Do You Qualify to Settle Your IRS Tax Debt For Pennies on the Dollar?

Now you no longer need to guess because the Internal Revenue Service has introduced a new tool for determining a taxpayer’s eligibility for an offer in compromise that can help lower the taxpayer’s outstanding tax debts. 

The IRS’s new Offer in Compromise Pre-qualifier tool Helps Tax Practitioners determine a taxpayer’s eligibility for an offer in compromise and calculates a preliminary offer amount before they start on the paperwork. An offer in compromise is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. 

The online tool asks information such as the taxpayer’s ZIP code, state, county, the total number of members of their household, including those over age 65, and the total IRS tax debt, along with the most recent tax year they are requesting to compromise. It begins by asking if the taxpayer is in an open bankruptcy proceeding, has filed all of the required federal tax returns, made all of the required estimated tax payments, and submitted all of the required federal tax deposits if they are self-employed or have employees.  

The tool also requests information on the taxpayer’s assets, income and expenses, and leads to a proposal. 

Last year, the IRS expanded its Fresh Start initiative to offer more help to unemployed and financially stressed taxpayers (see IRS Announces More Flexible Offer-in-Compromise Terms to Help a Greater Number of Struggling Taxpayers!). Those efforts included streamlined procedures for both installment agreements and offers in compromise. The IRS now has more flexibility with financial analysis for determining reasonable collection potential for distressed taxpayers. 

However, an offer generally will not be accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement. The IRS first examines a taxpayer’s income and assets before making a determination regarding the taxpayer’s ability to pay. 

The number of requests for offers increased by 28 percent between fiscal years 2007 and 2011. At the same time, the resources available at the IRS to work on the offers have decreased, creating an inventory backlog and delaying responses to taxpayers.  

The new OIC pre-qualifier tool could help the IRS reduce this backlog by encouraging taxpayers and tax practitioners to do the work ahead of time to determine whether an offer in compromise is worth pursuing.

IRS Problems Keeping You Awake at Night?
 

Want to Settle for Pennies on the Dollar!

Contact the Tax Lawyers at Marini & Associates, P.A.

 

for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms 

or Toll Free at 888-8TaxAid (888 882-9243).

Source:

AccountingToday

 

Get Ready for the EU TIN ... Comming To Europe Soon!

The European Commission requested consultations from the pubic regarding establishing an EU Taxpayer Identification Number (TIN).

Comment Are Requested:

 

Use of an EU Taxpayer Identification Number (TIN)

Title

Consultation on the "Use of an EU Taxpayer Identification Number (TIN)" [short-name: EUTIN]

Policy fields

Taxation

Target groups

All citizens and organisations are welcome to contribute to this consultation. Contributions are particularly sought from individual citizens, businesses, tax practitioners, academics, intergovernmental, non-governmental and business organizations, tax administrations.

Period of consultation

From25.02.2013 to 17.05.2013

Objective of the consultation

The Commission adopted on 27th June 2012 a Communication on the fight against tax fraud and tax evasion. An Action Plan which details concrete proposals to strengthen the fight against tax fraud and tax evasion was adopted on the 6th of December 2012.   One of the 34 measures contained in the Action Plan is the creation of a European Taxpayer Identification Number (EU TIN) which is described as follows (action 22):   "TINs are considered as providing the best means of identifying taxpayers under automatic exchange of information.   The national TINs are however built according to national rules which differ considerably and make it difficult for third parties (financial institutions, employers, other) to correctly identify and register foreign TINs and for the tax authorities to report back this information to the other tax jurisdictions.   The creation of an EU TIN might constitute the best solution to overcome the current difficulties faced by Member States in properly identifying all their taxpayers (natural and non-natural persons) engaged in cross border operations.   Whether this could be a unique EU number or the addition of an EU identifier to existing national TINs is an issue which should be further explored, as should be explored links with the other existing EU registration and identification systems.   Although the concept of an EU TIN is simple, its implementation is a complex issue which calls for a step-by-step approach.   A public consultation will be launched by March 2013. The presentation of a subsequent legislative proposal requires further in-depth studies and the strong support of the Member States. As a first step, a possibility would be to further develop the "TIN on EUROPA" portal, by making it possible to check the validity of national TINs by linking this application with Member States' databases." The Commission services are launching this public consultation in order to collect the opinions of all interested stakeholders on the creation of an EU Taxpayer Identification Number (TIN). The Commission is seeking to collect information on the possible scope of an EU TIN (both in terms of operations and taxpayers covered), its practical aspects (including possible simplification and a step-by-step approach), its design and functioning, as well as various legal considerations (a.o. data protection).   The views expressed by the contributors will be used by the Commission services to identify the appropriate approach to the creation of an EU TIN and to develop the appropriate policy response.   The contributions may also be used in the possible preparation of the relating impact assessment.

In taking this action forward, it will be important to confirm its exact scope in addition to addressing a large set of practical and legal questions in order to ensure that any resulting proposal will reflect the needs and concerns of stakeholders.

 

Information Sharing Have You Losing Sleep?

Contact the Tax Lawyers at Marini & Associates, P.A.

 

for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

Source:

EU Taxation & Customs Union

 

Everything You Ever Wanted To Know About...ATRA of 2012.

The Joint Committee Released Their Explaniation of American Taxpayer Relief Act (ATRA) of 2012.

This document, prepared by the staff of the Joint Committee on Taxation in consultation with the staffs of the House Committee on Ways and Means and the Senate Committee on Finance, provides an explanation of tax legislation enacted in the 112th Congress.

The explanation follows the chronological order of the tax legislation as signed into law. For each provision, the document includes a description of present law, explanation of the provision, and effective date. Present law describes the law in effect immediately prior to enactment. It does not reflect changes to the law made by the provision or subsequent to the enactment of the provision. For many provisions, the reasons for change are also included.

In some instances, provisions included in legislation enacted in the 112th Congress were not reported out of committee before enactment. As a result, the legislative history of such provisions does not include the reasons for change normally included in a committee report.

In some cases, there is no legislative history for enacted provisions. For such provisions, this document includes a description of present law, explanation of the provision, and effective date, as prepared by the staff of the Joint Committee on Taxation.

In some cases, technical explanations of certain bills were prepared and published by the staff of the Joint Committee. In those cases, this document follows the technical explanations.

Section references are to the Internal Revenue Code of 1986, as amended, (the ‘‘Code’’) unless otherwise indicated. 

American Taxpayer Relief Act of 2012 Giving you Headaches?

Contact the Tax Lawyers at Marini & Associates, P.A.

for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

========================================================================
 

 

JCS-2-13 Download 

FEBRUARY 25, 2013,

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File Type: pdf

The Internet Sales Tax Exemption About To Expire?

U.S. states could collect millions of dollars in online sales taxes, with members of both parties in Congress sponsoring legislation that would resolve states' decades-long struggle to tax businesses beyond their borders.

A bipartisan group of 53 lawmakers in the Senate and House backed the Marketplace Fairness Act of 2013 last Thursday, Febuary 15, 2013, which aims to resolve the differences between bills introduced in the Senate and House in the last Congress. 

The proposed legislation permits States to enforce the Collection of Sales & Use Taxes from Internet Retailers, placing them on a par with brick and mortar businesses.  


This Act permits States to require qualifying Sellers to collect and remit sales and use taxes on remote sales, but the States must implement certain simplification requirements.  

The bills introduced in the House and Senate are substantially similar in all material respects. Each provides an important exception, the "Small Seller Exception", for businesses with less than $1 million dollars in annual domestic remote sales. 

Since 1992 when the Quill case was decided by the Supreme Court, States have been prohibited from collecting sales taxes on purchases made by in-state customers from out-of-state sellers who lack sufficient physical presence. Simplification is required because the Supreme Court ruling cited a concern that collecting sales tax for multiple states would be too difficult. 

The Marketplace Fairness Act requires that states must simplify their sales tax laws in order to ease those concerns and make multistate sales tax collection easy.  

In the last decade, Internet sales have gone from 1.6 percent of all U.S. retail sales to more than 5 percent, according to Commerce Department data, a proportion that will likely grow as shoppers turn more to handheld devices to make purchases. In the third quarter of 2012, retail "e-commerce" sales were $57 billion, the department said. 

Large Internet retailers are worried the tax could drive up the cost of doing business. They would also have to create new systems and software to collect the surcharges, adding to their costs.

Amazon said in July it prefers having the tax issue resolved at the federal level. States and cities say they can recoup billions of dollars with the tax. Some estimate around $11 billion in tax revenues are currently being lost, due to exempt internet sales.

In the last decade, Internet sales have gone from 1.6 percent of all U.S. retail sales to more than 5 percent, according to Commerce Department data, a proportion that will likely grow as shoppers turn more to handheld devices to make purchases. In the third quarter of 2012, retail "e-commerce" sales were $57 billion, the department said.

Large Internet retailers are worried the tax could drive up the cost of doing business. They would also have to create new systems and software to collect the surcharges, adding to their costs. Amazon said in July it prefers having the tax issue resolved at the federal level.

States and local jurisdictions will clearly benefit from significantly increased tax revenue, but internet purchasers will find their bargain purchases much reduced in value and businesses will find their compliance costs increased.

 

Have State & Local Tax Issues? 

Contact the Tax Lawyers at Marini& Associates, P.A.

 

for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms

Sources:

AccountingToday

Marcum Tax Flash

Reuters

 

How to Report Your Tribal Trust Settlement to the IRS? Up Dated

On Friday, February 15, 2013 we posted How to Report Your Tribal Trust Settlement to the IRS?

 

Since then the IRS announces the publication of Notyice 2013-16, which updates and supersedes Notice 2013-1. 

Notice 2013-1, 2013-3 IRB 281, provides guidance on the federal tax treatment of per capita payments that members of Indian tribes receive from proceeds of certain settlements of tribal trust cases between the United States and those Indian tribes. Additional tribes have settled tribal trust cases against the United States since publication of Notice 2013-1. This notice provides an updated Appendix that reflects the additional settlement agreements.

Notice 2013-1 Appendix is modified and superseded.  
 

Tribes That Have Entered into Settlement Agreements of Tribal Trust Cases

1. Assiniboine and Sioux Tribes of the Fort Peck Reservation

2. Bad River Band of Lake Superior Chippewa Indians

3. Blackfeet Tribe of the Blackfeet Indian Reservation

4. Bois Forte Band of Chippewa

5. Cachil Dehe Band of Wintun Indians of the Colusa Rancheria

6. Chippewa Cree Tribe of the Rocky Boy’s Reservation

7. Coeur d’Alene Tribe

8. Confederated Salish and Kootenai Tribes

9. Confederated Tribes of Siletz Indians

10. Confederated Tribes of the Colville Reservation

11. Confederated Tribes of the Goshute Reservation

12. Crow Creek Sioux Tribe

13. Eastern Shawnee Tribe of Oklahoma

14. Hualapai Indian Tribe

15. Iowa Tribe of Kansas and Nebraska

16. Kaibab Band of Paiute Indians of Arizona 　

17. Kickapoo Tribe of Kansas

18. Lac Courte Oreilles Band of Lake Superior Chippewa Indians

19. Lac du Flambeau Band of Lake Superior Chippewa Indians

20. Leech Lake Band of Ojibwe

21. Lower Brule Sioux Tribe

22. Makah Indian Tribe of the Makah Reservation

23. Mescalero Apache Tribe

24. Minnesota Chippewa Tribe

25. Nez Perce Tribe

26. Nooksack Indian Tribe

27. Northern Cheyenne Tribe of Indians

28. Omaha Tribe o Nebraska

29. Passamaquoddy Tribe of Maine

30. Pawnee Nation

31. Prairie Band of Potawatomi Nation

32. Pueblo of Zia

33. Quechan Tribe of the Fort Yuma Reservation

34. Red Cliff Band of Lake Superior Chippewa Indians

35. Rincon Luiseño Band of Indians

36. Rosebud Sioux Tribe

37. Round Valley Indian Tribes

38. Salt River Pima-Maricopa Indian Community

39. Santee Sioux Tribe of Nebraska

40. Sault Ste. Marie Tribe

41. Shoshone-Bannock Tribes of the Fort Hall Reservation

42. Soboba Band of Luiseno Indians

43. Spirit Lake Dakotah Nation

44. Spokane Tribe of Indians

45. Standing Rock Sioux Tribe

46. Stillaguamish Tribe of Indians

47. Summit Lake Paiute Tribe

48. Swinomish Indian Tribal Community

49. Te-Moak Tribe of Western Shoshone Indians

50. Tohono O’odham Nation

51. Tulalip Tribes

52. Tule River Indian Tribe

53. Ute Indian Tribe of the Uintah and Ouray Reservation

54. Ute Mountain Ute Tribe

55. Winnebago Tribe of Nebraska

56. Qawalangin Tribe of Unalaska

57. Tlingit & Haida Tribes of Alaska

58. Northwestern Band of Shoshone Indians

59. Hoopa Valley Tribe

60. Ak-Chin Indian Community

61. Oglala Sioux Tribe

62. Yurok Tribe

63. Cheyenne River Sioux Tribe

Need Tax Help the Tax Treatment of Tribal Trust Settlement Proceeds?

Contact the Tax Lawyers at Marini & Associates, P.A.

for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

 

Are You an IRS Audit Target? - Part II

We previoustly posted Are You an IRS Audit Target? - Part I.  We continue this discuss herein.

Several approaches can improve the odds that you won’t be caught in an audit. Some are surprisingly simple. These include fact-checking names and Social Security numbers for you, your spouse and dependents and filling out accurate occupational descriptions for you and your spouse.

Other tips cited by the NAEA include accurately reporting“all the income that the IRS knows about,” as IRS computers will match all W-2s, 1099s and other tax documents for you with your Social Security number.

“When you receive a substantial part of your earnings in cash or without paperwork, that doesn’t mean you’re off the hook,” the group adds. “IRS computers look at certain aspects of your lifestyle and will tag you for audit if your visible income is much too low to match your ZIP code or family size.”

CCH cites several types of deductions that raise red flags because they aren’t allowable. These include trying to claim a loss on your home, deducting excessive moving expenses and trying to claim medical deductions for unnecessary cosmetic surgeries.

Yet nothing seems to draw scrutiny like the adoption credit. A staggering 69 % of such returns were audited last year, with the examination process extending four months on average.

Even if you're not in one of the above target groups, you're not necessarily off the hook. Some returns are randomly selected. But most "winners" of the audit lottery are identified by the tax agency's discriminant-function program.

Under that program, IRS has created a number of composite hypothetical taxpayers. The agency's computers compare your return with those of the hypothetical taxpayers. The further your return is from the statistical norms, the more the computer clicks. And, the more the computer clicks, the higher the probability your return will be kicked out for review.

The table below gives average itemized deductions for 2009 returns filed in 2010. If your deductions are above average, the IRS is more likely to notice you.

US taxpayers' average deductions
Adjusted gross income	Interest	Taxes	Charity	Medical
Under $15,000	$8,838	$3,337	$1,496	$8,414
$15,000-$29,999	8,434	3,184	2,048	7,783
$30,000-$49,999	8,699	3,943	2,274	7,028
$50,000-$99,999	10,153	6,247	2,775	7,269
$100,000-$199,999	13,456	11,069	3,888	9,269
$200,000-$249,999	17,572	18,524	5,947	21,599
$250,000 and up	25,227	48,317	18,488	38,149

Regardless of the averages, deduct only the expenses you actually incurred. If you spent more than the average, claim it. Just be prepared to substantiate your numbers.

Are you Being Audited by the IRS?

Contact the Tax Lawyers at Marini & Associates, P.A.

for a FREE Tax Consultation at www.TaxAid.usor www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

Sources:

azcentral.com
msn.com

Are You an IRS Audit Target? Part I

The IRS said it audited more than 1million individuals in fiscal 2012 for the sixth year in a row, collecting more than $50 billion for the third consecutive year. While those numbers might seem high, audit rates are really quite low. The IRS’ audit rate is roughly 1.03 % of all tax returns filed.

The IRS generally has kept up its audit activity despite a $305,000,000 budget cut that reduced full-time staffing by 8 % over the past two years, including 6 % in the enforcement area over the past year. That 1.03 % audit rate last year was almost double the level of a decade earlier.

Certain activities and behaviors can put you in greater danger of being Audited by the IRS.

High income is one. “Audits in the upper-income ranges remained substantially higher than other categories,” the IRS stated in a recent report. Of people with less than $200,000 in income, 0.94 % faced an audit. That jumped to 12.14 % of those earning at least $1 million.

Certain business categories are another. The IRS said it’s taking a closer look at “flow-through entities,” which include partnerships and Subchapter-S corporations. Audit rates in both areas have increased in recent years, though they both remain slightly lower than 0.5 %.

Then there are big corporations. Of those with assets of at least $250,000, more than 29% got audited in fiscal 2012, which ended last Sept. 30.

Self-employed individuals who file Schedule C also face an elevated risk of audit. One curiosity: Those Schedule-C filers earning between $100,000 and $200,000 actually had worse odds, with 4.3% of returns audited, compared with those earning more money, where the audit rate was 3.8%.

The IRS has gotten more reward-focused about the taxpayers selected for audit.

“Like all smart businesses, the IRS wants to turn a profit these days,” according to a commentary by the National Association of Enrolled Agents, an organization of licensed of return-preparation specialists.“Currently, tax returns are selected for audit based on the chance that the IRS will find enough errors or missing income to generate additional taxes — and perhaps penalty and interest.”

We will continue this discussion in Are You an IRS Audit Target? Part II.

Are you Being Audited by the IRS?

Contact the Tax Lawyers at Marini & Associates, P.A.

for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

Sources:

azcentral.com
msn.com



3 tips to avoid an IRS audit

Something less fun than doing your taxes? Getting an audit. Here's how you can avoid one.

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The details of the IRS discriminant-function program are a secret. It includes more than just raw numbers. For example, if your tax return shows a ZIP code from a low-income neighborhood and you deduct a charitable contribution of $10,000, regardless of your adjusted gross income, the computer is going to notice. That doesn't mean you're going to be audited, but the probability has soared.

Want to play the audit game? The IRS audited 1,581,394 individual tax returns in the fiscal year that ended Sept. 30, 2010. That was a rate of 1.1%, up from 1.0% the year before. But only 22% of the fiscal 2010 examinations were face-to-face audits. The rest were correspondence exams.

Of returns showing income of $200,000 or more, the audit rate was 3.1% in fiscal 2010, up from 2.8% the year before.

Unless you fall within the specific targets or have substantial income, I'm betting that the probability of an IRS audit will go down this year. This is one of those lotteries that you don't want to win. How lucky do you feel?

 

 

http://money.msn.com/tax-planning/are-you-in-the-irs-cross-hairs-schnepper.aspx