The IRS Audit Blog

Archive for July, 2006

Question: Sending clients to collections and reporting to IRS as income?

My company provides the pharmacy service to patients who had previously agreed to pay for the service not covered by insurance. They client does not pay and we are going to write off the debt and send them to collections. Can we report this to the IRS on a 1099, and which form (1099C?) Are there any pitfalls I should be aware of?

Answer: Whether or not to report a debt to the IRS is never optional. Either (a) you must report it and are required to report it, or (b) you must not report it.

When it is proper to report it, the correct form to use is 1099-C.

However, if you are sending the debt to collections, it is premature to report it now. You report it, on Form 1099-C, when it is canceled or forgiven, either of which means that a final decision has been made not to require the person to pay the debt, either because the statute of limitations has expired or because the expense of collecting the debt would exceed the amount that is likely to be collected.

Churches, service organizations and businesses seek help for Haiti

Catholic parishes to collect donations All Catholic parishes in the Diocese of Wilmington conducted a special collection at all Masses Saturday and Sunday, Jan. 16-17, to aid victims of the devastating earthquake that shook the island nation of Haiti Tuesday, Jan. 12. The Most Rev. W. Francis Malooly, bishop of the Diocese of Wilmington, said the money will go to assist the Catholic Relief …

John Turner

Make Your Tax Return IRS-Proof

Is there really such a thing as an audit-proof tax return? A way of preparing your return to guarantee that you won’t be subject to an audit? Of course not. But there certainly are ways to minimize your risk.

BITTER AND FRUSTRATED: DC TAXPAYERS SOUND OFF

Bankruptcy is a legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Bankruptcy law provides for the development of a plan that allows a debtor to resolve his debts through the division of his assets among his creditors. This supervised division also allows the interests of all creditors to be treated with some measure of equality. Few bankruptcy law proceedings allow a debtor to stay in business and use revenue generated to resolve his or her debts.

Customer advocate site designed to tell you, the people what you need to know about this new law with words you can understand. Many people turn to a bankruptcy attorney for help. Bankruptcy Lawyers can help explain bankruptcy law and ensure that the bankruptcy process goes as smoothly as possible. When most people think of bankruptcy, they think in terms of Chapter 7, where the unsecured debts are normally discharged in full. Bankruptcy of any variety is a difficult or deal at best, but at least with Chapter 7, a debtor was able to wipe out their debts in full and get a fresh start. Chapter 13, however, is another story, since the debtor must pay back a significant portion of the debt over a 3-5 year period, with 5 years being the standard under the new law. Prior to the advent of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” the most common reason for someone to file under Chapter 13 was to avoid the loss of equity in their home or other property. And while equity protection will continue to be a big reason for people to choose Chapter 13 over Chapter 7, the new rules will force many people to file under Chapter 13 even if they have NO equity. That’s because the means test will take into account the debtor’s income level.

Filing Bankruptcy is a difficult decision to make. In 2008 over 1 million Americans filed personal bankruptcy in order to improve their financial situation. Bankruptcy can help you prevent foreclosure of your home, stop debt collector harassment and get a fresh financial start.

However, the figures used by the court for living expenses are NOT your actual documented living expenses, but rather the schedules used by the IRS in the collection of taxes. A big problem here for most consumers is that their household budgets will not reflect the harsh reality of the IRS approved numbers. So even if you think you are “safe,” and will be able to file Chapter 7 because you don’t have $100 per month to spare, the court may rule otherwise and still force you into Chapter 13. Some of your actual expenses may be disallowed. What remains to be seen is how the courts will handle cases where the cost of mortgages or home rentals are inflated well above the government schedules. Will debtors be expected to move into cheaper housing to meet the court’s required schedule for living expenses? No one has any answers to these questions yet.

It will be up to the courts to interpret the new law in practice as cases proceed through the system. The two most common consumer bankruptcies are Chapter 7 and Chapter 13 bankruptcy. Sponsoring bankruptcy lawyers handle these types of bankruptcies exclusively so you can be sure you are getting accurate legal advice when you file bankruptcy. Bankruptcy attorneys will fight to protect your rights and your property. Bankruptcy attorneys fight the aggressive and annoying creditors for you. They can help you keep your home, vehicles and other property. A bankruptcy lawyer will be committed to getting you debt relief and providing you with valuable information, services and advice to get you a better financial future. There are many convenient locations to make filing bankruptcy or learning about the alternatives we offer, even easier.

Business digest

BrieflyPit Stop Sports Bar Grill has opened at 4279 Mariner Blvd., Spring Hill.

Liens – IRS Collection Alternatives, from the Taxpayer Advocate Service

Question: Is a Business License Needed? ?

I am have a small business, and basically my business in virtual. I don’t have a solid brick and mortar site. I run my business from my site and out of my e-mail. We do have a P.O. Box where I ship everything out of. I don’t have a large sales number. Like under $600 per year. IDK it helps but I am in georgia.

Soo… basically my question is do I need a business licensee, and a FIN or whatever they are called. Like do I need to register, and how exactly would I go about paying taxes.

I don’t have any money for an attorney, or a CPA or anything. Its all me.

Answer: You need to go on-line and apply for a TIN (Tax Identification Number).
All businesses need a TIN. If you are doing business as yourself then you do not need a DBA (Doing Business As) which is an assumed name.

The reason I can answer is I have set up in business this year. shipping out of my house via eBay. Once you set up as a business then you can take the additional tax deductions that will then apply to you such as postage, cost of goods to resell. The cost of your internet provider, ect.

Check out small business association online and go to irs.gov online.

Hope this helps!

Taxes can be paid quartley or yearly.

Latest Georgia news, sports, business and entertainment

Here are some of the stories making headlines in Georgia

Ottawa Divorce Lawyer,Attorney Legal Services,Lawyers Personal Injury,Criminal Defense Attorneys,Counsel,Mediator,Counselor,Power of Attorney,Immigration,Bankruptcy,Tax Law Office,Notary,Notaire,Attorney General,Medical Malpractice,Brain Injury

Unemployed may still owe taxes for 2009

If a single adult made $9,350 or less, they don’t have to file taxes. For couples, it’s $18,700 or less not to file.

Learn About The Recovery Rebate Message in TurboTax