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Tax Tips and Resources in Twin Cities, MN


 
 

Resources

 
Internal Revenue Service www.irs.gov

MN Department of Revenue http://taxes.state.mn.us

Social Security Administration www.socialsecurity.gov

MN Dept of Employment and Economic Development www.uimn.org

MN Secretary of State www.sos.state.mn.us

MN Attorney General www.ag.state.mn.us

MN New Hire www.mn-newhire.com
 
Public-accountant-in-Purple-Suit---Public-acc
 

Resources


 

Archived Tuesday Tax Tips

 

IRS Tax Lien (Part II):

Paying your tax debt in full is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt. When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exists. Three methods are available: discharge of property, subordination, or withdrawal. Part II will explain discharge of property. Parts III and IV will explain the other methods.

Discharge of property: A ‘discharge’ removes the lien from specific property. There are several Internal Revenue Code provisions that determine eligibility. Publication 783, Instructions on How to Apply for Certificate of Discharge from Federal Tax Lien, explains the process. The seven-page publication explains the From 14135, Application for Certificate of Discharge of Federal Tax Lien, basis for the discharge, and frequently asked questions with answers. (IRS Web Site) (TTT 09/26/17 thru 10/10/17)
 

IRS Tax Lien (Part I):

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property, and financial assets.

A federal tax lien exists after the IRS puts your balance due on the books (assesses your liability); sends you a bill that explains how much you owe (Notice and Demand for Payment); and, you neglect or refuse to fully pay the debt in time.

The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property. For more information, see Publication 594, The IRS Collection Process. (IRS Web Site) (TTT 09/19/17)
 

IRS Online Payment Plan/Installment Agreement:

If you are financially unable to pay your tax debt immediately, the IRS will set up a monthly payment program through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.

All required tax returns must be filed before applying for any payment agreement.

To be eligible to apply of an online payment agreement: the individual must owe $50,000 or less in combined individual income tax, penalties and interest and have filed all required returns; and, the businesses must owe $25,000 or less in payroll taxes and have filed all required returns. An online payment agreement (regular installment agreement) fee is $149. An online payment agreement that includes direct debit installment agreement (DDIA) fee is $31. FYI: A regular installment agreement fee is $225 and the regular installment agreement with direct debit is $107. (IRS Payment Plans) (TTT 09/12/17)
 

How Does the IRS Contact Taxpayers? (Part IIIb)

When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. The IRS does not normally initiate contact with taxpayers by emails, nor does it send text messages or contact through social media channels.
IRS Visits (cont.): When an IRS knocks on your door, ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credentials (PIV). Pocket commissions describe the specific authority and responsibilities of the authorized holder. The PIV is a government-wide standard for secure and reliable forms of identification for federal employees and contractors. Criminal investigators also have a badge and law enforcement credentials.

The IRS never initiates contactusing social media or text messages. First contact generally comes in the mail but not always. A special page on IRS.gov, “How to know it’s really the IRS calling or knocking on your door,” helps taxpayers determine if a person claiming to be from the IRS is legitimate or an imposter. (IRS 2017ARD 150-3) (TTT 09/05/17)

 

How Does the IRS Contact Taxpayers? (Part IIIa)

When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. The IRS doesn’t normally initiate contact with taxpayers by emails, nor does it send text messages or contact through social media channels.
IRS Visits: (1) IRS revenue officers routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owned, delinquent tax returns, or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer; however, payment will never be requested to a source other than the US Treasury; (2) IRS revenue agents usually visit taxpayers or tax professionals to conduct the audit after either mailing a notice and/or agreeing on the day and time. IRS revenue agents will sometimes make unannounced visits to a taxpayer’s home or place of business to discuss a tax matter; and, (3) IRS criminal investigators are federal law enforcement agents who may visit a taxpayer’s home or place of business unannounced while conducting an investigation. They will not demand any sort of payment.
Next week, Part IIIb, Forms of official credentials. (IRS 2017ARD 150-3) (TTT 08/29/17)
 

How Does the IRS Contact Taxpayers? (Part II)

When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. The IRS doesn’t normally initiate contact with taxpayers by emails, nor does it send text messages or contact through social media channels.
The IRS employees may first call the taxpayer. IRS revenue officers work directly with taxpayer to educate them about their options to resolve delinquencies and to collect delinquent taxes and tax returns, while protecting taxpayers’ rights. IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit. Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities but only after the taxpayer and their representative has received written notice. Private debt collectors for the IRS must respect taxpayers’ rights and abide by the consumer protection provisions of the Fair Debt Collection Practices Act.
All tax payments are to the U.S. Treasury. Taxpayers should never use a preloaded debit card or wire transfer to make a payment. The IRS provides specific guideline on how to make a tax payment at irs.gov/payments.
Part III Tax Tip will explain IRS contacts via IRS visits. (IRS 2017ARD 150-3) (TTT 08/22/17)

 
 
Public Account Standing in Door way - Public Accountant in Oakdale, MN
 

How Does the IRS Contact Taxpayers? (Part I)

When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. The IRS doesn’t normally initiate contact with taxpayers by emails, nor does it send text messages or contact through social media channels.
Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, advance notice is provided in writing via a letter or notice, but not always.
Part II Tax Tip will explain IRS contacts via Phone calls. Part III Tax Tip will explain IRS contacts via IRS visits.
IRS employees and contractors will never: be hostile or insulting; demand payment without giving taxpayers the opportunity to question or appeal the amount; require a specific payment method, such as a prepaid debit card; threaten lawsuits, arrest, deportation or other action for not paying; nor, asks for credit or debit card numbers over the phone. (IRS 2017ARD 150-3) (TTT 08/15/17
 

What is IRS Form 2848, Power of Attorney?

Form 2848, Power of Attorney and Declaration of Representation’s, purpose is to authorize an individual to represent the taxpayer before the IRS. The person the taxpayer authorizes must be eligible to practice before the IRS. Form 2848, Part II, Declaration of Representation, lists eligible designations. They are attorney, certified public accountant, enrolled agent, officer of the taxpayer organization, full-time employee of the taxpayer, family member, enrolled actuary, unenrolled return preparer (limited), student attorney or CPA (limited), and enrolled retirement plan agent. The taxpayer and authorized representative will sign and date the form. The authorization will allow the representative to discuss the taxpayer’s tax issues with the IRS and request and inspect the taxpayer’s confidential tax information. (IRS Form 2848 Instructions) (TTT 08/08.17)

Employer Classification of Workers (Part II):

The IRS is alerting employers to classify workers correctly. An employer that misclassifies employees as independent contractors may be liable for employment taxes. However, an employer that has a reasonable basis for classifying its workers as independent contractors may be entitled to special relief under section 530 of the Revenue Act of 1978 (P.L. 95-600). The IRS also has a Voluntary Classification Settlement Program that provides an opportunity to reclassify workers as employees for future ax periods, with partial relief from federal employment taxes.
Workers who believe an employer improperly classified them as independent contractors may use Form 8919, Uncollected “Social Security and Medicare tax on Wages, to figure and report the employee’s share of uncollected social security and Medicare taxes. (IRS Fact Sheet FS-2017-9) (TTT 08/01/17)

Employer Classification of Workers (Part I):

The IRS is reminding employers of the importance of correctly classifying workers for purposes of federal employment taxes. Whether a worker is an employee or an independent contractor depends on a number of factors that fall into three categories: behavioral control, financial control and the type of relationship between the worker and the service recipient. An employer who is unsure of how to classify its workers can file a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. There is no fee for requesting a worker classification determination. (IRS Fact Sheet: FS-2017-9) (TTT 07/25/17)

Teenage Taxpayers with Summer Jobs:

Summer jobs are a great way to earn extra spending money or to save for school. Students and teenage employees normally have taxes withheld from their paychecks by the employer. Some workers are considered self-employed and may be responsible for paying taxes directly to the IRS. A self-employed person pays taxes on earned income by making estimated tax payments during the year. An employee will complete Form W-4 for their employer and a self-employed person will complete Form W-9 for their contractor. Visit IRS.gov for more information. (IRS 2017ARD 130-1) (TTT 07/18/17

Unemployment Benefits:

Unemployment compensation is included as income for the year received. The taxpayer should receive a Form 1099G, Certain Government Payments, by January 31. This form shows the amount received and the amount of any federal income tax withheld. You can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. If you decide not to have withholding you may have to make estimated tax payments during the year. (IRS 2017ARD 047-2) (TTT 7/11/17)