Accounting News and Notes

Gwinnett CPA Teaches  Getting Your Business’s Internal Financials Ready for an Audit, IRS Representation Issues or Submitting an IRS Offer in Compromise

Although it is tempting to address a crisis only when it arrives, it is much more prudent to be aware and ready for events before they come issues for failing to prepare, is preparing to fail. However it is often when a client has been called to task on an audit or is considering submitting an Offer in Compromise when a CPA can especially be invaluable in readying for the tasks at hand. Like a good general, the first task of a CPA in representing a corporate or personal tax return is to assess the damage, understand the whole of the tax environment and nuances thereof, control the communication with the IRS/taxing authorities, and to plan a strategy that works best for the client. Care needs to be exercised to ensure that a well-thought out plan needs to be tailored to that particular client to ensure a successful IRS audit experience. Below is a sample of a letter that might be sent to a client to coordinate the many and varied tax issues to ensure no important items are missed or ignored.

I just received statement for the open monies for the 2006 to 2008 showing $120,000 outstanding, including taxes penalties and interest due and payable to the IRS. Time, when dealing with the IRS, is not our ally. It is critical that we get all of your tax filings and current payments, for the 2009 tax year, ASAP. Failure to do so can/will result in two potentially worse negative tax issues than before:  

-The IRS is not statutorily allowed to work with a taxpayer to either consider/process an Offer in Compromise or an Installment Agreement unless a taxpayer is current on all of its current year responsibilities and payments.

-Tax fines and penalties along with its attendant interest continue to be accrued until the manner/open balance is either paid is full or formally abated. 

ASAP please forward me a copy of your filed 2009 corporate and personal income tax returns so that I might review it for any potential errors or deficiencies. We have often helped taxpayers to legally amend their corporate and personal income tax returns to correctly claim previously missed deductions resulting in the refund of thousands and thousands of dollars. 

I suggest that ASAP that you complete IRS Form 433A, Form 656 and Form 433B (if applicable) so that we might evaluate if you are an candidate to submit an Offer in Compromise. To read more about the rules of submitting and processing a successful Offer in Compromise visit http://www.hiscpa.com/offer-in-compromise.html  

Failing to respond to IRS notices ASAP can expose you to additional collection efforts by the IRS including levies, liens, asset seizure and garnishments, which otherwise might be avoided by quickly, efficiently, and effectively addressing IRS notices received. 

If you are not a candidate for an Offer in Compromise I suggest that either ASAP you pay the tax and interest in full, while asking for penalty abatement or get on an installment plan. 

Please be sure your internal 12-31-08 Balance Sheet equals the Balance Sheet on page Four of the Corporate Income Tax Return/IRS Tax Form 1120S. In this way we will know that your 2009 internal financial statement is starting off with the correct balances, as they are listed on the corporate income tax return.

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html  

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Gwinnett CPA Firm on Addressing Back Tax Issues for Atlanta Taxpayers for Decades

For those taxpayers who have not filed their tax returns for the past several years the filing of these old back returns is often the easiest and quickest way to assess the obligations and correct the records of IRS tax assessments/calculations. In the review of past taxes that were either filed or assessed by the IRS, a CPA can learn of missed deductions and to legally amend past filed tax returns. This is one of the first and most important steps in the tax review process to ensure that our tax obligations to the IRS include only monies that are legally owed and do not include any tax bill amounts that are not legally owed. Our tax system expects taxpayers to pay only what they owe and it is up to CPA’s and their clients to ensure that only their just tax amounts are listed as due and payable.

Installment agreements, though frequently encouraged by the IRS, are financially problematic as though collection efforts stop while an Installment Plan is in full force and effect, as a result of a written agreement with the IRS and timely payments by the taxpayer. However it is also during this time that payments are being made during the payment period that penalties and interest continue to be accrued. Accordingly there are  frequently financial and strategic options. such as:

• Payment of  the tax and interest in full.  If you can do this and have valid reasons or explanations as to why the monies are in arrears, the IRS will abate assessed penalties. This frequently is not only the least expensive option but also much faster than the submission of an Offer in Compromise and the limitations of qualification thereof. To read more about this process and how we saved one client $120,000 visit http://www.hiscpa.com/blog/2009/06/27/atlanta-cpa-saves-metro-atlanta-client-120000-in-payroll-tax-penalties/
•  Offer in Compromise. If you qualify the IRS will reduce your tax bill to a combination of your net worth and your “excess cash flows” over the next five years. Though this is an arborous process, frequently tens of thousands of dollars of taxes, penalties and interest are reduced to a settlement amount that is literally pennies on the dollar. To discover if you qualify visit http://www.hiscpa.com/offer-in-compromise.html
• A Review of Old Filed Tax Returns. Frequently I have worked with taxpayers to determine that original returns were either not filed, filed incorrectly or that valid deductions were originally left off the filed returns. This alone is perhaps the largest single determining factor in the errant calculation by a taxpayer of the true amounts owed.

Representing yourself before the IRS is a recipe for disaster and is analogous to the saying that “He who represents himself has a fool for a client. As Believers we are called to surround ourselves with wise counsel and failing to do so will add folly, toil, and additional financial drain, helping our “financial ship” sink faster still. Sitting down with a CPA who is well versed in tax representation issues is your best first step to getting back tax issues, payments and returns filed and paid. Finding the right solution to your tax problem helps resolve tax problems better and faster. Though an Installment Agreement is often the most convenient it often results in both prolonging the problem and the largest financial outlay.

To learn more about IRS/Tax Representation Issues and an Offer in Compromise visit http://www.hiscpa.com/irs-representation.htm  

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, Douglas, Fayette

Marietta area CPA Teaches Avoiding Common Pitfalls When Using IRS Installment Plans

Installment plans are great options for taxpayers who are not able to either qualify to submit an Offer in Compromise or to pay the tax in full, while asking the IRS for penalty abatement. Though these are often much better financial options, as they frequently result in a lower cash outlay. These options are only for those who either meet the rules, guidelines and procedure for submitting an Offer or who have the financial ability to pay the tax and interest in full at the time of requesting a penalty abatement.

If you are in the midst of addressing IRS tax issues and  trying to evaluate between an Offer of Compromise or an Installment plan, frequently the options look bleak, as often they are. However there is good news for those who are desirous to look “outside the box” in looking to solve your IRS tax problems. Knowing the ins and outs of varying programs will do much to help you know what is in your best interest.

IRS Installment plans are essentially long range, but are frequently the most convenient way to solve an IRS tax bill short term. However this option is frequently the worst option as interest and penalties continue to be assessed thus ensuring that you continue to owe even more additional monies rather than less. Form 9465 is used by taxpayers with the IRS to make an Installment Agreement Request to set up a monthly payment plan. If at all possible it is recommended that before you set up an installment plan, you look to other options available such as a loan from a bank.

Also great care should be taken to be a forward thinker when doing your cash flow and to plan long term to ensure that you will be able to fulfill the financial commitment you make in a Formal IRS Installment Plan. For example, if you owe taxes for the 2007 tax year and have not yet filed your 2008 returns and have not yet done adequate tax planning for 2009, setting up an Installment Plan with the IRS might be one of the worst things you can do. Care should be exercised to both, get all of your 2008 returns filed first and then to evaluate your 2009 taxable income to ensure that you will have the taxes and monies to pay all of the tax years in question. Failing to do so can be especially problematic as one of the rules of being on an Installment Plan is that you have to stay current on all of your filings and payments for the duration of the payment period, or the IRS will void the Installment Agreement and reinstate collection efforts. Considering all of these options allows you to have a much less problematic agreement  and avoid unnecessary headaches, professional fees, and additional fines, penalties and interest.

For those who owe the Internal Revenue Service less than $10,000 there is an option called a Guaranteed Installment Agreement. In general terms to qualify for this you have to have timely filed and paid all income tax returns for the last five years and have not used an installment agreement during this period.

For amounts owed the IRS of more than $10,000 then the plan is still available but the IRS may request additional information to determine and validate that you are not able to pay the present amount owed in full. As part of the Installment rules for all levels of IRS debt, the IRS expects you to file and pay all future tax filings on a timely basis. Failure to do so will immediately invalidate your Installment Agreement allowing the IRS to use liens, levies, and garnishments to effect and force collection. Typically to protect its financial interest in an Installment agreement the IRS will file a general lien necessitating taxpayers to get permission from the IRS in advance to either refinance or sale assets. Also, please note that the IRS will apply all monies as they see fit allowing dollars to be first applied to penalties and interest leaving the principal balance potentially unchanged.

Installment agreements are problematic because frequently there may be better options such as:

-Paying the tax and interest in full. Frequently if you can do this and have valid reasons or explanations as to why the monies are in arrears, the IRS will abate assessed penalties.

-Reviewing old returns. Often I have worked with taxpayers to determine that original returns were either not filed, filed incorrectly or that valid deductions were originally left off the filed returns.

-An Offer in Compromise. If you qualify the IRS will reduce your tax bill to a combination of your net worth and your “excess cash flows” over the next five years.

Representing yourself before the IRS is a recipe for disaster. Sitting down with a CPA who is well versed in tax representation issues is your best first step to getting back tax issues, payments and returns filed and paid. Finding the right solution to your tax problem helps resolve tax problems better and faster. Though an Installment Agreement is often the most convenient it often results in both prolonging the problem and the largest financial outlay.

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ or all John Dillard CPA today at 770.814.9304

-Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

Serving Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding, Walton, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder and Woodstock