Stay out of a  IRS tax audit and by all means take advantage of all tax credits.

Should you have any questions, call us today. As former IRS Agents we can help navigate you through this process

Tax Law Changes for 2011 Federal Tax Returns

Due date of return.

You can file your federal tax return by April 17, 2012. The due date is April 17, instead of April 15, because April 15 is a Sunday and April 16 is the Emancipation Day holiday in the District of Columbia. Thanks DC!

New forms.

In most cases, you must report your capital gains and losses on the new Form 8949, Sales and Other Dispositions of Capital Assets. Then, you report certain totals from that form on Schedule D (Form 1040). If you had foreign financial assets in 2011, you may have to file the new Form 8938, Statement of Foreign Financial Assets, with your return.

Standard mileage rates.

The 2011 rates for mileage are different for January 1 through June 30 than for July 1 through December 31. For business use of your car, you can deduct 51 cents a mile for miles driven the first half of the year and 55 ½ cents for the second half. Medical and moving mileage are both 19 cents per mile for the early half of the year and 23 ½ cents in the latter half.

Standard deduction and exemptions increased, finally!!!

The standard deduction increased for some taxpayers who do not itemize deductions on IRS Schedule A (Form 1040). The amount depends on your filing status.

The amount you can deduct for each exemption has increased $50 to $3,700 for 2011.
Self-employed health insurance deduction. This deduction is no longer allowed on Schedule SE (Form 1040), but you can still take it on Form 1040, line 29.

Alternative minimum tax (AMT) 

This years exemption amount increased. The AMT exemption amount has increased to $48,450 ($74,450 if married filing jointly or a qualifying widow(er); $37,225 if married filing separately).

Health savings accounts (HSAs) and Archer MSAs.

The additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses increased to 20 percent. Beginning in 2011, only prescribed drugs or insulin are qualified medical expenses.

Roth IRAs.

If you converted or rolled over an amount from a traditional IRA to a Roth IRA or designated Roth in 2010 and did not elect to report the taxable amount on your 2010 return, you generally must report half of it on your 2011 return and the rest on your 2012 return.

Alternative motor vehicle credit.

This year you can claim the alternative motor vehicle credit for a 2011 purchase only if the vehicle is a new fuel cell motor vehicle.

First-time homebuyer credit.

The credit expired for most taxpayers for 2011. Sadly!

Some military personnel and members of the intelligence community can still claim the credit in 2011 for qualified purchases.

Health coverage tax credit.

Recent legislation changed the amount of this credit, which pays qualified health insurance premiums for eligible individuals and their families. Participants who received the 65 percent tax credit in any month from March to December 2011 may claim an additional 7.5 percent retroactive credit when they file their 2011 tax return.

Should you need tax help or tax preparation by Former IRS agents call us today.

Tax Law Changes for 2011 – Summary Tax Guide for Easy Reading – Tax Prep by Former IRS Agents is a post from: Fresh Start Tax Blog

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By the way, if you are looking for former IRS Agents to prepare your tax returns call us today.

Top Tax Tips to Help You Determine if Your Social Security Benefits are Taxable

Many people may not realize the Social Security Benefits they received in 2011 may be taxable.

All Social Security recipients should receive a Form SSA-1099 from the Social Security Administration which shows the total amount of their benefits. You can use this information to help you determine if your benefits are taxable.

Top tips:

1. How much , if any ,of your Social Security Benefits are taxable depends on your total income and marital status.

2. Generally, if Social Security benefits were your only income for 2011, your benefits are not taxable and you probably do not need to file a federal income tax return.

3. If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status (see below).

4. Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet. Your tax software program will also figure this for you.

5. You can do the following quick computation to determine whether some of your benefits may be taxable:

a. First, add one-half of the total Social Security benefits you received to all your other income, including any tax-exempt interest and other exclusions from income.
b. Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

6. The 2011 base amounts are:

$32,000 for married couples filing jointly.
$25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouse at any time during the year.
$0 for married persons filing separately who lived together during the year.

Hope this helps. Call us for the finest tax prep services.

Are Social Security Benfits Taxable – Your Answer – Former IRS Agents is a post from: Fresh Start Tax Blog

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Find out right now by reading the information below or calling our firm today.

Check your Eligibility for Earned Income Tax Credit

The Earned Income Tax Credit is a financial boost for workers earning $49,078 or less in 2011.

Four of five eligible taxpayers filed for and received their EITC last year. The IRS wants you to get what you earned also, if you are eligible.

Here are the top things the IRS wants you to know about this valuable credit EITC, which has been making the lives of working people a little easier since 1975.

1. Always check the new tax law changes each year. As your financial, marital or parental situations change from year to year, you should review the EITC eligibility rules to determine whether you qualify. Just because you did not qualify last year does not mean you won’t this year.

2. If you qualify, this credit could be worth up to $5,751.

EITC not only reduces the federal tax you owe, but could result in a large refund.

The amount of your EITC is based on your earned income and whether or not there are qualifying children in your household. The average credit was around $2,240 last year.

3. If you are eligible for EITC, you must file a federal income tax return and specifically claim the credit – even if you are not otherwise required to file. Remember to include Schedule EIC, Earned Income Credit when you file your Form 1040 or, if you file Form 1040A, use and retain the EIC worksheet.

4. You do not qualify for EITC if your filing status is Married Filing Separately.

5. You must have a valid Social Security number for yourself, your spouse – if filing a joint return – and any qualifying child listed on Schedule EIC.

6. You must have earned income.

You have earned income if you work for someone who pays you wages, you are self-employed, you have income from farming, or – in some cases – you receive disability income.

7. Married couples and single people without children may qualify. If you do not have qualifying children, you must also meet the age and residency requirements, as well as dependency rules.

8. Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay in earned income for the EITC. If you make this election, the combat pay remains nontaxable.

9. It’s easy to determine whether you qualify. The EITC Assistant, an interactive tool available on the IRS website, removes the guesswork from eligibility rules.

Just answer a few simple questions to find out if you qualify and estimate the amount of your EITC.

10. Free help is available at Volunteer Income Tax Assistance sites to help you prepare and claim your EITC. If you are preparing your taxes electronically, the software will figure the credit for you. To find a VITA site near you, visit the IRS.gov website.

Contact our tax firm today for immediate tax help or tax preparation.

IRS Earned Income Tax Credit – 4 out of 5 taxpayers Eligibile – IRS Tax Experts – Former IRS is a post from: Fresh Start Tax Blog

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1. Board Certified Tax Attorneys / IRS Tax Lawyers,

2. Certified Public Accountants,

3. Former IRS Managers / Agents,

4. Enrolled Agents,

5. Former IRS Employees

We have a combined 205 years of professional tax experience and over 60 years of direct IRS experience in the local South Florida district and regional offices of the Internal Revenue Service.

If you are dealing with the IRS there are certain internal procedures, policies and internal manuals that the public and other practitioners are completely unaware of. Because of our 60 years of IRS experience we know all of these internal procedures and settlement policies.

Many of these procedures deal with IRS tax settlements, IRS audit procedures, IRS levies and liens. Because of vast amount of tax direct tax experience with the IRS we can completely and permanently resolve these issues.

How to chose a tax firm for IRS Tax Representation.

Before choosing any professional tax firm check out the FIRM experience on their website. Do not be fooled by website advertisement. Make an appointment and have a face to face meeting with the tax professional,

Make sure you can speak directly to the person that will be working your case,

How long has the firm been in practice,

Lastly, check the BBB rating of the tax firm.

IRS Tax Representation – Miami, Ft.Lauderdale, Palm Beaches – Former IRS Agents – IRS Attorneys, IRS Lawyers is a post from: Fresh Start Tax Blog

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Here are some tax tips to help you through the process.

Tips for Recently Married, Divorced Taxpayers  or others who recently had a Name Change

If you changed your name after a recent marriage or divorce, the IRS reminds you to take the necessary steps to ensure the name on your tax return matches the name registered with the Social Security Administration. A mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of your return and may even delay your refund.

Here are tips from the IRS for recently married, divorced taxpayers or other individuals who have a name change.

1. Hyphenated Names – If you took your spouse’s last name — or if you hyphenated your last names, you may run into complications if you don’t notify the SSA.

When newlyweds file a tax return using their new last names, IRS computers cannot match the new name with their Social Security number.

2. If you recently divorced and changed back to your previous last name, you’ll also need to notify the SSA of this name change.

3. Informing the SSA of a name change is easy. Simply file a Form SS-5, Application for a Social Security Card, at your local SSA office or by mail and provide a recently issued document as proof of your legal name change.

4. Form SS-5 is available on SSA’s website at http://www.socialsecurity.gov/, by calling 800-772-1213 or at local offices.

Your new card will have the same number as your previous card, but will show your new name.

5. If you adopted your spouse’s children after getting married and their names changed, you’ll need to update their names with SSA too. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number – or ATIN – by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions with the IRS.

The ATIN is a temporary number used in place of an SSN on the tax return. Form W-7A is available on the IRS.gov website or by calling 800-TAX-FORM (800-829-3676).

Name change – What to do for tax purposes – IRS Tax Help is a post from: Fresh Start Tax Blog

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Here are some tax tips about tax scams.

The Internal Revenue Service receives thousands of reports each year from taxpayers who receive suspicious emails, phone calls, faxes or notices claiming to be from the IRS. Many of these scams fraudulently use the IRS name or logo as a lure to make the communication appear more authentic and enticing. The goal of these scams – known as phishing – is to trick you into revealing your personal and financial information.

The scammers can then use your information – like your Social Security number, bank account or credit card numbers – to commit identity theft or steal your money.

Here are five things the IRS wants you to know about phishing scams from IRS.

1. The IRS never asks for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts.

2. The IRS does not initiate contact with taxpayers by email to request personal or financial information. If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site:

• Do not reply to the message.

• Do not open any attachments. Attachments may contain malicious code that will infect your computer.

• Do not click on any links. If you clicked on links in a suspicious e-mail or phishing website and entered confidential information, visit the IRS website and enter the search term ‘identity theft’ for more information and resources to help.

3. The address of the official IRS website is www.irs.gov. Do not be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on the suspicious site and report it to the IRS.

4. If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence. You can forward a suspicious email to phishing@irs.gov. Help all taxpayers and report them today.

5. You can help the IRS shut down these schemes and prevent others from being victimized. Details on how to report specific types of scams and what to do if you’ve been victimized are available at www.irs.gov. Click on “phishing” on the home page.

Do not be a victim!!!

IRS Tax Scams – Victim of a Tax Scam – Call Former IRS Agents – Get tax relief today is a post from: Fresh Start Tax Blog

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The IRS corrected 10.6 million “mathematical errors” in taxpayers’ returns in 2010, more than double the 4 million it corrected in 2005, the report said.

But the IRS itself made mistakes – out of 300,000 returns on which it disallowed exemptions for dependent children, it had to restore the exemption just over half the time.

The odds of a tax audit, 1.1%

How many math errors does the IRS correct each year? Read and find out is a post from: Fresh Start Tax Blog

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Thousands of taxpayers get audited because they incorrectly file the wrong filing status.

This is an immediate trigger for the IRS. As a result the rest of their tax return get audited.

This is How Determine Your Correct Filing Status for IRS purposes:

Determining your filing status is one of the first steps to filing your federal income tax return.

There are five filing statuses:

1.Single,

2.Married Filing Jointly,

3.Married Filing Separately,

4.Head of Household and

5.Qualifying Widow(er) with Dependent Child.

Your IRS filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits and deductions, and your correct tax.

You can qualify  for more than one filing status.

Here are eight facts about filing status that the IRS wants you to know so you can choose the best option for your situation.

1. Your marital status on the last day of the year determines your marital status for the entire year.

2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.

3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.

4. A married couple may file a joint return together.

The couple’s filing status would be Married Filing Jointly.

5. If your spouse died ( sorry to hear ) during the year and you did not remarry during 2011, usually you may still file a joint return with that spouse for the year of death.

6. A married couple may elect to file their returns separately.

Each person’s filing status would generally be Married Filing Separately.

7. Head of Household generally applies to taxpayers who are unmarried.

You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.

8. You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2009 or 2010, you have a dependent child, have not remarried and you meet certain other conditions.

IRS Filing Status – Read this to stop a IRS Audit – Former IRS Agents – Audit Proof your tax return today. is a post from: Fresh Start Tax Blog

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Make sure you follow these tax tips when you are preparing your income tax return.

Call us if you need more information and we can help audit proof your tax return.

 Tax Tips Regarding Tip Income

If your pay from work involves compensation through tips, then the IRS would like you to be aware of a few facts about tip income.

Here are key points to keep in mind:

1. Tips are taxable Tips are subject to federal income, Social Security and Medicare taxes. The value of non-cash tips, such as tickets, passes or other items of value, is also considered income and subject to tax.

2. Include tips on your tax return You must include in gross income all cash tips you receive directly from customers, tips added to credit cards, and your share of any tips you receive under a tip-splitting arrangement with fellow employees.

3. Report tips to your employer If you receive $20 or more in tips in any one month, you should report all of your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes.

4. Keep a running daily log of your tip income. You can use IRS Publication 1244, Employee’s Daily Record of Tips and Report to Employer, to record your tip income.

For more information see IRS Publication 531, Reporting Tip Income, and Publication 1244 which are available at www.irs.gov. Both can be ordered by calling 800-TAX-FORM (800-829-3676).

If you need help with income tax preparation call us today, we are former IRS Agents.

IRS Tip Income – Tax tips from Fresh Start Tax – Income Tax Preparation – Audit Proof your tax return is a post from: Fresh Start Tax Blog

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Has the IRS placed on levy on your bank account or your wages?  You can get your your levy released and be placed in a IRS hardship without the filing of your returns to get the levy released.

Contrary to popular belief what the IRS tells you about having all your tax returns filed before they will put you into a IRS Hardship is just not true.

Every time we call the IRS with a client that has a true IRS hardship and meets the income test and expense tests for a IRS Hardship we are ALWAYS told all tax returns must be filed.

You do not have to file all your tax returns to get the levy released, at least immediately.

We should also say that with this ruling you will find below, it does not preclude you from the filing of your tax returns. The requirement is still there and IRS will probably give you a new date to have your tax returns filed.

There has been a recent ruling by the Taxpayer Advocates Office now setting the record straight.

Do not be bullied by the IRS.

March 29, 2011

Control No: TAS-13.1.10-0311-008
Expires: March 29, 2012

MEMORANDUM FOR TAXPAYER ADVOCATE SERVICE EMPLOYEES
s/ Nina E. Olson
FROM: Nina E. Olson
National Taxpayer Advocate

SUBJECT: Interim Guidance on Handling Collection Cases where
Economic Hardship is Present but the Taxpayer has not
Filed all Required Returns

The purpose of this memorandum is to update the guidance issued on March 23,
2010, entitled Interim Guidance on Handling Collection Cases where Economic
Hardship is Present but the Taxpayer has not Filed all Required Returns
concerning how Taxpayer Advocate Service (TAS) employees should handle
collection cases involving taxpayers with economic hardships and unfiled returns.

The Tax Court opinion, Vinatieri v. Commissioner, 133 T .C. 392 (2009)
illustrates some of the issues that can arise in this type of case. In that case, the
Tax Court held that if, during a Collection Due Process (CDP) levy hearing, the
taxpayer establishes that the proposed levy will create an economic hardship, the
IRS cannot proceed with the proposed levy action, even if the taxpayer has not
filed all returns that are due. During the CDP hearing, Ms. Vinatieri submitted
financial information to support her claim that she could not pay an outstanding
income tax liability.

The Appeals officer found that although she established
economic hardship (within the meaning of IRC § 6343(a)(1)(D)), he could not
place her account in a Currently Not Collectible (CNC) status because she had
not filed two income tax returns. Instead, the Appeals officer issued a notice of
determination sustaining the proposed levy action.

The Tax Court held that as a matter of law, the Appeals determination to proceed with a levy was wrong. IRC
§ 6343 requires the release of a levy if the taxpayer is experiencing an economic
hardship, even if the taxpayer has not filed all returns. The court also held that
rather than proceeding with the levy, the Appeals officer should have considered
alternatives to the proposed levy action.

Note: IRC § 6343(a)(1)(D) states that a levy shall be released if “the Secretary
has determined that such levy is creating an economic hardship due to the
financial condition of the taxpayer.” Treasury Regulation § 301.6343-1(b)(4),

2
defines economic hardship: “The levy is creating an economic hardship due to
the financial condition of an individual taxpayer. This condition applies if
satisfaction of the levy in whole or in part will cause an individual taxpayer to be
unable to pay his or her reasonable basic living expenses. The determination of a
reasonable amount for basic living expenses will be made by the director and will
vary according to the unique circumstances of the individual taxpayer. Unique
circumstances, however, do not include the maintenance of an affluent or
luxurious standard of living.”

TAS employees should advocate for the taxpayer experiencing economic
hardship when the IRS has issued a notice of levy or a Final Notice of Intent to
Levy, but the IRS will not place the account in CNC status or release a levy
because of unfiled returns. Most TAS cases will be in the Automated Collection
System (ACS), but could also involve a Revenue Officer or Appeals (either in the
form of a Collection Appeal Program (CAP) conference or CDP hearing).
A more detailed discussion of relevant IRC sections, regulations, and IRM
references for assistance in case building and advocating for taxpayers are
included in the attachment to this memorandum.

When advocating for a taxpayer in this type of situation, attach a copy of the
Vinatieri opinion to the Operations Assistance Request (OAR) and use Special
Case code LE when making these arguments to the IRS. If the IRS disagrees
and does not provide a compelling reason to support its disagreement,
immediately elevate the case to a manager for consideration of a taxpayer
assistance order (TAO). Also, consider whether referral to a Revenue Officer
Technical Advisor (ROTA) may also be appropriate. However, remember that
often “time is of the essence” in these cases, and a TAO may be necessary so
the taxpayer is not further harmed.

This IGM will be incorporated into IRM 13.1.10. If you have any questions,
please contact James Book, Management and Program Analyst, TAS Technical
Analysis and Guidance at 816-291-9944.

IRS Hardship – IRS Levy – All tax returns do not have to be filed – Former IRS Agent – Owe Back Taxes is a post from: Fresh Start Tax Blog

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