Do You Know Your Appeal Rights?

Did you know that the IRS makes a determination that you disagree with, you may have Appeal rights? If you disagree with the final determination from an audit, a levy or lien you received, you have Appeal rights. You usually have a specific amount of time, often 30 days to file for an Appeal. The notice you received should tell you how long you have to file and how you need to do so. Here are some important points you need to know:

• Be prepared to show documentation to support your objection.
• An Appeals conference is an informal meeting. You can represent your self or have a CPA or Enrolled Agent to represent you.
• The conference can be held over the phone or in person.
• If you still disagree with the findings of the Appeals Officer, you can contest this ruling in Tax Court--this will require an attorney to represent you.

Publication 5 at irs.gov will give you more details. If you file and Appeal that is just based on your not liking the results, you Appeal will be denied. You need to have documentation to show you have reasonable cause to request a different determination. For instance, your audit showed you owe more taxes than you believe you owe. You found documentation for expenses that were not taken into consideration--that is a valid reason to Appeal.

If you need either representation for an Appeal or just someone to help you resolve you tax problems, contact an Enrolled Agent.

What You Need to Know About Choosing a Tax Preparer?

If you haven't filed you taxes or have prior year returns you still have not filed, you may want a professional to help you prepare your returns. Before you choose, you need to consider the following:

• Beware of anyone promising a refund before they have even reviewed your financial information.
• Be sure you carefully review the return once it is prepared. Your preparer must sign it too.
• Never sign a blank return and never sign it in pencil.
• Find out how long they have been doing tax returns.
• Are they an Enrolled Agent or CPA?

If the person that you hire is an Enrolled Agent or CPA, they were required to pass an exam to demonstrate their knowledge of taxes. Most tax preparers have no requirements unless they are employed by a reputable company. Be sure yours is qualified.

Be aware the IRS hold you accountable for the accuracy of your return, even if you have someone else prepare it. Be sure you at least look over your return to be sure the Social Security Numbers are all correct and all income number were accurately reported. Also be sure you were not given any deductions you were not entitled too.

Unscrupulous prepares will give clients deductions they are not entitled to to get them bigger refunds and get a larger fee. It is not legal or ethical to do this. You are the one who will be penalized if you took deductions you should not have. You will pay not only additional tax, but accuracy penalties and failure to pay penalties.

Choose your preparer carefully, like you would any other professional. Check their credentials and ask others who they would recommend. A good tax preparer may save you money, a poor one will likely cost you money.

How Can I Pay the IRS Less Than I Owe?

That questions would be number 1 on my top ten list of frequently asked questions. The short answer is that is possible in some cases. You may hear a lot about people being able to pay "pennies on the dollar". I am here to tell you that very rarely happens.

If you are elderly, living on a modest fixed income and have basically no assets. Then you may qualify. If you are young make a decent amount of money and have any real estate or other valuable assets, you probably don't qualify.

Here are several ways you may be able to pay the IRS less that the total you owe:

• Offer In Compromise
• Partial Pay Installment Agreement
• Currently Not Collectible
  
• Penalty Abatement

Each of the options only applies in very specific cases. As indicated above, the Offer is very hard to qualify for. A better and more likely option is one of the other choices. A Partial Pay Installment Agreement means after looking thoroughly into your financial situation the IRS determine the amount you are able to pay each month will not full pay your liability before the Statute to collect the taxes expires.

Currently Not-Collectible is possible if you current expenses(as allowed by the IRS) exceed your income. Even if you own your home, if your credit or you income is such that you cannot borrow against the equity to repay your your taxes, you may qualify for this option. The IRS will monitor you income every year or two looking for increases in income. If your ability to pay does not change, or even if it changes to allow some payment, the statute to collect may expire before you have paid all you owe.

The last option is for those who have a legitimate reason for not filing and or paying their taxes. They will not abate the tax itself nor the interest, but may abate the penalties if you can show that your lack of filing and or paying is not due to willful neglect, but is due to reasonable cause.

If you need assistance in implementing any of these options, you may need an Enrolled Agent to assist you.

What If I Forgot To File My Tax Return?

If you did not file you tax return by the April 15th deadline you need to file it as soon as possible. Although you will pay a Failure to File Penalty, if you file less than 60 days after the due date, you will pay 5% of the unpaid taxes per month or part of a month the return is not filed. If you file it more than 60 days after it was due, you will pay a minimum of $135 or 100% of the unpaid tax, whichever is smaller.

The Failure to File Penalty is more than the Failure to Pay Penalty. The Failure to Pay Penalty is 1/2 of 1% of the unpaid balance for each month the taxes are unpaid. So even if you cannot pay, you should file as soon as possible.

If both penalties apply, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty.

If you have reasonable cause that you can substantiate is not due to willful neglect, then you may be able to get the Failure to File Penalty abated. You need to write a letter to the IRS explaining why you could not file by the deadline. I forgot or I didn't know they were due, are not acceptable reasons. A death in the family or a serious illness or other major life altering event, may be accepted.

For more information on Penalties see the IRS website. If you need assistance in filing your returns or have prior year returns that have not been filed, you may need to contact an Enrolled Agent or other tax professional.

If You Are Working, You Are Getting Your 2009 Stimulus Payment

There have been a lot of questions about the 2009 stimulus payment. The good news is, if you are working, you are already getting it! Beginning April 1, all employer had to adjust the withholding tables down to the number based on the stimulus bill passed by Congress.

You should be seeing around $8 per pay check for singles and around $15 for couples. The great part is, unlike the 2008 Stimulus plan, your teenager(over 17) or college student if working, will get the benefit of this plan. For 08, if you were over 17, your parents did not get the extra $300 and if you were claimed on their return, you did not get it either.

For 2009, everyone who works gets the benefit. If you are on Social Security, you will be sent a check for $250.

To read an article on all the aspects of the Obama Stimulus Plan visit the MSN Website.