Ideal Tax Solution Is Informing Taxpayers That The IRS Can No Longer Ruin Their Credit

COSTA MESA, Calif.Ideal Tax Solution, a leader in the tax resolution industry, is sharing great news with U.S. taxpayers, especially those saddled with a tax debt issue. Recently, the three major credit bureaus decided to no longer report tax liens on credit reports. This offers an opportunity for Americans who owe back taxes to the IRS or have a tax lien judgment against them to obtain a higher credit score.

“More than 5.5 million liens will be removed from consumer’s credit reports, increasing the chances that they will get new loans from banks,” said David Hong, a Senior Enrolled Agent at Ideal Tax Solution. “The change means that a negative event that could have held a taxpayer back from getting approved for financing will be wiped off the consumer’s credit report. That could increase their credit score and make them look more creditworthy to lenders.”

With the change to how tax liens are reported, Americans with past tax issues may be able to finally apply for a home loan, auto loan, or credit card. Previously, tax liens could appear on a credit report for seven years after the date of payment, and sometimes longer. This was devastating to many consumers, as it could even prevent them from getting a job.

Consumers suffering from tax problems experience much stress. Ideal Tax Solution is ready to help clients navigate through their tax issues and come up with a viable solution. They offer comprehensive professional representation in defense of taxpayer rights, arriving at resolutions for numerous situations that include unpaid taxes, tax levies, tax liens, wage garnishment, unfiled tax returns, tax audit, IRS asset seizure, tax penalties, penalty and interest abatement, expiration, and much more. They also provide instant protection by filing a “stay of enforcement,” which blocks the IRS from seizing a taxpayer’s bank account or assets. The service concludes with a resolution that allows the taxpayer to make a fresh start with the possibility of saving tens of thousands of dollars.

Although the changes in tax lien reporting is good news for Americans wanting to apply for credit, Ideal Tax Solutions would like to remind taxpayers that owing money to the IRS still places them at risk for IRS collection activities, such as asset seizures, bank levies, wage garnishments, and liens on property. Visit https://www.idealtaxsolution.com/services/ to learn how Ideal Tax Solution can help resolve your tax problems and to sign up for a free consultation.

About Ideal Tax Solution:

Headquartered in Orange County, California, Ideal Tax Solution is licensed in all 50 states and provides tax resolution services to consumers throughout the U.S. The company’s team of tax attorneys and consultants helps clients burdened by a tax debt issue by easing the stress and anxiety that comes with serious tax problems. With a mission to provide clients with affordable and expert representation against either the IRS or state revenue agencies, Ideal Tax Solution is ready to assist Americans who have overwhelming tax debt. Go to https://www.idealtaxsolution.com to see how.

Choosing A Top-Flight Tax Attorney

 

tax attorney

The prospect of hiring an attorney for a complex tax matter can be intimidating, particularly if you’ve never had to hire an attorney before. A top-flight tax attorney isn’t necessarily the attorney who works as part of a large big-city firm.

A top-flight attorney is an attorney who is familiar with your tax matter, and who is accessible and willing to answer your questions. Their rates are within your budget and they are willing to communicate with you during each phase of your case. Outstanding tax attorneys can be found within tax firms or as sole practitioners.

Knowing what to look for in a tax attorney is the first step in seeking the resolution you need for your tax matter.

Where to start

In addition to Yelp reviews, seek recommendations from colleagues, neighbors or friends that have retained a tax attorney. Contact the state bar association for referrals to a tax attorney in your community. The bar association can also refer you to low-cost attorneys if you are of limited means.

Once you have several referrals, contact each attorney. Some will offer a free consult, while others will charge for their time, even if you decide not to hire them.

Make the most of your free consult time. Focus your questions on the following areas besides your tax matter:

Experience: Besides length of time in practice, has the attorney worked with clients in situations similar to yours? What was the outcome? How many similar cases has he or she handled?

Knowledge: Does he or she specialize in taxation, real estate and/or small business matters? Are they familiar with the precedent cases that pertain to your case, and do they have extensive knowledge of IRS tax code and regulations?

Your attorney’s degree of knowledge will directly affect the outcome of your case, so choose wisely.

Communication, availability and rapport: Will your attorney communicate with you directly, or will your case be managed by a paralegal staff during the initial stages? Will it be easy to reach your attorney quickly if you need to?

Does their communication style and preference match your own (if you prefer email/text communications for non-secure conversations, look for an attorney who is comfortable with those means of communication).

Is your attorney willing to meet with you in person? If you prefer face-to-face interaction throughout all stages of your case, look for an attorney who will be willing to accommodate communication preference.

Are you at ease in speaking with the attorney, or do you feel intimidated or rushed? You want an attorney where there is an easy rapport with clear communication.

Fee structure/affordability

While no two tax attorneys are alike in their communication style or level of experience, there are several fee structures that are common in the legal field:

Flat fee: You will pay the attorney a set fee, based on the nature and complexity of your case.

Payment arrangements: Mutual agreement between you and the attorney whereby you pay a set amount each month until the bill is paid in full.

An ethical tax attorney realizes that legal costs can create a hardship for most consumers. To that end, ask about alternative pay structures such as reduced retainers or applying your tax refund to your legal costs.

If the attorney or law firm is unwilling or unable to accommodate your income limitations, ask for a referral to a lower-cost attorney or firm  or contact the local bar association for a referral.

Facing a complex tax issue that requires legal counsel is stressful and time-consuming, particularly if you’ve never had to hire an attorney. By contacting several attorneys and asking pointed questions, you will find the best attorney for your tax case.

 

 

 

The Offer In Compromise: Is It For You?

offer in compromise

The IRS offers several repayment options for taxpayers, including the Offer In Compromise. Is it for you?

Note: The content in this post is not intended to replace the advice of a licensed tax professional. If you are facing a tax-related hardship, consult a tax professional to determine the best option for your unique circumstances

Facing a sizable tax bill is unsettling, especially if you lack the means to pay it. The Offer In Compromise (OIC) is one of the payment options available. Here is a brief look at the OIC and what it can and can’t do for you.

The OIC is designed for taxpayers who have the means to only pay a portion of their total tax bill.

Requirements

You’ll need to file IRS form 656, along with the $186.00 filing fee.

Generally you’ll have between 11-24 months to pay the agreed-upon amount.

The IRS will take into consideration your ability to pay, your income/assets and asset equity when determining your eligibility for OIC.

Eligibility

The IRS has designed an eligibility screening tool that you should use before applying for the OIC program. If you are eligible, you will need to complete the OIC form, (Form 433-A for individuals or form 433-B for businesses).

You’ll need to submit the forms along with the $186.00 filing fee and your initial payment.

Payment options

  • The IRS offers several different payment options:
  • Lump sum in cash
  • Periodic payments, in which you pay the initial amount and then make monthly payments while the IRS evaluates your application.
  • If you meet the low-income guidelines, you don’t need to submit an initial payment or the application fee, and you won’t need to make monthly payments while the IRS evaluates your offer.

If your offer is accepted:

You must meet all terms of the offer

Any tax refunds due during the calendar year will automatically be applied to your tax debt

Any federal tax liens will not be released until you have satisfied the OIC terms

If your offer is rejected, you and your tax professional have the right to appeal. You can file the Request for  Appeal form within 30 days in order for your appeal to be considered.

Facing a significant tax debt can be stressful. It’s always best to enlist a qualified tax professional when dealing with a sizable tax bill, especially if you lack the means to pay it in full.

Your tax pro can help you determine the best payment plan for your circumstances, and they can negotiate with the IRS on your behalf.

If you are in need of a licensed tax pro or if you are facing a large tax debt, visit us at indealtaxsolution.com and get in touch by using any of the available options under the “Contact” tab on the menu bar.

You don’t have to go it alone. We can help.

What Happens If You Miss The Tax Deadline

Tax day is right around the corner. Are you ready?

 

tax deadline

Taxpayers will have an additional three days to file their taxes this year. Most people associate April 15 with the  tax deadline, but tax day 2016 will fall on the 18th. The IRS received over 99 million returns in 2015, and issued over 77 million refunds.

What if your tax return won’t be among those filed by the deadline this year? What happens if you miss the tax deadline?

First, the good news. If you will be receiving a refund, you have up to three years to file your return in order to claim that refund.

However, if you will owe taxes, there are penalties for missing the tax deadline:

  • The late-filing fee is 5% of your balance. The penalty for paying your tax bill late is 0.5% of the balance you owe. If you file late and pay your balance late, you’ll be hit with both penalties.

Penalties will accrue for every month you don’t file your return or pay your tax bill.

If you know you will have trouble paying your tax bill in one lump sum, you can file a request for an installment agreement through the IRS. Keep in mind you will still need to file your return on time in order to apply for the installment plan.

If you’re confident in filing your own return, you can use one of the many tax filing software packages available, or you can file through the IRS’s Free File portal, available to taxpayers who earn $62,000 or less.

Even with those tools, you may still need more time. In that case, you can either file for an extension on your own or have your tax preparer do it on your behalf. The extension will grant you until Oct. 15th to prepare and file your return.

You’ll still need to pay your tax bill on time, however, in order to avoid late payment penalties.

There are times when missing the tax deadline is unavoidable. In that case, filing an extension would be to your benefit while you gather your tax paperwork and calculate how much tax you’ll owe.

April 18 is coming sooner than you think. Keep these tips in mind if you won’t be able to file your taxes on time. You lessen the impact of any penalties and still give yourself the extra time you need to file your return.

 

New (Tax) Year’s Resolutions

Untitled design(3)As 2015 winds down, tax season is gearing up. Here are some great ways to make sure things are looking up for you tax-wise in 2016.

1. Resolve to e-file

Electronically filing your tax return, or e-filing, has its rewards. No lost paperwork in the mail, no IRS employee errors as they manually process your return, and a faster turn-around for refunds. By e-filing your return, your information is transmitted directly to the IRS. A tax pro can e-file on your behalf, or you can take the DIY approach with many of the e-filing options available to consumers.

2. Know what you’ll owe

If your income changes considerably in 2016, chances are you’ll be facing a higher tax bill for 2016. Income sources such as bonuses, IRA distributions, purchase contracts, settlements, and certain gambling winnings can all nudge you into the next highest tax bracket.

Prepare in advance, if you can, by setting aside enough money in your savings account to cover the increased tax bill. By doing so, you’ll lessen the “sticker shock” on tax day, and can take care of your tax bill in one lump sum. By doing so, you’ll avoid penalties, fees, and possible hassles in dealing with the IRS.

A qualified tax pro can be of great help at a time like this, and can advise you in taking the steps necessary to address your higher tax bill in 2016.

3. Ask for help

If you’re facing back taxes, IRS collection actions, a large tax bill, or any other serious tax matter, 2016 is your year to ask for help. Very few people are equipped to wade through IRS tax code and to interpret and apply those regulations to their own tax scenario.

Enlisting a qualified tax pro to help you assess your individual tax matter can pay dividends in terms of peace of mind and a clearer idea as to what the IRS is requesting from you. A tax pro will help you understand complicated IRS tax code as it applies to your circumstances, and can advise you of the best course of action to take in dealing with the IRS.

The end of 2015 doesn’t have to mean the start of tax headaches in 2016. By e-filing, understanding how much you’ll owe and asking for help,  you can get ahead of the stressed-out masses waiting til the end of 2016.

By resolving to get a fresh start in the new tax year, your tax outlook for 2016 could look much brighter.

If you’re facing a serious tax issue, resolve to take charge by calling us at (888) 224-3004 or by clicking the white “Start Chat” button at the top of our homepage. We have qualified tax pros on staff who can help you make sense of your back taxes, IRS collection, or other serious tax matter.

5 More Overlooked Tax Deductions

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freeimages.com

Make the most of these overlooked deductions

Yesterday’s post discussed five of the most easily missed tax deductions. Now is a great time to review your receipts and records to see if you qualify for any of these tax deductions.

Hang on to those receipts, however. You’ll need them on tax filing day, and as proof of eligibility for a given deduction should you ever be audited.

As with any deduction, be sure to check with a licensed tax preparer regarding your eligibility for any itemized deduction, especially if this will be your first year claiming that deduction.

IRS tax code is complicated, and a qualified tax pro will be able to assess your unique tax scenario and also determine whether or not you are eligible for these deductions.

1. Education expenses: Education doesn’t come to an end when you receive your diploma or degree. Enrolling in college courses that are specific to your skill set or to train for a new career is a good strategy in today’s economy.

Eligible expenses include books, tuition, fees and supplies not covered by financial aid, scholarships or tuition reimbursement through your employer.

2. Safe deposit box fees: Be sure to keep track of monthly or quarterly safe deposit box fees; you can deduct them at the end of the year.

3. Foster care expenses: The IRS defines a foster child as a child who is placed with you through a court order, judgement, or by a licensed private or government foster care agency. Unreimbursed foster care expenses are also tax deductible.

4. Lead paint removal: If you’re planning on getting rid of the lead paint on that old house you just bought, good news: lead pain removal expenses are tax-deductible.

There is a catch, however. In order for it to be a qualified expense, the lead paint removal must be for the purposes of preventing a child from eating or otherwise consuming the lead-based paint.

The surfaces must also be in bad shape, and be within easy reach of a child who already suffers from lead exposure. In other words, if your child tested positive for lead exposure due to lead-based paint in your home environment, you do have a shot at deducting the paint removal costs.

IRS code relating to this deduction is complicated, so if you will be removing lead-based paint from your current home or a home you just bought, be sure to check with your tax advisor regarding this deduction.

5. Medical travel expenses: If you or a loved one are ill and need to travel out of town for medically necessary treatment, hold onto to all of your travel and lodging receipts.

 

Will Student Loans Affect Your Credit Score?

vecezy.com
vecezy.com

 

According to the Wall Street Journal, the average college grad in the class of 2015 will be $35,000 in debt on average. For many students, student loans are the only option for financing their college education when other options (Pell Grants, school-based awards) fall short in covering college-related expenses. If you’re among the millions of college grads with a student loan balance,  you might have questions regarding your credit rating and student loans. Here’s the rundown:

Student loan debt is regarded as “good debt”...when payments are made on time. “Good debt” is seen as a loan or expenditure that will ultimately increase value in the long run. Other examples include mortgages and business loans. These are all seen as debt that was accrued in order to provide a valuable asset to society  either in terms of a higher-paying job, starting a business, or creating long-term residence in a community (mortgage loans).

At the same time, if you were to run up $35,000 in credit card debt, the credit rating agencies wouldn’t hold that debt in the same positive light as your student debt.

By maintaining your good standing in your student loan payments, you could potentially qualify for other forms of credit later on.

The consequences of falling behind on your student loan payments (or failing to pay them altogether) are far-reaching. You overall credit rating will suffer, making it harder for you to qualify for a car loan or mortgage. If you are able to qualify, you’ll be charged a higher interest rate or additional fees. A low credit rating or credit score will also affect your ability to rent a home or apartment; you could end up paying a higher deposit than a tenant with a higher credit rating.

There are also tax  consequences to defaulting on your student loan payments. Since most student loans are issued by the government, the government lender has the right to seize your tax refunds until the loan is brought current.

If you’re having trouble making your student loan payments, don’t wait until the loan goes into default. Contact your student loan servicer to see if you qualify for a forbearance (temporary suspension of your student loan payments) or an alternate payment plan. Be persistent and enlist a student loan advocate if you need to.

Staying current on your student loan payments can have a positive impact on your credit rating. You’ll have an easier time qualifying for other loan products such as car loans as long as you can make payments on the additional debt. Unlike credit card debt, student loans are regarded as “good debt” and are held in higher regard by the credit rating agencies.

Defaulting on a student loan payment can have far reaching consequences, from being denied additional loans to paying higher interest rates and rental deposits.

Additionally, any tax refunds can be seized as payment of your past due student loan debt, which can be bad news if you’re anticipating a sizable tax refund.

By understanding the impact of student loan debt on your credit rating and the consequences of late or defaulted payment, you’ll be in a better position to take charge of your financial future and to take action should you fall behind on your payments.

 

Will A Tax Extension Increase My Chances of An Audit?

A tax extension grants you an additional six months to file your taxes. You’ll have more time to gather your documentation, file your forms and enlist  a tax pro if necessary.

Filing an extension doesn’t increase your audit risk. Depending on your return, filing an extension may actually lower your audit risk, especially if you take the extra time to double-check all the information you provide on your return. Most audits stem from incomplete, inaccurate or missing information on tax returns.

At the same time, an extension could increase your overall tax liability. If you’re not able to pay your tax bill by April 15, you’ll begin to accrue interest and penalties on the balance until it is paid in full. If you find your tax bill to be beyond your reach, you do have the option of consulting with a tax advisor who can inform you of your options and possibly negotiate with the IRS on your behalf.

If you suspect you can’t file by the April 15 deadline, it’s still a good idea to estimate how much you’ll owe in taxes and to pay the balance on or before the April 15 deadline. You won’t have to hassle with late fees or penalties and you can concentrate on filing for your extension and gathering the needed documentation so you can file your return before the extension expires.

No one likes the thought of facing an audit, but you most likely won’t face an increased audit risk if you file an extension. While you’ll face late fees and penalties on your tax bill if you don’t pay by the April 15 deadline, an extension in and of itself won’t trigger an audit.

Just remember to provide all the requested information on both your extension request and your tax return, and double-check your figures for accuracy before filing your return. In terms of audit risk, it’s much better to have an accurate extended return than an incomplete or inaccurate return filed quickly on April 15.

Is There Such Thing as IRS Debt Forgiveness?

Chances are, being “one in a million” means that you stand out from the crowd and have something unique to offer. However, being one in a million with respect to the IRS doesn’t have the same meaning. Over 1 million taxpayers owe taxes to the IRS at any one time. If you’re among them, you have plenty of company, and chances are you’re worried about your tax debt.

In order to lighten their workload and to make the best use of existing personnel and resources, the IRS isn’t going to pursue each and every taxpayer. While the IRS does make a good-faith effort to collect taxes that are owed, current staffing and resource levels make collecting from each and every person unrealistic.

In some cases, the IRS is willing to relinquish some of its claim to your tax debt if you owe back taxes. If you’re tight on cash and owe back taxes, there are programs available to you.

Fresh Start

Fresh Start was enacted as a means of clearing tax debt entirely. There are currently two option available to you under this program: Partial Payment Installment Agreement (PPIA) and the Offer In Compromise (OIC).

The PPIA option is the most common under the Fresh Start program. The PPIA allows you to make affordable payments on your IRS account until the debt is cleared entirely or if you have paid the debt for 10 years.

The OIC program allows you to settle your debt with the IRS by paying a mutually-agreed upon amount. You could qualify for OIC if you meet any of these criteria:

  • Have not been turned down for OIC in the past
  • Owe a new debt
  • Are in full compliance with the IRS (no outstanding past debt, or no history of defaulting on prior payment arrangements)
  • Have no plans to file for Chapter 7 bankruptcy or are unable to do so.

You can file for an OIC online or enlist a tax pro to help you file the forms. 

RCP and CNC

Both of these statuses refer to the likelihood of the IRS being able to collect on your tax debt. In doing so, the IRS will asses the Realistic Collection Potential (RCP) of your account. Your tax debt could be designated as RCP if:

  • You’re low-income
  • Have no means to pay the account
  • Have no assets such as bank accounts or real estate the IRS could potentially seize and liquidate in order to satisfy your tax debt.

While your tax debt may not be forgiven altogether, the IRS typically won’t make any collection attempts.

The Currently Not Collectible (CNC) option also prevents the IRS from collecting on your tax debt. This status indicates you also don’t have the means to pay what you owe, and this designation was designed to allow you to slowly increase your income or come up with the means to satisfy your tax debt. Once your account reaches 10 years, the IRS can no longer legally collect from you.

In any case, the IRS cannot legally collect from you if your tax debt is older than 10 years. If you’re facing back taxes, there are program available to you that can take the sting out of owing back taxes.

In any event, you can take the DIY approach or hire a tax pro to walk you through the process and explain your options and rights. It’s always best to check in with a tax pro if this is your first time owing back taxes. Don’t let back taxes get you down. Take charge of your tax debt.

 

 

 

Check Out These Great IRS Tools

Marinela Prodan/freeimages
Marinela Prodan/freeimages

 

If you hear “IRS” chances are you picture hours spent on Eternal Hold, long lines in their field offices, or worse yet, dealing with pages of complex tax terms. All you want to do is file a return, learn more about deductions,  track the status of your refund, or research basic tax information.

Fortunately, the IRS feels your pain and has created some great online resources for busy people like you:

1. Interactive Tax Assistant: The Interactive Tax Assistant offers answers to your essential tax concerns, such as determining your filing status, tax credits, and more. You’ll answer a series of questions online, follow the prompts, and you’ll have access to the tax code information you need.

2. Volunteer Tax Return Preparation Lookup: If you earn $50,00 or less and need help filing your return, this tool will help you locate free tax prep assistance in your community.

3. FreeFile: This online portal is available to you if you earn $60,000 or less. You can file your return online for free, but it helps to be familiar with basic tax codes (see Interactive Tax Assistant).

4. Electronic Federal Tax Payment System: The Electronic Federal Tax Payment System (EFTPS) offers online payment options if you have a federal tax balance. You can use this system to pay income taxes, payroll taxes, and estimated taxes. No more snail mail payments!

5. Online Payment Agreement: If you have a tax balance and need to pay it off over time, the Online Payment Agreement is a great tool to use if a tax pro’s services just aren’t in your budget.  You’ll be able to set up an IRS installment plan and make monthly payments to clear your tax balance.

6. Authorized E-File Provider Search: If you want to electronically file your tax return and would rather have a tax preparer file them, use this tool to locate authorized E-File providers. Just enter your zip code, and the system will generate a list of authorized E-File pros in your community.

7. Where’s My Refund: This portal allows you to track your tax refund. You can access this tool beginning seven days after your filing date. Fill in the requested fields, you deposit information, and the system will generate your tracking information and estimated deposit date.

Life these days is hectic. Who has time to be on Eternal Hold or to stand in long lines? The IRS has come to your rescue with this series of online tools to help you with basic tax matters such as tracking your refund or determining your tax filing status.

Of course if you’re dealing with a complex tax matter such as past due taxes, liens, asset seizures, or wage garnishments, it’s best to enlist a tax pro who can help you.

We have qualified tax pros on staff to help you untangle the toughest tax matters. Get started today by giving us a call or by clicking the white “start chat” button at the top of the page.