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As much as we try to avoid dealing with the IRS, it may not always be possible. This section gives us a better idea of what the IRS is looking for and tells you how to avoid being on their radar. You will also find tips on what to do if you receive a letter from them. If you have been contacted by the IRS and require further assistance, please call our office for an appointment.

By using the “Where’s My Refund” tool on the IRS website, Taxpayers can check on the status of their federal income tax refunds seven days after they e-filed their return. If they file a paper return, they can check four to six weeks after mailing their return.“Where’s My Refund” is easy to use and is the fastest way to check on a refund. Even taxpayers who file Form 1040EZ-T just to claim the telephone excise tax refund can utilize “Where’s My ...

It’s a moment many taxpayers dread. A letter arrives from the IRS and it’s not a refund check. But don’t panic; many of these letters can be dealt with simply and painlessly.Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers speci...

During Fiscal Year (FY) 2010, the IRS processed 230 million Federal tax returns and supplemental documents and collected $2.3 trillion in gross taxes. After accounting for 122.2 million refunds, totaling $467.3 billion, collections (net of refunds) totaled $1.8 trillion. During FY 2010, there were more than 141.1 million individual income tax returns filed, accounting for 61.3 percent of all returns filed. Individual income tax withheld and tax payments, combined, totaled almost $1.2 trillion...

Payments that you receive from your IRA or qualified retirement plan before you reach age 59½ are normally called ‘early’ or ‘premature’ distributions. These funds are subject to an additional 10 percent tax and must be reported to the IRS. There are a number of exceptions to the age 59½ rule if you make an early withdrawal. Some exceptions apply only to IRAs, some only to qualified retirement plans, and some to both. In addition to the 10 percent tax on ...

As hard as you and your tax return preparer may try to file a complete and accurate tax return by the due date, circumstances such as the following may work against your efforts: Investment firms frequently send out corrected 1099 forms and annual statements. Some 1099s arrive after the filing due date. You may have rolled over an IRA account or sold a stock at a loss and forgot to have it reported on your tax return. A significant deduction may have been overlooked, which is easy t...

Are you doing your spring cleaning and wondering if you can throw out some of those old tax records? If you are like most taxpayers, you have records from years ago that you are afraid to throw away. It would be helpful to understand why you keep the records in the first place. Generally, we keep “tax” records for two basic reasons: (1) we need to keep the records in case the IRS or a state agency decides to question the information reported on our tax returns, and (2) we need to keep track ...

To make sure the notice is a CP-2000, look on page one on the upper right-hand corner. It will be identified with the symbol CP-2000. If it is some other type of notice, a different type of action will be required. The notice informs you of the proposed changes to income, payments, credits or deductions and the amount due to the IRS (or possibly a refund due to you). It is normally a five- to six-page letter. The size of the notice varies according to the number of issues identified in your n...

The IRS may be auditing fewer returns but they are getting smarter about choosing those they do audit. Their goal, of course, is to focus scrutiny on the most "audit worthy" returns-those with potential for big adjustments. As taxpayers, all of us would like to avoid an audit. But how does one avoid being "chosen"? While there's no sure way, experts do offer advice on what to look for to help cut audit risk.Are deductible expenses out of line with income? When a return goes through the IRS co...

An IRS tax audit can come in a number of forms. The most demanding are the face-to-face audits, which require sitting down with an auditor and reconciling income and deductions. Others are the less demanding correspondence audits where the IRS has reason to believe that the taxpayer failed to include reported income or has overstated deductions. Correspondence Audits– Employers, banks, lending institutions, schools, brokerage firms, escrow companies and others all feed data to the IRS, which ...

Correspondence from the IRS has a tendency to escalate a taxpayer’s pulse rate. However, most of the communication received is not the feared “come on down” letter that requests an appearance for a face-to-face audit, but instead may only require a written explanation. Generally, all types of income (wages, interest, dividends, etc.) are reported by the payer to the IRS, who in turn, matches the reported income to the recipient’s tax return based on Social Security number (SSN). Over the pas...

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt. If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. For instance, the IRS could: Seize and sell property that you hold (such as your car, boat or house)...

What is a non-filer? “Non-filer” is the term used in the tax industry for someone who has failed to file the required tax returns for one or more years. Whether you are simply a procrastinator, owe money and can’t pay, have marital problems or for whatever reason did not file, it is important for you to know that there are ways to remedy the situation. Not filing on time can lead to a variety of problems, least of which is not sleeping at night. Don’t listen to those ...

The U.S. tax system is built on the premise that all taxpayers are expected to report their tax liabilities accurately and pay them on time. However, the Internal Revenue Code gives the IRS the authority to “compromise” (i.e., settle based on a taxpayer’s adverse economic circumstances) a tax liability for less than its stated amount.Do you qualify for an offer-in-compromise? Generally, if you can pay your tax liability in full, even if it takes a few years, you won’t ...

When married taxpayers file jointly, they become “jointly and individually” responsible (often referred to as “jointly and severally liable”) for the tax and interest or penalty due on their returns. This is true even if they later separate or divorce. Joint filers remain “jointly and severally liable” even if a divorce decree states that a former spouse is responsible for any amounts due on previously filed joint returns. The IRS will use all means to collect the tax from either or both of ...

So what happens if you can’t pay your tax liability?   For taxpayers who cannot pay all their taxes at once, there is the installment agreement option. IRS Form 9465 is used to request a monthly installment plan. Generally, you can have up to 72 months to pay off the liability. Depending upon how much you owe, the IRS may investigate your ability to pay before granting an installment agreement. To be eligible for an installment agreement, you must first file all returns that are required and ...