by Jim Magary | Feb 11, 2016 | Tax Help
We are an AFFORDABLE full-service firm that specializes in the resolution of all federal and state tax matters. Since 1982.
We have over 206 years of professional tax experience and over 65 years of working directly for government agencies and the local, district, and regional tax offices.
If you owe any type of tax or state payroll taxes and need to understand the process of payment options, the offer in compromise to settle your tax debt, the filing of back taxes or going through a tax audit call us today and speak to a true tax professional and tax expert.
Since 1982 we have been serving a nationwide audience in resolving any IRS, federal or state tax matter.
We are A+ rated by the Better Business Bureau.
The Employment Development Department
The EDD is in charge of California Payroll Taxes.
The EDD regularly tries to reclassify independent contractors to employee status to get business owners to pay additional California payroll taxes.
The EDD can personally hold an individual taxpayer liable for a corporation’s nonpayment of California payroll taxes. they will aggressively go after any individual responsible party who was supposed to pay over this tax.
The EDD has criminal authority. They may criminally prosecute a taxpayer for not paying over their required California Payroll Taxes.
The EDD has powers to file tax liens, levy and seize bank accounts, and close down for the nonpayment of California payroll taxes. As a former IRS agent and teaching instructor, I understand this process well is I myself have closed over 300 businesses in my time with IRS.
The EDD has an Offer In Compromise program that can save qualified taxpayers who can settle their debt for pennies on a dollar.
What you should know before preparing an Offer in Compromise
Are you an Offer in Compromise candidate?
If you are an individual or business taxpayer that does not have the income, assets, or means to pay your tax liability now or in the foreseeable future, you may be a candidate. The Offer in Compromise program allows you to offer a lesser amount for payment of a non-disputed final tax liability.
Generally, the State approve san Offer in Compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.
Although you will be evaluated each case is based on its own unique set of facts and circumstances, we give the following factors strong consideration:
• The taxpayer’s ability to pay.
• The amount of equity in the taxpayer’s assets.
• The taxpayer’s present and future income.
• The taxpayer’s present and future expenses.
• The potential for changed circumstances.
• Whether the offer is in the best interest of the state.
The process your application?
They will only process your Offer in Compromise application if you have done all of the following:
• You have filed all of the required tax returns. If you have no filing requirement, note it on the application.
• You have fully completed the Offer in Compromise application, and provided all supporting documentation.
• You agreed with the Franchise Tax Board on the amount of tax that you owe.
• You authorized the Franchise Tax board to obtain your consumer credit report and to investigate and verify the information you provided on the application.
Will a collateral agreement be required?
Upon approval, the State may require you to enter into a collateral agreement for a term of five years. Generally, a collateral agreement will be required if you have significant potential for increased earnings.
A collateral agreement requires you to:
• Pay us a percentage of your future earnings that exceed an agreed upon threshold.
Are collections suspended?
Collection activity is not automatically suspended.
If delaying collection activity jeopardizes our ability to collect the tax, we may continue with collection efforts. Interest will continue to accrue.
OWE STATE PAYROLL TAXES + California + Payments Options + Offer in Compromise + Settle + File Taxes + Audits
by Jim Magary | Feb 11, 2016 | Tax Help
Need help getting a payment agreement with IRS, call us today. Former IRS agents and managers since 1982. YOU MAY BE ABLE TO SETLE YOUR TAX DEBT.
Direct debit installment agreements (DDIA) give taxpayers a convenient way to make payments on their installments while eliminating the need for checks or paper forms and IRS resources to process the payments each month.
During Fiscal Year 2014, more than 500,000 taxpayers entered into DDIAs, and approximately $2.8 billion was collected.
Revising DDIA procedures to automatically add new liabilities to existing DDIAs could increase revenue collection and reduce taxpayer burden.
TIGTA AUDIT ON THE DDIA
Taxpayers are required to remain in tax compliance as a condition of entering into an installment agreement, and systemic processes exist to default an installment agreement if a taxpayer incurs and fails to pay a new tax liability.
These defaults may occur even if the taxpayer would have preferred adding the new liability to the installment agreement.
This audit was initiated to determine whether the systemic default of DDIAs due to new tax liabilities causes unnecessary burden on taxpayers and the IRS or improves taxpayer compliance.
WHAT TIGTA AUDIT FOUND
DDIAs provide benefits for both the taxpayer and the IRS.
Taxpayers benefit from establishing DDIAs because they do not have to manually write a check and mail it in order to fulfill their obligations.
The IRS benefits because taxpayer payments can be posted faster and do not require IRS employee involvement.
In addition, taxpayers who enter into DDIAs are less likely to default on their agreement compared with taxpayers who enter into traditional installment agreements.
In order to maintain a DDIA, taxpayers must pay any new tax liability when due or the DDIA will systemically default.
When defaulted, the IRS stops automatic collection from the taxpayer’s financial accounts. TIGTA found that when DDIA defaults are due to a new tax liability, most taxpayers want to include the new balance due into their existing DDIA.
In addition, the IRS has a procedure that eliminates the need to default the DDIA if a taxpayer incurs a new tax liability, but it is only used when taxpayers request it.
As a result, systemic DDIA defaults increased taxpayer burden because taxpayers incurred additional interest on their unpaid balances.
In addition, revenue collection was suspended until the DDIAs were restructured, and some DDIAs were not reestablished.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS:
1) consider establishing systemic programming to allow DDIA taxpayers who incur a new unpaid tax liability to absorb the new liability into the current agreement without stopping the automatic payment in qualifying situations;
2) in the interim, provide taxpayers with information as to how they can avoid a default of their DDIA in the event of a new unpaid liability on Form 9465, Installment Agreement Request, and Form 433‑D, Installment Agreement; and
3) for taxpayers who cannot absorb their liabilities in existing DDIAs, establish procedures so that direct debit payments do not stop while the DDIA is suspended and the IRS actively addresses the new balance due.
IRS management agreed that systemically adding a new tax liability to an existing DDIA could save time and collect additional revenue, but did not commit to ensuring that qualifying new liabilities would be absorbed into existing DDIAs or discontinuing the practice of stopping automatic collection when the DDIA is suspended due to a new liability.
Management did agree to provide taxpayers with more information on how to avoid default. TIGTA believes that all of the recommendations would benefit the IRS and taxpayers.
by Jim Magary | Feb 11, 2016 | Tax Help
Falsely Padding Deductions on Returns is on the IRS Annual “Dirty Dozen” List of Tax Scams to Avoid
The Internal Revenue Service warns taxpayers to avoid the temptation of falsely inflating deductions or expenses on their returns to under pay what they owe and possibly receive larger refunds.
The vast majority of taxpayers file honest and accurate tax returns on time every year.
However, each year some taxpayers fail to resist the temptation of fudging their information.
That’s why falsely claiming deductions, expenses or credits on tax returns is on the “Dirty Dozen” tax scams list for the 2016 filing season.
Taxpayers should think twice before overstating deductions such as charitable contributions, padding their claimed business expenses or including credits that they are not entitled to receive especially like the Earned Income Tax Credit or Child Tax Credit.
Increasingly efficient automated systems generate most IRS audits.
The IRS can normally audit returns filed within the last three years.
Additional years can be added if substantial errors are identified or fraud is suspected.
Significant civil penalties may apply for taxpayers who file incorrect tax returns including:
- 20 percent of the disallowed amount for filing an erroneous claim for a refund or credit.
$5,000 if the IRS determines a taxpayer has filed a “frivolous tax return.” A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax reported is substantially incorrect.
In addition to the full amount of tax owed, a taxpayer could be assessed a penalty of 75 percent of the amount owed if the underpayment on the return resulted from tax fraud.
- Taxpayers even may be subject to criminal prosecution (brought to trial) for actions such as:
1.Willful failure to file a return, supply information, or pay any tax due
2.Fraud and false statements
3.Preparing and filing a fraudulent return, or
4.Identity theft.
Criminal prosecution could lead to additional penalties and even prison time.
Taxpayers should remember that they are legally responsible for what is on their tax return even if it is prepared by someone else, so they should be wise when selecting a tax professional.
by Jim Magary | Feb 11, 2016 | Tax Help
Your Social Security Benefits May be Taxable
If you receive Social Security benefits, you may have to pay federal income tax on part of your benefits.
These IRS tips will help you determine if you need to pay taxes on your benefits.
• Form SSA-1099.
If you received Social Security benefits in 2015, you should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount of your benefits.
• Only Social Security.
If Social Security was your only income in 2015, your benefits may not be taxable. You also may not need to file a federal income tax return.
If you get income from other sources you may have to pay taxes on some of your benefits.
• Tax Formula.
Here’s a quick way to find out if you must pay taxes on your Social Security benefits:
Add one-half of your Social Security to all your other income, including tax-exempt interest.
Then compare the total to the base amount for your filing status.
If your total is more than the base amount, some of your benefits may be taxable.
• Base Amounts.
The three base amounts are:
◦ $25,000 – if you are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from your spouse for all of
2015
◦ $32,000 – if you are married filing jointly
◦ $0 – if you are married filing separately and lived with your spouse at any time during the year
Is Social Security Taxable + What You Need To Know + Former IRS
by Jim Magary | Feb 11, 2016 | Tax Help
We are an affordable full service tax firm that specializes in the release of California tax levies & settlements of tax debt. Since 1982 .
You can call us today and speak to a CPA or former government agent who knows the exact process of how to get a fast and affordable levy release with the possibility of settling your case at the same time through an offer in compromise.
We cannot only get your tax levy released, we can settle your tax that at the same time.
As a general rule, the board of equalization does not send out a tax levies until it tries to take positive steps to reckon the collection of the tax through voluntary compliance.
As a general rule the last thing a federal or state agency wants to do is take mandatory collection action that will upset the taxpayer. They always use enforcement action as a last resort except in cases of Jeopardy assessments.
Many times taxpayers are hesitant to address the issue it forces the state or federal agency to take levy action. a levy is a formal seizure.
Should voluntary compliance fail, collection activities includes liens, levies, wage garnishments , suspension of licenses and other similar actions. many times the suspension of licenses are the worst part of the collection process because it can cease and desist all income.
The appropriate collection actions are determined by the collection staff after a careful review each taxpayer circumstances and compliance history.
The decision to take summary collection actions is not taken lightly and it is never the first option they always asked to voluntarily collect the facts
The tax levy procedures are as follows:
After steps have been taken to collect the money and all notices have been sent and the tax liability still remains at large as well as all voluntary compliance methods have failed and the taxpayer has not make arrangements to pay the tax, a notice of levy is usually the most effective collection activity taken by the BOE staff.
When the financial institution or others holding the asset receive the levy it will a place a 10 day hold on the taxpayer’s assets unless a claim of exemption is filed within 10 days.
The funds will be sent on the 11th day. The tax levy notice that is sent will include two copies one that is sent to the entity being levied typically the bank or credit union and a copy to the taxpayer.
Should you have any question call us today for free initial tax consultation and we will walk you through the process of obtaining a levy release.
We are a full service tax firm with all work being done in-house.
California Tax Levy Help + Payment Plans + Offers to Reduce Tax Debt + Settle with Offer in Compromise
by Jim Magary | Feb 11, 2016 | Tax Help
We are an AFFORDABLE full service tax firm that specializes in the settlement in negotiation of federal and state tax debt.
Call us today for a free initial tax consultation. 1-866-700-1040
If you have received a tax levy or tax lien, wish to make an installment agreement or settle your back tax debt, call and speak to one of our tax professionals about resolving any state or federal issue that you have.
We have over 206 years of professional tax experience and over 65 years of working directly for government agencies in the local, district, and regional tax offices.
We are a full service tax firm with all work being done in-house.
About Tax Levies, State of California
• Legal authority.
If you have a delinquent balance, we have the legal authority to collect. (California Revenue and Taxation Code Sections 18817 and 18670)
• Levy amount .
They issue levies to collect 100 percent of your delinquent balance for taxes, penalties, fees, and interest.They also issue levies for non-tax debts such as Court-Ordered Debt and Vehicle Registration Debts.
• Levy amount reduced.
They may reduce a levy amount in certain circumstances. If we do, we will mail a levy reduction notice to your bank, and if you provide us with a fax number, we will fax it.
Past Due Liabilities
If you have past-due liabilities, the information below may help you with the collection process.
You may also be interested in Payment Proposals and Offers in Compromise.
Call us today to learn more. 1-866-700-1040
• Board of Equalization
• Employment Development Department
• Franchise Tax Board
• Internal Revenue Service
Board of Equalization
If you receive a Demand for Tax Payment, it means you have a tax or fee liability that is due and payable by the date indicated.
Employment Development Department
The EDD sends out Employer Account Statements (DE 2176) when employers owe past due amounts and/or do not submit quarterly/annual reports when due.
The DE 2176 explains the reason for the statement and requests payment in full and/or the return(s).I
Employers who do not file and pay liabilities timely are subject to the filing of a State Tax Lien.
Offers in Compromise allow qualified tax debtors to eliminate a payroll tax liability at less that full value.
If you receive a notice from the Franchise Tax Board requesting a return or payment for taxes, contact us immediately.
Even if you can’t pay your taxes in full, file your return to avoid further penalties.
Internal Revenue Service
If you do not pay in full when you file, you will receive a bill.
This bill begins the collection process.
The first bill you receive will explain the reason for your balance due and demand payment in full.
It will include the tax due plus penalties and interest that are adding to your unpaid balance from the date your taxes were due. As former IRS Agents we completely understand the process.
Liens, Levies, and Offsets
Liens, levies and offsets are three ways to collect unpaid taxes.
A lien provides public notice to your creditors that someone has a claim against your property. When the debt is paid, the lien is released.
A levy gives the creditor the authority to actually take and sell your property to satisfy the debt. A
n offset occurs when the taxes that you owe are deducted (offset) from a refund due by another government agency.
Board of Equalization
A lien is a legal claim to your property as security for your tax or fee debt.
You will receive in the mail you a preliminary notice at least 30 days before filing a lien with the county recorder.
If you do not pay your liabilities or make arrangements to settle your tax or fee debt, BOE may levy (seize) any type of real or personal property that you own or have an interest in.
The BOE will usually only levy property after sending you a Demand for Payment letter and you have neglected or refused to pay the tax or fee.
Employment Development Department
The EDD may record a state tax lien against employers who do not file required returns and pay liabilities timely. For more information, please see Information Sheet: State Tax Lien (DE631TL).
Franchise Tax Board
FTB may record against taxpayers when their tax debts are delinquent. FTB notifies taxpayers 30 days prior to recording the lien.
If the taxpayer does not respond, a lien is recorded with the county recorder.
Call us today if you have any concerns or questions about any matter if you owe back state or federal taxes. We only handle cases with tax debt of over $15,000.
Owe Back State Tax Debt + Tax Levy + Tax Lien + Settle Taxes Debt + Franchise Tax Board, California State
