Unfiled Tax Returns

Estimated tax payments – IRS Problem Resolution

April 2, 2008 | Mike Habib, EA

New, changed and expired provisions affect 2008 individual estimated tax

Mike Habib, EA
MyIRSTaxRelief.com

Apr. 15, 2008 is the due date for affected calendar year taxpayers to make their first installment of 2008 estimated tax. There aren’t any drastic changes in the estimated tax rules themselves for 2008. However, there are a number of new, changed and expiring provisions that will affect some individuals’ estimated tax computations for 2008. This article provides a brief overview of the estimated tax rules for individuals and looks at the changes that may impact 2008 estimated taxes.

Who needs to pay estimated tax. Individuals who have income that is not subject to withholding (for example, earnings from self-employment, interest, dividends, rents, alimony, etc.) must pay estimated tax or face a penalty. In addition, taxpayers who do not elect voluntary withholding on unemployment compensation and the taxable part of social security payments also may have to pay estimated tax on those items or face a penalty. (Code Sec. 6654)

When and how much to pay. For 2008 estimated tax, in general, a taxpayer must pay 25% of a “required annual payment” by Apr. 15, 2008, June 16, 2008, Sept. 15, 2008 and Jan. 15, 2009 to avoid an underpayment penalty. (Code Sec. 6654(c))

Trucker Tax Relief – Trucker Tax Resolution Service

April 1, 2008 | Mike Habib, EA

Truckers Tax Relief – Are you a truck driver with tax problems?

Trucking Tax & Accounting: Back Taxes – Unfiled delinquent tax returns – IRS & State audits – Messy books / accounting

If you’re a truck driver and owe the IRS, you’re better off resolving your tax debt now. As you know, tax problems do not go away by themselves! Stop your IRS wage garnishment today, stop your IRS bank levy today, and release your IRS tax lien today.

Dependent deductions tax problem

March 25, 2008 | Mike Habib, EA

Tax breaks for qualifying relatives are limited – what you should know
Internal Legal Memorandum 200812024

Mike Habib, EA
myIRSTaxRelief.com

An Internal Legal Memorandum (ILM) explains that various tax breaks are not allowed for qualifying relatives. Specifically, the ILM concludes that, apart from a dependency exemption, a taxpayer’s qualifying relative may not qualify him for the earned income credit, head of household filing status, or the child tax credit, but in limited circumstances may qualify the taxpayer for the child and dependent care credit.

Background. A taxpayer is entitled to a deduction equal to the exemption amount for each person who qualifies as his “dependent.” (Code Sec. 151(c))

2004 Unfiled tax returns Back Taxes Past Due Tax Return

March 24, 2008 | Mike Habib, EA

IRSHas $1.2 Billion for People Who Have Not Filed a 2004 Tax Return

Mike Habib, EA

MyIRSTaxRelief.com

Credit card debt triggers tax problems – know your options

March 20, 2008 | Mike Habib, EA

Did you know that forgiven credit card debt triggered taxable income

Mike Habib, EA
myIRSTaxRelief.com

A new Tax Court case illustrates how a taxpayer generally has taxable income when a credit card company agrees to accept a reduced payment in settlement of his or her account.

IRA Tax Problem? What options you have

March 20, 2008 | Mike Habib, EA

“Makeup” required minimum distributions salvage lifetime payouts to nonspouse IRA beneficiary

Mike Habib, EA
myIRSTaxRelief.com

A private letter ruling allows the nonspouse beneficiary of an IRA to salvage lifetime payouts even though she failed an essential rule requiring distributions to begin by the end of the year following the year of the IRA owner’s death. She made up missed annual required minimum distributions (RMDs) and paid a penalty excise tax, but by doing so she avoided a tough 5-year payout rule.

Background. If an IRA owner dies before his required beginning date (RBD), namely Apr. 1 of the year following the year in which age 70 1/2; is attained, then as a general rule his entire interest must be distributed within 5 years of his death. (Code Sec. 401(a)(9)(B)(ii)) However, if any part of the IRA is (1) payable to (or for the benefit of) a designated beneficiary, (2) that part is to be distributed under regs over the life or life expectancy of the designated beneficiary, and (3) the distributions begin not later than 1 year after the date of the deceased’s death (or a later date as prescribed by regs), then that part is treated, for Code Sec. 401(a)(9)(B)(ii) purposes, as paid out when distributions commence. (Code Sec. 401(a)(9)(B)(iii))

Reg. § 1.401(a)(9)-3, Q&A 3(a), says that where there’s a nonspouse beneficiary for the IRA (or a qualified plan account), in order to satisfy the life expectancy payout rule in Code Sec. 401(a)(9)(B)(iii), “distributions must commence on or before the end of the calendar year immediately following the calendar year in which the [IRA owner or employee] died.”

The determination of whether the five-year or lifetime payout rule applies depends on the provisions of the IRA. It may be silent as to which rule (5-year or lifetime payout) applies, specify which rule applies, or it may allow the owner (or beneficiary) to elect which rule applies. (Reg. § 1.401(a)(9)-3, Q&A 4)

IRS Tax Problems? Get Resolution today – here’s why

March 19, 2008 | Mike Habib, EA

If you owe the IRS, you’re better off resolving your tax debt now. As you know, tax problems do not go away by themselves! Stop IRS wage garnishment today, stop IRS bank levy today, and release IRS tax lien today.

As you can see from the statement below by Mr. Douglas H. Shulman, the new IRS Commissioner, he will first concentrate on Enforcement, then secondly its Service! Are you saying where is the kinder and gentler IRS?

Contact us today to resolve your tax problems.

Statement of Commissioner Douglas H. Shulman

I want to extend my thanks to the members of the Senate and the Senate Finance Committee, especially Chairman Baucus and Senator Grassley. I also want to thank President Bush for nominating me and Treasury Secretary Paulson for his support.

The Internal Revenue Service touches virtually every adult, every business and every non-profit organization in America. It is an honor to assume the leadership of this critical agency. I recognize the great responsibility I have been given and will work to ensure that the IRS is fair, impartial and respects the rights of all taxpayers.

As Commissioner, I will concentrate on both enforcement and service. For the majority of Americans who pay their taxes willingly and on time, there must be clear guidance, accessible education and outstanding service. Our aim should be to make it as easy as possible for citizens to pay the correct amount of taxes in the most efficient and least burdensome manner possible.

IRS 2008 list of notorious tax scams

March 17, 2008 | Mike Habib, EA

IRS unveils 2008 list of notorious tax scams – the “Dirty Dozen”

Mike Habib, EA

myIRSTaxRelief.com

IRS Website Provides Guidance on S Corporation Election Problems

March 17, 2008 | Mike Habib, EA

IRS website provides guidance on S corporation election problems
Filing Requirements for Filing Status Change, on IRS website

Mike Habib, EA
myIRSTaxRelief.com

In a recent posting on its website, IRS explains the steps to be taken and forms to be filed by taxpayers requesting to change their filing status from a C Corporation (filing Form 1120) to an S Corporation (filing Form 1120S). In particular, IRS explains what to do if a taxpayer hasn’t timely filed Form 2553, and either has or hasn’t filed Form 1120S for the first year of the intended S corporation election.

Background. S corporations are incorporated entities with many of the same attributes as traditional C corporations, including limited liability, transferable ownership, and unlimited life. But unlike C corporations, S corporations are generally not subject to income tax. Instead, the business’s profit or loss is passed through to the shareholders, who report it on their individual returns. To qualify, a corporation must elect S corporation status and meet a number of requirements. It can have no more than 100 shareholders, and only certain types of taxpayers can be shareholders. It can have only one class of stock.

Poker Tournament Winnings Must be Reported to the IRS

March 8, 2008 | Mike Habib, EA

Starting March 2008, casinos and other sponsors of poker tournaments will be required to report most winnings to winners and the Internal Revenue Service, according to the IRS.

Mike Habib, EA
myIRSTaxRelief.com

The new requirement, which went into effect on March 4, 2008, was contained in guidance released Sept. 4 by the Treasury Department and the IRS. The guidance is designed to clear up confusion about the tax reporting rules that apply to poker tournaments. In recent years, some casinos and players have been confused over whether poker tournament sponsors who hold the money for participants in a poker tournament are required to report the winnings to the IRS and withhold tax on the winnings.