IRS Trouble Solvers - October 2021

FOSTERING FRIENDSHIPS, BUSINESS COLLABORATIONS, AND COMMUNITY Merging for the Better

One year ago, IRS Trouble Solvers merged with Golden Tax Relief to form IRS Trouble Solvers, LLC, and the decision could not have been any better. By combining my office with Pat Sheehan’s, we opened up a variety of doors and solutions to be able to help more people. In blending our talents and resources, we are better suited to serve both businesses and individuals. We pride ourselves on not only resolving our clients’ tax matters, but also setting them up for success by giving them tools to not end up in the same situation — we assist in digging them out of a hole and ensuring they do not fall back in. Many times, when dealing with IRS issues, people are left feeling as if they don’t have an option other than giving in to the IRS. Oftentimes, they have tried to fix it themselves, only to become frustrated, scared, and exhausted. When individuals find themselves at this point, at the end of the rope (so to speak), we encourage them to tie a knot and hang on for dear life because we are that knot they hang cling on to. At IRS Trouble Solvers, we are the advocate our clients need — and we fight the IRS for them! Since I’ve been in the shoes of my clients and I know how it feels to be wrongly accused by the IRS, I have a passion for helping others navigate these tricky waters.

monitor the action the IRS takes on each client on a daily basis. This keeps us one step ahead at all times.

We take a very client-centric approach: Each case is different and customized based on their circumstances. We do not push clients into a box; we fit the box around them. However, IRS Trouble Solvers does have four cornerstones upon which the company is based, and we apply them to every single case. No. 1: Change Change is required in order for you to move away from a tax problem. Continuing on the same path you had been on in the past and expecting a different result is the definition of insanity. You must be open to change so we can draw a line in the sand and know that from this point moving forward, there won’t be any more tax problems. No. 2: Time It did not take a short time to get into an IRS rut, and it won’t take a short time to get out of this. When it comes to dealing with the government and the bureaucracy built within, you must understand that it cannot be done overnight. You must respond to us in a timely manner — we can only advocate on your behalf if you will reply. No. 3: Investment No, we’re not talking about money here. You must make this operation a priority in your life; if you don’t, you won’t see a change. We must partner together as part of the investment. Just like you need our help, we need yours to make sure we advocate in the best way possible. No. 4: Accountability We ask for your sincere promise that you will give us the right to hold you accountable. In order to advocate on your behalf, we need to hold you accountable to the deadlines the IRS requires. At IRS Trouble Solvers, our tagline is peace, protection, and posterity . We want to give you peace of mind in this process. We want you to know that we’ve got your back no matter what. Lastly, we care about your future. There is a light at the end of the tunnel. We are so excited about how far we have come — and are equally excited about all the future holds for our team and our clients! -Ben Golden

“WE DO NOT PUSH CLIENTS INTO A BOX; WE FIT THE BOX AROUND THEM.”

Over the past year, we surprised ourselves exponentially by doubling in size and adding highly skilled tax attorneys, enrolling agents, CPAs, and former IRS employees to our team. We also now have the ability to offer additional services including tax resolution, tax planning, and bookkeeping services! Because of these additional services, we are uniquely situated to ensure our clients do NOT find themselves in the same trouble ever again. We’ve put a unique process in place for those clients who are business owners — it’s certainly the brainchild of the merger. We also have the unique ability to

OCT 2021

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Few places house events with higher stakes than the courtroom. Lawyers, judges, and jury work with (and against) one another, all while the fate of a person’s livelihood hangs in the balance. The courtroom has indeed captured our collective imagination, which is why television dramas about lawyers and courtrooms have been so popular for decades. Even in 2021, that hasn’t changed. So, if you’re a courtroom drama junkie and are looking for your next binge, then check out some of the following titles as we begin the season of new TV shows. ‘For Life’ The verdict isn’t always the end of the story — sometimes it’s the beginning. “For Life” follows a prison inmate wrongfully convicted of a life sentence and his desperate struggle to become a lawyer. He then works toward overturning his case and returning to his family. This ABC show was a huge hit with critics and fans alike and has been greenlighted for a second season. ‘Defending Jacob’ Oaths in the court of law are strong, but are they stronger than the bonds of family? That’s what one former assistant district attorney will have to answer when one of his son’s classmates is discovered murdered, and many signs point to his son, Jacob, as the killer. This miniseries debuted on Apple TV+ in April 2020 and stars Chris Evans of “Captain America” fame. ‘Perry Mason’ If your taste in story settings is more art deco than postmodern, then you might enjoy this Emmy Award-nominated show from HBO. Set in 1931, Perry Mason is a top-notch criminal defense attorney, who takes on what could be the biggest case the bustling city of Los Angeles has ever seen. As much a character study as it is a crime drama, the performances in this show may suck you in even more than the story itself. NEW LEGAL DRAMAS FOR YOUR LIST Don’t Miss Out on These Gripping Stories!

Here we are, nine months into 2021 and many businesses have still not heard anything back from the IRS regarding their 2020 business return. What gives? A recent report by a watchdog group stepped in to shed some light on the issue. COVID-19 is to blame. A report issued in September by a U.S. Treasury branch watchdog stated that the pandemic triggered a backlog of nearly 8 million paper-filed business tax returns at the IRS last year. That represents a 3,230% increase relative to 2019 when the IRS had roughly 239,000 paper returns waiting to be processed. These delays are largely due to “unprecedented and drastic moves” that the IRS made in an effort to protect employees and taxpayers throughout the pandemic, according to the report. Those measures included closing tax processing facilities and other offices across the country in early April and also extending the federal tax deadline to July 15. Backlogs mainly affected employment tax returns. Thus, 5.5 million were in queue for processing by the end of 2020. 2020 BACKLOG INCREASES B WHAT’S THE H

Delays on business tax returns affected partnerships, companies, estates and gifts, fiduciaries, and tax-exempt groups. As of now, things have improved, but there is still work to be done to catch up. Kenneth Corbin, commissioner of the IRS Wage and Investment

SLOW COOKER SQUA KALE, & SAUSAGE SO

But if none of these seem particularly interesting to you, “Law & Order” is still there to help scratch your crime drama itch.

INGREDIENTS

1 tbsp vegetable oil

Salt and pepper, to taste

4 Italian chicken sausages, sliced to bite-size pieces

4 cups chicken broth

1 tsp smoked paprika

6 cloves garlic

1 tsp Italian seasoning

1 onion, chopped

3 cups kale, chopped

6–7 cups butternut squash, peeled and cubed

1 tbsp red wine vinegar

Inspired by SugarAndSoul.co

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BY 3,230% HOLDUP?

Division, said that to correct this problem, the IRS improved telework operations, hired about 3,500 new employees, and transshipped more than 2.3 million returns, forms, and documents.

OCTOBER WIN OF THE MONTH California Landscaper Seeks IRS Help

“We took, and will continue to take, progressive action to address

the backlog of returns. At the same time, we continue to protect the safety and health of our employees and the taxpaying public,” Corbin stated in a letter on Aug. 11, 2021. Additionally, the IRS offered incentive pay and overtime for IRS employees. Having only met 63% of its recruitment goal for processing operations, the agency is still understaffed, causing difficulties processing tax- year 2020 returns.

According to the report, it is projected that the shortage of IRS employees will have an effect on taxpayers looking forward to refunds or which have claimed pandemic business credit. The struggle to get caught up continues.

CASE SNAPSHOT Client: Business lists expenses on a Schedule C — on his personal return Type of IRS Issue: Personal audit of business expenses including cost of goods sold, repairs and maintenance, reimbursements, office expenses, and legal and professional services Tax Years in Question: 2018 and 2019

Is your return still in the backlog? The STRUGGLE IS REAL!

IRS Claimed Liability: More than $230,000 Savings: $187,037 or 81.3% of the liability

An IRS Trouble Solvers client, a landscaping business owner in California with several employees, was audited for the 2016 and 2017 tax year before seeking our assistance. This audit was closed, but then the IRS decided to also look at the 2018 and 2019 tax years as well. In our client’s case, the IRS had assessed the increase in liability due to inadequate reporting and lack of substantiation. When we were hired, the IRS had already concluded the audit, issued their report, and assessed that our client owed over $230,000 in taxes and penalties. First, we secured an extension, thus allowing us time to review the report, gather the appropriate documentation, and create our report to counter all points made by the IRS. We pulled together our “audit football” and forced the IRS to reengage in the review process. By providing the IRS with over 6 inches of documents, we successfully reduced the client’s tax liability for 2018 to just over $42,962.41 and ZERO for 2019. As a result of the “no change audit” (meaning the IRS has sustained all of the items reviewed and no changes are needed) for 2019, this brings an end to the continuous audit cycle, which can happen when the IRS finds an error in the taxpayer’s returns.

ASH, OUP

DIRECTIONS

1. In a large pot, heat oil over medium heat. Add sausage and cook 4–5 minutes, stirring often, then remove from the pot and set aside. 2. Add garlic and onion to the pot. Sauté 4–5 minutes. Add squash, salt, and pepper. Sauté 8 minutes. 3. In a slow cooker, combine sautéed vegetables, sausage, chicken broth, and seasonings. Cook on low heat for 3 hours and 30 minutes. 4. Open the pot and add the kale. Cook another 20 minutes, then add the red wine vinegar and stir to combine. Cook 10 more minutes, then serve and enjoy!

Our client can now return to the business he loves — creating and maintaining a relaxing oasis for his clients — free of IRS problems!

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INSIDE THIS ISSUE

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One-Year Merger Anniversary

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A Few New Legal Dramas for Your List IRS Backlog of 2020 Business Tax Returns Slow Cooker Squash, Kale, and Sausage Soup

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Win of the Month

How Is Cryptocurrency Taxed?

SO, WAIT — HOW IS CRYPTOCURRENCY TAXED?

A Quick Explanation

Many people enjoy using Bitcoin and other cryptocurrency for the financial freedom that it offers — especially because there are very few fees, if any, involved. Utilizing banks and regular stocks can come along with some large fees. However, this currency still does ultimately get taxed. Here’s how!

Realized gains are those that have been actualized when an existing position is sold for more than it was purchased. So, if the asset happens to depreciate in value and it is traded, sold, or used at a loss, you may be able to subtract the loss from other capital gains to reduce your taxes.

Calculating Taxes on Cryptocurrency Gains and Losses To determine your taxes on cryptocurrency, compare your net proceeds to your cost basis. You also must take into consideration the length of time that you owned the asset. This information is crucial for figuring out the type of capital gain or loss you recognize. Some gains or losses are determined to be “short term,” typically a year or less, and others are “long term,” more than a year. It is important to note that you can offset your capital gains with capital losses.

How It’s Taxed The buzz about cryptocurrency is that it is not backed by any government affiliation and is subject to little or no regulation. However, this is false. When a crypto exchange occurs, both gains and losses must be reported to the Internal Revenue Service. Thus, this is taxed just like traditional stocks and personal assets.

When it comes to federal income taxes, cryptocurrency is thought of as “property” and is therefore treated as a capital asset. This means that it is subject to capital gains taxes just as stocks and bonds are. If the asset appreciates in value and you trade, sell, or use it for profit, then it will be taxed just like capital gains. However, you only owe tax when those gains are realized.

Tracking your crypto gains and losses is crucial for staying on top of everything when tax season rolls around. As always, you can turn to your trusted financial advisor for professional assistance and advice

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