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COVID-19 and Recent IRS Relief to Taxpayers Having Payment Problems

On November 2, 2020, the Internal Revenue Service announced a new program, the Taxpayer Relief Initiative (“TRI”), to help taxpayers who are unable to pay their taxes because of the pandemic. Taxpayers who owe taxes and cannot not pay have always had options such as installment agreements and offers in compromise, but now they have more flexible options. Currently, there are over 20 million taxpayers (individual, business, and specialty taxpayers) who owe the IRS back tax debt. Here are some …

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IRS Makes it Easier to Qualify for an Installment Agreement

The IRS recently changed its rules regarding monthly Installment Agreements, making it easier for individual taxpayers to get into one.  Now, taxpayers with unpaid balance of assessments (total balance not including accruing but unassessed penalties and interest) less than $250,000 can pay their balance over 72 months (or the remaining time on the collection statute, whichever is less), without having to provide any financial information. Previously, the IRS only allowed taxpayers with unpaid balance of assessments below $100,000 to qualify …

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What happens to my bitcoin when I die?

Cryptocurrency is a digital or virtual currency that is becoming more widely used in business transactions. Last year alone, over $335 billion dollars was held in cryptocurrencies. The IRS has taken the position that cryptocurrencies are not currencies at all. Instead, they are characterized as property or goods and therefore taxed and treated likewise.  Digital currencies have value and must be reported as assets, as part of the value of an estate. This means tax-basis must be tracked. Many challenges …

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Important Pro-Employer Amendments to the CARES Act

Important Pro-Employer Amendments to the CARES Act On June 4, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act of 2020, which amended the PPP loan provisions of the CARES Act in several helpful ways. These provisions include: Extending the time for which PPP Loan funds can be spent, and still be eligible for forgiveness, to 24 weeks from origination of the loan, or through December 31, 2020, whichever is earlier; Reducing the percentage of PPP Funds …

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Now May Be the Best Time to Resolve IRS Tax Debts

With many Americans out of work, or living on reduced income due to the global pandemic, they may no longer be able to pay the IRS if they have outstanding tax liabilities. When an IRS tax debt cannot be paid in full, the IRS provides three alternatives for collecting funds from a taxpayer: (1) Installment Agreement (several versions); (2) Offer in Compromise; or (3) Currently Not Collectible Status. Under an Installment Agreement, the IRS will agree to accept monthly payments …

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Coronavirus Tax Relief for Individuals

On March 13, 2020, President Donald Trump declared a national emergency pursuant to because of the rapidly spreading coronavirus.  The President instructed the Secretary of the Treasury to provide relief from tax deadlines to Americans, all of whom have been adversely affected by the COVID-19 emergency.  In response, the Department of the Treasury and the Internal Revenue Service issued several notices which, among other things, postpone this year’s tax-filing and payment deadlines from April 15, 2020 to July 15, 2020.  …

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Unfiled Tax Returns and IRS Visits

If you have unfiled federal income tax returns, you might receive a personal visit from an IRS employee.  The IRS recently announced that it hired additional Revenue Officers (IRS collection employees) who will be making house calls to taxpayers missing one or more returns in a prior year, and who earn over $100,000.  These unannounced visits began in February 2020. The IRS has already contacted these non-filers by correspondence (generally by mail), notifying them of missing returns, so they should …

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Do you Need A Cryptocurrency Trust?

What happens with your cryptocurrency if you get disabled or die?  Cryptocurrency is hard to keep track of during life and at death, and many people do not understand this type of digital asset.  The importance of keeping track of your cryptocurrency during life involves keeping good records of your trading history, choosing the right exchanges and being secure, staying aware of updates on exchange policies and tax law, and tracking wallet addresses for coin, token, and mining transactions.  How …

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Taxation of Litigation Awards and Deductibility of Attorneys’ Fees

We are frequently asked about the tax consequences of receiving a judgment or settlement in a lawsuit.  Damages received as the result of a breach of contract or property damage have always been, and continue to be, taxable.  For personal injury actions, however, the tax consequences have changed quite a bit over the last 20 years. Prior to 1996, if someone received an award for personal injuries, other than punitive damages, all amounts received were not taxable and/or were excluded …

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Beware of Tax Resolution Companies

You owe the IRS money.  You know you owe the IRS money.  You may have even set up an installment agreement with the IRS that you have been faithfully paying for a while.  But the next thing you know, your phone is blowing up, and your mailbox is overflowing with unsolicited ads from any number of the thousands of “tax resolution” or “tax relief” companies around the country. The messages take many forms.  Some seem to be nice and helpful …

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