Most married couples choose to file joint tax returns. The Internal Revenue Code provides that each spouse on a joint return is jointly and severally liable for the taxes owed on the return. Thus, if one spouse fails to report taxable income, the other is held jointly and severally liable for the consequent tax debt. …
Sometimes you might get saddled with a tax debt that’s beyond your ability to pay. The IRS prefers that you pay your debts in a one-time payment, but there are instances when this just isn’t possible. If you’re facing a large amount of tax debt, you might consider paying it through a payment plan. A …
United States Employers are responsible for withholding federal income and payroll taxes from their employee’s paychecks and remitting those withheld payroll taxes to the government. Otherwise, the employer will be subject to the failure-to-deposit (FTD) penalty of up to 15% or even criminal and civil sanctions for willfully failing to pay employment taxes. The failure …
If the CDTFA auditor finds that you or your business owe taxes, penalties, and/or interest, they will prepare a Report of Field Audit or a Report of Investigation. If you agree with their conclusion, that report will be sent to the Sacramento Headquarters for collection action, to which you will receive a Notice of Determination …
What To Do If You Disagree With The CDTFA Audit Results Read More »
A taxpayer may request a Collection Due Process (CDP) hearing; however, they must meet the following requirements: Only the taxpayer may request a CDP hearing, which is based only on the first filing of the Notice of Federal Tax Lien (NFTL) or the first issuance of notice of intent to levy for a tax period; The …
IRS Form 12153: Collection Due Process Hearing Request Read More »
Most taxpayers know that the IRS can put a lien on real and personal property to collect unpaid tax debt, but few understand what happens after the lien is created and encumbers property. Here, we’ll discuss the basics of a Federal Tax Lien, including how they’re created and what happens after they encumber real and …
Federal Tax Liens: When They’re Created and Released Read More »
Sometimes the IRS makes a mistake. Taxpayers are supposed to receive a notice of deficiency for tax liability before an assessment so they have an opportunity to dispute their tax liability, but sometimes taxpayers simply don’t receive this notice. In that case, the Internal Revenue Code affords those taxpayers an opportunity to challenge the merits …
Challenging the Merits of an IRS Tax Assessment in a CDP Hearing Read More »
Innocent Spouse Relief is available to taxpayers who sign a valid joint tax return. A joint tax return is valid when it was signed voluntarily by both spouses. But what if the taxpayer signed the joint tax return under duress? In that case, the tax return is invalid and cannot be subject to innocent spouse …
Signature Under Duress: Avoiding Joint and Several Liability for Tax Debt Read More »
The IRS imposes the accuracy-related penalty when the taxpayer’s underpayment of federal taxes is due to a substantial understatement of income tax, negligence, or other errors in the tax return. The civil tax penalty is 20% of the underpayment. The main reason for implementing an accuracy-related penalty is to encourage the accurate payment and filing of …
While the Notice of Federal Tax Lien is just a public announcement of what you owe the IRS, the real action happens in the tax levy process where the IRS seizes your real and personal property or assets. Usually, levy notices are given to the financial institutions and employers with whom the tax debtor is …
