Tax Relief BlogDid 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.
Articles Posted in IRS Tax Help
Looking for a new and good taxman CPA or an EA for tax preparation, planning, bookkeeping services?
Every year we add new clients to our Whittier, Los Angeles, CA firm, usually the client is looking for a change because their taxman, tax preparer, bookkeeper, CPA (Certified Public Accountant) or EA (Enrolled Agent), has retired, or passed away, or sold their practice / business or just need a more attention and better one-on-one tax advice.
If your taxman, tax preparer, bookkeeper, 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:
- Clients always deal with Mike Habib directly, the principal of the firm,
- Clients trust our A+ Better Business Bureau rating, and our firm is former Dave Ramsey ELP 2012-2019,
- Clients get outstanding service and specialized tax knowledge and expert advice.
Breaking News: Decision in the Loving v. IRS appeal
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.
Los Angeles, California CPA Certified Public Accountant, EA Enrolled Agent, Orange County, San Bernardino, Riverside, Whittier, CA
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.
Did you receive an IRS or state tax lien notice, letter, postcard or phone call?
Get professional tax help today, call us at 877-788-2937.
If a responsible person willfully fails to pay trust fund taxes (income tax withheld, FICA, RRTA, Medicare) to the IRS, is he personally liable for the trust fund recovery penalty?
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 877-788-2937 or email us to schedule an appointment.
What is the TFRP trust fund recovery penalty?
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 877-788-2937 or email us to schedule an appointment.
Is a taxpayer that fails to file or pay payroll taxes subject to penalty?
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.
When will IRS collection action be initiated? Back taxes help?
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.
Can the IRS take a lien out on property for payroll taxes?
Do you owe 941 employment and payroll back taxes?
The answer is:
Yes the IRS take a lien out on property for payroll taxes.
Under IRC §6321, the federal government can encumber property with a general tax lien. Generally, this lien can be used to encumber any property that the taxpayer owns (this is generally determined under state law). A tax lien will be imposed on a taxpayer when he neglects or fails to pay taxes after demand by the government.
Have You Been Notified of an IRS Tax Audit? Help is Available.
About 1.1% of taxpayers are selected for a tax audit each year. The IRS examines tax returns to verify that the tax reported is correct. Some of those people are selected randomly, others have items on their returns which raise a red flag and trigger the audit. Whichever category you fall into, you should know your rights, know what to expect, and know that you are entitled to be represented by a tax professional that can assist you with every aspect of the audit.
Upon receiving a letter informing you of the audit, you’ll be required to phone within 10 days to acknowledge the letter and schedule an appointment. It’s important that you do this in a timely fashion. Within the letter, or during that call, you will be advised on what items are being called into question. Depending upon your ability to obtain the supporting documentation, you will make an appointment with the IRS auditing agent. You may choose to have representation before you make that appointment, because a tax specialist will advise you of the time frame you’ll need to prepare for the meeting and in most cases you do not have to appear, your representative, power of attorney, would handle the audit for you.
