Tax Problems


How to deal with tax issues that won’t go away

Here are just a few of the most common issues with which taxpayers are faced. If you have additional questions, please give us a call at 619.422.6181and we will be happy to work with you on your particular situation. The most important thing is to not ignore tax problems. They won’t ever go away. They will only get worse and become more costly with each passing year.

If you know you have specific unresolved tax issues or concerns about your current year’s taxes, please contact us immediately. We are experts at representing you in front of the IRS and have worked closely with them throughout the years.

Filing an extension will prevent costly penalties for late filing and give you a six-month extension on filing the return. The extension, however, is only an extension on filing—it’s not an extension on payment.

We will work with you to figure out your anticipated tax payment and send that in with the request for extension.

Also don’t forget about state taxes. The same rules apply so it is important to address this issue as soon as possible.

You need to file your return anyway to avoid costly penalties for late filing. If possible, pay your state tax balance so you will only be dealing with the IRS.

If you will be able to pay the balance within a few months of filing, pay as much as possible with the return or extension. Upon receiving the IRS notice of tax due, send in the balance. You will incur interest costs at federal rates plus late payment penalties of ½ % per month.

If you choose to pay by credit card, keep in mind thatyou’ll have to pay a percentage of your tax as a convenience fee plus you’ll be paying interest to your credit card company.

If you have no other tax debts, the IRS will generally accept an installment agreement if your unpaid liability is less than $50,000 and the tax will be paid within six years. We can prepare this form for you regardless of who prepared your past returns.

First of all, don’t assume the IRS is right. Check your return carefully against the notice you received.  If you agree with the changes, go ahead and send in the balance owed. If you don’t agree, a response must be filed promptly. If you aren’t sure how to respond, give us a call. Don’t disregard this.

If you didn’t file at all, the IRS will prepare a return for you and send you a bill for the tax balance. Don’t just accept their version. We can prepare prior year returns including all of the deductions for which you are entitled. Bottom line, you can’t just ignore it. It won’t go away.

You have the right to be represented by an attorney, CPA or Enrolled Agent during an audit. Generally, you do not need to be present during the audit. It is highly advisable to follow these guidelines. We are licensed to represent you before any taxing authority and have a great deal of experience in audit.

We are experts in dealing with tax issues. Give us a call for help in resolving any IRS or state income tax issue or dispute. We can handle this for you even if your previous return was self-prepared or prepared by another firm.

Liens and levies are known as “collection activities.” A lien is a claim on property to satisfy a debt. Federal law gives the IRS an automatic lien on your property when you are notified of a tax liability and do not pay within 10 days. Generally, this can be avoided by responding to the notice.

A levy is the seizure of property to satisfy a tax debt. The IRS must give 30 days’ notice before placing a levy on a taxpayer’s property. Your main home cannot be levied if tax, interest and penalties are $5000 or less. Written court approval is required for seizure of a residence.

401k, IRA and other retirement plans are also considered fair game by the IRS. If distributions are due to an IRS levy, the early withdrawal penalty will not apply. If you withdraw the funds to avoid a levy, the early withdrawal penalties will apply.

The IRS may delay collection activities if your income is insufficient to pay the tax and meet basic living expenses. The IRS will require a Collection Information Statement to make this determination. Give us a call to see if you qualify.