General
IRS Collections
Enrolled Agents
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| General
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Q:
I have two small home businesses and I was wondering what I could deduct exactly on my taxes, it said with PBS i could follow the list but i could not find that so how do i get that info?
A:
Good question. Very simply you can deduct anything you decide is necessary to operate and grow your business. This include a portion of all the expenses related to your home. A more detailed answer is available in our book "Making Tax A Game:Let's Play to Win!". It's available on our website or from Amazon. |
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Q:
What is the standard mileage rate accepted by the IRS?
A:
It's $0.55 for the first 2009. |
Q: TIN #
A: Federal Tax Identification Number secured by filing an SS-4 with the IRS. |
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Q:
How many expense categories do I need to make?
A:
There’s nothing magical about the categories. You can have as many as you choose. To us they are all “buckets”. The bottom line will still be the same regardless of how you categorize the expenses. Our recommendation is a minimum of six: advertising, office supplies, home business, travel/entertainment, and vehicle. |
IRS Collections
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Q: I filed my tax returns but didn't have the money to pay what was owed. What do I do now?
A: When the Internal Revenue Service sends you a notice stating that you owe back taxes, the amount is usually much higher than what you thought because they have tacked on penalties and interest. Of course you could just write a check and pay them the full amount, including penalties and interest. Worse you could just ignore them; meanwhile the penalties and interest keep piling up. Or you could hire a tax attorney who is experienced in the matters of back taxes. By analyzing your situation, we can determine your best course of action. For many taxpayers, this typically leads to an Offer in Compromise. |
Q: What is an Offer In Compromise?
A: An Offer in Compromise is an out of court agreement between the IRS and the taxpayer that resolves the taxpayer's liability. The Internal Revenue Service has the authority to settle or compromise federal tax liabilities by accepting less than full payment under certain circumstances. These circumstances are: Doubt as to liability - Doubt exists that the assessed tax is correct. Doubt as to collectibility (most common) - Doubt exists that you could ever pay the full amount of tax owed. Effective tax administration - (i.e., economic hardship) |
Q: Even though I am making installment payments, can I do an Offer In Compromise?
A: Yes! And in some cases the installment agreement can be suspended while the IRS is evaluating the Offer in Compromise. |
Q: When the IRS approves an Offer in Compromise, what happens next?
A: You may have up to ninety days or 2 years to tender payment to the Internal Revenue Service of the offered amount. Once the IRS has received payment, they will release all tax liens and there is no further liability. |
Q: How long does it typically take for an Offer In Compromise to be approved by the IRS?
A: Depending on the caseload, it generally takes ten to twelve months. But no matter how long it takes the Internal Revenue Service to review the Offer in Compromise, during that time all further collection activities are suspended. |
Q: Will I have to see or speak to the Internal Revenue Service if you take my case?
A: No! Enrolled Agents will handle your case in its entirety. All communications with the IRS will be made directly through our Enrolled Agents. |
Q: Can I file bankruptcy and discharge my taxes without entering into an Offer In Compromise?
A: Generally personal income taxes that are over three years old, and were assessed at least 240 days prior to bankruptcy filing, and voluntarily filed at least two years ago, can be included in a bankruptcy. However, most taxes aren't dischargeable. The trust fund portion of employment taxes is not dischargeable in bankruptcy; therefore, an Offer in Compromise is the only way to effectively eliminate the burden of the trust fund portion of employment taxes. |
Q: What type of documents will the IRS ask for with an OIC?
A:
Paycheck stubs, bank statements, utility bills, mortgage or rent payments. |
Q: When do I have to pay the amount being offered in an Offer in Compromise?
A: Upon receiving an approval letter from the Internal Revenue Service you may then have ninety days or as long as 2 years to pay the offered amount. After receiving payment, the IRS writes off the balance of the liability and releases all tax liens previously filed. |
Q: Can the IRS ever revoke an approved and paid Offer in Compromise?
A: Your Offer will not be revoked as long as you comply with the requirements relating to filing returns and paying required taxes for the five years after the date your Offer is approved by the Internal Revenue Service. |
Q: Is an Offer In Compromise best for me?
A: That depends on your situation, which is different for each taxpayer. That is why we offer a free consultation to assess your needs and to recommend what would be best for you in your particular situation. The OIC does NOT blemish your credit. In fact once the Offer is accepted and paid, all liens are released. We suggest that you complete our prequalification form and email or fax it back to us so that we can analyze your situation. |
Q: I am located outside California. Can you still help me?
A: Yes! The IRS has offices all over the country and every office is subject to the same guidelines. The OIC's are processed in NY, & TN. With today's instant communication, mail, phones, facsimiles, and e-mail, it has become simple to accommodate taxpayers who reside anywhere in the country. |
Q: I have not filed returns for a number of years. Is it too late to reach a settlement and make a fresh start?
A: All tax returns must be filed to do either an Offer in Compromise or an Installment Agreement. We will guide you to bring you current and formulate a strategy to pay off the balance due. For many taxpayers, this typically leads to an Offer in Compromise. |
Q: Can I go to jail or prison for not filing my taxes?
A: The IRS may seek to impose a criminal offense for failure to file tax returns as required. Even if you do file, the tax returns must be accurate and truthful because if false returns are detected by the IRS, a fraud referral to the Criminal Investigation Division will be generated. Failure to file returns is illegal and a FELONY, and subject to criminal and civil penalties. This means that you can go to prison, pay substantial penalties and be financially destroyed. Willful failure to file returns can result in a punishment of one year in jail and a $25,000 fine ($100,000 in the case of a corporation). |
Q: What are your fees?
A: Our fees for an Offer in Compromise are generally a flat rate and the terms of our engagement will be presented to you during your FREE consultation. |
Enrolled Agents
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Q: Are there other requirements to become an Enrolled Agent?
A: Over the years, an average of one-third of individuals taking the examination have passed, allowing them to apply for enrollment and subject themselves to a background investigation. In addition to the stringent testing and application process, Enrolled Agents are required to earn 72 hours of continuing professional education, reported every three years, to maintain their status. Because of the difficulty in becoming enrolled and maintaining that enrollment, there are fewer than 34,000 Enrolled Agents in the United States. In contrast, there are about 375,000 certified public accountants (CPAs) nationwide. |
Q: How do Enrolled Agents differ from other tax professionals?
A: Only Enrolled Agents are required to demonstrate competence in matters of taxation before they may represent a taxpayer. Also, they are the only representatives for taxpayers who receive that right from the U. S. government. (CPAs and attorneys are licensed by the states.) An individual may become an Enrolled Agent in one of two ways: The primary way is to pass a difficult, two-day examination given annually by the IRS. The test covers taxation of individuals, corporations, partnerships, estates, trusts, procedures and ethics. The other way is to have been an employee of the Internal Revenue Service for five years, regularly applying and interpreting the provisions of the Internal Revenue Code and regulations. |
Q: What exactly do Enrolled Agents Do?
A: Unlike lawyers or CPAs, Enrolled Agents specialize in taxation. Throughout the year they advise, represent and prepare returns for individuals, partnerships, corporations, estates, trusts and any entities with tax-reporting requirements. In California, for example, the more than 4,000 members of the California Society of Enrolled Agents prepare almost 2,000,000 tax returns each year. Enrolled Agents' expertise in the constantly changing field of tax law enables them to be effective representatives when taxpayers are audited by the IRS. |
Q: What are Enrolled Agents?
A: Enrolled Agents are individuals licensed by the federal government to represent taxpayers before the Internal Revenue Service. Enrollment dates back to 1884, when Congress acted to regulate persons who represented citizens in their dealings with the Treasury Department, after questionable claims had been presented for Civil War losses. |
