The Dreaded IRS Letter

Have you ever received a letter regarding your tax return from the Internal Revenue Service (IRS)? doesn’t exactly create a warm, fuzzy feeling. In fact, IRS correspondence often conjures up a feeling of dread, some of which is not warranted. The first actions to take when receiving such a letter are to remain calm and read the correspondence. Ignoring it is the most common way to create an even greater issue. Letters from the IRS generally fall into the following categories: – Request additional information – Refund due – Notification of an adjustment on your return – Address change confirmation – Appointment scheduled for an audit. – Certified letter (Most… Read More

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Innocent Spouse Tax Relief-Do You Qualify?

Often in divorce we rarely consider the possible consequences of filing joint returns. Maybe when you signed tax returns, you may have not been privy to certain information. Perhaps the former spouse underreported income, or claimed false deductions unbeknownst to you. After your divorce you started receiving notices from the IRS for joint tax returns.  Although you had no knowledge, the IRS can enforce collections from both parties involved.  In such a case, you may want to apply for innocent spouse relief if your former spouse understated taxes while you were both married. Understatement of taxes is derived from underreporting income, or false deductions or credits. To qualify you must… Read More

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Are You a Victim of IRS Identity Theft? Here is What to Expect.

Treasury Inspector General for Tax Administration suggests the IRS could lose $21 billion to tax fraud over the next five years. While these numbers continue to increase, you could potentially become a victim of tax fraud. All the crooks need is your name and social security number. Aside from a delay in receiving your refund; there are a few other implications. Here is what you can expect while you have an open ID theft case with the IRS: IRS Collection Notices– You may receive notices demanding you repay the refund you never received (this notice is the most troubling). Contact the IRS immediately and inform them you are a victim… Read More

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Has It Been Years Since You Filed a Tax Return?

You have not filed your taxes in years and the situation worsens as time goes by-feelings of dread and fear consume you. There is a good chance that you may be due a refund; however, you must request a refund within three years of the due date of the return. Another key point for filing those tax returns; the IRS ten year statute of limitations for collections. In other words, the tax balance will disappear after ten years if there are no other legal actions to toll the statute such as bankruptcy. However, the statute does not commence until tax returns are filed. The first step is to contact an… Read More

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The rise of IRS identity theft will likely delay tax refunds-Change your withholdings.

With the rise of identity theft, the IRS will likely delay tax refunds and increase audits in the future. According to the Taxpayer Advocate, identity theft cases jumped 157% from fiscal year 2011 to fiscal year 2013; this clearly shows no slowing down of IRS identity theft in the near future. Do you use the IRS as a savings institution? Does it make you feel good to receive a large tax refund to do those much needed home repairs? Well, now is the time to change your thinking, because you may not be able to get your refund when expected from the IRS. Due to the identity theft epidemic the… Read More

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AIRBNB- How does being a “host” impact your income taxes?

How does renting a room in your house or an entire apartment impact your income taxes?  It is important to keep good accounting records in order to minimize your taxes at the end of the year, While on vacation this year I decided to try Airbnb. Airbnb is a company that provides the platform for individuals (hosts) to rent rooms in their home or entire apartments mainly to travelers. Airbnb rates are typically lower than most hotels. The most intriguing aspect to me was the opportunity to interact with the locals which in my opinion adds to a traveler’s most authentic traveling experience. Of course, the accountant in me surfaced… Read More

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