If you have received a notice from the IRS the first and most important thing is to not panic. Most notices are minor and should not be of long lasting concern and many do not even require any action on your part. Here is some information that will help guide you through the process and put your mind at ease.

First, read the letter in full. Most often when you receive a notice from the IRS it is for something simple and straightforward. The letter should very clearly state the reason for the inquiry and exactly what it is that you need to do. Almost all notices can be dealt with on your own and you most likely will not need to call the IRS or visit one of their offices.

In the upper right hand corner of the notice you will find a notice number. You can visit the IRS Website to find out more information on your specific notice.

Most often people receive notices from the IRS to request payment or to as notification of a change that has taken place or will take place on your account. Sometimes a notice may also request additional information in order to process you tax return.

In the letter you will find very specific directions on what you need to do. If the letter is for a correction notice you will want to compare the information in the letter to your tax return. If you agree with the correction, then you do not need to do anything more, unless you owe additional money in which case you will need to send in payment.

If you do not agree with the correction then you will need to take immediate action and respond to the correction. You will need to write a letter in dispute and include all back up documentation to verify your claim. With the letter you will need to include the tear of portion of the notice received by the IRS. In the upper left hand corner of the notice you will find the address to mail your letter. After your request is received it will take a minimum of 30 days for the IRS to review and respond.

If you do not believe the notice is clear or you do have additional questions you can contact the IRS at the phone number in the upper right hand corner of the notice. Before you make the call it is a good idea to gather any information you may need to get your questions answered. At the very least have your IRS notice and tax return statement with you in order to expedite the call.

A final note is to always make sure you keep very good records of all correspondence with the IRS. Make sure you make copies of all written correspondence and detailed notes on any phone conversations. If you ever feel you are being treated unfairly you can always contact a tax expert for advice. You should also call the IRS immediately if you think you have received a fraudulent notice.

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In a perfect world we could be rest assured that any person, company, or offer we came across was legitimate. Unfortunately, this is not the reality of the world in which we live and therefore consumers across the nation must always be on the lookout for scams perpetrated by con artists. Criminals looking to make a quick buck have been doing so for generations, however with the invention and subsequent popularity of the Internet, these scams touch even more victims today.

To trick people into falling for their scams, criminals often misrepresent themselves as a well known company or government agency. The Internal Revenue Service (IRS) and it’s likeness have been used in many scams simply due to the fact that people commonly react to any correspondence they receive from the IRS.

The following tips will help you spot and respond to any tax scams that may come your way during tax season or throughout the year.

• Be wary of email-  This is true for all Internet scams but especially true for correspondence allegedly coming from the IRS.  As a general rule, the IRS does not use the email to contact taxpayers regarding tax accounts or issues with taxes.  In fact, the IRS is not going to contact you via email unless you have initiated the correspondence and even at this point will likely not discuss tax information via this method of communication. The IRS (and any legitimate company, bank, business) will never ask for confidential information via an email. Any email received by the IRS or what looks to be a bank, credit card company, or government agency asking for PIN numbers, bank information, or other personal or financial information should be reported as a phishing email and not responded to by the recipient.
• Understand how cyber-criminals get your information-  Internet scams using unsolicited email are popular due to the fact that many people do not realize they have been duped until it is too late. When you receive a suspicious email, understand that by navigating the email- i.e. clicking on links or opening attachments, that you make your computer vulnerable to malware that may be downloaded onto your computer and used to remotely view the information contained on your hard drive. Clicking on links may direct you to “look-a-like” websites that while similar to the real deal, are not the official websites of the IRS or other government agency. By entering personal information on a fictitious website or responding to an email, you open yourself up to identity theft and other scams that hurt your personal finances.
• Look for signs-  If you are not sure whether or not the email you have received is the real deal first, remember the first tip- the IRS does not contact you via email.  If you are still unsure or dealing with an email that is not from the IRS, hunt for the following signs: any request for personal information, enticing offer (encouraging you to respond), threats (your account is at risk or you will be in trouble if you don’t reply), and incorrect grammar, misspelling and odd phrasing or use of words. If you spot any of these telltale signs, you are almost always dealing with a scam.

When in doubt, remember that you can always ignore an email and look up the contact information of the sender and initiate your own call to see if the email is legitimate. Do not use the information made available in the email as many con artists set up elaborate scams including fake phone numbers that may be used to gather more personal information. Always follow your instinct and follow up on your own; independently from the email.

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That being said, make sure to act quickly in informing the IRS of your situation and inability to pay. The worst thing that one can do when unable to taxes would be to do nothing, and unfortunately this seems to be the case time and time again. While it may be easier to ignore the problem and withhold payments for the time being, just one missed payment can begin a slew of unpleasant events with the IRS. It’s likely that the IRS will immediately detect the defaulted agreement and take action much quicker than you expect. And, once they begin, garnished wages, tax levies, and other forced collections, all become likely scenarios- causing you even more money.

Sound appealing? We didn’t think so, either. And, even though contacting the IRS to let them know that you cannot make your payments on your tax installment agreement may not be the most enjoyable thing to do, it’ll sure save you a lot of unnecessary stress and trouble. Be sure to explain your situation carefully, capitalizing on any details you deem important. Also, prepare for the call before hand with proper dates and documents to back up your assertion. If your case appears valid, the IRS will likely understand- they are human, too. In most cases they’ll work with you to adjust the installment agreement- either reducing the payments or even deferring them for a later time.

However, the IRS may not be so understanding if they investigate and consider your monetary actions and inability to pay unwarranted. Be advised that the IRS will study each situation carefully; even requesting income and expense documents, in order to make sure that an individual is truly unable to pay because of ill circumstances rather than unwise monetary actions- like gambling in Vegas or making extravagant purchases. But, even if this is this case, contact the IRS anyway, because defaulting on a tax installment agreement with no explanation can yield far worse consequences, as previously discussed.

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In Florida’s case, because the state has no income tax, the amnesty period proves less intense. Regardless, the tax period still helps everyone. For the state, more unpaid taxes are returned- bringing valuable money back to public use.  For the individual, more money is saved, because less money goes to tax penalties and interest.  It becomes a win-win situation for all.

Which taxes, or actually, unpaid taxes, are eligible? All Department of Revenue administered taxes due before the starting date of the program (July 1, 2010) are entitled to relief.  However, unemployment taxes and the Miami-Dade County Lake Belt fees are not included in the arrangement. Furthermore, there are a few guidelines. For one, your tax liability must not already be covered by an existing settlement. And two, you must not be convicted or under criminal investigation for violating a Florida revenue law. If you meet the requirements, and of course owe back taxes to the state of Florida, visit www.myflorida.com/dor/amnesty to fill out a Tax Amnesty Agreement form asap. If you cannot pay your taxes by Sept 30, 2010 (the end of the program) an installment agreement may be your best option.

What if you owe money that has not yet been identified? It’s in your best interest to own up and participate in the program, as the interest required on the amount will be cut in half. If your liability has already been identified, the interest amount will still reduced, but by one fourth. As for penalties- they will be completely waived, regardless of situation.

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Organizing Paperwork

Instead of running through your house frantically opening drawers and file cabinets in search of paperwork you know you have “somewhere” the night before taxes are due, a better way is to set yourself up with a folder. Label the folder “2010 Taxes” and every time you receive anything that you’ll need to file taxes, you just slide it into the folder. If you’re not sure what you’ll need to file your taxes, take a look at the first page of IRS form 1040 – it lists a majority of documents you’ll need come tax time.

Documents to Save:

Do you have dependents? Keep a sheet of paper in your folder that includes their social security numbers so you don’t need to go in search of it at tax time.

Do you receive alimony? Add any receipts or documentation regarding your alimony payments in your folder.

If you receive W-2′s, 1099 Misc forms, or other documents that show what you’ve earned in wages and salaries, slide them into the folder. These are usually mailed in January for the previous year.

If you receive bank documents for interest and/or dividends earned, slide them into the folder.

If you receive notification of taxable refunds or credits from state or local income taxes, keep this paperwork in the folder.

If you made or lost money trading stocks or other securities, add the documentation to your folder. Consider completing a Schedule D to save your accountant or tax preparer time.

If you earned any other income in 2010, keep track of the documents that prove the amount earned. For example, this could be distribution from annuities, IRA’s or pensions, farming income, royalties, partnerships.

If you received unemployment compensation of $2,400 or more, you’ll need to claim it as income at tax time. (But if you have job search related expenses, keep track of them as you can deduct them at tax time to reduce your taxable income.)

If you received social security benefits you will need to have documentation at tax time.

Possible Deductions:

Keep receipts of medical related expenses (doctor bills, parking fees and tolls to appointments, etc). If you have a health savings account, keep track of your contributions and fees associated with the account.

Keep all documents related to your education expenses if you’re attending college or repaying student loans. Possible education expenses might include tuition, fees, student loan interest, etc.

Keep any paperwork showing alimony paid.

Document real estate taxes, mortgage interest, home improvements.

Organizing Paperwork for Business Owners

If you operate a small business, you’ll have more paperwork to keep track of for tax filing. Throughout the year, you’ll want to keep track of your income and expenses. Even if you’ll be using a professional tax preparer or accountant, you’ll want to keep your information organized to save them time (and yourself money!)

Keep all receipts for expenses related to your business. If possible, get an inexpensive accordion file from an office supply store or dollar store, label it with the categories of expenses your business uses, and slide receipts into the appropriate category. Possible categories might include: travel, meals and entertainment, office supplies, postage, educational materials.

Keeping your paperwork organized throughout the year eliminates the panic and frustration you experience at the last minute.

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• Self employed- There are many people who feel comfortable using one of the many tax software programs available to file their own taxes. In most cases, these individuals have very straight forward tax returns with little or no deviation from the “norm”. When you are self-employed, you may want to consider the help of a tax expert when filing your tax return. As a general rule, anyone who receives form 1099 to report wages, in most cases self employed individuals, freelancers and independent contractors, can benefit from a tax professional to help find deductions to lower their tax bill. In many cases a tax expert can eliminate having to pay a tax bill by finding business expenses that can be used as a deduction, and in some cases you might even qualify for a tax refund.

• Higher earnings- Individuals or couples who have a higher income ($70,000 +) can benefit by using a tax expert to lower their tax bill. Itemizing your deductions can go a long way toward getting the maximum refund and avoid paying additional taxes on your earned income.

• Major life events- Life changing events can often result in changes when filing your tax return. If you married, had a child, bought a house or withdrawn money from your retirement account, your taxes will be affected. These and other life changing events often require the help of a tax expert to ensure you are filing your tax return correctly.

• Canceled debt- If you have filed for bankruptcy or had debt forgiven in the past year, a tax expert can help you avoid paying income tax on the canceled debt. This is not always an option, however having a expert on your side will increase your chances of paying a higher tax bill.

• Back taxes- Do you owe back taxes? Are you filing a late tax return? These situations definitely require the help of a tax professional to avoid paying penalties and fees. Late returns cannot be filed electronically and filing your return manually is often more complicated without the help or guidance of tax software. Owing taxes to the IRS is unlike owing money to your landlord or cell phone service provider. Delinquent taxes are a serious matter and should be handled as such, therefore a tax expert is necessary to avoid making further mistakes which will result in additional financial burdens.

As you can see, there are a variety of situations which would benefit from the help of a tax professional. Finding the right person to help is key to saving money and avoiding additional fees and penalties. If you have decided the time is right to hire a tax expert, take the time to carefully research the person or company handling your taxes. This will give you the peace of mind that your financial future is in good hands.

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The IRS is complex and inefficient. Have you ever tried getting a quick answer or response from the IRS? It is a fact that many people have problems navigating the IRS and getting results. Every year there will be many people that will not be able to resolve their tax problems through the normal IRS channels. The Taxpayer Advocate service was created to help those individuals that have tried resolving their problems on their own and their attempts have failed. There are about 2,500 employees in the taxpayer advocate that are spread out around the country. The employees at the Taxpayer Advocate are trained to better navigate the IRS channels and get answers and results. The normal time to get a tax problem resolved through the Taxpayer Advocate is around 10-30 days, which is excellent compared to the normal navigation channels.

Do I qualify to use their services?

The taxpayer advocate was created in order to help those individuals that are facing economic hardship because of IRS tax problem and they have not been able to resolve their problem through the normal IRS channels. Below are the three factors that the IRS uses to determine if an individual can use the Taxpayer Advocate Services.

1. You are experiencing economic hardship due to your tax problem, even due to the fees of using tax professionals
2. There was a delay of 30 days or more when you tried to resolve your tax problem through normal IRS channels
3. You have not received a response from the IRS by the date that they promised you

If you meet the criteria for any of the 3 items listed above it is likely the Taxpayer Advocate service will help you. The service they offer is free and they will stick with you until your tax problem has been resolved.

How do I contact the Taxpayer Advocate?

There is a Taxpayer Advocate located in each state. If you want to request help you can call, visit, or fax the nearest Taxpayer Advocate Service office. If you don’t know the number of the closest Taxpayer Advocate Service office you can call (800) 829-4059 (locations of Taxpayer Advocate Services). Chances are, you won’t be able to get in contact with a person on the first call, you will be required to leave your information and wait for a response. It is also a good idea to send a letter that clarifies your problem. The more you can detail your problem, the easier it will be for them to decide if you qualify for their services. Once they review your case they will decide if you qualify and will assign an employee to your case.

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Here is some important tax relief information to consider if you recently been a victim of a disaster:

1. Document all damages. It is important that you do this so you can show your losses instead of just telling the IRS what happened. Be sure to keep receipts, take photographs, and write down all details that are important to your case. By doing all this you can easily calculate your losses. Although you may not feel like putting a lot of time into this portion of the process, it is very important. Difficult as it may be, you want to make sure that everything is properly documented.
2. Meet with a tax preparer. Simply put, you need professional tax assistance in this case. There are entirely too many details for you to think that you can handle them all without the help of an outsider. Anybody who has been a victim of a disaster should meet with a qualified and experienced tax preparer who knows which forms need to be filled out, as well as the details that should be included. Tax codes change all the time, so make sure you are working with a professional who is current with what is going on.
3. Assess value before and after. It is important that you know the fair market value of your property before the damage, as well as afterwards. If your home was destroyed entirely, such by a fire, make sure you know the value of the land.
4. Collect all the proper documents and information. This includes: photo ID, social security card, insurance claims, reimbursement records, FEMA claims, FEMA reimbursement records, SBA claims, SBA reimbursement records, 1099, W-2, police reports, receipts, and a list of all items that were damaged.

Along with the above information it is important to note one more thing: the IRS is usually more willing to abate or reduce penalties with a disaster victim. This includes penalties for failure to file and failure to pay. Of course, you will have to prove that you were a victim of a disaster. Fortunately, the four steps above will help you to do just that.

Disaster victims can and should receive tax relief from the IRS. If you feel that you qualify, the four steps above can help you find out for sure. Once you hire a tax professional with experience you will be moving forward and ensuring that you receive all the proper relief. The IRS is willing to help and work with disaster victims whenever possible. Be sure to take full advantage of everything that is available to you.

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1. Don’t offer a free consultation or free tax analysis: Many of the more reputable companies will offer this because they want to get to know your tax situation and financial situation before they take you on as a client. There are cases when a tax relief company would not be a good choice for a taxpayer. An ethical company will try to understand your situation before saying they can help you. Some companies rush to get you as a client before even knowing why you owe taxes and what your financial situation looks like.
2. Promise an offer in compromise: An offer in compromise is a great tax settlement that is only available to people who really deserve it. If the tax company promises you an offer in compromise settlement right away, you can turn your back and run. Acceptance rates are very low for this type of filing and even people that are good candidates regularly get denied, so therefore no tax professional can guarantee this type of settlement.
3. You were contacted by the company through a cold call: Companies that use high pressure sales tactics to get clients typically don’t have good services to back up their claims. They will use hard sell tactics and pretty much say anything in order to get you as a client. Hiring a tax relief company should not be rushed and it would be best if you avoided a company with these types of marketing tactics.
4. Watch out for large retainer fees: Some companies will charge large upfront fees before any services have been provided, this is not an industry norm. Sometimes they will require a small retainer fee in order to get started on the case but never a large portion of the total amount that will be owed.
5. You feel rushed when talking to them: This can be a red flag and could mean that they are taking on too many clients and won’t allocate enough time to successfully work on your case. Sometimes it is a good sign when they are a bit busy because it can be a sign that they actually do offer good services and they are in demand, but sometimes they tend to get greedy and take on too many customers. Many times companies will get really busy during the latter part of tax season. If you know you have a problem it is better to contact a company before this time so they don’t try to rush your case.
6. Bad Ratings Online: Many tax relief companies have done terribly with the better business bureau and other online complaint sites. Many top tax resolution companies actually have an F rating, which means there have been many unsatisfied clients and that company has not taken the appropriate actions in order to clear up these problems. It is a good idea to look at reviews and look for bad information written up on the company on sites such as rip off report or the BBB website.

Avoiding any of the above red flags can greatly increase your chance of finding a great tax relief company. Feel free to talk with multiple tax relief companies that offer a free consultation or tax analysis, you will start to get a good feel of which one will provide you the best service as long as you keep the things above in mind. Be sure to ask a lot of questions and move onto the next company if you don’t agree with the way they are handling your case.

If you would like a free tax consultation from us, please contact use by filling out the contact form or by calling the number on the site. Our tax professionals will give you a free tax analysis and an overview of what they feel they can do for you.

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Below are four types of tax professionals and when you should consider using each one:

1. Tax preparer. Generally speaking, a tax preparer is who you want to see if you simply need help with filing your return. Most of them can help with both individual and company returns. Of course, this is something you want to check on if you are in need of somebody to help with your corporation. Many tax preparers are seasonal workers. For this reason they do not often times know as much as some other professionals.
2. Certified Public Accountant (CPA). To become a CPA a person must have a college degree in accounting or a related field, or take the proper educational courses – this is not the case to become a tax preparer. Additionally, a CPA must pass a state exam for the ability to practice. There are many things that a CPA can help with including tax return preparation, representing clients during an audit, and certifying audit statements. Also, they are a good choice for corporations in addition to individuals.
3. Enrolled agent. To become an enrolled agent a person must pass an exam that is administered by the IRS. When it comes knowledge of tax code and related laws there are not too many people who know more than enrolled agents. While an enrolled agent cannot perform audit reports, they have the ability to represent clients during the audit process. This is the type of tax professional that you want on your side if you are audited – many of them worked for the IRS in the past.
4. Tax attorney/Tax Lawyer. If you are in serious trouble with the IRS a tax attorney can assist you. For instance, income tax evasion cases need to be handled by a qualified attorney. Along with this, tax attorneys can also prepare returns, represent clients during an audit, and defend them in the court room.

Overall, there is more than one type of tax professional. The four above are most common. Again, they include: tax preparer, certified public accountant, enrolled agent, and tax attorney. All tax professionals have something to offer. The one you choose should be based on your tax situation. The services we offer are from a tax team that is composed of all of the above tax professionals to handle simple tax filings to the most complex ones while ensuring the most efficient and cost effective solutions for our clients. So if you are unsure of what professional would be best for you, it doesn’t matter, we can handle all tax problems.

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