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Offer in compromise: How to Get the IRS to Accept Your Offer

Would you like to wipe your tax slate clean at an enormous discount? The IRS has accepted less than 1% of a tax bill and called it even. There is no legal right to ever have a valid tax bill reduced by the IRS. It is entirely a matter of government discretion whether or not you qualify for an Offer in Compromise—referred to as an Offer or an OIC. In all but a few instances, the...

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Estate Planning: Why Everyone Needs an Estate Plan

As an estate planning attorney, I see all the benefits a properly organized estate can offer on a daily basis. The benefits of estate planning aren't likely as evident to others and I wanted to help share some information on what an estate plan is, the benefits it offers, and how to get started. What is Estate Planning? Estate planning is the creation of a definite plan for managing your wealth while you’re alive and distributing your...

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What is a Florida Lady Bird Deed?

A common question we get is what in the world is a Florida lady bird deed? A lady bird deed—also known as an enhanced life estate deed—is a type of deed that allows an individual to make sure that their property does not pass through probate to pass to their beneficiaries after death. Overview A Lady Bird deed is increasing in popularity because it saves beneficiaries thousands of dollars in probate fees (and the headache of probate),...

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Tax Audit FAQ: Common Issues When Dealing With the IRS

In this article, we have collected the 20 most commonly asked questions about tax audits and briefly answered them for your reading pleasure. Explore our tax content to find in-depth information about each question. Frequently Asked Questions Our website is filled with an in-depth discussion regarding specific dealings with the IRS. Sometimes, all one needs is a quick tip. Below is a list of the questions I am most frequently asked with regard to handling IRS audits. Thankfully,...

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IRS Audits: Timing is Everything

The IRS is powerful, but not without limit. After getting over the shock of reading “we have selected your federal income tax return for examination,” look carefully at the year or years on the audit notice. In general, after you file a tax return, the IRS has only three years to begin and end an audit of that return. If you filed it before the due date, April 15, the three years start running from April 15. If...

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IRS Audits: Top Six Field Audit Issues

Some field audits last a couple of hours and are wrapped up that day. In extreme cases, a revenue agent may spend hundreds of hours over a year or two conducting a field audit. The typical field audit, however, involves an interview with the revenue agent that lasts an hour or two, followed by the revenue agent spending ten to 15 hours reviewing your records. Introduction The vast majority of people who are subjected to a field audit...

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The IRS Appeals Protest Letter

IRS appeals rules differ, depending on the amount of taxes you are disputing from an audit. It's important to know at which thresholds the IRS separates requests. Smaller cases allow for a less formal appeal request while larger cases require more in-depth communication. Below, you'll find an overview of these two case determinations and how the IRS assesses them. Under $25,000: Small Case Request If the total amount you’re disputing for any one tax year is not more than...

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Tax Court: How the IRS Handles ‘Regular Cases’

If you want to contest in tax court an audit outcome of over $50,000 for any one year, your case will be considered a regular case. Most people hire a tax pro to represent them when arguing a regular case. A Trial in Tax Court If your case reaches the trial stage, the judge may not be that patient with a taxpayer representing him- or herself. Strict court procedures and rules of evidence apply. After the trial, you...

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Should You File a Tax Return While Under Audit?

Here’s one way to minimize the expansion of your audit: Don’t file a tax return while an office (read here) or field (read here) audit is in progress. This rule does not apply if the IRS is conducting a correspondence audit (read here). If you file your return during an office or field audit, the audit is likely to be expanded to include that return. When April 15 rolls around, file a request for an extension to October...

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Reviewing the Automated Adjustment Notice

Money magazine estimates that between 25% and 50% of automated adjustment notices are erroneous. A common IRS mistake is not finding an income item that was reported elsewhere on the tax return. This can result in incorrectly misreported income, as illustrated below: EXAMPLE: Hilary reported $457 of money market fund income as interest. The financial institution labeled it as dividends in its report to the IRS. While dividends are listed right after interest on the IRS form, the...

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