Gathering all the information necessary to prepare your tax returns can be a time consuming and difficult task. We have made it easier to help you get organized for your tax preparation. We provide an organizer based on your previous year’s return which will help you to make sure you are not leaving anything out and allows you to update contact information. This organizer is sent out to all of our clients in January. However, if you are new to our firm, please call us at (631) 878-5188 and we would be happy to fax, email or mail you a blank organizer.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. We at Silverman & Associates can determine if you qualify for an offer and will negotiate with the IRS and/or State on your behalf.
The American Opportunity Tax Credit modifies the existing Hope Credit. The AOTC makes the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two.
The IRS allows an extension of time to file you tax returns. However, they do not allow an extension of time to pay. Penalties will be imposed if a payment is not estimated and made when the extension to file is sent. If you feel you are going to need to file an extension of time, we will discuss the possible tax effect with you when we prepare your extension.
There are several ways a return can be classified for audit. The Internal Revenue Service reviews all tax returns filed. Each return, whether a corporation or individual, is scanned for mathematical errors, cross matched with information reports and given a DIF score (Discriminate Function Score) based on an analysis of income to expense. Simply put, the higher the DIF score, the higher the chances of review for audit potential.
Another way would be to be “pulled” from a sampling group. There are a set amount of returns that are randomly pulled and audited for different issues. There is no specific reason the return is questioned, it simply fell into the sample group.
If the income you report on your return, does not match the income provided to the IRS via W-2s, 1099, etc., then an “IRP” report is generated and your return is questioned. These types of inquiries are usually handled through correspondence via mail and in most cases are easily resolved.
All returns are subject to the statute of limitation. If an individual return is not audited within three years of its filing date, the return will not be audited; however, if there is reason to believe the return is based on fraud, the return is subject to audit at any time.