by Fresh Start Tax | Apr 21, 2014 | Tax Help
If you need quick and affordable IRS tax help call us today. We can get your FAST TAX RELIEF. 954-492-0088
We have been in practice right here in South Florida since 1982 and we are A+ rated by the Better Business Bureau.
We live right here in the area in which we serve.
FST is comprised of tax attorneys, certified public accountants, and former IRS agents, managers and tax instructors.
Our former IRS agents worked right here out the local Fort Lauderdale IRS offices for a combined 60 years.
As Former Agents we have worked as IRS auditors, IRS revenue agents, IRS revenue officers, IRS appellate agents.
We understand all the IRS systems, the IRS protocols, and IRS settlement theories to get you affordable IRS tax help and tax relief.
Tax Services
If you have not filed back tax returns and have little or no records we can reconstruct all your back tax returns by pulling up IRS transcripts and preparing your return under reconstructive methods. If you’ll owe money we will work out a tax settlement.
If the IRS is sent to out a bank or wage levy once we have your current documented financial statement we can usually get you IRS tax levy relief within 24 hours.
If you are going through in IRS tax audit you can speak directly to one of our former IRS agents or appeals agents and find out the best possible tax defense so you can get out of your IRS tax audit unscathed or with little damage.
If you need to settle a back tax debt we will walk you through the IRS pre-qualifier tool for the offer in compromise program.
Nobody should file for an offer in compromise or tax debt settlement unless they truly are a settlement candidate. When we walk you through this program we will make sure you settle for the least amount of money IRS will accept.
Contact us today for free tax consultation and speak directly to a former IRS agent or manager.
If you currently have a representative need a second opinion please do not hesitate to call us.
by Fresh Start Tax | Apr 21, 2014 | Tax Help
Let Affordable Former IRS Agents fight your Battle and Win.
We our a local South Florida tax firm that has been located in South Florida since 1982.
We worked out of the local South Florida IRS offices for a combined 60 years of IRS tax experience.
Our staff is comprised of tax attorneys, tax lawyers, certified public accountants, enrolled agents and former IRS agents.
While at Internal Revenue Service we taught tax law. We are A plus rated by the BBB.
Being former IRS agents and managers we can give you any back tax help you need.
From a simple IRS notice or letter, going to IRS appeals, or going to tax court we can handle any tax situation.
We also represent taxpayers for Department of revenue, Florida sales tax issues as well.
FST can prepare any back tax returns that need to be filed with or without records, defend you during an IRS tax audit, or settle your debt for pennies on the dollar if you are a pre-qualified candidate to file for an offer in compromise.
Because of our years of combined work experience at the Internal Revenue Service we understand all the systems, the protocols, and the settlement theories to get you the very best tax relief possible.
A little about the IRS Settlement program
Make sure you are eligible
Before IRS will or can consider your offer, you must be current with all filing and payment requirements.
You are not eligible if you are in an open bankruptcy proceeding.
Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.You can find this on our website.
Submit your offer or tax debt settlement
Your completed offer package will include:
- Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
- Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
- $186 application fee (non-refundable); and
- Initial payment (non-refundable) for each Form 656.
Select a payment option
Your initial payment will vary based on your offer and the payment option you choose:
1. Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
2. Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
Contact us for free initial tax consultation.
Affordable IRS Help, Back Tax Returns, Audits, Debt Settlements, Tax Levy – Florida City, Richmond Heights, South Miami, Leisure City, Palmetto
by Fresh Start Tax | Apr 20, 2014 | Tax Help
Qualify for a Health Insurance Coverage Exemption
The Affordable Care Act calls for individuals to have qualifying health insurance coverage for each month of the year, have an exemption, or make a shared responsibility payment when filing his or her federal income tax return.
You may be exempt from the requirement to maintain qualifying health insurance coverage, called minimum essential coverage, and may not have to make a shared responsibility payment when you file your next federal income tax return.
You may be exempt if you:
- Have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income,
- Have a gap in coverage for less than three consecutive months, or
- Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group explicitly exempt from the requirement.
The IRS website, IRS.gov/aca, has a comprehensive list of the coverage exemptions.
How you get an exemption depends upon the type of exemption.
You can obtain some exemptions only from the Marketplace in the area where you live, others only from the IRS, and yet others from either the Marketplace or the IRS.
Additional information about exemptions is available on the Individual Shared Responsibility Provision web page on IRS.gov.
The page includes a link to a chart that shows the types of exemptions available and whether they must be granted by the Marketplace, claimed on an income tax return filed with the IRS, or by either the Marketplace or the IRS.
For additional information about how to get exemptions that may be granted by the Marketplace, visit HealthCare.gov/exemption
Qualify for a Health Insurance Coverage Exemption – Fresh Start Tax LLC
by Fresh Start Tax | Apr 18, 2014 | Tax Help
Oh goodie, there finally here, the New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers
Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers
This is another way for Big Brother to keep his eye on your wallet.
On June 26, 2012, the IRS announced new streamlined filing compliance procedures for non-resident U.S. taxpayers to go into effect on Sept. 1, 2012.
These new procedures are being implemented in recognition that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), Form TD F 90-22.1, but have recently become aware of their filing obligations and now seek to come into compliance with the law.
These new tax procedures are for non-residents including, but not limited to, dual citizens who have not filed U.S. income tax and information returns.
The address provided for in the instructions for the Streamlined Filing Compliance Procedures may only be used for returns filed under these procedures.
If you have already submitted tax returns through the Streamlined Filing Compliance Procedures, you must file subsequent year returns according to regular procedures.
The New Description of the New Streamlined Procedure
This streamlined procedure is designed for taxpayers that present a low compliance risk. All submissions will be reviewed, but, as discussed below, the intensity of review will vary according to the level of compliance risk presented by the submission.
For those taxpayers presenting low compliance risk, the review will be expedited and the IRS will not assert penalties or pursue follow-up actions.
Higher compliance risk
Submissions that present higher compliance risk are not eligible for the streamlined processing procedures and will be subject to a more thorough review and possibly a full examination, which in some cases may include more than three years, in a manner similar to opting out of the Offshore Voluntary Disclosure Program.
Taxpayers utilizing this procedure will be required to file delinquent tax returns, with appropriate related information returns (e.g. Form 3520 or 5471), for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for the past six years.
Payment for the tax and interest, if applicable, must be remitted along with delinquent tax returns. For a summary of information about federal income tax return and FBAR filing requirements and potential penalties.
Retroactive relief for failure to timely elect income deferral on certain retirement and savings plans where deferral is permitted by relevant treaty is available through this process.
The proper deferral elections with respect to such arrangements must be made with the submission.
Eligibility
This procedure is available for non-resident U.S. taxpayers who have resided outside of the U.S. since January 1, 2009, and who have not filed a U.S. tax return during the same period.
Amended returns submitted through this program will be treated as high risk returns and subject to examination, except for those filed for the sole purpose of submitting late-filed Forms 8891 to seek relief for failure to timely elect deferral of income from certain retirement or savings plans where deferral is permitted by relevant treaty.
It should be noted that this relief is also available under the Offshore Voluntary Disclosure Program. See below for the information required to be submitted with such requests. (If you need to file an amended return to correct previously reported or unreported income, deductions, credits, tax etc, you should not use this streamlined procedure.
Depending on your circumstances, you may want to consider participating in the Offshore Voluntary Disclosure Program.)
Submissions
All tax returns submitted under this procedure must have a valid Taxpayer Identification Number (TIN). For U.S. citizens, a TIN is a Social Security Number (SSN).
For individuals that are not eligible for an SSN, an Individual Taxpayer Identification Number (ITIN) is a valid TIN. Tax returns filed without a valid SSN or ITIN will not be processed.
For those who are ineligible for an SSN, but who do not have an ITIN, a submission may be made through this program if accompanied by a complete ITIN application.
For information on obtaining an SSN, see www.ssa.gov. For information on obtaining an ITIN, see the ITIN page.
Compliance Risk Determination
The IRS will determine the level of compliance risk presented by the submission based on information provided on the returns filed and based on additional information provided in response to a Questionnaire required as part of the submission.
Low risk will be predicated on simple returns with little or no U.S. tax due. Absent any high risk factors, if the submitted returns and application show less than $1,500 in tax due in each of the years, they will be treated as low risk and processed in a streamlined manner.
The risk level may rise if any of the following are present:
- If any of the returns submitted through this program claim a refund;
- If there is material economic activity in the United States;
- If the taxpayer has not declared all of his/her income in his/her country of residence;
- If the taxpayer is under audit or investigation by the IRS;
- If FBAR penalties have been previously assessed against the taxpayer or if the taxpayer has previously received an FBAR warning letter;
- If the taxpayer has a financial interest or authority over a financial account(s) located outside his/her country of residence;
- If the taxpayer has a financial interest in an entity or entities located outside his/her country of residence;
- If there is U.S. source income; or
- If there are indications of sophisticated tax planning or avoidance.
Taxpayers wishing to use these streamlined procedures must:
1. Submit complete and accurate delinquent tax returns, with appropriate related information returns, for the last three years for which a U.S. tax return is due.
Please note that all delinquent information returns being filed under this procedure should be sent to the address below with the rest of the submission.
2. Include at the top of the first page of each tax return “Streamlined” to indicate that the returns are being submitted under this procedure.
This is very important to ensure that your returns get processed through these procedures.
3. Submit payment of all tax due and owing as reflected on the returns and statutory interest due and owing.
For returns determined to be high risk, failure to file and failure to pay penalties may be imposed in accordance with U.S. federal tax laws and FBAR penalties may be imposed in accordance with U.S. law.
Reasonable cause statements may be requested during review or examination of the returns determined to be high risk.
For a summary of information about federal income tax return and FBAR filing requirements and potential penalties, see IRS Fact Sheet FS-2011-13 (December 2011).
4. Submit copies of filed FBARs for the last six years for which an FBAR is due. (You should file delinquent FBARs according to the FBAR instructions and include a statement explaining that the FBARs are being filed as part of the Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers.
Through June 30, 2013, you may file electronically (http://bsaefiling.fincen.treas.gov) or by sending paper forms to Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621. After June 30, 2013, you must file electronically (http://bsaefiling.fincen.treas.gov.))
If you are unable to file electronically, you may contact FinCEN’s Regulatory Helpline at 1-800-949-2732 or (if calling from outside the United States) 1-703-905-3975 to determine possible alternatives for timely reporting.
NOTE: Taxpayers filing FBARs electronically do not currently have the technological ability to include a statement explaining that the FBARs are being filed as part of the Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers. Until such time that they have the ability, it is not necessary to include the statement. (July 18, 2013)
5. Submit a complete, accurate and signed Questionnaire.
6. If the taxpayer must apply for an ITIN in order to file delinquent returns under this procedure, the application and other documents required for applying for an ITIN must be attached to the the required forms, information and documentation required under this streamlined procedure. See the ITIN page for more.
7. Any taxpayer seeking relief for failure to timely elect deferral of income from certain retirement or savings plans where deferral is permitted by relevant treaty will be required to submit:
- a statement requesting an extension of time to make an election to defer income tax and identifying the pertinent treaty provision;
- for relevant Canadian plans, a Form 8891 for each tax year and each plan and a description of the type of plan covered by the submission; and
- a dated statement signed by the taxpayer under penalties of perjury describing:
- the events that led to the failure to make the election,
- the events that led to the discovery of the failure, and
- if the taxpayer relied on a professional advisor, the nature of the advisor’s engagement and responsibilities.
8. This program has been established for non-resident non-filers.
Generally, amended returns will not be accepted in this program.
The only amended returns accepted through this program are those being filed for the sole purpose of submitting late-filed Forms 8891 to seek relief for failure to timely elect deferral of income from certain retirement or savings plans where deferral is permitted by relevant treaty.
Non-resident taxpayers who have previously filed returns but wish to request deferral provisions will be required to submit:
an amended return reflecting no adjustments to income deductions, or credits; and
all documents required in item 7 above.
9. The documents listed above must be sent to (please see the Read This First section of this page):
Internal Revenue Service
3651 South I-H 35
Stop 6063 AUSC
Attn: Streamlined
Austin, TX 78741
Other Considerations
Taxpayers who are concerned about the risk of criminal prosecution
Taxpayers who are concerned about the risk of criminal prosecution should be advised that this new procedure does not provide protection from criminal prosecution if the IRS and Department of Justice determine that the taxpayer’s particular circumstances warrant such prosecution.
Taxpayers concerned about criminal prosecution because of their particular circumstances should be aware of and consult their legal advisers about the Offshore Voluntary Disclosure Program (OVDP), announced on Jan. 9, 2012, which offers another means by which taxpayers with undisclosed offshore accounts may become compliant.
For additional information go to the OVDP page. It should be noted, however, that once a taxpayer makes a submission under the new procedure described in this document, OVDP is no longer available.
It should also be noted that taxpayers who are ineligible to use OVDP are also ineligible to participate in this procedure.
Reasonable Cause
Whether a failure to file or failure to pay is due to reasonable cause is based on a consideration of the facts and circumstances.
Reasonable cause relief is generally granted by the IRS when you demonstrate that you exercised ordinary business care and prudence in meeting your tax obligations but nevertheless failed to meet them.
In determining whether you exercised ordinary business care and prudence, the IRS will consider all available information, including:
- The reasons given for not meeting your tax obligations;
- The length of time between your failure to meet your tax obligations and your subsequent compliance; and
- Circumstances beyond your control.
Reasonable cause may be established if you show that you were not aware of specific obligations to file returns or pay taxes, depending on the facts and circumstances.
Among the facts and circumstances that will be considered are:
- Whether you have previously been subject to the tax;
- Whether you have been penalized before;
- Whether there were recent changes in the tax forms or law that you could not reasonably be expected to know; and
- The level of complexity of a tax or compliance issue.
You may have reasonable cause for noncompliance due to ignorance of the law if a reasonable and good faith effort was made to comply with the law or you were unaware of the requirement and could not reasonably be expected to know of the requirement.
by Fresh Start Tax | Apr 18, 2014 | Tax Help
We are the Affordable South Florida Professional Tax Firm.
We are a local South Florida tax firm that has been practicing since 1982 are our A+ rated by the Better Business Bureau.
As former IRS agents and managers we worked out a local South Florida tax offices and needless to say we know the system.
Fresh Start Tax LLC is comprised of tax attorneys, tax lawyers, certified public accountants, enrolled agents, and former IRS agents.
We can handle any IRS or State Tax Problem you have.
From a simple IRS notice or letter to going to IRS appeals or even going to Tax Court we can handle any and all IRS situations.
Owing Back Taxes to the IRS
If you owe back taxes to the IRS or have a current IRS tax Levy or looking for an IRS tax settlement you must be prepared to give IRS a current documented financial statement.
There are one of three financial statements IRS may require depending where your case is within the system and what you are trying to do.
When we review your case with you we will let you know the required financial statement IRS will ask for.
You will need to be prepared to give IRS the last 3 to 6 months of your bank statements, copy of all monthly expenses, and a copy of all pay stubs.
IRS will make a determination based on your current financial statement on how they will close or settle your case.
IRS Tax Levies
If you have an IRS tax levy and need an immediate release IRS will generate that release of tax levy once they have your current documented financial statement and work out a tax settlement with them. We can usually get a levy release within 24 hours of receiving your documented financial statement.
If you have a back tax filing and you have little or no records, we can go ahead and reconstruct your tax returns. Being former IRS agents and managers we know the exact process.
If you will owe money as a result of your back tax filing we can work out a tax settlement.
Needless to say we are IRS audit specialist and can provide your best possible audit defense.
Call us today for free initial tax consultation and speak to a true tax professional.
Areas of Professional Tax Representation
- On staff, Board Certified Tax Attorney’s, IRS Tax Lawyers, Certified Public Accountants, Enrolled Agents,
- Full Service Accounting Tax Firm,
- We taught Tax Law in the IRS Regional Training Center
- Former IRS Agents, Managers and Instructors with over 60 years experience in the local, district and regional IRS offices.
- Highest Rating by the Better Business Bureau “A” Plus
- Fast, affordable, and economical
- Licensed and certified to practice in all 50 States
- Nationally Recognized Veteran /Published Former IRS Agent
- Nationally Recognized Published EZINE Tax Expert
- As heard on GRACE Net Radio.com – Monthly Radio Show-Business Weekly
Areas of Professional Tax Practice:
- Same Day IRS & State Tax Representation
- Offers in Compromise / IRS Tax Debt Settlements
- Immediate Release of IRS Bank Levies or IRS Wage Garnishments
- Tax Relief from a IRS Bill, Letter or Notice of “Intent to Levy”
- IRS Tax Audits IRS Hardships Cases or Unable to Pay
- Payment Plans, Installment Agreements, Structured agreements
- Abatement of Penalties and Interest
- State Sales Tax Cases
- Payroll / Trust Fund Penalty Cases / 6672
- Filing Late, Back, Unfiled Tax Returns
- Tax Return Reconstruction
- FBAR/FATCA Experts, Representation
Affordable IRS Help, Back Taxes Filing, Tax Levy, Settlements, Tax Audits ,- South Miami, Florida City, Richmond Heights, Leisure City, Cutler Ridge,
by Fresh Start Tax | Apr 18, 2014 | Tax Help
The Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a financial boost for people working hard to make ends meet.
Millions of workers may qualify for the first time this year due to changes in their marital, parental or financial status.
Workers, self-employed people and farmers earning $50,270 or less in 2012 should check to see if they qualify by using the EITC Assistant on IRS.gov.
To get the credit taxpayers need to file a return and specifically claim the EITC, even if they aren’t required to file.
The EITC is a refundable tax credit.
This means taxpayers may get money back, even if they have no tax withheld.
Nationwide last year, over 27 million eligible individuals and families received nearly $62 billion in EITC.
Many special rules apply to the EITC, so taxpayers should review the rules carefully, even when paying someone else to prepare their returns.
Most people who qualify for the EITC also qualify for free tax preparation through the IRS Free File program, or at a local tax help site staffed by trained community volunteers.
The EITC has no effect on welfare benefits.
In most cases, EITC payments are not used to determine eligibility for Medicaid, Supplemental Security Income (SSI), supplemental nutrition assistance program (food stamps), low-income housing or most Temporary Assistance for Needy Families (TANF) payments.
Though unemployment benefits are not earned income, they are taxable income and may affect the amount of EITC.
Credit Limits for Tax-Year 2012
The EITC varies based on income and family size.
The table showing credit amounts can be found in the Instruction booklets for Forms 1040, 1040A and 1040EZ and in Publication 596, Earned Income Credit.
This includes the expanded benefit for families with three or more children.
Those who qualify for EITC for tax year 2012, can get a credit from:
- $2 to $475 with no qualifying children
- $9 to $3,169 with one qualifying child
- $10 to $5,236 with two qualifying children
- $11 to $5,891 with three or more qualifying children
As the list shows, not everyone qualifies for the maximum credit.
Last year, the average credit was $2,200.
The EITC provides a financial boost for millions of hard-working Americans. However, even though most federal tax refunds are issued in less than 21 days, many factors can affect how long it may take for taxpayers to get their refunds.
It is also possible that a tax return could require additional review and therefore take longer to process. Taxpayers can track the status of their refund with the “Where’s My Refund?” tool available on IRS.gov after the IRS starts processing tax returns on Jan. 30.
Eligibility for EITC
Besides filing a tax return, people must meet various requirements. Some of these requirements apply to everyone.
Then there are additional requirements that apply to those who have one or more children, and another set of requirements that apply to people who don’t have a qualifying child.
Rules for every taxpayer:
- Must have earned income, such as wages, tips or the income from running a business or farm. Most other types of income, such as retirement pensions, though usually taxable, do not count as earned income.
- Must have a Social Security number that is valid for employment for self, spouse and any qualifying children.
- A person can get the credit even with a small amount of investment income, such as interest from a bank account. However, the amount of investment income is limited to $3,200.
- The filing status used must be single, head of household, married filing jointly or qualifying widow or widower. A taxpayer who files as married filing separately cannot get the credit.
- Generally, must be either a U.S. citizen or resident alien.
- Cannot be a qualifying child of another person.
- Cannot file Form 2555 or Form 2555-EZ. These forms are used to claim the foreign earned income exclusion, a tax benefit for Americans who live and work abroad.
In addition, income must be below certain limits. For tax year 2012, both earned income and adjusted gross income (AGI) must each be less than:
- $13,980 ($19,190 married filing jointly) with no qualifying children
- $36,920 ($42,130 married filing jointly) with one qualifying child
- $41,952 ($47,162 married filing jointly) with two qualifying children
- $45,060 ($50,270 married filing jointly) with three or more qualifying children
Special Rules for Families
People who claim the credit, based on having one or more qualifying children, each child must meet the relationship test, age test, residency test and joint return test.
1. Each child must meet all four tests.
2.Relationship test. The child is the taxpayer’s:
3. Son or daughter, including an adopted child or child placed for adoption
Stepchild or grandchild
Foster child placed by an authorized placement agency or court
Brother, sister, stepbrother, stepsister, half brother, half sister, or
A descendant of any of them
Age test. At the end of 2012, the child was:
Younger than the taxpayer or the taxpayer’s spouse if filing a joint return and younger than 19
Younger than the taxpayer or the taxpayer’s spouse if filing a joint return and younger than 24 and a full-time student, or
Any age if permanently and totally disabled
Residency test.
The child lived with the taxpayer or the taxpayer’s spouse if filing a joint return in the U.S. for more than half of 2012.
A qualifying child who files a joint return can only do so to claim a refund with neither the child nor child’s spouse being required to file.
More than one person cannot claim the same qualifying child to claim EITC. If a child meets the rules to be a qualifying child of more than one person, only one person can use that child to claim the EITC. Also, if the child qualifies for both a parent and another person, the other person can only get the credit by having a higher AGI than the parent.
Taxpayers without a qualifying child must meet three additional tests:
Lived in the U.S. for more than half of 2012
At the end of 2012, was at least age 25, but under age 65
Cannot qualify as the dependent of another person
Special Rule for Combat Pay. Combat pay received by members of the military serving in Afghanistan, Iraq and other combat zone localities is usually exempt from tax. But under a special rule, the taxpayer can choose to count all of this as taxable income when figuring the EITC. In many cases, making this choice enables the person to claim the credit, or if already eligible, claim a larger credit.
Avoid Errors and Seek Accuracy
Even if someone else prepares the tax return, a taxpayer is still responsible for the accuracy the return. Because the EITC is complex, many people claiming it make mistakes. Taxpayers should get help if they are not sure whether they qualify. Common errors include:
Claiming a child who is not a qualifying child.
Filing as single or head of household when actually married.
Reporting incorrect income or expense amounts.
Missing or incorrect Social Security numbers for self, spouse or qualifying children.
If a taxpayer receives an IRS letter requesting additional information, an immediate response is the best practice to avoid delaying a refund. If help is needed, the taxpayer can call the phone number shown in the letter.
The Right Credit Amount for Those Eligible
Some people who claim the EITC either figure it incorrectly or are not eligible. A deliberate error can have lasting impact.
More than half of EITC claims are prepared by tax professionals. To help ensure that only those eligible get the credit and that everyone who is eligible gets the right amount, the IRS requires paid preparers to file Form 8867 with any federal return claiming the EITC. This is the same due diligence checklist that for over a decade preparers were required to use for determining a client’s eligibility and then keep in their records.
Taxpayers should be aware that they are ultimately responsible for all information on their returns, whether choosing self-preparation, seeking volunteer tax assistance or paying a professional to claim the EITC.
Beware of scams promising to increase an EITC refund. Creating fictitious qualifying children or inflating income levels to get the maximum EITC are scams that may result in severe penalties. Among other things, a taxpayer could be banned from claiming the credit for up to 10 years.
If an EITC claim was reduced or denied after tax year 1996 for any reason other than a mathematical or clerical error, the taxpayer must attach Form 8862, Information To Claim Earned Income Credit After Disallowance, to the next return filed to claim the credit.
How to Claim EITC
Following the late tax law changes made by Congress, the IRS plans to open the 2013 tax filing season and begin processing both paper and e-filed individual income returns on Jan. 30, after updating forms and completing programming and testing of its processing systems.
The vast majority of taxpayers who qualify can begin to file EITC claims with their federal tax return starting on Jan. 30, 2013.
To claim the EITC, taxpayers need to file a Form 1040, 1040A or 1040EZ . If a taxpayer is claiming the EITC with a qualifying child, the Schedule EIC must be completed and attached to the tax return.
Schedule EIC provides the IRS with information about the qualifying children, including their names, ages, SSNs, relationship to the taxpayer and the amount of time they lived with the taxpayer during the year.
Taxpayers can find more information on claiming EITC on irs.gov/EITC. The EITC Assistant available on irs.gov/EITC or the Instructions for Form 1040, 1040A and 1040EZ can help individuals determine their eligibility.
The instructions contain a worksheet and the earned income credit table to help determine the amount of the credit.
