The Power of Pen and Paper: Unveiling the Benefits of Writing an IRS Forgiveness Letter

In the realm of tax obligations, navigating the labyrinth of IRS regulations can often feel daunting. Whether due to an innocent oversight, a misunderstanding, or an unexpected life event, finding oneself in arrears with the Internal Revenue Service (IRS) is a situation that many individuals and businesses encounter at some point. However, amidst the anxiety and uncertainty, there exists a powerful tool that can potentially alleviate the burden: the IRS forgiveness letter.

Crafting a well-composed IRS forgiveness letter can yield a multitude of benefits, ranging from financial relief to fostering a positive relationship with the IRS. Let’s delve into the advantages of this often-overlooked practice:

1. Demonstration of Responsibility: Writing an IRS forgiveness letter showcases your willingness to take responsibility for any errors or oversights that may have led to the tax debt. By acknowledging the issue and expressing a genuine desire to rectify it, you demonstrate integrity and accountability, qualities that are likely to be viewed favorably by the IRS.

2. Explanation of Circumstances: In many cases, tax delinquency stems from extenuating circumstances such as illness, job loss, or unforeseen financial hardships. A well-crafted forgiveness letter provides an opportunity to explain the circumstances that contributed to the tax issue. Providing context can humanize your situation and evoke empathy from IRS representatives reviewing your case.

3. Request for Leniency: Alongside an explanation of circumstances, an IRS forgiveness letter typically includes a request for leniency or forgiveness of penalties and interest associated with the tax debt. By articulating your request respectfully and providing compelling reasons why leniency is warranted, you increase the likelihood of a favorable outcome.

4. Resolution of Compliance Issues: In addition to addressing outstanding tax liabilities, an IRS forgiveness letter can also serve as a platform to outline steps taken to ensure future compliance with tax laws. Whether it involves implementing improved record-keeping practices, seeking professional tax advice, or enrolling in IRS payment plans, demonstrating proactive measures toward compliance reinforces your commitment to meeting your tax obligations.

5. Reduction of Financial Burden: Perhaps the most immediate benefit of writing an IRS forgiveness letter is the potential reduction of financial burden. Depending on the circumstances and the IRS’s response, forgiveness of penalties and interest, or the establishment of a manageable payment plan, can significantly alleviate the strain of tax debt, allowing you to regain financial stability.

6. Preservation of Reputation: A history of tax delinquency can have far-reaching consequences beyond financial repercussions. It can tarnish your reputation and credibility, both personally and professionally. By addressing the issue head-on with a sincere IRS forgiveness letter, you demonstrate a proactive approach to resolving the matter, thereby safeguarding your reputation and integrity.

7. Promotion of Positive Relationship: Building a positive relationship with the IRS is invaluable in navigating future tax-related matters. By approaching tax issues with transparency, honesty, and respect, you lay the groundwork for a constructive relationship with IRS representatives. This can facilitate smoother resolution of any future tax issues and engender goodwill between you and the IRS.

In conclusion, the benefits of writing an IRS forgiveness letter extend far beyond the realm of financial relief. It is a powerful tool for demonstrating responsibility, explaining circumstances, requesting leniency, resolving compliance issues, reducing financial burden, preserving reputation, and promoting a positive relationship with the IRS. While crafting such a letter requires careful consideration and attention to detail, the potential rewards make it a worthwhile endeavor for anyone seeking resolution of tax-related challenges.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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Tax Deadlines

As the seasons change and springtime blooms, so too does the annual tax season approach its peak. April and May bring forth crucial deadlines for taxpayers to fulfill their obligations to the government. Whether you’re an individual taxpayer or a business owner, understanding these deadlines is paramount to avoiding penalties and staying compliant with tax laws.

April 15: Individual Tax Deadline

For many individual taxpayers in the United States, April 15 holds significant weight as the deadline for filing federal income tax returns. This date remains a steadfast marker on the calendar, although it may shift slightly in certain circumstances. Taxpayers are required to file their returns by this date, reporting their income, deductions, and credits for the previous tax year.

Moreover, April 15 isn’t just about filing—it’s also the due date for any taxes owed to the Internal Revenue Service (IRS). For those unable to meet this deadline, filing for an extension is an option, providing an additional six months to submit the necessary paperwork. However, it’s essential to note that an extension to file does not extend the deadline for paying taxes owed. Interest and penalties may accrue on any outstanding tax balance after April 15.

May 17: Extended Deadline for Individual Tax Returns

In certain years, such as those with extenuating circumstances or legislative changes, the traditional April 15 deadline may be adjusted. For instance, in 2021, due to the COVID-19 pandemic, the IRS extended the deadline to May 17. Taxpayers should always keep an eye out for announcements from the IRS or consult with tax professionals to confirm any changes to the deadline.

Additionally, May 17 also serves as the deadline for various other tax-related activities, including:

• Contributions to Individual Retirement Accounts (IRAs) and Health Savings Accounts (HSAs) for the previous tax year.
• Estimated tax payments for the first quarter of the current tax year.

Business Tax Deadlines

While individual taxpayers prepare to meet their obligations, business owners also face deadlines during this period. Corporations, partnerships, and other entities must file their tax returns by specific dates, depending on their fiscal year and entity type. For many businesses operating on a calendar year basis, the deadline falls on March 15. However, extensions may be available, granting additional time to complete and submit necessary paperwork.

Stay Informed and Prepared

Tax deadlines can be stressful, but with proper planning and awareness, taxpayers can navigate them smoothly. Keeping abreast of any changes to deadlines, understanding available extensions, and seeking professional guidance when needed are essential strategies for ensuring compliance and minimizing tax-related stress.

As April and May approach, individuals and businesses alike should mark their calendars, gather necessary documents, and take proactive steps to meet their tax obligations. By doing so, they can avoid penalties, maintain financial health, and focus on the brighter days ahead as spring unfolds its splendor.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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Unveiling the Financial Gatekeeper

In the intricate web of an organization’s financial operations, there exists a crucial linchpin that keeps the wheels of commerce turning smoothly – the staff accountant. Often working behind the scenes, these professionals play a pivotal role in maintaining the financial health and stability of a company. In this blog post, we delve into the world of staff accountants, unraveling their responsibilities, skills, and the impact they have on businesses.

Understanding the Role:

At its core, the role of a staff accountant revolves around managing an organization’s financial data, ensuring accuracy, compliance with regulations, and providing insights for strategic decision-making. While the specific tasks may vary depending on the industry and company size, there are several key responsibilities that remain consistent:

1. Recording and Tracking Transactions: Staff accountants are responsible for recording financial transactions in the company’s accounting software. This includes inputting data related to revenues, expenses, assets, and liabilities. These accurate records serve as the foundation for all financial reporting.
2. Financial Reporting: Staff accountants contribute to the creation of financial statements, such as balance sheets, income statements, and cash flow statements. These reports provide a snapshot of the company’s financial health and performance, enabling stakeholders to make informed decisions.
3. Reconciliation: Regular reconciliation of financial records is essential to identify discrepancies and errors. Staff accountants ensure that the numbers in the accounting system match the actual transactions, investigating and rectifying any discrepancies that arise.
4. Compliance: In a world governed by financial regulations and standards, staff accountants play a crucial role in ensuring the company’s financial practices adhere to laws and industry standards. This includes tax compliance, GAAP (Generally Accepted Accounting Principles) adherence, and industry-specific regulations.
5. Assisting in Audits: During internal and external audits, staff accountants provide the necessary documentation and explanations to auditors. Their meticulous record-keeping and ability to provide accurate information are vital in ensuring a smooth audit process.
6. Data Analysis: Beyond number crunching, staff accountants are increasingly expected to interpret financial data, identifying trends and anomalies that can inform strategic decisions. This analytical aspect of the role requires a combination of accounting knowledge and critical thinking skills.

Skills Required:

Success in the role of a staff accountant demands a blend of technical and interpersonal skills:

1. Attention to Detail: Precision is paramount in accounting. Staff accountants must meticulously analyze and record financial data to avoid errors that could have significant consequences.
2. Analytical Thinking: The ability to interpret financial data and draw meaningful insights from it is crucial for providing valuable information to management.
3. Communication: Staff accountants often collaborate with colleagues from various departments and present financial information to non-financial stakeholders. Effective communication skills are essential to convey complex concepts in an understandable manner.
4. Problem Solving: When discrepancies arise or financial anomalies are identified, staff accountants must employ their problem-solving skills to trace the source of the issue and implement corrective measures.
5. Tech Savviness: Proficiency with accounting software and other relevant tools is essential in today’s digitalized accounting landscape.

The Impact:

While staff accountants may not always take the limelight, their contributions are indispensable. They provide the financial information necessary for executives and managers to make informed decisions, guide budgeting and forecasting processes, and ensure the organization’s compliance with financial regulations. Inaccurate financial reporting can lead to dire consequences, making the role of a staff accountant crucial in maintaining the company’s reputation and stability.

In conclusion, staff accountants are the unsung heroes of a company’s financial operations. Their diligent work ensures that the financial engine runs smoothly, enabling businesses to navigate the complexities of modern commerce with confidence. As businesses continue to evolve, the role of staff accountants will remain a steadfast cornerstone of financial management.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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Hunkered Down, day 6

Texas got a liquidity lifeline last night. Abbott announced that all Texas counties have been included in the Economic Injury Disaster Declaration, which grants access to the Economic Injury Disaster Loan (EIDL) program. The program provides long-term, low-interest loans to small businesses (3.75%) and nonprofits (2.75%) with repayment terms up to 30 years. That’s great news for our local mom-and-pops and employers who are sinking fast.

The turnaround time for the Express loan is reported to be 36 hours. I’m a little skeptical, but I’ll let you know. We are prioritizing these applications and working as quickly as we can to help all of our clients. Bear with us, the 4506-T is already down this morning, and I started at 4am. I’ll keep trying throughout the day and let you know if I get one to go through. Click here to complete the online application at the SBA website.

Proposed: The Main Street Emergency Grant Program would offer grants to small, and possibly mid-sized businesses, and nonprofits to cover payroll and fixed costs, such as rent. The grants would be made avialable “quickly” to provide liquidity and avoid layoffs. This proposal has not been finalized.

Recommendation: Defer the Texas Franchise Tax payment and filing deadline until August 15th, 2020. The delay would defer preparation fees and tax payments for taxpayers, while allowing more time for tax return preparers to help clients navigate the current crisis. Please contact Glenn Hegar at the Texas Comptroller of Public Accounts and encourage him to support this recommendation.

See also:

• Hunkered Down, day 4
• Hunkered Down, day 2

~Mitzi E. Sullivan, CPA

Mitzi E. Sullivan, CPA is a cloud based professional services provider specializing in cloud accounting.

Hunkered Down, day 4

Trying to stay focused. I can hear the news continually in the background and none of it’s good. Working from home is difficult when you want to sit with your family and reach out to others that you can’t be with.

Video conferencing and online services are working well. Praise God! Century Link is actually working. This may be a new normal for many of our clients who are trying these new technologies for the first time. It’s convenient and, hey, you only have to dress from the waste up.

My clients are all scrambling, adapting to the constantly changing markets and conditions. With forced closings, many are laying off, not knowing when their doors will reopen. We desperately need congress to finalize the stimulus package so we can stop trying to hit a moving target. Here’s what I know so far.

Proposed: Small Business Loans and Economic Impact Payments to Individuals

As of this morning, congress is still working out the details and has not passed the bill. The treasury department’s proposal would guarantee small business interruption loans up to 100% of 6 weeks of payroll for a wide range of eligible small businesses.

Two equal economic impact payments would be issued on April 6th and May 18th to eligible individuals. These payments are predicted to be $1,000 to $2,000 each.

In Effect: April 15th Tax Relief

Federal individual and corporate tax payments due on April 15th, 2020 are automatically deferred for up to 90 days without incurring penalty and interest. The deferral includes both 2019, and 1st quarter 2020, income and self-employment taxes. The deferral is expected to add an estimated $300 billion in liquidity to the economy in the near term. The deferral amounts are limited, so call us or check the IRS website for details: Payment Deadline Extended to July 15, 2020 and Notice 2020-17 (PDF), Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.

See also: Hunkered Down, day 2

In Effect: Economic Injury Disaster Loan Program

Small business owners in the following designated states are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19): California, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Indiana, Maine, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Rhode Island, Utah, and Washington. Click here to apply. Find more information on the SBA’s Economic Injury Disaster Loans at: SBA.gov/Disaster.

~Mitzi E. Sullivan, CPA

Mitzi E. Sullivan, CPA is a cloud based professional services provider specializing in cloud accounting.

Free Tax Resources Provided by the IRS

• Free File – prepare and file your federal income tax return for free using tax preparation and filing software.
• Where’s My Refund? – is an online tool that will track your tax refund. You will need your Social security number or ITIN, your filing status and your exact refund amount to use the tool.
• Online Payment Agreements – you can apply for a payment plan online to pay off your balance over time.
• IRS2Go mobile app – Check your refund status, make a payment, find free tax preparation assistance, sign up for helpful tax tips, and more!
• Online Account – use this tool to view: Your payoff amount, updated for the current calendar day, the balance for each tax year for which you owe, up to 24 months of your payment history and key information from your current tax year return as originally filed.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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Hunkered Down, day 2

Wow! What a day. Monday, March 16, 2020 was intense. Tax deadline, concerned clients, family and friends, relocating my staff and all of their equipment to work from home, setting up remote phone and conferencing systems and back up and running by noon. Thanks to my awesome staff for gitin’ er done and to my amazing clients for your support. Not gonna lie, I binged on my quarantine snacks last night and I’m a little bloated this morning.

Looks like today will be chilly and rainy. No worries. We’re all hunkered down anyway. Here’s my plan for the next two weeks:

Count my blessings! I don’t have a clue whether we are overreacting or underreacting. Time will tell. I’m so thankful to live in a community where I trust the motives of my leaders. Thank you, guys, for your honesty and dedication to our community. I am praying wisdom for you all and trusting God to work through you.

Consider my neighbor. As of last night, there were no confirmed cases in Wise County. Let’s do what we can to keep it that way. I have family and friends who are immunocompromised, or work in health care or first response. If you don’t, pretend you do.

Use my gifts. I am diligently working with clients to help them navigate this rapidly transforming economy. The potential impact on our businesses and livelihood is daunting. But necessity is the mother of invention! I see a plethora of excellent ideas and new opportunities every day. My favorite from yesterday is A Touch of Rust Online Market which will replace the market scheduled for March.

Pray. Worrying is terrible for your immune system. There is nothing more destressing than chatting it up with the Creator of the universe. This ain’t His first rodeo. Share your concerns with Him, leave them with Him, then get up and git er done!

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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The Rapid Response to COVID-19 in the United States

Over the weekend, President Trump and the House of Representatives passed a relief bill for the coronavirus. The new bill includes:

FREE COVID-19 TESTING

The first drive through testing center in DFW will begin today at Parkland Health & Hospital System in Dallas. More testing centers will be added in DFW in the coming days.

PROTECTION FOR FIRST RESPONDERS

The Occupational Safety and Health Administration is required to issue rules and regulations to increase protections against the coronavirus. First responders will be given priority to testing and safety protections.

PAID SICK LEAVE

The benefit must be paid by employers with less than 500 workers. Any worker who contracts the coronavirus will receive 100% of their wages during recovery and isolation period. Employers will be reimbursed by the federal government via tax credit.

FOOD AID

The bill provides $1.3 billion in food aid for low-income pregnant women, senior citizens and food banks. States will be able to provide food stamps to help families and children who would miss out on free meals from schools.

UNEMPLOYMENT BENEFITS

Legislation has provided $1 billion to help those who have been laid off due to the coronavirus outbreak.

What can employers do to help limit the number of outbreaks?

Employers should implement remote working and encourage any employers who have symptoms to stay home. For employees who cannot work remotely, employers must encourage social distancing while at the workplace and provide cleaning supplies for all workstations. Employers should encourage and educate employees on the importance of sanitation and social distancing to help keep the outbreak as minimal as possible.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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COVID-19: Economic Impact and Government Relief

With COVID-19 impacting the world economy, President Trump has made plans to help strengthen businesses. Small business loans will be available to eligible organizations negatively impacted by economic slowdown. The Small Business Administration (SBA) has been instructed to provide low-interest loans to help strengthen organizations negatively impacted by COVID-19. To receive an Economic Injury Disaster Loan (EIDL) from the SBA, the organization must be in a county who has been approved for an Economic Loss Declaration. Small businesses who receive the EIDL are set to accrue interest at 3.75% and nonprofits at 2.75% with repayment terms extending up to 30 years.

In addition to the Economic Injury Disaster Loan program, “[President Trump] will be instructing the Treasury Department to defer tax payments without interest or penalties for certain individuals and businesses negatively impacted.” This tax holiday will give businesses a 90 day grace period to pay 2020 Q1 ES payments.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.

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