Posts Tagged ‘taxes’

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Enrolled Agent Help for Injured Spouses on IRS Refund Offsets

Saturday, April 30th, 2011

Passing the special enrollment examination provides an individual with the designation of enrolled agent in order to represent taxpayers before the IRS. Direct dealings with the Financial Management Service are required when IRS refunds are affected by the Treasury Offset Program. Tax refunds are issued by the Financial Management Service, another division of the US Treasury Department.

A taxpayer’s refund can be reduced or eliminated by the Treasury Offset Program in order to repay debts owed for delinquent child support or obligations to a federal agency, state income tax authority, or state unemployment agency.

The Federal Management Service provides information by written notice as well as response to telephone inquiries by taxpayers or their enrolled agent representatives. The details conveyed are the agency to which an offset debt is owed as well as its address and phone number.

Sometimes taxpayers on joint tax returns experience refund offsets for debts that only their spouses are responsible for paying. These circumstances usually require assistance of a tax professional who has completed the enrolled agent exam.

Injured spouse relief is available when Form 8379 is submitted. The IRS will process a partition of refund between jointly filing spouses before the offset occurs. The taxpayers receive the benefits of filing jointly but obtain separate allocations of the refund.

Form 8379 can be filed with a tax return or separately. When an amended return is filed that requests a joint refund, Form 8379 is attached to avoid an offset against the refund portion attributable to the spouse not liable for the past due obligation.

A tax professional who has completed enrolled agent continuing education can assure that Form 8379 is ready for processing by the IRS. When the form is submitted separately from a tax return, the IRS requires sufficient information to divide tax liability and provide segregation of the refund. Therefore, Form W-2 wage reports and similar income reporting documents are attached to Form 8379. This shows the IRS the withholding amounts of each spouse.

The IRS apportions a refund based upon the separate tax payments of the jointly filing taxpayers. For residents of a community property state, the allocations are calculated based upon local law. Injured spouse relief is much easier to obtain than innocent spouse status. Enrolled agent CPE reveals that an injured spouse claim is a relief from the burden of joint liability on a tax return.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

 

Article Source: http://www.articlesbase.com/taxes-articles/enrolled-agent-help-for-injured-spouses-on-irs-refund-offsets-4698694.html

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How do I choose a Tax Debt Resolution Professional?

Friday, April 29th, 2011

Rugged individualism is a great philosophy to apply in life.  Self-reliance, pulling one’s self up “by the bootstraps” is all a part of that overall approach to living and working.  Yet, when it comes to dealing with the IRS, that is a different matter altogether.  The landscape of resolving federal tax issues is complex and fraught with trouble if one is unclear how to navigate that wilderness of rules, procedures, guidelines and penalties.

This is where a tax professional can be a great help.  Taxes owed are like any other liability.  There are correct ways to retire this kind of debt.  There are short-term solutions and longer-term strategies too.  But which are best suited for the specific tax liability situation at hand?  A tax professional can make determinations about the specific issues involved and craft solutions that comply with the tax code, and all of the intricacies involved.  Tax liability relief is the goal: get the issues identified correctly, structure the proper solution for retiring the tax debt as promptly as possible, keeping it affordable and manageable, making sure to be in compliance with all applicable tax laws and regulations enforced by the IRS.

Quality Assurance and Tax Liability Relief Services. Any time one is in need of service, and willing to pay fees to secure it, it is only prudent to ensure that the provider is competent, qualified and authorized to provide services- especially when there are legal implications and consequences for you.  When it comes to tax liability relief, one not only wants to save money by paying the least in taxes, interest, and penalties.  One should also pay modestly for services to get the job done correctly.  Selecting the tax professional that is right for you is a simple matter covered in this report.


Should I Pay My Tax Professional a Retainer? Exercise caution when it comes to fees for retaining a tax pro in your corner.  The free consultation offered or not offered by a tax professional you may be considering to help you with your tax liability is a good sign for you to either engage them further or to keep shopping around.  During a free consultation you can get a feel for the chemistry involved in this soon-to-be critically important relationship and you will have the opportunity to discuss the scope of the services to be provided, at what cost, and how payment for services will be managed.  Retainers are difficult to control because the rate at which work is completed may involve additional fee payments before work is concluded.  Retainer contracts are difficult to monitor and it makes it unclear how to hold the service provider accountable for achieving necessary benchmarks on time to minimize costs.  Flat fees for the scope of work according to clear benchmarks and reasonable time frames are much more desirable than open-ended retainer fee agreements.

How Relevant is a Better Business Bureau Recommendation? A good rating is mandatory for any tax pro on your short list.  Be sure of their good rating before entering into final negotiations for services.  The Better Business Bureau has been around for 99 years offering protections in the marketplace for consumers paying good money for goods and services that are crucial to quality of life and liberties.  Look for the Bureau’s A-rating on any debt guidance specialist with IRS expertise.  A red flag to be on the lookout for is an IRS debt guidance enterprise operating under a “Doing Business As” license or a distinctly separate incorporated brand name.  These enterprise modes suggest there may be less than forthright identification of who the principals are and their overall ethics around full disclosure to prospective customers. Check beneath the surface of the service offerings and the pricing for each.

What about a Dun and Bradstreet Listing? This is the blue chip rating for a tax liability relief service provider.  Getting listed with D &B requires business performance credibility and is like the “good housekeeping seal” of approval.  If your choice comes down to a choice between providers listed in Dun & Bradstreet and some that are not listed, your choice is clear- go with D & B listed firms.

Does the Tax Liability Professionals Status with the Local Chamber of Commerce Matter? Yes.  Here’s why. Being a member in good standing demonstrates the tax liability relief professional is recognized as an ethical contributor to the overall health of the local business community.  There is a measure of trustworthiness implied by membership in good standing.

Quality of Service Based on Experience in Providing Tax Liability Relief Services.There is no substitute for experience working with the issues involved with interpreting the federal tax code as it applies to businesses and individual taxpayers.  The field is intricate and constantly changing.  Case work is the only way to stay up to date as it requires the provider to do research and make prudent strategic decisions on behalf of their clients.  And if those decisions do not bear fruit for their clients, word-of-mouth will be the final judge and jury as to the quality of service people can expect from that tax liability professional; their business depends on applying their experience in the best interests of their clients. Some consumer protection advocates suggest a minimum range of time in business of five to ten years as a good indicator of service quality.  Look at the experience levels of the attorneys and accountants who are members of the firm, across the board.

Article Source: http://www.articlesbase.com/taxes-articles/how-do-i-choose-a-tax-debt-resolution-professional-4692891.html

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PLEASE don’t hesitate to call (877) 971-3232, email info@ctaxrelief.com or visit our website COMMUNITY TAX RELIEF for any questions, concerns or some advice.

Community Tax Relief was created by Attorneys and Bankers with years of experience in both tax resolution and financial services. Our mission is to create a new standard for the industry, in which the customer and their best interest truly come first. We have grown tired of seeing clients getting taken advantage of and paying outrageous fees for which they receive little to no service in return. Too many clients are turned away from our competitors because they couldn’t pay high upfront fees.

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Five things to do if you get a tax lien

Thursday, April 28th, 2011

When you’re facing a tax liability and you can’t resolve it within a reasonable amount of time, the authorities will file liens (or tax warrants for some states) as an escalating step in the collections process. Lien notify the public that you have a tax liability.  It secures their interest in your property, receivables, tangible and intangible assets.  Recent reports show the IRS has been increasing the use of Federal Tax Liens to assist in the collection of back taxes. If you’ve received one you should know that you do have options but it is in your best interest to act quickly. To ensure that you have the best possible outcome, follow these initial steps in getting your tax problem resolved.

 

1) Do not delay or ignore it

 

May seem obvious, but it is the most important step. If you have been putting off a tax problem and have received a notice of a tax lien, you’ve now reached a point where it’s in your best interests to get in contact with the Internal Revenue Service or State taxing authority first. You can easily get in touch with them directly or use a tax resolution expert to take care of the communications for you. Facing up to a back tax issue can be stressful, but not dealing with a tax problem is only going to make the situation worse. Remember, a tax lien is not the final step in collections.

 

2) Confirm the lien is valid and accurate

 

Once you’ve received a notice, you should contact the taxing authority and verify the lien.  Do you owe taxes?  Do you owe for the type of taxes listed on the lien?  I know of a restaurant who was sent a bill from the Internal Revenue Service for excise taxes for tanning beds, it may get on in the kitchen, but there’s no tanning beds.  Don’t just assume that the lien is correct.  Verify your records and compare to the taxing authority that what they indicate you owe, you actually owe.

 

3) Research your appeal or withdrawal options

 

If you have sufficient proof, a reasonable cause, or other mitigating circumstances (such as a bankruptcy) you may qualify to appeal or even have the lien withdrawn completely. In certain instances the IRS may allow a temporary lift of a lien, often when it is in the best interest of both you and the IRS, such as selling property to use the funds to pay the tax debt. Many individuals (and occasionally some less scrupulous tax attorneys) will file an appeal in error and doing so can make tax relief more difficult by extending certain statutes of limitations.

 

4) Determine if you can pay of the tax debt

 

If you have the means available, often the best option available may be to pay the debt immediately so that the lien will be released. If you need to sell assets in order to help pay the tax debt, the IRS will often work with you to release the lien.  Depending on the amount of the tax lien you may want to consider your credit or loan options because you will often pay less to a bank or lending institution then you will the Internal Revenue Service or State taxing authority on a payment plan.

 

5) Establish your tax debt solution and follow through

 

It may feel like you are stuck with no options when you have a tax debt. This is why working with a tax resolution expert can be extremely helpful. A qualified expert should know the options available in your situation and what method will best absolve the debt and get the tax lien released. And while the Revenue Officers likely have this information too, you can’t always expect them to give you the answers (remember, their job is to get the debt paid in full as fast as possible.)

 

Whatever your solution may be, the final step is to keep up with the process. Get your paperwork in on time. Make all deadlines you establish with the taxing authority and provide your paperwork in a method that is verifiable (you don’t want your records getting lost in the mail.) If you receive a request or notice from the IRS or state, it is important you are responsive. Even though you may have worked out a method of resolving your tax debt, there is often a lot of paperwork and communication that needs to be continued. It’s entirely feasible that a person or business can fulfill these responsibilities on their own, but again a good tax resolution expert should be able and willing to take care of these items at a reasonable cost.

 

Article Source: http://www.articlesbase.com/taxes-articles/five-things-to-do-if-you-get-a-tax-lien-4693184.html

About the Author

Aaron Marx is a Managing Member of Safe Harbor Financial Consultants LLC a tax resolution firm based in Chicago IL. You can get more information about tax resolution services or visit their tax wiki for straightforward information about taxes and tax collections. Aaron also hosts a tax advocacy group on Facebook.

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GST In India A milestone in Indian tax reforms

Wednesday, April 27th, 2011

The Goods and Services Tax (GST) is value added tax on the consumption of the goods, paid by its original producers upon the change in goods or upon the transfer of the goods to its ultimate consumers.GST is proposed to be implemented in India by April 2012. The GST will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive for most goods and services with minimum exemptions.

The evolution of Indian service tax & excise tax to VAT was a long drawn process and in that regards going for GST will be a quantum jump in achieving comprehensive indirect tax reforms in India

The Indian government is redrawing tax reforms that will sweep away part of the current VAT system, a variety of state level direct and indirect taxes, excise duties, service tax and entertainment tax and replace them with a single Goods and Services Tax (GST).

The predicted rate for the proposed GST is said to be 20 percent. This should create a national tax standard across the country with consumers paying a single rate of GST across India abolishing all other state and central level taxes, including VAT, excise duty, service tax and luxury tax. The target date for implementation is the 1st of April next year to coincide with the start of the new fiscal year. Customs duty will be levied out of GST and is likely to be replaced by VAT on imports.

Currently, the various Indian states levy VAT at a 4 percent or 12.5 percent rate depending on the type of goods, with excise duty usually levied at 8 percent for most commodities. Services are taxed at 10.3 percent.

India is a federal republic and therefore the GST will be implemented concurrently by the central and state governments as CGST and SGST respectively. The objective will be to maintain a commonality between the basic structure and design of the CGST, SGST and SGST between states.

Announcement to this regard was done in finance budget 2007-2008 by then finance minister P.Chitambram as per which an Empowered Committee of state finance minister was formed to work with the Central Government to prepare a road map for introduction of GST in India. After this announcement, the Empowered Committee of State Finance Ministers decided to set up a Joint Working Group (May 10, 2007), with the then Adviser to the Union Finance Minister and the Member-Secretary of Empowered Committee as Co-convenors and the concerned Joint Secretaries of the Department of Revenue of Union Finance Ministry and all Finance Secretaries of the States as its members. This Joint Working Group, after intensive internal discussions as well as interaction with experts and representatives of Chambers of Commerce and Industry, submitted its report to the Empowered Committee (November 19, 2007).

On the framework of this discussion a final version by Empowered Committee was prepared seeking comments from government of India. These comments where duly recorded and where sent to states Finance and tax heads for consideration. Later a team of concerned official from states and representatives of Gov of India submitted their final draft on structure of GST. An important interaction has also recently taken place between Shri Pranab Mukherjee, the Union Finance Minister and the Empowered Committee (October 19, 2009) on the related issue of compensation for loss of the States on account of phasing out of CST.

Salient features of the GST model

Salient features of the proposed model are as follows:

(i) The GST shall have two components: one levied by the Centre and the other levied by the States. Rates for Central GST and State GST would be prescribed appropriately, reflecting revenue considerations and acceptability. This dual GST model would be implemented through multiple statutes (one for CGST and SGST statute for every State).

(ii) The Central GST and the State GST would be applicable to all transactions of goods and services made for a consideration except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits.

(iii) The Central GST and State GST are to be paid to the accounts of the Centre and the States separately. It would have to be ensured that account-heads for all services and goods would have indication whether it relates to Central GST or State GST (with identification of the State to whom the tax is to be credited).

(iv) Since the Central GST and State GST are to be treated separately, taxes paid against the Central GST shall be allowed to be taken as input tax credit (ITC) for the Central GST and could be utilized only against the payment of Central GST. The same principle will be applicable for the State GST. A taxpayer or exporter would have to maintain separate details in books of account for utilization or refund of credit

(v) Cross utilization of Input Tax Credit between the Central GST and the State GST would not be allowed except in the case of inter-State supply of goods and services under the IGST model.

(vi) Ideally, the problem related to credit accumulation on account of refund of GST should be avoided by both the Centre and the States except in the cases such as exports, purchase of capital goods, input tax at higher rate than output tax etc. where, again refund/adjustment should be completed in a time bound manner.

(vii) To the extent feasible, uniform procedure for collection of both Central GST and State GST would be prescribed in the respective legislation for Central GST and State GST.

(viii) The administration of the Central GST to the Centre and for State GST to the States would be given. This would imply that the Centre and the States would have concurrent jurisdiction for the entire value chain and for all taxpayers on the basis of thresholds for goods and services prescribed for the States and the Centre.

(ix) A uniform State GST threshold of gross annual turnover of Rs.10 lakh both for goods and services for all the States and Union Territories may be adopted with adequate compensation for the States (particularly, the States in North-Eastern Region and Special Category States) where lower threshold had prevailed in the VAT regime.

(x) The States are also of the view that Composition/Compounding Scheme for the purpose of GST should have an upper ceiling on gross annual turnover and a floor tax rate with respect to gross annual turnover. In particular, there would be a compounding cut-off at Rs. 50 lakh of gross annual turn over and a floor rate of 0.5% across the States. The scheme would also allow option for GST registration for dealers with turnover below the compounding cut-off.

(xi) The taxpayer would need to submit periodical returns, in common format as far as possible, to both the Central GST authority and to the concerned State GST authorities.

(xii) A tax payer 13 digit identification number will be issued . This would bring the GST PAN-linked system in line with the prevailing PAN-based system for Income tax, facilitating data exchange and taxpayer compliance.

(xiii) To make it simpler for tax payer, functions such as assessment, enforcement, scrutiny and audit would be undertaken by the authority which is collecting the tax, with information sharing between the Centre and the States.

On application of the above principles, it is recommended that the following Central Taxes should be, covered under the Goods and Services Tax: (i) Central Excise Duty (ii) Additional Excise Duties (iii) The Excise Duty levied under the Medicinal and Toiletries Preparation Act (iv) Service Tax (v) Additional Customs Duty, commonly known as Countervailing Duty (CVD) (vi) Special Additional Duty of Customs – 4% (SAD) (vii) Surcharges.

(viii) Cesses.Following State taxes and levies would be, to begin with, subsumed under GST: (i) VAT / Sales tax (ii) Entertainment tax (unless it is levied by the local bodies). (iii) Luxury tax (iv) Taxes on lottery, betting and gambling. (v) State Cesses and Surcharges in so far as they relate to supply of goods and services. (vi) Entry tax not in lieu of Octroi.

 

Article Source: http://www.articlesbase.com/taxes-articles/gst-in-india-a-milestone-in-indian-tax-reforms-4692133.html

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