KD-This Taxpayer came to our Firm as a Referral for owing the IRS $138,426.86 for tax years 2000-2009. She was very upset that her ex-husband, a professional film maker in CA, and self-employed did not pay in his taxes to the Federal Government during the time they were married. He claimed that he was paying his self-employment taxes in estimated tax payments, while his wife, KD was a W-2 Wage Earner having Federal Taxes withheld on her paycheck. It wasn’t until years later, that she had her taxes prepared and came to our Firm, at which time the IRS had issued Wage Garnishments on her paycheck, that she learned her ex did not pay his share of taxes. When the Wage Garnishment hit, she was divorced, a single wage earner with two young minor children living at home. There was no child support coming in from her ex-husband to help her support her minor children and there was not enough money left over at the end of the money to pay the IRS. She was barely getting by. Our Firm, Redd & Greaves, P.C., analyzed her monthly financial situation and it was determined that KD qualified as Status 53 or “Currently not Collectible”. After carefully reviewing the facts of her case, our Firm advised KD that she qualified for Innocent Spouse Treatment. She provided a history time line and facts that supported us filing a Form 8867, Request for Innocent Souse Relief, for the TP. The Firm just received a letter last week that her Innocent Spouse Relief has just been granted by the IRS for all tax periods. The TP is relieved that now she can finish raising her children without fear of the IRS taking any money she needs to put food on the table for her kids or keep a roof over their heads.  

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LKW-These Taxpayer(s) came to our Firm as a Referral for owing the IRS $126,153.87 for tax years 1999-2011. They were confused and overwhelmed over the amount owed as to what they should do. Also, they wanted to make sure that Mr. W could continue to work without fear of wage garnishments every two years. He felt like even though he was good at his trade, it was embarrassing that he had to quit his job every two years and he was tired of running from the IRS. He was ready to deal with the situation and needed a logical answer to what he could do. Redd & Greaves, P.C. gathered all Mr. and Mrs. W’s tax data and reviewed their situation and advised that it would be in their best interest to file bankruptcy. Ms. W was not so comfortable with that advice and asked for a meeting with our Firm to discuss their options and to go over the results of our computer generated profile for their case. She finally went along with the plan but was still leery of bankruptcy. After Mr. and Mrs. W met with us again, Mr. Redd told Mr. and Mrs. W that “life would get better for your after bankruptcy”, they took his advice and sought out a Bankruptcy Attorney referred by our Firm. Mr. and Mrs. W kept us informed through the whole process and a year later reported to us that they were so happy they took our advice and indeed, “life did get better for them”.  They later sent a thank you card and expressed that finding Redd & Greaves, P.C. was a blessing and that they could not have made that decision without our Firm. Our Firm now prepares tax returns for Mr. and Mrs. W and they truly value our services and friendship. They feel our Firm, Redd & Greaves, P.C., has changed their lives and are grateful.

 

  • Issue 2015-29 IRS Makes it Easier for Small Businesses to Apply Repair Regulations to 2014 and Future Years WASHINGTON-
    The Internal Revenue Service today made it easier for small business owners to comply with the final tangible property regulations. Requested by many small businesses and tax professionals, the simplified procedure is available beginning with the 2014 return taxpayers are filling out this tax season. The new procedure allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014. Also, the IRS is waiving the requirement to complete and file a Form 3115 for small business taxpayers that choose to use this simplified procedure for 2014. “We are pleased to be able to offer this relief to small business owners and their tax preparers in time for them to take advantage of it on their 2014 return,” said IRS Commissioner John Koskinen. “We carefully reviewed the comments we received and especially appreciate the valuable feedback provided by the professional tax community on this issue.” The new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. Details are in Revenue Procedure 2015-20, posted today on IRS.gov. The revenue procedure also requests comment on whether the $500 safe-harbor threshold should be raised for businesses that choose to deduct, rather than capitalize, certain capital expenses.

Now that it’s Tax Time, many small businesses are just now being educated on the recently implemented Tangible Property Regulations by the Internal Revenue Service. This regulation requires every business and rental property owner with materials, supplies, equipment and real estate to change their accounting method and file an eight page Form 3115, Change in Accounting Method and more often than not, multiple Form 3115’s.

This change by the IRS makes it more restrictive to take current tax deductions for materials and supplies that are not used in the year purchased and certain changes to how repairs and similar items were previously deducted. Although Congress gave the authority to the IRS to write these regulations and set limits on Taxpayers, with financial guidelines, the expressed concern was the adoption of the changes regulated by the IRS.

The instructions for the Form 3115 is 20 pages long and is required to be attached to the tax return filed, as well as a separate copy of the form to the IRS in Ogden, Utah. The Tangible Property Regulations are far too complex and burdensome on America’s Small Business and the IRS is requiring the Form 3115 be filed out on every Taxpayer with depreciable property, repairs and maintenance costs or materials and supplies. Compliance to this new regulation will cost the American Taxpayers a great deal more in preparation fees this year and better seek a good professional such as an Enrolled Agent who is knowledgeable about this new law.

A less complex approach would be to attach a statement or election to each tax return that the Taxpayer has adopted the Tangible Property Regulations but we all know the IRS’s motive with this new law is not to simplify anything!

Commissioner Koskinen and every member of Congress needs to hear your voice now before it is too late. Go to http://www.contactingthecongress.org and click on your state to find your Representatives. You can email the IRS Commissioner at John.A.Koskinen@irs.gov.

The IRS Commissioner, John Koskinen, announced that refunds totaling almost $760 Million for an estimated 981,600 Taxpayers is about to go away if they did not file a Federal Income Tax Return for the tax year 2010. In order to collect the money, the IRS requires an individual to file a 2010 Tax Return by April 15, 2014.

Taxpayers need to be aware that even if they file their 2010 Income Tax Return, their refund checks may be held up if they have not filed their 2011 and 2012 Income Tax Returns. The reason is that some or all of these refunds may need to be applied to the tax liability of the newer tax years such as 2011 and 2012. A good tax preparer, such an Enrolled Agent (EA) will always advise you to file all back tax returns to stay compliant with the filing requirements of the tax code. In this instance, Taxpayers may think their refund checks are one their way for 2010 only to be disappointed to learn they can be held up by not filing their 2011 and 2012 tax returns at the same time.

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for 2010, 2011 and 2012 can get a free transcript showing all the documents or file a Form 4506-T to request a transcript. Even if you have to wait for 2011 and 2012 transcripts, get your 2010 Tax Return filed by April 15, 2014.

 

 

WASHINGTON, DC, (February 10, 2014) The IRS has announced a new, simplified method for determining the in-home office deduction that doesn’t require extensive record keeping, and a lot of people are looking forward to giving it a try. Sure, it’s easier than using the time-consuming “actual expense method” to determine the amount you can deduct for the business use of your home, but is it right for you?

Qualified business use of a portion of the home generally means:
• Exclusive and regular use as the main place where you conduct your business, or meet with customers, clients or patients.
• Regular use as a storage area for merchandise you sell, or product samples, if your home is the only place you conduct your business.
• Regular use in providing daycare services for children, the elderly or disabled persons.

The new optional deduction is a simple $5 per square foot of business use up to 300 square feet, for a maximum deduction of $1500. Period. If you choose to use the new simpler option, you can still deduct the full amount of your mortgage interest and property taxes as itemized deductions, without worrying about calculating the percentage based on the business use portion of the home. You won’t have to be concerned with tallying up the direct or indirect costs of utilities, repairs or maintenance expenses, either.

But, don’t be too quick to throw away the calculator until you determine if the simpler deduction is the best one for your situation. Cynthia Jeanguenat, EA, a federally licensed enrolled agent and tax specialist with Horizons Unlimited Tax and Business Services in Virginia Beach, VA is not touting the simplified method to her longtime clients. “We don’t want them to stop keeping track of their expenses! I compare this simplified office-in-home deduction to business vehicle expenses. If a taxpayer keeps good records, and uses their vehicle more than 50 percent for business, then it’s possible the actual vehicle expenses will exceed the standard mileage deduction; but if a taxpayer does not keep records for the maintenance, gas, repairs and insurance, but does record the business miles driven during the year, then they can take the standard cents-per-mile deduction. That may not be the better deduction, but if they don’t keep records, then that may be all they can qualify for.”

Jeanguenat feels the same about the office-in-home deduction of $1500. “If a taxpayer keeps good records, chances are they will get a better deduction using their percentage of actual expenses. If they keep few records, then the $5 per square foot may be their best choice.”

The simplified method took effect January 1, 2013. Taxpayers can elect to use the simplified method or standard method for any tax year. However, once you have elected a method for a tax year, you cannot later change to the other method for that same year. You may, however, use the simplified method for one taxable year and the standard method for a later taxable year. The simplified method doesn’t require you to file the form 8829 needed for the standard deduction. More information on the new home office rules is available on IRS.gov, search for Home Office FAQs.

About Enrolled Agents
Enrolled agents (EAs) are America’s tax experts. They are the only federally-licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. While attorneys and certified public accountants are also licensed, only enrolled agents specialize exclusively in taxes. Enrolled agents are required to complete many hours of continuing education each year to ensure they are up-to-date on the constantly changing tax code and must abide by a code of ethics.

Tax Predictions for 2014

March 16, 2014

WASHINGTON, DC, (February 19, 2014) With Senate Finance Committee Chairman Max Baucus (D-MT) moving on to become US Ambassador to China, last year’s expectations for tax reform are out the window. The National Association of Enrolled Agents (NAEA), the association that represents the federally licensed tax practitioners who hold the highest credential awarded by the IRS, has released some prognostications for 2014.

1) The budget cuts Congress imposed on the IRS mean bad news for taxpayers. Levels of service at IRS, which weren’t that great anyway, will continue to deteriorate for taxpayers seeking answers and for tax professionals seeking assistance in representing clients in audits and collection actions. As National Taxpayer Advocate Nina Olson said in her Annual Report to Congress, “If you are a tax professional trying to resolve a problem for a client, you have a 20-minute wait on the line inaptly named ‘Practitioner Priority Service.’”

2) Largely as a result of 1), the number of taxpayers paying to have their returns prepared will hit an all-time record high. Taxpayers are smart – they’re going to HIRE someone to spend the afternoon on hold with the IRS.

3) Identity theft losses will continue to grow: fraudulent filers will file early and walk away with other people’s refunds and phony emails from IRS will lure naïve taxpayers to sites where they will disclose personal and financial information. The agency will continue to siphon staff from other areas to assist affected taxpayers, yet any taxpayer hit with an ID theft related problem will face long delays in resolving the issue (see 1)).

4) Silver lining: the IRS back office will deliver the filing season. The agency will make its projected refund turnaround time (90 percent of refunds issued within 21 days of filing) and returns will be processed free of software troubles.

Even if you have a C.P.A. or Tax Attorney, you may still need us! You want to reduce the amount you owe? You owe large penalties and interest? You want to be protected from a levy? You get no response from the IRS? You want a lien removed? You don’t know which way to turn? You want to bring your tax problems to an end at the least possible cost? You fear seizure of your home or property? You have a business and owe withholding taxes for past quarters? The IRS is threatening to shut down your business and liquidate your assets? Your business went under and you were charged with all the employee withholding taxes? Do you believe your situation is hopeless? Do you believe that you must pay every cent you owe?

 

THINK AGAIN! The IRS routinely dismisses charges. It has the legal power to forgive the entire amount owed. Using proven methods, we save people substantial dollars. We look forward to developing a strategy that is best for and acceptable to you!

 

A Tax Lien can result in garnishment of your wages, levy on your bank accounts, or even seizure of your home, car and other assets. Contrary to popular belief, Texas Homestead Laws do not protect your house, your car, or your wages from IRS Collection Laws. Tax Liens recorded at the Court House could affect your ability to get credit, find a job, rent a place to live or sell real property. Ignoring this situation can only make it worse. Our Tax Professionals can give you immediate relief from the IRS. We can help minimize or even avoid the adverse consequences of any such actions. Many tax assessments qualify for abatement, discharge and/or settlement. However, timing is critical. Once you engage us to represent you, you will no longer have to meet or talk with any representative of the IRS. We handle that for you. Representing Taxpayers before the IRS is our primary business. Our Tax Professionals deal with the IRS on a daily basis and have been doing so for years. As a result, we know the rules and are efficient, as well as, organized in providing these services. This translates into savings because there is no added expense for training of someone for your particular situation.

 

We analyze the facts of your case and apply our knowledge of IRS Collection Law in order to devise a stratey for minimizing your taxes. Then discuss the alternatives with you before proceeding to implement your plan.

 

We are Enrolled Agents (EA). An Enrolled Agent is a Federally Authorized Tax Practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of Treasury to represent Taxpayers before all administrative levels of the IRS for audits, collections, and appeals.”Enrolled” means EA’s are licensed  to practice by the federal government. “Agent” means EA’s are authorized to appear in the place of the Taxpayer or at the IRS. Only EA’s, attorneys and CPA’s may represent Taxpayers before the IRS.

 

You should be careful when you make the decision to choose a Tax Professional to help you. Check the BBB and other consumer websites before making your choice. There are many businesses who claim they will help you but are scams We have a blog at our website about this issue and much more. Visit our website today at http://www.rhgeas.com. We’re here to help you so contact us today! We look forward to hearing from you soon. We have two phone numbers (713) 947-9666 or (866) 402-3804 toll free. If you need help call us today.

 

Thank you,

 

Janet Greaves, EA

Redd & Greaves, P.C.

8866 Gulf Freeway, Suite #340

Houston, Tx  77017