by steve | Jun 3, 2010 | IRS Tax Advice, Tax News
What is the IRS process to collect tax
Once IRS has a valid tax return in hand IRS take that tax return and inputs into the” CADE” system of Internal Revenue Service and creates a valid notice of assessment. That creates the ” date of assessment. That assessment is known as the TC 150 date.
IRS then sends out a series of Notices and Letters that start from a first tax notice or bill, CP14, until the final notice of intent to levy, CP 504. This process takes about 4 months. The following is a list of most common notices or letters you may receive from the Internal Revenue Service regarding the tax process.
Notices and Letters you may receive from the IRS
* CP 14 Your balance due to IRS.
* CP22A Data processing adjustment and the balance is more than $5.
* CP90/CP297 Final Notice Notice of Intent to Levy and Notice of your right to a hearing.
* CP297A Notice of Levy and your right to a hearing.
* CP91/CP298 Final notice before levy on social security benefit.
* CP501 Reminder Notice, balance due IRS.
* CP503 Second IRS notice on balance due.
* CP504 Final Notice balance due.
* CP521 Installment Agreement reminder notice.
* CP523 Default of installment agreement
After these letters and notices have been sent, if these notices have not been responded to, IRS will always send the CP 504 notice. It will come by certified mail.Within 6 weeks from the date on that notice of intent to levy letter, federal tax levies, bank garnishments and federal tax liens will but sent out. IRS must always make a final notice and demand and make sure you had an appeals right on all cases within their system.
So what happens when the cases do out to the local field office
After processing thousands of cases as a former IRS agent I am asked, “just what happens to a case when it comes into the local office“. After cases leave the ACS unit and run there normal course in the “automated” system, IRS realizes the computer can do nothing to stir up the environment enough to make the taxpayer contact the IRS regional office, pay the tax, or work out some sort of deal. So the next steps must be taken.
A process of grading takes place on the” collection potential” of each case. Some of the factors are the dollar amounts that are due, the number of tax periods that tax is owed, the type of tax, whether the case qualifies for high dollar, and is this a “repeat” tax offender
.
IRS wants to make sure from a dollar amount the case is worth pursuing. On some cases, it is simply not worth the effort because of IRS thresholds. These are simply left in the collection system and automatic freeze codes are input on these cases. These cases will probably not be worked for some time.
The number of tax periods owed is an important issue because IRS does not want repeat offenders especially those who willfully neglect the process. These are called multiple delinquent accounts.
Payroll tax cases get the” highest priority” because those are the so called trust-fund cases. This was money held in TRUST for the United States government. These cases are the highest priority at the Internal Revenue Service. The repeat offender is a big determining factor if the case is issued to the field. IRS simply adds the score of these major factors and determines whether or not the case is field worthy.
Once a case becomes field worthy is only half of the factor. At that point the case must be evaluated for a particular field office. Because most of the field offices are over loaded with cases, a determination must be made whether the case is ready to be worked or not. The local office agents who work these cases are called, Revenue Officers. They have a case load that is controlled by management and believe it or not the National Treasury Employees Union. The Union makes sure management is fair and does not overload the employees with high inventories. The system works very well and keeps a great check and balance system.
After a Revenue Officer closes a case, the “que” determines what case should be worked next based on the highest score. The group manager then puts that case into the revenues officers inventory and monitors the case until the case is closed. Periodic checks are made to ensure the case is being worked in the manner and format that has been predetermined by the Internal Revenue Manual (IRM). Now that a Revenue Officer has the case, the next stop is to do a full compliance check on the file, that is to make sure all tax return filings and all current payments are up to date. This full compliance check ensures the case will be worked and closed without other outstanding being owed or unfiled.
Many times the Revenue Officer may ask or pull an ACCURIANT REPORT. This report comes from a search engine that can go back ten years and check on all relative information such as, real property, DMV and such. Also it can search for credit card information and see whether you turned in a loan application when applying for credit. They can easily do an asset search based on the financial statement given to the third party lending or credit card agent.
The next step in the process is to make contact with the taxpayer. They can do this in different ways. The Revenue Officer can call the telephone number that is usually found in the file, send out a letter, or go by and make a field call to the home or the place of business. Depending on the way each Revenue Officer works will determine how the follow up is made. The field call to the home or place of business is usually the best way to handle a new case because it gives the revenue officer a sense of the environment the taxpayer lives or works in. The field call is a wake up call to the taxpayer that IRS is on their case. If the IRS does make a visit to your place of employment or home do not to worry, they are simply wanting to make contact and get financial information necessary to close your case. The same revenue officer will be with you through the duration of the case. Also be advised that if you are not home, they may leave a card or contact a neighbor just to make there point known.
Fresh Start tip, be as friendly as possibly and let them know you will have your representative contact them in the next couple of days and thank them for reminding you of your tax obligation.
by steve | Jun 3, 2010 | Tax News
Owe Florida Sales Tax, Department of Revenue (DOR) FLORIDA , CALL THE AFFORDABLE EXPERTS 1-866-700-1040
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Contact us today for free tax consultation so you can stop the worry and stop the stress.
Florida Sales Tax and Department of Revenue Problems. Resolve them today!!!
Florida Sales Tax problems are causing a major concern for thousands of businesses in Florida.
Call 1.866.700.1040 and let us fix your Sales Tax Problems.
With the economy in our country today, we are walking into a major problem. Literally thousands of businesses are having Sales Tax issues.
We are moving towards a situation never seen in Florida and the United States and the Florida Department of Revenue is not backing down one bit.
Florida’s Department of Revenue is sending out more enforcement and audit notices than they have in their history.
There are several steps that you can take to fix your Sales Tax Problem immediately. Some information you should know.
A Professional and Experienced Firm
Fresh Start Tax has its main office in Ft. Lauderdale, Florida and the firms staff consists of tax attorneys, 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 typical client is one that has not filed or not reported matters involving sales taxes and or IRS related issues. We also have a network of attorneys that work criminal cases as well. We handle cases all through the State of Florida.
Over the past 27 years of private practice alone, we have settled thousands of government cases with successful results. We have an excellent track record and have the highest score in regards to the Better Business Bureau.
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. We are the professionals professional.
Representation Issues
State of Florida sales tax representation includes the following matters with the Florida Department of Revenue:
1. Tax audits on any and all sales tax issues and matters
2.Non-filing matters
3.Criminal investigations that are referred to attorneys that best fit your profile
4.Department of Revenue enforcement action or warrant proceedings
5. Stipulated time payments
6.Requests for settlements or Compromise
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.
1. Have all your tax returns filed before you call Florida Sales Tax and the Department of Revenue on your back tax issues.
2.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.
3. Be prepared to give the Department of Revenue all supporting documentation to prove your financial statement.
4.Make sure you are current on deposit requirements.
How to stop Florida Sales Tax collection enforcement on your back taxes sales tax
a. Contact the Department of Revenue on your back tax problem as soon as you become aware of the situation or receive a letter.
b. Let a professional tax company contact Florida Sales Tax before they start to take enforcement action and file warrants and or make this a criminal case.
c. Utilize the settlement program to reduce your tax debt, if you qualify.
d. Contact Fresh Start Tax, we are the true professionals in your area.
We would welcome the opportunity as tax consultants to meet with you on a complimentary basis to discuss how we can help your business save money and increase profits.
For a free consultation, please email us or call us today to schedule a meeting.1-866-700-1040
by steve | Jun 3, 2010 | Tax News
Open House Saturday June 5 to Help Taxpayers Solve Problems and Respond to Notices
The Internal Revenue Service will once again host a special nationwide open house on Saturday, June 5 to help taxpayers solve tax problems and respond to notices from the IRS.
Approximately 200 IRS offices, at least one in every state, will be open June 5 from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through their problems ?? especially recently received tax notices ?? and walk out with solutions.
?We?ve helped thousands of taxpayers resolve their problems the same day at these open houses,? IRS Commissioner Doug Shulman said. ?If you have a question regarding a notice, a problem with your taxes or difficulty resolving a tough tax issue, we encourage you to come in and work with us.?
IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS open house on May 15, close to 7,000 taxpayers sought and received assistance. About 97 percent of the taxpayers who came in for help had their issues resolved the same day.
At the June 5 open house, someone who has received a notice seeking additional information can speak with an IRS employee to get a clear explanation of what is necessary to satisfy the request. A taxpayer who cannot pay a tax balance due can discuss with an IRS professional whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise ? an agreement between a taxpayer and the IRS that settles the taxpayers debt for less than the full amount owed ? will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.
The open house on June 5 is the second of three events scheduled after tax season this year. The first was held on May 15. The next event, previously scheduled for Saturday June 26, will be held later this fall. Details regarding that event will be available later.
by steve | Jun 3, 2010 | IRS Tax Advice, Tax News
IRS Audit Techniques , Tax Audit Help- Former IRS Agents
We are comprised of tax attorneys, CPAs, and former IRS audit managers, instructors, and appeals agents.
We have over 60 years of direct working knowledge of the Internal Revenue Service and can help you with any IRS tax audit situation that you may have.
You can contact us today for free tax consultation and speak directly to former IRS auditors and tax audit managers. Also on staff as a former IRS appeals agent of 35 years.
Below we will discuss IRS audit techniques that the revenue agent or office auditor will use in the review of your tax return
The IRS and their “audit techniques”. What you should expect !!!!
Most taxpayers walk into an IRS audit having no clue about what to expect or the hornet’s nest they are getting themselves into.
Being a former IRS agent, I would love the taxpayer who has no clue about what was going on because you can have your way with them. Today, it would not be wise to walk into an IRS audit situation unless you are absolutely sure there are no problems with your return. If you know that to be a fact, you can boldly walk into the IRS office fearing nothing and you do not need a professional whatsoever.
However, if you think there is a problem, pay the money because it is your saving in the end. A smart professional can avoid penalties and interest and having the IRS pick up others years. Think through your situation.
As the IRS process starts….
The first thing the IRS agent will do is an analytical test. It is a review of the tax return, balance sheets and canceled checks. The agent takes a common sense approach into all available evidence.
Secondly, the IRS agent will look at all documentation to help determine and substantiate items claimed on the tax return.
The Agent will next interview the taxpayer or third parties that may be able to shed more light on the subject audit. The IRS agent will physically inspect the taxpayers assets, inventory or securities. The agent will observe the business by taking a tour and the owner’s reaction to statements and claims throughout the whole process. Lastly, the IRS agent starts the testing process of all books and records to make sure the tax return is true and correct.
Interviews: Authority and Purpose
1. Internal Revenue Code Section 7602 authorizes the Secretary or a delegate to examine books and records and to take testimony under oath.
2. Oral testimony is a significant factor in resolving tax cases.
Oral testimony
Oral testimony can be taken at the discretion of the IRS agent.
1. provide information not otherwise available from physical documentation
2.corroborate return information
3. provide relevant information not reflected on the return
4. establish the taxpayers intent
Who does the Interview?
1. Internal Revenue Code Section 7521(c) states that an examiner cannot require a taxpayer to accompany an authorized representative to an examination interview in the absence of an administrative summons.
However, the taxpayers voluntary presence at the interview can be requested through the representative as a means to expedite the examination process.
2. If the IRS agent can get the taxpayer by themselves the agent will have a field day. Representatives are a key to shielding off problems.
The Power of Attorney and the possible bypass of the “power”
1. When a taxpayer obtains representation, a valid power of attorney, the examiner will ensure that the authorization, Form 2848, Power of Attorney , or Form 8821, Tax Information Authorization , or a similar privately designed form, is properly executed. Service personnel are prohibited from disclosing tax information of a confidential nature to any unauthorized person.
2.Practice before the Service is restricted to persons recognized or qualified under provisions of Circular No. 230.
The IRS will not let anyone not authorized to appear on behalf of the taxpayer. If the taxpayer’s representative impedes or delays the examination by failing to promptly submit the taxpayer’s records or information requested by the examiner, failing to keep scheduled appointments, or failing to return telephone calls and written correspondence, the examiner may initiate procedures to bypass the representative and deal directly with the taxpayer or the business owner.
Where to Conduct Interviews
1. The time and place of interviews will be set by the IRS agent as long as they are reasonably scheduled.
2. Office examinations will be conducted at the Internal Revenue Service office closest to the location of the taxpayer.
3. Field examinations are conducted at the taxpayers residence or place of business, or where the taxpayers books and records are kept. It also can be held a the representative’s office.
Requests to Tape Record Interviews
1. Internal Revenue Code addresses audio recording of interviews.
2. Taxpayers may request to tape record an interview proceeding as long as “10 calendar days” advance notice of intent to record is provided to the Service. The taxpayer must supply his own recording equipment.
The Service has the right to simultaneously produce its own recording and has the right to reschedule the interview if the Service does not or will not have equipment in place. This is rare, but happens many times on taxpayer protesters.
3. All participants, both IRS and the taxpayer must consent to the recording of the interview.
4. All recorded interviews will contain the following information:
a.. The date, time, and place of the interview,
b.. The taxpayers name and social security number or business ID number
c.. Identification of all participants on the recording, along with a statement of each participants respective role in the proceedings
d. The purpose of the proceeding
e.. The tax year or years under examination or audit
f.. A clear description of written documentation provided in support of the issues
g. At the conclusion, a statement indicating the total recording time for the interview and that the interview has been completed and the recording is ended.
Types of Interviews
1.Initial Interviews. The initial interview is to be held as soon as possible after the IRS agent opens a case.
2. Subsequent Interviews. Subsequent interviews with the taxpayer should be held if and only if:
a.. The taxpayer does not provide all the information that the IRS requested;
b.. More detailed explanations are needed;
c.. A review of the IRS agent’s examination progress is needed.
The review should address information provided to date as well as outstanding information needed to complete the audit.
3. Closing Interviews. Closing interviews should be held to go over any proposed adjustments, and a signed agreement should be obtained.
Interview Techniques used by the Internal Revenue Service Audit Agent
1.Interviews provide information about the taxpayer’s financial history, business operations, and books and records that are not available from other sources.
Interviews should be used to obtain information needed to make informed judgments about the scope and depth of the examination and correctly resolve issues or look into other possible issues. Interviews are used to obtain leads, develop information, establish evidence and to find out the credibility of the information that the taxpayer is providing.
2. It is important to create an environment where the taxpayer feels comfortable. Examiners should maintain a friendly and professional demeanor. Suggestions for establishing rapport include:
a.. The IRS Agent should introduce themselves and give the taxpayer or representative their ID or badge number;
b. The IRS Agent should always explain what will happen during the examination or audit;
c.. The IRS Agent should be prepared to explain return selection procedures, rights to representation, and appeal rights. Very rarely does the IRS Agent explain the return selection process.
The IRS Agent should recognize that an IRS audit is often a once-in-a lifetime experience for the taxpayer and therefore the taxpayer may be tense or nervous. This is never the case. The taxpayer is always worried to death.
4. The IRS Agent should exhibit openness, honesty and be calm and objective as possible. This is not a time of emotion.
5. The IRS Agent should always be prompt and courteous.
Authority to Conduct Tours of Business Sites
1. ” Regulation 301.7605?1(d)(3)(iii)” states: where an examination takes place, the Service may visit the taxpayers place of business or residence to establish facts that can only be established by direct visit, such as inventory or asset verification.
The Service generally will visit for these purposes on a normal workday of the Service during the Service normal tour of duty hours.”
The IRS may do an inspection of a Taxpayers Residence, but their use is very limited.
The IRS Agent may consider inspecting the taxpayers residence. Due to privacy issues and the intrusiveness of such inspections, their use should be limited.
The purpose of inspecting the taxpayers residence includes (but is not limited to):
1. Determining the validity of deductions for an office or business located in the residence.
2. Determining the taxpayers financial status.
3. I would always have your professional representative there, review the walk through before the IRA agent arrives, make it a short, sweet and fast walk through. This rarely happens though.
Tours of Business Sites
1. The physical observation of the taxpayers operation, or tour of business site, is an integral part of the examination process. In viewing the taxpayers facilities and observing business activities is an opportunity to:
a.. Acquire an overview of the business operation;
b.. Get a feel for the business and the ownership;
c..Observe and test internal and external controls;
d. Clarify information obtained through interviews.
Cash Businesses
1. Many small businesses that deal almost exclusively in cash are likely to have few internal controls. Practically all income is received in cash. No independent third parties review the operation. Many expenses are paid in cash and documentation for transactions is often lacking. The IRS can and will pull industry standards and similar business records from research in the past.
2. The IRS has audited millions of cash businesses in the past. The IRS is trained to look for fraud and deceit. Caution should be used by all business owners in this situation and you should always have a trained professional representation.
Should you have any question regarding IRS TAX MATTERS, call us at FRESH START TAX 866-700-1040. We have tax attorneys, CPA’S, former IRS Agents ready to serve your professional needs
by steve | Jun 3, 2010 | IRS Tax Advice, Tax News
IRS Employment, Payroll Tax Audit – Former IRS Agents – Fresh Start Tax LLC – Get Results 1-866-700-1040
We are comprised of attorneys, CPAs, and former IRS agents. We have over 206 years of professional tax experience in over 60 years of working directly for the Internal Revenue Service. Also on staff is a former IRS appeals agent of 25 years.
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Being Former IRS Agents, Managers and Instructors gives us a unique advantage over everybody else for employment or payroll tax audit.
We know all the techniques, tax policies and settlement procedures to get you the results you need.
We have represented thousands of taxpayers since 1982 with glowing successes.
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Employment Tax or Payroll Tax Audits
The IRS will start its campaign to begin the Employment Tax or Payroll Tax Research Study. Business practices regarding these issues has changed significantly since its last study in the 1980’s.
The IRS feels there is a huge need for its Employment Tax Campaign. The IRS will collect the data that will help allow them to understand the compliance characteristics of employment tax filers.
Once this study is complete and the data is analyzed, the IRS will probably roll out a National Tax Employment Tax Campaign that will spill over to thousands of taxpayers. These smaller campaigns help the IRS know exactly where to target and are templates for The huge National Programs in Payroll Tax audits.
The two main goals for the ET NRP is to secure valid information for computing the employment Tax Gap and to determine compliance characteristics so the IRS can focus on non compliant employment tax areas.
IRS Random Audits
The IRS will randomly select 6000 poor souls for each of the next three years. The examination will be very extensive in scope. The taxpayers will receive the NRP soon in the mail.
It is of utmost importance that no person, entity or corporation go into these employment tax or payroll tax audit without professional representation. The IRS will have their way with the average Joe. Also, the IRS can spin off full audits of the business and personal returns as well.
A good professional company can limit the scope of this investigation and assure you the best results.
Find a professional company like Fresh Start Tax who has a professional staff of tax attorneys, former IRS agents and CPA’S. This is not a matter to fool around with. Trying to save money and do-it-yourself is impending doom. Be wise, smart and prudent.
How the IRS process works
The Internal Revenue Service has a process called the common-law test.
These common factors determine what side of the fence the person falls on, that of an employer or that of an employee. The IRS Agent will look at the where the ponderousness of evidence falls before making their determination on each case. No two audits or cases are ever the same.
There are different nuisances with each and every case. Below is some of the information and factors that are used by the IRS for their determinations on these Payroll Tax Audits or Employment Tax Audits.
The Internal Revenue Service Factors for Evaluation for Employee or Employer Test
There are two general tests the IRS uses for this determination for the Employment Tax Audits or Payroll Tax Audits
1. Common Law Test
2. Reasonable Basis Test
Call us for more details and get a free case analysis. 1-866-700-1040
IRS Employment, Payroll Tax Audit – Former IRS Agents – Fresh Start Tax LLC – Get Results
by steve | Jun 3, 2010 | IRS Tax Advice, Tax News
What you need to know about the Installment Agreements to the IRS
Here are the “10 Golden Tips”
1. Four million taxpayers are currently using Installment Agreements to pay their IRS taxes. It is the most common way to close your current IRS issue or case.
2. IRS will want a completed Form 433A or 433F, collection information financial statement, with supporting documentation. They will use this to determine if you are eligible for an Installment Agreement and how much your payments will be.
3. An Installment Agreement stops all enforced collection action immediately. It suspends the open case in the IRS enforced collection system.
4. The Installment Agreement allows you to make reasonable and affordable payments to the Internal Revenue Service.
5. The IRS will release any tax levies they may have filed if an Installment Agreement has been reached.
6. The IRS has two types of Installment Agreements, streamline and long term. The amount owed determines which agreement you are eligible for. Under $25,000 qualifies for the streamline which can be handled over the telephone.
7. An Installment Agreement still allows you to file an Offer in Compromise. Make sure your situation will qualify you for an Offer in Compromise.
8. With an Installment Agreement, penalties and interest continue to accrue on the total amount due to IRS.
9. Federal Tax Liens are not released because of Installment Agreements.
10. The Installment Agreement is only a temporary solution. At the end of the day the tax must be paid in full, have the statute expire or have the IRS accept an Offer in Compromise to fully close the case off the IRS system.
At the end of the day, there should be a clear exit strategy on how your case will be settled. Call Fresh Start Tax to help with your strategy. 1.866.700.1040
