Under the current federal tax system, employers are required to pay a Federal Unemployment Tax Act (FUTA) tax. The funds collected by the Internal Revenue Service (IRS) from this tax, together with state unemployment tax collections, are made available to workers who have recently lost their jobs in the form of unemployment compensation. See Internal
Blog
CP 523
The Internal Revenue Service (IRS) has a number of ways to both accommodate struggling taxpayers while also mitigating losses in connection with taxpayer’s failing to meet their tax obligations, one of which is to put a taxpayer in default on an installment agreement CP 523. Under the terms of an installment agreement, a taxpayer will
Collection Appeal Rights
When a tax debtor fails to stay current with his or her tax obligations, the Internal Revenue Service (IRS) will eventually initiate collection proceedings in order to collect the outstanding tax liability from the tax debtor. Tax debtor should understand that just because the IRS is a federal agency, its actions are not always proper
California Residency Audit
A person’s “residence” under California law is the key to understanding their state income tax liability. For this reason, the California Franchise Tax Board (FTB) conducts residency audits that will determine a person’s residency called a California Residency Audit. Outcomes of a California Residency Audit Generally, three outcomes are possible; a taxpayer may be found
Future Income (IRM 5.8.5.18)
The Internal Revenue Service’s (IRS) acknowledges that some taxpayers simply cannot meet their federal tax obligations. In other words, the taxpayer’s net assets and income less living expenses does not permit the taxpayer to pay back the IRS in full. In such situations, the IRS may be receptive to an Offer in Compromise, or an
FTB Collections
This blog entry will focus on the various techniques that the California Franchise Tax Board (FTB) use to collect on outstanding liabilities.There are a number of ways that a taxpayer could end up owing the FTB. Generally it is due to either: (1) filing a return and not paying the amount owed in full; (2)
Calculating IRS Interest
The Internal Revenue Service (IRS) method for calculating interest has changed over time. Currently, the method for calculating interest is described by the IRS as “daily compounding of interest (i.e., interest computed on interest).” Internal Revenue Service, Internal Revenue Manual, Part 20.2.6.1, available at https://www.irs.gov/irm/part20/irm_20-002-006r.html. In other words, each day interest accrues on the principal
Rights as a Taxpayer
The tax code is complicated, and can even be overwhelming, especially if you run into problems with your taxes. The IRS unquestionably has greater knowledge of the tax code, so it is important to be aware of your rights as a taxpayer. Congress, in the last two decades, passed the Taxpayer Bill of Rights. This
Bank Levies
When a tax debtor fails to meet his or her tax obligations, the Internal Revenue Service will typically initiate collection proceedings that begin in the form of instituting a levy on the tax debtor’s assets. A levy on the tax debtor’s assets is a effective way to ensure that those assets will be available to
Criminal Investigations
As a general rule, one should always file their tax returns regardless of that person’s ability to pay their taxes. That said, failure to file will not automatically result in a criminal investigation. According to the IRS, the average late filer has failed to file for three years or more and owes approximately $70,000. Furthermore,