 |
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
|||||||||||
 |
 |
 |
 |
 |
|
|||||||
 |
|
|||||||||||
 |
|
|||||||||||
 |
 |
 |
 |
 |
 |
 |
 |
|
||||
 |
|
|||||||||||
 |
|
|
|
 |
|
||
 |
 |
 |
|
 |
|
||
 |
|
||
 |
|
||
 |
|
||
 |
|
||
 |
|
||
 |
|
||
 |
|
||
Q. I was so excited to file my taxes electronically this year that I filed before I received one of my tax forms. It was a 1099 form for sick leave pay I received from a financial security plan at work. The amount I earned was a little over 500.00 and the taxes taken out were a little over 100.00. My taxes are filed and I am waiting to receive a refund. How do I fix my error?????
>>>>>IR$Maven's Reply:
Firstly, wait until you receive the refund. Then, get hold of a Form 1040X which is the form you use to file an amended 1040. It is not that difficult. You put down the original figures on the left, add the additional income and tax in the middle and end up with the revised amounts on the right. The bottom line of the form will be the amount you owe. If you send it in with a check before April 15th, there will be no extra charges. If the result is a refund, no extra charges will be incurred even if the amended return is filed after April 15th.
***********************************
Q. Can federal income taxes be discharged through bankruptcy and under what specific conditions if any?
>>>>>IR$Maven's Reply:
Federal income taxes generally can be discharged if they were assessed against you more than two years before the bankruptcy proceeding started. However, there are other conditions and exceptions. If you do not have an attorney to call, try calling the federal bankruptcy court in your jurisdiction. They should have at least a voice mail to connect you with a court clerk with whom you can discuss your case.
***********************************
Q. I have a Corp that I want to discontinue doing business. The net loss is approximately $6,000 that I would like to use as a Section 1244 stock loss. My question is what forms should I send in, if any, to the IRS to discontinue the business. I am the only stockholder with an initial stock investment of $6,000.
>>>>>>IR$Maven's reply:
There is no special notification to the IRS that is necessary. The final corporate tax return should reflect the $6,000 net loss. Be sure to check the box "final return" on the Form 1120. As the stockholder, you will then be entitled to take the $6,000 loss on Schedule D, Form 1040 as a short-term loss. Show $6,000 in the cost column and write "Loss on 1244 stock" on the line just below your entry. For higher amounts, see IRS Publications for limitations on the maximum amounts allowable as Section 1244 losses.
********************************************************
Q. How would I apply for an extension for my 1999 taxes?
>>>>IR$Maven's reply:
The first federal extension, using form 4868, allows you a four month extension until Aug. 15th, 2000, to file your return. You are still responsible for penalties @ 1/2% per month and interest @ 9% per annum for any tax due with the tax return. If you need more time, you can file Form 2688, for an additional extension of time until October 15, 2000.
***************************************************
Q. I was wondering of your thoughts on the tax laws in the United States. I believe there are different definitions, making it illegal for the IRS to tax us.
>>>>>>IR$Maven's reply:
The U.S. Treasury, by way of the IRS, is authorized to collect the tax because it is given the implied right to do so in the sixteenth amendment to the U.S. Constitution. There are no particular sections of the Constitution that state this in an affirmative fashion. The reliance has been on the Supreme Court to interpret the power of the Treasury to impose and collect income taxes. Many people have tried to interpret the tax laws themselves but it has proven fruitless.
*********************************
Q. Can you deduct a family member's funeral expense?
>>>>IR$Maven's reply:
Sorry- funeral expense is not tax deductible- for anyone. Reminder: you may be entitled to a partial reimbursement of funeral expenses from the social security administration. Give your local Social Security office a call.
***************************************************
Q. For the first time, I might have to have someone else do my taxes this year. How do I shop around for a good accountant? What kinds of questions should I ask? What should I look for?
>>>>>IR$Maven's Reply:
If you've been doing your own taxes, you should stay away from the store front tax preparers such as H&R Block. You are probably best off with either:
(1) an Enrolled Agent who is $90 -- $125 hour and has sponsored test, and could be quite good, or
(2) a CPA who will be more expensive but may have more experience and be more knowledgeable. Make at least three calls and do it between 6 - 7 PM when someone will actually listen to you. Ask how much experience he/they have with IRS audits (some old-timers I know have no idea how to handle an IRS audit ). Can he recite to you the five biggest changes in the tax law that are effective for 1999 returns? Will this person be the actual person who prepares your return? If not, will the rate then be cheaper? Are the returns computerized? If manual, hang up as fast as possible, and keep going. Conclusion: try to get a "feel" how the person reacts to your questions and go with your "gut feeling."
***************************************************
Q. I filed my 1998 taxes with a 1040 PC form with the payment due attached. It was sent out on April 15th - I made sure it was postmarked that date. How can I be sure that the IRS received my return and payment?? If they didn't receive it, how can I prove that I mailed it on time and what can I do now? Also, my girlfriend filed before April 15th and a refund is due. How can she check on the status of the refund?
>>>>>>IR$Maven's reply:
The IRS maintains a file for all returns that it has received and has mailed appropriate refunds. Please call 800-829-1040 and one of the selections will be for refund information. As to proving when you mailed in the return, the IRS accepts only a certified receipt from the U.S. P.O. or a receipt from several private delivery companies such as Fedex and Airborne Express. Absent any of these, you can plead your case with a letter to the IRS along with a copy of any penalty notice. You might just catch an IRS employee in a good mood.
**********************************
Q. In Oct. 1999, I filed my tax returns for the years 1995, 1996,1997 & 1998. My late filing was due to my mother's diagnosis with breast cancer in Dec. 1995. I submitted a form for an extension; but unfortunately, my energies were with my mother who battled her illness for 4 1/2 years. She lived with me, and I am a single parent. I took care of my mother and was her caregiver and more. The last thing on my mind was income tax returns. I finally filed, and the IRS owed me monies; all of which I received except for the 1995. They advised me the statute of limitations had run out. I thought the statute of limitations didnŐt start until the day of the filing and then you get 3years? My mother's oncologist wrote a letter advising the IRS of my active role on my mother's behalf to confirm why I was so late. $1,500 is a lot of money, I can't believe I have no recourse to collect that money. IRS said there is nothing I can do. Is that true? I would appreciate any help or advice.
>>>IR$Maven's Reply:
Unfortunately, the statute of limitations of three years begins to run from the date that the original return should have been filed. In your case, the three years started to run on April 15, 1996, for the 1995 tax year, and expired on April 15, 1999. Two additional thoughts: Firstly, if for any of the years there was a balance due, be sure to tell the IRS what you went through so that most penalties will be abated. Secondly, compose a letter stating all the facts and mail it to the IRS Commissioner, Charles Rossotti (IRS, Wash. DC). In a polite way, mention that you thought there was something included in the IRS Restructuring Act (effective 7/22/98) that allows the IRS to overturn a harsh result (such as yours) that was not the intention of the regulation. You never know...
Q. Is
there a statute of limitations on collections? If so, from when does the
clock start? I made an offer in compromise in 1989 which was denied. I'm
told that the clock restarted from the time of the offer. Is that true?
>>>>>IR$Maven's Reply:
Firstly, the statute of limitations on collections is ten years from the date the tax is assessed. Secondly, the ten year clock did not restart while the Offer was being considered; the clock just did not move. Once the Offer was denied, the ten year clock started running again. In addition, check with the IRS (they have to tell you) as to what the statute of limitations was at the time your tax was originally assessed. The ten year rule has not been in effect for a whole lot of years; it previously was less years.
**********************************
Q. Some years ago I lost a business and all I had remaining was a tax debt. There is no money to hire council and I live below the poverty level, I have assets of approximately $3,500 and am 64 years of age. I called the IRS and asked for an appointment, they have responded and will give the appointment, I have to handle this myself and wonder if you can offer some advice.
>>>>>IR$Maven's Reply:
Based on these facts, you should ask the IRS representative to help you fill out an Offer in Compromise and a Form 433A that goes with it. The Form 433A lists your assets and liabilities and your monthly income and expenses. The Offer In Compromise sometimes results in settling tax debts for a small percentage of tshe actual debt owed. Since you only have $3,500, I doubt whether IRS will ask you to part with any of it. Also, your age indicates that your future earnings prospects will not provide the IRS with some unexpected pot of gold from you in the forseeable future. It will take a few months for the approval process but, if granted, it will be worth the effort. After the approval, the IRS will stop bothering you, maybe forever.
Q. In
1995, to escape IRS persecution, my fiancee filed bankruptcy. Since the
IRS won't get anywhere close to what they say he owes them, he was told
by his attorney the IRS couldn't come after him again for the same taxes.
However, in the future they would keep any money he might have coming
as a refund, probably forever. If we marry, do we have to file tax returns
separately? Can the IRS keep any money that we might have due to us on
a joint return even though half of it is mine)? Everything is currently
in my name alone, so a separate return would not be difficult, just expensive.
>>>IR$Maven's Reply:
Effective 7/22/98, the rules for "innocent spouses" has changed drastically in favor of the taxpayers. Whatever your fiancee owes the IRS in back tax assessments is his problem alone. In fact, you were not even married at the time the IRS assessed the taxes against him. The IRS suggests that you use Form 8379 and attach it to your Form 1040. this form should alert the IRS to compute your income and deductions separately form those of your spouse and keep only his portion of any refund due. However, the IRS moves in strange ways. The IRS may very well grab any refund that shows up on a currently filed joint tax return, filed by you and your new husband. You will then have to write to the IRS and wait an indeterminate time period to get your money back. Conclusion: the practical answer is to file separate tax returns to stop the IRS from grabbing your refund.
***********************************
