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Employment Development Department Installment Agreement – Part Two

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If an entity which enters into long-term agreement is a corporation, LLC or an LLP, and the remaining balance is more than $10,000 of overall assessable tax liability amount, a form DE 204 must be filed. DE 204 establishes liability of corporate responsible persons in regards to assessed tax liability of the corporation.

In any case, EDD will also require written explanation of how the liability was created. EDD also will require financial statements, personal or business, with documentation regarding financial status such as loan denials, tax returns, bank statements, accountant’s financial reports, etc.

EDD may require additional supporting documentation regarding financial statement entries. Long-term agreement must be approved by EDD’s lead senior tax compliance representative or tax compliance supervisor.

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Employment Development Department Installment Agreement – Part One

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Under California law, taxpayers have a legal obligation to report and pay contributions and withholdings when due. If a taxpayer becomes delinquent in the payment of amounts due, the Employment Development Department (EDD) will take appropriate action to collect the full amount immediately.

The EDD recognizes that sometimes it is in the best interest of the state and in the interest of a California taxpayer that EDD allows an installment agreement to liquidate over a period of time an amount owed by taxpayer.

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Employee Payroll Taxes: How the EDD Handles Misclassified Workers

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Managing employee payroll taxes can get quite complicated, with a number of areas being particularly opaque. One of those is the question of employee classification; is a person properly classified as a worker or an independent contractor?

Misclassifying workers as independent contractors carries with it some significant consequences, including penalties and even potential fraud prosecution, so it is a topic worth exploring in some detail.

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How to Get Free Taxpayer Assistance

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It is my firmly held belief that everyone should have access to good, top quality legal representation. However, even by charging the absolute minimum that I can for legal services, there are some taxpayers for whom even my services are too costly.

Although I take on and handle a significant amount of pro bono projects during the course of the year, I wanted to provide more information for those looking to get free taxpayer assistance and the ways to go about getting assistance. You can get help through a number of avenues, either through the Internal Revenue Service or other third parties.

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Why Do I Owe State Taxes This Year? (& Why so Much?) 2022 Guide

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If you haven’t had to pay any state taxes for the past few years but now face a liability, you might be wondering, why do I owe state taxes this year? It’s a pretty common question that many taxpayers struggle to find the answer to.

You may not even be aware that you owe state taxes this year. It all depends on how your income has changed over the previous year and whether you still have any credits or deductions available to you that were used previously to reduce your taxes.

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IRS Criminal Investigations Division

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Introduction to the IRS Criminal Investigations Division

The IRS Criminal Investigation Division is responsible for handling tax cases that are the subject of fraud and misinterpretation of the law. According to the IRS, “Criminal Investigation (CI) serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.”

The IRS Criminal Investigations Divisions examines potential criminal activity that is specifically related to tax crimes and makes recommendations for prosecution to the United States Department of Justice – Tax Division. As an example, tax fraud cases are typically referred to the IRS Criminal Investigation Division.

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Divorce and Taxes Owed: Who is Responsible for Tax Debt in a Divorce?

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Joint and Separate Liability for Taxes Between Divorced Spouses

When a taxpayer files separately, it is clear who will bear the burden of any tax liability assessed by the IRS. However, it may not be as intuitive when a tax return is filed on behalf of two taxpayers.

If a joint return is filed, the liabilities linked to this return are held joint and several between both taxpayers. (Internal Revenue Code, IRC 6013(d)(3)). This means you are both on the hook for the entire tax liability, until it is paid or released.

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How Long Does the IRS Have to Collect on an IRS Balance Due?

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The IRS cannot chase you forever and, due to the 1998 IRS Reform and Restructuring act, taxpayers have a little relief from the IRS collections division’s pursuit of an IRS balance due.

Generally, under IRC § 6502, the IRS will have ten years to collect a liability from the date of assessment. After this ten-year period or statute of limitations has expired, the IRS can no longer try and collect on an IRS balance due.

However, there are several things to note about this ten-year rule. First and foremost, the statute is carefully crafted to read: ten years from the date of assessment. The assessment date is April 15th of the year that the taxes were due or the date the return was actually filed, whichever occurs later.

This means several things. First, there’s no way to reduce the IRS’s statute of limitations by filing your return before April 15th. Second, there’s a pretty severe penalty for late filing in that the ten-year period does not kick in until you actually file your return. Failing to file a return or attempting to hide from the IRS does not relieve you from liability.

Finally, the assessment date can change if you file an amended return or if the IRS has filed a substitute return on your behalf and you file a return to correct it. In addition, if you tried to conceal income or have filed a fraudulent income tax return, the statute of limitations does not apply on trying to collect on an IRS balance due.

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