Interest On Refunds

I personally never thought of that interest is teid to your tax refund. If you are due a refund, you may get interest on it. If the refund is made within 45 days after the due date of your return, no interest will be paid. If you file your return after the due date (including extensions), no interest will be paid if the refund is made within 45 days after the date you filed. If the refund is made within 45 days-period, interest will be paid from the due date of the return or from the date you filed, whichever is later.
Accepting a refund check does not change your right to claim an additional refund and interest. File your claim within the period of time that applies. If you do not except a refund check, no more interest will be paid on the overpayment included in the check.Interest on erroneous refund- On the flip side, all the interest you were charged on an erroneous refund generally will be forgiven. Any interest charged fior the period before demand for repayment was made will be forgiven unless:

1. You caused the erronoius refund in any way
2.The refund is more than $50,000

Say for instance, the IRS send yo a refund for $1000 but it shoudl have been for only $100, you don't have to pay the interest but you will have to pay the $900 back to the IRS will they request it.

Do you have a business with more than 25 vehicles?

Individuals and organizations with 25 or more trucks, tractors or other heavy vehicles used on highways now are required to make their excise tax filings with the Internal Revenue Service electronically, rather than by paper.

Form 2290, Heavy Highway Vehicle Use Tax Return, is used to report and pay highway-use excise taxes. Last year truckers and others filed over 700,000 Forms 2290 and paid over $1 billion in federal highway use taxes. E-filing of Form 2290 began in August 2007.
Electronic filing streamlines the processing of the Form 2290, is more safe and reliable than paper filing and reduces preparation and processing errors. Although electronically-filing Form 2290 is not required for taxpayers reporting fewer than 25 vehicles, all taxpayers are encouraged to file their forms electronically. Most Forms 2290 are due by August 31.
Another advantage of e-filing Form 2290 is that taxpayers don’t have to wait for a stamped version of the Schedule 1, Schedule of Heavy Highway Vehicles, to be returned by mail because they will almost instantly receive the equivalent of a stamped version electronically. This means truckers won't have to wait to register their vehicles with the appropriate state authority when obtaining the proper license tags.

Retirees....have you filed your 2007 return?

Just in the news, this past week was still the issue of many retirees and those drawing social security that have received their stimulus check because the lack of filing their 2007 return. Don't miss out on this qualifying opportunity to receive a payout.



The Internal Revenue Service today reminded qualifying retirees and veterans that it is not too late to file for an economic stimulus payment and announced it will send a second set of information packets to 5.2 million people who may be eligible but who have not yet filed for their stimulus payment.
The packages will contain everything needed by a person who normally does not have a filing requirement but who must file this year in order to receive an economic stimulus payment. There will be instructions, an example Form 1040A return showing the few lines that need to be completed, and a blank Form 1040A. The packages will be mailed over a three-week period starting July 21.
“All it takes is a few simple steps, and the payment can be on its way. It’s not too late to file, but the sooner people file, the faster they’ll receive their money,” said Doug Shulman, IRS Commissioner.People receiving only Supplemental Security Income are not eligible. Eligible people must have a Social Security number (unless their spouse is a member of the military) and be neither a dependent nor eligible to be a dependent on another’s tax return.
The mailing is part of an IRS summer campaign to reach out to those people who have no requirement to file a tax return but who may be eligible for a stimulus payment of up to $300 ($600 for married filing jointly). For those eligible for a payment for themselves, there also is a $300 per child payment for eligible children younger than 17.

Do You Qualify For Head Of Household?

To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. You can determine whether you paid more than half of the cost of keeping up a home by using the following worksheet.

Cost of Keeping Up a Home :

Property taxes
Morgage interest expense
Rent
Utility charges
Upkeep and repairs
Property insurance
Food consumed on the premises
Other household expenses

If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost of keeping up the home.
Costs you include: the cost of upkeep expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home.
If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost.
Costs you do not include: the cost of upkeep expenses such as clothing, education, medical treatment, vacations, life insurance, or transportation. Also, do not include the rental value of a home you own or the value of your services or those of a member of your household.


There are so many nuances that the average taxpayers negates to include when preparing tax returns. Before you cost yourself money, contact a licensed tax preparer to help prepare your returns.

Head Of Household-

If I moved out of my house on July 10, but was not divorced at the end of the year, can I file as head of household and take the earned income credit if I have a minor child? Can I also claim child care expenses?

You do not qualify for the head of household filing status because you and your spouse have not lived apart for the last 6 months of the taxable year and are not considered unmarried. Your filing status for the year will either be married filing separately, or married filing jointly. If it is married filing separately, you will not qualify for the Earned Income Credit and cannot claim a credit based on child care expenses. If you file a joint return with your spouse, you may be eligible to claim these credits. See Publication 503, Child and Dependent Care Expenses and Publication 596, Earned Income Credit

If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. You will also receive a higher standard deduction than if you file as single or married filing separately.

How to file: If you file as head of household, you can use either Form 1040A or Form 1040. Indicate your choice of this filing status by checking the box on line 4 of either form. Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax.
Considered Unmarried
To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. You are considered unmarried on the last day of the tax year if you meet all the following tests.
*You file a separate return (defined earlier under Joint Return After Separate Returns).
*You paid more than half the cost of keeping up your home for the tax year.
*Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances.
*Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Home of qualifying person, later, for rules applying to a child's birth, death, or temporary absence during the year.)
*You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described later in Children of divorced or separated parents under Qualifying Child or in Support Test for Children of Divorced or Separated Parents under Qualifying Relative. The general rules for claiming an exemption for a dependent are explained later under Exemptions for Dependents.

Stipulations On An Offer In Compromise

Individuals Must File All Federal Tax Returns and Pay Required Estimated Tax Payments
The IRS expects a taxpayer requesting an OIC to file all delinquent tax returns and pay any required estimated tax payment. IRS will notify taxpayers and provide 30 days to file delinquent returns or make the required estimated tax payments. Failure to comply will cause the IRS to return the offer back to the taxpayer. The $150 application fee along with all TIPRA payments previously paid will be retained by the IRS and applied to the taxpayer’s liability.
Businesses Must File All Federal Tax Returns and Timely Pay all Required Federal Tax Deposits
The IRS is cautious to avoid providing financial advantages to operating businesses through the forgiveness of tax debt. This may create the appearance that the delinquent business has been able to profit from its failure to pay, giving it an advantage over other, fully compliant businesses.
Businesses that have employees are expected to have paid all required federal tax deposits for the current quarter in order for their offer to be evaluated. If the IRS determines that the required deposits have not been paid, the taxpayer will be provided with a reasonable amount of time to pay the deposits before the IRS proceeds with the investigation. In addition, the business will be expected to remain current on all filing and deposit requirements while the offer is being investigated.
Failure to either pay the deposits as requested, remain current with filing or pay all deposits that become due while the offer is under investigation will cause the IRS to return the offer back to the taxpayer. The $150 application fee along with all TIPRA payments previously paid will be retained by the IRS and applied to the taxpayer’s liability.
Statute of Limitations for Assessment and Collection is Suspended - The statute of limitations for assessment and collection of a tax debt is suspended while an OIC is "pending," or being reviewed.
The OIC is pending starting with the date an authorized IRS employee determines the Form 656 Offer in Compromise is ready for processing. The OIC remains pending until the IRS accepts, rejects, returns or acknowledges withdrawal of the offer in writing. If a taxpayer requests an Appeals hearing for a rejected OIC, the IRS will continue to treat the OIC as pending. Once the Appeals office issues a determination in writing to accept or reject the OIC then the pending status is removed.
Taxpayers Must File and Pay Taxes - In order to avoid defaulting an OIC once accepted by the IRS, taxpayers must remain in compliance in the filing and payment of all required taxes for a period of five years or until the offered amount is paid in full, whichever is longer. Failure to comply with these conditions will result in the default of the OIC and the reinstatement of the tax liability.
Federal Tax Liens are Not Released - If there is a Notice of Federal Tax Lien on record prior to filing Form 656, the lien is not released until the OIC terms are satisfied, or until the liability is paid, whichever comes first. A Notice of Federal Tax Lien may be filed during the course of an OIC investigation regardless of the type of offer being considered.

Is Your OIC (Offer In Compromise) Processable

As a result of TIPRA, beginning July 17, 2006 in order to be considered for an OIC, a taxpayer must have met all of the following requirements:
The taxpayer is not a debtor in an open bankruptcy proceeding.
The $150 application fee, or a signed Form 656-A, "Income Certification for Offer in Compromise Application Fee and Payment" must be submitted.
The 20 percent payment with the lump sum offer, or a signed Form 656-A, "Income Certification for Offer in Compromise Application Fee and Payment" must be submitted.
The first installment payment on a periodic payment offer, or a signed Form 656-A, "Income Certification for Offer in Compromise Application Fee and Payment" must be submitted.
An offer that is received with a payment that is less than 20 percent payment on a lump sum offer will be deemed processable but the taxpayer will be asked to pay the remaining balance in order to avoid having the offer returned. Failure to submit the remaining balance will cause the IRS to return the offer and retain the $150 application fee.
Taxpayers filing a periodic payment offer (e.g. short term periodic, or deferred periodic offer) are required to submit the full amount of their first installment payment in order to meet the processability criteria. If the full amount of the first installment payment is not provided, the IRS will deem the offer not processable and will return the $150 application fee to the taxpayer.
If during the OIC investigation the initial offer amount is determined to be insufficient and not reflective of the taxpayer's ability to pay, the taxpayer will in most instances, be contacted and asked to increase the offer and submit the corresponding 20 percent payment if the offer was filed as a lump sum cash offer, or the periodic payment if the offer is a short term or deferred payment offer. The IRS may reject the offer if a taxpayer fails to increase the offer and provide the additional payment(s). The IRS will credit the taxpayer's account(s) with any payment(s) submitted with the original offer.
The IRS will deem an OIC "accepted" that is not withdrawn, returned, or rejected within 24 months after IRS receipt. If a liability included in the offer amounts is disputed in any judicial proceeding that time period is omitted from calculating the 24-month timeframe.
Application Fee Required for OIC - All taxpayers who submit a Form 656, "Offer in Compromise" must pay a $150 application fee except in two instances:
The OIC is submitted based solely on "doubt as to liability;" or>
The taxpayer's total monthly income falls at or below 250% of the Department of Health and Human Services (DHSS) poverty income levels.



If have further questions or need IRS help, please contact someone who is a licensed professional and skilled at resolving tax resolution issues.