tax attorney

Filing Tax Deadline Extensions


For many of us (especially those stuck in the frozen grip of winter), April 15 seems like a long time away.  However, a quick glance at the calendar reveals that, in reality, the income tax filing deadline is only two months away.  For many taxpayers, this is not much time to gather, organize, and submit your tax information, especially for self-employed individuals or taxpayers dealing with a unique tax issue this year.  As the tax deadline approaches, many taxpayers will find themselves unprepared to file their tax returns on the filing deadline date.

The Internal Revenue Service recognizes that there are situations where the taxpayer, in spite of their diligent attempts to comply with the April 15 tax filing deadline.  Therefore, they allow the taxpayer an opportunity to extend the tax filing deadline by filing Form 4868, Application of Automatic Extension of Time to File U.S. Individual Income Tax Return.  By filing this form on or before the April 15 tax filing deadline, the taxpayer is automatically granted a six-month extension of time to file the income tax return without incurring a late filing penalty.  In certain situations, such as matters involving taxpayers who are living overseas, the extension may be even longer.

When filing a tax deadline extension, the taxpayer must be aware that, while the time for filing the return has been extended, this does not mean that any payment that is owed for tax is also extended to the October 15 date.  When filing Form 4868, the taxpayer must estimate the amount of tax that will be owed when the return is finished and pay that amount on or before April 15 to avoid a late pay penalty.  If the taxpayer is unable to full pay the amount of tax owed, he or she should pay as much of the tax as possible, as the late pay penalty is a percentage of any unpaid tax.

At Victory Tax Solutions, we can prepare your tax returns and get them timely filed for you.  Our experienced staff is ready to assist you with any return that will benefit your situation, and can even help in many cases where you are unable to locate your tax documents for the tax year(s) at issue.  If you are unable to pay the full amount of tax, we can also help get you into a resolution that is going to work for you.  Call one of our account executives at (877) 772-0123 today!

Debt Cancellation

Debt Cancellation

What is debt cancellation? If you borrow money from a lender and the lender later forgives the debt, you may have to include the cancelled amount in income for tax purposes.  When you borrow money from a lender you are not required to include the amount you borrowed in income because you are obligated to repay the loan. If the lender later forgives your obligation to repay the debt you may have to include the loan proceeds in income because you are not required to repay the lender.

Cancellation of Debt income is not always taxable, there are a few exceptions.

  1. Bankruptcy: If you have debts that are discharged through bankruptcy these are not considered taxable income.

  2. Principal Residence Indebtedness: Under the Mortgage Debt Relief Act of 2007 you may be able to exclude cancelled debt from mortgage restructuring or foreclosure on your principal residence. This applies to indebtedness forgiven in 2007 through 2014.

  3. Insolvency: If your total debts are more than the fair market value of your assets you may be considered insolvent.  Some or all of the cancelled debt may not be taxable if you were insolvent when your debt was cancelled.

  4. Farm Debt: If the past three years more than half of you income was from farming, the loan was from an agency regularly engaged in lending and you incurred the debt directly from the operation of the farm, the income may not be taxable.

If a lender forgives a debt of more than $600 they should report the amount of cancelled debt to the IRS and to you on a Form 1099-C.  If you have received a 1099-C it is important that you take this document seriously, as it could have a large impact on the amount of tax that you owe. It is important if you receive a Form 1099-C that you have someone trained in tax matters review your tax documents in order to determine if the cancelled debt must to be included in your income.

Here at Victory Tax Solutions we have tax attorneys that understand the ins-and-outs of debt cancellation and how it can impact your tax liability. Make the right choice, allow the professionals at Victory Tax Solutions to prepare your Federal and State tax returns accurately.

Call Victory Tax Solutions to speak with one of our account executives today. The call is toll free 1-877-772-0123.

Affordable Care Act - Tax Implications

Affordable Care Act - Tax Implications

Victory Tax Solutions, LLC

"America's Trusted Tax Team"

The Affordable Care Act, known commonly as Obamacare, stands to affect taxpayers significantly for the first time as they begin to file their 2014 tax returns. For the first time, the IRS is asking individual taxpayers if they had "Minimum Essential Coverage" during the tax year. Failure to obtain either Minimum Essential Coverage or an exemption means the taxpayer pays a penalty on their tax return.

Minimum essential coverage means that a taxpayer has coverage for at least 9 months during the qualifying tax year. To have coverage for 1 month means the taxpayer must only have health coverage during at least 1 day of that month. The health insurance plan must also meet minimum requirements under the health care law. Generally, most health insurance plans meet the requirements of minimum essential coverage, and specialty plans such as workers compensation, accident/disability insurance, or specialty service plans do not qualify.

There are also nine categories of exemptions that exclude taxpayers from the requirement of minimum essential coverage. They are:

  1. Religious conscience
  2. Health care-sharing ministry membership
  3. Member of a federally recognized Indian tribe
  4. No federal income tax filing requirement, even if the taxpayer chooses to file
  5. A short coverage gap of less than three months
  6. Documented hardship showing inability to obtain coverage
  7. Affordability, wherein the minimum premium available is greater than 8 percent of household income
  8. In jail or prison
  9. Not lawfully present in the United States

In order to obtain validation of an exemption, a taxpayer must go through the health care marketplace to obtain their exemption number prior to filing the tax return.

If a taxpayer is charged a penalty by the IRS for not meeting minimum essential coverage or qualifying for an exemption but owes no other tax debt, the Affordable Care Act prohibits the IRS from either filing a tax lien or seizing the taxpayer's property in the form of levies, garnishments, or other seizures. However, the IRS can still collect the funds owed through the seizure of federal or state tax refunds, payment plans, or voluntary payments to the IRS.

If you have any questions or would like to discuss further, please call Victory Tax Solutions for a free consultation. Our toll free number is 877-772-0123.

IRS Tax Relief

Victory Tax Solutions, LLC

“America’s Trusted Tax Team”

IRS Tax Relief

What is IRS tax relief? IRS Tax Relief can be achieved when you solve your IRS tax debt problems.  There are many people out there struggling with IRS tax debt.  IRS debt could stem from many things including under withholding, a mistake on your tax return, or early withdrawal from retirement plans.  IRS tax debt can result in the IRS trying to seize your money in several different ways including liens and levies against you wages and social security. Don’t let yourself be someone that is held back by IRS tax debt.

There are several ways that IRS Tax Relief can be achieved.

Accurate Tax Returns – By having our tax professionals prepare your tax returns you can be confident that they will be prepared correctly.  Tax returns that are prepared correctly insure that you are getting back all the money that you deserve.  If your tax returns were prepared incorrectly in the past Victory Tax Solutions may be able to file reconsideration returns to adjust the amount that you owe to the IRS.

Installment Agreements – There are several different repayment plans available depending on your income, ability to pay and amount of debt.  Our tax attorneys can help set you up in the right type of installment agreement.

Currently Not Collectible – Depending on your ability to pay the amount you owe to the IRS, you may qualify for currently not collectible status.  If you qualify for currently not collectible the IRS will stop all collection activity including levies. Our tax attorneys will collect financial information and determine whether you may qualify for currently not collectible status.

Offers in Compromise- Depending on the amount of tax you owe and your income you might be eligible to pay less than the full amount of tax owed.  Offers in Compromise include a full financial review and take several months for a determination to be made.

The IRS can be extremely difficult to work with on your own. Here at Victory Tax Solutions we specialize in IRS Tax Relief.  Let us deal with the IRS for you!

You can trust our tax professionals to file your current or back tax returns correctly and efficiently. If you do owe money to the IRS we will find the resolution that will work best for you.

Call Victory Tax Solutions to speak with one of our account executives. The call is toll free 1-877-772-0123.

Payroll Tax Debt Relief

Victory Tax Solutions 

“America’s Trusted Tax Team”

What is IRS Payroll Tax Debt? IRS Payroll Tax Debt is money owed to the IRS for failure to withhold and/or pay required taxes on behalf of your employees. Who is an employee? If you have the right to control what a worker does and how they do it, likely they can be considered your employee.

Most employers must withhold, deposit, report and pay several different types of employment taxes. These taxes include Income Tax, FICA and FUTA:

  • Income Tax: Money owed by the employee individually, taken from their wages to foster timely payment.
  • FICA: Social Security and Medicare taxes owed to the government. Half of the tax is owed by the employer, and half is owed by the employee.
  • FUTA: Federal unemployment tax, owed by the employer.

To determine how much federal income tax to withhold on behalf of your employees you should look at the W-4s you have on file for your employees. You can encourage your employees to file new W-4s at the beginning of each year, especially if they owed taxes on their most recent return.

Once you have properly withheld taxes from your employees these taxes have to be deposited and reported. At the end of each year a W-2 has be prepared for each of your employees that reports wages, tips or other compensation. 

It is extremely important as an employer that you withhold correctly and deposit the withheld taxes in order to avoid IRS Payroll Tax Debt. One form of IRS Payroll Tax Debt is a Trust Fund Recovery Penalty. A Trust Fund Recovery Penalty (TFRP) is assessed against the owner or manager in charge of employment personally. It does not erase or transfer the debt owed by the company, it just doubles the overall amount owed to the government.

The Trust Fund Recovery Penalty can be imposed on any person that the IRS determines to be responsible for paying, collecting, or accounting for the taxes and acted willful in not doing so. A responsible party can be a partner, sole proprietor, office of the corporation, or an employee of the business. If the responsible person pays other business expenses instead of withholding taxes the IRS can find that you willfully failed to pay taxes and impose a Trust Fund Recover Penalty. The penalty is the full amount of the unpaid trust fund tax plus interest.

It is important that you try to avoid Trust Fund Recover Penalty by making sure employment taxes are collected and paid to the IRS timely. Additionally, if the IRS is proposing an assessment of TFRP, or has requested an interview, you have the right to be represented through that process. Defending yourself against TFRP assessment can be tricky, as the IRS looks at many factors to reach their determination. Tax Attorneys are typically skilled in these situations, and may help taxpayers avoid significant personal payroll tax debt.

If you are having issues with IRS Payroll Tax Debt it is important you contact a Tax Attorney right away. Here at Victory Tax Solutions we dedicate ourselves to helping employers with Payroll Tax Debt or Trust Fund Recovery Penalties.

Call Victory Tax Solutions today to speak with one of our account executives. The call is toll free 1-877-772-0123.