IRS Taxpayer Advocate Service Changes Case Acceptance Criteria

Posted on September 18, 2012 by Kursti Nakagawa

The Taxpayer Advocate Service (TAS) is altering the measures it uses to accept cases from taxpayers that are having difficulty dealing with the Internal Revenue Service to lighten its caseload. The TSA has restricted its case admission criteria as budget cutbacks are taking a toll on the IRS.

The IRS sent a recent email to tax professionals. “The Taxpayer Advocate Service is designed to be a “safety net” for taxpayers who are experiencing problems with the IRS. However, because TAS cannot help all six million to twelve million taxpayers who may be having problems at any given time, it must focus on cases where it can add the most value.”

The email was then linked to a document listing four categories the TAS plans to focus on in accordance to the revised case acceptance criteria.

Where a taxpayer is having financial hardship, emergency, or difficulty, and the IRS needs to move quicker than it usually does under normal circumstances. Because if the IRS does not move quickly (i.e. to release a lien or remove a levy), the taxpayer will have even more financial difficulty.
Where several different units and steps are required, and the case needs a “traffic cop” or “coordinator” to make sure everyone does their role. This is important for TAS to do.
Where the taxpayer has tried to find a resolution through normal IRS portals, but they have not worked.
Where the taxpayer is displaying unique issues or facts (legal issues included) and the IRS is not able to customize their approach.

“Last year, we assessed where our efforts have the greatest impact, and identified the four types of issues in which the IRS seemed to get the right answer (though slowly)”, said TAS. “Those cases involve the processing of original tax returns, amended returns, rejected and unstoppable returns, and injured (but not innocent spouse claims). We determined that TAS generally won’t accept cases involving pure processing issues so we could focus on higher-impact problems.”

“However, there are many exceptions to this policy. If the taxpayer is suffering an economic burden, TAS will take the case. If the case involves other issues, TAS will take the case. If the taxpayer is referred by a congressional office, TAS will take the case. And if the taxpayer specifically requests and insists, TAS will take the case.”

TAS has stated that it is trying to do its best to help tax preparers and taxpayers, but within limits. “We’ll continue striving to help tax professionals and their clients. But before you contact TAS, please remember that we are a finite resource that Congress created not to substitute for regular IRS procedures but to help taxpayers who need special attention.”

If you have tax debt you are unable to pay or any other questions our tax settlement professionals are happy to discuss you’re tax resolutions free of charge. 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 settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services visit us at www.professionaltaxresolution.com. Contact us by phone at 877.889.6527 to receive a free, no obligation consultation

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

Posted on September 17, 2012 by Kursti Nakagawa

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.

Red Flags to the IRS – Audit Statistics

Posted on September 6, 2012 by Kursti Nakagawa

Continue reading →

Business Tax Audit Advice From Former IRS Commissioner

Posted on August 21, 2012 by Kursti Nakagawa

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

Posted on August 6, 2012 by Kursti Nakagawa

election impact on capital gains The 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.