The IRS has broad collection powers that it can bring to bear to collect unpaid taxes. Even though it has these powers, it often chooses not to use them. This is especially true in cases where the collection actions would result in economic hardship for the taxpayer. What is an Economic Hardship? The term “economic…
Articles
6 Tips for the Trust Fund Recovery Penalty
If you are running a business and it is not withholding or remitting payroll taxes to the IRS, you should be aware of the trust fund recovery penalty. This penalty can make the business’ payroll taxes your personal tax problem. The IRS is able to assess the penalty against you individually. That means that the…
Get Rid of Unpaid Taxes Without Losing All of Your Assets
It is nice to have a retirement account with a significant balance. It is also nice to have a significant amount of equity in a home. It can be difficult to get tax relief from the IRS for unpaid taxes if you have one or more of these assets. Reasonable Collection Potential The IRS factors…
Deducting Expenses for Your Hobby
Do you have a hobby that makes money, but costs more than it makes? If so, here is what you need to know before deducting the expenses on your tax return. Business expenses are generally required to be reported on Schedule C, Profit or Loss from Business. A net loss from Schedule C is carried…
How to Avoid the Estimated Tax Penalty
The IRS imposes penalties for a number of different types of conduct. Many of these penalties can be abated or removed based on reasonable cause. Reasonable cause refers to there being extenuating circumstances. The estimated tax penalty is different, as extenuating circumstances are largely irrelevant. This makes it even more important to pay estimated taxes…
How to Get Information from the IRS
If you have ever been through an IRS audit, you know that the IRS likes to review records. The IRS expects you to have these records. It also expects you to produce the records timely and without question. But you have the right to request records from the IRS too. The Freedom of Information Act…
The FTC Warns About Tax Relief Companies
The Federal Trade Commission (FTC) is the nation’s consumer protection agency. It works to prevent fraudulent, deceptive and unfair business practices in the marketplace. It weighed in on the tax relief companies in an article posted on its website. Taxpayers should consider the FTC’s warnings before hiring a tax relief company. Unethical Tax Relief Practices…
Submit a Frivolous Tax Return or Document to the IRS?
We all do things that we regret. It is part of being human. This article addresses one of these things. Specifically, it addresses what you need to do if you filed a frivolous tax return or another document with the IRS and the IRS is attempting to impose a penalty on you for doing so.…
Get a Notice CP2000 from the IRS? Here is What You Need to Know
No one wants to get a letter from the IRS. Even seeing the envelope is scary enough. The IRS’s Notice CP2000 is even scarier. The IRS issues Notice CP2000 to alert you to changes it is making to your tax accounts. It almost always means that the IRS is increasing the amount of tax you…
About the IRS Federal Tax Lien | Part 3
This is the third part of a three-part series of articles that explain what you need to know about the federal tax lien if you have unpaid tax debts. If you missed the prior two installments, you can find them here and here. As explained previously, the IRS’s federal tax lien can have a devastating…