Tax Relief Blog

Did your business incur and report a loss for tax year 2013? By now, you’ve probably made the decision of whether to carry the loss forward to future tax years or back to a prior tax year. Here’s a quick overview of carrybacks and carryforwards.

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Every year we add new clients to our firm, usually the client is looking for a change because their tax preparer, CPA (Certified Public Accountant) or EA (Enrolled Agent), has retired, or passed away, or sold their practice or just need a more attention and better one-on-one tax advice.

If your tax preparer, CPA or EA, is no longer meeting your needs, we provide a complimentary 15 minutes to get to know our tax firm. Our clients enjoy working with our boutique tax firm for these main reasons:

  1. Clients always deal with Mike Habib directly, the principal of the firm,
  2. Clients trust our A+ Better Business Bureau rating, and our firm’s endorsement by financial guru Dave Ramsey,
  3. Clients get outstanding service and specialized tax knowledge and expert advice.

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The United States Court of Appeals for the DC Circuit, today rejected the IRS appeal in the case of Loving v. IRS in which three independent tax return preparers argued that the IRS had overstepped its authority when implementing the Registered Tax Return Preparer (RTRP) program.
The RTRP program was created to regulate paid tax preparers other than those already under Circular 230’s regulatory structure such as Enrolled Agents, certified public accountants and attorneys. The program required other paid preparers to register with the IRS, pass a competency test and complete specified continuing education annually.

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I want to discuss the difference between a CPA and an EA. Most people refer to any accountant, tax preparer, bookkeeper, etc as a CPA. However there are differences between a CPA, an EA and a tax attorney. All 3 are regulated by the IRS’ circular 230.

The distinction between the two designations is very important, since my specialty is federal taxation and tax accounting. I have chosen to earn the Enrolled Agent license from the US Department of the Treasury because it does not limit the geographic area in which I may practice. In other words, I can work with clients in any of the 50 United States (or its territories), unlike a CPA (certified public accountant), or a tax attorney, who has a license that is state specific.

Get professional tax help today, call us at 1-877-78-TAXES [1-877-788-2937].

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The trust fund recovery penalty (TFRP) can be applied to any responsible person who willfully fails to collect or pay trust fund taxes. The penalty amount is equal to the total amount of the tax that was not paid, up to the full amount. This is why it is sometimes known as the 100% penalty. The penalty is separate from the tax and the employer’s liability for such taxes.

Get professional IRS representation. Our firm represents taxpayers before all administrative levels of the IRS.

Please call us at 1-877-788-2937 or email us to schedule an appointment.

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In March 2010, President Obama signed the Patient Protection and Affordable Care Act (the “Affordable Care Act”) into law. While some provisions of the ACA have already gone into effect, a number of new provisions are scheduled to take effect January 1, 2014.

Although we do not intend this newsletter to be the answer-all to the ACA, we thought this would be a good time to look at some of the provisions that might affect you.

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The trust fund recovery penalty (TFRP) is a 100% penalty on an employer’s failure to pay its trust fund taxes. The TFRP can be assessed against any person in the employer’s business who is (1) responsible for collecting, accounting for, and paying withheld employment taxes, and (2) who willfully fails to collect or pay these taxes.

A director, officer, shareholder or employee of a corporation, a member or employee of a partnership, or any other person with the authority and control over these taxes can be held liable as a responsible person under the TFRP.

Get professional IRS representation. Our firm represents taxpayers before all administrative levels of the IRS.

Please call us at 1-877-788-2937 or email us to schedule an appointment.

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The taxpayer may be subject to several different penalties.

Failure to File
If a taxpayer fails to file on the date the return should have been filed (determined with regard to any extension of time for filing) the taxpayer will be subject to a failure to file penalty unless it is shown that the failure to file a return is due to reasonable cause and not due to willful neglect. This penalty is 5% of the net amount of tax due for each month (or fraction thereof) during which there is a failure to file any return, up to a maximum penalty of 25%. If the return is not filed within 60 days of the due date, the minimum penalty will be the lesser of $135 or 100% of the tax liability on the return (even if there are no unpaid taxes when the return is filed).

If both the “failure to file” and the “failure to pay” penalties apply for the same period, the failure to file penalty (5%) is reduced by the failure to pay penalty (0.5%). This generally results in a 4.5% per month failure to file penalty and a 0.5% per month failure to pay penalty.

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Two events must occur before the IRS may begin collections activity:

• First, the tax must be assessed and due. The tax may be shown on a tax return showing a balance due, an audit closing agreement, an audit deficiency that was not contested, an SFR substitute for return filed by IRS or a Tax Court judgment.

• Second, the IRS must give the taxpayer a Notice of Tax Due and Demand for Payment, which will request payment within 10 days. The notice is usually mailed to the taxpayer. Generally, if the taxpayer does not respond and the liability is for individual income taxes and the liability is small, the IRS will send a series of notices and attempt to make telephone contact with the taxpayer.

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Tax Return Preparation
For your tax returns, you want a professional tax firm EA or CPA firm you know you can rely on their tax expertise. Our tax professionals will make sure your federal and state income tax returns, business tax returns and trust and estate tax returns are prepared right from the get go. Our specialized boutique tax firm is trusted by dentists, doctors, lawyers, investors, executives and other professionals and high net-worth individuals. Individuals and businesses from all walks of life have been relying on our firm for quality tax preparation, representation and planning for many years.

Serving Long Beach, Lakewood, Los Alamitos, Seal Beach, California
We are A+ accredited member of the Better Business Bureau, we are also an endorsed local provider ELP by Dave Ramsey.

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