The Blog

What is the law regarding the payment of federal income taxes? Although taxpayers are initially given the responsibility of determining the amount of tax they owe by completing and filing the appropriate tax returns, paying income taxes is not voluntary. The requirement to file an income tax return and pay income taxes is clearly stated in the Internal Revenue Code, which imposes a tax on the income of individuals and corporations as well as estates and trusts. Failure to file an income tax return and submit payment of taxes with the return can result in harsh civil and criminal penalties, including fines and even imprisonment. What are frivolous tax arguments? Frivolous tax arguments are a group of arguments that are made by taxpayers who oppose … Continue reading →

The Federal Government recently announced a major expansion of its Fresh Start Program which was initiated last year to help taxpayers stuggling with tax debt. The recent changes supplement efforts that were already in place under the original Fresh Start Program to help individuals and businesses meet their tax obligations and reach tax settlements. Three major areas targeted by the recent Fresh Start expansion are penalty relief, Installment Agreements, and Offers in Compromise. The changes to these areas of tax relief are outlined below. Penalty Relief What is the failure-to-pay penalty? The failure-to-pay penalty is an amount assessed by the IRS on any tax amount owed that is not paid by the filing deadline. It is usually assessed at the rate of one half of one … Continue reading →

When choosing tax expert for your personal tax preparation needs or a business tax specialist for business tax preparation, it is highly important to choose a proven tax advisor with expertise in tax settlements and favorable reviews from previous clients. This is what clients of TaxMasters, a recently bankrupted tax preparation company in Houston, Texas, learned after trusting their tax returns to this company, who had broadcast a nationwide commercial promising to settle tax debt for less. The State of Texas is suing Tax Masters because they advertised free consultations with a tax specialist, but calls were actually received by salespeople not qualified to give help with taxes. This would be a violation of the Texas Deceptive Trade Practices Act. TaxMasters may have delayed submitting clients’ taxes until all fees … Continue reading →

The tax specialists at Professional Tax Resolution are a good choice for resolving your tax settlement issues. They are: Licensed  The tax resolution professionals at Professional Tax Resolution are Certified Public Accountants and Enrolled Agents. These are the only tax specialists who can represent you before the IRS on all tax issues, not just returns they have personally prepared. Experienced  The tax specialists at Professional Tax Resolution resolve tax debt issues for both individuals and businesses all day, every day. Because tax settlement is their only focus, they know how to successfully negotiate with the IRS to achieve the best tax resolution outcome for each client. Knowledgeable  The tax specialists at Professional Tax Resolution are familiar with all of the available tax settlement options and are well equipped to select the … Continue reading →

Did you know that you could be taxed on your frequent flier miles? That’s what thousands of Citibank customers learned when they received a 1099-MISC from Citi, which reported their miles as income to the IRS. These miles would have to be reported on their tax  returns, or they could risk getting a notice from the IRS. Understandably, some customers who were notified that 30,000 miles was considered $750 of income were furious and shocked that the bonus miles they earned from signing  up for a Citibank credit card could be taxable. Some even asked to have miles canceled and were told by Citibank that they should have asked before the end of 2011, even though customers were not aware of this tax liability until they … Continue reading →

The help of a qualified tax settlement professional can be an invaluable asset in attempting to resolve any type of back tax issue. However, the selection of a reputable tax professional can be a difficult task in itself. It is important to verify any advertised credentials before hiring because many individuals and companies who advertise tax settlement services are actually marketing agents and salespeople with no professional qualifications. Tax law is so complex and the policies and procedures of the IRS are so complicated that it takes an individual who is both knowledgeable and experienced to successfully negotiate a tax settlement agreement.  Some things to look for: Select a well established individual or firm, one that is likely to still be around to answer questions … Continue reading →

The IRS website “Where’s My Refund” for checking refunds is up again after being down for the better part of a week. The website was back in action about midday last Wednesday after being out of service since Feb. 15. Taxpayers who had received IRS acknowledgment that their tax returns were being processed were startled when they visited the website during the week and got a message that the IRS had no information regarding their return. The IRS said it was an error message and that if the IRS said the filing had been received, it was being processed. With the “Where’s My Refund” site back up, you can now check the website 72 hours after your e-filed return has been accepted to see the … Continue reading →

IRA owners have until April 17, 2012 to make a 2011 contribution to their IRA. This year, it is not too late to get a Saver’s Credit for IRA contributions. A number of IRA owners may qualify for the Saver’s Credit of up to $1,000 ($2,000 if filing jointly) on their 2011 tax return for 2011 IRA contributions. The Saver’s Credit reduces the amount of income tax that may be owed dollar-for-dollar, but not less than zero. Who is eligible for the Saver’s Credit? To qualify for the Saver’s Credit (Retirement Savings Contributions Credit) for eligible IRA contributions, the IRA owner’s 2011 adjusted gross income cannot be more than: • $56,500 when filing status is married, filing jointly • $42,375 when filing status is head … Continue reading →

Under ordinary United States tax law, the forgiveness of mortgage debt results in a tax liability for the taxpayer whose debt is either entirely or partially forgiven. When a lender forecloses or agrees to accept a short sale or a loan refinance agreement to a lower loan amount, the amount of mortgage debt forgiven is considered to be income for the borrower and is therefore subject to taxation by the IRS. However, since the passage of the Mortgage Forgiveness Act in 2007, homeowners have been protected from this potential burden to their tax settlement. The Mortgage Debt Forgiveness Act excludes forgiven mortgage debt from becoming a tax liability in the following specific instances: • Short Sales There is no tax on the difference between the … Continue reading →

Did you receive an IRS notice that you owe back taxes? While owing money can be a big worry, ignoring the problem will only make things worse. There are options to pay your tax debt, even if you can’t do it all at once. If you need help with tax resolution because you owe back taxes, you can take advantage of different methods of payment or request that the payments be broken up into installments. Here are some tips: A late tax bill from the IRS is expected to be paid promptly, including the taxes owed, penalties, and interest. You may want to get a loan so you can pay it in full to avoid making installment payments if you do not already have the money … Continue reading →