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Archive for Venar Ayar

Passport Renewals When You Owe IRS Tax Debt

Venar Ayar On Passports

Did you know that your IRS tax debt could prevent you from renewing your passport?  The IRS has been talking about doing this for years and beginning in February of 2018, the IRS began certifying tax debt to the State Department for seriously delinquent taxpayers, which could result in a denial of your passport renewal.

However, not all taxpayers who owe the IRS money will have their passports denied. Read on to determine whether your passport is at risk.

Your Tax Debt Must Be Seriously Delinquent

First, your tax debt, penalties, and interest must exceed $52,000 to be considered seriously delinquent. If you owe less than this amount, your passport is safe for now.

The IRS also needs to either file a Notice of Federal Tax Lien or a tax levy. Once your appeal options expire or are exhausted, your tax debt can be considered seriously delinquent.

Even if you meet these two criteria, there are a number of ways you can avoid certification of your tax debt to the State Department. Consult a tax attorney to avoid a certification and resolve your tax problems.

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Is Your Company Facing A Payroll Tax Audit? Here Are Four Steps To Help You Prepare

Venar Ayar Payroll Tax Audit

A tax audit is a time to prepare and not to panic. Many companies are requested to supply documents to support deductions, and if your company keeps good records, a tax audit can be a simple inconvenience.

The important thing is to prepare for your date with the tax auditor. He or she can be a federal auditor, a state auditor, or a local auditor from the IRS. Whoever comes, you should be ready with documentation and good information that supports your company’s payroll tax filing.

Here we will look at four steps that can help you prepared for the big day. But first, let’s understand the meaning of payroll audit.

What Is A Payroll Audit?

A payroll audit is an examination that analyzes s a company’s payroll processes to ascertain accuracy. It examines things such as business’s current employees, wages, pay rates, and tax withholdings.

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6 Common Offer In Compromise Mistakes To Avoid

Venar Ayar

Failure to get your offer in compromise (OIC) accepted is always devastating both financially and even emotionally because you are left with a tax burden that might be worse than before. A lot of these offers are rejected because incompetent tax resolution firms make one of six common mistakes. So, what are these mistakes, and how can you avoid them? We have looked at the 6 common offers in compromise mistakes that you should avoid.

What Is An Offer In Compromise?

You cannot make an OIC if you don’t know what it entails. This is an option provided by the IRS that permits taxpayers to settle part of their debts. It is a great option since it gives taxpayers a new beginning with the IRS, but the primary aim of the offer is to come to an agreement for payment that is friendly to both the IRS and the taxpayers.

You can submit an offer in compromise on the following grounds:

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Understanding The Basics Of The New IRS Virtual Appeal

Venar Ayar On Virtual

It is a common misconception among American taxpayers that the Internal Revenue Service (IRS) offices work at a slow pace (I mean… they’re not the post office. Amirite??). The IRS took a big step by offering an efficient and timeless program that allows taxpayers to hold “face to face” meetings with the IRS representatives – IRS Virtual Appeal.

This program was designed to remove the need for paperwork, and the long wait taxpayers endure when appealing their tax situations. Learn some of the basics of the new IRS virtual appeal program in this article to resolve your time consuming and complicated tax matter faster.

What is the New IRS Virtual Appeal Program?

As its name suggests, the IRS virtual appeal is a web-based video conference program that connects the IRS representatives, taxpayers, and their representatives via virtual technology. The IRS launched the virtual appeal program on August 1, 2017, as a pilot program and later rolled it over to some selected states in 2018.

So far, the program has allowed taxpayers, their representatives, and IRS appeals office staff to hold a meeting by way of a safe, web-based video conference. The video conference is not only secure but also private and can be done in your office or home.

This is a program that will bring the much-needed efficiency in the tax appeal cases and eliminate the need of visiting the IRS offices countless times.

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What Is The Threshold For FBAR Filing?

Venar Ayar On FBARs

If you had a financial interest in or signature authority over foreign accounts exceeding $10,000, you need to file a Foreign Bank Account Report (FBAR). An unfiled FBAR can lead to a $10,000 penalty for non-willful violations and much higher penalties for willful violations.

Aggregate Account Balance

The $10,000 threshold is based on your aggregate account balance. That means if you own two foreign accounts and their combined balance exceeds $10,000, you need to file an FBAR even if neither account exceeds $10,000 on its own.

The FBAR filing requirement is also based on the highest account balance during the year. If your account balance exceeds $10,000 for even one day during the year, you need to file an FBAR.

FATCA Filing Requirements

The Foreign Account Tax Compliance Act (FATCA) imposes different requirements on taxpayers with foreign accounts. This may require to file a Form 8938, Statement of Specified Foreign Financial Assets.

The Form 8938 filing requirements for taxpayers living in the U.S. are as follows:

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How To File An FBAR For Previous Tax Years

Venar Ayar On FBAR Filings

You have three major option for filing Foreign Bank Account Reports (FBARs) for previous tax years. The best option for you will depend on the specific facts of your case, such as:

  • Whether you failed to report foreign income during the tax years in question.
  • Whether your failure to file was willful or non-willful.
  • Your risk tolerance.
  • How much the estimated amount of penalties will be when using the Streamlined Procedure or the new Offshore Disclosure Framework.

Consult a tax attorney before you use any type of offshore disclosure method to make sure you are correctly following IRS procedures.

Delinquent FBAR Submission

This method involves simply sending in the delinquent FBARs. You don’t pay any penalties and you don’t have to amend your tax returns.

You can only use this strategy if you are not under civil examination or criminal investigation by the IRS and have not been contacted about the delinquent FBARs. You won’t owe any penalties if you didn’t have foreign income or paid tax on your foreign income during the years you failed to file FBARs.

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How To Avoid Tax Problems When Moving Overseas

Venar Ayar -Living Overseas

If you move overseas to retire or for other reasons, you’ll still need to stay on top of your U.S. tax obligations. That’s because the United States uses a citizenship-based taxation regime, unlike some other countries that tax income based on where it’s earned or where you live.

Be aware of the following tax issues before you make a permanent move to an overseas location.

State Tax Issues

You may plan to leave your home-state behind for good. However,RetiremRetirement Expatriationyour state may believe that you are still a resident who needs to pay state income taxes.

Some states are more aggressive than others in seeking taxes from residents who have moved overseas or to a different state. If you still own a home or have other ties, the state will be more likely to consider you a resident.

Consider the pros and cons of maintaining these ties. If you want to keep your residence for occasional visits, understand that this may have tax consequences.

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Is The IRS Pursuing A Criminal Charge Against You?

Venar Ayar - IRS Criminal Charges

The percentage of criminal charges filed against taxpayers in the United States in 2019 is generally lower than it has been in the previous years. The chances of undergoing a criminal investigation by the IRS are therefore minimal. However, you might still find yourself part of that small percentage with no idea how to address their tax issues and avoid a prison sentence. Tax issues are very complex and mistakes are bound to happen.

How Does The IRS Recognize Tax Fraud?

The IRS has become more understanding and lenient when it comes to errors in calculations and other honest mistakes, for instance, miscalculating the amount of Earned Income Tax Credit. This is a painful mistake with its consequences but it is not likely to trigger a criminal investigation.  Purposely concealing records such as a bank account from an auditor, on the other hand, is a sure way to call for probe into your situation. What scenarios then, may lead to a criminal investigation by the IRS?

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Innocent Spouse: Are You Being Pursued For Taxes You Know Nothing About?

Venar Ayar- Innocent Spouse

A significant number of couples choose to file joint taxes to mainly take advantage of the higher standard deductions and other benefits that married couples enjoy. However, most of these couples do not understand the legal ramifications that come with the joint-filing status. The government, for example, is allowed to come after either spouse in the event that there is a debt or wrongdoing by the other partner. If you are facing such a problem, this is where innocent spouse relief can help you. Having this problem in the midst of a divorce can make it even more complex since divorces are mostly traumatic.

All you need to know about innocent spouse relief

While it is possible for an innocent spouse to get some relief, this can only be possible under the right circumstances. First, this relief is only available for income taxes since employment taxes are excluded. Second, the relief can only be invoked by spouses that filed a joint income tax return. Those that filed returns on the basis of married filing separate are not entitled to the relief since everyone in such an arrangement is responsible for their taxes. Third, the IRS and even the courts are likely to disregard any tax liability that a couple may have set out in their divorce proceedings. Finally, it is also important to check with the laws from your state to ensure that you can get relief from both the IRS and your state.

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Filing For Bankruptcy And Handling IRS Income Tax Debt

Venar Ayar - Filing For Bankruptcy

Looming income tax debt can be daunting and create financial stress.  What are your best options to resolve the debt and would filing bankruptcy help?  Here is the breakdown of how tax debt is handled in the two main types of consumer bankruptcy.

Chapter 13 bankruptcy  is a debt repayment plan.  While it is still possible to discharge or eliminate a portion of debt through a Chapter 13 plan, the focus is repayment of debt with court protection from creditors.  This includes State of Michigan Income tax debt as well as IRS tax obligations.

The key to how the debt is handled is based on:

  • The age of the tax debt
  • The amount of time that has passed since the tax returns have been filed, including whether the tax returns were filed late.

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Does Your Spouse Want To Out You To The IRS?

Venar Ayar- Does Your Spouse

Whistle blowers are among the favorite heroes loved by the IRS. In fact, the IRS loves them so much that it has a program that may award a whistle blower up to 30% of the evaded tax or penalty it collects. While this should not be a problem to anyone that pays their taxes dutifully, you should be concerned if someone can blow the whistle on your illegal operations. So, who are these whistle blowers? Former employees, ex-business partners and even spouses are some of the people that may decide to out you to the IRS. These people may decide to turn on you for a couple of reasons and this blog article will help you know what to do in case it happens. But first things first.

Why do spouses turn on each other?

It is painful to think that the person you have committed your life to can blow the whistle on you. These people, however, have spent so much time with you and are likely to know some of your secrets including your tax evading tactics. Here are some reasons why spouses turn on each other.

1. Emotions

Let’s be frank here. Your spouse will not want to out you to the IRS if you are still in love with each other. This is especially true for people who are going through a divorce proceeding. There is likely to be an emotional element that makes a spouse or separated partner want to turn you in because of tax crimes. Maybe they feel hurt, betrayed or neglected over something you did to end the marriage and they may want to have their revenge. While there are other reasons for outing you, it is crucial that you do not underestimate the role of emotions in this. After all, you might end up in jail just because of this.

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Consequences Of Failing To Resolve Your Tax Debt

Venar Ayar - Consequences
Are You Unable To Resolve Your Tax Debt?

Very few things in life are as stressful as owing the IRS money, especially if you do not have the funds to pay what you owe. “So what should I do?” You are probably wondering. Well, this should not be a complicated issue if you can get the services of a proficient tax defense attorney. Since what you do at this juncture will matter a lot, it is important that you do the right thing to avoid legal trouble. Here are a couple of things to keep in mind if you are unable to resolve your debt.

The Don’ts
1. Failing To File Returns

The first and most tempting mistake that most people make when they realize they are unable to pay their taxes is not filing returns at all. While this seems like a good idea, it will lead to more penalties. The IRS automatically places a 5% penalty each month up to 25% if you do not file your taxes. Furthermore, you will also be expected to pay interest on the total bill until it is paid in full.

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