Author: 20/20 Tax Resolution

Taxes 2018: How The New Tax Law Will Impact Your Return

The biggest tax story in recent memory was the passage of the Tax Cuts and Jobs Act, which President Trump signed into law on Dec. 22, 2017. The new law creates several notable changes to withholding policies, the standard deduction, personal exemptions, the child tax credit and more. As we head toward the end of the year (and the beginning of tax season), we thought a tax reform primer is in order. Here’s what you need to know to prepare for next year’s filing.

Withholding

Many taxpayers’ withholding requirements were reduced in early 2018, enabling folks to keep more money from their paychecks throughout the year. However, this may mean a smaller refund than normal, or even an unanticipated tax bill next April. If you did not adjust your withholding after the requirements changed, you may be impacted and will want to keep this in mind when preparing your tax return next year.

To find out where you stand with these changes, you can use the IRS Withholding Calculator to perform a Paycheck Checkup, which will help you determine if you should adjust your withholding or make estimated or additional tax payments now. Use the results from the calculator to submit a new Form W-4 (Employee’s Withholding Allowance Certificate) to your employer.

Refunds

In addition, there are changes to the standard deduction, a suspension of some personal exemptions, an increase in the child tax credit, new credits for other dependents and new limits to (or the complete elimination of) certain other deductions. Be certain to research these changes if they impact your taxes to ensure you are complying with all new regulations. And keep in mind that your refund may be different (or you may even owe the IRS) as a result of these changes. If you anticipate getting a refund, remember that some refunds cannot be issued before mid-February 2019 (particularly those refunds that claim the Earned Income Tax Credit or the Additional Child Tax Credit).

A shorter tax form

The Form 1040 for tax year 2018 is shorter and replaces the current Form 1040, Form 1040A and the Form 1040EZ. The new Form 1040 can be supplemented with up to six additional schedules if needed. If you prepare and file your own taxes electronically, you must sign and validate your electronic tax return by entering your prior-year Adjusted Gross Income or your prior-year Self-Select PIN.

Get the whole story

Since the Tax Cuts and Jobs Act became law, the IRS has been working with tax return professionals and tax software developers to implement the new law and ensure taxpayers can rely upon these services for accurate information. To uncover how the law might impact you and your family, the IRS has created a new publication, Tax Reform Basics for Individuals and Families, which provides a complete overview of everything you need to know.

The Buzz Around A Credit Freeze

New Regulations Help Consumers Fight ID Theft. Here’s what you need to know to protect yourself.

A new federal law that took effect Sept. 21 mandates easier (and less expensive) protections for consumers hoping to shield their credit information against fraud and Identity Theft.

Under the Economic Growth, Regulatory Relief and Consumer Protection Act, consumers now have a guaranteed right to freeze or un-freeze their credit with no fees attached. Previously, consumers could contact the three major credit bureaus (Equifax, Experian and TransUnion) and institute a credit freeze for $10 at each bureau, preventing unauthorized access to a person’s credit and credit information. When you wanted to unfreeze your credit, an additional $10 fee was charged per bureau.

As a result of the new law, all requests for a credit freeze are completely free of charge and there are no fees for un-freezing credit at any time. In addition, a credit freeze can now be instituted for up to one year rather than the previous 90 days.

This huge victory for consumers comes just one year after Experian acknowledged a monumental data breach that put the credit information of nearly 150 million people at risk. Unfortunately, many consumers aren’t exactly certain what a credit freeze accomplishes, and there are a lot of misperceptions about how a credit freeze works.

What is a credit freeze?

A credit freeze allows consumers to maintain strict control over who has access to their credit and credit information. Once you institute a credit freeze, criminals are prevented from opening a credit card in your name, applying for a loan in your name or otherwise fraudulently accessing your credit. Insurers and employers are exempted under a credit freeze, and still have access to your information. In addition, your credit report can still be released to existing creditors or to debt collectors acting on their behalf.

However, under a credit freeze you are still able to use your existing credit cards or access any existing credit products you may already possess (like a home equity loan). You can unfreeze your credit in the event you decide to open a new credit card, apply for a mortgage or otherwise access your credit, and it should be available to you within an hour of lifting the freeze.

The new law also allows parents to initiate a credit freeze for children under the age of 16, freezing the credit file until the child is old enough to use credit. Also, if you have guardianship, power of attorney or conservatorship over an adult, the new law allows you to create a credit freeze on behalf of this person.

The key thing to remember is that a credit freeze provides protection from unauthorized access to credit but does not prevent you from accessing existing available credit.

Why institute a credit freeze?

Since there are now no financial fees or penalties for initiating a credit freeze, there’s really no good reason not to do so, according to credit experts. The main exception is when you know you will soon be applying for a new mortgage, opening a credit account or otherwise accessing your credit. But most financial advisors agree that initiating a credit freeze substantially limits potential abuse of your credit report and is in a consumer’s best interest even if their information hasn’t been compromised by any type of data breach.

What about other preventive measures like fraud alerts?

A fraud alert attaches a “red flag” to your credit, requiring lenders to verify your identity before issuing a loan or credit card. That typically means receiving a call to check if you’re at a particular store or bank attempting to take out new credit. There is no fee to institute a fraud alert and under the new law they last for one year (they previously lasted for 90 days). Victims of Identity Theft are entitled to an extended fraud alert, which lasts for seven years. To create a fraud alert you need to contact one of the three major credit bureaus, which are required to notify the other two of your decision.

What’s the next step?

If you think a credit freeze or fraud alert may be the right thing for you, the recently enacted law makes it even easier to do so. As part of the law, the three major credit bureaus are required to create an online option making it quick and easy to initiate your credit freeze. You will need to provide your personal data (name, address, date of birth, Social Security number, etc.) in order to create a credit freeze. Once you do so, each credit reporting company will provide you with a confirmation letter that includes a unique Personal Identification Number (PIN). You will want to keep this information private and readily available since you’ll need it to when you choose to lift the freeze.

In accordance with the new law, here are the links to all credit bureaus where you can institute your credit freeze:

20/20: Our Most Unusual Cases

From keeping Alaskans connected to saving Christmas, 20/20’s work goes well beyond dollars and cents

Over the past two decades, 20/20 Tax Resolution agents have seen and heard just about everything. Clients come to us because they’re facing devastating setbacks, financial missteps or stumbling business ventures. Our job, however, is not to judge the circumstances of these clients. It’s to help them find a way back to their productive, satisfying and happy lives. In the process of doing our work, we’ll go to great lengths to help clients reach their goal. Our innovative agents are accustomed to going the extra mile, leaving no stone unturned and fighting for the best resolution.

The following are just a few of our most unusual cases from the past 20 years:

The Doubter

You know you’ve done something right when your client is in such disbelief that he asks to call the IRS to confirm the outcome you’ve achieved.

“This client owed around $63,000,” said 20/20 Agent Alberto Douriet, E.A. “After reviewing his file, we found a settlement would have been around $10,000. He wanted an Offer In Compromise (OIC).”

Not bad, Alberto thought. But he suspected there could be a better resolution in a payment plan. Here’s why: Little did the client know, the Collection Statute Expiration Dates were scheduled to expire in nine months. Alberto explained to the client he could pay the $10K with an OIC, or pay a mere $125 a month for nine months until the expiration (a total of only $1,125). Of course, the client jumped at the chance to so dramatically reduce his costs.

“The first few times the client and I spoke, he was set on an OIC and didn’t want to talk about anything else,” Alberto said. “He was a very “hands on” individual, so I sent him information about CSEDs and encouraged him to do his own research on these matters to gain his trust, which I quickly did. Once it was all over, he was in shock.”

Saved From An Embezzler

What do you do when the CFO of your company embezzles more than a million dollars? Throw in the towel and move on, right? Not in the case of an enterprising client from 20/20 Agent Gabe Leap, E.A.

“This case was strange and unusual in that the proprietor of the existing business had nothing to do with the tax liability,” Gabe said.

Not only had a scoundrel embezzled money, but he liquidated the retirement accounts of employees. Without expert intervention, the company’s dedicated workers would be left high and dry – and without a job.

“The taxpayer only took it over in an attempt to keep the business operating so he and his fellow employees would have a place to work,” Gabe said.

A noble cause, indeed. But one fraught with a lot of headaches and risk – not the least of which was potential prosecution from law enforcement. Fortunately, Gabe and his team were able to deflect any charges and de-fuse the situation – and in the end people’s jobs were saved.

“We had to negotiate stays of collections and bring the FBI and the Department of Labor,” Gabe said. “We were able to legitimize the claim to the taxing authorities that the theft was the reason for the accrual.”

Saving A Necessary Service

When you live in a remote area, you’re often at the mercy of Mother Nature and challenging logistics. It’s not always easy to do simple things – and basic needs must be constantly replenished, often from far-off locations. So an airline delivery service that provides necessary goods and services is a critical need.

“Our client was an aviation company that flew critical flights to service remote parts of this state with goods and services,” said 20/20 Agent Joe Cunningham, E.A. “The client flew for the U.S. Postal Service, the FBI and local law enforcement, among other organizations.”

But when tax issues threatened to ground the planes, 20/20 was able to work with an alphabet soup list of government entities and mechanisms to keep pilots (and packages) in the air. All told, the 20/20 team’s efforts to save the company involved coordinating with the United States Postal Service (USPS), the Federal Aviation Administration (FAA), the FMS Division of Treasury, the IRS and others to save the airline.

Cunningham and his team used a variety of mechanisms to resolve the airline’s financial woes.

“We saved their company,” Joe said, “and kept this service available to residents.”

Boy Trouble Leads To Tax Trouble

Sometimes true love is not what it seems. But in the heat of the moment, we swear we’ll do anything to demonstrate our commitment to a relationship. Common sense doesn’t always win out.

“This client had significant penalties as a result of relying on a prior boyfriend who convinced her to be a ‘tax protester’ for several years,” said 20/20 Agent Matt Schiller, E.A. “He persuaded her that income tax in the United States is unconstitutional.”

Matt was able to work with the client to educate her on why she should promise never to take this position moving forward. In turn, he was able to convince the IRS of his client’s new perspective, removing the stigma and bias toward her that her Revenue Officer had developed due to the client’s previous viewpoint.

“I established an installment agreement to resolve the back tax,” Matt said. “We are currently preparing a penalty abatement request.”

Senior Security

Even the U.S. Government can have a heart sometimes. That turned out to be just the case for one of 20/20 Agent Tiffani Million’s clients. Tiffani’s client, a 71-year-old graphic designer, lived off his Social Security earnings and made a very limited amount of extra money through his small graphic design business.

“His business generated very little income and it possessed assets with little to no value,” Tiffani said. “Personally, he had one used vehicle and possessed no other assets with equity.  After he paid all of his monthly expenses, he didn’t have much left to live off of at the end of the month.”

Unfortunately, he owed back taxes of more than $84,000 – a sum he could never even consider hoping to pay. Tiffani recognized his situation was untenable, and performed what some might say was a miracle.

“I submitted an Offer in Compromise on the taxpayer’s behalf for $1, because of his extreme circumstances,” she said. “And the Internal Revenue Service accepted!”

Helping A Client Move Forward

It was a “Catch 22” type of situation for one of 20/20 Agent Sam Million’s clients. The client couldn’t pay her taxes because of lack of work, and she couldn’t land a steady job because of a federal tax lien on her credit report. What’s more, she was facing a $40,000 tax liability.

“The client had been mostly unemployed for several years with the occasional contracting position that would last one to three months,” Sam said. “We had tried several different methods of resolution, including an Offer in Compromise on her $40,000 tax liability. When we finally had an examiner agree to give a settlement of $6,000 the client had no current income and couldn’t afford the repayment.”

It seemed she was doomed to failure no matter what she did. But Sam didn’t give up hope. He understood that a clean credit report could help the client in her pursuit of full-time work – and the federal tax lien was preventing that from happening.

“After several months we decided to pursue a withdrawal of the federal tax lien so she could then qualify for a more long-term job position,” he said. “We had never requested a lien withdrawal with no resolution in place or tax liability being full paid. But we rolled the dice and submitted a request for the lien to be withdrawn so that the taxpayer could qualify for job opportunities and an income that would help her sustain a repayment plan to the IRS.”

The IRS Technical Advisor agreed to this, and issued a withdrawal of the federal tax lien, Sam said. In addition, the 20/20 team was able to negotiate a first-time abatement on the liability, reducing the client’s debt by roughly $6,000.

Saving Christmas for 100 families

Think of this scenario: The IRS issues a hefty levy against your construction company. It’s five days before Christmas. The $1.7 million liability is just $100,000 shy of your total business bank account. You’re forced to tell employees they won’t be receiving their expected regular paycheck right before the holiday.

Although he didn’t sport a white beard and a jolly red suit, 20/20 Agent Mike Ranalli may as well have swept in on a one-horse open sleigh when he told the business owner he had secured a release of the $1.7 million levy just prior to Dec. 25th.

“We were able to get the entire levy released through procedural wizardry,” said Mike. “As a result, the business was able to pay the company’s more than 100 employees. The night we told him about the funds release, our client said that he went home and downed a mug of vodka. No ice. No mixer. Just a mug of vodka. Whew!”

20/20 Hindsight

How We Began, Where We’re Going. Looking back on 20 years in the tax resolution business.

Two decades ago, the tax resolution business was a burgeoning industry. Consumers facing IRS action and beleaguered by complicated tax issues were clamoring for answers and assistance. Taxpayer expectations were high, and were sometimes accentuated by the dramatic results promoted by many of the new resolution firms.

“At the time there weren’t very many companies in the industry,” said Brian Biffle, who along with Tim Shea and Hansen Rada founded 20/20 Tax Resolution in 1998. “There was a tendency for companies to focus their promotional efforts on these spectacular resolutions that were sometimes secured. But the value and peace of mind consumers gained just by having an expert on their side sometimes became lost or ignored.”

Biffle, Shea and Rada knew there was a better way. They felt that clients in need deserved a straightforward approach, an honest assessment of their options and more important, the relief of knowing they were in capable hands. And they knew that increasing competition in the industry would be one way to encourage more accountability for all consumers.

Together, they thought, why not “show ‘em how it’s done.”

“Starting a business seemed like a good idea when you’re in your early 20s and don’t have anything to lose,” Biffle said only half joking. “We were young and we didn’t have mortgages and children.”Anniversary

Thus, on August 3, 1998, 20/20 Tax Resolution was born. The name signified the “perfect vision” the new company could provide to clearly see through complicated tax liabilities and options. The company’s promise: “Visualize a financially secure future.”

“We were really focused on being honest with our customers about what they could and could not accomplish with resolutions,” Biffle said. “We wanted to be realistic about what they could expect from their resolution.”

What’s more, 20/20 wanted to offer clients value without over promising results, resorting to pushy sales tactics or using fear-based hooks to lure nervous taxpayers. The newly formed company wanted to give customers a clear choice in an industry where competition was low and consumer vulnerability was high.

“We knew we could provide plenty of value without claiming that every client was going to save $100,000,” he said. “We could provide a clear assessment of their chances of success and what they could save. And we could demonstrate why it makes sense to hire an expert representative.”

20/20 understood right from the start that the peace of mind generated from having a knowledgeable expert in your corner cannot be underestimated. The company treated clients with respect and as partners on the road to a positive resolution.

“When you start a case you can’t promise things you don’t know,” Biffle said. “Clients respect that you might not have all the answers right away. They respect that honesty. That’s really the foundation of the whole company. Being honest with our clients. Being honest with our employees.”

A lot of disparate issues come together to create a great outcome, Biffle said. Sometimes issues are the client’s responsibility and sometimes they are our responsibility. The key at 20/20 has always been (and will always be) to develop the trust between our agent and the client to create the best possible resolution.

“If you’re negotiating on someone’s behalf for a year and you’re only giving them good news, something’s not right,” Biffle said. “Life’s not always about good news, and when you tell the client both the good and the bad they respect you more.”

With a solid business plan and approach in place, the stage was set for 20/20’s success. Of course, there were pitfalls along the way. Legal and legislative issues arose at times. And of course, there have been the ever-present challenges that come with running any business. There were times projections for company growth exceeded reality – and times when initial hopes for new hires fell short.

“Hiring and then having to lay people off is really tough,” Biffle said. “We care about all of our employees and anyone who has ever worked here.”

Over the years, 20/20 endured the ups and downs to become one of the industry’s most successful and respected firms of its type. Through three different offices and from one employee to more than 100, the company has grown by leaps and bounds. In just its second year (1999), the firm experienced significant growth eventually leading to $10 million in revenue by 2008. To date, 20/20 has served more than 27,000 clients in all 50 states.

Along the way, the company has evolved to meet the needs of clients, as well as to adapt to changing tax regulations and policies. After years of experience, the company recognized the challenges clients can face after their resolution is finalized. Sometimes, life circumstances interfere with a client’s ability to meet payment plan obligations. Other times, a mistake from a taxing authority can negatively impact an agreement. To combat these issues (and others), 20/20 created POA+ in 2008. This subscription-based service provides clients with ongoing monitoring of taxing authorities to ensure that no action on your status is taken without your knowledge. It maintains 20/20’s Power of Attorney on your behalf to ensure quick action should any issues arise and provides continued access to your 20/20 team for any questions you might have.

As for the future, Biffle said the company will continue to develop better and more cost-effective ways to assist taxpayers in an environment that is constantly changing. In the current political environment, decreasing funding for IRS operations makes the type of services 20/20 offers even more essential to taxpayers in need of assistance.

“We hear from clients everyday about how difficult it is to contact the IRS and get answers from them,” Biffle said. “Our worry is that this will only get worse the more the IRS becomes defunded. A person running for office saying ‘I want to give the IRS more money’ is not a real popular campaign slogan. We’re going to continue seeing taxpayers facing these problems.”

On the horizon, Biffle said the company is working to help alleviate some of that complexity by adding services for payroll issues and better financing options for clients. In addition, 20/20 is working on a product that will help clients quickly identify where they stand with the IRS for a low fee, allowing them to obtain the type of information they need to make important decisions.

“We have a lot of great things queued up for the future,” Biffle said. “I want us to continue to do what we’ve always done, which is to provide outstanding, ethical service to our clients. We’ve faced our challenges but looking back over 20 years I don’t see any challenge we can’t handle.”

20/20 Success Story: Douglas

Tough times and tough decisions forced couple into bankruptcy, losing their business and leaving them with hundreds of thousands in unpaid tax debt.

Situation:

As any business owner will attest, managing a company can be a delicate balancing act. During prosperous times, it’s easier to keep a steady ship. But when challenges arise, difficult decisions made under duress can come back to haunt you.

That’s a business lesson not unfamiliar to Douglas Smith and his wife, Dana. The one-time co-owners of an ambulance service provider had managed their successful business for many years until tough times forced the couple to make arduous economic choices. Squeezed between paying employee salaries and keeping current on all tax obligations, the couple chose the former – thinking they would “catch up” when financial pressures eased. However, as interest and penalties accumulated, the unpaid taxes became a hurdle too big to overcome. Forced into bankruptcy and struggling to pay bills and keep the company, the Smiths were distressed and disillusioned.

“There were some extraordinarily dark times,” recalled Doug Smith. “It certainly wasn’t the most joyous of times or the most anticipated of consequences.”

Analyzing Business Data - pen and numbers on paper

The Problem:

In the case of the Smiths and their business operations, there were actually multiple problems – all requiring attention at once. But perhaps the most pressing issue was the constant pressure from the IRS to settle the matter. Faced with a struggling business and a tax bill reaching “hundreds of thousands” of dollars, the Smiths were under an increasing amount of stress both at work and at home.

“You still have to pay your bills,” Doug said. “You still have to try to make your business work. We were still running the company trying to get a contract so we could get out of this mess. It was not good times.”

“There was a lot of stress. A lot of emotion,” Dana added. “We saw a lot of tears.”

With such a large amount of money owed and no way to pay it, the Smiths were becoming concerned about the potential consequences, including the fear that jail time might be a possibility.

“I don’t really know if it was a possibility but we’d heard stories,” Doug said. “Certainly with over a hundred thousand dollars at stake, I’m not sure how forgiving a prosecuting attorney would be if it had ever gotten to that point.”

Fortunately, it never did.

The Solution:

With the recognition that their tax troubles were only getting worse – and a desire to move forward with their lives in a positive way – the Smiths decided that professional help was in order. Disappointed by the lack of support they were finding in their community, the couple was understandably wary of seeking outside help. Yet, the Smiths needed help from someone familiar with, and adept at, solving the tax problem they were facing. Fortunately, 20/20 Tax Resolution possessed the exact experience the couple required.

“I did research online just to look for relief,” Doug said. “When I checked 20/20 Tax Resolution, I also checked their Better Business Bureau rating and decided they were the ones I wanted to call.”

Satisfied with 20/20’s BBB, the Smiths contacted the firm and were quickly blown away by the attention to detail and responsiveness of their 20/20 representative.

“They were very understanding and very clear on what we needed,” Doug said. “We were moving forward and making good progress when my bankruptcy came back to throw a bump in the road.”

During the process of finalizing an Offer in Compromise (OIC) with the IRS, it was determined that the Smith’s bankruptcy filing had not been “fully discharged” – which means the couple possessed remaining assets not considered in the OIC. (An OIC allows qualified individuals with an unpaid tax debt to negotiate a settled amount that is less than the total owed.) As a result, the original OIC was returned, but Doug said that 20/20’s commitment to resolving their issue never wavered.

“They were diligent, caring and showed the highest integrity,” he said. “My case took a few curves and hit some bumps along the way, but all were masterfully handled by them. I have nothing but the greatest of praise and highest recommendation for anyone needing 20/20’s tax resolution services.”

After a very long process, a new OIC was secured for the Smiths which effectively reduced their debt to a fraction of the couple’s original tax debt. (You can view the actual OIC here.) For the first time, the Smiths could see a light at the end of their very long, dark tunnel.

“For anyone going through this, I would say find a very good advocate for yourself,” Doug said. “I believe I found an excellent advocate at 20/20. My team was worth a million bucks. They were there whenever I had an issue. Sam Million and his assistant, John Casanova (the Smith’s 20/20 team) were exquisitely talented in helping with my case and understanding the stress I felt throughout the case. Thanks to their efforts our life has improved considerably.”

In fact, Dana said the assistance of 20/20 may just have saved the couple’s marriage. Today, the Smith’s are “starting over” and rebuilding their lives free of the worry and burden that overtook their lives for nearly six years. If everything works according to plan, the couple will purchase a new home this year – something unimaginable just a few short months ago.

20/20 Success Story: John

Facing tens of thousands in owed back taxes, Texas man turned to 20/20 Tax Resolution and discovered the meaning of sweet redemption

Situation:

John Mohan lived his life on the edge – but without ever realizing it. An electrician by trade in the small Texas town of Alvin (located about 40 miles south of Houston), John worked as an independent contractor for many years and never bothered to file a tax return for any of his contracting income. It wasn’t a conscious decision to disregard a responsibility, but more of an oversight that over time became an “outta sight, outta mind” kind of habit. Similar to others in the construction industry, John worked a variety of jobs over the years, ranging from electrician to carpenter. But when John took a job with a larger company that withheld taxes from each paycheck, the Internal Revenue Service took notice.

“I received a letter saying that I owed $4,000,” John, 53, said. “So I assumed that’s all they wanted and I went in to the IRS to try and finance that $4,000. That’s when they said ‘Wait, that’s $4,000 for ONE year.’ They wanted immediate filings for the last six or seven years.”

Man holding blue helmet close up

The Problem:

Like so many in the construction industry, John hadn’t kept meticulous records of his past earnings. He couldn’t afford to hire an accountant to help him go back nearly a decade and determine all the revenue he had earned and how to file his back returns. He was, in his own language, “devastated.” And the IRS was breathing down his neck.

“I wanted to just quit my job,” he said. “The IRS was threatening to garnish my wages right off the bat. I’ve heard horror stories about people going through this and I just had no idea what I was going to do. I had no idea where to even begin with something like that.”

John left the IRS office that day feeling sad, depressed and “all alone.” He knew he could be facing an insurmountable amount of back taxes and penalties. Losing sleep and worried about his economic future, John owed nearly $45,000 in back taxes spanning multiple years.

The Solution:

In what could be called an amazing coincidence, John returned home from the IRS to find a letter in his mailbox from 20/20 Tax Resolution. He had never heard of the Colorado-based firm with more than two decades of experience helping people just like him.  The letter arrived at the perfect time for John to take action.

“That really got the ball started,” John said. “Just contacting 20/20 really started to emotionally put me at ease.”

From the very onset of working together, 20/20 was able to remove the fear, worry and unrest John was constantly feeling about his tax situation. An aggressive IRS was sending John threatening letters and communicating ultimatums John wasn’t able to fully understand.

“They said don’t worry about it, just send the letters to us,” John said. “Every time I got a letter, I would pick up the phone immediately and call 20/20.”

That attention and compassionate assistance made a world of difference to John. He was able to better focus on his work and life – and remove the doubts and concerns from his mind. He was a bit concerned at the outset that 20/20 was located in Colorado while he lived in Texas. But those worries were quickly displaced by gratitude.

“I actually forgot about the whole situation a lot of times,” he said. “20/20 was just great. Those people are awesome. They even worked with me on creating a payment plan for the cost to resolve my situation.”

In the end, John received the greatest news of all: 20/20 was able to successfully negotiate an Offer in Compromise for John with a settlement of only $234! Although he’s still in the process of getting liens removed and he will need to stay on top of future tax obligations, John feels 20/20 helped him dodge a bullet that would have hampered his life for many, many years.

“I feel very blessed that I called 20/20,” John said. “I’d recommend anyone who has any tax problem at all to call 20/20. They are outstanding people.”

Tax Tip: What to do post resolution

Whew! You made it through to the other side! Congratulations on navigating the difficult maze of regulations, processes and emotions to successfully finalize a resolution to your tax problems. Time to relax, forget about the past and move on to a better future, right?

Well, not exactly. During 20/20’s two decades of working with clients, we’ve seen the pitfalls that can await taxpayers on the other side of the resolution process. We strongly advocate that our clients create a “post-resolution plan” to help them steer clear of future problems. Without a thoughtful approach to your new reality, the chances of needing additional help down the road increases.

The first step is to make certain you understand all aspects of your resolution, any payment plan that may be in place, the expected duration of the plan and – perhaps most important – how you will pay it. Don’t wait until your first payment is due to fully comprehend everything you agreed to in the resolution. Delaying this step is what typically leads to a first mistake: missing a payment (something you don’t want to do).

To avoid missing any payment deadlines, consider scheduling a direct deposit. If you choose to use traditional U.S. mail for your payments, remember that each payment must be received by the actual due date. Unlike filing a tax return, payments are not considered to be on time by their postmark. If you opt for snail mail, make certain to leave enough time for the post office to punctually deliver the payment.

A lot of managing your resolution just comes down to staying on top of it and identifying problems before they occur. At 20/20, we have been very successful at setting up manageable resolutions for clients for 20 years. We’ve found that very often, the root cause of problems can be traced back to a taxpayer’s individual habits, business practices or organizational skills.

While some businesses struggle to stay current due to genuine financial hardship, we often see business owners and officers neglect to establish effective business practices. One of the most effective ways to ensure compliance is to engage the services of a payroll firm. At 20/20, we partner with payroll and sales tax solutions in order to assist our clients in developing good and effective business practices. It’s important to make an honest assessment of your business and lifestyle to see if these solutions are right for you and your company.

Ask yourself the tough questions: Is your business undercapitalized? Are you overspending? Are there lifestyle changes you should consider to help keep you on better financial track? All of these are important considerations to study to keep you moving forward and avoid future tax problems.

Light at the end of the TunnelFinally, now that you have what probably feels like a new lease on life, don’t take it for granted. Keep vigilant on your resolution and be proactive if and when you have any problems surrounding the payment terms. Remember that communication is key to staving off future issues with the IRS or other tax authorities. Don’t hesitate to speak up when problems arise.

If you’re still concerned about the ability to successfully manage your resolution and steer clear of future problems, 20/20 offers a monitoring program called POA+. POA+ is a monthly, pay-as-you-go service that allows 20/20 to maintain an active role in your tax resolution plan. Our team will be able to receive and monitor notices from the taxing authorities to promptly address issues that arise as well as remain available to answer questions.

However you proceed, enjoy the relief that comes from knowing you are managing your tax obligations and taking the best care of your business. And be certain to stay on top of your resolution requirements! If things ever get out of hand again, remember that 20/20 is here to help.

Tax Returns: Why We Procrastinate

A quick online search of “tax returns” brings up all kinds of conflicting advice. Should you file early? Should you wait for the deadline? Is it damaging to file an extension? There are “experts” out there who will give you the opposite answer for each of the three questions. It’s no wonder people want to cover their heads and just wait until May. But what exactly is causing so many people to delay?

If you fall into one of the above categories (or you’ve cleverly created a new reason to procrastinate of your own), don’t worry. You’re in good company. According to the IRS, about one-third of Americans will wait until the last minute to file their taxes. In fact, in 2016 more than 29 million individual returns were filed between April 8th and Tax Day (this year it falls on April 17, 2018).

So kick back, relax and take your time. After all, it’s only March.

Fight Back Against Scams

It’s tax season, which means that tax scams are on the rise. It’s likely you – or someone you know – has received a suspicious email, phone call or even snail mail and wondered “can this be real?” If you answered “no,” congratulations! You just saved yourself a mess and headache. But unfortunately, thousands of Americans lose millions of dollars as well as their personal information to tax scams each year, according to the IRS.

It’s why the IRS regularly issues “Scam Alerts” to warn taxpayers against the potentially damaging scams. What’s even more alarming is that rip-off artists working to rid you of your money or your identity are finding increasingly clever ways to reach into your pocket. In addition to ordinary taxpayers, scams now target tax professionals, human resource/payroll departments and others. Nearly any entity that might possess your private information can be subjected to a tax scam.

Most recently, an IRS Scam Alert warned of a complex scam where criminals steal client (i.e., taxpayer) data from tax professionals and then file false tax returns under these clients’ names, using the clients’ real bank accounts for refund deposits. Scammers then use a variety of different methods to take back the money once it’s deposited – sometimes even posing as IRS officials and threatening the victims. You can read the full Scam Alert here.

So, what can you do to protect yourself? The first step is to know how the IRS operates and to become somewhat familiar with the types of scams out there (although they are constantly changing and adapting): tax tips tray

IRS protocols. The Internal Revenue Service will NEVER initiate contact with taxpayers by email, text message or social media platforms to request personal or financial information. If this happens to you, it’s a surefire sign someone is trying to scam you.

Deceitful practices. As mentioned above, tax scams come in all kinds of forms – and are delivered to victims in snail mail, email, text message or phone calls. Don’t be fooled by professional looking letterheads and logos or official sounding tax issues raised in the communication. If you have any doubt at all as to its authenticity, do not respond in any way and contact someone you trust to verify the communication.

Variety of scams. As the earlier example demonstrates, scam artists are a clever bunch. There are a variety of ways they will try to wriggle personal information out of you. Whether by asking you to provide private information (“phishing”), impersonating IRS personnel via telephone calls or directing you to official looking websites that infect your computer with malware (making you vulnerable to hacking), criminal scammers will stop at nothing to steal your money.

So consider this a primer to the basics of tax scamming you need to know to protect yourself and your private information. Remember that the IRS will not contact you and request private information arbitrarily via email or text. And finally, always say no to information requests that you are not absolutely, 100 percent positive are authentic.

To get more information about tax scams and how to identify them, read this comprehensive IRS Tax Scam Alert.