Author: 20/20 Tax Resolution

[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/

Presidential Candidate Tax Returns: Should Voters Care?

Reviewing tax returns can reveal a lot of information about a political candidate. But many tax experts caution the average voter may not be knowledgeable enough to know what all that information means – and they argue that any conclusions based upon a tax return can often be traced back to a voter’s pre-existing political position.

“As a company, 20/20 reviews a lot of tax returns. It’s our job to dispassionately review a  tax record and determine what steps need to be taken to resolve any tax issues,” said Brian Biffle, president of 20/20 Tax Resolution. “Voters review tax returns with a more subjective approach. So, before they pass judgment based on a candidate’s financial history, a ‘tax return primer’ might be in order to understand what they are reviewing.”

According to 20/20, here’s what voters can learn from a candidate’s tax return:

  • Sources of a candidate’s taxable income
  • Clues to business failures in losses or the overall fiscal health of business endeavors
  • Information on charitable deductions (not simply how much but where it’s distributed)

“For some voters this information can, in essence, become a test of character,” Biffle said. “They’re interested in where a candidate’s income originates and what types of charities the candidate supports.”

Other information revealed often causes voters to compare a candidate’s tax history to their own, said Biffle, and make judgments about how “in touch” a candidate is with voters, as well as the candidate’s ability to serve in the Oval Office. For example:

  • The effective tax rate paid by a candidate
  • Information on investments and loans
  • Real estate taxes (abatements, for example)
  • Real estate holdings
  • Information about the existence of offshore accounts, household employees and other holdings

“Voters sometimes view this information almost as a question of transparency,” Biffle said, particularly since candidates are not required by law to release their tax returns. “But in reality, none of these things provide a complete analysis of a person’s ability to lead. It’s only become an important factor to voters in recent elections.”

Although candidates are required to file Public Financial Disclosure Reports since the passage of 1978’s Ethics in Government Act, these reports don’t provide the detailed examination many voters have come to expect, Biffle said.

“We have clients from every walk of life, income level and background,” Biffle said. “At no time does a tax return provide an exact portrait of a person’s character. It simply offers a glimpse into their finances.”

20/20 Tax Resolution Success Story: Jurgen

20/20 Tax Resolution client came to the United States from Germany to pursue the American Dream – but unwittingly faced a classic American nightmare when he ended up on the wrong side of the IRS.

Situation:

In 2009, Golden, Colo. resident Jurgen was a real estate developer converting buildings into condominiums. But when the economy tanked and the Great Recession hit, he was unable to renew his 5-year loan, and suddenly tightened monetary restrictions prevented him from securing a new loan. Thus began a snowballing cascade of financial concerns that was topped off when Jurgen’s CPA suddenly passed away – unbeknownst to Jurgen who was busy managing his financial affairs. By the time he tried to connect with his now-deceased CPA, the accountant’s files had disappeared, along with all of his documentation.

“I did not find out until I had to do my new taxes (about eight months later),” Jurgen recalled. “By then, all the CPA’s files were gone. I didn’t know what to do.”

The Problem:

Unable to be confirmed through documentation, many of Jurgen’s deductions were denied by the IRS – to the tune of hundreds of thousands of dollars. He was now facing a tax debt of nearly half a million dollars.

With mounting debt and a wife and two children to support (one of whom was about to enter college), Jurgen was nearly in a panic. He recognized he couldn’t manage this situation on his own. So he researched online for the right kind of help. He found it at 20/20 Tax Resolution.

The Solution:

20/20 conducted a thorough examination of Jurgen’s circumstances and were able to connect with the IRS and intercede on his behalf. His 20/20 Senior Tax Consultant – working with Jurgen – took immediate steps to bring sanity back to his personal and business lives, including:

  • Getting all past and current tax returns in proper order in order to expertly diagnose the problem
  • Identifying all the next steps necessary
  • Reducing wage garnishment, which had been implemented by the IRS
  • Securing a hold on both the state’s and the IRS’ additional collection efforts
  • Negotiating a payment schedule that Jurgen could accommodate without destroying his financial future

As a result, 20/20 was able to help put Jurgen’s life back on track. “They treated me like a human being not somebody that screwed up,” he said. “They understood that the IRS is hard to deal with.” Based upon our experience working with taxing authorities, 20/20 was able to quickly assess Jurgen’s circumstances, alleviate his concerns and help calm him down. “It’s not a good situation when all of the sudden the IRS is after you,” he said. “It’s pretty scary when you think you’re going to lose everything and have to start over. There’s no way you can go through this by yourself. Go to somebody that’s a professional.”

To hear more about Jurgen’s story and his experience working with 20/20, watch the video above.

20/20 to Provide Expertise at 2016 NAEA Conference

David Miles, EA, vice president of 20/20 Tax Resolution, will present two National Tax Practice Institute® (NTPI™) courses at this year’s annual conference of the National Association of Enrolled Agents in Las Vegas Aug. 1-3.

The highest credential awarded by the Internal Revenue Service, an enrolled agent (EA) is a federally authorized tax practitioner empowered by the U.S. Department of the Treasury to represent taxpayers before the IRS. Miles will be leading two courses, including:

  • Introduction to Collections – Monday, Aug. 1 This introductory course to IRS Collections explores the fundamentals of the IRS collection system, as well as the skill set needed by those practitioners just beginning to represent clients before Collections.
  • Case Evolution with a Flowchart Approach – Wednesday, Aug. 3 This session covers the process for handling a collection case from start to resolution through the aid of a specific workflow.

“At 20/20, we’re very proud that every one of our tax professionals serving clients nationwide are credentialed enrolled agents or attorneys – and many of our agents hold both of these titles,” said Brian Biffle, president of 20/20 Tax Resolution. “Constant change is the nature of the tax business, and David’s expertise will help NAEA attendees refine and enhance the skills they take back to their clients.”

NTPI is a three-level program developed to sharpen the skills of enrolled agents at all stages of their careers. With each level of this program, participants expand their knowledge and skills, and gain the confidence needed to guide their clients successfully through the challenging maze tax regulations and agency structure.

Taxes 2016: Collection Cases, Unpaid Balances Increase

More people owe more money in unpaid taxes than at any other time in U.S. history, according to recently published figures from the Internal Revenue Service. According to the numbers for fiscal year 2015, unpaid tax balances increased by $7 billion and the number of active collection cases grew to 13.5 million.

All this data, coupled with the recent IRS announcement that the agency is planning to hire up to 700 enforcement agents to pursue collection efforts, points to an increasing need for tax resolution services, said David Miles, vice president of 20/20 Tax Resolution in Broomfield, Colo.

“With a growing emphasis on collection and the addition of 700 new enforcement hires, businesses and individuals facing unpaid tax burdens would be wise to take action first before the IRS takes it for them,” Miles said.

According to news reports, IRS hiring will first be focused on the department that monitors small businesses and self-employed individuals. This only increases the urgency for these audiences to address any lingering tax concerns, according to Miles.

“Most of our clients are an adaptable cross-section of American business,” he said. “They have a general sense of business, but the nuances of tax policy are not usually top of mind. Particularly with this new IRS development, our advice is always to err on the side ofover preparation.” 

Primarily, that means planning ahead for tax burdens, closely monitoring financial concerns throughout the year and keeping ahead of any potential IRS action.

“Undercapitalization seems to be the universal issue with companies facing tax problems.” Miles said. “Whether due to poor planning or unforeseen circumstances, undercapitalization often leads to a company’s collection problems. However, many companies compound the problem by ignoring the issue or just hoping it will go away. Being proactive before the IRS takes action is the best way to resolve tax challenges.”