TAX PROBLEM SOLVER BLOG

IRS Letter 1153 – Can the IRS collect business tax liability from me personally?

IRS 1153 letter, in brief, explains that the IRS has made unsuccessful attempts to collect unpaid employment or excise taxes from a business taxpayer.  Due to the inability to collect or the failure to respond to the IRS, the IRS now is attempting to collect a portion of the outstanding tax liability from an individual taxpayer.

The IRS can impose a Trust Fund Recovery Penalty (TFRP) levy against the individual taxpayer’s bank account if:

  1. The person is responsible for collecting and paying tax to the IRS, and
  2. The person WILLFULLY neglects to pay the taxes.

Typically, the IRS is trying to collect from a responsible individual whom has collected payroll/employment taxes on behalf of a business (Social Security or Medicare) and fails to remit such taxes.

Struggling businesses will often use the taxes set aside in trust to pay operating costs to keep the business alive.  Although this may seem like a reasonable solution (you can pay the IRS once you can pay your employees and ultimately generate more revenue to pay the IRS) this is NOT a solution!

The IRS will not be forgiving and will potentially levy BOTH your business and personal bank accounts.

If you have received an IRS letter 1153 or have fallen behind with your employment tax liability, call Tax Attorney, Sarah Martello for a free 15 minute consultation at 727-201-1153.


Hurricane Disaster? IRS Can Help!

The recent devastation following Hurricane Harvey and Hurricane Irma have left a lot of businesses struggling to pick up the pieces and move forward.  Distressed individuals and businesses are filing insurance claims that often, substantially fail to make them “whole” and provide less than adequate compensation allowing them to rebuild.

Among other government resources, the IRS provides tax benefits to help alleviate the economic burden many taxpayers face after a natural disaster.  With careful planning, a taxpayer can mitigate this burden by ensuring losses, recoveries, re-investments, and charitable contributions are correctly accounted for.

Generally, IRC 165 allows a casualty deduction for property that is deemed completely worthless and not compensated by insurance.

The Disaster Tax Relief Act, recently passed by Congress and signed by President Trump, provides additional benefits.

Big picture, this new act will allow:

Personal casualty losses less than 10% of AGI (Adjusted Gross Income) to qualify forRead More


Save Twice with Saver’s Credit on Your Tax Return

If you are a low-to-moderate income worker, you can save two ways for the same amount. With the saver’s credit, you can save for your retirement and save on your taxes with this special tax credit.

If you contribute to a 401(k), traditional or Roth IRA, 403(b), 457 or other retirement plan, you may be eligible for what’s formally known as the “Retirement Savings Contributions Credit”. The credit can be worth $200 to $1,000 per person, depending on your income (couples earning more than $62,000 and single filers earning more than $31,000 are ineligible). Knowing that you’re eligible for the credit might encourage you to save a little more.

The credit is worth 10% to 50% of the first $2,000 you contribute to the retirement plan for the year. You can claim the top 50% credit if your adjusted gross income in 2017 is less than $37,000 if married filing jointly, $27,750 ifRead More


Get Tax Breaks when Moving for Your First Job!

If you are moving to start your first job, your moving expenses may be tax-deductible, depending on how far you move. If you meet the criteria for the “distance test” you can deduct the cost of hiring movers and traveling to a new home: if the new job is at least 50 miles away from your old home, you can deduct moving expenses. These include: the cost of hiring movers (including costs of packing as well as transporting your possessions) or the cost of renting a moving van, if you do it yourself. You can also deduct the cost of travel from your old home to your new home (including lodging, but not meals). If you drive, you can deduct 17 cents per mile in 2017, as well as parking and tolls. Hold onto all your receipts and keep a mileage log. If you need to store your possessions, youRead More


IRS Collection Notices – Stop the IRS before a Lien or Bank Account Levy!

Have you been receiving letters from the IRS and unsure what to do and whether the IRS can take your asset?  You are not alone.

The situations where the IRS can levy assess liability is typically initiated when the Taxpayer owes but neglects to pay the IRS.   With that said, the IRS will issue a series of letters and/or notices to inform the Taxpayer of the circumstances. This situation may come about in several different scenarios:

  1. IRS issues a Notice CP 2000  that goes unanswered
  2. A Final Notice (CP 90, CP 91, CP 523) is issued and the Taxpayer does not respond;
  3. Failure to pay the IRS; or
  4. Ignoring the IRS after multiple attempts to resolve the liability;

Although there’s a mix of final notice/intent to levy letters, you know the IRS is serious about the levy if it is sent via certified mail with a deadline of 30 days “from issue date.”

The optionsRead More