The Short and Pointed 6-Week Tax Plan

October 15 seems so far away, doesn’t it? It’s just the first of September, after all. The problem for many small businesses, especially in a down economy, is that they are so busy running the business that no one even notices as September quietly rolls into October. And if you wait until October to start trying to put your tax return together, you are facing a near impossible filing deadline.

A common reason small businesses file an extension is because they don’t have all their information organized in time for their accountant to complete a tax return before April 15. Many of those who file an extension do so and then forget about the October 15 deadline because it’s so far away. At the current speed of business, six months seems like an eternity. The problem is that we are so busy trying to make a business run, addressing the hundreds of minor emergencies that crop up in a typical day, that we lose focus on getting our taxes together in a reasonable timeframe. 

Because we spend a great deal of our energy and time on helping our clients regain compliance at TaxMasters, we thought it might be effective to put together an easy-to-follow 6-week plan small businesses can use to make sure they get their taxes filed by the extension deadline on October 15. Kind of a preemptive action to help small business owners before they need us.

If you don’t start getting your tax information together now, you run the risk of missing the filing deadline, which means an automatic penalty. No one wants to pay the IRS more than they have to. So follow this plan and file on time this year. And remember that using a reputable tax professional to prepare your returns on time is one of the easiest ways to stay out of trouble with the IRS.

The Dates

September 1–Call your accountant and schedule the day you’ll provide your information

September 2–Physically put your hands on your income statements, expense statements, tax documentation, and other relevant paperwork

September 6–Start organizing all that stuff you pulled together on September 2 in a format your accountant can use

September 8–Chase down all your deduction information and add that to your file

September 9–Finish compiling all paperwork so you can hand it off on Friday

September 10–Deliver everything you put together to your accountant and schedule the pick-up date for no later than October 11

October 11–Pay the accountant and review your return

October 12–Take your time and review the return again, making certain you understand it

October 13–Finish working through any issues or questions you had about the return, sign it, and file it

October 15–Pat yourself on the back for a job well done and enjoy the fact that you are in compliance with the IRS

Following this schedule doesn’t necessarily mean you won’t have to call us in the future, but failing to file your tax return is the quickest way to attract unwanted attention from the IRS.

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax representation firms in the IRS tax relief industry. Patrick Cox and Tax Masters are located in Houston, Texas and the company is publicly traded under the ticker symbol TAXS.

Sole Proprietors Watch Out–Your Return May be Assigned to a Revenue Agent

Our sources are reporting that Treasury inspectors have recently lambasted IRS agents for not effectively finding all the unpaid taxes of sole proprietors. The Treasury inspectors completed a study of correspondence examinations on 2007 tax returns only to find that IRS examiners missed more than $16 million in unpaid taxes on sole proprietors in their limited sample.

It seems the failures lie in the correspondence examination process. In a face-to-face audits, the IRS process typically uncovers unfiled tax returns and unreported income. But with correspondence examinations, auditors failed to uncover these basic facts. As logic dictates, adding new steps to an already slow correspondence examination process will not speed up revenue collection for the IRS in a time when the tax gap continues to grow and the Treasury faces incredible pressure to generate additional revenue.

Face-to-Face Audits to Increase for Sole Proprietors

The IRS solution will reportedly be to adjust its selections procedures for auditing tax returns. This adjustment will call for tax returns from sole proprietors with unfiled tax returns or suspected unreported income to go directly to IRS Revenue Agents instead of going through the automated correspondence examination process.

In other words, if you are a sole proprietor with unfiled tax returns or unreported income, watch out. When Revenue Agents call, they are looking for what you have done wrong and for what they hope you are hiding. It is generally in your best interest to demand that a Revenue Agent speak to your tax representative before you say something you cannot take back. Talking to Revenue Agents can have devastating consequences to your personal finances and on your business.

At Tax Masters, we handle more audits in a day than most CPAs handle in a career. Do not wait until you are contacted by a Revenue Agent to act, you need to get into compliance before the IRS sends in the Agents. It is far less expensive to solve the problem before it is a crisis. If you are contacted by a Revenue Agent, we suggest you call us immediately. Speaking to them will likely make your problem much worse. Refusing to speak to them will make them quite mad, but it is your best option at that point. Be respectful, but firm and inform them you intend to hire a representative and you wish them to speak with your representative. As soon as you close the door or hang up the phone, call us at 1-800-581-0456 to discuss your tax problem and to hire the audit defense representation you deserve. Don’t wait for an appointment, call us today.

Protect Your Business–Hire Tax Masters for Audit Defense

An audit is serious and your business may depend on hiring the right audit defense. Choose wisely. Choose Tax Masters.

Until you need us,

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax representation firms in the IRS tax relief industry. Patrick Cox and Tax Masters are located in Houston, Texas and the company is publicly traded under the ticker symbol TAXS.

Outcomes of Not Paying Taxes

As most of us know, the job of collecting taxes in the US falls to a tax collecting agency called the IRS, or the Internal Revenue Service. Paying taxes facilitates the essential services the government provides that keep our lives running smoothly (infrastructure, defense, government programs, etc.).

There are times when taxpayers may, because of choices or circumstances, not be able to pay their taxes at the time of filing. In these situations, TaxMasters encourages taxpayers to contact the IRS and set up a simple payment plan if the tax debt is relatively small. If you do not want to deal with the IRS yourself, TaxMasters will be happy to set up and negotiate a payment plan for you. Whatever you do, do not ignore your tax debt or act as if it does not exist. Not paying taxes is bad enough, but not paying taxes and going silent may get you into a world of trouble.

If you choose not to pay your taxes, the IRS will eventually send you a notice informing you that you have a tax debt which has to be paid immediately. If you fail to comply with the notice, it could result in the IRS adding even more penalties and interest than they already have. And trust me when I tell you that you do not want an IRS tax collector hot on your trail.

If you do not respond to the IRS notices you receive, the IRS will eventually send you a final notice of intent to levy, and a notice of your right to a hearing. Keep in mind that interest and penalties have been constantly accruing as you have sat back and chosen not to act. The IRS has the legal right to levy your bank accounts, garnish your wages or social security check, and place liens on your property to “encourage” you to pay your tax debt. This intent to levy notice has a 30 day compliance period. After the 30 days are over, it will be incredibly difficult to salvage your financial status. The IRS typically does not provide you any leniency if you have reached this point in the collections process, and will begin aggressive collections activity.

If you have received a final notice of intent to levy, you need to get in touch with a tax representative immediately. Time is of the essence and it is most definitely not on your side. If you are in this position, the IRS is about to shake what little is left of your financial wellbeing.

There is a great deal of anecdotal evidence claiming the IRS is known for withholding facts, misleading people and setting them up for payments they cannot afford. Of course, this is a he-said, she-said argument. And what the IRS believes you can afford and what you believe you can afford often do not align. The result of not paying taxes can bring a heavy burden to your life. Rather than facing the IRS alone with so much at stake, it is generally best to take a good tax representative along with you to hammer out the negotiations. Paying taxes is not something any of us like to do, but an experienced tax representative with a strong tax preparation team can do a good job of preparing your past tax returns, hopefully finding ways to reduce your liabilities. IRS tax relief is not always about settling tax debt. For many TaxMasters clients, it’s about moving back into the world of legality and compliance. Any savings are icing on the cake. But the real goal of anyone with IRS tax problems needs to first be compliance. 

One last point. It is not illegal to owe the IRS money. So while they may come after your money and assets in an attempt to collect revenue, you are not breaking the law by not being able to pay.

It is illegal to not file an IRS tax return every year. So file those returns no matter whether you can pay or not. Intentionally not filing tax returns is an illegal act that can be prosecuted. Not paying taxes is serious, but tax evasion is in a totally different league.

Until you need us,

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax representation teams in the IRS tax relief industry. Patrick Cox and Tax Masters are located in Houston, Texas and the company is publicly traded under the ticker symbol TAXS.

The job of collecting taxes in the US falls to a tax collecting agency called the IRS or the Internal Revenue Service. Paying taxes facilitates the essential services the government provides that keep our lives running smoothly.

However, there are times when you may default on an annual payment due to unfortunate circumstances. As a result of not paying taxes, the IRS may send you a notice informing you that you have a tax debt and it is due, which has to be paid immediately. If you fail to comply with the notice, it could result in the IRS adding extra penalties and interest, and the notice may be followed up by an IRS tax collector.

If you do not respond to the IRS notices you receive, the IRS will eventually send you a final notice of intent to levy, and a notice of your right to a hearing. They may levy your bank accounts, garnish your wages or social security check, and place liens on your property to encourage you to pay your tax debt. This intent to levy notice has a 30 day compliance period. After the 30 days are over, it may not be possible to do much to salvage your financial status. The IRS typically does not provide you any leniency if you have reached this point in the collections process, and will begin aggressive collections activity. If you have received a final notice of intent to levy, you need to get in touch with a tax representative or the IRS immediately.

There is a great deal of anecdotal evidence claiming the IRS is known for withholding facts, misleading people and setting them up for payments they can not afford. The result of not paying taxes can place a heavy burden on a person’s life. So rather than going alone to the IRS, it is generally best that you take a good tax representative along with you to hammer out the negotiations. Paying taxes is not something any of us like to do, but an experienced tax representative with a strong tax prep team can do a good job of preparing your previous years tax returns, hopefully finding ways to reduce your liabilities. IRS tax relief is not always about settling tax debt. For many TaxMasters clients, it’s about moving back into the world of legality and compliance.

Until you need us,

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax relief teams in the tax representation business. Patrick Cox and Tax Masters are located in Houston, Texas.

Have a Delinquent Tax Return… or Two… or Three?

Delinquent tax returns can mean big trouble for US taxpayers. With the current administration calling for more revenue officers and the IRS ramping up audits and looking to trim the tax gap, taxpayers who have not filed past-due tax returns are at serious risk. If you or someone you know did not file a 2008 tax return, you need to take action now and file that delinquent return before the IRS contacts you. The penalties and interest the IRS assess can increase if they have to bring a delinquent tax return to your attention. While the IRS trusts taxpayers to file their returns every year, they will also pursue the noncompliant tirelessly and punish them by making them pay additional moneys in interest and penalties.

Delinquent Tax Returns - A Spiraling Tax Problem

Especially in a down economy, when good people simply don’t have the money to pay the tax they owe, neglecting to file a tax return can be a costly mistake. For those who have not filed a return for a given tax year, it becomes easier to fail to file a second year and even a third, particularly if the IRS seems not to notice. Do not be fooled. The IRS can wait a surprisingly long time before notifying a taxpayer that they did not receive a return. And often this notice is accompanied by a bill that the IRS assesses based on what they think you owe for multiple years with penalties and interest tacked on.

If you have even one delinquent tax return, you need to file it tomorrow. And if you have several, you need take action to file today if the IRS has not yet contacted you. And if the IRS has already sent you a notice with a bill, it means they have already filed a substitute return for you and want their money. You need to contact us today so we can help you file your delinquent tax returns based on your actual income and take into account all deductions you have coming. When the IRS files a substitute return on your behalf, they use estimates for your income based on various facts they know about your earning history and do not allow for any non-standard deductions. We’ve stated this numerous times before–The job of the IRS is to collect revenue for the US government. Allowing the IRS to file a tax return for you is like handing your wallet to a stranger and trusting him to take only what he needs. It is imperative that you file all delinquent tax returns to make sure you pay the IRS only what you owe.

If you have delinquent tax returns or need IRS tax relief, call us today. Our tax consultants will diagnose your tax problem and build a customized plan for solving your tax problems. Do not walk into 2010 without a plan in place to resolve your tax issues.

Procrastination costs money when it comes to the IRS. Call us now.

Until you need us,

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax relief teams in the tax representation business. Patrick Cox and Tax Masters are located in Houston, Texas.

We learned recently at TaxMasters, Inc. (TAXS) that more tax audits are on the horizon. With the current tax gap weighing heavily on the IRS, agents are looking for revenue wherever they can find it. IRS audits are always a source of heartburn for the taxpayer being audited, but when a business gets audited, the potential for disaster threatens not just one person, but every person who depends on that business for income, products, and services. If your business is facing an audit, TaxMasters offers the tax audit help you need.

Random Employment Tax Audits Going Up 33%

According to reports in The Kiplinger Tax Letter, the IRS will increase the number of random employment tax audits 33 percent over the next three years. The IRS hopes this 33 percent increase in random employment tax audits will help them collect additional revenue and update their estimates of the tax gap. The first audits are scheduled to get under way in November.

What the IRS is Looking For

Reportedly, IRS agents will be looking for employers that are violating worker classification rules and that abuse the tax rules for executive compensation and employee fringe benefits. The IRS is also reported to be looking for S corporations that pay their owners meager or non-existent salaries, which allows a corporation to pass profits through to its shareholders as dividends to save on payroll taxes. In other words, if your company is engaged in issuing 1099s instead of W2s for fulltime employees, offering executive bonuses, providing cell phones to employees, or passing out high dividends, look out. Make sure you work with a qualified tax preparer to put together all the information you need to support your case. If you don’t have that information at hand, you may be in line for a serious IRS audit.

Finding Tax Audit Help

If you are one of the unfortunate companies to be selected for a random employment tax audit or any other IRS audit, you may need some help. TaxMasters has a team of audit professionals standing by ready to provide the top-notch tax audit help you will need to face an IRS audit. Understand that any time the IRS amends a return or sends you a change notice, that constitutes an audit. That means you have the right to challenge the IRS audit findings. If you have been hit with an unfair or inaccurate assessment because of an audit, you need to contact us today.

Until you need us,

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax relief teams in the tax representation business. Patrick Cox and Tax Masters are located in Houston, Texas.

October 15 Tax Problems

So you waited until the last minute and couldn’t get all your documentation in order on Monday or Tuesday. By the time Wednesday, April 15 arrived, you knew you were too late and weren’t going to meet the IRS income tax filing deadline. Odds are you filed an extension using IRS Form 4868. If you did that, pat yourself on the back. Too many taxpayers simply let the filing go and don’t look back until the IRS forces them to.

Do You Have Unfiled Tax Returns?

If you did not file your 2008 tax return and did not file an extension, you need to get your 2008 taxes filed as soon as possible. And if 2008 is yet another return you haven’t filed in a long line of unfiled tax returns, you need to contact Tax Masters today to file your returns and get back into compliance with the IRS. We may even be able to save you some money in the process.

October 15 Extension Deadline

If you filed your IRS tax extension in April for tax year 2008, don’t let October 15 sneak up on you. Think back to April. If you filed your extension in a panic, you likely don’t know exactly what you owe the IRS. If you owed them anything, it has been building interest as time has passed. Our advice at Tax Masters is to make your internal deadline of getting all your tax information together September 25. That gives you three weeks to complete your own return if you are a self preparer, or three weeks to finalize things with your tax preparer, make out the check to the IRS, and file by October 15. and if you can’t afford to pay what you owe, don’t let that stop you from filing. File your return and work out a payment plan for what you owe.

Failing to File Tax Returns is a Federal Crime

Failure to file a tax return is a federal crime. At Tax Masters we spend a good deal of our time helping people rebound after failing to file tax returns for several years. It can take quite a bit of effort to get someone back into compliance with the IRS, especially if their record keeping wasn’t the best.

Don’t let the October 15 IRS income tax extension deadline sneak up on you. You don’t want to be out of compliance with the IRS, pay all the interest on the money you owe, and pay the failure to file fees on all your old tax returns. It’s far easier and cheaper to stay ahead when it comes to filing taxes.

You made a good decision in filing your income tax extension in April. Now close the deal and do what you need to do to file your 2008 tax return by the extension deadline. If you have all your materials and tax documentation together and organized by September 25, that gives you three weeks to get your tax return filed by October 15.

Until you need us,

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc., a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective tax relief teams in the tax representation business. Patrick Cox and Tax Masters are located in Houston, Texas.

IRS Notice CP 11 - Changes to Tax Return, Balance Due

The IRS sends notice CP 11 to inform you they made changes to your tax return that resulted in you owing more money to the government. In other words, they conducted an electronic audit and made changes to your tax return based on that audit. Most taxpayers who receive a CP 11 don’t realize they have been audited and that they may benefit from seeking tax audit help.

CP 11 instructs you that you should pay the tax liability reported in the body of the notice in full. Sometimes this notice includes additional penalties and interest that have accrued on the amount owed, and it may also include an installment agreement request form.

IRS Notice CP 11 is the Result of an Audit

Any time the IRS changes your income tax return, it is the result of an IRS audit. As such, you have the right to appeal the findings that triggered the change. One thing we know well at Tax Masters is that you should never assume that IRS changes to a return are correct. As the person responsible for paying your tax liability, it’s in your best interest to make sure the IRS hasn’t made a mistake.

CP 11 notices are typically generated after the IRS computers catch what they consider to be an issue or problem with your tax return in what is referred to as an electronic audit. In this type of audit, IRS systems detect an anomaly in your return, correct it automatically, and then generate the bill (CP 11). Very little, if any, human interaction is involved with this process. And as we all know, computer applications and scripts are only as good as the logic they are based on. It’s entirely possible that you have received a CP 11 in error or that the information in the notice is based on erroneous data or assumptions. 

We find an amazingly high error rate in favor of our clients with tax returns that have been automatically updated by IRS systems.

If you receive an IRS notice CP 11, contact us and let us talk through the details of your situation. It may be that you don’t owe what it is the IRS computers claim you owe.

Until you need us,

Patrick Cox Tax Masters

Types of IRS Tax Audits

An IRS audit can be one of the most trying experiences you will face. IRS auditors are notorious for looking until they find a problem they can use to extract more taxes from you. As I’ve stated before, we believe taxpayers should pay their fair share of taxes, but we also believe that you shouldn’t pay one dime more than your fair share. And while a taxpayer facing a field audit or an in-office audit is typically terrified, taxpayers who have had a correspondence audit typically don’t even understand that they’ve been audited. There are three types of IRS tax audits.

Correspondence Audit

The correspondence audit is the most common type of IRS tax audit. It might surprise you to know that most people who have been singled out for a correspondence audit don’t even know they’re being audited. The reason is that the IRS doesn’t come out and declare they are auditing you. Instead, they send a notice to you indicating that the IRS made a correction to your tax return. While a correspondence audit could technically be used to notify you that you owe less than you paid, it is most commonly used to inform you that you owe more and payment is due immediately. The IRS may also ask you to send in additional information to clarify something on your tax return. Even with a correspondence audit, it is usually a good idea to have a tax representative help you address the IRS in a way that won’t get you into trouble. Providing the wrong kind of information can lead to expansion of the audit into more areas or a more detailed investigation into items not initially targeted in the correspondence audit.

Field Audit

Among the types of IRS tax audits, the field audit is the least likely to involve individuals. Field audits are primarily used to audit businesses. The IRS sends an auditor, or a team of auditors, to a business to examine the financial books, documents, and transactions, generally to make sure the business is not short-changing the IRS or cooking their books. Generally in these circumstances, the IRS auditors will work with the corporate financial officer to go through the business’ income and expenses.

In-Office Audit

The in-office audit is the type of IRS tax audit most people think about when talking IRS audits. The IRS schedules an appointment for you to bring all your tax documentation to an IRS office location. At the IRS offices, you would then meet with an IRS auditor and substantiate your tax return with your supporting tax documentation. While it’s never a good idea to face an IRS tax audit on your own, if you are facing an in-house audit, you need to seek IRS audit help before responding to the IRS. The IRS auditors assume you have full and complete knowledge of the tax laws and regulations of this country. They also assume you have read and understood each of the thousands of publications issued by the IRS on various tax topics. Tax Masters understands that this is not what you do, but it is what we do.

IRS Audit Help

At Tax Masters, we supply more people and businesses with IRS audit help in one year than most CPA firms or accounting firms do in their entire professional life. Tax Masters has a great success record with all three types of IRS tax audits. Whether the IRS notifies you that you owe more than you reported on your tax return, shows up at your door asking to review your books, or schedules an in-office audit, the Tax Masters audit team has the experience and the latitude to help you resolve your IRS audit favorably. Don’t make the mistake of going through any type of IRS tax audit alone. Tax audit help is a simple click away.

Until you need us,

Patrick Cox Tax Masters

IRS Audit Help - Immediate IRS Tax Relief

–TaxMasters Patrick Cox

One of the aspects of IRS tax relief that often goes overlooked by some of the other firms is IRS audit help. When you face an IRS audit, it can be an extremely unnerving experience. Hiring a tax relief firm with a proven audit track record will give you the confidence you need to survive a tax audit.

TaxMasters Audit Help

The TaxMasters audit defense team is extremely effective at offering IRS audit help. The team has provided audit assistance to a growing number of clients over the years and has a fantastic IRS audit track record. The main reason the TaxMasters audit defense team is so effective is that we understand IRS auditors and the IRS audit process. We know the game and we know the tactics the IRS uses. TaxMasters ability to provide IRS audit help is unsurpassed in the industry.

If you are in need of IRS audit help, contact TaxMasters today for a free IRS audit consultation.

Why Hire TaxMasters?

Many IRS tax relief companies tend to focus too narrowly on filing an offer in compromise for every client that signs up with them. They can skimp on hiring truly qualified tax preparers by replicating and even automating their processes. The sum total effect of concentrating so hard on making the offer in compromise filing process the main focus is that these firms tend not to have personnel capable of performing even simple IRS audit defense.

At TaxMasters, we have an entire department devoted to IRS audit help and tax audit defense. It has been said that we process more IRS audits in a week than most tax CPAs do in their entire career. We understand how to limit the scope of an audit, how to organize and present information in a manner the IRS expects, and what aspects to focus on while minimizing the likelihood of the auditor finding any other cause for further audit.

Tax Audit Help Timeline

Tax audits take much less than time than most other tax issues to resolve. If notified by the IRS that you have been selected for an audit, either in person (desk audit), at your home or place of business (field audit), or if they notify you that you owe more than you reported (paper audit), you need tax audit help. In paper audits, the IRS can change the amount you owe and send you the bill without even giving you the opportunity to defend yourself. In these cases, TaxMasters can help with appealing the audit findings.

In all audit cases, walking into an audit without representation is like going to criminal trial without a lawyer. The IRS auditors spend their working hours figuring out how to get as much revenue from taxpayers as they can by law. If you don’t know tax law, the odds are stacked against you if you fail to enlist IRS audit help before contacting the IRS.

What To Do When Being Audited By The IRS

If you are facing an IRS tax audit, call us at TaxMasters today, before you respond to the IRS. We can help you get organized and will provide the IRS audit help to which you are entitled by law. We are here to represent you.

Until you need us,

Patrick Cox TaxMasters