The federal tax code is overly complex and since most of us are not financial professionals trying to make sense of it is often an exercise in frustration. When someone has a tax question calling the IRS for help typically leads to more confusion. Part of the problem is that consumers often don’t realize they’re entitled to certain protections under the tax code. In an effort to improve the resolution process, the IRS recently unveiled the Taxpayer Bill of Rights which summarizes several key provisions of the tax law. The IRS plans to provide the millions of Americans who receive a tax notice this year with a detailed description of their rights. If you’re facing an audit or attempting to negotiate the payment of a tax debt here’s what the IRS wants you to keep in mind.
1. You have the right to be informed. When the IRS determines there is a problem with your tax filing, you have the right to know what the issue is and what you need to do to be in compliance with the tax laws. Tax publications, forms, notices or any other correspondence must clearly outline IRS procedures. Additionally, you’re also entitled to a detailed explanation behind any decisions the IRS makes with regard to your tax account.
2. You have the right to quality service. Customer service is the cornerstone of any business. The IRS has stated that consumers should be addressed in timely, courteous and professional manner. If you feel like you’ve been mistreated by an agency representative speak to a supervisor about your experience.
3. You have the right to pay the correct tax. If you owe additional tax or you’ve got an outstanding tax liability, the IRS can only require you to pay the correct amount due. This includes any interest and penalties that have accrued. You can never be forced to pay a penny more than what you legally owe.
4. You have the right to object to the IRS’s actions. If the IRS proposes actions against you or attempts to enforce them you have the right to raise objections or provide documentation arguing against the action. In doing so the IRS is required to consider the objection or documentation fairly and provide you with an explanation if your claim is deemed invalid.
5. You have the right appeal an IRS decision. If the IRS rules against you regarding an issue with your tax account, you have the right to appeal. The Office of Appeals is required to conduct a fair and impartial review and provide you with a written explanation of their decision. If further appeals are necessary, you can typically take the case to court.
6. You have the right to finality. Appealing the IRS’s decision or challenging their position has a specific time frame and you have the right to know how long you have to take action. If you’re being audited, you’re also entitled to know how long the IRS has to complete it and to be notified when the audit is finished.
7. You have a right to privacy. Your personal information is protected under the tax code and any IRS inquiry or examination must comply with federal law. Your due process rights must be respected and if a collection due process hearing is necessary the IRS is required to provide it.
8. You have the right to confidentiality. When you provide information to the IRS, it can’t be disclosed to outside individuals or organizations without your consent. If your information is used or accessed inappropriately, you have the right to request that appropriate action be taken against the parties involved.
9. You have the right to seek representation. Dealing with the IRS can be intimidating but you have the right to retain an authorized representative to help guide you through the process. If you can’t afford to hire a tax attorney or other tax professional, you can get help from a Low Income Taxpayer Clinic so you don’t have to go it alone.
10. You have the right to a fair and just tax system. The IRS is prohibited from engaging in bullying tactics and taxpayers have the right to be treated fairly when resolving tax issues. If there are facts or circumstances that affect your ability to pay your tax debt or provide information in a timely manner, the IRS has to take this into account. You also have the right to get help from the Taxpayer Advocate Service if you can’t pay because of financial difficulty or if the IRS hasn’t addressed your situation in a timely manner.
In addition to notifying taxpayers directly, the IRS also plans to post copies of the 10 rights in all agency offices so they’re visible to employees and consumers. In a press release issued in June of 2014, Commissioner John Koskinen said it was “critically important” for taxpayers to read and understand the information. He also emphasized that the Taxpayer Bill of Rights is “a clear reminder that all of the IRS takes seriously our responsibility to treat taxpayers fairly.”
At the end of the day it is valuable to remember that the IRS is an organization made up of people like you and I. They have a job to do that we may find unpleasant but necessary. When it goes farther than that give me a call. My name is Michael Boehrer and I am the Founder of Your Accounting, Tax and Payroll service. I can be reached at 916-773-6454 or by visiting http://www.youratp.com
Misconceptions about tax deductability of actual business travel is one of my more challenging jobs. The difficulty confronting me is explaining where travel expenses are not deductible. On occasion, the trouble I encounter is uncovering travel deduction details that taxpayers tend to disguise.
Special rules for expensing business travel are the key component of study to become and Enrolled Agent. This tax category has its own set of standards that are separate from other business expenses. Many myths surround the complex subject of tax-deductible travel and because of mistaken beliefs by my client’s, my advice on this subject is commonly needed.
Confusion about business travel begins with defining exactly what costs comprise tax deductions. The first rule is that trips must have business matters as their primary purpose to qualify as tax deductible. If conducting business while traveling is merely incidental to the excursion, then the only tax-deductible expenses are those directly related to the business activity. This is no different than a taxpayer incurring a business expense while staying in his home city.
If travel is principally undertaken with a business purpose, the costs are deductible. Not only are transportation expenses tax deductions, but so are other outlays during the trip. Unknown to many business travelers is that all meals consumed on travel days are considered business expenses. This is a different tax consideration than local business meals when not traveling, which are only deductible when a business purpose is accomplished during the meal. The distinction is crucial. However, only half of the meal costs are tax-deductible, regardless of whether they are local for accomplishing a business objective or personal in nature but occur during a business travel day.
Traveling with family members or friends does not negate tax deductibility of the costs. A trip is still tax-deductible as long as it is primarily undertaken for business reasons. Of course, extra costs for bringing a spouse or significant other are not counted as part of the business expenses. Also, any outlays for sightseeing or pleasure are not tax deductible. This rule is also true for solo business travelers.
Consequently, diligent record keeping of travel expenses is required. Using my expertise in this issue is only possible when costs are properly identified. For example, segregation of sightseeing costs and additional charges for travel companions assures that they are not inadvertently counted as tax deductions. In addition, the fifty percent limitation on business meals requires accounting for them separately from other travel expenses. Fortunately, some factors for business travelers simplify the tax process. The most advantageous of these is that no receipts are required for travel expenses of $75 or less – except for lodging costs of any amount.
If you are a business traveler it is crucial that you have a handle on the do’s, the don’ts and how to support what you are deducting. My name is Michael Boehrer and I am the founder of Your Accounting, Tax and Payroll. Call me at 916-773-6454 or visit my web site at http://www.youratp.com We Can Help!
Where did the day go? Phone calls, emails, have you a got a minute’s and before it got started the day is over. You didn’t finish what you set out to do that day and now you add today to tomorrow. Time management skills must be applied to your business and personal life to gain control over your life. Manage your time and do NOT let it manage you. Do this and stress levels are reduced and a positive attitude with a sense of accomplishment can be achieved.
Here are a few tips get there…
1. Be Organized!
• Appointment calendars, “to do” lists, e-mail, answering machines, file folders, etc.
• Organization matters (don’t waste time constantly looking for your work).
• Calendar everything!
2. Plan Ahead & Schedule Everything!
• Determine how long your tasks will take.
• Consider what activities can be combined.
• Determine what tasks can be broken down into smaller tasks that may be easier to schedule.
3. Prioritize Your Tasks
• Use an A-B-C rating system for items on your “to do” lists. A items being highest priority.
• Set goals for both the short term and long term as to what you want to accomplish.
• Look at all of your “to do”s to gauge the time requirement and whether additional resources will be needed to accomplish them (if yes, schedule time to obtain those resources). Don’t postpone the small tasks.
4. Avoid Overload
• Include time for rest, relaxation and sleep.
• Don’t put everything off until the last minute.
• Learn to say “no” when appropriate and to negotiate better deadlines when appropriate.
5. Be Able to be Flexible
• The unexpected happens, you need to be able to fit it into your schedule.
• Know how to rearrange your schedule when necessary (it doesn’t manage you-YOU manage it).
• Know who to ask for help when needed.
6. Have a Vision (why are you doing all of this?)
• Have and follow a personal mission statement (personal and career). (Are your activities ultimately helping you achieve your goals?)
• Know what is important to you. What do you value most? Don’t forget the “big picture.”
• Have a positive attitude!
Don’t forget to reward yourself when you have finished a big project, on time of course!
Got questions about this? Call us. My name is Michael Boehrer and I am the Founder of Your Accounting, Tax and Payroll. Call me at 916-773-6454 or visit me at http://www.youatp.com We Have Answers!
Like tax attorneys and CPAs, Enrolled Agents who are tested and certified by the IRS represent their clients using a power of attorney while and advising and preparing tax returns. Using an Enrolled Agent or EA has many benefits over other types of tax professionals. Typically E.A.s have the most experience in dealing with the IRS because they either have to pass a comprehensive exam that covers all aspects of the tax code or the must have worked for the IRS for 5 or more years in a position which frequently interpreted and applied tax code and its regulations.
Privilege and the IRS Enrolled Agent
This privilege is not the same as a tax attorney because the privilege is only limited client privilege. The privilege allows confidentiality between the tax payer and the E. A. is up to a certain extent. This privilege covers situations where the tax payer is being represented by the E. A. for collection or audit matters but it does not apply to criminal cases.
Enrolled Agents Are Cost-Effective
Enrolled agents are normally the less expensive than using a tax attorney or CPA and if you are looking for a cost effective approach, an enrolled agent is worth considering.
Enrolled Agents Are IRS Experts
Enrolled agents are required to work for the IRS for 5 years or pass a series of examinations that meet the requirements of the IRS. You can be assured that when you choose an enrolled agent they are extremely knowledgeable in IRS proceedings. Enrolled agents are the only tax professionals that receive their right to practice from the US government.
My name is Michael Boehrer and I am an Enrolled Agent. I offer a common sense solution to the taxing issues you are facing. Call me at 916-773-6454 or visit me at http://www.youratp.com
In a word… No! Some might think that they can “get over” on the IRS when they are short staffed… nothing could or should be further from the truth. You have to pay your taxes and a good time to cheat is defined as never! With that said, why is it a bad thing that they are underfunded and understaffed?
The reality is that everyone makes mistakes and when it comes to your taxes if a mistake has been made, irrespective of who made it, you want it cleaned up sooner as opposed to later. Understaffing makes that hard to impossible to clear up and they want it cleared up as much as you do! Seriously, they do!
You hear on my voice mail that the pressing IRS deadlines are the reason I cannot answer my phones live and this is because I personally return calls to the IRS and not some staff person. You deserve that! Sometimes I am on hold for 2 hours or more getting a resolution! Again, you deserve that.
The IRS will resolve their staffing issues and I will keep calling on your behalf. If you want a Tax professional that takes your taxes seriously you can call me. My name is Michael Boehrer and my Company is Your Accounting, Tax and Payroll. I can be reached at 916-773-6464 or at http://www.youratp.com I Can Help!
Whenever you do your taxes one of the questions you’ll be asked is, “Do you have any dependents?” What exactly is a dependent anyway? Most often, but not always, a dependent is a child of yours. Sometimes, a dependent can be a parent, a sibling, and even in some cases a friend that lives with you. There are many requirements that you’ve got to meet for a person to qualify as a dependent. In general though, a dependent is someone that you support.
There are two types of dependents:
1. Qualifying child: that’s going to be a child or a disabled relative that will qualify you for the Earned Income Tax Credit (EIC)
2. Qualifying relative: a qualifying relative will get you an exemption for your taxes, but won’t qualify you to get EIC
Let’s look at the Qualifying child first. How does the IRS define what a qualifying child is? Remember, the IRS has weird rules, and it’s not the same as how your family decides who’s related or not. A Qualifying Child must have a valid social security number to qualify for EIC. If your child doesn’t have a social security number, but she gets one later, you can go back for up to three years to amend the returns. In addition to a social security number, for EIC a Qualifying Child must also meet the following tests:
Relationship: Son, daughter, adopted child, stepchild, foster child or a descendent of any of them such as a grandchild, or, a brother, sister, half brother, half sister, step brother, step sister or a descendant of any of them such as a niece or nephew. Please note that an adopted child or foster child must be placed by the courts. You’ve got to have legal documentation to support your claim; you can’t just take in your neighbor’s child and call her a foster child.
Age: At the end of the filing year, your child has to be younger than you (or your spouse if you file a joint return) and younger than 19; or younger than 24 and a full-time student; or permanently and totally disabled.
Residency: The child must live with you (or your spouse if you file a joint return) in the United States for more than half of the year.
Joint Return: The child cannot file a joint return for the tax year unless the child and the child’s spouse did not have a separate filing requirement and filed the joint return only to claim a refund.
Now one of the most common questions I hear about EIC is, “My boyfriend lives with me and my child, but he’s not her biological father, can he claim my daughter for EIC?” The answer is “NO” because the child doesn’t meet the relationship test to the boyfriend.
But, the boyfriend might be able to claim the child as a dependent for an exemption—just not claim EIC for her, because she may be a Qualifying Relative to the boyfriend instead of a Qualifying Child.
Rules for claiming a Qualifying Relative:
In order to be a Qualifying Relative the person can’t be a qualifying child. The second is to pass the member of household or qualifying relative test. Either the person lives with you for the entire 12 months of the year, or is related to you in your immediate blood line: your brothers and sisters, and their direct descendants, and their direct ancestors. Also, your in-laws are included here—even if you divorce, as far as the IRS is concerned, your mother-in-law is your mother-in-law forever. If, however, a person was at any time during the year your spouse, he or she can’t be your qualifying relative.
With the qualifying relative rule there is a gross income test: a qualifying relative can’t make more than the standard exemption in income, which for 2013 is $3,900. This means taxable income. If your mother’s only income was $6000 a year from Social Security, that’s not taxable so she’d meet the gross income test.
The last requirement is support: you have to provide your qualifying relative with more than 50% of his or her support. So, back to your mom on Social Security, if she makes $6,000 a year, and spent it all on food and rent, then you’d have to pay at least $6,000 more towards her support.
The rules for Qualifying Relative and Qualifying child can get pretty confusing, especially if you’ve got a unique situation. The IRS website has a tool to help you decide if you can claim a dependent or not. As you go through the questions, remember to answer them honestly and you’ll get a reliable answer. Sometimes people change their answers to get the result they want—that’s how you get into IRS trouble. Answer honestly and claim what you can, don’t claim what you can’t and you won’t have any problems. When you want to hit your head against the wall call me first! My name is Michael Boehrer and I am the Founder of Your Accounting, Tax and Payroll in Roseville. I can be reached at 916-773-6454 or at http://www.youratp.com
Are you one of the people who recently filed your taxes and wished you’d had the help of an accountant or are you unhappy with your current accountant? If you fall into either category here are a few suggestions to help you find and choose an accountant you can trust with your small business numbers and rely on for solid financial advice throughout the year.
Why Should You Hire an Accountant
A qualified accountant will save you time and clear up much of the confusion you experience when it comes to managing your finances and taxes, but a trusted accountant can provide other benefits, too.
• They Will Act As A Trusted Advisor – More than just a tax preparer, an accountant can become a trusted advisor to your small business, helping you manage cash flow, plan for growth, assess risk, and keep your books in order.
• They Will Help You Balance Business And Personal Needs – Many small businesses, particularly sole proprietors and startups, find that their business and personal finances are closely linked. A good accountant can help you make sound judgments beneficial to both.
How to Find an Accountant
Referrals are often the best way to find accountants you can trust. Network and mingle at local business events hosted by your local Chamber of Commerce, Small Business Development Center, or other small business organizations. Ask other business owners for referrals and even meet accountants.
Interviewing Candidates
Once you have a short list, schedule an initial consultation to help determine whether your candidates are the right fit for your needs: Some questions to ask include:
What’s your experience with small businesses? Small businesses have complex accounting needs and few resources to manage them. An accountant who understands these dynamics and has a solid small business client base will likely serve your needs better in the long run. You’ll also want to know that your accountant has experience with businesses that are structured like yours – whether you are a sole proprietor, LLC, partnership, or corporation.
What experience do you have with my industry? Ideally, your accountant should have knowledge of your industry but what is more important than that is there overall tax experience and their willingness to listen to what you specific needs are. Many accountants specialize in certain industries such as franchising, real estate, construction or exporting. Again, get referrals from others in your industry.
Do you do more than tax preparation? If you need help with tax filing, then a tax preparer is the way to go. But if you want long-term strategic advice to help you manage your small business finances, be sure to ask about the range of value-add services, such as business valuation, budgeting and forecasting, bookkeeping, risk assessment, and small business startup advice.
Who will I be working with? If your accountant is to become a trusted advisor, then you want to know from the get-go who exactly you’ll be working with. A smaller firm, where a partner or owner handles the bulk of the work, is often a better choice for small businesses looking for a long-term advisory relationship. The alternative is a larger firm, where you are handed off to a junior accountant after the initial handshake. Other things to consider as you compare your candidates are:
• Flexibility and responsiveness – for example, are they willing to visit your business premises for quarterly reviews? How quickly will they respond to queries or requests?
• Fees and charges
• Value-add services that you may want in the future, such as audit support or CFO services.
• Professional qualifications, EA’s, and references
Remember…
You are the person who is ultimately responsible for your taxes and finances. Still confused? If so then give me a call at 916-773-6454 and let’s talk. Our initial conversations are is free and if my company is not your best choice I will refer you out to the proper professional. I actually do this frequently. My name is Michael Boehrer and my company is YOUR Accounting, Tax and Payroll and we can be found at http://www.youratp.com We Can Help!
As an Enrolled Agent and Tax specialist I walk a fine line between taxes owed and taxes paid. Taxes are a huge benefit to our society and you only need to look around to be able to support that conclusion. National defense, roads, infrastructure, police, fire and the list goes on and on. Without the services and a way to pay for them we would not be the nation we are. However, as we have seen the stories of late about the IRS regarding how they are spending our tax dollars and who gets the greatest scrutiny and as a result of that it may be time to take a step back.
I am not going to attempt to outline each abuse of spending because I don’t have the time or the space to do each of these abuses justice. Instead, I am only going to focus on a single abuse that was recently revealed. (For those that are not aware, news reports that are damaging are released on Fridays due to decreased media scrutiny). The Internal Revenue Service, already under fire after officials disclosed that the agency targeted conservative groups, faces increased scrutiny because of an inspector general’s report that it spent about $50 million to hold at least 220 conferences for employees that ended up being little more than parties.
I will be the last individual to tell you that conferences are abuses of the system but the conferences they were referring to are clearly in the category of abuse. They were training the staff to do line dancing and they had video editors coming in to short and edit the footage for what can only be described as entertainment purposes.
In another case conference spending included $4 million for an August 2010 gathering in Anaheim, Calif., for which the agency did not even bother to negotiate lower room rates, even though that is standard government practice, according to a statement by the House Oversight and Government Reform Committee. Instead, some of the 2,600 attendees received benefits, including baseball tickets and stays in presidential suites that normally cost $1,500 to $3,500 per night. In addition, 15 outside speakers were paid a total of $135,000 in fees, with one paid $17,000 to talk about “leadership through art,” the House committee said.
The clients I work are never offered free tickets to baseball games, they are never upgraded to the Presidential Suite for free and almost all of them work to keep their travel costs as low as is reasonable. I guess the big difference comes down to which bill you are paying. Of course, in this case, you are paying both of them!
When it comes to your taxes you have to pay your fair share and then you have to question what the people you are paying are doing with the rest of your money.
My name is Michael Boehrer and I am an Enrolled Agent and I work for YOU! When you find yourself in any taxing situation you need to call me at 916-773-6454 or visit me online at http://www.youratp.com. I Can Help!
Yesterday had an even greater significance than many other Memorial Days have in the past. Yesterday I was able to take all of my girls to visit the grave of their Grandfather and explain to them his role in protecting their future… The one they are currently living. While may people were having a well earned barbeque we were grave side telling stories and laughing with Grandpa.
As you may know I am an Honorably Discharged United States Marine and I am so proud of this. Men and Women, both current and inactive who wear the uniform are a constant source of pride and energy for me. I am able these days to share my experience in the Marines with my children and they understand what I did and why I did it. The Marines shape what I do today and will shape that forever. This service is part of the legacy I leave for my children and what their Grandfather left for them. By remembering what those before us did we can learn from that and leave a better world. From Arlington to Sacramento I personally salute all current and retired veterans and look forward to those that have yet to serve. Semper Fidelis!
I work as an Enrolled Agent and I protect your financial future. Please call me at 916-773-6454 or visit http://www.youratp.com
I was asked recently why I take the time to write a weekly blog. Great question and I hope to provide some insight today. The reason I take the time and do the research required to blog is simple… Blogging allows me to communicate with my readers on a topic, any topic of my choosing. This runs from accounting to payroll to tax all the way to politics. Lets be honest and agree that po0litics affect all of the above!
I read this morning that some kids who are turning 21 will be able to remain on Medi-cal until the age of 26 at no cost to themselves. This gives the idea that Medi-cal is a free service from the government. It’s not free and even the government cannot mandate a free lunch! There is still no such thing! Someone is paying the freight for Medi-cal and that is the overburdened and over regulated California taxpayer. We pay for our own family and because the folks in Sacramento have decided that we are charitable they provide the mechanism to insure those that don’t want to pay for themselves. Nice system on one end and not so nice on the other… It all comes down to your point of view I guess.
I can site item after item that falls into this category and all it seems to do is make my blood boil and upset me. It seems that hard work and risk have become buzzwords of a bygone era and yet I hold out hope for better times. I heard Mark Cuban the owner of the Dallas Mavericks and a self made billionaire on a news program last night say “The most patriotic thing an American can do it become filthy rich. This creates jobs and feeds families”. I agree 100%! What about you?
My name is Michael Boehrer and I am the founder of Your Accounting, Tax and Payroll. If you have accounting, tax or payroll issues I can help! Call me at 916-773-6454 or visit me at http://www.youratp.com I can help!
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