For some taxpayers, their tax debt is way more than they could ever afford to pay back. This is common for many people who have a very high profit year, don’t pay their taxes and then later when they are dealing with the tax problem, they don’t have as much money as they did before. An IRS Offer in Compromise (OIC) allows you to settle your tax debt for less than the full amount you owe. It is an agreement made between a taxpayer and the IRS to settle a tax debt for a certain amount of money. Offers are hard to qualify for and if the IRS believes you can pay back the taxes in full, they may reject any offer proposal you make. An offer is something to consider if you can’t pay the full tax liability or it would create a financial hardship for you if you tried. The IRS will look at your ability to pay, income, expenses, and asset equity to choose a plan based on what they can expect to collect in a reasonable period of time. There is a lot of misconceptions on the internet about OICs and how you can qualify so it’s important to make sure you understand what an OIC is and if you would need it.
Imagine you’re getting ready for your summer vacation, you’ve got your bags packed and ready to go, and then you find out the IRS has suspended your passport. Your first thought could be if the IRS can even do that? The answer is yes. It’s the IRS’s new way to encourage taxpayers who are behind on their taxes, to pay what they owe. The IRS has begun to suspend passports for any taxpayer who owes a certain amount in taxes.
This month’s closed case round up includes a technician who withdrew from his retirement account too early and ended up owing a large tax debt, a client who waited four years for another tax attorney to solve their tax debt and ending up owing more, and a retiree who hadn’t filed his tax returns since 1990.
Around tax season, it seems like there’s a million different tax credits and you aren’t always sure which ones will work best for you. One of the tax credits that is available to a lot of people, but most people don’t know about is the Earned Income Tax Credit (EITC).The Earned Income Tax Credit is a tax benefit for people working with a low to moderate income. The EITC is one of the biggest refundable credits, because it can create a tax refund for you if you weren’t sure you’d get one. Many people don’t claim the EITC even though they qualify for it because they think they are either ineligible, didn’t know about the credit, don’t think they made enough money to qualify, or are worried about paying for tax preparation services.
As tax filing season quickly approaches, it’s important to know your options when filing your federal tax return. One of those options includes how you want to receive your tax return refund. You have two options when receiving your IRS tax return refund. You can either get it via check mailed to you or through direct deposit with your bank. The easiest, fastest and safest way to receive your refund is through direct deposit. 80% of tax payers choose direct deposit each year because of the simplicity of it. Direct deposit is free and it allows you to deposit your refund in up to 3 different bank accounts.
With tax season approaching quickly, it is important that you find the right IRS tax preparer to help file your tax returns. Regardless of who prepares the actual return, the taxpayer is liable for all the information submitted and any money owed after the return is filed. So, it’s important that you find someone who knows how to file individual tax returns. Quite often taxpayers get into trouble with the IRS because of a tax preparer that did not file correctly or made mistakes on their individual tax return. Here’s a few tips from the IRS that can help taxpayers find the best tax preparers.
The IRS sends millions of letters to taxpayers every year for many different reasons. These letters can be letting you know anything from the money you owe the IRS, problems with your tax return, or if you are going to be levied. Some letters need a response, while others are just giving you an update. Any notification from the IRS can be scary and if you are getting them for the first time, you might not be sure what the letters mean. Here are a few important notices to be aware of as some may require urgent action.
Floyd Mayweather Jr. may be undefeated in the ring, but the boxing champion could lose a couple million dollars due to tax problems. The IRS currently has Mayweather on the hook for $7.2 million in taxes for 2010, and that is on top of the $22.2 million the undefeated boxer owes for 2015. Mayweather filed a petition back in July that argued that the boxer, who earned $200 million for his fight against Manny Pacquiao, doesn’t have the cash on hand to pay his debt for 2015. The IRS refused a direct request by the fighter to pay in installments until he is paid for the Conor McGregor fight. The agency says it intends to levy Mayweather. This latest episode comes after Mayweather paid $15.5 million for over 5 years of taxes. Mayweather paid the debt only after the IRS filed liens against him. While waiting on the petition to make it to tax court, the IRS could seek to withhold Mayweather’s winnings from the McGregor fight by arguing that he wouldn’t pay his taxes otherwise.
You hear it all the time on the news about someone getting their bank account levied or someone getting a lien placed on their house. It seems scary and like most things with the IRS, the difference between a lien and a levy can be confusing to a taxpayer. Most taxpayers aren’t sure what an IRS wage levy is or how to know if you have a tax lien. We decided to break down the difference between a levy and lien and what you can expect from either action.
On this month’s closed case round up, we have one business investor who got audited after trying to claim loss income, a retired IRS employee that fell behind on her taxes, and a self-employed contract pumper that forgot to file a few years of his tax returns. Here’s the details on how some of our clients fell into tax trouble, and how we helped get them out!