The Internal Revenue Service (IRS) will begin accepting tax filings on January 23, 2023. This time IRS has hired more employees to help the taxpayers for a seamless experience. Taxpayers can contact IRS customer representatives through telephone and online tools as given in this link. People can also visit the IRS official website to check on the basic question under the FAQ section before contacting the customer representative team.

IRS Free Service Programs

IRS has various free services to help taxpayers with tax filing.

• The IRS’s Volunteer Income Tax Assistance and Tax Counselling for the Elderly programs are few that offer free basic tax return preparation to qualified individuals. Eligibility for the same can be checked on the above links.
• IRS Free File Program also opened on Jan 13, 2023. The service providers in this program will accept completed returns and file them electronically once it is open on Jan 23. This free file program is available only for taxpayers with AGI (Adjusted Gross Income) of $73,000 or less in 2022.
• For people in the service like the military community, the department of defense provides a free tax resource called MilTax. It includes software for tax preparation and electronic filing. It offers individualized assistance from tax advisers and up-to-date tax filing information. With MilTax, qualified taxpayers can file a federal tax return and up to three state taxes electronically for free.

Many software providers and tax professionals are already preparing taxpayers’ returns and will file them once the window is open. Therefore, IRS advises taxpayers to choose their tax professionals wisely. There are various types of tax return preparers, including enrolled agents, certified public accountants, tax attorneys, and others who don’t have professional credentials. It has even provided guidelines on selecting tax preparers through this link.

Importance of IRS Tax Credits

The IRS recommends individuals and tax professionals review their tax situations, so they don’t miss out on important tax credits like Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). IRS even set an awareness day on Jan 27, 2023, to make them understand the benefits of the EITC program. EITC helps low- and moderate-income workers and families.

Information on IRS Refunds

Taxpayers are advised to collect and submit accurate information for error-free returns filing. This will avoid delays in processing refunds if any. If taxpayers choose direct deposit and there are no issues with their tax return, then IRS expects that most taxpayers will get their refund within 21 days of filing electronically. But taxpayers with EITC and ACTC will receive their refunds in mid-February due to processing time in identifying fraudulent refunds under the 2015 PATH Act. Taxpayers can check their refund status through Where’s My Refund? Link. This link will show an updated status by February 18, 2023, for early EITC/ACTC filers. Further, individuals can securely log in to their IRS Online Account to access personal tax account information, such as the balance, payments made, and tax records, including adjusted gross income.

National Due Date to File a 2022 Tax Return

This year the due date for tax season 2023 will be April 18, instead of April 15, unlike last year. Weekends and the District of Columbia’s Emancipation Day holiday affect the deadline, and thus the extension is given for the individuals. The taxpayers also need to file for an extension before Apr 18, if they need time to file the tax returns. Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.

Key Deadlines to Remember

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys. We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation. But our certified professionals cooperate and work with all IRS offices across the country. Please contact us for more information. https://irsauditgroup.com/contact/

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The Work Opportunity Tax Credit (WOTC) is a federal tax credit that businesses can use to offset the cost of hiring people from specific target groups who have consistently encountered significant barriers to employment. WOTC initiatives help to improve workplace diversity and make it easier for all citizens to acquire decent jobs.

The Consolidated Appropriation Act, 2021 authorized the extension of the Work Opportunity Tax Credit until December 31, 2025. This means taxpayers can claim the credit on or before Dec 31, 2025, for such eligible hiring. Needless to say, WOTC is only for one time per employee and cannot be claimed for re-hired.

Eligible Businesses for WOTC

There is no specific limit on business size to be eligible under this scheme. Any size of business is eligible for the work opportunity tax credit if it hires candidates from qualified groups. This credit is available to both taxpayers and certain tax-exempt employers operating in the United States and some U.S. territories. Basically, the employers must fall under the below criteria as

• Taxpayers that can claim the credit against income taxes
• Tax-exempt employers can claim the credit only against payroll taxes and only for wages paid to members of the qualified veteran targeted group.

Target Groups Qualified under WOTC

Any employers can claim WOTC for the below-targeted groups under section 51 of the Code. The employee must be a certified member of any one of the following groups to proceed with the claim.

• Veterans
• Recipients state assistance under part A of title IV of the Social Security Act (SSA)
• Individuals who have previously served time in prison or who have been convicted of a felony
• People who live in empowerment zones or rural renewal counties
• Individuals who have been referred to an employer after completing a rehabilitation plan or program
• People whose families receive supplemental nutrition assistance under the Food and Nutrition Act of 2000
• Recipients of supplemental security income benefits under title XVI of the SSA
• Individuals experiencing long-term unemployment

How much can be claimed?

The amount of tax credit under the WOTC program varies based on the employee’s target group, total hours worked, and total qualified wages earned. For instance,

• If the qualified employee has worked for at least 400 hours and is still in the first year of employment, WOTC is equal to 40% of up to $6,000 wages paid or incurred with a maximum credit of $2,400 for an employee
• If the eligible employee has 120 to 399 hours of service, then a 25% rate applies to wages
• Up to $24,000 in wages may be considered in determining the WOTC for certain qualified veteran targeted group

 Procedure to Claim WOTC

Taxpayers and Tax-exempt organizations can apply through different IRS Forms to claim WOTC. But all need to complete Form 8850 which is a Pre-Screening Notice and Certification Request to certify that the employee is qualified under the target group. These documents must be submitted to the State Workforce Agency not the IRS within 28 days of the new employee’s start date. Once the State Workforce Agency certifies the employee, Taxpayers can file Form 5884 (Work Opportunity Credit) and tax-exempt employers file Form 5884-C (Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans) to claim the WOTC.

IRS Audit Group is a Tax Audit Representation Firm in Los Angeles, California. Our Tax professionals act on the behalf of the taxpayer during an IRS audit. The IRS audit process can terrify some taxpayers but the Taxpayer Bill of Rights states that individuals can seek help from an IRS tax representative like us to represent them during the IRS audit. Don’t Panic, if you have received a mail for IRS Audit but act fast by contacting us immediately for the next step.

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The IRS tax filing deadline has ended for most individual taxpayers for the season 2022. In case, if you have not done the tax filing by the end of the deadline which was on April 18, 2022, it is important to know the consequences as well as other options. People who qualify for tax exempt or who don’t owe taxes will not receive any penalties and interests. But it is different for those who have the liability to pay tax. They need to file tax return as soon as they can do it in order to reduce penalties and interest.

For the tax season 2022, IRS advised that individuals who owe taxes need to file returns and pay as much as possible on/before Jun 14, 2022, to avoid hefty fines. It also recommended to use the electronic filing options for faster processing. Similarly, the fastest and easiest way to pay the taxed is with IRS Direct Pay.

IRS Late Filing Penalty Structure

Missing the deadline of June 14 will typically result in a failure-to-file penalty, which is also known as a minimum late filing penalty. The minimum fine is $435 or 100% of the unpaid tax, whichever is smaller, if the return is more than 60 days late. If the taxpayer owes $435 or less in taxes, the penalty will be equivalent to that amount. The minimum fine will be at least $435 if they owe more than that.

Under the normal calculation, this penalty is 5% of the unpaid tax for each month or part of a month that the return is late, up to a maximum of 25%. Once the taxpayer files return, the late filing penalty will no longer be charged. In addition, once the tax is paid, the separate late-payment penalty and interest will also stop growing. None of these costs need not be calculated by the taxpayer. The IRS will instead send them a bill for any overdue sum.

Late Filing Options for Tax Season 2022

Even if the taxpayers have not filed the returns before the April deadline, they can do so electronically through Free-File service. Those who qualify can avail this free-file service until October 17, 2022. If you are not eligible for IRS Free File, then you can e-file using Free File Fillable Forms. The IRS paper forms used in this option are electronic counterparts. It helps individuals who are comfortable filing their own taxes where the e-filing does the part of the math.

Sometimes, taxpayers may miss the deadline because they were not able to pay the taxes, which in case they can opt for payment plan with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. Once the online process is complete, you’ll receive immediate notification of whether the agreement is approved. IRS provides two types of online payment plans as follows

• Short-term payment plan: If the entire amount owed, including taxes, penalties, and interest, is less than $100,000 and the payment period is 120 days or less.
• Long-term payment plan: If the total amount payable for the tax, penalties, and interest is less than $50,000 and the payment period is greater than 120 days. If IRS approves long-term payment plan, a setup fee can be charged depending on the taxpayers’ income.

If you are not eligible for an online payment plan, you may also request an installment agreement by submitting Form 9465, “Installment Agreement Request”, with the IRS. If the IRS approves your IA, a setup fee may apply depending on your income.

Can You Avoid the Penalties?

The penalties for late filing, late payment, and interest on unpaid taxes pile up quickly, so it’s crucial to file as soon as possible. A taxpayer who files after the deadline can, however, under some circumstances, be eligible for penalty relief. Those who received a penalty may call the IRS at the number listed on their notification and explain why they were unable to file and pay on time.

Administrative penalty reduction is frequently available to taxpayers who have a history of timely filing and payment. Generally, a taxpayer is eligible if they have been timely filing and paying taxes for the last three years and meet additional criteria.

IRS Audit Group is a Tax Audit Representation company in Los Angeles, California with a team of Tax Professionals, CPAs, Enrolled Agents, and Tax Attorneys. They are primarily specialized in IRS Audit Representation. We provide free consultation to understand your tax problems. Contact us: https://irsauditgroup.com/contact/

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The Section 501(c)(3) Internal Revenue Code specifies that any Tax-exempt organizations need to be organized and operated exclusively for exempt purposes. Also, it needs to ensure that none of its earnings inure to any private shareholder or individual.  In this context, the private inurement means that the assets of the organization must not be used to benefit a single person excessively.

Here are a few types of Exempt Organizations.

• Charitable Organizations
• Churches and Religious Organizations
• Private Foundations
• Political Organizations
• Other Non-profits

  The IRS requires most tax-exempt organizations to file annual tax returns. Even though most tax-exempt non-profit organizations do not pay federal taxes, these entities are required to file an informational return with the IRS.  Hence, such entities need to file their IRS return for this tax season 2022.

 The annual reporting return for tax-exempt organizations is referred to as a Form 990. Most of the tax-exempt organizations need to file an annual return, and it can be done electronically. The financial activity of an organization determines which form it must file, as shown in the chart below.

 The deadline for the tax season 2022 has been fixed as May 16 to file IRS return by the tax-exempt organizations. Taxpayers who need more time to file beyond the May 16 deadline can request Form 8868 which is the Application for Extension of Time to File an Exempt Organization Return. This form will provide a 6-month automatic extension. Extending the time to file a return does not extend the deadline to pay tax in circumstances where tax is payable. Organizations requesting an extension are encouraged to complete Form 8868 electronically, according to the IRS.

Extended Support From IRS

IRS helps taxpayers, board members, volunteers, and officers in filling returns to comply with their tax filing obligations. Therefore, it lists few modernized e-File (MeF) providers who have passed the IRS Assurance Testing System (ATS) requirements for Software Developers of electronic Exempt Organizations. The list of such service providers can be found using the below IRS webpage

https://www.irs.gov/charities-non-profits/tax-year-2021-exempt-organizations-modernized-e-file-mef-providers

IRS Audit Group is a Tax Audit Representation firm in Los Angeles, California. We are a team of tax attorneys having hands-on experience in dealing with IRS audit process. We help you file your tax return for 2022 complying with all obligations and represent you on IRS audit. Contact us to get free consultation to understand your issues. https://irsauditgroup.com/contact/

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Qualified Opportunity Fund (QOF) is an investment vehicle formed as a company or partnership with the goal of investing in property within Qualified Opportunity Zones. This program was formed per the 2017 Tax Cuts and Jobs Act to provide a tax incentive for private, long-term investment in economically distressed communities. There are thousands of low-income communities in all 50 states, the District of Columbia and five U.S. territories that are designated as Qualified Opportunity Zones. Taxpayers can invest in these zones through Qualified Opportunity Funds. This type of opportunity funds assists taxpayers in giving tax advantages and rewards to investors.

Certain types of businesses cannot be included in opportunity funds, even if it falls within opportunity zones. Following are types of business which are not included in opportunity funds.

• Golf courses
• Country clubs
• Massage parlors
• Hot tub facilities
• Suntan facilities
• Racetracks or other facilities used for gambling
• Liquor stores

Eligibility Criteria

To certify and maintain a Qualified Opportunity Fund, an entity must:

• Be a partnership, corporation, or LLC that is treated as a partnership or corporation, and it must have filed a federal income tax return;
• Be organized for the purpose of investing in Qualified Opportunity Zone property under the laws in one of the 50 states, the District of Columbia, a U.S. possession, or a federally recognized Indian tribal government: and
• Hold 90% of its assets in Qualified Opportunity Zone property.

IRS Form Required to Certify as a Qualified Opportunity Fund

The entity must file Form 8996, QOF, with the qualifying partnership or corporation’s federal tax return each year to attest and retain its status as a Qualified Opportunity Fund. The entity must file Form 8996 by the due date for 2022 tax return (including extensions).

Form 8996 is used to:

• Certify the corporation or partnership is organized to invest in Qualified Opportunity Zone property.
• Report that it meets the 90% investment standard of section 1400Z-2.
• Figure the penalty if it fails to meet the 90% investment standard.

Benefits to the Taxpayers

The QOF basically provides tax deferral to the capital gains if the taxpayer elects to do so. The basis in the QOF investment becomes zero when one elect to defer the gain. The longer the investment in the QOF, the higher the basis grows. The tax benefit received is determined by the length of time one retains the Qualified Opportunity Fund investment. For instance

• After five years, a taxpayer who defers gains through a Qualified Opportunity Fund investment obtains a 10% step-up in tax basis
• It will be followed by another 5% step-up after seven years. Note that the taxpayer must have invested before December 31, 2019, to receive the entire 15% step-up in tax base. The taxpayer will have held the investment in the fund for seven years when the tax is triggered at the end of 2026, thereby qualifying for the 15% increase in tax basis.
• If the taxpayer holds the investment in the QOF for at least 10 years, then such taxpayer may be able to permanently exclude gain resulting from a qualifying investment when it is sold or exchanged.

A team of tax attorneys from IRS Audit Groups helps taxpayers in filling their IRS return for 2022. We are certified tax lawyers who represent taxpayers during any IRS audit. We can resolve common tax problems to complex audit sessions to help comply our clients. Get free consultation by calling or filling the enquiry from our website below

https://irsauditgroup.com/contact/

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What is FBAR?

According to the Bank Secrecy Act, one must declare and keep records of certain foreign financial accounts, such as bank accounts, brokerage accounts, and mutual funds, to the Treasury Department every year. The accounts are reported on a Financial Crimes Enforcement Network (FinCEN) Form 114 called a Report of Foreign Bank and Financial Accounts (FBAR). The annual due date for filing FBARs for foreign financial accounts is April 15^th of every year.

Who must file FBAR?

A citizen, resident, corporation, partnership, limited liability company, trust, or estate in the United States must file an FBAR to report if they have a financial interest in or signature or other authority over at least one financial account located outside the United States and its aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

However, you are exempt from reporting foreign financial accounts if they are:

• Correspondent/Nostro accounts
• Owned by a governmental entity
• Owned by an international financial institution
• Maintained a U.S. military banking facility,
• Held in an individual retirement account (IRA) of which you’re an owner or beneficiary,
• Held in a retirement plan of which you’re a participant or beneficiary, or
• Part of a trust of which you’re a beneficiary,  if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.

Further taxpayers don’t have to file an FBAR for the tax year 2022 if you meet the following criteria:

• All your foreign financial accounts are reported on a consolidated FBAR, or
• You jointly own all your foreign financial accounts with your spouse and:
  • You completed and signed FinCEN Form 114a authorizing your spouse to file on your behalf, and your spouse reports the jointly owned accounts on a timely-filed signed FBAR.

Note: Your eligibility for this exception is unaffected by your filing status, such as married-filing-jointly or married-filing-separately.

How to file the FBAR?

The FBAR must be filed online using FinCEN’s (Financial Crimes Enforcement Network) BSA E-Filing System. The FBAR is not filed with the federal tax return. You need to call FinCEN’s Resource Centre to request an exemption from e-filing if you want to file your FBAR on paper. If FinCEN authorises your request, you will get a printed FBAR form to fill out and mail to the IRS.

If you wish someone else to file your FBAR on your behalf, fill out FinCEN Report 114a, Record of Authorization to Electronically File FBARs, and provide it to them. FinCEN Report 114a is not submitted with the FBAR; instead, retain it for your records and make it available to FinCEN or the IRS upon request.

Deadline to file for the Tax year 2021

The FBAR is an annual report that is due on April 15 of the year reported. If taxpayers miss the FBAR annual due date of April 15, they will get an automatic extension until October 15. To file the FBAR, you do not need to request an extension.

More information related FBAR filing and other resources available on the IRS website here – https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

IRS Audit Group are a team of Tax Professionals, CPAs, Enrolled Agents and Tax Attorneys, primarily specializing in Internal Revenue Services (IRS) Tax Audit Representation. We resolve your tax audit issues and represent on behalf of you to the IRS. Call us to get free consultation from our tax professional to understand our Tax audit concerns.

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Getting an audit notice from the state department of taxation used to be a scary experience. The IRS isn’t the only government agency that can send you a notice about your taxes. Agencies such as the California State Tax Audit, and the Board of Equalization can also inquire about the taxes you filed. The law places the burden on you to demonstrate that your state income tax return information is correct.

It is always unpredictable when it comes to getting an audit notice or an examination by the IRS. However, plenty of help is available by contacting experienced tax relief attorney like IRS Audit Group Beverly Hills to deal with the taxation authorities on your behalf.

How the State Taxation determines and What State Taxation Authority looking for in a Tax Audit?

State Income tax audits are done primarily as office audits. State taxation authorities use tax audits to determine if you properly reported your income, deductions, exemptions, and credits in your income tax filing. They may request you to provide supporting records in person, on phone, or by mail to prove that your filing is correct.

Auditors cross-match state and federal return data verify that all income reported on information returns has been included on the state return, that deductions taken on the state return are valid, adjust based on audits conducted by the Internal Revenue Service, and conduct domicile investigations.

State Tax Audit Defence Lawyer from IRS Audit Group Beverly Hills
Being selected for a state tax audit is not necessarily an indication of any tax fraud. Even if you don’t have any unfiled tax returns, and are certain that all information you have provided to the state taxation authority is correct, still you may get audited. The state tax auditor seeks to uncover honest record-keeping mistakes, as well as possible tax fraud. It is important to understand that any information you provide to the state tax examiner can and will be used against you.

It is always a good idea to be represented by a tax lawyer provided by from IRS Audit Group Beverly Hills, who understands how to deal with the state taxation authorities in a tax audit.
As an experienced tax attorney from IRS Audit Group, Beverly Hills will explain the standard procedure in a state tax and also elaborate their process to verify the accuracy of a taxpayer’s returns.

Hence, protect your rights by being represented by a tax attorney from IRS Audit Group Beverly Hills, who understands your situation, as well as state and federal tax code. The first and the best thing you can do in the event of a state tax audit is to invoke your right to legal counsel before answering any questions or providing any documentation regarding your case.

What Happens if the State Tax Auditor Uncovers Items which you Cannot Substantiate?
Even if the state tax auditor determines that you owe back taxes (plus any interest payments or penalties that may have accrued), there are several avenues that your tax attorney from IRS Audit Group Beverly Hills can help you. Depending on the situation, your attorney can help you to set up a tax payment plan, negotiate an offer in compromise, seek a penalty abatement or currently not collectible status, or file a state tax appeal.

If you have received notice of examination or documentation from the state taxation authority informing you of your rights during the state appeals process, you should act quickly to obtain legal tax representation. Contact RS Audit Group Beverly Hills California for a free initial consultation today at 1-888-300-6670.