Tax Relief with Timalyn Bowens

Episode 84: In this episode, Timalyn talks about a type of Offer in Compromise that may help taxpayers when the IRS made a mistake and assessed taxes they do not actually owe. She explains what a Doubt as to Liability Offer in Compromise is, when it may apply, and why documentation matters when dealing with the IRS.What is a Doubt as to Liability Offer in Compromise?A Doubt as to Liability Offer in Compromise, also called DATL, is used when there is a legitimate dispute about whether the tax debt is actually owed or if the amount the IRS assessed is correct under the law.Timalyn explains that sometimes the IRS does make mistakes, and there are situations where taxpayers are assessed taxes they were not actually responsible for.Who may qualify for this option?This option may apply if you truly believe that you do not owe part or all of the tax debt that was assessed and you have documentation to support your position.What form is used?Taxpayers who believe they qualify can complete Form 656-L, which is the Offer in Compromise for Doubt as to Liability.The IRS will review the documentation before deciding whether to accept or deny the offer.When can’t you use this option?There are situations where this option is no longer available.For example, if the tax debt was already decided by a final court judgment, if you are currently in bankruptcy, or if another IRS department is still actively working the same issue.Timalyn also explains that if you requested an audit reconsideration, you generally want to wait for that process to finish before submitting a DATL offer.What kind of proof do you need?You need documentation and a written explanation showing why the tax debt is incorrect.Timalyn shares an example involving 1099-K forms where taxpayers actually reported the income correctly, but because there was no separate breakout on the tax return, the IRS believed income was missing and assessed additional taxes.By providing reports and documentation showing the income was already included, they were able to get the issue corrected.Why is documentation important?Timalyn explains that the less information you provide, the more digging the IRS may do.Not providing a written statement explaining why the tax debt is incorrect can cause the offer to be returned without further consideration.That is why it is important to make sure your documentation clearly supports the story you are telling the IRS.Is this the same as financial hardship?No.Timalyn reminds listeners that Doubt as to Liability is different from Doubt as to Collectability.DATL is specifically for situations where there is a legitimate dispute about the tax itself, not because someone cannot afford to pay the balance.Need Tax Help Now?If you have questions about whether a Doubt as to Liability Offer in Compromise may apply to your situation, Timalyn invites you to send her an email or schedule a consultation through the Bowens Tax Solutions website.If you’d like to see if you’re a good fit to work with her to fight the IRS, you can book a consultation at: https://www.bowenstaxsolutions.com/As we conclude Episode 84, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and other podcast platforms.Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode.For more information about tax relief options or filing your taxes, visit: https://www.bowenstaxsolutions.com/If you have any feedback or suggestions for an upcoming episode topic, please submit them here https://www.americasfavoriteea.com/contactDisclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.

Episode 83: In this episode, Timalyn talks about a very common misconception she’s been hearing, people thinking they can just wait until tax season to pay everything. She explains how the underpayment of estimated tax works for individuals and what can happen if you don’t pay throughout the year.What is the underpayment of estimated tax?The underpayment of estimated tax is a penalty the IRS may charge if you don’t pay enough taxes as you go throughout the year. The tax system in the U.S. is pay-as-you-go, so as you earn income, you’re supposed to be paying toward your tax liability.Who needs to make estimated tax payments?If you’re a W-2 employee, your employer is already withholding taxes from your paycheck and sending that in for you. The same usually applies if you’re receiving Social Security or a pension.But if you’re self-employed or you have income coming in from rentals, investments, or other sources, then it’s your responsibility to make those payments during the year.When are estimated taxes due?Estimated taxes are typically due:- April 15 – Income earned Jan 1 – Mar 31- June 15 – Income earned Apr 1 – May 31- September 15 – Income earned Jun 1 – Aug 31- January 15 (following year) – Final payment for the yearEach payment covers income earned during different parts of the year, even though the dates don’t always line up evenly.What happens if you don’t pay throughout the year?A lot of people think they can just wait and pay everything when they file their tax return. While you can do that, the IRS may charge you a penalty for not paying on time throughout the year.That penalty is based on how much you underpaid, how long it was unpaid, and the interest rates for each quarter. And on top of that, interest continues to add up until the balance is paid.How can you avoid the penalty?You may be able to avoid the penalty if:- You owe less than $1,000 in total tax liability- You paid at least 90% of your current year’s taxes- You paid 100% of last year’s taxes (or 110% if your income is higher)The IRS will generally go with whichever option is more favorable for you.Can the penalty be reduced or removed?In some cases, yes. You may be able to reduce or remove the penalty using Form 2210.This can apply if you recently retired, became disabled, or had uneven income during the year, like receiving a lump sum payment or having seasonal income.What should you do moving forward?The main takeaway is to stay on top of your taxes during the year. If you’re working a job, make sure your withholding is correct. If you have other types of income, make sure you’re making estimated payments when needed.Waiting until the end might feel easier, but it can cost you more in the long run.Need Tax Help Now?If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website. Click this link to book a call.If you’re dealing with penalties, you may be a candidate for penalty abatement, where some penalties can be reduced or removed.As we conclude Episode 83, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms.Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode.For more information about tax relief options or filing your taxes, visithttps://www.bowenstaxsolutions.com/If you have any feedback or suggestions for an upcoming episode topic, please submit them here:https://www.americasfavoriteea.com/contactDisclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.

Episode 82:  In this episode, Timalyn talks about FinCen Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Within recent years, FinCen has cracked down on those who are willingly not filing their FBAR. The civil penalties for mistakes with the FBAR can range from $500 - $1,000,000+. That is why Timalyn is discussing it today, to help people avoid those penalties. What is the FBAR?The Bank Secrecy Act (BSA) was passed in the 1970s to help stop money laundering. Part of that requires taxpayers to disclose certain foreign financial accounts. This includes bank accounts, brokerage accounts, and mutual funds. These taxpayers are required to do this annually to the Treasury Department on Form 114.  Who needs to file the FBAR? Not all taxpayers with foreign accounts are required to file an FBAR. It can be an individual who is a citizen or resident, or an entity such as a partnership, corporation, LLC, Trust, or estate. They have a filing requirement if they meet the following requirements: A financial interest in or signature authority over at least one financial account outside of the United States. The aggregate amount in the account(s) at any time during the calendar year was $10,000 or more. There are some exceptions to these rules that can be found on the FinCen and IRS websites.  How do you file the FBAR? You can pay a tax professional to file the FBAR for you or you can file it yourself for free online by using the BSA E-filing system. If you choose to have a tax professional file this form for you, be sure that they have experience with preparing a Form 114. This is a specialized form.  If you’d like a tax professional or someone else to prepare this form for you and submit it electronically, you must fill out Form 114a, Record of Authorization to electronically file FBARs. This form is required even if the person filing the form for you is your spouse. When is the FBAR Due?The FBAR is due on April 15th, the same date as your 1040. However, it is not to be filed with your 1040. These forms go to two different areas under the treasury. Your tax return goes to the IRS and your FBAR goes to FinCen. If you miss the April 15th deadline you can get an automatic extension until October 15th, even without requesting it. If you have trouble in the future with your FBAR, you do have the right to representation. A tax professional with Form 2848, Power of Attorney, and Declaration of Representative on file with the IRS can do this for you. Only an Enrolled Agent, such as Timalyn, Certified Public Accountant, or Tax Attorney, can have a Form 2848 and be your tax power of attorney. Need Tax Help Now?If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website.  Click this link to book a call.Please consider sharing this episode with your friends and family. This information might be helpful to someone who really needs it.  As we conclude Episode 82, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms.  Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time.  Thanks for listening to today’s episode.For more information about tax relief options or filing your taxes, visit https://www.Bowenstaxsolutions.com/.If you have any feedback or suggestions for an upcoming episode topic, please submit them here:  https://www.americasfavoriteea.com/contact.Disclaimer:  This podcast is for informational and educational purposes only.  It provides a framework and possible solutions for solving your tax problems, but it is not legally binding.  Please consult your tax professional regarding your specific tax situation.

Episode 81:  In this episode, Timalyn talks about how to set up a payment arrangement with the IRS. Specifically, how to set up an online payment plan. What is an IRS Payment Plan?An IRS payment plan is an arrangement between a taxpayer and the IRS that allows the taxpayer to pay their tax debt down over time. The IRS refers to these as installment agreements. Timalyn discusses different types of Installment Agreements in Episode 10 of Tax Relief with Timalyn Bowens: IRS Installment Agreements. What is an Online IRS Payment Plan?An Online IRS payment plan is one that can be set up using the IRS online payment agreement application also known as OPA. If your debt plus penalties and interest is $50,000 or less and you can pay it off in 72 months or less you may be able to set up a payment arrangement through the IRS website. You’ll need an IRS account to do this. If you don’t already have one Timalyn wrote an article about how to get your IRS transcripts that will also walk you through setting up an account. You can find it here: How to Get an IRS Transcript Online in 3 Steps . Once logged into your account, you will be able to see your repayment options. Technology is great until it is not. Even though you may qualify, the option to set up the arrangement online may not be showing up on your account. If this is the case, then you’ll need to call the IRS ACS department to set up your payment arrangement. Timalyn reminds taxpayers that she never judges anyone’s tax competency. If you have listened to this episode and you still don’t want to set this up yourself, you can hire a professional to take care of it for you. A tax professional with Form 2848, Power of Attorney, and Declaration of Representative on file with the IRS can do this for you. Only an Enrolled Agent, such as Timalyn, Certified Public Accountant, or Tax Attorney, can have a Form 2848 and be your tax power of attorney. Need Tax Help Now?If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website.  Click this link to book a call.Please consider sharing this episode with your friends and family.  There are many people dealing with tax issues, and you may not know about it.  This information might be helpful to someone who really needs it.  As we conclude Episode 81, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms.  Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time.  Thanks for listening to today’s episode.For more information about tax relief options or filing your taxes, visit https://www.Bowenstaxsolutions.com/ .If you have any feedback or suggestions for an upcoming episode topic, please submit them here:  https://www.americasfavoriteea.com/contact.Disclaimer:  This podcast is for informational and educational purposes only.  It provides a framework and possible solutions for solving your tax problems, but it is not legally binding.  Please consult your tax professional regarding your specific tax situation.

Episode 80:  In this episode, Timalyn covers what an IRS IPIN is, who is eligible to get one, and how it is used.What is an IRS IP PIN?An IRS IP PIN is an Internal Revenue Service Identity Protection Personal Identification Number. The IRS issues these to taxpayers to help protect someone else from filing a tax return with their social security number (SSN) or individual taxpayer identification number (ITIN).The IP PIN is required to determine whether the taxpayer is filing their return electronically or by paper. If the IP PIN is not present for an e-file, the return will be rejected. If it is not present on a paper filing, a delay will be caused until the taxpayer sends in their IP PIN. Anyone who has a SSN  or ITIN and can verify their identity can apply for an IP PIN from the IRS. Parents and legal guardians can also request one for their dependents. This is not limited to minor dependents.How to apply for an IRS IP PINThe fastest way to get an IP PIN is online via your IRS account. If you don’t have an account, check out this article Timalyn wrote for people who need an account to access their transcripts: How to Get an IRS Transcript Online in 3 Steps . You cannot use this method if you are applying for a minor dependent.Once logged into your account, you can request an IP PIN from your profile. If you can’t verify yourself online, you can apply with an application via Form 15227, Application for Identity Protection Personal Identification Number. To use this method taxpayers must have:A valid SSN or ITINAn adjusted gross income (AGI) under $84,000 (Single) or $168,000 if Married Filing Joint. Access to a telephone If these criteria aren’t met the final way to request an IRS IP PIN is in person. An appointment can be made at your local Taxpayer Assistance Center. The IRS has a list of acceptable forms of identification you’ll need when going to your appointment. Here is a link to the list - Acceptable Documents to Prove Identity. Key IRS IP PIN things to RememberAn IP PIN is only valid for one calendar year.The IRS issues a new IP PIN via Notice CPO1A unless you’ve opted out of paper mail. Then it will just be uploaded to your IRS account and is available January - November.Your Federal tax return cannot be filed and processed without your IP PIN Need Tax Help Now?If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website.  Click this link to book a call.Please consider sharing this episode with your friends and family.  There are many people dealing with tax issues, and you may not know about it.  This information might be helpful to someone who really needs it.  As we conclude Episode 80, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms.  Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time.  Thanks for listening to today’s episode.For more information about tax relief options or filing your taxes, visit https://www.Bowenstaxsolutions.com/ .If you have any feedback or suggestions for an upcoming episode topic, please submit them here:  https://www.americasfavoriteea.com/contact.Disclaimer:  This podcast is for informational and educational purposes only.  It provides a framework and possible solutions for solving your tax problems, but it is not legally binding.  Please consult your tax professional regarding your specific tax situation.