The Blog

  The fiscal cliff has been the talk of the news for the last part of 2012. The nation did not go over the fiscal cliff, however due to the delays tax refund information is uncertain. Congress’ tardy action on the fiscal cliff tax provisions has caused problems for the Internal Revenue Service. The Internal Revenue Service now has to program its system and issue tax forms based on the revised laws. The IRS has not announced when taxpayers can start filing their 2012 returns, which means refunds will probably be late. Filing usually begins in mid-January. “The IRS is currently reviewing the details of this week’s tax legislation and assessing what impact it will have on this year’s filing season,” said the agency, adding … Continue reading →

A Notice of Deficiency is a formal written claim by an agency that you owe income taxes with interest and penalty dues. The Notice of Deficiency also explains that an assessment is being calculated in regard to your income taxes owed. A Notice of Deficiency is also referred to as a “ninety day letter”; because once you receive the letter you have 90 days to take action. Most people react in fear when receive such a notice in the mail. They feel overwhelmed and are not sure how to act appropriately. Keep in mind that not responding to a Notice of Deficiency is the worst possible course of action. If a tax agency does not receive a timely response after issuing an official Tax Notice, … Continue reading →

The Internal Revenue Service is not ready to retire the legacy e-file system. The e-file system became operational nationwide in 1990 and transformed the way taxes were filed. The e-file has proven in its time to be win-win for everyone. The taxpayers get their refunds by as fast as 10 days. Or, they have payment options to file now and pay later. The e-file returns are also very accurate. They have an error rate of 1% compared to 20% for a paper return. The next phase for the IRS filing system is the Modernized e-File (MeF) System. The MeF will send acknowledgments out in minutes opposed to 48 hours. The IRS had planned to replace the legacy e-file with the MeF after the 2012 filing season. However, there seems to … Continue reading →

Time is running out on a tax break that is aiding troubled homeowners from paying thousands of dollars to the IRS. The Mortgage Forgiveness Debt Relief Act of 2007 will need to get extended by Congress by the end of this year or many homeowners will owe the IRS money. These homeowners would have to begin paying income taxes on the portion of their mortgage that was forgiven due to a short sale, foreclosure, or principal reductions. For example if a person owes $150,000 on their home and it sells for a $100.000 in a foreclosure situation, the IRS could tax them on the remaining $50,000. Someone in the 25% tax bracket would pay $12,500 on the foreclosure. Short sales and principal reductions would also … Continue reading →

The United States government is alerting the public about a phony Internal Revenue Service site. The government is worried that the site may con people into disclosing personal and private information. Officials have stated that this website has been created to look like an IRS e –Services on-line registration page. The fake site’s URL address will end in a .com or .net or some other similar designation. The revenue service’s official site is IRS.gov. “The actual IRS e-services page offers Web-based products for tax preparers, not the general public,” the agency stated, “The phony Web page looks almost identical to the real one.” “If you find a suspicious website that claims to be the IRS, send the site’s URL by email to phishing@irs.gov, “the agency … Continue reading →

The Internal Revenue Service (IRS) Commissioner Doug Shulman has announced officially his plans to step down the end of this term. Mr. Shulman is the 47th commissioner to serve and he has been in office since March 24th, 2008 and plans to step down on November 9th, 2012.  George W. Bush appointed Shulman to office. Commissioners generally serve one term and no commissioner has ever served longer than five years since the office was created by Congress by the Revenue act of 1862. Shulman has held office during difficult times in this economy. According to Shulman, “The IRS team has made remarkable progress in the last few years during a challenging period. It has been an honor to serve the American people during this dynamic … Continue reading →

Do you want to make more money and save for retirement? According to Business Insider, it seems it pays more to be more married than single.  The report states that the percentage of Americans that are single has doubled since the 1960s. (Phentermine) Meanwhile, it also seems that these individuals are paying more money for their single status. In comparison to married couples singles spend more on health insurance, food, housing, and taxes. Singles also make 25% less than their married co-workers, when health care and retirement plans are taken into consideration. As far as saving for retirement a recent study showed that 85 % of married Americans have a retirement plan, meanwhile only 67% of singles have a plan. According to the study it … Continue reading →

 Do you owe previous years taxes? Here are some simple facts for filing back taxes. Each year most people file their individual tax returns or pay all their back taxes by April 15th. First of all, if you have not filed your return(s) you will have additional interest and penalties to pay. However, if you owe back taxes and need help, an Enrolled Agent or Certified Public Accountant (CPA) can assist you. Here are some steps you can take to help you pay and file your back taxes. 5 Helpful Tips for Filing and Paying Back Taxes Collect all of your documents together.  If you are missing any copies of previous tax returns simply ask the IRS for copies, it is free. Select a Tax … Continue reading →

The Supreme Court recently settled a divided debate when it ruled that the Patient Protection and Affordable Care Act (PPACA) individual mandate is constitutional and that the “shared responsibility payment” is a tax. How will this affect you? History Beginning in 2014, the PPACA will require individuals to carry a minimum healthcare coverage for themselves and their dependents or they will have to pay a fee which is called a “shared responsibility payment.” Before the Supreme Court decision was made, the first definition stated the shared responsibility payment was a “penalty” for people who decided not to purchase health insurance under the required mandate. In this decision the Court decided that the mandate was constitutional because the payment was included in Congress’ immense power to … Continue reading →

The IRS constantly researches areas it needs to analyze and focus on each year. We are coming up to the start of the government’s fiscal year on October 1st, and the government has already announced areas that it will focus on for the coming year. When it comes to compliance, the IRS has begun to look closely at small business underreporting. Small business underreporting is responsible for 84% of the $450 billion tax gap. Below are some of the major highlights discussed by the IRS at the national and regional tax forum held this summer in regards to small business audits.   Correct work reclassification Business classification can be an important interest to the IRS. The IRS realizes that businesses tend to incorrectly classify workers as independent … Continue reading →