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If you owe the Internal Revenue Service (IRS), you may be able to apply for a payment plan online to pay off your balance over time – but not right now. The IRS has scheduled a planned outage for the service.The website currently says: This service will be unavailable from approximately 12 a.m. (midnight) Eastern time on Wednesday, December 23, 2020, until approximately 7 a.m. Eastern time on Monday, Jan. 11, 2021, due to planned maintenance. We apologize for any inconvenience. Once the service is back up, you can check out the site to see if you qualify to apply online: You may qualify for a long-term payment plan (installment agreement) if you owe $50,000 or less in combined tax, penalties and interest, and filed all required returns. You may qualify for a short-term payment plan if you owe less than $100,000 in combined tax, penalties and interest. The best…

Are your accounts receivables piling up? With so many people out of work, many businesses are experiencing slow payers and (gulp) non-payers. If you’re not sure about the practical and tax aspects of handling those accounts, here are a few things to keep in mind. Don’t assume that you can send a Form 1099-C for nonpayment. When you get stiffed on a bill, some businesses figure they can exact their revenge by issuing a form 1099-C. Be careful. A form 1099-C, Cancellation of Debt, is issued when certain debts are discharged for less than the full amount owed following an identifiable event, and the amount is $600 or more. The form instructions note that you “File Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you” if “You are an applicable financial entity” and “An identifiable event has occurred.” The instructions further…

There was an article that circulated recently suggesting that bankruptcies didn’t peak as expected. If the folks who are reaching out to me are any indication, just give it time. With unemployment numbers still high and many areas still under shutdown orders due to the pandemic, it’s clear that the economy is not back to normal. And one of the consequences of that economy is the inability of many consumers to pay off debt. When you can’t pay off your debt, you may settle with the creditor for less than you owe. This can take a few forms, including short sales, foreclosures, or just agreeing with a credit card company to pay less than you owe if they stop chasing you for the balance. No matter the form it takes, if you have cancellation of debt for less than the amount you owe, the amount of the canceled debt is…

The Internal Revenue Service (IRS) is adding barcode technology to its tax notices. Starting this month, the IRS will add QR codes to certain tax notices. QR stands for quick response, since the code can convey a lot of information to your smartphone in a short period of time. It’s similar to a barcode but can transfer more information, including internet addresses. QR codes are a combination of pixels. Each piece of the code conveys specific information – the combination can generate a lot of information. To read the information, you scan the QR Code with a smartphone. The IRS is using the technology to allow taxpayers to scan codes on two particular notices, the CP14 or CP14 IA, with their smartphone and go directly to IRS.gov. From there, taxpayers can securely access their account, set up a payment plan, or contact the Taxpayer Advocate Service.  A CP14 notice is…

Did you recently receive a penalty notice for your payroll tax deposit even though you remitted the correct amount? You’re not alone. The Internal Revenue Service (IRS) has announced that a “small population of employers” may have received notice that they were being assessed a failure to deposit penalty – even though the penalty doesn’t apply. Here’s how that happened. As part of the FFCR Act (Families First Coronavirus Response Act), businesses with fewer than 500 employees (including some self-employed persons) are entitled to refundable tax credits. The credits are intended to mitigate the costs of providing qualified sick leave wages and qualified family leave wages paid to employees when an employee cannot work during the COVID pandemic. Additionally, under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), employers also had an opportunity to claim the new employee retention credit (ERC). The ERC provides a refundable credit to…

It’s my annual Taxes from A to Z series! If you’re wondering how to figure basis for cryptocurrency or whether you can claim home office expenses during COVID, you won’t want to miss a single letter. U is for Undue Hardship. If you’d read any posts on extensions – like this one – you are aware that filing for an extension is generally an extension of the time to file, and not the time to file. It’s almost the extension mantra. But did you know that there actually is an extension available for payments – but there’s a pretty high bar. First things first. The form is Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship (downloads as a PDF). It’s used to request an extension of time under section 6161 for payment of the tax shown on your return or an amount determined as a deficiency (an amount you…

With a week to go before the tax filing season deadline, many folks may be focusing on July 15, 2020, as the date to mail in payments for the 2019 tax year. But there’s another payment deadline looking: the Internal Revenue Service (IRS) is reminding taxpayers who took advantage of the People First Initiative tax relief that they need to restart their payments. In March of 2020, IRS Commissioner Chuck Rettig announced the details of the IRS People First Initiative. At the time, Rettig said, “The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes.” The program included options to suspend installment agreements, limit liens and levies, and no new passport certifications to the Department of State for taxpayers who are “seriously delinquent” through July 15, 2020. Now, however, as the IRS continues to reopen its operations (you can find out more here), taxpayers should start paying again to avoid…

It’s my annual Taxes from A to Z series! If you’re wondering how to figure basis for cryptocurrency or whether you can claim home office expenses during COVID, you won’t want to miss a single letter. J Is For Jeopardy Assessment. Okay, I should come clean from the beginning: This post doesn’t involve Alex Trebek. I know, that part stinks. But even Trebek-less, jeopardy assessments are pretty interesting. You already know that the Internal Revenue Service (IRS) has very specific procedures for assessments and collections. But sometimes, they have to do things a bit differently. And jeopardy assessments are one of those things. Jeopardy assessments are made – before the IRS makes an assessment of a deficiency – when the agency believes that assessment or collection would be endangered if regular procedures were followed. So, if the collection of an unassessed liability is in jeopardy, the IRS can make an…

Some Internal Revenue Service (IRS) call centers and services are temporarily shutting down in response to COVID-19. COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to Johns Hopkins, as of March 27, 2020, there are 593,291 confirmed cases of COVID-19 in 176 territories and countries. The United States has 101,657 confirmed cases with reported cases in every state. As a result, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. And, Governors in several states have issued stay-at-home orders and ordered non-essential businesses to close. That includes many federal employees. For example, Social Security offices are closed to the public for in-person service. The IRS is following suit. A notice on the IRS website declares, “In response to the national emergency and to protect our employees, America’s taxpayers, communities and our partners, the IRS…

The Internal Revenue Service (IRS) has announced a series of steps to assist taxpayers impacted by COVID-19. Relief ranges from easing payment guidelines to postponing compliance actions. COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to John Hopkins, as of March 25, 2020, there are 451,355 confirmed cases of COVID-19 in 172 territories and countries. The United States has 55,568 confirmed cases with reported cases in every state. As a result, on March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Additionally, several Governors have issued stay-at-home orders. The result is that many taxpayers cannot get out to file or do other tax-related business. In response, the IRS announced that the tax filing season been pushed to July 15, 2020. The IRS also started scaling back operations at its call centers, causing frustration for tax professionals…

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