by steve | Jan 26, 2010 | Tax Help, Uncategorized
IRS NEWS WIRE RELEASE
If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.
A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.
The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.
To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.
In order to be deductible, contributions must be made to qualified charities and cannot be designated for the benefit of specific individuals or families.
The new law applies only to cash contributions.
Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return.
You must itemize your deductions in order to claim these donations on your tax return.
You have the option of deducting these contributions on either your 2009 or 2010 tax return, but not both.
Contributions made to foreign organizations generally are not deductible. You can find out more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development.
Federal law requires that you keep a record of any deductible donations you make. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. For cash contributions made by other means, be sure to keep a bank record, such as a canceled check or a receipt from the charity. Receipts should show the name of the charity, the date and amount of the contribution.
All the information on this Blog is posted directly from the IRS sight.
PLEASE do all you can to help these suffering people of God. See the site listed below for more details.
http://www.usaid.gov/
by steve | Jan 25, 2010 | Tax Help, Uncategorized
Everyone Can Use Free File
The IRS Free File service provides free federal income tax return preparation and electronic filing for all taxpayers. All you need is access to a computer and the Internet and you can prepare and e-file your federal tax return for free.
Free File is offered through a partnership between the IRS and the Free File Alliance, a group of private-sector tax software companies. Since Free File?s debut in 2003, more than 27 million returns have been prepared and e-filed through this program.
Free File offers two options. The first is Traditional Free File, which includes approximately 20 tax preparation software products from which to choose. Taxpayers with 2009 incomes of $57,000 or less are eligible for this service. The second option is Free File Fill-able Forms, which is an electronic version of IRS paper forms. All taxpayers can use Free File Fill-able Forms to prepare and file tax forms electronically.
This has just come in off the news wire service from the IRS. If you can do this, get started today and do not wait. How cheap is free?
by steve | Jan 22, 2010 | Tax Help, Uncategorized
The IRS has a wonderful feature called TaxWise TV. It is an Audit Technique guide that no one should be without. What most taxpayers do not know is that the IRS has set up Market Specialization Programs that are unique for every industry. What that means.
TaxWise TV features the IRS Audit Technique Guide and Navigating IRS.gov
to help the IRS agents conduct examinations of returns more efficiently and require less of the taxpayers time, the IRS produces Audit Technique Guides, which focus on developing highly trained examiners for a particular market segment. These publicly available guides contain examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations.
by steve | Jan 21, 2010 | Tax Help, Uncategorized
Ordinary Business Care and Prudence
- Ordinary business care and prudence includes making provisions for business obligations to be met when reasonably foreseeable events occur. A taxpayer may establish reasonable cause by providing facts and circumstances showing that they exercised ordinary business care and prudence (taking that degree of care that a reasonably prudent person would exercise), but nevertheless were unable to comply with the law.
- In determining if the taxpayer exercised ordinary business care and prudence, review available information including the following:
- Taxpayer’s Reason. The taxpayers reason should address the penalty imposed. To show reasonable cause, the dates and explanations should clearly correspond with events on which the penalties are based. If the dates and explanations do not correspond to the events on which the penalties are based, request additional information from the taxpayer that may clarify the explanation
- Compliance History. Check the preceding tax years (at least three) for payment patterns and the taxpayers overall compliance history. The same penalty, previously assessed or abated, may indicate that the taxpayer is not exercising ordinary business care. If this is the taxpayers first incident of noncompliant behavior, weigh this factor with other reasons the taxpayer gives for reasonable cause, since a first- time failure to comply does not by itself establish reasonable cause.
- Length of Time. Consider the length of time between the event cited as a reason for the noncompliance and subsequent compliance. Consider: (1) when the act was required by law, (2) the period of time during which the taxpayer was unable to comply with the law due to circumstances beyond the taxpayers control, and (3) when the taxpayer complied with the law.
- Circumstances Beyond the Taxpayer’s Control. Consider whether or not the taxpayer could have anticipated the event that caused the noncompliance. Reasonable cause is generally established when the taxpayer exercises ordinary business care and prudence, but, due to circumstances beyond the taxpayers control, the taxpayer was unable to timely meet the tax obligation. The taxpayers obligation to meet the tax law requirements is ongoing. Ordinary business care and prudence requires that the taxpayer continue to attempt to meet the requirements, even though late.
by steve | Jan 20, 2010 | Tax Help, Uncategorized
Telephone Service. The report designates the IRS’s declining ability to answer telephone calls as the most serious problem facing taxpayers. Olson notes that the IRS has set a target for FY 2010 of answering only 71 percent of calls from taxpayers seeking to speak with a customer service representative about account questions, down from 83 percent in FY 2007.
?In other words, the IRS is planning to be unable to answer about three of every 10 calls it receives,? Olson said, adding that the IRS expects those who get through will have to wait an average of 12 minutes. The report states that this projected level of service is barely above the level of 69 percent notched in 1998, when Congress passed the landmark IRS Restructuring and Reform Act due in large part to concerns about inadequate taxpayer service. This level of service is unacceptable,? Olson wrote.
Examination and Collection Issues. The report contains a detailed assessment of the Internal Revenue’s examination and collection practices, concluding that many practices have been developed piecemeal and that the IRS lacks an effective overarching strategy to maximize voluntary compliance. The report also concludes that IRS collection practices often harm taxpayers without producing revenue.
In particular, the report cites the IRS lien filing policies as the second most serious problem facing taxpayers. The IRS uses automated systems to file liens against taxpayers in a variety of situations, even when the taxpayer possesses minimal or no property and the lien will do little more than damage the taxpayers financial viability and access to credit. A study conducted by Olson?s office found no obvious causal relationship between the number of lien notices filed and the amount of overall revenue collected. Over the past decade, the IRS increased its lien filings by nearly 475 percent ? from about 168,000 in FY 1999 to nearly 966,000 in FY 2009, yet overall inflation-adjusted collection revenue declined by 7.4 percent during this period.
A second study found that IRS procedures for determining a taxpayers ability to pay outstanding tax liabilities may be driving some taxpayers into long-term noncompliance because the IRS fails to consider other debts such as credit card balances, school loans, and actual hospital or medical bills. Other tax systems, including Sweden’s, consider the taxpayers overall financial picture.
?Any taxpayer with these debts will tell you that these creditors don’t go away,? Olson said. Taxpayers are placed in the intolerable position of agreeing to pay the IRS more than they can actually afford (given their other debts) and then defaulting on the IRS payment arrangements when they channel payments to unsecured creditors in order to get some peace. Thus, the IRS itself fosters noncompliance by its failure to take a holistic approach to the taxpayers debt situation.?
http://www.irs.gov/newsroom/article/0,,id=217903,00.html
This report is taken directly from the National Taxpayer Advocate published at the IRS website. The question I ask, what will IRS do to fix the problems? I guess we will wait and see.
The above link is the report in full given to congress.
by steve | Jan 20, 2010 | Tax Help, Uncategorized
How to Obtain a Transcript of Your Past Tax Information.
ALL Taxpayers who need to get their past tax return information on business or personal can obtain it from the Internal Revenue Service. Here are some of the things to know if you need copies of your federal tax return information.
There are two very easy options for obtaining free copies of your federal tax return information or tax return transcripts. First of all, the IRS does not charge a fee for transcripts, which are available for the current year as well as the past six or seven tax years.
A tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes you, your representative or the IRS made after the return was filed. It is the original tax record. In many cases, a tax return transcript will meet the requirements of lending institutions, such as those offering mortgages and student loans and other institution needing official tax records.
A tax account transcript shows any later adjustments either you, your representative or the Internal Revenue Service made after the original tax return was filed. The transcript shows basic information including marital status, type of return filed, adjusted gross income and taxable income.
To request either transcript by phone, call 800-829-1040 and follow the prompts in the recorded message. You can also send a letter to the IRS asking for the above information. Be sure to include the years of the information you are seeking.
