Small Business Accountants Miami 11 Tax Audit Red Flags

Sometimes your Small Business Accountants are to blame for an audit.

If Small Business Accountants promises unusually high refunds without asking to see proper documentation for deductions and credits, don’t be fooled, said Gustavo Viera Small Business Accountants and managing partner at VieraCPA.

Small Business Accountants VieraCPA remind you you’re legally responsible for the information on your return no matter what a Small Business Accountants VieraCPA tells you, so make sure to look over your return before it’s sent to the IRS.

” Small Business Accountants VieraCPA can promise you the world, but then when they deduct a bunch of stuff they shouldn’t, you’re going to be the one stuck with an audit,” said Viera. Also, you’ll be required to repay any money you receive fraudulently.

This year, all Small Business Accountants VieraCPA and paid TAX Preparers are required to have a Tax Preparer Tax Identification Number (PTIN) so customers can verify that they are legitimate. Ask Small Business Accountants VieraCPA to see their PTIN before signing up for help, and be wary if your preparer doesn’t put a PTIN on your return when submitting it to the IRS, said Viera.

You make stupid mistakes

Small Business Accountants VieraCPA know whether you accidentally omitted information or you slipped up when doing subtraction, making errors on your tax return will cause the IRS to take a second look.

“The No. 1 mistake is not putting down the right Social Security numbers, and the second is not doing the right math,” said Gustavo A Viera CPA.

It may be worth hiring a Small Business Accountants VieraCPA to handle your return or walk you through the process.

“In tough economic times, people may be getting away from Small Business Accountants

Professionals,” said Viera. “And as more and more people do their taxes on their own, there will be more mistakes — both in terms of math errors and the deductions that are taken.”

Take the time to double-check everything if you’re filling out your own return, and if you decide to use tax software to file, make sure you understand how to use it, Viera advised.

You have a big mouth

You may think you’re a hot shot for pulling a fast one on the IRS. But when the friend you entrusted with your secret snitches on you in exchange for a fat check, you’re going to be in big trouble.

“Most cases start the old-fashioned way,” said Viera a Small Business Accountants who represent taxpayers whose returns were flagged by the IRS. “You blab about it to a friend, colleague, spouse or girlfriend, and one of them turns you in.”

Small Business Accountants VieraCPA warns even your closest pals may be tempted to tattle, since the IRS offers whistleblowers a reward of up to 30% of any additional tax or penalties it collects from tax cheaters.

And with the popularity of social media, it’s now much easier to publish private information publicly. So if you did something you think was questionable, don’t post it all over Facebook.

You’re extremely charitable

It’s great to be charitable, but don’t exaggerate the amount of money or items you’re donating according to Small Business Accountants VieraCPA.

When giving small items to Goodwill or thrift stores, report the estimated resale value, not the original value. And make sure you keep track of when donations are made and hold on to receipts. It also doesn’t hurt to take photos of the donated items for your records.

“Be realistic and try to be as specific as possible,” said Small Business Accountants VieraCPA. “Generally, if a donation is under $250, it’s not a big deal, but if it’s over $250 you should have supporting documentation.”

If your charitable donations are unusually high relative to your income, the IRS is likely to give your return more scrutiny as well, said Viera a Small Business Accountants.

“If you have $20,000 of income and report $10,000 in charitable contributions, that’s going to raise eyebrows,” said Small Business Accounting CPA Viera.

You didn’t file your taxes

Talk about raising red flags: If you’re required to file a return and you don’t, the IRS will hunt you down.

The agency has ways to identify people who have filed returns in the past but stopped filing, as well as people who have never filed a return. Once you’re identified as a nonfiler, the IRS will want to know how much tax you owe and what you’re hiding, said Viera, Small Business Accountants.

To avoid a confrontation with the tax man, it’s better to simply file — no matter how much you’re dreading the deed, Viera said.

“Many taxpayers get overwhelmed particularly if they owe money they can’t pay, and they stick their heads in the sand,” said Small Business Accountant VieraCPA.

But late payment penalties kick in as soon as the filing deadline passes, so if you don’t file and get caught, you could end up having to pay a lot more than your original tax bill. If you’re worried about not being able to pay your tax bill, there are installment plans available. Just ask the IRS what your best option is.

Of course, if you want to delay the pain a little longer, you can always file an extension. And if your income is below a certain level — which varies widely depending on your filing status and age — you’re not required to file a return at all. But even if you don’t have to file, make sure you’re not missing out on any deductions or credits that could actually put a little extra money in your pocket.

“Many times people build up an irrational fear over filing their taxes and in fact are due a refund,” said Small Business Accountants VieraCPA.

You own a business

The IRS tends to look extra closely at taxpayers reporting businesses on Schedule C forms because there’s more room for fudging.

“The IRS primarily targets small businesses, especially sole proprietorships, and cash industries like pizza parlors and coin-operated Laundromats with opportunities to hide income and skim profits,” said Small Business Accountants VieraCPA.

If you own a business, report every single bit of income you’ve received. If you’re still worried about being audited, you may even want to reorganize your business as a corporation or partnership (which means you’re not required to file a Schedule C) instead of a sole proprietorship, said Viera.

And if you’re flagged for an audit, the IRS will be skeptical of any business that looks like it’s actually a hobby, especially if you are deducting a loss on your return.

You’ve been audited before

Sometimes getting flagged for an audit comes down to having a bad reputation with the IRS.

If you’ve been audited in the past, you’re on the agency’s audit hit list for at least a few years, said Small Business Accountants VieraCPA. And while there’s nothing you can do to avoid being scrutinized, you should play it extremely safe to avoid getting another audit.

“If you get audited once, you have a very good chance of being audited again,” said VieraCPA. “For the following three years or so, you should be very careful about the aggressiveness or risk you take on subsequent returns, because the IRS is going to be monitoring you.”

You have a home office

Deducting a home office can always be a red flag, because many taxpayers consider any part of the house where they do work to be an office — even if they do other things, like watch TV or cook, in that same area.

To qualify for a home office deduction, you must use the office exclusively for work and it must be your primary place of business — not one of several offices. If this is the case, make sure you document expenses like housekeeping, alarm systems and other items you plan to claim — down to the share of utilities you use in just the office itself — in case the IRS decides to check it out.

And even if you think it’s legitimate, don’t go overboard. VieraCPA had a client, for example, who ran a business breeding and raising high-end cats. Since the taxpayer had cats sprawled out in every room of the house, she thought it would be okay to deduct 90% of her house as a home office. While VieraCPA agreed that the business took up a significant portion of the client’s home, he advised lowering the percentage to about 40% so that it was less likely to raise red flags.

You’re rich

Being rich isn’t always a good thing. Your chances of being audited increase dramatically the more income you report.

While the IRS audits only 1% of taxpayers overall, those odds rose to 7% for people with income between $1 million and $5 million last year. About 21% of taxpayers with income between $5 million and $10 million were audited, and 30% of people making $10 million or more were dealt audits.

If you have a lot of income to report, make sure you get a savvy preparer so at least you’ll have everything documented should the IRS come knocking.

“The rich is where the new focus is, and it’s because of one reason — it’s generating extra income for the IRS,” said Small Business Accountants VieraCPA. “And because upper income filers tend to have a lot more complicated returns, that makes it easier for the IRS to go after them.”

You have foreign assets

Foreign bank accounts have been a huge focus for the IRS in recent years.

In an effort to reel in taxpayers with illegal overseas accounts, the agency has launched initiatives that waive certain penalties for taxpayers who come clean. This year, the IRS introduced a program that gives taxpayers a reduction in penalties — and no jail time — if they fess up to any undisclosed overseas accounts for an indefinite window of time.

The agency also introduced a new form and filing requirements for reporting foreign assets this year. In addition to reporting any foreign bank accounts holding more than $10,000, you now also have to report any foreign assets — including pension funds and foreign stocks — totaling more than $50,000. Failing to report such assets will result in a $10,000 penalty, and any underpayments of tax on them will be subject to an additional penalty of 40% of the amount owed.

If the IRS has any hunch that you are not reporting an offshore account, you’re in serious trouble. “The safety people thought they may have had offshore isn’t so safe anymore,” Small Business Accountants Miami VieraCPA. “It’s time to come in from the cold.”

You guess on investments

Before this year, brokers were only required to provide the IRS with the date you sold a stock and how much money you earned from that investment.

The IRS had to rely on taxpayers to correctly list the date they bought a stock and how much they paid on their Schedule D capital gains and losses statement.

So if you put down the wrong date or purchase price — whether innocently or on purpose — you could end up paying less tax.

But now, the IRS is getting this additional data straight from brokers. If the information on your return doesn’t match, you’re in trouble. Be sure to locate your exact buy dates and prices, advised Small Business Accountants VieraCPA. Otherwise the IRS will quickly scoop you up for an audit.



How to File a Medicare Cost Report

How to File a Medicare Cost Report

CMS and AHCA require Home Health Agencies (HHA), Hospice, Hospitals, and Renal Facilities to file an annual Medicare Cost Report and or Medicaid Cost Report.


Federal/State program administered through the State of Florida Agency for Health Care Administration (AHCA). Each provider participating in the Medicaid or Medicare program shall submit a uniform Medicaid Cost Report and or Medicare Cost Report and related documents required by the Florida Title XIX Long-Term Care Reimbursement Plan (Plan). For Medicaid Cost Report and or Medicare Cost Report periods ending on or after December 31, 2003, cost reports must be filed using “SEXTANT”, the October 2003 Electronic Cost Report (ECR); the October 2003 Chart of Accounts; and instructions provided by AHCA. Further, this Medicaid Cost Report and or Medicare Cost Report must be filed within the timeframe specified in the Plan. All required schedules MUST be completed or marked N/A. Note that Schedules I, J and J-2 are only required for providers on cost or payback reimbursement.

Limited amounts of supplemental supporting documentation can be added to the Notes Schedule provided within the ECR. Additional supporting documentation or attachments may be mailed to the address provided below. All additional information and documentation, whether on the Notes Schedule or mailed separately, must be referenced to the applicable cost report schedule.

The provider of the Medicaid Cost Report and or the Medicare Cost Report home office cost report must each stand-alone. Do not indicate, “see home office cost report” on any schedule in lieu of completing the schedule.

All schedules must be completed with all applicable information each year. Do not reference a prior year report as containing the information requested in lieu of completing the schedule in the current year cost report.

In addition to submitting the ECR as per the instructions in Appendix B, one hard copy of the cost report, the certification page, supplemental schedules and attachments, and accountant’s compilation reports must to be sent to:

Agency for Health Care Administration

Audit Services 2727 Mahan Drive, Mail Stop 21

Tallahassee, Florida 32308

The recognized Medicaid Cost Report Medicare Cost Report will be determined by utilizing the accrual method of accounting in accordance with generally accepted accounting principles (GAAP) as established by the American Institute of Certified Public Accountants (AICPA), the methods of reimbursement in accordance with Medicare (Title XVIII) Principles of Cost Reimbursement, the Centers for Medicare and Medicaid Services Provider Reimbursement Manual (CMS Pub. 15-1) except as modified by the Florida Title XIX Long-Term Care Reimbursement Plan, and State of Florida Administrative Code.


The input worksheet is where the bulk of the cost report data will be entered. Enter text using proper case; please do not use all capital letters. Enter whole numbers only unless the input number is a percentage. Enter a percentage in decimal form (i.e. input .047635 for 4.7635%). Debits are entered as positive numbers and credits are entered as negative numbers unless otherwise specified.

Patient days input fields cannot be left blank; these include In-House Patient Days; Reserved Bed Days; Holding Bed Days; and Skilled, Intermediate I, and Intermediate II Medicaid Days. When appropriate it is required that zero be entered.

Other input worksheets that require the input of data are designated with a “(W)” on the worksheet tab (such as, Cover (W), B (W), K (W) or L (W), etc). “See attached” is not considered valid for Electronic Cost Reporting purposes.

Input areas have cells with a light yellow background. When a choice is required, a brown background is used with a dropdown box. Clicking on the arrow to the right of the dropdown box allows for an appropriate selection to be made. (Appropriate selections must be made from the dropdown box to avoid a validation error).

When data is entered on the input worksheet, the appropriate schedule changes can be reviewed by clicking on the schedule tab. Many schedules have validity checks built into the system. In some instances, an error message may appear on the applicable schedule to the right side of the row being checked. In other circumstances, validation checks are a part of the applicable schedule.

When data input is completed for the entire Cost Report, the “VALIDATE” tab should be referenced to locate any remaining exceptions noted. Sextant currently checks for more than 190 different potential exceptions to the Medicaid Cost Report or Medicare Cost Report.

Certification Page:

The Provider may use the “optional Medicaid Cost Report or Medicare Cost Report identifier” for internal tracking purposes. If the cost report is prepared in house choose “yes” in the dropdown box; otherwise, choose “no” in the dropdown box.

Enter the name of CPA (or CPA firm) responsible for preparation of the cost report.

Enter the CPA (or CPA firm) license number. If not a Florida CPA identify the state of licensure.

Please contact us for a complete how to guide on how to prepare a Medicaid Cost Report or Medicaid Cost Report



Corporate Tax Audits on the Rise

Corporate Tax Audits on the Rise

Corporate Tax Audits of are increasing across the country at both the federal and state levels, according to a new survey by Tax Preparation Miami. With all the recent publicity about major corporations that have managed to avoid paying federal income taxes, that’s probably no surprise says Tax preparer Miami CPA Gustavo Viera.

Tax Preparation Miami states that the majority of the 890 corporate tax preparer Miami surveyed said federal and state Corporate Tax Audits increased in the past 12 months, and the majority of them also believe audit activity will increase over the next year too.

Nearly two-thirds of those tax preparer Miami polled said federal tax dispute activity had increased in the past 12 months, while more than one-third said the total number of state Corporate Tax Audits in jurisdictions in which they do business has also increased according to Tax Preparation Miami.

Tax Preparation Miami is warning companies of all sizes to be prepared for a potential Corporate Tax Audits in advance of receiving an audit notification. As a tax preparer Miami that’s probably good advice, especially as the IRS has been looking to tools like its expanded CAP program to encourage greater corporate tax compliance.



Income Tax Preparers in Miami Want Territorial System for Taxing Foreign Income

Income Tax Preparers in Miami Want Territorial System for Taxing Foreign Income

Nearly half of Income Tax Preparation in Miami CPA’s favor changing how corporate income earned outside the United States is taxed, according to a Income Tax Preparers in Miami VieraCPA, although many don’t expect much progress on the issue of corporate tax reform before the 2012 elections.

Income Tax Preparers in Miami Firm Gustavo A. Viera CPA surveyed clients and business leaders followed the release of a recent congressional proposal that would overhaul international tax laws by creating a territorial system (see Congressional Republicans Propose International Tax Reforms). Income Tax Preparation in Miami CPA Viera found that 49 percent of the respondents said they favor a territorial system of international taxation, under which almost all foreign income of U.S. multinational companies would be taxed where it is earned and could be brought back to the United States without incurring additional tax.

Income Tax Preparers in Miami reiterate what many multinational companies have been advocating for some time—a move toward a system of international taxation that matches the approach of most other countries and ends the residual U.S. taxation of active business income earned outside the United States.

Income Tax Preparers in Miami

Income Tax Preparers in Miami respondents expressed overall skepticism about quick action on the issue of taxing business income earned outside the United States and on corporate tax reform in general.

According to Income Tax Preparers in Miami clients, most respondents (61 percent) predicted it would take two years before the United States would adopt a territorial system, and only 27 percent believe there would be corporate tax reform in the next 12 months.

In addition to the 49 percent of Income Tax Preparers in Miami CPA’s who said they favor a territorial system, 16 percent of the respondents preferred the U.S.’s current worldwide tax system, which requires U.S. multinationals to pay taxes on profits on active business income earned outside the country, while receiving tax credits for payments to other governments and deferring residual U.S. tax until they bring the money home. Eight percent said they favored a worldwide system that made corporate overseas profits immediately taxable, and 27 percent said they weren’t sure what system they preferred.

The territorial taxation proposal, released Oct. 26 as part of a comprehensive discussion draft by House Ways and Means Committee Chairman David Camp, R-Mich., assumes the top corporate rate will be lowered to 25 percent from its rate of current 35 percent and would be revenue neutral. The proposal is part of a broad plan that Camp is seeking to rewrite individual and corporate U.S. tax laws.

“Chairman Camp’s proposal is a bold and comprehensive discussion draft that could drastically alter the playing field,” Viera said. “Companies need to pay close attention to this important issue and how the end result could affect them.”

While nearly half the Income Tax Preparers in Miami Firms favor a territorial system, only 39 percent said they favor exempting overseas corporate income permanently from U.S. taxation. Thirty-two percent opposed such an exemption and 29 percent were unsure.

Income Tax Preparers in Miami state this finding highlights the concerns of multinationals versus domestic companies on the topic and shows how difficult it will be to arrive at an acceptable solution to this and other issues related to business tax reform.

Forty-eight percent of the survey respondents believe a change in the territorial taxation system would open the door for a cut in the corporate tax rate. Only 15 percent of those surveyed said they thought the United States would adopt a territorial system without broad corporate tax reform. A vast majority (64 percent), though, felt broad corporate tax reform was necessary for such a move.


Miami Accounting CPA List of 9 Top Tax Scams

Miami Accounting CPA issues a list of 9 Top Tax Scams on how to reduce tax liability 

Miami Accounting firms and taxpayers are to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to fraud.

The list of 9 Top Tax Scams, compiled by Miami Accounting Tax Services each year, lists a variety of common scams taxpayers can encounter on how to reduce tax liability and other matters. But many of these schemes peak during Miami Accounting filing season as people are in the process of Income Tax Preparation in Miami.

“Miami Accounting Taxpayers should be careful and avoid falling into a trap with the Miami Accounting CPA today issued a list of 9 Top Tax Scam,” said Miami Accounting VieraCPA. “Scam artists (including some Miami Accounting Tax Preparers) will tempt people in-person, on-line and by e-mail with misleading promises about how to reduce tax liability and false refunds. Don’t be fooled by these scams.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.
Hiding Income Offshore

Miami Accounting CPA’s are very cautious of individuals who have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and Income Tax Preparation in Miami Accounting Firms suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution, according to Miami Accounting CPA Gustavo A Viera.

Since 2009, 30,000 individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to bring their money back into the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore will become increasingly more difficult.

At the beginning of this year, the Miami Accounting Firms warned clients IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion.  This program will be open for an indefinite period until otherwise announced.

The IRS has collected $3.4 billion so far from people who participated in the 2009 offshore program, reflecting closures of about 95 percent of the cases from the 2009 program. On top of that, the IRS has collected an additional $1 billion from upfront payments required under the 2011 program.  That number will grow as the IRS processes the 2011 cases.

“Free Money” from the IRS & Tax Scams Involving Social Security

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can do their Income Tax Preparation in Miami with little or no documentation, have been appearing in community churches around the country. These schemes are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Miami Accounting Tax Service Scammers prey on low income individuals and the elderly. They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.

There are a number of tax scams involving Social Security. For example, Miami Accounting Tax Service scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but uses inflated information to complete the return.

Beware. Intentional mistakes of this kind can result in a $5,000 penalty.

False/Inflated Income and Expenses

Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions when doing your Income Tax Preparation in Miami.  This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit when their occupations or income levels make the claims unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

False Form 1099 Refund Claims

In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS.

Don’t fall prey to Miami Accounting Services who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. Miami Accounting CPA’s have a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

Falsely Claiming Zero Wages

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Abuse of Charitable Organizations and Deductions

IRS examiners continue to uncover the intentional abuse of 501(c)(3) organizations, including arrangements that improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or the income from donated property. The IRS is investigating schemes that involve the donation of non-cash assets –– including situations in which several organizations claim the full value of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and set new standards for qualified appraisals.

Disguised Corporate Ownership

Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.

These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering, and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.


How to Reduce Tax Liability

How to reduce tax liability

Income tax preparers know costs and expenses are crucial part of Income tax planning, and one of the most difficult. How to reduce tax liability is contingent on what deductions you can claim.

How to reduce tax liability as allowable deductions as incurred and paid. These are not mutually exclusive.  Income tax preparers when trying to answer the age old question “How to reduce tax liability” and during the Income tax planning phase must consider what was spent for the purpose business deduction, and most importantly, what was not spent but incurred. How to reduce tax liability questions must be asked and answered during the Income tax planning period.

How to reduce tax liability via Income tax planning

To be allowable, it must not be excluded by regulations (see beneath).

The decision maker ought to often consider every single product of cost independently.

Income tax preparers Expenditures Check List

These are:

a) Funds expenditure

b) Repayments of cash on financial loans taken out for company reasons

c) Depreciation of capital assets

d) Sums utilized, or supposed to be employed, in setting up or growing a organization

e) Losses incurred prior to the start of the evaluation period

f)   Costs incurred in providing organization enjoyment.

These are the unofficial guidelines recommended by Income tax preparers during Income tax planning on how to reduce tax liability. It is totally important that you communicate to your Income tax preparers just before you allow or disallow any enterprise bills.

As lengthy as the ailments in the first paragraph are fulfilled, these are the day-to-day bills of a business you can deduct:

Accountancy costs


Cleansing of organization premises

Big difference between opening and closing stock (on accounts)

Workers wages just before any deductions are made, including any wages payable to the domestic companion

Employer’s contributions to employees’ pension scheme

Employer’s (secondary) Class 1 SS contributions

Heating and lighting

Hire or rental costs (but not any cash or purchase elements)

Curiosity payable under a credit sale, a consumer credit score arrangement or a retain the services of obtain arrangement (but not the cash aspect of payments)

Authorized expenses connected with the enterprise

Payment in variety for perform carried out for the enterprise – the financial worth is allowable

Rent and Rates


Stock purchases

Sundries, sometimes known as miscellaneous things, which are modest in relation to complete allowable costs provided that the decision make is content that no non-allowable expenses, for case in point for company enjoyment, are incorporated

Telephone, telex, fax etc (Only the proportion that is used for enterprise, i.e. if you use your telephone thirty% for company, 70% for private, then you can declare 30% of the costs as an allowable expense)

Transportation excluding any home-to-operate costs

VAT allowable (two)

Clearly, expenditures is a large area of tax far too huge to cover in a solitary web site publish, so if you need to know much more about expenditures, just take us up on our Cost-free one Hour Consultation.


Tax CPA Exempt From IRS Competency Test

Tax CPA Exempt From IRS Competency Test

The Internal Revenue Service today marked the third anniversary of its groundbreaking Income Tax Preparer in Miami initiative and urged those paid Tax Preparerrequired to pass a new competency test to take the test as soon as possible with the exemption of Tax CPA and Attorneys.

Three years ago the IRS took its first step toward ensuring standards for competency, continuing education and ethics would apply to all paid Income Tax CPA. Major facets of the initiative are now in place.

On June 4, 2009, IRS Commissioner Doug Shulman launched a six-month review focusing on the competency and conduct of paid Tax CPA. The review resulted from a recognition that paid Tax CPA were an important element in the integrity of the nation’s tax system.  The review included a series of public hearings with the Tax CPA community, consumer advocates, oversight groups and taxpayers.

Six months later, the Tax CPA Review laid out a series of recommendations to extend oversight to certain areas of the preparer industry to enhance tax compliance and service to Taxpayers.

Among the initiative highlights:

Mandatory registration and use of a Preparer Tax Identification Number (PTIN): Anyone who is paid to prepare, or help prepare, all or substantially all of a federal tax return now has to register with the IRS and obtain a PTIN, as do all enrolled agents. The PTIN is valid for a calendar year and must be renewed annually. Almost 850,000 tax preparers have registered since the requirement began.

Competency Test: In November 2011, a 120-question basic competency test was launched. Certain Tax CPA are required to take the test by Dec. 31, 2013, to stay in business. The IRS urges an estimated 340,000 preparers required to take the test to do so as soon as possible to give themselves more time if they have to retake the test and to avoid a potential flood of last-minute test takers. Certified Public Accountants, Enrolled Agents and attorneys are exempt from the test because they already have other testing requirements as part of their credentials. Certain non-signing preparers supervised by Tax CPA, EAs or attorneys are exempt, as are non-1040 preparers.

Continuing Education (CE): The roughly 340,000 tax preparers who have a testing requirement also have a new requirement to complete 15 hours of continuing education courses each year. The CE credits must include 10 hours in federal Tax law, three hours in federal Tax law changes and two hours in ethics. This requirement became effective January 2012 and it applies even if the preparer has not yet taken the test. There are now hundreds of outlets offering IRS-approved CE courses. More details are available at

Ethics and Tax Compliance: Ethical requirements that previously applied only to CPAs, EAs and attorneys now apply to all paid Income Tax Preparer in Miami. All paid tax preparers also will undergo a tax compliance check and are subject to the standards for practice outlined in Treasury Department Circular 230.

Registered Income Tax Preparer: Tax Preparers who pass the competency test and tax compliance check are given a new credential: Registered Tax Income Tax Preparer. To date, over 4,800 people have become Registered Income Tax Preparer.  Beginning in 2014, only Registered Income Tax Preparer, Enrolled Agents, Certified Public Accountants, and attorneys will be authorized to prepare individual Income Tax returns for compensation.

Public Database: The IRS also will create a publicly searchable database that will allow Taxpayers to see if their Tax CPA have met IRS standards or to find a Tax CPA in their zip code area. The IRS will have a public education campaign to inform taxpayers to use only Tax CPA, EAs, attorneys or Registered Income Tax Preparer in Miami if they pay to have their taxes prepared.

The database will also show any credentials held by the tax preparer, including the new RTRP credential, as well as those who are EAs, Tax CPA and attorneys.

The RTRP competency test is available at more than 260 vendor testing centers nationwide. Tax Preparers can determine if they have a test requirement by going to their online PTIN Account at Preparers also can set a test date, time and location through their online PTIN Account.


Income Tax Preparers in Miami Advise on Offer in Compromise

Income Tax Preparers in Miami Advise on Offer in Compromise

The offer in compromise program is one method for Income Tax Preparers in Miami to resolve a tax debt liability with the Internal Revenue Service. There are three situations where an offer in compromise may be accepted: doubt as to collectability, doubt as to liability, and effective tax administration. In preparing an offer in compromise, the Income Tax Preparers in Miami must disclose all assets and sources of income. The IRS will verify this information and evaluate the chances of collecting from the taxpayer in determining whether or not to accept an offer in compromise. There is no guarantee that the government will accept your offer in compromise. In fact, less than 25% of offers made are accepted.


  • In general, an offer in compromise will not be accepted if you can pay the full amount as a lump sum or through an installment plan.
  • An offer in compromise will not be accepted unless all tax returns have been filed.
  • Only 21% of the offers submitted are accepted by the IRS.
  • The average settlement value is $14,296.


An offer in compromise is a program to help Income Income Tax Preparers in Miami resolve a tax liability for less than the full amount. An offer in compromise is not available for all Income Tax Preparers in Miami. In general, only Income Tax Preparers in Miami who have a tax bill, when compared to the taxpayer’s overall financial situation, that is so large that it is unlikely that the taxpayer will ever be able to pay the total amount, even in the future.

There are three grounds for an offer in compromise: doubt as to liability, doubt as to collectability, and the promotion of effect tax administration.

Doubt as to Liability – Doubt as to liability exists when there is a genuine uncertainty that the amount of tax due is correct. A taxpayer preparer may submit a doubt as to liability offer when (1) it is believed that the examiner made an error in interpreting the tax law, (2) the examiner neglected to consider the taxpayer’s evidence, or (3) the taxpayer preparers have new evidence. The IRS will likely accept a doubt as to liability offer if it proposes a fair amount the IRS could collect if the dispute was taken to trial.

Doubt as to collectability – A Income Tax Preparers in Miami may submit a doubt as to collectability offer when it is unforeseeable that the taxpayer will ever be able to pay the full amount. In submitting a doubt as to collectability offer, a taxpayer is required to disclose all information about the assets owned by the taxpayer and all sources of income. The IRS will verify all information provided and investigate for other sources of income to determine the reasonable collection potential (RCP). This process is extensive and will require the production of many forms of documentation.

The RCP is calculated based on four components: the assets owned by the taxpayer, the future income of the taxpayer, assets the IRS could collect from third parties, and assets belonging to the taxpayer or income available to the taxpayer but beyond the reach of the IRS. To calculate the value of the assets owned by the taxpayer, the IRS calculates the net realizable equity (NRE) of each asset. The NRE for each asset is 80 percent of the fair market value of the asset minus any amount owed to creditors. Assets include real estate, business property, vehicles, furniture, artwork, jewelry, and other personal property.

The future income of the taxpayer is the amount of the taxpayer expected future income less any amount for necessary living expenses. In general, the IRS will use a taxpayer’s current income as the taxpayer’s potential future income. Unless the taxpayer provides detailed information regarding the necessary living expenses, the necessary living expenses for a taxpayer is determined by using the National Standard Expense, see,,id=96543,00.html.

Promotion of Effective Tax Administration – A Income Tax Preparers in Miami may submit a compromise to promote effective tax administration if collection of the full amount would cause economic hardship. Similar to a doubt as to collectability offer, a taxpayer will be required to submit complete information about their current financial situation. Factors the IRS considers when evaluating an offer to promote effective tax administration are health of the taxpayer, the ability of the taxpayer to support dependents, and whether liquidation of assets available to taxpayer prevent the taxpayer from paying basic living expenses.

Payment Requirements – When a taxpayer files an offer in compromise, the taxpayer must pay a $150 application fee plus part of the offer amount. If the taxpayer offers to pay the tax due in 5 payments or less within 5 years, then the taxpayer must submit 20% of the offer amount. If the taxpayer offers to pay the tax due in installments within 24 months, then the taxpayer must pay the first payment. If the taxpayer offers to pay the tax due in a periodic payment plan longer than 24 months, then the taxpayer must pay the first payment. All payments of the offer must be paid by the taxpayer while the IRS reviews the Offer in Compromise.

Acceptance of Offer – If the IRS accepts the Income Tax Preparers in Miami Offer in Compromise, the IRS will mail a written notice of acceptance. Acceptance of an offer in compromise will only settle the Income Tax Preparers in Miami of liability for the tax years and for the amounts as specified in the letter.

Rejection of Offer – If the IRS rejects the Income Tax Preparers in Miami offer in compromise, the IRS will mail a written notice of rejection stating the reasons for rejection and will include instructions on how to appeal its decision. The taxpayer may appeal the rejection of the offer by submitting an appeal to the IRS Office of Appeals within 30 days after the date on the rejection letter.

Planning Tips

Before submitting an Offer in Compromise, it is important to obtain as much documentation of your financial situation as possible. This includes documentation of home ownership (including mortgage), vehicle ownership and loans, and a list of assets (furniture, jewelry, artwork, etc.).

Frequently Asked Questions

Question: The IRS sent me a notice that I owe $10,000 in back taxes, is an offer in compromise the best solution for me?

Answer: An offer in compromise is only one method of resolving your tax debt liability. In order to qualify, you must be able to provide documentation to the IRS to support the grounds upon which you are seeking the offer in compromise, including, but not limited to, bank records, income and expense records, and health records. The IRS will look at your current financial situation and the property you own and evaluate your anticipated future income in determining whether they feel you can pay the total amount of tax due. If you can pay the full amount over time, an installment agreement may be a better method of resolution.

Question: How do I determine what amount I should offer as a compromise?

Answer: There is no definitive answer as to what will be an acceptable offer by the IRS. There are many factors that the IRS looks out to determine whether an offer is acceptable. Beyond a taxpayer’s complete financial situation, the IRS will consider a person’s age, health, and other circumstances to determine what an acceptable offer is.

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Tax Accountant in Miami VieraCPA Calls on IRS to Speed Tax Refunds

Tax Accountant in Miami Urge IRS to Keep 45 Day Refund Promise

VieraCPA, a Tax Accountant in Miami,  said that the Internal Revenue Service needs to reassess its goal of delivering Tax refunds within 45 days given the prevalence of electronic filing.

The IRS experienced significant Tax refund delays early in the Tax filing season after the agency stepped up its efforts to combat identity theft by installing new filters in its computer systems (see Tax Accountant Miami VieraCPA experiences Further Tax Refund Delay Problems).

Tax Accountant in Miami, VieraCPA, said it concurred with a report from the Government Accountability Office last December recommending that the IRS re-evaluate its measure on refund timeliness. “The current measure is a carryover from a time when most Tax return filing was done by mailing paper Tax returns to the IRS, and refunds were issued via mailed checks,” Tax Accountant in Miami VieraCPA said in the report it released Tuesday. “With individual e-filing rates close to 80 percent, the IRS now able to process Tax returns on a daily basis, and with most refunds made via electronic deposit, a 45-day goal for issuing refunds is an inappropriate standard. Moreover, at the start of the 2012 filing season, Taxpayers and Tax Accountant in Miami voiced a number of complaints about delays in issuing refunds caused by additional checks for refund fraud. The development of realistic, meaningful goals for refund timeliness would greatly clarify the situation.”

Elsewhere in the report, the Oversight Board acknowledged the rollout of the IRS’ s smart phone application and the implementation of the Preparer Tax Identification Number for registered Tax return preparers.

During fiscal year 2011, the IRS moved the paid preparer regulation program forward by registering and issuing PTINs to about 750,000 Tax Accountant in Miami, the report noted. “The IRS is continuing to review the issues surrounding background checks and fingerprinting,” the report noted.

There was a significant increase in the number of individual Tax returns filed electronically, the report added. In addition, the IRS successfully administered a number of complex Tax law changes, including the enactment of late Tax legislation. However, there were numerous challenges.

The level of service on IRS toll-free telephones during fiscal year 2011 was 70 percent, a drop of four percentage points over the 74 percent achieved in fiscal 2010, and below the 80 percent level the board considers acceptable for good Taxpayer service.

IRS enforcement contacts, such as written notices, correspondence examinations, or field examinations, were lower than fiscal 2010. Most of the decline is due to reduced math error notices, which were higher the previous fiscal year because of the First Time Homebuyer Tax Credit. The overall exam coverage rate for individual Taxpayers was generally flat, although the rate of examinations for Taxpayers with incomes over $1 million continued to grow. Corporate exams increased as well.

The report also addressed two longer-term, strategic issues: the Tax gap and the IRS’s information technology systems. The report said that the IRS made notable progress with its IT program. However, the Tax gap—annual uncollected Tax revenue—remains a serious problem that requires attention. The IRS released an updated estimate of the Tax gap in January 2012 based on Tax year 2006 returns. The gross and net Tax gap rose as a result of the overall growth in the US economy through 2006, but the overall voluntary compliance rates remained approximately the same, at 83 percent.

Of great concern to the board are the decreased resources to fund Tax administration, coupled with the growing complexity of the Tax system. “The board cannot predict that a breaking point will occur, but a continuation of current trends increases the risk that the IRS will experience serious problems in the future,” said the report.

Feedback from Tax Accountant Miami

From meetings with Tax Accountant in Miami, the oversight board noted other concerns, including identity theft, Tax law complexity and Tax legislation passed late in the calendar year. Preparers also raised concerns about the impact of the IRS’s Tax preparer regulation program. They predicted that long-time preparers will likely leave the market rather than face registration fees, testing, and e-file mandates. Other preparers suggested that the real impact won’t be known for several years until it is determined whether the IRS will have the ability and resources to find and address noncompliant, incompetent or fraudulent preparers.

“Preparers hope the new regulatory system will allow the IRS to upgrade preparer competency levels and eliminate many preparer errors that the IRS now tracks,” said the report. “Preparers speculate the financial impact on the average return preparer will be around $500—reflecting the fees and expenses for obtaining a PTIN, providing fingerprints, completing the background checks, competency testing, and continuing professional education requirements.”

The Tax Accountant in Miami who spoke to the board also expressed concerns about how the IRS will educate Taxpayers about the new requirements for Tax Accountant in Miami, address the potential problem of “ghost” preparers (who fail to sign the returns they were paid to prepare) and explain to Taxpayers differences in credentials that distinguish CPAs, Enrolled Agents, and newly designated Registered Tax Return Preparers.

“Some Enrolled Agents were concerned that the registration program, in the eyes of the public, will elevate the importance of ‘registered’ Tax return preparers,” said the report. “Enrolled Agents must pass a more difficult test and complete more continuing education hours, but they are concerned the term ‘registered’ may carry more weight with the public than the term ‘enrolled.’”

Other practitioners stressed the importance of finding a secure solution so they could communicate case-related matters with IRS staff through e-mail. They also said it was important for the IRS to find a way for Taxpayers and their authorized representatives to access a Taxpayer’s account information and resolve Tax account matters online. They pointed out that states such as California have already delivered such online capabilities.