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The IRS and state governments have announced various tax relief programs due to the coronavirus. We’ll do our best to keep this page updated with the most up to date information. The IRS’s Coronavirus Tax Relief Announcements As of today (March 18, 2020), the deadline to file your 2019 tax return is April 15, 2020. There’s a ton of misunderstanding and misinformation regarding the deadline. Many news organizations are reporting that the IRS gave a…
The IRS has three years from the due date of a return or when you actually file the return to audit you. Most audits are completed in under a year, but they can sometimes take longer. Bear in mind that three years is the limit under normal circumstances. If you excluded more than 25% of your actual income from the return, the statute of limitations is extended to six years. Should the IRS have reason…
Although everyone dreads the prospect of a tax audit, they’re a rare occurrence. In 2018, the IRS audited an estimated 1 million returns, which is only 0.5% of all returns filed the year before. Situations that can trigger a tax audit include: Miscalculations on any of your personal or business tax return Claiming a high home office deduction High charitable donations An unusually high number of business expenses There are four types of tax audits,…
Out of all of the offenses in the U.S. Tax Code, tax fraud results in the highest number of charges being laid.  According to the U.S. Sentencing Commission, 517 of the cases it handled in 2018 involved income tax evasion. Incidentally, the district of New Jersey was one of the top five districts for tax fraud offenders that year, with 17 cases.  Common examples of tax fraud include: Omitting income from your tax return. This…
Last March, attorney Michael Avenatti, who is best remembered for his representation of actress Stormy Daniels, proved that failure to make estimated tax payments is a bad idea. In addition to being charged with providing false tax returns for 2011-13 in order to receive $4.1 million in loans, the U.S. Attorney’s Office in Los Angeles stated that Avenatti failed to file personal income tax returns for those years and made no estimated tax payments…
Like most creditors, the IRS will act on its right to collect taxes that you owe. In the beginning, its collection process is similar to what you may have encountered with an overdue credit card or utility bill: you get a Notice and Demand for Payment (also known as a CP501 notice) in the mail explaining what you owe and requesting payment in full. With an overdue tax bill, this amount will include the…
For most people, the deadline for paying taxes on income earned in 2019 will be April 15, 2020. If you have a more complicated return or just need extra time collecting the documentation needed to complete and send it, you have to file an extension with the IRS by April 15 or face interest and penalties. There is no cost to file an extension, although if you own a business, the deadline will vary depending…
When you owe money to the IRS, you’ll quickly learn that it has collection resources that outstrip any other creditor. The government has the authority to garnish your wages, salary, commissions, bonuses, and other forms of income without getting a court order first. It can also take more of your money than a regular creditor is allowed. In general, the IRS will send you several notices before the garnishment process begins. Below is an overview…
Thanks to the gig economy, a growing number of people are inspired to take control of their financial future by starting their own business. One of the first things they ask themselves is, “Do I need a tax ID number for my business?” In most cases, the answer to that question is yes. But there are exceptions. Tax ID Numbers Explained The Internal Revenue Service (IRS) uses taxpayer identification numbers to track payments to individuals…
On April 3, 2016, the German newspaper Süddeutsche Zeitung published the ‘Panama Papers,’ which were confidential documents belonging to Panama-based law firm Mossack Fonseca. Among other things, the papers exposed over 214,000 tax havens for politicians, celebrities, and current or former world leaders. While most of the documents involved offshore business entities that were 100% legal, others identified shell corporations designed to evade taxes and dodge international sanctions. Suddenly offshore banking became synonymous…