Are You Missing Your Federal Tax Refund for 2008?

If you have just filed your 2008 federal tax return, and you have yet to receive your rebate, you can log onto the irs.gov website to find out if the return has been processed. Whether you opted for direct deposit or asked the IRS to mail your refund check, you still have the option of tracking your refund on the irs.gov website.

You can generally get information about your refund 72 hours after IRS acknowledges receipt of your e-filed return, or three to four weeks after mailing a paper return.
Have a copy of your tax return handy. You will need to provide the following information from your return:

*Your Social Security Number (or Individual Taxpayer Identification Number);
*Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er))
*The exact whole dollar amount of your refund

It's a good indicator that if you have not received your refund within 28 days, from the original IRS mailing date shown, then you are able to trace your refund by changing your address online.
Begin your search at"Where's My Refund" Here you will enter your SSN, Filing Status, and Refund Amount, and hit submit.

As always, please be aware of emails and phising scams. It is important to keep in mind that the IRS never sends out emails falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

IRS Speeds Lien For Homeowner's Trying To Refinance Or Sell

The Internal Revenue Service announced earlier in the year an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.If taxpayers are looking to refinance or sell a home and there is a federal tax lien filed, there are options. Taxpayers or their representatives, such as their lenders, may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan. Taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.“We don’t want the IRS to be a barrier to people saving or selling their homes. We want to raise awareness of these lien options and to speed our decision-making process so people can refinance their mortgages or sell their homes,” said Doug Shulman, IRS commissioner. “We realize these are difficult times for many Americans,” Shulman said. “We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions.”Filing a Notice of Federal Tax Lien is a formal process by which the government makes a legal claim to property as security or payment for a tax debt. It serves as a public notice to other creditors that the government has a claim on the property.In some cases, a federal tax lien can be made secondary to another lien, such as a lending institution’s, if the IRS determines that taking a secondary position ultimately will help with collection of the tax debt. That process is called subordination. Taxpayers or their representatives may apply for a subordination of a federal tax lien if they are refinancing or restructuring their mortgage. Without lien subordination, taxpayers may be unable to borrow funds or reduce their payments. Lending institutions generally want their lien to have priority on the home being used as collateral.

Do You Have Tax Debt & You Are Looking To Buy A New Home?

We all know that with the rising issues with the economy and the number of declined loans, it is becoming increasingly harder to purchase a home these days. Not to mention if you are in tax debt, there are implied liens placed on your property until that lien has been satisfied.


Recently I have been asked to supply mortgage lenders with a letter declaring that the lien has been satisfied because the debt was paid in full. At this time, the mortgage lenders will not grant a loan to a taxpayer until they know that there is no liens attached to the properties.

On the flip side, if you are selling your home, you will need to apply for a loan discharge. You do not want to purchase a property with a lien attached to it. This is particularly why title searches are ran before a homeowner makes the final decision.


Discharge of a Federal Tax Lien :


If you are giving up ownership of property, such as when you sell your home, you may apply for a Certificate of Discharge. Each application for a discharge of a tax lien releases the effects of the lien against one piece of property. Note that when certain conditions exist, a third party may also request a Certificate of Discharge. If you're selling your primary residence, you may apply for a taxpayer relocation expense allowance.



Withdrawing Liens
By law, a filed notice of tax lien can be withdrawn if:
*The notice was filed too soon or not according to IRS procedures,
*You entered into an installment agreement to pay the debt on the notice of lien (unless the agreement provides otherwise),
*Withdrawal will speed collecting the tax, or
*Withdrawal would be in your best interest (as determined by the Taxpayer Advocate), and in the best interest of the government.



If you have tax debt, and you need someone to help get you in a resolution so that you can move forward with the purchase of a new home, don't hesitate to call a tax professional today.

Can The IRS Abate Interest Owed On Valid Tax Liability?

So many taxpayers are convinced that the IRS will abate interest. Unfortunately the only reason why the IRS would abate interest, would be due to their error or neglagance. If an error occured on the taxpayers part, then in no instance would they be accountable for the error. The IRS takes great pride on not making mistakes and where they are mistakes made, the IRS will do a proctological exam on the emplied error ( depending on the value of the error) before issuing a refund. On the other hand, penalty abatement is more feeseable but it to has its miticulous requirements before abating. Reason's would be as followed:*Incarceration*Severe medical condition that would prevent a taxpayer from filing their returnUnfortunately, penalties are difficult to get abated as well, but the IRS will consider a reasonable cause that would benefit a taxpayer in granted. Requesting Abatement or Refund of Interest Due to IRS Error or DelayThe IRS can abate interest if the interest is caused by IRS errors or delays.The IRS will abate the interest only if there was an unreasonable error or delay in performing a managerial or ministerial act (defined on this page).
The taxpayer cannot have caused any significant aspect of the error or delay. In addition, the interest can be abated only if it relates to taxes for which a notice of deficiency is required. This includes income taxes, generation-skipping transfer taxes, estate and gift taxes, and certain excise taxes. Interest related to employment taxes or other excise taxes cannot be abated. The term “managerial act” means an administrative act that occurs during the processing of your case involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel.

Myth: Wages,Tips & Other Compensation Are Not Considered Income

This argument asserts that wages, tips, and other compensation received for personal services are not income, because there is allegedly no taxable gain when a person “exchanges” labor for money. Under this theory, wages are not taxable income because people have basis in theirlabor equal to the fair market value of the wages they receive; thus, there is no gain to be taxed.
A variation of this argument misconstrues section 1341, which deals with computations of tax where a taxpayer restores a substantial amount held under claim of right, to somehow allow adeduction claim for personal services rendered.Another similar argument asserts that wages are not subject to taxation where a person has obtained funds in exchange for their time. Under this theory, wages are not taxable because the Code does not specifically tax these so-called “time reimbursement transactions.” Some take a different approach and argue that the Sixteenth Amendment to the United States Constitution did not authorize a tax on wages and salaries, but only on gain or profit.
For federal income tax purposes, “gross income” means all income from whatever source derived and includes compensation for services. Any income, from whatever source, is presumed to be income under section 61, unless the taxpayer can establish that it is specifically exempted or excluded.
In 1994,the court stated, “an abiding principle of federal tax law is that, absent an enumerated exception, gross income means all income from whatever source derived.” The IRS issued Revenue Ruling 2007-19, advising taxpayers that wages and other compensation received in exchange for personal services are taxable income and warning of the consequences of making frivolous argumentsto the contrary.

Can You Prevent Levies/Liens ?

Many of our clients are all consumed with having liens/levies filed. Once this happens, consider yourself in collections status. However to get here, one would have to be a perpetual late filer or have debt liability, causing them to react (to important notices)later than than they should have. It's always important to take care of the issue at hand versus waiting to the last minute which in turn will cause undo stress and increased penalties and interest that are extremely difficult to get abated. Keep in mind that there are several notices (about 11 to be exact) the Internal Revenue Service will send you before you get assigned to the collection department. Unfortunately, some taxpayers are naturally procrastinators which invariably continue to get themselves in deeper debt with the IRS, if not addressed as soon as the notice is received.


It's apparant that taxpayers don't take the IRS serious when these notices are sent. But after the following subsequent notices are sent, the IRS will not be so lenient with a taxpayer after trying to worn them time after time. For all tense and purposes, the IRS gives a delinquent taxpayer ample opportunity to get in compliance. These eleven notices could delay the collections process for years.


Here are the notices the IRS will send to a delinquent taxpayer before sending them to the collections department: CP-501CP-502CP-503CP-504L-1058. After you have been sent the CP-504, the IRS considers you in "collections". Immediate action to levy your bank account or wage will take place in about 40 days from the time you are sent the CP-504. If issued a bank levy, the financial institution has to place a hold on the available funds for 21 days before being levied. About 30 days from when the 504 is sent , the taxpayer will be issued an L1058. This is the final notice that confirms the levy implementation on ones bank or wage. If a taxpayer tries to call and rectify their tax debt, they will be unsuccessful due to the requirement of a Power Of Attorney. POA's are the only individuals with enough authority to have a Stay On Collection granted.

In terms of a lien filing, there is always an implied federal tax lien when you have tax liability. Most of the time this tax lien is not filed unless you owe over $25,000. If you owe less than this amount, you can get into an affordable payment plan based on the assessed balance. If you get into the installment agreement before the lien is applied then you are secured with no future levies,liens. However, if you let the issue persist then levies/liens will be issued and not liens are never lifted until the debt is paid in full.


It is imperative that you take care of your tax debt and file your returns on time. Once entering in the collection process, there is no turning back. The IRS will continue this daunting process with hopes the client pays their debt owed in full.There are reputable companies out there that can help with the filing of your taxes and your tax liability where you don't have to pay your debt in full. If you find yourself currently in the collection department, don't wait. Its better to be proactive instead of trying to catch up.

How Could You Get Your Tax Penalties Abated?

So many taxpayers are convinced that the IRS will abate interest. Unfortunately the only reason why the IRS would abate interest, would be due to their error or neglagance. If an error occured on the taxpayers part, then in no instance would they be accountable for the error. The IRS takes great pride on not making mistakes and where they are mistakes made, the IRS will do a proctological exam on the implied error ( depending on the value of the error) before issuing a refund. On the other hand, penalty abatement is more feeseable but it to has its miticulous requirements before abating. Reason's would be as followed:

*Incarceration*Severe medical condition that would prevent a taxpayer from filing their return. Unfortunately, penalties are difficult to get abated as well, but the IRS will consider a reasonable cause that would benefit a taxpayer in granted.Requesting Abatement or Refund of Interest Due to IRS Error or DelayThe IRS can abate interest if the interest is caused by IRS errors or delays.The IRS will abate the interest only if there was an unreasonable error or delay in performing a managerial or ministerial act (defined on this page). The taxpayer cannot have caused any significant aspect of the error or delay. In addition, the interest can be abated only if it relates to taxes for which a notice of deficiency is required. This includes income taxes, generation-skipping transfer taxes, estate and gift taxes, and certain excise taxes. Interest related to employment taxes or other excise taxes cannot be abated. See Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund, for more information.Managerial act. The term “managerial act” means an administrative act that occurs during the processing of your case involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel.

A decision regarding the proper application of federal tax law is not a managerial act.Ministerial act. The term “ministerial act” means a procedural or mechanical act that does not involve the exercise of judgment or discretion and that occurs during the processing of your case after all prerequisites of the act, such as conferences and review by supervisors, have taken place.

A Resolution To Relieve You From Your Current Tax Liability

I had a client email me ask me what Currently Not Collectible actually meant. So many taxpayers with outstanding tax liability have no idea that IRS can stop collections on your liability. However, CNC Status is not as easy to obtain as it used to be. The IRS is cracking down on the qualifications for CNC. The IRS's decision is predicated on the following requirements:

1. The IRS has to deem you as having less than $25/month in MDI (Monthly Disposable Income) which is your income less your monthly expenses (IRS allowable expenses),
2. No liquid assets to pay yout liability
3. Automatic CNC will be approved if the taxpayer is deceased with no collection potential from the deceadent estate or no collection potential for estate taxes
4. CNC approved a corporation or LLC is classified as a partnership or association taxable as a corporation remains in business and is current but is unable to pay back taxes. Also when a corporate income tax liability owed by a financial institution certified as insolvent by the Officer of the Controller of the Currency or the Office of Thrift Supervision
5. A taxpayer is deployed to a combat zone
6. When collection of the liabiltiy would create an undue hardship for taxpayers by leaving them unable to meet necessary living expenses.

According to the IRS approval, they will cease payments of taxes for at least 12-18 months, when they will review your current financial stability for re-approval of CNC or the induction back into collections for ability to pay (closing code).When the time comes to re-evaluate your case, the IRS will default your CNC status if they can't locate you, and could possibly levy you. The IRS will annually send you a statement balance (CP 89) around 12-18 for case review. They basically want to see if anything has changed about your current financial state. Finally, a tax lien will always be filed with CNC status. This is a public notice filed with the county courthouse against your property. Therefore, if you were to go try to sell your property, the lender would first be paid off, then the IRS and any left over proceeds would be for your gain.

Are You In Tax Compliance?

What does being tax compliant mean?- Filing all required tax returns (Business or Individual) for the years 2001-2006-Paying your taxes (Business-income,payroll,excise) (Individual-income,payroll,excise)-Being current on your tax payments (Business -estimated and federal tax deposits) (Individual -estimated taxes)

What does "Due Process"mean? Following legal procedures set forth in the IRS for assessing additional tax liability. Notice (i.e. CP 2000 or an Audit Report) (Form 4549).*30 Day letter (for to exercise internal appeal rights)*90 Day letter (for Taxpayer to exercise appeal to the US Tax Court)- Certified Mail!!!!A Tax Consultant can help you better understand the nuances of the collection process.