I Owe Back Taxes! How do I fix it?

22 Oct

I Owe Back Taxes! How do I fix it?

  1. GATHER ALL YOUR DOCUMENTS.  To file your back taxes, you will need all of your tax documents. This includes your W-2's, 1099's, 1098's, receipts and any other documents that will affect the outcome of your taxes. If you are missing documents, such as past W-2's, 1099's and 1098's, you can request a transcript from the IRS.
  1. PREPARE YOUR TAXES.  Each year, tax laws changes and the instructions change with them, this means that wrong instruction may require you to prepare the return over again. When you have all your documents in front of you and you are ready to start entering your data, double check to make sure that the instructions you are using are for the same tax year as the tax return you are preparing.
  1. SUBMIT YOUR FORMS. Submit the forms to the IRS at the address listed in the Form 1040 instructions. If you find that you owe income tax for any of the prior years, remember to include as large of a payment as you can to reduce your interest charges. Unlike tax penalties which stop accruing when the maximum is reached, monthly interest still accrues indefinitely until the tax is paid. Once the IRS receives your tax returns, you should expect to receive notice of the exact penalty and interest charges you are responsible for.
  1. HIRE A PROFESSIONAL. It is important to understand that the IRS will come for what is owed to them, therefore, it is always best to have an advocate that represents your best interest. The tax experts at Tax Champions have over 35 years of experience negotiating back taxes.  For more information call us today at 800-518-8964.

18 Jul


  1. PAY YOUR TAX BILL.  If you receive a bill from the IRS, pay the bill as soon as you can, this is will save you money. If you are unable pay it in full, you should pay as much as you can to reduce the interest and penalties charged for late payment.
  1. GET A SHORT-TERM EXTENSION TO PAY YOUR BILL. There is a chance that you can qualify for extra time to pay your taxes if you can pay in full in 120 days or less. To determine if you qualify, apply online at IRS.gov. 
  1. APPLY FOR A MONTHLY PAYMENT PLAN. If you owe $10,000 or more and need more time to pay, the best option is to hire a tax relief professional to handle this type of situation for you. At Tax Champions we will work hard to ensure that your tax debt is as minimal as possible as well as establishing an affordable payment plan to get the IRS off your back.
  1. CONSIDER AN OFFER IN COMPROMISE. If you cannot pay your taxes, and Offer in Compromise lets you settle your tax debt for less than the full amount that you owe. Tax Champions has over 35 years of successfully assisting their clients in achieving the best tax settlement possible. When dealing with the IRS, it is always best to have a trusted tax professional that is well versed in the most current tax laws to act on your behalf.
  1. CHANGE YOUR WITHHOLDING OR ESTIMATED TAX.  You may be able to avoid owing the IRS in the future by having more taxes withheld from your pay. Do this by filing a new Form W-4 with your employer. The IRS Withholding Calculator on IRS.gov can help you fill out a new W-4. If you have income that’s not subject to withholding you may need to make estimated tax payments. If you are self-employed or a businesses owner, it is best to hire a certified public accountant to take care of these situations for you. Morgan, Dagget, Wotman, LLC, home of Tax Champions, offers full service accounting and tax services. For more information call us today at 800-518-8964.

29 Jan

IRS warns of new tax email scam hitting Hotmail users

In an article posted Accounting Today, the IRS has issued yet another scam:
The Internal Revenue Service issued a warning Wednesday to taxpayers and tax professionals about a new email scam targeting Hotmail users in which the thieves try to steal personal and financial information.

The phishing email has a subject line saying, “Internal Revenue Service Email No. XXXX | We’re processing your request soon | TXXXXXX-XXXXXXXX”. The email takes taxpayers to sign into a bogus Microsoft web page and then asks for their personal and financial information.

The IRS said it has received more than 900 complaints about the new scam that appears to exclusively target Hotmail users. The suspect websites associated with the scheme have been shut down, but taxpayers should be on the lookout for similar scams.

Individuals who get suspicious-looking emails claiming to be from the IRS should send it to [email protected] and then delete it. The IRS noted that it generally doesn’t initiate contact with taxpayers via email to ask for their personal or financial information.

For more information, see “Tax Scams and Consumer Alerts” page on IRS.gov. The IRS also reminded tax professionals to beware of phishing emails, free offers and other common tricks by scammers. The IRS also advised tax professionals who have data breaches contact the IRS immediately through their Stakeholder Liaison and to see Data Theft Information for Tax Professionals for more details.

By    Michael Cohn
Published December 13 2017, 6:55pm EST

16 Aug

Tax provisions in the Senate health care bill

Senate Republicans on Thursday released a draft bill that would repeal many provisions of the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148. The Senate bill, called the Better Care Reconciliation Act of 2017, differs in many respects from the House-passed American Health Care Act, H.R. 1628, but like the House bill, it would repeal many of the tax provisions enacted by PPACA.

The text of the bill released on Thursday is labeled a “discussion draft,” and the text of the bill the Senate eventually votes on may differ. Also, because the Senate and House health care bills are different, either the House would have to vote on the Senate version, or the chambers would have to hold a conference to reconcile the differences.

Here is an overview of the Senate bill’s tax provisions:

  • The bill would eliminate the limitation on recapture of excess advance payments of Sec. 36B premium tax credits after 2017.
  • It would limit eligibility for the premium tax credit to taxpayers whose income does not exceed 350% of the federal poverty line (instead of the current 400%) and modify how the credit works, effective for tax years after 2019.
  • It would repeal the Sec. 45R small business health insurance tax credit after 2019.
  • It would eliminate the Sec. 5000A individual health insurance mandate by reducing the penalty to zero, effective retroactively to Jan. 1, 2016.
  • It would reduce the Sec. 4980H penalty under the employer mandate to zero, effective retroactively to Jan. 1, 2016.
  • It would temporarily repeal the Sec. 4980I “Cadillac” excise tax on certain high-cost employer-sponsored health insurance plans and health plan benefits after 2019. (Its effective date was previously delayed until 2020.) However, after 2025, the tax would come back into effect.
  • It would eliminate the prohibition on using health savings accounts (HSA), Archer Medical Savings Accounts (MSAs), health flexible spending arrangements (FSAs), and health reimbursement arrangements to pay for over-the-counter medicines.
  • The amount of the penalty on distributions from HSAs and Archer MSAs that are not used for qualified medical expenses would be reduced.
  • The Sec. 125(i) limitation on contributions to health FSAs would be repealed for tax years beginning after Dec. 31, 2017.
  • The annual fee imposed on pharmaceutical manufacturers and importers under PPACA Section 9008 would no longer be imposed after 2017.
  • The Sec. 4191 medical device excise tax would be repealed, effective for sales after Dec. 31, 2017.
  • The annual fee imposed on health insurance providers under PPACA Section 9010 would no longer be imposed after 2017.
  • The bill would repeal the Sec. 139A elimination of a deduction for expenses allocable to a Medicare Part D subsidy.
  • The income threshold for itemizing medical expense deductions under Sec. 213 would revert to 7.5% from its current 10%, effective for tax years beginning after Dec. 31, 2016.
  • The 0.9% Medicaid surtax under Sec. 3101 would be repealed, effective for remuneration received after Dec. 31, 2022.
  • The 10% excise tax on indoor tanning services would be repealed, effective Oct. 1, 2017.
  • The 3.8% net investment income tax would be repealed for tax years beginning after Dec. 31, 2016.
  • The Sec. 162(m)(6) $500,000 federal income tax deduction limitation for compensation paid by a covered health insurance provider would not apply to tax years beginning after Dec. 31, 2016.
  • The bill would increase the HSA contribution limit to equal the amount of the deductible and out-of-pocket limitations for high-deductible health plans (HDHPs).
  • Married taxpayers would both be allowed to make catch-up contributions to the same HSA.
  • An HSA established within 60 days of the start of coverage under an HDHP plan would be treated as having been established on the date coverage under the health plan begins, allowing medical expenses incurred before the establishment of the HSA to be treated as qualified medical expenses.

Alistair Nevius ([email protected]) is the JofA’s editor-in-chief, tax.

20 Oct

Corporate tax audit

Walter Wotman, owner and head CPA of Tax Champions and his staff have successfully represented a vast array of businesses through the audit process. It doesn't matter if your business is large or small. We make sure that every client is treated with the same professionalism to ensure the best results possible in each and every case. We have all heard horror stories of businesses representing themselves through an audit with little to no experience. Don't wait until you are in the middle of an audit to decide that you need help. Although we are able to jump in if this is the case, it is always better for our firm to be involved with the audit form the beginning. We make sure that every client has an understanding of the audit process and what to expect from start to finish.

20 Oct

Penalty Abatement Representation

As with most dealings with the IRS, requesting a penalty abatement can be difficult to accomplish on your own without extensive knowledge of tax law and experience in dealing with the specifics of what may or may not qualify for a successful penalty abatement and in many cases it may take appealing the denial of the abatement in order to have a successful outcome. Although penalty abatement is never guaranteed, having an experienced CPA or other licensed tax professional will typically give you your best shot at a favorable outcome.

20 Oct

Penalty Abatement Forms

The form used for the most common circumstances for abatement certain penalties is the 843 Request for Abatement and Refund form. Some of the reasons for utilizing this form for an abatement or refund would be for additional tax caused by certain delays or errors by the IRS, an employer error or over withheld tax among various other reasons.

20 Oct

First time penalty abatement

There are several ways to accrue penalties with the IRS such as failing to pay your tax bill on time, filing your taxes late or not filing at all to name a few. The IRS will agree to abate certain penalties through the First Time Penalty Abatement waiver which can be applied for a single tax period. Many taxpayers are not aware that they may qualify for this abatement and it is helpful to speak to an experienced CPA firm to determine if having them negotiate an abatement will likely be successful for your particular circumstance.

20 Oct

Negotiated Settlements

Working with the IRS when you owe them more money than you can afford to pay is never a fun process which lands many tax payers into more trouble by accepting an agreement that they cannot afford. The IRS will always try to get you to pay as much money as quickly as possible using a traditional installment agreement which breaks your tax debt into payments over a certain amount of months, regardless of whether this is affordable or not. What they seldom mention over the phone is that there are various settlement and repayment programs available based on one's ability to pay which can make your payment affordable and even reduce the overall tax liability. Determining which program will be most beneficial and will save the most money is difficult when you have no idea what is available. Hiring an experienced CPA firm to ensure the most favorable results for your specific circumstance is a great option but make sure you do your due diligence before choosing a firm. Tax Champions has over 35 years experience negotiating on behalf of our clients and maintains an accredited A+ Better Business Bureau rating with zero complaints and can help with any type of state or federal tax problem.

20 Oct

Unfiled taxes

The number one issue that tends to lead to most other tax problems is having unfiled tax returns. The IRS will not consider any type of negotiated settlement or payment agreement until a tax payer is current with their filings. In certain cases, when a number of years go by without filing, the IRS will file "substitute returns" which do not take into consideration your deductions and generally lead to a higher tax debt than when the taxes are filed by your tax professional. As a client of Tax Champions, we will prepare and file all applicable unfiled tax returns to bring you current, quickly and accurately to ensure the least amount of tax liability possible which is the first step before working out a negotiated settlement or when of the various repayment programs which may further reduce the overall tax liability paid to the IRS.

Copyright Tax Champions 2017