How To Deal With An IRS Notice

Most people tend to panic when they receive a notice from the IRS. Many, many people think that by stuffing that notice under the mattress, the problem will go away. Unfortunately, it doesn’t work like that. The best way to address a notice from the IRS is to deal with it immediately and head on. Here are some tips for what to do when you receive an IRS notice.

1. Don’t panic, and don’t shred it. Most IRS notices can be dealt with pretty simply. Not quickly, but simply.

2. Be sure you understand WHAT the notice is for. The IRS sends all sorts of notices — bills for overdue taxes, requests for you to file a missing tax return, to request additional information about something, notify you of pending deadline, etc. The notice will ALWAYS thoroughly explain why you are receiving it. READ IT.

3. Every notice from the IRS will explain what you need to do with it. If they want extra information from you, it will explain what information they need. If it’s a bill, well, then they just want your money.

4. If you receive a notice about a correction to your tax return, you should review the correspondence and compare it with the information on your return.

5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.

6. If you do not agree with the correction the IRS made, it is important that you respond as requested, within the time limit. Respond to the IRS in writing to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the lower left corner of the notice. Allow at least 30 days for a response from the IRS.

7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right corner of the notice. When you call, have a copy of your tax return and the correspondence available.

8. Keep copies of any correspondence with your tax records. Also keep record of who you talk to, including their IRS employee ID number (they’re required to give it to you), and detailed notes of your conversation.

If you receive a notice that you don’t understand or … Continue reading

Tips for Avoiding a 2012 Tax Bill

With the summer of 2012 coming to a close, it’s a good time to look at your tax payments you’ve made this year and see if you’re likely to accrue a tax liability for this year or not.

You should act soon to adjust yor tax withholding to bring the taxes you must pay closer to what you actually owe. If you’re ahead of schedule in terms of payments for the year, then you can reduce your withholding and actually keep more of your paycheck for the rest of the year.

Most people have taxes withheld from each paycheck or pay taxes on a quarterly basis through estimated tax payments. Each year millions of American workers have far more taxes withheld from their pay than is required. Many people anxiously wait for their tax refunds to make major purchases or pay their financial obligations. It is best, however, to not tie major financial decisions to your anticipated refund — especially if you owe back taxes for previous years, because the IRS is simply going to keep that refund, even if you filed an Offer in Compromise this year.

Here is some information to help bring the taxes you pay during the year closer to what you will actually owe when you file your tax return.

Employees

New Job? When you start a new job your employer will ask you to complete Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use this form to figure the amount of federal income tax to withhold from your paychecks. Be sure to complete the Form W-4 accurately.

Life Event? You may want to change your Form W-4 when certain life events happen to you during the year. Examples of events in your life that can change the amount of taxes you owe include a change in your marital status, the birth of a child, getting or losing a job, and purchasing a home. Keep your Form W-4 up-to-date.

You typically can submit a new Form W–4 at anytime you wish to change the number of your withholding allowances. However, if your life event results in the need to decrease your withholding allowances or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days of that life event.

If you need help determining how many exemptions to claim on your new W-4, feel free to get in touch … Continue reading

[Free Book] “Tax Resolution Secrets” available free until Sunday

A few days ago, I learned that Amazon has a nifty little feature in their Kindle publishing system for authors that lets us offer our books for zero cost during any 5 day period once per quarter.

My book, Tax Resolution Secrets is both the #1 and #2 best-selling tax resolution book on Amazon (#2 is the Kindle ebook edition, #1 is the paperback). In order to celebrate this little achievement, I’d like to do this 5-day free offer that Amazon allows authors to do.

So, running through Sunday, you can download the Kindle edition of Tax Resolution Secrets at absolutely no cost. You don’t even need to own a Kindle device in order to read it — there are Kindle apps for most smartphones, and even a Mac and Windows application as well.

The book is 100% geared towards the lay consumer, not towards licensed professionals. However, if you’re new to the tax resolution side of things, you might actually get quite a bit out of reading the book. It discusses appeals, SFRs, Installment Agreements, penalty abatements, the OIC process, lien releases, and more. The book shows people how to handle these sorts of tasks on their own, so I think it would make a good reference book for tax professionals, also.

The other thing that you’ll see about the book is that I use it as a lead generation tool. By downloading the book for yourself, you’ll actually see HOW I use it to generate leads — it’s pretty obvious what I’m doing with it once you actually see it.

The only thing I ask is that you please write a review of the book for me on Amazon. I’ll be working on the second edition here in a few months, and your feedback can help improve the book for everybody else.

To download the book, as well as submit a review, just visit Amazon’s page for Tax Resolution Secrets Kindle Edition.… Continue reading