Boston Tax Law Blog

Taxpayers don't have to just accept an IRS decision

On behalf of Levins Tax Law posted in Internal Revenue Service on Thursday, May 7, 2020.

Periodically, Massachusetts taxpayers find themselves opening mail that does not bring the good news. Perhaps the IRS made a decision with which an individual does not agree, but the person does not realize that he or she can challenge it. Doing so is number four on the taxpayer bill of rights.

A Massachusetts resident can object to what the IRS does or proposes to do. He or she may also provide additional documentation to the agency to that supports the taxpayer's position. If a clerical or mathematical error was found, he or she has no more than 60 days to contact the IRS and provide documents that counter the agency's contention that an error occurred.

Did the IRS fail to make important information clear?

On behalf of Levins Tax Law posted in Internal Revenue Service on Wednesday, April 29, 2020.

With everything going on across the country and here in Massachusetts, information comes fast and furiously. While many people are glad to get updates on certain things as timely as possible, it is easy to miss small but important pieces of information they need. For instance, some people may have missed a vital piece of information from the IRS regarding the filing of their 2019 tax returns and the refund they expect.

Back on April 9, the IRS reminded taxpayers who have not yet filed that it would be preferable for them to do so electronically. In fact, this method has become so popular that the data indicates seven of every eight taxpayers file their returns online. However, the piece of information that the one of every eight taxpayers who sends in paper returns may have missed is the status of their refunds.

There is no need to face tax collection cases alone

On behalf of Levins Tax Law posted in Tax Controversies on Wednesday, April 22, 2020.

There is no way around the fact that the Internal Revenue Service has a great deal of power. When it comes to tax collection cases initiated against people across the country and here in Massachusetts, the agency can do more than just assess penalties and interest. The IRS can even conduct criminal investigations that could threaten the freedom of the taxpayers in its sights.

Of course, many controversies Massachusetts residents find themselves in with the IRS do not result in criminal charges. However, they could end up costing some taxpayers hundreds, thousands or even hundreds of thousands of dollars. Investigators and agents of the IRS know how far they can go, but they may count on you not knowing. They may push the envelope when it comes to getting you to capitulate.

Make sure the standard deduction is the best option

On behalf of Levins Tax Law posted in Internal Revenue Service on Wednesday, April 15, 2020.

With the deadline for filing federal income tax returns pushed to July 15, some Boston residents may breathe a sigh of relief that they have one less issue to deal with right now. However, at some point, they will need to turn their attention to getting their federal returns filed, especially if they are expecting a refund. One of the biggest strategic questions when filling out tax forms is whether it would be more advantageous to use the standard deduction or itemize.

Under the Tax Cuts and Jobs Act, the standard deduction for the 2019 tax year increased. If an individual is single or married filing separately, it is $12,200, and $24,400 for married couples filing a joint return or qualifying widows or widowers. A head of household can deduct $18,350.

Sometimes failing to file a tax return points to tax evasion

On behalf of Levins Tax Law posted in Tax Evasion on Wednesday, April 8, 2020.

The IRS tends to pay attention when someone here in Massachusetts or elsewhere does not file a return. In many cases, the individual is not required to file a tax return because he or she anticipates a refund or does not make enough money to be required to do so, and the agency takes no action. However, there are times when an individual who does not file one or more returns ends up under investigation for tax evasion.

For instance, a man recently pleaded guilty to tax evasion after he failed to file tax returns from 2009 to 2016. However, he did more than just not file his federal income tax returns. According to testimony and documents, the man actively avoided paying taxes through a variety of methods.

How far back will the IRS go during an audit?

On behalf of Levins Tax Law posted in Internal Revenue Service on Thursday, April 2, 2020.

Boston residents share one big question with others across the country: how long should they retain their federal income tax returns and their supporting documents. Answering this question may not be as simple as people think. However, the IRS generally only goes back three years for an audit, but that could be extended depending on a person's circumstances.

When the IRS audits an individual, it is ordinarily due to common issues with federal income tax returns. Issues such as underreporting income and claiming deductions and credits that an individual may not have the right to claim ordinarily serve as red flags for the nation's taxing authority. For this reason, it is important to keep any documentation used when filling out a return. In addition, the more organized this information is, the better off the filer may be since disorganization could make the auditor suspicious that there is more to the story.

IRS deadlines change once again

On behalf of Levins Tax Law posted in Internal Revenue Service on Thursday, March 26, 2020.

In recent weeks, life has changed across the country. It is hard to find any one unaffected by recent events, including here in Massachusetts. Trying to keep up with the changes may seem like an uphill battle. For instance, IRS deadlines that most taxpayers used to rely on have changed dramatically recently.

For instance, just days ago, it was announced that individuals still needed to file their federal income tax returns by April 15 but could delay payments due for 90 days. The deadlines have now changed once again. Now, taxpayers have through July 15 to file their federal income tax returns and to make payment of any monies owed. This makes it easier for everyone since there was already enough confusion regarding what was and was not postponed.

News stories are confusing. Don't miss important IRS deadlines

On behalf of Levins Tax Law posted in Internal Revenue Service on Wednesday, March 18, 2020.

With everything that is going on across the country right now, the federal government is making certain concessions to help the public. One of them has to do with the IRS and income taxes. The news reports may not have been clear enough, and as a result, taxpayers here in Massachusetts and elsewhere could end up in trouble with the IRS.

The deadline to pay taxes is moved 90 days from April 15. However, federal income tax returns or a request for an extension must still be filed by April 15. What this does is allow people who owe an additional 90 days to pay the amount due without fear of incurring penalties or interest. All other deadlines remain intact.

Tax situations that could lead to tax audits

On behalf of Levins Tax Law posted in Tax Controversies on Wednesday, March 11, 2020.

Like people across the country, the last thing most Massachusetts residents want to do is end up on the radar of the IRS. Of course, the agency does not necessarily have to have a reason to begin an audit, but taxpayers certainly do not want to give it one. Unfortunately, some situations could lead to tax audits if filers are not careful.

For instance, self-employed Massachusetts residents need to make sure they report all of their income and carefully choose the deductions they take. Only those deductions that represent something essential to working should be taken. In addition, make sure that any source of income claimed as self-employment is motivated by making a profit and not a hobby that occasionally generates some income.

The IRS may start knocking on doors

On behalf of Levins Tax Law posted in Tax Crimes on Friday, March 6, 2020.

Millions of Americans, including most Boston residents, diligently file their tax returns every year whether they will have to pay or will receive a refund. Then there are taxpayers who fail to timely file their returns and do not pay their taxes. For this reason, the IRS may begin doing something it warns people it never does -- show up at people's doors.

One of the first things the IRS will tell people when it comes to tax scams is that the agency will never simply show up at a person's door. Instead, contact will be made by mail first. Even though that will still happen, after a certain point, the agency may pursue measures that are more aggressive, such as home visits.