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Atlanta Tax Law Blog

Divorce agreements not binding on IRS

Georgia residents sometimes enter into tax-sharing agreements through which two parties agree to be responsible for paying a certain percentage of the tax liabilities owed. These types of agreements or orders are common in divorce cases. As a 2017 case demonstrates, the agreements are not binding on the Internal Revenue Service.

In the case, the IRS disallowed some rental property loss deductions that two former spouses had claimed on their joint income tax returns before they divorced. The ex-spouses asked the tax court to relieve them of joint and several liability for the tax liabilities that resulted from the disallowance.

Debts that can cause income tax refunds to be held back

Every year, taxpayers in Georgia and around the country who were expecting to receive federal income tax refunds are sent what are known as offset notices instead. The Bureau of Fiscal Service, which is part of the U.S. Department of the Treasury, sends these notices out when refunds are being withheld because taxpayers owe certain types of debt. The agency can also garnish Social Security and Social Security Disability Insurance benefits in similar situations.

The BFS may send offset notices when taxpayers have unpaid federal or state taxes, are delinquent on their court-ordered child or spousal support payments or have defaulted on a federally insured student loan. Income tax refunds may also be withheld when state authorities believe that taxpayers received more unemployment compensation that they were entitled to. This can be because they committed fraud or failed to properly report all of their income.

How to recognize an IRS agent

It is possible that a Georgia resident will be visited by an IRS agent. However, it is important to understand whether or not a person claiming to be an agent is a legitimate representative of the IRS. There are three main reasons why an agent may want to visit with a taxpayer. First, a caseworker may make a routine unannounced visit to remind a taxpayer about his or her tax obligations.

Those who are under audit may also receive a visit from an agent, but those visits are generally planned in advance. Furthermore, a representative from the IRS will generally call ahead to confirm the appointment date and other details. Those who are under criminal investigation may also be subject to unannounced visits by federal agents. However, in such a scenario, no one from the government will demand payment on the spot.

Could you take advantage of the IRS Fresh Start program?

Are you getting alarming notices from the Internal Revenue Service? Are they impatient for you to pay your back taxes? As a rule, nobody likes to hear from the IRS, and if you are in arrears, you are probably having some sleepless nights, wondering what to do.

The IRS is not the ogre that many people make it out to be. The agency does give taxpayers options. In fact, here are three for you to consider under the IRS Fresh Start program.

Charitable giving as part of estate planning

When Georgia residents consider writing a will, they are often concerned with ensuring that their loved ones are provided for, that minor children will be taken care of, and that their end-of-life medical decisions will be respected. One area that is sometimes neglected is that of charitable giving.

Many people have strong feelings and convictions about a variety of social and cultural issues. While they may make contributions to charities and other nonprofit organizations while they are alive, charitable giving as part of one's estate plan is often not a consideration. This is unfortunate, because there may be ways that individuals and couples can use charitable giving as a way to not only help fund necessary causes and organizations but to also protect their assets before and after death.

People may start receiving IRS calls

Up until recently, Georgia residents could be fairly certain that if someone was calling them in relation to a debt owed to the Internal Revenue Service, the individual calling was a scammer. However, a change made by the IRS in April 2017 means that debt collectors hired by the IRS may be calling people who owe money in an effort to collect unpaid taxes.

Per the Federal Trade Commission, people who may receive a call on behalf of the IRS are those with tax debts that are more than two years old. The IRS says that there are $400 billion in unpaid taxes each year, and this is an effort to help reduce those numbers.

IRS to conduct fewer audits in 2017

Taxpayers in Georgia and around the country are less likely to receive an audit notice in 2017 than they were in previous years due to belt-tightening at the Internal Revenue Service. Lawmakers rely on the money collected by the IRS to fund federal agencies and pay for entitlement programs. However, congress has slashed the agency's funds in recent years. This has led to budget cuts and layoffs in virtually all IRS departments, and fewer auditors mean fewer audits.

The IRS now audits less than 1 percent of the income tax returns it receives each year. Many experts expect that figure to fall even further in the years ahead. However, taxpayers may still be wise to submit their returns on time. This is because the IRS must pay daily interest, which is currently set at 4 percent, on any refunds that remain unpaid 45 days after the earlier of either the due date or the date that it was accepted by the agency.

Why taxpayers should consider an extension

Georgia residents who need more time to file their taxes may ask for an extension. This means that those who ask for an extension on their 2017 personal tax returns won't have to file until Oct. 16. One of the best reasons to ask for an extension is to cut down on potential late fees. The IRS charges a 5 percent late filing fee for each month that a return is late on top of any taxes owed.

By extending the deadline to file, it may be possible to extend the deadline by which a taxpayer must file a return to get a refund. In most cases, this date is three years from the original due date of the return. Those who wish to fund a SEP-IRA or any other self-employment retirement plan may benefit by filing for an income tax filing extension.

How to handle income tax identity theft

Georgia residents may have heard about income tax identity theft. The act involves a criminal stealing a person's social security number and using it to file a fraudulent return. The criminal's goal is to trick the IRS into sending a refund based on that fraudulent return. In an effort to combat this problem, the IRS, state tax agencies and private companies have joined forces.

One of the strategies used to reduce income tax identity theft is to track the IP addresses of computers used to file returns. If the same IP address submits multiple returns, it could be a sign of fraud. However, despite the best efforts of the IRS, $3.1 billion in fraudulent refunds were paid out in 2014. This is according to the Government Accountability Office (GAO), and it is believed that the actual number could be higher than that.

5 ways to save money on your taxes this year

Death and taxes are the two constants everyone must face, but that does not mean there is nothing you can do to make both more comfortable. As a tax-paying citizen, you have the right to do what you can to lower your taxes and minimize your obligations. Many Americans miss out on ways to cut taxes, but the following steps can help lower your liability as you plan for next year.


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