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525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Do You Owe the IRS Money That You Can’t Pay? Are You a Year or More Behind in Filing Your Income Tax Returns? Are You Behind in Your Payroll Tax Filings or Payments? Our Tax Relief services and Tax Resolution assistance can help you get tax relief!
Showing posts with label EA. Show all posts
Showing posts with label EA. Show all posts
Monday, October 21, 2024
Friday, August 2, 2024
Colorado Springs: What If the IRS Files a Substitute Return For Me?
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, July 31, 2024
Colorado Springs: How Can I Get Audit Reconsideration? What is an Audit Reconsideration?
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, July 24, 2024
Colorado Springs: How Can I Get a Penalty Abated Using Reasonable Cause?
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Tuesday, July 16, 2024
Colorado Springs: Can I Really Settle My Tax Debt for Pennies on the Dollar?
The simple answer to the question in title of this blog is "maybe". Why do I say that?
The IRS provides a lifeline for those who either cannot pay or who doubt they actually owe the tax through the Offer in Compromise (OIC)
program, governed by Section 7122 of the Internal Revenue Code. This
program allows taxpayers to settle their tax liabilities for less than
the full amount owed for those who qualify. Taxpayers have to be patient as this process can take at least a year to complete.
To qualify for an OIC a taxpayer must calculate their RCP using guidelines provided by the IRS that include both actual expenses and nation standards. Once RCP is calculated the determination is made whether a taxpayer qualifies for the OIC or has to set up an installment agreement and full pay.
I recently completed a case that took over a year for the IRS to send us the OIC acceptance letter. The taxpayer was unable to pay the tax in full after calculating the RCP. This was a doubt as to collectibility offer. We were able to settle an $80,000 plus debt for $100. The taxpayer has two responsibilites now: 1) To make the $100 payment and 2) Stay tax compliant for the next five years, including making estimated tax payments if required. If these two conditions are not met, the taxpayer can become liable once again for $80,000 tax debt.
We cannot settle every case for such a small amount. Each taxpayer's facts and circumstances are unique. Only a full analysis of your situation can determine what the best course of action will be. Using a local Enrolled Agent(EA), CPA, or tax attorney who will complete such an analysis is highly recommended.
Section 7122 on Offer in Compromise is a valuable tool for taxpayers in distress. However, this path requires careful preparation and a clear understanding of the obligations involved. Consulting with a tax professional can enhance the chances of a successful application.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Thursday, July 11, 2024
Colorado Springs: What is an IRS Tax Levy? What is the Purpose
What would lead to the IRS to levy your bank accounts or other property? The legal seizure of your accounts or property is an extreme measure the IRS could take to satisfy a tax debt. If you have been ignoring the IRS when it comes to filing tax returns or making payments on your taxes, this extreme measure may be used to get your attention. Nothing will quite get your attention as your bank stating that your accounts are essentially frozen due to an IRS levy.
How many letters did you receive from the IRS? If you failed to open the letters and respond to the IRS, the levy process most typically begins with the IRS assessing the and sending a Notice and Demand for Payment. With no payment made or contact initiated to the IRS, the next notice possibly sent through certified mail, is a Final Notice of Intent to Levy and Notice of Your Right to a hearing at least 30 days before the levy action.
Most commonly I have heard of bank accounts being subject to an IRS levy. I some cases the frozen funds can be made available for you the taxpayer. Each taxpayer's circumstances are unique.
The best solution for an IRS levy is to never get an IRS levy. Stay compliant and make your tax payments in a timely manner.
However, if you do receive a levy notice taking quick action is highly advised. I recommend you do any or all of the following:
- Hire a tax professional (EA, CPA, or Tax Attorney) to assist you through this process
- Collect documents and records to build your case
- Request a Collection Due Process hearing or
- Prepare to make a payment in full, arrange a payment schedule, or if qualified file for an offer in compromise.
Ignoring a tax levy can lead to severe financial consequences. Immediately working to resolve the issue with a tax professional will help you quickly resolve the issue. As you work with a tax professional toward a resolution, you will be able to sleep better an minimize the impact on your financial well-being.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, July 10, 2024
Colorado Springs: Am I or Am I Not an Innocent Spouse?
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Thursday, July 4, 2024
Colorado Springs: What Exactly is the IRS Collections Process?
How many of us desire to be contacted by a collection agency? I would say none of us want to be contacted by a collection agency, especially if the collection agency is the Internal Revenue Service. If we failed to file an income tax return and/or failed to pay our income taxes you can count on getting the series requesting payment of your taxes.
Why is it important to still file my tax return, even if I cannot pay the tax? One reason is that you want to start the statute of limitations on your tax return and the payment of your taxes. If you do not file your tax return, then the statute has not started and essentially you give the IRS a longer period of time to collect the taxes due.
Under IRS Code Section 6502, the IRS has ten years from the date of assessment to collect outstanding tax liabilities. This why it is important to file your return and to start the 10 year clock. For example, if you wait three years to file than you just gave the IRS an extra 3 year to collect from you. Under some circumstance this period can be extended. Also, if the IRS does not collect the debt within this 10 year period, the liability is typically no longer enforceable.
The IRS Collection Process begins when a taxpayer fails to pay their tax bill. Initially, the IRS sends a series of notices and demands for payment. If the taxpayer does not respond or set up an installment agreement, the IRS can take more aggressive actions. Some of the options include liens on property, levying bank accounts, or garnishing wages.
Taxpayers have a right to have an Enrolled Agent (EA) represent them though this process. An EA can help the taxpayer to setup an installment agreement, prepare an offer in compromise, or speak to the IRS on the taxpayer's behalf.
Having a tax professional help you during the collection process is vital for you to understand the processes and timelines. An EA will help you to be informed and to mitigate the impact of IRS collection efforts.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, July 3, 2024
Colorado Springs: Can I Appeal This IRS Collections Notice?
Few pieces of mail cause as much stress as a certified letter with the Internal Revenue Service in the return address area. Then, when you open the letter you see a large balance due that you did not expect. What can you do to navigate this challenging situation?
1. Hire a tax professional: An Enrolled Agent (EA) can represent you before the IRS, review your tax records, and provide expert guidance on how navigate the appeals process
2. Understand the Notice: An Enrolled Agent will carefully read the collections notice and help you to understand the amount owed, the reasons behind it, and the deadline for responding, which is crucial to avoid further penalties.
3. Gather Documentation: An EA will help you to identify the relevant documents, including tax returns, payment records, and any correspondence with the IRS. The proper documentation is essential to building a case with the IRS.
4. File a Written Protest: After careful review of all the information and if you disagree with the notice, an EA will prepare to file a written protest. The protest will clearly state the reasons for disagreement and provide supporting evidence. The more comprehensive the protest the better. Make sure the protest is timely filed.
5. If Needed, Request an Appeals Conference: An EA can represent you in an appeal conference. The IRS Independent Office of Appeals operates separately from the collections division and aims to resolve disputes impartially. During the conference, your EA will present your case and any additional evidence.
6. Explore Alternative Solutions: If appealing the notice is not feasible, explore other options like installment agreements or an offer in compromise, which allows you to settle your tax debt for less than the full amount owed.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Tuesday, July 2, 2024
Colorado Springs: What If My Colorado Income Taxes are Unpaid and Not Filed?
Many times when taxpayers are behind on their federal taxes, they are also behind on their state taxes. When it comes to tax collections and notices, the Colorado Department of Revenue can be more aggressive than the IRS. What is the best action for a taxpayer to take when both the IRS and the Colorado Department of Revenue are owed large sums? You need to promptly address the issue
To start you will need to prepare the federal return first, because information from the federal return is use in calculating the Colorado tax return. Depending on your circumstances, you may file the Colorado return before filing the federal tax return. This determination is made on a case by case basis.
If you owe tax the Colorado Department of Revenue will assess penalties and interest on the tax. You can calculate the interest and penalties with the tax on the return and include with the payment. If you are unable to make the full payment, submit the tax return anyway. The Colorado Department of Revenue will process the return and send you balance due notice.
After the tax, interest, and penalties have been assessed you can make a payment by check, money order, or online. If you are unable to pay in full, you can setup a payment plan by following the Colorado Department of Revenue guidelines. In some cases setting up a state payment plan is to your advantage if you also owe federal income tax. This is why I mentioned earlier the possibility of filing the Colorado income tax return before filing the federal income tax return.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Monday, July 1, 2024
Colorado Springs: The IRS is Charging Me a Penalty. How Can I Get the Penalty Abated?
The IRS charging you a penalty? Did you file your tax return late? Did you not pay your federal income tax on time? Did you fail to pay your taxes at all? If you answered 'yes' to any or all of these questions, then do not be surprised if the IRS is charging you a penalty. The Internal Revenue Code Section 6694 allows the IRS to charge penalties for taking unreasonable positions, reckless conduct, and/or willful conduct.
When the IRS charges a penalty, what options are available? Taxpayers can request and receive penalty abatement or removal of penalties under conditions. Consulting with an Enrolled Agent, (EA) is wise to help you navigate through the process of obtaining penalty abatement.
What are the types of Penalty Abatement?
First-Time Penalty Abatement (FTA): Available to taxpayers who have a clean compliance history for the past three years and have not previously requested penalty abatement
Reasonable Cause Abatement: If you can demonstrate that your failure to comply was due to circumstances beyond your control, such as natural disasters, serious illness, or other significant life events.
Administrative Waivers: Sometimes, the IRS provides administrative relief for specific groups of taxpayers or under certain conditions.
A tax professional like Marcelino Dodge, EA, CTRC, can review your tax records and review your eligibility for a specific type of penalty abatement. After this review, the gathering of documents is required to help with the preparation of the necessary forms for submission to the IRS. Your request is then submitted to the IRS.
You will need to follow-up on the request after a reasonable period of time. Patience is important as the IRS can take a while to process the request.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Friday, June 28, 2024
Colorado Springs: What Can I Do If I Disagree With the Amount the IRS Says I Owe?
You receive an IRS notice saying you owe a large sum. But, you disagree with the assessment, because there is a legitimate question about the correctness of the assessed tax amount. What you can do is file a "Doubt as to Liability" Offer in Compromise.
Is this the correction option for your case? Possibly it is, possibly it is not. You need to consult with a tax professional, such as an Enrolled Agent (EA) because there are pros and cons to this type of offer.
Some of the pros are:
- Collections stops
- Forces audit reconsideration
- Can reopen Trust Fund Recovery Penalty Assessment
Some of the cons are:
- Must offer something (even if it is a $1)
- Compromises future liability (no refunds)
- Taxpayer must be compliant
Remember, this option is designed for taxpayers who genuinely dispute the accuracy or existence of their tax debt. This could be due to errors in the IRS's calculations, misinterpretation of tax laws, or missing information that could alter the liability. Importantly, this type of offer cannot be rejected simply because the IRS cannot locate your return or verify the liability.
To qualify, you must present a compelling case that reflects what the IRS might reasonably expect to collect if the matter were taken to court. This involves providing substantial evidence and documentation to support your claim. The IRS uses its discretion to determine whether your offer is reasonable, considering the potential outcomes of a court case.
If you believe there is a genuine error in your tax assessment, submitting an OIC based on Doubt as to Liability could be a viable path to resolving your tax issues.
For more detailed information consult with an EA, who specializes in tax resolution to ensure your offer is well-prepared and stands the best chance of acceptance.
For more detailed information consult with an EA, who specializes in tax resolution to ensure your offer is well-prepared and stands the best chance of acceptance.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, June 26, 2024
Colorado Springs: What If the IRS Files a Substitute Return For Me?
Forget to file your tax return? Did you think that if you did not file your tax return the IRS would not notice? Whatever you are thinking, note that the IRS has more information than you realize. IRS code section 6020 allows the IRS to file a tax return for you with the information they have that includes 1099's, W-2's, and other tax reporting forms.
The question is what can you do if the IRS has filed a Substitute for
Return (SFR) on your behalf?
1. Hire a Tax Professional: An Enrolled Agent (EA) that specializes in tax resolution matters can review your circumstances and assist you in taking the proper steps to resolve this tax matter.
2. Gather Your Documents: Collect all tax returns and relevant financial documents, including W-2s, 1099s, receipts, and any other records that support your income, deductions, and credits for the tax year in question.
3. File Your Original Return or Accept the IRS Prepared Return: Depending on your circumstances, you may not even need to file the original return. Each case is different, especially if you have several years of unfiled tax returns.
4. Respond to the IRS: Work with your tax professional to timely respond to IRS notices. I recommend sending any mailings certified with with a return receipt.
Taking these steps can help fix the situation and potentially reduce your tax liability. Always aim to file your returns on time to avoid the complications of an SFR.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Monday, June 24, 2024
Colorado Springs: Can I Challenge a Bad IRS Tax Assessment?
Nothing causes worry and stress more than receiving a piece of mail with the Internal Revenue Service as the sender. Then, after you open the piece of mail to your surprise the IRS is assessing you tax and penalties on income that you are not even sure is income you earned. What do you do?
Step one is to contact a tax professional to help you sort through this and determine if the assessment is even correct. Marcelino Dodge, EA, CTRC will assist you in determining if the assessment is correct
Next, if it is determined the tax bill is wrong, contacting the IRS to discuss the issue will sometimes resolve misunderstandings or errors. If the
initial contact does not resolve the issue, a formal challenge
the assessment would be next.
Taxpayers have the right to request a review of the penalty before it is assessed. If the penalty has already been assessed, Marcelino Dodge, EA, CTRC can help you request a penalty abatement either before or after the penalty is paid.
If the abatement request is denied, you can appeal the decision. An appeal is sent in writing to a different IRS office. This written request for consideration by IRS Appeals is an impartial reconsideration because your request is being seen in an IRS office that did not initially review your case.
Should the appeal not resolve the issue, the next option is to take your case to Tax Court. Sometimes though after you file the petition to Tax Court, your case may be settled before even going to court. If you do go to court and the court finds in your favor and determines that the IRS’s position was largely unjustified, you may be eligible to recover some of your administrative and litigation costs.
Navigating any tax dispute can be complex, so it’s helpful and recommended to consult with a tax professional who can provide guidance tailored to your specific situation. Remember, you have rights and options to ensure fair treatment by the IRS.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Monday, August 7, 2023
Colorado Springs: Do I Need a Representative to Help With My Tax Matters? Is It Possible to Do It On My Own?
It is possible for a taxpayer to attempt to navigate the complicate IRS system by either preparing their own tax return or speaking with the IRS when behind on their taxes. Keep in mind though the IRS does not always volunteer information on programs that can help taxpayers. Sometimes tax professionals and tax representatives have to educate IRS employees on the tax statutes.
With a trained tax professional like Marcelino Dodge, EA you will save time and more importantly you likely save money even after paying fees. Many time penalties can get reduced and if you qualify you may be able to settle your tax debt for less than you owe.
These are just a few consideration if you feel like you want to manuever the IRS rapids on your own.
Cash Tracks Financial of Colorado Springs
Marcelino Dodge, EA
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
www.cashtracksfinancial.com
success@cashtracksfinancial.com
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