The Internal Revenue Service posted a press release today announcing two new benefits available to employers hiring workers who were previously unemployed or who were working part time. These benefits are part of the Hiring Incentives to Restore Employment (HIRE) Act signed into law today.

Tax Break for Employers Hiring Unemployed Individuals

Employers who hire unemployed workers this year (between Feb. 3, 2010 and the end of the year) may qualify for a 6.2 percent payroll tax incentive. this would exempt the employer from their share of Social Security taxes on wages paid to these workers after March 18, 2010. This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers still need to withhold the employee’s 6.2 percent share of Social Security taxes, as well as income taxes.

Tax Break for Employers Retaining Employees

For each worker retained for a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.

The two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify, but only if the workers they are replacing left voluntarily or for cause.

The new law requires that the employer obtain a statement from each eligible new hire certifying that he or she was unemployed during the 60 days before beginning work,  or that he or she worked fewer than a total of 40 hours for someone else during the 60-day period. The IRS is currently developing a form employees can use to make the required statement.

Businesses, agricultural employers, tax-exempt organizations and public colleges and universities all qualify to claim the payroll tax benefit for eligible newly-hired employees. Household employers cannot claim this new tax benefit.

Claiming the Benefits

Employers can claim the payroll tax benefits on the federal employment tax return they file quarterly beginning in the second quarter of 2010. We expect to see revised forms and further details on these two new tax provisions posted on IRS.gov during the next few weeks.

This is a fantastic new tax break for employers who are growing and adding head-count. We highly doubt whether employers who were not already planning on hiring new employees will be able to participate. But this is certainly welcome news to those who will be able to claim the benefits.

We would caution businesses to work closely with a reputable tax preparer in determining whether you qualify for this tax break.

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 evaluation.

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

Tax Liens

As tax problems go, one of the worst things the IRS can do is attach tax liens to your property. They can always garnish your wages and levy your bank accounts, but tax liens are a particularly paralyzing weapon in the IRS arsenal.

Many taxpayers with lingering issues don’t realize just how much trouble they are in until it is too late. They see notice after notice come through with ever-increasing amounts of money owed and escalated warnings. The problem is that reading an IRS notice is about as easy to the average taxpayer as reading tea leaves.

Final IRS Notices

If you receive a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (CP 90) or a Final Notice before Levy on Social Security Benefits (CP 91), the IRS is about to take your money.

While this is a 30-day notice, you do not have 30 days to act. If you receive one of these final IRS notices, you need to call us immediately. Even if you call today and we get everything in place in the next week, it’s a possibility that the IRS systems will not update quickly enough to stop the tax liens, levies, and garnishments that are scheduled to take place 30 days from the day the final IRS notice was sent.

If you are receiving any IRS collection notices, do not wait to take action, the longer you wait the more expensive the solution becomes. If you do have a Final Notice of Intent it is not too late, but you must act today to preserve your rights. Act immediately and call TaxMasters now!

Consequences of Tax Liens

Tax liens carry many consequences, short-term and long-term. As soon as the IRS files a tax lien, all property registered in your name is flagged. You generally cannot refinance or sell a piece of property, even to pay off your tax debt, without going through lien subordination or coming to some sort of agreement with the IRS beforehand.

In addition to freezing your ability to sell property, a tax lien puts a big red flag on your credit report. Most finance companies will not lend to you if you have a tax lien. And those that will lend to you in this circumstance typically charge almost inconceivable amounts of interest.

The long-term effects of the IRS filing a tax lien tend not to be discussed much, but they are very real. First, there’s the cost it will take you to get back into compliance with the IRS. Cost of services at any reputable IRS tax relief firm goes up as soon as you have a tax lien in place. The reason is that it takes a great deal more work to bring a taxpayer back from the bottom of the IRS tax lien cliff than to stop them from falling off in the first place. While you are working to regain compliance, the tax debt grows because of penalties and interest. So you wind up spending your resources and time on efforts to regain compliance instead of actually paying off the debt. Even after you have regained compliance fully and have paid your tax debt in full, settled that debt, or worked out a payment plan with the IRS, your credit remains in shambles. In many ways a tax lien does more damage to your credit long-term than does bankruptcy. So everything you finance over the decade following the enforcement of a tax lien costs more due to high interest rates.

All the additional costs that come with tax liens amount to an increased tax on the non-compliant. The current IRS and financial systems are designed not only to punish you for your tax lien now, but to continue to punish you for at least the next ten years.

Avoiding Tax Liens

Avoiding tax liens should be your highest priority if you currently have a tax problem. The way to do that is to call us today and get started right away on fixing your tax problem before it leads to a tax lien. Do not wait until you receive a final IRS notice. We can still help you even if you already have a tax lien, but the odds of stopping the IRS from filing a tax lien plummets exponentially with each day you wait to call.

Contact us or call us today at (866) 694-4018.

Until you need us,

Patrick Cox TaxMasters

Website Upgrade at TaxMasters

We’re very excited to roll out our new and improved TaxMasters website this week. The new site will give TaxMasters clients and potential customers more information about the IRS collections process and about tax problems in general. We kept the information on the site that has been most useful to our clients over the years and then added more detail, more resources, and more raw information about the IRS and how the agency collects revenue.

After being in the IRS tax representation and tax resolution business for going on a decade now, we have learned that taxpayers in need of representation make better clients if they know more about what stage of collections they are facing. To that end, we have developed an entirely new section of the website dedicated to defining and discussing IRS problems in detail. We created an IRS Collections Process Chart to help you identify the stage of the collections process you are in and to help you understand what to expect next. This can be vital in not allowing too much time to go by before acting to solve your tax problem. TaxMasters can solve just about any tax problem, but it is so much cheaper and more straightforward to get through the tax resolution process if you engage us sooner rather than later.

We have also added definitions of individual filer notices and business filer notices to help taxpayers understand what the IRS is saying to you when they send you something in the mail. We describe each notice the IRS currently sends and then make note of the most serious ones with explanations of the implied consequences.

We also added a couple of different tax calendars and some handy tax resolution resources for clients and potential clients alike. So come on by the main site and take a look. We’d be glad to know what you think. Be sure to stop by the Success Stories page and the TaxMasters Reviews page. We still have all the in-depth IRS tax relief information we have had in the past to help you with your decision to move forward with IRS audits, tax settlements, filing past-due tax returns, and stopping wage garnishment.

Until you need us,

Patrick Cox TaxMasters

Economic ‘Crisis’

The glance I took at the headlines this morning was flat out depressing. Small Banks Ailing as Recession Mounts, Hedge Fund is Dissolving as It Faces 2nd Inquiry, Shake-Up at Shell, Quarterly Earnings Fall at Staples… these are just a few. There is some growing optimism out there, but it’s my perception that most people think we are in terrible economic shape. It’s clear that people are scared to spend right now, even though most are still making about what they were this time last year. Of course there’s those who have lost their jobs and we empathize with that situation. But most of us still have a job. So what’s the deal?

Gallery Furniture–What Recession?

There is a business here in Houston named Gallery Furniture run by an incredible retail business mind in Jim McIngvale, better known around town as Mattress Mac. I can’t recall where I saw the reference, but when asked about the impending recession several months back, McIngvalestated plainly that he couldn’t control others, but that he didn’t plan to participate in any recession or downturn. I like that kind of attitude. It happens to be the same attitude we have at Tax Masters.

If You Get Knocked Down, Stand Back Up

Last week the main warehouse for McIngvale’s furniture business burned. This was a 100,000 square foot facility full of furniture, mattresses, and electronics. Gone. We all watched andwaited to see how Mattress Mac would respond. Less than 48 hours after the incident, Gallery Furniture was running a new television ad, thanking people for their support and informing everyone that their store on the west side of Houston was open for business and they were carrying on their Memorial Day sale as planned. If that’s not resilience, I don’t know what is. Our hat’s off to Jim McIngvale and Gallery Furniture for refusing to go down. Jim is known to be a class act here in Houston. I have met him once or twice and wholeheartedly agree with that opinion of him.

It’s my assertion that it will take people like those at Gallery Furniture to get this country back on track. It’s going to take people who refuse to stay on the floor when knocked down.

Proposed Increases in IRS Enforcement Budget, People, and Resources

As the recession, real or perceived, tightens its grip on the common taxpayer in the United States, the IRS is going to more aggressively pursue every dime they think you might owe. As a matter of fact, if you have been following my posts, you’ve already read about Obama’s 800 and about the current administration’s push to quadruple the IRS enforcement budget over the next five years. The message is plain. Pay your taxes and play by the rules or the IRS is coming for you.

Solve Your Tax Problem Now Before It Grows

As I’ve stated before, now is not the time to have a tax problem. Some estimate that 20 percent of U.S. taxpayers have some sort of IRS tax problem. That’s one in five. Look around you. Think about your friends. One in five of them owes the IRS money or is facing an audit. Now is the time to fix these problems, before the IRS has more resources and a larger budget with which to pursue tax evaders. Don’t let simple mistakes become a crime. This is a simple choice. But it’s a choice you must make.

Tax Masters is Strong and Here to Help

As Mattress Mac stated concerning the economy and what it means for Gallery Furniture, we’re not participating in any recession at Tax Masters. We are strong and we are here to help taxpayers all over the country fix the problems they have with the IRS. If you have a tax problem, you really need to get this fixed sooner rather than later. Don’t let your tax debt grow into something you can’t possibly pay off. Those penalties and interest are working against you right now as you read this.

Call Tax Masters today at (866) 694-4018 and put yourself on the road to settling with the IRS right now. You’ve already procrastinated long enough. Tax debt does not go away unless you take the appropriate actions to make it go away. Call us. We can help.

Until you need us,

Patrick Cox Tax Masters