tag:blogger.com,1999:blog-54681649867186642162024-03-13T14:47:26.602-06:00TaxHelpTaxHelp articles, news & tactics to fight IRS Audits, Collections & Return ErrorsAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5468164986718664216.post-37930736144931687202016-12-13T19:09:00.000-07:002016-12-13T19:58:28.066-07:00Come on Down!When the IRS "invites" you to come on down to their office, it can be very intimidating because you don't know what to expect and what documents the IRS wants from you. But now, the TaxHelpLaw program relieves you of fear by showing you exactly what to do and say.
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Every line of every common IRS form & schedule is explained. You will see, read and listen to detailed, step-by-step instructions that are easy-to-follow. You'll learn what to gather for the IRS and how to present it to them with the tactics of a Tax Attorney!
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When you are dealing with the IRS you must be very patient. <a title="TaxHelpLaw - Save time & money with tax attorney guidance!" href="//taxhelplaw.com">TaxHelplaw</a> teaches you how to overcome your fear by being well-prepared!
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These programs are unique. They are the only available sources for video, audio & text preparation for an audit. Sure, accountants and attorneys will represent you in an audit (for a fee) but <em>you still must gather and arrange your evidence.</em> Your accountant or attorney doesn't know your business or your records so you will pay extra for them to become familiar. Even then, you still will be responsible for getting the documents.
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TaxHelpLaw.com shows you exactly what to gather and how to arrange it for the IRS or for your representative. You will save a pile of money by following the TaxHelpLaw Action Steps!
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J. David HopkinsAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-33217679276731757812016-12-13T19:08:00.002-07:002016-12-13T19:18:20.537-07:00What is a Return? What proof do I need of deductions?Technically, a return is any taxpayer verification of income and deductions and an agreement with the IRS, or at least no contest from the IRS. So, a "return" that everyone files every year is one definition of a return, but it is not the only one.
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Since the attestation clause is a sworn statement, the taxpayer verifies the truthfulness of the return under penalty of perjury. If a taxpayer has no records of income they are required to reasonably estimate the amount. Similarly, a taxpayer must also reasonably estimate all deductions to which they are entitled.
So, it would be erroneous to require a taxpayer to honestly reveal his or her income to the best of their knowledge without simultaneously allowing reasonable deductions off that income, <em>despite a lack of hard evidence.</em>Anonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-13044225602667795602016-12-13T19:07:00.005-07:002016-12-13T19:19:21.203-07:00The Problem of Cooperating with the IRS!When approached by the IRS for an audit or collections many people believe that if they cooperate with the IRS then it shows their good faith and the IRS will leave them alone.
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However, IRS agents who conduct audits are trained to keep digging into your affairs to find fault. They take one-sided notes of conversations so they can be witnesses against the taxpayer in any hearing. It is nearly impossible to rebut IRS agent testimony.
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For collections, Revenue Officers are constrained in what they can allow and they are trained to look for all sources for collection. Everything you reveal to a Revenue Officer or Agent can and will, be used against you!
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Therefore, in either circumstance, it is better to have an attorney represent the taxpayer with the IRS so they can be a barrier against improper IRS inquiry and to advance the taxpayer's interests.
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J David Hopkins, JD, LLM - TaxHelpLaw.com has 3 easy steps to IRS victory!<br /><img style="border:0;float:left;margin:15px;" src="//media.merchantcircle.com/4614292/TaxHelp%20Logo2._full.jpeg" />Anonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-72689433982283290532016-12-13T19:06:00.002-07:002016-12-13T19:20:09.050-07:00Dangers of making an Offer in Compromise to the IRSYou have undoubtedly heard TV advertisements promising to "settle" or "negotiate" your IRS debt & you are given the impression that the result is guaranteed to be in your favor. If you will notice, these ads rarely come from Attorneys because Attorneys have a duty of honesty and advocacy for your interests. Many of these promoters have fought criminal charges & declared bankruptcy because of fraudulent practices.
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You won't learn this from the TV ads but the procedure proposed to be used against the IRS is called an "Offer in Compromise". This procedure has been vastly over-abused as a supposed method of reducing or eliminating your tax debt. Mainly because these promoters are not Attorneys and cannot pursue your rights fully with the IRS and the Courts. They only have one method of resolving your problem but Attorneys have many solutions.
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But, in fact, the IRS is also pushing debtors to submit offers in compromise. <em>See</em> <a title="IRS Fresh Start" href="https://www.irs.gov/uac/the-what-ifs-for-struggling-taxpayers?_ga=1.25729469.1051418024.1465842071" target="_blank">What If </a>& <a title="Letter 278C" href="http://taxhelplaw.com/en/solutions/other-problems/letter-278c/" target="_blank">Letter 278C</a>. So, why are fraudulent promoters and our enemy, the IRS, asking you to submit an Offer? The reasons may range from absolute ignorance to sinister opportunism against unsuspecting debtors <em>in their most fragile time of life</em>.
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Before you are induced to make an Offer consider these facts:
<span style="text-decoration:underline;">Rejection Rates</span>: Although it varies from year to year, the average acceptance rate for an Offer in Compromise hovers around 30-35%, meaning the chance of rejection is 65-70%.
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<span style="text-decoration:underline;">Cost</span>: The IRS inquiry and process is very time-consuming (if done correctly) and requires a lot of financial planning and shifting. Thus, the fees to hire a representative are easily above $5,000.00 in most cases. Plus, the IRS requires you to put down (non-refundable) 20% of a lump-sum offer or begin making (non-refundable) payments for a 6-24 month Offer.
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<span style="text-decoration:underline;">Unfairness in the Process</span>: The amount of information you are required to reveal to the IRS about your personal life and finances is vast. The IRS literature suggests that when using their calculator, that your offer will be accepted. In fact, the IRS will review the Form 433 you are required to submit along with all the immense supporting documentation and deny you legitimate expenses while trying to raise your current income and the <em>following 5 years of income</em>.
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The IRS will not allow expenses beyond the "National Standards" for the various items: Food, clothing, housing, auto, insurance, etc. So, therefore, your income is artificially inflated and your expenses are unfairly decreased. So, it appears you can pay substantially more than your submitted amount and your Offer will be denied.
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<span style="text-decoration:underline;">Extension of Statute of Limitations for Collection</span>: When you submit an Offer to the IRS, <em>regardless of whether they accept it or not</em>, you give them additional time to collect from you. So, the obvious trick is to solicit an Offer from you, gather all your financial information, plus the down-payment and then reject your offer to gain time onto the limitations period and know your financial ability to pay. Promoters of making Offers simply want to take your money.
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<span style="text-decoration:underline;">Appeals</span>: It is almost certain that your initial Offer will be denied and you will have to Appeal. But, this adds to the cost and continues to extend the Statute of Limitations.
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It is easy to see that the only acceptable Offers come from people who happen to have a little money or equity in an asset and will not work again for the next 5 years. So, basically Offers are only good for <em>retired, disabled or homeless</em> people, not for everyone. Whatever you do, don't take money out of your retirement plan or sell an asset to pay for the taxes without getting legal advice. There's no sense in creating a new tax debt to satisfy the old one.
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So, what the solution? First, see if amendments or filings may reduce the tax. Second, see if a Penalty Abatement Request will reduce the penalties (without extending the statute). Third, look at transforming the non-deductible tax debt into a deductible debt, such as mortgage. Fourth, see if a payment agreement or uncollectible status will allow the statute to expire. Fifth, see if Bankruptcy is a better solution. Mush of the IRS collection process mirrors Chapter 13 bankruptcy so it might be best to file.
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There are numerous other strategies and tactics against the IRS, depending on the process and your situation. It is best to review ALL your options with a tax attorney who represents your best interests.
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J. David HopkinsAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-91484968840511632912016-12-13T19:05:00.003-07:002016-12-13T19:17:13.157-07:00What is the Definition of an Assessment?It has been asked in the queries how to define an assessment. To put it plainly, an assessment is the formal recording of a taxpayer's tax liability. However, this simple definition fails to alert you to the vast division between not owing and owing the IRS, which will bring a myriad of procedural rules to follow.
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Once the IRS places your debt into their system it is an "assessment" and they can collect. Prior to that, they cannot collect. You can "self-assess" this debt by filing a return. If you fail to file a return, the IRS can gather all the evidence they can about you and file the return for you.
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So, prior to an assessment are the procedures towards assessment: Filing returns, <a href="//taxhelplaw.com/solutions/return-errors/">Return Errors</a>, <a href="//taxhelplaw.com/solutions/audit-prep-steps/">Audits</a>, <a href="//taxhelplaw.com/solutions/unfiled-returns/">Unfiled Returns</a>, <a href="//taxhelplaw.com/solutions/appeals/">Appeals</a>, & <a href="//taxhelplaw.com/solutions/court-cases/">Tax Court</a> each of which carries its own strategies and tactics.
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After assessment are the procedures of <a href="//taxhelplaw.com/solutions/collections/">Collection</a>, <a href="//taxhelplaw.com/solutions/appeals/">Appeals</a>, <a href="//taxhelplaw.com/solutions/collections/">Offer in Compromise</a>, <a href="http://southerncoloradolawfirm.com">Bankruptcy</a>, <a href="//taxhelplaw.com/solutions/court-cases/">US District Court</a>, <a href="//taxhelplaw.com/solutions/penalties-reduced/">Penalty Abatement</a>, among other things.
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Each of these assessments and procedures are also found in the area of <strong>Business Tax</strong>, with the huge added wrinkle of the <a href="//taxhelplaw.com/solutions/business-withholding-taxes/">Trust Fund Recovery Penalty</a>.
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Then, all of this is repeated with the <a href="//taxhelplaw.com/solutions/colorado-tax-problems/">Colorado Department of Revenue</a>.
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Click on the links above for advice on each of these topics!
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J. David Hopkins, JD, LLMAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-46172379575696121862016-12-13T19:04:00.002-07:002016-12-13T19:20:53.620-07:00How to prove to the IRS that you are uncollectibleThe proof required to show you can't pay and the IRS should cease active collection will be revealed with the Form 433F or Form 433A (& the supporting documentation). This takes a lot of work. Essentially, the IRS subtracts your allowable expenses from your net income and asks you to pay the difference.
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Here are the various Forms used by the IRS to ascertain if you can pay:
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<a href="https://www.irs.gov/pub/irs-pdf/f433f.pdf" target="_blank">Form 433F</a> - Collection Information Statement Individuals (short form)
<a href="https://www.irs.gov/pub/irs-pdf/f433a.pdf" target="_blank">Form 433A</a> - Collection Information Statement Individuals (long form)
<a href="https://www.irs.gov/pub/irs-pdf/f433b.pdf" target="_blank">Form 433B</a> - Collection Information Statement Businesses</ul>
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<strong>INCOME ISSUES:</strong> With wage earners the income is easily ascertainable from recent pay stubs. Self-employed taxpayers will have to reveal their business income and expenses to arrive at Net Business Income, which can be more difficult.
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For self-employed taxpayers, you can use Quickbooks or whatever program you are using to compute your current year tax obligation (Form 1040X). Also, TaxHelp has a series of <a title="TaxHelp Webinars to Save you Money!" href="https://taxhelplaw.com/webinars-shop/">Webinars</a> to help you properly construct these forms so you are not rejected.
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<strong>EXPENSE ISSUES:</strong> The IRS only allows you certain expenses so you will have to build your case with solid evidence. Get the actual invoices or billings for all the expenses and divide them into the proper categories. Then, place them in chronological order. Next, get copies of all the payments and match them with the billings with a <a href="https://taxhelplaw.com/benefits-clc/taxhelp-calculator/" title="TaxHelp Desktop Calculator" target="_blank">total tape</a> on top so the IRS can easily trace your expenditures.
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It helps if you can present any medical or physical ailments to show the IRS your difficulties. Gather all the medical reports from your doctors and get any recent medical billings as expenses on the Form 433. The medical reports can also be used to make a <a href="https://taxhelplaw.com/solutions/penalties-reduced/">Penalty Abatement Request</a>.
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If you are meticulous and determined you can win the case. But, you don't want to invite disaster by rashly giving the IRS personal documents which will cause more trouble. It's best to complete the Form 433 <em>in pencil</em> and come see Mr. Hopkins for advice prior to submitting your information to the IRS.
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Use a TaxHelp Webinar to complete the appropriate Form:
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<a href="https://taxhelplaw.com/taxhelp-membership-options/webinar-433a-2/">Form 433A Webinar</a>
<a href="https://taxhelplaw.com/taxhelp-membership-options/webinar-433f-2/">Form 433F Webinar</a>
<a href="https://taxhelplaw.com/taxhelp-membership-options/webinar-433b/">Form 433B Webinar</a></ul>
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After you've completed the Forms contact this office for further instructions. Thanks!
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J. David HopkinsAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-60931547583824810172016-12-13T19:01:00.001-07:002016-12-13T19:33:37.420-07:00Process of an Offer in CompromiseThere are 2 reasons you can make an Offer in Compromise: Doubt as to Collectibility & Doubt as to Liability, or both. To start the process of an Offer in Compromise for Doubt as to Collectibility you must complete <a href="//taxhelplaw.com/wp-content/uploads/2016/12/f656b-2-1-16.pdf" target="_blank">Form 656</a>, which is included in the <a href="//www.irs.gov/pub/irs-pdf/f656b.pdf" target="_blank">Form 656-B</a> booklet.
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To start the process of an Offer in Compromise for Doubt as to Liability use <a href="//taxhelplaw.com/wp-content/uploads/2016/12/f656l.pdf" target="_blank">Form 656L</a>, included in the <a href="//www.irs.gov/pub/irs-pdf/f656l.pdf" target="_blank">Form 656L</a> booklet.
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To see if you can "pre-qualify" use the IRS OIC <a href="//irs.treasury.gov/oic_pre_qualifier/" target="_blank">Prequalifier tool</a>. You must not be in a bankruptcy, have filed all tax returns, made any estimated payments required & made all required <a href="//www.irs.gov/pub/irs-pdf/p15.pdf" target="_blank">employee tax deposits</a>, including the <a href="//www.irs.gov/pub/irs-pdf/p15a.pdf" target="_blank">supplement</a>.
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However, in order to complete the Pre-Qualifier you have to complete <a href="//taxhelplaw.com/wp-content/uploads/2016/12/f433-AOIC.pdf" target="_blank">Form 433(OIC)</a>, which is essentially the same as the <a href="//www.irs.gov/pub/irs-pdf/f433a.pdf" target="_blank">Form 433A</a>, used in general IRS collections.
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You can make a lump-sum offer (preferred) or a payment plan which will extend for 5 years, based on the bankruptcy rules.
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During the offer the IRS may file a lien but they will suspend collection activities. However, just by making an offer (regardless of whether it is accepted or not) all applicable statutes of limitations will be extended by the time period the offer is being considered plus 1 year.
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Given the IRS rate of rejection, it should be anticipated that you will have to Appeal an unfavorable ruling. (See <a href="//www.irs.gov/pub/irs-pdf/f13711.pdf" target="_blank">Form 13711</a>).
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For Offers based on Doubt as to Collectibility you goal is to show you can't pay and won't be able to pay in the foreseeable future. For offers based on Doubt as to Liability you must show you don't owe it, much like an <a href="//www.irs.gov/pub/irs-pdf/p3598.pdf" target="_blank">Audit Reconsideration</a>. Please take our <a href="//taxhelplaw.com/taxhelp-membership-options/webinar-433a-2/" target="_blank">Webinar</a> for Form 433A to prepare you to make an Offer in Compromise.
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Every case requires different levels of proof & different qualifications. For Doubt as to Collectibility in general, be prepared to show you have a lot of on-going bills or support obligations. It helps if you have some kind of medical or physical malady. So, please obtain any doctor or medical reports you have on yourself or family member to give to the IRS.
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For Doubt as to Liability you may have to dig deep into your old records to get the evidence. Fortunately our online <a href="//taxhelplaw.com/taxhelp-membership-options/" target="_blank">Audit Defense Program</a> shows you how to get your evidence and present it to the IRS to win!
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In either event it is helpful to have legal advice PRIOR to making an Offer with the IRS. An offer is only 1 tool to be used to reduce or erase your IRS debt. ALL options should be explored before making a decision. So, you need to obtain your Account Transcripts from the IRS, gather your tax returns, your credit report, any divorce or bankruptcy papers & all IRS notices you have received. Call our office so we can sit down & create an <b>Action Plan</b> to fight the IRS!
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J. David HopkinsAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-71107060655989372802015-01-20T15:52:00.002-07:002015-01-20T15:52:58.837-07:0010th Circuit Banshee Assaults Late-filed ReturnsWhen you don't prepare your own return and the IRS has evidence that
you owe taxes they can assess the tax against you without your agreement
under 26 USC § 6020(b). This assessment is called a "Substitute for
Return" (SFR). But, this is not considered a "return" by you since you
didn't swear to the truth of it under penalty of perjury (Attestation
Clause).<br />
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If you haven't filed but later file <em>before</em> the IRS makes an assessment, this <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;"><span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">is</span></span> a "return" because you signed the attestation clause.<br />
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In
the first case, you can never get a bankruptcy discharge for the taxes
because you didn't file a return. But, in the second case, you are
allowed a discharge if all the other bankruptcy conditions are met.<br />
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But,
what about the case where the taxpayers file a return after the IRS has
assessed the tax by way of an SFR? The taxpayers did sign the
Attestation Clause but the IRS has already made an assessment.<br />
The Federal 10th Circuit Court of Appeals says "no discharge" for these late-filed returns. (<em>See</em> <a data-mce-href="https://taxhelpaudit.files.wordpress.com/2015/01/opinion-122914-2.pdf" href="https://taxhelpaudit.files.wordpress.com/2015/01/opinion-122914-2.pdf">Mallo v. USA</a>)
The court held that late filed returns did not meet the "applicable
filing requirements" under §523(a), thus they were not "returns" and no
bankruptcy discharge is allowed.<br />
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There is plenty of debate about
the wisdom of this ruling and it might become a Supreme Court case. But,
the IRS has not delayed in enforcing collection against bankrupt
taxpayers. Thousands of hostile letters are now being sent by the IRS to
collect.<br />
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Taxpayers who have not filed now have a major dilemma.
The IRS has 10 years to collect a tax, even if they assessed it by way
of SFR. If the taxpayers file returns they give the IRS <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;"><span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">another</span></span> 10 years to collect.<br />
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So,
many taxpayers will likely not file returns and let the 10 years
expire, which is contrary to the IRS goal of voluntary compliance.<br />
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It
appears the 10th Circuit (and the IRS) believe they are enforcing a
rule to demand compliance but what really is going to happen is a lot of
non-compliance.<br />
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Look at the facts: The IRS won't accept an Offer
in Compromise or enter a payment plan unless all the returns are filed.
Taxpayers with late-filed returns can't get a bankruptcy discharge. If
the taxpayers file they give the IRS another 10 years to collect.<br />
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So,
I predict the taxpayers are going to avoid the IRS, not do returns and
let the 10 years SFR collection period expire. Let's give a typical
example:<br />
Joe works construction. He is called "self-employed" and
has received a Form 1099-MISC every year from 2003-2007 at $40,000 a
year. He never does his returns and the IRS assesses the tax (SFR) based
on the full $40,000 a year income, plus the Self-Employment tax (FICA)
on January 13, 2009 for all years. The IRS has until January 13, 2019 to
collect that assessment.<br />
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Of course, if Joe did the returns he
would get to deduct all of his expenses and the amount he owed would be
less. But, a debt would still exist. If he can't pay it, it doesn't
matter what amount it is.<br />
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By 2014, the IRS has pestered Joe to
extremity. But, they only have 5 years left to collect. If he does the
returns, he lowers the tax but he gives the IRS another 10 years to
collect. The IRS penalties and interest for late-filed returns are so
great that the debt will still be enormous. If he can't pay it off or
Compromise, he'll have to endure another 10 years of IRS collections.<br />
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Or, let's take another example. Because of under-withholding, a wage-earning employee, Mary, with no family or children owes $50,000.00 in taxes for tax years 2003-2007. These taxes were assessed by SFR procedure on January 13, 2009 so the limitations period expires on January 13, 2019. By 2014, the IRS has levied on her bank accounts and wages at various times but they only have 5 years left to collect. If she files the returns, she will still owe the exact same amount but she will have given the IRS another 10 years to harass her. So, why file?<br />
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From these examples it is obvious
many taxpayers will try to avoid the IRS and let the 10 years expire
without doing returns. For many, that will be difficult because of
changed circumstances, such as marriage, children, a wage-paying job,
etc.<br />
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Thus, it will be even more important now to seek legal advice
from a tax lawyer if you have late-filed returns. For those taxpayers
who can't avoid the IRS, they are going to have to prepare and file the
returns. <i>But, they must be thoroughly researched for all advantages <u>prior</u> to filing.</i><br />
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From there, they can try to lower the debt with a <a data-mce-href="http://taxhelplaw.com/en/solutions/penalties-reduced/" href="http://taxhelplaw.com/en/solutions/penalties-reduced/" target="_blank" title="Penalties Reduced Prep Steps - Actions for you to save time & money!">Penalty Abatement</a>. But, if it still can't be paid, then the only other options are an <a data-mce-href="http://taxhelpaudit.wordpress.com/2014/10/30/dangers-of-making-an-offer-in-compromise-to-the-irs/" href="http://taxhelpaudit.wordpress.com/2014/10/30/dangers-of-making-an-offer-in-compromise-to-the-irs/" target="_blank" title="The Dangers of Making an Offer in Compromise to the IRS">Offer in Compromise</a> or endure 10 years of payments to the IRS. Both of these options are dangerous.<br />
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So,
when a taxpayer is faced with another 10 years of IRS hassle for a debt
that can’t be paid, dodging the IRS sounds attractive. Thus, I predict
that this new ruling from the 10th Circuit will encourage non-compliance
with the tax laws.<br />
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J. David Hopkins, JD, LLM<br />
1-13-2015Anonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-71825258295566038552015-01-20T13:00:00.002-07:002017-02-06T11:09:07.357-07:00Mad Dog Tranquilized! IRS Audit Tactics<h6>Audit Strategies & Tactics</h6>
You need to explore tactics before you talk to the IRS. The IRS examines returns to determine the accuracy of your income and deductions. However, an audit is more than just an examination of your accounting books. It is an investigation of YOU!
The IRS will often want to examine your bank accounts and your lifestyle. They usually request a lot more information from you than is necessary to determine income. But, they are looking for any suspicious transactions or activity for their purposes as well as for other governmental agencies with whom they are connected.
<h6>Income Items</h6>
The first thing the IRS looks at are all the documents given to them by your employer, banks, mortgage lenders, etc. (<a href="https://taxhelplaw.com/resources/irs-tax-transcripts/" target="_blank">More</a>) They accept as true all documents given to them. If there is an error, YOU must have it corrected - the IRS will not reverse it.
Next, the IRS looks at your bank statements. They add up all the deposits and declare them to be income. YOU must prove which deposits are not income. There is a special section in our <a href="https://taxhelplaw.com/taxhelp-membership-options/" target="_blank">Audit Defense</a> program devoted to "Proving Deposits are Not Income".
Finally, the IRS looks at your expenditures and your "lifestyle" to impute income to you. They add up all your expenditures and declare them to be income unless YOU can show you had money from other means, such as savings, friends&family; or loans.
<h6>Deductions</h6>
The first item usually reviewed by the IRS is your mileage log. You are required to keep one, but not many people do. Therefore, the IRS looks for that first. If you have one, they are more generous; if you don't have one, they start digging for more errors.
Next, they will look for contract labor you hired. If you issued 1099MISC forms, they are more forgiving. If you did not, they will require much more proof of the validity of the expense. They will look at your payments, your contracts, the industry standard, and how the workers filed their returns. Plus, the IRS could allege that you misclassified the subcontractors and they should be employees. That is a major problem!!
Finally, the IRS will thoroughly go through every expense deduction. You must match the payments with the invoices in chronological order or risk the IRS tacking on a "<a href="https://taxhelplaw.com/wp-content/uploads/2016/02/cfr-26sec.1.6662-3b1.pdf" target="_blank">negligent record keeping</a>" or "<a href="https://taxhelplaw.com/wp-content/uploads/2016/03/26USC6662-1.pdf" target="_blank">accuracy-related</a>" penalty. The invoices alone won't work because that doesn't show payment. The payments alone won't work because that doesn't show business purpose. Your testimony of business purpose is not as persuasive as contemporaneous notes on the billings.
So, you must have all the payments with all the billings, in chronological order. Don't make the IRS agent look through a pile of bills!! It's irritating, shows poor record keeping and leads to further investigation of you.
<h6>Pursue your case</h6>
All of these issues & more are explored in depth in our <a href="https://taxhelplaw.com/taxhelp-membership-options/" target="_blank">Audit Defense</a> program. TaxHelp has a <a href="https://taxhelplaw.com/wp-content/uploads/2016/03/4RsTaxHelp-Guide-to-Your-Rightspdf.pdf" target="_blank">Guide to Self-Representation in an IRS Audit</a>, along with more information in the "<a href="https://taxhelplaw.com/benefits-clc/vital-links/">Vital Links & Resources</a>" tab on TaxHelpLaw.com. But, we recommend having a tax attorney zealously represent you because they can prove your case without compromising your privacy.
Often, people want to use their return preparer or CPA for audits. In letter audits, that is fine. But for office and field audits, it's dangerous because of the familiarity of the CPA to you & the case and their lack of knowledge of IRS procedure and powers. They can't be independent and advocate for you. Nor can they use the Courts, which is often a cheaper way to fight the IRS!!
J. David Hopkins, JD, LLMAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-37399960210436921472015-01-20T12:51:00.000-07:002015-01-21T14:15:49.837-07:00All My Deductions Were Rejected!After the IRS spends countless hours pouring over your documents, making copies and wasting your time, they often send a <a data-mce-href="http://taxhelpaudit.com/benefits-clc/irs-letters-notices/irs-audit-letters/form-4549-determination/" href="http://taxhelpaudit.com/benefits-clc/irs-letters-notices/irs-audit-letters/form-4549-determination/" target="_blank" title="Audit Form 4549 – IRS Determination">Form 4549</a>
which outlines the lines of your return they question and the amounts
they are proposing to allow or disallow. But, taxpayers are often
shocked to find that the IRS has disallowed ALL of their deductions.<br />
<br />
Don't
worry. Usually it is because the evidence is not in proper order and
the IRS doesn't want to spend the time organizing your documents. The
purpose of the <a href="http://taxhelpaudit.com/">TaxHelpAudit</a> program is to show you how to organize and
prepare your files for the IRS.<br />
<br />
Then, once the documents are
organized you can determine what is missing and what further evidence
you need to prove your case. You will also discover if the IRS has any
factual or legal objection to your evidence.<br />
<br />
And, an audit does not necessarily end your arguments. You can still <a href="http://taxhelplaw.com/en/solutions/appeals/">Appeal</a> an Audit or go to <a href="http://taxhelplaw.com/en/solutions/court-cases/">Tax Court</a>. Don't give up!!!<br />
<br />
J. David Hopkins, JD, LLMAnonymoushttp://www.blogger.com/profile/08367144804687873193noreply@blogger.com0tag:blogger.com,1999:blog-5468164986718664216.post-15476870988576265752012-03-15T10:53:00.000-06:002012-03-15T10:53:48.792-06:00Why won't the IRS help me?<h3></h3> Dealing with the IRS is made more frustrating by the complete lack of help you will receive from the IRS employees. The publications they print are hard-to-follow and offer no guidance. Any letter you receive from them is packed with methods to pay but little advice on how to fight.<br />
<br />
The reason for this is because the IRS (like any gov't) can't offer legal advice. If they did, they would be forever embroiled with claims of improper advice. Plus, the employees at the IRS have limited authority and if you don't ask them to perform specific tasks for you, on the proper forms, they have no legal authority to act.<br />
<br />
So, the only way to win your case against the IRS is to know the law thoroughly, know what you want specifically, know which forms to put your request upon and exactly what language to use. Otherwise, your case gets thrown around various IRS offices and "appeals" and nothing gets done. You may call them repeatedly and be assured they are "working your case", only to find out in 6 months that nothing has happened.<br />
<br />
It takes diligence to pursue the IRS. You must follow up with them and make sure they are doing what you request. You have to appease them and make sure you are current with filings and payments.<br />
<br />
But, above all, don't look to the IRS for advice. They aren't allowed to adequately give advice and it will be deficient. Use the IRS to gather information, then create and pursue the best case possible!<br />
<br />
<a href="http://taxhelplaw.com/" target="_blank">J. David Hopkins, JD, LLM </a><br />
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