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Danbury Tax Law Blog

What is an offer in compromise?

You owe money to the Internal Revenue Services (IRS). You have no idea how you're going to pay it back. Then you hear that the IRS sometimes accepts an "offer in compromise." What is this and how can it help?

As the name implies, it means that you offer to pay a portion of what you owe. If the IRS agrees, they'll accept that smaller payment and the rest of your tax debt will be wiped out.

4 tips to prepare for an audit

You're being audited. While you're not thrilled, what you're really concerned about is making a mistake. You don't want to be blamed for trying to break the tax laws, and you want everything to go as smoothly -- and quickly -- as possible.

Below are four tips that can help.

Will Trump administration change the tax code?

There was a lot of talk about tax reform during the presidential campaign. Now that the Trump administration is well into the second half of its first year, it's a good idea to review what changes may come.

The administration has not revealed a concrete plan regarding tax reform proposals. While any changes require the backing of an often contentious Republican congress, there are some common goals between the two.

4 ways that a tax lien impacts you

A federal tax lien may be used when taxes remain unpaid. It's a tactic the government utilizes to seize other assets to make up for the taxes that are owed.

As soon as one is put on your assets, it's critical to understand how it's going to impact you and what options you have. Below are four key ways that it could affect you moving forward:

Businesses must pay sales tax correctly

Most Connecticut residents pay all of the taxes that they owe in a timely manner. However, some evade taxes by finding ways to pay less than they are supposed to. Those individuals may be accused of tax crimes and face corresponding penalties.

One case involves the owner of a Chinese restaurant in Milford. The owner, 64, was arrested by special agents of the Criminal Investigations Unit while she was at the restaurant. She was accused of using Zapper software to avoid paying over $30,000 in state sales taxes.

Connecticut officials say threat of tax collection scams is real

Representatives with the Connecticut State Attorney's Office, Revenue Services and Consumer Protection Departments, as well as the Internal Revenue Service (IRS) all issued a joint statement on Monday, July 10, 2017. They are, once again, warning Connecticut residents to remain vigilant for phone calls in which the caller falsely states that they're being made on behalf of a tax collection agency.

In the joint press release, the different government agencies attempted to remind Connecticut residents about how this ages-old phone scam is most often carried out. They emphasize that, more often than not, the scammer calls its victims and tells them that they have an outstanding debt owed to the IRS.

What the IRS does if you get your tax return wrong

Residents of Connecticut may make genuine errors in the process of filing their income tax returns, including mathematical mistakes and delays. However, it is important to address those mistakes expediently, so that the Internal Revenue Service does not view them as tax crimes.

When you make a mathematical error, the IRS will typically eschew formal action against you and instead just send you a polite letter. That letter may tell you that they automatically adjusted your taxes, or ask you to confirm information so that adjustment can be made.

Connecticut residents should understand audits

The hardworking residents of Danbury, Connecticut (Fairfield County), work hard and pay their taxes. However, there may be instances when taxes are miscalculated or otherwise inadvertently underpaid. If the Internal Revenue Service (IRS) feels that there is a discrepancy between the amount that was due in one or more years and the amount that was paid for those years, they may launch an audit. For that reason, it is important to know some details about the audit process.

Audits happen based on information that the IRS has about your tax returns and income. The IRS gets that information from a range of sources, including other audits, information from the federal government, information from a state agency or information from another state's revenue department.

What happens if you don't file your taxes?

Citizens of Danbury, Connecticut (Fairfield County), usually tend to pay their taxes when they are due. However, if they pay late or insufficiently, they may be faced with tax collection issues.

Are tax collection issues worse when the April 15 deadline is missed?

Actions you take in filing your taxes that may get you audited

Whether you've attempted to do your own taxes online or have submitted a complex filing due to owning diverse assets, the risk of an Internal Revenue Service (IRS) audit is real for everyone. This may lead you wondering what type information is most apt to get the IRS' attention.

The amount of individuals or corporations that are audited by the IRS has gone down considerably in the past few years. This is due in large part to the fact that the IRS has lost as much as 30 percent of its enforcement-oriented workforce since 2010. During the 2016 fiscal year, the IRS reported that it audited only 0.6 percent, or 1.2 million, of the total tax returns that were filed that year.

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