Irs Tax Audits ? By The Numbers

Irs Tax Audits ? By The Numbers

While the IRS is aggressively pursuing taxes overseas, domestically they have been increasing audits for individuals, higher-income taxpayers, as well as the business returns of S-corporations and Partnerships:

1) Audit rates increased in 2007, both for overall individual rates and for higher-income taxpayers.

2) Audits of individuals with incomes of million or more increased from 17,015 during fiscal year 2006 to 31,382 during fiscal year 2007, an increase of 84 percent. One out of 11 individuals with incomes of million or more faced an audit in 2007.

3) Audits of individuals with incomes over 0,000 reached 113,105 returns, up 29.2 percent from the prior year total of 87,885.

4) The IRS increased audits of individual returns with income of 0,000 or more, auditing 293,188 of these returns in 2007, up 13.7 percent from last year’s total of 257,851.

5) Overall, the total individual returns audited increased by 7 percent to 1,384,563 in 2007 from 1,293,681 in 2006. That’s the highest number since 1998.

6) The IRS filed 3.8 million levies and almost 700,000 liens during 2007, an increase from the previous year and a substantial increase from five years earlier.

For businesses, the IRS continued efforts to review more returns of flow-through entities (i.e. Partnerships and S Corporations):

1) Audits of S Corporations increased to 17,681 during 2007, up 26 percent from the prior year’s total of 13,984.

2) Audits of partnerships increased to 12,195 during 2007, up almost 25 percent from the prior year’s total of 9,777.

3) Audits of mid-market corporations increased to 4,473, up 6 percent from last year’s total of 4,218.

4) Audits of businesses in general rose to 59,516, an increase of almost 14 percent from the prior year’s total of 52,223.

Although the audits of large corporations dipped slightly in 2007 to 9,644 audits, the number of audits is up 14 percent from the fiscal year 2002 level.

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Tax Relief Consultants

Tax Relief Consultants

Tax relief consultants have one goal in mind, and that’s to find practical solutions to tax problems. The key word is “practical”, because a good solution is one that actually solves the problem and provides real tax relief. Overdue taxes only get worse as time passes because of the addition of penalties and interest on top of taxes you owe.

Practical Solutions

When you’re looking for practical solutions, the last place you should turn is to the IRS. People make the mistake of believing the IRS will be happy the taxpayer has approached them in an honest effort to pay their taxes. Unfortunately, the IRS sees their power as almost bestowed by divine right and will probably treat you more like a fool than an honest taxpayer.

If you’ve tried working with the IRS and have gotten nowhere, the reason is because the IRS really isn’t interested in settling. The IRS wants the full amount of payment including interest and penalties. The agent is not going to offer a compromise or a tax reduction or penalty abatement simply because you did the right thing by contacting them. Chances are the agency will wait for you to press for tax relief in order to see how much you know about such issues.

Tax relief consultants are like sending in the cavalry. Facing the IRS alone is not wise. You need reinforcements that understand the tax laws and stay abreast of all tax and tax enforcement rules. Tax specialists know what rights taxpayers have and can defend those rights at the IRS.

The best way to get tax relief is to use tax relief consultants. Consultants can force the IRS to consider the many options available for tax relief.

Resolutions That Work

Tax resolutions that work are ones that offer a way to eliminate the tax burden. This doesn’t mean you’re entitled to a reduction that can be paid immediately. It means your tax relief consultants can negotiate a tax payment plan that will eventually pay off the past due tax amount.

Of course, in some situations, the tax relief consultants will be able to negotiate a tax settlement that reduces or eliminates the taxes. It all depends on your current personal financial situation and the reasons you owe the taxes.

When you need help resolving your tax problems, tax relief consultants can help. Expert tax negotiators can work with the IRS to find reasonable and practical tax relief solutions. Attempting to address these issues alone doesn’t make any sense when you consider the history of the agency. A tax negotiator will make sure you are treated fairly according to your taxpayer rights.

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Tax Problem Assistance

Tax Problem Assistance

It’s important to get tax problem assistance as early as possible when you know you owe unpaid taxes. Waiting to see how the process goes is not a good strategy. You can bet your last tax dollar the way it’s going to go is the IRS is going to present you with a bill you may or may not be able to pay.

Knock, Knock, Knocking on the Taxpayer Door

Tax problems can present themselves in a myriad ways. You may have tax problems that are actually the responsibility of a spouse you have divorced. You may be close to having your property seized or you are still in the notification phase of the IRS collection process.

Of course, the IRS agent may be physically knocking on your door too. Once you get a notice of intent to seize assets, the agent will want to personally inspect your assets. The agency is always operating under the assumption the taxpayer has hidden cash or assets that aren’t being claimed.

It doesn’t matter what tax situation you are now experiencing, it’s never too late to get a tax negotiator involved. The sooner you get tax assistance, the easier it will be to negotiate a settlement fairly quickly. But even if you’re refusing to answer the door when you hear the agent knocking, a tax representative can help you get your life back and offer you tax problem assistance.

Every year, more than 25 million citizens must deal with tax problems. You’re not alone in any sense of the word. But the sheer quantity of the tax audits, assessments and collection activities means the IRS is willing to settle tax accounts to reduce the workload as long as they’re comfortable with the facts being presented about the past due taxes.

That’s where a tax negotiator can provide invaluable assistance. Professional tax negotiators are registered with the IRS and have proven they understand the laws, regulations and process of settlement. Taxpayers can get tax problem assistance with any kind of tax problem from clearing up small balances to stopping the seizure process.

Stairway to Permanent Tax Problem Assistance

Each step of the tax negotiation process requires certain forms and documentation. The quicker the IRS receives requested information, the quicker the account can be settled. The agreement with the IRS will be customized in that your particular problems are the only issues addressed. The IRS decision will rest on the ability of the negotiator to prove your capacity to pay or not pay the taxes. If you have been thinking of handling your tax problems yourself or hiring a local tax attorney, I’d highly recommend getting tax problem assistance from a professional tax debt negotiator.

During the negotiation process, it can feel as if you’re climbing a stairway that’s 10 stories tall. The IRS is not an agency that’s easy to deal with on a regular basis. It’s best to leave the negotiations to those who understand how the IRS “thinks.” Tax problem assistance is for anyone who knows they need to settle any kind of tax issue with the IRS.

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Instant Tax Solutions for Help with You Tax Problems

Instant Tax Solutions for Help with You Tax Problems

If you’ve a tax debt from past years, or have already done your taxes for this twelvemonth and anticipate owing money, you can ascertain an answer. The answer is not to brush aside the debt, however. Though the IRS entirely has ten years to gather up a tax debt, it has a lot of very potent instruments at its administration during those ten years. You will be a good deal more euphoric if you deal with it at once.

Allowing a tax attorney to assume your troubles makes sense as their experience and cognition can make your profit go further. However, finding out an adept tax attorney can be hard as you are assigning your monetary resource and personal data into their hands, and entrusting they will take care of you at present, and in the next.

A tax lawyer can stop the IRS through a number of strategies and it’s up to you to determine what incisively to apply. You will be able to explain your berth and you and your attorney can come up with the gustiest resolution for your troubles. The IRS applies numerous processes in order to acquire what they require and they generally come through. Only a seasoned tax lawyer can catch them in their tracks.

Instant Tax Solutions has the tax cognition and IRS negotiation accomplishments to incur an auspicious and low-priced resolution of your IRS tax debt trouble. ITS tax masters are experts in talking terms with the IRS. Taxpayers can be browbeaten by the IRS into taking on a settlement for more than they require paying. Call us at once and let us counsel you of a more low-cost solution. Our experts can promptly ascertain if you measure up for other alternatives accessible with the IRS.

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You would like to adjudicate your hardest to avoid grievous tax issues before they start. IRS Collections processes are inconceivable to annul if you owe the IRS. Call Instant Tax Solutions to resolve your grave tax problems. Brushing aside the financial obligation will event in expanded penalisations and amercements that may double up or triple your master debt. Irs levy

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New Law For Tax Debt Settlement

New Law For Tax Debt Settlement

There was a new law passed in 2005 that will effect taxpayers who are under an IRS wage garnishment. Rather than help improve financial situations for taxpayers, this new law will make solving tax problems with the IRS more difficult.

In recent decades, the IRS has made a focused effort to get people back into good status by reaching deals on overdue taxes. With the passage of this new law, it seems taxpayers who are behind on their taxes will have a more difficult time getting the matter resolved with the IRS.

A few decades ago, the IRS used to be the terror in most peoples nightmares. Specifically, people who had unpaid income taxes lived in dread of having the IRS catch up with them and freeze their bank account, garnish their wages, or worse, evict them from their residence and sell off their home. To promote voluntary resolutions, whereby the IRS would collect money and the taxpayer could get a tax problem resolved, the IRS instituted a program known as the offer in compromise.

The offer in compromise program was designed to let taxpayers with back tax problems cure their situation voluntarily. Instead of waiting for the IRS to catch up to them, taxpayers could come forward and actually negotiate with the IRS. In exchange for this voluntary action, the IRS would consider a reduction of the amount past due including penalties and interest. To be honest, the program was a massive success.

Effective July 16, 2006, the offer in compromise program has undergone changes pursuant to a new federal law. Ironically, the small government Republican majority in Congress pushed through a foolhardy piece of legislation known as the Tax Increase Prevention and Reconciliation Act of 2005. The legislation mandates very specific changes to the offer in compromise program.

The most dramatic change is the new 20 percent rule. Pursuant to the new legislation, a taxpayer that has problems with past due taxes must send in 20 percent of the offer amount with their offer in compromise. This money is not refundable. Nor will the IRS even acknowledge an offer in compromise if the funds are not submitted. The logic behind this legislation is baffling to many. This 20 percent “fee”, if you will, does not guarantee that your offer will be accepted. In fact, the IRS can keep the 20%, reject your offer, and apply the amount to the back taxes that are allegedly owed. A reasonable person can see that these terms do not encourage taxpayers to get right with the IRS.

When a taxpayer gets behind on tax payments, he almost always gets way behind. It is rare to find someone who is only one year in arrears. It is likely that most people who miss paying taxes one year take the head in the sand approach. Fearing all kinds of trouble, they just ignore the situation. When the next year rolls around, they don’t file again because they are worried about alerting the IRS. As a result, the amount of taxes due grows rapidly each year, particularly when penalties and interest are added. The 20 percent requirement seems to serve no purpose other than to give people another reason to ignore the problem.

The offer in compromise was originally designed to get people back into the system, so that they could begin to pay taxes again. Studies and statistics showed that the government would collect far more in revenues over the years if taxpayers were given a clean start. For all practical purposes, the new 20 percent rule conflicts with this purpose and hurts this program. Taxpayers who are under an IRS wage garnishment are already suffering from reduced income. It will be much more difficult for them to reach a solution because they presumably won’t have the 20 percent to even make an offer to settle with the IRS.

It would be wise to write your Senators and Representatives in Congress if you don’t approve of this new law.

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IRS Tax Debt and Benefiting From Tax Attorney Services

IRS Tax Debt and Benefiting From Tax Attorney Services

IRS tax debt

If you happened to be one of the unfortunate individuals to owe tax debt from your past years, or you have paid your taxes for the current year, and still expect to owe further taxes to the IRS in the form of IRS debt, it’s possible for you to find a solution to redeem your taxes. The actual solution lies in not ignoring to pay your debt. Even though the IRS can collect the taxes up to ten years, it possesses many other powerful options to recover, and chances are it will. If you have outstanding IRS tax debt, the best possible solution is to utilize your savings, or alternatively borrow some funds to clear the debt. By paying your entire outstanding dues, it’s possible to save upon the penalties and fines, which are likely to be levied in case you decide to avail more time and clear your taxes over a period of time. If one borrows against some asset value such as your home, it’s quite possible the interest incurred might be tax deductible. It’s also possible to avail tax relief if you can represent your case properly to the IRS.

Tax attorney services

Since last few years, tax attorneys, and the services offered by them have been in high demand, especially since the tax season is approaching soon. Many taxpayers are likely to need tax help. While selecting your representative to deal with your IRS issues and concerns, it is quite important to retain somebody who can represent you to the best of his or her abilities, and not have conflicts while representing your case to the IRS. Even though the tax attorneys can be quite knowledgeable, properly trained, and have the ability to handle your issues, it is found that they can lack in aggressiveness when it comes to representing you to the IRS. The thing is most agencies like to maintain good terms with the tax authorities, since their entire business is dependent upon special tax clients, helping out tax debtors in availing IRS debt help, and good market reputation. It’s sad that IRS often takes advantage of some timid and docile tax attorneys because it knows that firm prefer to keep a positive image, and IRS can well damage the reputation through propaganda.

It’s generally believed that it’s expensive to retain a good tax attorney to avail IRS debt relief. At a first glance, the client might feel that the tax laws are simple to understand and straight forward. So they often feel they can communicate directly with the IRS and avail an acceptable situation. This could turn out to be a mistake, since IRS rules can be interpreted in many different ways, and IRS is an expert in that. So it’s recommended not to take any chances, and have an effective arbitration by employing the services of an experienced tax attorney to get effective tax debt settlement.

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5 Reasons to File Delinquent Tax Returns: There?s Still Hope if You Haven?t Paid Your Taxes This Year

5 Reasons to File Delinquent Tax Returns: There?s Still Hope if You Haven?t Paid Your Taxes This Year

The April 15 tax deadline has come and gone. For the millions of taxpayers who failed to file legally required tax returns, tax help is available for those who act now! Even taxpayers who received an extension for filing are not granted more time for the payment of taxes owed and may need income tax relief.

The act of not filing your tax returns can lead to more significant financial problems in the long run. Not to mention, failure to file tax returns may be construed as a criminal act by the IRS, punishable by one year in jail and ,000 for each year not filed. Needless to say, it’s one thing to owe the IRS money, but another thing to potentially lose your freedom for failure to file a tax return.

 The longer you put off dealing with overdue taxes, the more serious your IRS problems will be. So I recommend filing any tax returns that are due as soon as possible to avoid additional interest, penalties and potential IRS collection tactics, such as a levy on your bank account.

 With the federal budget deficit for the current year expected to top .8 trillion, Americans can expect more tax audits and increased IRS actions. So anyone who owes back taxes will want to avoid becoming targets of aggressive IRS collection efforts that can financially cripple them for life.

 Here are 5 reasons to file your delinquent tax returns:

 1) You can go to jail for not filing your taxes

Even if you haven’t filed your tax return for one year - it is still considered delinquent and could be construed by the IRS as a criminal offense. Actor Wesley Snipes didn’t report more than million to the IRS and he was convicted of three misdemeanor counts of failing to file a tax return. Richard Hatch, who won the first season of CBS’s hit show Survivor, is in prison for failing to report million in prize money.

The IRS goes after those U.S. taxpayers who try to avoid taxes, and Average Joes as are just as likely as high-profile individuals to be targets of the tax-collecting agency. At every level, the agency has become increasingly aggressive in pursuing tax cheats. Are you willing to lose your freedom because you failed to file your tax returns?

2) You can incur a 25% penalty for not filing your tax returns

In this economic downturn, Americans may opt to not file because they don’t have the funds to pay the taxes owed. The best thing for taxpayers in difficult financial situations to do is file their tax return, pay what they can and work with the IRS to establish a payment plan that will keep them compliant.

Additionally, if there are any delinquent tax returns that are due, they should consider filing these returns as soon as possible to avoid the wrath of any potential IRS action, such as a levy on their bank accounts.

3) You can incur additional penalties for not paying your taxes

If you fail to pay your taxes due, you will incur additional penalties for failure to pay. Taxpayers who request an extension of time to file should keep in mind that this it is not an extension of time to pay. To avoid additional penalties, taxpayers should file by the deadline and pay as much as they can, even if they are unable to pay the entire amount due. You will still have a failure to pay penalty, but it’s much less. Then you can work with a specialized tax resolution expert to help you negotiate a tax settlement.

4) You can be subject to an increased tax bill if the IRS prepares your taxes for you

The IRS may prepare a “Substitute For Return” for delinquent taxpayers, in which they won’t be able to file for all of their personal exceptions or allowable deductions. Because these returns are filed in the best interest of the government, the only deductions they’ll usually see are the standard deduction and one personal exemption, subjecting them to a larger tax liability. So it’s important for individuals to file their 2008 tax return as well as any prior delinquent tax returns as soon as possible to save money and avoid significant long-term consequences.

5) You must have all prior tax returns filed to be eligible for income tax relief

All back tax returns must be filed before the IRS will even entertain any type of tax settlement like an offer in compromise or monthly payment plan arrangement. The good news is the sooner you take care of your delinquent taxes, the less penalties and interest you’ll owe.

I believe there’s a solution to every problem. For delinquent taxpayer, it’s never too late for to resolve your tax debt and avoid IRS penalties.

For more information on receiving income tax relief or help resolving back taxes, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.

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Irs Debt Tax Attorney

Irs Debt Tax Attorney

You may think you don’t need an IRS debt tax attorney at first, but it doesn’t take long to find out that expert assistance is imperative. Anything connected with the Internal Revenue Service and past due taxes can become very complicated quickly. In fact, there are a lot of people who have failed to reach a reasonable agreement with the Internal Revenue Service because they didn’t understand the rules, laws, regulations and procedures.

No Amateurs Allowed

Negotiating with the Internal Revenue Service can be a delicate process in many respects. The process of obtaining an “Offer In Compromise” is a perfect example. An Offer in Compromise is a statement that you create, telling the Internal Revenue Service what you think is a reasonable settlement amount in exchange for eliminating the total debt or closing the past due tax account upon payment.

An Offer in Compromise sounds quite simple by definition, but the process is much more complicated than simply telling the Internal Revenue Service what you think is a fair and reasonable agreement. For one thing, you have to prove your offer makes sense in light of your financial condition. You also have to show how everyone benefits by the Internal Revenue Service accepting your offer.

An Offer In Compromise is only accepted approximately 15% to 50% of the time (depending on which statistics you believe). That’s really not very high odds. The best way to improve your chances of successfully coming to agreement with the Internal Revenue Service is by using the services of a lawyer. An attorney with an expertise in taxes is certified to work as a negotiator with the Internal Revenue Service and so begins the process from an advantage point the average taxpayer doesn’t have.

The Offer In Compromise filing can be complex which means you need an attorney that has experience and can prove success in a variety of tax cases. No two debt situations are alike and it takes knowledge of the laws and regulations to negotiate successfully.

Navigating the System

An IRS debt tax attorney knows and understands the current Internal Revenue Service taxation laws. But even beyond that an attorney specializing in tax negotiations stays current on taxation law changes. This is important when trying to deal with the Internal Revenue Service.

There’s another reason why you need an IRS debt tax attorney when filing an Offer in Compromise. The compromise process is very time consuming and requires frequent communication with the Internal Revenue Service. Most taxpayers are working middle class and can’t take the required amount of time away from their jobs to meet over and over again with the Internal Revenue Service. In addition, staying current on laws for taxation is a job in and of itself.

The Offer In Compromise is just one debt solution that’s available to taxpayers. An attorney can review all of the possible solutions which can solve your Internal Revenue Service problems.

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Small Business Taxes: 5 Tax Myths That are Costing You a Bundle

Small Business Taxes: 5 Tax Myths That are Costing You a Bundle

This article is based on the assumptions that 1) You are a small business owner or self-employed person (including home-based and part-time business owners) and 2) You don’t like to pay taxes. In fact, whenever you think about paying taxes, you get so mad you end up all worked up with nowhere to go.

Now, if paying taxes makes you so upset, what have you done about it lately? Why was your tax bill so high last year?

You paid too much tax last year (and the year before that, and the year before that . . .) because you have probably been an innocent victim of many popular myths about taxes.

Here they are. Get rid of them or you’ll be stuck paying too much tax forever.

Tax Myth #1: “I don’t make enough money to worry about reducing my taxes.”

Nothing could be further from the truth. People at all levels of income can pay less tax.

Tax reduction strategies are not just for the rich and famous. No matter how much money you make, you can pay less tax than you currently pay.

In fact, if your business has a loss, you can use that loss to offset other sources of income, such as wages from a regular job, your spouse’s wages, investment income, rental income, and other business income.

And if your business loss is so great that it more than offsets all your other income, you can take advantage of a special rule that lets you: a) Carry back that excess loss to the two prior years, thereby entitling you to a refund of taxes you already paid for either (or both) of those two prior years; and/or b) Carry forward that excess loss to the next 20 future years, so that any income you earn in the future will be reduced by that excess loss.

Tax Myth #2: “Tax reduction strategies are too complicated for me to use.”

Again, hogwash. There are plenty of ways for you, the average American, to lower your taxes.

Tax reduction is not just for the wealthy who pay high-priced attorneys to finagle their way out of paying taxes with sophisticated tax-avoidance schemes, like off-shore trusts and foreign bank accounts.

The average small business owner has plenty of tax reduction strategies at his/her disposal. You just have to know what they are and how to use them.

Tax Myth #3: “I had my return prepared by an accountant, so I know I paid the right amount of taxes.”

There are thousands of excellent, hard-working accountants doing a great job. And if you use a tax professional, maybe he/she has done everything possible to reduce your taxes to the legal minimum.

Based on my own experience, however, I’m convinced that many taxpayers who use professional tax preparers are overpaying their taxes, sometimes by thousands of dollars each year.

Why is that? Well, there are many reasons. The most obvious one is this: Many professional tax preparers are just that: tax preparers and tax preparers only.

A good tax accountant may know how to prepare a tax return in his/her sleep. He knows the forms backwards and forwards. He knows what numbers go on which form perfectly.

But that’s it. That’s all he/she knows.

A good tax preparer is not necessarily knowledgeable in tax reduction strategies. There’s a big difference between a good tax preparer and a savvy tax reduction specialist.

When you look for a good accountant, make sure you find one who doesn’t just “do the returns”, send out a bill and say “Next, please.”

Tax Myth #4: “My tax situation is OK because my BLANK (fill in the blank with a family member or other good friend) takes care of my taxes.”

There are various versions of this myth. Do any of these sound familiar?

“My brother-in-law takes care of my taxes.” “My uncle takes care of my taxes.” “My college buddy takes care of my taxes.”

And of course, the same problem exists with Myth #4 as Myth #3. Even when someone you know and trust does your returns, how do you know that this person is a good tax reduction specialist?

And often, many of these family members or “buddies” are not even professional tax preparers. This person just happens to be “The Family Accountant.” Just like every family has one person who knows a lot about cars (or mutual funds, or carpet cleaning, or whatever), many families have someone who “knows enough to be dangerous” with regard to taxes.

And even if your “Family Accountant” is a professional tax preparer, he’s probably not charging you for the return. He’s doing you a favor. He prepares your return; you change his oil.

My first reaction to this kind of situation (when someone is getting his/her return prepared for free) is this: You get what you pay for. When a family member does your return for free, how much attention can he give to your need for tax reduction strategies? Probably very little.

Tax Myth #5: “My tax situation is OK because I prepare my own returns.”

If this statement applies to you, then perhaps you are a “do-it-yourself-er”. Money is tight and you are used to doing things yourself anyway, so why not save a few bucks each year and do your own returns?

So you’ve spend countless hours over the years pouring over the forms and instructions, trying to figure out how to do the returns. And you’ve done OK. No letters from the IRS, no audits. Hey, pat yourself on the back!

And now that tax preparation software is so readily available and affordable, doing your own return is a breeze. Just key in a few numbers here and there, push the print button, and presto, you’ve got your return done in record time. And now you can even e-file your return with your own computer.

Have you ever heard of the book, “The Millionaire Next Door” (by Thomas J. Stanley and William D. Danko)?

This book describes the common characteristics of millionaires in our country. My favorite millionaire characteristic is this:

Millionaires become millionaires by minimizing their taxes and getting their tax & other financial affairs in order.

Now comes the Million Dollar Question: How do you think millionaires get their tax affairs in order? By doing their own tax returns? Of course not. Millionaires don’t prepare their own tax returns. They have more productive things to do with their time.

Instead, what millionaires do is spend time and money each year on tax planning and tax reduction strategies, not figuring out what number goes on which line of Form XYZ.

So my challenge to you is this: What are you going to do this year to reduce your taxable income?

Are you a believer in any of these myths? Now’s the time to get rid of them, once and for all. Your financial well-being depends on it.

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Tax Refunds, Corporate, Business and Individuals

Tax Refunds, Corporate, Business and Individuals

It is tax time again and most people don’t realize there is a great opportunity to get refunds and generate found cash flow at the corporate, business and individual levels.. Instead of waiting for the dreaded March and April deadlines, it is important to consider getting your tax returns done early this year.

Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund…This could generate a substantial amount of available cash that you may not have anticipated.. You should also consult your tax professional to ascertain where you stand. Additionally, individuals should be talking with their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government….This could generate needed cash either to invest and/or survive debt demands…..

Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund…This could generate a substantial amount of available cash that you may not have anticipated.. You should also consult your tax professional to ascertain where you stand. Additionally, individuals should be talking with their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government….This could generate needed cash either to invest and/or survive debt demands…..

In order to obtain these objectives, it is highly recommended you get your 2008 books, financial statements in order to ascertain where you stand for the calendar year ended 2008. These books can be prepared by either your in house computer system, a bookkeeper and/or outside accountant. Additionally, you should make sure that your bank accounts are reconciled therefore all cash transactions have been accounted for. Depreciation and all other bookkeeping adjustments should be recorded, therefore giving you an accurate 2008 balance sheet and profit and loss statement.

These 2008 financial statements with appropriate tax adjustments should be compared to the 2006 and 2007 federal income tax returns. In order to get carryback refunds from prior years, the current tax return must be filed first making you eligible to get carryback refunds from prior years.

Here is a brief edited example…. Lets assume the C Corporate Tax Return for 2006 generated taxable income of ,000 and 2007 taxable income was ,000. For the current year, the corporation lost 0,000 and paid in estimated taxes of ,000 for 2008… Based upon this example, the corporation would receive its ,000 estimated taxes back and could carryback the 0,000 loss back to 2006 and 2007 and recover those taxes paid in those years. In addition, the remaining ,000 unused losses could be carried forward to year ended 2009 and offset against future taxable incomes….Please consult a tax professional to go over the exact details of your situation…..

Companies that have sole proprietorships or pass thru entities like a S Corporation and/LLC may be able to recover business taxes at the personal level. Once again, obtain all your information for 2008 and sit down with a qualified professional to plan out and execute your situation…

In conclusion, start off 2009 with a quick jump with preparing your tax returns early vs the normal last minute and/or extension type thinking. These tax refund monies could be used for any purpose and get the year off to a good start…

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