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
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
Amended Return & Tax Debt Help
DebtHelp.com Tip: You realize after filing your tax return, that you forgot to record a huge chunk of income on your tax return. Or, you find out that you could have claimed more deductions. So, you have received an IRS Notice stating the findings in which you are charged new taxes, penalties, and interest. You need tax debt help. What can you do to correct this?
Use IRS Form 1040-X to file an amended return. There are stipulations that apply to filing an amended return. They are not to be used simply to lower your tax debt. They are to be used only for an honest oversight causing your tax return to have errors.
Form 1040X– Amended U.S. Individual Income Tax Return. You must file your amended return within three years from the date you originally filed your tax return. For instance, to file an amended return for your 2005 tax return, you have until April 15, 2008 to file an amended return.
You will need to mail in to the IRS service center where you normally mail your tax return to. When you do mail your amended return in, be sure to keep a copy for your own records
When you complete Form 1040X, you need to have your original tax information available. This is due to the fact that you need to write in your original income, deductions, and any credits taken on your original tax return. You also will report the changes you are making, and any correct amounts. This can simply be done by crossing out the original figure and writing in the new/correct figure. Be sure to cross reference the new figure to a supporting schedule and/or form explaining the change. (This will be a separate attachment to your amended return). Finally, figure your new tax based upon these new figures. Include your tax payment, if any, along with your amended return.
You can use this form to correct a mistake or to claim a refund on the original income tax return. For instance, if you did not report some income (like when you receive a Form 1099 after your filed your 1040), you claimed deductions or credits you should not have claimed or vice versa.
If you find that you need to make changes on more than one past return, use a separate amended return for each year. Do not combine figures from different years into one amended return, in other words.
Be sure that when you complete your amended return Form 1040X, that you provide the IRS with details about all the changes you are making. It is recommended to explain these changes by developing schedules and forms that suit your purpose. Be sure to attach any of this additional information to your Form 1040X. By explaining your changed items thoroughly and in easy-to-understand terms, you may receive some tax debt help from the IRS in the form of a lower tax bill.
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
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
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
Levy Process
DebtHelp.com Tip: After you have received your Notice of Lien statement, you will receive other notices allowing certain time periods in order to take care of your back taxes. If you choose to ignore any of these notices, the IRS levy process starts.
First, you will receive IRS letters all stating the amount of your unpaid taxes and that the IRS is intending to levy your property to satisfy this debt. You will be given references involving IRS Publications that you can refer to for more information. You also will be given information about how you can appeal the levy process. Letters you may receive include:
Letter 11 – Final Notice of Intent to Levy and Notice of Your Right to a Hearing. You should receive this 30 days prior to the levy. Letter 1058 – Final Notice Reply within 30 Days
Letter 1085 – 30-day letter proposed assessment
Whichever you receive will depend upon your individual situation.
After receiving an IRS letter, you will receive a notice regarding your IRS levy.
CP 90 – Final Notice of Intent to Levy
CP 92 – Notice of Levy upon Your State Tax Refund CP 242 – Notice of Levy upon Your State Tax Refund
Once again, which Notice you receive will depend upon your individual situation.
On average, there will be a 30 day period between the time you receive notice of levy and the actual seizure of your property. It does not come unexpectedly.
A written notice of levy can be mailed to a third party holding your property (such as a bank), or an IRS agent can simply show up at your property and take property.
The IRS levy process can extend over months. It is not something that ends in an IRS agent simply showing up at your door while taking your property. You have received ample notice about the process, yet have chosen to ignore it. Therefore, you are paying the consequences. The IRS levy process is the last step in the enforced collection process.
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.
