When it comes to levying intangible property from a third party of the taxpayer, the IRS will generally use one of two forms: 1. Form 668-W (Notice of Levy on Wages, Salary, and Other Income) – This form is used to levy on wages or salaries for personal services, or in some cases for accounts receivable for personal services performed in a work relationship. 2. Form 668-A (Notice of Levy) – This form is used to levy on all other … Read more
Believe it or not, it is a crime to willfully not file your tax return, pay tax or estimated tax, keep records, or supply information required by the laws or regulations. IRC Sec. 7203 makes it a misdemeanor to willfully not carry out the duties listed above. IRC Sec. 7203 misdemeanor is a lesser offence than Section 7201 felony of evading taxes because IRC Sec. 7203 involves the omission of a statutory requirement rather than an actually act of evasion. … Read more
Sometimes, a taxpayer may wish to change or add additional years to their already accepted Offer in Compromise. This can arise from many different situations, one being a taxpayer’s inability to pay the balance on a subsequent filed tax return when something unforeseen happens. Submitting Changes In order to submit a change to an accepted Offer in Compromise, the taxpayer must send their request to the IRS in writing but another Form 656 is not required and the taxpayer does … Read more
In the case of delinquent tax returns, the taxpayer may need to use unconventional methods to calculate the income they had earned in prior years. There are many different methods available to the taxpayer depending on factors such as the availability and adequacy of the taxpayer’s books and records. Methods for Calculating Income The primary methods for the taxpayer to calculate their income in regard to filing their delinquent tax returns include: 1. Indirect bank deposit method 2. Indirect expenditure … Read more
The first step in any pre bankruptcy planning phase is to have someone to a realistic assessment of why the business is not doing well. This is extremely important because the owners of the business have trouble seeing their business objectively and without emotions. Being able to see a business objectively will give you the ability to make the tough decisions that are hard to make. Pinpointing Problems It is important to pinpoint where the problems in the business are … Read more
A partnership that fails to file a completed return on time, including extensions, is subject to a penalty for their violation of IRC Sec. 6698. The penalty will equal $195 per partner, per month or part of a month (up to 12 months) that the return is late. Partnership Failure to File Penalty This can become very expensive if there is a large amount of partners within the partnership. If there are 100 partners, the penalty would be $1,500 per … Read more
If the IRS determines that a transaction lacks economic substance, the underpayment of tax attributable to the disallowance of tax benefits will be subject to a 20% penalty. The penalty will increase to 40% if the taxpayer does not adequately disclose the relevant facts affecting the tax treatment on their return or on a statement attached to the return. Amending the Return An amendment made to a return is not taken into account if it is filed after the taxpayer … Read more
A correspondence audit is an audit conducted by an IRS Service Center and involves issues that can be resolved either by mail or over the phone. In some cases, the taxpayer may wish to request a conference to discuss issues that they are having trouble communicating in writing or over the phone. Requesting a Conference It is simple to request a conference with the IRS to discuss a correspondence audit; however, it becomes more complicated if details are left out … Read more
Paul has filed his 2011 Form 1040 on July 20, 2012. There was no extension filed for this return and therefore it is considered late. The tax return shows a net tax liability of $4,000; however, the IRS assessed an additional tax of $1,000 based on Paul’s failure to report certain interest and dividend income that he received. During 2011, Paul withheld and made estimated tax payments of $1,500. Amount to be Shown on the Return The amount of tax … Read more
The IRS started a program called the Delinquent Return Hold Program to search for and withhold the refunds that belong to non-filing taxpayers until their delinquent tax returns are filed. Delinquent Return Refund Hold Program Under the Delinquent Return Refund Hold Program, the IRS holds refunds and credits when a taxpayer files a current year tax return but has at least one unfiled tax return within the prior five year period. The purpose of the program is to get the … Read more
Tidy Tax Services
9100 S Dadeland Blvd
Miami, FL 33156
866.749.7717
