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Eight Tips for Taxpayers Who Owe Taxes

January 6, 2016

While most taxpayers get a refund from the IRS when they file their taxes, some do not. The IRS offers several Payment Options for those who owe taxes. Here are eight tips for those who owe federal taxes.

  1. Tax bill payments.  If you get a bill from the IRS this summer, you should pay it as soon as possible to save money. You can pay by check, money order, cashier’s check or cash. If you cannot pay it all, consider getting a loan to pay the bill in full. The interest rate for a loan may be less than the interest and penalties the IRS must charge by law.

  2. Electronic Funds Transfer.  It’s easy to pay your tax bill by electronic funds transfer. Just visit IRS.gov and use the Electronic Federal Tax Payment System. You may also use EFTPS to pay your taxes by phone at 800-555-4477.

  3. Credit or debit card payments.  You can also pay your tax bill with a credit or debit card. Even though the card company may charge an extra fee for a tax payment, the costs of using a credit or debit card may be less than the cost of an IRS payment plan. To pay by credit or debit card, contact one of the processing companies listed at IRS.gov.

  4. More time to pay.  You may qualify for a short-term agreement to pay your taxes. This may apply if you can fully pay your taxes in 120 days or less. You can request it through the Payment Agreement application at IRS.gov. You may also call the IRS at the number listed on the last notice you received. If you can’t find the notice, call 800-829-1040 for help. There is generally no set-up fee for a short-term agreement.

  5. Installment Agreement.  If you can’t pay in full at one time and can’t get a loan, you may want to apply for a monthly payment plan. If you owe $50,000 or less, you can apply using the IRS Payment Agreement application. If approved, IRS will notify you immediately. You can arrange to make your payments by direct debit. This type of payment plan helps avoid missed payments and may help avoid a tax lien that would damage your credit.

    Taxpayers may also apply using IRS Form 9465, Installment Agreement Request. If you owe more than $50,000, you must also complete Form 433F, Collection Information Statement. For approved payment plans the one-time user fee is $105 for standard and payroll deduction agreements. The direct debit agreement fee is $52. The fee is $43 if your income is below a certain level.

  6. Offer in Compromise.  The IRS Offer-in-Compromise program allows you to settle your tax debt for less than the full amount you owe. An OIC may be an option if you can't fully pay your taxes through an installment agreement or other payment alternative. The IRS may accept an OIC if the amount offered represents the most IRS can expect to collect within a reasonable time. Click here to see if you may be eligible before you apply. We will notify you of other options if an OIC is not right for you.

  7. Fresh Start.  If you’re struggling to pay your taxes, the IRS Fresh Start initiative may help you. Fresh Start makes it easier for individual and small business taxpayers to pay back taxes and avoid tax liens.

  8. Check withholding. You may be able to avoid owing taxes in future years by increasing the taxes your employer withholds from your pay. To do this, file a revised Form W-4, Employee’s Withholding Allowance Certificate, with your employer. The IRS Withholding Calculator tool at IRS.gov can help you fill out a new W-4. 

For more information on
 IRS's Fresh Start program...

 

 
Contact the Tax Lawyers
at Marini & Associates, P.A.
 
for a FREE Tax Consultation
at www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).

Read more at: Tax Times blog

Transfer Pricing Moves Ahead & OECD and G20 Broaden Intra-Group Services Provisions

January 4, 2016

This Post was Contributed by Robert Feinschreiber and Margaret Kent. Transfer pricing methodologies are beginning to spread far beyond the narrow confines of section 482.

Consider two very recent examples:

1.       Argentina had enacted revenue raising measures designed to penalize companies that would shift profits from Argentina to a tax haven. Argentina used an OECD BEPS transfer pricing rationale in enacting these anti-tax-haven provisions. Most Argentinian enterprises that make use of tax havens use Panama for that tax haven purpose, in part because of the commonality of language. Panama sued Argentina, arguing that the Argentinian tax restrictions are an artificial trade constraint. Panama brought suit at the World Trade Organization (WTO). Other countries are now involved. Panama won the initial round at the WTO, but Panama has joined the OECD’s Global Forum, a measure that would ultimately bring the country into compliance with the OECD’s Transfer Pricing Guidelines. Panama’s attack is similar to the attack on DISC before GATT three decades ago.

2.       The plaintiffs in a class action suit based on the 1934 SEC Exchange Act argued that the defendant, Hutchinson Technology, through Bank of America and Merrill Lynch, violated SEC rules. The rules in question involve valuation rules emanating from transfer pricing concepts, i.e., the Proxy failed to disclose “the range, median and mean revenue and EDITPA multiples,” paragraph 47. The case was filed November 30, 2015 in Minneapolis. The plaintiffs asserted that omission is material, and the Proxy is misleading.

3.       Remember, worldwide transfer pricing rules begin across 82 countries beginning January 1, 2016.    

Additionally, the OECD and the G20 finalized the BEPS program in late 2015, which substantially updated the services transfer pricing rules and deleted the pre-existing 2010 guidance. The new OECD and the G20 provisions addressed the transfer pricing intra-group services provisions that arise when one member of a multinational enterprise group provide services for other members of the group. Click here for more information on these changes.

Don't Have Support For Your Intercompany Pricing?
 
 

 
 
 Contact the Tax Lawyers at 
Marini & Associates, P.A.


for a FREE Tax Consultation

Toll Free at 888-8TaxAid (888)882-9243.



 

Read more at: Tax Times blog

Have An Unpaid Tax Bill? Your US Passport Is In Jeopardy of being Revoked in 2016!

December 21, 2015

On Tuesday, December 1, 2015 we posted Have An Unpaid Tax Bill? Your Passport Could Soon be Revoked!  where we discussed that a recent bill known as the  H.R. 22, Fixing America’s Surface Transportation Act (FAST Act), which It includes amendments to the tax code that would allow authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000 or who have not obtained or won’t provide a Social Security number, has been approve by the conference committee.

The applicable provision in the FAST Act is entitled "Revocation or denial of passport in case of certain unpaid taxes (sec. 52101 of the Senate amendment, sec. 32102 of the House amendment, sec. 32101 of the conference agreement and secs. 6320 and 6331 and new secs. 7345 and 6103(k)(11) of the Internal Revenue Code)" 

Well the highway funding bill was signed by President Obama on December 4, 2015,  which now gives the US government the right to revoke or deny the passports of US persons who owe more than USD50,000 in federal taxes (including penalties and interest). The new provision is expected to become effective on January 1, 2016.

The new law adds a new Internal Revenue Code (section 7345) which authorizes the Treasury Secretary to certify, to the Secretary of State (Secretary), that a taxpayer has a "seriously delinquent tax debt'". A "seriously delinquent tax debt" is greater than USD50,000 and one for which the IRS has either filed a lien or levy. Upon receiving the certificate, the Secretary can deny, revoke, or limit the taxpayer's US passport. The notice must spell out that the taxpayer is entitled to file a lawsuit in the US Tax Court or a federal district court to challenge this certification.

All the existing remedies for addressing an IRS lien or levy continue to apply! Therefore, this new provision of denying a passport will not apply to taxpayers who have entered into installment agreements or offers-in-compromise, or who have requested collection due process hearings or innocent spouse relief.

US citizens living abroad should ensure that their IRS tax affairs are in order before December 31, 2015, in order to ensure that they do not have any issues with their US passport.
 

 Have A Tax Problem?

 Want To Keep Your US Passport?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.


for a FREE Tax Consultation

Toll Free at 888-8TaxAid (888)882-9243.

  

 

Read more at: Tax Times blog

IRS Tell Estates No Closing Letters – Pull Transcripts Yourself!

December 18, 2015

The IRS is the federal agency which has the most direct contacts with Americans. Dealing with the IRS is never easy. The starting point is 75,000 pages (in fine print) of the Internal Revenue Code and Regulations which Americans must somehow master to file accurate tax returns.

To make life even more difficult, irrespective of the IRC and Regulations, the IRS creates a number of procedural requirements necessary to complete various tasks involving the IRS' contacts with taxpayers. One such situation involving the filing of Federal Estate Tax Returns (forms 706 and 706-NA) has been the automatic issuance of closing letters (IRS Letter 627, catalogue # 40285J) when the IRS has completed reviewing these forms. Under Section 6324 of the IRC, the IRS has a 10 year lien on all property which appears on an estate tax return. In order to avoid personal liability, the executor of the estate and anyone else who had contact with either the assets or proceeds of the estate (see Section 2203) can be held liable for any unpaid tax unless one receives a form 5173, Federal Transfer Certificate which frees everyone from this potential liability.  Form 5173 was always issued in tandem with with the automatic issuance of the federal closing letter.

This was too simple for taxpayers so the IRS, in its infinite wisdom, decided to make life a little bit more complex with one of its procedural requirements. For estate tax returns filed after June 1, 2015, if the estate wished to receive a closing letter and form 5173, the personal representative or power of attorney had to send a letter to the IRS more than four months after the filing of the tax return requesting the issuance of both the closing letter and form 5173.   

This procedural change unleashed a firestorm of complaints directed toward the IRS. In lieu of going back to the old procedure where a closing letter was automatically issued when the IRS closed an estate, the IRS came up with a completely new procedure which is, leave it to the IRS, even more complex. The new procedure requires the taxpayer to request an account transcript from the IRS Transcript Delivery System. Tax professionals can register with the government to obtain secure tax transcripts; only registered professionals, accompanied by form 2848 (Power Of Attorney) can receive these transcripts. 

This new  methodology will send the tax professional something called a transcript delivery system page, from which one must request a transcript option utilizing this option which can then generate the closing letter. Such a letter cannot be issued until the transcript shows an IRS Transaction Code  421 which indicates that a 706/706-NA has been accepted by the IRS or the the IRS examination is complete. In order to learn more about how to work the system, there is a tutorial program to which one can refer by clicking on "TDS Tutorial." 

This having been said, one wonders about how one gets the required form 5173 (transfer certificate) which is not mentioned in the IRS material. This certainly presents an opportunity to demonstrate how the IRS can create unnecessary complexities (and accompanying misery) for people wishing to receive Federal Closing Letters. Lots of luck!

Have a US Estate Tax Problem?
 
Estate Tax Problems Require
an Experienced Estate Tax Attorney
Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).
Robert S. Blumenfeld  - 
 Estate Tax Counsel

Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.






 

Read more at: Tax Times blog

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