A CP 90 or CP 297 notice in the mail from the IRS - it's one of the scariest things you ever experience, to open an envelope with one of these notices. An IRS tax levy intimation isn't an unstoppable force that has been set in motion. You still have the power to change its course.
But you have to be quick. You can be one of those people who are too afraid of the IRS to open an e-mail from them. Once you get an IRS tax levy notice, your 30 day clock to respond starts. When your time runs out, they begin delivery process - they come and grab your property or something to pay for what they think you owe them.
No, they aren't going to beat your door down with a battering ram and grab your large screen TV. They'll just send an IRS tax levy notice to your employer and grab your money right at the source.
This is a situation that you don't want, of course. Once your place of employment knows about your tax problems, it isn't going to look good on your employee evaluation. Basically, the IRS, once they set their sights on you, are not going to let go until you either pay up or give them a reason why they have the wrong man.
Now that last part probably has your interest right away - convincing them that they have to wrong man. The first thing you want to do is to get professional help - go to a tax firm and retain them. You need their guidance.
Take a look at all your tax returns and try to look for and find out what the IRS has a problem with. If you owe the IRS anything, of course, it's going to be hard to get them off your case.
After you've taken care of all your back taxes, see your tax professional about putting a 433-F financial statement for the current year together - fully supported with old documentation needed. Once the IRS takes a look at your 433-F, they'll come back to you with their thoughts on how you can put this behind you.
It couldn't hurt if you got yourself abreast of the IRS to find out what expenses the IRS allows in your kind of case. If none of this seems to work for you, you do have other options at your disposal.
You could, for instance, talk to the IRS to agree to an installment plan. They'll ask you to prove to them that you really are unable to pay all their dues right away. But if you do convince them, this could be a perfectly acceptable way to go forward. Or else, if you are able to prove to them that you're too financially challenged to be able to pay them back, you can come back to them with an Offer in Compromise.
You really don't have to worry about having the IRS believe. Most of the time, they are just happy to work with you.
Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts
Monday, May 14, 2012
Wednesday, August 24, 2011
Help your Business Emerge from an IRS Tax Audit Owing Nothing (as Opposed to Owning Nothing)
No business wants to tangle with a snorting and charging IRS (come to that, no individual person hopes for that either). Small businesses can be especially vulnerable to an IRS tax audit - in particular, ones like small stores and restaurants that do a lot of cash business. Mistakes happen when you handle cash. Any time a business finds itself marked by the IRS they know that it doesn't matter if they are found innocent of any tax law abuse in the end - it's going to cost them a lot of money and a lot of time. Not to mention everyone's going to go home with an ulcer in the end.
There are things you can do though, that can help you go through the ordeal with the minimum fuss possible and help you emerge at the other end owing nothing (as opposed to owning nothing).
When you receive notice that you are under IRS tax audit, that isn't to send you into a panic. Most audits aren't the body cavity-search experience that you hear they can be. Usually, all they want is a little reassurance that some math error somewhere is only a clerical mistake. Sometimes, they'll find that the numbers on your 1099 doesn't agree with the figures on the company return. If you could just do a new tax form or give them the right document, they'll just go away (they have other people to torture, you know). Sometimes, there are certain deductions that entities like real estate investment businesses can claim that wouldn't apply to other businesses. The auditor will just want to know that all is on the up and up.
Not even accountants and CPAs deal with the IRS on their own when they have the bad luck to get audited. It's stressful for them too. CPAs hire CPAs or tax attorneys when they are audited. It takes emotion out of the experience. A self-composed professional can zero in on problems in an IRS auditor's assertions. The tax law isn't black and white in all places. A lot of the time, laws can be open to interpretation. And an auditor, can choose to take a hardline for no reason. It takes a knowledgeable tax authority to be able to argue with such an auditor.
Remember how in the movies the police always say that anything you say can and will be used against you in court of law? That applies to audits to. In your to appear cooperative, you might volunteer information that they could use against you. Remember that you're not to the trust the IRS (not that you would need to be told that, but people tend to forget when they feel threatened). You want to give the IRS exactly as much as they ask and no more. If possible, answer everything with a yes or no.
In the end, you don't want to assume that whatever the IRS tax audit contends is right. They are as liable to make mistakes as anybody.
There are things you can do though, that can help you go through the ordeal with the minimum fuss possible and help you emerge at the other end owing nothing (as opposed to owning nothing).
When you receive notice that you are under IRS tax audit, that isn't to send you into a panic. Most audits aren't the body cavity-search experience that you hear they can be. Usually, all they want is a little reassurance that some math error somewhere is only a clerical mistake. Sometimes, they'll find that the numbers on your 1099 doesn't agree with the figures on the company return. If you could just do a new tax form or give them the right document, they'll just go away (they have other people to torture, you know). Sometimes, there are certain deductions that entities like real estate investment businesses can claim that wouldn't apply to other businesses. The auditor will just want to know that all is on the up and up.
Not even accountants and CPAs deal with the IRS on their own when they have the bad luck to get audited. It's stressful for them too. CPAs hire CPAs or tax attorneys when they are audited. It takes emotion out of the experience. A self-composed professional can zero in on problems in an IRS auditor's assertions. The tax law isn't black and white in all places. A lot of the time, laws can be open to interpretation. And an auditor, can choose to take a hardline for no reason. It takes a knowledgeable tax authority to be able to argue with such an auditor.
Remember how in the movies the police always say that anything you say can and will be used against you in court of law? That applies to audits to. In your to appear cooperative, you might volunteer information that they could use against you. Remember that you're not to the trust the IRS (not that you would need to be told that, but people tend to forget when they feel threatened). You want to give the IRS exactly as much as they ask and no more. If possible, answer everything with a yes or no.
In the end, you don't want to assume that whatever the IRS tax audit contends is right. They are as liable to make mistakes as anybody.
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