How Does the IRS Taxpayer Advocate Service Work for You?

The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service.  It protects taxpayers’ rights by ensuring that all taxpayers receive fair treatment. It can also help you to know and understand your rights under the Taxpayer Bill of Rights.

The Taxpayer Bill of Rights describes ten basic rights that all taxpayers have when dealing with the IRS.  These are your rights.  Know them.  Use them.

The TAS site at taxpayeradvocate.irs.gov also can help you with common tax issues and situations:  what to do if you made a mistake on your tax return; if you got a notice from the IRS or you’re thinking about hiring a tax preparer.

What can a Taxpayer Advocate do for you?

TAS can help you resolve problems that you can’t resolve with the IRS.  And the service is free.  Always try to resolve your problem with the IRS first, but if you can’t, then contact the Taxpayer Advocate Service.  Timely contact with TAS is paramount to resolution.

  • TAS helps individuals, businesses, and tax-exempt organizations.  If you qualify for TAS help, your advocate will be with you at every turn and do everything possible.
  • You may be eligible for TAS help if your IRS problem is causing financial difficulty or you believe the IRS procedure just isn’t working as it should.
  • TAS has offices in every state,  the District of Columbia, and Puerto Rico.  Your local advocate’s number is in your local directory and at taxpayeradvocate.irs.gov.  You can also call TAS at 1-877-777-4778.

The Taxpayer Advocate Service is your voice at the IRS.  Don’t hesitate to use it!

Filing Extensions Without Penalties and Interest

Can’t file your tax return by the April 15th deadline?

Taxpayers can request an automatic six-month extension of time to file the tax return.  But, taxpayers beware, there is a catch!  An extension is just an extension on the time to file the return; it is NOT an extension on the time to pay!

Taxpayers are required to estimate the amount of tax that may be due with the tax return and remit payment with the extension to avoid Failure to Pay penalties.  These penalties, plus interest, could accrue from April 15 until the tax is paid, regardless of the extension.  If a balance is still owed when the actual tax return is filed, at least the penalties and interest will have been minimized.

If taxpayers are unable to file their tax return by April 15, there are several ways to request an automatic extension of time to file an individual return.  Enrolled agents and other tax professionals can e-file the Application for Automatic Extension of Time to File US Individual Tax Return (Form 4868) for taxpayers.  Or, the application can be found on the IRS website (www.irs.gov), printed and mailed to the IRS, or e-filed.  Whether taxpayers use a tax professional or submit the application themselves, all or part of the estimate of the income tax due can be paid with a check, credit/debit card, or by using the Electronic Federal Tax Payment System.

Information regarding remitting payment may be found on Form 4868. Be sure to record the confirmation number provided upon payment.

If a taxpayer estimates that they will owe taxes and is unable to pay, it is important that they file their returns timely.  Put another way, either file an extension or your completed return by April 15, even if you cannot pay the full balance due.  If you do not, Failure to File penalties will be assessed (at 5% per month times the balance not paid by April 15 up to a maximum of 25%) in addition to Failure to Pay.  You may establish a payment plan to pay the balance due.

If you receive a notice from the IRS at any time during the year, contact your tax preparer immediately.  If you did not hire one to prepare your tax return, you should then contact a licensed tax professional.  Only enrolled agents (EAs), CPAs and attorneys have unlimited rights to represent you before the IRS.  The term enrolled agent reflects that an EA can act as your “agent” before administrative levels of the IRS–meaning he or she can talk to or meet with IRS in your stead.  To find an enrolled agent in your area, visit the searchable “Find an EA” directory at http://www.naea.org.

Five Key Tax Tips about Tax Withholding and Estimated Tax

If you are an employee, you usually will have taxes withheld from your pay. If you don’t have taxes withheld, or you don’t have enough tax withheld, then you may need to make estimated tax payments. If you are self-employed you normally have to pay your taxes this way. Here are five tips about making estimated taxes:
1. When the tax applies. You should pay estimated taxes in 2015 if you expect to owe $1,000 or more when you file your federal tax return next year. Special rules apply to farmers and fishermen.
2. How to figure the tax. Estimate the amount of income you expect to receive for the year. Also make sure that you take into account any tax deductions and credits that you will be eligible to claim. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax.
3. When to make payments. You normally make estimated tax payments four times a year. The dates that apply to most people are April 15, June 15 and Sept. 15 in 2015, and Jan. 15, 2016.
4. When to change tax payments or withholding. Life changes, such as a change in marital status or the birth of a child can affect your taxes. When these changes happen, you may need to revise your estimated tax payments during the year. If you are an employee, you may need to change the amount of tax withheld from your pay. If so, give your employer a new Form W–4, Employee’s Withholding Allowance Certificate. You can use the IRS Withholding Calculator tool help you fill out the form.
5. How to pay estimated tax. Pay online using IRS Direct Pay. Direct Pay is a secure service to pay your individual tax bill or to pay your estimated tax directly from your checking or savings account at no cost to you. You have other ways that you can pay online, by phone or by mail. Visit IRS.gov/payments for easy and secure ways to pay your tax. If you pay by mail, use the payment vouchers that come with Form 1040-ES.

Additional IRS Resources:
Publication 505, Tax Withholding and Estimated Tax
Estimated Tax – frequently asked Q & As
Tax Topic 306 – Penalty for Underpayment of Estimated Tax