Who you, a Guru? After you read these 100 Tax Relief tips, you'll be one. But we're looking to recruit a Guru to blog, write a 101 tip Tax Relief book, and become a leader of this community.
Hot topics for both consumers and webmarketers on WebmasterRadio.FM
Every Wednesday, 4PM Eastern.
Debt Calculator
DebtHelp.com Tip: A helpful tool you can use to figure out the right figure for your tax debt repayment, if found in the Debt Calculator. As an example, there is one located at debthelp.com.
This handy tool is easy to use and can be used as a budget planning tool. It can provide you with a way to ease your tax burden without suffering financial hardship.
Here are some documents you will need to calculate a tax help relief figure:
Any income documents (W-2 or paycheck if you are an employee)
Fixed monthly expenses (utilities, rent, mortgage, car payment, etc.)
Variable monthly expenses (groceries, health supplies, i.e.)
Calculation:
Add up all your income for the year
Add up all of your fixed expenses for the year
Add up all your variable expenses (estimated) for the year
Input all of those figures into the debt calculator. The debt calculator does all the work for you. To make it easier on you, you can just input the individual figures without adding up the separate categories.
The debt calculator should arrive at a figure that tells you have much you have left to pay on your IRS tax debt.
The debt calculator is known as a debt calculator due to the fact that it lets you know how much debt you carry in relation to your income. For IRS tax debt settlement help, it will let you know how much income tax debt you can reasonably afford to pay. In traditional ratio analysis, debt calculations can spell the difference between success and failure. It will let you know if you are overextended (have too much debt). It is a budgetary planning tool. The debt calculator can be fun to use, also. Whenever you notice a change in your income or expenses, simply input the new amounts and find a debt friendly repayment figure.
Save Tip
Comments
Tip Rating
Assets That Might Be Levied
Once you have not voluntarily paid, or agreed upon paying, your back taxes, the IRS starts their enforced collection process. The point where the IRS seizes your assets is known as the IRS tax levy stage. Some of your assets that the IRS may take from you include:
Bank accounts
Personal property such as accounts receivable from your business, computers, furniture
Wages
Income from customers
Vehicles (boats, motorcycles, cars, etc.)
Social Security benefits
Retirement plans
Real property (real estate you own)
Stocks, bonds, investment items (such as dividends)
State and federal income tax refunds, current and future
Accounts that belong to you, but are held by someone else. For example, cash loan value of your life insurance, licenses, rental income, mutual fund accounts.
An IRS levy arrives shortly after the Notice of Lien. You may receive a written notice, or not. An IRS levy can happen even though no a tax lien has not been filed.
An IRS levy occurs only when you have not attempted to contact the IRS or repay your unpaid tax bill. They do not happen totally out of the blue.
Save Tip
Comments
Tip Rating
Federal Tax Lien Process
DebtHelp.com Tip: Having a federal tax lien filed against you does not happen overnight. It is part of a legal process ending with the IRS attaching the tax lien to your property.
Here is an easy way to understand the tax collection process leading to a federal tax lien:
Tax return. When you file your tax return you are expected to pay your entire tax bill in full. You will enclose payment along with your tax return. Or, if you are filing your tax return online, you will pay electronically.
Bill. If you do not pay your tax bill in full, you will receive a bill from the IRS stating the amount of unpaid taxes due. Titled ‘Notice and Demand for Payment’. This bill will also contain an explanation of your balance due amount.
You are given the chance to pay your unpaid tax bill (within 10 days of receiving the first Notice) by submitting payment to the IRS. You can do this by check or money order. Or, you can pay via credit card (a convenience charge may apply). Call 1-800-272-9829 or 1-888-729-1040 for this purpose.
If you do not contact the IRS to voluntarily pay your taxes, you will cause the tax collection process to be taken to the next step. This next step is an enforced collection effort to secure payment.
Notice. When you do not pay your tax bill in full, and have not contacted the IRS to arrange a satisfactory payment arrangement, the IRS will file a ‘Notice of Federal Tax Lien’. You will receive this notice when it appears you have neglected or are avoiding the IRS.
The Notice of Federal Tax Lien will give your creditors notice about the IRS having a claim against your property. The tax lien also applies to any property you acquire after the lien is put in place (this is known as a future interest). It also may negatively affect your credit history.
The tax lien attaches to your personal and real property and any future interests you may obtain in any property. If you are a business owner, it will attach to any rights you have in property.
Dispute. If you dispute the amount of your unpaid tax bill (Notice and Demand for Payment), contact the IRS as soon as possible. You can visit your local IRS office, or write to the IRS address on your Notice. When you contact the IRS either in-person or through the mail, have a copy of the bill and copies of any records regarding your tax bill amount. Obviously, you will not be mailing any original documents. Only mail copies of documents that support your position. You can take originals into the IRS office, but be sure to have them returned to you upon your leaving the office. They are your permanent records.
You can also call the IRS 1-800-829-1040 to discuss the Notice. Be sure you have your Notice will you and any supporting documents you need to dispute why you believe the amount is incorrect.
IRS tax laws state you can ask the IRS to review your federal tax lien case, if you seek an appeal on your federal tax lien filing. If you are not satisfied with that, you are entitled to a Collection Due Process Hearing.
Contact. Do not be afraid to contact the IRS. They are there to help you. They want to resolve your unpaid tax bill as quickly as you do. Plus, you are protected during the entire collection process under the Taxpayer Bill of Rights. See IRS Publication 1 (Rights as a Taxpayer) for more information.
Save Tip
Comments
Tip Rating
Back Tax Forms
Whenever you are ready to file your back taxes, you have two options:
Obtain directly from the IRS
Develop a substitute form
IRS. The IRS usually carries tax forms for prior tax years. You can obtain them by ordering online, downloading them from the IRS website, or calling the IRS toll-free to order them. You will be calling 1-800-829-1040 to request your back tax forms.
Substitute tax forms. The IRS has a Substitute Forms Unit that accepts IRS tax forms that you develop. However, there are guidelines that must be met. For instance, the substitute tax form you develop must:
Be on white, unlined paper
Conform to the physical layout of the applicable IRS form. (Have the same number of pages, i.e.)
Wording should match the official IRS form as closely as possible
All perjury statements must be worded verbatim as the original IRS form.
Prior approval is needed unless the only change is the preprinted year.
The substitute form you develop must not hinder the IRS tax process.
You need to know that the following tax forms are not allowed by the Substitute Forms Unit. You will need the actual tax form where applicable, in other words.
· Wager earner documents: W-2, W-2c, W-3, and W-3c (see Publication 1141 and 1223 for information on these forms).
· Income reporting documents: 1099 series, W-2G (gambling winnings), 1096, 1098 series, 5498 series and 1042-S (Publication 1179 provides more information on this area)
· State tax forms. Period.
· Federal Tax Deposit (FTD) coupons
· Forms 1040-ES (OCR) and 1041-ES (OCR), which may not be reproduced.
· Forms 5500, 5500-EZ, and associated schedules (see the Department of Labor website (www.dol.gov) for information on these forms).
· Requests for information or documentation you received from the IRS.
Submitting. You can send your substitute tax form to the Substitute Forms Program via email. The email address is taxforms@irs.gov. In the subject line, be sure to put “PDS Submissions”. Your documents must be in pdf format.
Here are some more guidelines for sending email substitute forms to the IRS:
Do not send individual files for each of your substitute forms. You need to send one attached pdf file containing all of the forms you wish to submit.
The process of emailing your substitute tax forms will not quicken the review or approval process. The files are dealt with in the order they are received, along with any mailed-in submissions.
Of course, the smaller your submission, the quicker the processing time.
Be sure to optimize your pdf file prior to submitting.
Largest attachment is 2.5 megabytes.
Zip files are acceptable.
In addition to submitting forms via email, you may continue to send your submissions to:
Internal Revenue Service SE:W:CAR:MP:T:T:SP Attn: Substitute Forms Program 1111 Constitution Avenue, NW Room 6406 Washington, DC 20224
Save Tip
Comments
Tip Rating
Example of Innocent Spouse Relief Case
DebtHelp.com Tip: Jane and Joe Hanes filed a joint tax return for the 2006 tax year. The IRS, upon receiving third party information, found out that the tax amount due on the Hanes’ tax return was understated. The IRS had reason to believe that Joe Hanes had received $40,000 worth of unreported income from investments he owned. Jane Doe had no knowledge of, nor reason to know, that Joe had these investments. He had never mentioned the investments, nor had she seen any statements in the mail about them.
The IRS penalized the Hanes for underreported income. Jane Hanes can request innocent spouse relief. Innocent spouse relief will decrease, or eliminate, Jane Hanes tax debt. She incurred this tax debt due to her filing a joint tax return containing underreported income due to her husband’s erroneous item.
Save Tip
Comments
Tip Rating
Applying Guidelines For An Offer in Compromise
Offer in Compromise programs offer taxpayers a way to reduce their tax debt at less than the full original amount of tax debt. Sometimes this program is affectionately known as ‘pennies on the dollar’. The agreed amount in an Offer in Compromise includes the original unpaid tax bill, interest, and penalties. In order to apply for an Offer in Compromise (OIC), you need to follow some guidelines.
Form. You will need to file IRS Form 656 as a requirement.
Online. You can also go online to request an OIC.
Financial statement. You will need to supply the IRS with financial information about your situation. This is done on IRS Form 433-A for individuals. For businesses, you will use IRS Form 433-B.
Verification. You will need to supply verification of your financial situation. Verification includes bank statements, vehicle titles, mortgage notes, financing agreements, etc.
Cover letter. Write a cover letter explaining why the IRS should accept your OIC offer.
You need to convince them it is to their best interest to enter into this Offer of Comprise agreement. Enclose this letter with your IRS Form 656.
Fee. There is a $150 application fee. This is nonrefundable. Include this with your application package.
Save Tip
Comments
Tip Rating
Unfiled Tax Returns Information
DebtHelp.com Tip: The IRS’ statute of limitations timeframe regarding starting an audit depend on a couple of factors. Both involve whether you file a tax return or not. First, did you file a return? Secondly, did you not file a return?
If you did file a return, the IRS has three years from the original date of your tax return filing to start an audit. That means that within that time period, you should have been notified of any pending IRS examinations along with any explanation for the needed examination (audit).
If you did not file a return, however, there is no statute of limitations timeframe for the IRS to start or complete an audit on you. There also is no timeframe limit for assessing and collecting any taxes due from you. In other words, if you do not file a tax return, the IRS can come after you 10 years after the date you were supposed to have filed a tax return.
LifeTips is part of ideaLaunch, the hub for a group of websites offering
solutions that help clients improve mind share, market share and profit online.
