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Optima Newsletter – July: How the Economy Affects Your Taxes

News letter

How the Economy and Inflation Affect Your Taxes

The IRS updates certain tax provisions annually to account for inflation, so your tax and investment plans should change accordingly.

How to Avoid Having Your Tax Refund Garnished

CEO David King and Lead Tax Attorney Phil Hwang discuss these circumstances and what you should do if you’re thinking your refund could be at risk for IRS seizure. 

Trading Stocks and What it Means for Your Taxes

While stocks may seem like an effortless path toward financial stability, they do affect your taxes. Understanding what’s expected when you file can keep you out of trouble with the IRS.

Tax Reduction Strategies

While taxes are inevitable, you want to make sure that you’re not paying more than you have to. You can legally reduce your taxes by using strategies that you may not be aware of.

The FDCPA: What is it and how does is protect taxpayers?

collection practices act

Being in debt is a stressful circumstance that collectors can often intensify with unfair practices. Therefore, the Fair Debt Collection Practices Act (FDCPA) prohibits companies from using such practices to collect debts from you.

What Does the FDCPA Cover?

Mortgages, credit cards, medical, and personal debts are all covered by the FDCPA. The collectors that are prohibited by this act include the following:

  • Collection agencies
  • Debt buyers
  • Lawyers who regularly collect debts as part of their business
  • Other entities that buy past-due debts from creditors to collect them

The FDCPA doesn’t cover business debts. In addition, it doesn’t cover collection by the original creditor that you’re indebted to.

FDCPA Communication Restrictions

Debt collectors can’t contact you under certain circumstances.

  • Harassment: Debt collectors cannot harass you over the phone or by any other form of contact
  • Inconvenient Times: Debt collectors may not contact you at inappropriate hours or places. This includes before 8:00 a.m. and after 9:00 p.m. Contacting your place of work is also not allowed under the FDCPA.
  • Power of Attorney: Once you have attorney representation, the collector must cease contact with you. The attorney is now responsible as the main point of contact regarding your case. Hence, if you are contacted by a collector, you should inform them that you’re represented by an attorney and give them the attorney’s name.

Once you tell a collector to stop contacting you, they can only contact you to inform you that there will be no further contact, or to notify you that legal action (such as a lawsuit) is taking place.

Debt Information

The collector calling you for a payment is required by law to inform you about the debt. Things they should share include:

  • Identify the creditor (name and address of current or former creditor)
  • Amount owed
  • That you can dispute the debt

FDCPA and Tax Debt

The IRS must also abide by the Fair Debt Collection Practices Act. You have rights as a taxpayer that restricts their communication and enforcement practices. Optima Tax Relief is the nation’s leading tax resolution firm with over $1 billion in resolved tax liabilities.  

If You Need Tax Help, Contact Us Today for a Free Consultation 

New Consequences of Payroll Tax Liability

payroll tax debt

The responsibility of payroll taxes falls on the shoulders of employers, although they come from employee paychecks. The federal government, Social Security and Medicare heavily rely on taxes from employee wages.

IRS revenue officers are now tracking how unpaid payroll taxes were spent during their “trust fund investigation.”

Payroll Taxes Used for the Employer’s Benefit

Employers will now face more penalties for payroll fraud. This can include wrongfully spending payroll taxes or pocketing it for themselves. Maintaining a luxury lifestyle while owing payroll taxes can now lead to prosecution.

Revenue officers are being instructed to pull employer 1040 tax returns to learn whether the money that benefited them was reported as income. If the money was not reported as income, the RO will submit the returns and investigation records to the civil audit division. Another option is that the RO will refer the case to the IRS Criminal Investigation Division to review for criminal prosecution. The course of action made by the RO depends on the severity of the case.

What This Means for Business Owners

Business owners should utilize their tax professionals and seek advise to avoid any possible criminal activity. It’s important to review and track where the payroll money goes for the year. If you know that some of your payroll tax money went to yourself as an employer, you should prepare to amend your income tax returns before the IRS catches up to you.

Avoiding handling this matter could put you in a worse financial situation, or even lead to prosecution.

Payroll Tax Debt

If you are currently in unaffordable tax debt, Optima’s team of tax professionals may be able to aid your case. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.  

Contact Us Today for a No-Obligation Free Consultation 

New IRS Voice Bot Options Shortens Wait Time

IRS voice bot

Many taxpayers are hesitant about calling the IRS for several reasons, including the long wait time to speak with a representative. A phone call could take hours that you may not have to spare in your day to get answers to simple questions. The IRS launched what they believe to be the answer to this problem: voice bot options.

How the IRS Voice Bot Works

Generally, voice bots are artificial intelligence that allow callers to interact using verbal responses. Taxpayers with simple questions about payments, notices and other tax related inquiries can now avoid waiting for a live person to become available.

The voice bot offers services in both English and Spanish, aiding a large percentage of Americans.

Which Lines Have a Voice Bot?

While the IRS states that numerous lines now have voice bot options, it seems this feature will best be suited for Automated Collection System toll-free lines, Accounts Management, discussing payment plan options, and frequently asked questions.

So far, the voice bot has answered over 3 million calls. The IRS continues to add functions to help more taxpayers resolve their issues quickly.

Future Voice Bot Enhancements

Upcoming 2022 enhancements for the automated feature includes:

  • Account and return transcripts
  • Payment history
  • Current balance owed

The Economic Impact Payment line will also have responses for frequently asked questions.

Need more assistance?

Optima Tax Relief is the nation’s leading tax resolution firm with over $1 billion in resolved tax liabilities.  

If You Need Tax Help, Contact Us Today for a Free Consultation