Blog - Tim Hart

How Far Back Can the IRS Go for Unfiled Taxes?

November 10, 2024 | Tax Compliance Tax Relief

Summary The IRS has no limit on how far back it can go to collect unfiled taxes since the filing of a tax return triggers the deadlines on the ability to collect unpaid taxes. The agency can assess taxes for any year that a tax return hasn't been filed through an audit process, and if the taxes aren't paid voluntarily, the IRS can use various collection methods to obtain the money (tax liens and levy's). The consequences of not filing taxes can vary based on how long... CONTINUE READING

Penalty Abatement Policies- First Time and Recurring

November 10, 2024 | Tax Penalties Tax Relief

Summary Penalty relief can be negotiated with the IRS and NYS Department of Taxation and Finance for various tax penalties, including failure to file, negligence, fraud, late filing and failure to pay on time. 1) Reasonable cause for the failure to file or pay taxes can be a basis for penalty reduction. 2) First-time penalty abatement is available for taxpayers with no history of tax problems who incur a penalty for the first time. 3) Reasonable cause relief is available for taxpaye... CONTINUE READING

What Happens to Your 401(k) If You Owe Taxes to the IRS?

October 18, 2024 | Tax Debt

Summary Yes, the IRS can take your 401(k) for taxes owed if you fail to pay your taxes in full and on time. The IRS has broad authority to levy assets, including retirement accounts, to collect unpaid taxes. However, the IRS generally only takes this action as a last resort after other collection efforts have failed. To protect your 401(k) from an IRS levy, it's crucial to be proactive about your tax debt. Respond to IRS notices promptly and work with the IRS to establish a... CONTINUE READING

What You Should Know About the Downsides of an IRS Offer in Compromise

October 18, 2024 | Offer in Compromise

Summary An Offer in Compromise is a tax resolution option that allows individuals to pay off their tax debt for less than they owe. While it offers benefits, there are also downsides to consider. Filing an Offer in Compromise requires a $205 application fee and an initial payment of 20% of the proposed lump sum amount or the first month's payment for periodic payments. The IRS will scrutinize financial records, and accepted offers become public records. The process can be le... CONTINUE READING

Can the IRS Take All of Your Wages? Wage Garnishment Explained

October 17, 2024 | Tax Debt

Summary The IRS can garnish wages to collect past-due taxes if taxpayers fail to pay or make payment arrangements. The amount of garnishment depends on factors such as wages, pay cycle, tax filing status, and dependents. The IRS follows specific rules, allowing them to garnish a substantial portion of a paycheck. Wage garnishment is a common IRS levy to ensure consistent progress in tax debt repayment. To prevent wage garnishment, taxpayers can explore payment options like installme... CONTINUE READING

Can You Go to Jail for Not Paying Taxes?

October 13, 2024 | Tax Compliance Tax Debt Tax Fraud Tax Penalties

Summary Individuals who intentionally evade taxes can face criminal charges and potentially go to jail. Tax fraud and tax evasion are felonies, with penalties including fines and imprisonment. Nearly two-thirds of people convicted of tax fraud receive prison sentences, averaging 16 months. The IRS Voluntary Disclosure Program allows taxpayers to file back taxes and avoid prosecution if they voluntarily disclose their failure to file and make an honest attempt to pay. Tax authorities... CONTINUE READING

Tax Emergency? Guide to Form 911 for Taxpayer Advocate Help

October 12, 2024 | Tax Help

Summary The Form 911, known as the Request for Taxpayer Advocate Assistance, serves as a gateway for taxpayers seeking help from the Taxpayer Advocate Service (TAS), an independent division of the IRS. TAS provides assistance to taxpayers who have been unable to resolve their tax issues through regular channels. The form enables taxpayers to seek intervention when facing economic harm, adverse actions, potential incurring of expensive costs, unanswered IRS correspondence, and when t... CONTINUE READING

Form 433-B Collection Information Statement for Businesses

October 11, 2024 | Payment Plans

Summary The Form 433-B (OIC) is used to apply for an offer in compromise on business taxes. It requires detailed information about the business, including financial information, assets, liabilities, and income and expenses. The OIC version of the form has some notable differences from the standard version, particularly in determining equity in business assets and reporting business income and expenses. When completing the form, businesses should be prepared to provide supporting doc... CONTINUE READING

What Happens If You Commit Tax Fraud? Possible Prison and Fines

September 9, 2024 | Tax Fraud Tax Penalties

Summary The punishment for tax fraud depends on the type of fraud committed and the specific law broken. Criminal tax fraud can lead to imprisonment of up to five years and fines of up to $250,000 for individuals and $500,000 for corporations. Civil tax fraud leads to civil penalties of 75% of the under-reported tax. Tax fraud involves willfulness, which includes knowledge, intent, and purpose. Accidental, careless, or negligent mistakes are not considered tax fraud. Real-world exam... CONTINUE READING

Can the IRS Freeze My Bank Account? What You Need to Know

September 9, 2024 | Tax Debt Tax Penalties

Summary The IRS has the authority to freeze funds in a taxpayer's bank account up to the amount of their tax debt. The IRS typically sends multiple notices before levying an account, giving the taxpayer time to address the issue. There are various reasons for the IRS to freeze an account, such as significant tax debt, non-compliance, or fraudulent activity. If an account is frozen, the taxpayer has 21 days to respond before the funds are sent to the IRS. Options to release a freeze... CONTINUE READING

IRS Revenue Officers vs. Revenue Agents—How to Respond

What is the Difference Between an IRS Revenue Officer and an IRS Revenue Agent? When an IRS representative contacts you directly to discuss your taxes—whether it’s a specific return, the results of an...

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