IRS Notice of Deficiency As a Wake-up Call

Posted on November 17, 2014 by Kursti Nakagawa

IRS Notice of Deficiency A Wake up Call Not to Ignore!

Let IRS Notice of Deficiency be a Wake-Up Call

Let IRS Notice of Deficiency be a Wake-Up Call – If you have received an IRS Notice of Deficiency, let it serve as an official wake-up call, informing you that you have a back tax issue that needs attention. Although a Notice of Deficiency is usually sent went the tax balance shown on a tax return is less that the amount the IRS believes you owe, it can sometimes be sent when no tax return has been filed. Either way, the Notice of Deficiency is an official communication from the IRS informing a taxpayer that they have a back tax balance. It is always sent by certified United States mail to the last known address of record for the taxpayer in question.

A Notice of Deficiency not only informs a taxpayer of the amount of their outstanding tax liability, but also provides an explanation of how the back tax amount was determined. It also itemizes any interest or penalties that have been assessed. In addition to providing this detailed account of amounts owed to the IRS, the Notice of Deficiency outlines the accepted process for responding to the communication. In general, the delinquent taxpayer has 90 days from the date the deficiency was mailed (150 days if mailed to an address outside of the United States) to either pay the assessed amount or contest it. Paying the back tax balance requires signing and dating the Consent to Assessment and Collection form, while contesting the assessment involves filing a petition with the United States Tax Court asking for a reconsideration of the back tax amount owed.

The worst possible response to receiving a Notice of Deficiency is no response. If a taxpayer does not sign the Consent to Assessment and Collection or file a petition with the United States Tax Court within the allotted 90 day time period, the IRS will resort to more aggressive collection techniques. Most often, they will issue a Notice of Intent to Levy. This notice requires a response and will automatically be followed by seizure of the delinquent taxpayer’s property if it is ignored for more than 30 days.

If you have received an IRS Notice of Deficiency, let the CPAs and Enrolled Agents at Professional Tax Resolution help you resolve your back tax issues. Our tax settlement professionals have a thorough understanding of tax law together with the experience to know which settlement options will be the best fit for your specific set of circumstances. Visit us today at www.professionaltaxresolution.com or call us at 877.889.6527 to receive a free, no obligation consultation.

IRS Announces 2015 Tax Changes

Posted on October 31, 2014 by Kursti Nakagawa

IRS Tax Changes for 2015

IRS Announces 2015 Tax Changes

IRS Announces 2015 Tax Changes – Although the Federal Reserve predicts that inflation will be under two percent again in 2015, the IRS has modified certain tax rates and ceiling amounts to cover the anticipated increase. While none of the changes seem particularly significant, any or all of these can become important to an individual taxpayer or a business that is bumping up on one of the interval markers. The new list of 2015 inflation adjustments was released just a few days ago, on October 30, 2014.

Some of the 2015 IRS inflation adjustments are highlighted below:

Standard Deduction

The standard deduction will increase to $6,300 for single taxpayers and $12,600 for married couples filing jointly (up from $6,200 and $12,400, respectively).

Personal Exemption

The personal exemption will increase to $4,000 from $3,950. However, the personal exemption will begin to phase out for individuals with adjusted gross incomes in excess of $258,250.

Alternative Minimum Tax Exemption

The Alternative Minimum Tax exemption will increase to $53,600 for single taxpayers and $83,400 for married couples filing jointly (up from $52,800 and $82,100, respectively).

Minimum Income for 39.6% Tax Rate

The maximum tax rate of 39.6% will be applied to any single taxpayers whose income exceeds $413,200 and any married couple filing a joint return whose income exceeds $464,850. These amounts are up from $406,750 and $457,600 in 2014.

Minimum Income for Limitation on Itemized Deductions

Limitations will be imposed on itemized deductions for single taxpayers with adjusted gross incomes in excess of $258,250 and married couples filing jointly with combined adjusted gross incomes in excess of $309,900. These income limits are up from $254,200 and $305,050 in 2014.

Maximum Earned Income Credit

The maximum earned income credit for a married couple filing jointly with three or more dependent children increases to $6,242 (up from $6,143 in 2014). Increases for other categories and income amounts can be found in IRS Revenue Procedure 2014-61.

Basic Exclusion for Estates

The basic estate exclusion increases to $5,430,000 (up from $5,340,000 in 2014).

Foreign Earned Income Exclusion

The foreign earned income exclusion increases to $100,800 (up from $99,200 in 2014).

Limit on Employee Contributions to Healthcare Spending Accounts

The maximum allowable contribution to an employer sponsored healthcare flexible spending account increases to $2,550 (up from $2,500 in 2014).

Although these increases are relatively small in response the low rate of inflation that is projected to continue into 2015, they should nevertheless be considered as one factor in an effective tax planning strategy. Ignoring any changes to the tax code could potentially result in tax payments that are higher than would otherwise be necessary.

If you have tax questions or a tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com or call us at 877.889.6527. 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.

Reality Stars Suffer the Consequences of Back Taxes

Posted on October 15, 2014 by Kursti Nakagawa

Reality Stars Suffer the Consequences of Owing Back Taxes

Reality Stars Suffer Consequences of Back Taxes

Reality Stars Suffer the Consequences of Back Taxes – The recent indictments of reality television stars Mike Sorrentino and Teresa and Joe Giudice highlight the importance of staying current with the IRS. All three, together with Mike’s brother Marc Sorrentino, were charged multiple offenses that included failing to file federal tax returns, misreporting income and underpaying income taxes. While these individuals operated under the radar for years, their attempts to avoid paying income taxes eventually caught up with them. They now face serious consequences that seem much more painful that paying the back tax balances they originally owed.

Jersey Shore star Mike Sorrentino and his older brother Marc, who was acting as his financial manager, were recently indicted for failing to pay a back tax balance on income of over nine million dollars earned over the last five years. Although both Mike and Marc claim that their accountant is to blame for their tax troubles, they have not been able to convince the tax collection authorities that this is the case. Among other things, the brothers have been charged with 1) grossly underreporting millions of dollars of income earned from promotional television appearances, 2) funneling business proceeds into personal bank accounts, 3) claiming various personal items such as expensive clothes and cars as business expenses and 4) failing to report cash payments made to various booking agencies. If convicted, the Sorrentino brothers could face multiple years in prison for evading the payment of taxes on income earned during the time period under scrutiny.

Occurring almost concurrently with the indictments of the Sorrentino brothers, Teresa and Joe Giudice, stars of another reality show, the Real Housewives of New Jersey, were convicted of similar charges of tax evasion together with charges of mail fraud, wire fraud and bankruptcy fraud. The couple plead guilty to submitting fake W-2 forms to obtain mortgages, using the phone to bilk cash from banks and falsely reporting income and assets in bankruptcy proceedings. In addition, Joe was convicted of failing to file federal income tax returns over a period of four years resulting in a back tax balance on income of nearly a million dollars. The couple recently negotiated a plea deal and will begin serving consecutive prison sentences.

The cases of both the Sorrentinos and the Guidices illustrate the negative consequences of ignoring tax deadlines and failing to pay back tax balances. The Internal Revenue Service is a very powerful collections agency and will resort to forceful collection activity if income taxes are not paid in a timely manner. When faced with a back tax balance, the worst choice a taxpayer can make is to ignore the problem and hope that it will go away. In light of increasingly sophisticated collection techniques, the possibility of this happening is very unlikely. The IRS will begin by assessing penalties and interest and will follow this by more aggressive techniques including tax liens, tax levies and wage garnishments. If none of these actions result in payment of the back tax balance, the taxpayer may face criminal prosecution for willfully evading the payment of income taxes.

Enrolled Agent Earns Prestigious Title

Posted on September 24, 2014 by Kursti Nakagawa

Professional Tax Resolution Enrolled Agent Earns Prestigious Title-

Enrolled Agent Earns Prestigious Award!

Professional Tax Resolution is pleased to announce that one of our talented Enrolled Agents, Jean Krieger, recently earned the elite Fellow designation from the National Association of Enrolled Agents (NAEA). This prestigious title is awarded each year to a select group of tax practitioners who complete all three of the rigorous levels of study offered by the National Tax Practice Institute (NTPI). The Fellow designation recognizes Jean’s expertise in the field of tax as well as her commitment to protecting taxpayer rights.

For more information visit us at www.professionaltaxresolution.com. For more information about Jean and the rest of the talented staff at Professional Tax Resolution read About US or call us at (877) 889-6527.

Did You Miss the Tax Extension Deadline?

Posted on September 17, 2014 by Kursti Nakagawa

Did You Miss the Tax Extension Deadline?

Did You Miss the Tax Extension Deadline?

Tax Deadline Reminder – September 15, 2014 – Did You Miss the Tax Extension Deadline?

Final deadline for 2013 Corporate Tax Returns if an extension was requested.

Final deadline for 2013 Partnership Tax Returns if an extension was requested.

Final deadline for 2013 Trust Income Tax Returns if an extension was requested.

Did you Miss the Tax Extension Deadline? Do you have Tax Issues? We can help. Don’t let Tax Liabilities ruin your life.

Is the IRS demanding full payment for unpaid taxes? Have you received an IRS Notice of Deficiency or a State Tax Notice? Is there a lien against your property or have your wages been garnished?

The Professional Tax Resolution team, which has over 100 years of combined tax settlement experience, can help relieve your tax problems in as little as 24 hours. Don’t be afraid of the IRS! We can quickly identify the source of your tax problems and make your tax issues go away forever.

A free thirty minute consultation call could save you thousands of dollars. Can you afford to wait?

Call us at 1.877.889.6527 or visit our website at ProfessionalTaxResolution.com