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Preparing For Several Types Of IRS Audits

Getting an IRS audit can be quite frustrating. However, if you know your rights, then it will be a lot easier for you to deal with an audit. It is a good idea to get legal help for audit. In fact, you should contact a professional as soon as you get a notice saying that you have been audited. Ignoring the problem will not make it go away.

Preparing For Several Types Of IRS Audits

Before you get IRS audit help, it is important to note that there are four types of audits. You will have to prepare differently for each type of audit.

Correspondence Audits

This is an IRS audit that is less common than the other types of audits. The Internal Revenue Service will send you a letter in the mail saying that you need to send in a certain part of your return. They may ask you questions about your charitable deductions and ask you to send in your receipts. This will typically not cause any issues if you are able to send in the information that they request.

In fact, if you have a legitimate tax return and the other necessary information, then you may... read article

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Attorney Mary E. King

How To Respond To An Offer In Compromise Rejection

An Offer In Compromise is a settlement that one makes with the Internal Revenue Service. A person will make a lump sum payment that is less than what they originally owed. An Offer In Compromise can alleviate the tax burden that one is experiencing. Unfortunately, Offer In Compromise rejection is not that common. In fact, the Internal Revenue Service rejected 57.4 percent of the offer in compromise applications in 2014.

 How To Respond To An Offer In Compromise Rejection

Reasons for Offer In Compromise Rejection

- The Internal Revenue Service believes that the amount is too low, and you will need to pay more.
- You have high expenses or are living above your means.
- The Internal Revenue Service believes that you are able to pay the full amount that you owe.

It is important to remember that a rejection is not the same thing as a return. You have the right to get an Offer In Compromise apeal if your application is rejected. However, you cannot get an appeal if your application is returned. Here are some of the reasons your application may be returned:

- The Internal Revenue Service requested additional information, and... read article

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Attorney Mary E. King

5 Tips For People Who Owe Money To The IRS

Owing the IRS back taxes can make you feel like you don’t have any options. But you do have your rights as a taxpayer, there is a law adopted by the IRS called the "Taxpayer Bill of Rights." Everyone has options, especially if you act quickly. Below are some tips for people who owe back taxes to the IRS.

1. Pay in Full if Possible

If you are able to do so at all, it is always in your best interest to pay the whole amount you owe in full. This is best because it will save you from having to pay hefty penalties and interest. After penalties and interest accrues, it can be even more difficult to convince the IRS to work with you.

2. Request Penalty Relief

As a taxpayer, you have the right to give the IRS more information to help back up your claim that you owe less in taxes than they are requesting. Also, you may offer information to suggest that you should be considered for penalty relief from paying the full amount due. Some reasons people qualify for this type of relief may be due to illnesses or military... read article

How To Get Rid Of Your Tax Lien

A tax lien affects every part of your life, but what you may not have known is that it actually can negatively affect your credit. It can cause your credit score to drop by dozens or even hundreds of points. And the effects of the lien won't go away quickly.

 

Tax liens can appear on your credit report for an indefinite period. However, most credit bureaus will remove them after ten years. Once the tax lien gets paid and released, it must be removed from your credit report seven years after it got initially filed.

Not every taxpayer that has a tax lien knows about it. The Notice of Federal Tax Lien, or NFTL for short, is a tool that the IRS uses to tell your creditors that you owe a tax debt. If you're not able to pay your tax debt, the IRS may file an NTFL. If you owe more than $10,000, the filing of the NTFL will be automatic.

When the NTFL gets filed, the credit reporting agencies will pick it up. Models of credit scoring don't like tax liens, and the effect on your credit scores can be similar to bankruptcy,... read article

What To Do With Your Foreign Bank Account

For many years, many Americans used foreign bank accounts to hide money from the IRS without fear. In an effort to crack down on this problem and ensure that American citizens pay all required taxes on their income, the IRS has recently begun suing various foreign banks and basically attempting to eliminate the offshore banking secrecy protections that have long been in place.

These efforts have led to dramatic changes that affect all Americans with bank accounts in foreign countries. Whereas your money may have been safely hidden in years past, the IRS now requires all foreign banks to provide reports on all American-owned accounts. Furthermore, it is now considered a crime to fail to report any foreign accounts and foreign income. Almost all foreign banks are now cooperating with the IRS and automatically turning over all information about American-owned bank accounts.
What to Do If You Have a Foreign Bank Account?
 

The legal actions the IRS has taken against numerous foreign banks have completely eroded most banking privacy rules, which means that anyone who has not reported should be worried. This not only includes those with personal offshore accounts, but also any company-held accounts... read article

Who Is Responsible For Unpaid Payroll Taxes

Employers based in the United States are required by law to deduct payroll taxes. But did you know that there are situations where the person, not the business, can be held legally accountable? When faced with a payroll tax problem, the IRS will conduct two tests to determine whether the business or an individual should be held liable, they include the Responsible Person test and the Willful Failure test.

 
Responsible Person Test
 

A Responsible Person is broadly defined as a person who is legally obliged to make a tax payment. There are a few criteria used to render this judgment. If an individual has the capacity to allocate funds, she will be thought to be responsible. Similarly, the authority to sign checks is another indicator. A Responsible Person can be broadly defined as anybody who has authority over a company's finances. It can also include employees with hiring and firing power.

Further, sometimes even former employees can be Responsible Persons. It depends on whether the former employees have retained their financial authority in the company. Although, one caveat is that employees who are not owners and not exercising autonomous judgment are not Responsible Persons. Despite... read article

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Attorney Mary E. King

5 Ways To Stop The IRS From Garnishing Your Wages

If you're having trouble paying your taxes, you may be afraid that the IRS may garnish your wages. You're not alone. Countless others face the same problem. But there are things you can do to either prevent the IRS from garnishing your wages, or stop the garnishment if it's already happening to you.

 
Pay Off Your Back Taxes Immediately
 

The easiest way to stop the IRS from garnishing your wages is to make sure all of your taxes are fully paid as well as any interest or penalties that may have accrued because of late payments. Obviously this option may not work for everyone, but if you have the means, this is the best course of action.

 
Look For Missed Credits or Deductions
 

Another option is to have a tax professional comb through your tax records to see if any credits or deductions were overlooked. Yes it will cost money to have a skilled professional look at your records, however the money you pay could well be worth it. If you owe a lot of money and a big deduction or credit can be found, this option could reduce a great deal of your total tax... read article

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Attorney Mary E. King

Trust Fund Recovery Penalty A Serious Issue That Warrants An Attorney's Expertise

Most business owners know that they are responsible for ensuring that the payroll taxes for themselves and their employees get paid to the Internal Revenue Service (IRS). Something many people don't realize is that, unlike other corporate taxes, owners can be held personally liable if those taxes go unpaid. Furthermore, employees, officers and even shareholders of companies can be penalized for unpaid payroll taxes under certain circumstances.

Payroll Tax Problems Pensive businessman calculates taxes at desk in office

It is important to understand that payroll tax debt is very different than other types of corporate debt. In most cases, individuals are protected from personal liability for business debts, even those for a business they own. However, federal law places a personal responsibility for ensuring that payroll taxes are paid on any individual who they can reasonably assume has the authority and ability to make sure the taxes are paid on a timely basis. This could mean officers and employees of the company, as well as possibly shareholders and even third parties, such as an outside accountant.

Unlike other types of taxes, payroll taxes - including FICA. Medicare and withheld income... read article

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Attorney Mary E. King

Can You Really Negotiate With The IRS For Reduced Payroll Tax Debt?

Businesses with employees are required by law to make payroll tax payments to the Internal Revenue Service in a timely manner. Payroll tax withheld by an employer, to be paid to the IRS, is also known as trust fund tax. In reality, the employer holds the money in trust for its employees.

Negotiate With The IRS

The IRS reports that there are an estimated 2 million businesses that owe over $50 billion in unpaid payroll taxes. The IRS is aggressive in seeking payment of past-due payroll taxes.

A business facing an issue involving past due payroll taxes needs to understand what options are available to effectively address the issue. Possible strategies include retaining experienced legal counsel to negotiate with the IRS and attempt to arrange an offer in compromise to deal with the payroll tax debt.

IRS Enforcement Test

The IRS utilizes a test to determine a business's liability for payroll taxes. First, the business must be responsible for collecting and paying payroll taxes to the IRS. Second, the business must have willfully failed to properly collect and pay payroll taxes to the IRS.

Penalties for Nonpayment of Payroll Taxes

The IRS has stiff penalties for failing to pay... read article

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Attorney Mary E. King

Is The IRS Fresh Start Program For Real?

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.

Is The IRS Fresh Start Program For Real?

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.

Installment agreement

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

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Attorney Mary E. King

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