- SFR - Substitute for return : The IRS will file a return on your behalf. They will file based on what information is reported. You can file a regular return to try to reduce the liability.
- Levy - when the IRS issues a bank or wage seizure of property in order to satisfy a tax debt
- Lien - when the IRS issues a legal claim to your property as a security of payment for your tax liability.
- Compliance - paying taxes and filing all returns on time. IRS requires that tax payers file the last five years plus the current year and pay all estimated taxes up to date in order to enter into a solution. After an agreement is met, the taxpayer must maintain compliance or the agreement is broken.
- Estimated Tax Payments - these are payments made to the IRS through out the year on April 15, June 15, Sept 15, and Jan 15 of the following year. These payments are to be made by those taxpayers that do not have taxes withheld from their paychecks (example 1099 employees) Also if you ended up owing over $1000 at the end of the year last year, you need to make these payments.
- Statue of Limitation - the IRS has set time frames on certain activities that will expire
- Stay on Collection - the IRS will work with you to give you time but ONLY ONCE
- Offer in Compromise - option put in place by the IRS that if you qualify, you may be able to settle the debt for less than the amount you owe
- Audit - The IRS will request you to provide specific documentation as proof of items that you reported on your return. You must show the documentation or it could be taken off the return. Some audits may be in person or by mail.
- Revenue Officer - this person is specifically assigned to your case and generally lives in your area. This is the highest level of the IRS. Their main agenda is resolve the tax liability issue.
Melissa, Effectur
5 comments:
Great information about important tax terms
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Thanks for explaining the terms chic
Diane
Mel,
So I learned today that the IRS has around 14 months to determine whether or not they need to audit you...or take some action. This is why Jim said you never need to file your own returns through E- serivces vs. paper returns.Everything on an e-file is red letter perfect. It gives them reason to audit you four months earlier than normal.
The first thing to understand about tax rates is how they work. Above you are seeing the 2013 tax rates.
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