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: Why Do I Do Tax Resolution?

 

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: Tax Resolution Training with NATP at Taxposium in Orlando, FL

 

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 Can I Get Audit Reconsideration? What is an Audit Reconsideration?

 

 

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 Not Let Your Tax Problems Only Be Half Fixed!

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