Tax Relief BlogWidow entitled to equitable spousal relief for some years
Martinez, TC Memo 2008-165
Articles Posted in IRS Tax Help
Form 5405 First-Time Homebuyer Credit
Newly revised 2008 Form 5405, First-Time Homebuyer Credit, reflects Recovery Act IR 2009-14 Mike Habib, EA Tax Relief & Tax Problem Resolution In a news release issued on Feb. 25, 2009, IRS has announced that it has posted a revised version of the 2008 Form 5405, First-Time Homebuyer Credit, to reflect recent improvements to the credit made the American Recovery and Reinvestment Act of 2009 (Recovery Act, P.L. 111-5). Pre-Recovery Act credit. Under pre-Recovery Act law, for qualifying purchases of principal residences in the U.S. after Apr. 8, 2008 and before July 1, 2009, eligible first-time homebuyers may claim a refundable tax credit equal to the lesser of 10% of the purchase price of a principal residence or $7,500 ($3,750 for married individuals filing separately). A taxpayer is considered a first-time homebuyer if he (or spouse, if married) had no present ownership interest in a principal residence in the U.S. during the 3-year period before the purchase of the home to which the credit applies. Eligible first-time homebuyers who purchase a principal residence after Dec. 31, 2008, and before July 1, 2009, may elect to treat the purchase as made on Dec. 31, 2008. For eligible purchases in 2009, a taxpayer may elect to claim the credit for 2008 or 2009 by attaching Form 5405 to the taxpayer’s original or amended 2008 tax return or 2009 tax return. The first-time homebuyer credit phases out for individual taxpayers with modified AGI between $75,000 and $95,000 ($150,000-$170,000 for joint filers) for the year of purchase. The credit for new homebuyers is recaptured ratably over fifteen years, with no interest charge, beginning with the second tax year after the tax year in which the home is purchased. For each tax year of the 15-year recapture period, the credit is recaptured as an additional income tax amount equal to 6⅔% of the amount of the credit. This repayment obligation may be accelerated or forgiven under certain exceptions.
Observation: In other words, the credit for new homebuyers is the equivalent of a long-term interest-free loan from the government.
Recovery Act enhancements to the credit. For residences purchased after 2008, Sec. 1006 of the Recovery Act:
- increases the maximum homebuyer credit to $8,000. (Code Sec. 36(b))
- extends the credit so that it applies to purchases before Dec. 1, 2009. (Code Sec. 36(h))
- correspondingly, for purposes of the election to treat the purchase of a principal residence as having been made on Dec. 31, 2008, extends the last date of purchase has until Nov. 30, 2009. (Code Sec. 36(g))
- generally waives the recapture of the credit for qualifying home purchases after Dec. 31, 2008. However, if the taxpayer disposes of the home or the home otherwise ceases to be the principal residence of the taxpayer within 36 months from the date of purchase, the pre-Recovery Act rules for recapture of the credit apply. (Code Sec. 36(f)(4)(D))
Observation: Committee reports indicate that this waiver of the recapture applies without regard to whether the taxpayer elects to treat the purchase in 2009 as occurring on Dec. 31, 2008, which is allowed by Code Sec. 36(g).
Form 5405. Form 5405 is fairly straightforward. Part I A calls for the address of the home qualifying for the credit while Part I B asks for the date it was acquired. A box must be checked on Part I C if the taxpayer is choosing to claim the credit for a home bought in 2009.
Observation: Specifically, Part I C calls for the box to be checked “[i]f you are choosing to claim the credit on your 2008 return for a main home bought after December 31, 2008 and December 1, 2009.” Thus, Form 5405 reflects the Recovery Act change making this option available for a main home bought Dec. 31, 2008 and before Dec. 1, 2009.
Obama Business Tax Impact
The American Recovery and Reinvestment Act of 2009 (commonly referred to as the Recovery Act), which was signed into law on Feb. 17, 2009, makes a number of beneficial changes for business. Here’s a review of the more widely applicable provisions that could have an impact on you and your enterprise.
Mike Habib, EA Tax Relief & Tax Problem Resolution
Liberal expensing limits continued for another year. The Recovery Act gave a one-year lease on life to enhanced expensing rules, which allow qualifying businesses the option to currently deduct the cost of business machinery and equipment, instead of recovering its cost via depreciation over a number of years. For tax years beginning in 2009, the maximum amount that a business may expense is $250,000, and the expensing election begins to phase out when a business buys more than $800,000 of expensing-eligible assets. These dollar limits are the same as those that were in effect for 2008. Had the Recovery Act not been passed and signed into law, the dollar limits would have dropped this year to $133,000 and $530,000 respectively.
Major Tax Changes
President’s FY 2010 budget will propose many major tax changes for businesses and individuals
“A New Era of Responsibility: Renewing America‘s Promise,” the Administration’s preview of its FY 2010 budget, is available at http://www.omb.gov
Energy tax incentives
Energy tax incentives in the American Recovery and Reinvestment Act of 2009
Mike Habib, EA Tax Relief & Tax Problem Resolution The recently enacted “American Recovery and Reinvestment Act of 2009” (the 2009 economic stimulus act) includes a package of tax incentives to encourage investments in renewable energy projects or more-efficient technologies. I’m writing to give you an overview of these new provisions. Please call our offices for details of how the new changes may affect you, your investments, or your business.
Long-term extension and modification of renewable energy production tax credit. The new legislation extends the placed-in-service date for wind facilities for three years (through December 31, 2012). It also extends the placed-in-service date through December 31, 2013 for certain other qualifying facilities: closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; waste-to-energy; and marine renewable facilities.
Offer in compromise tax relief
IRS not obligated to accept offer in compromise
Bennett, TC Memo 2008-251
Release your federal tax lien
IRS Speeds Lien Relief for Homeowners Trying to Refinance, or Sell their house
Contact Mike Habib, EA to release your IRS Federal Tax lien
The Internal Revenue Service announced an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.
No More Tax Problems
Here is a New Year resolution you can’t afford to ignore… No more tax problems!! Yes, you can get rid of your tax problems in 2009.
Trust Fund Recovery Penalty
Once is enough as far as collection of the trust fund recovery penalty is concerned Chief Counsel Advice 200838027
The IRS has issued a new Chief Counsel Advice (CCA) on the trust fund recovery penalty. The IRS notes that the CCA may not be used or cited as precedent.
IRC §6672, imposes a penalty on any person who is required to collect, truthfully account for, and pay over withheld income and Social Security taxes who willfully fails to do so. The amount of the penalty is equal to the amount of the tax that was not collected and paid. The penalty is often referred to as the “trust fund recovery penalty” (TFRP). The penalty is imposed on a “responsible person.” A “responsible person” is anyone within a corporation or partnership who has the duty to collect, account for, or pay over the tax. Depending on the facts of the case, a responsible person could be an officer, a director, an accountant, a comptroller, or even a payroll manager.
IRS Tax Help for IRS Tax Problems
IRS Tax Help
by Mike Habib, EA
UNFILED BACK TAX RETURNS
Do you have back tax returns that are Unfiled? Are you missing the records and forms necessary to file your tax returns? I have the experience and procedures to help you in reconstructing the records necessary to file your back tax returns. The IRS will not allow you to file an offer in compromise or get an installment agreement if you are not current on filing your back tax returns. If you have a refund coming to you and you file more than 3 years past the due date, the IRS will keep the refund. It is important to get your past due returns filed and I can prepare them for you. Get tax help now.
IRS Tax Audit Help
If you have been notified by the IRS that your income tax return has been selected for examination, it is very important that you do not disregard notices. If enough time has passed without cooperation on your part, you will lose any right you have to present your side of the story to explain the income or deductions on your return. We have seen many taxpayers who have ignored IRS requests and ended up paying tax, penalty and interest on overstated income or legitimate deductions.
If you are being audited, we can represent you before IRS and advocate your position to explain and push for every valid deduction possible under audit. If you have received an audit notice, please call us as soon as possible so that we can begin working on your case while it is in the early stage of the audit.
Offer in Compromise – OIC Tax Help
The IRS, the State, and other taxing authorities would allow individual or business taxpayers that cannot fully pay their entire tax liability to settle their tax obligation through the Offer in Compromise Program. This is a great opportunity for the qualified taxpayer to settle their entire tax debt for less than they actually owe. The IRS, the State, and other taxing authorities sets specific rules and guidelines for accepting an Offer in Compromise. When evaluating an Offer in Compromise, the taxpayer’s past, current and future financial situation are analyzed before an Offer in Compromise can be accepted. Contact us today to see if you would qualify for an Offer in Compromise, as each individual or business financial situation is different.
Installment Agreement – IA Tax Help
The IRS, the State, and other taxing authorities would allow individual or business taxpayers that cannot fully pay their entire tax liability to settle their tax obligation through an Installment Agreement which allows taxpayers to pay their taxes owed through monthly installment payments. We can negotiate the payment amount and the time frame for the installment agreement on your behalf. When we establish an Installment Agreement for you, it would be a negotiated amount you can afford to pay and live with based on your financial condition. To effectuate an installment agreement, the taxpayer must be compliant by being current with all tax filing requirements before entering into an installment agreement with the IRS, the State or other taxing authority.
Currently Non Collectible – CNC Tax Help
Currently Non Collectible – CNC is accomplished when the IRS holds off an individual or business taxpayer’s account from active enforcement collection efforts. There are specific rules and requirements that a taxpayer must meet before a CNC status be accomplished. The IRS would not pursue enforcement collection activity against the taxpayer and possibly the statute of limitations on the entire tax liability will run. CNC is a temporary status and if the taxpayer’s financial situation changes, the IRS could start enforcement collection on the delinquent tax account.
Wage Levy / Wage Garnishment / Wage Attachment Tax Help
The IRS, the State and other taxing authorities are actively collecting taxes for the United States Treasury, the State and other localities. If an individual or a business taxpayer can not or refuses to pay their taxes, the IRS, the State and other taxing authority will enforce collection activities through direct contact such as field visits, demand letters, and collection phone calls. The taxpayer should never disregards the demands for delinquent tax payment as the IRS, the State and other taxing authority will be exercising their levy power to collect their delinquent taxes. Wage levy and wage garnishment is enforced to collect the delinquent taxes owed by the taxpayer. Contact us today to negotiate the release of your wage garnishment, and stop your wage levy and save your paycheck.
Bank Levy Release Tax Help
The IRS, the State and other taxing authorities are actively collecting taxes for the United States Treasury, the State and other localities. If an individual or a business taxpayer can not or refuses to pay their taxes, the IRS, the State and other taxing authority will enforce collection activities through direct contact such as field visits, demand letters, and collection phone calls. The taxpayer should never disregards the demands for delinquent tax payment as the IRS, the State and other taxing authority will be exercising their levy power to collect their delinquent taxes. The bank levy is enforced to collect the delinquent taxes owed by the taxpayer. Contact us today to negotiate the release of your bank levy, and save your bank account from being frozen or wiped out.
Payroll Tax Problem Representation Tax Help
We actively represent business taxpayers with payroll tax problems before the IRS and or the State. We help business owners and corporate officers understand and adhere to various payroll tax requirements. Our clients usually never meet or deal with the IRS or the State directly, instead we handle all the payroll tax resolution directly with the IRS and or the State. Delinquent payroll tax is a very serious matter and should be addressed quickly for a favorable resolution as business owners, corporate officers and potentially other employees could be personally liable. Businesses should be current and compliant to reach a final settlement.
Taxpayer Account Review Tax Help
The Taxpayer Account Review service is to help individual and business taxpayers obtain specific balances and information about their tax account with the IRS, the State, or any taxing authority. Most taxpayers receive inaccurate and usually incomplete information from the IRS, the State, or other taxing authority. The Taxpayer Account Review is vital for taxpayers to receive exact and accurate information about their tax account including penalties and interest assessed. We will provide you a detailed account break down for the years in question detailing tax amounts, any credits or payments, and penalties and interest assessed. This is a great tool for root cause analysis to find out what is driving your tax liability
Penalty Abatement Tax Help
For most taxpayers, the accumulated interest and penalties are as much as, or more, than their original tax debt! If this is your situation, we can help by requesting what’s called a Penalty Abatement. A penalty abatement works like this: If we can show reasonable cause, the IRS may agree to reduce or even eliminate your penalties altogether. What’s reasonable cause? Generally, some kind of hardship beyond your control which prevented you from paying your taxes. It can be as simple as explaining to the IRS that your basement flooded, that you received bad tax advice, or that you or one of your family members suffers from a severe health problem. We can tell you whether you are a candidate for a penalty abatement when you call for your free consultation.
Innocent Spouse Relief Tax Help
An Innocent Spouse is spouse “A” who has become liable for income taxes from a joint return filed with spouse “B” when spouse “B” has caused the income taxes to underpaid by mistake or fraud, and spouse “A” signed the return believing the return to be true and correct. For spouse “A” to be entitled to relief under the Innocent Spouse rules, spouse “A” must be able to prove when signing the returns, he or she did not know or have reason to know that at the time filing, the return either understated income or overstated deductions.
Federal Tax Lien Help
Federal tax liens are a public record stating that you owe federal taxes and are filed in the county you live. Because the tax liens are public records they will show up on your credit report. This often makes it difficult or impossible for a taxpayer to obtain financing, even for an automobile or home. The tax liens need to be reviewed to determine if they are valid. If the tax liens are valid, a strategy must be developed to deal with the IRS tax liabilities.
