The Mission Statement of the Tax Resolution Blog?

We created the Tax Problem Resolution Blog to aid the average person to become more discerning buyers of tax resolution and tax representation services. Please read the index of articles below to learn more about the tax resolution industry and to assist you in solving your specific tax problem.

Jay Freeborne, Enrolled Agent at Washington Tax Services, open for business since 1989

Tuesday, November 29, 2016

How Did the IRS Offer in Compromise Rules Get So Much Better?

In our nearly 30 years of operation, Washington Tax Services,has seen a lot of rule changes with the IRS in the Offer in Compromise (OIC) program, BUT never a development as generous as the 2012 OIC calculation rule change. This new rule, originally created in the Spring of 2012, is truly a game changer and should have you strongly consider doing an OIC on your back tax debt!

First, what is an Offer in Compromise (OIC)?
  
The Offer in Compromise (OIC) is a procedure used to settle tax debts with the IRS. If the IRS determines you meet certain criteria, they might agree to settle your debt for $500, for example, on the $50,000 or whatever amount you owe. 

Second, what's the biggest change to the OIC rules?

Previously, IRS settlements were calculated by multiplying 48 months of one's "allowable" disposable income.

Old rules: 48 months

So - if your disposable income was $500 - multiplied by 48 months = your settlement with the IRS would be $24,000.00*  (*with many other factors to consider - of course - like assets, "allowable" expenses and statute of limitations).

New rules: 12 months

With the new rules?  Only 12 months of disposable income is required or using the previous data set -- $500 multiplied by 12 months -- your settlement would be only $6,000.00!*

Bottom line: You pay 75% LESS than Before! 

  
Watch this video to see Jay Freeborne, E.A., speak on the OIC rule changes

READ PART 2: "Can You Pay Off Tax Debt Before it Expires?" in our Offer in Compromise series HERE

Please call us at 1-888-282-4697 to discuss how this program might benefit you or EMAIL us your tax situation HERE and we'll contact you. Washington Tax Services - since 1989. 

Friday, November 18, 2016

Shopping for Tax Resolution and Tax Relief? One Customer's Experience.

A client took the time to write a couple paragraph review of their experience with Washington Tax Services:
"Through the research of other tax service companies I found several national service providers to be misleading. Several of the companies I interviewed tried to oversell me on unrealistic expected outcomes while leveraging fear to win my business. At Washington Tax Service this was not the case at all as I found them to be the most ethically sound, setting proper/realistic expectations and customer focused in the industry. They have followed through with every single commitment made to me since my first call to them around 18 months ago."
Thank you for the awesome and thoughtful review. Have a tax problem that you would like honestly analyzed? Call Washington Tax Services at 1-888-282-4697. Or EMAIL us a description of your tax situation HERE and we'll contact you.

Monday, November 14, 2016

2016 Election Results Impact on IRS Tax Collection and Tax Compliance.

With the Republicans sweeping to victory in all branches of government this November 2016, what can one expect as far as the impact on the IRS and tax policy over the next four years? We can use the George W. Bush era as a good yardstick of how current Republican governance might operate. From 2001 to 2008 - we saw an IRS that functioned pretty normally - albeit with a few conservative policy touches like stricter rules for Offer in Compromise, etc.. But ultimately, the Republicans operated as "governing" conservative parties do rather than when they are in the opposition: implementing tax cuts - an almost guaranteed event in the coming months - BUT also mixed with the realism that revenues will be needed to offset the tax-cuts. One can expect that they will keep the infrastructure of the IRS mostly intact to keep the revenues coming in as was done in the G.W. Bush era. However - one can expect the elimination of the Estate Tax which affects a few thousand rich families a year.

AS far as the culture of paying your taxes and the civic duty behind it, Donald Trump certainly doesn't strike anyone as a poster-boy for good tax compliance - the first candidate in over 40 years not to release his tax returns, for example. But it remains to be seen whether his nonchalance on taxation will have an affect on the motivations of those people and businesses that want to come out of the wilderness to get into compliance? It seems to make sense that these parties might feel a little bolder in NOT acting to get into compliance as a result of the change of government. But even so - it is uncertain how the new Government will lead in the realm of encouraging tax compliance.

Update: November 17: Tax reform will be at the top of Trump and GOP agenda: Tax Reform - Top Item on GOP Agenda Next Year

Even still - there are about two and a half months before the new government takes charge. Current tax policy and IRS culture should remain in place UNTIL then. 2016 tax returns will be due on April 15th. If you haven't paid your taxes for 2016 or haven't filed taxes in a couple of years - it might be a good time to contact us:

Washington Tax Services has seen a lot of changes of government in our 28 years. No matter who's in power, we will keep a close eye on how to best resolve your unique tax situation based on the current culture and policy of the IRS or State agencies. Call us at 1-888-282-4697 for a free analysis of your tax situation or EMAIL us a description of it HERE and we'll call you.  

Friday, November 4, 2016

Haven't Filed Corporate Taxes? 1120's or 1120-S? 3 Years, 7 Years? Forever?

If you have an open or closed business that hasn't filed corporate taxes, you are probably wondering "when is the IRS going to contact us?" Or "will we get audited? "Could officers go to jail?" 

All of these are plausible fears. As 2017 nears, The IRS is shifting their resources towards auditing Corporations and companies who haven't filed their 1120's.

Here are a couple of relevant points/questions for Corporations that haven't filed: 

1. Are you a valid corporation in your State? Being a valid corporation means paying an annual fee in your State. Every Secretary of State has a look-up feature where you can check your corporation's validity: Secretary of State Website. If you aren't a valid corporation any longer or quit being a valid a few year's back, your approach to compliance is going to be much different. We call non-valid corporations...

2. "Just-Kidding Corporations" - if you aren't a valid corporation (see above) or have never filed a corporate return, we might consider you a "just-kidding corporation" and likely bring you into compliance as a "sole-proprietor" and file your business returns as a 1040 - Schedule C or individual return. It depends on how many years that are unfiled to your record keeping in how we decide.

3. What if the business was closed? You might have our staff research your IRS record to see what would be the best way to handle your closed business to insure that the tax problem does not trickle down to yourself individually. Solutions range from filing all of the corporate returns, filing a final form to show IRS you are officially closed to letting you decide if you want to do nothing after reviewing the odds/pros and cons.

4. You haven't Filed your Payroll Taxes (941's) Either! Non-filers of 941's have a lot to be concerned about as payroll taxes can be assessed individually to officers as "Trust fund taxes." Important questions to non-filers of 941's is whether you gave your employees W2's and submitted both your W2's and W3's to the Social Security Administration. Action or non-action will have to gauged upon a careful analysis of the legal ramifications, liability individually, etc. The IRS will have three years to assess you individually

Washington Tax Services is a staff of experts on non-filers - knowing the laws as well the culture in which the IRS currently operates. Haven't filed corporate or individual tax returns? Call us at 1-888-282-4697 or EMAIL us a description of your tax issue HERE and we'll contact you. 

Friday, October 28, 2016

After a Lull in IRS Enforcement - Unfiled 2014 Returns Could Be Scrutinized

If you or your business haven't filed tax returns in a long time, either yourself and your fears of the consequences of not-filing are going to be your motivator to action or the IRS is going to be the catalyst. In recent years, the IRS has NOT been the driver that they once were due to budget cuts. To further illuminate the IRS's lack of action on non-filers, the agency which monitors the IRS, TIGTA, has released a report recommending that the IRS transfer resources to pursue "high income" non-filers. In the report, it appears the IRS had neglected non-filers for the 2012 tax year due to a coding error. They had fixed this coding error for 2013 - but at that time they didn't have adequate staff or resources to pursue the non-filers. TIGTA has highlighted this neglect in their report and is recommending that the IRS push resources into pursuing non-filers of 2014.

What does this mean for you, the non-filer? Well you might want to have us research your IRS record quickly to determine what would be the proper compliance for you.

Offer in Compromise? If you haven't filed six or more years, the big question is will you owe taxes or not? If you qualify for an Offer in Compromise (OIC) - you have every reason to file all of the tax years and make a settlement on the taxes.

File the Minimum - Pay What you Owe? On the other hand - if you are too "rich" for an OIC, you might want to file the two or three most recent years and pay what you owe plus some penalties and interest just to close the door to further IRS scrutiny.

Our research and analysis of your tax compliance will help clear up what is the best route for you.

In normal years, the IRS clearly would be your motivator - they would file your tax returns for you if you didn't file, assessing the tax debt, and then collecting the unpaid taxes from you. But in the last six years, the IRS has been a much leaner institution and not acting as they normally do as Congress has reduced their resources. The reduction in their budget was a political payback by Congress for the IRS scrutiny of non-profit conservative groups. As the elections approach, what can we expect from the IRS and Congress? Well clearly a Democratic Congress will try to fund the IRS back to normal levels.

If you haven't filed tax returns in a quite a while - you might also benefit reading our index of articles for "Non-Filers".

WATAX is focused on assisting non-filers of tax returns and people and businesses who owe back taxes. Please call us at 1-888-282-4697 for a free analysis of your tax situation. Or EMAIL us a description of your tax issue HERE and we'll contact you. 

Tuesday, October 18, 2016

After Three Years, the IRS Scam Based in India is Closed!?


As you can see above - the visits to our "IRS Scam" page have diminished to nearly nothing thanks to the efforts of the Indian government who shut down the scam finally: Indian Call Centers Shut Down. We had been tracking this scam since it's inception in 2013. In three years, the scam managed to con several millions of dollars from duped US citizens. Glad to see that it's gone!

If you were as disgusted by this scam as we were, you might feel better after reading an entertaining piece at Vox.com written by Alvin Chang who "trolled" the IRS scam for months before they closed down.

We are proud to have helped thousands avoid this scam: Beware of IRS Scam (our comment's section had 413 posts!). We promise to be there to report on the next shady stuff in the tax world that we see come down the pike.

Do you have a tax problem that you would like us to analyze? Call us at 1-888-282-4697 or send us a description of your tax issue HERE and we'll contact you. Staff of Washington Tax Services.

Wednesday, October 12, 2016

Setting up a Payment Plan with the IRS: Is It Forever? What Strategies Are Helpful?

Naturally the staff of Washington Tax likes to achieve the absolute best outcome for our customers that we possibly can. We always want to score a touchdown like an Offer in Compromise for $1,000 against $100,000.00. However, we are obviously limited by what the IRS will accept for our clients. In some instances, an installment agreement to pay back the liability is the best thing we can do initially.

How do we make a payment plan palatable for our clients who want the greatest bang for their buck?

1. Monitoring your tax case --  We manage all of the contact with the IRS -- handling all deadlines - keeping the IRS from levying you until an agreement is reached.

2. Timing -- the average person might go too fast in setting up an agreement with the IRS. Particularly, when some IRS liabilities are going to expire -- your tax professional should be careful at entering into an agreement too fast. Furthermore, your tax professional should also be able to gauge where you stand in the collection process so your first move is a good one without haste.

3. The amount of the agreement -- A hastily arranged payment plan might be more than you can handle - monthly. Your tax professional should be able to make the agreement manageable and doable for you - utilizing the 12 month adjustable tactic, streamline agreements and other tricks of his/her trade.

4. Planning ahead for a default -- With your tax debt possibly expiring in a few years - you obviously want to pay the IRS as little as you have to. For this reason, you and your tax professional might team up to see if "defaulting" your agreement - which buys you about four months of no payments -- can help you pay less - and then planning for these defaults in advance of tax debts expiring.

5. Penalty abatement -- If the payment plan was the only avenue for getting yourself out of the collection process, your tax professional should ask for a penalty abatement once the agreement has been honored EVEN if you don't have strong case for it (but filing and paying your taxes going forward certainly helps this cause).

While we hope to NOT to set you up in a payment plan on your back taxes, if we have to -- we'll try to give your tax case as much value as we can - with the goal of you paying the absolute least towards your tax debt.  Please call us at 1-888-282-4697 to discuss your tax issue or send us a description by EMAILING us HERE.  Staff of Washington Tax.