tax levy defense.
There is a very specific system used to get an IRS tax levy released, whether it be a bank levy or wage garnishment levy. Being former IRS agents we know the system.
Not only were we former IRS agents and teaching instructors we also taught new IRS agents or jobs. When you have received an IRS tax levy it only makes sense to have former IRS agents provide you tax levy defense and case settlements all at the same time.
We understand all the systems, formulas, and all the protocols to get an immediate relief of a IRS tax levy.
Knowing the system makes this a streamlined process and is able to get faster and quicker tax relief.
We can stop your IRS tax levy right now and settle your case at the same time.
Within 24 hours of receiving your current documented financial statement we can get an IRS bank levy or wage garnishment levy released and settle your case all at the same time.
IRS will close and settle your case generally one of three ways. (usual cases )
After a review of your current financial statement (433f ) IRS will place you either into :
1.currently not collectible status,
2. ask you for a monthly payment agreement or
3. you could submit an offer in compromise if you are a qualified and suitable candidate.
We will review with you your options to find out which is the best fit based on your current financial condition. Remember, your documented financial statement holds the key.
Call us today for a free initial tax consultation. When you call our office you will speak to a true tax expert.
For the Record : What is a IRS Tax Levy?
A levy is a legal seizure of your property to satisfy a tax debt.
Levies are different from liens.
A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.
Where does Internal Revenue Service (IRS) authority to levy originate?
The Internal Revenue Code (IRC) authorizes levies to collect delinquent tax. See IRC 6331. Any property or right to property that belongs to the taxpayer or on which there is a Federal tax lien can be levied, unless the IRC exempts the property from levy.
What actions must the Internal Revenue Service take before a IRS tax levy can be issued?
The IRS will usually levy only after these three requirements are met:
1• The IRS assessed the tax and sent you a Notice and Demand for Payment (a tax bill);
2• You neglected or refused to pay the tax; and
3• The 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.
The IRS may 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.
Please note: if the IRS levies 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.
When will the IRS issue IRS tax levy garnishments?
If you do not pay your taxes (or make arrangements to settle your debt), and the IRS determines that a levy is the next appropriate action, the IRS may levy any property or right to property you own or have an interest in.
For instance, the IRS 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).
Call us today and hear the truth about your case.
Stop your IRS tax levy within 48 hours and settle your case at the same time.
A word of the wise, when you call their tax relief companies many times you are speaking to a salesperson and not the person who will be working your case.
We are true tax experts, since 1982. We have released hundreds and hundreds of levy since 1982 and settle tax debt to same time.
IRS Tax Levy Garnishment Relief Help + Stop Levies NOW + Bank, Wage Levy + Settle Tax Debt + Haven’t Filed Returns
by Fresh Start Tax | May 24, 2016 | Tax Help
Home Mortgage Points
The term points is used to describe certain charges paid to obtain a home mortgage. Points are prepaid interest and may be deducible as home mortgage interest, if you itemize deductions on Form 1040, Schedule A (PDF), Itemized Deductions.
If you can deduct all of the interest on your mortgage, you may be able to deduct all of the points paid on the mortgage.
If your acquisition debt exceeds $1 million or your home equity debt exceeds $100,000, you cannot deduct all the interest on your mortgage and you cannot deduct all your points.
See Publication 936, Home Mortgage Interest Deduction, to figure your deductible points in that case. Refer to Topic 505 and to Can I Deduct My Mortgage Related Expenses? for more information on deducting mortgage interest and points.
You can deduct the points in full in the year you pay them, if you meet all the following requirements:
1. Your main home secures your loan (your main home is the one you live in most of the time).
2. Paying points is an established business practice in your area.
3. The points paid were not more than the amount generally charged in that area.
4. You use the cash method of accounting. This means you report income in the year you receive it and deduct expenses in the year you pay them.
5. The points paid were not for items that are usually listed separately on the settlement sheet such as appraisal fees, inspection fees, title fees, attorney fees, or property taxes.
6. The funds you provided at or before closing, including any points the seller paid, were at least as much as the points charged. You cannot have borrowed the funds from your lender or mortgage broker in order to pay the points.
7. You use your loan to buy or build your main home.
8. The points were computed as a percentage of the principal amount of the mortgage, and
9. The amount shows clearly as points on your settlement statement.
You can also fully deduct (in the year paid) points paid on a loan to improve your main home if you meet tests one through six above.
Points that do not meet these requirements may be deductible over the life of the loan. You can deduct points paid for refinancing generally only over the life of the new mortgage.
However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first six requirements stated above, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds.
You can deduct the rest of the points over the life of the loan. Points charged for specific services, such as preparation costs for a mortgage note, appraisal fees, or notary fees are not interest and cannot be deducted.
Points paid by the seller of a home cannot be deducted as interest on the seller’s return, but they are a selling expense that will reduce the amount of gain realized.
The buyer may deduct points paid by the seller, provided the buyer subtracts the amount from the basis or cost of the residence.
You can only deduct points you pay on loans secured by your second home over the life of the loan.
You may be subject to a limit on some of your itemized deductions, including points. For more information on the adjusted gross income limitations, please refer to the Form 1040 Instructions (PDF) and Topic 5
by Fresh Start Tax | May 24, 2016 | Tax Help
Should I Itemize?
There are two ways you can take deductions: you can itemize deductions or use the standard deduction.
Deductions reduce the amount of your taxable income.
The standard deduction amount varies depending on your income, age, and filing status, and changes each year.
Certain taxpayers cannot use the standard deduction:
.
• A married individual filing as married filing separately whose spouse itemizes deductions.
• An individual who files a tax return for a period of less than 12 months because of a change in his or her annual accounting period.
• An individual who was a nonresident alien or a dual-status alien during the year.
Nonresident aliens who are married to a U.S. citizen or resident alien at the end of the year and who choose to be treated as U.S. residents for tax purposes can take the standard deduction. For additional information, refer to Publication 519, U.S. Tax Guide for Aliens.
• An estate or trust, common trust fund, or partnership; see Code Section 63(c)(6)(D).
You should itemize deductions if your allowable itemized deductions are greater than your standard deduction or if you must itemize deductions because you cannot use the standard deduction.
You may be able to reduce your tax by itemizing deductions on Form 1040, Schedule A (PDF), Itemized Deductions.
Itemized deductions include amounts you paid for state and local income or sales taxes, real estate taxes, personal property taxes, mortgage interest, and disaster losses.
You may also include gifts to charity and part of the amount you paid for medical and dental expenses.
You would usually benefit by itemizing on Form 1040, Schedule A (PDF), if you:
• Cannot use the standard deduction
• Had large uninsured medical and dental expenses
• Paid interest or taxes on your home
• Had large unreimbursed employee business expenses
• Had large uninsured casualty or theft losses, or
• Made large charitable contributions
Your itemized deductions may be limited and your total itemized deductions may be phased out (reduced) if your adjusted gross income for 2015 exceeds the following threshold amounts for your filing status:
• Single – $258,250
• Married filing jointly or qualifying widow(er) – $309,900
• Married filing separately – $154,950
• Head of household – $284,050
Refer to the Form 1040, Schedule A Instructions (PDF) for the limitation amounts.
Use the Itemized Deductions Worksheet-Line 29 in the Form 1040, Schedule A Instructions (PDF) to determine if you are subject to the phaseout on itemized deductions. For more information on the difference between itemized deductions and the standard deduction, refer to the Form 1040 Instructions (PDF), or Publication 17, Your Federal Income Tax for Individuals.
You may also refer to Topic 551 and Publication 501, Exemptions, Standard Deduction, and Filing Information.
by Fresh Start Tax | May 24, 2016 | Tax Help
We are former AFFORDABLE LOCAL IRS agents and managers who know the system. We get the job done right.
Since 1982, Tax Firm in South Florida. Covering Vero Beach. We are a full-service firm that specialize in IRS tax debt relief.
We are an IRS problems service business that can help you in any facet of an IRS or state tax problem.
We are experts in all IRS tax matters. Since 1982 we have been handling IRS 1982 we have been handling IRS Tax Debt Matters.
Our services range from immediate tax debt relief to stopping IRS levies and garnishments to provide efficient IRS audit defense, the settling of tax debt, payment plans in placing people into hardship.
Our 65 years of direct IRS work experience puts us in a category all by ourself. We are uniquely qualified to handle any IRS audit, collections or appellate matter as well as any state agencies deficiency problems.
Being former IRS agents we are experts in the settlement, immediate IRS levy releases, IRS payment plans, IRS tax defense for audits and any back payroll tax debt.
If you have received an IRS levy or wage garnishment within 24 hours of receiving your current financial statement we can get a full release, we can represent you during an IRS tax audit, if you owe back taxes we can settle your tax debt get you in a hardship or set up a payment plan depending on your current financial statement.
We will explain to you all your options and remedies on your initial call.
We have over 65 years of working directly for the local IRS offices. We have worked to supervisors, managers and teaching instructors. there is no firm in South Florida with more direct experience working for IRS.
We know the system inside and out.
After your first initial tax consultation we can provide an exit strategy for all cases. Let our years of experience be your best ally.
If the IRS has found you a responsible person for the trust fund penalty, call us today for free initial tax consultation and we will walk you through the process of resolving this tax at once and for all.
There are various options you have for IRS tax debt relief: And We Know them All
Before the Internal Revenue Service makes determinations on open collections accounts they need to have a universal way to make decisions.
As a general rule, they take a current financial statement on form 433F, you can find those our website.
1. hardships, or currently not collectible,
2. payments plan, and
3. the offer in compromise, if you are a qualified and suitable candidate.
4. bankruptcy is another option.
The Process of Getting IRS Tax Debt Relief on Trust Fund Tax Debt + Payroll Tax Debt
We need to look to find out if you were truly responsible under 6672 of the IRS code. many time IRS ram rods these penalties to people who truly were not responsible for trust fund taxes.
I’ve work so many cases and being a former IRS agent IRS just tries to set these penalties up against everybody and many people do not have proper representation to fight IRS.
We will carefully review your case to find out if you were truly responsible for the trust fund penalty.
We will conduct a review to find out if there is any way that we can appeal for change the assessment of this trust fund tax.
If we feel we would’ve beat this assessment through the appellate process we can go ahead and file an offer in compromise as to doubt as to liability and appeal this assessment.
If you are responsible for the tax, IRS will take a current financial statement and make a determination based on the collectibility of the tax.
How the Internal Revenue Service will work your case if you owe the IRS tax debt.
IRS will require a 433A or 433F, an individual financial statement.
You can find that form directly on our website.
Many times the IRS uses 433F, depending were the cases in the system. Cases worked in the ACS system uses shorter version of the financial statement.
If the case is worked in the local office the revenue officer will use form 433.A
That financial statement will need to be fully documented along with bank statements, copies of checks and monthly expenses.
We will walk you through the process of how the IRS will work your case in the collection action that can possibly taken.
Will also review with you the IRS national standards program on all cases for those who owe back taxes.
Once IRS reviews your current financial statement they will make a determination and generally put you in one of two categories with the option of filing an offer in compromise.
OPTIONS: IRS has the option to:
1.IRS determines on 40% of the cases that taxpayers are put into hardship which means they can’t pay the tax at this time. Sometimes it is called currently not collectible. Cases that are placed at currently not collectible or hardship stay in there for a period of 2 to 3 years and come back out to the field at a later time.
2. 6.5 million people enter monthly payment plans and pay a certain amount based on their current documented financial statement.
Other taxpayers file an offer in compromise to settle their case for pennies on the dollar. The offer in compromise requires a lot of skill and expertise to have accepted by the Internal Revenue Service.
What is an offer in compromise? OIC
It 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.
Taxpayers who can fully pay the liabilities through an installment agreement or other means, will not be eligible for a OIC in most cases.
In order to be eligible for a OIC, the taxpayer must have filed all tax returns, made all required estimated tax payments for the current year and made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
In most cases, the IRS will not accept a OIC unless the amount offered by a taxpayer is equal to or greater than the reasonable collection potential (the RCP).
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.
IRS Tax Settlements + The IRS may accept a OIC based on three grounds:
• First, the IRS can accept a compromise if there is doubt as to liability. A compromise meets this only when there is a genuine dispute as to the existence or amount of the correct tax debt under the law.
• Second, the IRS can accept a compromise if there is doubt that the amount owed is fully collectible.
Doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
• Third, the IRS can accept a compromise based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and 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 a OIC based on doubt as to collectibility or based on effective tax administration, taxpayers must use the most current version of:
1. Form 656, Offer in Compromise, and also submit Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or,
2. Form 433-B (OIC), Collection Information Statement for Businesses. A taxpayer submitting a OIC based on doubt as to liability must file a Form 656-L (PDF), Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433-A (OIC) and/or Form 433-B (OIC).
Form 656 and referenced collection information statements are available in the Offer in Compromise Booklet, Form 656-B (PDF).
In general, a taxpayer must submit a $186 application fee with the Form 656. Do not combine this fee with any other tax payments.
However, there are two exceptions to this requirement:
• First, no application fee is required if the OIC 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 exception applies if 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. Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception.
A taxpayer who claims the low-income exception must complete section 4 of Form 656 and check the certification box.
Options: Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A “lump sum cash offer” is defined as an offer payable in 5 or fewer installments within 5 or fewer months after the offer is accepted. If a taxpayer submits a lump sum cash 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 $186 application fee.
The 20 percent payment is “nonrefundable” meaning it will not be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance.
Instead, the 20 percent payment 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 payment.
An offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more monthly installments and within 24 months after the offer is accepted.
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 $186 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum cash 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.
Upon acceptance of a OIC, the taxpayer may no longer designate offer payments to any specific tax liability covered in the offer agreement.
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 where 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.
The offer in compromise requires a lot of skill because reviewed by several layers of Internal Revenue Service. I should know, I am former IRS agent and teaching instructor of the offer in compromise.
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