Landmark Tax Group - June 2021

Landmark Tax Group - June 2021

Landmark Ledger 5 Things You Need to Know When You Owe the IRS

(949) 260-4770 Professional | Experienced | Licensed Expert IRS & State Tax Relief

June 2021

D ealing with the IRS can be a nerve-racking and painstaking process for taxpayers. The Tax Code is so complicated that most people feel overwhelmed when trying to work with the IRS to resolve their tax debt problems. The less knowledge a taxpayer has about taxes and the procedures of the IRS, the more intimidated they feel when it comes time to resolving their tax matters. This complexity and intimidation is an advantage for the IRS when it comes to negotiating with most taxpayers. There are certain facts that the IRS would never readily share with taxpayers that shed light on its internal strategies and processes. This month, I want to share five secrets the IRS doesn’t like to talk about (and show you where you can learn even more).

3. It’s highly unlikely the IRS will seize your assets

The number of IRS seizures has dropped substantially in the past few years, with more cases being resolved as installment agreements or tax settlements instead. Even still, it’s in your best interest to begin the resolution process with the IRS as soon as possible to increase the chance of keeping your assets and to reduce the chance of collection enforcement. Demonstrating that you are willing to resolve your back tax issues will help facilitate a smooth negotiation process. 4. The approval percentage of an offer-in- compromise is significantly higher when submitted by a tax professional. Submitting an offer-in-compromise (OIC) is a very complex process, and there are many underlying guidelines that need to be considered to increase the chance of success. An Enrolled Agent, CPA, or Tax Attorney with sufficient experience in the OIC process knows the eligibility requirements and what the IRS is looking for. During my time at the IRS, I was also responsible for processing, accepting, and rejecting OIC applications.

No. 1: By law, the IRS has only 10 years to collect from you.

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The 10-year clock starts ticking when you file your return. When the collection statute expires, your tax balance goes away forever. Now, if the IRS didn’t come calling after a couple of years of missed taxes, it doesn’t mean you’re in the clear. It’s very possible they have yet to get around to processing your file. Be proactive in addressing your tax matter to avoid further problems down the road and prevent enforcement actions, such as a tax lien or bank levy. Be aware that certain events can freeze and extend the 10-year statute.

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2. The IRS is limited in what it can garnish from your paycheck.

5. Who you choose to represent you can make a huge difference in your case.

The IRS is the most powerful collection agency on the planet. However, the IRS policy and procedure handbook limits the amount of money it can take from your paycheck. Unfortunately, the IRS doesn’t always follow its own rules, so if you feel something isn’t adding up, don’t hesitate to seek help.

Typically, tax preparers, accounting firms, and most attorneys don’t have training or experience in handling IRS tax resolution

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DIY or Buy? Lawn Games for Family Summer Fun

Buy: Check out the kid-friendly rubber horseshoe set from Wayfair.com, which requires no installation, can be used indoors or alongside your outdoor game, and is safe for younger children.

The warm summer sun may be enough to beckon your family outdoors, but lawn games will guarantee hours of fun outside. If you’re handy, there are plenty of great lawn games you can make yourself. If not, buy an off- the-shelf alternative and enjoy the easy setup. Giant Jenga: Easy DIY All you need to build a giant Jenga tower are two-by-fours that are cut to length. If you’re handy with a saw, you can do this at home. If not, ask to have the wood cut at your local lumberyard. Be sure to sand down the edges before stacking the boards to create a classic Jenga tower! For extra fun, pick a few paint colors and paint each board. Visit ABeautifulMess. com/make-this-giant-jenga to see a complete set of instructions.

Cornhole: Advanced DIY The humble beanbag may be the most versatile backyard game piece. It’s used in the popular game commonly known as cornhole. To build your own cornhole set, you’ll need a couple of sheets of 1/2-inch thick plywood along with two-by-fours, some hardware, and a variety of tools including a drill, jigsaw, and sander. Visit DIYPete.com/cornhole-board-plans to get both written and video instructions. Buy: Ready to play ASAP? Cornhole sets are available from many large retailers around summertime, or you can order a customized set featuring your favorite team, family name, or characters from your favorite movies by looking at Etsy.com.

Buy: Skip the project and buy GoSports Giant Wooden Toppling Tower online, which retails for about $70 and stacks over 5 feet high.

Classic Horseshoes: Intermediate DIY Tossing horseshoes is a great way to pass an afternoon. To play, you’ll just need to set up two sand pits in your yard. Get a handful of horseshoes, and you’re ready to go! Many DIY plans are available online, including one from HousefulOfHandmade.com/ultimate-diy-horseshoe-pit.

Whether you buy or DIY, remember to have fun and always supervise your children while playing outdoors, especially when it comes to yard games!

What Happens if You Owe Taxes in California?

We talk a lot about what to do when you owe the IRS or if you’re dealing with IRS-related issues, but what about state taxes — specifically, California?

• Interception • Claim for refund — time limit (if you are due a refund or overpaid, you can file a refund claim until the latter of four years from the due date of your tax return or one year from the date of overpayment)

If the California Franchise Tax Board (FTB) determines you have a balance due, there are several actions it can take, many of which are similar to actions the IRS can take. If you owe taxes to the FTB, the following information will help you understand the agency’s collection process. Avoiding State of California Franchise Tax Board Enforcement Action The California Revenue and Taxation Code (R&TC) provides authority for the FTB to take involuntary collection actions when taxpayers are delinquent in paying their state income tax. You can prevent involuntary collection actions if you: • Pay your tax liability in full • Enter into an installment agreement •File required tax returns and pay the balance due or provide proof that you have no filing requirement •Make an offer in compromise that they accept • Establish that a financial hardship prevents you from paying your liability, also known as “currently not collectible” status

FTB fees and penalties can also include:

• Late filing penalty —25% of the amount due, after applying any payments and credits made on or before the original tax return due date • Late payment penalty — 5% of the unpaid tax (underpayment), plus 0.5% of the unpaid tax for each month or part of a month it remains unpaid, for a maximum penalty of 25% of the unpaid tax • Estimated tax penalty — a penalty on any unpaid amount from the due date of the estimated tax installment to the date they receive your payment or to the due date of the tax return, whichever is earlier • Mandatory e-pay penalty — 1% of the amount paid, unless your failure to pay electronically was for reasonable cause and not willful neglect • Dishonored payment — if your financial institution does not honor a payment you make to the FTB by your check, money order, or electronic funds transfer, the penalty is 2% of the payment amount ($1,250 or more). For a payment less than $1,250, the penalty is $25 or the payment amount, whichever is less. • Demand to file penalty — if the FTB sends you a demand to file your income tax return or to provide them with information, and you do not comply, they impose a penalty of 25% of the tax on their assessment before applying any payments or credits

Tools of the Trade Here is a breakdown of actions the FTB has at its disposal:

• Tax liens • Bank, wage, or other levies • Interest rates • Installment agreement rejection

If you need help with California back taxes, get in touch at help@ landmarktaxgroup.com !

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THE TOP 3 TAX RELIEF SCAMS TO WATCH OUT FOR

are not licensed tax professionals, and their only goals are to

You’ve seen the ads: “We solve your tax problems for pennies on the dollar!” “We are the only tax resolution firm with ex-IRS Agents!” “No one else knows about this limited IRS program, so call us today!” As the saying goes, if it sounds too good to be true, it probably is. As actual former IRS Agents, we’re familiar with many tax relief scams. Here are three scams to watch out for. Misrepresenting Potential Outcomes This scam typically begins with deceptive advertisements claiming to reduce a taxpayer’s tax liability for next to nothing and settling with the IRS for a fraction of what a taxpayer owes. They often make grandiose claims of settlements and urge listeners to call right away to prevent missing out on a supposed time-sensitive opportunity for tax relief. These false promises continue once a taxpayer visits the company’s website or makes a call to the company. Salespeople Most of these unscrupulous tax relief companies have numerous salespeople that handle all incoming calls. They

determine how much you owe and then convince you that they can substantially reduce your debt, all the while securing a non-refundable deposit via your credit card, bank number, or personal check. Once you sign up via a contract, they continue to charge you and take little or no favorable actions on your case.

Scam Taxpayers, Change the Name, Repeat What happens when scam victims and State

Attorneys General start to catch on to these companies? Once the tax relief firm starts to have issues with its deceptive business practices, it forms a new corporation, gets a new name, and goes back to the same unethical and illegal practices.

Learn more about these and other scams — as well as how to protect yourself — at LandmarkTaxGroup.com/firm-overview/irs-tax-relief-scams !

TAX QUOTES

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cases. This is because tax relief work is a specialized niche that is best left to professional tax relief firms that focus 100% on tax resolution cases. To resolve past due taxes and get into compliance with the IRS, you want to work with an organization with in-depth knowledge of tax relief matters that has successfully represented numerous clients in IRS negotiations. Since I was responsible for these types of cases while at the IRS, I chose to dedicate Landmark Tax Group to only IRS collection and IRS audit matters — tax relief is our specialty!

“INCOME TAX HAS MADE MORE LIARS OUT OF THE AMERICAN PEOPLE THAN GOLF.”

Want to learn more secrets from the IRS? Be sure to check out our many resources at LandmarkTaxGroup.com/Free . There you’ll find our free

reports, including “IRS Debt — 10 Things You Need to Know When You Owe the IRS,” and so much more. If you’re dealing with a stressful tax issue right now, give Landmark Tax Group a call (949-260-4770) so we can figure it out together!

— WILL ROGERS, HUMORIST

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Inside This Issue What You Need to Know When You Owe 1 DIY or Buy: Summer Lawn Games Here’s What Can Happen if You Owe Taxes in California 2 Watch Out for These Tax Relief Scams Tax Quotes 3 Have You Explored a National Forest? 4

Explore a National Forest for Free

On National Get Outdoors Day

Many people in the U.S. and across the world have a national park trip on their travel bucket list. While Zion, Yellowstone, and the Great Smoky Mountains are all awesome locales, outdoor enthusiasts often overlook a resource that is less busy, less expensive, and usually right in their backyard: national forests. All but 10 states have a national forest (or more than one!), so if your home state doesn’t have one, it’s very likely a neighboring state does! And there’s no better time to hike, bike, forage for mushrooms or berries, or camp at a nearby national forest than this month. The tree-filled landscape will provide shade and help you beat the summer heat, and to further incentivize visitors, the U.S. Forest Service (the organization that oversees the national forests) is offering a fee-free day on Saturday, June 12, in honor of National Get Outdoors Day! While parking and day-use fees to access national forests tend to be relatively modest, fee-free days open up the opportunity to all visitors. The U.S. Forest Service has a great interactive map tool that prospective

park-goers can use to learn more about the forests in their area, amenities and activities, and accessibility. Visit FS.fed.us/ivm to access the map and see what’s near your hometown! If you’re dreaming up travel plans beyond your state’s border, consider visiting these notable U.S. national forests. • El Yunque National Forest: Located in Puerto Rico, El Yunque is the only tropical rainforest in the United States. • Tongass National Forest: Spanning 16.7 acres and several islands across Southeast Alaska, the Tongass is the country’s largest national forest. • Salmon-Challis National Forest : This Idaho forest is the largest contiguous wilderness area in the lower 48 and contains the Frank Church-River of No Return Wilderness. • Cibola National Forest and Grassland: Spread across north-central New Mexico, west Texas, and Oklahoma, this forest and grassland area is notable for its diverse ecosystems and wildlife. The Sky Islands portion of the park is also home to over 200 rare plant and animal species.

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