Tag Archives: tax preparation

Late Tax Return? What Happens Next

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It’s the day after taxes were due, April 18th, 2012. What do you do if you still haven’t filed your tax return?

The IRS has some guidelines for what happens with returns that are past due. If the IRS doesn’t hear from you and you don’t file a return:

  • The IRS will increase your taxes as they assess penalties and interest.
  • A substitute return will be filed for you from the IRS, based only on information they have from sources other than you. Therefore, you would not get any additional exemptions or deductions you could be entitled to and your tax liability could be overstated.
  • After the IRS assesses your taxes, the IRS will begin the collection process. They could place a levy, which is legal seizure of property to pay tax debt, on your wages or bank accounts. They could also file a federal tax lien, which is a claim used as security for a tax debt, against property you own.

While the IRS may have already filed a substitute return, you should still prepare and file your own return because the IRS can adjust your account for correctness. You can then take advantage of the allowed exemptions, credits, and deductions. To make sure your tax settlement makes the most of your deductions, it can be smart to consult a professional tax resolution specialist.

If you need help because you didn’t make the tax filing deadline or have an unresolved tax liability, our experienced tax resolution professionals can provide the tax settlement and tax preparation help you need. For more information about our tax preparation and tax settlement services, visit us today at professionaltaxresolution.com. Our staff has the knowledge and experience to help you file your late taxes in a timely manner.  Contact us today at (877) 596-4143 or info@protaxres.com to receive a free, no obligation consultation. 

Refunds Down, Direct Deposit Up

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The IRS recently released statistics showing that while more taxpayers have filed earlier this year, the tax return refund amount they are getting back will be less on average and most likely received through direct deposit.

According to the IRS, 75.3 million Americans have already been sent their refunds as of March 30, 2012, compared to 75.2 million last year at the same date. While more taxpayers have filed early this year, the average refund has dropped from $2,922 in 2011 to $2,826 in 2012.

Last year, a payroll tax cut allowed workers to pay 2% less into Social Security and Medicare, which could partly explain the change. However, the total taxable income for these workers also increased.

More taxpayers are requesting direct deposit this year, 62.5 million versus 60.7 million. This means 88% of 2012 tax refunds have been deposited into taxpayers’ bank accounts compared to 86% last year. The average amount deposited also shows a drop, as the average refund was $3,120 in 2011 and is $3,006 in 2012.

If you still haven’t filed your taxes, the deadline is fast approaching. Because of a federal holiday and April 15th falling on a weekend, the due date for filing taxes this year is Tuesday, April 17th. If your procrastination is due to some confusion with the tax forms or because of a change in circumstances that makes your taxes different this year from last year, professional tax resolution may be the best option to ensure that you don’t make mistakes that could lead to an audit. (Klonopin)

If you need help meeting the tax filing deadline or have an unresolved tax liability, our experienced tax resolution professionals can provide the tax settlement and tax preparation help you need. For more information about our tax preparation and tax settlement services, visit us today at professionaltaxresolution.com. Our staff has the knowledge and experience necessary to help you file your taxes accurately and on time.  Contact us today at (877) 596-4143 or info@protaxres.com to receive a free, no obligation consultation. 

IRS Collection Financial Standards

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Are you delinquent on your taxes and can’t afford to pay your tax debt? The IRS released updated Collection Financial Standards on April 2, 2012, to help with calculating delinquent tax repayment of federal taxes. These standards help to define a taxpayer’s ability to pay a tax liability.

Standards include the following four categories of allowable living expenses:

Food, clothing, and other items Food, apparel and services, housekeeping supplies, personal care products and services, and miscellaneous (either living expenses that are not included in the former categories, or expenses in the former categories that exceed the standards)

Out-of-pocket health care expenses In addition to what is paid for health insurance, this includes medical services, prescription drugs, and medical supplies (such as vision care items like glasses and contacts)

Housing and utilities Rent or mortgage, property taxes, insurance, interest, and utilities such as gas, electric, water, garbage collection, landline and cellular phone, internet, and cable; calculated as a local standard according county US Census, American Community Survey, and BLS data, also takes into account how many persons are in the household

Transportation Monthly loan or lease payments as well as operating costs including maintenance, repairs, insurance, fuel, registration, licenses, inspections, parking, and tolls; public transportation alone or in combination with vehicle ownership; calculated as a local standard

The six-year rule for repayment of tax liability allows for payment of living expenses exceeding the Collection Financial Standards and other expenses like minimum payments on student loans and credit cards, as long as the liability can be paid in full within six years. This includes paying off the penalties and interest.

If you need help with delinquent taxes or have an unresolved tax liability, our tax resolution professionals can provide the tax settlement help you need. Visit professionaltaxresolution.com for more information about our tax settlement services. Our staff has the experience and expertise necessary to know which tax settlement option will most effectively resolve your specific back tax issues.  Contact us today at (877) 596-4143 or info@protaxres.com to receive a free, no obligation consultation. 

You Have to Pay Your Taxes

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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 compliance with federal tax laws. These arguments indicate that paying federal income taxes is voluntary and that certain categories of individuals are exempt from paying income taxes for reasons that have no merit.

What are the most common types of frivolous tax arguments?
Although frivolous tax arguments can take many forms, they most commonly fall into one of the following categories:

  • Paying income tax is voluntary These arguments maintain that the filing of federal income tax returns and the paying of federal income tax is voluntary. They contend that existing laws impose no legal obligation to either pay taxes or file tax returns.
  • Certain forms of income are exempt from taxation These arguments assert that certain forms of income are exempt from taxation for a variety of bogus reasons. One of the common variations of this argument is that military retirement pay is excluded from income tax. Other groundless contentions maintain that income from foreign sources is not taxable or that wages and tips received for personal services are not subject to taxation.
  • Taxpayer is not a United States Citizen The most common form of this argument is given by an individual who asserts that they are relieved of an obligation to abide by federal tax laws because they have rejected United States citizenship in favor of state citizenship.
  • Collection of taxes violates a Constitutional Amendment These arguments assert that the collection of income taxes violates one or more of the amendments of the United States Constitution. Some citizens refuse to pay taxes on the basis of religious or moral grounds that they say are guaranteed by the First Amendment. Others maintain that the payment of income taxes is some form of servitude that is in violation of the Thirteenth Amendment. Another common form of this argument is that federal income taxes represent the confiscation of property, which is prohibited by the Fifth Amendment.

What are the penalties for using a frivolous tax argument?
 In order to deter taxpayers from wasting time and resources, the United States Tax Court imposes harsh penalties on individuals who attempt to avoid or delay paying income taxes through the use of groundless or frivolous arguments. In 2006, Congress passed the Tax Relief Health Care Act, which increased the maximum penalty imposed for submitting a frivolous tax return from $500 to $5,000. This amount was increased to $25,000 by an amendment passed in March 2007. In addition to increasing the penalty for submitting a frivolous tax return, this amendment included a list of 40 specific positions that were deemed frivolous by the United States Tax Court.

 

If you have failed to meet tax filing deadlines or have an unresolved tax liability, our experienced tax resolution professionals can provide you with the tax settlement help you need. For more information about our tax settlement services, visit us today at professionaltaxresolution.com. The members of our staff have the knowledge and experience necessary to know which tax settlement option will most effectively resolve your specific back tax issues.  Contact us today at (877) 596-4143 or info@protaxres.com to receive a free, no obligation consultation. 

Deceptive TaxMasters Firm Mishandles Clients’ Taxes

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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 were collected from them. This was resulting in missed tax deadlines, incurring fees and interest owed to the IRS.

This recent blog on ProfessionalTaxResolution.com describes how to choose a tax settlement professional. For your business tax preparation needs, here are tips for selecting a business tax resolution specialist.

It is very important to know you are speaking with a tax professional and not a salesperson when you handle your taxes to avoid costly mistakes and deceptive practices. If you have trouble paying your taxes all at once, options like installment agreements through the IRS can split up the sum into more manageable monthly payments. An offer in compromise can also be reached, where taxpayer’s tax liability is settled for lower than full amount that is owed.

If you are in need of any type of tax settlement services or have tax debt, the qualified tax specialists at Professional Tax resolution can provide you with the help you need.  Because our professionals are familiar with all of the available tax settlement options and are experienced at negotiating tax settlement agreements with the IRS, we can ensure that you will receive the maximum tax advantage for your specific financial situation. For more information about our tax settlement services, visit us today at professionaltaxresolution.com. Contact us by phone at (877)-889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.