How likely are you to be audited?
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
3d ago
Many business owners and individuals fear an audit when doing their taxes. They are worried that they’re going to make a mistake and that the IRS is suddenly going to swoop in, looking for evidence of fraud and potentially handing out financial fines – or even making arrests. But how likely is that to happen? Statistically speaking, audits are very infrequent. As a general rule, roughly one out of 100 Americans will face an audit. But it can be significantly smaller than even that 1%. For example, the rate was just 0.63% in 2020. More than 99% of people who filed their taxes never heard from t ..read more
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Leins, levies and wage garnishments: what are they, and how to avoid them.
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
4d ago
If you have heard of liens, levies and garnishments, you might feel like you’re stuck in a complicated mess. After all, the tax code is complicated and dealings with the IRS can seem even more so. It is important to understand what these mean, though, and to know how to avoid them. After all, any of these signal financial trouble, which is why you should be aware of what they are. Liens When you owe money to the government, they can place a lien on something you own, like a house or car. It is sort of like a slap on the wrist, but also a reminder to pay what you owe or at least make arrangemen ..read more
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There’s help available for delinquent payroll taxes
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
2w ago
If you are facing collection action from the Internal Revenue Service (IRS), you need to take action. This is not a time for avoidance.  There is typically a path to negotiation. The following tips can help you create a workable payment plan that will get you current on your payroll taxes. File those returns As long as you have unfiled employment tax returns, you can’t negotiate a payment plan to pay off your balance. This should be your primary focus. The same applies to making current any outstanding quarterly payroll taxes.  Familiarize yourself with Form 433-B This is the Collect ..read more
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How can I navigate a tax audit? 3 tips to handle it like a pro
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
1M ago
An IRS tax audit is not anything a business person or individual wants to deal with. However, sometimes, an audit notice letter may arrive unexpectedly. This means the IRS has selected someone’s tax return for review. If this happens to you, there is no need to panic. Instead, approach the audit with a level-headed and prepared mindset. Consider the following tips to handle an IRS tax audit like a pro. Understand what is required from you Reading the audit letter is the first step to understanding what the IRS requires from you. It will typically outline the specific items or areas of your tax ..read more
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Can you appeal the findings of an IRS tax audit?
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
1M ago
When the IRS conducts an audit of your tax return, it thoroughly examines your financial records and transactions to ensure accuracy and compliance with tax laws. After completing the audit, the IRS issues a report detailing its findings, which may include adjustments to your tax liability, additional taxes owed or penalties assessed. If you disagree with the audit results, you have the right to appeal the findings. Concerning audit results could be rooted in errors in the IRS's calculations, misunderstandings about tax laws or regulations or missing information that was overlooked during the ..read more
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What happens if the IRS disallows your business deductions?
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
2M ago
Tax laws and forms are complicated, especially if you’re a business owner. You understand that claiming deductions is a common practice to reduce taxable income and lower tax liabilities. However, if the IRS disallows certain business deductions during an audit or review, it can have significant financial and legal ramifications. The IRS only audits a small percentage of tax returns each year, so most people filing a 1040 have little to worry about. But if you are self-employed, your risk of an audit increases. Your Schedule C states your profit and losses. It also includes a section to record ..read more
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Can I really settle my tax debt for less?
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
2M ago
There are few experiences as intimidating as dealing with the IRS. The IRS can intercept your wages, seize or put liens on your property or even freeze your bank account. If you owe unpaid taxes, it is in your best interest that you figure out how to resolve the matter. One of the options you can consider is striking a deal with the IRS. And while the IRS won’t always let you have your way, there are instances when you can negotiate your tax debt through what is known as an offer in compromise (OIC) arrangement. Understanding offer in compromise Basically, this is an agreement between you and ..read more
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Understanding the anatomy of a successful offer in compromise
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
3M ago
It’s nearly that time of the year when you have to file your taxes. You’ve likely been expecting it, but you’re not necessarily prepared for it. You aren’t alone. Tax season is often the most feared time of the year because taxpayers don’t want to know what they owe the Internal Revenue Service (IRS).  Many people end up paying hundreds, sometimes thousands of tax dollars to the IRS. This can be difficult to do for some people. Taxpayers struggling to pay off their tax debt may be able to settle a deal where they pay less taxes than they owe. This is called an offer in compromise. He ..read more
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Can someone pay less than the total amount of their past-due taxes?
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
3M ago
Tax debt is arguably the most intimidating financial obligation a person can face because the Internal Revenue Service (IRS) has the power to take more aggressive collection actions than many other entities. Tax debts could lead to wage garnishment or government levies against personal property. Additionally, the IRS can recommend the prosecution of someone the agency suspects of tax fraud or tax evasion. Most people dealing with tax debts are eager to get them back under control. There are businesses that advertise on the radio and elsewhere about how they can help people settle their tax deb ..read more
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What’s an offer in compromise and how does it work?
Mockensturm | Toledo Tax Law Blog
by On Behalf of Mockensturm, Ltd.
4M ago
Individuals and businesses often seek creative solutions to alleviate their financial burden when dealing with tax obligations. One such option is the offer in compromise (OIC), a program administered by the Internal Revenue Service (IRS). An offer in compromise is a contract between the taxpayer and the IRS that settles tax debt for less than the full amount owed. Eligibility for an offer in compromise Not everyone qualifies for an OIC, and the IRS carefully evaluates each application. Eligibility criteria include: The inability to pay the full tax debt Doubts about the accuracy of the tax b ..read more
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