Frequently Asked Questions - GENERAL

FAQs - GENERAL

Owning or managing any type of small business has the same five primary elements: employee relationships, financial management, sales development, marketing diversity, customer retention.

The IRS charges interest and penalties on quarterly bases. The period begins after April 15th of the tax year and continues until the debt is satisfied. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest is compounded daily. If you file on time but don't pay all amounts due on time, you'll generally have to pay a late payment penalty of one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is reached. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. For individuals who file by the return due date, the one-half of one percent rate decreases to one-quarter of one percent for any month in which an installment agreement is in effect.

If you have a tax liability and cannot afford to make the payment all at once, you are afforded the opportunity to do installment payments. The taxpayer would file form 9465 requesting an installment payment with the amount that the taxpayer can afford. Once the IRS accepts the agreement, the taxpayer will make such payments until the debt is erased. There are special rules if the taxpayer owes more than $25,000. Those taxpayers should seek professional assistance.

Qualifying Children: To be claimed as a qualifying child, the person must meet four criteria:
Relationships — the person must be your child, step child, adopted child, foster child, brother or sister, or a descendant of one of these (for example, a grandchild or nephew).
Residence — for more than half the year, the person must have the same residence as you do.
Age — the person must be under age 19 at the end of the year, or under age 24 and a be a full-time student for at least five months out of the year, or any age and totally/permanently disabled.
Support — the person did not provide more than half of his or her own support during the year.
Tie-Breaker Tests for Claiming a Qualifying Child: If two or more taxpayers claim a dependent as a qualifying child in the same year, the IRS will use the following tie-breaker tests to determine which taxpayer is eligible to claim the dependent. The tie-breaker tests are listed in order of priority. The child will be the qualifying child of:
the parent,
the parent with whom the child lived for the longest time during the year,
if the time was equal, the parent with the highest AGI,
If no taxpayer is the child's parent, the taxpayer with the higher AGI.

First, before your try to negotiate a settlement we must determine what the cause is. If the cause can be resolved, you would not have to send any money back. If on the other hand the IRS examined your return and found something that was incorrect, than we can fix that issue and minimize your debt. If nothing can resolve the issue, than you have several options to pay back the IRS and a chance to reduce your outstanding amount.

You need to file your tax returns, you have 3 years to file however the interest and penalties will accrue from April 15th of the year the return should have been filled.

No, you must file dependents that meet the residency, age, and relationship test.

You should file all your income, from w2's, 1099, business income, rental income, and lottery income. Any source of income needs to be stated so you don't have any issues once the IRS examines your return.

No. You can claim it only if the vehicle is used for business or if the position you hold must utilize your vehicle to accomplish your tasks, i.e. paper delivery, pizza delivery etc.

It is always good to keep your receipts, but for business returns it is more important that your keep track of your revenue and expenses. By keeping a ledger you will be able to prove any expenses incurred during the year.

IF your tax debt has not been addressed by you the IRS can garnish your wages and deduct fees from your personal bank account. This is why any IRS letter must be addressed in a timely manner.

Yes, if you file a joint return. However the innocent spouse can retrieve their portion of the refund if only one spouse is liable.

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