Tax Relief Blog

Taxpayer Advocate’s Annual Report to Congress highlights compliance problems & suggests improvements

January 30, 2008 | Mike Habib, EA

Taxpayer Advocate’s Annual Report to Congress highlights compliance problems & suggests improvements

The National Taxpayer Advocate has released its 2007 Annual Report to Congress. It’s a voluminous study of the most serious problems facing taxpayers and IRS, along with suggested improvements. These problems include late-year Code changes by Congress, nonreporting of income in the cash economy, and lack of clear IRS guidance to taxpayers on the tax consequence of cancellation of debt.

https://www.irs.gov/advocate/article/0,,id=177301,00.html

Don’t get into an IRS payroll tax problem – Payroll Taxes forms 940, 941, and 944

January 30, 2008 | Mike Habib, EA

Payroll Taxes forms 940, 941, and 944 update

Don’t get into an IRS payroll tax problem…

IRS has revised its instructions for Forms 940, 941, and 944 and will be sending out notices in February to employers that are eligible to file Form 944 for the 2008 tax year.

IRS tax audit and IRS tax problems facing transportation or construction businesses, and other similar industries

January 25, 2008 | Mike Habib, EA

IRS tax audit and IRS tax problems facing transportation or construction businesses, and other similar industries

IRS SBSE-04-0108-003, 1/14/08

The IRS has reissued interim guidance that provides audit guidelines to its examiners reviewing excess per diem payments. The original guidance expired in November 2007.

IRS Penalty Abatement – Don’t Pay the IRS Penalties!

January 21, 2008 | Mike Habib, EA

alties, options to address your IRS tax penalty and more…

The IRS has over 148 different types of penalties. And boy do they love to hand them out. The worst part is that the IRS also charges interest and additional penalties on the original penalty.

So you must try to get them reduced or completely abated to zero. CLICK HERE FOR HELP

After you have decided to make a request to the IRS to “Abate Your Penalties” you must consider where and when to make the request. In my experience your chances are better in dealing with IRS Service Centers. The timing of your request depends on the type of penalty assessed against you. It always makes sense to request penalty abatement before you pay the IRS.

IRS tax audit, IRS tax examination, IRS audit reconsideration, IRS appeal

January 18, 2008 | Mike Habib, EA

IRS tax audit, IRS tax examination, IRS audit reconsideration, IRS appeal

Are you asking yourself … If I have tax problems who should I contact?

Fiscal Year 2007 Enforcement and Service Results
As reported in a statement issued by IRS, it has continued to make strong progress in a number of key enforcement areas. IRS enforcement efforts increased in fiscal year 2007: overall, enforcement revenue reached $59.2 billion, up from $48.7 billion in 2006.

The IRS has a check for you!

January 17, 2008 | Mike Habib, EA

What’s New: IRS has $110 million in undeliverable refunds

Are you still waiting for your tax refund? If so, you may be one of the 115,478 taxpayers to whom the IRS has been unable to deliver a refund check. The refunds total about $110 million.

Every year there are taxpayers who don’t update the IRS or the U.S. Postal Service when they move or change their mailing address. Checks are mailed to the last known address for taxpayers, and when the address isn’t current, the checks are returned as undeliverable.

Mortgage Tax Debt Relief, AMT Relief

January 11, 2008 | Mike Habib, EA

Mortgage Tax Debt Relief, AMT Relief – why you need professional tax advice

AMT relief. In general terms, to find out if you owe alternative minimum tax (AMT), you start with regular taxable income, modify it with various adjustments and preferences (such as add-backs for property and income tax deductions and dependency exemptions), and then subtract an exemption amount (which phases out at higher levels of income). The result is multiplied by an AMT tax rate of 26% or 28% to arrive at the tentative minimum tax. You pay the AMT only if the tentative minimum tax exceeds your regular tax bill..

Although it was originally enacted to make sure that wealthy individuals did not escape paying taxes, the AMT has wound up ensnaring many middle-income taxpayers. One reason is that many of the tax figures (such as the tax brackets, standard deductions, and personal exemptions) used to arrive at your regular tax bill are adjusted for inflation, but the tax figures used to arrive at the AMT are not.

List of expiring tax provisions

January 8, 2008 | Mike Habib, EA

I thought you might find this list of tax provisions expiring 12/31/07 helpful as you do year-end tax planning.

TAX PROVISIONS EXPIRING 12/31/07

* Deduction of up to $2,000 or $4,000 (depending on income) for college tuition.

IRS releases 2008 tax figures

January 8, 2008 | Mike Habib, EA

As you prepare for the upcoming tax year, I thought you might find this brief rundown of 2008 tax changes useful.

* ADOPTION TAX CREDIT increases to $11,650 for adoption of an eligible child.

* SECTION 179 maximum deduction increases to $128,000. Phase-out threshold increases to $510,000.

AMT – Alternative Minimum Tax 2007-2008

January 8, 2008 | Mike Habib, EA

On December 26, 2007, President Bush signed the “Tax Increase Prevention Act of 2007,” providing a one-year “patch” to the alternative minimum tax (AMT).

Without this legislation, an estimated 25 million taxpayers would have had to pay an average of $2,000 in additional taxes for 2007.

The new law increases the 2007 AMT exemption amount to $66,250 for joint filers, to $33,125 for couples filing separately, and to $44,350 for single taxpayers and heads of household. Most nonrefundable personal tax credits will be allowed to offset AMT liability.