Updated: Jan 4
You know the story? The Grinch is hated by everybody in Who-Ville. He attempts to steal everything that he thought made Christmas what it is. All the presents, the trees, the food, etc. Then one person (Cindy Lue) decides maybe the Grinch isn’t so bad and just needs love, resulting in the Grinch giving everything back and joining in the Who-Ville celebration of Christmas.
Now don’t we wish the IRS would give everything back too? Flash! That will never happen. The friendly folks at the IRS see it as their duty to collect every last dollar legitimately owed by all Americans.
But wait! Maybe there are some spots in the IRS’s stone cold heart that are showing warmth. Could that be possible?
How about first time forgiveness of penalties? Yes, if you ask, the IRS must forgive penalties if you haven’t had a prior penalty assessed in at least 3 years. We help clients get this benefit a lot. The IRS’s way of thinking? Folks make mistakes occasionally and therefore are entitled to a little grace. BUT only if you ask!
Cryptocurrency transactions related IRS audits. Well so far, the IRS is very focused on going after tax cheats on this, they just are short handed and have to prioritize their activities. Does this mean you can cheat on Crypto transaction reporting? Absolutely not! Always report all your income properly. Ever heard of “Russian Roulette?” Don’t play Russian Roulette with your taxes. Be honest and report everything, then you will sleep better and if you ever do get audited by the IRS, you shouldn’t have any trouble.
How about tax debts that are over 10 years old? Forgiven? Yes. This is called the “Ten Year Statute of Limitations.” There are some complicated twists and turns to this happening. The 10 year period is supposed to begin when the tax is assessed. There are situations that can “pause the clock” such as Bankruptcy filing, Offer In Compromise filing, being out of the country for at least 6 months, military deferments, etc. The IRS will not tell you your tax debt has been forgiven. You must confirm it by acquiring written documentation from the IRS (called a Certificate of Release of Federal Tax Lien) stating your debt has been forgiven. So if you have an IRS tax debt that is over 10 years from originally being assessed. (That means your tax returns were filed on time, you owed, and it’s been over 10 years since then.) you might be advised to seek out a tax professional to help you inquire of the IRS if it has indeed been forgiven.
Have you heard? Isaiah 9:6 says, “For a child is born to us. A son is given to us; and the government will be on his shoulders. His name will be called Wonderful Counselor, Mighty God, Everlasting Father, Prince or Peace.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.