Business, Taxes and Accounting

Tax Relief CPA Alerts Delinquent Taxpayers as IRS Intensifies Collection Efforts and Audit Activities for 2024

LOS ANGELES, Calif. -- James Cha, a CPA and a Certified Tax Resolution Specialist from Ace Plus Tax Resolution, alerts that the IRS is ramping up collections and tax audits in 2024, and urges taxpayers to act with tax relief strategies.

:: IRS Increasing Audits, Collections, and Tax Levies in 2024

For years, the IRS paused many collection actions due to COVID-19, halting notices from its Automated Collection System. But in 2024, that reprieve ends as the agency ramps up collections and audits with increased funding.

If you haven't received IRS notices recently about unfiled returns or unpaid taxes, expect that to change. The IRS is hiring more auditors and resuming collection notices aggressively. Be prepared for stepped-up IRS collections efforts in 2024.

:: 2024 IRS Hiring Increase and Enforcement Efforts to Surge with New Funding

The Inflation Reduction Act provided $80 billion for the IRS to modernize and enhance tax enforcement. With the funds, the agency plans to hire thousands of new auditors, revenue officers, and personnel. The hiring blitz is already underway.

James states, "The IRS currently has about 14,000 enforcement personnel but aims to rapidly expand its workforce, with a 55% auditor increase targeted for 2024 alone according to watchdog reports."

:: Resumption of IRS Collection Notices

During the COVID-19 pandemic, the IRS took many steps to help taxpayers, including increased tax credits, new tax credits for employers, and halting many collection activities.

As of 2024, the IRS is sending out new collection notices, and it's using Letter LT38 to alert taxpayers about upcoming collection notices. The agency is also sending out demands for payment and notices about unfiled returns.

If you have unpaid taxes or unfiled tax returns, expect to see the following notices soon:

* LT38 - This notice alerts you of your unpaid tax debt and advises you that the agency is going to start sending out notices again. It also informs taxpayers of automatic penalty relief on failure-to-pay penalties for tax years 2020 and 2021 for taxpayers with assessed balances of $100,000 or less for each tax year.

* CP59 - The IRS sends this notice to people with unfiled tax returns. You can respond by filing the enclosed Form 15103 which allows you to explain why you haven't filed or why you're not required to file. If you don't respond, the IRS may issue a substitute for return to assess tax against you more than you were supposed to owe and start the collections process.

* CP3219N - The IRS uses this notice of deficiency to alert people with unfiled returns about a proposed tax assessment made against them. When you receive this notice, you have 90 days (150 days if you're out of the country) to file a tax return, appeal in Tax Court, or agree with the assessment.

* CP504 - The IRS sends this notice to people with unpaid taxes before it seizes their state tax refunds and starts to seize other assets (wages, bank accounts, personal/business property, real estate, etc.). The IRS started sending these notices to people who owe for 2022 and older tax debts.

The IRS is boosting compliance efforts, intensely targeting high-income non-filers. In a Feb 29 announcement, the agency said it issued over 125,000 notices for unfiled 2017-2022 returns. Around 25,000 cases involve taxpayers with over $1 million income, while 100,000 are for those earning $400,000-$1 million.

However, that doesn't mean you don't have to worry if you have unpaid taxes and your income is lower than the above thresholds. Janet Yellen did not deny a claim that 90% of new IRS audits would be on individuals making less than $400,000 annually. Also, The IRS still uses the $200,000 threshold to measure high-income returns since it defined high-income taxpayers as those with a total positive income of $200,000 or more.

As the IRS continues to increase collection efforts through 2024 and beyond, the agency will reach out to millions of taxpayers at all kinds of income levels.

:: Taxpayer Options for Unpaid Taxes

Unpaid taxes can be extremely stressful, but there are options. The IRS offers the following payment plans and relief options to taxpayers who owe back taxes:

* Installment agreement - Take up to the collection expiration date to make monthly payments on your tax debt. Interest and a small late payment penalty will continue to accrue on your account, but the IRS won't pursue any collection actions against you.

* Partial payment installment agreement - A special type of monthly payment plan with a reduced amount where the IRS waives the remaining balance at the end of the payment plan, but you must provide financial disclosure to prove that you're paying the highest monthly payments that you can afford.

* Offer in compromise - You pay the most you can afford to pay based on your income and assets in a lump sum or 24 monthly payments with this one-time settlement. The IRS forgives the remaining balance, but you must stay compliant with certain rules for the next five years or you risk losing the agreement.

* Currently not collectible - To get your account marked as currently not collectible, you must prove to the IRS that you can't afford to pay anything. Then, the IRS pauses all collection actions against you until your finances improve.

There are also other relief programs that may be able to help you. For example, unpaid payroll taxes can lead to severe consequences from the IRS, including the Trust Fund Recovery Penalty, levies, and seizures, but seeking professional tax representation can help resolve these issues and protect your business from the IRS's aggressive collection actions.

Penalty abatement can reduce or eliminate penalties based on reasonable cause or first-time incidents. The IRS's Innocent Spouse program helps taxpayers who are facing tax debt due to actions their spouse took without their knowledge. Additionally, depending on the situation, you may also want to look into tax appeals, OICs based on doubt of equity, or OICs based on effective tax administration.

:: Steps Towards Compliance: Responding to 2024 Notices

IRS Commissioner Danny Werfel said, "The IRS is now taking swift and aggressive action to close the tax gap and has a variety of efforts underway to improve compliance in overlooked areas."

If you receive an LT38, CP59, CP504, or any other IRS collection notice, don't ignore it. Failure to respond will lead to increased penalties and more interest, and it could subject you to involuntary collection actions such as tax liens, wage garnishments, tax levies, and passport revocation or denial.

A tax relief professional can also help you identify the best option and negotiate with the IRS on your behalf.

:: Get Ready for IRS Collections 2024

James advises, "There are numerous tax relief options that are put forth by the government, but individuals and business owners should seek an experienced tax relief specialist who can strategize, take full advantage, and save considerable sums of money for taxpayers."

About Ace Plus Tax Resolution:

Ace Plus Tax Resolution provides customized solutions to taxpayers with IRS and state tax problems. James Cha is a CPA and Certified Tax Resolution Specialist at Ace Plus Tax Resolution, and has been representing his clients and dealing with the IRS for 35 years. His practice is in Los Angeles, yet his clients are all across the nation. Learn more at: https://aceplustaxresolution.com/

Contact him at (213) 600-7388 or James@AcePlusTaxResolution.com for a free consultation.

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Business, Free News Articles, Taxes and Accounting

The IRS Collection is Now Back and Sending Final Intent to Levy Notices – Ace Plus Tax Resolution Suggests Tax Relief Strategies

LOS ANGELES, Calif. -- James Cha, a CPA and a Certified Tax Resolution Specialist from Ace Plus Tax Resolution, underlines that the IRS is starting its collection actions by sending Final Intent to Levy notices, and urges taxpayers to act with tax relief strategies.

The IRS collection enforcement is now back! The IRS switched its lenient position during COVID-19 and has now started sending millions of Final Notices of Intent to Levy (Letter 11 or LT11) from June 15, 2021. Its Automated Levy and Systematic Lien Programs were halted since April 2020 due to COVID, but these programs have now returned. It's time to take action to protect your bank accounts, wages, and other assets and income from the IRS!

A levy occurs when the IRS collects the back taxes by seizing delinquent taxpayers' real or personal properties. Typically, levies are made on financial accounts held for them by others, such as a bank, a stockbroker, or an employer. Levies can be placed on bank accounts, social security benefits, and retirement income.

If anyone wishes to appeal this proposed levy action, Form 12153, "Request for a Collection Due Process or Equivalent Hearing," has to be sent to the IRS within 30 days from the receipt of LT11.

About 45 days after Letter 11 is issued, a levy will take place if the taxpayer has not contacted the IRS for resolution. The IRS computer sends levy notices to any financial institution suspected of holding funds under its Social Security numbers or names, or to any employers or contractors who have filed a W-2 or 1099 form showing they have paid them in the past. In addition to any properties, a levy can attach to any future federal tax refunds or state income tax refunds that they are to receive, in order to satisfy the federal tax liability.

James Cha, CPA, CTRS, says that "It is critical for the taxpayers to understand where they are in the collection process. Any delinquent taxpayers are highly recommended (or strongly urged) to start working out a deal with the IRS as soon as possible."

Upon receiving Letter 11, here are some critical points to consider:

* Get any missing returns filed as soon as possible to be in compliance.

* Respond to the notices or letters, and seek professional tax help for the best possible resolution options.

* Respond to IRS requests in a timely fashion.

Additionally, James states "It is also worth noting that I expect that the IRS will continue to hire many more new employees to ramp up its enforcement actions". In 2021, the IRS has already announced plans to hire 87,000 new employees, doubling their workforce over the next six years. The current administration has pledged $80 billion toward enforcement activities over the next ten years.

Tax Reliefs

In the case where the taxpayer is approached by the IRS for back taxes, the best possible course of action might be to adopt an approach to deal with the issue tactfully without panicking.

James believes "the best course of action is to see if they qualify for any tax relief options." However, this can only be done after delinquent tax returns have been filed and all current income tax or payroll tax deposits have been paid.

Businesses or individuals can settle their taxes substantially less than they owe through an Offer in Compromise if they qualify. Financial inability to pay is the most common reason an Offer is accepted, but it must be supported by and verified with well-prepared financial documents and statements.

Or, through an Installment Agreement, businesses or individuals may set up an affordable payment plan to pay off the back taxes. If they qualify for a Partial Payment Installment, they will not be paying off the full amount, as the balance left at the end of the payment term will be forgiven. Strategizing is crucial when submitting an application in order to maximize the benefit.

Also, they may be able to halt IRS collection actions by declaring a Currently Not Collectible status. To qualify for this status, they must prove they have a dire financial situation and none to very little income. The IRS will put a pause on their attempt to collect payment until the financial situation improves.

Lastly, business owners who have fallen behind on their Payroll Tax Obligations need to figure out the best method to protect themselves and deal with the IRS.

The Final Words

There are numerous tax relief options that are put forth by the government, but individuals and business owners should seek an experienced tax relief specialist who can strategize, take full advantage, and save considerable sums of money for taxpayers.

Ace Plus Tax Resolution provides permanent solutions to taxpayers with IRS and state tax problems. James Cha is a CPA and Certified Tax Resolution Specialist(r) at Ace Plus Tax Resolution, has been representing his clients and dealing with the IRS for over 30 years. His practice is in Los Angeles, but his clients are all across the nation.

Contact him at (213) 600-7388 or James@AcePlusTaxResolution.com for a free consultation.

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Business, Free News Articles, Restaurant, Hotel and Hospitality, Taxes and Accounting

Newly-Passed Restaurant Revitalization Fund and Restaurant Tax Relief Strategies by Ace Plus Tax Resolution

LOS ANGELES, Calif. -- James Cha, a CPA and a Certified Tax Resolution Specialist from Ace Plus Tax Resolution, underlines the newly enacted restaurant revitalization fund, recent tax challenges the restaurant industry is facing, and tax relief strategies.

Restaurant Revitalization Fund and Grants

Along with small and medium enterprises, the restaurant industry has also been severely impacted by the pandemic. However, the governments have been trying to ensure that tax reliefs are provided to help the restaurant industry. This has been effectively encapsulated in the Restaurant Revitalization Act signed on March 11. Certified Tax Resolution Specialist James from Ace Plus Tax Resolution recommends that "restaurant owners that are financially struggling must strategize and receive the full benefit of the Restaurant Revitalization Fund."

$5 billion of the fund will be available to eligible restaurants with gross receipts during 2019 of $500,000 or less.

In addition, the crux of this particular tax relief regime provides grants to restaurant applicants of up to $10 million. This is mainly to compensate them for the pandemic-related revenue loss. In this aspect, all restaurants are declared as eligible for the program, with some exceptions, like restaurants that are operated by a state or a local government or are owned by a publicly-traded company. However, it is to be noted that the grant that would be awarded to the entity is not supposed to exceed an aggregate of $10 million and should be limited to $5 million per physical location.

The grant amount will be based on the pandemic-related revenue loss. If the entity was in business for 2019, either entirely or partially, the loss is calculated as the 2020 average monthly gross receipts multiplied by 12, subtracted from 2019 average monthly gross receipts multiplied by 12. A different calculation method is to be applied if the business newly opened anytime between January 1, 2020, and the enactment date of the bill, March 11, 2021. The grant will be reduced by the 7(a) SBA loans received, including PPP loans.

Under this particular act, there are certain expenses that are eligible for restaurants. They mainly include payroll costs, paid sick leaves, mortgage, rent and utilities, maintenance, supplies, food and beverage expenses, operational expenses, and any other expenses SBA deemed essential. In the same manner, the grant is supposed to be used for expenses that fall within the covered period between February 15, 2020, and December 31, 2021.

Taxability

Restaurant Revitalization Grants that are received are not subject to income tax. In the same manner, the exclusion will not result in the denial of a deduction reduction of tax attributes or a denial of increase in basis. This implies that these businesses are not supposed to include the grant amount as a gross income in the tax return.

Tax Problems for Restaurant Owners

James denotes, "Restaurant Revitalization Grant has been a much-needed life support for the troubled industry. Followed by the pandemic, the restaurant industry was perhaps the most impacted by lockdowns, with the ongoing burden of having to remit tax payments. Payroll taxes, for one, continue to be a pressing cause of concern for the restaurant industry".

When their business struggles, restaurant owners are tempted to use these funds to cover the business expenses. The IRS takes late payroll tax payments very seriously because it wasn't the business owners' money to begin with. If the IRS thinks that if an individual was responsible for filing or paying taxes but did not, then he or she becomes liable for the unpaid taxes.

Business owners must realize that the IRS has the power to close their business, come after the owner personally by asserting Trust Fund Recovery Penalty, levy bank accounts, or seize income sources and properties in an attempt to collect back taxes. Also, their passport may be revoked or declined to issue or renew by the U.S. Department of State.

Tax Reliefs for the Restaurant Industry

In the case where the business is approached by the IRS for back taxes, the best possible course of action might be to adopt an approach to tactfully deal with the issue, without panicking.

James believes "The best course of action is to see if they qualify for any tax relief options." However, this can only be done after delinquent tax returns have been filed and all current income tax and payroll tax deposits have been paid.

Businesses or individuals can settle their taxes for substantially less than they owe through an Offer in Compromise if they qualify. Financial inability to pay is the most common reason an Offer is accepted, but it must be supported by and verified with well-prepared financial documents and statements.

Or, through an Installment Agreement, businesses or individuals may set up an affordable payment plan to pay off the back taxes. If they qualify for a "Partial Payment" Installment, they will not be paying off the full amount, as the balance left at the end of the payment term will be forgiven. Strategizing is crucial when submitting an application in order to maximize the benefit.

Also, they may be able to halt IRS collection actions by declaring a Currently Not Collectible status. To qualify for this status, they must prove they have a dire financial situation and none to very little income. The IRS will put a pause on their attempt to collect payment until the financial situation improves.

The Final Words

The current day and age are quite challenging for almost all business owners. In this regard, it is imperative for businesses to be fully aware of all the taxes that they owe, as well as the options that are available to them. There are numerous tax relief options that are put forth by the government, but business owners should seek a certified tax relief specialist to clearly understand their options and eligibility, so that they can strategize, take full advantage, and save considerable sums of money as taxpayers.

Ace Plus Tax Resolution provides permanent solutions to taxpayers with IRS and state tax problems to individuals and businesses struggling with unmanageable IRS tax problems. If you're struggling with payroll tax problems, contact their tax professionals for a free consultation.

Learn more at - https://AcePlusTaxResolution.com

James Cha is a CPA and Certified Tax Resolution Specialist(r) at Ace Plus Tax Resolution, has been representing his clients and dealing with the IRS for over 30 years. His practice is in Los Angeles, but his clients are across the nation. Contact him at (213) 600-7388 or James@AcePlusTaxResolution.com.

Watch our video about how to resolve your payroll tax problems: https://youtu.be/Xw4mjLKoWKI

Related link: https://AcePlusTaxResolution.com/

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Business, Free News Articles, Taxes and Accounting

Certified Tax Resolution Specialist, James Cha from Ace Plus Tax Resolution, Advises Non-Filers to File Their Back Tax Returns Now

LOS ANGELES, Calif. -- James Cha, a Certified Tax Resolution Specialist from Ace Plus Tax Resolution, urges taxpayers to file their tax returns as soon as possible, even if they missed the tax deadline or can't pay off, as they're only increasing their tax bill by delaying.

The IRS has started again to send the collection notices to taxpayers from late October. These notices were paused due to COVID-19. Now, the IRS's mail backlog is caught up enough to enforce non-payments, and they will start levy, lien, and other threatening collection activities.

The IRS has slowed down in many aspects due to COVID-19, but they never stopped investigating people who haven't filed tax returns. Pursuing non-filers can be one of the IRS's most efficient enforcement strategies because issuing non-filer notices can be a cost-effective tool that requires little more than automated notices.

There is an ever-increased chance that the IRS will start ramping up their collection activities right after the presidential election is over.

Consequences of Non-Filing

Why are there so many non-filers? Quite many people misunderstand and think, "If I don't file, then the IRS won't know. Then the IRS cannot pursue, lien, or levy me." Or, "I didn't get any notices the following year. I must've gotten away."

"However, this isn't true," says Ace Plus Tax Resolution's Certified Tax Resolution Specialist(R), James Cha. "Taxpayers are only increasing their tax bills by not filing and waiting. The IRS will investigate and catch up with non-compliant cases in the following years. Once the IRS system discovers those cases, it will send out warning letters and threaten non-filers. Failure to file a tax return may be construed as a criminal act by the IRS and can be punishable by up to one year in jail for each year not filed. If left unresolved, the non-filers find themselves in a tough spot when the IRS freezes their bank accounts, garnishes their wages, seizes or sells their assets, suspends their passports, takes their retirement funds, takes their home, and so much more."

Why Should Non-Filers File Tax Returns As Soon As Possible?

If a taxpayer hasn't filed tax returns in the past several years, it is strongly recommended that they file their returns as soon as possible, even if they can't pay them off at the moment.

If taxpayers fail to file or pay the returns, the IRS will keep adding penalties at an extremely high rate and also charge them interest. The IRS charges 5% of the amount due every month for failure to file, and 0.5% for failure to pay for a maximum of 25% each. Because of 0.5% reduction in penalty for any month, the maximum penalty amount combined is 47.5% of the taxes owed.

Compliance is Required before Resolution

Ace Plus Tax Resolution can bring you back to compliance by filing back tax returns, which will stop the failure-to-file penalty. What's important is that the taxpayer needs to be "current" with any filing obligations to be eligible for any back tax liability settlement with the IRS.

To be Current, You Must:

1. File tax returns for the most recent six years, and

2. Make current tax payments.
a. sufficient withholding (W-2 employee)
b. estimated tax payments (self-employed)
c. quarterly payroll tax deposits (business)

Ace Plus Tax Resolution's solutions include:

If qualified, Offer in Compromise allows a negotiation to settle back tax liability for a substantially reduced amount from the full amount owed. Keep in mind that the IRS can reject the offer if the financial documents are not professionally prepared or the taxpayer is not in compliance with the IRS. For applicants who have not filed all of their tax returns or made all required estimated tax payments or deposits, their offers will be rejected.

The Installment Agreement is for those who are unable to make the full tax payment immediately. There is a limit to how much they can owe to qualify for the agreement for online application. Thus, non-filers should consult with a tax relief professional for detailed information.

Another method is to see if they qualify for a Currently Not Collectible status upon submitting a financial statement. If the taxpayers have no means to pay the debt at the moment or anytime soon, they can request the IRS to delay the collection process until their financial situation improves. Note that this doesn't mean the back tax liability will disappear - the IRS can come back and collect your taxes years later. Other solutions include lien relief, release of wage or bank levies, penalty abatement, Bankruptcy Dischargeability Analysis, etc., depending on the non-filer's situation.

James adds on and says, "the IRS is making deals right now for back tax liability due to COVID-19. So, now is the best time to negotiate with the IRS."

Bottom Line

Without these alternative solutions, the amount the taxpayer owes to the IRS can become so massive that they cannot pay off the amount. It's like this huge snowball rolling downhill, getting bigger and bigger with growing penalties and interest. In fact, millions of taxpayers in America are delinquent in filing tax returns and are struggling to pay the IRS.

If you're struggling with tax problems, it is strongly recommended that you seek help from tax relief experts who can guide you through the most suitable resolution method and reduce the liability owed to the IRS to the lowest amount possible if you qualify. This can resolve your non-filing problems effectively and permanently.

​Learn more at - https://AcePlusTaxResolution.com

Watch why you should file back tax returns here and how a tax professional can help you: https://www.youtube.com/watch?v=6-761u9qxJs

James Cha is a CPA and Certified Tax Resolution Specialist(R) at Ace Plus Tax Resolution, providing permanent solutions to taxpayers with IRS and state tax problems. He has been representing his clients and dealing with the IRS for over 30 years. His practice is in Los Angeles, but his clients are across the nation. Call us at (213) 600-7388 or email at James@AcePlusTaxResolution.com.

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