Orange County Accountant

What happened? You’ve filed your taxes and you’re in trouble. Maybe you filed yourself or you went to one of those companies that file your taxes for your. After finishing everything you find out you owe money! You recheck your math and deductions once, twice, three times and…you really are in debt to the IRS! It’s understandable that you’re mad as hell or you want to start crying, but the IRS-Hitman has some advice.

Don’t panic…don’t ignore the debt, and do file the return. You can try to put off the debt by requesting an extension; October 15th is the latest you can put it off. This could give you a chance to come up with the money that you owe by then. But you do have to file, and the longer you wait the harder the debt will be to deal with.

Depending on how much you owe, you can try to deal with the IRS on your own, or you can seek professional tax help. The first thing you need to do however is to jump on the problem immediately! Do not wait.

Can I bury my head in the sand? I recommend against this. What happens if you wait? First of all the IRS starts sending you letters telling you how much you owe, and asks that you contact them to setup arrangements. If you don’t respond to the IRS then…well, things can get real bad real fast for you. The IRS can seize your wages, seize you bank account, or any other accounts you have. They can also put a levy on your home. That’s why taking immediate action is so important.

But wait… There are options available to you. You want to take action, but you have no way to pay the debt in full. Most people can’t pay their IRS debt in full, and usually it’s over $1,000. Not too many people have that kind of money lying around.

• Setup a payment plan with the IRS.

• Apply for an Offer in Compromise. This can reduce your debt to pennies on the dollar. Beware however, this is very difficult to get, and the IRS frequently denies applicants.

• Apply for Currently Not Collectible status. Again this is very difficult as you have to prove to the IRS that you are living at the bare minimum.

Choose wisely…However you choose to deal with your IRS tax debt is up to you. The key is to make a choice, and not to bury your head in the sand. Just because you don’t see an IRS-Hitman doesn’t mean he doesn’t have you in his sights.

Now you have the smoking gun…Use it!

Double your pleasure?Owing the IRS money is a hard thing to deal with. There can?t be anything much worse?right? Well you could owe the IRS money and have un-filed tax returns. How can it be worse you ask? Aren?t the un-filed returns included in the debt? You have to be compliant. When you?re in debt to the IRS you do have some options to deal with that debt. Whether you want to setup a monthly payment plan, or try to settle your debt with an Offer in Compromise. Un-filed tax years put a big red stop sign in front of any negotiation efforts. Why? You?re not in compliance with the IRS. Compliance means you have to be up to date with all of your filings. If you are not in compliance the IRS won?t work with you. Collector?s paradise?Don?t get me wrong the IRS will work to get your money, but they?ll do so through bank levies, wage garnishment, and asset seizures. Not all bad?Of course the IRS is perfectly willing to get you in compliance. In fact they?ll even do it for you. This is called a Substitute Filing Return, and if the IRS does this your existing debt will multiply before your eyes. Here?s the secret?So you want to settle your debt without the IRS taking your stuff. You don?t want the IRS to file your returns for you and cause you to owe even more money. The question is: what can you do?

You can file those returns is what you can do! Depending on how far back those returns go you may not have all of the financial records from the time. You can get your basic information from the IRS in the form of a wage and income transcript. If you have any information for deductions or credits available great! If you don?t you?ll just have to settle for what is available.

If the IRS has Substitute Filed your returns you have to provide complete proof that their return was wrong. If you don?t have the proof, you?ll have to accept their return for you.

Once you?re in compliance however you can begin working on your tax debt. You can put yourself into a position to at least discuss payment options with the IRS, or even settle your debt. Now you have the Smoking gun?Use it!

With not much time remaining until the April 15 IRS income tax deadline, many Americans are scrambling to finalize their income tax returns. This year, a growing percentage of taxpayers will choose to file an IRS income tax extension, which will postpone their tax deadline to October 15.

If you?re considering filing an income tax extension, you?re not alone. The IRS recently estimated that 10.2 million of the 140 million tax filers will file for a tax extension this year. What?s more, approximately 2 million of those extensions will be electronically filed online.File Later tax extension service – a popular website where taxpayers can file their income tax extension – compiled the following list of reasons why taxpayers should consider joining the growing trend of taxpayers filing a tax ex tension rather than stress about getting their returns completed by April 15.

Although the IRS doesn?t care (or ask) why millions of taxpaying Americans file for extensions every year, you may find these valuable: 1. Accountants and tax professionals are much busier in April than they are in October. Getting the proper amount of time with an accountant gets harder and harder the longer you wait leading up to April 15. Extending your income tax deadline to October 15 will give your accountant or tax pro that extra time to focus on your tax return, which may mean extra tax savings in your pocket.2. Filing an income tax extension may reduce your chance of audit. IRS auditors have quotas they need to meet every year on the number of returns audited. Returns are sorted for auditors by filing date, and most auditors will have met their quotas before they get to extended returns.3. Getting paperwork together to complete your taxes isn?t easy. Organizing that shoebox of W2s, 1099s, mortgage interest statements, and receipts can take longer than you expect. Giving yourself the extra time needed will ensure you?re taxes are done right, and extending will give you extra time to track down any additional deductions so you?re getting the biggest tax return possible.4. For business owners, funding retirement plans such as Simplified Employee Pensions (SEPs) or SIMPLE IRA?s can be expensive. Filing for an income tax extension will also extend your deadline to fund these types of retirement plans.5. It?s easy. Your income tax extension can be filed in less than 10 minutes using an online provider like File Later. The process is completely paper-free, and your extension will be e-filed, meaning you?ll get an email confirming the IRS has approved your extension, and you?ll have 6 more months to finalize your tax return.

And remember, even though you may be interested in the reasons to extend your income tax return, the IRS doesn?t care or ask. As long as your application is filed correctly, your extension will be granted by the IRS and your new tax deadline will be October 15.

2008 Income Taxes–How to negate the damaging effects of deductions that will be taken away from the IRS effective 2009.
Found out that doing energy-saving write-offs for your IRS taxes will no longer be deductible in 2009.