If you owe back taxes you are not alone. Federal employees from the U.S. Postal Service to the Executive Office of the President have not paid their 2007 federal income taxes.
The Internal Revenue Service is trying to collect billions of dollars in unpaid taxes from nearly half a million federal employees. According to IRS records, 171,549 current federal workers did not voluntarily pay their federal income taxes in 2007. The same is true for 37,752 active duty military and nearly 200,000 retired civilian and military personnel.
Almost 450,000 federal employees and retirees did not pay their taxes for a total of $3,586,784,725 in taxes owed last year.
Each year the IRS tracks the voluntary compliance rate of all federal workers and retirees. The percentage of employees and retirees who are delinquent has gone up and down over the past five years, but the amount unpaid has increased each year topping $3.5 billion for the first time in 2007.
The agency with the most delinquent employees is the U.S. Postal Service. With more than 747,000 employees, the postal service is the largest employer in the federal government, but with a 4.16 percent delinquency rate, it is a full 1 percent above the average compliance rate this year.
The IRS would not provide comparable data for the general population. But a spokesperson for the IRS did supply the delinquency rate for IRS employees -- less than 1 percent. The IRS is the only federal agency where an employee can be fired for not paying his taxes.
The Executive Office of the President, which includes the White House, has 58 employees who did not pay $319,978.
The Federal Housing Finance Board comes in as the agency with the best compliance rate of all agencies with 100 or more employees. The FHFB had four of its 134 employees on the list of delinquents, three of them have now entered into voluntary payment plans with the IRS.
In fact, 152,554 of the delinquent feds have entered into payment plans. Nevertheless, $2.7 billion remains uncollected.
Other notable agencies with high delinquency rates include the Smithsonian Institution, where nearly 5.5 percent of the employees didn't pay their taxes. On Capitol Hill, more than 1,000 workers are on the list. The Government Printing Office has the highest percentage of delinquent employees with 7.23 percent.
If you owe back taxes you are not alone. Don't feel overwhelmed, like there is no where to turn. Call someone who can help with your situation.
Thursday, September 25, 2008
FAQs about First Time Home Buying Credit
Q. Which home purchases qualify for the first-time homebuyer credit?
A. Only the purchase of a main home located in the United States qualifies and only for a limited time. Vacation homes and rental property are not eligible. You must buy the home after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home.
Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.
If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return.
Q. How much is the credit?
A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $75,000 or more. Whatever the size of the credit a taxpayer receives, the credit must be repaid over a 15-year period.
Q. Are there income limits?
A. Yes. The credit is reduced or eliminated for higher-income taxpayers.
The credit is phased out based on your modified adjusted gross income (MAGI). MAGI is your adjusted gross income plus various amounts excluded from income—for example, certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000.
This means the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.
Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if you buy a main home:
Your income exceeds the phase-out range. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.
You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
You stop using your home as your main home.
You sell your home before the end of the year.
You are a nonresident alien.
You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year.
Your home financing comes from tax-exempt mortgage revenue bonds.
You owned another main home at any time during the three years prior to the date of purchase. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another main home at any time from July 2, 2005, through July 1, 2008.
Q. How and when is the credit repaid?
A. The first-time homebuyer credit is similar to a 15-year interest-free loan. Normally, it is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. The repayment amount is included as an additional tax on the taxpayer’s income tax return for that year. For example, if you properly claim a $7,500 first-time homebuyer credit on your 2008 return, you will begin paying it back on your 2010 tax return. Normally, $500 will be due each year from 2010 to 2024.
You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.
For more help you can check out the IRS web site.
For more tax help click here.
A. Only the purchase of a main home located in the United States qualifies and only for a limited time. Vacation homes and rental property are not eligible. You must buy the home after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home.
Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.
If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return.
Q. How much is the credit?
A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $75,000 or more. Whatever the size of the credit a taxpayer receives, the credit must be repaid over a 15-year period.
Q. Are there income limits?
A. Yes. The credit is reduced or eliminated for higher-income taxpayers.
The credit is phased out based on your modified adjusted gross income (MAGI). MAGI is your adjusted gross income plus various amounts excluded from income—for example, certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000.
This means the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.
Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if you buy a main home:
Your income exceeds the phase-out range. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.
You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
You stop using your home as your main home.
You sell your home before the end of the year.
You are a nonresident alien.
You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year.
Your home financing comes from tax-exempt mortgage revenue bonds.
You owned another main home at any time during the three years prior to the date of purchase. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another main home at any time from July 2, 2005, through July 1, 2008.
Q. How and when is the credit repaid?
A. The first-time homebuyer credit is similar to a 15-year interest-free loan. Normally, it is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. The repayment amount is included as an additional tax on the taxpayer’s income tax return for that year. For example, if you properly claim a $7,500 first-time homebuyer credit on your 2008 return, you will begin paying it back on your 2010 tax return. Normally, $500 will be due each year from 2010 to 2024.
You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.
For more help you can check out the IRS web site.
For more tax help click here.
Tax Credit to Aide First-Time Homebuyers
Tax Credit to Aid First-Time Homebuyers; Must Be Repaid Over 15 Years
IR-2008-106, Sept. 16, 2008
WASHINGTON — First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.
Available for a limited time only, the credit:
Applies to home purchases after April 8, 2008, and before July 1, 2009.
Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.
However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.
Eligible taxpayers will claim the credit on new IRS Form 5405. This form, along with further instructions on claiming the first-time homebuyer credit, will be included in 2008 tax forms and instructions and be available later this year on the IRS Web site.
If you bought a home recently, or are considering buying one, the following questions and answers may help you determine whether you qualify for the credit.
Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.
If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return.
You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.
However, some exceptions apply to the repayment rule.
They include:
If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount.
If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens.
This includes situations where the main home becomes a vacation home or is converted to business or rental property.
There are special rules for involuntary conversions.
Taxpayers are urged to consult a professional to determine the tax consequences of an involuntary conversion.
If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale.
If you transfer your home to your spouse, or, as part of a divorce settlement, to your former spouse, that person is responsible for making all subsequent installment payments.
For any tax related questions or to get help if you owe the IRS call a reputable tax resollutions firm.
IR-2008-106, Sept. 16, 2008
WASHINGTON — First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.
Available for a limited time only, the credit:
Applies to home purchases after April 8, 2008, and before July 1, 2009.
Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.
However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.
Eligible taxpayers will claim the credit on new IRS Form 5405. This form, along with further instructions on claiming the first-time homebuyer credit, will be included in 2008 tax forms and instructions and be available later this year on the IRS Web site.
If you bought a home recently, or are considering buying one, the following questions and answers may help you determine whether you qualify for the credit.
Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.
If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return.
You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.
However, some exceptions apply to the repayment rule.
They include:
If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount.
If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens.
This includes situations where the main home becomes a vacation home or is converted to business or rental property.
There are special rules for involuntary conversions.
Taxpayers are urged to consult a professional to determine the tax consequences of an involuntary conversion.
If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale.
If you transfer your home to your spouse, or, as part of a divorce settlement, to your former spouse, that person is responsible for making all subsequent installment payments.
For any tax related questions or to get help if you owe the IRS call a reputable tax resollutions firm.
Thursday, September 18, 2008
SIMPLE IRA Plan
A SIMPLE IRA plan is a Savings Incentive Match Plan for Employees. Because this is a simplified plan, the administrative costs should be lower than for other, more complex plans. Under a SIMPLE IRA plan, employees and employers make contributions to traditional Individual Retirement Arrangements (IRAs) set up for employees (including self-employed individuals), subject to certain limits. It is ideally suited as a start-up retirement savings plan for small employers who do not currently sponsor a retirement plan.
To establish a SIMPLE IRA plan, you:
Have a business with, generally, 100 or fewer employees.
Need to complete just a form or two.
Cannot have any other retirement plan.
Here are some tools to help you start up your SIMPLE IRA plan.
How to set up a SIMPLE IRA plan.
Forms and Publications you'll need to start your SIMPLE IRA.
"Starting a SEP or SIMPLE IRA Plan" video - a discussion on two types of retirement plans (SEP and SIMPLE IRA) that are tailored for many businesses (2:00 min.)
Advantages:
Easy to set up and run – usually just a phone call to a financial institution gets things started.
Administrative costs are low.
Employees can contribute, on a tax-deferred basis, through convenient payroll deductions.
You can choose either to match the employee contributions of those who decide to participate or to contribute a fixed percentage of all eligible employees’ pay.
Under a SIMPLE IRA plan, you, the employer, make contributions to traditional IRAs (SIMPLE IRAs) set up for each of your eligible employees. In addition, this type of plan allows your employees to defer a part of their salaries into the plan for retirement. A SIMPLE IRA Plan is funded both by employer and employee contributions. Each employee is always 100% vested in (or, has ownership of) all money in his or her SIMPLE IRA.
How does a SIMPLE IRA plan work?
Example 1:
Elizabeth works for the Rockland Quarry Company, a small business with 50 employees. Rockland has decided to establish a SIMPLE IRA plan for its employees and will match its employees’ contributions dollar-for-dollar up to 3% of each employee’s salary. Under this option, if a Rockland employee does not contribute to his or her SIMPLE IRA, then that employee does not receive any matching employer contribution from Rockland.
Elizabeth has a yearly salary of $50,000 and decides to contribute 5% of her salary to her SIMPLE IRA. Elizabeth’s yearly contribution is $2,500 (5% of $50,000). The Rockland matching contribution is $1,500 (3% of $50,000). Therefore, the total contribution to Elizabeth’s SIMPLE IRA that year is $4,000 (her $2,500 contribution plus the $1,500 contribution from Rockland). The financial institution partnering with Rockland on the SIMPLE IRA plan has several investment choices and Elizabeth is free to pick and choose which ones suit her best.
Example 2:
Austin works for the Skidmore Tire Company, a small business with 75 employees. Skidmore has decided to establish a SIMPLE IRA plan for all its employees and will make a 2% nonelective contribution for each of its employees. Under this option, even if a Skidmore employee does not contribute to his or her SIMPLE IRA, that employee would still receive an employer contribution to his or her SIMPLE IRA equal to 2% of salary.
Austin has a yearly salary of $40,000 and has decided that this year, he simply cannot make a contribution to his SIMPLE IRA. Even though Austin does not make a contribution this year, Skidmore must make a contribution of $800 (2% of $40,000). The financial institution partnering with Skidmore on the SIMPLE IRA plan has several investment choices and Austin has the same investment options as the other plan participants.
A SIMPLE IRA Plan has a life cycle with four distinct stages.
Click on the below links to review additional information on each of the life stages of a SIMPLE IRA Plan:
Choosing a SIMPLE IRA Plan
Establishing a SIMPLE IRA Plan
Operating a SIMPLE IRA Plan
Terminating a SIMPLE IRA Plan
SIMPLE IRA Plan Checklist
It’s important to review the requirements for operating your SIMPLE IRA plan every year.
This checklist has been designed as a diagnostic tool to help you keep your SIMPLE IRA plan in compliance with important tax rules.
To establish a SIMPLE IRA plan, you:
Have a business with, generally, 100 or fewer employees.
Need to complete just a form or two.
Cannot have any other retirement plan.
Here are some tools to help you start up your SIMPLE IRA plan.
How to set up a SIMPLE IRA plan.
Forms and Publications you'll need to start your SIMPLE IRA.
"Starting a SEP or SIMPLE IRA Plan" video - a discussion on two types of retirement plans (SEP and SIMPLE IRA) that are tailored for many businesses (2:00 min.)
Advantages:
Easy to set up and run – usually just a phone call to a financial institution gets things started.
Administrative costs are low.
Employees can contribute, on a tax-deferred basis, through convenient payroll deductions.
You can choose either to match the employee contributions of those who decide to participate or to contribute a fixed percentage of all eligible employees’ pay.
Under a SIMPLE IRA plan, you, the employer, make contributions to traditional IRAs (SIMPLE IRAs) set up for each of your eligible employees. In addition, this type of plan allows your employees to defer a part of their salaries into the plan for retirement. A SIMPLE IRA Plan is funded both by employer and employee contributions. Each employee is always 100% vested in (or, has ownership of) all money in his or her SIMPLE IRA.
How does a SIMPLE IRA plan work?
Example 1:
Elizabeth works for the Rockland Quarry Company, a small business with 50 employees. Rockland has decided to establish a SIMPLE IRA plan for its employees and will match its employees’ contributions dollar-for-dollar up to 3% of each employee’s salary. Under this option, if a Rockland employee does not contribute to his or her SIMPLE IRA, then that employee does not receive any matching employer contribution from Rockland.
Elizabeth has a yearly salary of $50,000 and decides to contribute 5% of her salary to her SIMPLE IRA. Elizabeth’s yearly contribution is $2,500 (5% of $50,000). The Rockland matching contribution is $1,500 (3% of $50,000). Therefore, the total contribution to Elizabeth’s SIMPLE IRA that year is $4,000 (her $2,500 contribution plus the $1,500 contribution from Rockland). The financial institution partnering with Rockland on the SIMPLE IRA plan has several investment choices and Elizabeth is free to pick and choose which ones suit her best.
Example 2:
Austin works for the Skidmore Tire Company, a small business with 75 employees. Skidmore has decided to establish a SIMPLE IRA plan for all its employees and will make a 2% nonelective contribution for each of its employees. Under this option, even if a Skidmore employee does not contribute to his or her SIMPLE IRA, that employee would still receive an employer contribution to his or her SIMPLE IRA equal to 2% of salary.
Austin has a yearly salary of $40,000 and has decided that this year, he simply cannot make a contribution to his SIMPLE IRA. Even though Austin does not make a contribution this year, Skidmore must make a contribution of $800 (2% of $40,000). The financial institution partnering with Skidmore on the SIMPLE IRA plan has several investment choices and Austin has the same investment options as the other plan participants.
A SIMPLE IRA Plan has a life cycle with four distinct stages.
Click on the below links to review additional information on each of the life stages of a SIMPLE IRA Plan:
Choosing a SIMPLE IRA Plan
Establishing a SIMPLE IRA Plan
Operating a SIMPLE IRA Plan
Terminating a SIMPLE IRA Plan
SIMPLE IRA Plan Checklist
It’s important to review the requirements for operating your SIMPLE IRA plan every year.
This checklist has been designed as a diagnostic tool to help you keep your SIMPLE IRA plan in compliance with important tax rules.
Setting up a SIMPLE plan for your Employees
If you are a small business owner and are thinking about setting up retirement plan for their employees, you should be aware of important deadlines coming up in October.
A SIMPLE, or Savings Incentive Match Plan for Employees, must be established by Oct. 1 for 2008 contributions.
Business owners who requested an extension to file their 2007 tax return have until Oct. 15 to set up a SEP, or Simplified Employee Plan and take a deduction for 2007.
Related Links:
Publication 3998, Choosing a Retirement Solution for Your Small Business
IRA Online Resource Guide Order the IRA Resource Guide on CD-ROM
Publication 560, Retirement Plans for Small Business
A SIMPLE, or Savings Incentive Match Plan for Employees, must be established by Oct. 1 for 2008 contributions.
Business owners who requested an extension to file their 2007 tax return have until Oct. 15 to set up a SEP, or Simplified Employee Plan and take a deduction for 2007.
Related Links:
Publication 3998, Choosing a Retirement Solution for Your Small Business
IRA Online Resource Guide Order the IRA Resource Guide on CD-ROM
Publication 560, Retirement Plans for Small Business
Setting up a SEP for your Business
A SEP is a Simplified Employee Pension plan. Because this is a simplified plan, the administrative costs should be lower than for other, more complex plans. Under a SEP, employers make contributions to traditional Individual Retirement Arrangements (IRAs) set up for employees (including self –employed individuals), subject to certain limits.
To establish a SEP, you:
Can be a business of any size, even self-employed.
Must adopt a SEP plan document.
Generally cannot have any other retirement plan.
Here are some tools to help you start up your SEP.
How to set up a SEP Plan.
Forms and Publications you'll need to start and operate your SEP.
"Starting a SEP or SIMPLE IRA Plan" video - a discussion on two types of retirement plans (SEP and SIMPLE IRA) that are tailored for many businesses (2:00 min.)
Advantages:
Easy to set up and operate - usually just a phone call to a financial institution gets things started.
Administrative costs are low.
Plan can have flexible annual contribution obligations – a good plan if cash flow is an issue.
Under a SEP, you, the employer, make contributions to traditional IRAs (SEP-IRAs) set up for each of your eligible employees. A SEP is funded solely by employer contributions. Each employee is always 100% vested in (or, has ownership of) all money in his or her SEP-IRA.
How does a SEP work?
Jed works for the Quincy Chintz Company. Quincy decides to establish a SEP for its employees. Quincy has chosen a SEP because the chintz industry is cyclical in nature, with good times and down times. In good years, Quincy can make larger contributions for its employees and in down times it can reduce the amount. Quincy knows that under a SEP, the contribution rate (whether large or small) must be uniform for all employees. The financial institution that Quincy has picked to work with for its SEP has several investment funds for the Quincy employees to choose from. Jed decides to divide the contribution to his SEP-IRA among three of the available funds. Because only employer contributions are permitted, Jed cannot also make contributions under the SEP.
A SEP has a life cycle with four distinct stages. Click on the below links to review additional information on each of the life stages of a SEP.
Choosing a SEP
Establishing a SEP
Operating a SEP
Terminating a SEP
SEP ChecklistIt is important to review the requirements for operating your SEP every year. This checklist has been designed as a diagnostic tool to help you keep your SEP in compliance with important tax rules.
SEP Fix-It GuideTips on how to find, fix, and avoid common mistakes in SEP plans.
Tuesday, September 16, 2008
Tax Relief for Hurricane Ike Victims
IRS Gives Taxpayers in Area Threatened by Ike Until Sept. 22 To File Corporate and Individual Estimated Taxes
IR-2008-105, Sept. 12, 2008
WASHINGTON — Taxpayers and tax preparers affected in coming days by Hurricane Ike will have an extra seven days to file corporate tax returns and third-quarter estimated taxes otherwise due on Monday, Sept. 15, 2008, the Internal Revenue Service announced today.
Hurricane Ike is expected to make landfall on the Gulf Coast of Texas, not far from Houston, by early Saturday morning.
Because the storm is falling within one business day of the Sept. 15 due dates, taxpayers directly impacted by the storm will have until midnight Sept. 22 to meet their tax filing obligations without incurring late filing and payment penalties.
The IRS is likely to further postpone that deadline and make further tax relief available following damage assessments by the Federal Emergency Management Agency.
Affected taxpayers can mark paper tax returns with the words “Hurricane Ike.” Taxpayers who e-file their returns can use their software’s “disaster” feature, if available.
For further information, see Tax Relief in Disaster Situations
See pictures of the devastation from hurricane Ike.
IR-2008-105, Sept. 12, 2008
WASHINGTON — Taxpayers and tax preparers affected in coming days by Hurricane Ike will have an extra seven days to file corporate tax returns and third-quarter estimated taxes otherwise due on Monday, Sept. 15, 2008, the Internal Revenue Service announced today.
Hurricane Ike is expected to make landfall on the Gulf Coast of Texas, not far from Houston, by early Saturday morning.
Because the storm is falling within one business day of the Sept. 15 due dates, taxpayers directly impacted by the storm will have until midnight Sept. 22 to meet their tax filing obligations without incurring late filing and payment penalties.
The IRS is likely to further postpone that deadline and make further tax relief available following damage assessments by the Federal Emergency Management Agency.
Affected taxpayers can mark paper tax returns with the words “Hurricane Ike.” Taxpayers who e-file their returns can use their software’s “disaster” feature, if available.
For further information, see Tax Relief in Disaster Situations
See pictures of the devastation from hurricane Ike.
Tax Relief in Disaster Situations
Updated Sept. 12, 2008
The IRS is providing taxpayers affected by Hurricane Ike with seven extra days to file individual estimated taxes and corporate taxes due Monday, Sept. 15. The agency is continuing to monitor the impact of Hurricane Ike along the Gulf Coast.
Tax relief is now available to victims of Hurricane Gustav in Louisiana. Certain filing and payment deadlines have been postponed until Jan. 5, 2009. See the news release for more details.
With an active hurricane season underway, the IRS recommends that taxpayers in vulnerable areas take steps now to protect their tax and financial records. For further information on hurricane recovery, visit the Federal Emergency Management Agency hurricane response page.
The Housing and Economic Recovery Act of 2008 offers a new option to homeowners who previously claimed a casualty loss deduction resulting from hurricanes Katrina, Rita and Wilma. Details on filing amended returns will be available in the near future. See revised questions and answers for more information.
Recent Tax Relief
• Relief for Hurricane Gustav Victims in Louisiana, see News Release
• Relief for Victims of Tropical Storm Fay in Florida, see News Release
• Relief for Victims of Hurricane Dolly in Texas, see News Release
• Special Relief for qualified recovery assistance property placed in the Kansas disaster area, see Notice 2008-67
• Special Help for Greensburg, Kan., Tornado Victims, see News Release
• Don't See What You're Looking For? Around the Nation contains links to previously issued disaster relief.
• NEW: For Forms, Publications, FAQs and General Information See Disaster Assistance and Emergency Relief for Individuals and Businesses.
• Ayuda por Desastres Paginas en espanol
• Tax Relief for Hurricane Katrina, Rita and Wilma Victims The IRS offers tax assistance to victims of the 2005 Gulf Coast hurricanes.
The IRS is providing taxpayers affected by Hurricane Ike with seven extra days to file individual estimated taxes and corporate taxes due Monday, Sept. 15. The agency is continuing to monitor the impact of Hurricane Ike along the Gulf Coast.
Tax relief is now available to victims of Hurricane Gustav in Louisiana. Certain filing and payment deadlines have been postponed until Jan. 5, 2009. See the news release for more details.
With an active hurricane season underway, the IRS recommends that taxpayers in vulnerable areas take steps now to protect their tax and financial records. For further information on hurricane recovery, visit the Federal Emergency Management Agency hurricane response page.
The Housing and Economic Recovery Act of 2008 offers a new option to homeowners who previously claimed a casualty loss deduction resulting from hurricanes Katrina, Rita and Wilma. Details on filing amended returns will be available in the near future. See revised questions and answers for more information.
Recent Tax Relief
• Relief for Hurricane Gustav Victims in Louisiana, see News Release
• Relief for Victims of Tropical Storm Fay in Florida, see News Release
• Relief for Victims of Hurricane Dolly in Texas, see News Release
• Special Relief for qualified recovery assistance property placed in the Kansas disaster area, see Notice 2008-67
• Special Help for Greensburg, Kan., Tornado Victims, see News Release
• Don't See What You're Looking For? Around the Nation contains links to previously issued disaster relief.
• NEW: For Forms, Publications, FAQs and General Information See Disaster Assistance and Emergency Relief for Individuals and Businesses.
• Ayuda por Desastres Paginas en espanol
• Tax Relief for Hurricane Katrina, Rita and Wilma Victims The IRS offers tax assistance to victims of the 2005 Gulf Coast hurricanes.
Its not too Late to File and get Your Stimulus Payment
If you haven't yet filed a tax return to get your stimulus payment, you still have time to do so. But you must file by Oct. 15 to get your payment this year. And if you've already filed to get your payment but have a question or issue, it might be addressed here.
Find the Answer
Still looking for your rebate even though you've already filed a tax return? Or wonder why it's smaller than you were expecting? You may find the answer to your question in our:
• Top five questions people are asking
• Frequently asked questions about eligibility, payment amounts, payment delivery and more
If You've Already Filed a Tax Return
You may have already filed but still have outstanding issues. Find out more if you:
• Haven’t gotten your economic stimulus payment,
• Received one for a different amount than you were expecting,
• Amended your tax return,
• Changed your address, or
• Are in the military, have a spouse or children with ITINs instead of valid SSNs and received a reduced or no stimulus payment
If you still have questions, try:
• The IRS' online tool that tells you if your payment has been scheduled for delivery the upcoming week, Where's My Stimulus Payment?
• The Rebate Hotline at 1-866-234-2942
If You Haven't Yet Filed a Tax Return
If you haven’t filed a federal tax return to claim your economic stimulus payment, you have until Oct. 15 to file to get your payment this year.
Find out more if you:
• Receive Social Security retirement or disability benefits
• Receive Veterans Affairs pension, disability or survivor's benefits
• Receive Tier 1 Railroad Retirement benefits
• Are a low-wage worker, or Filed for an extension of time to file your return.
Get Basic Information
If you're not sure what the payment is all about, read the basic information.
Find Out if You're Eligible
You are eligible if:
• You or your family has at least $3,000 in qualifying income from, or in combination with, Social Security benefits, Veterans Affairs benefits, Railroad Retirement benefits and earned income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.
• You and any family members listed on your tax return have valid Social Security numbers.
• You are not a dependent or eligible to be a dependent on someone else’s federal tax return. (The same must be true of any family members claimed on your return.)
Calculate How Much You May Get
Eligible individuals — between $300 and $600
Joint filers — between $600 and $1,200
With eligible children — an additional $300 for each qualifying child
The actual amount depends on the information on your tax return. To find out how much you might be eligible for, use the economic stimulus calculator.
Find Out When You'll Get Your Payment
Whether you've already filed, have yet to file or filed for an extension, find out when you can expect to receive your stimulus payment.
Claim Your Payment...
Complete a federal tax return this year, even if you don’t normally do so. For instructions, a sample Form 1040A and a blank Form 1040A, see our 8-page informational package. Or use the longer Form 1040 and its instructions.
Then...
File electronically. For free free tax preparation software and electronic filing for people submitting a return solely to receive their stimulus payment, use Free File: Economic Stimulus Payment.
Or...
Mail a paper tax return to the IRS based on where you live.
Choose Direct Deposit or Paper Check
You can get your payment electronically as a direct deposit into your checking or savings account by filling in lines 44 b, c and d on Form 1040A or lines 74 b, c and d on Form 1040. Or you can get a paper check by leaving those lines blank.
Get Free Help at Taxpayer Assistance Centers
IRS employees will help prepare Form 1040A returns for low-income workers, retirees, disabled veterans and others. For a list of centers in your state and their hours of operation, Contact My Local Office .
Information For Businesses
Information on the business provisions of the economic stimulus payment.
For More Information
Check out our:
news releases, audio files, fact sheets and legal guidance
Flyers, public service announcements and other marketing products for IRS's partners and others
Avoid Rebate Scams
Identity thieves are using the stimulus payment as bait in their scams. Details can be found in news release IR-2008-11, IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting.
Find the Answer
Still looking for your rebate even though you've already filed a tax return? Or wonder why it's smaller than you were expecting? You may find the answer to your question in our:
• Top five questions people are asking
• Frequently asked questions about eligibility, payment amounts, payment delivery and more
If You've Already Filed a Tax Return
You may have already filed but still have outstanding issues. Find out more if you:
• Haven’t gotten your economic stimulus payment,
• Received one for a different amount than you were expecting,
• Amended your tax return,
• Changed your address, or
• Are in the military, have a spouse or children with ITINs instead of valid SSNs and received a reduced or no stimulus payment
If you still have questions, try:
• The IRS' online tool that tells you if your payment has been scheduled for delivery the upcoming week, Where's My Stimulus Payment?
• The Rebate Hotline at 1-866-234-2942
If You Haven't Yet Filed a Tax Return
If you haven’t filed a federal tax return to claim your economic stimulus payment, you have until Oct. 15 to file to get your payment this year.
Find out more if you:
• Receive Social Security retirement or disability benefits
• Receive Veterans Affairs pension, disability or survivor's benefits
• Receive Tier 1 Railroad Retirement benefits
• Are a low-wage worker, or Filed for an extension of time to file your return.
Get Basic Information
If you're not sure what the payment is all about, read the basic information.
Find Out if You're Eligible
You are eligible if:
• You or your family has at least $3,000 in qualifying income from, or in combination with, Social Security benefits, Veterans Affairs benefits, Railroad Retirement benefits and earned income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.
• You and any family members listed on your tax return have valid Social Security numbers.
• You are not a dependent or eligible to be a dependent on someone else’s federal tax return. (The same must be true of any family members claimed on your return.)
Calculate How Much You May Get
Eligible individuals — between $300 and $600
Joint filers — between $600 and $1,200
With eligible children — an additional $300 for each qualifying child
The actual amount depends on the information on your tax return. To find out how much you might be eligible for, use the economic stimulus calculator.
Find Out When You'll Get Your Payment
Whether you've already filed, have yet to file or filed for an extension, find out when you can expect to receive your stimulus payment.
Claim Your Payment...
Complete a federal tax return this year, even if you don’t normally do so. For instructions, a sample Form 1040A and a blank Form 1040A, see our 8-page informational package. Or use the longer Form 1040 and its instructions.
Then...
File electronically. For free free tax preparation software and electronic filing for people submitting a return solely to receive their stimulus payment, use Free File: Economic Stimulus Payment.
Or...
Mail a paper tax return to the IRS based on where you live.
Choose Direct Deposit or Paper Check
You can get your payment electronically as a direct deposit into your checking or savings account by filling in lines 44 b, c and d on Form 1040A or lines 74 b, c and d on Form 1040. Or you can get a paper check by leaving those lines blank.
Get Free Help at Taxpayer Assistance Centers
IRS employees will help prepare Form 1040A returns for low-income workers, retirees, disabled veterans and others. For a list of centers in your state and their hours of operation, Contact My Local Office .
Information For Businesses
Information on the business provisions of the economic stimulus payment.
For More Information
Check out our:
news releases, audio files, fact sheets and legal guidance
Flyers, public service announcements and other marketing products for IRS's partners and others
Avoid Rebate Scams
Identity thieves are using the stimulus payment as bait in their scams. Details can be found in news release IR-2008-11, IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting.
Monday, September 15, 2008
Collection Due Process (CDP)
Collection Due Process (CDP)
CDP procedures are available to you if you've received any one of the following notices:
• Notice of Federal Tax Lien
• Notice of Intent to Levy
CDP Procedure
You have 30 days to request a hearing to preserve your right to go to Court.
Complete Form 12153, Request for a Collection Due Process or Equivalent Hearing.
It is important you identify all your reasons for your disagreements.
The completed Form 12153 should be sent to the same address that is shown on your Lien or Levy Notice.
If your request is not received within 30 days, you are still entitled to an Appeals hearing. However, if you still disagree with the Appeals determination you cannot go to Court.
Dealing with the IRS can be very difficult, why not start here and let the expers help you out.
Collections Appeals Program (CAP)
Do you want to go through a Collections Appeals Program or CAP Hearing?
If you choose to go through this CAP process, then you cannot go to Court on the Appeals' decision.
CAP procedures are available to you if you've received any one of the following notices:
Notice of Federal Tax Lien ,
Notice of Levy ,
Notice of Seizure ,
Denial or Termination of Installment Agreement
CAP Procedures
If your only collection contact has been a notice or telephone call:
Call the IRS telephone number shown on your notice
Explain why you disagree and that you want to appeal the decision
Be prepared to offer a solution
Before you can come to Appeals you will need to first discuss your case with a Collections manager.
If you have been contacted by a Revenue Officer:
Call the Revenue Office you've been dealing with
Explain why you disagree and that you want to appeal the decision
Be prepared to offer a solution
Before you can come to Appeals you will need to discuss your case with a Collections manager.
Complete Form 9423, Collection Appeals Request
You have 2 days from your conference with the Collections manager to submit Form 9423 to the Revenue Officer.
Call Effectur to help anser your questions about taxes you owe or how to deal with the Appeals Process and the IRS.
If you choose to go through this CAP process, then you cannot go to Court on the Appeals' decision.
CAP procedures are available to you if you've received any one of the following notices:
Notice of Federal Tax Lien ,
Notice of Levy ,
Notice of Seizure ,
Denial or Termination of Installment Agreement
CAP Procedures
If your only collection contact has been a notice or telephone call:
Call the IRS telephone number shown on your notice
Explain why you disagree and that you want to appeal the decision
Be prepared to offer a solution
Before you can come to Appeals you will need to first discuss your case with a Collections manager.
If you have been contacted by a Revenue Officer:
Call the Revenue Office you've been dealing with
Explain why you disagree and that you want to appeal the decision
Be prepared to offer a solution
Before you can come to Appeals you will need to discuss your case with a Collections manager.
Complete Form 9423, Collection Appeals Request
You have 2 days from your conference with the Collections manager to submit Form 9423 to the Revenue Officer.
Call Effectur to help anser your questions about taxes you owe or how to deal with the Appeals Process and the IRS.
Wednesday, September 10, 2008
Avoid Errors That Can Delay Your Stimulus Payment
People Can Avoid Common Errors that Delay Stimulus Payments
IR-2008-103, Sept. 9, 2008 WASHINGTON — People who are awaiting an economic stimulus payment or who have yet to file can avoid common errors that may delay their payment. They also can use the IRS Web site to answer most common questions.
The Internal Revenue Service, which is still issuing economic stimulus payments, has been studying trends and common issues in filing errors and questions posed by people calling its customer service telephone lines.The most common question posed to the IRS is from people wondering when they will receive their stimulus payment. The question can be answered easily by going to IRS.gov and using the “Where’s My Economic Stimulus Payment?” Web tool.
Here’s how to avoid common mistakes:
File only one tax return – People should file only one 2007 tax return. It takes the IRS up to 12 weeks to process paper returns and issue the stimulus payments. However, some people are filing more than one tax return in an effort to receive a stimulus payment, which could further delay their stimulus payment. The IRS is concerned there will be more multiple filings as the October 15 deadline approaches for filing a return in 2008.
List qualifying income – Some people are listing their monthly income instead of annual income. People must list their annual amount of qualifying income to be eligible for the minimum payment of $300 ($600 married filing jointly.) The qualifying income required by law is at least $3,000 in benefits from Social Security, Veterans Affairs and Railroad Retirement, earned income and/or combat pay.
Review Your Tax Liability – Some people who have either small amounts of tax liability or no tax liability are getting smaller stimulus payments than they expected or none at all. Generally, the law provided for a maximum stimulus payment of $600 ($1,200 for married couples) or an amount equal to a taxpayer’s tax liability, whichever was less. Tax liability is the net amount of federal income taxes paid after deductions and credits. If people had no tax liability but had at least $3,000 of “qualifying income” from specific sources, they would be eligible for $300 ($600 for married couples.) There also is a $300 payment for each qualifying child.
Amended return – Generally, people cannot file an amended return solely to get an economic stimulus payment unless they are a retiree, veteran or have other “qualifying income.” While amended returns will be processed to correct the income, deductions and income tax as appropriate, the economic stimulus payment amount will not be adjusted based on an amended return. If people do not receive a payment this year, they can claim it when they file their tax return in 2009.
Use Most Current Address – People must use their most current address in order to receive a timely payment. People who change addresses after filing should complete Form 8822 and a change of address card with the U.S. Postal Service. If the postal service is unable to deliver the payment, it is returned to the IRS.
People must file a 2007 tax return by October 15 in order to receive the economic stimulus payment this year, even if they normally do not have a filing requirement because their income is too low or not taxable. The IRS already has issued 90 percent of the economic stimulus payments but will continue to issue payments through December.
For people who filed a 2007 tax return eight to 12 weeks ago but who have not received a payment, the quickest and easiest way to track the status of the payment is to go to “Where’s My Economic Stimulus Payment?” on IRS.gov. The online tool will report when the payment has been issued. People will need their Social Security Number, their filing status and the number of exemptions claimed on their tax return to use this tool.
The IRS online tool also can report other issues, such as ineligibility because income was too high or the returning of an undeliverable payment to the IRS.
The economic stimulus payment begins to phase out for individuals whose income is $75,000 or more and for joint returns with income of $150,000 or more. To be eligible, a person cannot be a dependent or eligible to be a dependent of another person. To be eligible, an individual must have a valid Social Security Number unless his or her spouse serves in the military.
Supplemental Security Income (SSI) does not count as “qualifying income” for stimulus payment purposes. The biggest mistake of all would be failing to file a 2007 return in order to receive the stimulus payment, especially for people who are eligible but who do not normally file a tax return because their income is low or nontaxable. People in this category can use a Form 1040A, provide a little information to complete the return and send it to the IRS by October 15. People also are urged to help friends, family or neighbors who may be in this category and unaware of their eligibility.
People who do not file a tax return by October 15 can still obtain their economic stimulus payments when they file their 2008 tax return. If they wait until next year to file, their payments will be based on their 2008 income and personal situations rather than on 2007 information.
Foy questions with help cpncerning taxes or taxes owed, look into contacting a tax resolution firm to help you.
IR-2008-103, Sept. 9, 2008 WASHINGTON — People who are awaiting an economic stimulus payment or who have yet to file can avoid common errors that may delay their payment. They also can use the IRS Web site to answer most common questions.
The Internal Revenue Service, which is still issuing economic stimulus payments, has been studying trends and common issues in filing errors and questions posed by people calling its customer service telephone lines.The most common question posed to the IRS is from people wondering when they will receive their stimulus payment. The question can be answered easily by going to IRS.gov and using the “Where’s My Economic Stimulus Payment?” Web tool.
Here’s how to avoid common mistakes:
File only one tax return – People should file only one 2007 tax return. It takes the IRS up to 12 weeks to process paper returns and issue the stimulus payments. However, some people are filing more than one tax return in an effort to receive a stimulus payment, which could further delay their stimulus payment. The IRS is concerned there will be more multiple filings as the October 15 deadline approaches for filing a return in 2008.
List qualifying income – Some people are listing their monthly income instead of annual income. People must list their annual amount of qualifying income to be eligible for the minimum payment of $300 ($600 married filing jointly.) The qualifying income required by law is at least $3,000 in benefits from Social Security, Veterans Affairs and Railroad Retirement, earned income and/or combat pay.
Review Your Tax Liability – Some people who have either small amounts of tax liability or no tax liability are getting smaller stimulus payments than they expected or none at all. Generally, the law provided for a maximum stimulus payment of $600 ($1,200 for married couples) or an amount equal to a taxpayer’s tax liability, whichever was less. Tax liability is the net amount of federal income taxes paid after deductions and credits. If people had no tax liability but had at least $3,000 of “qualifying income” from specific sources, they would be eligible for $300 ($600 for married couples.) There also is a $300 payment for each qualifying child.
Amended return – Generally, people cannot file an amended return solely to get an economic stimulus payment unless they are a retiree, veteran or have other “qualifying income.” While amended returns will be processed to correct the income, deductions and income tax as appropriate, the economic stimulus payment amount will not be adjusted based on an amended return. If people do not receive a payment this year, they can claim it when they file their tax return in 2009.
Use Most Current Address – People must use their most current address in order to receive a timely payment. People who change addresses after filing should complete Form 8822 and a change of address card with the U.S. Postal Service. If the postal service is unable to deliver the payment, it is returned to the IRS.
People must file a 2007 tax return by October 15 in order to receive the economic stimulus payment this year, even if they normally do not have a filing requirement because their income is too low or not taxable. The IRS already has issued 90 percent of the economic stimulus payments but will continue to issue payments through December.
For people who filed a 2007 tax return eight to 12 weeks ago but who have not received a payment, the quickest and easiest way to track the status of the payment is to go to “Where’s My Economic Stimulus Payment?” on IRS.gov. The online tool will report when the payment has been issued. People will need their Social Security Number, their filing status and the number of exemptions claimed on their tax return to use this tool.
The IRS online tool also can report other issues, such as ineligibility because income was too high or the returning of an undeliverable payment to the IRS.
The economic stimulus payment begins to phase out for individuals whose income is $75,000 or more and for joint returns with income of $150,000 or more. To be eligible, a person cannot be a dependent or eligible to be a dependent of another person. To be eligible, an individual must have a valid Social Security Number unless his or her spouse serves in the military.
Supplemental Security Income (SSI) does not count as “qualifying income” for stimulus payment purposes. The biggest mistake of all would be failing to file a 2007 return in order to receive the stimulus payment, especially for people who are eligible but who do not normally file a tax return because their income is low or nontaxable. People in this category can use a Form 1040A, provide a little information to complete the return and send it to the IRS by October 15. People also are urged to help friends, family or neighbors who may be in this category and unaware of their eligibility.
People who do not file a tax return by October 15 can still obtain their economic stimulus payments when they file their 2008 tax return. If they wait until next year to file, their payments will be based on their 2008 income and personal situations rather than on 2007 information.
Foy questions with help cpncerning taxes or taxes owed, look into contacting a tax resolution firm to help you.
IRS Stimulus Checks for Seniors and Retirees
You Must File a 2007 Federal Income Tax Return to get your Stimulus Payment
Even if you aren’t normally required to file a federal income tax return, you must file one if you want to be among the 130 million individuals who will receive a check from Treasury beginning in May of this year. The IRS will use information on the 2007 tax return filed by the taxpayer to determine eligibility and calculate the amount of the stimulus payment.
In most cases, payments will range from $300 to $600 for individuals and $600 to $1200 for joint filers. Parents and anyone else eligible for a stimulus payment will also receive an additional $300 for each qualifying child (subject to income phase-outs).
“We want to make sure everyone who is eligible for these payments receives them,” says IRS Executive Julie Rushin. “Most eligible taxpayers do not need to take any extra steps to receive the payment. All they have to do is file a 2007 federal tax return and the IRS will automatically do the rest. No other action, extra form or call is necessary.”
You Must Have a Valid Social Security Number
Taxpayers must have a valid Social Security Number to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security Number. Children must be eligible under the Child Tax Credit and must also have a valid Social Security Number to be eligible as qualifying children.
You Must File a 2007 Federal Income Tax Return, Even if You Normally Would Not
Low-income workers who had at least $3,000 in earned income (such as wages) and other qualifying income in 2007 but do not otherwise earn enough to be required to file a federal tax return need to file a return to qualify for the stimulus payment. Other qualifying income includes Social Security benefits, certain Railroad Retirement benefits, or certain veterans’ benefits.
Certain Benefits Count toward Your Qualifying Income
Normally, Social Security benefits, certain Railroad Retirement benefits and veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs are not subject to income tax. However, the economic stimulus law passed in February contains special provisions allowing recipients of these non-taxable benefits to count them toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.
However, Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.
This means if you had, for example, $500 in wages and $2,500 in any combination of the benefits described above, you can add these together to reach the $3,000 qualifying income requirement.
For purposes of meeting the qualifying income requirement, the following benefits need to be reported in any combination on line 20a of U.S. Individual Income Tax Return Form 1040 or Line 14a of the Form 1040A:Social Security benefits reported in box 5 of the 2007 Form 1099-SSA, which people should have received in January. Taxpayers who do not have a Form 1099 may also estimate their annual Social Security benefit by taking their monthly benefit, multiplying it by the number of months during the year they received the benefits, and entering the number on line 20a of Form 1040 or Line 14a of the Form 1040A.
Certain Railroad Retirement benefits reported in box 5 of the 2007 Form 1099-RRB, which recipients would have received in January.
The sum of certain veterans’ disability benefits received in 2007, including veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs. Taxpayers who weren’t required to file a tax return can estimate their annual veterans’ benefits by taking their monthly benefit, multiplying it by the number of months during the year they received payments, and entering the number on line 20a of Form 1040 or Line 14a of the Form 1040A.
Have You Already Filed Your 2007 Federal Income Tax Return?
If you are a recipient of the benefits described above and have already filed your 2007 tax return reporting at least $3,000 in qualifying income, you do not need to do anything else. The Treasury will automatically begin sending taxpayers their payments in early May.
Otherwise you may need to amend a previously filed tax return to include benefits to reach the $3,000 qualifying income level. You can use IRS Form 1040X to amend a tax return in order to qualify for the stimulus payment. Adding these benefits on an amended tax return will not increase your tax liability but will establish eligibility for the stimulus payment.
Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Taxpayers who have already filed with direct deposit won't need to do anything else to receive the stimulus payment. For taxpayers who haven't filed their 2007 returns yet, the IRS reminds them that direct deposit is the fastest way to get both regular refunds and stimulus payments.
Some are Not Eligible for Stimulus Payments
Anyone who does not have a valid Social Security Number including those who file using an Individual Tax Identification Number (ITIN), an Adoption Taxpayer Identification Number (ATIN) or any other identification number issued by the IRS is not eligible for this payment. Also ineligible are individuals who can be claimed as dependents on someone else’s return, or taxpayers who file Form 1040-NR, 1040-PR or 1040-SS.
The above is information supplied by the IRS website.
You can get help preparing and filing your taxes or help in resolving an IRS issue by finding a reputable tax resolution firm.
Even if you aren’t normally required to file a federal income tax return, you must file one if you want to be among the 130 million individuals who will receive a check from Treasury beginning in May of this year. The IRS will use information on the 2007 tax return filed by the taxpayer to determine eligibility and calculate the amount of the stimulus payment.
In most cases, payments will range from $300 to $600 for individuals and $600 to $1200 for joint filers. Parents and anyone else eligible for a stimulus payment will also receive an additional $300 for each qualifying child (subject to income phase-outs).
“We want to make sure everyone who is eligible for these payments receives them,” says IRS Executive Julie Rushin. “Most eligible taxpayers do not need to take any extra steps to receive the payment. All they have to do is file a 2007 federal tax return and the IRS will automatically do the rest. No other action, extra form or call is necessary.”
You Must Have a Valid Social Security Number
Taxpayers must have a valid Social Security Number to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security Number. Children must be eligible under the Child Tax Credit and must also have a valid Social Security Number to be eligible as qualifying children.
You Must File a 2007 Federal Income Tax Return, Even if You Normally Would Not
Low-income workers who had at least $3,000 in earned income (such as wages) and other qualifying income in 2007 but do not otherwise earn enough to be required to file a federal tax return need to file a return to qualify for the stimulus payment. Other qualifying income includes Social Security benefits, certain Railroad Retirement benefits, or certain veterans’ benefits.
Certain Benefits Count toward Your Qualifying Income
Normally, Social Security benefits, certain Railroad Retirement benefits and veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs are not subject to income tax. However, the economic stimulus law passed in February contains special provisions allowing recipients of these non-taxable benefits to count them toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.
However, Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.
This means if you had, for example, $500 in wages and $2,500 in any combination of the benefits described above, you can add these together to reach the $3,000 qualifying income requirement.
For purposes of meeting the qualifying income requirement, the following benefits need to be reported in any combination on line 20a of U.S. Individual Income Tax Return Form 1040 or Line 14a of the Form 1040A:Social Security benefits reported in box 5 of the 2007 Form 1099-SSA, which people should have received in January. Taxpayers who do not have a Form 1099 may also estimate their annual Social Security benefit by taking their monthly benefit, multiplying it by the number of months during the year they received the benefits, and entering the number on line 20a of Form 1040 or Line 14a of the Form 1040A.
Certain Railroad Retirement benefits reported in box 5 of the 2007 Form 1099-RRB, which recipients would have received in January.
The sum of certain veterans’ disability benefits received in 2007, including veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs. Taxpayers who weren’t required to file a tax return can estimate their annual veterans’ benefits by taking their monthly benefit, multiplying it by the number of months during the year they received payments, and entering the number on line 20a of Form 1040 or Line 14a of the Form 1040A.
Have You Already Filed Your 2007 Federal Income Tax Return?
If you are a recipient of the benefits described above and have already filed your 2007 tax return reporting at least $3,000 in qualifying income, you do not need to do anything else. The Treasury will automatically begin sending taxpayers their payments in early May.
Otherwise you may need to amend a previously filed tax return to include benefits to reach the $3,000 qualifying income level. You can use IRS Form 1040X to amend a tax return in order to qualify for the stimulus payment. Adding these benefits on an amended tax return will not increase your tax liability but will establish eligibility for the stimulus payment.
Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Taxpayers who have already filed with direct deposit won't need to do anything else to receive the stimulus payment. For taxpayers who haven't filed their 2007 returns yet, the IRS reminds them that direct deposit is the fastest way to get both regular refunds and stimulus payments.
Some are Not Eligible for Stimulus Payments
Anyone who does not have a valid Social Security Number including those who file using an Individual Tax Identification Number (ITIN), an Adoption Taxpayer Identification Number (ATIN) or any other identification number issued by the IRS is not eligible for this payment. Also ineligible are individuals who can be claimed as dependents on someone else’s return, or taxpayers who file Form 1040-NR, 1040-PR or 1040-SS.
The above is information supplied by the IRS website.
You can get help preparing and filing your taxes or help in resolving an IRS issue by finding a reputable tax resolution firm.
Monday, September 8, 2008
IRS Collections and Your Options for Appeal
Before you prepare a request for Appeals, you need to decide if Appeals is the place for you. Select the appropriate appeal procedure for specific instructions on preparing your request for Appeals. If you decide you want to present your dispute to Appeals, you will need to prepare a request for Appeals and mail it to the office that sent you the decision letter.
Collection Appeals Program (CAP)Collection Appeals Program (CAP) is generally quick and available for a broad range of collection actions. However, you can’t go to court if you disagree with the Appeals decision.
Collection Due Process (CDP)Collection Due Process (CDP) is available if you receive one of the following notices:Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (Lien Notice), a Final Notice - Notice of Intent to Levy and Notice of Your Right to A Hearing, a Notice of Jeopardy Levy and Right of Appeal, a Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing (Levy Notices), and a Notice of Levy and Notice of Your Right to a Hearing. If you disagree with the Appeals decision, you may be able to take your case to court.
Offer in Compromise (OIC)An Offer in Compromise (OIC) is an agreement between the taxpayer and the government that settles a tax liability for payment of less than the full amount owed.
Trust Fund Recovery Penalty (TFRP)If you are a person responsible for withholding, accounting for, or depositing or paying specified taxes including non-resident alien (NRA) withholding and employment taxes, and willfully fail to do so, you can be held personally liable for a penalty equal to the full amount of the unpaid trust fund tax, plus interest. A responsible person for this purpose can be an owner or officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. A trustee or agent with authority over the funds of the business can also be held responsible for the penalty.
There are many options that the taxpayer has to resolve their tax issues. This can all be very confusing and overwhelming. Think of calling a tax professional to help you out in this very hard time. The can give you advice and answer many of your questions.
Collection Appeals Program (CAP)Collection Appeals Program (CAP) is generally quick and available for a broad range of collection actions. However, you can’t go to court if you disagree with the Appeals decision.
Collection Due Process (CDP)Collection Due Process (CDP) is available if you receive one of the following notices:Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (Lien Notice), a Final Notice - Notice of Intent to Levy and Notice of Your Right to A Hearing, a Notice of Jeopardy Levy and Right of Appeal, a Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing (Levy Notices), and a Notice of Levy and Notice of Your Right to a Hearing. If you disagree with the Appeals decision, you may be able to take your case to court.
Offer in Compromise (OIC)An Offer in Compromise (OIC) is an agreement between the taxpayer and the government that settles a tax liability for payment of less than the full amount owed.
Trust Fund Recovery Penalty (TFRP)If you are a person responsible for withholding, accounting for, or depositing or paying specified taxes including non-resident alien (NRA) withholding and employment taxes, and willfully fail to do so, you can be held personally liable for a penalty equal to the full amount of the unpaid trust fund tax, plus interest. A responsible person for this purpose can be an owner or officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. A trustee or agent with authority over the funds of the business can also be held responsible for the penalty.
There are many options that the taxpayer has to resolve their tax issues. This can all be very confusing and overwhelming. Think of calling a tax professional to help you out in this very hard time. The can give you advice and answer many of your questions.
IRS Appeals Office Defined
The mission of Appeals is to resolve tax controversies, without having to go to court on a basis which is fair and impartial to both the government and the taxpayer.
Independence from other IRS offices is critical for Appeals to accomplish this important mission.
In the last few years, concerns have surfaced that the IRS' modernized structure and processes did not provide the level of independence intended by the Internal Revenue Service (IRS)Restructuring and Reform Act of 1998 (RRA 98).
At the request of Appeals, the Treasury Inspector General for Tax Administration (TIGTA) completed a thorough audit of the independence of Appeals. This audit looked internally at the processes, quality measures, and customer satisfaction survey results. Additionally, TIGTA looked outside of Appeals and interviewed numerous tax professionals about their experiences around the independence of Appeals.
The findings reflected in the final report from TIGTA indicated a strong support of Appeals’ independence. Representatives from the American Bar Association, the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, and the National Society of Accountants advised TIGTA they believe the independence of Appeals is generally very high.
The IRS has done a good job in the way they have structured their Appeals processes. If you are confuesed or feel overwhelmed about the whoe appeals issue, find a resolution firm that can help you get through all the "red tape". It is always best to let a prefessional handle your issued with the IRS.
Independence from other IRS offices is critical for Appeals to accomplish this important mission.
In the last few years, concerns have surfaced that the IRS' modernized structure and processes did not provide the level of independence intended by the Internal Revenue Service (IRS)Restructuring and Reform Act of 1998 (RRA 98).
At the request of Appeals, the Treasury Inspector General for Tax Administration (TIGTA) completed a thorough audit of the independence of Appeals. This audit looked internally at the processes, quality measures, and customer satisfaction survey results. Additionally, TIGTA looked outside of Appeals and interviewed numerous tax professionals about their experiences around the independence of Appeals.
The findings reflected in the final report from TIGTA indicated a strong support of Appeals’ independence. Representatives from the American Bar Association, the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, and the National Society of Accountants advised TIGTA they believe the independence of Appeals is generally very high.
The IRS has done a good job in the way they have structured their Appeals processes. If you are confuesed or feel overwhelmed about the whoe appeals issue, find a resolution firm that can help you get through all the "red tape". It is always best to let a prefessional handle your issued with the IRS.
What Can You Expect from your IRS Appeals?
From the IRS website
Appeals is independent of any other IRS office and provides a venue where disagreements concerning the application of tax law can be resolved on a fair and impartial basis for both the taxpayer and the government.
An Appeals or Settlement Officer will review the strengths and weaknesses of the issues in your case and give them a fresh look. Appeals conferences are conducted in an informal manner, by correspondence, telephone or in person. Most differences are settled in these appeals without expensive and time-consuming court trials. Appeals will consider any reason you have for disagreeing, except for moral, religious, political, constitutional, conscientious objection, or similar grounds. Our goal is to provide a forum for us to work together to resolve the tax dispute.
IRS Commitments
Explain your appeal rights and the Appeals process
Listen to your concerns, be courteous and professional
Be timely and responsive (See Frequently Asked Questions)
Be fair and impartial
Your Responsibilities
Listen to our explanation of your appeal rights and the Appeals process
Give us a statement as to how you understand the facts and the law, listing all issues with which you disagree and why.
Give us any additional information or documentation that will be helpful to your case within a reasonable time.
Tell us when and how you think your case should be resolved.
Let us know the best time to contact you.
Frequently Asked Questions
Q. I sent in my appeal request/protest. How long will it be before I hear from the Appeals office?
A. This varies, depending on the type of case you are appealing and the time needed to review the file before sending your case to Appeals. Normally, you can expect to hear from an Appeals employee within 90 days after you file your appeal request.
If more than 90 days have gone by and you still haven’t heard from Appeals, you should contact the office where you sent your appeal request. They can tell you when they forwarded your case to Appeals. If they were delayed in sending your case, you would not expect to hear from Appeals until at least 90 days from that date. If more than 90 days has gone by and there is no known delay, ask that office to contact Appeals to get a time frame for when Appeals will contact you. You can also contact an Appeals Account Resolution Specialist (AARS) in Fresno Appeals at 559-456-5931. After researching the Appeals data base, they can tell you if your case has been assigned to an Appeals employee, their name and number and you can contact that employee directly.
Q. How long will it take to resolve my case once it is received in Appeals?
A. It depends on the facts and circumstances. It could take anywhere from 90 days to a year. Appeals continues to work towards reducing the time to resolve cases. Your Appeals Officer or Settlement Officer can provide you with a more specific timeframe.
Dealing with the IRS can be a daunting task. There are many details that can be easily overlooked. Self representation is no representation. Find someone who knows how to resolve you IRS issues.
Sunday, September 7, 2008
Preparing a request for your Appeal
Review the letter and publication(s) that were sent to you by the IRS department making the decision.
These will tell you:
How to prepare a request for an appeal (protest)
Where to mail the request
When the request must be received
What information you need to include in the request for an appeal
For specific information appealing Examination issues, refer to the Examination page.
For specific information appealing Collection issues, refer to the Collection page.
FILING A REQUEST FOR APPEALS DOES NOT STOP INTEREST AND PENALTIES FROM ACCRUING
Interest and certain penalties will continue to accrue during the Appeals process and during any subsequent Appeals to the Courts on any amount not paid. In order to stop the accrual of interest and penalties on proposed adjustments, refer to Notice 1016, How to Stop Interest. For an explanation on how to stop interest from accruing on an unpaid balance, refer to Publication 594, What You Should Know About the IRS Collection Process.
These will tell you:
How to prepare a request for an appeal (protest)
Where to mail the request
When the request must be received
What information you need to include in the request for an appeal
For specific information appealing Examination issues, refer to the Examination page.
For specific information appealing Collection issues, refer to the Collection page.
FILING A REQUEST FOR APPEALS DOES NOT STOP INTEREST AND PENALTIES FROM ACCRUING
Interest and certain penalties will continue to accrue during the Appeals process and during any subsequent Appeals to the Courts on any amount not paid. In order to stop the accrual of interest and penalties on proposed adjustments, refer to Notice 1016, How to Stop Interest. For an explanation on how to stop interest from accruing on an unpaid balance, refer to Publication 594, What You Should Know About the IRS Collection Process.
Preparing for your Hearing
Examination
Before you prepare a request for Appeals, you need to decide if Appeals is the place for you. If you decide you want to present your dispute to Appeals, you will need to prepare a request for Appeals and mail it to the office that sent you the decision letter.
Preparing A Request For Appeals
Small Case Request
You prepare a small case request instead of a written protest if the total amount for any one tax period is $25,000 or less.
Send a letter requesting Appeals consideration.
Indicate the changes you do not agree with and the reason you don’t agree.
For specific guidance in preparing a small case request/protest, refer to Form 12203, Request for Appeals Review.
Formal Written Protest:
Prepare a formal written protest for all of the following situations:
If the total amount for any one tax period is greater than $25,000.
Employee plan and exempt organization cases without regard to the dollar amount at issue.
Partnership and S corporation cases without regard to the dollar amount at issue.
To prepare a formal written request for Appeals you must:
Include your name, address, social security number, and daytime telephone number.
Include a statement that you want to appeal the IRS findings to the Appeals office.
Include a copy of the letter showing the proposed changes and findings you don’t agree with (or the date and symbols from the letter).
Indicate the tax periods or years involved.
List all the changes you do not agree with and why you don’t agree.
State the facts supporting your position on any issue that you do not agree with.
Cite the law or authority, if any, on which you are relying.
Sign the written protest under the penalties of perjury.
You can represent yourself in Appeals, and you may bring another person with you to support your position. If you want to be represented by someone, the person you choose to represent you must be an attorney, a certified public accountant, or an enrolled agent authorized to practice before the IRS.
Before you prepare a request for Appeals, you need to decide if Appeals is the place for you. If you decide you want to present your dispute to Appeals, you will need to prepare a request for Appeals and mail it to the office that sent you the decision letter.
Preparing A Request For Appeals
Small Case Request
You prepare a small case request instead of a written protest if the total amount for any one tax period is $25,000 or less.
Send a letter requesting Appeals consideration.
Indicate the changes you do not agree with and the reason you don’t agree.
For specific guidance in preparing a small case request/protest, refer to Form 12203, Request for Appeals Review.
Formal Written Protest:
Prepare a formal written protest for all of the following situations:
If the total amount for any one tax period is greater than $25,000.
Employee plan and exempt organization cases without regard to the dollar amount at issue.
Partnership and S corporation cases without regard to the dollar amount at issue.
To prepare a formal written request for Appeals you must:
Include your name, address, social security number, and daytime telephone number.
Include a statement that you want to appeal the IRS findings to the Appeals office.
Include a copy of the letter showing the proposed changes and findings you don’t agree with (or the date and symbols from the letter).
Indicate the tax periods or years involved.
List all the changes you do not agree with and why you don’t agree.
State the facts supporting your position on any issue that you do not agree with.
Cite the law or authority, if any, on which you are relying.
Sign the written protest under the penalties of perjury.
You can represent yourself in Appeals, and you may bring another person with you to support your position. If you want to be represented by someone, the person you choose to represent you must be an attorney, a certified public accountant, or an enrolled agent authorized to practice before the IRS.
Requesting an Appeals Conference or Hearing
Once you determine if you want to appeal your determination, you are ready to request an Appeals conference or hearing if you can explain why you disagree.
Consider the following:
If you need help in deciding whether the IRS made an incorrect decision due to misinterpreting the law, check the publications discussing your issue(s) for additional information, or refer to Tax Topics.
If you believe the IRS did not properly apply the law due to a misunderstanding of the facts, be prepared to clarify and support your position refer to the Examination page.
If you believe the IRS is taking an inappropriate collection action against you, or you do not agree with Collection's denial of your offer in compromise, refer to the Collections page.
If you believe the facts used by the IRS are incorrect, then you should have records or other support available to back up your position.
Getting help with this kind of action against the IRS is a good idea. There are several options when it comes to choosing a firm to help you out.
Consider the following:
If you need help in deciding whether the IRS made an incorrect decision due to misinterpreting the law, check the publications discussing your issue(s) for additional information, or refer to Tax Topics.
If you believe the IRS did not properly apply the law due to a misunderstanding of the facts, be prepared to clarify and support your position refer to the Examination page.
If you believe the IRS is taking an inappropriate collection action against you, or you do not agree with Collection's denial of your offer in compromise, refer to the Collections page.
If you believe the facts used by the IRS are incorrect, then you should have records or other support available to back up your position.
Getting help with this kind of action against the IRS is a good idea. There are several options when it comes to choosing a firm to help you out.
Thursday, September 4, 2008
Let's determine if an IRS tax appeal is right for you.
Many people who have had an examination by the IRS do not agree with the outcome. You may Appeal the determination.
Appeals is the place for you if:
You received an IRS correspondence explaining you have the right to come to Appeals to dispute an IRS decision.
AND
You do not agree and are not signing an agreement form sent to you.
If you meet the above qualifiers listed above then you may be ready to request an Appeals conference or hearing.
Appeals is not for you if:
Your only concern is that you cannot afford to pay the amount you owe.
The correspondence you received from the IRS was a bill and there was no mention of Appeals.
If you are lost and not sure where to turn next call Effectur and let them help you out today.
Appeals is the place for you if:
You received an IRS correspondence explaining you have the right to come to Appeals to dispute an IRS decision.
AND
You do not agree and are not signing an agreement form sent to you.
If you meet the above qualifiers listed above then you may be ready to request an Appeals conference or hearing.
Appeals is not for you if:
Your only concern is that you cannot afford to pay the amount you owe.
The correspondence you received from the IRS was a bill and there was no mention of Appeals.
If you are lost and not sure where to turn next call Effectur and let them help you out today.
Can you appeal your tax dispute with the IRS?
Many of the different departments within IRS are responsible for making decisions concerning the application of tax law to various taxpayer issues. In some cases, agreement on these decisions, or determinations, cannot be reached. In other words, the taxpayer does not agree with the determination.
This is where Appeals comes in. Appeals is independent of any other IRS office and serves as an informal administrative forum for any taxpayer who disagrees with an IRS determination. Appeals provides a venue where disagreements concerning the application of tax law can be resolved on a fair and impartial basis for both the taxpayer and the government. The mission of Appeals is to settle tax disagreements without having to go to the Courts and a formal trial.
As with all dealings with the IRS it is a goos idea to have someone representing you. If you need to ask some questions and find out more, get in touch with a firm who can help you.
This is where Appeals comes in. Appeals is independent of any other IRS office and serves as an informal administrative forum for any taxpayer who disagrees with an IRS determination. Appeals provides a venue where disagreements concerning the application of tax law can be resolved on a fair and impartial basis for both the taxpayer and the government. The mission of Appeals is to settle tax disagreements without having to go to the Courts and a formal trial.
As with all dealings with the IRS it is a goos idea to have someone representing you. If you need to ask some questions and find out more, get in touch with a firm who can help you.
Tax Relief for Hurricane Gustav Victims
News from the IRS Web site IRS.gov
The Internal Revenue Service is providing tax relief to victims of Hurricane Gustav in affected areas of Louisiana.
The IRS is postponing until Jan. 5, 2009 deadlines for taxpayers who reside or have a business in the disaster area. The postponement applies to return filing, tax payment and other time-sensitive acts otherwise due between Sept. 1, 2008 and Jan. 5, 2009.
This includes:
Individual estimated tax payments due Sept. 15, 2008.
Corporate extended 1120 tax returns due Sept. 15, 2008.
Individual extended 1040 tax returns due Oct. 15, 2008.
“As residents of Louisiana return to their homes following Hurricane Gustav, taxes are one thing they won’t need to worry about,” IRS Commissioner Doug Shulman said. “This relief gives them extra time to get their lives in order before having to deal with their tax matters.”
In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 as long as the deposits are made by Sept. 16, 2008.
Other provisions are listed in the Grant of Relief section below.
Taxpayers who reside in or have a business located in the following parishes qualify for the relief announced today: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Rapides, Sabine, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, Terrebonne, Vermilion, Vernon, West Baton Rouge and West Feliciana.
IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request tax relief.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing or payment due date between Sept. 1, 2008 and Jan. 5, 2009.
The postponement of time to file and pay does not apply to information returns in the W-2, 1098 or 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 provided the taxpayer made these deposits by Sept. 16, 2008.
If you need help with filing taxes or resolving your IRS issue, please call a reputable resolution firm.
The Internal Revenue Service is providing tax relief to victims of Hurricane Gustav in affected areas of Louisiana.
The IRS is postponing until Jan. 5, 2009 deadlines for taxpayers who reside or have a business in the disaster area. The postponement applies to return filing, tax payment and other time-sensitive acts otherwise due between Sept. 1, 2008 and Jan. 5, 2009.
This includes:
Individual estimated tax payments due Sept. 15, 2008.
Corporate extended 1120 tax returns due Sept. 15, 2008.
Individual extended 1040 tax returns due Oct. 15, 2008.
“As residents of Louisiana return to their homes following Hurricane Gustav, taxes are one thing they won’t need to worry about,” IRS Commissioner Doug Shulman said. “This relief gives them extra time to get their lives in order before having to deal with their tax matters.”
In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 as long as the deposits are made by Sept. 16, 2008.
Other provisions are listed in the Grant of Relief section below.
Taxpayers who reside in or have a business located in the following parishes qualify for the relief announced today: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Rapides, Sabine, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, Terrebonne, Vermilion, Vernon, West Baton Rouge and West Feliciana.
IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request tax relief.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing or payment due date between Sept. 1, 2008 and Jan. 5, 2009.
The postponement of time to file and pay does not apply to information returns in the W-2, 1098 or 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 provided the taxpayer made these deposits by Sept. 16, 2008.
If you need help with filing taxes or resolving your IRS issue, please call a reputable resolution firm.
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