National Taxpayer Advocate Nina Olson on IRS Budget Cuts

January 19, 2015

 

 

IRS’s diminished service expectations for FY 2015 are as follows:

  1. The IRS is unlikely to answer even half the telephone calls it receives, and levels of service may average as low as 43%.
  2. Taxpayers who manage to get through are expected to wait on hold for 30 minutes on average and considerably longer at peak times.
  3. The IRS will answer far fewer tax-law questions than in past years. During the upcoming filing season, it will not answer any tax-law questions except “basic” ones. After the filing season, it will not answer any tax-law questions at all, leaving the roughly 15 million taxpayers who file later in the year unable to get answers to their questions by calling or visiting IRS offices.
  4. Tax return preparation assistance has been eliminated.

Clearly, the value that a tax expert adds this year is even higher than it has been in the past. Taxpayers will have a very difficult time reaching the agency.

(the above was reprinted from an article addressed in the National Association of Enrolled Agents member newsletter)

As an Enrolled Agent, our firm is uniquely experienced to assist you in all areas of tax filing. Please let us know how we can help.


2015 Tax Filing Season to begin January 20, 2015

January 19, 2015

For those of you may recall the 2014 tax filing season being delayed in the wake of the government shutdown, this filing season seems to be on schedule.

As posted on the IRS home page, http://www.irs.gov, the 2015 tax filing season is set to begin on January 20, 2015.

You can avoid having to file twice by not filing early. Please remember…filing a paper return prior to this date will only delay the processing of your return and it would most likely be returned to you.


2014 Tax Filing Season Delayed

October 30, 2013

The 2014 tax filing season will be delayed one to two weeks in the wake of the government shutdown, as posted on the IRS home page www.irs.gov.

The government shutdown occurred during the peak season for getting systems caught up on programming, testing and deployment. The earliest the IRS will begin accepting and processing 2013 returns is January 28, 2014. The latest day to start is February 4, 2014. Be watching for any change in this date sometime during December, 2013.

Filing a paper return prior to this date will only delay the processing of your return further. IRS will NOT accept any “early” filed returns and they will most likely be retuned to the Taxpayer.

 


IRS Warnings regarding Government Shutdown

October 14, 2013

For those taxpayers who requested a six-month extension of their taxes, and are still in the process of getting their 2012 individual income taxes prepared, the October 15th deadline still remains in effect to submit their individual tax return on a timely basis. The only additional time applies to military and others serving in a combat zone and those in parts of Colorado affected by the recent severe weather.

Payments submitted to IRS will be processed, however expect delays on refunds which will not be issued until normal government operations resume.

 


Special Tax Considerations In Bankruptcy

May 9, 2011

In today’s struggling economy, more individuals and businesses are filing bankruptcy each day than ever before. The saying “you don’t know what you don’t know” is never truer than in the tax considerations in Bankruptcy.

Of course, I can’t go over all the rules/regulations in the space provided. However, let’s cover some basic information.

Failure to file tax returns timely or obtain an extension can cause a bankruptcy petition to be converted to another chapter or dismissed. In chapter 13 cases, the debtor must file all required tax returns for the periods ending within 4 years of the filing of the bankruptcy petition.

Not all debts may be discharged depending on the chapter and the nature of the debt. For discharge of unpaid tax under chapter 7, taxes for which no return was filed, taxes for which a return was filed late after 2 years before the bankruptcy petition was filed, taxes for which a fraudulent return was filed, and taxes that you willfully attempted to evade or defeat are NOT subject to discharge. There can be different rules under chapter 13 as a payment plan.

What happens to a cancellation of debt that the debtor must generally include in income such as a 1099-C? The debtor may not have to report the entire amount of canceled debt as income under a bankruptcy exceptions.

Two very good Internal Revenue Publications are Pub #908 & #334. Also the instructions for Form 982 could aid you in this very difficult area of tax considerations.

If you are thinking you are filing bankruptcy to discharge taxes due, you may find out too late that you have missed one of the important timing deadlines to include those particular taxes.

Please seek out professional guidance from an Enrolled Agent or a Bankruptcy Tax Attorney experienced with bankruptcy issues prior to filing.


Is Income Related to Gulf Oil Spill taxable?

June 30, 2010

On June 25, 2010 the Internal Revenue Service provided guidance to those individuals and businesses affected by the oil spill in the Gulf of Mexico. Here is a very brief overview of the current law.

The law requires that a taxpayer include in gross income payments the taxpayer receives for lost business income, lost wages, or lost profits. This income may also be taxable for self-employment tax. However, how the income is structured determines the taxability. Is it made by an employer or by any employer/employee obligation? Be prepared. Know whether or not you will be receiving a 1099 Misc or a W-2 at the end of the year.

Generally, payments the taxpayer receives for property damage or destruction in not included in gross income as long as the payments do not exceed the taxpayer’s adjusted basis in the damaged or destroyed property. Should there be a gain, the tax can be deferred if replacement property is purchased and later sold. If the payments are less (including insurance reimbursements) the taxpayer may have a deductible casualty loss.

However, gross income payments received for personal physical injuries or physical sickness (not emotional distress) is generally not taxable.

Every person has unique financial circumstances. Be sure you understand your tax obligation as it relates to payments from BP.