tax representation: The IRS can have your Passport Revoked - 11/16/19 03:02 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. One of those issues is debts owed to the IRS for past taxes. The IRS has a lot of tools in their toolkit to include seizure of cash accounts and levies on wages. One of the newest tools is to revoke the passports of people with “significant” tax debt.
How much is significant? Currently it’s $52,000. The State Department is required to deny applications for new or renewing passports. If you already have a passport, the State Department may revoke it or place limits on your travel.
The IRS wants to … (0 comments)

tax representation: 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)

tax representation: 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)

tax representation: The Intersection of Divorce and Taxes - 11/04/19 09:20 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. Divorcing couples have a whole host of problems to work out and many times the tax implications are way down the list of priorities. Sometimes these implications are not considered at all. Here are the most important tax aspects to consider for people who find themselves in this situation:
If you are divorced on 12/31 – you cannot file a joint tax return for the year. If you are still married on 12/31 and do file a joint return – this cannot be undone by amending … (1 comments)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: What to do if you don’t really owe the IRS - 09/01/19 07:50 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 can assess taxes through its many audit programs. Many of these programs are automated to an extent that no human was involved in the process. Inevitably, this leads to situations where the taxpayer has little understanding of why he or she owes taxes. There are two main options to fixing this situation.
You can request an Audit Reconsideration by filing Form 12661 and including all of the documents that were not considered in the original audit process. To qualify for this process, you must still … (0 comments)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

tax representation: 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)

 
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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Mobile: (352) 317-5692

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