by Fresh Start Tax | Dec 18, 2013 | Tax Help
IRS Tax Representation for IRS Tax Audits – For Best Results Use Former IRS Agents
We are a local South Florida tax firm that has been representing taxpayers in South Florida since 1982.
We are A+ rated by the Better Business Bureau.
We are a team of tax attorneys, certified public accountants, and former IRS agents and managers who worked right here out of the local South Florida IRS offices.
We are one of South Florida’s most affordable and experienced professional tax firms.
Being Former IRS Agents and Managers we can tell you, it is not in your best interest to represent yourself during a IRS audit and we should know.
When an IRS agent finds a taxpayer by themselves in a tax audit they pretty much can do whatever they feel because after all they are the law. Most taxpayers do not know that they have rights during an IRS tax audit and to go in up unrepresented is foolish.
Keep in mind that an IRS agent has the right to expand the tax audit beyond the scope of the initial paperwork sent to the taxpayer and many times tax professionals can keep the IRS from going much deeper into a taxpayer or companies tax return.
I should also say if you have a squeaky clean tax return and no skeletons in the closet I see no reason at all why you cannot represent yourself during an IRS tax audit.
When many people come into my office and I see there is absolutely nothing wrong with their tax return, and I find that the IRS’s just conducting a random audit, I recommend in those cases taxpayers should go and by themselves and avoid professional tax fees.
You only call a tax professional when you receive an IRS audit notice and truly need tax help because you are not sure some of the issues on your tax return. Each taxpayer usually knows the depth and scope of their own tax return and whether the IRS has true audit potential.
Facts of IRS Audits
The Internal Revenue Service audits 1.03% of all tax returns filed.
I would not recommend you play the IRS lottery game because of your tax return false out of the national standards you have an excellent chance of being audited by the Internal Revenue Service.
Nationwide the IRS audits 1.5 million tax returns per year.
359,000 are actually audited by local IRS agents and rest are by mail or correspondence tax audits.
IRS collects $10.2 billion a year as a result of IRS audits by field agents and $5.2 billion a year by document matching programs.
What is an IRS audit?
An IRS audit is a review, examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is accurate.
The IRS Tax Audit Selection Process
Selecting a return for audit does not always suggest that an error has been made.
Returns are selected using a variety of methods including:
- Random selection and computer screening , sometimes returns are selected based solely on a statistical formula.
- Document matching, when payor records, such as Forms W-2 or Form 1099, don’t match the information reported.
- Related examinations, returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.
- Sometimes tax returns are audited because spouses and ex-employees report findings to the Internal Revenue Service.
IRS Tax Audit Methods
An audit may be conducted by mail or through an in-person interview and review of the taxpayer’s records.
The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit).
The IRS will tell you what records are needed.
Audits can result in no changes or changes. Any proposed changes to your return will be explained in writing.
IRS Audit Notification
Should your account be selected for audit, you will be notified in two ways:
1. By mail, or
2. By telephone
In the case of a telephone contact, the IRS will still send a letter confirming the audit.
Your Rights During an Audit
These taxpayer rights include:
1. A right to professional and courteous treatment by IRS employees.
2. A right to privacy and confidentiality about tax matters.
3. A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
4. A right to representation, by oneself or an authorized representative.
5. A right to appeal disagreements, both within the IRS and before the courts.
IRS Tax Audit Length
The length of each audit varies depending on the type of audit, the complexity of items being reviewed, the availability of information being requested, the availability of both parties for scheduling of meetings and your agreement or disagreement with the findings. as a general rule if you are scheduled for office audit those can last from week to three weeks.
Sometimes if an IRS revenue agent is auditing your tax return it can take anywhere from a month to a year.
Records Needed
You will be provided with a written request for specific documents needed.
The law requires you to retain records used to prepare your return.
Those records generally should be kept for three years from the date the tax return was filed.
The IRS does accept some electronic records. If records are kept electronically, the IRS may request those in lieu of or in addition to other types of records. Contact your auditor to determine what can be accepted to ensure a software program is compatible with the IRS’s.
IRS Audit Determinations
An audit can be concluded in three ways:
1.No change:
An audit in which you have substantiated all of the items being reviewed and results in no changes. Great news here.
2. Agreed:
An audit where the IRS proposed changes and the taxpayer understands and agrees with the changes.
3. Disagreed:
An audit where the IRS has proposed changes and the taxpayer understands, but disagrees with the changes.
What Happens When You DISAGREE with the Audit Findings?
A conference with a manager may be requested for further review of the issue or issues. In addition, Fast Track Mediation or an Appeal request may be filed.
Contact us today for free initial tax consultation .
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 Tax Representation
- Offers in Compromise or 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
- 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
Audit Defense – Audit Representation – Tax Return Audits – Miami, Ft.Lauderdale, Boca, Pompano – Dade, WPB, Broward County
by Fresh Start Tax | Dec 18, 2013 | Tax Help
Get Offer in Compromise Approved
I am a Former IRS agent and teaching instructor of the offer in compromise program.Firm has over 206 years of combined IRS work experience and over 60 years of direct working experience in the IRS local, district, and regional tax offices.
We are comprised of tax attorneys, certified public accountants, and former IRS and state tax agents.
We been in practice since 1982 in our A+ rated by the Better Business Bureau.
We are the affordable tax experts for offers in compromise.
Being Former IRS agents we understand the complete inner workings of the Internal Revenue Service and how to get an offer in compromise approved. Not only did we work the program and IRS we were instructors that taught the program to other IRS agents.
Offer in Compromise getting easier to be approved
The Internal Revenue Service is making it much easier for taxpayers to get an offer in compromise approved. In the past, IRS made it very difficult to have offers in compromise accepted because the sheer amount of time it would take to get an offer approved. It was much easier to deny the offer compromise that to work the offer in compromise.
Stats for Offers in Compromise
- Last year, 58,000 offers in compromise were filed by taxpayers with the Internal Revenue Service.
- IRS accepted 38% of all offers in compromise filed by taxpayers.
- The average settlement was $.14 on a dollar.
- Taxpayers should know that there are 7500 cases sitting in the Internal Revenue Service queue at this time and offers in compromise take anywhere from four months to eight months to work.
How to Get Your Offer Approved by the IRS
It is all about knowing the IRS settlement formulas.
To get your offer in compromise approved you must know the systems, the formulas, and be familiar with the national standard test used by Internal Revenue Service to accept offers in compromise.
IRS will look at two main factors in settling your case.
The Internal Revenue Service is concerned about your income and your assets.
Regarding Your Assets
You must give IRS the total liquidity you have in all your assets or your offer in compromise will not improved.
This includes equities in vehicles, IRA, pensions and basically anything that has value. IRS will want you to surrender that equity to them and make them part of the settlement. Since the Internal Revenue Service can seize all those assets they absolutely mandate that that liquidity be part of the offer.
Regarding Your Income
IRS will want to know what the value of your current monthly income. IRS will compare your current income against the national, regional and local standards tests that you can find on our website or on IRS.gov.
Internal Revenue Service will find out if you have any disposable income after subtracted against the national, regional and local standards.
Any money left over monthly is multiplied by 12.( a yearly factor)
IRS will simply add up your total asset liquidity plus the value of your disposable monthly income and that will be the base amount of your offer to the Internal Revenue Service. The Internal Revenue Service will accept no less than that amount.
Other Factors that may come in to play
IRS will also at the full body of the case such as age, education level , medical conditions, prospects for more income. There is a full-page checklist that IRS requires the agent complete so IRS sees and understands the full body of a taxpayer’s financial life.
The Brand New Fresh Start Tax Program to get your Offer in Compromise Approved
The Internal Revenue Service another expansion of its Fresh Start initiative by offering more flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially distressed taxpayers to clear up their tax problems and in many cases more quickly than in the past.
This focuses IRS on the financial analysis used to determine which taxpayers qualify for an OIC. This announcement also enables some taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past.
In certain circumstances, the changes include:
1. Revising the calculation for the taxpayer’s future income,
2. Allowing taxpayers to repay their student loans,
3. Allowing taxpayers to pay state and local delinquent taxes,
4. Expanding the Allowable Living Expense allowance category and amount.
What is a Offer in Compromise OIC
The OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed.
An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or a through payment agreement.
The IRS looks at the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential.
Offers in Compromise are always subject to acceptance on legal requirements and always must be approved by District Council of the Internal Revenue Service.
The IRS recognizes that many taxpayers are still struggling to pay their bills so the agency has been working to put in place common-sense changes to the OIC program to more closely reflect real-world situations.
When the IRS calculates a taxpayer’s reasonable collection potential, it will now look at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years.
All offers must be fully paid within 24 months of the date the offer is accepted. we have had many clients have their offers in compromise accepted only to failed to meet the terms. If that happens IRS keeps all monies paid to IRS and starts the enforcement action in the cycle all over again.
Other changes to the program include narrowed parameters and clarification of when a dissipated asset will be included in the calculation of reasonable collection potential.
In addition, equity in income producing assets generally will not be included in the calculation of reasonable collection potential for on-going businesses.
Allowable Living Expenses per the National Standards
The Allowable Living Expense standards are used in cases requiring financial analysis to determine a taxpayer’s ability to pay.
The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas.
These standards are used when evaluating installment agreement and offer in compromise requests.
The National Standard miscellaneous allowance has been expanded to include additional items. Taxpayers can use the miscellaneous allowance for expenses such as credit card payments and bank fees and charges.
Guidance has also been clarified to allow payments for loans guaranteed by the federal government for the taxpayer’s post-high school education.
Payments for delinquent state and local taxes may be allowed based on percentage basis of tax owed to the state and IRS.
Taxpayers wishing to settle their case with an offer to compromise should do so by the use of a professional tax firm that has filed at least 100 offers in compromises.
Unless you have extensive working knowledge of the Internal Revenue Service the odds of getting an improved offer in compromise are slim.
I’ll suggest taxpayers who want to do this on their own walk through the IRS pre-qualifier tool that they can find on our website.
It is understandable that taxpayers do not want to pay in the neighborhood of $5000 for a professional firm.
If you do this on your own, hazards exist.
However , this pre-qualifier tool at least will give the taxpayers a better understanding of the offer in compromise program.
Contact us today for free initial tax consultation and we can walk you through the process of helping you get in IRS offer in compromise approved.
We have an A+ rating by the Better Business Bureau have been in private practice since 1982.
Also on staff are former IRS appellate agents for those who have had their offers in compromise rejected and need to take it to the next level.
Get a Offer in Compromise Approved, Former IRS, Affordable – Atlanta, Jacksonville, Orlando, Tampa
by Fresh Start Tax | Dec 18, 2013 | Tax Help
How to get Offer in Compromise Approved – Use Former IRS Agents
I am a Former IRS agent and teaching instructor of the offer in compromise program.
I understand the complete inner workings of the Internal Revenue Service and how to get an offer in compromise approved.
The Internal Revenue Service is making it much easier for taxpayers to get an offer in compromise approved.
Last year, 58,000 offers in compromise were filed by taxpayers with the Internal Revenue Service.
IRS accepted 38% of all offers in compromise filed by taxpayers.
The average settlement was $.14 on a dollar.
Taxpayers should know that there are 7500 cases sitting in the Internal Revenue Service queue at this time and offers in compromise take anywhere from four months to eight months to work.
It is much better for taxpayers to file an offer in compromise when they have received their CDP letters because the offers usually take a shorter period of time to work.
How to Get Your Offer Approved
It is all about knowing the IRS settlement formulas.
To get your offer in compromise approved you must know the systems, the formulas, and be familiar with the national standard test used by Internal Revenue Service to accept offers in compromise.
IRS will look at two main factors in settling your case.
The Internal Revenue Service is concerned about your income and your assets.
Regarding Assets
You must give IRS the total liquidity you have in all your assets or your offer in compromise will not improved.
This includes equities in vehicles, Ira, pensions and basically anything that has value. IRS will want you to surrender that equity to them and make them part of the settlement. Since the Internal Revenue Service can seize all those assets they absolutely mandate that that liquidity be part of the offer.
Regarding Income
IRS will want to know what the value of your current monthly income. IRS will compare your current income against the national, regional and local standards tests that you can find on our website or on IRS.gov.
Internal Revenue Service will find out if you have any disposable income after subtracted against the national, regional and local standards.
Any money left over monthly is multiplied by 12.
IRS will simply add up your total asset liquidity plus the value of your disposable monthly income and that will be the base amount of your offer to the Internal Revenue Service. The Internal Revenue Service will accept no less than that amount.
Other Factors
IRS will also at the full body of the case such as age, education level , medical conditions, prospects for more income.
Please understand IRS will Google your name and many times look at credit reports for hidden information you have not disclosed to them. Understand that IRS does conduct asset and name searches.
The New Fresh Start Tax Program to get your Offer in Compromise Approved
The Internal Revenue Service another expansion of its “Fresh Start” initiative by offering more flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially distressed taxpayers to clear up their tax problems and in many cases more quickly than in the past.
This focuses on the financial analysis used to determine which taxpayers qualify for an OIC. This announcement also enables some taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past.
In certain circumstances, the changes include:
1. Revising the calculation for the taxpayer’s future income.
2. Allowing taxpayers to repay their student loans.
3. Allowing taxpayers to pay state and local delinquent taxes.
4.Expanding the Allowable Living Expense allowance category and amount.
What is a Offer in Compromise
The OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed.
An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or a through payment agreement.
The IRS looks at the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential.
Offers in Compromise are always subject to acceptance on legal requirements and always must be approved by District Council of the Internal Revenue Service.
The IRS recognizes that many taxpayers are still struggling to pay their bills so the agency has been working to put in place common-sense changes to the OIC program to more closely reflect real-world situations.
Settlement types for Offer in Compromise
When the IRS calculates a taxpayer’s reasonable collection potential, it will now look at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years.
All offers must be fully paid within 24 months of the date the offer is accepted. we have had many clients have their offers in compromise accepted only to failed to meet the terms. If that happens IRS keeps all monies paid to IRS and starts the enforcement action in the cycle all over again.
Some of the Forms for the Offer in Compromise
The Form 656-B, Offer in Compromise Booklet, and Form 656, Offer in Compromise, has been revised to reflect the changes.
Other changes to the program include narrowed parameters and clarification of when a dissipated asset will be included in the calculation of reasonable collection potential.
In addition, equity in income producing assets generally will not be included in the calculation of reasonable collection potential for on-going businesses.
Allowable Living Expenses per the National Standards
The Allowable Living Expense standards are used in cases requiring financial analysis to determine a taxpayer’s ability to pay.
The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas.
These standards are used when evaluating installment agreement and offer in compromise requests.
The National Standard miscellaneous allowance has been expanded to include additional items. Taxpayers can use the miscellaneous allowance for expenses such as credit card payments and bank fees and charges.
Guidance has also been clarified to allow payments for loans guaranteed by the federal government for the taxpayer’s post-high school education.
Payments for delinquent state and local taxes may be allowed based on percentage basis of tax owed to the state and IRS.
Taxpayers wishing to settle their case with an offer to compromise should do so by the use of a professional tax firm that has filed at least 100 offers in compromises.
Unless you have extensive working knowledge of the Internal Revenue Service the odds of getting an improved offer in compromise are slim.
I’ll suggest taxpayers who want to do this on their own walk through the IRS pre-qualifier tool that they can find on our website.
It is understandable that taxpayers do not want to pay in the neighborhood of $5000 for a professional firm.
If you do this on your own, hazards that exist.
However , this pre-qualifier tool at least will give the taxpayers a better understanding of the offer in compromise program.
Please call us today for a free initial tax consultation.
How to Get a Offer in Compromise Approved – Use Former IRS Agents
by Fresh Start Tax | Dec 17, 2013 | Tax Help
Tax Tips to Help You Save for 2013
Yes, it is that time again.
Although the year is almost over, you still have time to take steps that can lower your 2013 taxes.
Now is a good time to prepare for the upcoming tax filing season.
Taking these steps can help you save time and tax dollars.
They can also help you save for retirement.
Here are three year-end tips from the IRS for you to consider:
1. Start a filing system for your taxes.
If you don’t have a filing system for your tax records, you should start one. It can be as simple as saving receipts in a shoebox, or more complex like creating folders or spreadsheets. It’s always a good idea to save tax-related receipts and records.
Keeping good records now will save time and help you file a complete and accurate tax return next year.
2. Make Charitable Contributions Now.
If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2013.
This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2014. A gift by check also counts for 2013 as long as you mail it in December. Remember that you must give to a qualified charity to claim a tax deduction.
Use the IRS Select Check tool at IRS.gov to see if an organization is qualified.
Make sure to save your receipts. Store in the clouds if you can.Plan for a disaster.
You must have a written record for all donations of money in order to claim a deduction. Special rules apply to several types of property, including clothing or household items, cars and boats. For more about these rules see Publication 526, Charitable Contributions.
If you are age 70½ or over, the qualified charitable distribution allows you to make tax-free transfers from your IRAs to charity.
You can give up to $100,000 per year from your IRA to an eligible charity, and exclude the amount from gross income. You can use the excluded amount to satisfy any required minimum distributions that you must otherwise receive from your IRAs in 2013.
This benefit is available even if you do not itemize deductions. This special provision is set to expire at the end of 2013.
See Publication 590, Individual Retirement Arrangements (IRAs), for more information.
3. Contribute to Retirement Accounts.
You need to contribute to your 401(k) or similar retirement plan by Dec. 31 to count for 2013. On the other hand, you have until April 15, 2014, to set up a new IRA or add money to an existing IRA and still have it count for 2013.
Another Tip sometimes forgotten:
The Saver’s Credit, also known as the Retirement Savings Contribution Credit, helps low- and moderate-income workers in two ways. It helps people save for retirement and earn a special tax credit.
Eligible workers who contribute to IRAs, 401(k)s or similar workplace retirement plans can get a tax credit on their federal tax return. The maximum credit is up to $1,000, $2,000 for married couples. Other deductions and credits may reduce or eliminate the amount you can claim.
IRS Taxes – Lower your 2013 Taxes – Tax Tips
by Fresh Start Tax | Dec 17, 2013 | Tax Help
IRS – Record keeping Requirements
Well organized records make it easier to prepare a tax return and help provide answers if your return is selected for examination, or to prepare a response if you receive an IRS notice.
Records such as receipts, canceled checks, and other documents that support an item of income or a deduction, or a credit appearing on a return must be kept so long as they may become material in the administration of any internal revenue law, which generally will be until the period of limitation expires for that return.
For assessment of tax you owe – this generally is 3 years from the date you filed the return. Returns filed before the due date are treated as filed on the due date.
There is no period of limitations to assess tax when a return is fraudulent or when no return is filed.
If income that you should have reported is not reported, and it is more than 25% of the gross income shown on the return, the time to assess is 6 years from when the return is filed.
For filing a claim for credit or refund, the period to make the claim generally is 3 years from the date the original return was filed, or 2 years from the date the tax was paid, whichever is later.
For filing a claim for an overpayment resulting from a bad debt deduction or a loss from worthless securities the time to make the claim is 7 years from when the return was due.
If you are an employer, you must keep all your employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.
If you are in business, there is no particular method of bookkeeping you must use.You are on your own.
However, you must use a method that clearly and accurately reflects your gross income and expenses.
The records should substantiate both your income and expenses.
Publication 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses, provide additional information on required documentation for taxpayers with business expenses.
Carry on!
IRS – Recordkeeping Requirements
by Fresh Start Tax | Dec 17, 2013 | Tax Help
Ever since I can remember as a former IRS agent, the Internal Revenue Service always honored the holiday season for taxpayers making sure they had money available the last two weeks of the year for holiday gifts, shopping and whatever.
This year, the IRS levy moratorium will take place from December 16 through to December 26.
IRS will not send out any IRS tax levies unless on a Jeopardy or termination cases.
The average taxpayer has nothing to fear.
IRS Levy Moratorium 2013 – December 16 – 26th – No IRS TAX LEVIES
