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Frequently Asked Questions

Understanding Tax Return Preparer Credentials and Qualifications

UNLIMITED REPRESENTATION RIGHTS: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals.

Circular 230 is a publication of certain U.S. Treasury regulations which include the rules governing practice before the U.S. Internal Revenue Service (IRS). These rules require attorneys, those qualified to practice as Certified Public Accountants, Enrolled Agents, and other persons who prepare tax returns and provide tax advice to do certain things. The rules in Circular 230 also prohibit certain conduct. Penalties may be imposed for noncompliance. The rules in Circular 230 are codified as Title 31 of the Code of Federal Regulations, Subtitle A, Part 10.12

Circular 230 contains rules of conduct in preparing tax returns. Persons preparing tax returns must not:
Take a position on a tax return unless there is a realistic possibility of the position being sustained on its merits. Frivolous tax return positions are prohibited. Unreasonably delay prompt disposition of any matter before the IRS. Charge the client an “unconscionable fee” for representation. Represent clients with conflicting interests. Solicit business using false statements. Cash checks issued by the U.S. Treasury to a client for whom the return was prepared.

Section 10.27 of Circular 230 has traditionally included restrictions on contingent fee arrangements between taxpayers and their representatives. In July 2014, however, those restrictions were struck down by the U.S. District Court for the District of Columbia “with respect to the preparation and filing of Ordinary Refund Claims, where ‘preparation and filing’ precedes the inception of any examination or adjudication of the refund claim by the IRS and any formal legal representation on the part of the practitioner.” The Court ordered that the government was permanently prohibited from enforcing the applicable restrictions in Circular 230.9

Persons preparing returns or giving tax advice must:

Disclose on returns all nonfrivolous tax positions whose disclosure is required to avoid penalties.10 Return records to clients. Sign all tax returns they prepare. Provide clients a copy of tax returns. Advise clients promptly of errors or omissions of the preparer or client in any tax matter with respect to which the preparer is retained. Submit records, etc., requested by the IRS in a timely manner. Exercise due diligence and use best practices of the profession

How are fees determined?

We competitively offer a simple fee range of $150 to $350 for most personal tax returns. We try to maintain historical fees for returning clients. State Returns are additional.

Your tax preparation fee is not dependent on the number of forms used to prepare your tax returns. Rather your fee will depend on the amount of time required to accurately and comprehensively prepare your tax returns. You can help by being organized and using our simple, individual organizer. Unlike other tax accounting firms, we are comfortable giving solid price quotes and guaranteeing our work.

There is no additional charge for electronic filing or extra copies of your tax return later in the year. There is never a charge for initial consultation or planning meetings or when you call during the year and ask questions on tax matters and advice on how to minimize your taxes.

Beware of Inappropriate Pricing Methods

While tax accountants employ a variety of pricing mechanisms, there are some pricing models that are illegal and prohibited by regulations issued by the Treasury Department in Circular 230. As a general rule, tax professionals are prohibited from charging “an unconscionable fee” for providing tax services. Further, tax professionals are prohibited from charging a fee that’s based on any information contained in the tax return. One common example is a fee that’s based on a percentage of your tax refund. Tax preparers are also prohibited from charging contingent fees except in certain limited circumstances.

Additionally, you should be wary of a tax preparation fee that is much higher than normal. Exorbitant fees can be an early indicator that your tax preparer is engaging in fraudulent activities. Several cases of fraud have involved tax preparers taking inappropriate deductions and tax credits and charging large fees to their clients. If your invoice is much higher than you anticipated, be sure to ask your accountant how the fees were determined.

Will I be charged interest and penalties for filing and paying taxes late?

Yes, when you do not file and pay your taxes on time, you will be charged interest on any unpaid balance, and you may also be subject to penalties, such as the failure-to-file and failure-to-pay penalties.
Interest charged on any unpaid tax compounds daily from the due date of the return (without regard to any extension of time to file) until the date you pay in full.
The interest rate is the federal short-term rate plus 3%.
The federal short-term rate is determined every three months.
For current interest rates, visit the News Release and Fact Sheet Archive and look for the most recent Internal Revenue release about interest rates or search “quarterly interest rates” on IRS.gov; the relevant interest rate is the rate for underpayments.
If you did not pay your tax on time, you will generally have to pay a late-payment penalty, which is also called a failure-to-pay penalty.
The late-payment penalty is 0.5% of the tax owed for each month or part of a month that the tax remains unpaid after the due date, up to 25%.
You will not have to pay the penalty if you can show reasonable cause for the failure to pay on time.
The 0.5% rate increases to 1% per month if the tax remains unpaid after several notices and 10 days after the IRS issues a final notice of intent to levy or seize property.
If your return was filed timely and you are paying your tax via an installment agreement, the penalty is 0.25% for each month or part of a month that the installment agreement is in effect.

Can I get immediate tax relief with an Installment Agreement?

Yes, IRS will no longer send levies or take any enforcement action once an Installment Agreement is in place.

What is a Form 9465 Streamline Installment Agreement?

This is an Installment Agreement for people who owe under $50,000 in back taxes. You must have all your tax returns filed to qualify for this. Under the Streamline Installment Agreement you are not required to file a financial statement.

Does Internal Revenue Service charge a fee for an Installment Agreement?

Yes, the IRS does charges a fee for an Installment Agreement. It is usually built into the tax payment itself. A separate check is not required.

Can I get an Installment Agreement if I have not filed my last year’s return?

No. IRS will make you file all tax returns. They will not give you an Installment Agreement until all returns are current.

How many types of Installment Agreements does the IRS offer?

The IRS offers several types of installment agreements. For balances under $10,000 there is a statutory installment agreement. If the balance is over $10,000 but under $50,000 the Fresh Start program offers a streamlined installment agreement. A collection  information statement (CIS) on form 656 is not required. If your balance is over $50,000, call Plano Tax Prep for a consultation to discuss your options. There is a solution to every tax problem.

Will the IRS file a Notice of Federal Tax Lien with an Installment Agreement?

RS usually files a Federal Tax Lien on every case that there is a balance due. There are times when they can withhold the filing of the Federal Tax Lien. A professional should be consulted on these cases.

Is a partial payment required for an IRS Installment Agreement?

No. The IRS simply builds it into the total tax due.

Can I have a direct deposit payment plan for the IRS?

Yes, the direct deposit payment plan for the IRS is one of the best ways to keep your payments current with the IRS. There are forms that can be provided to make this happen. Ask your Fresh Start Tax Representative.

Does an Internal Revenue Service Installment Agreement hurt my credit?

The Internal Revenue Service Installment Agreement is only known by you and the IRS. Only if a Federal Tax Lien is filed will your credit be hurt.

What happens if I have an agreement but can no longer make my payment because some life circumstance has happened?

Not a problem, simply call us at Plano Tax Prep and we will work to get your payment agreement modified to fit your new condition. This happens all the time and we do this on a regular basis. With this economy, this is happening more and more.

Does the IRS use their own form for an Installment Agreement?

Yes. The IRS has their own internal form to activate the Installment Agreement.

Can I pay my Installment Agreement off with a payroll deduction?

Yes, and the IRS prefers that you do. The IRS will be assured they get their money on time. They always prefer the employer to make the payments. Sometimes, they will insist on it.

Does a Partial Payment Installment Agreement stop IRS enforcement action?

In almost all cases a Partial Payment Installment Agreement stops all enforcement action. IRS usually will not levy during this period of time.

I need my Wage Garnishment stopped immediately, how can I do that?

Contact Joseph Rosio at Plano Tax Prep, once we have your information we work with IRS to stop the wage garnishment. In many cases this can be done immediately.

Will an Installment Agreement release my wage garnishment?

Yes, the installment agreement will release your Wage Garnishment or Bank Levy immediately.

Are quarterly estimated tax payments still due if I am on a payment agreement?

The IRS expects all taxes to be paid and filed on a timely basis and that includes the estimate tax payment. If you miss any filings or payments it could void your payment plan.

If I am on a fixed retirement income such as Social Security, can the IRS still levy me?

IRS can levy almost anything that moves. The answer is yes. The IRS can even levy disability income. The IRS must be contacted and your case resolved or they will levy most forms of income.

Is the IRS Partial Payment Installment Agreement going to close my case?

Yes, the Partial Payment Installment Agreement is a method of case closure for the IRS. These type of cases will put your case into the IRS closed status because of an active Installment Agreement.

Understanding Tax Return Preparer Credentials and Qualifications

UNLIMITED REPRESENTATION RIGHTS: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals.

Circular 230 is a publication of certain U.S. Treasury regulations which include the rules governing practice before the U.S. Internal Revenue Service (IRS). These rules require attorneys, those qualified to practice as Certified Public Accountants, Enrolled Agents, and other persons who prepare tax returns and provide tax advice to do certain things. The rules in Circular 230 also prohibit certain conduct. Penalties may be imposed for noncompliance. The rules in Circular 230 are codified as Title 31 of the Code of Federal Regulations, Subtitle A, Part 10.12

Circular 230 contains rules of conduct in preparing tax returns. Persons preparing tax returns must not:
Take a position on a tax return unless there is a realistic possibility of the position being sustained on its merits. Frivolous tax return positions are prohibited. Unreasonably delay prompt disposition of any matter before the IRS. Charge the client an “unconscionable fee” for representation. Represent clients with conflicting interests. Solicit business using false statements. Cash checks issued by the U.S. Treasury to a client for whom the return was prepared.

Section 10.27 of Circular 230 has traditionally included restrictions on contingent fee arrangements between taxpayers and their representatives. In July 2014, however, those restrictions were struck down by the U.S. District Court for the District of Columbia “with respect to the preparation and filing of Ordinary Refund Claims, where ‘preparation and filing’ precedes the inception of any examination or adjudication of the refund claim by the IRS and any formal legal representation on the part of the practitioner.” The Court ordered that the government was permanently prohibited from enforcing the applicable restrictions in Circular 230.9

Persons preparing returns or giving tax advice must:

Disclose on returns all nonfrivolous tax positions whose disclosure is required to avoid penalties.10 Return records to clients. Sign all tax returns they prepare. Provide clients a copy of tax returns. Advise clients promptly of errors or omissions of the preparer or client in any tax matter with respect to which the preparer is retained. Submit records, etc., requested by the IRS in a timely manner. Exercise due diligence and use best practices of the profession

How are fees determined?

We competitively offer a simple fee range of $150 to $350 for most personal tax returns. We try to maintain historical fees for returning clients. State Returns are additional.

Your tax preparation fee is not dependent on the number of forms used to prepare your tax returns. Rather your fee will depend on the amount of time required to accurately and comprehensively prepare your tax returns. You can help by being organized and using our simple, individual organizer. Unlike other tax accounting firms, we are comfortable giving solid price quotes and guaranteeing our work.

There is no additional charge for electronic filing or extra copies of your tax return later in the year. There is never a charge for initial consultation or planning meetings or when you call during the year and ask questions on tax matters and advice on how to minimize your taxes.

Beware of Inappropriate Pricing Methods

While tax accountants employ a variety of pricing mechanisms, there are some pricing models that are illegal and prohibited by regulations issued by the Treasury Department in Circular 230. As a general rule, tax professionals are prohibited from charging “an unconscionable fee” for providing tax services. Further, tax professionals are prohibited from charging a fee that’s based on any information contained in the tax return. One common example is a fee that’s based on a percentage of your tax refund. Tax preparers are also prohibited from charging contingent fees except in certain limited circumstances.

Additionally, you should be wary of a tax preparation fee that is much higher than normal. Exorbitant fees can be an early indicator that your tax preparer is engaging in fraudulent activities. Several cases of fraud have involved tax preparers taking inappropriate deductions and tax credits and charging large fees to their clients. If your invoice is much higher than you anticipated, be sure to ask your accountant how the fees were determined.

Will I be charged interest and penalties for filing and paying taxes late?

Yes, when you do not file and pay your taxes on time, you will be charged interest on any unpaid balance, and you may also be subject to penalties, such as the failure-to-file and failure-to-pay penalties.
Interest charged on any unpaid tax compounds daily from the due date of the return (without regard to any extension of time to file) until the date you pay in full.
The interest rate is the federal short-term rate plus 3%.
The federal short-term rate is determined every three months.
For current interest rates, visit the News Release and Fact Sheet Archive and look for the most recent Internal Revenue release about interest rates or search “quarterly interest rates” on IRS.gov; the relevant interest rate is the rate for underpayments.
If you did not pay your tax on time, you will generally have to pay a late-payment penalty, which is also called a failure-to-pay penalty.
The late-payment penalty is 0.5% of the tax owed for each month or part of a month that the tax remains unpaid after the due date, up to 25%.
You will not have to pay the penalty if you can show reasonable cause for the failure to pay on time.
The 0.5% rate increases to 1% per month if the tax remains unpaid after several notices and 10 days after the IRS issues a final notice of intent to levy or seize property.
If your return was filed timely and you are paying your tax via an installment agreement, the penalty is 0.25% for each month or part of a month that the installment agreement is in effect.

Can I get immediate tax relief with an Installment Agreement?

Yes, IRS will no longer send levies or take any enforcement action once an Installment Agreement is in place.

Can I get an IRS Installment Agreement on unpaid business payroll taxes?

Yes. IRS takes Installment Agreements on payroll tax/form 941 cases. You must be current on all payroll tax deposits and all payroll tax returns. IRS will not set up an agreement if this is not done.

Can I get an Installment Agreement if I have not filed my last year’s return?

No. IRS will make you file all tax returns. They will not give you an Installment Agreement until all returns are current.

Is a partial payment required for an IRS Installment Agreement?

No. The IRS simply builds it into the total tax due.

Does an Internal Revenue Service Installment Agreement hurt my credit?

The Internal Revenue Service Installment Agreement is only known by you and the IRS. Only if a Federal Tax Lien is filed will your credit be hurt.

How long is my agreement in the IRS computer system for?

Your agreement is locked in the computer system for a varied, case by case period of time. IRS puts a closing code based on the agent’s experience or based on a your adjusted gross income filed on each year’s return as they get processed.
You will not know how the IRS is closing the case unless they tell you. Always ask when they plan to kick out the agreement. Generally, as a rule thumb, the agreements stay in the system for at least three years, but each case is treated differently.

Does the IRS take installment plans on all types of taxes?

Yes it does. IRS will set up an installment plan on any type of tax.

Does an IRS Installment Plan release my Federal Tax Lien?

No once a Federal Tax Lien has been filed by the IRS only a full payment to the IRS or an accepted Offer in Compromise will release the Federal Tax Lien.

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This Firm Is Not A CPA Firm. Our Accountants on Staff are Licensed CPA's in Texas