Tax Relief with Timalyn Bowens
Timalyn Bowens is an Enrolled Agent which enables her to represent clients before the IRS in all 50 states. This podcast is for individuals and business owners. It focuses on various tax issues (i.e. tax liens and tax levies), how to avoid them and what happens when you've made a mistake. Timalyn will provide information about handling back taxes, tax relief options and how she can help you or your business by negotiating with the IRS to minimize and/or eliminate tax-related penalties and interest. Disclaimer - This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems but is not legally binding. Please consult your tax professional regarding your specific tax situation.
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What if I Disagree with an Audit?
07/18/2025
What if I Disagree with an Audit?
Episode 63: In this episode, Timalyn concludes her series on IRS audits by addressing a critical concern: what to do if you disagree with an audit decision. In the previous two episodes, Timalyn broke down what IRS audits are and why taxpayers may be selected for one. Now, she helps listeners understand the next step—how to respond when they believe the IRS got it wrong. Mistakes happen, whether it’s human error or an automated system glitch. But you don’t have to accept the results without a fight. Timalyn walks through the three potential outcomes of an audit: No Change: You provided sufficient proof, and no changes were made Agreed: You understand and accept the changes Disagreed: You understand the changes but do not agree When there's disagreement, Timalyn explains your rights and outlines three key options: Request a conference with an IRS manager. Use the IRS’s Alternative Dispute Resolution (ADR) program for mediation. with the IRS Independent Office of Appeals. Timalyn does explain the difference between mediation and filing an appeal, when it might be more effective than an appeal, and the importance of acting within time limits. Timalyn reminds listeners they have the . Whether it’s hiring an Enrolled Agent, CPA, or tax attorney, or qualifying for a , you don’t have to handle it alone. If you cannot pay the new tax assessed in full, Timalyn briefly reviews your payment options. She also shares the previous podcast episodes where she went into more detail about each option: Timalyn encourages listeners who are DIY-ing their tax relief to download for a breakdown of the collection process. Need Tax Help Now? If you are currently facing an audit or have received a notice, schedule a consultation with Timalyn through her website: As we conclude Episode 63, make sure to subscribe on Spotify, Apple Podcasts, or your favorite podcast platform. Remember, Timalyn Bowens is , and she’s here to fill the tax literacy gap — one taxpayer at a time. Thank you for listening to today’s episode. For more information about tax relief, visit: . Got feedback or an episode suggestion? If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Why Am I Being Selected for an Audit?
07/04/2025
Why Am I Being Selected for an Audit?
Episode 62: In this episode, Timalyn explains why the IRS selects certain taxpayers for audits and reassures listeners that being chosen does not automatically mean anything is wrong. Following up on last week’s episode, , Timalyn continues her audit series by breaking down how audit selections are made and why it is important not to panic if you receive an IRS notice. Contrary to common fears, receiving an audit notice does not mean jail time or that you did something wrong. Many audits are selected at random or flagged through a computer system that looks for unusual patterns or differences compared to similar tax returns. The IRS also uses related examinations, which means if your return is connected to someone else who is being audited, such as a business partner or investor, your return may also be reviewed. Timalyn explains that: Your tax return may be selected because it differs from statistical norms within your industry. Amended returns do go through a screening process, but do not always lead to an audit. IRS audit notices are always initiated by mail and never by phone. Scammers often use phone calls to impersonate the IRS and gather personal information. If you’d like more information on amended tax returns, you can check out Timalyn also has a video on her YouTube channel that will walk you through . Timalyn shares real-life examples to help you understand why the IRS may request certain documents and emphasizes the importance of submitting exactly what is requested. Submitting more than what is asked for could lead to unnecessary scrutiny. In this episode, you will also learn: How to respond when you receive a request for documentation What kind of records should you keep and for how long Why receipts should be clear and specific when used to support deductions The value of working with a skilled bookkeeper and having accurate financial records Timalyn closes with an important reminder. As a taxpayer, . That includes the right to professional and respectful treatment from the IRS, the right to understand what the IRS is requesting and why, and the right to be represented during the audit process. If you are feeling overwhelmed, you do not have to face the IRS alone. An , CPA, or tax attorney can represent you and help make sure your audit is handled properly and professionally. Need Tax Help Now? If you are currently facing an audit or have received a notice, schedule a consultation with Timalyn through her website 👉 As we close Episode 62, make sure to subscribe on Spotify, Apple Podcasts, or your favorite platform. Follow Timalyn on social media to stay informed, empowered, and tax-literate. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap — one taxpayer at a time. Thank you for listening to today’s episode. For more information about audit support and tax relief services, visit: . Got feedback or an episode suggestion? If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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What is an IRS Audit?
06/20/2025
What is an IRS Audit?
Episode 61: In this episode, Timalyn breaks down one of the most misunderstood topics in tax: the IRS audit. After 60+ episodes of educating taxpayers, she’s kicking off a brand-new series that explores what an audit really means — and what it doesn’t. Many people fear a suit-wearing IRS agent knocking at their door, but as Timalyn explains, that’s highly unlikely. Instead, most audits today are conducted through correspondence and notices, not surprise visits. So, what is an audit? An IRS audit is simply a review or examination of your accounts and financial information to ensure you reported everything correctly and according to tax law. Timalyn explains how discrepancies (like mismatches between your return and a third-party report) can trigger an audit, but that doesn’t automatically mean you’re in trouble. She also walks through how audits apply to individuals and organizations, including what the IRS looks for in businesses, churches, and nonprofits. For example, are expenses “ordinary and necessary”? Was depreciation properly reported? Were financial records kept accurately? Timalyn helps listeners understand the process and stresses the importance of documentation and good bookkeeping, especially for small business owners. This episode is part one of a three-part audit series where Timalyn will later explain: Why are some taxpayers selected for an audit What happens when you agree with the audit findings What happens when you disagree with audit findings And if you’re already in an audit and feeling overwhelmed? You have the right to tax representation. Timalyn explains how professionals like Enrolled Agents (like herself), CPAs, or tax attorneys can step in to help you navigate the audit process, avoid unnecessary penalties, and protect your peace of mind. Need Tax Help Now? If you’re facing an audit or just want to avoid one, book a consultation with Timalyn through her website: Know someone stressed about the IRS? Please share this episode with them. Tax confusion causes unnecessary fear — and this series could provide the clarity and confidence someone needs today. As we wrap up Episode 61, stay connected with Timalyn by subscribing on Spotify, Apple Podcasts, Amazon, or your favorite platform. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap — one taxpayer at a time. Thanks for listening to today’s episode! For more information about tax relief options, visit: . Got feedback or an episode suggestion? If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Your Right to Appeal IRS Decisions
06/06/2025
Your Right to Appeal IRS Decisions
Episode 60: In this episode, Timalyn explains your right to appeal unfair IRS decisions and why you shouldn't give up. We are celebrating three years and 60 episodes of the Tax Relief with Timalyn Bowens podcast! Provisions from the 2017 Tax Cuts and Jobs Act are set to expire in December, and many taxpayers are worried about IRS mistakes - especially after recent budget cuts and workforce reductions. Does this mean you have to accept wrongful IRS decisions? Timalyn says absolutely not. She explains that the IRS has an Independent Office of Appeals that provides fair, impartial review of disputes without going to court. These appeals officers are separate from regular IRS agents and focus only on the facts of your case. Timalyn emphasizes that this appeal process is your right as a taxpayer. She warns that with IRS staffing shortages, it's more important than ever to stand up for yourself when they make mistakes. Automated systems and overworked employees can lead to errors in levies, liens, or tax adjustments. Timalyn urges listeners to act quickly if disputing an IRS decision. The appeals process has strict deadlines, and professional help from an Enrolled Agent like Timalyn can make all the difference in getting a fair outcome. What do you think? Have you ever needed to appeal an IRS decision? Do you feel confident navigating the process if necessary? Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues silently. This information might be exactly what someone you care about needs. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 60, we encourage you to connect with Timalyn on social media. You can subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other platforms. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode! For more information about tax relief options, visit: https://www.Bowenstaxsolutions.com. Got feedback or an episode suggestion? If you have any feedback or suggestions for an upcoming episode topic, please submit them here: https://www.americasfavoriteea.com/. Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Is the IRS Going Away?
05/23/2025
Is the IRS Going Away?
Episode 59: In this episode, Timalyn addresses whether or not the IRS is here to stay. We have seen significant changes at the IRS within the past few months as they went through a work force reduction. We have also seen them lose $40 billion of the $80 billion that was promised to them in funding by the Biden Administration. Does this mean that they are going to go bye bye? Timalyn doesn't believe so. She believes that this smaller force will make it more difficult for taxpayers to handle their IRS issues on their own. She also fears that some taxpayers will receive unfair treatment, as well as be looked over with certain automated systems. Timalyn urges listeners to take their IRS debt seriously. With things such as automated levies, a smaller workforce within the IRS means that those things may take longer to remove if the proper department cannot be reached. What do you think? Do you feel that the IRS is here to stay or will it soon be eliminated as a government agency? Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her . Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 56, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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How Long Do You Have to Pay Taxes?
05/09/2025
How Long Do You Have to Pay Taxes?
Episode 58: In this episode, Timalyn explains how much time you have to pay your tax bill and how much time the IRS legally has to collect. Your tax balance is due on the due date of the return. However, when the IRS sends you a will give you 30 days to pay before the IRS uses any enforcement. This includes things like an or . If you can pay the debt off within 180 days you may qualify for a short-term installment agreement. This agreement can be arranged using your online IRS.gov account to set up an online payment agreement (OPA). If the amount is over $50,000 you will have to call the IRS to set up this arrangement. Don't just assume you have 180 days. A payment arrangement is a privilege, not a right. Communication is key when dealing with the IRS. If the debt is $10,000 or less and you've been compliant the past 3 years you may be eligible for a Guaranteed Installment Agreement. Timalyn offers 1-1 consultations to help set this up at www.Bowenstaxsolutions.com . Timalyn also have an e-book you can purchase to walk you through the process, Guaranteed Payment Plan: How to Guarantee A Payment Plan with the IRS. Timalyn also goes into more detail about . Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. The IRS legally has 10 years from the time your taxes were assessed to collect on the debt. If you can't afford to pay the debt off within 72 months you may be able to get the payments lower. But this means that you will have to pay on the debt until the last day the IRS can collect. This is known as the collection statute expiration date (CSED). Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 56, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Why Do I Owe Taxes This Year?
04/25/2025
Why Do I Owe Taxes This Year?
Episode 57: In this episode, Timalyn explains the reason you likely owe taxes this year. She highlights 5 common reasons that people owe each year. It is ultimately the responsibility of the taxpayer to ensure that they are withholding enough taxes. The top 2 reasons that people owe the IRS is because their withholding and/or estimated tax payments are off. Timalyn has created a series on her YouTube channel to walk you through the process of correcting your withholding for a W-2 job, pension, or your social security. You can find this series below. If you are self-employed or make investment income you may need to make estimated tax payments. Timalyn discusses this in Episode 21 of this podcast. You can check it out here - . In addition to those estimated tax payments, if you are self-employed, you are looking at a new tax, the self-employment tax. This is your share of Social Security and Medicare Tax. It's 15.3% of your net profit. Which is double what you'd pay if you were a wage earner. Timalyn explains this in more detail in Episode 8 - You may qualify to pay your balance over time. If you owe less than $50,000 and have been tax compliant, you may qualify to set up an OPA yourself using the IRS website. An OPA is an . The final 2 reasons that Timalyn discusses for you potentially owing are that you went through life changes that affected the deductions/credits you qualify for and you are in a higher tax bracket. Both situations call for an adjustment to be made in your withholding or estimated tax payments. If you can't pay the current balance in full you may be eligible to request for an Installment Agreement with your tax return by using Form 9465, Request for Installment Agreement. Timalyn has a video on her YouTube channel that can walk you through the process. You can find it here: Timalyn also goes into more detail about . Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. to book a call. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 56, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit https://www.Bowenstaxsolutions.com/. If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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What If I Can't Pay My Taxes?
04/11/2025
What If I Can't Pay My Taxes?
Episode 56: In this episode, Timalyn explains that all hope is not lost if you can't pay your taxes in full. You do have options! First, take a deep breath! Make sure that you have your tax return filed on time. This will help you avoid any additional penalties, such as the . Payment Arrangments You may qualify to pay your balance over time. If you owe less than $50,000 and have been tax compliant you may qualify to set up an OPA yourself using the IRS website. An OPA is an . If the balance is $10,000 or less and you haven't owed in the past 3 years or defaulted on an IRS payment arrangement you may qualify for a Guaranteed Payment Plan. Timalyn offers 1-1 consultations to help set this up at . Timalyn also have an e-book you can purchase to walk you through the process, . You may also make a request for an Installment Agreement with your tax return by using Form 9465, Request for Installment Agreement. Timalyn has a video on her YouTube channel that can walk you through the process. You can find it here: Timalyn also goes into more detail about . Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. to book a call. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 56, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit https://www.Bowenstaxsolutions.com/. If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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The Failure to File Penalty
03/28/2025
The Failure to File Penalty
Episode 55: In this episode, Timalyn explains what the failure to file penalty is and why it is adding so much to your tax bill. She will not only talk about what it is but how it's calculated, and how to potentially get it removed. Can't File Your Taxes On Time? You can avoid the failure-to-file penalty by filing a timely tax return or tax extension. If you're an individual needing to file an extension you can do so by filing Form 4868. Timalyn will have a video to walk you through filing the 2024 4868 on her YouTube channel, coming out on March 31st. The Failure to File Penalty This is the penalty that the IRS assess to taxpayers when they file their tax return late. For individuals and corporations, it can be up to 25% of the balance owed. For Partnership and S-Corp returns the penalty is $245 for each partner/shareholder for each month, up to 12 months. This penalty can easily cripple small business who just doesn't understand their filing obligations. Getting the penalty removed Timalyn has covered penalty abatement in previous episodes of this podcast. There is first time penalty abatement and there is also reasonable cause abatement. This is a service that Timalyn offers in her firm. But it's best to get the information to understand if it's something you'd qualify for. You can check out the previous episodes by using the links below: Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. to book a call. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 55, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Is Unemployment Taxable?
03/14/2025
Is Unemployment Taxable?
In Episode 54 Timalyn discusses unemployment tax and how it affects a taxpayer's tax liability. Some forms of unemployment are not taxable such as workers compensation. The topics covered in this episode are: What is unemployment? Is unemployment taxable? What's workers compensation? How is unemployment reported? What is Form 1099-G? If you'd like to work with Timalyn directly, you can book a call with her at www.Bowenstaxsolutions.com . As we conclude Episode 54, we’d like to encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Apple Podcasts, Google Podcasts, Spotify, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit: https:/www.Bowenstaxsolutions.com If you have any feedback, or suggestions for an upcoming episode topic, please submit it here: https://www.americasfavoriteea.com/co... Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Is Severance Pay Taxable?
02/28/2025
Is Severance Pay Taxable?
In this episode, Timalyn discusses severance pay and the tax implications of receiving a severance package. She breaks it into 3 sections: What is severance pay? Is severance pay taxable? Why is my severance pay taxed at a higher rate? How to lower the taxes on your severance pay. If you are already facing a tax debt that you can't pay in full Timayn mentions episode 18 - as a resource for you to use to stop the IRS from using enforcement such as tax levies to collect from you. If you'd like to work with Timalyn directly you can book a call with her at . As we conclude Episode 51, we’d like to encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Apple Podcasts, Google Podcasts, Spotify, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit: https:/www.Bowenstaxsolutions.com If you have any feed back, or suggestions for an upcoming episode topic, please submit it here: Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Marriage & Taxes
02/14/2025
Marriage & Taxes
In this episode, Timalyn walks the listener through a checklist of tax "to-dos" couples should complete before saying "I do." This list includes updating the taxpayer's address for communication with the IRS and adjusting their withholding. Below are resources to help you with both. One of the most difficult conversations for taxpayers to have with their future spouses is about finances. Timalyn discusses how a spouse's previous debts can affect the taxpayers filing together. A spouse can protect their share of a tax refund is by claiming injured spouse relief. This was previously discussed in . As we conclude Episode 52, we’d like to encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Apple Podcasts, Spotify, and your favorite podcast platform. Remember, Timalyn Bowens is America’s Favorite EA and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit: https:/www.Bowenstaxsolutions.com If you have any feedback, or suggestions for an upcoming episode topic, please submit it here: Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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The 2025 Tax Calendar
01/31/2025
The 2025 Tax Calendar
Timalyn comes back after a 10 month break from the podcast microphone with the 2025 tax calendar for US taxpayers. Listeners can find the tax calendar dates that Timalyn refers to in . Timalyn also announced that she is now accepting new tax preparation clients for the first time since 2020. If you are interested in having Bowens Tax Solutions prepare your 2024 taxes you can book an initial consultation at As we conclude Episode 51, we’d like to encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Apple Podcasts, Google Podcasts, Spotify, and many other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA andshe’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit: https:/www.Bowenstaxsolutions.com If you have any feedback, or suggestions for an upcoming episode topic, please submit it here: https://www.americasfavoriteea.com/contact Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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I am coming back!
01/24/2025
I am coming back!
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Your Rights as a Taxpayer
03/22/2024
Your Rights as a Taxpayer
Episode 50: In this episode, Timalyn explains your rights as a taxpayer. How do those rights balance with what the IRS’ mission is? You may have an opinion on how the IRS is doing, but either way, it’s a part of the government that definitely impacts your life. Taking a Quick Moment to Celebrate Before she begins, Timalyn is excited about having recorded 50 podcast episodes! It’s been a way for her to fill the tax literacy gap, one taxpayer at a time. It’s her hope that these easy to follow episodes breakdown complex tax issues into understandable topics. Did you know that 95% of podcasts fail? There are 2.8 million podcasts and less that 500,000 are considered active. Only 11% of podcasts make it to 50 episodes. So, now you can understand why she’s so excited. Thank you for following her podcast over the past 2 years. The Mission of the IRS The IRS is focused on providing America’s taxpayers with top-quality service. They want to help taxpayers to understand and meet their responsibilities. Finally, the IRS wants to enforce the law with fairness and integrity. Timalyn admits, things could be much worse. She wants to make sure you understand your rights when dealing with the IRS. That’s correct, you have rights as a taxpayer. According to the , you have the right to . Timalyn has described the specific tax professionals who are qualified to handle tax debt issues with the IRS. These 3 groups are enrolled agents, CPAs and tax attorneys. There are 9 other important rights and they can be found in . It explains the rights, but also the processes for examination, appeals, collections and refunds. Today, we’ll focus on the Taxpayer Bill of Rights. Let’s go through them, below. #1: The Right to Informed. You have the right to know what you need to do to be in compliance with the IRS. “Taxanese” is a complicated language and it can sometimes difficult to follow or understand. The IRS issues publications to help you. is a free resource that explains compliance matters. Nevertheless, you may need to consider hiring a tax professional to assist you. #2: The Right to Quality Service. Yes, that’s part of the IRS’ mission. While the slow responses and backlog (especially since the pandemic) may not seem like they’re on the way to achieving their mission, Timalyn actually credits the IRS with doing a good job investing in new technology to serve you better. You have a right to prompt, courteous and professional response from the IRS. While the publications are written to be easily understandable, the reality is that tax issue are complicated. You might want to check out the . It’s a good resource. #3: The Right to Pay No More than the Correct Tax. This means you have the right to only pay the amount due, including any interest and penalties. It’s why the IRS posts the quarterly interest rates. You might want to listen to Timalyn’s Episode 7 on . #4: The Right to Challenge the IRS’ Position and to Be Heard. You have every right to be heard by the IRS. Believe it or not, the IRS actually does want to hear from you. You have the right to have your claims about what you owe examined. This is why you’ll need to substantiate your claim with documents and other proof. You have the burden of proof in this situation. #5: The Right to Appeal and IRS Decision in an Independent Forum. In , Timalyn explains that your appeal is actually handled by another department, not the IRS Collection Department. You can appeal all the way to tax court, but you must do it in a timely manner. #6: The Right to Finality. This means you have the right to know your deadlines for challenging the IRS’ position. The IRS will let you know how long you have to appeal. If you are going to exercise this right, you must do it within a specified period of time. Finality also refers to the right to know when an audit has been finished or where they are in the process. #7: The Right to Privacy. You have the right to expect that the IRS will keep your information private and to stay within reasonable/necessary limits. The information privacy means the IRS can’t publicize how much you owe for separate years. They are permitted to communicate with your bank, if they are going to . They can communicate with your employer if they need to until you’ve paid off your tax debt. #8: The Right to Confidentiality. The information you provide the IRS cannot be disclosed to other parties, unless they’ve been authorized by you or the law. For instance, if you hired Timalyn, you’d complete , designating her as your tax power of attorney. Once this form is submitted, the IRS would be authorized to communicate with her regarding your tax situation. She is also bound by confidentiality, so Timalyn can’t speak to others about your taxes. If you file as married filing separately, the IRS cannot even speak to your spouse about your taxes. If you file married filing jointly, then they can communicate with either spouse. #9: The Right to Representation. This means you have the right to seek assistance from the , if you qualify. Timalyn offers multiple, free resources to help you, but she does charge for representation. If you can’t afford the fee, you could always check with the Low Income Taxpayer Clinic to see if they can work with you. Also, check out the #10: The Right to a Fair and Just Tax System. This is the right Timalyn protects the most. Do you feel as if you’ve been taken advantage of by the IRS? The system will consider specific facts and circumstances that might impact the amount you owe, your ability to pay or your ability to provide timely information. In Episode 37, Timalyn describes the . The person you hire to represent you is going to tell your side of the story. They should also be ready to work hard to ensure the IRS treats your fairly. Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. to book a call. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 50, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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How to Qualify for an Offer in Compromise
03/08/2024
How to Qualify for an Offer in Compromise
Episode 49: In this episode, Timalyn continues the discussion began in Episode 48. Today, she’s explaining how to qualify for an offer in compromise. She’ll also provide information regarding how to apply for it. NOTE: Click here to listen to . What Is the IRS Considering when You Apply for an Offer in Compromise? Remember, the offer in compromise allows you to settle your tax debt for less than you actually owe. The IRS doesn’t approve this option for every tax payer who applies. The IRS provides a to see help you see if you qualify. The IRS is considering 4 factors: Your Ability to Pay Your Income Your Expenses Your Assets When it comes to your ability to pay the IRS also considers your age. Your medical condition and medical history also comes into play. Do you have a disease or condition that might prevent you from working? This, along with your level of education all impact what the IRS considers to be your ability to pay. The IRS will analyze your earned and passive income. Earned income is produced as a result of an action or activity you perform or something you did to in the past. Passive income considers investment income, dividend income, and interest income. Your expenses can be subjective. What you consider a necessary expense may not be allowed by the IRS. If this is the case you may have to increase your initial offer. Remember, the that are used to determine an individual’s ability to pay. In and 39, Timalyn discussed using . This form helps to calculate your disposable income, for an installment agreement. You’ll can use for the offer in compromise. Are You Eligible for an Offer in Compromise? Before you pursue this route, you need to have all of your required tax year returns filed. Timalyn comments that this commonly refers to the last 6 years of returns. Employers must also have all of your IRS Form 941s filed. These are the forms. The same goes for your 940 FUTA (). You also need to be up-to-date on your required estimated payments (). Additionally, you can’t be in an open bankruptcy proceeding. If you’re applying for an offer in compromise for the current year, you need to have filed a tax extension, if it’s tax season. Timalyn stresses that you need to make sure you have all of the above completed and filed before you even begin the offer in compromise process. Substantiation of Your Expenses Along with the 433-A (OIC), you must provide all of the information necessary to substantiate your expenses. This includes, mortgage information showing your required monthly payment amount and where you are on those payments. If you are leasing (renting), you’ll need to supply a copy of the lease and proof of payments. Form 656-B This is the booklet you’ll use in applying for your offer in compromise. It includes important information about additional documents, including and the non-refundable $205 application fee. Make sure you are using the most current version of these forms. You’ll also need to include the initial payment for each Form 656 you are submitting. It’s important that you have a separate check or money order for each one. The application fee is also a separate check. Designate Your Payments The application fee and the initial payment(s) will be applied to your tax debt. Timalyn recommends designating payments to a specific tax year and tax debt. It’s going to take several months (maybe 6-9), to find out if the IRS has accepted your offer in compromise. If they reject it, you won’t receive the money back, so at least you’ll know where it’s going. The IRS Can Still File a Lien Against You It’s possible for the IRS to file a while they’re reviewing your offer. In , Timalyn explained what this is and how it might impact you. The IRS will suspend other tax debt collection efforts (including garnishing your wages, levying your bank account, etc.). What If the IRS Rejects Your Offer in Compromise? If this happens, your assessment and collection period will be extended. If you were hoping your CSED () would lapse, that’s not going to happen. They’ll add the time it took to process the offer. Make all required payments detailed in your offer during the time the IRS is processing (i.e. evaluating) your offer. One option is the lump sum cash payment. This is 20% of whatever amount you were offering. The remaining balance due must be paid in 5 or fewer payments. Again, be sure to make those payments while you’re waiting for a written response from the IRS. The other payment option is to make periodic payments. Basically, continue to pay the same amount as you sent for your initial payment, each following month. If they accept your offer, simply continue paying your monthly installments until the tax debt is fully repaid. You only have 24 months to pay the debt in full, using this option. Those 24 months have to be before the CSED lapses. A failure to make the required payments nullifies your offer, even if the IRS was going to accept it. Timalyn points out that during this process, you don’t have to make payments on an existing . The 2-Year Automatic Acceptance Your offer is automatically accepted if the IRS doesn’t make its decision in a period of 2 years, from the date they receive your offer and supporting documentation. Timalyn strongly recommends you mail correspondence to the IRS using certified mail. The post office will return a receipt with a specific date the IRS received the offer. This is the date you use in determining your 2-year window. Remember, before you go down this road, it’s important that you determine if you even qualify for an offer in compromise. Again, refer to the beginning of this episode during which specific forms were explained. You should really consider working with an experienced tax professional who handles tax relief cases. An offer in compromise is extremely complicated and isn’t something most people should do on their own. In addition to all of the filings, if the IRS actually accepts your offer, you MUST meet all of the offer terms listed in , Section 7. The IRS won’t release any existing tax liens, until your offer terms are satisfied. Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. to book a call. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 49, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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What Is an Offer in Compromise?
02/23/2024
What Is an Offer in Compromise?
Episode 48: In this episode, Timalyn explains an option some people have in resolving their tax debt. This option is referred to as an offer in compromise. Understand that not every tax payer qualifies for this, but you hear commercials about it all the time. Note: This is a complex topic and deserves more than a quick, 15-minute episode to fully explain it. The plan is to cover this topic in 2 separate episodes. The next episode will explain , while this episode explains what an is. While not every taxpayer will qualify for the offer in compromise, the vast majority (90%+) would actually qualify for an (Episode 10). This may be the better option for many people. An important reason Timalyn is covering this topic is so that you can understand “WHY” you may or may not meet the criteria for an offer in compromise option. Regardless of what you may have seen on the Internet, filing on your own is not something you should do, if you’re in serious tax debt. When you hire someone for , that person takes on the responsibility of speaking on your behalf before the IRS. Offer in Compromise – Doubt as to Collectability This is an agreement that settles your debt for less than the amount owed. Again, this is the hook used by many of the commercials you may have heard. The partial pay installment agreement would do the same thing without exposing your assets to a potential liquidation requirement. The IRS will not accept your offer if there’s a chance the liability can be paid in full, in a lump sum or in an installment agreement. The streamlined installment agreement typically has a 72-month pay-off term. If you’ve already been working to get yourself in a better situation to be able to pay your taxes, and you owe $10,000 or less, you may have the option of a . Even though you might think you can’t repay your debt via an installment program, remember, the IRS has some additional discretion, because they are limited by the (the Collection Statute Expiration Date). However, if they determine you would be able to pay off your tax debt before the CSED, they would reject an offer in compromise. Owe $100,000 or more in Tax Debt? Getting an offer in compromise approved will require an additional level of authorization. This would be granted by the IRS District Counsel. Some people refer to the Offer in Compromise as the fresh start initiative. The program began in 2011. It changed the computation for a taxpayer’s future income. It also extended the amount that can be repaid for student loans, as an allowable expense. goes into more detail as Timalyn discusses IRS Form 433-F. Offer in Compromise – Doubt as to Liability You would submit this when there’s a genuine dispute as to the existence of a tax debt, or the amount of the tax debt. It’s used when there’s a likely error by the IRS in assessing the tax debt. The offer must be greater than $0 and based on the amount you believe is the correct amount of tax liability (not what the IRS is claiming you owe). The Doubt as to Liability option will require you to submit . The Doubt as to Liability option is typically used after an audit was performed and tax was assessed. However, you had incomplete documentation at the time. Now, the supporting documentation you’ve found shows you really don’t owe the amount indicated by the IRS. Offer in Compromise – Effective Tax Administration This is when the amount owed is not in dispute. There are assets that could be liquidated to pay the debt, but exceptional circumstances exist that would result in an undue economic hardship, if full payment of the debt would be required. The same would exist if paying the full tax debt would be unfair or unequitable. Timalyn provides an example of an elderly individual living on a fixed income. Even if this person owned his/her home, selling the home to pay the taxes would make it very difficult from a financial standpoint, assuming the person were to live another 10 years, or more. Social security retirement benefits are really not enough to live off of, given today’s inflationary environment. The cost of living is relatively expensive, so adding a rent payment would make it nearly impossible. In the above example, this individual might be an ideal candidate for the offer in compromise – effective tax administration option. Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. to book a call. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 48, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Three Top Issues with Divorce and Taxes
02/10/2024
Three Top Issues with Divorce and Taxes
Episode 47: In this episode, Timalyn discusses three top issues arise involving your taxes after a divorce. Divorce happens and Timalyn has worked with many clients who are caught in this situation. While she’ll focus on 3 important issues, that doesn’t mean those are the only issues related to divorce and taxes. Today, she’ll address filing status, claiming dependents moving forward, and dealing with a joint tax liability after the divorce. With that being said, let’s listen to Timalyn. Note to Tax Professionals: Timalyn is going to be teaching a class on Divorce and Taxes via the platform. She’s previously provided a class to subscribers of . Those classes take a deeper dive into topics such as property settlements and transfers, Qualified Domestic Relation Orders (QUADROs), etc. Determining Your Optimal Filing Status Timalyn begins by discussing whether the divorce was amicable or not. If the divorce was not finalized by the end of the tax year, then technically and legally, the couple can still file as married filing jointly. If there’s a tax liability, you want to consider not filing jointly because that will be just one more thing tying you together. Another option is to use the status, married filing separately. This could make sense if you and your soon to be ex-spouse aren’t getting along, but a refund is expected. You wouldn’t have to worry about splitting the refund. If there’s a liability, because you filed separately, you wouldn’t have to worry about the other person’s tax liability. If you were to choose married filing separately, you’ll be in the same tax brackets as if you were filing as a single. Therefore, more of your income is going to be taxed at a higher rate. Here are some quick examples: ● Married Filing Jointly – the standard deduction is ~ $27,000 for 2023 returns. ● Married Filing Separately (e.g. Single) – the standard deduction is ~ $13,000. Therefore, the person filing separately or as a single, will remain in the 10% and 12% tax brackets for a shorter period of time compared to someone who is filing using the status married filing jointly. This couple wouldn’t jump to the 22% tax bracket until the reach almost $110,000 in gross income. However, a person using married filing separately, or as a single, they’ll jump to the 22% tax bracket when they get to ~ $55,000 in gross income. The thing to remember is that if you had your set as married filing jointly, assuming you made $50k and your spouse made $60k, your withholdings are only going to cover 12%. So, the spouse making $60k will still have withholdings closer to 12%. But, after separating if that spouse files using married filing separately, they will now be getting taxed at the 22% bracket. By working together as the divorce proceeds, you may be able to agree to file using married filing jointly to receive the best tax benefit for both parties. The IRS 1040 provides a spot so you can file an additional form enabling a couple to split the tax refund so that it goes into 2 separate accounts. The court may need to decide how the allocation will be made. How to Handle Dependents for Tax Purposes After a Divorce If dependents are involved, an important consideration is the determination of whether the couple was separated at all, during the tax year. If they were separated (not cohabitating), did that occur in the last 6 months of the year? Assuming the couple wasn’t living together during the last 6 months, but one parent took care of more than 50% of the dependent’s expenses: ● The parent who did not have the child could file married filing jointly (if the other spouse agreed) or married filing separately. ● The parent who did have the child could file married filing jointly (if the other spouse agreed), married filing separately or file as head of household (because for the last 6 months they were legally separated and they did maintain the household, incurring more that 50% of the dependent’s expenses). Filing using the head of household status gives you a tax bracket that is lower than married filing separately, but not as low as married filing jointly. The jump to the 22% bracket won’t happen as quickly and the standard deduction will be ~$19,000 (for the 2023 tax year). Timalyn strongly advises that your either have a tax professional prepare your taxes during this period, or that you at least consult with one. You have some options and you want to make sure you select the best one for your particular situation. NOTE: If you were divorced as of December 31st of the tax year, then married filing jointly and married filing separately are not available to you. You have the options of filing as a single or as head of household (if you qualify). Which Parent Gets to Claim the Child? If the divorce is amicable, you could have the custodial parent complete . This is an important form. It’s a Release or Revocation of Release of Claim to Exemption to Child by Custodial Parent. Because there are no longer exemptions for a child or children, it’s an all or nothing situation. The custodial parent gets to claim the child tax credit. However, the custodial parent can use Form 8332 to release the child tax credit to the other parent. Depending upon the divorce decree’s designation of the custodial parent, it’s that person who needs to sign the release, designating which year(s) it will apply. It’s during that year or years the non-custodial parent can claim the child. Understand, there is nothing to block a child from being claimed when you e-file. It can be a race to see who claims the child first. If a return is submitted including the child’s social security number as a dependent, it blocks the other parent’s return from being accepted – if that child was already claimed. This is why the IRS Form 8332 is so important. If you did have the right to claim the child, you have the 8332 to support your position when you take it to the IRS. Many people don’t realize the IRS trumps your divorce decree. Even though the family court designated the custodial parent, the IRS is going to look at specific rules. This includes the number of overnight stays during a particular tax year. It also considers which parent maintained the household where the child lived, as well as who paid more than 50% of the expenses. If the parents were even on the overnights and expenses, there are tie-breaker rules. Again, these are just a few reasons why the tax law is different than your state’s family law. Form 8332 can eliminate the frustration and games. It can protect both of the parents, down the road. For more information on , listen to Episode 19. There’s also a related . Dealing with Joint Tax Liability after a Divorce If you had a tax liability while you were still married, it is a joint tax debt, regardless of what the divorce decree states. The IRS considers both individuals responsible. There may be a way for you to claim or possibly . Timalyn has published episodes on both topics. Remember, there are specific timeframes for making these claims and your specific state jurisdiction may have guidelines. If you think you are eligible for innocent spouse relief, with Timalyn at Bowens Tax Solutions. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 47, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Options to Handle Your IRS Debt if You Cannot Pay It in Full
01/26/2024
Options to Handle Your IRS Debt if You Cannot Pay It in Full
Episode 46: In this episode, Timalyn discusses 4 various options you have to handle your IRS debt, if you cannot pay it in full. While you need to pay your tax debt, there are ways to do it so that you’re not overly burdened. In addition to the lump sum payment, she’ll explain the offer in compromise, installment agreements, currently not collectible status, and bankruptcy. Have You Received an IRS CP504 Notice? If this is a letter you’ve already received, then you know the . The reality is you’re now in a tough situation. While you haven’t been able to pay your tax debt, you most likely haven’t communicated with the IRS about your particular situation. Now, the IRS is going to have the right to access your bank account(s) and decide how much they are going to take. The Offer in Compromise You’ve probably heard about commercials claiming you can settle your tax debt for pennies on the dollar. In reality, many people won’t qualify for this option. This is sometimes referred to as the Fresh Start Program, which was implemented by Congress. However, the Fresh Start Program isn’t just about the Offer in Compromise. There are ways to qualify for the Offer in Compromise. You may be able to claim the debt doesn’t actually belong to you. This is “Doubt as to Liability.” Unfortunately, this may be very difficult to prove. “Debt as to Collectability” means the IRS probably won’t be able to collect the debt from you. “Effective Tax Administration” is another claim you may be able to use to qualify. The on its website, so you can see if you might be able to qualify for the Offer in Compromise resolution. In Episodes 39 and 40, Timalyn discussed . By completing this form, you’ll have a good idea of whether you’d qualify for the Offer in Compromise option. The form will help to prove your ability to pay or lack thereof. It also takes into consideration your health, age and education. These are factors the IRS will use to determine if you qualify. Any offer you make will have to include a certain percentage of the equity you have in specific assets. If you have a lot of equity in your home or other assets (including your retirement portfolio), the IRS could require you to sell one or more of the assets to create funds available to pay your tax debt. So, if that’s your situation, the Offer in Compromise might not be the preferred option for you. It’s important for you to consider working with a qualified professional who will help you to best represent your situation to the IRS. Installment Agreements Timalyn discussed this option in . These are generally various payment plans you can have with the IRS. There are 3 popular options: Streamlined, Regular and Partial Pay. Timalyn prefers the Partial Pay Installment Agreement because it looks at your assets, but focuses on your income and your expenses. Assuming you can’t pay off your tax debt before the (CSED), the IRS will still want as much as they can get from you. Establishing an installment agreement may be a good option, based on your specific situation. Currently Not Collectable Status Timalyn explains that this option temporarily puts your tax account on hold. You’ll still complete the IRS Form 433 to prove that you really have nothing left after calculating your income and deducting the allowable expenses. The IRS cannot put you in a financial hardship to pay your taxes. There may be a difference in what you consider a necessary expense and what the IRS considers. These would include your rent/mortgage and monthly car payment. Now, this does not mean you never have to pay the tax debt. Interest will continue to accrue during the period of not collectable status. But as Timalyn discussed, the IRS only has the option of collecting the debt before the CSED. The IRS will not levy you during the Currently Not Collectable (CNC) period. Once the period has passed, the IRS can require you to submit documentation to see if you should still qualify. If this sounds like a good option for you, listen to , where Timalyn explains how to temporarily put your tax account on hold. Bankruptcy Now, admittedly, this won’t be the right choice for everyone. However, if you qualify, you can use this to eliminate certain types of debt. Timalyn cannot provide legal advice about bankruptcy, because she is not an attorney. She does have relationships with bankruptcy attorney to whom she can refer you, if you need this option. There is a 3-year, 2-year and 240-day rule, you need to understand. You can’t have any fraud claims, no taxes related to a trust and no Substitute for Return (SFR) on your account. The tax debt you’re trying to discharge must be at least 3 years old. It must have been filed with the IRS for at least 2 years. Additionally, no other tax assessments can have been made by the IRS during the past 240 days. Assuming you meet the above qualifications, that tax year is eligible for bankruptcy. However, if there is a tax lien, even if you bankrupt the tax debt, you’ll still have to repay the amount covered by the lien. Again, this may not be the best option, but depending upon your situation, it may be the option you can use. Final Words of Advice As Timalyn has advised in previous episodes, it’s important to remember to breathe. She invites you to contact her to see if she would be able to represent you. The majority of her clients come owing 6-figures or more to the IRS, they may be facing an audit or even worse, they are actively being levied by the IRS. Don’t wait for that to happen to you. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 46, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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Understanding Your IRS Notice
01/12/2024
Understanding Your IRS Notice
Episode 45: In this episode, Timalyn discusses IRS Notices. She’ll explain what they are, why you’re receiving your IRS notice and how to read it. Then, she’ll provide some insights into the 3 types of IRS Notices that are currently being sent out fairly aggressively by the IRS. Love Letters from the IRS Timalyn lightheartedly refers to notices and communications from the IRS as love letters. In all reality, they can be extremely serious and require immediate attention. Once a client hires Timalyn to help resolve tax debt issues, she also receives copies of the same letters. What Is an IRS Notice? This is written correspondence from the IRS to the taxpayer. It can address a number of issues including a balance due, updates on activity on your account or if any changes to a tax return have been made. Not every IRS Notice involves bad news. Nonetheless, receiving one can cause anxiety. For example, during the pandemic some people received notices of stimulus payments or confirmation of payment of the advanced child tax credit, etc. If you’ve filed an amended tax return or you find a refund you were due, the IRS will also send you a notice. Some IRS notifications are issued to inform you of why you are receiving an IRS communication and what you need to do to resolve any potential issues. IRS CP503 Notice The bulk of the notifications being sent to taxpayers are CP503 notices. In Episode 29, Timalyn explained the (demand for payment of unpaid taxes). The CP503s are different. The CP503 notification is the second notice and a reminder of an unpaid tax balance due. If you have a tax liability when you submit your tax return, you’ll receive a CP14. Then, if the balance hasn’t been paid, the IRS will issue a CP501 (the first notice for balance due). IRS CP504 Notice Timalyn explains that the notification is the one you really need to be concerned with, if you receive it. This is a final notice and balance due. The CP504 is also notification of the IRS’ intent to levy. In Episode 5, Timalyn answered the question, “ Basically, the Intent to is the IRS telling you they have the legal right to take money owed from your personal bank account or business bank account. The IRS also has the legal right to contact your employer to request a garnishment (funds to be withheld) from your paycheck, which are then sent to the IRS. The latter can happen regardless of whether you are a W-2 employee or 1099 independent contractor. The IRS can also require the employer to make backup withholdings. Don’t Put Your Head in the Sand If you have received notifications from the IRS, don’t ignore them. In many situations, the IRS is willing to work with you. However, if you don’t open the letters and fail to respond, you’re going to run out of options and the IRS will run out of patience. How to Read the IRS Notice The office address of the IRS will tell you which actual office is sending the notification. It also signifies the level of importance of this particular IRS notice. If the address has a local address and the name of an IRS representative, your case has been assigned to an IRS revenue officer. Your assigned IRS revenue officer is the only person you’ll be able to communicate with, going forward. He/she is the only IRS contact with whom you can correspond or speak with on the phone about your tax debt situation. These revenue officers are already overloaded with cases, you just added to his/her workload. At the top right of your IRS notice, there is a designation of the type of notice you’re receiving. This could be the CP501, CP503 or the dreaded CP504 (the Intent to Levy). Timalyn comments that there are other types of notices, but these are the more common ones being issued, at this time. Remember, there are also notices of if you failed to report all of your income or miscalculated a deduction/credit. The IRS Notice also provides information regarding the deadline for you to respond. There may still be a way to deal with this, even if the deadline has passed. However, you need to take action, quickly. You can appeal an IRS decision if you’ve received an IRS CP504 (Intent to Levy) notification. You have the option of trying to contact the IRS via telephone (good luck). You may also want to pull to identify where you might disagree with the IRS and what information they are using to support their claim. The IRS Notice should also include a copy of the Taxpayer Bill of Rights. It grants you . In Episode 10, Timalyn explains . Bowens Tax Solutions specializes in tax representation. Consider to speak about your tax debt situation and potential options. In Episode 37, Timalyn explains the . It’ll explain the 3 phases of tax relief. In closing, Timalyn urges you to make sure you read any IRS notification you may already have. These can become extremely serious, but there are steps you can take to resolve the issues. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 45, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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A Holiday Message from Timalyn Bowens, EA
12/29/2023
A Holiday Message from Timalyn Bowens, EA
As 2023 comes to an end and we look forward toward 2024, Timalyn Bowens, America's Favorite EA, shares a few brief comments for her audience. It's been a long road, full of interesting twists and turns. Next year promises to bring more of the same. However, Timalyn is grateful for opportunity to continue her mission to close the tax literacy gap, one taxpayer at a time. She wishes you Happy Holidays for you, your family and your business.
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Is Your Business Audit-Ready?
12/15/2023
Is Your Business Audit-Ready?
Episode 44: In this episode, Timalyn discusses issues related to tax audits. The fear people have about being audited is often paralyzing. It’s a serious issue and you need to be prepared to both avoid it and to know what you need to do if it happens. There are steps you can take to ensure your business is audit-ready. There’s No Such Thing as an Audit-Proof Return Regardless of what some tax professionals might claim, there’s no way to guarantee you won’t be audited. There are different types of audits and the selection “triggers” vary. The IRS has the Discrimination Function System that produces a DIF score. This system rates the potential for change based on past IRS’ experiences with similar returns. The IRS can track returns for similar businesses, using categories such as NAICS codes. This code describes your type of industry. When they look at a collection of similar returns from the same industry, they can determine averages for specific data points, such as expenses, credits, etc. for your reported income level. If your DIF score is out of that range, it could trigger an audit. Irregularities can also raise flags. For instance, if all of your figures on your tax return are round numbers, that would seem odd and could result in an audit. The IRS has a whistleblower program. They pay snitches who were correct about something they alerted the IRS to regarding someone else’s tax filings. It Doesn’t Mean You Did Anything Wrong Timalyn emphasizes that just because you’re being audited, it doesn’t mean you did anything wrong. She explains that for 2023, there was a 0.4% chance that taxpayers would face an audit. Lower income individuals actually had a slightly higher chance. Don’t Fear the Boogey Man An audit isn’t as scary as it sounds. It’s a review or exam of your tax account and your financial information to ensure proper reporting. If you keep good records and don’t inflate/deflate your income or expenses, is there really anything to fear? You have the information and it’s accurate. As long as you can prove that information was reported correctly to the IRS, you should be fine. If your records are extremely unorganized, you had to guess at certain dollar amounts or someone else guessed for you, the audit may become a problem for you. Correspondence Audits This is where the IRS will contact a taxpayer to request specific information. If you’ve received an audit notice, or a field audit where the IRS agent comes to you, Timalyn recommends you don’t handle this on your own. It doesn’t matter how good your records are. Yes, you may be able figure out how to handle the process, but you’re going to be at a disadvantage and the opportunity to make a mistake is significant. This is not something you should simply search for on YouTube. You need an experienced tax professional who knows how to deal with the IRS and the rights you have, during the audit process. If you’ve received an audit notice, you can . She also has an episode on what you need to look for when hiring a tax professional. Episode 23 is titled, “” In the show notes for that episode, there’s a link to Episode 16, “.” Both are full of valuable information for your consideration. When you receive a Correspondence Audit, the IRS may not explain specifically why they are requesting the information. It can be a significant source of anxiety. Make sure you respond to the IRS in a timely manner. Timalyn suggests responding before the deadline, in case something else needs to be addressed. If you have good records, this will be much easier. Do You Already Have a Tax Power of Attorney? If you already have a , you’ve already authorized this person to speak to the IRS on your behalf. They’ve filed submitted , so they will also receive the correspondence from the IRS. Don’t assume the person who prepared your tax return is receiving the same correspondence you have received from the IRS. Unless they’ve submitted Form 2848, the IRS does not have the authorization to speak with that tax preparer and vice versa. Prepare Your Business for an Audit This is the best thing you can do, especially because of the random nature of IRS audits. Timalyn re-emphasizes the importance of good record keeping. You have to be able to substantiate everything you entered on your tax return. This applies to both income, expenses and credits. There are many ways people have committed fraud by overstating their income when applying for the PPP loans, SBA loans, or a mortgage. These are reasons the IRS may require you to substantiate your income. Good financial statements, based on accurate bookkeeping can help you to prove you received the income you claim, even if you don’t have a 1099 to back it up. Your bookkeeper or accountant will reconcile your bank account. The financial reports should reflect your income. Make sure the person who prepares your financial statements has access to your bank statements. If they are doing it without access, you may be setting yourself up for a significant issue or issues. The same record keeping applies for your expenses. It’s why business owners should not co-mingle their business and personal funds. During an audit, explaining the different purchases will be more complicated if you can’t determine whether they were for business or personal reasons. You Need a Bookkeeper This person is a valuable resource. It’s something Timalyn often recommends you outsource. A business owner can waste a lot of time trying to do their own bookkeeping. You should definitely understand your financial records, but the time spent doing all of the record keeping and reporting could be better spent generating more revenue. The 3-H’s of Record Keeping Timalyn suggests there are questions to consider related to record keeping. ● How long should you keep your records? ● How should your store your records? ● How do you deliver your records? specifically deals with how long you need to retain your tax records. Don’t Create More Problems for Yourself If you’re being audited, remember to only provide the IRS what they are asking for. Make sure the support for those records is readily available. Timalyn uses the example of someone who was asked to show income for a number of years. However, because they didn’t have good records, they instead decided to turn over all bank statements to the auditor. This resulted in the auditor finding even more questionable transactions that were flagged. If you’re going through an audit, you typically wouldn’t know how to handle the IRS. Even good intentions can lead to many more problems. That’s why you should work with a tax representation professional who is familiar with the process and can best represent you. Check out Episode 33, “” Just because someone prepared your taxes doesn’t mean they’re equipped to represent you. As 2023 comes to a close and tax season looms, you need to ask yourself if your business is audit-ready? Do you have good financial records? How are we handling the 3-H’s of record keeping? Is our tax preparation professional asking questions about our records? It’s time to get ready. One step you can take is to . If you are a tax professional who would like to help taxpayers with their audits, Timalyn strongly suggests . Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 44, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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The Corporate Transparency Act
12/01/2023
The Corporate Transparency Act
Episode 43: In this episode, Timalyn discusses the (CTA), which is not necessarily tax related, but US Treasury Department is in charge of the CTA. It’s a topic many will approach their tax professionals for explanations and advice. Timalyn will explain what it is, who’s in charge of it and who it affects. The Corporate Transparency Act was passed in 2021. It’s currently scheduled to go into effect on January 1, 2024. There is pressure to delay the date, but as of now, it remains set for January. What is the Corporate Transparency Act? The Corporate Transparency Act is a law to enhance the transparency of entities and entity structure. Over the years, people have chosen to start businesses in certain states to shield specific information from the general public or other considerations. This concept is used for good purposes, and unfortunately it can be used for bad purposes (some of which may even be illegal). The Corporate Transparency Act requires that companies must provide the government information about the owners and beneficiaries of the business. It’s an effort to reduce potential illicit activities. Who Is Responsible for Enforcing the CTA? The (FinCEN) is who will be enforcing the reporting requirements under the Corporate Transparency Act. FinCEN is housed within the Treasury Department, along with the IRS. This is one reason that individuals will think that this is a tax issue. If you have overseas bank accounts or are in a business that has them, you may already be familiar with FinCEN. Timalyn explains that organizations or individuals having $10,000 or more in cash or other assets must submit an annual report to FinCen. This form is known as the . The Corporate Transparency Act reporting requirement is actually a legal issue, not a tax issue. For this reason, Timalyn advises you to reach out to an attorney for advice, especially if you don’t know if you have to comply with the CTA reporting requirements. Who Needs to Comply with the Corporate Transparency Act? Almost all legal entities will fall under the Corporate Transparency Act reporting requirements. If you registered a business as a corporation, LLC or an LLP, you are required to file the (BOI). The BOI information that is to be reported includes: ● Full Legal Name of the Beneficial Owner ● Date of Birth ● Social Security Number ● Government Picture ID ● Current Address of the Individual ● Address of the Business Entity Who is a Beneficial Owner? Timalyn explains they are people who exercise substantial control over the entity, either directly or indirectly. You would also be considered a beneficial owner if you own over 25% of the company. It’s usually people who are responsible for major decisions related to the company. The same person may also work in the day to day operations. Are there Exemptions for Certain People or Types of Organizations? Yes. In fact, there are currently 23 exemptions. For information on these, subscribe to . As more information becomes available, Timalyn will post it on this blog, along with other useful information for business owners Here Are 5 Entities Exempt from the BOI Filing Requirement ● Governmental Authorities ● Banks ● Credit Unions ● Tax-Exempt Entities ● Accounting Firm If you are an accountant, Timalyn recommends you , at . You’ll find plenty of useful information for accounting and tax professionals. What is the Deadline for Filing the Beneficial Ownership Information Report? As of the recording of this episode, if your entity is formed after 01/01/24, you have 90 days to after the official start of your business file with FinCEN. If your business was open prior to 01/01/24, you have the full year to gather and submit the information for the beneficial owner(s). Please don’t procrastinate on filing the BOI. If you already have the required information, go ahead and file it. Remember, this doesn’t get filed with your tax return. You’ll on the FinCEN website. What if I’m Late in Filing the BOI? There is a $500/day civil penalty if you are late in filing your report. If you are found to be engaged in fraudulent or illegal activity by FinCEN, you will be subject to up to 2 years in prison and/or up to $10,000 in a criminal penalty. If you have trouble filing the report, Timalyn advises you to reach out to an attorney. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 43, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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What Is Tax Planning?
11/17/2023
What Is Tax Planning?
Episode 42: In this episode, Timalyn speaks to individuals and business owners. Tax debt can be a serious issue, both financially and emotionally. When it comes to taxes, you need to have a plan. Failing to plan is planning to fail. But, what is tax planning? What Does Failing to Plan Look Like with Taxes? Assume last year you didn’t like your tax bill. It is now November and you are just beginning to think about your taxes, you didn’t really have a plan for 2023. You should have been developing tax reduction strategies and implementing them much earlier. Timalyn recommends looking at tax reduction strategies before the year even starts. Another way people fail to plan for taxes is by not seeking out the advice and guidance of an expert in their industry. If you have a retail business you don’t need a tax professional who focuses primarily on the transportation industry. If you have real estate properties, it would be better to work with a tax professional who understands real estate investing. Tax law has different ways of applying tax credits and deductions for different tax industries. You need a specialist who understands the nuances of your specific industry segment. Don’t Rely only on the Internet for Tax Planning Advice Assume you Googled “Tax Planning” or some other phrase and found Timalyn. Not every piece of advice applies to your particular situation. Rather, treat that information as a starting point. Dig deeper for a tax expert who is closely aligned with your type of business. Tax strategies are not universally or equally effective for everyone. Developing an Effective Tax Plan An efficient tax plan will involve tax strategies customized to fit your lifestyle, your goals and focused on reducing your tax liability over time. There’s no one-size-fits-all strategy. Roth IRA vs. Traditional IRA For instance, a Roth IRA is a popular savings tool. Contributions to a Roth IRA are paid with after-tax dollars. They will not reduce your tax liability in the current year. The good news is that the dollars you put in, and the interest that accumulates, won’t be taxed when you pull them out. Now, a traditional IRA is paid with pre-tax dollars, which would reduce your current year’s tax liability. The down side is that you’ll eventually pay taxes on the money when you pull it out, years from now. Are you making more money now, during your working years, than you will be in your retirement years? It might not make sense for you to invest in a Roth IRA instead of a traditional IRA, depending upon your specific situation and your specific goals. This is especially true if you are concerned with reducing your tax liability during those earning years. This is why it makes sense to work with a tax planner as well as a financial advisor when planning your retirement. Should I Hire My Minor Child to Work in My Business? This will probably be a separate episode in 2024. If you’re interested in learning more about this option, subscribe to Timalyn’s blog, . Does Your Tax Professional Give You This Type of Advice? Before you get upset with your tax professional, ask yourself, “Have I asked for tax strategies or have I asked for a tax plan?” You may not realize it, but tax planning is a different service. It’s generally not included with tax preparation service. It’s an investment in your future. Many tax professionals assume you already know there’s a difference between tax preparation and tax planning. If you need the latter, ask your tax professional if they provide that service and if it’s something you can invest in to lower your tax liability. If not, they may be able to refer you to someone or maybe it’s time for you to spend time looking for a tax planning professional. As a starting point, check out Tax Relief with Timalyn Bowens episode 16 , . Invest in Your Future Spending money to hire an experienced tax planning professional will usually save you money. It’ll also give you some control over your tax bill and tax liability. You tax bill is what you owe after everything you’ve already paid in during the year. While everyone has a tax liability, if you’ve properly implemented an efficient tax plan, you may be able to avoid a tax bill. Timalyn is going to go into more detail about this on , in the upcoming weeks. Be sure to subscribe to it, so you’ll know when that information is published. Please consider sharing this episode with your friends and family. This information may be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 42, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . f you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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3 Ways to Reduce Your Business Tax Liability
11/03/2023
3 Ways to Reduce Your Business Tax Liability
Episode 41: In this episode, Timalyn talks specifically to business owners. There’s a possibility that you either owe taxes now, or that you will owe them in the future. As a person whose focus is on achieving your business goals, let’s assume you’ve hit your income goal for the year. As you begin to pull together your information, you suddenly realize you owe taxes. Maybe you actually owe more this year than you did last year. Are you beginning to worry that the more you make, the more you’ll owe? Timalyn will provide 3 ways to reduce your business tax liability. Timalyn begins by setting up a scenario many business owners are familiar with, because a tax liability can cause a lot of stress and even throw you off of your game. But, it doesn’t have to be that way. Tip #1: Be Proactive Let’s not worry about issues in the past. This is about moving forward by taking proactive steps to reduce your tax liability by investing in your business. You do this by hiring experts. Timalyn comments that she receives the best return on her investment when she invests in herself. The same is true for investing in your business. On September 18, 2023, Timalyn launched the . This is to help other tax professionals. When you invest in an industry expert to help you in your business, the return on that investment should be at least 2 to 3 times what it cost you. As an example, 75% of the tax professionals in Timalyn’s program brought in new clients within 3 weeks of beginning her program. It’s a perfect example of how investing in yourself, as a business owner, can have a significant impact on your progress. Tip #2: Consider Hiring Financial Experts Having another set of eyes on the situation can be a big benefit. But what type of financial expert should you consider hiring? The Value of a Bookkeeper / Accountant In Episode 16, Timalyn discussed, “.” The same steps apply to hiring a bookkeeper. The bookkeeper is managing historical data. In other words, when and where you spent money. Remember, the fees you pay your bookkeeper are also tax deductible. The value of tracking the historical data is that it enables you to make income projections. Trend data is a good way to make projections about your specific business. You can also consider how you are performing relative to your industry. The data will also highlight areas of weakness you may need to address. You may notice certain expenses are unusually high. By knowing your numbers, you’ll have better insight into how your business is performing. This is especially important when a problem exists. Once you uncover it, you can develop a plan to effectively deal with it, much earlier than if you’d simply waited until the end of the year. A bookkeeper can also highlight areas of opportunity. For example, you may be able to outsource an activity. Knowing your numbers enables you to make an informed decision as to whether you can afford to outsource and/or hire. Tip #3: Consider Investing in a Tax Plan Tax preparation is not the same as tax planning. You should expect to pay an additional fee for tax planning services. Tax planning is specific to you and your business. You’ll have customized strategies designed to help you. However, not all tax professionals are tax planning experts. While Timalyn can do tax planning, she specializes in tax relief and she’d refer you to a trusted colleague for tax planning services. Timalyn will be posting more information about reducing your tax liability on her blog, . She’ll also be launching a video series on . Be sure to subscribe to both of these free resources. Please consider sharing this episode with your friends and family. This information may be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 41, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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What Is an Amended Tax Return?
10/20/2023
What Is an Amended Tax Return?
Episode 40: Have you ever filed your tax return and then realized something doesn’t look right on the return? You have the right to file an amended tax return to correct mistakes and/or oversights. Timalyn will explain what this is and why you should file it. IRS Form 1040-X The is the form you’ll use to correct your original return. There are other types of amended returns. Form is used for Partnerships, Form and are used for Corporation and S-Corporation amendments. For today’s episode, Timalyn will focus on the 1040-X. What Is a Continuous Use Form? The IRS Form 1040-X is considered a continuous use form. This means the IRS isn’t updating this form each year. If your return is for 2020 or later, you’ll use the same form. You Found a Mistake, So Now What? It’s possible that by filing the 1040-X, you could be able to reduce your tax liability based on the new (amended) information. Even if it doesn’t reduce your liability, it may still reduce the penalties and interest. Timalyn uses the example of how business owners may have overlooked the Sick and Family leave credit during the COVID years. There are 2 resources you may want to review to see if you are eligible for the credits: The 1040-X is used to correct a 1040, 1040-SR (for seniors) or 1040-NR (for non-residents). It can be used to make adjustments for , it can be used to claim a carry-back due to a loss or unused credit. The 1040-X can also be used to make certain elections, after the prescribed deadline. The 1040-X shows your original information and then shows how the additiona information changes the originally submitted return. You can use the form to correct a genuine mistake. If the IRS doesn’t correct a math mistake, you could use the 1040-X to make the correction. If you are worried about being assessed with an accuracy-related penalty, listen to . In Episode 25, Timalyn discussed . A credit against tax owed may need to be entered, because if the IRS corrects a math error, it may not address other issues related to that new information. Timalyn provides an example of this from a recent client’s situation. Don’t Procrastinate Timalyn explains that you must move in a timely manner when you realize there’s an error on your return. IRS form 1040-X must be filed within 3 years of the date you filed your original return, if you are now or refund, or within 2 years of the date you paid the tax, whichever is later. Note, the 3-year window does include extensions. While this episode primarily deals with mistakes on your federal tax return, you may also need to review your state and local tax returns. The current 1040-X be e-filed. The 1040-X for 2019 and prior tax years cannot be e-filed. Timalyn uses the example of someone who either did or didn’t claim their child, this may need to be amended, once the error is identified. Injured Spouse Relief This was covered in . You can use it to protect your share of a refund if your spouse owes back taxes, child support, or any other government entity entity. Timalyn also wrote about it. Make sure you include an updated injured spouse form with the 1040-X if a credit or refund is due. For more information on the form . Don’t Intentionally Manipulate Your Income to Get a Mortgage If you’re trying to get a mortgage and you intentionally file fraudulent information or try to manipulate the tax return so you qualify, you may be committing mortgage fraud. The 1040-X shouldn’t be used, after you’ve qualified using false information. If you need to generate additional income to qualify for a loan, focus on doing that and avoid the legal liability. If you’ve enjoyed this episode, please on the podcast platform you are streaming on or Google. Please also consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 40, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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IRS Form 433-F (Part 2)
10/06/2023
IRS Form 433-F (Part 2)
Episode 39: In this episode, Timalyn continues her discussion of the importance of IRS Form 433-F when negotiating with the IRS. You may want to review Episode 38, which is Part 1 of the discussion. It’ll help you to better understand today’s episode. To listen to Episode 38, . What Is IRS Form 433-F? This is the Collection Information Statement. This is the form the IRS uses to collect a wide range of financial information including your income, debts, expenses and assets. When you’re attempting to negotiate with the IRS, you’re asking them to understand that you are unable to pay the full amount of your tax debt, at this time. They obviously want the full picture about your financial situation, so the information you enter onto this form is the starting point. If you’re working with a tax professional to represent you in a tax debt negotiation, but they haven’t discussed the Form 433-F, it’s probably a red flag. For tax professionals who aren’t using this form with your clients, you may be doing them a disservice. In Episode 9, Timalyn explained . These are the investigation, compliance and negotiation. IRS Form 433-F substantiates what you can actually afford to pay and why. It’s not uncommon for your and the IRS to have differing opinions on this answer. Today, Timalyn explains the detailed information you need to input on the form. Again, if you haven’t already listened to Episode 38, this might be a good time to listen to that brief episode. She’ll also discuss what you will need to substantiate as proof. Finally, she’ll help you to know if you’ve completed the form properly. Basically, “Is it right?” In Episode 38, Timalyn discussed why you’ll need to use this form if you’re requesting an installment agreement, because you’re unable to pay the tax debt within 72-months or before the Collection Statute Expiration Date (“CSED”). This includes whether you owe $25,000, but can’t pay it off within 72-months, or if you more than $50,000 but you could pay some of the tax debt. Understanding the Detailed Information The IRS wants to know you bank account(s) information. This helps to prove your cash flow. If your name is attached to an account, you’ll need to list it. Do you have lines of credit? If so you’ll need to list this information. This includes your actively used credit cards and the credit card numbers. They want to see what you’re purchasing. Are you using these cards for necessities or is it for discretionary items, like steak dinners, concerts and vacations? The IRS will want to know about your assets. You’ll need to submit the account numbers for retirement accounts including 401(k), IRA, Pensions and brokerage accounts. It would also include the VIN for any vehicles (i.e. cars, motorcycles, boats, etc.) you may own. They’ll look at what you owe verses how much equity you have in those vehicles. There’s a possibility that the IRS could require you to sell a vehicle to pay your tax debt. Timalyn advises you not to try to lie about your vehicles/assets. The IRS will eventually find out about them. This is especially true if you’ve posted pictures of it/them on your social media. It’s best to be upfront and honest. In one situation, a client has several vehicles and assumed the IRS would see how much he was paying on the loans, so that would obviously reduce his available cash flow to pay the tax debt. In reality, the IRS looked at the situation differently. As Timalyn explains, she had already advised him of what would happen, and it turns out she was right. Friends, listen to your tax professional. She/he has been through this, many times. They’ve studied it. And most importantly, you’re paying for their advice in the first place. You’ll also need to provide any loan numbers and balances. The IRS wants to see what you owe and actually, when you incurred that debt. There’s more information you’ll need to include, but the above should give you an idea of the types of information. Substantiating the Debt You’ve listed the assets on Form 433-F. Now, you need to list the expenses associated with the assets. As Timalyn explains, if you have a vehicle, you’ll need to supply at least the last 3 months of insurance payments. You may pay your premium on a semi-annual or annual basis. No problem, you’ll simply divide the payment by 6 or 12 to get a monthly expense amount. Any payment information should also match your bank account records. You’ll need to substantiate all liabilities. For instance, you’ll need to show credit card and/or loan payments. If you own or rent a home/condo/apartment, you’ll need to supply a copy of the mortgage or lease agreement. This is all about proving the debt you’re claiming to owe and the payments you’re making toward those debts. Pay Careful Attention to Your Expenses Expenses are handled differently from debt obligations. For this reason, you should consider working with a tax professional, who is familiar with tax debt negotiation. Certain expenses can be compared to what are called the National Standards or Local Standards. Timalyn explained what National Standards are and how they can be used to your advantage in . The IRS sets certain levels of acceptable expenses based on various areas of the country. It’s possible you can list the national standard defined amount, even if you don’t actually pay that much. A word of caution, you should consult with a tax professional on this point. The IRS will find out, if you’re trying to make false representations on IRS Form 433-F. By using the limits allowed in the Standards, this can help to substantiate and ultimately lower the amount you’re able to pay as part of your . The fact is, you’re using the IRS guidelines to do it. Understanding Your Cash Flow Timalyn explains that any income you receive will need to be substantiated. This includes non-taxable income, such as social security retirement benefits. This will be factored in as income, even if it may not be taxable. If you work a W-2 job, you’ll need to provide all pay stubs for the last 3 months and yes, this must match your bank account information. Alimony payments will need to be included on IRS Form 433-F. This is true even if it was ordered as part of a divorce prior to the Tax Cuts and Jobs Act. You’ll also need to show any child support payments. Don’t Go It Alone If you’re going to negotiate with the IRS, don’t go at it alone. Even if you don’t hire a tax professional to actually represent you, you should schedule a meeting with one to at least get advice for how you should handle it. Having an experienced tax professional on your side could save you much more than what it cost you to hire them in the first place. If you’re a tax professional and you would like to become better skilled at helping your own clients, consider signing up for Timalyn’s . It’s a private podcast, including an article subscription and a private group community. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 39, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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IRS Form 433-F
09/22/2023
IRS Form 433-F
Episode 38: In this episode, Timalyn is going to discuss a document that’s often used in tax relief negotiations, IRS Form 433-F. In her previous episode, she addressed the tax relief journey to try to make it easier to understand. Today, she’ll do the same with a form that plays a big role in your negotiations with the IRS. NOTE: Timalyn points out that you need to make sure you’re using . There’s a similar document, IRS Form 433-F (OIC), that’s used when you’re making an offer in compromise. However, the “OIC” version is not the form for today’s discussion. Timalyn is on a mission to fill the tax literacy gap, one taxpayer at a time. While she uses these forms all the time, she realizes that most taxpayers don’t fully understand what they are or why Timalyn is asking for certain information that goes on them. She understands what information the IRS is going to request, so having the correct information can both speed up the process and help to move the negotiations forward. It’s a Collection Information Statement The 433-F is more detailed than your . The form provides supporting information for , which allows you to pay your tax debt in installments, rather than in a lump sum. If you are going to apply for an installment agreement on your own, and it’s not a streamlined agreement (meaning you can’t pay it back within 72-months or before the – CSED), you’ll need to provide the IRS with additional information to support your situation. Timalyn explains that if you owe more that $50,000, you will be required to submit specific financial information, using IRS Form 433-F. If you are applying on your own and it is streamlined, you can use to request an installment agreement. For more information, . The IRS will charge you a $225 set-up fee. However, if you do it online or over the phone, the fee is only $31. If you plan to apply for an installment agreement on your own, consider purchasing Timalyn’s . It will walk you through the process and to get your plan set up quicker. What is the purpose for the 433-F ? This form collects your current financial information used to determine how you can satisfy your debt. This applies to an individual or a small business owner. The IRS wants you to prove why you’re going to need more than 72-months to pay the debt. The form gathers that information. You’ll use this form to report your income over the last 3 months. Remember, it may have changed since you filed your tax returns. Timalyn takes a minute to explain why you should probably seek a consultation with a tax professional who has specific experience in tax relief. That information will be extremely helpful, even if you decide not to ultimately hire him/her to represent you in this process. While the IRS wants the last 3 months, you actually might want to provide the last 6, 9, or 12 months, because certain factors, such as a period of unemployment, may change the picture in your favor. Timalyn explains the IRS is really trying to analyze your cash flow. Some jobs pay weekly, while other sources of income such as social security only pay monthly. Over the past 12 years as an , Timalyn knows the IRS is also looking at what you owe other people or companies. Having other required payments will limit your cash flow, but it’s not that easy. The IRS will consider your credit card balance and your available credit. They may determine you could use some of the available credit to pay your tax debt. Additionally, the IRS will review your assets. For instance, do you have equity in your vehicles? How much do you owe on the loans? How much are the monthly payments? What is the fair market value of the vehicle(s)? Realize the IRS may require you to sell some assets to pay your tax debt. Starting to get the picture? Are You a Business Owner? If so, the IRS wants to know about your accounts receivable balance. The IRS can consider you’re A/R because it could increase your normal cash flow. You need to be open and honest in your negotiation with the IRS. If they think you’re playing games, they will be much more difficult in striking any type of arrangement with you. In fact, they could simply decide to issue on specific tax years. Do I Have to Provide All of This Information? Timalyn’s answer is, “it depends.” The IRS has the right to specific information when you’re involved in a negotiation with them. Remember, you owe them and are at their mercy. If you’re trying to establish an installment arrangement, you’re asking them for a favor (even though we may not look at it that way). On the other hand, there are National Standards and Local Standards. If your expenses fall below these levels, you still get the benefit of the allowable standard. It’s like taking advantage of the standard deduction on your tax returns. Be sure to listen to Episode 39 for more information in this scenario. This is complicated, so you may decide to get a consultation with a tax professional. You can sign-up for a with Timalyn. There is a fee, but you’ll have a full hour for her to review your specific situation and give you a diagnosis. You can later decide to hire her or you can decide to hire another tax professional. Either way, you’ll have solid advice and will be better prepared to take the next step. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 38, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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The Tax Relief Journey
09/08/2023
The Tax Relief Journey
Episode 37: In this episode, Timalyn describes what happens during the process of you retaining tax representation. She provides explanations of what’s going to happen during the 3 phases of tax relief. Timalyn walks us through the onboarding process, the investigation phase, compliance and negotiation. While she’ll step in to represent you, it’s still a partnership and she’ll need your assistance. Timalyn begins by mentioning Episode 9, which explains . However, people still have questions about the process itself. This discussion is based on her process. Other tax professionals may do it differently, and that’s okay. The Onboarding Process Everything begins with a consultation. While Timalyn offers a number of free resources, the consultation provides you the opportunity to ask her specific questions about your situation. She’ll create a roadmap showing you how to resolve your tax debt issue. While not every situation requires you to hire a tax professional to resolve the issue, some do. In Episode 36, Timalyn focused on the related to payroll tax issues. That type of issue definitely justifies hiring a tax professional. If you decide to hire Timalyn within 14 days of your consultation, she’ll credit you the cost of the initial consultation. 4 Things Timalyn Needs, before She Begins The first is an engagement letter. It outlines the services she’s offering, when payments are due, what you can expect from Timalyn and what she will expect from you. The letter must be signed before the work begins. The second is a completed . This is a form designating Timalyn to act as your Tax Power of Attorney. This form is then sent to the IRS. It authorizes her to speak directly to the IRS on your behalf. The third item is a signed Form 7216, which gives her permission to use a 3rd party software to pull your transcripts and evaluate your data. The fourth item Timalyn needs is your payment for her services. In her firm, Timalyn typically breaks the pricing up by each phase. She goes on to explain that at a minimum, the investigation phase has to be paid for, before the work begins. Timalyn charges different fees depending upon whether you owe more or less than $100,000. If your tax issue is $50,000 or more, she will need your financial information. Expect a detailed questionnaire from Timalyn. The Investigation Phase This is when Timalyn begins communicating with the IRS and evaluating your tax transcripts to identify any missing returns and to determine what penalties have been assessed. She’s also going to work with you to understand if you were going through something that may be eligible for abatement (i.e. “forgiveness”). Once this is completed, she’ll schedule a case update with you. At this point you’ll be able to decide if you can move forward on your own, or if you’ll still need Timalyn to continue working on your resolution. If she’ll need to be involved, Timalyn will provide a price for the compliance process. The Compliance Phase This is where it really becomes a partnership. Efficient communication and information is critical. When any missing returns are prepared and submitted, this will alter the amount of tax debt and that typically results in additional penalties may be assessed. A second case update will be scheduled to review your completed returns before they are filed. You’ll need to sign and file them. Timalyn may be able to e-file the returns, using . The Negotiation Phase At this step, you are still in a partnership with Timalyn, assuming you’ve retained her to represent you. She’ll continue to speak to the IRS on your behalf. However, she’ll need your financial information including current expenses, debts, and asset information. She needs to have the information in a timely manner (refer back to your engagement letter). is the most common document Timalyn and the IRS will use during the negotiation. It’s a detailed summary of your financial situation. Remember, the IRS wants its money, but the information on this form can help prove to the IRS that there’s only so much available. There’s a chance you may qualify for a temporary hold on the collections by having your debt classified, Currently Not Collectible (“CNC”). Listen to to learn more about this. If you’re not eligible, you may still , which Timalyn covered in Episode 10. There’s also the option of making an offer in compromise. Timalyn has videos describing the offer in compromise on her YouTube channel. Here are a couple: 1) 2) This was a lot of information. The main point is that you’ll need to stay in communication with your tax professional. Don’t disappear. By ignoring or responding slowly, you’ll delay resolution of your tax debt and may incur additional interest on the back taxes. IF YOU ARE A TAX PROFESSIONAL Before she goes, Timalyn wants to remind tax professionals that on September 18, 2023, the Tax Pro Representation Journey, a private podcast and article subscription will launch. Make sure you . Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 37, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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The Trust Fund Recovery Penalty
08/25/2023
The Trust Fund Recovery Penalty
Episode 36: In this episode, Timalyn continues with a topic related to payroll taxes. Today, she’ll discuss the Trust Fund Recovery Penalty. It’s one of the biggest tax penalties the IRS can use. The penalty can be up to 100% of the taxes owed. Does she have your attention yet? Let’s listen to Timalyn discuss how to avoid this penalty. In episode 28, Timalyn discussed the . This penalty can be 20% of the miscalculated tax. That seems like a big deal until you learn about the Trust Fund Recovery Penalty, which can be up to 100% of the unpaid taxes. Additionally, there’s no cap on the amount eligible for the penalty. The Trust Fund Recovery Penalty can be assessed to the business, but also to people the IRS deems responsible for the payroll taxes not being paid. This extends to people that may not even be the owner of the business. You may still be held responsible according to the IRS’ rules. What Is the Trust Fund Recovery Penalty? Timalyn explains the trust fund is the taxes withheld by the employer, on behalf of the employee. Each private-sector employee has submitted a instructing how much should be withheld for income taxes. In addition to those taxes money Social Security and Medicare tax (FICA) are also withheld from wages. Those withheld funds are held in a “trust.” As previously stated, the Trust Fund Recovery Penalty is 100% of the trust fund tax. This is the employee’s portion of FICA and the income tax withheld. The employer is required to submit those funds to the IRS. If the employer willfully neglects to submit these fund, they are evading taxes. This is significantly different from avoiding taxes. Timalyn focuses on the important distinction between in Episode 34. How Long Does the IRS Have to Assess the Penalty? The IRS has 3 years to assess the Trust Fund Recovery Penalty. If you haven’t made an arrangement to pay those taxes, you need to address it ASAP. The IRS actually has 10 years to collect the taxes. Refer to Episode 5 for an explanation of the (“CSED”). This date is established, once the penalty has been assessed. As stated in Episode 35, can be charged as civil penalties or as criminal charges. So, beyond the financial aspects, there’s also a risk of incarceration if you’re found to have willfully not collect or didn’t truthfully calculate the taxes. Why Is the Trust Fund Recovery Penalty so Harsh? The answer is two-fold. First, if this penalty applies, you’ve been a tax evader. Second, if you haven’t paid the taxes withheld from the employee, the IRS also considers you a thief. You’ve stolen funds from your employee and the IRS. Because you didn’t pay the taxes withheld, the employee won’t receive the benefit of the tax payments they thought were lawfully paid. If there’s a tax refund, the IRS is coming after you because now they’ve paid out money that was never paid to them in the first place. Additional Penalties Can Be Assessed Before assessing the TFRP the IRS will assess other penalties as well. They will still assess you with the failure to deposit penalty and the if you didn’t file the proper payroll returns. Once the IRS adds the TFRP on top of that it can cause a serious financial leak in your business, possibly resulting in you closing. If you’re exposed to payroll tax penalties, including the TFRP, you need to communicate with the IRS. Don’t let the problem grow worse. Timalyn explains that communication is key. The IRS may be willing to work with you. Who Can Be Held Responsible? At the beginning of the episode, Timalyn mentioned the penalty can be assessed to more individuals than just the business owner. Any person responsible for withholding, accounting for, depositing or paying specified taxes – and willfully failing to do so. The above scenario could include the company treasurer, an accountant, an officer, director, shareholder, or even a bookkeeper. If you have an employee responsible for payroll activities or anyone who has signing authority on certain checking accounts. Any or all of them can be assessed the Trust Fund Recovery Penalty. Remember this is 100% of the unpaid withholdings. Imagine how financially devastating this could be. Can I Get the IRS Trust Fund Recovery Penalty Removed? Yes. If the IRS deems you were not responsible for the negligence. There will be interviews and required proof, but it may be possible. However, with payroll taxes can be very complicated. If you’re involved in this type of situation, Timalyn highly recommends hiring a tax professional to represent you. She explains in Episode 33. That episode also has a link to help you decide on which kind of tax professional might be best for you. You can to review and discuss options related to your specific situation. A point to remember, it will probably be best for you to hire a separate tax professional to represent you, instead of trying to have the same professional represent the business and all impacted parties. There could be a potential conflict of interest. You want to make sure someone is representing your best interest. It’s important that you get the help you need to address this situation, before it gets any worse. Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either. As we conclude Episode 36, we encourage you to connect with Timalyn on . You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms. Remember, Timalyn Bowens is and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options, visit . If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: . Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
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