Haven’t received your W-2 or 1099? Incorrect W-2 or 1099? Follow These 3 Important Steps

What if you haven’t received your W-2 or 1099 or you have an incorrect W-2 or 1099? 

You’ve been strategizing all year and compiling all of your tax forms since January.  You waited for most of February for that one missing document…your W-2 or 1099 from your company.  Shouldn’t I have it by now, you ask.  The answer is YES.  What can you do about it?

Under federal law, employers must send employees their W-2’s by January 31^st of each year.    Similarly, companies with independent contractors must provide 1099 forms by January 31^st.

W-2s or 1099’s are also filed with the IRS.  The purpose for this is to inform of the wages or non-employee compensation a worker has earned and how much Social Security and Medicare taxes were withheld.

If you still have not received your W-2 or 1099 or it needs to be corrected, follow these important steps:

#1: Call your company

There may have been a simple mailing mistake so call your company’s payroll or human resources department.   It could be as simple as getting your new address.  They can also email you or possibly provide your W-2 or 1099 in a secure portal on their website.

If there is an error on the W-2 or 1099 you did receive, contact your company and let them know in detail why it is incorrect.  If they agree with the error, they can issue a corrected W-2 or corrected 1099.  These corrections will go to the IRS and to you so the records all match. Be sure to let your company know the correction is urgent.

#2: Contact the IRS

If your company fails to provide you with your W-2, it is time to get help from the IRS.   They can contact your company (if you haven’t received after February 14^th) and inquire as to the missing W-2.  They can be reached at (800) 829-1040. Be sure to have the following information when you call:

• company or payer name, address and phone number
• dates of employment
• federal tax withholding estimate of your W-2. This can be found on the last W-2 pay stub.

Form 1099’s are not necessary for filing, like a W-2 is, so calling the IRS is not necessary.  Just refer to your own records if you have a missing 1099.

#3: File your tax return

If your company provided you with the documentation you requested, obviously file by the April 15 due date.  If you still don’t receive your W-2, the IRS will send you form 4852, IRS substitute to Form W-2.  You will prepare this form and file it with your tax return. To complete Form 4852, You can use your pay stubs to insert the figures necessary.

Tax Resolution

Be aware that you may finally receive the missing or corrected Form W-2 or 1099 after you filed your return.  If you made a mistake on your Form 4852 that you need to correct, or if the 1099 amount you reported is agreed incorrect, you’ll need to file a 1040X amended tax return.  You may face an IRS audit if it isn’t corrected.

Not receiving timely W-2’s or 1099’s are actually a common problem so don’t feel alone. Many companies go out of business, merge or are purchased by another firm or just have terrible bookkeeping.  Some companies are also victims of fraudulent or incompetent payroll employees or payroll companies.

If you unfortunately incur tax debt due to a 1099 you overlooked and receive an underreporter notice, called a CP2000 notice, there are options such as IRS installment agreements and IRS settlements (known as offer in compromise).

Taxpayers needing tax resolution help with missing or incorrect W-2’s or 1099’s should seek the advice of a tax attorney.  The Attorneys at Delia Law have many years of tax relief experience and will competently represent you before the IRS.

Please call for a no-cost tax attorney consultation for tax resolution. Our attorneys are available to serve you in San Diego, Orange County and Los Angeles.  We are also available nationwide.  We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

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Know These Top 3 Tips for Acceptance of your IRS Offer in Compromise

Getting an acceptance of your IRS offer in compromise can be quite challenging.  With careful planning and proper preparation however, you can greatly increase your chances of acceptance of your IRS tax settlement.

It is best to hire a tax attorney to get the job done.  Only an experienced tax attorney, knowledgeable of the tax laws and art of IRS negotiation has the skill to analyze and determine if you will qualify for an offer in compromise.  Do not waste your time with tax resolution companies, CPA’s, or enrolled agents.  Get it done right the first time, and settle your IRS tax debt.

Here are some top tips to follow when filing your offer in compromise application:

1. File all unfiled tax returns

To the point, an offer cannot be considered if all required tax returns have not been filed.  No exceptions.

2.  Pay your estimated tax payments for the current year

Estimated tax payments must equal either 100 percent of your total tax from the prior tax year, or 90 percent of the income tax you expect to owe for the current year.  Divide the total by 4 to get your quarterly payment amounts.  All estimated tax payments that are due should be paid prior to filing an offer.  For more information see Publication 505, Tax Withholding and Estimated Tax.

3.  Prepare and file a complete offer in compromise application

Be sure that your application is complete.  The offer in compromise forms can be found in the Offer in Compromise Booklet.

A complete application includes:

• Form 433-A or Form 433-B. This is a financial statement the IRS calls the Collection Information Statement for Wage Earners and Self-Employed individuals (433A) or for Businesses (433B).  It gathers your income, assets, liabilities and expenses.  The purpose of it is to determine the reasonable collection potential or RCP.
• Form 656-B. This form identifies the tax years and type of tax to be settled or compromises. It also identifies the offer amount and payment terms.
• Application fee. The offer in compromise requires a $186 application fee made out to the “United States Treasury.”  There is an exception to this requirement if you meet the low-income certification guidelines found in the offer in compromise application.
• Offer amount. You must select a payment option and include the payment (made out to the “United States Treasury” with your application.  This check must be separate from the application fee.  This is where a tax attorney is invaluable.  Knowing how much to offer generally depends on a lot of variables and must be demonstrated in your application.  And just like the application fee, there is an exception to this requirement if you meet the low-income certification guidelines.
• Supporting documentation. All information listed in the 433A must have supporting documentation.  Some of the most common include:
  • wage and income statements (w-2, 1099, k-1)
  • profit and loss statements if self-employed or own a business (LLC, S-Corp, C-Corp, Partnership)
  • bank account statements (generally for the last 3 months)
  • car loan statements
  • health insurance statements
  • 401(k), IRA or other retirement/investment plan statements
  • child support, spousal support orders and divorce decrees
  • mortgage statements/utility bills
  • lease agreement
  • loan documentation and statements
  • child care bills/receipts

If your offer in compromise application does not include the above basic forms and information, the IRS will return your application.  If all documentation is properly included, it will be moved on to assignment to an offer in compromise officer in approximately 6 to 9 months.

The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time.

Taxpayers needing tax resolution help with an offer in compromise should seek the advice of a tax attorney.  The Attorneys at Delia Law have many years of tax relief experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution. Our attorneys are primarily available to serve you in San Diego, Orange County and Los Angeles.  We are also available nationwide.  We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

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IRS Statute of Limitations on IRS Collections

Thinking you will owe the IRS forever?  Many calls pour in to tax attorneys from taxpayers wondering whether the IRS “statute of limitations” will expire on an old IRS tax debt.  For the most part, the IRS has limitations on how many years it has to collect.

IRS tax debt assessment

The IRS generally has three years to assess taxes on a taxpayer from the due date of the return or when it was filed, whichever is later.   If there are unpaid taxes, shortly thereafter, an assessment is made when a certificate of assessment is signed off on stating the amount owed by a taxpayer.  See the IRS Procedures for Assessment of Tax under 25.6.1.9 in their Internal Revenue Manual.

Basics of the IRS Collection Statute Expiration Date (CSED)

As a general rule, there is a ten-year statute of limitations on IRS collections that begins to run from the date of assessment.   Thus, when you fail to pay in full when you file a tax return, the IRS will then mail you written notice of the amount due.  The date on this notice is generally your assessment date.  If you cannot find this first notice, you can find this date of assessment by ordering your tax account transcript.

Be aware, the IRS can prepare a substitute return (SFR) for you if you did not file.  See IRC 6020(b).  From this return, the IRS can make a deficiency assessment, which starts the ten-year period. Thus, not filing a return is the worst thing you can do, especially if you think you will avoid the IRS for ten years.  Check out this article on the consequences of late filing and what you can do about it.

Once the ten-year collection statute expires, the IRS can no longer collect upon your debt.  It essentially “falls off” from your account.  For example, if you filed your 2007 return by the due date of April 15, 2008 and the tax debt was assessed shortly thereafter, the CSED should have expired around April 2018.

If you are counting on the collection statute expiring soon, be sure to watch out.  As the CSED nears, the IRS typically gets very aggressive in its collection activities and often assigns a revenue officer on the case.  A revenue officer is an advanced tax collector that has many powers to quickly garnish wages and seize personal and real property.

For more information on the IRS collection statute, see the IRS Internal Revenue Manual.

Suspension or extension of the ten-year IRS statute of limitations

The ten-year collection period can end up lasting more than ten years because it can be suspended or extended for one or more time periods. Certain actions can suspend the running of time on IRS CSED’s, which also generally suspends the ability of the IRS to collect unpaid tax debt.  Some of the most common include:

1. Filing for bankruptcy. When you file for bankruptcy, the court issues an automatic stay preventing the IRS from taking collection action.  The suspension lasts for the period of the bankruptcy case plus six months.
2. Tax resolution determination. The period is also suspended while the IRS is considering your request (plus 30 days following rejection) for an installment agreement, offer in compromise or request for innocent spouse relief.
3. Partial payment Installment Agreement extension. If you propose a partial payment installment agreement (PPIA), the IRS will likely have you sign form 900 Tax Collection Waiver, waiving the ten-year limitations period. This extension can be no more than six years.  Be sure to carefully consider this extension.  It may be a wiser choice to refuse extending the deadline and let the IRS collect whatever it can before it runs out.
4. IRS suit in federal court. The IRS can also extend the ten-year period by suing you in federal court; however, it rarely does this.
5. Taxpayers who reside outside of the United States. The collection statute will be suspended if a taxpayer resides outside of the United States for six months or more.  Thus, the CSED will not expire until six months after the taxpayer comes back to the U.S.
6. Voluntarily extension of the statute of limitations period. If you agree to extend it, you can.  However, nowadays the IRS has limited powers to coerce taxpayers to do so.  As in the case above, the IRS can offer a reasonable partial payment plan if a taxpayer agrees to extend the statute.

Taxpayers needing tax help with regard to the IRS statute of limitations should seek the advice of a tax attorney.  The Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution. Our attorneys are primarily available to serve you in San Diego, Orange County and Los Angeles.  We are also available nationwide.  We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

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IRS Revocation of Your Passport for Seriously Delinquent Federal Tax Debt

Do you owe the IRS and are trying to travel outside of the United States?  There is a ton of fear among taxpayers now who have recently received IRS Notice CP508C, Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the U.S. Department of State.  If you have received this, you may be worried about an IRS revocation of your passport.

The biggest concern for most is that they won’t be able to return to the U.S. if their passport is revoked during their trip. Below is some clarification on this issue.

Requirements for non-issuance/non-renewal or revocation of your passport

On December 4, 2015, Congress enacted Section 7345 of the Internal Revenue Code, requiring the IRS to notify the State Department of taxpayers certified as owing a seriously delinquent tax debt.  The IRS began sending certifications of unpaid tax debt to the State Department in February of 2018.

A seriously delinquent tax debt is tax debt (including penalties and interest) totaling more than $51,000 for which:

1) a Notice of Federal tax lien has been filed OR

2) a levy has been issued to collect upon the debt

If either of these two situations apply, when you go to apply for or renew your passport, the State Department will deny it.

Still, what if you have an existing passport?  The IRS notice states that if you have a valid passport, the State Department may revoke your passport or limit your ability to travel outside the United States.  What can you really expect from this?  How will they “limit your ability” to travel abroad?  Basically, you can use your passport until you are notified by the State Department that it has been “revoked” or “limited.”

If you are outside of the United States when the revocation occurs, the State Department may issue a limited validity passport good for a return to the U.S.  If you must travel and are deemed seriously delinquent, you can call the National Passport Information Center at 877-487-2778 to inquire about your situation.

For more information, the IRS issued Notice 2018-01 dated Jan. 16, 2018, and also has an IRS informational link on their website.

How to avoid being “Seriously Delinquent”

Section 7345(b)(2) provides that a seriously delinquent tax debt does not include the following:

• A debt that is being timely paid under an IRS-approved installment agreement under section 6159;
• A debt that is being timely paid under an offer in compromise accepted by the IRS under section 7122;
• A debt that is being timely paid under the terms of a settlement agreement with the Department of Justice under section 7122;
• A debt in connection with a levy for which collection is suspended because of a request for a due process hearing (or because such a request is pending) under section 6330; and
• A debt for which collection is suspended because the individual made an innocent spouse election (section 6015(b) or (c)) or the individual requested innocent spouse relief (section 6015(f)).

Additionally, an IRS revocation of your passport will not occur if:

• you are in bankruptcy
• you are identified by the IRS as a victim of tax-related identity theft
• your account the IRS has determined is currently not collectible due to hardship
• you are located within a federally declared disaster area
• you have a request pending with the IRS for an installment agreement
• you have a pending offer in compromise with the IRS
• you have an IRS accepted adjustment that will satisfy the debt in full

Also, certification will be postponed while an individual is serving in a designated combat zone or participating in a contingency operation.

Finally, even if the IRS certifies a taxpayer as seriously delinquent, the State Department holds the IRS’s certification application for 90 days to permit the resolution of the tax debt.

In summary, if the following occurs:

• The tax debt is fully satisfied or becomes legally unenforceable.
• The tax debt is no longer seriously delinquent (see above) or
• The certification is erroneous,

The IRS will reverse this certification to the State Department generally within 30 days and provide notification to the State Department as soon as possible.

Tax resolution options for tax debt

IRS tax debt comes about in many different ways such as audit, underreporting of income, or failure to withhold enough over the year.  If it is impossible to pay back the IRS, you may be able to negotiate an Offer in Compromise, settling your IRS tax debt for less than you owe. If the IRS accepts your offer, you can pay the amount agreed upon, and all federal tax liens will be removed (generally after one month of the final settlement payment).

It is highly recommended that you get a tax attorney to help with your offer. An offer in compromise takes much planning, strategy and advanced negotiation skills, not to mention it can take up to six months to a year to get accepted.

If you are not eligible for an offer in compromise, other options include:

• Currently Not Collectible (CNC) status—due to your financial hardship, the IRS will suspend collection activity against you. This is just a temporary fix, until your financial condition approves. It is a valuable resolution option because it can allow you time to get your finances in order.
• Payment plan/installment agreement– allows you to pay off your tax debt over time. Usual agreements range from three to seven years. You can elect to pay off the entire amount over time or attempt to negotiate a reduced payoff amount (i.e. partial payment installment agreement). With a PPIA, a full set of financials is required to be submitted to the IRS showing you can only pay a reduced amount.

If you are in fear about an IRS revocation of your passport or need assistance with other IRS tax problems, seek the advice of a knowledgeable tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.

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Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt?

Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt?

Putting off preparing all of those unfiled tax returns? Don’t let them pile up because as time goes by, there is less and less information available to you for preparation. You also just tend to forget what happened in those years. Even worse, the IRS, after making demands for those unfiled tax returns, can file a substitute for return (“SFR”) based upon only information reported to them. You don’t want that so file your back taxes!

Late filing – Gather your documents

If you have a lot of past due tax returns or even one return that is delinquent from many years back, you may have a mental block in getting started due to having to compile the older documentation. It can be done. Luckily, you can call or order online, IRS wage and income statements that show all income reported (w-2s, 1099s). However, you will have to compile personal expenses or business expenses from your bank statements or from any kept receipts. The important thing is not to stress. Find a reputable tax preparer that can assist you through the process.

Late filing – Will I get my refund?

If you finally file your return and you are expecting a refund, the time limit for receiving your refund is three years from the original filing deadline. Let’s say the deadline for your 1040 return is April 15, 2016. You will thus have until April 15, 2019 to file an original return and to claim your refund. If you do not file within that three-year time frame, the refund expires. This means that you will not receive the overpaid amount and will not be able to apply that refund to any other years owing. Essentially, you are giving away money to the IRS so definitely file before the three-year statute of limitation expires.

Late filing – What if I just don’t file?

When you don’t file, you run the risk of the IRS preparing a tax return for you based upon the information reported to them, called a substitute for a tax return (“SFR”). The IRS does this so they can assess tax and begin collection activities. You can get “account transcripts” from the IRS to see if this was done. You may be infuriated and ask yourself, can the IRS do this? Yes, according to IRC §6020 (b), the IRS is authorized to prepare tax returns based upon information available to it in situations where a person has not filed a return. For more information on SFRs, see the Internal Revenue Manual 4.12.1. Since they can do this and they have, then why should you bother filing original returns? Because the IRS does not have all of the tax information you may have and does not include any additional expenses, tax credits or exemptions to which you may be entitled. As you can see, it may greatly overstate your actual tax liability. It is generally best to file an original tax return and ask the IRS for “SFR Reconsideration.” See IRM 5.1.15 for more information on the reconsideration process. If you do not file an original return, the SFR will remain and the IRS will send a letter asking you to consent to the proposed tax. If you ignore it, they will issue a statutory notice of deficiency (“SND”). If you do not respond to the SND, the IRS will move forward with collections and may place a levy on your bank accounts and/or garnish your wages.

Late filing -Tax resolution options

If you have a balance due on your original returns or if you agree with the IRS SFR, look to resolve the IRS tax debt with a payment plan, currently not collectible status or offer in compromise. You must move quickly as active collections are taking place. It is best to get tax help with an experienced tax relief attorney to get a resolution put in place most advantageous to you and your financial situation. Taxpayers needing tax help with how to file back taxes and tax debt help should seek the advice of a qualified tax attorney. The Los Angeles Tax Attorneys at Delia Law have many years of tax fraud experience and will competently represent you before the IRS. Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.

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Late filing for taxes- What If I haven’t filed taxes in years?

Late filing, what if I haven’t filed taxes in years and I have IRS Tax Debt?

Putting off preparing all of those unfiled tax returns?  Don’t let them pile up because as time goes by, there is less and less information available to you for preparation.  You also just tend to forget what happened in those years.  Even worse, the IRS, after making demands for those unfiled tax returns, can file a substitute for return (“SFR”) based upon only information reported to them.  You don’t want that so file your back taxes!

Late filing -Gather your documents

If you have a lot of past due tax returns or even one return that is delinquent from many years back, you may have a mental block in getting started due to having to compile the older documentation.  It can be done. Luckily, you can call or order online, IRS wage and income statements that show all income reported (w-2s, 1099s).  However, you will have to compile personal expenses or business expenses from your bank statements or from any kept receipts. The important thing is not to stress.  Find a reputable tax preparer that can assist you through the process.

Late filing – Will I get my tax refund?

If you finally file your return and you are expecting a refund, the time limit for receiving your refund is three years from the original filing deadline.  Let’s say the deadline for your 1040 return is April 15, 2016.  You will thus have until April 15, 2019 to file an original return and to claim your refund. If you do not file within that three-year time frame, the refund expires.  This means that you will not receive the overpaid amount and will not be able to apply that refund to any other years owing.  Essentially, you are giving away money to the IRS so definitely file before the three-year statute of limitation expires.

Late filing – What if I just don’t file?

When you don’t file, you run the risk of the IRS preparing a tax return for you based upon the information reported to them, called a substitute for a tax return (“SFR”). The IRS does this so they can assess tax and begin collection activities.  You can get “account transcripts” from the IRS to see if this was done. You may be infuriated and ask yourself, can the IRS do this?  Yes, according to IRC §6020 (b), the IRS is authorized to prepare tax returns based upon information available to it in situations where a person has not filed a return.  For more information on SFRs, see the Internal Revenue Manual 4.12.1. Since they can do this and they have, then why should you bother filing original returns?  Because the IRS does not have all of the tax information you may have and does not include any additional expenses, tax credits or exemptions to which you may be entitled.  As you can see, it may greatly overstate your actual tax liability. It is generally best to file an original tax return and ask the IRS for “SFR Reconsideration.”  See IRM 5.1.15 for more information on the reconsideration process. If you do not file an original return, the SFR will remain and the IRS will send a letter asking you to consent to the proposed tax.  If you ignore it, they will issue a statutory notice of deficiency (“SND”).  If you do not respond to the SND, the IRS will move forward with collections and may place a levy on your bank accounts and/or garnish your wages.

Late filing – Tax resolution options

If you have a balance due on your original returns or if you agree with the IRS SFR, look to resolve the IRS tax debt with a payment plan, currently not collectible status or offer in compromise.  You must move quickly as active collections are taking place.  It is best to get tax help with an experienced tax relief attorney to get a resolution put in place most advantageous to you and your financial situation. Taxpayers needing tax help with a late filing and how to file back taxes and tax debt help should seek the advice of a qualified tax attorney.  The Los Angeles Tax Attorneys at Delia Law have many years of tax fraud experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you. This blog post is not intended as legal advice and should be considered general information only. Keywords:  Late Filing, Unfiled tax returns, file back taxes, past due tax returns, how to file back taxes, tax debt help, IRS tax debt, tax relief attorney

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