Showing posts from April, 2017

The IRS Can Restrict Travel for Tax Debt

          In 2015, Congress passed the FAST Act, part of this allows the IRS collect large Tax debts. This complex program involves cooperation between the IRS and the State Department regarding those who are classified as “seriously delinquent in tax debt”. This program called IRC Section 7345 , started being administered in March 2017.           Taxpayers who are certified by the IRS to be in this position, will have their names turned over to the State Department. They can have their Passports denied , limited , or revoked until they return to good standing with the IRS. This is particularly true if applying for or trying to renew a Passport. This is used as leverage for debt collection. Those who will be affected by this program are those who owe $50,000 or more and (1) have a lien filed with all ways of relief denied or (2) a levy issued.           As with any IRS collection process, there will be letters sent clearly stating what is happening. In this case from the IRS and

What If You Still Need to File A Tax Return?

          In a word, the best advice is: Hurry. Even though the deadline may have been missed, it’s better to be late than very late. Penalties and interest related to taxes owed grow each day. Go to your qualified Tax Professional and figure out how much you may owe. When filing a late Tax Return, send in that amount, or at least as much as possible.           However, if you do not owe taxes, there will be no penalty. In fact, if there is a Tax Refund due, the Taxpayer will receive the entire amount. Many of these individuals may not be required to file a Tax Return, but if they do not, they will lose their right to a refund in 3 years.

Keeping Up With the Speed of Change 2

             It seems today, that the only constant that we can rely on is change. Whether that is true or not, there are many things that we do need to be aware of, and adjust to. A new example is a very dangerous email scam that targets businesses and its employees. A criminal sends an email, pretending to be an executive in an organization, to a member of the Payroll or Human Resources Department. They ask for a list of all employees and their Forms W-2. Falling for a Business Email Compromise of this sort will be devastating.           If this happens, the IRS must be notified to keep these thieves from filing false Tax Returns in order to receive refunds. This data loss must also be reported to any State Tax Agencies, as well as, the FBI’s Internet Crime Complaint Center ( IC3 ). The IRS can also help with guidance to share with employees who have had their personal information stolen. These steps must be taken quickly once it is clear a breach has occurred.           In t

When Tax Time is Over, What Can You Toss Out?

          When it comes to Taxes and filing a return, people either want to keep everything, or throw it all away. While the IRS certainly wants Taxpayers to keep their important documents, there is a balance that can be struck. Here are a few general guidelines that can be followed when dealing with your Tax records.           If a Tax Return is filed correctly and on time, the supporting documents can be thrown away ( after shredding ) after about  3 years. If information in the Tax Return is not accurate, the documents should be saved for at least 6 years. That is how long the IRS will legally be able to start an audit. If no Tax Return was filed or it was fraudulent, there is no statute of limitations. Criminal action could be brought at any time .           Some items that can be shredded and thrown away are documents that have nothing to do with your Taxes. Records that are not related to deductions or credits claimed. Paycheck stubs can also fall into this category. No

Tax Collection for the IRS

        Some of the most recent Tax news is that the IRS will restart a program that used private debt collection agencies to collect overdue Federal Taxes. These cases will deal with taxes owed over a number of years, starting with less than $50,000. Letters will be mailed to Taxpayers affected by this in the coming weeks, by the IRS and by the debt firm. The program will start slow, but thousands of letters will be mailed by this summer. The majority of Taxpayers will not notice the change, but there are details that we all should know, in order to avoid those who will try to take advantage of this adjustment           There are only four companies involved in this program. Only they are authorized to represent the IRS in this matter. All payments will still go to the IRS, not to the debt collection agencies. This process always starts with letters, so any surprise phone calls demanding money is a thief trying to scam a Taxpayer. These are cases in which the IRS has already been

Never Ignore the Payroll Tax

          For any business, the matter of Payroll Tax is very serious. The IRS looks at it as the government’s money and any failure to pay will trigger an aggressive response. In some cases that could mean fines and jail time. Using money to pay vendors, the landlord, or employees in order to function, is never considered a good reason to avoid paying the Payroll Tax.           In general, the IRS will pursue Responsible People in a business when this obligation is not being met. This can happen even if they are not personally aware of this Tax not being paid. A Responsible Person is an officer, director, or anyone who makes decisions about paying or who has check signing authority. If Payroll Taxes are not being paid, the IRS will penalize any or all Responsible Persons for the full amount of Taxes owed. This allows them to pursue them each individually in order to collect the Tax.           An injunction can be put in place to keep a bad situation from getting worse and force

Before Deducting A Donation

          Many people every year, give to charities of their choice. Whether it is in the form of cash or property, people give freely and in some cases they wish to claim that gift as a deduction on their Tax Return for that year. If that is the case, here are some points to keep in mind, in order to make that possible.           The donation must be given to a qualified charity . Check their status before parting with your funds. Political organization, individuals, and political candidates do not qualify. For donations of $250 or more , there must be a receipt from the charity and a description of what was given. If a Taxpayer was given something as result of the donation, this is a Benefit in Return . This might be tickets to events, merchandise, meals, or other similar things. In this case, the deduction would be reduced by the amount of benefits given. There are other factors to consider, and a qualified Tax Professional can help Taxpayers through this process.

Keep Aware of These "Dirty Dozen"

For the past few years, the IRS has released a list of the 12 most common Tax scams to be on the watch for. Many of them peak at this time of year. Here are a few to avoid. Phishing. The IRS will never begin contact by means of an email. Never open these emails, click those links, or use fake websites asking for your information. They are trying to steal your identity. Phone Scams are a constant issue as con artists threaten Taxpayer’s with arrest, deportation, and other things. The IRS never starts contact by means of a phone call. Fake Charities . Be careful of groups with names that are similar to national charities, but just a little bit different. They could just be trying to collect people’s money for their own benefit. Take a little time to make sure your funds are going to the right cause. Excessive Business Tax Credit claims . These tend to be hard to qualify for and there are good reasons for that. Unless a Taxpayer has a farm or runs a research group, they should