Category Archives: Blog

IRS Notice -Changes in Letter-Fowarding Policy for Missing Taxpayers

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The IRS has now made some new changes in its letter -forwarding services.  Under this new approach, the IRS has recently stated that they will not provide letter –forwarding services to locate a taxpayer that may be owed assets from an individual, company, or organization.  This is important news for missing taxpayers that may be entitled to a retirement plan or other financial benefits.

From now on the IRS expects individuals and companies to use the internet, such as missing person locator services, to find missing tax payers. Due to current budget constraints, the IRS has decided to halt the letter-forwarding program “AKA –free detective services.” “Since the release of this revenue procedure in 1994, several alternative missing person locator resources, including the internet, have become available,” it said. “Accordingly, the Service will no longer consider locating a missing taxpayer who may be entitled to a retirement plan or other financial benefit from an individual, company or organization to be a humane purpose for which the Service will provide letter-forwarding services.”

As a result, the letter forwarding program is limited to situations in which a person is trying to locate a taxpayer to convey a message for a humane purpose as defined in Section 4 or in an emergency situation.

If you have a concern in regards to IRS Notices or any other tax question(s), our tax settlement professionals can help you. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which option will be the best fit for your specific set of circumstances.

For more information about our tax resolution services, visit us today at www.professionaltaxresolution.com. Contact us by phone at 877-889-6257 to receive a free, no obligation consultation.

 

Business Tax Audit Advice From Former IRS Commissioner

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Audit

 

An audit can be both an alarming and bothersome time for a business. Here are some simple and helpful steps from the Commissioner of the IRS to make the process go as smoothly as possible. These suggestions are especially useful to small and medium sized businesses.

How to Maneuver the Audit Process:

1. Gather your Workplace Organization – Upon receiving the notice, immediately meet with your employees, tax professionals/CPA, and other involved groups. Also, thoroughly examine all documents. It is vital to be prepared in a timely and organized fashion for your first meeting. First impressions can be critical.

2. Courtesy to the Agent – Keep in mind IRS agents have a challenging job. If the agent is treated respectfully, they are more apt to be understanding on your matter.

3. From the Offset Establish the Whole Outlook of the Investigation – This is very important. The IRS is very open about business matters. It pays to have no unknowns or surprises during the audit. Everything should be carefully examined.

4. Be Punctual on Timelines – The IRS will want to establish timelines and target dates for reports and materials. Missing a deadline due to setting an improbable timeline could have serious consequences. That being said the IRS has resource limitations and will want to get the audit done on a prompt schedule. Be prepared in knowing this.

5. Record Preparation and Communication – It is very important to have all of your materials organized and labeled. Everyone involved in the process should be thoroughly prepared and well-informed.

6. Execute your Own Review – Be thorough and go beyond what the IRS expects of you. The results can be advantageous. There have been situations where in fact checks have been received from the Treasury.

7. If it is Imperative, Speak to the Manager – If question’s or complications arise just ask to speak to the IRS agent’s manager. The IRS actually encourages business owners to contact the higher up personnel to seek a resolution.

8. Mediation and Arbitration – The IRS has significantly broadened its opportunity for taxpayers to seek a resolution. When it is applicable mediation and arbitration are great channels to consider for solving a problem.

9. Appeals and Litigation – The minute you receive the audit notice, always know that you might have to seek the final outcome through mediation and arbitration, IRS appeals, or even litigation.

If you have a concern in regards to an audit or any other tax question(s), our tax settlement professionals can help you. For more information about our services, visit us today at  www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which option will be the best fit for your specific set of circumstances.

For more information about our tax resolution services, visit us today at www.professionaltaxresolution.com.  Contact us by phone at 877-889-6257 to receive a free, no obligation consultation.

Impact of the Presidential Election on the 2012 Capital Gains Tax Rate

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election impact on capital gainsThe bipartisan tax code signed by President Reagan in 1986 set both income tax and capital gains rates at 28 percent. Since that time, increases in income tax rates together with reductions in capital gains rates have resulted in the 20 percent margin between the two rates that exists today. The capital gains tax rate is scheduled to increase on January 1, 2013 which will reduce that margin to 15 percent. President Obama is in favor of this increase while presidential hopeful, Mitt Romney, is against it. In addition, Obama is in favor of raising ordinary income tax rates while tax settlements Romney is in favor of decreasing them. Any of these proposed changes will be significant and are certain to be taken in to consideration by businesses and individuals when making decisions about the allocation of their assets.

The Current, Scheduled and Proposed Tax Rates

  • Current Rates
    The top capital gains rate is currently 15 percent while the top ordinary income tax rate is 35 percent.
  • Scheduled Rates for 2013
    The top capital gains rate is scheduled to increase to 20 percent for households earning $200,000 or less and to 23.8 percent for households earning more than that amount. There is no scheduled increase for the top income tax rate.
  • Proposed by Obama
    Obama’s most recent budget proposes raising the top capital gains rate to 23.8 percent and the top income tax income tax rate to 39.6 percent.

Proposed by Romney
Romney has proposed eliminating the capital gains tax altogether for households earning $200,000 or less and setting the top rate at 15 percent for households making more than that amount. He proposes reducing the top ordinary income tax rate to

The Arguments

  • In Favor of a Preferential Tax Rate for Capital Gains  – Those in favor of a preferential tax rate for capital gains say the lower tax rate helps to mitigate the double taxation of corporate income that has already been taxed at a 35 percent rate. They argue that raising capital gains taxes will discourage investors which, in the business sector, will have a negative effect on job creation and the economy. Since capital is now more mobile, those who favor a lower capital gains tax rate maintain that raising rates in the United States will drive capital to places that are more attractive for capital investment.
  • Against a Preferential Tax Rate for Capital Gains  –  Those against a preferential tax rate for capital gains say that double taxation is not as big an issue as some make it out to be. They argue that many companies don’t pay the maximum 35 percent tax rate. This group also makes the point that capital gains are earned on many assets such as real estate that are not subject to corporate taxation in the first place. They maintain that historically there has been no direct correlation between capital gains tax rates and the level of capital investment.

If you have questions about the implication of the current and projected income and capital gains tax rates for your specific financial situation, our experienced tax settlement professionals can provide you with the information you are looking for. We can help you make decisions about how to effectively allocate your financial resources for tax purposes. For more information about our tax debt resolution services or any other tax issue, visit us today at www.professionaltaxresolution.com. Contact us by phone at (877)-889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.

 

5 Ways to Get Caught Cheating on Your Taxes

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As unemployment and the economy continue to loom over America, you may be tempted to cheat on your taxes since what you owe seems like too much to pay. This is never a good idea. With penalties, fees, interest, and in extreme cases, jail time as possible consequences, cheating on taxes is simply not worth it. If you do have issues with paying and need tax settlement help, consulting a professional on a legally maximizing your deductions or setting up payment plan is a far safer option.

Here are 5 common tax deduction cheats that the IRS looks for:

Commuting Costs associates with going to and from work can never be deducted, even if your workplace is hours away. The burden of an expensive commute lies solely on you, because it is non-deductible expense.

Volunteering While donated goods and cash can be deducted, the services you have donated cannot. This applies even if you can calculate the value of the service. However, if costs are incurred while you are volunteering, those can be deducted.

Pets Since pets are not considered dependents, personal pet costs including food, medical bills, and grooming are not tax deductible.

Remodeling Your home improvements are considered personal expenses. You cannot claim them as tax deductions.

Gym membership Unless you have a diagnosed medical condition that causes your doctor to specifically prescribe a gym or health club membership, your membership cannot be deducted. The difference is that the first is a medical deduction, and the second is just beneficial.

If you want to avoid mistakes on your tax return and receive the deductions that you qualify for, our experienced tax settlement professionals can help. We can also work with you if you have filed your taxes and cannot afford to pay in full. Please visit professionaltaxresolution.com for more information on our tax resolution services. You may also call us at (877) 889-6527 or email info@protaxres.com to receive a free, no obligation consultation.