“4. Representation. You may either represent yourself or, with proper written authorization, have someone else represent you in your place. Your representative must be a person allowed to practice before the IRS, such as an attorney, certified public accountant, or enrolled agent. If you are in an interview and ask to consult such a person, then we must stop and reschedule the interview in most cases. “You can have someone accompany you at an interview. You may make sound recordings of any meetings with our examination, appeal, or collection personnel, provided you tell us in writing 10 days before the meeting.”Based on my own experience, when a taxpayer wanted to record our interview, it made me even more cautious about what I was saying. That is not to say that I wasn’t careful to speak the truth or to act in a courteous manner without the recording. It meant that as IRS employees, we were less spontaneous. We were more guarded in what we said. Every case that is worked by any IRS employee is subject to review by their division’s review staff. If the reviewer has questions about determinations made, the case can be “kicked back” to the auditor for explanation. If the review staff feels the case has not been developed fully, or worked properly, it will not be closed until the auditor addresses the concern of the reviewer. As the auditor gains experience on the job, the better judgment they develop and the fewer cases are returned by the reviewer. But a random case will still be subject to review at any time in the examiner’s career. When the taxpayer wants to record the interview, they must request this 10 days in advance of the appointment so that the auditor can arrange for their own recording device. The auditor will also have their supervisor, or another auditor, present during this recording. Will you have someone accompany you? Or will you feel outnumbered? Do you want this interview to be the most formal or the most comfortable? I know, it is never comfortable in the audit “hot seat.” Next post I’ll talk about the remaining four taxpayer rights.
This is such a BIG topic and it’s not possible to answer every question here. I’m not your insurance specialist, I am your Income Tax Audit Specialist. Here is the introduction to this new tax wrinkle that may impact your current and future tax returns.
The healthcare coverage you currently carry for yourself and your family may be all you need. If you have what is called Minimum Essential Coverage, you probably don’t have to do anything.
But if you go without coverage for any part of the year, there are special rules that apply. If you don’t qualify for an exemption, you may need to make a special payment called an Individual Shared Responsibility Payment.
Who qualifies for an exemption? Those who…
- Do not have to file a tax return
- Do not have access to affordable health care
- Are a member of certain exempt groups
- Are suffering a hardship.
- Have other situations as shown at www.IRS.gov/aca
If you and your dependents do not have coverage and do not qualify for an exemption, then you may have to make a “shared responsibility” payment when you file your tax return.
This payment is either a percentage of your income or a flat dollar amount, whichever is greater. The payment is based on the number of months you go without coverage, or the number of months you are exempt.
If you get your health insurance coverage through the Health Insurance Marketplace, you may be eligible for the Premium Tax Credit. This can help people with moderate income more easily afford the coverage.
If you meet the following requirements, there is a Premium Tax Credit:
- Your income must be within certain limits
- You must not be eligible for other coverage through an employer or government plan
- You cannot be claimed as a dependent on someone else’s return
- You cannot file your tax return using the Married Filing Separate status
When you apply for coverage through the Marketplace, you can choose to get the credit now or you can choose to get the credit later. If you choose to get the credit now, you are asking the marketplace to pay some, or pay all of the estimated credit in advance, directly to your insurance company. That will help lower your out of pocket premium costs. If you choose to get the credit later, you take that credit on your income tax return.
If you choose the advance payment, to get the credit now, be sure to report changes in your income or changes in your family size. Report these changes when they happen to ensure you are getting the correct amount of advance credit. This is important, because getting too much or getting too little credit can affect your income tax return refund or balance due.
I still get my insurance from a private insurance company. There is a lot to learn about ObamaCare and income taxes. In next week’s article, I will address the time line for getting coverage now for next year.
By January 31, 2014:
1. File Form 941 for the 4th quarter 2013 OR Form 944 for the whole year 2013
2. File your state’s 4th Quarter 2013 income tax withholding tax reports
3. File your state’s 4th Quarter 2013 unemployment tax report
4. File Form 940 for the whole year 2013 federal unemployment tax report
5. Give Forms W2 to your employees
6. Give Forms 1099 to your independent contractors
By February 28, 2014 :
1. Send Form W3 with Copy A of all Forms W2 to Social Security Administration
2. DO not mail the W3/W2 to IRS, it goes to SSA
3. Mail Form 1096 with IRS copy of Forms 1099 to the Internal Revenue Service.
4. 1096 is the form that goes to IRS
5. I’s OKAY to file these transmittal forms in January. You don’t have to wait till February 28th.
- How long have you been in the tax business?
- What licenses or designations do you have?
- What tax issues do you specialize in?
- Do you have the knowledge and experience to handle my tax situation?
- Do you outsource any of your work?
- How do you charge your fee; how much will it cost?