IRS Tax Help

IRS Tax Levy On IRA Account

September 15, 2010 | Mike Habib, EA

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 5.11.6.2(5).

Tax Representative: Why Representation Is A Powerful Tool

September 1, 2010 | Mike Habib, EA

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.

Tax Help

July 26, 2010 | Mike Habib, EA

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.

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Important tax developments

July 10, 2010 | Mike Habib, EA

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.

Taxpayer Advocate Report

July 10, 2010 | Mike Habib, EA

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.

Christian IRS Tax Help – Audit Representation – Back Tax Resolution

July 2, 2010 | Mike Habib, EA

Christian IRS Tax Help

By Former Dave Ramsey ELP 2012-2019

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 and or IRS audits. 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 and IRS audit representation.

IRS Tax Help to Oil Spill Victims

June 28, 2010 | Mike Habib, EA

IRS Offers Tax Help to Oil Spill Victims

SOURCE: WEBCPA

The Internal Revenue Service has issued guidance to individuals and businaesses affected by the oil spill in the Gulf of Mexico and announced new efforts to help affected taxpayers, including a special Gulf Coast Assistance Day on July 17.

Tax Relief – Get tax debt relief today

June 19, 2010 | Mike Habib, EA

Tax Relief – Get tax debt relief today

Reasonable Cause/Good Faith Defense: Even if the taxpayer did not have substantial authority for a position and failed to make adequate disclosure, the substantial understatement penalty does not apply if the taxpayer had reasonable cause for the tax underpayment and acted in good faith [IRC Sec. 6664(c); Reg. 1.6664-4]. This defense is applied on a “facts and circumstances” basis [Reg. 1.6664-4(b)]. However, the key factor seems to be whether the taxpayer made a reasonably energetic attempt to determine the correct tax liability. For example, an honest misunderstanding of fact or law, an isolated computational error, reliance on professional tax advice, or reliance on information returns all indicate reasonable cause/good faith. However, if the taxpayer should have known better, the defense will not apply.

Observation: According to IRM 20.1.5.6, the most important factor in determining whether the taxpayer has reasonable cause and acted in good faith is the extent of the taxpayer’s effort to report the proper tax liability. For example, reliance on erroneous information reported on an information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. Similarly, an isolated computational or transcription error may indicate reasonable cause and good faith. Other factors to consider are the taxpayer’s experience, knowledge, sophistication, education, mental and physical condition, and reliance on the advice of a tax advisor.

Having Unfiled Tax Returns and need Help?

June 8, 2010 | Mike Habib, EA

Having Unfiled Tax Returns and need Help?

Taxpayers with unfiled tax returns can invite a lot of problems. The famous IRS has coined ten years for the collection of taxes that are owed. If the return for owed taxes was filed ten years ago, the IRS will probably use the last address known to them. The government will not be able to maintain any contact if you have already left the country. But if by any chance, you return back within the ten years limit, this can be a big problem. If you start earning or start with any job, it will be very easy for the IRS to contact you and then you are in big trouble. They not only claim the unfiled tax returns but all of the fines interest and penalties that have accrued over the original payment are also asked for. If you have somehow not at all bothered to file the tax returns, it is very important for you to have all the documents necessary to file your tax returns. Having lower income or lots of medical bills will not make any difference. It could simply lead to the conclusion that you probably are left with no money at all to pay for the mortgages or even the regular bills.

If anyone finds himself stuck in such serious circumstances it is strongly suggested that services of an experienced tax relief professional be asked. Only they will be able to guide you properly as to what is required to be done. They will be able to sort through all of the back taxes of past years and negotiate with the IRS to make some reasonable solution. The help of tax relief expert can invite many days of annoyance, severe deadlines or some difficult and confusing forms to be handled on your own. The tax relief specialist, as a professional will do his best to help you deal with the situation and come out of it successfully. He will be spending most of his time to sort out the best interest of the client and find a solution.

IRS Tax Lien

May 7, 2010 | Mike Habib, EA

Tax Lien – How to handle an IRS federal tax Lien

A tax lien is a civil action filed in court of the county where a person resides or a business operates by a government agency particularly the Internal Revenue Service. IRS is seeking a legal claim – attachment against that person’s or business’ property or money owing to taxes. In normal situation, once the claim is proved, the court will then make an order of attachment or lien against the said property or money and published on public records. But in the case of the IRS, because of its federal power and the quasi-judicial status, it need not go to court for this process and issues directly a tax lien on the tax payer’s property. This means that it announces to the world that you owe the IRS taxes for which the property is being secured. The property that maybe subject of the tax lien can either be real which is most preferred, or personal. Once there is a tax lien on record, it becomes difficult or impossible for a taxpayer to dispose of the same and it will likewise affect the taxpayer’s credit standing. For example, the taxpayer cannot sell a parcel of land or a car subject of the tax lien nor can the taxpayer secure a financing to purchase a parcel of land or a car for that matter, unless of course, you satisfy the tax lien or until final payment is made on your liabilities or in short, the tax lien is released, discharged, withdrawn or removed.

Tax Liens are effective for a period of ten years and are generally self-releasing after that period unless refiled by the IRS in which case, it shall be effective for another 10 years. The government’s tax lien on a taxpayer’s property is priority over his other creditors and thus, the government is first on the list of creditors to be satisfied in the case of attachment and liquidation.