When you’re faced with tax debt that you do not have the ability to pay in full, you should ideally contact the IRS to apprise them of your situation and work out a payment plan. However, if you do not work out payment arrangements with the IRS, or you default on your payment agreement, the IRS may begin to take increasingly hostile collections actions against you.
Let’s say that you have just received the results of an IRS audit and they are not favorable. The auditor has assessed additional back taxes, and now, you are on the hook for additional interest and penalties as well. Do you have any recourse against these findings?
Just a reminder that the last day you can make a tax-deductible purchase, pay a tax-deductible expense, or make tax-deductible charitable contributions for 2018 is Dec. 31. Every taxpayer’s situation is unique, and the suggestions offered here may or may not apply to you.
The Currently Not Collectible (CNC) program is an IRS program designed to provide relief from collection activities for taxpayers who would encounter undue financial hardship if they had to pay their tax debt. The IRS requires you to provide information relating to your income, expenses and assets.
The recent tax law changes eliminated the deduction for personal casualty losses for tax years 2018 through 2025, but did retain a deduction for losses within a federally declared disaster area. As a result of the wild fires in the west, hurricanes and flooding in the east, we’ve had a number of presidentially declared disaster areas this year.
IRS audits have been on the decline in recent years as a result of the reduction in IRS enforcement personnel. According to the IRS’s 2017 Data Book, the IRS audited just over 900,000 individual tax returns, or about 0.6%, of all tax returns filed in calendar year 2016.
As I’m sure you’re aware, the Tax Cuts and Jobs Act of 2017 (TCJA) was enacted at the end of last year. It’s the largest tax overhaul since the 1986 Tax Reform Act and will affect almost every business in the United States. In light of all the changes that took effect this year, it’s time for year-end business tax planning.
You’ve filed your tax return with a balance due and are unable to pay and are unsure what you should do next. Well, within a short period of time after receiving your return, the IRS will begin its automated collection process. Here’s how it works.
The IRS’s offer in compromise program can be a great way to reduce the amount of debt you owe and make your payments more manageable. After all, the program is mutually beneficial to you and the IRS—it allows you to negotiate a tax settlement for less than you owe and allows the IRS to collect a portion of the debt owed to them.
Have you realized gain from the sale of an asset and want to defer paying the tax? Opportunity Zone Investments may be the solution for you. If you have a large taxable gain from the sale of a stock, asset, or business and who would like to defer that gain with the possibility of excluding some of it from taxation you should investigate Qualified Opportunity Funds (QOF).