statute of limitations

Why You Should File Past Due Tax Returns, Now!

Taxpayers that have failed to file tax returns for some extended period of time should strongly consider doing so immediately. Even if taxpayers have filed for an extension, time is of the essence to avoid costly penalties as the IRS assesses failure to file (FTF) and failure to pay (FTP) penalties in this situation.

The failure to file penalty is assessed at a rate of 5% per month or partial month up to a maximum rate of 25%. The failure to pay penalty is assessed at a rate of 0.5% per month or partial month up to a maximum rate of 25%. If the IRS assesses both the FTF and FTP penalties, the FTF penalty is reduced by the amount of the FTP penalty.

Laws That Limit The IRS’ Power To Levy

Taxpayers with debts for back taxes have rights which are contained within the Internal Revenue Code. These laws limit the power of the IRS to collect and levy. These laws grant taxpayers rights that protect them from the collection enforcement powers of the IRS. Taxpayers should ensure that they invoke the protections of these laws to the fullest by retaining an experienced and knowledgeable tax professional.

Here are the most important collection laws that limit the IRS’ power to levy:

*Internal Revenue Code § 6330 and § 6331(d)

You’ve filed your tax return, how long does the IRS have to audit you?

You’ve filed your tax return, how long does the IRS have to audit you?You’ve filed all of your tax returns, and because of your level of income you find yourself in the class of taxpayers whose return is more likely to trigger an IRS audit. So you wonder, how long does the IRS now have to audit you?

Due to disclosure requirements, the IRS makes contact with a taxpayer selected for an audit by telephone or mail only.  When returns are filed, they are compared against norms for similar returns. These norms are developed from audits of a statistically valid random sample of returns, selected as part of the National Research Program conducted by the IRS to update return selection information.

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