1. When the IRS makes an adjustment to your tax return, you will receive a report or letter explaining the proposed adjustments.  This letter will also explain how to request a conference with an Appeals office should you not agree with the IRS findings on your tax return.
2. In addition to tax return examinations, many other tax obligations can be appealed.  You may also appeal penalties, interest, trust fund recovery penalties, offers in compromise, liens and levies.
3. You are urged to be prepared with appropriate records and documentation to support your position if you request a conference with an IRS Appeals employee.
4. Appeals conferences are informal meetings.  You may represent yourself or have someone else represent you.  Those allowed to represent taxpayers include attorneys, CPAs, or individuals enrolled to practice before the IRS.
5. The IRS Appeals Office is seperate from, and independent of, the IRS office taking the action you may disagree with.  The Appeals Office is the only level of administrative appeal within the Agency.
6. If you do not reach agreement with IRS Appeals or if you do not wish to appeal within the IRS, you may appeal certain actions through the courts.
7. For further information on the appeals process, refer to Publication 5.

The Hiring Incentives to Restore Employment Act (HIRE) is a plan to create jobs by providing a temporary tax break to companies that hire the unemployed. 

Current Status: President Obama signed the HIRE Act into law on March 18, 2010

HIRE will exempt an employer from paying the employer portion of Social Security taxes for the remainder of the year on new hires who are currently unemployed.  If those employees stay ont he payroll for at least a year, the employer would also get up to a $1,000 business credit per employee.  As a result, an employer can save up to $6,622 in employer Social Security Tax for each qualified hire.  There is no limit to the total amount of tax benefits or hires during this period, so employers will receive greater tax benefits by hiring individuals earlier in the year.  Please note, the Social Security tax exemption can NOT be taken in conjunction with the Work Opportunity Tax Credit, they must choose one or the other..

The business credit will be the lesser of $1,000 or 6.2% of the wages paid by the employer to the retained worker during the 52 week consecutive week retention period.

As I receive more information I will post it on this blog.

Thanks

The IRS today issued proposed regulations requiring tax preparers to use Preparer Tax Identification Numbers (PTINs) on all tax returns and tax refund claims they prepare.. 

"These regulations allow the IRS to better identify and match tax return preparers with the tax forms they prepare.  This proposed PTIN system will help us  ensure taxpayers receive competent, ethical service from qualified professionals and strengthen the integrity of our tax system," said IRS Commissioner Doug Shulman.

The proposed regulations also provide that tax return preparers must apply for a PTIN, regularly renew the PTIN, and pay associated user fees.  As part of the process, some tax return preparers would also be subject to a tax compliance check, which could include a review of the preparer's history of compliance with personal and business tax filing and payment obligations.

If your preparer does not have a PTIN, you should ask why and consider changing preparers.

Errors made on tax returns may delay processing of your tax return, which in turn, may cause your refund to arrive late.  Here are several common errors:

1. Incorrect or missing Social Security Numbers;
2. Incorrect or misspelling of dependent's last name;
3. Filing status error;
4. Mathe errors;
5. Incorrect bank account numbers for direct deposit;
6. Forgetting to sign and date the return;
7. Incorrect AGI information on electronically filed tax returns;
8. Claiming the Making Work Pay Tax Credit

1. Don't Procrastinate.  Resist the temptation to put off your taxes until the very last minute.  Rushing to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.
2. Visit the IRS Website.  In 2009 more than 296million visits were made to IRS.gov.  They have numerous resources to assist you.
3. File Your Return Electronically.  Last year, 2 out of 3 returns were filed electronically.  PAS offers electronic filings and rapid refunds for it's clients.
4. Don't Panic If You Can't Pay.  If you cannot pay the full amount of taxes you owe by the April 15th deadline, you should still file your return and pay as much as you can to avoid as many penalties and interest as possible.  You can contact the IRS and make payment arrangements on the remaining amoiunt due.
5. Request an Extension But Pay On Time.  You can qualify for an automatic 6 month extension period but you are required to pay the taxes due at the time of the extension.  We can give you a good idea of how much that will be.  Any overpayments will be refunded when we file your taxes.

The Child Tax Credit is a valuable credit that can significantly reduce your tax liability.  Here are ten important facts

1. Amount - You may be able to reduce your by federal tax liability by up to $1,000 for each qualifying child
2. Qualification - Someone who meets the qualifying criteria tests
   1. Age Test - A child must be under 17 at the end of the tax year
   2. Relationship Test - The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these people which includes your grandchild, niece or nephew.  Adopted children are always treated as your child.
   3. Support Test - The child must not have provided more than half of their own support
   4. Dependent Test - You must claim the child as your dependent on your federal income tax return
   5. Citizenship Test - The child must be a US citizen, US national, or US resident alien
   6. Residence Test - The child must have lived with you for more than half of the calender year.  There are some exceptions to this rule.
   7. Limitations - The credit is limited by the taxpayers' modified adjusted gross income
3. Additional Child Tax Credit - If the amount of your Child Tax Credit is greater than the amount of of income tax you owe, you may be able to claim the credit

For more information, see IRS Publication 972 available at irs.gov or call PAS at 843-224-6875

1. Normally, debt forgiveness results in taxable income; however, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2M of debt forgiven on your principle residence
2. The limit is $1M for a married person filing separately from their spouse
3. You may exclude debt reduction through mortgage restructuring as well as mortgage debt forgiven in foreclosure
4. To qualify, the debt must have been used to buy, build, or substantially improve your principle residence
5. Refinance debt proceeds used for the purpose of substantially improving your principle residence also qualifies for the exclusion
6. Proceeds of refinanced debt used for other purposes (ie. to pay off credit cards) does not qualify for the exclusion
7. If you qualify, claim the special exclusion by filing Form 982
8. Debt forgiven on second homes, rental property, business property, credit cards, or auto loans do not qualify for relief
9. If your debt is reduced or eliminated you will receive a Form 1099C
10. Examine the 1099C carefully and notify the sender of any errors immediately

You might be eligible for a valuable tax credit.  A tax credit is a dollar-for-dollar reduction of taxes owed.  Some credits are even refundable.

Earned Income Tax Credit is a refundable credit for certain people who work and have earned income.  Income, age, and the number of qualifying children determine the amount of the credit.

Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, to enable you to work or look for work.

Child Tax Credit is for people who have a qualifying child.  The maximum amount of the credit is $1,000 for each qualifying child.

Retirement Savings Contribution Credit, also known as the Saver's Credit, is designed to help low to moderate income workers save for retirement.

Health Coverage Tax Credit pays up to 80% of the health insurance premiums for eligable Trade Adjustment Assistance recipients and Pension Benefit Guaranty Corporation payees.

FIVE TIPS ON 1st TIME HOME BUYER CREDIT

Claiming the First-Time Homebuyer Tax Credit on your 2009 tax return might mean a larger refund but it can seem complex.  Here are five tips to clarify the documentation required by the IRS:

1. SETTLEMENT STATEMENT:  You must attach a copy of the HUD-1 to the tax return;
2. PROPERLY EXECUTED SETTLEMENT STATEMENT: Generally  a properly executed Settlement Statement, HUD-1, includes all parties names and signatures along with the property address, the purchase price, and date of purchase;
3. RETAIL SALES CONTRACT: If you are purchasing a mobile home, you will need to provide a copy of the sales contract that is fulle executed and has all of the information from #2 above;
4. CERTIFICATE OF OCCUPANCY: For newly constructed homes, you will need to provide a copy of the Certificate Of Occupancy showing the owner's name, property address, and the date of certificate; and
5. LONG-TIME RESIDENTS: If you a re along time resident claiming the credit, the IRS also recommends you attach documentation covering the five (5) previous years such as your 1098s (Mortgage Interest Statement), Homeowner's Insurance, or even property tax records you may be able to easily access online.

FOUR STEPS TO FOLLOW IF YOU ARE MISSING A W-2

1. Contact your employer.  Your employer may have a wrong address and may need to re-send your W-2.  Please allow them time to get the W-2 to you if they need to resend it.
2. Contact the IRS.  If you have not received your W-2 by 2/16 and the IRS can assist you.
3. File your return.  You must still file your return by April 15th or an extension even if you do not have your W2.  You can also file your return with a "Substitute W-2" using Form 4852.
4. File a Form 1040X.  Once you receive your W-2, you may "amend " your tax return for any differences between what you filed and the W-2.  There may be significant penalties is the Form 4852 is significantly different than the W-2 filed.