by Jim Magary | May 11, 2016 | Tax Help
We are affordable professional tax firm that can stop an IRS tax levy immediately. Since 1982 A+ rated by the BBB.
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.
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.
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.
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.
First of All, 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.
IRS Tax Levy Help + Stop Tax Levies NOW + Bank, Wage Levy Garnishments + Settle Tax Debt + Aventura + 33180, 33162 + Dade County
by Jim Magary | May 11, 2016 | Tax Help
We are affordable professional tax firm that can stop an IRS tax levy immediately. Since 1982 A+ rated by the BBB.
We are your best course of action for IRS tax levy defense. We are the affordable local professional firm that knows the system inside and out.
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.
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.
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.
First of All, 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.
Make sure you are speaking to a true IRS tax expert and not a salesperson.
We are true tax experts, since 1982.
IRS Tax Levy Defense + Stop Tax Levies NOW + Bank, Wage Garnishments + Settle Tax Debt + Ft.Lauderdale, Broward County
by Jim Magary | May 11, 2016 | Tax Help
We are former AFFORDABLE IRS agents and managers who know the system. Since 1982, Local Tax Firm in South Florida.
We are AFFORDABLE local IRS tax experts and specialists. A plus rated by the BBB.
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. Our 65 years of direct IRS work experience puts us in a category all by ourself.
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. We are some of the most experienced IRS experts in the industry and our practice is located right here in South Florida.
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 self for 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.
Call us today and find out all your options on how to get immediate and permanent IRS tax relief.
You can speak to a former IRS agent or manager who has worked this system for years. You will not find more experience IRS tax experience for IRS tax problems.
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.
As former IRS agents we set up trust fund penalties against responsible persons for corporations or businesses that owed back payroll taxes.
If a company can no longer pay their back payroll taxes, the Internal Revenue Service has the right under 6672 to set up the trust fund debt against those who are held responsible. This is called the trust fund penalty.
You’ll know if you are one of these persons because you will receive IRS form 2751 & 1153 indicating a proposed notice of assessment against you.
There are various options available. As soon as we review your case we can instantly tell you ways to help resolve your problem.
Being former IRS agents and managers we know every possible solution to remedy this tax debt. We can resolve and possibly reduce your tax obligation. When you talk to us for your free initial tax consultation we will review with you every possible option to completely and permanently resolve your tax issue.
Every tax matter and problem has a resolution strategy. Generally there is a short-term strategy in a long-term strategy.
There are various options you have for IRS tax relief:
The basic options include:
1. trust fund appeals, the possibility of an offer in compromise, doubt to liability,
2.hardships, or currently not collectible,
3. payments plan, and
4. the offer in compromise, if you are a qualified and suitable candidate.
5. bankruptcy is another option.
The Process of Getting IRS Tax Debt Relief on Trust Fund 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.
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?
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.
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.
IRS Tax Problem Relief Services + Stop IRS Levies + IRS Audit Defense + Payment Plan + Settle IRS Tax Debt + Ft.Lauderdale, Broward County
by Jim Magary | May 11, 2016 | Tax Help
We are a AFFORDABLE Professional and Experienced Firm, A plus Rated BBB. Since 1982, Local South Florida Sales Tax Firm, Experts in Florida Sale Tax Audits.
We have over 206 years of professional tax experience and over 65 years of combined work experience in the local governmental agencies. We are true local experts, since 1982.
Call us today for free to initial tax consultation and we will explain to you the Florida sales tax audit procedures and best defense practices
Fresh Start Tax LLC has its main office in Ft. Lauderdale, Florida and the firms staff consists of CPA’S, former IRS agents and former instructors who have worked hand in hand with the Florida’s Sales Tax and the Department of Revenue.
Fresh Start Tax and it’s principles have handled thousands and thousands of cases over the years, both in government service and in their professional practice.
Our professionals are members of various National Organizations, have been keynote speakers on tax issues and are certified by the Florida Department of Professional Regulation to administer and teach other professionals in their continuing educational programs.
With your free initial consultation we will review your case and give you very specific expectations based on your circumstances. Please keep in mind not all circumstances are the same and your history and your tax records will determine the outcome of your case.
As former agents and teaching instructors we have an excellent idea on how these cases will go down. If you will all back tax will work out a settlement for you at the same time. we know the system inside and out.
You can call us anytime for free tax consultation and review your case.
State of Florida sales tax representation includes the following matters with the Florida Department of Revenue:
• Tax audits on any and all sales tax issues and matters,
• Non-filing matters,
• Criminal investigations that are referred to attorneys that best fit your profile,
• Department of Revenue enforcement action or warrant proceedings
• Stipulated time payments,
• Requests for settlements or Compromise
The Keys to resolving your Florida Sales Tax Problem or Audit
There are several keys to make sure your case is resolved timely. These keys are necessary on every case. The Department of Revenue is interested in resolving the cases in their system.
The DOR goal is to close cases and get them out of their inventory.
Here are the keys necessary to stop enforcement action on your back taxes.
• Have all your tax returns filed before you call Florida Sales Tax and the Department of Revenue on your back tax issues.
• Be prepared to give the Department of Revenue a financial statement whether you are a hardship candidate, want an installment agreement or want to settle your case.
• Be prepared to give the Department of Revenue all supporting documentation to prove your financial statement.
• Make sure you are current on deposit requirements.
If Are you being Audited by Florida DOR:
The State of Florida, Department of Revenue audit taxpayers to:
• Enforce Florida tax laws uniformly.
• Deter tax evasion.
• Promote voluntary compliance.
• Educate taxpayers.
As a general rule, the State of Florida Sales Division accepts most tax returns as filed, however they audit some returns to verify accuracy and evaluate compliance.
Florida Sales Tax Audits do not always result in the taxpayer owing additional tax, penalty or interest.
The auditor may adjust a credit carryover or correct distribution without assessing additional tax. The auditor may even determine that a refund is due.
How Are Taxpayers Selected for Audit by the Florida Sales Tax Division
The methods for selecting a business or individual to audit vary from tax to tax.
Here are some examples of sources we use to identify a potential Florida sales tax audit candidate:
• Internal Revenue Service information.
• Information sharing programs with other states and state agencies.
• Computer-based random selection.
• Analysis of Florida tax return information.
• Business publications, periodicals, journals, and directories.
What Types of Records Will I Need to Provide to an Auditor or Inspector?
When we notify you of our intent to audit, we will also tell you what records you will need to provide.
The types of records may include, but are not limited to:
1. General ledgers and journals
2. Cash receipt and disbursement journals
3. Purchase and sales journals
4. Sales tax exemption or resale certificates
5. Florida tax returns
6. Federal tax returns
7. Depreciation schedules
8. Property records
9. Other documentation to verify amounts entered on tax returns
You must keep your records for three years since an audit can extend back that far.
The Department may audit for periods longer than three years if you did not file, or filed a substantially incorrect return or payment.
Your Rights During an Florida Sales Tax Audit
The Florida Taxpayer’s Bill of Rights provides protection for taxpayers’ privacy and assets during their interactions with Revenue employees.
Your rights include:
• The right to fair treatment.
• The right to get available information and prompt, accurate responses to your questions.
• The right to have the Department begin and complete its audit in a timely manner after we notify you of our intent to audit.
• The right to get simple, nontechnical statements which explain the reason for audit selection and the procedures, remedies, and rights available during audit, appeals, and collection proceedings.
Call us today for a free initial tax consultations. We are one of South Florida’s most experienced, affordable and professional tax firms.
Florida Sales Tax Audit + Affordable Audit Defense Experts + Owe Back Sales Tax Debt + Ft.Lauderdale Local Specialists + Broward County
by Jim Magary | May 11, 2016 | Tax Help
Affordable Tax Audit Specialists + We are an affordable local South Florida team of IRS tax audit experts, former IRS agents and managers, since 1982. A + Rated BBB
We know the IRS system inside and out. Not only were we former IRS agents we were teaching instructors and supervisors within the IRS audit system.
We were former teaching instructors with the 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.
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.
What are the chances of an IRS Audit? Less than one percent, that’s it.
If you got an audit letter, you are very unlucky.
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.
Facts about IRS Tax Audits:
• The IRS audits a total of 1,391,581 tax returns a 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.
• 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 Discriminant 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 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.
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
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, Specialists + Affordable Former IRS + Ft.Lauderdale, Broward County
by Jim Magary | May 11, 2016 | Tax Help
An AFFORDABLE Professional and Experienced Firm, A plus Rated BBB. Since 1982, Local South Florida Audit Sales Tax Firm.
We have over 206 years of professional tax experience and over 65 years of combined work experience in the local governmental agencies. We are true local experts, since 1982. We work on a local South Florida government offices.
Call us today for free to initial tax consultation and we will explain to you the Florida sales tax audit procedures and best defense practices
We are specialist for all IRS & State matters as well.
Fresh Start Tax LLC has its main office in Ft. Lauderdale, Florida and the firms staff consists of CPA’S, former IRS agents and former instructors who have worked hand in hand with the Florida’s Sales Tax and the Department of Revenue.
Fresh Start Tax and it’s principles have handled thousands and thousands of cases over the years, both in government service and in their professional practice.
We handle cases all through the State of Florida.
Our professionals are members of various National Organizations, have been keynote speakers on tax issues and are certified by the Florida Department of Professional Regulation to administer and teach other professionals in their continuing educational programs.
With your free initial consultation we will review your case and give you very specific expectations based on your circumstances.
Please keep in mind not all circumstances are the same and your history and your tax records will determine the outcome of your case.
As former agents and teaching instructors we have an excellent idea on how these cases will go down. If you will all back tax will work out a settlement for you at the same time.
You can call us anytime for free tax consultation and review your case.
State of Florida sales tax representation includes the following matters with the Florida Department of Revenue:
• Tax audits on any and all sales tax issues and matters,
• Non-filing matters,
• Criminal investigations that are referred to attorneys that best fit your profile,
• Department of Revenue enforcement action or warrant proceedings
• Stipulated time payments,
• Requests for settlements or Compromise
The Keys to resolving your Florida Sales Tax Problem
There are several keys to make sure your case is resolved timely. These keys are necessary on every case. The Department of Revenue is interested in resolving the cases in their system.
The DOR goal is to close cases and get them out of their inventory.
Here are the keys necessary to stop enforcement action on your back taxes.
• Have all your tax returns filed before you call Florida Sales Tax and the Department of Revenue on your back tax issues.
• Be prepared to give the Department of Revenue a financial statement whether you are a hardship candidate, want an installment agreement or want to settle your case.
• Be prepared to give the Department of Revenue all supporting documentation to prove your financial statement.
• Make sure you are current on deposit requirements.
If Are you being Audited by Florida DOR:
The State of Florida, Department of Revenue audit taxpayers to:
• Enforce Florida tax laws uniformly.
• Deter tax evasion.
• Promote voluntary compliance.
• Educate taxpayers.
As a general rule, the State of Florida Sales Division accepts most tax returns as filed, however they audit some returns to verify accuracy and evaluate compliance.
Florida Sales Tax Audits do not always result in the taxpayer owing additional tax, penalty or interest.
The auditor may adjust a credit carryover or correct distribution without assessing additional tax. The auditor may even determine that a refund is due.
How Are Taxpayers Selected for Audit by the Florida Sales Tax Division
The methods for selecting a business or individual to audit vary from tax to tax.
Here are some examples of sources we use to identify a potential sales tax audit candidate:
• Internal Revenue Service information.
• Information sharing programs with other states and state agencies.
• Computer-based random selection.
• Analysis of Florida tax return information.
• Business publications, periodicals, journals, and directories.
What Types of Records Will I Need to Provide to an Auditor or Inspector?
When we notify you of our intent to audit, we will also tell you what records you will need to provide.
The types of records may include, but are not limited to:
1. General ledgers and journals
2. Cash receipt and disbursement journals
3. Purchase and sales journals
4. Sales tax exemption or resale certificates
5. Florida tax returns
6. Federal tax returns
7. Depreciation schedules
8. Property records
9. Other documentation to verify amounts entered on tax returns
You must keep your records for three years since an audit can extend back that far.
The Department may audit for periods longer than three years if you did not file, or filed a substantially incorrect return or payment.
Your Rights During an Florida Sales Tax Audit
The Florida Taxpayer’s Bill of Rights provides protection for taxpayers’ privacy and assets during their interactions with Revenue employees.
Your rights include:
• The right to fair treatment.
• The right to get available information and prompt, accurate responses to your questions.
• The right to have the Department begin and complete its audit in a timely manner after we notify you of our intent to audit.
• The right to get simple, nontechnical statements which explain the reason for audit selection and the procedures, remedies, and rights available during audit, appeals, and collection proceedings.
Call us today for a free initial tax consultations.
Florida Sales Tax Audit Help & Defense + Owe Sales Tax Debt + Local Specialists
