Tax Solution – Tax Pro Resolvers

Solutions We Offer to Problems You Face

Our team of CPA’s, former IRS agents and tax attorneys are here to help you quickly resolve your IRS problems. Let us take that weight off your shoulders. Our goal is to help you become current with the IRS while taking every possible deduction available to you to reduce taxes, penalties and interest. We often find that our folks who think they owe taxes actually receive a refund. Here’s what we do:

1099-C
Cancellation of Debt

These are not necessarily taxable.
We specialize in resolving 1099 C issues quickly and often with no tax impact.

Abate, Remove IRS Penalties & Interest

It’s possible that you may qualify for hardship status with the IRS.
Our team of CPA’s, former IRS agents and tax attorneys will review your information to determine if this is a viable solution for you.

You may qualify for relief from penalties if you made an effort to comply with the requirements of the law, but were unable to meet your tax obligations, due to circumstances beyond your control. You may qualify for relief from a penalty by administrative waiver if it’s your first tax penalty or you meet other criteria allowed under tax law.

Applying for Hardship Status

What qualifies as an IRS hardship?
An economic hardship occurs when we have determined the levy prevents you from meeting basic, reasonable living expenses. In order for the IRS to determine if a levy is causing hardship, the IRS will usually need you to provide financial information so be prepared to provide it when you call. Reasons for a 401(k) Hardship Withdrawal.

According to the IRS, the following as situations might qualify for a 401(k) hardship withdrawal: Certain medical expenses. Burial or funeral costs. Costs related to purchasing a principal residence. College tuition and education fees for the next 12 months.

Bank Levy or Payroll Garnishment

There are very few things that are more stressful than opening your bank account only to see that the IRS has taken money from your account or receiving a notice from your employer that the IRS has issued a garnishment of your wages which takes effect immediately.

A bank garnishment is a legal document that allows a financial institution to deduct funds from a taxpayer’s account. A wage garnishment is a legal order that directs an employer to withhold a portion of an employee’s wages and send them to the IRS to pay off tax debt.

A bank garnishment is also known as a levy.

Resolve choices: Pay the debt; file an objection with the court; file for bankruptcy; or Offer in Compromise. An OIC allows you to settle your debt with the IRS for less than the amount you owe. Our team of professionals will review your specific situation and put a game plan together to quickly stop the garnishment (USUALLY BEFORE the NEXT pay period) and resolve your tax issues.

Cannot Pay the IRS

Is it possible to reduce the amount you owe the IRS? YES!

Our team of CPA’s, former IRS agents and tax attorneys are exceptionally prepared to help you overcome this challenge! It’s important to set up a payment arrangement, to work for an abatement or tax forgiveness, and to resolve outstanding debt to the IRS proactively. By being proactive, we can avoid garnishments and levies and may even be able to help you qualify for tax forgiveness.

Failure to File or Pay Penalties: Abatement

Fires, natural disasters or civil disturbances.
Inability to get records.
Death, serious illness or unavoidable absence of the taxpayer or immediate family.
System issues that delayed a timely electronic filing or payment.
The IRS generally has 10 years – from the date your tax was assessed – to collect the tax and any associated penalties and interest from you. This time period is called the Collection Statute Expiration Date (CSED). Your account can include multiple tax assessments, each with their own CSED.

Income Tax Preparation & Filing

Is it possible to reduce the amount you owe the IRS? YES!

Our team of CPA’s, former IRS agents and tax attorneys are exceptionally prepared to help you overcome this challenge and to help you file your returns on time! Did you know that many well know tax preparation companies hire people who have no degree in accounting or taxes? They put them through a short course to give them an “official” certification and then let them prepare you return. Do you want your return filed by someone who passed the CPA exam, who studied tax accounting for years and who knows the ins and outs of the tax laws? Yes! Our team is most prepared to help you prepare for coming years, to help you be more strategic in your tax planning and to help you legally minimize the amount of tax due.

A tax return is a document filed with a tax authority that reports income, expenses, and other relevant financial information. On tax returns, taxpayers calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. In most places, tax returns must be filed annually.

What is the difference between filing and preparing taxes?

The short version goes something like this: Tax filing is when you prepare and submit your tax return to the IRS by a determined deadline. Tax planning is working with a financial professional to make sure you use the tax code to your greatest advantage.

Innocent Spouse

You had no idea that your spouse incorrectly filed your tax return. Are you eligible for Innocent Spouse status?

The innocent spouse rule is one of three types of relief offered by the Internal Revenue Service (IRS) from the joint and several liability of a joint tax return. The rule provides for relief from responsibility for paying tax, interest, and penalties resulting from erroneous items reported by the applicant’s current or former spouse on their joint return. Erroneous items are any unreported gross income received, or any incorrect deduction, credit, or property basis claimed by that spouse. The applicant can receive total relief if they had no knowledge or reason to know of the erroneous item, or partial relief if they were only unaware of a portion of the erroneous item.

As explained by the IRS, a person applying for innocent spouse relief must meet three requirements: (1) that the applicant filed a joint return that has an understatement of tax as a result of erroneous items attributable only to their current or former spouse; (2) that the applicant did not know and had no reason to know that there was an understatement of tax at the time they signed the joint tax return; and (3) that it would not be fair to hold the applicant liable for their spouse’s understatement of tax, given their situation’s facts and circumstances. Additionally, the applicant and their spouse must not have participated in a fraudulent transfer of property. If an applicant meets the requirements, they must file Form 8857 with the IRS no more than two years after the IRS first attempted to collect the increased tax, unless the applicant qualifies for an exception, such as for equitable relief.

IRS Debt Forgiveness

The IRS Debt Forgiveness program works by allowing taxpayers to have some or all of their tax debt forgiven. Depending on the amount owed, taxpayers may be able to obtain full or partial forgiveness. If they grant full forgiveness, the IRS will erase all outstanding tax liabilities and not require further payments.

To qualify for this program, all tax returns must have been filed, you must have no assets, on limited income, and in financial hardship.

IRS Federal Tax Lien Release

Under what circumstances will the IRS release a tax lien?

The IRS will release the lien once you pay the debt – either in a lump sum or over time.

IRS Collection Appeals

Do I have any recourse if I disagree with what the IRS is trying to collect? YES! Our team of CPA’s, former IRS agents and tax attorneys are exceptionally prepared to help you.

The Collection Appeals Program (CAP) is one of two appeals programs available to taxpayers to challenge IRS collection actions. The Program allows the taxpayer to appeal a collection action before or after certain IRS actions. The taxpayer can also use CAP in connection with issues arising under installment agreements.

If a taxpayer does not pay, the Internal Revenue Service sends the taxpayer a bill. This begins the collection process. Along with the bill, which is called a notice, the IRS automatically sends Publication 1, Your Rights as a Taxpayer, and Publication 594, Understanding the Collection Process.

IRS Prepared My Tax Return

The IRS uses the information it has (usually information statements about your income, like Forms W-2 and 1099) to file for you. But the IRS doesn’t give you any credits or deductions that you might use if you prepared and filed your own return.

IRS Tax Fraud

Tax fraud is often defined as an “intentional” wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing. Tax fraud requires both: a tax due and owing; and. fraudulent intent.

IRS Tax Relief – Tax Options for Relief

Tax relief refers to any government program or policy designed to help individuals and businesses reduce their tax burdens or resolve their tax-related debts.

For example, the child tax credit gives a tax break to parents of minor children, while the tax credit for green improvements (e.g., energy-efficient windows) furthers the goal of U.S. energy independence and cleaner air.

Tax benefits are generally broken into two major categories: tax deductions and tax credits. As you examine programs that could potentially apply to you, it’s a good idea to know the differences in how tax savings can work.

In short, a credit gives you a dollar-for-dollar reduction in the amount of tax you owe. A tax deduction, also sometimes called a tax write-off, provides a smaller benefit by allowing you to deduct a certain amount from your taxable income IF you itemize deductions.

20 popular tax deductions and tax breaks

Here are some of the most popular tax breaks for the 2024 tax filing season, and links to our other content that will help you learn more.

1. Child tax credit

The child tax credit, or CTC, is a tax break for families with children below the age of 17. To qualify, you have to meet certain income requirements as well.

In 2023 (taxes filed in 2024), the child tax credit could get you up to $2,000 per child, with $1,600 of the credit being potentially refundable.

2. Child and dependent care credit

The child and dependent care credit, or CDCC, is meant to cover a percentage of day care and similar costs for a child under 13, a spouse or parent unable to care for themselves, or another dependent so you can work. Generally, it’s up to 35% of $3,000 of expenses for one dependent or $6,000 for two or more dependents.

3. American opportunity tax credit

The American opportunity tax credit, sometimes shortened to AOC, lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500.

4. Lifetime learning credit

The lifetime learning credit lets you claim 20% of the first $10,000 you paid toward tuition and fees, for a maximum of $2,000. Like the American opportunity tax credit, the lifetime learning credit doesn’t count living expenses or transportation as eligible expenses. You can claim books or supplies needed for coursework.

5. Student loan interest deduction

The student loan interest deduction lets borrowers write off up to $2,500 from their taxable income if they paid interest on their student loans.

6. Adoption credit

The adoption credit is a nonrefundable tax break that helps taxpayers cover a certain amount of qualified adoption costs per child. The credit begins to incrementally decrease at certain income levels and completely phases once your modified adjusted gross income (MAGI) exceeds the given threshold for that tax year.

For 2023 (taxes filed in 2024), the credit maxes out at $15,950. The credit is phased out at MAGI of $279,230 or more.

7. Earned income tax credit

This earned income tax credit (EITC) is a refundable tax break for low-income taxpayers with and without children.

For 2023 (taxes filed in 2024), the credit ranges from $600 to $7,430, depending on how many kids you have, your marital status and how much you made.

8. Charitable donation deduction

If you itemize, you may be able to write off the value of your charitable gifts — whether they’re in cash or property, such as clothes or a car — from your taxable income. Per the IRS, you can generally deduct up to 60% of your adjusted gross income.

9. Medical expenses deduction

In general, you can write off qualified, unreimbursed medical expenses that are more than 7.5% of your adjusted gross income for the tax year.

10. Deduction for state and local taxes

You may deduct up to $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes.

11. Mortgage interest deduction

The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay.

12. Gambling loss deduction

Gambling losses and expenses are deductible only to the extent of gambling winnings. So, spending $100 on lottery tickets isn’t deductible — unless you win, and report, at least $100, too. You can’t write off more than the amount you win.

13. IRA contributions deduction

You may be able to deduct contributions to a traditional IRA, though how much you can deduct depends on whether you or your spouse is covered by a retirement plan at work and how much you make.

14. 401(k) contributions deduction

The IRS doesn’t tax what you divert directly from your paycheck into a traditional 401(k). In 2023, the contribution limit was $22,500 ($30,000 if 50 or older). In 2024, that limit rises to $23,000 ($30,500 for those 50 and above).

These retirement accounts are usually sponsored by employers, although self-employed people can open their own 401(k)s.

15. Saver’s credit

The saver’s credit runs 10% to 50% of up to $2,000 ($4,000 if filing jointly) in contributions to an IRA, 401(k), 403(b) or certain other retirement plans. The percentage depends on your filing status and income.

16. Health savings account contributions deduction

Contributions to HSAs are tax-deductible, and the withdrawals are tax-free, too, as long as you use them for qualified medical expenses.

17. Self-employment expenses deduction

There are many valuable tax write-offs for freelancers, contractors and other self-employed people. (How it works.)

18. Home office deduction

If you use part of your home regularly and exclusively for business-related activity, the IRS lets you write off certain self-employment deductions for associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses.

20. Solar tax credit

The solar tax credit, also known as the “residential clean energy credit,” can get you up to 30% of the installation cost of solar energy systems, including solar water heaters and solar panels.

Bonus: Electric vehicle tax credit

The nonrefundable EV tax credit ranges from $3,750 to $7,500 for tax year 2023. Taxpayers can also get a credit of up to $4,000 for used cars. Eligibility depends on a number of rules, including income, price of the vehicle and whether the car meets IRS manufacturing guidelines for qualified EVs.

IRS Trust Fund Penalty – the 6672 Penalty

What is a 6672 penalty?

IRC 6672 is the authority for the TFRP. The TFRP is a penalty against any responsible person required to collect, account for, and pay over taxes held in trust who willfully fails to perform any of these activities.

How is the trust fund recovery penalty calculated?

The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on: The unpaid income taxes withheld, plus. The employee’s portion of the withheld FICA taxes

Owe 401K IRS Taxes

The Internal Revenue Code grants fairly broad powers to the IRS when it comes to retirement account garnishments. Specifically, the IRS has the right to levy or garnish your 401(k) to collect monies owed toward unpaid tax obligations.

Passport Revocation

The IRS may ask the State Department to exercise its authority to revoke a taxpayer’s passport. For example, the IRS may recommend revocation if the IRS had reversed a taxpayer’s certification because they promised to pay and failed to do so.

Generally, the IRS will not recommend revoking a taxpayer’s passport if the taxpayer is making a “good-faith” attempt to resolve their tax debts.

Payroll taxes

This is an area that you MUST be current. If you owe payroll taxes, it is urgent that our team of CPA’s, former IRS agents and tax attorneys get to work resolving this as quickly as possible. A payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security and Medicare.

One to five days late results in a 2% penalty. Six to 15 days late results in a 5% penalty. 16 days late or within 10 days of the first IRS notice results in a 10% penalty. 10 days after the first IRS notice results in a maximum penalty of 15%

Sec. 7202, which by its title applies to willful failures to collect or pay over the tax, provides, in its entirety, as follows:

Any person required under this title to collect, account for, and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, together with the costs of prosecution.

Sec. 7201 is titled “Attempt to Evade or Defeat Tax.” It provides that “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony.” Persons convicted of violating Sec. 7201 may be fined “not more than $100,000 ($500,000 in the case of a corporation)” or, like Sec. 7202, “imprisoned not more than 5 years, or both, together with the costs of prosecution.

Received IRS Letter, Notice or Bill

When the IRS needs to ask a question about a taxpayer’s tax return, notify them about a change to their account, or request a payment, the agency often mails a letter or notice to the taxpayer. Getting mail from the IRS is not a cause for panic but, it should not be ignored either.

Generally, the IRS will not recommend revoking a taxpayer’s passport if the taxpayer is making a “good-faith” attempt to resolve their tax debts.

Tax Audit

We understand that a tax audit can be intimidating and even scary. An audit is an examination of the taxpayer’s books and records to determine whether taxes are being correctly reported.
Who is better to help you resolve your audit than a CPA who is a former IRS agent? We know how the IRS thinks when processing an audit and can identify potential areas of concern and resolve them BEFORE there is an issue. Our job is to help you resolve tax issues so that you can focus on your family, your business, or anything else that makes you smile. Turn your IRS audit worries over to us.

Tax Debt or Liens

We know that life gets busy and if you think you may owe taxes, it sometimes feels easier to ignore them than deal with them.

Any time you don’t pay the tax balance shown on your federal income tax return in full by the due date, you create a tax debt. A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets. A federal tax lien comes into being when the IRS assesses a tax against you and sends you a bill that you neglect or refuse to pay it. The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.

Tax Liens & IRS Settlements

Has the IRS assessed taxes due? Have they filed a lien against you for the amount they think you owe? Now you can’t sell a house or get a tax refund without paying that debt to the IRS first. Is there a solution? ALMOST ALWAYS!

The IRS will sometimes consider a settlement that allows you to pay a reduced amount of what you owe in back taxes, which is called an offer in compromise. You must convince the IRS that you can’t afford to pay what you owe and offer to pay the reduced amount in a lump sum or in short-term installments.

If you owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien), Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier.

Unfiled Back Taxes

We know that life gets busy and if you think you may owe taxes, it sometimes feels easier to ignore them than file them.

If you don’t file a required tax return by the deadline, it’s called a back tax return, an unfiled return, or past-due return. You can face consequences with the IRS if you have back tax returns. Here’s the bad news, the agency can go back an unlimited amount of time. There is no IRS statute of limitations on unfiled tax returns. However, in a lot of cases, you can catch up by filing just the last six years of returns, and the IRS has all kinds of programs to help people pay their unpaid taxes. Here’s the good news, if the IRS owes you, there is NO failure to file penalty.

Unfiled Tax Returns

Unfiled taxes mean you haven’t filed your federal income tax return for this year or previous years. Here’s the bad news, the agency can go back an unlimited amount of time. There is no IRS statute of limitations on unfiled tax returns. However, in a lot of cases, you can catch up by filing just the last six years of returns, and the IRS has all kinds of programs to help people pay their unpaid taxes. Here’s the good news, if the IRS owes you, there is NO failure to file penalty.

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