WORKSHOP: Tax Situation SOS: Dealing with Client Interactions with the IRS - PowerPoint Presentation

1. WORKSHOP: Tax Situation SOS: Dealing with Client Interactions with the IRS

2. HousekeepingThis webinar will be recorded and will be made available to registrantsAll webinar attendees are muted upon entry to ensure sound qualityAsk a question or share your thoughts anytime by typing into the text box of your Zoom portalIf you experience any technical issues, email us at jchu@prosperitynow.org

3. Workshop AgendaSession IntroductionPresentation: Accounting Aid SocietyPresentation: University of DenverDiscussion: Q&ADiscussion: Breakout RoomsWrap Up and Next Steps

4. Workshop SpeakersMargarita PerezUnited Way SuncoastSamantha GalvinUniversity of DenverDennis DolbeeAccounting Aid Society

5. Presentation: University of DenverSamantha Galvin

6. What are Low Income Taxpayer Clinics (“LITCs”)?Represent taxpayers before the IRS or in court on audits, appeals, tax collection matters, and other tax disputes. Services are provided for free or for a small feeThere are currently 131 LITCs around the U.S. housed in academic institutions and legal aid and non-profit organizationsPartially funded by a grant from the Dept. of TreasuryMission is to represent, educate and advocate on behalf of low income and English as a second language (“ESL”) taxpayers

7. Who can LITCs help? Ninety percent of LITC clients must have household gross income within 250% of the federal poverty limit (“FPL”):1 person ≤ $32,2002 people ≤ $43,5503 people ≤ $54,9004 people ≤ $66,250For each additional person add $11,350Ten percent of LITC clients can be above this limit. Each LITC has the discretion to determine when to accept “above income” cases.

8. When can LITCs help?Liability DisputesAuditsTax CourtLiability DefensesID TheftInnocent Spouse ReliefCollection CasesCollection Due Process HearingsCollection Alternative Options

9. Notices for Liability Disputes Notices: CP 05A,CP 2000, Notice of Deficiency/CP3219A,Math Error Notices (CP16 or CP22)All Time Sensitive (depending on notice type: 30, 60, or 90 days)Different supporting documents needed depending on the issueEITCEducation CreditsCancelled Debt IncomeSchedule C Substantiation

10. CP05A Example

11. CP 2000 Example – 30 days

12. Notice of Deficiency (CP3219A) Example – 90 days

13. Math Error Notices – 60 daysCP 16 or CP 22Explains IRS took a simple corrective action, but it may be more complicated than thatMillions of math error notices were sent out for issues related to stimulus (Economic Impact Payment or Recovery Rebate Credit) issuesIf taxpayer disagrees, requires a response within 60 days from the date of the notice Request the IRS to abate it, but IRS does not have to inform the taxpayer of the right to abateIf a taxpayer requests an abatement, then IRS will use the deficiency (audit) procedures Cannot challenge the math error notice in the Tax Court until taxpayer requests the abatement

14. CP16 Example

15. CP22 Example

16. Advanced Child Tax CreditI.R.C. section 7527A authorized half of 2021 child tax credit to be paid in advance (from 7/21-12/21)Enrollment was automatic based on 2019 or 2020 returnNon-filer Portal/Sign Up Tool was available for those who did not have a filing requirementPayment made by direct deposit or paper check (form 3911 can be used to trace payments)CTC Update Portal Launched 6/22Use to unenrollDetermine eligibilityChanges to bank information or address

17. Advanced Child Tax Credit - ReconciliationAdvanced payments will need to be reconciled on 2021 return (IRS will send Letter 6419)Caps on repayment for certain taxpayers who received too muchFull repayment protection: MAGI < $60K (MFJ, QW); $50,000 (HOH); $40,000 (S, MFS)Limited if MAGI exceeds income thresholds or if main home not in the US for more than half of 2021Phased out completely once MAGI = $120,000 (MFJ, QW); $100,000 (HOH), or $80,000 (S, MFS)

18. Notices for Liability DefensesIdentity TheftIdentity Verification RequestsLetters:5071C letter, 5747C letter, 6331C letter, or 5447C letter Innocent Spouse ReliefNotice of Determination

19. ID Verification Options and IssuesOnline at idverify.irs.gov:Account number from credit card, mortgage, student loan, home equity loan or home equity line of credit, car loan, and Mobile phone number in taxpayer’s name, Also… notice, tax return, address on last year’s returnID Verification Number: (800) 830-5084Schedule appointment at Taxpayer Assistance Center

20. Other Resources Internal Revenue Service: www.irs.govSpecific information on Adv. CTC: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021Taxpayer Advocate Service: https://www.taxpayeradvocate.irs.gov/LITC Consultation; find LITC closest to you at: https://www.taxpayeradvocate.irs.gov/about-us/low-income-taxpayer-clinics-litc/#finder

21. Presentation: Accounting Aid SocietyDennis Dolbee

22. IRS Notices for Tax LeviesDennis DolbeeAccounting Aid Society

23. What is a Levy?

24. IRS LevyRequired notices that must be given to a taxpayer:Notice and demandNotice of intent to levy and Notice of a right to a Collection Due Process (CPD) hearing

25. IRS LevyTwo types of levies:Regular andContinuing

26. Regular Levy

27. Continuing Levy

28. IRS Notices

29. Discussion: Q&A

30. Discussion: Breakout Rooms

31. Breakout Room ExpectationsYou’ll be sent out into randomly assigned breakout rooms! Here’s some discussion questions to guide the conversation: Are you connected with your local LITC? How to you work with them and what best practices do you have to share?When clients bring IRS letters into your site, what steps do you usually take?If you experience any technical issues, email us at jchu@prosperitynow.org

32. Wrap Up & Next Steps

33. Wrap Up & Next StepsRecommended PracticesComing Up: Workshop: I’m In: Virtual Reloaded