IRS Using Private Debt Collection Agencies

In 2015, President Obama signed into law the Fixing America’s Surface Transportation Act, known as the FAST Act. It provides long-term funding for transportation projects. Buried in the bill is a requirement that the IRS must use private debt collection companies.

Starting in 2016, the IRS is required to use private debt collection companies to collect “inactive tax receivables” (i.e., any outstanding assessment that the IRS includes in potentially collectible inventory). Traditionally, this debt has been hard to collect tax.

IRS Collections Program: When the IRS first began using private tax collectors, it assured taxpayers that they would know they are in the program before being contacted by a private collection agency. This way, taxpayers could be wary of any bill collectors who claim to be working on behalf of the IRS.

Contact By Letter: Private tax collectors will usually contact a taxpayer by letter. If the taxpayer’s last known address is incorrect, the private collector searches for the correct address. Next, the private collector will telephone the taxpayer to request full payment.

Payment Directly to the IRS: If the taxpayer cannot pay in full right away, the private collector offers an installment deal for up to five years. Please note, private collectors cannot accept payments. Do not pay them directly! All checks will still be made payable to the U.S. Treasury—not to an individual or firm. The collection agency will provide the appropriate IRS mailing address for payments. The collection agencies will never request that cash or checks be sent to individuals.

There is some speculation that this requirement may result in additional attempts by fraudsters to collect payments. If you receive a letter or phone call, please do not hesitate to contact Green FS immediately so that we can help you determine if this is a legitimate debt collection.

Estimated Taxes Payment Schedule

Who Must Pay Estimated Tax?

If you are filing as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.
If you are filing as a corporation you generally need to make estimated tax payments for your corporation if you expect the corporation to owe tax of $500 or more when you file the tax return.

Due Dates:

Q1 January 1-March 31 – DUE April 18, 2016

Q2 April 1- May 31, 2016 DUE June 15, 2016

Q3 June 1 – August 31, 2016 DUE September 15, 2016

Q4 September 1 – December 31, 2016 DUE January 17, 2017

Missing payments can equal to hefty penalties for you and your business. If you need help filing your estimated taxes please contact us today 888.391.9993 or info@greenfs.com.

 

6 Facts to Know Before Deducting a Charitable Donation

If you gave money or goods to a charity in 2015, you may be able to claim a deduction on your federal tax return. Here are six important facts you should know about charitable donations.

1. Qualified Charities. You must donate to a qualified charity. Gifts to individuals, political organizations or candidates are not deductible. An exception to this rule is contributions under the Slain Officer Family Support Act of 2015. To check the status of a charity, use the IRS Select Check tool.

2. Itemize Deductions. To deduct your contributions, you must file Form 1040 and itemize deductions. File Schedule A, Itemized Deductions, with your federal tax return.

3. Benefit in Return. If you get something in return for your donation, you may have to reduce your deduction. You can only deduct the amount of your gift that is more than the value of what you got in return. Examples of benefits include merchandise, meals, tickets to an event or other goods and services.

4. Type of Donation. If you give property instead of cash, your deduction amount is normally limited to the item’s fair market value. Fair market value is generally the price you would get if you sold the property on the open market. If you donate used clothing and household items, they generally must be in good condition, or better, to be deductible. Special rules apply to cars, boats and other types of property donations.

5. Form to File and Records to Keep. You must file Form 8283, Noncash Charitable Contributions, for all noncash gifts totaling more than $500 for the year The type of records you must keep depends on the amount and type of your donation

6. Donations of $250 or More. If you donated cash or goods of $250 or more, you must have a written statement from the charity. It must show the amount of the donation and a description of any property given. It must also say whether you received any goods or services in exchange for the gifts.

Being charitable can very rewarding, but it’s important to report your contributions correctly. Contact GFS if you have questions.

Mileage Rates for Business, Medical and Moving For 2016

Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

54 cents per mile for business miles driven, down from 57.5 cents for 2015

19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015

14 cents per mile driven in service of charitable organizations

The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates. The charitable rate is based on statute.