This Phone Call Is For You and They Say They’re From the IRS

Posted on February 26th, 2016

It’s the time of year when millions of Americans turn their thoughts to taxes. It can be a stressful time, even for taxpayers who have all the information they need and the resources to pay any amounts they owe. Stress levels can increase quickly, however, when there are surprises, such as a phone call from someone claiming to represent the IRS and threatening arrest, driver’s license revocation, deportation, or other court action unless a payment is arranged immediately.

The IRS reports seeing a marked increase in tax-related phone scams, and that this activity peaks during filing season. Based on the tactics scammers routinely use, there are several obvious ways to know a caller is not legitimate.

  • The IRS will never make a phone call about a tax return issue without first sending the taxpayer a notice through the mail. This is perhaps the most obvious trigger. If you have not received a notice from the IRS through the mail about a specific tax return or tax-related issue, a phone call claiming to be from the IRS is almost certainly a scam.
  • There are specific timelines built into the U.S. tax code to provide taxpayers the opportunity to question or appeal IRS claims. Therefore, the IRS will never call a taxpayer to demand immediate payment.
  • The IRS will never demand that a taxpayer use a specific method, such as a prepaid debit card, to remit taxes that are owed.
  • Likewise, the IRS will never ask for credit or debit card numbers over the phone.
  • Although the IRS is serious about enforcement, calling upon local police or other law-enforcement groups to arrest a taxpayer for being delinquent is never part of their enforcement process.

The best thing for a taxpayer to do after receiving such a phone call is to simply hang up immediately without providing the caller with any information. If a taxpayer already knows they owe, or suspects they owe taxes, they should either call their tax service provider, or contact the IRS at 800-829-1040 to verify their status with a legitimate IRS employee.

People often ignore tax notices because of some circumstance that seems larger than they can handle. But the reality is the IRS isn’t going away and the passage of time makes things worse, not better. Legitimate tax notices should not be ignored. Left unattended, they can lead to interest, penalties, wage garnishments, asset seizures, and more.

Call the office of Brian C. Goodman & Associates to discuss your questions about contact you have received from the IRS. We’ll help you determine whether it is a scam or legitimate, and what your next steps should be. With us on your side, you can have confidence that our tax professionals know how to respond to whatever tax notice you receive. We’ll review the notice, tell you what it means, and help achieve the quickest resolution possible. You’ll probably never have to deal directly with the IRS.

What Is Innocent Spouse Relief?

Posted on February 9th, 2016

When it comes to filing taxes married couples often take advantage of the many benefits of filing a joint return. It’s a great option, but may also cause problems for some, especially if the couple is living apart due to divorce or separation, and if one spouse has had trouble with IRS payments in the past.

When a joint return is filed, the IRS considers both spouses named on the return “equally and severally” liable for 100% of taxes, interest and penalties owed. In other words, they’re responsible together as a couple, and also as individuals. This “equality” still applies even if one spouse earned all or most of the taxable income.

Problems can occur if the IRS finds that insufficient taxes were paid on the return. This can be the result of something as simple as a math error, an incorrect deduction, or because of an intentional omission of taxable income on the part of one spouse. No matter what the cause, when it’s determined that there was a deficiency in the amount reported, the IRS holds both spouses equally liable for the full amount owed.

First the IRS will send a formal notification to the couple at their last known address. If they’re no longer together, the spouse who receives the notice can be left holding the bag as the IRS will continue to pursue them for payment of all tax owed, plus interest and penalties.

The Innocent Spouse relief was created to release spouses in this situation from all or a portion of the liability, but they must first qualify and apply for the program which has three categories, each with its own requirements:

  1. Standard Innocent Spouse Relief: releases a spouse who is deemed innocent, from liability for unpaid back taxes, interest and penalties.
  1. Separation of Liability: responsibility for the unpaid tax, interest and penalties is divided between both spouses.
  1. Equitable Relief: granted when a spouse doesn’t qualify for the first two categories of relief, but the IRS determines that it would be unfair to hold them responsible for the taxes owed.

If you find yourself in this situation, working out a favorable resolution can be complicated and overwhelming.  That’s why it’s best to talk to a CPA before trying to resolve the problem onyour own.  Your Royersford CPA, Brian C. Goodman & Associates PC can provide you with the information you need to fully understand your options and can also represent you before the IRS. Contact us for a free consultation to see how we can assist you in resolving this and other IRS problems. For your convenience, we also offer a second CPA office in New Tripoli with the same tax and accounting services.

IRS Passport Law and Fresh Start Program

Posted on February 4th, 2016

If you’ve ever owed back taxes you know that the IRS has a reputation for being pretty relentless when it comes to collecting what you owe.  And, never mind interest and penalties, if you don’t act promptly – or worse, ignore them –  they’ll step up their efforts with wage garnishments, liens, or seizure of personal property to get your attention.

Over the last few years, there have been some changes made by the IRS that includes some good news and, some not-so-good news for anyone who’s fallen behind on their taxes.  Either way, these changes warrant your attention.

The not-so-good news is that Congress passed a new law in December 2015 allowing the IRS to work with the State Department to revoke the passport of anyone with a tax debt of $50,000 or more that is determined to be…”seriously delinquent, unpaid and enforceable.”  Affected taxpayers receive written notice before their passport is cancelled and are permitted to return home if they’re are outside the US but are issued a Federal tax lien.  Taxpayers who have made an installment agreement are exempt unless they become delinquent on payments, and exceptions can be made for innocent spouses, some military personnel and minors who have large unpaid-tax bills.

On the good news side, what a lot of people may not know is that the government has also developed a program called Fresh Start, designed to help tax payers who find themselves in these situations.

Introduced in 2013, the Fresh Start program was designed primarily for individual tax payers, (small businesses owners may also qualify) by making it easier for those who owe back taxes to avoid further action by the IRS. Some of the benefits of the Fresh Start program include:

  • The amount owed before a Federal tax lien is issued has been increased to $10,000
  • Installment agreements are more streamlined and easier to access
  • Tax payers owing $50,000 or less can now take advantage of installment agreements with up to 6 years to pay in full
  • There is more flexibility in consideration of requests for an Offer in Compromise and in analyzing a taxpayer’s ability to pay less than the full amount owed, making this program available to a larger group of taxpayers.

The IRS website has links to resources that can help you take advantage of the Fresh Start program including a pre-qualifier tool for offers in compromise and an electronic payment options page.

As always, it’s best to work with a CPA to make sure you understand all your options thoroughly.  The CPAs at Brian C. Goodman & Associates have been helping Philadelphia residents with discrete, affordable tax problem solutions for three decades, and we’re fully qualified to represent you in IRS proceedings if needed. Give us a call find out how we can help you resolve any of your tax problems.

AICPA Takes on IRS and Expands Internationally

Posted on January 28th, 2016

American Institute of CPAs president and CEO Barry Melancon said the AICPA is pushing the Internal Revenue Service to improve its services for both taxpayers and CPAs while preparing to become a more international organization.

During a wide-ranging speech Tuesday in New York at a meeting of the Accountants Club of America, Melancon gave an update on the AICPA and the future of the profession.

“Basically the service levels in the Internal Revenue Service to preparers and taxpayers are at an all-time low,” he said. “To use a South Louisiana French term, it sucks. We do not have a 21st century IRS, and we are not likely to get one in the short term. We’re not going to get one because the Congress absolutely loathes the Internal Revenue Service and the leadership of the Internal Revenue Service.”

Melancon discussed some of the political challenges facing the IRS in Congress, and the $290 million that Congress earmarked in last month’s tax extenders legislation toward improving taxpayer service and cybersecurity and combating identity theft.



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