Tax Services | 3 Solution Types for Businesses and Individuals, serving the Metro Detroit area

Sample of Services:

• Audit and tax debt representation before the IRS and state taxing authorities
• Business and individual compliance – Preparation and tax resolution
• Cost segregation (accelerated depreciation) studies and submissions
• Employer 941/944 (payroll) tax debt issues and trust fund recovery penalties
• Tax planning – Using proprietary methods and tools to avoid/minimize liability from flow-through Businesses to individual returns

Tax planning is done primarily to mitigate liability. It involves creating scenarios and performing those activities to allow either a business or individual to take certain tax positions to allow deductions and credits.

This is done during the calendar or fiscal year in question to create these scenarios and pursue activities to allow a taxpayer to affirmatively take these positions during preparation and filing in the following year.

This is part of Tax Compliance. Proper Accounting and Bookkeeping are inputs that allow Preparer’s to characterize and take positions that are the “most” beneficial to the taxpayer (business or individual).

Tax Preparation and filing is a key component toward compliance since it is a self-declaration of positions that are submitted to the Internal Revenue Service.

When the Internal Revenue Service does not agree with the tax positions or documentation that businesses and individuals file, they notify taxpayers through letters detailing their disagreement and will re-assess the amount of additional tax owed and/or penalties owed.

If you’re notified by the IRS for additional assessments owed, Do Not pursue trying to resolve this on your own. Always consult an experienced and competent professional.

Businesses

Business compliance includes adjusting entries, balancing and reconciling accounts and closing the books for either the fiscal or calendar year period in preparation for the inevitable return filing including relevant schedules. Tax positions/treatments should reflect and be consistent with the type of activities of the business and in accordance with the Internal Revenue Code.

Individuals

Compliance for an individual means that your return(s) are (accurately) and timely filed within the due dates specified by the IRS. Tax compliance also means that your obligations are settled in full or agreed-upon debt payments are being made. Your return(s) and the positions you take should reflect your lifestyle and personal situation.

Planning

• Active engagement where a plan is created to reduce or mitigate liability by actively managing activities that occur during the year (not after the tax year).
• Plan complexities range from Individual plans that are limited to consistent W2 (or 1099) income, consistent filing status, with no big lifestyle events or changes to Individuals with flow-through business entities with seasonal income changes and big changes in their personal situation.
• Plans only work if these roadmaps are monitored for changes throughout the year and corrective actions are followed.
• Tax Credits, deductions, income deferral, quarterly payments and positions, are just a few of the methods used to defer or mitigate liabilities.

Tax Preparation

• Tax preparation is not planning.
• reparation is only concerned with “settling up” with the IRS (during tax season) to determine if any additional money is owed or if the taxpayer overpaid during the year – A refund.
• Other than some suggestions (to open an IRA as a way to obtain additional deductions), there are very few ways to mitigate or reduce your exposure during the prep cycle – since most suggestions or recommendations cannot be retroactively applied to the prior year.
• Preparers are (often) not in a position (because there isn’t time during the tax season) or they lack a detailed understanding of your personal situation to implement any savings during the filing cycle.

As an Enrolled Agent, Mike Faremouth can represent businesses and individuals in all matters involving unresolved tax debt issues and/or audits both at the federal and state level.

For IRS representation, we focus on providing solutions to Clients for two distinct issues –

1. Business payroll/trust fund recovery penalties, and
2. Business audits.

Effective Tax Debt Representation and Resolution.

Sole Proprietorship, Partnership, S-Corporation and C-Corporations, Reviewed. Choosing the better alternative – Partnership or S-Corporation for Federal tax purposes for your Business.

Tax Planning and Advice Prep for 4 Business Entity Types.

Potential IRS Red Flags.

September 2020 – Stock and Debt Basis – A Practical Overview.

August 2020 – Newsletter – About Entities, Deductions, and Pricing.

Avoid Frustration with Employer Identification Numbers – EIN.