Tax Relief Blog

Can the IRS levy an IRA for Back Taxes? Yes the IRS can levy your IRA for unpaid back taxes.

Mr. Wayne Smith did not pay his back taxes after filing 3 years of tax returns. He owed the IRS around $36,000 of back taxes. He went to tax court, and the court ruled for the IRS and its $36,000 levy on Mr. Smith. Mr. Smith had a personal hardship, he was spending more than $800,000 plus his IRA income on his gambling addiction and not paying his back taxes.

Ordinary creditors are prevented from levying pension and IRA accounts due to anti-alienation provisions, the IRS does not conform to these anti-alienation provisions as many taxpayers think, the IRS can and will levy IRA and other retirement accounts to collect on any unpaid back taxes. In other words, the IRS is pretty much free to levy IRA accounts at its own will specially in cases of flagrant taxpayers abuse. Learn more by reading Internal Revenue Manual Section

The positive side in an IRS IRA levy, is that the IRS would forgive the 10% early withdrawal penalty for the amount they levy from the IRA account to cover the unpaid back taxes.

So, I hope this clarify a misconception, that the IRS cannot touch IRA or other retirement accounts as perceived by many taxpayers. If you have any unpaid back taxes, you should seek professional help from a licensed tax representative to protect your rights and resolve your tax problem.

Call Mike Habib, EA today at 1-877-788-2937 to get a free case analysis.

IRS tax levy help in all 50 states including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.

Skills of a Tax Representative

Tax representative is a person who is a licensed tax professional representing individual or business taxpayers regarding their tax issues before the IRS or state taxing agency. Only Enrolled Agents, Tax Attorneys and CPAs are authorized by the IRS to represent taxpayers.

Companies and individual taxpayers with complex tax matters should consider hiring a professional tax representative who would work on resolving your tax controversy problems.

When selecting a tax firm or a law firm to represent you before the IRS, you should retain the firm that specializes in representation, most traditional firms provide such a wide array of services like bookkeeping, financial compilation, tax preparation, tax planning and other services. That does not mean that they cannot represent you, it’s just that they are not the Subject Matter Experts! Our firm focuses on tax representation before the IRS and all 50 states, we will represent our clients, explain their options and protect their rights. Do not compromise on your tax representation!

Get a confidential case analysis by calling Mike Habib, EA at 1-877-788-2937.

If you owe the IRS a large tax debt or if you are being audited, you should seriously contact us as quick as possible to even the odds specially if the IRS officer is making aggressive demands and intimidating you with aggressive levies and asset seizures.

We offer representation services in areas such as: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Pittsburgh, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa, Orlando.

Taxpapers.jpgFranchise Tax Board is Contacting Thousands of Businesses to File Delinquent Tax Returns

Sacramento: The state is contacting more than 40,000 California businesses that have not filed their 2008 state income tax returns with the Franchise Tax Board (FTB).

The notices inform the businesses that they have 30 days to file a return or show why there is no tax filing requirement. Businesses that disregard these notices could face tax assessments that may include penalties, interest, and fees.

FTB annually reviews more than 5 million income records received from the Internal Revenue Service, the State Employment Development Department, the State Board of Equalization, financial institutions, and other business entities, then compares that data to tax returns already filed to identify noncompliance. Last year, FTB collected approximately $38 million from non-filing businesses the agency notified.

California faces an annual tax gap of $6.5 billion per year. The tax gap is the difference between taxes owed and taxes paid. The failure to file tax returns is one part of the tax gap along with underreporting of income, overstatement of tax deductions, and the underpayment of taxes owed.

Part 2 of 2
Dishonored Check – A penalty is charged if a taxpayer’s check is returned because of insufficient funds. For checks of $1,250 or more, the penalty is 2% of the check amount. For checks less than $1,250, the penalty is the lesser of $25 or the amount of the check.

Paying Late – The penalty is ½% of the unpaid tax for each month or part of a month the tax is unpaid. If the IRS issues a Notice of Intent to Levy and the taxpayer does not pay the balance within 10 days, the penalty increases to 1% per month. The penalty cannot be more than 25% of the tax paid late. The late payment penalty is reduced to ¼% per month for those paying in installments.

Missing Tax ID Number – This penalty is $50 for each missing number. This penalty is charged when a taxpayer does not provide a social security number (SSN) for himself, a dependent, or another person or does not provide his/her SSN to another person when required.

Penalty on Tips – This penalty is charged if a taxpayer does not report tips to his/her employer. It equals 50% of the social security tax on the unreported tips.

Negligence – This “accuracy-related” penalty is 20% of the tax underpayment that is due to negligence or tax valuation misstatements.

The “accuracy-related” penalty is imposed if any part of an underpayment of tax is due either to negligence or a taxpayer’s disregard of rules or regulations but without the intent to defraud. The penalty is 20% of the portion of the underpayment attributable to the negligence, etc.

“Negligence” includes any failure to make a reasonable attempt to comply with the law or to exercise ordinary and reasonable care in preparing a tax return, as well as failure to keep adequate books and records or to substantiate items properly. “Disregard” includes any careless, reckless or intentional disregard.

Fraud – The civil fraud penalty is one of the most powerful tools that the IRS has. It applies if any part of a tax underpayment is due to fraud, and the penalty equals 75% of that portion of the taxpayer’s underpayment attributable to fraud. Although IRS has the burden of proving fraud by clear and convincing evidence, if it shows that any portion of an underpayment is due to fraud, the entire underpayment is treated as attributable to fraud except for any portion that the taxpayer shows (by a preponderance of the evidence) not to be so attributable.

No time limit exists on the assessment and collection of tax if a fraudulent return is filed. Likewise, a return subject to the civil fraud penalty is treated as fraudulent for bankruptcy purposes. As a result, taxes shown on such a return are not normally discharged in a bankruptcy proceeding.

Although civil fraud is not defined by statute, some courts have defined it as an actual and deliberate, or willful, wrongdoing with specific intent to evade a tax believed to be owed.

Fraud-Late Filing Penalty – The law allows the IRS to increase the penalty for filing late if a taxpayer did not file on time because of fraud. The penalty is 15% of the amount of tax that should have been reported on the tax return and an additional 15% for each additional month or part of a month the taxpayer didn’t file a return. The penalty cannot exceed 75% of the tax unpaid.

“Excessive” Claim Penalty – Generally, if a claim for a refund or credit for income tax is made for an “excessive amount,” the person making the claim is liable for a penalty equal to 20% of the excessive amount. The “excessive amount” is the amount by which the amount of a person’s claim for a refund or credit for any tax year exceeds the amount of the claim allowable under the Internal Revenue Code for that tax year.

The penalty does not apply if it is shown that the claim for the excessive amount has a reasonable basis or if any portion of the excessive amount or credit is subject to an accuracy-related or fraud penalty.

Frivolous Return – In addition to any other penalties, the law imposes a penalty of $5,000 for filing a frivolous return. A frivolous return is one that does not contain information needed to figure the correct tax or shows a substantially incorrect tax because the taxpayer takes a frivolous position or desires to delay or interfere with the tax laws. This includes altering or striking out the preprinted language above the space where the taxpayer signs.

It is possible that some of the penalties listed above can be reduced or removed if a taxpayer can show reasonable cause. The IRS Penalty Handbook used by its agents defines reasonable cause as those reasons deemed administratively acceptable to the IRS. “Reasonable cause relief is generally granted when the taxpayer exercises ordinary business care and prudence in determining their tax obligations but is unable to comply with those obligations.” The Handbook also says, “Each case must be judged individually based on the facts and circumstances at hand.”

Do you have large tax penalties? Would you like to abate these penalties? Call us at 1-877-788-2937.

Most tax penalties are substantial, punitive and can dramatically increase the overall tax bill. Penalties are assessed for a many reasons. Some tax penalties are due to a taxpayer’s carelessness or inattention to tax details. Other penalties are incurred due to the overstatement of deductions, the failure to report income, missing documentation, negligence, fraud or procrastination.
Recently, Congress added additional penalties for making excessive claims or filing frivolous tax returns. The following is an overview of the IRS penalties that can be imposed on a taxpayer.

The IRS assessed taxpayers over $29,000,000,000.00 (that’s 29 Billion Dollars) in penalties during 2009.

• Filing and Paying Late – These penalties will apply when a taxpayer fails to timely file and does not pay the taxes he or she owes. The combined penalty is 5% of the unpaid tax for each month or part of a month the return is late, but not for more than five months. The late filing penalty is reduced by the late payment penalty. Thus, the 5% includes a 4½% penalty for filing late and a ½% penalty for paying late.

The 25% combined maximum penalty includes 22½% for filing late and 2½% for paying late. The ½% penalty for paying late is not limited to five months. This penalty will continue to increase to a maximum of 25% until the taxpayer pays the tax in full. The maximum 25% penalty for paying late is in addition to the maximum 22½% late filing penalty for a total penalty of 47½%.

If a taxpayer does not file a return within 60 days of the due date, the minimum penalty is $135 ($100 for returns required to be filed before January 1, 2009) or 100% of the balance of the tax due on the return, whichever is smaller.

• Underpayment of Estimated Tax – Our tax system is a “pay-as-you-go” system. To facilitate that concept, the IRS has provided several means of assisting taxpayers in meeting the “pay-as-you-go” requirement. These include:

• Payroll withholding for employees;
• Pension withholding for retirees; and
• Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.

When a taxpayer fails to prepay the required tax, he or she can be subject to the underpayment penalty. This penalty is 2% higher than the prime rate and the penalty is computed on a quarter-by-quarter basis.

Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000, no penalty is assessed. In addition, the law provides “safe harbor” (minimum) prepayments. There are two safe harbors, which are discussed below:

1. The first safe harbor is based on the tax owed in the current year. If a taxpayer’s payments equal or exceed 90% of what is owed in the current year, he or she can escape a penalty.

2. The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for higher-income taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%.

The IRS would consider abating their tax penalties for taxpayers with reasonable cause. If you have a substantial tax penalty and would like to abate it, call us at 1-877-788-2937.

Tax Help

Debt in taxes is a serious matter that should not be ignored. Compared to other debts, tax debts do not easily go away unless you find a viable solution to the problem. This is where tax help from the experts plays an important role in making sure that you do not get into further trouble with the IRS when it comes to dealing with your taxes.

Ask for help

No one can really run away from taxes, which is why tax help is a significant solution for those who are in dire need of assistance in dealing with theirs. You need to get in touch with an expert who can talk and compromise things with the IRS for you. In such cases, you are presented with choices including an enrolled agent, a tax attorney, and a CPA. But if you need serious tax help, the person you should call is the enrolled agent.

Understanding the abilities of an enrolled agent

Average taxpayers are not equipped with comprehensive knowledge about taxes so they will need third party tax help from an enrolled agent who is familiar with everything about taxation. Enrolled agents are authorized by the Department of Treasury to represent individuals or businesses when they need tax help regarding issues with the IRS. With their help, you will not have to deal with audits, collections, or appeals alone because you have someone who is knowledgeable enough regarding those matters to lend you a helping hand.

Why the enrolled agent is better

There are other tax experts available including CPAs and tax attorneys, so why pick an enrolled agent for tax help? For starters, enrolled agents are already familiar with the IRS system simply because they have worked with the IRS before, have regularly utilized the tax code, and have passed exams that can prove their expertise. Aside from that, they are federally authorized, which means that their scope of work is not limited to their home state. CPAs and attorneys, on the other hand, are licensed by their respective state.

Dealing with the IRS can be very difficult for ordinary citizens and business entities because just one mistake puts you at risk for more debt. Therefore, make sure you seek tax help from a certified professional. That way, you can be saved from interests, penalties, and legal actions, and come up with a good settlement.

More services

Enrolled agents can represent you when you need to talk to the IRS. You can ask for tax help from them if you receive an IRS audit, if you have back tax returns that you failed to file, if you are facing tax liens issues, and more. They can help you in settling your debts with the IRS by helping you come up with a convenient way to pay your debts, arrange for penalty abatement, appeal for your taxes, and others. These and other services make enrolled agents valuable assets to taxpayers who are having issues with the IRS.

Get in touch with an enrolled agent now at the Tax Help line 1-877-78-TAXES [1-877-788-2937]

Once you receive a notice from the IRS regarding your taxes, do not ignore. Call us here at 1-877-78-TAXES so you can talk to Mike Habib, an enrolled agent. He specializes in assisting businesses and individuals who need tax help for over 20 years now. His expertise in financial advisory and taxation allows him to effectively help all his clients. You, too can count on Mike Habib’s services here at MyIRSTaxRelief.Com because he will personally negotiate the best solutions for you with the IRS.

Tax Help in areas such as: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa

The following is a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.

Deadline extended for closing home purchase to qualify for homebuyer credit. Relief has been provided to taxpayers who couldn’t meet a key June 30, 2010, closing date for qualifying for the homebuyer credit. As a general rule, both the regular first-time homebuyer credit of $8,000 and the reduced credit of $6,500 for long-term residents generally expired for homes purchased after Apr. 30, 2010. However, if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit could be claimed if the purchase closed before July 1, 2010. Under the relief measure, if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit may be claimed if the purchase is closed before Oct. 1, 2010. Thus, this extension allows homebuyers who signed a contract no later than the April 30th deadline to complete their closing by the end of September.

Guidance addresses tax breaks for hiring new employees. Employers are exempted from paying the employer 6.2% share of Social Security (i.e., OASDI) employment taxes on wages paid in 2010 to newly hired qualified individuals. These are workers who: (1) begin employment with the employer after Feb. 3, 2010 and before Jan. 1, 2011, (2) certify by signed affidavit, under penalties of perjury, that they haven’t been employed for more than 40 hours during the 60-day period ending on the date the individual begins employment with the qualified employer; (3) do not replace other employees of the employer (unless those employees left voluntarily or for cause), and (4) aren’t related to the employer under special definitions. The payroll tax relief applies only for wages paid from Mar. 19, 2010 through Dec. 31, 2010.

Employers may qualify for an up-to-$1,000 tax credit for retaining qualified individuals. The workers must be employed by the employer for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period.

The IRS has issued guidance on these tax breaks in the form of frequently asked questions. They carry valuable information on subjects such as the scope of the exemption, how it interacts with other tax breaks, and when an employer must receive the employee’s certification of former unemployment status. For example, the IRS explains that the exemption and credit can be claimed for a new employee replacing a downsized employee.

Detailed guidance released on new small business health care credit. The IRS has issued detailed guidance on the small employer health insurance credit created by the recently-enacted health reform legislation. Under the new law, effective for tax years beginning after Dec. 31, 2009, an eligible small employer (ESE) may claim a tax credit for nonelective contributions to purchase health insurance for its employees. An ESE is an employer with no more than 25 full-time equivalent employees (FTEs) employed during its tax year, and whose employees have annual full-time equivalent wages that average no more than $50,000. However, the full credit is available only to an employer with 10 or fewer FTEs and whose employees have average annual full-time equivalent wages from the employer of not more than $25,000. The new guidance adopts a liberal approach to the new law’s requirements, including three alternative methods for figuring total hours of service (important for determining how may FTEs an employer has), and also explains how small employers claim the credit if their State provides a credit or subsidy for employee health coverage. The IRS has released a state-by-state table of average health insurance premiums for the small group market for the 2010 tax year. The table is needed to calculate the credit for this year.

Guidance issued on new under-age-27 rule for health coverage of children. The IRS has issued guidance on the tax treatment of health coverage for children under age 27 under the new health reform law. The new under-age-27 rule, which went into effect March 30, 2010, applies broadly to employer-provided coverage or reimbursements, cafeteria plans, flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), voluntary employees’ beneficiary associations (VEBAs), and the above-the-line deduction for a self-employed individual’s medical care insurance costs.

Availability of FICA exception for medical residents to be resolved. The Supreme Court has agreed to review a 2009 decision of the Court of Appeals for the Eighth Circuit, which upheld the validity of regulations that generally prevent medical residents from qualifying for the FICA student exception. Under these regulations, an employee includes a medical resident who works 40 hours or more for a school, college or university is not eligible for the student exception. The Supreme Court will now decide their validity. Its decision will have important ramifications for the many teaching hospitals and their residents.

States address estate planning uncertainty. As of now, there is no estate or generation-skipping transfer (GST) tax for individuals who die this year. There are issues as to how formula clauses in wills and trusts using estate or GST tax terms (e.g., “the applicable exclusion amount,” or “the marital deduction”) will be construed, if the decedent dies in 2010. Several states have addressed this situation by enacting laws providing a special rule of construction under which formula clauses that refer to certain estate and GST tax terms generally will be construed as referring to the federal estate tax and GST tax laws which applied to estates of decedents dying on Dec. 31, 2009. These statutes could impact the amount that will pass under one’s will to a person’s spouse and children.

Deadline extended for retirement plans in federally declared disaster areas in eight States. The IRS has administratively extended to July 30, 2010, the April 30, 2010, deadline for restating affected pre-approved defined contribution plans and, if applicable, for submitting determination letters to the IRS, and the Code Sec. 401(b) remedial amendment period for these retirement plans. The relief applies to sponsors of defined contribution plans that were affected by the storms and other severe weather in counties in Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia that were federally declared disaster areas in the period from March 1 through May 31, 2010.

Therapeutic Discovery Project Program implemented. The IRS has established the guidelines for applying for the new Therapeutic Discovery Project Program created by the recently enacted health reform legislation. The program will provide tax credits and grants to small firms that show significant potential to produce new and cost-saving therapies, support good jobs and increase U.S. competitiveness. Small firms may apply for certification for tax credits or grants under the program on Form 8942, which must be postmarked no later than July 21, 2010.

Temporary regulations fill in statutory gaps on new indoor tanning tax. The IRS has issued temporary regulations on the health reform’s legislation’s new 10% excise tax on indoor tanning services provided on or after July 1, 2010. The regs address practical considerations that may not have been contemplated when the law was drafted. For example, they addresses prepayments for tanning services and services provided as part of a gym membership.

National Taxpayer Advocate Submits Mid-Year Report to Congress; Identifies Priority Challenges and Issues for Upcoming Year

WASHINGTON — National Taxpayer Advocate Nina E. Olson today released a report to Congress that identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the coming fiscal year. The report expresses concern about the adequacy of IRS taxpayer service, particularly as the IRS begins to implement health care reform, about new information reporting burdens facing small businesses and others, and about certain IRS collection practices.Among the areas the report identifies for particular emphasis in FY 2011 are the following:1. Taxpayer Services.

Spending for IRS taxpayer service programs has been declining in recent years. At the same time, more taxpayers have been contacting the IRS for assistance as the IRS has been tasked with administering an increasing number of social benefit programs, including Economic Stimulus Payments, Making Work Pay credits, and First-Time Homebuyer credits. The report says that as a result of the imbalance between taxpayer demand and IRS resources, the IRS has fallen short of providing adequate taxpayer service in important areas. Most notably, after answering a high of 87 percent of its calls from taxpayers seeking to reach a telephone assistor in FY 2004, the IRS answered only 53 percent of its calls in FY 2008 and has set of goal of answering only 71 percent in the current fiscal year.

The report attributes much of the problem to inadequate funding for taxpayer services. While funding for the IRS overall has been increasing in recent years, the additional funding has been earmarked for enforcement programs. An analysis of IRS budget trends conducted by TAS shows that since FY 2004, inflation-adjusted funding for IRS enforcement activities has risen by 17.9 percent while spending for taxpayer service programs has declined by 6.8 percent, as shown in the following chart:

Taxpayer Services vs. Enforcement Spending Since FY 2004, Adjusted to 2010 Dollars (May 2010)

Moreover, a substantial portion of the budget for taxpayer service includes the costs of processing tax returns, which is essentially an overhead function. Funding for core taxpayer service (known as “Pre-filing Taxpayer Assistance and Education”) now stands at only $685 million, or six percent of the IRS budget. The report notes further that the Administration’s FY 2011 budget proposal projects that funding for taxpayer services will decline by another 7.2 percent over the next two years (FY 2012 and FY 2013), while funding for enforcement will increase by an additional 13.7 percent.

The report asserts the cuts in taxpayer service spending are harmful both because they undermine tax compliance and because they undermine the IRS’s ability to successfully deliver social benefit programs. First, with respect to tax compliance, Ms. Olson states:

There appears to be an implicit assumption built into existing budget procedures and projections that raising tax compliance requires ramping up enforcement and that taxpayer service is less important – perhaps even unimportant – for compliance. We think this implicit assumption is wrong. . . . Consider an individual without a college degree who becomes a successful plumber or electrician with a growing customer base. If he hires employees, he will face a host of employment, immigration verification, and state and federal tax requirements, including the need to withhold and pay over payroll taxes and to file employment tax and income tax returns on behalf of his business. For most taxpayers, these requirements would seem daunting or even impenetrable, and some taxpayers inevitably do not comply simply because they have no idea where to begin.

The report states that many noncompliant taxpayers are baffled by complex rules and states that additional taxpayer service, particularly outreach and education, could improve tax compliance.

Second, with respect to the IRS’s ability to deliver social programs, the report expresses concern that the IRS currently is neither structured nor funded to do the job effectively. “I have no doubt the IRS is capable of administering social programs, including health care,” Ms. Olson said. “But Congress must provide sufficient funding and the IRS itself must recognize that the skills and training required to administer social benefit programs are very different from the skills and training that employees of an enforcement agency typically possess. While some enforcement measures are required to prevent inappropriate claims, the overriding objective of agencies that administer social benefit programs is to help as many eligible persons qualify for the benefits as possible. That requires outreach and working one-on-one with potentially eligible individuals. If the IRS continues to ramp up enforcement while reducing taxpayer service programs, I would be concerned about its ability to administer the new health care credits and penalty taxes in a fair and compassionate way.”

Ms. Olson suggests that the IRS mission statement be revised to explicitly acknowledge the agency’s dual role as part tax collector and part benefits administrator. Such a revision would require the IRS to develop a strategic plan that gives sufficient attention to both roles and would underscore that the IRS requires sufficient funding to perform both functions effectively.

During FY 2011, TAS will continue to advocate for improved taxpayer services and will continue to make the case that taxpayer service is important not only as a courtesy but as a driver of tax compliance as well.

2. New Business and Tax-Exempt Organization Reporting Requirements.

The report expresses concern that a new reporting requirement contained in the Patient Protection and Affordable Care Act may impose significant compliance burdens on businesses, charities, and government agencies. Beginning in 2012, all businesses, tax-exempt organizations, and federal, state and local government entities will be required to issue Forms 1099 to vendors from whom they purchase goods totaling $600 or more during a calendar year. To meet this requirement, these businesses and entities will have to keep track of all purchases they make by vendor. For example, if a self-employed individual makes numerous small purchases from an office supply store during a calendar year that total at least $600, the individual must issue a Form 1099 to the vendor and the IRS showing the exact amount of total purchases. The provision will have broad reach. According to a TAS analysis of 2009 IRS data, about 40 million businesses and other entities will be subject to the new requirement, including roughly 26 million non-farm sole proprietorships, four million S corporations, two million C corporations, three million partnerships, two million farming businesses, one million charities and other tax-exempt organizations, and more than 100,000 government entities. All of these nearly 40 million businesses and other entities are subject to the new reporting requirement.

TAS has not yet reached any conclusions regarding the benefits and burdens of the requirement, but the report expresses concern that the burdens “may turn out to be disproportionate as compared with any resulting improvement in tax compliance.” During FY 2011, TAS will study the impact of the new reporting requirement more closely and, depending on what its study finds, may propose administrative or legislative recommendations to modify the provision or suggest that Congress consider less burdensome tax gap proposals, including a TAS proposal to require reporting of non-interest bearing bank accounts, to replace it.

3. IRS Collection Practices.

The report expresses continuing concern that IRS collection practices emphasize collection of past-due liabilities even where doing so inflicts unnecessary or disproportionate harm on taxpayers and jeopardizes future tax collection. “The conventional wisdom seems to be that more hard-core enforcement actions like liens and levies mean more revenue,” Ms. Olson said. “But the data don’t bear that out. Since FY 1999, the IRS has increased tax lien filings by about 475 percent and levies by about 600 percent, yet inflation-adjusted revenue raised by the IRS Collection function has actually declined by about seven percent over that period.”

Lien filings can badly damage a taxpayer’s financial viability because lien filings appear on credit reports, causing the taxpayer’s credit score to drop an average of about 100 points immediately and causing lasting harm because they typically remain on the taxpayer’s credit record for at least seven years. Many employers, mortgage companies, landlords, car dealerships, and credit card issuers check credit reports, so the filing of a tax lien can adversely affect the taxpayer’s ability to obtain and retain a job, purchase a home, rent an apartment, or obtain credit generally. Accordingly, a lien filing may reduce the taxpayer’s income or increase his expenses, thereby impairing his ability to pay tax in the future. Last year, the IRS filed nearly one million liens against taxpayers.

The report also notes that the IRS has issued at least four public statements over the past year-and-a-half pledging to assist financially struggling taxpayers who are having difficulty paying their tax bills. Yet the number of liens and levies has continued to rise, the number of offers-in-compromise the IRS is accepting is near an all-time low, and there is little evidence the IRS is changing its collection practices.

After publication of her 2009 Annual Report to Congress, Ms. Olson issued several Taxpayer Advocate Directives to the IRS on lien issues, including directives (i) to discontinue its policy of automatically filing tax liens in cases where the IRS has determined that the taxpayer’s account should be placed into “currently not collectible” status based on financial hardship and (ii) to require managerial approval for the filing of liens in cases where the taxpayer owns no assets. She has also urged the IRS to expand the availability of the offer-in-compromise program for financially struggling taxpayers who cannot reasonably pay their tax debts in full.

In response to these concerns, the IRS has convened a senior-level task force to conduct a comprehensive review of collection practices. Ms. Olson writes that she appreciates the IRS’s willingness to examine the issue. However, she remains concerned that it will take years to conduct the comprehensive review, and that in the interim, the IRS will continue both to damage taxpayers’ credit ratings and to undermine long-term tax compliance without any significant revenue gains to show for their actions. Accordingly, IRS collection practices will remain a key area of focus for TAS in FY 2011.

The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The statute requires these reports to be submitted directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report is submitted mid-year and must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report, due on December 31 of each year, must identify at least 20 of the most serious problems encountered by taxpayers, discuss the ten tax issues most frequently litigated in the courts, and make administrative and legislative recommendations to resolve taxpayer problems.

If you are facing tax problems and in need of professional representation to get tax relief for unpaid back taxes, or unfiled returns, or if you are a business facing 941 tax problems, call us today at 1-877-78-TAXES. We are a professional tax representation firm that offers tax relief services, visit us online at

Tax Problems are problems related to Taxation and most prominent is Income taxation. It affects natural persons – individuals or people and juridical persons – companies, corporation and other legal entities. Tax problems begins from the time you start earning for a living and receiving income or making profits, every time you spend or the expenses you incur up to the time you have spent all of your hard-earned money and profits. Tax Problems are those affecting any benefits you receive from the government and elsewhere, the tax exemptions you enjoy; even the savings you made and interest you earn and receive from any savings and investments. Tax problems also affect the home or properties you buy and sell; it involves even the how many children you have and if you donate to some charity or if somebody makes any payment to you or if you just inherited a lump sum of money, Tax Problem will be there if you don’t declare all you financial transactions and activities and don’t check which are taxable and not and if so, when, when and how to make tax payments.

This is so because, tax problem covers situations from the preparation of the income tax return, calculating the tax liabilities, earnings and expenses and exemptions until the full payment of the income tax is made. But this is just under the normal circumstances. Tax problems also arise under special circumstances like late in filing of the return, late in payment of the tax due, extension in filing returns, extension in payment of tax or taxes, and payment in installments. When you think everything is already fine and complied with, you will be notified and learn of a Tax Lien, Tax Levy or a Bank Levy against you and even garnishment on your wage. You may well discover that a tax audit has been made and discovery of deficiency in payment arising out of improper or erroneous calculation of tax, discovery of inconsistencies between that declared in your income statement, expenses and exemptions as against the records of the IRS from other sources such as your employer’s payroll, your bank statement and for companies – calculation of sales tax and other duties and taxes, 941 Payroll tax and many more; the incorrect calculation of interests and consequently erroneous payment of the amount due.

When you resort to solving the tax problem, you will find that you will encounter more related tax problems in paying back taxes, problems in settling your debt, problem in negotiating with the IRS, problem in complying with IRS payment plan and what have you. For an individual, untrained mind in the field of taxation, even small and big business, this is a real headache and the simplest issue in complying with form alone, albeit, the substance is enormous as a cross carried on one’s shoulder.

The reality is far worse than it seems. The question is: Can you handle the situation of your tax problems without an expert advice and assistance?

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Mike Habib, EA provide tax relief services and solutions to any tax problem, call us today toll free at 1-877-78-TAXES (877-788-2937) also online at

Tax problems resolution in areas such as: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa, Santa Ana

Christian IRS Tax Help

Christian IRS Tax help means reliable and professional help by a Christian tax professional. It is correlated with real solutions to IRS or State tax problems of a taxpayer with unpaid back taxes. Most people avoid this topic while others ignite upon hearing IRS or TAX. But the truth is that, the IRS Tax Help is about tax problems assistance or simply means that there are several ways to help you if you have IRS or State tax problems. For the record, it is not only the duty of the IRS officers and agents to effectively collect taxes or review tax returns or statement of income or perform detailed analysis of financial status of the taxpayer or otherwise give them difficulties and headache, it is also the duty of the IRS to help and assist taxpayers with their taxation problems, or find a solution to a taxpayers’ liability. The IRS also offers tax resolution or relief options to provide tax amnesty in some cases to delinquent taxpayers. Our firm provides IRS Tax help to our clients, either individual taxpayers or businesses with back taxes.

The problem with the IRS and its personnel is that, they are aggressive, zealous and trained to collect the most out of taxpayers coupled with their personal and family problems that they fail to qualify as an effective aid and vigilant sentry for the taxpayer when it comes to IRS Tax help or tax problem resolution. Their most important and primordial function is to collect taxes as quickly as possible. While voluntary and free aid organizations more or less lack the necessary experience and expertise to go through the intricacy, complexity and difficulty of the procedures and substance in resolving tax problems and issues. In either way loyalty, trustworthiness and sincerity are often needed for effective Christian IRS Tax Help.

A legitimate tax relief company or a tax resolution firm, a tax relief specialist, an enrolled agent, a tax lawyer or a CPA is more favoured and attuned to be solicited for advice and assistance. They are the experts in this field, IRS Tax Help, and mostly have the necessary experience in delivering the needed help and assistance.

It is confusing at times when seeking Christian tax help being necessary and needed. We can hear of Tax Relief, Tax Resolution, Tax Amnesty, Penalty Abatement and many more. But what are they really? Tax Relief and Tax resolution are the same and they all pertain to the civil aspect of tax liability while Tax Amnesty usually pertains to the criminal aspect of tax problems. Penalty abatement is just one of the tax relief options available to a debtor taxpayer along with IRS Offer in Compromise, Installment Agreement / Payment Plan, removing you from active collection or CNC status, Innocent Spouse and many more. IRS Tax help can give you peace of mind and the details can be elicited once you consult with an experienced and reliable tax professional solely concentrating in this subject matter.

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Christian tax debt relief help offered in in areas such as: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Pittsburgh, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa, Orlando