Understanding Innocent Spouse Tax Relief from the IRS

Here’s the set up, you were married and during that time your spouse handled the taxes. You get divorced then find out that your spouse made mistakes or outright lied on the taxes. He or she can’t be found or somehow hides their income, so the IRS makes you pay.

The IRS may agree with you. It’s called Innocent Spouse Relief, which can relieve you of tax liabilities, penalties and interest during those years that you filed jointly with your ex.

The Internal Revue Service created this relief due to the fact that these situations actually happen often and they recognize that the tax liability is unfair to put on the innocent spouse.

This is a great option if this describes your situation. Keep in mind though, if were aware that your spouse was filling incorrect or fraudulent tax returns; it’ll be a hard sell for the IRS to let you off the hook. And let’s be real, why should they? However, again, if you were unaware, let’s see if you qualify!

To quality fir Innocent Spouse Tax Relief, you must meet certain requirements as determined by the IRS.

Under the rule, there are 3 types of relief to consider for couples that filed joint tax returns. And as stated, these may relieve you from your responsibilities for unpaid back taxes, penalties and interest. We’re only going to cover the “classic” Innocent Spouse Relief, since this is the most popular.

Classic Innocent Spouse Tax Relief Requirements – This is the origin relief created before the other two. There some conditions you must meet to qualify for Innocent Spouse Relief.

1. The two of you filed a joint return with your current or former spouse under reported or omitted income earned. This also includes the overstatement of deductions, exemptions, etc. Basically, they knowing filed a false return.
2. At the time you put your signature on the return, you were unaware or didn’t have any reason to know that your spouse was doing this.
3. Under the circumstances, it’s unfair to make you responsible to pay for the understated tax return.

If we’ve struck a nerve, complete IRS Form 8857 – Request for Innocent Spouse Relief. Be certain to remember the qualifications when finishing the form. Be as detailed as you can and include plenty of explanations about the situation, whatever it was at the time.

Include a letter stressing the big reasons why it’s unfair to go after you for these tax liabilities. A human will read the letter, so they need to have a clear idea of the situation if you are to have any success. It will also help to speed up the process. Also, if you were an abused spouse, include statements covering that as well. This may require written whiteness statements to support your claim.

Mail the package off to:
IRS – IRS-Stop 840-F
Innocent Spouse
P.O. Box 120053
Covington, KY 41012.

Good luck!

To many, the trading on the financial markets represents a distant and idealised dream. High volume markets such as the foreign exchange are particularly appealing to novice traders, primarily because of their margin based returns that can far outweigh an initial investment. When you are not involved in the day to day realities of forex trading, it can seem like an adventurous land of endless opportunity.

In fact, the reality is far removed from this romanticised vision. Aside from the inherent risks associated with forex trading, there are also tax requirements that impact heavily on any profits that you gain in the market place. The IRS has played a key role in regulating financial trading throughout the years, and this is something that you must be aware of prior to committing yourself to the market.

The IRS and Forex Trading: 3 Things to Bear in Mind

With this in mind, what are the key tax considerations that can influence your profitability as a forex trader? Consider the following: –

The Relationship Between the IRS and the Financial Industry Regulatory Authority

As an active forex trader, you are subject to the taxation of any gains and losses that you make through the activity. This is a fact often lost on inexperienced traders, who occasionally measure their capital and returns without calculating the necessary evil of taxation. On another note, is also worth noting that the IRS’s independent rules for trading are entirely separate from those established by the Financial Industry Regulatory Authority (FINRA). While the latter determine who is permitted to trade and the relationship between brokers and clients, the former are concerned only with how day trading income is taxed.

The Difference Between Trading and Investment

While trading and investment are considered by many to be one and the same thing, there are key differences between the two. As a general rule, investors are concerned with longer term gains, and may also hold a full time role of employment in addition to managing a stock portfolio. In contrast, forex traders are eligible for special tax dispensation so long as they acquire their main source of income through the practice. While the IRS does not publicise its methods for qualifying trading activity as a business, it does provide a general set of guidelines that apply to those who operate primarily as a foreign exchange trader.

The Need for a Detailed Record of Trading Activity

While investors typically earn capital gains and losses from their long term positioning, the IRS are extremely stringent when appraising the status of forex traders. As a rule, the organisation demand that traders actively seek out returns from daily market movements, while also requesting that such an intention is sustained over a set period of time. Forex traders must also prove this, by including specific records of their trading activity with all income tax returns and documents. If they fail to do this, then they will be unable to qualify for special tax dispensation from the IRS and ultimately lose out of a portion of their profits.

The Conclusion

The intricacies of taxation provide an interesting backdrop to forex trading, and highlight the need for practitioners to prepare themselves fully before they enter the market place. With this in mind, it is crucial that you consider learning as an ongoing and evolutionary process, using technical forex research tools and tutorials to assist the process. Without such a commitment, you will be unable to cope with the everyday realities of forex trading and the pressures that it brings.

Tax info is difficult to grasp in any language. it’s even harder be harder to get if it’s not in your mother tongue. The IRS offers a good assortment of free and easy-to-use resources and services for spanish-speaking taxpayers. Here are some tips if you would like federal tax help from the agency in Spanish.

Get answers twenty four hours on a daily basis seven days every week. IRS.gov/espanol encompasses a wealth of data accessible daily for people and businesses. you’ll notice links to tax-related info and warnings regarding common tax scams that may victimize taxpayers. you’ll additionally check the standing of your tax refund through the improved on-line tool “¿Dónde está mi reembolso?” victimization the Asistente EITC, you’ll ascertain if you qualify for the attained tax Credit, a refundable reduction for several people that attained but $50,270.

Use Free File to arrange and e-file your taxes for complimentary. authority Free File offers free tax preparation and e-file choices for all taxpayers. The Free File program could be a partnership between the authority and also the Free File Alliance. The Alliance could be a cluster of private-sector software package corporations. If your 2012 financial gain was $57,000 or less, you qualify to use free tax software. If your financial gain was higher, otherwise you area unit snug getting ready your own income tax return, there is Free File Fillable Forms, the electronic versions of authority paper forms. Visit IRS.gov/freefile and choose ‘En Español’ to review your choices.

Try authority e-file to file your come. authority e-file is that the safe, simple and most typical thanks to file a income tax return. The authority has processed over one billion returns safely and firmly. If you owe taxes, you have got payment choices to file early and pay by the Gregorian calendar month fifteen tax point in time. Visit IRS.gov/espanol and choose Opciones Electrónicas to review your choices.

Get up-to-date at the transmission Center. Watch YouTube video tax tips and hear podcasts on numerous authority topics in Spanish and English. Enter the keywords “Centro Multimediático” into the search box of the authority.gov web site.

TeleTax offers you tax and refund info. TeleTax could be a fee, automatic utility. It provides useful pre-recorded tax topic messages and refund info. you’ll realize an inventory of over one hundred twenty five TeleTax topics on the market in Spanish and English within the directions for type 1040, 1040A or 1040EZ. after you decision to see your refund standing, have a replica of your income tax return handy. this can assist you reply to the system prompts. TeleTax is accessible twenty four hours on a daily basis, seven days every week at 800-829-4477.

Get tax forms and publications. you’ll read and transfer many tax forms and publications in Spanish directly from authority.gov/espanol at any hour of the day or night.

Visit the authority Spanish Newsroom. realize the agency’s most up-to-date announcements, tips and data on new tax laws that would have an effect on you. Avoid missing any advantages and maintain to this point by typewriting the keywords “Noticias linear unit Espanol” into the search box of the authority.gov web site.

Call the authority for complimentary tax facilitate in Spanish. The authority’ fee signal offers service from communicatory IRS representatives. decision the authority client baseline at eight00-829-1040 so press the amount 8.

Stay connected through Twitter linear unit Español. Get all the latest info and useful tax tips in Spanish by following the authority on Twitter @IRSenEspanol. Get multilingual help at authority remunerator help Centers. guests will get facilitate at authority remunerator help Centers in additional than a hundred and fifty languages, as well as Spanish, either in the flesh or through associate degree Over-the-Phone Interpreter. Before you visit, it’s invariably a decent plan to see TAC locations, hours and on the market services by visiting authority.gov and clicking on ‘Help & Resources’ so on ‘Contact Your native authority workplace.’

Many people look for help from professionals when it’s time to file their tax return. If you use a paid tax preparer to file your federal income tax return this year, the IRS urges you to choose that preparer carefully. Even if someone else prepares your return, you are legally responsible for what is on it.

Here are ten tips to keep in mind when choosing a tax return preparer:

1. Check the preparer’s qualifications.  All paid tax return preparers are required to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer belongs to a professional organization and attends continuing education classes.
2. Check on the preparer’s history.  Check with the Better Business Bureau to see if the preparer has a questionable history. Also check for any disciplinary actions and for the status of their licenses. For certified public accountants, check with the state boards of accountancy. For attorneys, check with the state bar associations. For enrolled agents, check with the IRS Office of Enrollment.
3. Ask about service fees.  Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers can. Also, always make sure any refund due is sent to you or deposited into an account in your name. Taxpayers should not deposit their refund into a preparer’s bank account.
4. Ask to e-file your return.  Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. IRS has safely and securely processed more than one billion individual tax returns since the debut of electronic filing in 1990.
5. Make sure the preparer is accessible.  Make sure you will be able to contact the tax preparer after you file your return, even after the April 15 due date. This may be helpful in the event questions arise about your tax return.
6. Provide records and receipts.  Reputable preparers will request to see your records and receipts. They will ask you questions to determine your total income and your qualifications for deductions, credits and other items. Do not use a preparer who is willing to e-file your return by using your last pay stub before you receive your Form W-2. This is against IRS e-file rules.
7. Never sign a blank return.  Avoid tax preparers that ask you to sign a blank tax form.
8. Review the entire return before signing.  Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
9. Make sure the preparer signs and includes their PTIN.  A paid preparer must sign the return and include their PTIN as required by law. The preparer must also give you a copy of the return.
10. Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or altered a return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. Download the forms on the IRS.gov website or order them by mail at 800-TAX-FORM (800-829-3676). 

Tax amnesty, although not rule, are the occasional exception. The way it works is simple, for a specified limited time, taxpayers can pay a predefined amount in exchange for forgiveness of a tax debt, including interest and penalties. These are offered without any criminal prosecution. However, harsher penalties for those who qualify but don’t take the amnesty, often accompany the amnesty legislation.

Although bills have been proposed, there are currently no federal tax amnesty programs. The last one was in 2009, under President Bush. The program granted almost 15,000 taxpayers amnesty. The need for federal tax amnesty is apparent, so says many tax experts and legislators. When someone has a tax debt but can’t possibly pay it, the penalties and interesting can quickly drive the total debt due. By offering federal amnesty, these debts could be relieved and save years of costs trying to collect them.

Offshore Voluntary Disclosure Program

The IRS began an open-ended offshore voluntary disclosure program (OVDP) in January 2012 on the heels of strong interest in the 2011 and 2009 programs. The IRS may end the 2012 program at any time in the future. The IRS is offering people with undisclosed income from offshore accounts another opportunity to get current with their tax returns. The 2012 OVDP has a higher penalty rate than the previous program but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk detection by the IRS and possible criminal prosecution.

State Amnesties

States within the United States have and still often do offer amnesty programs. The state of Louisiana, for example, brought in $450 million from its 2009 tax amnesty program, three times more than what was expected, according to Governor Jindal.

In 2010, Pennsylvania held a tax amnesty, during which state tax collectors waived 100 percent of penalties and half of the interest for tax delinquents who came forward.

Kentucky, Maine, Rhode Island and Texas all offered tax amnesties of one sort or another in 2012.

Although highly unlikely, ultimately, yes they can.

Today’s IRS is a kinder, gentler government organization. The Taxpayers’ Bill of Rights discourages the practice and leans more towards working out a deal, assuming you owe back taxes.Also, the negative publicity of such a thing helps no one.

The other side of that, however, is vacation, rental properties or that swanky cabin retreat in the mountains. If you owe considerable taxes (over $5,000 but realistically more like $250,000) and haven’t been playing nicely with the IRS, this may be a move that they cold consider. However, your primary residence is probably safe.

Fear not, the tax collectors (agents) don’t have the authority to seize your property. This requires a court order, which with the help of tax advocate service, can be contested in court.

The bottom line is, if you throw IRS correspondences in the trash and/or fail to return phone calls, or broke the law by lying about your income or assets, the IRS could go after your house as a last resort. Even then, there is still hope by fessing up, getting a tax advocate and work on a solution, the IRS will most likely back off.

If you find yourself in this sort of hot water, grow a pair and call them. Or, if you have the resources, hire an attorney to call on your behalf.

The IRS Isn’t in the Real Estate Business

Section 6331 of the Internal Revenue Code syas the IRS can “levy upon all property and rights to property” of a taxpayer who owes back Federal tax. The IRS can levy upon assets that are in the possession of the taxpayer, called a seizure. Again, they most likely wont. It may of little help for those owe a monster debt but the IRS can’t take a home if the tax debt is less than $5,000 under the code.

The biggest problem for the IRS to take your home is that they must apply to a neutral magistrate for permission to move forward on a property seizure. This requirement by code limits their power to act unilaterally in these situations.

The IRS prefers and is governed by code to take your bank accounts and retirement without the need for permission from a court. The IRS does not want your personal home, they are only after money. Again, if you work with them, they won’t take your house.

Transfering Property to Someone Else

Although this occurs to many big owers, selling, giving or otherwise transferring ownership of your house ot property to someone else must occur some time before the tax levy property seizure. And even then, if the IRS can prove this was your motive, they can still sieze your real estate assets.

Be very careful here. Beyond the IRS taking the property anyway, you may be liable criminally if you illegally hid assets or lied about when and why property was sold or given away. If you didn’t transfer assets to someone else before getting into hot water with the IRS, now is not the time to think about it.

The IRS’s e-file (electronic filing) makes it a lot simpler for taxpayers to choose which IRS tax form to file. For the most part, the e-file software chooses the best form for your particular situation for you. Most folks e-file in this eletronic age but if you prefer the old fationed way, the Iternal Revenue Service has some tips to help you choose the right form.

Those who choose to file a paper tax return should know that the IRS no longer mails paper tax packages. The best way to get forms and instructions is by visiting the IRS website at IRS.gov. You can also order forms and have them mailed to you by calling the IRS forms line at 1-800-TAX-FORM (829-3676). You may also pick up tax forms from a local IRS office, most libraries in your area and post offices carry the forms.

Here are some tips that will help paper tax return filers choose the best tax form for their situation.

You can generally use the 1040EZ if:

Your taxable income is below $100,000;
Your filing status is single or married filing jointly;
You are not claiming any dependents; and
         
If you can’t use Form 1040EZ, you may qualify to use the 1040A if:

Your taxable income is below $100,000;
You have capital gain distributions;
You claim certain tax credits; and
You claim adjustments to income for IRA contributions and student loan interest.

If you cannot use the 1040EZ or the 1040A, you’ll probably need to file using the 1040. The reasons you must use the 1040 include:

Your taxable income is $100,000 or more;
You claim itemized deductions;
You are reporting self-employment income; and         
IRS Publication 17, Your Federal Income Tax, provides helpful information about which form is best for you.

Access to IRS forms and instructions or information about e-filing, including IRS Free File, is available 24 hours a day, seven days a week on IRS.gov. Tax products often appear online well before they are available on paper. You’ll find downloadable tax products on IRS.gov by clicking on the “Forms and Pubs” link on the Home page.

The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.

In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

“This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction,” said Acting IRS Commissioner Steven T. Miller. “The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013.”

The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.

Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option. 

The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, posted today on IRS.gov.

As part of its efforts to support people in the areas hit by Hurricane Sandy, the IRS is expediting the review and approval process for organizations that are applying for tax-exempt status to provide relief for Hurricane Sandy’s victims.

Often, it’s best to use existing charities, including churches and other places of worship, because they tend to have fund-raising and distribution infrastructures already in place and frequently can administer relief programs more efficiently than newly formed organizations.
 
But those who have decided they would prefer to start their own charity should apply to the IRS for tax-exempt status by filing IRS Form 1023. At the top of the form write, “Disaster Relief, Hurricane Sandy.”

The IRS will expedite those applications and ensure they meet the legal requirements for tax exemption.  

Relief also applies to tax-exempt organizations required to file Form 990 series returns with an original or extended deadline. See IR-2012-83, IRS Provides Tax Relief to Victims of Hurricane Sandy; Return Filing and Tax Payment Deadline Extended to Feb. 1, 2013.

The Internal Revenue Service is issuing a warning about a new tax scam that uses a website that mimics the IRS e-Services online registration page.

The actual IRS e-Services page offers web-based products for tax preparers and payers, not the general public. The phony web page looks almost identical to the real one.

The IRS gets many reports of fake websites like this. Criminals use these sites to lure people into providing personal and financial information that may be used to steal the victim’s money or identity.

The address of the official IRS website is www.irs.gov. Don’t be misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.

If you find a suspicious website that claims to be the IRS, send the site’s URL by email to [email protected] Use the subject line, ‘Suspicious website’.

Be aware that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

If you get an unsolicited email that appears to be from the IRS, report it by sending it to [email protected]

The IRS has information at www.irs.gov that can help you protect yourself from tax scams of all kinds. Search the site using the term “phishing.”

Don’t say the IRS never does anything for the “little guy”. The earned income credit EITC is a refundable tax credit designed for working families and individuals with low to moderate income. The amount of the credit varies depending on your level of income and how many dependents you support.

To be eligible for the earned income credit, your earned income and adjusted gross income need to be within certain ranges. The amount of the tax credit varies based on your earned income and how many qualifying children you are supporting in your household.

For the years 2009 through 2012, the Earned Income Credit is temporarily increased for working families with three or more dependents. Previously the earned income credit maxed out at two dependents. The earned income credit will revert back to maxing out with two dependents starting in 2013.

The earned income tax credit is a great benefit for workers who don’t make much money or to those who did work but then lost a job. This tax break returns to qualified individuals a portion of the taxes they paid. It can actually produce a tax refund for eligible filers who had no tax liability. Unfortunately, most tax credits are nonrefundable meaning they simply zero out a tax bill. For example, if you owe $800 and have a $1,000 credit, your bill of $800 is zeroed out but the remaining $200 is not returned to you. With a refundable credit such as the earned credit income, the IRS would refund the extra $200 to you.

There is however, a drawback to the credit. The filing process is rather complicated and typically eligible taxpayers don’t have much cash to spare; they normally cannot afford professional help in filing for it. The IRS has an online program to help these filers.

The easiest way to find out if you qualify for the earned income credit is to use an application found on the IRS Web site called the EITC Assistant. This process will help you determine if you are eligible for the Earned Income Credit and will help you calculate the amount of the credit. You do not have to be a parent to qualify. Be aware that there are links to applications for more than one tax year so be sure to pick the right one.

Married couples who file separate returns are not eligible for the earned income credit. If you are married but haven’t lived in the same home as your spouse for the last six months of the year, then you may be able to file as head of household and take the credit.

The rules governing the earned income tax credit are rather complicated. Do yourself a favor and use the IRS website to determine if you qualify.

Current economic times make it wise to seek out non-traditional methods to save for your retirement. One particular method is increasing in popularity. More and more people are using the self-directed IRA to purchase real estate.

A self-directed IRA is probably the lesser known of IRA options. It requires you to make active investments on behalf of the plan. To open this type of IRA, you must hire a trustee or custodian to hold the IRA assets. This person will also be responsible for administering the account and filing required documents with the IRS.

As with other IRA accounts, you may chose to invest in stocks, bonds and mutual funds. However, you also have the option to invest in things that most investment houses don’t offer. Things such as small businesses, boat slips, storage units, parking lots, land and homes.

Experts agree that in general, real estate can be a good long-term investment and generate higher returns than the stock market.  However, you should remain cautious. The wise investor will spend some time getting organized and doing their homework. Using a self-directed IRA to invest in real estate makes the most sense when you fully understand the requirements involved.

Consider seeking legal advice as well as input from an accountant and real estate agent to obtain as much information as possible. Be familiar with the rules for the type of IRA you’re using. Regardless of the type, contribution limits still apply, and there are penalties for early withdrawals.

Keep in mind a few things as you consider investing in real estate through a self-directed IRA.

• It takes time. Build a timeline to help you plan accordingly. Assume that it will take two or three weeks to open an account at a typical brokerage firm. Remember that you also need to find a custodian. The down payment must come from IRA funds, which means that rollovers may be required.

When a real estate investment is contracted, you will review and sign the purchase agreement. Then your custodian must approve it and release funds to the title company. All of these steps take time.

• You can’t take advantage of IRA investments until you retire. You won’t be able to use the fund to pay off your mortgage. In addition, you may not live in or use the property you buy as an investment in the self-directed IRA. Presumably, you’re buying a property because it will appreciate in value. Be advised that you lose the depreciation tax deduction that you would otherwise receive in a traditional investment property.

• Your spouse, immediate family or companies in which you have a 50% interest cannot be involved. An IRA is an individual account and you want to avoid conflicts of interest.

• It’s a lot of work. Be fully informed regarding the reporting and administrative requirements for using this type of IRS to buy real estate. You should not be doing work on the property. All expenses, maintenance, taxes and insurance must be paid from the IRA. The same applies to any association dues or membership fees. Realize that finding reliable tenants and contractors will take time. Lastly, keep in mind that every payment paid from the IRA must be approved by your custodian.

• All income from the property is tax deferred, including rental income and capital gains. Obviously, this will be very beneficial if you will be in a lower tax bracket at retirement.

Taxpayers should keep copies of their tax returns, but if they cannot be located or have been destroyed during natural disasters or by fire, the IRS can help. Whether you need your prior year’s tax return to apply for a loan or for legal reasons, you can obtain copies or transcripts from the IRS.

Here are 10 things to know if you need federal tax return information from a previously filed tax return.

1. Get copies of your federal tax return via the web, phone or by mail.

2. Transcripts are free and are available for the current and past three tax years.

3. A tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes made after the return was filed.

4. A tax account transcript shows any later adjustments either you or the IRS made after you filed your tax return. This transcript shows basic data including marital status, type of return filed, adjusted gross income and taxable income.

5. To request either type of transcript online, go to IRS.gov and use the online tool called Order A Transcript. To order by phone, call 800-908-9946 and follow the prompts in the recorded message.

6. To request a 1040, 1040A or 1040EZ tax return transcript through the mail, complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use Form 4506-T, Request for Transcript of Tax Return.

7. If you order online or by phone, you should receive your tax return transcript within five to 10 days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail.

8. If you need an actual copy of a previously filed and processed tax return, it will cost $57 for each tax year you order. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area.  Copies are generally available for the current year and past six years. Please allow 60 days for delivery.

9. The fee for copies of tax returns may be waived if you are in an area that is declared a federal disaster by the President. Visit IRS.gov, keyword “disaster,” for more guidance on disaster relief.

10. Forms 4506, 4506-T and 4506T-EZ are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Tax shelter. It sounds like a wonderful thing. Be honest, if you’re going to need shelter from things in this life, storms and taxes are probably near the top of your list. But what is a tax shelter and how does it work?

A tax shelter is a type of investment that allows you to reduce your tax liability. Examples include investments in retirement plans and real estate. You can also reduce your taxable income if you have losses on investments.

You may have heard of offshore tax shelters. How do they work?

A company can incorporate in countries with less stringent regulations than those imposed by the IRS. Many countries allow businesses to keep income secret from the government of the country in which the business is actually headquartered. For example, you could open a small office in Belize although your multi-billion dollar business doesn’t actually perform any work in Belize. The income earned by your business can be protected from taxing agencies.

It’s done fairly easily in Belize. You need only one director and one shareholder. There are no requirements for public filings, you are not required to file an annual return and your accounts will not be audited. These loose standards allow you to be as secretive as you wish.

You will find similar advantages in Cyprus, Malta, Singapore and Mauritius in addition to several countries in the Caribbean. There are several governments interested in helping the rich get richer. The latest estimates indicate that there are approximately sixty-five tax havens spanning the globe.

The promoters of these tax shelters cite several advantages. Probably the most significant is that the countries in which the funds are kept have few, if any reporting regulations, which blankets the investor’s banking services in secrecy. This secrecy protects your wealth from lawsuits, creditors and the almighty IRS. Estate taxes can also be avoided this way.

Individuals and companies alike can use the banking systems of these countries for their savings and they’ll be afforded the same privacy and tax advantages as the entities incorporating in them. Unfortunately, these shelters have been abused by those engaged in illegal activities like drug smuggling and sex slavery.

The amount of money that can be saved through these tax shelters is beyond staggering. It’s been estimated that as much as ten billion dollars in lost tax revenues has been taken from the United States alone.

Be aware that this kind of lost tax revenue has not gone unnoticed by governments and watchdog organizations. Many non-profit organizations have focused the world’s attention on the premise that the loss of revenue has contributed not only to the underdevelopment of poorer countries but also to the economic problems within the countries from which this money is hidden. Specifically they claim that education and health care are not properly funded while money that should have been collected as tax to address these issues is being hidden in illegal tax shelters.

Some promoters of offshore tax shelters say that these tax havens are not only for the rich and powerful. They claim that they also exist for the little guy and the amount of money involved is truly overwhelming. While some continue to debate their legality and their morality, others are protecting their wealth from the tax man.

An IRS lien can remain in place for up to 10 years, meaning you face a decade of bad credit and financial instability. You’re unable to do anything involving credit when you have an IRS lien: buy a house, get a new credit card, or even sign a lease. But there are ways you can get your IRS lien lifted. Read on to learn how.

Removing Your IRS Lien with a Lump Sum Payment

The fastest and most effective way of removing an IRS lien is to make a lump sum payment on your entire tax debt. The purpose of an IRS lien is for the government to guarantee repayment of your tax debt, so a lump sum payment will get them off your back quickly and for good. If you’re unable to afford a lump sum payment on your own, it’s often recommended that you borrow money from friends and family who (hopefully) won’t charge you penalties and interest like the IRS does.

You can also get a loan from the bank to pay off your IRS tax debt, though you’ll first have to make your case to the government to lift your IRS lien to be able to get the loan (remember that an IRS lien negatively affects your credit). This shouldn’t be difficult to do, as your getting a bank loan will, in turn, help the IRS get their money faster. Plus, as an upside for you, the interest on bank loans are always less than the interest on IRS back tax debt.

Removing Your IRS Lien with an Installment Agreement

In February 2011, the IRS announced changes to its IRS lien policies, including making an IRS lien removal possible for qualifying taxpayers who meet eligibility requirements. Previously, an IRS lien would stay in place until your entire tax debt was paid off, even if you had entered into an Installment Agreement. Now, if you’re an individual with Form 1040 tax debt, a business with income tax liability only, or an out-of-business entity with any type of tax debt, you can get your IRS lien removed after entering into a Direct Debit Installment Agreement if you meet the following requirements:

• You owe $25,000 or less. If you owe more than $25,000, you can pay your debt down to $25,000, then request an IRS lien removal.
• Your Direct Debit Installment Agreement will pay your tax debt in full within 60 months or before the Statute of Limitations expires, whichever is first.
• You are in full compliance in every other way with the IRS.
• You have made 3 consecutive direct debit payments.
• You have not previously received a lien removal for the same tax debt unless it was for an improper filing of the IRS lien.
• You have not defaulted on your current, or any previous, Direct Debit Installment Agreement.

Removing Your IRS Lien with an Offer in Compromise

If you meet the requirements to settle your IRS back tax debt with an Offer in Compromise, you’re in a better position than ever. Not only will you be able to settle your back taxes for less than you actually owe, but your IRS lien will be automatically removed once your Offer in Compromise application is accepted and your offered amount is paid in full.

Are you in danger of an IRS lien? You must take action now before your IRS lien results in tax levies and asset seizures. Contact the IRS immediately and find a tax preparer professional to help sift through the paperwork.

No doubt you’re here because you need some help. Most likely you’ve:

1. Got questions about paying taxes in general,
2. Are being audited and don’t know what to do first,
3. Have had your bank accounts seized and want to know what’s next,
4. Want to pay the least amount of taxes as possible,
5. Started a small business and find the tax system overly confusing,
6. Just can’t make sense of all the instructions, or
7. Have a shitload of questions and simply want some straight answers without waiting forever on terminal hold with the IRS.

Maybe we can help. We’ve been in your shoes a time or two and know how frustrating it is to get an answer that makes sense. We’ve faced the Internal Revenue Service head on, had bank accounts seized because of misinformation, missed payments, been audited, accumulated notices, worked diligently to get issues resolved, and sometimes, have just been a bit lackadaisical about following through with IRS requirements. Keep in mind, we’re not experts. We’ve simply compiled, in one place, an assortment of information that should help you make sense of all the chaos.  If we’ve not addressed your situation, call the IRS and ask them your question. They’re not scary people. Some of them are jerks, but if you’re nice and honest, you’ll get a nice and honest response.

Seriously though, it’s time to take the bull by the horns and get cranking — take care of business so you can relax and minimize the number of ulcers you’re accumulating because of the stress.

Supporters such as Gary Crittenden suggests that being proactive in these situations will not only help you understand, but will also help eliminate stress. Using a site like this can help you get to the bottom of finnancial stresses.

My after-tax income from my small business is greatly reduced by the incomes taxes I pay each year. A friend of mine told me I could reduce the amount of taxes I owe by shifting my income elsewhere. Is that true?

Answer:

Generally, you can reduce the amount of taxes you pay by shifting the income from your business from yourself to family members who are in a lower income tax bracket. For instance, instead of paying yourself the usual salary, you could employ a family member who is in a lower tax bracket and pay him or her part of the salary you would receive for service performed for the business.

The family member must perform services for your business and the compensation you pay that family member must be reasonable. Therefore, paying your son $100,000 per year to change the cartridges in your copier and empty the trash each day would not be reasonable compensation in the eyes of the Internal Revenue Service.

Employing family members is just one method of shifting income to reduce your tax burden. Talk to your tax and financial professional about this and other methods, such as gifting assets and designating a beneficiary to receive your insurance policies and/or retirement assets instead of withdrawing the amounts during your lifetime.

Yes.

The requirement to file an income tax return is not determined by whether you owe taxes or not, so you must file if you meet all other criteria. In other words, if you earned $26,000, for example, but paid enough taxes via payroll withholding, you still must file.

Beyond that, you may want to file; you will get a refund of any withheld taxes, or are eligible for the earned income credit or other refundable tax credits, or could get a stimulus payment, or to get Social Security credits.

If you don’t file, you will get a surprise letter from the IRS, who will be glad to file your taxes for you and will! The practice of the IRS is to assess what they estimate you owe, not considering any deductions you could be eligible for on your tax form. It may take up to a few years, but they will be in touch and the bill could be in the thousands of dollars.

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