Colorado Springs: Does Your Tax Professional Have the Right Ingredients?

 

I was waiting for my pizza out back of The Next Us Building. I was able to get what I wanted on my pizza. I thought "Do taxpayers get their tax professional with right ingredients to resolve their tax issues?" Does your tax professional make you feel valued and confident? As you personally work with Marcelino Dodge, EA you will feel confident that your tax issues will be successfully resolved so you can sleep well each and every night.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Do Your Taxes Feel Like a Bunch of Mondays Hitting You All at Once?

 

Do you dread the Monday morning after a fantastic weekend? Maybe that is how you feel about unfiled tax returns or a large tax bill. Do you feel nervous and exposed over having to deal with the IRS by yourself? Let us help to eliminate the overwhelming stress and worry of being harassed by the IRS, so you will not have to worry about the your money being clawed back by the IRS.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Can a $400,000 IRS Payment Request Really be Reduced to $0?

 

There is nothing that will shock you and make you feel helpless as receiving a notice from the IRS that says something like "you failed to file your tax return so we filed a tax return for you and by the way, you now owe us $400,000 in taxes, penalties and interest." How and why does a taxpayer even receive such a notice?

There are several reasons why a taxpayer could receive such notice.  First is that they have not filed a tax return for one or more years.  The Internal Revenue Service (IRS) received income documents (W-2's, 1099's, etc) from third parties indicating that income was paid to the taxpayer.  When the IRS went looking for a tax return to match the income documents, there was no tax return on record.  There can be any number of reasons why a tax return was not filed.  The reason is not important to the IRS.  The IRS is just looking for a tax return.  When the tax return is not filed the IRS has the statutory authority to file a substitute tax return on behalf of the taxpayer with the information they have.  That is happened with the client who received a $400,000 tax bill from the IRS and a $35,000 tax bill from the state.

How did we get this $400,000 tax bill reduced to $0?  After meeting with the taxpayer, we decided on a course of action that would help the taxpayer to reduce the debt.  At the time I did not know for sure how much of the tax debt we could reduce.  After implementing the agreed upon solution, we very pleased when we received letters stating that the federal tax is reduced to $0 and the state tax is reduced to $0.  This is a case where the taxpayer qualified to have the tax debt reduced.  I cannot guaranteed this result for every client.  What I can guarantee is that we will work very hard so your feelings of worthlessness and overwhelming worry will instead become confidence and thankfulness that the dark cloud the of the IRS taking your hard earned is gone.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: How shady is your tax representation?

 

Are you in the know or are you kept in the dark on you tax case? Are you feeling nervous and excluded from the process of fixing your tax issues? Learn how you can be joyful and hopeful about your tax case.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Overwhelmed and Stressed About Dealing With IRS?

 

Stressed about dealing with the IRS. Eliminate pain and anxiety with the services of an Enrolled Agent.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Feel Like You Are in Valley With Your Overdue and Unfiled Tax Returns?

 

Want to get out of the deep valley of dealing with the IRS?

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Why file back taxes!

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: What Could Cause My Tax Return to Be Audited?

There is nothing more frightening than opening your mailbox and finding a letter that has "Internal Revenue Service" in the return address section of the envelope.  Any number of questions will go through your mind: "What did I do wrong?"; "Did my tax professional make a mistake?"; or "Did I forget to report some income?"

While each of these questions are important to you, the reason for the IRS letter can range a a typo to non-cash contributions to foreign forms.  How can you as a taxpayer be prepared just in case a letter requesting verification of something on the tax return arrives?  Advance preparation and documentation is always the best.  Some of the biggest issues are non-cash contributions. If you are donating an item of significant value, an appraisal is always the best way to ready for the documentation request. You can even include the appraisal with the tax return.

Consistent losses on Schedule C can also trigger an audit.  You really need to keep good documentation of your efforts to make a profit.

I have only briefly covered two of the reasons why your return may be audited.  In all events it is best to always have the documents easily accessible for the positions you are taking on your tax return, just in case.  Prompt and thorough responses to the IRS are always best. 

An Enrolled Agent can represent you before the IRS in these cases to reduce your anxiety and worry of dealing with the IRS on your own.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: What Can I Do My IRS Records Are Lost or Destroyed?

Imagine this: you come home to find your dog happily chewing on your IRS records or the unexpected natural disaster strikes and all your records are either washed away or blown away. Feelings of helplessness and worry set in about what steps you can take to file tax returns with no records.

This can be especially stressful when you have a business. How can you take that feeling of being exposed and change it to a feeling of optimism?

1) Contact a tax professional such as an enrolled agent who assist you record reconstruction and provide guidance.

2) You can contact employers and financial institutions to get copies. Sometimes you can download copies from online portals.

3) If you are business owner, there are rules that will allow the reconstruction of income and expenses, thus removing that numbing feeling of being exposed to the IRS with no hope.

4) Keep Future Records Safe: To prevent future mishaps, consider storing important documents in a secure location and store digital copies in the cloud that can serve as a backup.

While having your IRS records accidently destroyed can leave you feeling overwhelmed and isolated, it’s a manageable situation. With prompt action to reconstruct your records and notifying the IRS, you can minimize any potential issues. By keeping your records safe in the future you will feel confident and secure should the IRS come knocking. 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Is a Doubt as to Collectability Offer in Compromise Really Possible?

Do you feel numb and overwhelmed because of owing $20,000 or more to the IRS?  Have the IRS notices been stacking up? You hear an advertisement on the radio or see one on the television claiming that the IRS will settle your tax debt for pennies on the dollar.  You sit back and ask yourself is this really possible? Or, you think that it is too good to be true?

My answer to your questions is that with the proper guidance and professional assistance you can qualify for an IRS settlement.  But, you must complete the IRS process and provide substantiation of your claim. You must also have mountains of patience.  The process with the IRS can take time.

How do I know this?  About two years ago I had a new client come in with over $80,000 in taxes owed going back to 2013.  After completing an analysis of the taxpayer's circumstances and documents, I was able to determine that the taxpayer would qualify for a Doubt as to Collectability Offer in Compromise.  I completed the paperwork, gathered the support for what was stated on the OIC form, and had the taxpayer sign the OIC form.  I then submitted the package to the IRS.

After we received an acknowledgement letter, a few weeks later, it took about one year to get the initial response of a denial of the taxpayer's claim.  Since we felt we had a strong case, we appealed the initial result.  After a few months and some some communication with the appeals officer, we finally received the acceptance letter.  We were able to settle the taxpayer's $80,000+ debt for $100.  We both expressed a sigh of relief.  The taxpayer now has two responsibilities 1) pay the $100 and 2) stay tax compliant for the next 5 years.

This case shows that we can help taxpayer's to resolve tax debts they are unable to pay.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: What Does Doubt as to Collectability Mean?

 

Many taxpayers feel helpless and isolated when they have a large tax bill with the IRS.  In many cases they think there is nothing that they can do, but just do their best in trying to make payments.  Often times the taxpayer's circumstances do not allow them to really make any payments thus leaving them feeling embarrassed about not knowing what to do or where to go for solutions.

Are you perhaps feeling the pain of IRS notices and liens?  With the proper guidance you may qualify for a Doubt as to Collectability Offer in Compromise(OIC) with the Internal Revenue Service (IRS).  How does a taxpayer qualify for a Doubt as to Collectability OIC?

If you are suffering from financial hardship this could be the best option for you.  However, you must prove to the IRS that your assets an income are insufficient to pay the tax.  To apply you must include documents supporting your income and expenses.  There must also be a completed detailed financial disclosure.  The IRS uses national and local standards to evaluate a taxpayer's ability to pay.

After careful review the IRS may determine that you qualify for a small settlement and are unable to make full payment. If the IRS makes this determination, you have a limited amount of time to make the payment offered.  Plus, you must stay tax compliant for the next 5 years or the tax debt will reappear and you may have to start this process all over again.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Can Bankruptcy Solve My Tax Problems?

Having a large tax debt can make you feel both frightened and overwhelmed that your bank account will be drained by the IRS.  Then, someone suggests that if you file bankruptcy that will eliminate the tax debt.  It this true? Will filing a chapter 7 bankruptcy eliminate your tax debt?

Certain IRS debts may be dischargeable in bankruptcy. To qualify for discharge under Chapter 7 or Chapter 11, the tax debt must meet specific criteria:

1. Age of Debt: The tax debt must be at least three years old.
2. Filing Date: You must have filed a tax return for the debt at least two years before filing for bankruptcy.
3. Assessment Date: The IRS must have assessed the tax debt at least 240 days before you file for bankruptcy.
4. No Fraud or Evasion: The tax return must not be fraudulent, and you must not be guilty of tax evasion.

If these conditions are met, the tax debt may be discharged, meaning you are no longer legally required to pay it. However, any cancellation of debt (COD) income resulting from the discharge is reportable on the bankruptcy estate's tax return, not your individual return.

It's also important to note that while bankruptcy can provide relief, it doesn't eliminate all tax-related obligations. Consulting with a bankruptcy attorney or tax professional can help you navigate the complexities and determine the best course of action for your specific situation.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: What If the IRS Files a Substitute Return For Me?

 

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

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:

1. Hire a tax professional (EA, CPA, or Tax Attorney) to assist you through this process
2. Collect documents and records to build your case
3. Request a Collection Due Process hearing or
4. 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.

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

 

 

 

 

 

Colorado Springs: Why Did the IRS File a Lien on My Assets?

How would you answer the following questions:

1. Did you fail to file your tax return? 
2. Did you fail to pay your tax full? 
3. Or, did you fail to arrange to make payments on your taxes if you were unable to pay in full?

If you answered "yes" to any or all of the above questions and you owe the IRS more than $10,000, then that is probably why you received the notice of an income lien on your assets. What makes it possible for the IRS to file a lien.  Under the Internal Revenue Code Section 6321, the IRS has the authority to protect the governments interests by filing lien.  When a lien a placed, the IRS then has a legal claim to your property when you neglect or fail to pay your tax.

Three conditions must be met for a tax lien to attach to your property:

1. The IRS assess your tax liability of $10,000 or more.
2. The IRS sends you a bill explaining how much you owe.
3. You either neglect to make payment or refuse to pay in full within 10 days

After each of these conditions is satisfied, the lien attaches to all your assets including real estate, personal property, and financial assets.

An IRS tax can have a significant impart on your credit score.  Thus, you may find it more challenging to qualify for loans or credit.  If you want to sell or refinance your home, an IRS tax lien will make it more challenging to accomplish, but not impossible.  With the tax lien the government has an interest in your property as security for the tax debt.

In what ways can you address a tax lien:

1. Pay the debt in full
2. Request a payment plan, which the IRS may agree to and withdrawal the lien
3. You may qualify for lien subordination, to allow other creditors to move ahead of the IRS

If facing an IRS tax lien, prompt action is necessary. I recommend consulting with a tax professional who can provide you with the needed guidance to resolve this issue as quickly as possible after they take a complete look at all your facts and circumstances.

 

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

 

 

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. 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

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.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

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?

1. 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

2. 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.

3. 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.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

Colorado Springs: Why Is My Return Being Examined by the IRS?

You filed your tax return and think that everything is okay.  Then, a few months later your get the dreaded letter with an IRS return address on it.  When you open the letter you learn that your return is being examined for any of the following reasons:

1. Failure to report all your income
2. You need to verify your dependents for Child Tax Credit
3. Documentation is needed to claim the Earned Income Tax Credit
4. Any other discrepancy the IRS finds resulting from information provided by third parties

These IRS examinations of income tax returns  are to ensure compliance with tax laws and to maintain the integrity of the tax system.  How can you avoid one of these examinations?

First, be sure to report all your income. It vital to keep good records of every place you work during the year.  If you move, immediately inform employers of any address change to ensure timely receipt of your W-2's.  As a self-employed person report all income received for product and services, including cash payments.  Your clients or customers could send in a 1099 for the payments they made to you.  The IRS used matching software to verify if what is on the tax return matches the amounts reported by third parties.

Second, if more than one taxpayer tries to claim a qualifying child for the Earned Income Tax Credit (EITC), the IRS will often examine a return an request documents supporting the claim for the credit.  If the IRS determines that a payment for EITC as made in error, the taxpayer that received the payment in error will have to pay the EITC credit amount back to the IRS, often with penalties and interest.

Third, high-income earners and those with significant business expenses also attract attention. If your lifestyle or deductions seem disproportionate to your reported income, the IRS may investigate to ensure that all income is accurately reported and that deductions are legitimate.

Last, charitable contributions that appear excessive relative to your income can also prompt an audit. The IRS wants to verify that these deductions are genuine and not inflated to reduce tax liability.

In summary, the IRS examines tax returns to detect discrepancies, ensure accurate reporting, and prevent fraud. By understanding these triggers, taxpayers can file more accurately and reduce the likelihood of an audit.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

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.

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com