FTS Program Discussed by Denver Tax Attorney

Denver Tax AttorneyA Denver tax lawyer at The McGuire Law Firm recently learned that the IRS Fast Track Settlement (FTS) program will be expanded nationwide.  As a  tax attorney John McGuire works extremely hard to stay up to date with all IRS notices and publications that may impact our clients.  Information regarding the FTS program is stated below.

The FTS Program was designed to help small businesses and the self-employed who are being examined by the IRS.  Typically, small business and self-employed individuals would be examined by the division within the IRS called the Small Business/Self Employed Division called the SB/SE Divisions.  The goal of the program is to expedite these examinations so small businesses can settle any issues with the Internal Revenue Service quickly.

Generally the FTS Program may be available to taxpayers within the jurisdiction of the SB/SE if:

–          The issues are full developed

–          A limited number of issues are disputed and thus the majority are agreed upon

–          The taxpayer states a written position, or has filed for a small claims request where the total amount of tax liability for any period is $25,000 or less

 

The FTS Program is not available under the following circumstances and cases:

–          Offers in compromise, Trust Fund Recovery Penalty cases, Collection Due Process cases and cases within Collection Appeals

–          When certain issues are set to be litigated

–          When an issue that would be resolved for one party could result in an inconsistent treatment in the absence of participation from another party

In terms of maintaining and protecting taxpayer rights, which is a concern of our tax attorneys, the program does not inhibit or prevent the taxpayer from exercising their appeal rights if the FTP program is deemed unsuccessful by the taxpayer.  The goal of the IRS is to have IRS audit issues resolved within 60 under the FTS Program, as opposed to months or years. 

Taxpayers who are under examination will work directly with IRS Agents in the SB/SE area and the IRS appeals office in the FTS Program.  It is anticipated that the IRS appeals officer will primarily serve as a mediator.  Certain cases can even be fast tracked.

Interested taxpayers or tax attorneys representing taxpayers can contact the examination group manager or specialty program group manager.  Form 14017 needs to filed and the taxpayer submits a brief written response to the IRS’ current position.

As a Denver tax attorney, John McGuire has represented many individuals and businesses before the IRS in audit and examination proceedings.  We offer a free consultation to discuss your tax issue.

Please feel free to contact The McGuire Law Firm at anytime to schedule a free consultation with a Denver tax attorney.

Denver Tax Attorney on IRS Installment Agreements

An installment agreement with the Internal Revenue Service is an agreement whereby a taxpayer agrees to pay a certain amount of Denver Tax Attorneymoney on or before a certain day of each month to satisfy their outstanding tax debt with the IRS.  As a Denver tax attorney, John McGuire has established many installment agreements with the Internal Revenue Service on behalf of clients and the article below should provide useful information for any taxpayer looking to pay their taxes to the IRS via installments.

The IRS allows taxpayers to satisfy their debts by making installment payments.  If your tax debt is $25,000 or less, the IRS is likely to allow an installment agreement without verification of financial information given you are willing to pay up to, or more than a certain amount.  Moreover, if the tax debt is $50,000 or less, the IRS may formalize an installment agreement with minimal financial disclosure given that the amount proposed by the taxpayer will resolve the tax debt within a certain period of time, which is usually 72 months (or six years).  These types of installment agreements are generally referred to as streamlined installment agreements.

If the taxpayer is unable to pay the amount of which would allow for a streamlined installment agreement, the IRS will require financial disclosure.  This financial disclosure would consist of Form 433A for individuals and/or Form 433B for businesses.  The IRS uses these collection information statements to determine what a taxpayers monthly ability to pay is and thus what they would request as a monthly installment agreement amount.  Often the amount the IRS would request as a monthly payment will exceed what the taxpayer feels they can pay because the IRS applies national standards for allowable living expenses.  If these standards are less than what the taxpayer actually pays for certain expenses, the IRS is likely to feel the taxpayer can pay more than they are offering to pay on a monthly basis.

Important considerations and issues regarding an installment agreement are stated below.  Please feel free to contact our Denver tax attorneys to discuss any of these issues or related tax issues.

 

–         Once an installment agreement is proposed, this can act as a hold on IRS enforcement.

–          Once an installment agreement is formalized, the agreement will act as a hold on enforcement.

–          To comply with the installment agreement, the taxpayer must make the required monthly payment and remain current and compliant by timely filing all tax returns and paying all future taxes.

–          Upon formalization of the installment agreement the failure to pay penalty is reduced.

–          The terms of an installment agreement can be amended due to changes in financial circumstances or even reduction of the tax debt.  Further a taxpayer who is/was on an installment agreement may be able to default the installment agreement and submit an offer in compromise if their financial circumstances would allow them be an offer in compromise candidate.

–          A taxpayer can establish an installment by calling the IRS automated collection system, working with their assigned revenue officer or through a collection due process hearing.

A Denver tax attorney at The McGuire Law Firm can assist you in establishing an installment agreement with the IRS if you have IRS tax debts, and can assist you with other IRS problems.

Contact The McGuire Law Firm and schedule your free consultation with  tax attorney in Denver.

Recent IRS Scam

In recent times, tax attorneys have seen a number of scams whereby individuals will use the IRS as a means by which to obtain Denver Tax Attorneyinformation or money from people.  With the digital age and access to information these scams and identity theft, relevant to tax issues and the Internal Revenue Service has increased.  Recently the IRS has reported a SCAM that has been attempted against a number of taxpayers.  The SCAM involves an individual calling a taxpayer and purporting to be an IRS revenue agent where in fact the individual does not work for the IRS.  The fake IRS agent makes statements and intimidates the taxpayer into paying taxes that the taxpayer does not even owe!

The Internal Revenue Service has confirmed certain details to watch for regarding this SCAM, which are stated below:

 

–          The Scammer will generally use common names and surnames to identify themselves as an IRS agent.  For example, the Scammer may state, “Hi, my name is John Smith and I am revenue agent with the IRS.”

–          The Scammer may know the last four digits of your social security number.  Remember, just because someone knows the last four digits of your social security number, that does not mean or verify they work for the IRS.  Generally, an individual working for the IRS would be able to tell you your entire social security number and be able to answer detailed tax related questions such as prior years taxable income or adjusted gross income.

–          Emails have been sent by the Scammer in an attempt to support the phone.

–          Thos receiving the “fake” phone call have reported hearing background noise during the telephone call, which would be similar to if you were speaking with an IRS agent or employee through a call center or IRS service center.

–          The Scammer threatens the taxpayer with a jail sentence or the ability to revoke driving privileges.

–          The Scammer has also hung up on the victims and called back a second time using an individual to impersonate a police officer or other authority figures.

In general, taxpayers should be aware that it is not normal to receive direct contact from the IRS unless you have already received IRS notices or spoken with an individual who is a revenue officer.  Taxpayers should always be weary of giving any personal information or payment over the phone to an individual purporting to be from the IRS.  To be safe, a taxpayer can always choose to call back the Internal Revenue Service at a service center.  Phone numbers can be found online at www.irs.gov  Further, if you do need to make a payment to the IRS, you call a service center, mail payment to the correct IRS center or use the online EFTPS electronic payment system.

A Denver tax attorney at The McGuire Law Firm can assist you in verifying a legitimate IRS tax debt if you are concerned.  A tax attorneys can contact the IRS and speak directly with an agent on your behalf and obtain the necessary transcripts if need be.

Contact The McGuire Law Firm to speak with a tax attorney in Denver!

How is an Offer in Compromise Calculated?

How is an Offer in Compromise Calculated? Denver Tax Lawyer

An offer in compromise should be considered a tax settlement with the Internal Revenue Service.  When a taxpayer owes money to the IRS, under certain circumstances the taxpayer can submit a proposal to pay less than the amount of tax due.  While many people know what an offer in compromise is, many taxpayers ask a tax attorney how much their offer in compromise will be- what will we offer the IRS?  How much will the offer be?  The answer a tax attorney must or should provide is, “it depends.”  While many people may expect this answer from a tax attorney, it is true.  An offer in compromise is calculated by the taxpayer’s reasonable collection potential, which is viewed as the taxpayer’s ability to pay.  Thus, because each taxpayer’s situation is different, there is no equation to use when estimating what a taxpayer will pay.  There is no general percentage to apply to the amount of tax owed by the taxpayer to estimate what the IRS will accept when submitting the offer in compromise.

When calculating an Offer in Compromise amount, a tax attorney should look at the following issues and figures.

 

–          Total Household Income; and,

–          National Standards for allowable living expenses

–          Other allowable expenses

–          Equity in assets including all property such as home, car, investment accounts, business interests and any other assets.

–          Available reductions in equity dependent upon the asset and use of the asset.

Based upon the above figures, a taxpayer’s disposable income can be calculated.  The taxpayer’s disposable income is then multiplied by 12 or 24 depending upon the repayment terms of the offer in compromise proposed by the taxpayer.  This figure is then added to the taxpayer’s equity in assets after applicable discounts are applied.  The total figure through this equation is considered the taxpayer’s ability to pay.  If the amount is less than the total amount due than our tax attorneys would consider the taxpayer to be a possible candidate for the offer in compromise program and discuss the options with the client.  If the amount calculated through the offer equation is greater than the total tax liability, then the taxpayer may not be a candidate for an offer in compromise.  However, if circumstances change, our tax attorney’s position may change regarding the possibility of submitting an offer in compromise.  Moreover, a taxpayer may be able to qualify for an effective tax administrative offer in compromise, whereby the taxpayer show the ability to satisfy their tax debt, but due to extraordinary circumstances, full payment would create an economic hardship on the taxpayer.

A tax attorney at The McGuire Law Firm can discuss the option of an offer in compromise to settle your tax debt.  Contact The McGuire Law Firm to schedule a free consultation with a tax attorney in Denver!

FATCA Application to U.S. and Foreign Financial Institutions by Tax Attorney

FATCA Application to U.S. and Foreign Financial Institutions Denver Tax Attorney

A Denver tax attorney at The McGuire Law Firm can assist you regarding the FATCA provisions and application of these provisions.  Below is information related to U.S. and foreign financial institutions.

U.S. Financial Institutions

United States financial institutions (USFIs) in addition to other United States withholding agents must withhold 30% of certain payments to foreign entities that have a United States source, if the USFI or withholding agent are unable to document an entity for purposes of FATCA.  An additional requirement exists for USFIs and United States withholding agents to report information relating to certain non-financial foreign entities with substantial U.S. owners to the Internal Revenue Service.

FATCA Registration applications can be submitted by USFIs online at the FTACA Registration website.

Foreign Financial Institutions

To avoid being withheld upon, under FATCA, a Foreign Financial Institution (FFI) can register with the Internal Revenue Service.  In registering, the FFI agrees to report to the IRS information regarding their United States accounts, which would include the accounts of certain foreign entities of which have substantial United States owners.

Foreign Financial Institutions that enter into an agreement with the Internal Revenue Service in regards to reporting account holders, may be required to withhold 30% on payments to foreign payees if the payees do not comply with FATCA.

Most government entities, non-profits, small financial institutions and retirement entities are likely to be exempt from the status of an FFI that would require registering and reporting.  FFIs would include banks & depository institutions, mutual funds, hedge funds, private equity funds, and certain insurance companies.  If an FFI is not exempt the failure to register could cause a 30% withholding tax on some United States source payments that are made to the FFI.  FFIs that register receive a Global Intermediary Identification Number (GIN) from the Internal Revenue Sevice.

A Denver tax attorney at The McGuire Law Firm can assist clients in regards to the FATCA provisions and regulations, as well as through the IRS’ voluntary disclosure program.

Contact The McGuire Law Firm to schedule a free consultation with a tax attorney in Denver!

IRS Action During Government Shutdown

IRS Action During the Government Shutdown Denver Tax Attorney

As we all know, the U.S. federal government “shutdown” on October 1, 2013 due to the house and senate’s inability to pass a short term spending bill that would continue to keep the government funded.  As a Denver tax lawyer, John McGuire has been paying close attention to the impact the shutdown will have on IRS action.

This government shutdown has impacted federal agencies including the IRS.  As tax attorneys, we represent a number of individuals and businesses before the Internal Revenue Service regarding tax audits, tax debts and other federal tax controversies.  Thus, we have received a number of inquiries from our clients regarding what the IRS is doing in terms of collection, enforcement and tax audits during the shutdown.  Additionally, in many circumstances, we have been unable to contact Internal Revenue Service revenue officers, and Internal Revenue Service departments such as the automated collection division and tax practitioner hotline.

In regards to IRS federal tax liens, the IRS announced that federal tax liens are not being issued and filed during the shutdown by revenue officers and nor are they being automatically generated.  Additionally, IRS bank levies are not being issued during the shutdown.  However, certain taxpayers may have received these notices with October 2013 dates, but these federal tax lien and IRS levy notices were issued prior to the shutdown.  Certain notice that a taxpayer may be subject to a federal tax lien or IRS levy may be automatically generated and issued to the taxpayer during the shutdown.

Regarding IRS enforcement action, the only enforcement action currently occurring in non-criminal cases involves cases and situations where action must be taken now to best protect the government’s interest.  For example, if a taxpayer owes a tax debt, and the collection statute on the tax liability is in jeopardy of expiring in the immediate future, the IRS may be taking enforcement action at this time.  Regarding criminal cases, the majority of criminal tax cases continue to be prosecuted by the applicable criminal investigative departments and units.  This corresponds with the fact that most federal law enforcement agencies have continue to operate and function during the government shutdown.

If you have a tax debt with the IRS or an ongoing tax audit and have questions regarding the impact of the government shutdown, it is recommended that you contact a tax attorney to discuss your situation and circumstances.  A tax attorney at The McGuire Law Firm can assist you with  tax matter or tax problem before the Internal Revenue Service.

Contact The McGuire Law Firm and schedule a free consultation with a Denver tax attorney to help resolve your IRS tax matters.  A free consultation is offered to all potential clients.

5 Reasons to Hire a Tax Attorney

5 Reasons or Situations of Which You Should Hire a Denver Tax AttorneyDenver Tax Attorney

 1) If you are being audited by the IRS or owe taxes to the IRS, you should contact a tax attorney.  An experienced tax attorney can represent you before the IRS and often prevent enforcement action such as bank levies, asset seizures and wage garnishments.  Further, your tax attorney can help you resolve the tax issue, as well as help educate you to hopefully prevent the issues from occurring in the future.  John McGuire is an experienced Denver tax attorney at The McGuire Law Firm and has successfully represented hundreds to thousands of businesses and individuals before the IRS.

2) If you are starting a business, a tax attorney can educate you on the tax issues and implications regarding the taxation of different business entities, and tax affects to the business owners.  Further, if your business will have employees, a tax attorney can help you understand your requirements regarding withholding taxes, 941 returns and federal tax deposits. A Denver tax attorney can assist you with the formation of your businesses and in understanding your tax responsibilities.

3) If you are considering gifting or transferring property to loved ones or other parties, a tax attorney can help draft the necessary documents and advise you regarding the federal tax implications.  A tax attorney will often work with clients regarding the advantages of gifting within their estate plan and execute these gifting strategies within the estate planning documents.

4) Your considering buying a rental property, but do not understand depreciation and how the rental property will impact your individual income tax return.  A tax attorney can help you understand these issues and thus allow you to take full benefit of the federal tax code and likely reduce your personal income tax.  A Denver tax attorney at The McGuire Law Firm can outline the tax implications and issues to consider when purchasing rental properties, in addition to other issues such as liability.

5) You have not filed tax returns in a while and are scared of the IRS.  Call a tax attorney immediately.  The longer you wait, the worse the situation will become.  A Denver tax attorney at The McGuire Law Firm can contact the IRS on your behalf, obtain information & transcripts and help you prepare and file returns with the IRS.  If the tax returns once filed result in a tax debt, we can help you resolve your IRS debt with an offer in compromise, installment agreement or other resolution option.

 

Call us at 720-833-7705 to speak with a Denver tax attorney and schedule your free consultation.