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Different Types Of IRS Audits Require Different Preparation

Dealing with IRS audits and all of the baggage that comes with them is an exceedingly difficult task for practically anyone, especially since there are many different types of IRS audits. Each of these audit types require different preparation techniques. Through different settlement programs and legal defense angles, your IRS debt issues can be properly addressed and successfully closed. Here is a closer look at how different types of IRS audits require different preparation.

Field Audit

When you are faced with an audit, it's important that you're well prepared. A field audit may just be the most daunting of the many types. The reason for this is that the IRS will visit you at your office or home. It's important to note that the audit isn't limited to a certain amount or type of items. While these types of audits are rarer than the others, they occur because the IRS is specifically looking for something and are practically certain that they will find it. Legal representation is essential when preparing for a field audit.

Audit Through Correspondence

A correspondence audit... read article

Mary King
Attorney Mary King

How To Stop An IRS Tax Levy

An Internal Revenue Service (IRS) notice of intent to levy is a last-resort collection method to shock and scare delinquent taxpayers into paying overdue taxes, but if they cooperate, even if they can't pay, they can stop a levy from going into effect and sometimes even reduce the arrearages or at least make tolerable arrangements to pay them over time.

how business prep for tax time

Pre-Levy IRS Procedure

The Fifth Amendment of the Constitution prohibits the IRS from taking taxpayer property without due process of law. To comply with this prohibition, the IRS must notify the taxpayer of the impending levy and grant an opportunity to be heard about it. The IRS must send the taxpayer a notice "given in person, left at the dwelling or usual place of business of such [taxpayer], or sent by certified or registered mail not less than 30 days before the day of the first levy." [i]

The notice must include "in simple and nontechnical terms the right of the [taxpayer]... read article

Mary King
Attorney Mary King

Mistakes On Tax Returns Can Be Costly - Here Are A Few To Avoid

The holiday season is over, and many people are starting to think about taxes. With the annual changes in tax law, it is easy to feel intimidated and procrastinate to the point of being rushed, which makes it more likely that mistakes will occur. According to the Internal Revenue Service (IRS), the following errors are the most common.

Misspelled Names
While most people do not misspell their own names, they do misspell the names of wives, husbands and other dependents. A good rule of thumb is to use names exactly as they appear on Social Security cards. If the Social Security information is wrong, it should be corrected as soon as possible.

Incorrect or Missing Social Security Numbers
This error usually occurs because of fast typing or inattention to detail. All numbers should be double checked before filing the return.

Wrong Filing Status
The IRS provides five distinct filing statuses, and it is vital to choose the correct one. They are Single, Married Filing Separately, Married Filing Jointly, Head of Household and Qualifying Widow or Widower With Dependent Child. Every taxpayer must choose a filing status that matches the current life situation. Under state law, if a person is married on December 31 of the tax... read article

Mary King
Attorney Mary King

Tax Deductions For Business Gifts - Limits And Guidelines

The tax code is clear - there is a cap on how much you can deduct per business gift. Right now the maximum allowance for any single business gift is $25 per recipient.

Obviously, many business gifts or multiple gifts to any single client or business partner might exceed that amount, but right now the IRS only permits a maximum of $25 tax deduction for any given recipient. Furthermore, the IRS regulations stress that this $25 cap is per individual, not the gift themselves. Therefore if you reward a faithful customer with three business gifts over the course of a year for a total of $75, you are only permitted a single $25 deduction because all of the gifts went to the same individual.

That being said, if you bought those same three gifts but bestowed them on three different people, you could write off the entire amount as a tax deduction. And, since completing deduction paperwork for your tax forms requires a lot of due diligence, it is critical to be as accurate as possible, which is why incidental costs are so relevant.

What Are Incidental Costs?

The IRS regulations stipulate that the $25 cap on gifts for a single individual does NOT... read article

Mary King
Attorney Mary King

Getting Through To The IRS In Next To Impossible For Taxpayers

If you've ever tried to contact the IRS by phone, and had an incredibly difficult time reaching a human being, it's not just you. Just recently, IRS Commissioner John Koskinen admitted in a public speech that his agency is deliberately ignoring at least 60% of phone calls. Citing a lack of resources, Commissioner Koskinen called on Congress to fork over more of the taxpayers' money in order to be able to answer telephone calls from those same taxpayers.

In his speech given at the National Press Club, Commissioner Koskinen complained that his customer service staff were overwhelmed, and unable to answer the majority of phone calls that they receive. The commissioner claimed that if Congress increases the IRS' budget, they will be able to collect an additional $2 billion in compliance revenue.

Unfortunately for Mr. Koskinen, a recent report from the House Ways and Means Committee revealed that the IRS is misusing its resources, preferring to pay out bonuses to employee and fund parties instead of diverting staff to answering customer phone calls.

The Congressional report emphasized that even Commissioner Koskinen had recognized that the IRS was providing 'abysmal' customer service. But a close review of the IRS budget revealed that the IRS... read article

Mary King
Attorney Mary King

Tax Deductions For Business Gifts

Tis the season and in many areas of the business world, it is common to buy gifts for customers and business associates. This is just one way to maintain good working relationships, increase professional networking, open doors for opportunities as well as thanking someone for a job well done. There is also an another good reason to purchase such gifts. All or, at least part, of the costs associated with purchasing business gifts, may be deducted from your taxes. There are IRS rules that must be followed.

holiday gift tax deductions

IRS Gift Definition

The IRS defines a gift as any transfer of an item to a person either directly or indirectly. This transfer does not have to have full consideration returned. Consideration is money or the value of an item in terms of money.

Gift Costs

This is like many other types of tax deductions; the IRS places a limit on just how much can be deducted when money is spent to purchase gifts associated with doing business. The IRS limitation is $25 per recipient per year at this time. A business is able to spend as much as it feels necessary... read article

Mary King
Attorney Mary King

How Businesses Should Get Ready For Tax Time

Preparing for taxes is not a business owner's favorite activity, but the right approach can make the experience flow more smoothly. Those who are new to the business world may find tax preparation intimidating, and the following suggestions will help.

how business prep for tax time

Period of Accounting
The majority of businesses use the standard calendar year of January 1 to December 31 to report expenses and income. If a different fiscal year is required, the business should submit form 8716 to the Internal Revenue Service (IRS)to request a different filing schedule.

Accounting Method
Businesses track finances either by accrual or cash. The accrual method records expenses and income as they occur with the payment being received at a later time. With the cash approach, expenses and income are recorded when they are actually paid. While either way is fine, a business with inventory will need to use the accrual system. The accrual method shows the larger financial picture, while the cash method shows only how much money a business has.

Expense Records
For a business to take advantage of deductions, accurate and detailed expense records need... read article

Mary King
Attorney Mary King

Top Reasons People Get Audited

Nobody wants to get in trouble with the IRS, but there is help available for people who are dealing with fines and penalties. While it may be possible to reduce you overall tax bill and arrive at a reduced settlement, it is far better to avoid the audit and fines to begin with. The first step in avoiding an audit is learning what the IRS looks for and what activities can trigger an audit.

irs audit preparation

Forgetting to Claim Income
It is not just up to you to report your income. Employers are required to report the earnings of independent contractors and their employees. Additionally, people may also claim payments made to you if they’re tax deductible. In addition to reporting income, you must also report dividends, interest income, and other earnings. Failure to do so will result in penalties, fines, and possibly an audit.

Excessive or Creative Business Expenses
There is a bit of leeway when it comes to business expenses, but you should take care with every deduction. Occupational codes are routinely used to determine what’s normal and what may be excessive. If your expenses are not in line with your industry,... read article

Mary King
Attorney Mary King

Why Should I Hire An Attorney For Tax Debt Problems?

If you owe tax debt to the IRS, then you most certainly should contact an attorney to help you. Tax law is extremely complex, and it is hard for a person without experience in tax law to understand the best way to get themselves out of debt in the cheapest and fastest way possible. An attorney can guide you through this process, saving you time, money, and stress.

Attorney Client Privilege

The first thing to know is that tax lawyers are different from tax accountants because of confidentiality. Like other lawyers, tax lawyers and their clients have protected communication and total confidentiality. If you tell an accountant about a tax strategy you used that turned out to violate part of the US tax code, that accountant could be called to testify against you in court. On the other hand, you are completely safe sharing everything with a lawyer- they can never be asked to testify against you.

Next, you gain the right to power of attorney representation with a lawyer. Representation here means that the lawyer can stand in for you in many situations, such as during meetings and answering letters. Because they are experienced in the process of tax law and tax... read article

Mary King
Attorney Mary King

Real IRS Debt Settlement Programs For Tax Payers

Overview

solve tab debt problemsAnytime a person owes money to the IRS, this debt can be a huge drain on their life. There are many different ways in which the IRS can come after a person who owes them money. Although we should all pay our taxes, there are times in life when situations dictate our lives. There are many examples of people over the years who have wanted to pay their taxes but simply could not for various reasons. It is vital to work with an attorney that has your best interests in mind in this situation. Unlike the scam filled TV attorneys, our law firm actually has experience helping residents of Florida resolve their tax debt. If you are in a situation where you owe the IRS money, it is vital to get some professional legal advice.

Why Hire An Attorney?

IRS debt is different from typical debt that a person owes. The IRS has a lot of power to make a person's life difficult when tax debt is owed. For example, a person can have their wages garnished at work until the ... read article

Mary King
Attorney Mary King

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