When DIY Won't Do: 3 Times, When Hiring a Tax Relief Professional is the Only Way to Go
When it comes to your money, there’s only one person that truly has your best interests at heart - and that person is looking back at you in the mirror. Handling your own finances and making your own decisions can give you peace of mind and help you avoid a costly mistake.
There is a lot to be said for the do-it-yourself approach to your money, yet the go it alone path does have its limitations, especially when it comes to the IRS and back taxes.
We see clients that have tried to handle their taxes on their own, sometimes raising red flags with the IRS, resulting in audits, or getting hit with a big tax bill they can’t pay. They might setup an installment agreement on their own, but often times, the DIY approach just makes the penalties and interest keep stacking up putting in an endless loop of back taxes. Many of our clients started out by trying to do this on their own or with their current tax preparer.
Dealing with the IRS takes a very specialized skill set that most tax preparers and even CPA’s don’t possess. Make sure you have a tax resolution specialist on your side. Rarely can someone who is not a tax resolution specialist achieve the same results as someone who works in this field.
So, before you end up in that horror story, here are 3 times when hiring a tax pro or a tax relief firm like ours is the only way to go.
#1 You Just Received a Major Windfall
Even if you know how to handle your finances, receiving a major windfall can throw your plans for a loop. Whether you are the lucky holder of a winning lottery ticket or the recipient of a major inheritance, it pays to seek outside advice.
If you choose the DIY approach and make a mistake, you could end up paying more in taxes than you should, but a high tax bill is not the only danger. Handling your windfall the wrong way could throw off your asset allocation, impact financial aid for your college-bound children and create additional problems down the road.
#2 You Have Existing Tax Problems with the IRS
When you have issues with the IRS, you absolutely cannot afford to go it alone. Attempting to resolve tax issues on your own is unwise in the extreme, and a single slipup could leave you on the hook for even more. I mean, ask yourself if you would go before a judge in court without a lawyer representing you? Probably not. It’s the same here. Representing yourself before the IRS is generally not a good idea. Don’t do it. You most likely will get “creamed”!
If you receive a notice from the IRS, time is of the essence, but you should not let the desire for fast action override the need for professional help and guidance. If you want to resolve your issues fairly without going broke, do yourself a favor and find the right tax resolution firm. Hiring an enrolled agent, CPA or an attorney who is trained in tax relief is the best way to preserve your rights. You do not want to go it alone.
#3 When You Have Assets You Need to Protect
When you owe taxes, the IRS only cares about one thing, and that is to get paid what they think you owe them.
They’ll levy your bank account, emptying everything you have in there. If you run a business, that means you won't be able to pay your employees, pay your office rent or keep your lights on, ultimately putting you out of business.
They’ll also garnish your paycheck leaving you about 10% to 25% of your net pay to live on. Good luck with that.
They can also put a lien on your assets, including real estate, personal property and financial assets. This puts in jeopardy everything you’ve worked so hard to attain.
Hiring the right tax relief professional can help you avoid such extreme measures taken by the IRS. They’ll communicate with the IRS on your behalf and can often remove a lien or levy. If you have assets you can’t afford to lose, then hiring a tax relief pro is the only way to go.
The Bottom Line
Even if you are confident in your DIY approach or feel your tax problem isn’t so serious, it never hurts to get a second opinion. If you are doing everything right, that tax resolution specialist’s advice will give you peace of mind. If there are deficiencies in your actions, the advice you get could stop you from making a devastating, and possibly irreversible, mistake.
If you do run into tax trouble, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem. Visit us at www.elitetaxrelief.com or CALL NOW! (479) 242-7499.
8 Reasons to Work with a Tax Resolution Professional To Resolve Your Back Taxes
When you owe money to the IRS, it is hard to think about anything else. While being in debt is never fun, no matter who the creditor is, the IRS enjoys almost unlimited power to collect the money they are due.
Unlike your mortgage lender or credit card company, the Internal Revenue Service has the power to attach your wages, raid your bank account and even take your freedom. No other creditor even comes close in terms of its power and influence and taking on the agency on your own could be asking for trouble.
If you have received a notice from the IRS, you need to act fast, and you need the right assistance in your corner. Taking on the IRS requires specific expertise, and that is why it is so important to work with a quality tax resolution company. Here are eight reasons why working with a tax resolution service could save your good name - and your bank account.
- You gain specific expertise. The IRS is a specialized agency, and you need expert advice and guidance to get the most positive resolution.
- It will give you peace of mind. Just being contacted by the IRS can make your heart beat a bit faster, but working with a tax resolution expert can set your mind at ease. Generally, once you hire a tax resolution expert you won’t have to meet or speak with the IRS.
- The tax resolution process could save you a lot of money. Tax resolution agents are experts at settlements, and working with one could save you a ton of money.
- Timely action could save your home and property. If you wait too long, you could put your home, business, bank accounts and personal property at risk. Time is of the essence when it comes to resolving tax issues, and timely assistance could make a world of difference.
- You will feel less alone. Few things feel as lonely as fighting the IRS on your own. When you work with a tax resolution expert, not only do you not have to go it alone but they actually step into your shoes to represent your best interests.
- You will have a chance to file missing returns. When faced with a big tax bill, it is easy to do nothing, but failing to file tax returns could have serious consequences down the line. If you have years of unfiled returns, a tax resolution expert can help you catch up.
- Expert help could make an audit less scary. Receiving that audit notice in the mail can be frightening, but a tax resolution expert can guide you through the process. When you work with a tax resolution professional, you will have one less thing to worry about.
- You could save your credit score. Unresolved issues with the IRS will reflect badly on your credit report, lowering your credit score and making it harder to borrow money or qualify for a mortgage. Timely tax resolution could preserve your stellar credit score and help you avoid those serious consequences.
Owing money to the IRS can be very frightening. There is a reason those three letters strike so much fear into the hearts of ordinary citizens, even those who have done nothing wrong.
If you are in trouble with the IRS, you cannot afford to ignore the issue, so act fast and get the help you need today. Working with a tax resolution expert carries a host of benefits, starting with the eight outlined above.
Reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem. Visit us at www.elitetaxrelief.com or call (479) 242-7499 Now!
Why Early Adopters of Cryptocurrency Should Explore Their Tax Resolution Options Now
The stunning rise in the value of Bitcoin, along with the myriad of cryptocurrencies, is surely one of the biggest financial stories of the 21st century, at least so far. What started out as a mere curiosity and niche project for programmers and geeks has quickly blossomed into a full-fledged financial asset, and an increasingly popular one at that.
For early adopters, the financial returns have been simply mind-boggling. You may have heard about the generation of Bitcoin millionaires, and there are plenty of those newly rich investors to go around.
Given the rapid rise and relative anonymity of Bitcoin transactions, it was only a matter of time before the IRS caught on, and the tax agency has caught on – and caught up – in a big way. After years of taking a hands-off approach to cryptocurrency investments, the IRS is now paying close attention – and requesting the real-world identities of those supposedly anonymous buyers and sellers.
While every investor in cryptocurrency should be aware of their potential tax liability, the problem could be even more acute for early adopters – the very investors who have profited the most from this unique form of digital payment.
As with all things tax, the Internal Revenue Service is likely to start where the big money is, and the tax agency has increasingly set their sights on early adopters. If you were prescient enough to buy into the promise of Bitcoin and other cryptocurrencies when everyone else was looking the other way, it may be time to settle up with the IRS.
For early adopters of cryptocurrencies like Bitcoin, a little proactivity could go a long way. The IRS has already requested records from Coinbase and other big cryptocurrency exchanges, and it is only a matter of time before they catch up to you and your profits.
For now, the tax agency claims it has requested information on only the largest accounts, but it is reasonable to assume the IRS will expand its scope in the future. If you have booked your Bitcoin profits and want to settle up with the IRS, contacting a tax resolution agency now could save you a lot of money – and potentially a lot of grief.
There are many reasons for early adopters of Bitcoin and other cryptocurrencies to work with a tax resolution service, starting with the complexity of reporting profits in digital currency. The IRS is still fairly new to regulating and taxing cryptocurrency, and there has been a lot of confusion and misinformation over how profits are taxed and how people are supposed to pay.
Regardless, if you haven’t reported your crypto earnings or filed your taxes for the past few years, it’s time to do so now. By working with a tax resolution expert, you will gain access to a world of expertise, so you can draw on that knowledge to accurately report how much cryptocurrency you have purchased, how many coins you have used and how much you have gained or lost on each transaction.
This accounting is very important since it could impact not only your tax bill but any future taxes and penalties. According to the IRS, holders and users of cryptocurrencies have been responsible for reporting their gains all along, and failing to do so could mean big penalties and lots of back interest.
A tax resolution specialist will be able to guide you through what is surely one of the most complicated tax situations in many years. The very complexity of the cryptocurrency market makes navigating the tax consequences especially difficult, and it never hurts to have some expert assistance in your corner. So do yourself a favor and come clean now – the IRS has finally caught on to the cryptocurrency revolution, and the tax agency is making up for lost time and making the lives of early adopters a lot more difficult.
If you want an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Contact us at (479) 242-7499 or visit www.elitetaxrelief.com.
A Taxing Situation: Timely Tax Tips for Cryptocurrency Investors
Until recently, cryptocurrency investors have mostly flown under the radar as far as taxes are concerned. Now those days are coming to an end, and many holders of virtual currency are scrambling to understand what they owe and how their investments may impact their finances.
The IRS has already requested the identities of those who hold substantial amounts of cryptocurrency, and it is only a matter of time until the tax agency broadens its scope. Just as with overseas bank accounts, the days of free riding in the cryptocurrency market are quickly coming to an end.
When the veil of secrecy got pierced for holders of Swiss bank accounts, wealthy individuals all over the world were shocked -- and suddenly a lot poorer. And while cryptocurrency fans have primarily relied on the supposed anonymity of their investments to protect themselves, recent events have shown that Bitcoin, Ethereum and the like are not entirely as anonymous as advertised. So, before the tax man comes calling, it is time to get out ahead of the situation.
Here are some timely tax tips for cryptocurrency investors but before we get into it, if you need an expert tax advisor or are already in tax trouble, reach out to our firm and we’ll schedule a confidential consultation. Call 479-242-7499.
Do Not Assume Your Account is Too Small
If you only have a few hundred dollars in the cryptocurrency market, you may assume that your account is too small to get the attention of the IRS, but that is not necessarily the case. As the tax agency gets better at sorting out the records of cryptocurrency exchanges, they will likely expand their reach beyond the most significant players in the marketplace.
As the reach of the tax agency broadens, more and more cryptocurrency investors will become ensnared in their net. Keep in mind that much of this information gathering is automated and that the IRS may begin to generate statements on that basis.
Know that All Cryptocurrencies Will Be Impacted Eventually
While Bitcoin is the first, and by far the most significant cryptocurrency tax target, eventually the IRS will start poking around in other forms of virtual payment. Even if you have eschewed Bitcoin in favor of other cryptocurrencies, you should not expect a free ride from the IRS.
In fact, certain altcoins may garner considerably more IRS scrutiny, especially forms of payment associated with drug purchases and other transactions on the dark web. Even if you are not doing anything wrong, your holdings in those altcoins could get the attention of the IRS and eventually generate a big tax bill.
Keep Careful Records
The tax man is coming eventually, and the best thing you can do is prepare now. Waiting until the IRS comes calling could mean big penalties and additional interest, so the best strategy is to calculate your holdings and determine what you might owe.
Keeping extensive and accurate records will be essential going forward, but you might want to go back and look at your past purchases and sales. Every transaction, including purchases using cryptocurrency as payment, could potentially be a taxable event, so good recordkeeping is vital.
The IRS is interested primarily in the money you make on cryptocurrency, not necessarily on how many virtual coins you own. Calculating the cost basis, i.e., what you paid for the coins in the first place, can help you avoid paying too much in taxes while keeping you on the right side of the IRS.
Watch Out for Scams
The fact that cryptocurrency is in the IRS crosshairs has taxpayers worried. Unfortunately, the new tax scrutiny has also given rise to many scams, and it is essential for investors to prepare for the possibility.
These tax scams are likely to follow a familiar scenario, albeit with a cryptocurrency twist. The scam artist may call holders of cryptocurrency, claiming to be from the IRS and demanding immediate payment for taxes owed.
While the tax agency has taken a new interest in cryptocurrency investments, they do not initiate collection activities over the phone or via email. If you do owe money on your cryptocurrency holdings, you will receive a letter from the IRS, and possibly a bill as well. If you receive a threatening phone call or suspicious email, ignore it - or report it to the authorities and the IRS.
The cryptocurrency market is growing up, and the IRS has finally taken notice. After many years of flying under the radar, cryptocurrency investors are finally getting the attention of the IRS. Whether you were an early adopter or recently joined the virtual payment revolution, you need to prepare for the tax implications of this 21st-century investment. The sooner you get started, the less taxing the situation will become.
If you need an expert tax advisor or are already in tax trouble, reach out to our firm and we’ll schedule a confidential consultation. Call 479-242-7499 TODAY.
What are the Chances that your Income Tax Return will be Audited?
For the vast majority of taxpayers, there is not much need to worry that you will be audited. In 2016, only 0.6% of individual income tax returns were audited according to the IRS 2017 Data Book. Why? For starters, the IRS budget has been cut resulting in more than 2,200 fewer agents available to audit returns. However, the “real” audit rate is closer to 7.o% as the IRS does not include the over 9.2 million notices that are questioning items on your client’s tax returns such as forgetting to include a 1099-Misc form. The IRS is relying more and more on technology to uncover underreporting and underpayment of taxes. Also, certain taxpayer groups are more susceptible to catching the attention of auditors.
If you’re in the middle of an audit or owe back taxes, contact us to schedule a free consultation. Visit www.elitetaxrelief.com or call 479-242-7499.
Returns that report more than $10 million in income or report no income
Sixteen percent of individuals who reported over $10 million in income were audited in 2014. Surprisingly, those returns that reported no income were audited at a higher rate than the average person. In 2014, 5.3% of tax returns with no income reported were audited. If your income is $25,000 - $200,000, you're highly unlikely to be singled out for an audit.
Estate Tax Returns of more than $5 million
In 2014 the IRS did an audit on 8.5% of estate tax returns which was well above the .9% of individual returns. Even larger estate tax returns, 21% of those between $5 million to $10 million were audited, while 27% of those over $10 million received an audit.
Individual filing of international returns raises a red flag
The IRS is focusing more attention on international returns. Statements made by experts in the field, strongly emphasized the practice of offshore tax evasion as being fundamentally unfair. Wealthy people evading the law by stashing their money overseas and not paying their share of tax is forcing the bulk of lower income citizens to foot the bill to fund the government. In 2014 only 4.8% of the international returns were audited.
Errors in information entered
Simple careless mistakes in filling out income tax forms send up red flags to the tax auditors. Filers neglect to get all report forms and statements together and forget to report dependents and exemptions correctly. The automated systems recognize these discrepancies but can't tell if they are actual mistakes or intentional. Neglecting to report all your income and other information could result in an audit, especially at higher incomes. Those who contribute to more charities and other organizations open up the possibility for fraud.
Reports of itemized deductions that are unrealistic
If an individual or small business claims itemized deductions that are clearly out of line, they could be signaled out for an audit. Filers need to know what a legitimate deduction entails.
Carefully reading directions for completing forms and checking for accuracy and honesty will reduce the chances of an audit. Hiring a tax professional, specifically someone with tax resolution experience like our firm, can help you stay out of tax trouble.
If you need an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Visit us at www.elitetaxrelief.com or call 479-242-7499.
Achieve Tax Resolution with an Offer in Compromise
An offer in compromise is the IRS’ tax resolution debt settlement program. It’s a program for taxpayers who owe the Internal Revenue Service more money than they can afford to pay.
It’s the IRS’s version of a “fresh start” when it comes to tax debt. If approved, the IRS accepts a lesser amount (sometimes a fraction of what’s owed) to settle your debt. However, it isn't always easy to gain approval due to its strict criteria. Your odds for acceptance increase significantly when you have experience negotiating with the IRS.
The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship.
Information You Need to Submit an Application for an Offer in Compromise
It's important to remember that the IRS wants its money and will only accept an offer in compromise if it thinks it wouldn't receive any money otherwise. You must be current with all filing and payment requirements to apply. Additionally, you cannot be in the process of filing bankruptcy.
You can find more information about the IRS Offer in Compromise on the IRS website here. If you want help with your back tax problem, contact us today for a consultation. www.elitetaxrelief.com 479-242-7499.
After supplying the IRS with your name, address, social security number, and the amount of tax debt you would like it to consider for this program, you need to supply details about your income, assets, and expenses. In addition to wages, your personal income can include:
● Business profit
● Self-employment income
● Rental income
● Child support or alimony
● Interest on investments
Your assets can include things such as:
● Stocks and bonds
● Resale value of your personal vehicles
● Market value of your home
● Balance of your retirement savings accounts
● Balance of bank accounts, including checking, savings, and investments
For the expense section, you should only include items you pay regularly. These may include:
● Rent or mortgage
● Child support or alimony
● State and federal taxes
● Daycare costs
● Costs to maintain a vehicle
● Auto, health, and life insurance
Compiling this information and completing the application correctly can be challenging even for tax practitioners who don’t have expertise in dealing with the IRS. Your CPA or tax advisor most likely doesn’t have experience with resolving back tax issues. That’s why we recommend working with a specialized tax resolution professional like us to better understand this option and increase your chances of approval.
I’m In Tax Trouble, What Are My Options?
A letter from the IRS is rarely a good thing. One of the worst missives to get from the tax man is the CP90 – Final Notice Before Levy. It is a final warning shot to scare you into paying up and should not be ignored.
After an IRS final notice, you could:
- Pay in full - but if you could afford to do that, you probably already would have done so.
- Sign on for an installment agreement on your own, with penalties and interest so excessive it will never end.
- Ignore them and wait for terrible consequences like garnished wages and tax liens. Don’t do this, ever.
- Contact your tax resolution professional to see what your resolution options are.
The CP90 intends to intimidate you into calling so the IRS can take as much as possible from you even if it leaves you in dire financial straits, unable to pay your bills or support your family.
A better option is to work with a certified tax resolution expert that can negotiate on your behalf for better results. A tax expert can pursue resolutions that would be difficult (if not impossible) to negotiate on your own. Below is a look at four options to deal with tax debt.
Offer in Compromise (OIC)
An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer's tax liabilities for less than the full amount owed. It can be far more reasonable than an IRS installment agreement, but you have to see if you qualify based on your unique financial situation and specific case.
Installment Agreement (IA) or Partial Payment Installment Agreement (PPIA)
These are well-structured installment agreements that can slash penalties by 50%. The IA is an agreement to pay what’s owed in full while a PPIA lets you pay a reduced amount. These agreements generally run 6-72 months,
Penalty Abatement (PA)
This agreement strips away penalties tacked onto your tax balance. Penalties include failure-to-file, failure-to-pay, and failure-to-deposit (for business owners). If you’ve never had a penalty before, a first-time abatement (FTA) penalty waiver may apply. Otherwise, your tax relief consultant can fight for a reasonable cause abatement if any of the following apply:
- Illness, death, or incapacitation of the taxpayer or their immediate family
- Fire, casualty, natural disaster, etc. affecting the taxpayer
- Inability to obtain records and documents
Currently Not Collectible (CNC)
In cases of extreme financial hardship, your tax rep can argue that you can’t afford to pay anything. With this option, your tax debt goes on the back burner, and you make no monthly payments although penalty and interest keep accruing. The big advantage of CNC is that the 10-year statute of limitations on collection keeps ticking so you might be able to ride it out and pay nothing on the tax debt. If you’ve received an IRS final notice or threatening letter, don’t ignore it. Instead, contact Elite Tax Relief at 479-242-7499 or 1-855-4-IRS-DEBT to speak with a tax resolution specialist to get the IRS off your back for good.
Fort Smith, Arkansas Tax Debt Professionals
Do you owe the IRS $15,0000 thousand dollars or more? Have you searched for help only to find it's coming from out of state? I'm Ken Mullinax founder of EliteTaxRelief.com. I'm located in Fort Smith, Arkansas and I specialize in helping people resolve their tax problems. As a former IRS revenue officer, I know their collection tactics and can help you avoid their pitfalls. Don't risk the IRS taking your money right before Christmas.
Call us at (855)-447-7332 to schedule a complimentary tax resolution consultation where we will review your tax debt and explain your options.