The IRS has a way to help tax payers who get behind. This is called the Fresh Start Program. This program helps both individuals and businesses create a plan to settle their back taxes and move forward. The program can help a payer avoid tax liens and seizures that make it difficult for the payer to continue to live or conduct business.
Development of the program
The U.S. government began the Fresh Start program in 2008. Changes in 2012 make it even easier for taxpayers to settle old debts. For example, if the payer faces a period of unemployment, they might qualify for penalty waivers. Payers can also qualify for extensions without penalty. Users can take advantage of installment agreements and compromise programs. It's important to work with a team of skilled and experienced attorneys in order to help you choose the best option in your case.
If you owe back taxes, you may be able to arrangement for a payment plan. This is called an installment agreement. You can pay monthly amounts instead of worrying about the IRS trying to seize... read article
The Internal Revenue Service (IRS), can garnish an individual's wages if he or she has a tax debt that has not been settled, similar to a creditor. However, the IRS is unique from creditors because it can garnish an individual's wages before receiving a judgment. In addition, the IRS also has the power to garnish more funds than other creditors. Fortunately for taxpayers, the IRS offers several payment options for individuals wanting to avoid wage garnishment.
What Tax Obligation Options Does the IRS Offer?
After an individual files his or her taxes, they will either owe the IRS money or be issued a tax refund. For those who owe the IRS money, there are several payment options. Although it is ideal to write a check to the IRS for the full amount owed, many individuals do not have the funds to make the full payment all at once, so these individuals will need to seek out other payment options. The IRS offers the following payment options for those not able to pay the full amount at once:
Arrange... read article
Taxes are one of the major problems that many businesses run into. What can be deducted from your expenses? What happens if the Internal Revenue Service audits you? Those are just a few of the many business tax problems that people often run into. Fortunately, there are things that you can do in order to avoid problems.
Not Deducting Business-Related Expenses Properly
Start-up costs can create major problems for businesses when it is time for businesses to do their taxes. Many small business owners think that they can deduct all of their expenses from their taxes. However, you cannot do that until you make a sale. Any expense that you incur prior to making your first sale is considered a start-up cost. This includes things such as renting an office space, buying equipment or buying a computer. You can deduct these costs over the next 15 years.
You can deduct $5,000 in start-up costs during your first year of business. You can also deduct $5,000 in organizational costs. Legal fees and the cost of setting up a corporation are examples of organizational costs.
There are several ways to settle tax debt. Ignoring the problem is always a mistake. Ignoring the debt can cause penalties to rapidly increase. In addition, the interest on the tax debt is likely to increase rapidly when the debt is ignored. Here are some things that you can do if you owe money to the IRS:
1. Utilize Services Of A Tax Relief Professional
A tax relief professional can give advice that's tailored to your situation. This may help you to pay the money back in full or create a successful compromise. While this advice will cost you something, it generally pays off. Here are possible solutions that you might be able to implement either with or without the advice of a tax relief professional:
2. Installment Programs
Installment programs are the most common way to pay the IRS if you don't have the money to pay in full. Often times, installment programs allow for monthly payments that are quite reasonable.
3. Installment Program-Like Arrangements
If you aren't able to pay back the money with a traditional installment program, there is another option. Partial payment installment programs allow for smaller payments than traditional installment programs, but they... read article
Keeping money in an offshore bank account isn't a way to get out of reporting it to the IRS. Foreign banks are increasingly likely to provide information about their US clients to the IRS.
Here are some important things you need to know about having a foreign bank account:
1. All Income Must Be Reported
If you are earning money in a foreign country, it still might be taxable. This includes interest from foreign bank accounts. If you are living or working abroad, you might not have to pay US tax on money that you earned m the country that you're residing in. A foreign tax credit may be available. However, you are still obligated to report the income to the IRS.
2. You May Need A Special Form When You Report Your Foreign Bank Account(s)
Individuals who have $10,000 or more in foreign bank accounts have to report to the IRS using the FINCEN form. This form is due on a different date than other tax forms. The FINCEN form is due on April 15th. It is also necessary to report foreign bank accounts on the standard tax form.
People who have less than $10,000 in foreign bank accounts don't need the FINCEN form. Still,... read article
Do you deduct payroll taxes from the wages of your employees and set the money aside but forget to remit taxes due to a busy business schedule? Do you borrow money from your tax fund hoping to refund before the due time for submitting taxes but when the date arrives you have no money to remit taxes? If you answered yes to any of the above questions, you are not alone. These are some of the common reasons small business entrepreneurs fail to remit payroll taxes. The other reasons include a natural disaster or a change in one's depositing schedule.
A huge share of the annual revenue accumulated by the Internal Revenue Service is derived from payroll taxes. Unpaid and under-reported taxes amount to $72 billion. This is the reason there are serious consequences when businesses do not deposit payroll taxes.
According to Jim Medlock, Education Advisor for the "American Payroll Association", if business owners are unable to pay taxes on time, they should make an effort to find money from additional sources to pay taxes promptly. The penalties for failing to pay taxes can impact not only the business but also the individuals who make the... read article
When you declare bankruptcy, an automatic stay temporarily prevents the IRS from collecting your tax debts. Being bankrupt does not affect all taxes the same way. The effect of a bankruptcy declaration depends on your tax debt and whether you are declaring Chapter 7 or 13 bankruptcies. Read on to learn about an automatic stay, dischargeable taxes, non-dischargeable taxes, and your options for non-dischargeable back taxes.
What is An Automatic Stay?
An automatic stay begins when you declare that you are bankrupt. This automatic stay prevents your creditors, including IRS, from engaging in any activities of collecting from you. If a creditor wants to collect their debts after declaring that you are bankrupt, they must seek court permission to relieve them from an automatic stay so they can pursue their debt.
An automatic stay lapses when the court discharges your case, or dismisses your case without a discharge, or when the court waives the stay at the behest of your creditor.
When are Taxes Dischargeable?
There are four main conditions that need to be satisfied for taxes to be discharged. These are as follows:
The tax liability should not have any element... read article
Attorney Mary King has helped hundreds of people work with the IRS to get their taxes problems under control. For a free 15-minute consultation, fill out the form below.
Liens are used by the government to secure back tax payments, and it is common for the federal government to file liens. The government files the lien with the county where the taxpayer resides or conducts business. After this is done, the lien goes on the person's property. It applies to both real estate assets and other assets that the person owns. When an individual's property is sold with the lien in effect, some of the money from the sale goes directly to the federal government.
The lien always goes on public record. Not only can members of the public see that the lien exists, but they can also see the amount of money that the taxpayer owed to the IRS at the time the lien was filed. Credit reporting bureaus and creditors typically view this information. A federal tax lien can be quite damaging to your credit score.
Most people dream about what they would do if they won millions in a lottery but no one thinks about the applicable tax. The 2016 Powerball, which went up to $1.5 billion, generated a flurry of ticket-buying activities across the country and the issue of how much tax its winner would incur came up. Many variables influence the taxes you pay after getting lucky in a lottery.
These taxes are sources of revenue for the state that participates in a particular competition. Put simply, both federal and state laws consider lottery winnings as incomes. A lot of half-truths and misconceptions about what lottery winner owe the state can confuse you even more. However, an experienced attorney who is well-versed in tax laws can help.
Federal Taxes on Lotteries
Most people already know about the federal taxes on lottery winnings- the federal withholding tax that applies to winnings that exceed $5,000. However, you can pay more than 25% because the highest limit for the federal income tax bracket is 39.6%. Your federal income tax will also depend on how you get the payment.
For mega-jackpots like the $1.5 billion Powerball, most winners choose to get... read article
You have probably heard stories about tax indictments and convictions. It is scary to hear about those things because you may be worried about your own taxes. The IRS can be aggressive when they are pursuing income taxes. However, they are even more aggressive when it comes to collecting payroll tax.
The money that is withheld from an employee's paycheck is supposed to go straight to the IRS. If the IRS does not receive this money, then the losses will quickly add up. The money that is withheld from the paycheck is often referred to as trust money. This is money that belongs to the government. Even if the employer has a good reason for not sending this money to the IRS, they can still face serious penalties.
For example, some people use their payroll tax in order to cover business expenses. This may seem like a good way to use payroll tax because a business has to pay bills in order to stay open. However, this excuse will not be accepted by the IRS.
People can also get in trouble for paying the payroll taxes late. In some cases, the payroll... read article