Taxpayers Who Lost Their Jobs or Had Their Hours of Work Substantially Reduced May Wind Up In IRS Collections
As We Continue to Endure the Health and Financial Ravages of the Corona Virus, Unfortunately More Bad News May be on the Horizon
Tax Pros Predict that 1 to 2 Million Taxpayers May Fail to File Their 2020 Tax Returns Due to the Pandemic Financial Crisis
Currently, there are 15 million taxpayers in IRS collections. IRS estimates that 7 million taxpayers are currently not filing their tax returns. Many tax professionals are predicting that another 1 to 2 million taxpayers may fail to file their tax returns due to the pandemic financial crisis and the closing of their businesses and loss of jobs.
You don’t need to be a victim. Ignoring one’s tax problem usually results in the problem only getting worse. With failure to file penalties assessed at a rate of 5% a month, over the penalty period of 5 months, that is an additional 25% of penalties on top of the taxes due. Then there is interest being assessed on the underpayment of tax and on the penalties assessed. It is not unusual that the total interest and penalties assessed are 60% to 70% of the total taxes due.
Mistake #1:
Procrastinate. Put off until tomorrow what you can do today. Let those penalties and interest accrue substantially increasing your IRS tax debt.
Mistake #2:
Ignore those IRS letters and notices. The IRS sends numerous letters and notices to taxpayers allowing them certain taxpayer rights to address their assessments and set up a payment plan. Many taxpayers ignore those notices until the IRS begins to levy wages, social security benefits, and bank accounts. When the taxpayer finally realizes that the situation must be addressed, certain appeal rights may have been missed and the process to get the taxpayer into compliance becomes more complex.
Mistake #3:
Forgetting that unemployment compensation benefits paid to you are taxable income and that the taxes withheld on those payments (if any) are usually insufficient.
Tax Planning Tip #1
Call a tax professional who specializes in solving IRS tax problems. Better yet, call several firms. While your tax professional may be an excellent tax preparer, very few tax professionals specialize in solving IRS tax problems. You want the very best handling your tax debt problem, not someone who does it part-time.
When you make those calls, listen very carefully to what they share with you and take notes. Are you speaking with the person who will resolve your problems, or are you speaking with a sales person? What are their credentials and experience? Check their website for testimonials and reviews. Check with the Better Business Bureau. Check if they are in good standing with the IRS if an Enrolled Agent, local bar association if an attorney, and the State Board of Accountancy if a CPA.
Tax Planning Tip #2
Understand the process as to how the tax professional will solve your tax problem.
Our process is quite simple.
- We offer a free telephone consultation to understand your situation.
- We provide you with a fixed fee retainer arrangement and a letter of understanding as to what services we will provide to you.
- We pull your IRS transcripts to learn everything about you from an IRS perspective.
- Any unfiled tax returns are prepared and filed.
- We provide you with an analysis of the alternatives available to you to solve your IRS tax debts.
If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.
About F. Bryan Haarlander, EA, CTRS:
Bryan Haarlander, an Enrolled Agent and a Certified Tax Resolution Specialist, is an affiliate member of the Suburban West Realtors® Association, a member of the American Society of Tax Problem Solvers (ASTPS), PA Society of Tax & Accounting Professionals (PSTAP), the National Society of Accountants (NSA) and the National Association of Tax Professionals (NATP). He is the author of “How to Resolve Your IRS Tax Debt Problems” as well as a book on how to start your own business. He has been practicing in Exton for 19 years. His firm serves clients in the western suburbs of Philadelphia, PA, which includes the cities of Chester Springs, Coatesville, Collegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia, Phoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks, Chester, Delaware, Montgomery and Philadelphia Counties, as well as clients in Delaware, New Jersey, New York and throughout the continental USA.
If not a subscriber to his blogs, http://www.taxexpertblog.com and http://www.stopmytaxproblems.comyou may wish to do so as he discusses various pertinent tax and business issues.
For individual tax payers, real estate professionals, contractors and other self-employed individuals with IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.
Keystone Financial Solutions, Inc. specializes in providing innovative tax planning, tax preparation, and solving IRS tax debt problems. The company’s web site is https://www.keysolutions.us and its telephone number is (610) 594-2601.
By visiting our website you can learn about the 5 Secrets the IRS Doesn’t Share and order a FREE SPECIAL REPORT: Should You Represent Yourself or Hire a Tax Professional.
BE SURE TO READ THE DISCLAIMER PAGE: Tax laws, IRS rules and regulations change frequently. Although we hope you’ll find this information helpful, this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher shall not assume liability for any losses, injuries, or damages from the display or use of this information. Should you wish to engage our firm to represent you and your individual situation, please call us at (610) 594-2601.
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