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Tax Compliance Helps With IRS Tax Resolution

Jan 15, 2024 | Tax resolution

Taxes

Tax Man

Tax compliance means.

The filing of tax returns and current-year compliance.

Tax Return Compliance

Under the Internal Revenue Service Manual (IRM 1.2.14.1.18), tax compliance is the filing of the last six years of tax returns.  As of January 2024, six years would include Tax Years 2023, 2022, 2021, 2020, 2019, and 2018. You are welcome to file tax returns for more years, but the minimum requirement is for six years.

Note:  You have three (3) years from the time of the original filing date to file for a tax refund. If you file after that time, the IRS will not refund taxes. I have seen taxpayers lose over $13,700 annually because of untimely filing.

Current Year Compliance

Current-year compliance depends on what type of entity you are. You can be an individual, self-employed, or a corporation.

Individual- W2 wage earner

Proper withholding of taxes from wages.  Proper is the keyword. You need to withhold sufficient taxes to adequately pay your current taxes.

 Self-Employed, Real Estate Investors, Etc.

Income taxes are collected on an ongoing basis. For those employed, this means that an employer pays federal and state taxes on your behalf. For those who do not have taxes withheld on their earnings, the IRS requires Estimated Quarterly Payments. Those who fall into this category include self-employed, realized real estate investments, cryptocurrency, realized capital gains, etc.

These payments are due quarterly, but they can be made more often.

Bess Kane a CPA in San Mateo, California said, “I think it’s easier to make 12 smaller payments than four larger payments. If you owe $1,200 for the year. I would rather pay $100 monthly than $300 four times a year. And if we’re talking bigger numbers, it gets pretty extreme.”

As of 2024, estimated tax payments are due: 

September 1 – December 31, 2023

Jan 16, 2024 

January 1- March 31, 2024

April 15, 2024 

April 1- May 31, 2024

June 17, 2024 

June 1- August 31, 2024

September 16, 2024

 

Corporations

Filing and timely paying payroll and Federal taxes. Non-payment of withheld payroll taxes can/will cause a 100% tax penalty. Those responsible for the payment of these taxes can/will be held personally liable.

Note: A responsible person can/does include anyone with check signing authorization.

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