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Tax Tips on Unemployment Benefits

3/26/2017

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Taxpayers who received unemployment benefits need to remember that it may be taxable. Here are five key facts about unemployment:

Unemployment is Taxable. Include all unemployment compensation as income for the year. Taxpayers should receive a Form 1099-G, Certain Government Payments, by Jan. 31. This form shows the amount received and the amount of any federal income tax withheld.

There are Different Types. Unemployment compensation includes amounts paid under federal law or state law as well as railroad, trade readjustment and airline deregulation laws. Even some forms of disability payments can count. For more information, see IRS Publication 525.

Union Benefits May be Taxable. Benefits received from regular union dues as income might be taxable. Other rules may apply if a taxpayer contributed to a special union fund and those contributions to the fund are not deductible. In this case, report only income exceeding the amount of contributions made.

Tax May be Withheld. Those who receive unemployment can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. Those choosing not to have tax withheld may need to make estimated tax payments during the year.

If you have been contacted by the IRS or have IRS tax problems, Get a free consultation from an experienced tax relief expert today (800)790-8574 or visit our www.advancetaxrelief.com

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Owing the IRS and Federal Tax Liens - ADVANCE TAX RELIEF

3/21/2017

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Advance Tax Relief The Internal Revenue Service routinely files Federal Tax Liens against taxpayers who have unpaid tax obligations. A federal tax lien is a document filed with a county government (usually where the taxpayer lives or conducts business) notifying the general public that a taxpayer has an unpaid federal tax debt. Liens attach to the taxpayer's property (both real property and personal property).

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If property is sold while a lien is in effect, the IRS will be paid out of the sales proceeds before the taxpayer is paid. Once a lien is filed, it becomes a matter of public record. Liens record the full amount owed to the IRS at the time the lien is filed. This information is routinely picked up by the various credit reporting bureaus, and so federal tax liens will eventually show up on your credit report.

Liens Are Different from Levies Some people use the words "lien" and "levy" interchangeably. A tax lien is a document filed by the IRS to protect the government's ability to collect money. A levy is the forced collection of tax, for example by confiscating money directly out of a bank account or paycheck.

Preventing a Lien Federal tax liens can be prevented from being filed in the first place by paying the tax in full and prior to any lien is filed by the IRS. Liens can also be prevented by setting up an installment agreement that meets the IRS requirements to avoid filing a lien. The IRS will not file a federal tax lien if a taxpayer sets up either a guaranteed installment agreement or a streamlined installment agreement. These types of installment agreements require that the outstanding balance be $10,000 or less in the case of guaranteed installment agreements or $25,000 or less in the case of streamlined installment agreements. If a taxpayer owes more than $25,000, a lien can be prevented if the taxpayer pays down the balance so that the balance is $25,000 or less and establishes a streamlined installment agreement.

Notifying Taxpayers that a Lien has been Filed The IRS generally notifies taxpayers after a federal tax lien has already been filed. The IRS will send taxpayers a Notice of Federal Tax Lien after the IRS has already filed a lien with the county. Federal tax liens are effective beginning ten days after the IRS issues a written demand for payment of outstanding taxes.

Removing a Lien The IRS will remove a federal tax lien if the lien was filed in error, if the outstanding balance is paid in full, if the outstanding balance is otherwise satisfied (for example through a successful offer in compromise), or if the lien becomes unenforceable (for example, because the lien has expired due to the ten-year statute of limitations). There are two basic ways to remove a federal tax lien: withdrawal and release.

Withdrawing a federal tax lien means the IRS will rescind the lien, as if the lien was never filed in the first place. Lien withdrawals generally occur when the federal tax lien was filed in error (for example, if a lien was filed against the wrong person). If a lien was filed in error, you should contact the IRS right away. An IRS agent will review your account history to verify that you don't owe the outstanding tax, and will prepare the paperwork necessary to withdraw the lien. However, the IRS has instituted a fresh start program under which taxpayers may be eligible for lien withdrawal provided certain criteria are met.

Releasing a federal lien means that the lien no longer encumbers your property. Upon releasing a lien, county records will be updated to reflect that the lien has been released. However the fact that there was once a federal tax lien will remain on your credit report for up to ten years. Liens are released within 30 days of full payment of the outstanding tax obligations or upon setting up a guaranteed or streamlined installment agreement. Less frequently, the IRS may release a federal tax lien if that will speed up the collection of tax or is in the best interests of the taxpayer and the government. Most federal tax liens are automatically released by the IRS after full payment of tax. The IRS should provide you with a copy of the lien release, which you can forward to the credit reporting bureaus to update your credit reports. Under the IRS's fresh start program, taxpayers may be eligible for lien withdrawal or release if their outstanding balance is under $25,000.

How a Federal Tax Lien Impacts Your Credit Federal tax liens adversely impact the credit of taxpayers. Your credit score will likely suffer, and you may find yourself with less than ideal opportunities to obtain new credit or to refinance existing credit.

Tactics for Dealing with Liens The best tactic is to prevent a tax lien from being filed in the first place. Consider bringing your outstanding balance under $25,000 and set up an installment agreement. This could result in you being eligible for a streamlined installment agreement, and no federal tax lien will be filed. If a lien has already been filed, you might be eligible for lien withdrawal under the IRS's fresh start program. You could bring your balance under $25,000 by transferring some or all of your tax to a credit card or home equity line, or by making payments to bring your balance under the $25,000 threshold. After the IRS has filed a tax lien, your options are much more limited. You could bring your balance under $25,000 and set up a streamlined installment agreement in an attempt to take advantage of the fresh start program. You could also pay off the outstanding balance in full.

Liens are Not Updated on Your Credit Report Unlike other credit and loan accounts, the IRS will not periodically update the balance on your federal tax lien. You can contact the IRS to obtain a letter showing the current payoff amount. However, that updated payoff amount will be sent only to the taxpayer. Taxpayers needing assistance in dealing with tax liens and tax collections should seek the advice of Advance Tax Relief.

If you have been contacted by the IRS or have IRS tax problems, Get a free consultation from an experienced tax relief expert today (800)790-8574 or visit our www.advancetaxrelief.com

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Debt Cancellation May be Taxable - Advance Tax Relief

3/7/2017

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if a lender cancels part or all of a debt, a taxpayer must generally consider this as income. However, the law allows an exclusion that may apply to homeowners who had their mortgage debt canceled in 2016.

Here are 10 tips about debt cancellation:

Main Home. If the canceled debt was a loan on a taxpayer’s main home, they may be able to exclude the canceled amount from their income. They must have used the loan to buy, build or substantially improve their main home to qualify. Their main home must also secure the mortgage.

Loan Modification. If a taxpayer’s lender canceled or reduced part of their mortgage balance through a loan modification or ‘workout,’ the taxpayer may be able to exclude that amount from their income. They may also be able to exclude debt discharged as part of the Home Affordable Modification Program, or HAMP. The exclusion may also apply to the amount of debt canceled in a foreclosure.

Refinanced Mortgage. The exclusion may apply to amounts canceled on a refinanced mortgage. This applies only if the taxpayer used proceeds from the refinancing to buy, build or substantially improve their main home and only up to the amount of the old mortgage principal just before refinancing. Amounts used for other purposes do not qualify.

Other Canceled Debt. Other types of canceled debt such as second homes, rental and business property, credit card debt or car loans do not qualify for this special exclusion. On the other hand, there are other rules that may allow those types of canceled debts to be nontaxable.

Form 1099-C. If a lender reduced or canceled at least $600 of a taxpayer’s debt, the taxpayer should receive Form 1099-C, Cancellation of Debt, by Feb. 1. This form shows the amount of canceled debt and other information.

Form 982. If a taxpayer qualifies, report the excluded debt on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. They should file the form with their income tax return.

IRS.gov Tool. Taxpayers should use the Interactive Tax Assistant tool - Do I Have Cancellation of Debt Income on My Personal Residence? - on IRS.gov to find out if their canceled mortgage debt is taxable.

Exclusion Extended. The law that authorized the exclusion of cancelled debt from income was extended through Dec. 31, 2016.

IRS Free File. IRS e-file is fastest, safest and easiest way to file. Taxpayers can use IRS Free File to e-file their tax return for free. If they earned $64,000 or less, they can use brand name tax software. The software does the math and completes the right forms for them. If they earned more than $64,000, they can use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It is best for those who are used to doing their own taxes. Free File is available only on IRS.gov/freefile.

More Information. For more on this topic see Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.

We are tax relief experts specializing in IRS back tax help, Installment Agreements, tax lien help, wage garnishment release, IRS Offer in Compromises and a whole lot more. Get a free consultation from an experienced tax relief expert today (800)790-8574 or visit our www.advancetaxrelief.com

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IRS CURRENTLY NON COLLECTIBLE - STATUS 53

3/4/2017

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There are times where you agree with the IRS that you owe taxes, but you can’t pay due to your current financial situation. If the IRS agrees that you can’t both pay your taxes and your reasonable living expenses, it may place your account in Currently Not Collectible (CNC) (hardship) status.

While your account is in CNC status, the IRS will not generally engage in collection activity (for example, it won’t levy on your assets and income). However, the IRS will still charge interest and penalties to your account, and may keep your refunds and apply them to your debt.

Before the IRS will place your account in CNC status, it may ask you to file any delinquent tax returns. If you request CNC status, the IRS may ask you to provide financial information, including your income and expenses, and whether you can sell any assets or get a loan. If your account is placed in CNC status, during the time it can collect the debt the IRS may review your income annually to see if your situation has improved .

Generally, the IRS can attempt to collect your taxes up to 10 years from the date they were assessed, though the 10-year period is suspended in certain cases. The time the suspension is in effect will extend the time the IRS has to collect the tax.

“If you’re in serious tax debt, I recommend these guys completely, 100 percent. It’s not a scam, it’s not fake, it’s real. They will really take care of you.” - A. Ortiz

If you need help with IRS tax problems or need help with the innocent spouse relief process contact Advance Tax Relief today: (800)790-8574

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Author

Noah Daniels, EA is a tax specialist and IRS Enrolled Agent. He has assisted hundreds of taxpayers with resolving their IRS tax issues nationwide saving them millions of dollars in back taxes, penalties and interest. Noah has also received numerous awards for his dedication to the tax resolution industry. Contact him via email atnoah.daniels@advancetaxrelief.com or (713)300-3965 with any tax related questions you may have. Thanks.

ADVANCE TAX RELIEF BLOG

Tax Tips on Unemployment Benefits

Owing the IRS and Federal Tax Liens - ADVANCE TAX RELIEF

Debt Cancellation May be Taxable - Advance Tax Relief

IRS CURRENTLY NON COLLECTIBLE - STATUS 53

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ADVANCE TAX RELIEF BLOG

Tax Tips on Unemployment Benefits

Owing the IRS and Federal Tax Liens - ADVANCE TAX RELIEF

​Debt Cancellation May be Taxable - Advance Tax Relief

IRS CURRENTLY NON COLLECTIBLE - STATUS 53

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Debt Cancellation May be Taxable - Advance Tax Relief