Articles

IRS Federal Tax Lien

(This article is courtesy of the Internal Revenue Service)

What is a Federal Tax Lien?

A federal tax lien is the government’s legal claim against your
property when you neglect or fail to pay a tax debt. The lien protects
the government’s interest in all your property, including real estate,
personal property and financial assets. A federal tax lien exists after:

The IRS:

Puts your balance due on the books (assesses your liability);

Sends you a bill that explains how much you owe (Notice and Demand for Payment); and

You:

Neglect or refuse to fully pay the debt in time.

The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.

https://www.irs.gov/businesses/small-businesses-self-employed/understanding-a-federal-tax-lien

Enrolled Agent

(This article is courtesy of the NAEA, National Association of Enrolled Agents)

What is an Enrolled Agent?

Enrolled agents (EAs) are America’s tax experts. They are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service.
These tax specialists have earned the privilege of representing
taxpay­ers before the IRS by either passing a stringent and
com­prehensive three-part examination covering individual tax returns;
business tax returns; and, representation, practice and procedure – or
through relevant experience as a former IRS em­ployee. All candidates
are subjected to a rigorous background check conducted by the IRS.

https://www.naea.org/about-naea

IRS Tips Concerning Your Personal Tax Information

The following is from an article on the IRS website.  When you
have any IRS tax questions, you may want to check with their site at https://www.irs.gov.  Here are excerpts from the article, which is linked at the end of the next paragraph.

“Tax professionals provide an incredibly valuable service to
taxpayers and our nation’s tax system,” said IRS Commissioner Chuck
Rettig. “We encourage people to carefully choose who they trust with
their most sensitive tax and financial information. There are some
simple steps taxpayers can follow to make sure they’re getting good,
professional help.“  https://www.irs.gov/newsroom/irs-choose-tax-preparers-carefully-tax-return-preparer-fraud-makes-irs-2019-dirty-dozen-list-of-tax-scams

Choose return preparers wisely

It is important to choose carefully when hiring an individual or firm
to prepare a tax return. Well-intentioned taxpayers can be misled by
preparers who don’t understand taxes or who mislead people into taking
credits or deductions they aren’t entitled to claim. Scam preparers
often do this to increase their fee.

Here are a few tips to consider to help avoid fraudsters:

Look for a preparer who is available year-round. In the event
questions come up about a tax return, taxpayers may need to contact the
preparer after the filing season is over.

Ask if the preparer has an IRS Preparer Tax Identification Number
(PTIN). Paid tax return preparers are required to register with the IRS,
have a PTIN and include it on tax returns.

Inquire whether the tax return preparer has a professional
credential (enrolled agent, certified public accountant or attorney),
belongs to a professional organization or attends continuing education
classes. Because tax law can be complex, competent tax preparers remain
up-to-date on tax topics. The IRS website has more information regarding
national tax professional organizations.

Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
This tool can help locate a preparer with the preferred qualifications.
A searchable and sortable listing of tax preparers registered with the
IRS, the directory includes the name, city, state and zip code of
attorneys, CPAs, enrolled agents, Annual Filing Season Program participants, enrolled retirement plan agents and enrolled actuaries.

Check the preparer’s history. Check the Better Business Bureau
website for information about the preparer. Look for disciplinary
actions and the license status for credentialed preparers. For CPAs,
check with the State Board of Accountancy. For attorneys, check with the
State Bar Association. For Enrolled Agents, go to IRS.gov and search
for “verify enrolled agent status” or check the Directory.

Ask about service fees. Avoid preparers who base fees on a
percentage of their client’s refund or boast bigger refunds than their
competition. Don’t give tax documents, Social Security numbers or other
information to a preparer if merely inquiring about their services and
fees. Unfortunately, some unscrupulous preparers have used this
information to improperly file returns without the taxpayer’s
permission.

Make sure the preparer offers IRS e-file and ask to e-file the tax
return. Paid preparers who do taxes for more than 10 clients generally
must file electronically. Since electronic filing began in the 1980s,
the IRS has processed more than 1.5 billion e-filed individual tax
returns. It’s the safest and most accurate way to file.

Provide records and receipts. Good preparers ask to see these
documents. They’ll also ask questions to determine the client’s total
income, deductions, tax credits and other items. Do not hire a preparer
who e-files a tax return using a pay stub instead of a Form W-2. This is
against IRS e-file rules.

Understand representation rules. Attorneys, CPAs and enrolled agents
can represent any client before the IRS in any situation. Annual Filing
Season Program participants may represent taxpayers in limited
situations if they prepared and signed the tax return. However,
non-credentialed preparers who do not participate in this program may
only represent clients on returns they prepared and signed before the
end of 2015.

Never sign a blank or incomplete return.

Review the tax return before signing. Be sure to ask questions if
something is not clear or appears inaccurate. Any refund should go
directly to the taxpayer – not into the preparer’s bank account.
Reviewing the routing and bank account number on the completed return is
always a good idea.