We are still reviewing the Taxpayers Bill of Rights.  Our last newsletter covered your first 5 rights under the IRS Bill of Rights. Now we are finishing with the last 5.

• The Right to Finality

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

• The Right to Privacy

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will prove its case in a due process hearing.

• The Right to Confidentiality

Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers and others who wrongfully use or disclose taxpayer return information.

• The Right to Retain Representation

Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.

• The Right to a Fair and Just Tax System

Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay or ability to provide information in a timely manner. Taxpayers have the right to receive assistance from the Taxpayers Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and in a timely manner through its normal channels.

The IRS provides the following sources for forms, publications and additional information.  You can also contact Hornstein Financial and speak to Steve Hornstein or Samara Lewinson about your tax questions. 

Did you know that as a taxpayer you have a Bill of Rights?  That’s correct.  There is a Taxpayer Bill of Rights.  Now that Tax season has begun here at Hornstein Financial we will be covering this topic in our newsletter.   

The IRS Mission is to provide America’s taxpayers with top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all. 

• The Right to Be Informed

Taxpayers have a right to know what they need to do in order to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

• The Right to Quality Service

Taxpayers have a right to receive prompt, courteous and professional assistance in their dealings with the IRS.  To be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.

• The Right to Pay No More Than the Correct Amount of Tax

Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

• The Right to Challenge the IRS’s Position and Be Heard

Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

• The Right to Appeal an IRS Decision in an Independent Forum

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

The IRS provides the following sources for forms, publications and additional information.  You can also contact Hornstein Financial and speak to Steve Hornstein or Samara Lewinson about your tax questions. 

January

Employers must provide employees with a W-2 by Jan. 31.

Businesses that hire independent contractors will have to give them their 1099-MISC by that date.

Retirees should also pay attention to their mailboxes in January. That’s when the Social Security Administration sends beneficiaries an SSA-1099, which will detail what they received during the previous year.

If you blink, you may miss your 1099-R, a document filers get when they’ve taken a distribution from a retirement plan or from an IRA. Expect your brokerage firm to send this out to you by the end of January.

February and March

You may have heard about the triple tax benefits of a health savings account: You can make tax-deductible or pretax contributions to it. Also, your money will grow free of taxes and you can use the cash tax-free for qualified medical expenses.

Further, if you had health insurance coverage last year, whether you bought it through a state or federal marketplace or you had it at work, you’ll get a Form 1095-A, -B or -C by early March.

Mid-February – Owners of taxable investment accounts should be on the lookout around for a slew of 1099s from their brokerage firms.

These forms report dividends and interest of more than $10, as well as capital gains and stock sales.

If you own a home, watch out for Form 1098, which you’ll need to deduct mortgage interest.

You can also deduct tuition and education costs and student loan interest.

Chase these forms down

Investors in partnerships, and recipients of a trust or estate, may have to sit tight all spring while waiting for their Schedule K-1, which reports income, losses and dividends.

These individuals may have to estimate their income and taxes, and then request an extension with the IRS.

Shareholders in S-Corps who need a K-1 to file their taxes can’t get this document until the corporation has completed its return.

You may need to do a little legwork to get other forms. For instance, you’ll need to ask your child care provider for additional documents if you’d like to claim the child and dependent care credit.

Always talk to your tax professional if you are confused or have questions.  Call our office to make an appointment or speak to someone today 818.887.9401.