Dealing with IRS Collections, Do’s and Don’ts

 

Is the IRS is trying to collect a debt from you?  Grown men – and women – have been reduced to tears because they feared IRS collection agents.

 

It doesn’t have to be this way. In fact, the worst thing you can do is ignore IRS collection agents. When you ignore them and don’t try to work out a mutually satisfactory arrangement for the repayment of your tax debts, they have no choice but to resort to enforced collection. An IRS agent has almost unfettered power to seize your assets, garnish your wages and, if he or she believes that you are intentionally evading taxes, to refer you to the Criminal Investigation Division. Jail Time!

 

Avoiding the inevitable is not the way to go. My experience is that if your qualified representative (enrolled agent, EA) deals with the agent in a direct and prompt, manner you can almost always work out some sort of payment arrangement that will allow you to maintain a reasonably comfortable lifestyle.

Here are five do’s and five don’ts for dealing with IRS collection agents:

The Do’s:

• Do consult a tax professional, preferably an EA, to find out what your rights are. Do file all your tax returns whether or not you have the money to pay the tax liability shown on those returns. Not filing your tax return is a crime.
• Do meet the call back deadlines included in IRS correspondence.
• Do treat IRS personnel with respect.

The Don’ts:

• Don't lie to the IRS.
• Don’t hire any organization that tells you the income tax is illegal or that there are legal ways for you to be exempt from taxes. These are scams.
• Don’t procrastinate
• Don’t blame others for your predicament. This is just another form of procrastination.

As with most things we fear, the reality is never as bad as the fantasy. The IRS is powerful but is also reasonable. The horror stories you hear are usually from people who ignored the IRS and didn’t follow my list of do’s and don’ts.

 

 

 

Call HGi Financial Services for assistance with all your tax returns, collections and audits. Share this with your family and friends. They may have tax concerns or know someone who does.

 

Go to http://www.hgifinancial.com/ for additional information.

Your Guide to Social Security

With spousal and survivor social security benefits in the mix, married couples have a daunting task to maximize lifetime benefits.

 

There is a “file and suspend” strategy we can use to qualify your spouse for a spousal benefit while both of you earn delayed retirement credits. (Until age 70)

 

Your spouse still working? We can flip the “file and suspend strategy” on its side, and use the strategy known as “restricting an application”.

By combining the strategies, the husband gets spousal benefits from 66 to 70. And both spouses qualify for delayed retirement credit until age 70.

 

Ready to start planning for your social security retirement? Set a consultation appointment with Holly Gunnette, EA, Senior Advisor. We can work out a plan, and if you are a Gold Plus Tax Maintenance member, the first appointment is included in your GPTM fee.

Tax Season is fast approaching here are our office hours from February 9^th through April 15^th:

Monday          7:30 am – 5:00 pm

Tuesday          7:30 am – 7:00 pm
Wednesday     7:30 am – 7:00 pm
Thursday        7:30 am – 7:30 pm
Friday             7:30 am – 11:30 am
Saturday          9:00 am – 3:00 pm
Sunday                    Closed

Call soon for your tax appointment!

To See, or Not to See, a Tax Professional

 

According to the National Taxpayer Advocate, nearly 60 percent of taxpayers hire paid preparers to do their taxes. With all the tax software programs out there, why do so many people turn to a professional?

 

“Some fans of over-the-counter tax programs would never dream of hiring a professional, but it really depends on the situation,” says Holly Gunnette, EA, an enrolled agent in California. “Young, single adults with one or two W-2s can probably do fine with tax software, but what if you’re married, own a home, have kids, are going to college or have kids going to college? There are plenty of confusing tax traps just waiting for you.”

 

A knowledgeable tax pro should actually save you money because he or she will interview you in-person and ask a lot of questions to determine what deductions you may qualify for. Tax laws change every year, and if it’s not your full-time job, it’s hard to keep up. Here are just a few areas where you could be missing out on saving money on taxes.

Education and child care. The IRS publication explaining the variety of education credits alone is 94 pages long. How about child care expenses? That publication is a quick read at only 19 pages! Those publications cover only two line items on most 1040 forms.

Volunteer expenses. Gunnette points out that if you are a Scout leader, volunteer in your church or local food bank, deliver books to a hospital or meals to seniors, many of your volunteer expenses, including mileage, may be deductible.

 

Job related expenses. Perhaps you’re a traveling nurse. Do you wear a uniform? Do you carry protective gloves and a stethoscope that you are not reimbursed for? Do you have to renew a license or take continuing education courses to maintain a license? Job-related expenses may also be deductible on your tax return.

Filing status. Married people don’t always file jointly. There are as many reasons filing separately might be a good idea as a bad one. 

Are you paying off student loans?  Wondering if you should contribute to a Traditional IRA? Paying alimony? You don’t even have to itemize deductions, these items can reduce your income and that reduces your tax bill. All of these are questions that impact the amount of taxes you will pay and a wrong answer can cost you money. Tax professionals such as enrolled agents are licensed and required to take continuing education courses every year to stay up-to-date on all the latest tax changes.

 

About Enrolled Agents

 

Enrolled agents (EAs) are America’s tax experts®. They are the only federally-licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. While attorneys and certified public accountants are also licensed, only enrolled agents specialize exclusively in taxes.

go to http://hgifinancial.com/ for additional information.

 

 New Tax Bracket

The tax year 2013 brought us a new top tax bracket, so the tax returns you file on or before April 15, 2015 will feature some people sending Uncle Sam a bigger portion of their income. 39.6 percent for incomes of more than $406,750 (for single filers) or $457,600 (married, filing jointly).

The more you know about taxes and 2014's new taxes in particular, the better you can plan and the less you'll likely pay. Got a situation or a question? We are ready and waiting for your call. Remember: Enrolled Agents are America’s Tax Experts!

What’s that New Tax?

New taxes you may first notice in 2014 include a Medicare surtax. The Net Investment Income Tax (NIIT) is "a 3.8 percent surtax” that will be due on the lesser of your net investment income for the year, or the amount by which your “modified adjusted gross income” – or MAGI – exceeds those income thresholds. And yes, if you're a high earner, you might get hit with both the 0.9 percent Additional Medicare Tax and the 3.8 percent NIIT surtax. Note that the Additional Medicare Tax applies to your earned income and the NIIT applies to investment income. What investment income is subject to this? Generally interest, dividends, capital gains, rental and royalty income, nonqualified annuities, businesses that are taxed on your return as “passive activities” and income from businesses involved in the trading of financial instruments or commodities are affected. Please call or email for more information on this.

With all the ghouls and goblins out there

trying to rob you of your hard earned money,

let HGi Financial Services help you

get all the treats you have coming to you.

Don’t be tricked this upcoming tax season.

 

Happy Halloween!