3 things gay couples must know before signing a joint return

3 things gay couples must know before signing a joint return

Gay marraige and amended tax returns

Gay marraige and amended tax returns 
Is the IRS trying to mislead gay couples on what refunds they may be entitled to?

Does the IRS always follow its own Offer in Compromise rules?

Does the IRS always follow its own Offer in Compromise rules?

OVDP 2013 Updates

OVDP 2013 Updates

Tax Audit Defense

Tax Audit Defense

Tax Audit Defense

Tax Audit Defense

Seriously. People died for the Bill of Rights. Kind of crappy not to exercise your rights guaranteed there under, eh?

IRS Installment Agreement and Payment Plans - Is it an Ideal Solution to Wage Garnishment?

A wage garnishment, unlike other type of levies can have serious impact on your financial wellbeing. The Internal Revenue Service takes away a major part of your salary and will leave only very few hundred dollars for your expenditures. The exact money you're going to get will depend upon on your claims for exemptions on W-4, the state you reside in and few other things. So regardless of your salary, you're going to get not even one- third of it. During these times, many taxpayers will agree to IRS installment agreement to stop the levy. In this article, we will explain whether or not the installment agreement is the best solution to solve an IRS garnishment. 

Now your wage is levied and you immediately contact the IRS and ask them the best way to eliminate it. The first question they will ask is whether you can settle all of the dues in a single shot. If not, the IRS will come up with an installment agreement where the exact amount will depend on certain factors. For that, be prepared to provide detailed financial information of yours by completing a form 433-A or 433-F.

Forms 433-A,433-B, and 433-F provides the IRS the list of your earnings that will be used to determine your monthly installment. Your average income and living expenses, bank accounts, property you own and other financial obligations have to be entered on this form. Using this information, the IRS will compare your earnings with your monthly expenditures to figure out a monthly payment plan that will work in your situation. 

According to IRS manual, only certain expenses are allowed to claim. As an example, consider your monthly bill comes around $2000. But IRS will estimate based on their stipulated guidelines such as the place you live, average rental cost in your state and so on. They will come to you and say that your expenditures can only be around $1200. The IRS will further say that you have the ability to pay $800 a month. They don’t care whether you have the money to pay for or afford the estimated amount every month. If you tell the IRS that that you will be evicted if you don’t pay the full rent of $1000 a month, the IRS will simply say, “move to a cheaper place ". 

You will have to find a way to make the IRS accept a higher allowed expense in order to meet your basic needs. If it can be proven that there is a need for specific kind of housing, the IRS will accept the number that is beyond the allowable limit. But this is quite difficult and it is best handled by a tax lawyer with expertise with negotiating with the IRS.

Suppose if you use part of your house for running your business, you can claim for extra expenditures since you require a much larger house for your needs. If you have special needs for mobility friendly homes and if you can’t find a home with all the needed facilities at a cost fixed by the IRS, then additional expenses are allowed to claim.

However you cannot claim for higher expenses when the IRS thinks that it is not required. Suppose you happen to be living in a house which costs multi- million dollars and for that you're paying out monthly mortgage of $10,000. Here, IRS can't sanction for an extra $7200. They want to remove the mortgage payment from your monthly bill by asking you to move to a cheaper house. IRS gives time (around one year) to find an appropriate home which will also save you from foreclosures and thereby avoiding the negative impact on your credit history.

Bear in mind, there is always a limit on the permitted expenses. But under certain situations, it's possible to request for higher allowance to maintain the minimum standard of living. Some of the expenses that you may claim for include health care expenditures, kid’s education, any secured loan, other tax commitments such as the state property taxes and transportation costs.

You will be responsible in figuring out the basis expenses and showing it correctly to the IRS, if not don’t get surprised to see an unaffordable repayment plan from the IRS. When this occurs, the taxpayer will certainly be pushed into distressing situations. Either they no longer can make monthly payment for installment agreement or else they will start to default taxes for the current year. During these situations, the installment agreement will be terminated and IRS will begin garnishing wages again.

To protect yourself from this entire nightmare, it is best to get educated. If you want to stop the garnishment successfully, you need to follow a 7 step plan. Just click here to learn how to safeguard yourself from IRS wage garnishments and find a permanent way out of an IRS tax problem.

3 things to do before calling the IRS taxpayer advocate

3 things to do before calling the IRS taxpayer advocate

What You Might Not Know About Your IRS Revenue Officer

Section 5.1 of the Internal Revenue Manual (IRM) lays out the procedural guidelines Revenue Officers has to follow when assign a case for collection. But even if you read the entire IRM, you aren't going to learn about the 4 dangerous types of Revenue Officer who work in the IRS tax collection section. Don't worry, the following paragraphs is going to uncover about them. Keep reading.

The IRS main goal is always to collect highest amount of taxes from you with minimum effort. We heard a story that during IRS recruitment, they'll make the job applicants to take a basic humanity test. People who flunk are hired for the collection office. This may be a rumor but one thing is real- IRS Revenue Officers are the most difficult individual one will ever encounter in their life. If you do not get any legal assistance while confronting the officers, the final outcomes become generally disastrous. To make things even worse, these four dangerous types of Revenue Officers can levy unfairly or create new difficulties for you.

1. When newbie look to impress management
These new Revenue Officers could be looking to get into the Criminal Investigation Division (CID), or may believe the ultimate way to become a group manager (120k + per year is the standard) is by making themselves to be tough. Any problems with IRS senior management will only affect the tax payers since they are the ones normally targeted to draw out their aggressiveness.

2. Facing the anger of group manager
It's difficult to sack a Revenue Officer. Their job is guaranteed right up until they retire. So they don’t care to do their every day duties. They seldom give reply to messages and they don’t review files. They simply send out tax levy notices and go for a vacation without worrying about the follow up actions they have to carry out. This puts their group manager in a mess. Revenue Officials are appointed permanently and the manager cannot terminate them except only if do some serious criminal offense. Therefore the group manager’s wrath at times will get directed towards taxpayer and ultimately he is going to be affected it.

3. Entire team acting together
The Revenue Officers sometimes will put the previous events aside but there are also times where he/ she will not let it go. And there will be times where the whole team (Revenue Official, group and territory manager) might work against you.

4. Revenue Officials competing for GS-13 grades
The GS-13 is the top most position a Revenue Officer could get. Plus there is only fifty GS-13 posts available in the United States. These individuals know everything about finances and can deal with any complicated cases. They very well know about all the methods which people use to deceive the IRS and for lowering tax liability. For example, if properties and assets are hidden, dissipated or transferred to third person, it is considered as collection at risk. Here, this top level officer can issue jeopardy levy or jeopardy assessment to the taxpayer. This happens when the IRS thinks your measures can put tax collection at risk. This is called jeopardy as they don’t need to issue any prior warning and the IRS can lawfully seize your property.

If you have a GS-13 assigned to your case - you should stop messing around. It is going to get really bad for you (well if you don’t plan on living long this won't pertain to you). Pyramiding taxes is a major compliance problem, so you have to stop doing it immediately and further you should try to settle tax liabilities as early as possible.

Right to Due Process
Every tax payer of America is protected under United States constitution where it ensures due process rights for them prior to when the tax department takes any law suit. Sadly, many people waste these privileges by not acting in time. There are many 'nice guys' working as Revenue Officer, however they work for the federal government. They never going to provide or share strategies which will help you but not the government. That is why you should not wait in taking immediate action if the case is handled by a Revenue Officer. It is imperative that you call for assistance today to protect all your legal rights.

Penalty for not filing FBAR the ulitimate consequence

My feeling is there is a much better chance that one could go to prison for an unfiled FBAR than die in a plane crash. But that is more of a testament to modern-day Airline Transport safety than there being a huge risk of imprisonment for not filing an FBAR.

This is my thinking: My guess is that there are about 1.5 million US persons with FBAR obligations (most of those Ex-pats) , with only a small fraction of those who used the "proper" channels of OVDI. So how many of the rest can the "Justice" Department imprison? My guess, as at most, 300 over the next 10 years. And those will likely be pleas down from much more serious charges, not just naked FBAR/tax evasion charges (This is not to say they won't get a handful of show cases)

What do you think about these numbers? Will the US Bureau of Prisons be building huge new complexes to house all these new FBAR criminals? Or will the number incarcerated for tax/BSA prisoners stay about the same, with the IRS just using FBAR violations to get more money?  

Penalty for not filing FBAR the ulitimate consequence

IRS tax attorney or IRS taxpayer advocate service

IRS tax attorney or IRS taxpayer advocate service

Unaffordable IRS installment agreement payments

Unaffordable IRS installment agreement payments

IRS child support garnishment

IRS child support garnishment

Federal tax lien priority over mortgage

Federal tax lien priority over mortgage

What to do when you receive a letter from the IRS

What to do when you receive a letter from the IRS

How does a Federal Tax Lien affect your credit score

How does a Federal Tax Lien affect your credit score

The Senate wants your passport if you owe 50k + to IRS.

Isn't this lovely? 

IRS debt passport

The Simplest Way to Avoid IRS Tax Lien

The IRS is one thing that leaves fear among the hearts of everyone. In case you are targeted by them in any way, it could be a stress filled event that has the potential to be very dangerous. The IRS can file a tax lien for several reasons and lots of individuals are wondering what they can do to prevent them. If you get an understanding of the reasons, IRS people can never come to one’s life.  What exactly are the reasons that make IRS to file a tax lien?

Before going to the reasons, first an individual must understand what a tax lien is. A federal tax lien is the government legal claim against any of your property when you fail to pay the required taxes. The IRS files an open public document to tell the entire world about your unsettled taxes and these data is going to be available at the county recorder office. Once the Notice of Federal tax lien is recorded against you, lots of junk e-mails gets to you from the tax resolution agencies guaranteeing to assist you from the tax lien. A tax lien not only affects your credit history but also your track record. So start taking steps promptly to stop facing this unpleasant situation. 

The very first thing you should watch for is Notice of Intent to Levy mail from the Internal Revenue Service. They will file the tax lien only right after mailing this CP 504 notice. There is a one month waiting period after the letter been dispatched, so the moment received, it is advisable to make quick response to the federal agency. Or else huge problems awaits for the person. IRS sends the letter to the last acknowledged address plus they do not worry about whether it gets to you or not. Also keep in mind that in some instances, the IRS can document a tax lien without the need of mailing the letter of intent notice.

Paying your tax debts in whole is the simplest way to avoid the IRS from filing tax lien against you. A tax lien is usually considered as major derogatory item and it can impact your credit history considerably. All the three main credit rating firms will add tax lien on their consumer credit reports. A lien can restrict the usage of or encumber property when the debts are not cleared. If you don’t want to encounter situation like this, always keep tab on IRS mails and if you receive notice, take fast steps by paying all your tax debts completely.

IRS tax lien is a critical matter which shouldn't be taken lightly. IRS will never hesitate to use every tactic in their book that makes one to repay the taxes. Incase if you receive the notice, get in touch with the IRS immediately to find out more about the options available to you. The process for preventing a tax lien is a lot easy than finding the steps to deal with it later. Pay off your tax debts on time which forbids the IRS coming in one's life. Though terrifying to deal with them, a few simple steps can shield you from the actions of the IRS.

FBAR penalties on life insurance policies

IRS FBAR penalties on foreign life insurance policies.

Our intern Andrew Fengdoes a nice job of explaining what types of policies have problems.