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tax debt and unfiled returns Archives

IRS reminds those with tax debt to pay up or lose their passport

The Internal Revenue Service (IRS) has a toolbox full of tools it can use against taxpayers who fail to pay their tax obligations. One tool it recently threatened to wield against taxpayers with significant debt: the ability to revoke the taxpayer’s passport.

Part II: 3 problems with tax debt collection by private agencies

A law passed in 2015 requires the Internal Revenue Service (IRS) outsource collection of certain tax debt to private debt collection (PDC) programs. This is not the first attempt at using third party businesses to collect on tax debt. In 2004, Congress granted the IRS to create a similar program. After three years, the IRS chose not to renew the program due to inefficiencies.

Part I: How much tax debt are private agencies collecting?

The estimated tax gap for fiscal 2017 – the difference between the amount owed and the amount collected – was $197 billion. For about two years the IRS has been contracting with private collection agencies in an attempt to narrow it.

Standing in the way of a simplified tax filing process

Back in 2004, a Stanford tax professor attempted to simplify the tax filing process with a California pilot. His proposal was called ReadyReturn and started with a pre-populated tax return with income generated from government records. The taxpayer could make corrections and add expenses and deductions.

If you haven’t done taxes for years, this is what can happen

When business is going really well, there may not be any time to sit down and focus on taxes. Having a bookkeeper do data entry is often not enough. After a couple years go by, it might even amount to a months-long project to get caught up.

Tax filing deadline looms — what if your business can’t make it?

The Internal Revenue Service (IRS) requires businesses to file tax returns by March 15, 2019. A failure to file on time can result in penalties. The easiest way to avoid the penalty is to file on time. If your business is unable to meet the March 15 deadline, consider requesting an extension.