If you’re facing an IRS tax issue or audit, it’s good to remember that thousands of tax payers go through this same process every year — you are not alone. While that might not be particularly comforting, it’s important to understand that thousands – potentially millions – have gone through the same experience.

Here are some steps to follow when the IRS knocks on your door:

Don’t Panic

When you first learn that the IRS has selected to audit your return – or put a levy on your bank account – you may start to feel overwhelmed and anxious. While it’s good to be concerned, it’s never good to worry or feel stressed out. Take a deep breath, and remember that thousands of people have survived a similar problem.

Find Tax Representation

Quite often, facing the IRS alone is neither practical or wise for the individual tax payer. There are complicated rules and laws governing income tax, and it’s all but impossible for someone to learn all the ins-and-outs of the tax code in order to represent themselves in a tax controversy.

What’s more, the rules are so complicated that they’re sometimes improperly applied by the IRS. It may be that the IRS has made a mistake, and your case could change dramatically if this is the case.

Either way, finding a tax attorney – or more specifically, a specialist in tax controversy – is the next order of business whenever you’re facing a tax problem. An attorney will work to protect your interests, challenge the IRS, and give you the confidence and peace of mind.

Organize Documents

Once you’ve found tax controversy representation, the next step is to gather your documents. For all IRS issues and audits, it’s best to be as organized as possible. Pull together all of your basic tax records (old tax returns and receipts for payments you’ve made to the IRS), make sure these records are carefully marked and sorted, and then get this information to your attorney.

When you’re facing an IRS tax problem, follow the steps above to slow down, organize yourself and find good representation. With time, good representation, and a bit of luck, you will survive your encounter with the IRS.

The post How To Handle IRS Tax Problems appeared first on Olson Tax Consulting, LLC.

Finding free tax forms and the right forms isn’t that difficult anymore with Gov’t offices and libraries offering them.

Here are some places in Denver to find them:

Libraries
Local libraries often carry a full assortment of IRS forms. These are generally a great place to start since there are several locations in the Metro Denver area with often convenient hours too.

IRS Office
The local Denver IRS office has forms as well. You can find it at 1999 Broadway, Denver, CO 80202. They are open from Monday-Friday – 8:30 a.m.- 4:30 p.m. The forms they carry are based on availability. Call them at (303) 446-1675 before heading down.

You can find more offices throughout Colorado by clicking here.

Online
Can’t make it to any of the locations listed above? Try going online to IRS.gov and downloading the forms you need. The IRS has really stepped up over the past several years in providing easier access to the forms you need. Their online site has forms, FAQs sections and instructions. It can be a great resource for deciding whether you want to tackle your taxes on your own or find a professional tax service.

With ample places to find tax forms in Denver, you can find most anything you need to make this tax season the best yet. Hopefully that means the kind of tax season where you don’t have to pay!

The post Best Places to Find IRS Tax Forms in Denver appeared first on Olson Tax Consulting, LLC.

The Top 10 Income Tax Return Mistakes That People Make

1. Missing the deadline
2. Forgetting to file (or deciding not to)
3. Forgetting their social security number, or adding the wrong number by mistake
4. Math errors
5. Failing to keep old copies of their returns
6. Forgetting to sign and/or date their return
7. Claiming false dependents
8. Losing their important receipts
9. Failing to report and pay taxes for domestic employees
10. Failing to check the work the tax prep company or person does on their behalf

Other Common Tax Errors:

• Filing the wrong forms
• Filing under the wrong status
• Not filing or calculating self-employment tax
• Failing to check whether or not you are subject to the alternative minimum tax
• Mis-using or not using the earned income credit
• Failing to pay attention to changes in tax laws
• Failing to declare all income

Jana’s Free Income Tax Advice

Be sure to print out and save copies of your old bank statements, tax returns, and any other documents you have that are currently in electronic format. This way you don’t have to worry about losing records because of a lost file or computer problem.

If printing these docs out doesn’t sound like a good option, then be sure to invest in a good backup system (you can backup your files to the web, or buy an at-home RAID storage device).

The post 10 Common Income Tax Snafus – INFOGRAPHIC appeared first on Olson Tax Consulting, LLC.

The IRS Fresh Start Program could help you get caught up on your taxes.

The Internal Revenue Service has revised the program that allows delinquent taxpayers who are experiencing financial troubles to settle their debts for less than the total tax liability.

The Fresh Start Initiative, which began in 2011, has been upgraded and now offers more flexible terms, allowing more people to take advantage of the significant savings the IRS gives through the program.

Future Income

This program is not available to all taxpayers. In order to qualify, delinquent taxpayer’s must prove that they do not have the ability to repay the total amount and will not have the means to repay in the future.

Previously, the IRS looked at future income for the next four or five years. Because all debts must be repaid within two years under the offer-in-compromise, the IRS now considers one year of future income when the debt will be repaid in five or fewer months and two year worth of income potential when the offer is for more than five months, but less than 24 months.

Allowances

When the IRS grants an offer-in-compromise, the taxpayers’ income and expenses are taken into account to determine monthly payment amounts.

Previously, there were few allowable expenses and much of the taxpayers’ budget was applied toward their tax bill. Now there are some new allowances that the government takes into consideration, including minimum student loan payments, state tax obligations and a more generous Allowable Living Expenses, making it easier for taxpayers to comply with the agreement and repay delinquent taxes.

The Allowable Living Expense allowance looks at the cost of living for the geographic area where the taxpayer lives. A miscellaneous allowance allows delinquent taxpayers to make credit card payments and take care of other financial obligations, such as bank fees.

The IRS hopes, that by expanding the Fresh Start program, more delinquent taxpayers will be able to settle their tax debts sooner, rather than later.

The post What The IRS “Fresh Start” Program Means to You appeared first on Olson Tax Consulting, LLC.

If you have a big tax bill, here are some ways you can pay it.

Repay with a Private Loan

When you receive your tax bill, it will detail how much you will pay in interest and penalties. The interest must be charged by and law and is often much higher than the interest that would be charged by a lender for a private loan.

If you qualify, consider applying for a loan instead of setting up a payment plan so that you can avoid paying high interest and penalties.

EFT Payment

If you have the money to pay off your tax bill, you can pay the bill immediately by Electronic Funds Transfer. Use the Electronic Federal Tax Payment System online or call the IRS directly to make the payment.

Credit Card Payment

You can also pay off your tax bill with a credit card. Just like private loans, paying with a credit card is often much more affordable for taxpayers.

You can pay with a credit card through each of the following processing companies: WorldPay, Official Payment Corporation, and Link2Gov.

More Time to Pay

If you need extra time to pay your tax bill, you may be able to request a short-term extension by filling out an online payment agreement or calling the IRS directly.

If you are requesting a short-term extension, you should not be required to pay a fee. Keep in mind, though, that interest and penalties may still accrue if you do not pay your tax bill by the extension date.

Installments

If you cannot pay the tax bill in full, you can request to pay the amount you owe in monthly installments.

You must be current with tax payments and you must have filed your taxes for each prior year before you can request installment payment arrangements. Fill out Form 9465 and wait 30 days from the receipt of the application to see if you have been approved. Not everyone will be approved.

Flexible Terms

The Offer in Compromise Program has become the most flexible option for taxpayers who truly cannot afford to pay off their tax bill. This program will help those who are financially unstable lower the amount they owe.

The IRS will only settle with you if they believe your situation calls for lowering the debt. As you can see, the IRS does give you several options to pay off your tax bill. If you have not taken notice to your tax bill, it is time to review the bill and compare your options. Choose the most practical option, make arrangements, and make sure that the burden if off of your shoulders.

The post Do You Owe the IRS Money? Here’s What You Need to Know appeared first on Olson Tax Consulting, LLC.

If you are moving for work, check to see what expenses the IRS will let you deduct.

Timing

The expenses must occur within one year of the date that you start a job at your new home. In addition, you must work full-time at least 39 of the 52 weeks in the first year you live in your new residence. If you are self-employed, you must work full-time for 78 weeks in the first 24 months after you move. In some cases, moving expenses are allowed for people who are laid off, retired, disabled or are members of the armed forces.

Distance

In order to deduct moving expenses, you will need to calculate the distance from your current residence to your place of employment and the distance from your former residence to your new job location. If your new place of employment is at least 50 miles more from your current home than your old job, you pass the distance test.

Moving Expenses

If you meet the time and distance tests, you may be able to claim the costs of packing, shipping, transporting and storing your household goods.

Transportation costs, such as airfare, tolls, mileage, lodging during the move and parking fees are also deductible. Fees related to connecting and disconnecting utilities can be deducted when you meet the time and distance tests.

Non-Deductible Expenses

Some of the expenses you incur as a result of moving are not tax deductible.

For example, the purchase price of your new home is not deductible. Any fee related to early termination of a lease cannot be deducted. Additionally, you can’t deduct long-term storage fees, driver’s license fees, security deposits and any losses you incur related to leaving your former residence.

Moving can be expensive. It is important to keep all of your moving related receipts because many of your expenses may be tax deductible, meaning you’ll recoup some of those costs come April.

The post Are You Moving? The IRS Might Let You Deduct Moving Expenses appeared first on Olson Tax Consulting, LLC.

The entity, Compliance Services, is trying to get businesses to spend $125 to prepare these documents. The Secretary of State says that while “most corporations are required to keep records of annual minutes, they are not required to file these records with any third party,” according to a notice from the office.

The solicitation states that: “The preparation of minutes of annual meetings does not satisfy the requirement to file the Periodic Report required by COLORADO REVISED STATUTES Section 7-90-501.” This simply is not accurate and is creating some confusion.

The truth is that annual meeting minutes are not required to be filed with Colorado Secretary of State’s Office or any other government agency or third party.

There is such a thing, though, of an “annual report filing” that most businesses submit to the Secretary of State’s office with just a $10 fee.

If you have any questions about these solicitations or other notices, please contact us. We will happily help you sort through the confusion.

The post Colorado Secretary of State Warns about Deceptive Compliance Services Letter appeared first on Olson Tax Consulting, LLC.

Need old tax returns to prove income? The IRS has steps you can take to get copies.

Return Transcripts

Some lending institutions and government entities may require a transcript of your tax return as proof of income. Tax return transcripts include most of the information from the originally filed return, including schedules and forms.

Any changes made by you or the IRS are not reflected on return transcripts. Return transcripts are available for no charge for the current year and the past three years . If you need a transcript of your tax return, you can order it through the IRS website, by phone or through the mail.

Account Transcripts

If you filed any amendments or the IRS made adjustments to your return, an account transcript will show the new information.

When you order an account transcript, the report will show your basic information, including your adjusted gross income, taxable income, the type of return you filed and your marital status.

Account transcripts are free and available for the current and the three past years. They can be ordered online with the Order a Transcript tool, over the phone or by mail.

Copies

When you need an actual copy of your full tax return, the IRS will charge you $57 per return. The fee will be waived, however, if you live in a federal disaster area. You can order tax return copies for the current year and the previous six years. You can order a return or account transcript online or over the phone. Copies must be requested by mail using Form 4506. While transcripts should arrive in your mail within 10 days, copies can take up to 60 days to be delivered to your home.

The post How To Get Your Old Tax Returns from The IRS appeared first on Olson Tax Consulting, LLC.

Looking for a charitable donation deduction make sure you follow these tips.

1. The organization you’re donating to must have tax-exempt status. The charity can provide you with this information or you can look the charity up by using the Exempt Organizations Select Check on IRS.gov.
2. Donations of cash are fully deductible unless something is received in return for the donation. If this is the case, the fair market value of the item or service received is subtracted from the total donation amount to determine the amount eligible for deduction. If you’re donating physical goods, you can usually deduct the fair market value of the item donated, although special rules do apply to donations for certain things, like household items, clothing, cars and other types of vehicles.
3. Keep detailed records and proof of each donation — even the small ones. Usually a cleared check, credit card statement, payroll deduction record, or written statement from the charity are sufficient.
4. Contributions of $250 or more require a written statement from the charity. A non-cash donation valued at more than $500 will also require Form 8283 — Non-Cash Charitable Contributions, is filed with your taxes. Any non-cash donation with a value of more than $5,000 will also typically require a property appraisal.
5. Keep timing in mind during your donation process. Only donations actually made within a tax year can be deducted, meaning pledged donations don’t count. The money you pledged to donate must leave your possession by Dec. 31, in order to be counted on that year’s tax bill.
6. Itemize all deductions. The last step is making sure you itemize all of your tax deductions on your tax return form. That means you can’t just fill out the standard form. You’ll need to fill out Form 1040 Schedule A.

Making donations to a charitable donation is a win-win for everyone involved. The organization receives either money or goods to help out people in need and you can write off some money on your taxes. Follow these tips and rules to ensure everything is done by the books.

The post Planning on Deducting A Charitable Donation? Here Are 6 Things You Should Know appeared first on Olson Tax Consulting, LLC.

Got a notice from the IRS? Don’t fret, here is the best way to handle it.

1. Every IRS letter sent out doesn’t deal with complicated tax issues. Most of the time, they are just looking for a simple confirmation.
2. Again, these requests don’t always require you to pay more taxes. Sometimes, a simple account change is involved. Other times, they might be missing some basic information from you (i.e. a child’s birthdate, or date of marriage.)
3. These letters give you a step-by-step approach to solving whatever the problem is — no matter how difficult.
4. It may just be a notice of correction to a particular year’s tax return. Who knows, maybe you’re actually getting more money back!
5. Sometimes, you might owe just a little bit of extra money, because of a minor mistake. If this is the case, you may not need to do anything at all, as long as you agree with the change.
6. If you feel the IRS is wrong in its judgement, you have 30 days to file an appeal.
7. If you don’t want to wait on the mail system to take care of the problem, you can always call the IRS. This actually might be preferred so you’re not worrying about the issue.
8. Make copies of any IRS notice you receive and send back. The IRS receives a lot of mail, and if they misplace the one you sent back, it’s important you have an additional copy.

Again, don’t be scared if you receive a letter from the IRS. Most of the time, it’s not a huge cause for concern. Simply follow the instructions that come with the letter and most of the time, you can resolve the problem within 24 hours.

The post What To Do If The IRS Sends You An Official Notice appeared first on Olson Tax Consulting, LLC.