FREQUENTLY ASKED QUESTIONS

CAN WE ELECTRONICALLY FILE YOUR TAX RETURN?

Are you worried about how and where to file your tax return this year? We can help end your worries about your tax return by electronically filing your tax return while communicating to you through our secure portal, email, and telephone. If your wish to see us, our staff is well and we stagger our appointments to insure that you are the only one in our waiting area and to give us time to sanitize the conference room between clients. In the appointment, we will give you a new, uncapped pen to sign documents. We value the health of our clients and acknowledge the importance of your tax return. Call our office today for more information of how we can help you with your tax return.

WHAT RECEIPTS SHOULD I BE SAVING THROUGHOUT THE YEAR, SO I CAN "WRITE THEM OFF?"

When people talk about "writing off" items for tax purposes they mean that they're deducting that expense form their taxable income. 

How you take your deduction is up to you: You can either take the standard deduction, or you can itemize, listing out a lot of different deductions in the hopes that they add up to be bigger than the standard deduction. So you should only save receipts for things like charitable donations if you're itemizing. Otherwise, don't worry about it. 

But there are some deductions you can take without itemizing. Those include student loan interest, supplies if you're a teacher, moving expenses, alimony, tuition you're currently paying and IRA contributions. So, save receipts and records of those regardless of whether you are itemizing. 

ARE THERE ANY BENEFITS TO FILING EARLY? AND WHAT HAPPENS IF I FILE AFTER THE DEADLINE?

The main benefit of filing before April is getting your tax refund back sooner. But filing really close to the deadline could also cost you money. Most CPA's will charge you a premium if you dump your tax stuff on them two weeks before April 15th. Doing yours taxes earlier will mean that if you hit a snag like a missing form or needing to resolve a big question, you have more time to solve it. 

As for filing late, you can easily ask for an automatic extension if you think you won't be able to file on time. But you were just being absent-minded, didn't ask for an extension and filed after the April 15th deadline, you'll owe the IRS fines and interest, which can be a big chunk of cash. 

WHAT IS THE DIFFERENCE BETWEEN AN EXEMPTION, CREDIT, AND DEDUCTION?

Exemptions and deductions work the same way. They reduce your taxable income, which lowers your tax bill. For example, if you take a $1,000 deduction, and you're in the 20% tax bracket, you could save $200 on your taxes. Or if you get a $3,800 exemption, that is about $760 less in taxes. 

The difference between exemptions and deductions lies in what you get and take them for. You can take deductions for a variety of stuff: student loan interest, charitable deductions, tax-preparation fees... that list goes on and on. But exemptions are what you get for people in your family. You get one for being you, one for a spouse, one for each child and one for any other dependents. 

Credits work differently. They're a straight-up discount on your tax bill. So if you get a $1,000 credit, you pay $1,000 less in taxes. You get credits for things like having a low income, buying a plug-in electric car and other stuff.  

SHOULD I PAY IRS PENALTIES?

If your taxes are unpaid, the IRS can hit you with more than 148 different types of penalties. The worst part is that the IRS can charge interest and additional penalties on top of the original penalty.

Penalties can make up a high percentage of the total amount owed to the IRS. Consider requesting the IRS to reduce all penalties to zero.

Often IRS penalties can be reduced to zero with reasonable cause. What defines reasonable cause? Well, in our experience of negotiating with the IRS, anything may qualify – as long as it’s reasonable.

We have found that the IRS has abated penalties for medical reasons, bad accountants, ignorance of the tax laws, ex-spouses, helping to provide care for a loved one, military call-ups, fires, floods, alcoholism, drug abuse, death and even for relying on incorrect IRS advice.

You may be pleasantly surprised. You have nothing to lose by asking, and the savings could be huge.

We will work to negotiate with the IRS on your behalf to reduce or even to eliminate these penalties.

WHAT HAPPENS IF I DON'T FILE MY TAX RETURNS ON TIME?

Many people don’t realize that the IRS charges a penalty of up to 25% just for filing your tax return late. That’s right; you will pay an additional 25% of your tax liability if you miss the deadline for filing individual tax returns. That number is even higher for late payroll tax returns.

Many people don’t know that you can file any tax return on time and avoid the 25% penalty even if you don’t send in the money that is owed on the return. We see many people who could have saved thousands of dollars in penalties if they knew this. In the future, no matter what is going on in your life, file every tax return on time, even if you only send in part of the money owed with the return.

Yes, of course, you’ll receive an ugly letter from the IRS for not sending in the money owed, but so what? You will have avoided a 25% penalty.

SHOULD I BE AFRAID OF THE IRS?

Knowing your taxpayer rights gives you power when resolving your IRS problems. Instead of feeling helpless when up against potentially overwhelming back taxes and IRS penalties, choosing to hire qualified and experienced Tax Attorney, CPA or enrolled agent is the best way to understand all of the options available to you for solving your tax troubles permanently.

We know that IRS tax problems can cause an immense amount of fear and anxiety. We take that fear and anxiety away by understanding the Internal Revenue Service rules and regulations. Our mission and passion is to provide tax help to those who feel hopeless against the IRS. Our role is to negotiate the lowest possible IRS payment amount allowable by law. Some clients have four to eleven years of unfiled tax returns. It feels insurmountable and terrifying, but your tax worries are fixable. We believe that there is a solution to every problem. We help people in financial crisis to turn their lives around, so they can plan for now and the future. If you have IRS problems, you owe it to yourself and your loved ones to get help today.

DO I HAVE TO TALK WITH THE IRS AUDITOR?

Actually, speaking with the auditor by yourself is the worse action to take.

The Taxpayer Bill of Rights allows you to be represented by a qualified practitioner who can answer your questions and provide documentation to the IRS. With the best of intentions, many taxpayers attempt to handle their own audit or even hire the person who prepared the tax return to handle everything. Usually, this decision does not work out to your advantage because most tax return preparers do not negotiate with IRS collection auditors on a daily basis. The IRS can intimidate them easily and many times this results in an unfavorable outcome for you.

CAN I BEAT THE ODDS WHEN FACING AN IRS AUDIT?

The IRS wins 80% of tax audits against taxpayers that are not represented by a qualified practitioner. Taxpayers are deemed guilty until proven innocent. The IRS can begin auditing your tax returns by disallowing every deduction made on a return until each deduction is proven to be legitimate. If the IRS has decided to audit, it’s imperative to fight back. Additionally, if you don’t file your taxes, the IRS may file them for you. And the IRS never files in your best interest.

Having representation for audits improves your chances for successful tax resolution vastly. As the American crime writer Joseph Hansen said, “He who is his own lawyer has a fool for a client.” Treat an IRS audit as seriously as you would a murder trial. Always go before the IRS with competent representation.

CAN IRS AUDITS BE RESOLVED SWIFTLY?

The best time to end an IRS audit is at the first meeting.

Whenever our firm represents clients during IRS audits, we perform a trial audit in our office before we ever meet with the IRS. This allows us to know which areas need more documentation or answers. When we meet with the IRS (Remember: you are not required to attend), we can answer the auditor’s questions quickly and accurately, provide necessary documents and get a settlement in your best interest. We always meet the IRS at their office or at ours but never at the client’s.

If you receive an IRS audit letter in the mail asking you to come in or to call for an appointment, remember that you don’t have to talk with the IRS auditor. Get representation. Call our office today.

DOES THE IRS CUT DEALS?

The IRS does make deals on taxes, including all penalties and sometimes interest. The requirements are rigid, but if you qualify, the results are incredible. To qualify for a deal with the IRS you must meet certain requirements. We can review your financial situation and tell you what you can expect.

If you meet the IRS requirements, you owe it to yourself to let us help you reduce your tax obligations as much as 85% and possibly eliminate all penalties and interest.

The IRS makes these deals in order to get you back in the system as a current taxpayer and to collect some money on the old taxes that you owe. The fine print in these deals requires you to file your tax returns and pay on time for the next 5 years. If you don’t, the IRS revokes the deal and will collect from you for the original tax amount plus applicable penalties and interest.

I’M CURRENTLY SEPARATED FROM MY SPOUSE, WHO OWNS HIS OWN BUSINESS, AND WE ARE IN THE PROCESS OF GETTING A DIVORCE. I HAVE ALWAYS FILED JOINTLY WITH MY SPOUSE AND NOW THE IRS IS SENDING ME NOTICES STATING I OWE $35,000. I HAVE NO IDEA HOW THEY ARE COMING UP WITH THIS AMOUNT AS MY SPOUSE SAID HE WAS PAYING THE IRS.

You may be able to avoid this liability entirely under the IRS’s Innocent Spouse Relief rules. Under federal law if an income tax return is signed by both husband and wife, both spouses are 100% responsible for the taxes owed. However, the law permits special consideration where a spouse cannot be held responsible for mistakes that are attributable to the other spouse.

If you meet the following criteria you may be able to apply for innocent spouse relief:  

• your spouse didn’t report all their income

• you were not aware of the omission

• and you had no reason to know about it when you signed the tax return

It would be unfair to hold you liable for the taxes owed due to your spouse’s omission. If you feel you were deceived by your spouse or tricked into signing a return you thought was correct, this will help your case too. There are many other ways you may be eligible for relief under the IRS’s innocent spouse rules. We can help sort this out and determine the proper path for resolution.

Call us today to see if we can help with your claim for innocent spouse relief. 

I DIDN’T FILE TAX RETURNS FOR SEVERAL YEARS AND I AM AFRAID TO START FILING AGAIN. WHAT SHOULD I DO?

We understand that good people sometimes get in difficult situations. However, the IRS identifies taxpayers who fail to file income tax returns as a serious threat to tax administration and the American economy. If you don’t file a tax return, the IRS will file a return for you and assess you with the tax liability. You don’t want the IRS to determine how much you owe in taxes. 

We will help you file those unfiled tax returns to your best advantage and negotiate with the IRS for the lowest tax liability allowable by law. Some clients have four to eleven years of unfiled tax returns. It feels insurmountable and terrifying, but your tax worries are fixable. We believe that there is a solution to every problem. We help people in financial crisis to turn their lives around, so they can plan for now and the future. If you have IRS problems, you owe it to yourself and your loved ones to get help today.

MY WIFE AND I FILED A JOINT TAX RETURN. HOWEVER, OUR REFUND WAS APPLIED TO HER PAST-DUE STUDENT LOAN. IS MY REFUND GONE?

You're an injured spouse if all or part of your share of a refund from a joint return was or will be applied against the separate past-due federal tax, state tax, child or spousal support, or federal non-tax debt (such as a student loan) owed by your spouse. If you're an injured spouse, you may be entitled to recoup your share of the refund. There are complicated time limits for claiming your refund so don’t wait, call our office today.  

RECENTLY, I HAVE SEEN TV COMMERCIALS AND HEARD RADIO ADS THAT DISCUSS THE IRS’ “CURRENTLY NOT COLLECTIBLE TAX PROGRAM” OR “CNC TAX PROGRAM” OR “REDUCED SETTLEMENT” OR “IRS HARDSHIP PROGRAM”, WHICH IS “AVAILABLE FOR A LIMITED TIME ONLY.” I AM CURRENTLY NOT PAYING MY PAST-DUE TAXES. AM I ELIGIBLE?

In reality, there is no such “program” and there never has been. Thus, there is no “limited time” to apply. However, the IRS can place certain delinquent tax cases in a “Currently Not Collectable” (CNC) status after its agents have determined that there is no way to collect the taxes from the delinquent taxpayer.

Be aware that CNC status is usually a temporary solution and not the “pie in the sky” of tax relief. The tax is not forgiven, the tax is not settled for less than the full amount and interest and penalties continue to accrue. And if the IRS takes away the CNC designation, the case is usually re-opened and returned to active collection status. The IRS most often takes away the CNC status if the taxpayer fails to file a tax return in the future, accrues a new tax liability or the taxpayer’s financial situation changes sufficiently to allow payments to be made against the back-tax debt. 

But there is good news! CNC status puts the IRS at bay and allows you to live your life without IRS intrusions into your bank accounts, wages and property. When combined with the expiration of the statute of limitations on collection, it is a legitimate method of resolution for your IRS tax debt.

The IRS will consider your account to be CNC if our office provides them with a complicated information statement verifying that there would be a financial hardship if the IRS forced you to pay them.

IS IT REALLY IMPORTANT THAT THE AMOUNT OF TAX WITHHELD FROM MY PAYCHECK BE CLOSE TO WHAT I OWE IN TAXES EACH YEAR?

Employees can face payroll tax issues for several different reasons. The most common reasons are usually as a result of improper income tax withholding. Often employees can incorrectly complete paperwork when hired and inadvertently not pay enough money from their paycheck for income tax withholding. When it is time to file taxes, a taxpayer may be surprised to learn that they actually owe money to the IRS. If they are unable to pay, tax debt may occur, causing problems such as bank levies, tax liens and wage garnishments that may be used by the IRS to collect back-taxes. Check out our Tax Tips section on this website to determine the proper amount of tax you should have withheld.  

OUR RESTAURANT HAS NOT BEEN PROFITABLE, AND I AM WORRIED WE ARE NOT CURRENT IN FILING OUR PAYROLL TAXES WITH THE IRS. I HAVE HEARD THERE CAN BE BIG PENALTIES. WHAT SHOULD WE DO?

Employers can find themselves in a sticky payroll tax situation for a number of reasons. Two of the most common include the failure to file payroll tax returns and the failure to pay payroll taxes. Whether it be an innocent mistake or an inability to pay because the business is not performing well, the IRS will take every step possible in order to obtain the money owed. The IRS will even begin personal collection efforts against certain managers and other employees of a company under the “Responsible Person Assessment” rule. Whatever the cause of your company’s payroll tax problem, we can help. Call us today, and let us help you reduce your tax debt.