Friday, May 17, 2013

IRS Tax Exempt Application Scandal

The IRS has been under a lot of fire recently due to how they handled certain tax exempt applications from advocacy groups such as the tea party groups. This is all said to have happened between 2010 and 2012 and the IRS claims they were separating and organizing 501(c)(4) applications to produce a better work flow. The applications that had the most difficult time were the ones containing "tea party" or "patriot" in their names. Some applicants were asked questions that were not customary and inappropriate, their applications fell through the cracks, or they received a much longer response time than other applicants.  Despite the IRS' opposite counterclaim of not selecting and organizing the applications in a political or partisan rationale, the head of Exempt Organizations at the IRS has made a public apology. The IRS says they fixed the situation last year and have adopted new procedures to prevent such thing from happening again. Since this situation has been uncovered it has not been handled lightly, the head of the IRS, Steven Miller was forced to resign on May 15th and today marks the first hearing of a series of Congressional Hearings on the IRS scandal. Stay tuned for news and updates as we follow the hearings. 

Thursday, May 9, 2013

IRS Feeling the Effects from Government Budget Cuts

Government spending cuts are now having an effect on the chances of you getting audited. The cut which is known as the “sequester” is said to eliminate $600 million from the IRS’s budget this year. What does that mean? And how does that affect me? The cut will cause IRS employees to go on temporary unpaid leave for up to seven days starting May 24th and continuing throughout the pay periods. Fewer agents on hand to assist taxpayer’s wants/needs mean it may be harder to get the help you want. Due to the cut IRS employees will have less time to work on audits, meaning they will not be able to do as many audits as they did years prior. This does not mean you are in the safe house, just because the IRS won’t be starting as many new audits as before they will most likely pay extra attention to the ones they do focus on. 

Tuesday, May 7, 2013

New IRS Guidance on Principal Residence Foreclosures from tax Liens

The IRS has issued new guidance for foreclosures that have to do with a taxpayers principal home. Before the IRS can seek suit to foreclose on a personal principal property there are certain administrative cures that will be looked at first as well as if the taxpayer has any hardship issues, all these will be assessed before seeking a suit. These administrative cures help provide a more detailed look at the policies and procedures for suits. The guidance includes two options for the process of collecting the taxpayers principal residence. The first option is a  obtaining a  court order through proceeding that would allow for the administrative seizure of a principal residence under tax code Section 6334(e)(1). The second option is a suit to foreclose on the principal residence from the tax lien under Section 7403, but all administrative cures and hardships need to be examined beforehand. Most of these administrative cures include contacting the tax payer with the lien and advising them on the issue, the options they have and obtain and other other neccessary information.