What is an Enrolled Agent?

As I work in my job assissting people with resolving their tax issues, I have decided to become an enrolled agent. We have several EA's in our office. Most people have no idea of the importance of an enrolled agent or what you must do to become one so I decided to shed some light on the subject.

An enrolled agent is a person who has earned the privilege of practicing, that is, representing taxpayers, before the Internal Revenue Service. Enrolled agents, like attorneys and certified public accountants (CPAs), are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can practice before.

How do you become an enrolled agent?
There are two tracks to becoming an enrolled agent.
The two tracks are:
Written examination.
You can become an enrolled agent by demonstrating special competence in tax matters by taking a written examination. This track requires that you -
Apply to take the Special Enrollment Examination (SEE); prometric.com/irs;
Achieve passing scores on all parts of the SEE;
Apply for enrollment; and
Pass a background check to ensure that you have not engaged in any conduct that would justify the suspension or disbarment of an attorney, CPA, or enrolled agent from practice before the IRS.

IRS experience.
You can become an enrolled agent by virtue of past service and technical experience with the IRS that qualifies you for enrollment.
This track requires that you -
Possess the years of past service and technical experience specified in Circular 230;
Apply for enrollment; and
Pass a background check to ensure that you have not engaged in any conduct that would justify the suspension or disbarment of an attorney, CPA, or enrolled agent from practice before the IRS.

Joe the Plumber Owes Back Taxes

The man mentioned in the debate between Obama and McCain the other night owes back taxes.

According to this report on FoxNews.com, Joe the plumber owes back taxes. He owes the state of Ohio $1182.98 in back taxes and has a lien placed on his property by the state until he pays what is owed.

This is not as unique as you might think. Millions of people owe back taxes to either the IRS or the state in which they live.

Getting out of debt with the IRS can be a very arduous task. What a tax payer needs is a resolution with the IRS or the state. Not knowing how to handle the situation can cost you time and money.
Hiring a tax resolution firm to resolve your issue can help you in many ways. Call a reputable firm and get some help today.

Stimulus Checks for Military Combat Personel

This section is for military personnel who are serving in combat zones.

For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard and National Guard are also included, but not the U.S. Merchant Marine or the American Red Cross.

Normally, combat pay is not counted as income and is not taxable. For the purposes of receiving an economic stimulus payment, however, military personnel serving in combat zones have the option of including their nontaxable combat pay on their 2007 or 2008 income tax returns if it helps their eligibility for the 2008 economic stimulus payments.

To receive the stimulus payment this year, combat zone personnel or their spouses must file a tax year 2007 income tax return by Oct. 15, 2008. Otherwise, they can claim the economic stimulus payment on next year’s income tax return.

Military personnel who normally would not file an income tax return because their 2007 income is not taxable can file a simple Form 1040A with the IRS if they want to receive the economic stimulus payment. They should report their nontaxable combat pay on line 40b of the Form 1040A to show at least $3,000 in qualifying income. The Department of Defense lists the amount of excluded combat pay, along with the designation, “Code Q,” in box 12 of Form W-2.

The IRS has developed Package 1040A-3, an 8-page publication containing tax tips, a sample Form 1040A and a blank Form 1040A. The package contains everything needed to file the return immediately.
Package 1040A-3 , 8-page information package

Basic Eligibility Requirements

You have, or your family has, at least $3,000 in qualifying income from, or in combination with, Social Security benefits, certain Veterans Affairs benefits, Railroad Retirement benefits and earned income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.

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.)

Due to a new law change, the spouses and children of married military personnel are not required to have valid Social Security Numbers.

To Claim Your Payment

If you normally don’t file a federal tax return but must file one this year solely to claim your economic stimulus payment, you should file by Oct. 15, 2008, to ensure that you receive the payment this year.
Find out where to send your tax return.
It will generally take a minimum of eight weeks after you file your return to get your stimulus payment.


Free Tax Help Available

Individuals who need to file a return this year to receive a stimulus payment may be able to take advantage of free tax preparation sites nationwide for low-income and older taxpayers.
Free File - Economic Stimulus Payment provides free tax preparation software and electronic filing for people who are submitting a return solely to receive their economic stimulus payment
The Volunteer Income Tax Assistance (VITA) program provides help to low- and moderate-income taxpayers. Call 1-800-906-9887 to locate the nearest VITA site.
IRS employees will help prepare Form 1040A returns for low-income workers, retirees, disabled veterans and others at IRS Taxpayer Assistance Centers. For a list of centers in your state and their hours of operation, Contact My Local Office.

Foreign Earned Income Exclusion

Choosing the Exclusion

The foreign earned income exclusion is voluntary. You can choose the exclusion by completing the appropriate parts of Form 2555.

When You Can Choose the Exclusion

Your initial choice of the exclusion on Form 2555 or Form 2555-EZ generally must be made with one of the following returns.

A return filed by the due date (including any extensions).
A return amending a timely-filed return. Amended returns generally must be filed by the later of 3 years after the filing date of the original return or 2 years after the tax is paid.
A return filed within 1 year from the original due date of the return (determined without regard to any extensions).

You can choose the exclusion on a return filed after the periods described above if you owe no federal income tax after taking into account the exclusion.

If you owe federal income tax after taking into account the exclusion, you can choose the exclusion on a return filed after the periods described above if you file before IRS discovers that you failed to choose the exclusion. You must type or legibly print at the top of the first page of the Form 1040 "Filed pursuant to section 1.911-7(a)(2)(i)(D)."

If you owe federal income tax after taking into account the foreign earned income exclusion and the IRS discovered that you failed to choose the exclusion, you may still be able to choose the exclusion. You must request a private letter ruling under Income Tax Regulation 301.9100-3 and Revenue Procedure 2007-1.

Revenue procedures are published in the Internal Revenue Bulletin (I.R.B.) and in the Cumulative Bulletin (C.B.), which are volumes containing official matters of the Internal Revenue Service. The I.R.B. is available on the Internet at http://www.irs.gov/. You can buy the C.B. containing a particular revenue procedure from the Government Printing Office (online at http://www.blogger.com/app/scripts/exit.jsp?dest=http%3A%2F%2Fbookstore.gpo.gov%2Firs or call 1-866-512-1800).

Effect of Choosing the Exclusion

Once you choose to exclude your foreign earned income, that choice remains in effect for that year and all later years unless you revoke it.

Solving timely filed returns problems can be very confusing and can take a lot of know how to resolve. If you find yourself in this position, call someone who can help you out and resolve your IRS issues.

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.

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.

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.

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.

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.

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.

How to deal with the IRS

In my time working for a tax resolution firm, I have found out many things regarding the IRS and taxpayers. Many people believe that the IRS is out to get them and will make it difficult for the them to resolve their situation. The IRS will do little to go over all your options for a resolution. The IRS is the biggest creditor and has ways of collecting money other creditors do not have.

The IRS is the only creditor who has the ability to take money directly out of your bank account and directly out of your pay check. They can even collect from pensions and social security. The IRS can even collect from accounts receivable for businesses who owe a liability. They do this through levies.

Iif you don’t know what you are doing when dealing with the IRS, you will not get the best result possible for yourself. Self representation is no representation. You need people representing you who now how to deal with the IRS and do it hundreds of times per day. They will help you get the best possible outcome that you qualify for.

You don’t go to court without a lawyer, why would you face the IRS without professional representation

Do You Have a Tax Lien?

Tax liens can be filed by the IRS 10 days after a balance due notice or demand for payment has been sent to the tax payer. Lien's are a public notice to the tax payer's creditors that the goverment has claim against the tax payer's property.

The IRS will only release a notice of federal tax lien within 30 days of the tax payer paying their liability in full or if an offer in compromise is accepted and the terms of the agreement fulfilled.

Liens are filled in the courthouse of the county of residence of the taxpayer. Most people believe that the IRS reports this to the credit bureaus. This is not the case. The federal tax lien is public notice and the credit bureaus pick it up there. Having a lien on your creidt reort will damage your credit score.

If you questions about tax liens or other tax problems contact Effectur