As we continue to endure the health and financial ravages of the corona virus, unfortunately more bad news is likely on the horizon.
Currently, there are 15 million taxpayers in IRS collections. IRS estimates that 7 million taxpayers are not filing their tax returns. Many tax professionals are predicting that another 1 to 2 million taxpayers may fail to file their tax returns due to the pandemic financial crisis and the closing of their businesses and loss of employment.
But, you don’t need to be a victim. Ignoring one’s tax problem usually results in the problem only getting worse. With failure to file penalties assessed at a rate of 5% a month, over the penalty period of 5 months that is an additional 25% of penalties on top of the taxes due. Then there is interest being assessed on the underpayment of tax and on the penalties assessed. It is not unusual that the total interest and penalties assessed are 60% to 70% of the total taxes due.
Mistake #1: Procrastinate. Put off until tomorrow what you can do today. Let those penalties and interest accrue, substantially increasing your total IRS tax debt.
Mistake #12: Ignore those IRS letters and notices. The IRS sends numerous letters and notices to taxpayers allowing them certain taxpayer rights to address their assessments and set up a payment plan. Many taxpayers ignore those notices until the IRS begins to levy wages, social security benefits, bank accounts and confiscate assets.
When the taxpayer finally realizes that the situation can no longer be ignored, certain appeal rights may have been missed and the process to get the taxpayer into compliance becomes more complex.
Tax Planning Tip #1
Call a tax professional who specializes in solving IRS tax problems. Better yet, call several firms.
While your tax professional may be an excellent tax preparer, very few tax professionals specialize in solving IRS tax problems. You want the very best handling your tax debt problem, not someone who does it part-time.
When you make those calls, listen very carefully to what they share with you and take notes. Are you speaking with the person who will resolve your problems, or are you speaking with a sales person? What are their credentials and experience? Check their website for testimonials and reviews. Check with the Better Business Bureau. Check if they are in good standing with the IRS if an Enrolled Agent, local bar association if an attorney, and the State Board of Accountancy if a CPA.
Tax Planning Tip #2
Understand the process as to how the tax professional will solve your tax problem.
Our process is quite simple.
- We offer a free telephone consultation to understand your situation.
- We provide you with a fixed fee retainer arrangement and a letter of understanding as to what services we will provide to you.
- We pull your IRS transcripts using a POA (IRS Form 2848) to learn everything about you from an IRS perspective.
- Any unfiled tax returns are prepared and filed.
- We provide you with an analysis of the alternatives available to you to solve your IRS tax debts.
For real estate professionals with IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.
Bryan Haarlander, an Enrolled Agent and a Certified Tax Resolution Specialist, is an affiliate member of the Suburban West Realtors® Association, a member of the American Society of Tax Problem Solvers (ASTPS), PA Society of Tax & Accounting Professionals (PSTAP), the National Society of Accountants (NSA) and the National Association of Tax Professionals (NATP). He is the author of “How to Resolve Your IRS Tax Debt Problems” as well as a book on How to Empower Your Business to Reach Its Full Potential. He has been practicing in Exton for 19 years.
His blogs . . . http://www.taxexpertblog.com and http://www.stopmytaxproblems.com discuss pertinent tax and business issues.
By visiting our website you can learn about the 5 Secrets the IRS Doesn’t Share and order a FREE SPECIAL REPORT: Should You Represent Yourself or Hire a Tax Professional.
Keystone Financial Solutions, Inc. specializes in providing innovative tax planning, tax preparation, and solving IRS tax debt problems. The company’s web site is https://www.keysolutions.us and its telephone number is (610) 594-2601.
If you have any IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.
Disclaimer: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information. Should you wish to engage our firm to represent you, please call us at (610) 594-2601.
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