Landmark Tax Group - February 2020

Landmark Ledger How Much Does the IRS Charge in Penalties? Minimize What You Owe by Taking These Tips to Heart

(949) 260-4770 Professional | Experienced | Licensed Expert IRS & State Tax Relief

February 2020

While many people are focused on their loved ones during Valentine’s Day this month, there’s one thing you

your total unpaid taxes. This accrues every month you do not pay your taxes. The silver lining is if both penalties are applied, your total penalty won’t exceed 5%. If you find yourself without the resources to pay your taxes in full or in part, you do have options. Your tax professional can work with you to set up an affordable IRS installment agreement. An installment agreement is a monthly payment plan where taxpayers in need can pay down a tax debt in more manageable amounts over time. This prevents the IRS from levying any assets or bank accounts as long as payments are made on time. You can also file for an extension before the tax deadline. If you do this, and you’ve paid at least 90% of what you owe, you may not face a late penalty at all. If you file your taxes more than 60 days past April 15 or your extended due date, the minimum penalty is either 100% of your unpaid taxes, or $135, whichever is smaller. Although, if you can prove reasonable cause for not paying on time, you may avoid late fees altogether. After you’ve made the necessary adjustments in your taxes, identify the root cause of your tax liability to ensure it doesn’t happen again next year. If you’re still concerned about the penalties you may face this tax season, contact us for immediate assistance. We can help resolve an anticipated IRS collections case way before the IRS enforcement begins. As licensed back tax specialists, we can also try to remove any penalties from your tax account as well. At Landmark Tax Group, we can help you navigate through the entire process so you’re spending more time focusing on your loved ones and not tax penalties.

shouldn’t forget to do: review your taxes. Finances can take a toll on your relationships if you don’t keep track of how much you’re paying in taxes. In previous editions, we’ve broken down how to determine how much you’re overpaying or underpaying in taxes. If you find yourself underpaying and unable to make up the difference, you’ll most likely be faced with IRS penalties. If you fail to pay or file your taxes on time, you’ll receive either a “failure to pay” or a “failure to file” penalty. Even if you pay a portion of your taxes by April 15, a penalty might still be applied. While you may still get the fine, it’s always important to pay as much as you can on time. This way, you’re reducing additional interest and penalties. The late penalty for filing is generally 5% of every month’s unpaid taxes. The penalty starts accruing on April 16 but will not exceed 25% of what you owe. However, there are exceptions. For S corporations, failure to file penalties amount to $195 per shareholder per month.

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If you do not pay your taxes by the deadline, you are immediately given a “failure to pay” penalty of 0.5% of

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“If you find yourself without the resources to pay your taxes in full or in part, you do have options. Your tax professional can work with you to set up an affordable IRS installment agreement.”

–Michael Raanan, MBA, EA, Former IRS Agent


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Valentine’s Lessons

Talking to Your Adolescent About Relationships

With Valentine’s Day approaching, stores are filled with chocolates, stuffed animals, and cards for significant others. Love is in the air! Even though you may not realize it, your kids may also be feeling the pressure. Crushes, dates, and broken hearts are part of their lives, too, but they may struggle to talk with you about it. Thankfully, developmental experts have weighed in on how to approach these important and delicate conversations. Judith Myers-Walls, professor emeritus of child development at Purdue, urges parents not to treat their kids’ crushes as silly. We may know these early expressions of love aren’t that serious in the long run, but to an adolescent, the emotions are very powerful. “They are very easily embarrassed about those feelings,” Myers-Walls observes, “so parents and other adults should be respectful and not tease about those issues.” Rather than make kids feel ashamed of these early romantic feelings, let them know you’re there to talk to them about it. No Laughing Matter

to consider,” he writes, explaining that adolescents tend to only focus on their own feelings and need to learn to consider how their crush may feel about them. This awareness might prevent them from overstepping someone else’s comfort zone.

Respecting Themselves

At the same time, kids and teens should know the importance of respecting their own feelings. Setting boundaries can be especially important when your child is confronted with an unwanted Valentine’s Day card or request for a date and feels pressured to reciprocate. “Boundary setting is imperative to learn during adolescence because it is a time of identity formation,” writes Dr. Marilyn Price-Mitchell in Psychology Today. “Healthy boundaries allow teens to feel respected, valued, and empowered to build positive relationships in their lives.” It also helps them handle uncomfortable social situations with grace and maturity. Crushes and first dates are a part of growing up, as is learning how to contribute to healthy relationships. Much like a first step or learning to drive, patient, loving parental support makes all the difference.

Respecting Others

Dr. David Anderson, a clinical psychologist at the Child Mind Institute, believes it’s especially important to talk to adolescents about respecting boundaries. “One of the big lessons we want to be sending to kids at any age is that there are two people

Losing Sleep Over Your Tax Debt? Have No Fear, IRS Payment Plans Are Here

With tax season in full swing, it’s a stressful time of year. If you utilized our last newsletter to determine how much you owe in preparation

responsible for penalties and fees. If you do get approved for an installment plan that lasts several years, you’re required to adequately file and pay all subsequent tax returns during that time. Eligibility is also dependent upon your previous history. As long as you have not failed to file your returns during the last five years and have not entered into an IRS payment plan during that time, you are still eligible. In situations of debt larger than $25,000, the IRS may require you to submit a financial package to evaluate your income, expenses, and assets. If your business has a debt larger than $10,000, it’s almost guaranteed you will need a financial package. This will allow them to thoroughly investigate your finances to verify your need for a payment plan. But like any other debt, interest still accrues while you’re on the program. Applying for payment plans can be tricky and stressful to navigate. If you find yourself in need of one, reach out any time. For a free consultation, give us a call at ( 949) 260-4770 or visit our website at .

for tax season and find that you’re short, you have options that may make tax season a little less stressful — as long as you’re realistic with your approach. If you work with a licensed IRS representative, they can help you establish a fair and reasonable payment plan. There are a couple of different ways to set these up, but they’re all dependent upon filing your taxes on time. During your filing, you can submit an installment agreement request by mail, phone, or online. From there, the IRS will review your request and your tax account to determine if you meet their guidelines. However, if you owe $10,000 or less, you’re much more likely to get a payment plan that best suits your needs. If you’re uncertain about your eligibility, there are a few other key factors you need to be aware of. You are liable to pay off your debt within a strict time frame allotted by the IRS. Otherwise, you’re


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Is the IRS After You?

If the IRS sends you a subpoena or knocks on your door this spring, you need to know what you’re up against. The first thing you should know is this: If you’ve been given notice you’re under investigation, it’s one of the last procedures before they file charges. Before you get a subpoena in the mail, here is what you need to understand about an IRS criminal investigation. An IRS criminal investigation is not the same as an IRS audit. During an audit, the IRS is determining whether you correctly prepared your tax return. During an investigation, though, the IRS is building a criminal case, which means you will be prosecuted by the U.S. attorney’s office. If you’re convicted, you are subject to severe consequences, including fines and jail time. This is why it’s essential to understand the signs and reasons for an IRS criminal investigation.

There are many reasons the IRS prosecutes taxpayers, but listed below are some of the most typical ones:

• • • • • •

Willful failure to pay Fraudulent statements Additional taxes due Attempt to defeat taxes

• • • • • • •

Tax evasion avoidance

Bankruptcy fraud

Gaming-related fraud

Health care or insurance fraud

Tax evasion

Money laundering Real estate fraud

Willful failure to maintain records

Questionable tax refunds

If you’re concerned the IRS is investigating you, there are a few telltale red flags you need to be aware of. First, your bank records have been subpoenaed by the U.S. attorney’s office or the IRS Criminal Investigation Division (CID). Second, you’ve been in contact with an IRS agent and they suddenly stop working with you. This is another sign they might be reporting your case to a CID agent. Third, you’re working through an audit, yet the IRS stops conversing with you. This commonly happens as a case is referred to the CID. When the CID takes on a case, any changes to your account could jeopardize their case against you. If a CID agent contacts you or you notice any of the signs above, be sure to contact an experienced IRS tax attorney immediately to discuss your options.



“One thing is clear: the Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.” –Ron Paul “But in this world, nothing can be said to be certain, except death and taxes.”

–Benjamin Franklin


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2030 MAIN STREET, STE. #1300 IRVINE, CA 92614 (949) 260-4770 Professional | Experienced | Licensed Expert IRS & State Tax Relief

Inside This Issue Navigating IRS Penalties 1 Crushes, Valentine’s Day, and Parenting Have No Fear, IRS Payment Plans Are Here 2 The Criminal Characteristics of IRS Criminal Investigations 3

Sudoku Answer Key

Learn All About Leap Year 4 LEAP INTO 2020

Facts About the Leap Year

Like the Olympics and presidential elections, leap years only occur once every four years, which is why many people look forward to Feb. 29. But there’s a lot that you might not know about this quirk on the calendar.

U.S. is roughly 187,000. Some famous leaplings include motivational speaker Tony Robbins, rapper Ja Rule, and singer Mark Foster of Foster the People.

However, the most famous leapling is probably Superman. When you invent a super-being, you might as well give him a super-birthday.



To keep the calendar in sync with Earth’s orbit around the sun, an extra day is added to it every four years. Earth takes exactly 365 days, 5 hours, 48 minutes, and 46 seconds to orbit the sun. Those extra hours add up over time, so another calendar day becomes necessary. But a leap year doesn’t occur every four years. Adding that extra day still doesn’t quite keep Earth on track, so the calendar skips leap years that occur during century years not divisible by 400. For example, 2000 was a leap year, but 2100 won’t be.

Anthony, Texas/New Mexico (a single town that straddles the two states’ borders), claims the title “Leap Year Capital of the World.” The city throws one massive birthday party for all leaplings but invites everyone to join the celebration. Two leapling neighbors from Anthony began the tradition in 1988, and it’s blossomed into a festival with thousands of participants every four years. It includes banquets, hot air balloons, a carnival, concerts, parades, and more. When you have four years to plan in between each shindig, there’s time to go big. Celebrate this leap year by doing something unusual or new. It’s a special day that doesn’t occur often, so make the most of it by doing something you’ll talk about for another four years.


The odds of being born on Feb. 29 are 1 in 1,461. That means that of the roughly seven billion people in the world, only about five million of them are “leaplings.” The number of leaplings currently living in the


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