Tax Relief New York

The IRS offers 7 bits of advice when receiving a notice.

1.    Don’t ignore it. We agree. Too often clients bring us their notices with days to go before more penalties are to be imposed. This goes for NY state notices too.

2.    IRS notices usually deal with a specific issue about your tax return. Absolutely true. That’s why we counsel our clients not to panic when they receive an IRS notice.  In our experience the longer the letter, the less concerned we are. An audit notification is only a few sentences on a single page signed by a human being. On the other hand, full audits are way down from 2010 because there are simply less people to do them.

3.    Read it carefully and follow the instructions about what you need to do. If this were true accountants would be out of business. With significantly less people, these notices are overwhelmingly computer generated. Computers do not handle nuance well. Sometimes we have to read a letter several times to understand what they are asking.

4.    If it says that the IRS corrected your tax return, review the information in the notice and compare it to your tax return. Unless the amount the IRS is demanding is relatively nominal it is helpful to have a professional review the changes the IRS is proposing. Surprisingly large percentages are simply wrong, or incorrectly calculated, or the IRS doesn’t have all the facts relating to a taxable transaction.

5.    You can handle most notices without calling or visiting the IRS. Anyone who has tried getting past the gnarled tangle of phone menus that the IRS puts up to prevent you from speaking to a human being can only be thankful that any part of this is true. Even if you do get through to the possibility of talking to a human being, it is not uncommon for 50% or more of the calls to go unanswered. As professionals we try to avoid speaking to IRS agents because even though they provide us a dedicated line, we cannot be sure that the agent on the line is versed in the relevant tax law. We generally trust the IRS tax rules and regulations as provided on their website. Where IRS human agents come in handy are in penalty abatement or taxpayer advocacy issues.

6.    Keep copies of any notices you get from the IRS. We agree.

7.    Don’t fall for phone and phishing email scams that use the IRS as a lure. First of all, the IRS rarely if ever emails. They consider faxes secure means of communication and think emails are vulnerable to hacking. So you are unlikely if ever to get an email from the IRS. Never respond to an “email from the IRS”. Do not click on any embedded link or attachment. DO NOT FORWARD IT TO US. Advise us that you received such a communication and we’ll take it from there.

You are only slightly more likely to get a phone call from the IRS and generally only after several initial attempted communications via traditional mail. Whether or not you can remember having received any such prior notices, get the employee number and name of the agent calling you and have us call them.

No one looks forward to an IRS notice. If we prepared your taxes we are already well versed in your tax situation and are better equipped to deal with an IRS notice. IRS notices should not be taken lightly.

The IRS offers 7 bits of advice when receiving a notice.

1. Don’t ignore it. We agree. Too often clients bring us their notices with days to go before more penalties are to be imposed. This goes for NY state notices too.
2. IRS notices usually deal with a specific issue about your tax return. Absolutely true. That’s why we counsel our clients not to panic when they receive an IRS notice.  In our experience the longer the letter, the less concerned we are. An audit notification is only a few sentences on a single page signed by a human being. On the other hand, full audits are way down from 2010 because there are simply less people to do them.
3. Read it carefully and follow the instructions about what you need to do. If this were true accountants would be out of business. With significantly less people, these notices are overwhelmingly computer generated. Computers do not handle nuance well. Sometimes we have to read a letter several times to understand what they are asking.
4. If it says that the IRS corrected your tax return, review the information in the notice and compare it to your tax return. Unless the amount the IRS is demanding is relatively nominal it is helpful to have a professional review the changes the IRS is proposing. Surprisingly large percentages are simply wrong, or incorrectly calculated, or the IRS doesn’t have all the facts relating to a taxable transaction.
5. You can handle most notices without calling or visiting the IRS. Anyone who has tried getting past the gnarled tangle of phone menus that the IRS puts up to prevent you from speaking to a human being can only be thankful that any part of this is true. Even if you do get through to the possibility of talking to a human being, it is not uncommon for 50% or more of the calls to go unanswered. As professionals we try to avoid speaking to IRS agents because even though they provide us a dedicated line, we cannot be sure that the agent on the line is versed in the relevant tax law. We generally trust the IRS tax rules and regulations as provided on their website. Where IRS human agents come in handy are in penalty abatement or taxpayer advocacy issues.
6. Keep copies of any notices you get from the IRS. We agree.
7. Don’t fall for phone and phishing email scams that use the IRS as a lure. First of all, the IRS rarely if ever emails. They consider faxes secure means of communication and think emails are vulnerable to hacking. So you are unlikely if ever to get an email from the IRS. Never respond to an “email from the IRS”. Do not click on any embedded link or attachment. DO NOT FORWARD IT TO US. Advise us that you received such a communication and we’ll take it from there.

You are only slightly more likely to get a phone call from the IRS and generally only after several initial attempted communications via traditional mail. Whether or not you can remember having received any such prior notices, get the employee number and name of the agent calling you and have us call them.

No one looks forward to an IRS notice. If we prepared your taxes we are already well versed in your tax situation and are better equipped to deal with an IRS notice. IRS notices should not be taken lightly.

The new tax law will hit the Tri-state area particularly hard.  There are some last minute things you can do to mitigate the impact.

1. Prepay your 2018 real estate taxes on or before 12/31/2017.  If you pay your local taxes directly, either send them a check or go on to their website and e-pay. If your property taxes are paid by your bank, contact them to see if you can make a pre-payment DIRECTLY TO THE LOCAL GOVERNMENT before year-end.
2. Prepay your January 15th 2018 estimated State income taxes on or before 12/31/2017. This only applies to self-employed people or those with businesses.  The new law expressly prohibits wage earners from doing this.
3. Give your favorite charity an extra boost in 2017.  While you can still deduct charitable deductions next year, it’ll be less of a deduction next year.
4. Prepay as many miscellaneous deductions as you can afford in 2017. They all go away in 2018:
   1. Any job related subscriptions, continuing education and traveling expenses.
   2. Tax preparation expenses, investment related expenses, and bank fees.
5. Postpone any alimony payments due in December 2017 to January 2018.  Starting in 2018 there will be no tax distinction between alimony payments (deductible to the payer, taxable to the payee) and child support payments.

Eyeball last year’s tax return to see if anything described here affects you.  As always, everyone’s tax situation is different so the onus is on the reader to determine whether this makes fiscal sense.