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The high volume of changes in the Tax Code, along with a shortened cycle and missed deadlines, are increasing the risk of a delayed start to the 2019 tax-filing season, according to a new report from the Treasury Inspector General for Tax Administration.

The report pointed out that the Tax Cuts and Jobs Act of 2018 made a number of significant changes to the Tax Code affecting individuals and businesses, as well as tax-exempt organizations, and is the first major tax reform legislation in more than 30 years.

The IRS estimates that implementation of the law will require creating or revising approximately 450 forms, publications and instructions, and modifying around 140 information technology systems to ensure it can accommodate the newly revised tax forms.

The IRS Information Technology organization’s normal deadline for business units requesting information technology products and services for the next filing season is January 31. After passage of the TCJA last December, the IRS IT organization set up several interim deadlines to facilitate timely implementation of the law’s provisions. However, the business units missed the deadlines for submitting work request notifications and business requirements. After that, the IT organization set a new deadline of June 1, 2018, for submitting final work request notifications. The most recent deadline shortened the time frame for making system changes for the 2019 filing season by four months. But, as of July 5, 2018, the IT organization hadn’t received all the final work request notifications and business requirements. Delays in receiving the information mean less time available for modifying and testing systems, thereby increasing the risk of a delayed start to the 2019 filing season.

Another major area of concern, according to the report, is the IRS’s ability to quickly fill a number of critical positions that were vacated by IRS employees or contractors. Thanks to the lengthy process involved in hiring IRS employees or bringing contractors on board, the positions might not be quickly filled, against putting the timeliness of the IT updates at risk.

Reference: https://www.accountingtoday.com

Are you planning to grow your tax resolution business and increase your revenue? So stop worrying, because Logics brings to you the perfect solution and a must-have feature in your logics CRM.

We are delighted to announce the launch of a new feature “ Client Financing” in irsLogics. An amazing feature that actually allows you to be paid on an otherwise lost deal. Irslogics now enables you to provide a quick financial solution to your clients so that they can afford your services with confidence.

The process is hassle-free for you and your clients. Your representative needs to fill up a form and Logics submit the application to multiple lenders. The application gets approved in no time and your client receives offers from lenders in the email. Client e-signs loan documents and gets funded.

Here are some benefits of this feature :

• Your customer only needs to fill one form which already has most of the information filled by Logics software.
• Your customer will get several options to choose from.
• Quick approval time. The complete process takes just 3 days approximately.
• Improves cash flow!
• Keeps client loyal to your company with more options.

So No More Loss! No More Delays!

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Did your client just find out that they missed out something in their tax return? No worries. IRS has a solution for that. IRS provides you a chance to file an amended tax return to cover up things you have missed. Although there are certain limitations, tips, and tricks you have to keep in mind. You should use Form 1040X, Amended U.S. Individual Income Tax Return, to amend your client’s filed Form 1040, 1040A or 1040EZ. Remember to select the year of the return you're amending on the 1040X. Also, this can be submitted through mail only, there is no option for e-filing in case of an amended tax return. Although it is suggested to file an amended tax return if you missed something or made a mistake in your tax return, it is not mandatory. Here is the list of situations when and when not to file an amended tax return.

When to file:

1: You should consider filing an amended tax return if there is a change in filing status, income, deductions or credits.

2: It is lesser than three years from the date you filed your client’s original tax return or two years of the date the tax was paid, whichever is later. Be sure to enter the year of the return you are amending at the top of Form 1040X.

3: If you are filing an amended tax return to claim an additional refund, you should wait until your client has received the original tax refund before filing Form 1040X. Amended returns take up to 12 weeks to process. Original refund can be encashed while waiting for for the additional refund.

4: If your client owes additional taxes, file it and pay the tax as soon as possible to minimize interest and penalties.

When not to file:

1: Generally it is not needed to file an amended return to correct math errors. The IRS will automatically make those changes.

2: Also, there is no need to file an amended return because your client forgot to attach tax forms, such as W-2s or schedules. The IRS normally will send a request asking for those if they are needed.

3: Certain things can’t be changed in the original tax return by an amended tax return. For example, after crossing the due date for the original return you cannot change from married filing joint to married filing separate.

Source: https://www.forbes.com/sites/robertwood/2012/04/20/5-simple-rules-to-follow-when-amending-your-tax-return/#502610154892

www.irs.gov

Tax scams are one of the biggest problems for IRS because they still continue even after taking so many precautions and giving alerts. Notorious scammers keep coming with new tactics and stealing the hard earned money of taxpayers. Recently IRS warned taxpayers on impersonation scams. Since it is summertime many taxpayers have filed there returns and are probably waiting to hear from IRS. So this tends to be a good time for scammers. As tax professionals, you would like to save your clients from being a bait for scammers. Here are some tips to help your clients avoid tax scams.

1: Spread awareness: You need to make your clients aware of these scams. Communicate with your clients whenever there is a scam alert from IRS. Tell them what kind of scams they are, what their mode is and how we can avoid them. According to IRS-

• The IRS does not call and leave pre-recorded, urgent messages asking for a callback. In this tactic, the victim is told if they do not call back, a warrant will be issued for their arrest. Other variations may include threats of other law-enforcement agency intervention, deportation or revocation of licenses. So in no case, taxpayers should respond to these messages.
• The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations. So taxpayers should never respond to such emails either.

2: Tell your client how to detect scam calls and emails: There are certain clues to find out if it is a scam call. Here are certain clues shared by IRS to find out if it is a scam call:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
• Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
• Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.

3: Make a group/community for clients to share the experience- People learn more from real experiences than just by reading something. So you can create a group or community on social media or through a blog, where people can share their experiences and get suggestions from others. This will help to spread awareness and will make your client more vigilant.

These scams can create chaos among taxpayers. Give them confidence that you are always there for help and they can approach you anytime for questions related to scams. Assure them that their data is safe with you. This small help will not only save your client from being a victim of a scam, it will also help to build trust with them.

Source: www.irs.gov

Everything You Need To Know About Penalty For Underpayment of Estimated Tax.

Underpayment of estimated tax is a tax penalty which is charged to an individual for not paying enough of his/her estimated tax and withholding. IRS provides Form 2210 to underpaying taxpayers, in which taxpayer determines how much they owe and can compare it to the amount IRS has already received. By subtracting any withholdings, taxes, and payments they will find out the outstanding amount.

Ways in which Underpayment of tax penalty can be avoided or reduced:

• If the taxpayer owes less than $1000, after subtracting their withholding and refundable credits or if they paid the smaller of at least 90% of the tax owed for the current year or paid 100% of the tax shown on the tax return for the previous year (2016 return must cover 12 months) they don't have to pay this penalty.
• Taxpayers must pay quarterly installments of their estimated tax in amounts figured by the regular installment method. If a taxpayer has fluctuating income they may end up paying less on quarterly basis resulting in underpayment penalties. Through the use of the annualized income installment method, taxpayers may more accurately estimate their taxes.
• Taxpayer generated a large part of their income later in the year.
• If a taxpayer discovers before the end of the year that they will owe more taxes than their withholding, they can file a new W-4 form with their employer. If at the end of 2017 they have withheld the full amount of taxes, they won’t be penalized.
• The taxpayer has already paid a large amount earlier in the year. For example, if a taxpayer has applied a large overpayment from last year’s return to this year’s taxes.

 There are certain conditions in which IRS waives off the penalty

• You could not make a required payment because of a casualty event, disaster, or other unusual circumstance.
• You retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.

Source: www.irs.gov , www.hrblock.com

If you have just started your tax business your top concern would be to market it. Here are some techniques to keep in mind while starting your marketing efforts:   1: Start marketing to your neighbors, friends, and acquaintance: Before you start approaching completely unknown people to become your customers it is always better to approach people you already know. You can distribute flyers, ask for references and word of mouth. Reasons why it is a better approach are: -You will get encouragement, support, and confidence. -You can ask for genuine feedback. -You may have a bunch of customers which you can use as a reference of your tax resolution.   2: Promote your strength: Since you have just started the new business you first want to gain the confidence of clients. So it is better to first promote your strong points. It may be offer in compromise, filing tax returns faster, or penalty abatement. Use digital media and run ad campaigns, use word of mouth or simply use banners. You just have to promote and show off your best ability.   3: Invest In building your brand: When you start a company it is very important to build the identity of your new entity. It can be done with your company logo, mascot, website. You can use them anywhere inside your office ( even on stationery items or cups), promote them online, through print media or tv/ radio ads.   4: Nurture your customers. For any business best source of leads are referrals. Your good work will reflect in the number of referrals you get from your customers. If they get good results they will talk about your work which will give you good results at the end. Using a dedicated tax resolution CRM can be a good idea to take a good care of your customers. 5: Build Strategic Partners: A person or a company who is in a business which is directly or indirectly related to tax resolution can be your strategic partner. Having them on board will extend your business reach. You will get genuine references, tax resolution leads and word of mouth just by sharing a part of the business you get from their leads or giving them incentives for their work. If they are already in business for quite some time you will get the advantage of the trust they have built with local customers and the wisdom they have gained about the market. They will keep you updated about the changing trends of tax business and interest of your prospects. Investing in strategic partners will ultimately fuel your business. If you are using a CRM you can add your partner's name in lead source for the tax leads coming from them. This will help you to keep track of the revenue coming from them.

There has been a constant debate over the high corporate tax rates in USA. President Donald Trump said  in Springfield Missouri “When it comes to the business tax we are dead last”. He also argued that US needs to shrink its corporate tax rate if it wants to have any hope of competing with its economic rivals. But what is the real fact behind US corporate taxes. When we talk about taxes there are two things we should consider one is statutory tax (which are specified by law) and effective taxes (which is actually being paid). Although on papers it is true that US has highest corporate tax in the world, but that is statutory tax rate. In reality what US corporates pay is much less than that. The top federal statutory corporate income tax rate has been 35 percent since 1993, in USA. After adding state taxes, the top statutory rate is even higher. It was 39.1 percent approx in 2012. Which is highest in the world. But when you compare the effective tax rates we have 3 other countries, Argentina, Japan and United Kingdom ahead of us. According to a 2017 Congressional Budget Office report, the US’s effective corporate tax rate was 18.6 percent. Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013. Corporates usually do this by misusing the loopholes in tax laws. U.S. corporations evade $90 billion a year in income taxes by shifting profits to subsidiaries. According to Citizens for Tax Justice’s survey of 288 corporations, which included most of the Fortune 500 corporations that were profitable each year from 2008 through 2012, paid an average effective federal tax rate of just 19.4% over that period. General Electric, Boeing, Priceline.com, Verizon and 22 other profitable Fortune 500 firms paid no federal income taxes from 2008 through 2012, according to Citizens for Tax Justice. 111 profitable Fortune 500 firms paid zero federal taxes in at least one of those five years. General Electric got $3.1 billion in refunds on $27.5 billion in profits from 2008 to 2012. The company paid less in federal income taxes in five years than a single American family pays in one year. All these facts reveal the truth behind high corporate tax rates in USA. So instead of decreasing tax rates government should focus on correcting the flaws in tax code to boost the economy and have a competitive edge over its economic rivals. Source: https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-corporate-tax-rates/

Tax resolution is a competitive business. If you are starting one or planning to grow your existing tax business you have to involve very actively to ensure a continuous flow of lead. Here are some tactics to keep getting high-quality leads:   1: Referral programs: Referrals are one of the easiest and pocket-friendly way to increase client base. Be it a big tax firm or a startup, a good referral system can attract clients like anything. New practitioners can always start with their own references, family, friends and ask them for more references. You can even start incentivized referral campaigns once you have established your business. Incentivised referral campaigns are a proven success for lead generation.   2: Invest in Channel Partners: Your channel partners can be local businesses who don’t do the same job as yours but are somewhat in a related business, for example, other financial services, loan providers etc. They are the ones who can provide you good quality qualified leads. You can even do co-marketing and help each other getting business. You can provide incentives to your channel partners for their good performance to encourage them to keep working for you.   3: Offer free consultation: Offering free consultation helps increasing number of prospects with high chance of converting into your customers. Free services attract a good number of people and with your professional approach and best in class services you can impress them, gain their trust and convert them into your customers.   4: Online marketing: Online marketing is a great way of increasing your reach. It can be done through websites, social media platforms, and paid aids. Here is how online marketing can benefit your tax business.

• Through website: A website is the best platform to showcase your product. It is quite pocket-friendly and serves many purposes. You can optimize your website to make it more searchable in organic search. You can use adword campaigns and backlinks to your website to increase traffic. You can also add a call to action buttons to make your website interactive and encourage your website visitors to take some actions like subscribing, emailing or even purchasing.
• Social media is another common platform to display your products. Its biggest benefit is, it is free of cost. Although you may have to pay some amount if you go further for paid promotion. A well maintained social media page will raise awareness about your business. You just have to showcase your services and offering clearly, inform your prospects, clients, relatives, and friends about the page and invite them to follow you on same. You can also participate in group conversations and post regularly to show your presence.

You should have all links to your social media pages on your website and vice versa. You can run various paid campaigns and contests online aiming to generate leads.

Offer in compromise is an amazing option to get a relief from a giant tax debt, although it is not uncommon to have an OIC rejected. Obviously, it happens because of the mistakes made while filling the OIC. Here are the most common mistakes that tax professionals make while dealing with OIC case: 1: Ignoring their clients' current tax compliance: It is a condition of applying for an offer in compromise that the taxpayer remains compliant with all the tax liabilities. From compliance with tax liabilities, it means that taxpayer has paid the proper taxes or they have had the taxes withheld from their salaries. Failing to do so will get the OIC canceled. 2: Failing to match eligibility criteria: IRS has set eligibility criteria for filling OIC. Ignoring those and still applying will only result in a waste of time and money. Eventually, the application will be rejected. 3: Incorrect information in the form: At times you put incorrect information specifically numbers like tax amount, income etc. It is highly advised to do proper calculations, double check the figures and be confident in each and every amount you put in form 656 and 433-A. IRS is not going to accept any figure without checking its authenticity. 4: Not using Bankruptcy factor: Using bankruptcy threat for your client can help you get the OIC accepted. Even IRS allows taxpayers to compare what the IRS would receive from bankruptcy to what the IRS would receive from an accepted offer in compromise. 5: Ignoring statute of limitation: Statute of limitation is the time frame (generally 10 years) in which IRS can collect taxes from a taxpayer starting from the date of assessment of tax liability. Usually, if your client’s statute of limitation period is nearing to end the applying for OIC is not the right thing to do. Instead, you should try to get the client to be deemed uncollectible. Source: www.kpateloffice.com, www.faithfirm.com

Filing tax jointly has some pros and cons. Generally, IRS encourages taxpayers to file their taxes jointly with their spouse to receive more tax benefits and discounts than they can get by filing separately. So it is definitely profitable for couples to file taxes jointly. But if they do so they both are responsible for complete tax debt, even if one of them understated the tax liability which attracted penalties. Luckily IRS provides a solution for this. One of the solutions is Innocent spouse relief.   Innocent spouse relief is one of the tax relief techniques which is used by the spouses who want to avoid paying taxes or penalties which IRS may collect from them even if it was wrongly reported by their spouse or ex-spouse (if they have signed a joint return). Hereby wrongly reporting we mean any unreported income, incorrect deduction, credit, or basis.   Now, who can qualify for innocent spouse relief? To qualify for innocent spouse relief, you must meet these conditions:

• You filed a joint tax return with your spouse.
• Your spouse or ex-made “mistakes” that caused you to understate the tax liability on your joint tax return.
• You didn’t know or had no reason to know about the understatement.
• It would be unfair to make you liable for the tax understatement.

In case you have not filed a joint return and your signatures were forged you have to prove the same. You can then request the IRS to cancel the joint return so that you are liable for your tax only. It must be less than two years since the IRS first attempted to collect this tax debt from you. If you are requesting a refund for taxes paid, you must file the request within 3 years after the date the tax return is filed or 2 years following the payment of tax, whichever is later. If these above conditions are met you should be able to apply for innocent spouse relief. Form 8875 is used to apply for innocent spouse relief. In case your spouse is dead, divorced or separated you will need to provide documents related to that.

Penalties are used by IRS to make taxpayers follow tax rules and it uses quite often.However IRS also provides options to get penalties removed, or abated. Sometimes taxpayer does not even know about penalty abatement or simply ignore it. But as a tax practitioner, you need to act promptly and smartly if your client comes to you with the same issue. You may be able to save hundreds or thousands of dollars’ worth of fees and penalties. Let us know about some most common penalties and how to get them abated. -Failure-to-pay penalty—This is imposed when a taxpayer doesn’t pay taxes on time. It is the most common of all penalties. -Failure-to-file penalty—This is imposed when a taxpayer doesn’t file a return on time. First-time penalty abatement can be used for failure to pay and failure to file penalties and is quite an easy one for taxpayers who have not been assessed with any other penalties of a “significant amount” on the same type of tax return within the past three years and have been in compliance with all filing and payment requirements. Here are some tips for failure to file and failure to pay penalty abatement:

• If you timely contact the IRS, arrange installment agreement and file a request for abatement of penalties, you may be spared penalties for failure to file a tax return and late payment of taxes, which can amount to a lot of money. Generally, one can have up to 60 months to pay.  In certain circumstances, one can have longer to pay or the agreement can be approved for an amount that is less than the amount of tax they owe. Your request for an installment agreement cannot be turned down if the tax you owe is not more than $10,000 with the following conditions: 1)During the past 5 years you have been in compliance with all payments, returns and have not had any installment agreement. 2)IRS is confirmed that you can not make the payment of the amount owed during a particular period and you have provided all the necessary information required by IRS. 3)You agree to pay the full amount you owe within 3 years and to comply with the tax laws while the agreement is in effect.
• You can attach a penalty non-assertion request before penalties are even assessed. Once the penalty has been assessed, a taxpayer can request penalty abatement. This can ensure that all forms are filled out correctly and that every qualification has been met.
• Tax practitioners should give reference of the appropriate section of the IRS Penalty Handbook. Those who specifically referred to a section of the penalty handbook are much more likely to have IRS penalties reduced/abated that too in a comparatively short period of time.
• If your client’s penalty abatement got denied by any chance you can consider the office of appeals. You may get a positive result as appeals officers are usually willing to negotiate and compromise as compared to IRS agents.

- Another common penalty is estimated tax penalty commonly known as underpayment tax penalty. It is imposed when Individual taxpayers don’t adequately withhold from their wages and/or pay estimated tax payments evenly throughout the year.  It is quite difficult to be removed, but impossible. Here are some tips for the estimated tax penalty abatement:

• Many times IRS credits payment to the wrong period, which attracts estimated tax penalty. Getting it corrected on time will save your client from getting the penalty. You can call 866-860-4259 to address any payment issues. It is the IRS Practitioner Priority Service line.
• If your client’s income varies during the year you should consider using annualized income installment method. This can reduce or remove the penalty.
• You should follow the transcripts from IRS every year to know how payments are calculated and applied.

Technology is proving to be a boon for businesses. It is helping various industries to grow exponentially. Same is the case with tax resolution industry. Tax resolution software is technology’s gift to tax professionals. In the USA it was first introduced by Intellirose LLC by the name of IRSLogics (A dedicated CRM software for tax resolution professionals) in 2008. It was much required due to the tough nature of tax industry. Continuously changing rules and a strict regulatory authority (IRS) makes it difficult to sustain in business. IRSLogics took most of the load with its advanced features by automating each and every piece of the business process. Following IRSLogics few other tax softwares were also launched. Here are the 5 reasons why tax resolution software became an important part of the industry: 1: It makes tax resolution quick and easy: It automates the tax resolution process.Tax pros are now able to manage cases of the offer in compromise, innocent spouse, installment agreements, wage garnishment, penalty abatement with much accuracy and ease. It also keeps you updated with IRS forms. 2: Streamlines sales process: Apart from tax resolution the CRM features like lead management, reports, and dashboard results in a smooth sales process. Which leads to a direct increase in sales and revenue. 3: Customer satisfaction: When tax resolution software takes care of your business you get enough time to take care of your customers. Moreover, it reduces the time taken to solve a case. Leaving your customer happy, satisfied and willing to come back to you for future services. 4: Happy employees: Happy employee means happy customers. Auto populated forms, easy billing, a readily available solution in front of them by using dedicated tax resolution tool makes a huge difference as compared to the traditional manual tax resolution or using other generic CRM software. Your employees will be stress-free, handling more cases at a time and most importantly happy and satisfied. 5: Builds customer data: A CRM is a warehouse of data and a good customer data is the key to success for any business. It stores your customer and prospects information safely at one place which can be further used to scratch leads and making strategies for business expansion.  

With changing rules, strict regulatory authority (IRS) in place and enormous competition, tax industry is one of the toughest. To maintain your success is a challenge. Despite all the challenges you can still stand strong. And the key to staying competitive is keeping innovating. Here is the few pointer which will help you : 1: Keep adding new services to your business: You should stay aware of different services you can offer related to your business. It will not only get you new customers but will also make your existing client use your new services. For example, tax advisor can extend their services to financial advising and a tax preparer can start tax resolution services. 2: Use new technology: Technology does not only support your business but can become the backbone of your tax business if used wisely. You should keep yourself updated with new technologies you can use in your business. Having a good tax resolution software is one of the best examples of technology used by tax resolution professionals. Read here how to choose best tax resolution software. 3: Keep updating your image: It is important to tax business to look fresh, eye catchy and alluring. You should keep changing your image according to new trends, requirements, and changes in your business. This can be done by giving your website a fresh look, a new logo etc. Even a change in single color of the wall can make you look different, modern and attract customers for you. So go ahead and do calculative changes to the image of your business. 4: Recruit better talent: Your employees make a huge difference on how your tax firms perform. Be innovative in keeping your talent pool motivated, updated and educated. Usually, a talent pool should consist of experience and smart young enthusiasts. Keep them in the right proportion and you will see the change. Look for good institutes giving tax and accounting education and hire the best graduates from them. Although there is nothing that can beat your tax and accounting knowledge, experience and confidence but the above points will definitely help you in keeping a competitive edge in the tax industry.  

What is Offer In compromise. Offer in Compromise is a program by Internal Revenue Service under 26 U.S.C , § 7122 which allows qualified individuals with an unpaid tax debt to settle down to an amount that is less than the total owed to clear the debt. Form 656 is used for the checklist to determine if the taxpayer is eligible for the offer in compromise program. The objective of the OIC program is to accept a compromise when acceptance is in the best interests of both the taxpayer and the government and promotes voluntary compliance with all future payment and filing requirements. Here are the tips to get IRS offer in compromise accepted: Check Eligibility The formula to check offer in compromise eligibility is: You will take the total debt your client owes, minus total assets (reduce your home value by 20%). Take the monthly available income times the months left in the Statute of Limitations (10 years after your assessment date). If this total is less than the total debt your client owes to the IRS less the assets, your client may qualify for an Offer in Compromise. Your offer amount will be 12 times the monthly available income. However, qualifying for an OIC does not mean your client will get an OIC. To obtain an OIC, your client must be able to pay the offer amount, which is the computed amount required to be paid to the IRS to settle the debt. Pre Checks before submitting the application Your client’s OIC application will go through a strict financial investigation. The IRS will evaluate your income, assets, expenses, and future earning potential. They will even find out if there is any possibility that the taxpayer could pay off the whole debt in future. To avoid any discrepancies and rejection of application please follow the checklist below. 1: Before submitting the offer, please make sure that your client’s all tax returns have been filed. All the programs including the OIC are restricted to people who actually filed returns. 2: There should not be any open bankruptcy proceedings against your client. 3: Double check all the number you fill in the forms. Every number you put on the form needs to be supported and these supporting documents must accompany the forms. The IRS requires 3 months of documentation. Your offer will get rejected if you don’t do it correctly. It is better to be extra cautious before submitting than to get the offer rejected and start the settlement process again with new application fee and down payment. Submit your offer Here are the steps to submit offer in compromise: You'll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF).   1: Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms; 2: Form 656(s) - individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656; 3: $186 application fee (non-refundable); and 4: Initial payment (non-refundable) for each Form 656. Negotiating with IRS Agent 1: Although OIC applications can be submitted through the mail, but if you want to discuss some points with the IRS agent, you will have to call the agent and review the form with them as well. Being a tax professional you can submit the application over phone and respond to the queries of IRS agent at the same time. 2: As an experienced tax advisor you will know that the IRS trains their offer examiners to look out for the best interests of the government. The IRS is very good at pressuring. Your job is to not get intimidated and deal with these tactics confidently. Give your client best of your service and protect their rights. 3: You need to give IRS a good reason why you believe your client will not be able to pay off the entire balance. Not any and every reason is going to work. They are trained to evaluate claims considering future possibilities. Disability, substance abuse problems, huge balance amounts, dependent care, limited income potential as a result of advanced age, or serious health matters are considered to be as good reasons. During application review While the IRS reviews OIC application, make sure your client does not accumulate more tax debt. Keep paying the tax amount and don’t wait for an approval or rejection of your OIC. IRS takes it negatively if you add more tax debt while waiting for results of your application. If offer gets rejected If the offer is rejected, it does not end all the possibilities of you getting OIC. You can apply again following the below points: 1: You may appeal a rejection within 30 days using Request for Appeal of Offer in Compromise, Form 13711 (PDF). 2: The online self-help tool may provide additional assistance on appealing your rejected offer. 3: Your letter should address the issues raised in the OIC rejection with a supporting document. If the offer gets accepted this time, you will have the opportunity to renegotiate their rejected offer under more acceptable terms for the IRS. If you don’t hear back from the IRS within 2 years after submitting an offer, your client’s OIC will be automatically accepted. For better and fast services you can use Tax resolution software, which will do most of the calculation and analysis for you so that you can concentrate on offer submission and negotiation process.   Reference: https://www.irs.gov/individuals/offer-in-compromise-1https://en.wikipedia.org/wiki/Offer_in_compromise

https://www.aicpastore.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2014/CPA/APR/IRSoffer_compromiseprogram.jsp

CRM software is a must have tool for any tax firm these days. Most of you are already using one or may be planning to buy one. Even if you are using one and evaluating other options then this is the right time. Tax season is still far and you have enough time to try out different tax softwares available in the market. Here are some points a smart tax professional will consider while finalizing his next tax resolution software:   1: Free and easy to install: While deciding the crm software for your tax firm it's vital to ensure that its installation is quick and is free of cost. There are some softwares in market which need assistance of software experts for installation which comes at a cost. Installing or setting up a software is your first experience with it, so it will be quite pleasing to you if it is simple, not time-consuming and does not require much of technical assistance. Moreover, it should allow you to add users later if you plan to expand.   2: Automatic updates: Tax laws change frequently all over the country and it can be hard to keep up with new developments with your busy schedule. You should look for a  system that gets updated automatically and gives you all newly revised tax forms.   3: Free 24X7 support: It is essential to have availability of 24X7 technical support and customer service. If things go wrong a reliable support and helpful customer service is what you need. There is nothing more relaxing than an easily accessible staff members ready to support you any time any day. Enquire well about company’s tech support before making the final decision as a good tech support can turn a mess into a miracle.   4: All in one: You should look for software which takes care of all your business needs. It is always tedious to manage separate software for each business process. An all in one tax resolution software is what you need if you want to save time and avoid confusions. Many softwares these days are integrated with other service providers to cover maximum business needs of your tax firm. When a software is taking care of all your operations from lead generation to billing half of your burden is already reduced.   5: Easy to use: It's bitter but it is a truth that not everyone is computer savvy. You might lose a good salesperson or a good tax expert if you look for a computer expert while hiring. Most tax relief software providers offer free demos. Take the demo and test it yourself. A confusing crm software is the last thing you want to give to your employees or use yourself. Keep it simple and save your time for other things.   6: Environment friendly: Your tax resolution crm software should completely remove the requirement of mind- numbing paperwork. For example e signature, online tax forms, integrated emails are some services which are not only environment friendly but they save a lot of time for you and your customers. It also makes you earn some extra points for your prompt services.   So keep these points in mind and do your thorough research. Remember that you are buying the CRM to streamline your business and remain hassle free to plan your business strategies with free mind. A little time and effort spent on research will lead to long term tension free and flourishing business.  

Like any service based company tax professionals are highly dependent on technology. Many tax professionals and CPA’s use CRM software to improve their business results, but the question is how can this technology become more and more beneficial? Without any doubt the answer is bringing cloud computing to the picture. Cloud computing is "a type of Internet-based computing," where different services like software applications and platforms are delivered to an organization's computers and other devices through the Internet unlike regular software applications, which are distributed and deployed on-premise . In a cloud-based software users don’t need to install and run the software on their computers. It will be delivered to their devices anywhere and anytime through a secured portal. Tax professionals or accountants who have used cloud technology acknowledge its benefits. They were able to expand their business from just book keepers and seasonal tax preparers to full fledged tax resolution professionals and strategic partners of their clients. This is how cloud computing can fuel your business and ease your way to success: Saves money: -Cloud computing reduces and in some cases completely eliminates the need of company’s own IT infrastructure, which further reduces related operational costs like power, air conditioning, and administration. -It allows users to pay as per their usage. -No installation and setup cost. --These services are managed by service providers only so it reduces the maintenance cost. Saves time: -There is no need to install any software, so applications can be implemented very easily in less time, with minimal administration efforts. -It makes adding new locations and new users very quick and easy. -Most cloud providers are extremely reliable in providing their services, with many maintaining 99.99% uptime. The connection is always on when user is on internet. It saves time required for maintaining otherwise a local system. Updates automatically: Latest version of softwares can be updated at no cost and without users’ involvement. Provides Flexibility: -It allows you to work from anywhere. -New users or locations can be added or removed easily as per requirement. -You can extend data access to your client, allowing them to view their business progress any time. Ensures Security: -Cloud technology provides great security and recovery plans in case of disaster or emergency. Cloud service provider takes multiple and continuous data backups for such situations. All the above benefits gives tax professionals a strategic edge over competitors as it allows them to outsource technology and instead focus on their key business activities and objectives. Although there is no shortcut to success, using cloud computing certainly boosts your business and helps you achieve your goals.

The Trump Plan will revise and update both the individual and corporate tax codes: Individual Income Tax Tax rates The Trump Plan will collapse the current seven tax brackets to three brackets. The rates and breakpoints are as shown below. Low-income Americans will have an effective income tax rate of 0. The tax brackets are similar to those in the House GOP tax blueprint. Brackets & Rates for Married-Joint filers: Less than $75,000: 12% More than $75,000 but less than $225,000: 25% More than $225,000: 33% *Brackets for single filers are ½ of these amounts The Trump Plan will retain the existing capital gains rate structure (maximum rate of 20 percent) with tax brackets shown above. Carried interest will be taxed as ordinary income. The 3.8 percent Obamacare tax on investment income will be repealed, as will the alternative minimum tax. Deductions The Trump Plan will increase the standard deduction for joint filers to $30,000, from $12,600, and the standard deduction for single filers will be $15,000. The personal exemptions will be eliminated as will the head-of-household filing status. In addition, the Trump Plan will cap itemized deductions at $200,000 for Married-Joint filers or $100,000 for Single filers. Death Tax The Trump Plan will repeal the death tax, but capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms. To prevent abuse, contributions of appreciated assets into a private charity established by the decedent or the decedent’s relatives will be disallowed. Childcare Americans will be able to take an above-the-line deduction for children under age 13 that will be capped at state average for age of child, and for eldercare for a dependent. The exclusion will not be available to taxpayers with total income over $500,000 Married-Joint /$250,000 Single, and because of the cap on the size of the benefit, working and middle class families will see the largest percentage reduction in their taxable income. The childcare exclusion would be provided to families who use stay-at-home parents or grandparents as well as those who use paid caregivers, and would be limited to 4 children per taxpayer. The eldercare exclusion would be capped at $5,000 per year. The cap would increase each year at the rate of inflation. The Trump Plan would offer spending rebates for childcare expenses to certain low-income taxpayers through the Earned Income Tax Credit (EITC). The rebate would be equal to 7.65 percent of remaining eligible childcare expenses, subject to a cap of half of the payroll taxes paid by the taxpayer (based on the lower-earning parent in a two-earner household). This rebate would be available to married joint filers earning $62,400 ($31,200 for single taxpayers) or less. Limitations on costs eligible for exclusion and the number of beneficiaries would be the same as for the basic exclusion. The ceiling would increase with inflation each year. All taxpayers would be able to establish Dependent Care Savings Accounts (DCSAs) for the benefit of specific individuals, including unborn children. Total annual contributions to a DCSA are limited to $2,000 per year from all sources, which include the account owner (parent in the case of a minor or the person establishing elder care account), immediate family members of the account owner, and the employer of the account owner. When established for children, the funds remaining in the account when the child reaches 18 can be used for education expenses, but additional contributions could not be made. To encourage lower-income families to establish DCSAs for their children, the government will provide a 50 percent match on parental contributions of up to $1,000 per year for these households. When parents fill out their taxes they can check a box to directly deposit any portion of their EITC into their Dependent Care Savings Account. All deposits and earnings thereon will be free from taxation, and unused balances can rollover from year to year.

Business Tax The Trump Plan will lower the business tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax. This rate is available to all businesses, both small and large, that want to retain the profits within the business. It will provide a deemed repatriation of corporate profits held offshore at a one-time tax rate of 10 percent. It eliminates most corporate tax expenditures except for the Research and Development credit. Firms engaged in manufacturing in the US may elect to expense capital investment and lose the deductibility of corporate interest expense. An election once made can only be revoked within the first 3 years of election; if revoked, returns for prior years would need to be amended to show revised status. After 3 years, election is irrevocable. The annual cap for the business tax credit for on-site childcare authorized by Sec. 205 of the Economic Growth and Tax Relief Reconciliation Act of 2001 would be increased to $500,000 per year (up from $150,000) and recapture period would be reduced to 5 years (down from 10 years). Businesses that pay a portion of an employee’s childcare expenses can exclude those contributions from income. Employees who are recipients of direct employer subsidies would not be able to exclude those costs from the individual income tax and the costs of direct subsidies to employees could not be used as a cost eligible for the credit. SOURCE: TAXPOLICYCENTER.ORG DONALDJTRUMP.COM

The real beauty of tax resolution is that it’s a lead generator for your other financial services. Your tax resolution clients are in trouble because they don’t keep up with some important financial factors in their lives or businesses. The following are some of the services they may need help with:

• Tax prep:  Helping with the required tax forms for amended returns and missing returns for current year and previous years.
• Payroll taxes:  While completing payroll it’s important for your business clients to figure out the amount of money that has to be set aside as payroll taxes towards FICA and this needs professional help on which you can capitalize.
• Bookkeeping: It can be offered as an additional service as most tax resolution clients books are either non-existent or a mess.
• Wealth management: Investment advisory and holistic investment planning considering various factors like tax implications, investment goals etc.
• Business valuation: Liquidation value of the business may be required for tax resolution purposes.   
• Write up work.
• Account monitoring: Occasionally pulling updated transcripts to check for IA payments, pyramiding, FTDs (Federal Tax Deposits) and Return filing.

Therefore, offering these different services can enhance your business and maximize the lifetime customer value of your clients. In terms of marketing this is known as ‘Cross-Selling’.  Not only is it considered as a good business practice, but also helps in effective planning of your finances.

Tax fraud is an increasing problem in USA and is a great nuisance for IRS. Tax-refund fraud is expected to soar again. IRS has already caught approximately 35,000 fraudulent e-filed tax returns and 741 paper tax returns as of Feb. 29, 2016. Here are some interesting facts about tax fraud: 1: The typical tax evader in the United States is a male under the age of 50 in the highest tax bracket and with a complicated return, and the most common means of tax evasion is overstatement of charitable contributions, particularly church donations. 2: Around 90 percent of people who employ babysitters and housekeepers end up cheating on their taxes. 3: If you report against your company/employer for tax evasion, you can earn 30% of the amount collected. 4: The IRS estimated that, by filing tax documents using the identities of real people, fraudsters collected at least $5 billion in 2013 from the agency. 5: Walter Anderson an American telephone entrepreneur who was arrested and convicted in the largest tax evasion case in United States history. He was accused of hiding his wealth in offshore companies in Panama and the British Virgin Islands in an attempt to avoid taxation on his income. The Federal District Court of Washington DC later determined that Anderson did not have substantial financial resources. The companies that Mr. Anderson managed reportedly earned nearly $500 million in revenue during a five-year period. 6: Florida is the state with most identity theft complaints per capita, which is approximately 5 times greater than the state (South Dakota) with least number of complaints . 7: The IRS can issue an audit up to 3 years after your taxes were filed and up to 6 years later if you are suspected of underreporting your income by at least 25%. If you are suspected of fraud, the limit is indefinite. 8: Molson Coors paid no taxes in 2009, and was actually paid $14.7 million by the government. The company used its UK and Canadian based businesses to house gains, paying lower taxes in those countries. Coors also deferred taxes to future years. 9: GE made $10.3 billion in pre-tax income in 2008, but didn't have to pay a single cent in taxes. GE has two divisions, one is the manufacturing and media company, and the other is its financial arm. GE Capital is U.S. based and had significant losses, which allowed it to not pay taxes, while the company's offshore divisions made gains on which they did not have to pay taxes. 10: Bank of America paid no taxes in 2009, even though it made $4.4 billion income. Bank of America utilized a series of tax deductions for losses to offset its taxes, while also taking advantage of the government's $49 billion backstop for credit losses. Although facts 8, 9 and 10 could be interpreted as  fraudulent but they are considered tax loopholes exploited by major US corporations. Source: https://wallethub.com/edu/states-where-identity-theft-and-fraud-are-worst/17549/#main-findingshttps://en.wikipedia.org/wiki/Walter_Anderson_(entrepreneur)

http://facts.randomhistory.com/tax-facts.htmlhttps://usahitman.com/20-taxes/

Tax Season has already begun, and you would be busy filing tax returns by now. But, you are not really ready for it until you prepare yourself to confront this new tax scam. The busiest time of the year seeks your attention not only to prepare tax returns for your clients but also to protect yourself from becoming prey to scammers. Like every year IRS is suspecting some new scams this year. Although IRS has reported a smooth opening of tax season this year with receipt of several thousand tax returns and no real filing issues. But IRS has also admitted that in 2016 it has already seen several email phishing scams, some posing as the IRS. IRS said that scammers are targeting Tax preparers to steal sensitive information – either the preparers’ passwords for IRS accounts or sensitive taxpayer data stored on computers. Tax preparers are getting emails asking them to update their e-services information. The links provided in the email to access e-Services appear to be a phishing scam to capture e-Services usernames and passwords. If you receive any such email impersonating to be from a legitimate organisation, keep in mind the following things:

• Do not click on the links or take any other action. Just disregard the email and go directly to their websites instead
• Just remember that no legitimate organisation- be it your bank, or IRS will ever ask for sensitive information through such unsecured methods.
• To avoid malware, don’t open attachments in emails unless you know who sent it and what it contains.

Scam emails and websites can infect your computer with malware and the malware can give the scammer access to all the sensitive data on your device or track your login information. IRS suggests tax preparers to use computer security scans to avoid such situation:

• Robust security software that helps block malware should be installed for preparers and all employees. Keep it turned on and active at all times.
• Use the “deep scan” function to fully scan all drives and files for any malware or viruses. Performing a deep scan periodically can find any bugs that hide in places a “quick scan” does not search.
• Set your security software to update automatically so it is always up-to-date to detect new and emerging malware and viruses.
• Review the security plan for your office and operations. IRS Publication 4557 can help you.
• Educate employees about the dangers of phishing malware, emails and other scams. One phishing email can result in all office computers being hacked.

Although Tax season is in full swing but taking some time out and practicing these security methods will keep your personal and financial data protected from scammers. Source: https://www.irs.gov/uac/Tax-Preparers-Perform-a-Deep-Security-Scan-of-Your-Computer-Drives  

Customer retention is critical to any company’s success. Most tax professionals will agree that 80% of business comes from 20% of the customers, which illustrates the importance of keeping your clients happy.  Happy clients generate revenue by: - Saving the money you invest for attaining new customer. - A satisfied and loyal customer will grow your business through referrals. - A satisfied customer is more likely to pay for additional services. - Less investment and more business leads to increased profit. Here are some ways to help you retain customers: Let them know that you care: . Good customer service can significantly impact a client’s opinion of your company.  Replying promptly to emails and phone calls, delivering work on time or earlier, and taking the time to answer questions shows your clients that you are on top of things, and that you genuinely care about their well-being. On the other hand, poor customer service and communication will increase tension between you and your clients.. Stay in touch with your client: Being in regular contact with your clients during the tax resolution process serves multiple functions. First, it allows you to update your clients with any important updates on their cases. Second, regularly updating your clients will allow you to keep them up to date on the documents you need them to sign or deliver to you.  Finally, staying in regular contact with your clients allows you to keep updating them on new services that are available to them, be it tax preparation or other accounting services.. Reward your customers for coming back to you: Introduce some discounts or offers for repeat purchases. Keep Innovating: Innovation does not always mean introducing new products or services. It also includes improving your business model and ways to enhance customer experience. Slight changes in business processes can yield significant results. Every positive experience strengthens customer loyalty and increases the likelihood of referrals.

While the peak of tax season is the most chaotic time of the year, it is also the most lucrative for most of the tax professionals. Without proper preparation you can miss out on many opportunities to increase revenue. The best time to begin these preparations is now, during the off season.. The more planning and preparation you do beforehand, the better your business will perform during tax season. Now is the time to learn from last season’s mistakes! Here are some points you should keep in mind while preparing:

1. Plan your budget: Keep last season’s accounts up to date and start preparing for next season. Last tax season should give you a good projection for your future costs during next season. Using that you can plan how much you need to allocate for tax season and off season.
2. Business expansion: If you’re looking to expand, do it now. You don’t want to have to train new employees during rush season, and you don’t want to come across office problems or moving problems then either.
3. Marketing plan: Start planning for marketing initiatives for next season.

• Do some research to get a better understanding of your customers’ expectations.
• Attract new clients through referral marketing.
• Work on your website to improve its visibility on search engines, make it look more presentable and user-friendly.
• Work on your logo and company’s message to target the right customers.
• Give free consultations for selected tax issues. Free counselling to a first time visitor may win you a loyal customer for next tax season.
• Use social media to reach new clients and increase visibility.
• Target seminars, meets, fairs and show your presence through advertising. Distribute brochures covering all the services you offer.

4. Keep your tools ready: If you are planning for expansion you may want to upgrade/change your tax software.  The right software can help you manage a higher volume of clients, increase your ROI on marketing, and lower operational costs.
5. Stay in touch with your clients: Keep sending emails to your clients throughout the year, especially on holidays.  Keep updating them about new offers, and offering limited time discounts can help you lock in clients before the season starts.

Tax Resolution is one of the most in demand as well as demanding professions. Complex tax laws are making taxpayers run to tax experts for help, and with the increased demand for help comes increased competition. Tax resolution can be daunting with so many challengers in the market. Where am I going to get clients and can I establish and keep growing in this market?”. These are questions many tax professionals have as they start their own tax business or want to grow their existing business. Clearly there is more than one factor and method to success, but one of the most oldest and proven methods for acquiring new clients is client referrals.Imagine making cold calls…

Searching phone numbers and other details on internet, telling the prospect about the company and persuading them to try your services. It takes a lot of time and patience, and you will only end up closing a small percentage of these leads. Now imagine calling a person referred by your client… You already have the phone number and basic information, so you save a lot of time here. Its easier to close these leads because of your referral, who the client already knows and trusts. What if you get a call asking about your services??? Customer has basic knowledge regarding your services, and some confidence from the one who referred you. A benefit of these leads is that you already know they need your services.. Is there anything better than that when it comes to new leads?? The last two situations are definitely better. You don’t have to spend money and time on marketing planning. It can also run parallel to other marketing strategies to double the results. Having a good referral system is one of the easiest and pocket friendly way to increase client base. Be it a big tax firm or a startup, a good referral system can act as a magnet to attract clients. New practitioners can always start with their own references, family, friends and ask them for more references. There are few points to keep in mind, and you can start a highly productive referral system. 1: Be sure about your services: You need to build credibility and trust with the customer to make them feel comfortable sharing referrals and recommendations with you. To ask for a referral you need to first deserve to have the referral. Make sure you deliver best in class services, if you feel you are missing out somewhere, try to fill the gap with some discount or value added services to make the customer feel contended. After all, customer satisfaction is the key to success in service industry. If you are unsure how your customer feel about your services, you can always do a quick survey through email/phone to know your customer’s satisfaction level. Once you are sure you are making your customers satisfied, you can comfortably and confidently ask for referrals. 2: Ask for referral: A sales without referral is just a half job done. Remember, your hesitation or ignorance can make you lose good business prospects. While asking for a referral you can help them in recalling your names by briefly telling them about the services you provide. No matter you made a sales with the customer or not, even if he is does not need in your services, “You Must Ask For a Referral”. He might know someone who is looking for tax assistance. At times customers may want to remain anonymous when you call the referral prospect. You should respect their wish and assure them that you will not disclose their names. But most of the time they will not, for genuine referrals. 3: Referral campaigns: You would have came across many brands giving discounts or cashback for providing referrals or many online websites which offer attractive deals on sending invitations to join. These are the referral campaign that help increasing your reach and creates a healthy sales funnel. Yes you need to let out some money in form of discounts and offers, but eventually it pays off with bonus. 4: Follow Up: If the customer is not able to recall any reference, you can ask for a permission to call back or mail again after few days. And don’t forget to get back to to him. Set a reminder. This should be as important as asking for the payment. 5: Express Gratitude: At the end, don’t forget to thank them for giving you time and information. They should feel how important and valuable their response is to you.