Frequently Asked Questions

Back Taxes owed

Q.1 Will I get audited? What happens if I do?

Ans.Probably not. If you make less than $200,000 there’s a 1 in 98 chance you could be audited, according to 2011 figures. This number might even go down in 2013, with I.R.S. budget cuts due to the sequester.
You’re more likely to get audited if you do something that the I.R.S. considers evidence that you’re trying to game the system, like taking really big deductions on a very low income or putting in nice, neat round numbers that all end in 00. Learn the most common audit triggers and how to avoid them.
But if you do get audited, it might not be so bad. Most likely, it will be conducted by mail (only about one in five audits involve your showing up in person or an auditor showing up to your business or home), and the I.R.S. will just ask for back-up documentation. That’s why you should be very organized and keep your documentation for deductions, retirement contributions, HSA distributions and anything else you claim around for several years, in case the I.R.S. asks for proof.

Yes, you can sometimes settle unpaid taxes for less than you owe. The two most common options are an offer in compromise or a partial payment installment agreement (PPIA). There are strict requirements for both programs, and you have to give the IRS detailed financial information to prove you meet the criteria

Tax Lien

Q.1 Will the IRS file a tax lien after I submit my offer?

The IRS may file a Notice of Federal Tax Lien during consideration of your offer. Moreover, the IRS will release the tax lien 30 days after payment terms are met and the payment verified.

Tax Problem

You are required to file federal and state income tax returns if your income is above a certain level. This amount varies depending on your filing status, age and the type of income you receive.

There are instances when you may want to file a tax return even though you are not required to do so. You may want to file to get money back if federal/state income taxes were withheld from your pay. Also you may qualify for an Earned Income Tax Credit (EITC), if you worked, but did not earn a lot of money. EITC is a refundable tax credit which means that you could quality for a tax refund.

If you are not sure if you are required to or should file, make an appointment and we will figure it out together. We will not charge you for the consultation.