Author: 20/20 Tax Resolution

2017 Year in Review: Top Tax News

No matter your perspective on the recent passage of tax reform, there’s no question it is the biggest tax story of the year – and perhaps of the decade. The estimated $1.5 trillion bill is being touted as the savior of the middle class and simultaneously denounced as just another exercise in trickle-down economics. Time will tell how the expansive bill shakes up the economy, but with provisions impacting everything from health care to the standard deduction, the reform is sure to impact just about every American in some way.

Business man holding TAX on blurred abstract background

The rest of 2017’s tax stories are not quite as dramatic, but important nonetheless. Here’s a rundown of the top tax news of the year:

  • Employment taxes: The IRS stepped up efforts to combat delinquent employment taxes in the wake of a scathing report in May from the Treasury Inspector General for Tax Administration. The IRS watchdogs reported that the number and size of payroll tax violations is going up, and IRS penalties alone have not been enough to stop the trend. Although the willful failure to remit employment taxes is a felony, there have historically been fewer than 100 criminal convictions per year.
  • Use of private debt collectors: In June it was announced that the IRS began using private debt collectors to try and recoup overdue money owed the government. The IRS program engages four private-sector collection agencies to pursue the toughest debt. Generally these are cases where money has been owed for multiple years and the case is not currently being worked by federal employees.
  • Tax reform impact on delinquent taxes: A change in pass-through taxation, which impacts taxpayers who have some or all of their business income taxed on their individual return, could aid S corporations, LLCs, partnerships and sole proprieterships. As a result, these entities might have fewer challenges meeting their tax obligations. However, tax reform is not expected to have a major impact on tax resolution needs. As always, “life happens” so some people will owe – and some of those people will inevitably need tax resolution services.

The biggest story of the year may be that nothing really changes. The need to have a solid tax plan in place for individuals and businesses is still essential. Be certain to plan ahead for tax obligations, monitor your business throughout the year to guard against revenue ebbs and flows – and make certain you always have a plan to pay.

Happy New Year to you and yours, and best wishes for a profitable 2018!

Top Five Concerns of People Facing IRS Action

You’ve received a letter from the IRS telling you there’s a problem with your taxes. You’re not entirely clear on what the letter means. Yet you are sweating a little. You’re nervous about what happens and what steps you should take next. You’re anxious and are tempted to ignore it all.

Here’s your first step: DO NOT IGNORE THE IRS NOTICE. For your next step, read the following concerns that 20/20 most often hears from clients calling our office for the first time. With our 19 years of experience helping people overcome tax difficulties, we’ve heard just about every concern. Here are the top five concerns common to our clients. Taking Notes

1. Aggressive enforcement and liens

People who speak with 20/20 agents overwhelmingly express fear that the IRS wants payment immediately and by any way possible. Taxpayers want protection from aggressive enforcement actions like bank levies, accounts receivables levies, wage garnishments and asset seizure. While every person’s case is unique, we have a variety of tools we can use to intercede and ensure that these extreme IRS actions are avoided. In nearly every case, we are able to use these tools to give clients the time and space they need to establish compliance and form a strategy to meeting their tax obligations.

2. Difficulty dealing with or communicating with the IRS

It’s not surprising that the second most-frequent concern we hear is that resolving this issue will require inordinate amounts of time, effort and frustration. Who hasn’t sat on hold trying to reach an account service representative? Taxpayers envision a customer service nightmare multiplied tenfold by government inefficiency. Because we work with the IRS all the time, we’re familiar with the agency’s communications processes and we know how to reach the right person to get the right information. We take over communication and do it for the taxpayer, freeing them up to run their business – and their life.

3. Revenue officer showing up at place of business and employees or others finding out about liability

While the IRS is stepping up enforcement and collection efforts of unpaid or delinquent taxes (particularly employment taxes), the agency does work to respect and protect a taxpayer’s privacy. However, in a busy office where documentation and information is shared widely, it’s entirely possible that some news about tax issues may filter out to others. But any employee or other individual will feel less anxious when they know a qualified, experienced tax resolution company like 20/20 is working on the case. The alternative is to have employees or others worry that nothing is being done to manage the liability.

4. Debt to IRS growing out of control (penalties and interest accrual)

There are very few ways to avoid having to pay interest when a tax obligation is delinquent. However, 20/20 can make certain that all obligations, interest and even any penalties will be the least amount allowable under the law. The bottom line: Doing something to resolve the situation is always better than doing nothing.

5. Getting a good and manageable resolution.

Finally, 20/20 clients are worried about achieving a fair, manageable resolution that won’t break the bank and will alleviate their worries. Fortunately, we’ve been helping clients achieve this goal for almost 20 years so we can say with confidence that we can help most taxpayers. We’ll use our experience to obtain the best resolution available under your specific circumstances.

While reactions to potential IRS action vary, it’s fairly typical for clients to feel some or all of the above concerns. Some people seem unfazed and are not frightened of the IRS at all. Typically, this reaction comes from taxpayers who have dealt with the IRS previously. The strongest fear many people experience is that others (employees, spouses, friends, etc.) will discover the problem. There’s a certain stigma about owing money to IRS – and they worry what others will think.

But the truth is many people experience these types of problems and it doesn’t indicate any lack of character. Taxes are a complicated issue – and running a business is always challenging. What’s important is recognizing when you need help in order to keep any problems from becoming overly burdensome. That’s precisely why we exist.

Summertime Tax Tip: Amending a 1040 Return

As the IRS states, the tax code is a complex set of laws affecting virtually every American individual and business. Last year the IRS processed over 244 million tax returns and other documents. The volume is a tribute to the voluntary tax system as well as the IRS workforce.

Undoubtedly, however, the complexity and volume of our tax system means that errors are almost unavoidable. As representation experts we do our best to find and correct those errors made by the IRS. But, that’s just one side of the equation. Every year countless taxpayers ask us what to do if they discover an error on a return that was already filed. The short answer is to not panic and correct the mistake.

2020 Summer Tax Tip_FINAL_PNG

Questions about your unique situation? Learn more about ways we can help or feel free to contact us at any time!

To download a high-resolution version of this infographic, please click here

 

Employment Tax Noncompliance Reaching Historic Numbers

As political leaders in Washington consider dramatic cuts to federally funded programs and agencies, billions in employment taxes, interest, and penalties has gone unpaid due in some part to decreasing efforts from the IRS to pursue and collect from the growing number of delinquent employers.

That’s the assessment of experts at 20/20 Tax Resolution, a tax resolution firm that specializes in helping business owners manage and resolve tax obligations when they’ve fallen behind. According to IRS data, nearly $46 billion in unpaid employment taxes and penalties were left unaccounted for in fiscal year 2015. Yet, five consecutive years of IRS budget cuts have reduced the agency’s ability to manage enforcement caseloads.

“Employers are often under tremendous financial pressure to meet tax obligations,” said David Miles, vice president at 20/20 Tax Resolution. “When they fall behind, either through financial necessity or willfully, it’s important that the IRS possess the resources to work with employers to rectify any shortfalls.” IRS Building Sign

According to the federal budget proposed by the Trump Administration in early March, the IRS budget would be reduced to $9.65 billion, a 14.1 percent cut for the fiscal year that begins in October and would mark the agency’s sixth consecutive year of budget cuts. The proposed 2017 cut goes against the stated desires of Treasury Secretary Steven Mnuchin, who believes the IRS needs more money and staff to fulfill its mission and increase revenue. For taxpayers seeking to meet their tax obligations, the proposed IRS budget cuts would result in fewer personnel available to resolve issues, slower response times and ultimately more frustration.

“It has been shown that every dollar of IRS funding returns four dollars in revenue – and as much as $10 if invested in enforcement activities,” said Miles. “Yet additional cuts to IRS funding will further erode the agency’s capabilities to realize this revenue generation.”

“A properly funded IRS provides necessary resources to garner faster, more efficient and more accurate resolutions to employer tax issues,” Miles said. “To reiterate, when fewer resources are available, the result is a reduction in decision makers, longer wait times and slower resolutions, making employers focus longer on their tax troubles and potentially even dissuading some employers from complying voluntarily.”

“Egregious” employer tax noncompliance (defined as 20 or more consecutive quarters of non-payment) has tripled over a 17-year period, according to IRS records. When collection against an employer is unsuccessful, the IRS pursues the individuals responsible for the company by assessing the Trust Fund Recovery Penalty (TFRP). In FY 2015, the IRS assessed the TFRP against approximately 27,000 responsible persons – 38 percent fewer than just five years before as a result of diminished revenue officer resources.

“It becomes a challenge for employers to seek resolution when the resources required to remedy tax issues are not available or are exceedingly difficult to manage,” Miles said. “For the sake of taxpayers and the nation as a whole, a fully supported IRS offers the best way to help employers meet their obligations.”

[Infographic] 5 Common Business Owner Payroll Myths: Debunked

When it comes to running a business, ensuring that payroll obligations are met, both to employees and all applicable taxing authorities, doesn’t come without challenges. While there are a wide variety of resources available to help businesses of all sizes manage their payroll obligations, perhaps no other challenge can be as “taxing” (particularly for small- to medium-sized companies) as ensuring that these obligations are met.

If you own a company, take some time to familiarize yourself with some of the most common myths many business owners believe when addressing their payroll tax concerns.

 

Five Common Payroll Myths Debunked

Questions about your unique situation? Learn more about ways we can help or feel free to contact us at any time!

To download a high-resolution version of this infographic, please click here

Keep These Resolutions for a Happy New (Tax) Year

New Year’s resolutions focused on financial goals can be the most rewarding to achieve but are often the most difficult to maintain, according to tax resolution experts at 20/20 Tax Resolution.

“Making financial changes can feel daunting,” said Brian Biffle, president of 20/20 Tax Resolution. “However, they can be the most critical resolutions to establish and keep, particularly if you own your own business.”

A lack of financial planning (leading to challenges meeting tax obligations) is the overwhelming reason business owners seek tax resolution services, Biffle said. Therefore, developing goal-oriented financial practices is the most effective way to avoid facing action from taxing authorities.

Here are 20/20’s top 2017 New Year’s tax resolutions:

  • Make those changes you talked about in April: Remember when you noticed you weren’t maintaining business receipts properly? Review your 2015 tax return to recall what changes you wished you made last year.
  • Resolve to keep better records: It seems like a no-brainer, but maintaining organized, accurate records throughout the year is the quickest way to reduce future tax headaches.
  • Make projections: Many business owners fail to project taxes they’ll owe throughout the year, creating financial uncertainty around tax deadlines. Projecting for these costs helps eliminate surprises.
  • Start a tax-specific bank account: A specific tax-focused bank account to set aside for that expense and serve as a constant reminder to save for tax obligations.
  • Review business and personal expenses: It’s usually easier than one thinks to identify items that can be eliminated, saving hundreds of dollars.

“Most important, get on it,” Biffle said. “If you are currently experiencing a tax debt problem, be proactive and stop running from the issue. It’s really not as frightening as it seems and there are experienced professionals that can help.”

Holiday Hiring: Don’t Forget About Tax Regulations

Retailers and seasonal companies currently on a hurried hiring spree for the holiday season would be wise to slow down enough to ensure they are complying with all required tax regulations, according to experts in the tax resolution business.

“Because seasonal hiring often occurs in a hurry, it’s important that businesses adhere to their usual hiring policies and processes so they don’t overlook critical tax documentation and considerations,” said Brian Biffle, president of 20/20 Tax Resolution in Broomfield, Colo. “First and foremost, it’s important to remember that part-time and seasonal employees are subject to the same tax withholding rules that apply to any other employees.”  

To ensure against unexpected tax issues, it’s important that businesses have the resources and the record-keeping systems in place to manage an influx of temporary employees during the busy season, according to Biffle. Maintaining accurate records is not only critical with respect to payroll issues, but also down the road should problems arise. In addition, there are a number of other considerations that must be addressed, Biffle said. For example:

  • Correctly identifying employment status (1099 or W2)
  • Incorporating additional administrative costs (payroll management, for example) into hiring plans
  • Ensuring any potential health care coverage costs (if required for seasonal employees working 30 hours or more per week) are factored into hiring decisions – a rare requirement based on a variety of criteria but worth verifying when making hiring decisions
  • Anticipating the unexpected and planning accordingly

“The retail business especially can be unpredictable, particularly if a ‘hot’ item captures consumer attention creating additional hiring needs. So it’s smart for employers to examine all variables that may impact the bottom line – including hiring costs,” Biffle said. “It can be very easy to neglect costs like these during the rush of the season when business is plentiful, but doing so can put a business in a serious financial bind.”

Conversely, Biffle said that seasonal workers should pay attention to any tax implications created by accepting a holiday job. Workers should ensure they factor in tax withholding to cover any tax liability (whether done through the employer or as a self-employed individual), including federal income tax, state income taxes, Social Security and Medicare (FICA) taxes, as well as any local taxes that may be required.

Business Basics: Resources for Managing Your Business

Ask any business owner and they’re likely to tell you the same thing: They love doing their work but occasionally (and in some cases, regularly) struggle with managing business operations. After all, the work is what beckons and inspires business owners – not the bookkeeping. Many people start their businesses to pursue their passions. But if you’re like many, you could use an occasional business primer to ensure you’re managing the business as effectively as possible (as well as to keep taxing authorities satisfied). While not an exhaustive list of business knowledge, the following links can help provide critical information on a variety of basic business operations.

20/20 Tax Resolution offers the following resources to help businesses manage their tax liabilities and obligations:

The Internal Revenue Service provides a thorough overview of basic tax knowledge that is valuable to any business owner:

The U.S. Small Business Administration offers a variety of resources for business owners. Click on the links below to drill down deeper into each of these topics:

What’s Your Process? How to Work a Collection Case

When it comes to the world of tax resolution, why do you take a particular action while working a case? Is it because your client asked you to? Maybe it’s because you know it’s the ‘right’ thing to do? Or, perhaps because this is always your professional recommendation? No matter what your answer might be these are not mutually exclusive options according to 20/20 Tax Resolution’s vice president, David Miles, EA. When practicing collection representation, one needs to hone in on the balance between what gets done in every case, regardless of the circumstances, and what happens only because it’s necessary given the situation.

This foundation helped shape his most recent EA Journal article (June-August 2016 edition), What’s Your Process? How to Work a Collection Case. For the sixth year in a row, Miles has been published in The National Association of Enrolled Agents (NAEA) bi-monthly publication — this prestigious journal allows members of the NAEA to stay up-to-date on any industry trends, tax updates and association news. 

When asked to discuss the overarching theme of his piece, Miles explains, “Ultimately, a practitioner needs to be able to advise a taxpayer on what could happen and also what is most likely to happen in the course of a collection case. The practitioner then must take the taxpayer’s specific situation into account to develop a strategy that allows decisions on where and when action is necessary. An efficient tax resolution practice provides tangible results that are interpreted as success by the taxpayer.”

This article also served as a synopsis to a graduate level National Tax Practice Institute® (NTPI™) course that he presented during the National Association of Enrolled Agents annual conference held in Las Vegas Aug. 1-3. “I encourage those in practice to consider approaching every case, from the easiest to the more complex and the ones engaged at the first sign of a liability to those who engage you much later on, in a way that ensures the taxpayer’s interests are protected and advanced in the most capable manner possible. This session covered the process for handling a collection case from start to resolution through the aid of a specific workflow. It is my goal that each practitioner will infuse their own personality, professionalism and style into a system after having a chance to take this course,” says Miles.

Want to read the full EA Journal article? No problem, click here.

Celebrating 18 Years of Putting Lives Back Together

DENVER, August 9, 2016 – 20/20 Tax Resolution, a market leader in the tax debt resolution industry, is celebrating its 18th anniversary of providing compassionate, comprehensive tax resolution services to businesses and individuals, the company announced today.

In 1998, few people were aware of the “tax resolution” industry. Although there were a few firms specializing in resolving tax issues, most people facing IRS action or experiencing difficulties meeting tax liabilities were unsure of where to turn, or who to trust.

“We wanted to create a company that provided ethical and compassionate services for businesses and individuals who often face fear and uncertainty along with the financial burdens that come with tax issues,” said Brian Biffle, president and founder of 20/20 Tax Resolution. “So to ease these concerns, we created a process that allows a person to take control of their tax debt. We partner with each client to manage communication with taxing authorities, implement a resolution plan, negotiate on their behalf and pursue a strategy that allows them to move forward.”

In the 18 years since 20/20 was created, the need for assistance working with the IRS and state taxing authorities has only increased, according to the company’s VP of Resolution Richard Davidson. 

“The complexity of tax policy makes resolving difficult issues challenging for many businesses and individuals,” Davidson said. “It’s critical that these clients work with licensed tax professionals who stay updated as laws and regulations evolve.”

20/20’s commitment to ongoing training and education, as well as its compassionate approach to client service, attracts the top professionals in the business.

“Our team members get a great deal of satisfaction knowing they are helping people reclaim their lives,” said David Miles. “Because of this, they are committed to finding the best resolution strategy for clients. Our culture encourages agents to seek innovative solutions and offer new suggestions. We equip our tax professionals with the knowledge needed to successfully resolve even the most unique cases.”

It’s difficult to comprehend the concern that business owners and individuals feel when they discover an unpaid tax liability, according to Miles.  “Many of our clients are hesitant to take that first step to finding help. We understand that fear and treat each client accordingly.”

To view a video case study of 20/20’s compassionate process in action, visit: https://www.2020taxresolution.com/2020-tax-resolution-success-story-jurgen/