florida: The Non-filer Gotcha - 11/12/19 02:22 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. One of the common mistakes that non-filers make is to reason that because they had income tax withholding that probably exceeded their liability, they are immune from the IRS actions. Huge mistake that can cost thousands of dollars.
 There is a statute of limitations of when you can claim a refund of taxes. Any claims must be filed at the later of either:
         Three years from the date that the tax return was filed, or          Two years from the date that the payment was recorded on … (0 comments)

florida: Offers-in-Compromise and Tax Compliance Requirements - 11/10/19 05:10 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. An Offer-in-Compromise can be a great technique for clearing an IRS debt for less than the total due. But many times, these offers are rejected by the IRS because the taxpayer is not currently in “Tax Compliance.”
What does the IRS consider to be Tax Compliance? It’s two basic factors:
      Has the taxpayer filled all their required tax returns for the last 6 years, and       Is the taxpayer up to date with his or her current year tax payments, Producing an Offer-in-Compromise can have a … (0 comments)

florida: The Second Worst Business Mistake You Can Make - 11/02/19 01:34 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. See this post about the absolute worst business mistake. But what is the second worst mistake you can make that often leads to the worst mistake? The answer is misclassifying employees as contractors. If the IRS determines that you have done this evil deed, the resulting taxes and penalties can easily put you out of business.
What makes it so expensive? The IRS is going to calculate the taxes due for each if the three open tax years by taking the total wages for each year and … (1 comments)

florida: Discharging Taxes through Bankruptcy - 10/26/19 02:28 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. One option to consider when trying to figure out a plan to get the IRS out of your life is to file bankruptcy. Bankruptcy is a complicated subject that requires an attorney who specializes in that area of the law. This is not a DIY project and this post is only meant to inform you about the general rules regarding which taxes might be dischargeable.
Some taxes, interest, and penalties might be dischargeable if all the following apply:
         The tax return was due (including extensions) more … (1 comments)

florida: The IRS Private Collection Agency Program - 10/26/19 09:19 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS has begun using private collection agencies to help collect tax debts. Initial reports are that things are not going well with the program. My advice is to request that the case be reassigned to the regular IRS Collections Division.
The Collection Agencies do not have the power to negotiate an Offer-in-Compromise, remove Levies, or just about anything else. All they can do is to demand payment within 120 days or offer to setup an installment plan. You can make a better deal with the IRS … (0 comments)

florida: How does the IRS Wage Garnishment Process Work? - 10/23/19 02:07 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS can and will garnish the wages of a taxpayer who does not cooperate with them in working out a plan to pay past due taxes. You can think of this as the low point in your negotiations and any plan that increases the take-home pay is a positive.
Once a taxpayer has ignored the final notice, the IRS will send a Form 668 to the employer notify them of the levy. The employer is required to provide to the employee a Statement of Dependents and … (0 comments)

florida: Uncollectible? Now might be a Great Time to make an Offer - 10/05/19 01:18 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Getting the best deal possible with the IRS is all about strategy. The key data input into your strategy is the Reasonable Collection Potential formula that goes by the acronym of RCP.
The RCP in many cases may come out as zero or some small number. This means that it is unlikely that the IRS will be able to collect on that debt and as a result it’s a waste of time to continue pounding on the taxpayer for no return. They will therefore change the status … (1 comments)

florida: IRS Penalties can be Abated - 10/05/19 08:49 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Penalties for Failure to File, Failure to Pay, or Failure to Deposit can increase your tax bill by another 25%. There is a way to get these penalties reversed called the First Time Penalty Abatement or FTA for short.
To qualify, you must have the following covered:
You must currently be in “compliance”, meaning that all your filings and have made and all your current year estimated and withholding taxes have been paid. Your record must not show previous penalty assessments for the past three tax years. … (1 comments)

florida: IRS Cryptocurrency Letters - 09/22/19 08:12 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS has released several thousands of notices to taxpayers regarding cryptocurrency transactions. What the heck is this all about?
I know, we all thought that cryptocurrencies where all about secrecy. We used to think the same thing in the past about Swiss Banks, but that turned out to not be the case. In the cryptocurrency case, the IRS has issued John Doe Summons to organizations such as Coinbase that has apparently resulted in the release of names on accounts and perhaps some specific transaction information. Additionally, … (0 comments)

florida: Cancellation of Debt Exceptions - 09/17/19 08:06 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Cancellation of Debt produces taxable income unless that income is can be recharacterized or is one of the exceptions. See the previous post explaining the reporting process for Cancelled Debt https://activerain.com/blogsview/5413175/cancellation-of-debt---can-you-avoid-the-taxes-
Canceled debt that’s not included in income because we recharacterized it as something else include:
Debt that’s canceled as a gift, bequest, devise, or inheritance Certain cancellations of student loans Interest that was included with the principal that was written off A qualified purchase price reduction given by a seller The Canceled Debt exclusions include:
Debt … (1 comments)

florida: Cancellation of Debt – Can you avoid the taxes? - 09/16/19 08:19 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. You think you see the light at the end of the tunnel when your creditors write-off your debts to them as uncollectable. But suddenly, there is another train heading your way. The write-off itself is taxable income.
All financial institutions such as banks, credit unions, and any organization in the business of lending is required to issue a Form 1099-C in the year that a “recognizable event” occurs and the amount of cancellation is $600 or more. If you get one of these, please understand that the … (0 comments)

florida: When should you consider filing “Married Filing Separate”? - 09/15/19 09:27 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Couples who file jointly, become liable for the total taxes reported and any future taxes that might be assessed by the IRS. This can be an economically dangerous position to be in for some spouses.
Married Filing Separate is an option that should be considered when:
         One spouse is self-employed and the other has a regular job with income tax withholding          One spouse has large pass-due tax liabilities or student debts.          The marriage is on the skids and the spouses are no longer cohabiting … (0 comments)

florida: Injured Spouse vs. Innocent Spouse - 09/14/19 08:17 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Couples who file jointly, become liable for the total taxes reported and any future taxes that might be assessed by the IRS. There are two forms of relief when one of the spouses gets caught up in joint liability issues.
Injured Spouse Claims applies to married filing joint people in which the withholding tax credits of one spouse were used to offset the liabilities of the other spouse. These liabilities can be the result of past due tax debts, child support, and other nontax government debt such … (0 comments)

florida: Installment Agreements – Can you Qualify? - 09/09/19 11:28 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS has several different Installment Agreement Plans to make it easier for a taxpayer to get caught up. These include:
         Automatic Installment Agreement          Streamlined Installment Agreement          Expanded Installment Agreement          Regular Installment Agreement          Partial-Pay Installment Agreement The Automatic Installment Agreement is for debts that are less than $10,000 and can be paid within 3 years.
The Streamlined Installment Agreement is for individuals with debts up to $50,000 and businesses with debts up to $25,000 that can be paid over a period up … (1 comments)

florida: The Golden Rules for dealing with the IRS - 09/01/19 06:44 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. To solve complex tax issues such as how a taxpayer can get caught up with back taxes, you eventually must deal with IRS employees. Here are my Golden Rules for dealing with the IRS:
Do not ignore them. It’s highly unlikely that they will just go away and nobody likes feeling ignored. Do not lie to them. It’s a federal offense and could result in criminal charges.. Do not expect them to work out the best deal possible for you. They represent the government’s interests, not … (1 comments)

florida: Why you should Request your Collections Appeal - 08/31/19 08:48 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Once the IRS Collections Division makes a decision to not accept your offer-in-compromise or other proposal, all is not lost. You can and should request an Appeals hearing to avoid the inevitable levy actions on your bank accounts and wages.
 
Every taxpayer has the right to the Collection Due Process or CDP. This is not an automatic action. You must file a Form 12153 within 30 days from the earliest date of the IRS’s final notice letter that they intend to lien or to levy. Upon receipt of this form, the … (1 comments)

florida: How can Non-Filers get "Righteous" with the IRS? - 08/31/19 08:13 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue.  The IRS has several programs going that are looking for serial non-filers. The bad news for people in this situation is that society is collecting more and more information about people in general and the IRS is getting better at using these public databases to find them.
What should you do to get out of this mess? Here are the steps that you should follow:
Prepare the missing returns for only the last six years. The IRS’s internal rules is to normally only look for the last … (0 comments)

florida: How the RCP Formula Works – Part 3 - 08/23/19 02:05 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS Offer-in-Compromise is an agreement to clear a tax debt for less than its face value. How many dollars is the IRS willing to compromise on depends upon a formula. This formula is called the “Reasonable Collection Potential” or RCP for short.
 
My previous two posts covered how the calculations are made to determine an amount that the IRS hopes they can collect from a taxpayer. Now the fun part (at least from my perspective). What can we do to make the formula produce the best deal … (1 comments)

florida: How the RCP Formula Works – Part 2 - 08/23/19 01:05 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS Offer-in-Compromise is an agreement to clear a tax debt for less than its face value. How many dollars is the IRS willing to compromise on depends upon a formula. This formula is called the “Reasonable Collection Potential” or RCP for short.
 
My previous post covered the first part of the formula which calculates the value of property owned. Today, I will cover the second part which is based on future income. This is not future income for the rest of the taxpayer’s life. Rather it’s the … (1 comments)

florida: How the IRS RCP Formula Works – Part 1 - 08/16/19 02:57 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS Offer-in-Compromise is an agreement to clear a tax debt for less than its face value. How many dollars is the IRS willing to compromise on depends upon a formula. This formula is called the “Reasonable Collection Potential” or RCP for short.
 
The formula is based on two ideas – first, that a taxpayer might have equity built up in assets that they currently own which could be paid over to cover the debt. And secondly, the taxpayer will have future earnings, a portion of which, could … (1 comments)

 
Jim Payne, CPA, CPA firm practicing in the area of IRS Collections (Backoffice Squared) Rainmaker large

Jim Payne, CPA

CPA firm practicing in the area of IRS Collections

Gainesville, FL

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