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Personal Finance

We are dedicated to keeping clients abreast of the latest developments and tax-saving strategies. This section includes a library of hundreds of timely articles about business, taxes, finances, trends and the like. The articles are categorized by subject matter, which can be accessed from the links. Click on your topic of interest and find a wealth of information.

DEALING WITH THE IRS

As much as we try to avoid dealing with the IRS, it may not always be possible. This section gives us a better idea of what the IRS is looking for and tells you how to avoid being on their radar. You will also find tips on what to do if you receive a letter from them. If you have been contacted by the IRS and require further assistance, please call our office for an appointment.

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Refund Status Available From IRS Website
By using the “Where’s My Refund” tool on the IRS website, Taxpayers can check on the status of their federal income tax refunds seven days after they e-filed their return. If they file a paper return, they can check four to six weeks after mailing their return.

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What to Do If You Receive an IRS Notice
It’s a moment many taxpayers dread. A letter arrives from the IRS and it’s not a refund check. But don’t panic; many of these letters can be dealt with simply and painlessly.

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Chances for Being Audited
During Fiscal Year (FY) 2010, the IRS processed 230 million Federal tax returns and supplemental documents and collected $2.3 trillion in gross taxes. After accounting for 122.2 million refunds, totaling $467.3 billion, collections (net of refunds) totaled $1.8 trillion.

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Penalties for Early Distributions from Retirement Plans
Payments that you receive from your IRA or qualified retirement plan before you reach age 59½ are normally called ‘early’ or ‘premature’ distributions. These funds are subject to an additional 10 percent tax and must be reported to the IRS.

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When to Amend Your Return
As hard as you and your tax return preparer may try to file a complete and accurate tax return by the due date, circumstances such as the following may work against your efforts.

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When to Throw Out Tax Records
Are you doing your spring cleaning and wondering if you can throw out some of those old tax records? If you are like most taxpayers, you have records from years ago that you are afraid to throw away. It would be helpful to understand why you keep the records in the first place.

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Reading the CP-2000 Notice
To make sure the notice is a CP-2000, look on page one on the upper right-hand corner. It will be identified with the symbol CP-2000. If it is some other type of notice, a different type of action will be required.

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Keep a Low Audit Profile
The IRS may be auditing fewer returns but they are getting smarter about choosing those they do audit. Their goal, of course, is to focus scrutiny on the most "audit worthy" returns-those with potential for big adjustments. As taxpayers, all of us would like to avoid an audit. But how does one avoid being "chosen"? While there's no sure way, experts do offer advice on what to look for to help cut audit risk.

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Avoiding Tax Audits
An IRS tax audit can come in a number of forms. The most demanding are the face-to-face audits, which require sitting down with an auditor and reconciling income and deductions. Others are the less demanding correspondence audits where the IRS has reason to believe that the taxpayer failed to include reported income or has overstated deductions.

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IRS Has Your Numbers!
Correspondence from the IRS has a tendency to escalate a taxpayer’s pulse rate. However, most of the communication received is not the feared “come on down” letter that requests an appearance for a face-to-face audit, but instead may only require a written explanation.

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Liens and Levies
A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.

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Are You a Non-Filer?
What is a non-filer? “Non-filer” is the term used in the tax industry for someone who has failed to file the required tax returns for one or more years. Whether you are simply a procrastinator, owe money and can’t pay, have marital problems or for whatever reason did not file, it is important for you to know that there are ways to remedy the situation.

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Offer-in-Compromise
The U.S. tax system is built on the premise that all taxpayers are expected to report their tax liabilities accurately and pay them on time. However, the Internal Revenue Code gives the IRS the authority to “compromise” (i.e., settle based on a taxpayer’s adverse economic circumstances) a tax liability for less than its stated amount.

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Innocent Spouse Relief
When married taxpayers file jointly, they become “jointly and individually” responsible (often referred to as “jointly and severally liable”) for the tax and interest or penalty due on their returns. This is true even if they later separate or divorce.

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Installment Agreement
So what happens if you can’t pay your tax liability?   For taxpayers who cannot pay all their taxes at once, there is the installment agreement option. IRS Form 9465 is used to request a monthly installment plan. Generally, you can have up to 72 months to pay off the liability. Depending upon how much you owe, the IRS may investigate your ability to pay before granting an installment agreement.

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