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Posts by Thelma

Can the IRS Seize Your Bank Account Without Any Notice?

Can the IRS Seize Your Bank Account Without Any Notice?

By on Feb 27, 2019 in Bank account levy, IRS | 0 comments

If you owe the Internal Revenue Service (IRS), and they have attempted to contact you about this issue multiple times, and you’ve not responded, then yes, the IRS can seize your bank account. But the real question is: “Can they do this without any notice?” The answer is no. The IRS is supposed to give you several opportunities to pay your taxes. This is mainly done by mail. While other forms of communications can easily get hacked, and even some can impersonate an IRS representative over the phone, the good old fashion United States Postal Service still has proven to be reliable. Although, there are some scam artists who may also send mail disguised as the IRS. So if you’ve received a letter from the IRS, address it! Whether you think it’s legit or not, you’ll be better off verifying the document with the IRS first. Unfortunately, you may have to waste some of your valuable time doing this, but it’s better to make sure that the letter is valid rather than to assume it’s a scam. Either way, the IRS ought to be notified. Do keep in mind that you should contact the IRS directly regardless of whatever information was printed on the letter. There’s a chance that scammers might include some sort of bogus contact information. Uncle Sam, however, always lets you get in touch with the IRS on a relatively direct basis. That being said, you have to act fast in order to avoid incurring some kind of future penalty or the dreaded seizure of an important account. If you’re worried about whether or not the IRS will take money from your bank account, there are several steps that need to happen before that can take place. And a lot of that has to do with you not being negligent. If you prefer to avoid the IRS seizing money from your bank account to pay off your tax debt, there are a few things you can do to prevent this: 1) Communicate Believe it or not, the IRS appreciates it when you communicate with them and explain your situation. However, it’s certainly worth noting that there’s a fine line between explaining your financial situation so that...

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How to Resolve a Tax Dispute with the IRS

How to Resolve a Tax Dispute with the IRS

By on Feb 19, 2019 in IRS | 0 comments

If you disagree with the IRS about a decision they have made regarding your tax return, you may assume that you don’t have any chance of resolving it in your favor. Well, as it turns out, you may have a better chance than you might think – especially if you follow some basic tips and the following strategy. Here is how we suggest you resolve a tax dispute with the IRS: 1. Do Not Panic A dispute with the IRS can cause significant anxiety and stress, but it doesn’t have to. Of course, you already have a full plate before having to worry about a potential tax dispute. Recognize that a tax dispute is very often resolved in writing, without a face-to-face meeting. Keep in mind that getting all worked about the problem won’t solve it, and it could even make things worse by making you chose a bad decision somewhere along the way. 2. Read Carefully and Respond Quickly Generally, the best response, if you receive a notice or letter from the IRS disputing a part of your tax return, is to take the time to read the entire notice, making note of the action requested, date requested and information that is requested. Many disputes with the IRS can be resolved with very little effort if you follow the directions outlined in the notice. If you disagree with the notice, pull together any/all supporting documentation that you have (receipts, tax forms, etc.) and respond in writing by the deadline listed in the correspondence. While it might seem like the federal government has a tendency to drag its feet, you don’t want to do anything that might provide them with the freedom of moving even more slowly. Reply well in advance of this deadline if at all possible to ensure faster service. 3. Appeal If you do not agree with a decision or ruling made by the IRS, you have the right to appeal. You can appeal the results of an audit or a change made to an offer in compromise in which the IRS has increased the penalties and fees associated with your payment. You may qualify for mediation services through IRS programs like Fast Track Settlement (FTS),...

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Hiring a Professional to Negotiate with the IRS on Your Behalf

Hiring a Professional to Negotiate with the IRS on Your Behalf

By on Feb 12, 2019 in Debt Relief, Tax relief, Tax Tips | 0 comments

In some cases doing things yourself is often the best way to yield quick results. Yet, when it comes time to handle situations like tax filing and debt, it’s often a good idea to bring in a third party that knows the tax laws and has successfully dealt with your special kind of tax case. The Internal Revenue Service (IRS) might respond better to someone who has had experience dealing with various kinds of tax matters. Knowing what kinds of solutions to ask for can go fairly quickly than asking an IRS representative what can be done to help them. While it’s true that IRS representatives are there to assist you, they can only do so much on their end. Bear in mind that they’re not working for you; they’re working for the United States government. Their job is to make sure that they are taking the necessary steps to ensure that taxpayers are paying their debt. They will do what they can to help you but to put it plainly, they’re not going to hold your hand or provide consultation services to you at any time of the day. The IRS is there for you Monday-Friday, 9 am to 4:30pm-and every other taxpayer in the country! That’s a lot of people! In fact, when you consider that many people have to send in separate returns for every business they run, you can start to see that it’s theoretically possible that they’d be dealing with more forms than there are people in the USA. While it’s never gotten quite that bad yet, they do estimate that slightly over 151 million returns were processed last year alone. How Resolving Tax Debt Issues Yourself Might Affect Your Life No wonder you’re on hold waiting for a representative! It’s not uncommon to sit on hold for an hour with the IRS. Not everyone has the luxury of sitting on hold for that long, especially during the weekday. When you finally get a live operator, you may only have a few minutes to talk! As you might imagine, IRS agents are very often backlogged with tax files from dozens if not hundreds of people. They might not know what’s best for your particular...

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How Early 401K Withdrawals Can Affect Your Tax Return

How Early 401K Withdrawals Can Affect Your Tax Return

By on Feb 4, 2019 in Taxes | 0 comments

Your 401(k) retirement account is an excellent way to save for your retirement and some employers even match your contributions, giving you an extra boost for your nest egg. But, what happens if you come upon hard times before you retire and need to cash in some or all of your 401(k)? Accessing these funds before you are 59 and a half may help you in the short term, but keep in mind that there are tax consequences for tapping into your retirement early. You want to make sure that you take these consequences into account ahead of time so that you are not hit with a hefty tax bill come April that creates another financial problem for you and your family. Increased Taxable Income If you withdraw funds from your 401(k) before retirement, these funds become taxable income that’s added to your regular annual income. This is primarily because the contributions were not counted as taxable income when you put them into your retirement account. It is also possible that this additional taxable income can push you into a new tax bracket, also causing you to owe more to the IRS. Early Withdrawal Penalties When you take money out of your 401(k) early, you also will likely have to pay a penalty for doing so on top of paying the taxes already discussed. Most often, the penalty you’ll pay to the IRS is 10% of what you withdraw from your retirement account. So, if you take $10,000 out of your 401(k), you will have to pay the IRS an additional $1,000 for the early withdrawal penalty. Expectations… There are some exceptions to the early penalty rule that you should be aware of. In these cases, you can take out as much as you need without penalty: If you have a permanent physical or mental disability that a physician can sign off on and can thus no longer work, you can take IRA withdrawals without penalty. If you lose your job and collect unemployment compensation for 12 consecutive weeks, you can take penalty-free IRA distributions if you use the money to pay for health insurance for you or your spouse or dependents. The contingency to this is that you...

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Are IRS Installment Tax Payments Deductible?

Are IRS Installment Tax Payments Deductible?

By on Jan 18, 2019 in Tax Deductions | 0 comments

Are IRS Installment Tax Payments Deductible? An installment agreement is one way to pay back taxes, interest, and penalties to the IRS over time if you are unable to pay in one lump sum. Like a credit card payment, you are paying back the debt (plus any interest and penalties accrued) over time, rather than paying the debt all at once. This is the most widely used payment plan offered by the IRS and one that they are likely to grant you. In addition, other instances to do with the IRS often seem like they are part of an installment plan. In this article, we parse some of the other common confusing claims you may or may not make associated with payments or fees. How Likely Are You to Be Granted an Installment Agreement? The IRS is actually fairly open to granting installment agreements to those who need them. For example, if you owe less than $50,000 and are current on your taxes, you should be granted an installment agreement (generally for 72 months) from the IRS automatically with just a simple request. If you owe more than $50,000, you will have to provide some detailed financial information, but still, have a good chance of it being granted. You should be aware that, like a credit card, you are paying back not only debt but interest and penalties that generally amount to approximately 8-10% as well. Depending on the size of your debt that can really add up fast. Another thing to note is that you also get a say in determining your monthly payment, so give that some thought as you go through the process. If your installment agreement is approved, the IRS will want you to pay via payroll deduction or direct debit. Are Taxes and Interest Deductible? One very common question asked by taxpayers who are currently paying an installment agreement or who are considering applying for one is whether any portion of the payment is tax deductible. NO – Unfortunately, the answer to this is no. Unlike tax breaks that you might get on your mortgage interest and property taxes, you are not allowed to deduct the interest or penalties that are part of an...

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