Is The IRS Going To Take My Refund?

Still Waiting for Your Refund?

Fri, 24 Apr 2026 18:59:51 GMT

Where’s My Refund? How to Check Your Tax Refund Status Fast

If you’ve already filed your tax return and are expecting a refund, you’re probably asking the same question millions of taxpayers ask every year: “Where’s my money?”

The good news is the IRS provides several ways to check your refund status—and in most cases, refunds are issued faster than you might expect.

How Long Does It Take to Get a Tax Refund?

For most taxpayers, the IRS issues refunds within 21 days of accepting an electronically filed return.

In fact, you can start checking your refund status:

Within 24 hours after e-filing, or
About 4 weeks after mailing a paper return

If you’re within that window, your refund is likely still being processed.

4 Easy Ways to Check Your Refund Status

1. Use “Where’s My Refund?” (Fastest Option)

The IRS offers an online tool called Where’s My Refund? that gives real-time updates.

You’ll need:

Your Social Security Number
Filing status
Exact refund amount

This is the quickest and most commonly used method.

2. IRS Individual Online Account (New Feature)

The IRS now allows you to opt in for email notifications when your refund status changes.

This is a great option if you don’t want to keep checking manually—you’ll be notified when there’s an update.

3. IRS Mobile App

You can also track your refund using the official IRS mobile app.

It provides the same information as the online tool but is convenient if you prefer checking from your phone.

4. Call the IRS Refund Hotline

If you prefer to speak to an automated system, you can call:

Refund Hotline: 800-829-1954
Amended Return Hotline: 866-464-2050

Keep in mind, phone lines may have wait times during peak season.

Why Is My Tax Refund Delayed?

While most refunds are processed quickly, some returns require additional review. Here are common reasons for delays:

1. Errors on Your Tax Return

Simple mistakes—like math errors or forgetting to sign your return—can slow things down.

2. Missing Direct Deposit Information

If you didn’t include bank details, your refund may be delayed or sent by check instead.

3. Claiming Certain Tax Credits

Credits like the Additional Child Tax Credit often require extra verification, which can extend processing time.

4. Filing an Amended Return

Amended returns take longer because the IRS must compare the original and updated filings.

5. Injured Spouse Relief Claims

These require manual processing, which can significantly delay your refund.

What Should You Do Next?

If your refund is delayed, don’t panic right away. Start by checking your status using one of the tools above.

If it’s been more than 21 days since filing electronically and there’s no update, it may be time to dig deeper or get professional help.

Need Help With Your Tax Situation?

At Arch Tax, we help clients not only file returns—but also resolve issues when things don’t go as planned.

Whether your refund is delayed, your return was flagged, or you simply want expert guidance, we’re here to help.

Reach out today and let’s get your tax situation back on track.

Missed the Tax Deadline?

Fri, 17 Apr 2026 20:58:47 GMT

If you missed the April 15 tax filing deadline, you’re not alone—and more importantly, you still have options.

The key is to act quickly. The longer you wait, the more penalties and interest can add up. Here’s exactly what you need to know and do next.

File Your Tax Return as Soon as Possible

Even if you can’t pay what you owe, filing your tax return should be your first priority.

Failing to file can result in a failure-to-file penalty , which is typically much higher than the penalty for not paying. Filing now helps reduce those penalties and puts you back in good standing with the IRS.

If you still need to file your 2025 tax return, electronic filing options like IRS Free File are available through October 15, 2026.

Can’t Pay Your Taxes? File Anyway

A common mistake taxpayers make is avoiding filing because they can’t afford to pay the full amount owed.

That’s the worst move you can make.

Instead:

File your return immediately
Pay as much as you can
Work on a plan for the remaining balance

This approach helps limit penalties and interest while showing the IRS you’re making a good faith effort.

Understand Penalties and Interest

If you owe taxes and missed the deadline:

Interest begins accruing immediately
Late payment penalties continue until paid in full

The sooner you file and pay—even partially—the more you reduce the total cost.

Set Up a Payment Plan

If you can’t pay your balance in full, the IRS offers several payment options, including installment agreements.

You may qualify to:

Make monthly payments
Apply online for a payment plan
Manage your balance through your IRS account

Taking action here can prevent more aggressive collection actions down the road.

Use IRS Online Payment Tools

The IRS provides multiple secure ways to pay your taxes:

IRS Online Account
IRS Direct Pay
Electronic Federal Tax Payment System (EFTPS)
Debit or credit card
Digital wallets

When you pay electronically, you receive instant confirmation , giving you peace of mind that your payment was received.

You Might Qualify for Penalty Relief

Some taxpayers may be eligible for penalty relief , especially if they have a history of filing and paying on time.

This is often referred to as First-Time Penalty Abatement .

If you qualify, you could have certain penalties reduced or removed entirely—something many taxpayers overlook.

Expecting a Refund? You Should Still File

If the IRS owes you money, there is no penalty for filing late .

However, failing to file could mean leaving money on the table.

You may still qualify for valuable refundable credits such as:

Earned Income Tax Credit (EITC)
Child Tax Credit

Don’t assume you don’t need to file—many people miss out on refunds simply because they don’t submit a return.

Consider Working with a Tax Professional

If you’re unsure what to do next, working with a qualified tax professional can make the process much easier.

The IRS provides a directory of credentialed tax preparers, but choosing the right professional matters. The right guidance can help you:

Minimize penalties
Set up the best payment solution
Ensure your return is filed correctly

Need Help Getting Back on Track?

At Arch Tax, we help taxpayers navigate situations just like this every day—from late filings to IRS payment plans and penalty relief.

If you’re feeling overwhelmed, don’t guess—get clarity.

Still Haven't Filed? Your Last-Minute Options

Fri, 10 Apr 2026 19:18:55 GMT

With the April 15 tax deadline right around the corner, many taxpayers are feeling the pressure. If you haven’t filed your tax return yet, don’t panic—there are still several options available to help you file on time or avoid penalties.

Here’s what you need to know if you’re filing at the last minute.

Review Before You File

Before submitting your tax return, take a few extra minutes to review everything carefully. Filing quickly is important—but filing accurately is even more critical.

Make sure:

All income is properly reported (W-2s, 1099s, side income, etc.)
You’ve included any additional income or adjustments (such as those on Schedule 1)
You’ve claimed all eligible deductions and credits
You have documentation to support the numbers on your return

Simple mistakes can delay your refund or trigger IRS notices, so accuracy matters.

Use Free Filing Options

If your income qualifies, you may be able to file your taxes for free.

IRS Free File is available for taxpayers with an adjusted gross income of $89,000 or less
You can also use Free File Fillable Forms if you’re comfortable preparing your own return, regardless of income

These tools can help you file electronically and avoid mailing delays.

Get Help If You Need It

If you’re unsure about your return or need assistance, there are still resources available—even this close to the deadline.

Volunteer Income Tax Assistance (VITA) offers free help to low- to moderate-income taxpayers
Tax Counseling for the Elderly (TCE) provides support for individuals age 60 and older
AARP Tax-Aide has thousands of locations offering free tax preparation
MilTax is available for eligible military members and their families

Getting help can prevent costly mistakes and give you peace of mind.

Need More Time? File an Extension

If you’re not ready to file by April 15, you can request an extension.

Filing an extension gives you until October 15 to submit your return—but there’s an important catch:

An extension to file is not an extension to pay.

If you owe taxes, you should estimate your balance and make a payment by April 15 to minimize penalties and interest.

The good news is that anyone—regardless of income—can file an extension for free using IRS Free File.

Make a Payment or Check Your Refund

If you owe money, the IRS offers multiple payment options online, including payment plans.

If you’re expecting a refund, you can track it using the IRS “Where’s My Refund?” tool for real-time updates.

Don’t Wait Until the Last Minute Next Year

If you’re feeling stressed right now, you’re not alone. Many taxpayers wait until the final days to file—but it often leads to rushed decisions and missed opportunities.

Planning ahead, staying organized, and working with a tax professional can make the process much smoother—and potentially save you money.

Need Help Filing or Resolving a Tax Issue?

At Arch Tax, we help individuals and business owners navigate tax filing and resolve complex tax situations—even at the last minute.

If you need help filing your return, requesting an extension, or dealing with IRS issues, we’re here to help.

 Contact us today and get your taxes handled the right way—before time runs out.

IRS Audit Risks for Retirees

Fri, 03 Apr 2026 18:07:24 GMT

Retirement may mean the end of your working years—but it doesn’t mean you’re off the IRS radar.

While the IRS audits less than 1% of individual tax returns, certain financial situations can increase your chances of being flagged. For retirees, understanding these risks is key to avoiding unnecessary scrutiny, penalties, and stress.

Let’s break down the most common IRS audit triggers retirees should be aware of.

1. High Income from Investments or Retirement Accounts

Even if you’re no longer working, you may still have significant income.

Retirees often receive income from:

Investment portfolios (capital gains, dividends)
Retirement accounts (IRA or 401(k) distributions)
Rental properties or other passive income streams

The IRS tends to focus more on higher-income taxpayers. If your retirement income is substantial—especially approaching or exceeding $400,000—it increases the likelihood of closer review.

2. Failing to Report All Income

One of the most common audit triggers is mismatched income.

The IRS receives copies of your tax documents, including:

Forms 1099 (investment income, retirement distributions, interest)
Social Security benefit statements
Any W-2s from part-time work

If your tax return doesn’t match what the IRS has on file, it can quickly raise a red flag.

This is especially important for retirees who have multiple income sources. Even small omissions can trigger notices.

3. Required Minimum Distribution (RMD) Mistakes

This is a big one.

Once you reach age 73, the IRS requires you to take Required Minimum Distributions (RMDs) from certain retirement accounts.

Failing to take your RMD—or not taking enough—can result in a 25% penalty on the amount that should have been withdrawn.

This is one of the most avoidable (yet common) mistakes retirees make.

4. Gambling Income and Losses

If you gamble—whether casually or frequently—you are required to report:

All gambling winnings as income
Losses (but only up to the amount of winnings)

A common mistake is reporting losses without reporting winnings, which can immediately attract IRS attention.

5. Business or Side Income Errors

Many retirees stay active with:

Consulting work
Small businesses
Side gigs

If you’re earning income, the IRS expects accurate reporting.

Additionally, claiming business losses year after year can raise concerns. The IRS may determine your activity is a hobby, not a business—meaning your deductions could be disallowed.

6. Large Charitable Contributions

Charitable giving is great—but large or unusual deductions can trigger scrutiny.

This is especially true if:

Donations represent a large percentage of your income
You donate high-value non-cash items

Proper documentation is critical here. Without it, deductions can be denied.

7. Foreign Accounts and Income

The IRS has increased its focus on international compliance.

If you have:

Foreign bank accounts
Overseas investments
Income from outside the U.S.

You may be required to report this through additional filings.

Failure to do so can lead to penalties—and increase your audit risk.

How Retirees Can Reduce Audit Risk

The good news? Most audit risks are avoidable with proper planning.

Here are a few simple steps:

Report all income accurately
Ensure you take your RMDs on time
Keep good records and documentation
Double-check your return for errors or mismatches
Work with a professional if your situation is complex

Need Help Navigating Retirement Taxes?

At Arch Tax, we help retirees stay compliant, reduce risk, and avoid unnecessary IRS issues.

If you’re unsure about your situation or want a second set of eyes on your tax strategy, we’re here to help.

How to Handle Missing Tax Documents

Fri, 27 Mar 2026 19:28:48 GMT

Filing your tax return without all the necessary documents can lead to delays, errors, or even IRS notices. If you’re still waiting on important forms like a W-2 or 1099, don’t panic—there are clear steps you can take to stay on track and file correctly.

Start by Contacting the Issuer

If you haven’t received a tax document, your first step should be to contact the employer, payer, or agency responsible for issuing it. In many cases, the form may have been delayed, lost in the mail, or sent electronically to an account you haven’t checked.

Reaching out early can save you time and prevent unnecessary complications later.

Check Your IRS Online Account

The IRS provides access to wage and income transcripts through your Individual Online Account. These transcripts can include information reported to the IRS, such as:

W-2 wages
1099 income
Interest and dividend income
Health insurance marketplace information

Keep in mind, these transcripts may not always be complete right away. If the IRS hasn’t received the data from the employer or payer yet, it may not appear.

Having access to your transcripts can still be a helpful backup when documents are missing.

Estimate Your Income if Necessary

If you’re unable to obtain your forms in time, you can still file your tax return by estimating your income and withholding amounts.

To do this, you’ll use Form 4852 , which acts as a substitute for missing W-2 or 1099 forms. This allows you to file your return without waiting indefinitely.

However, accuracy is important. Use pay stubs, bank records, or prior statements to make the best possible estimate.

Be Ready to Amend Your Return

If you later receive the correct tax documents and they differ from your estimates, you’ll need to file an amended return using Form 1040-X .

This ensures your tax return reflects the correct information and keeps you compliant with IRS rules.

Watch for Incorrect Forms (Especially 1099-G)

If you receive a Form 1099-G for unemployment benefits that looks incorrect, take it seriously.

Unemployment income is taxable, so reporting the wrong amount can cause issues. You should contact the issuing state agency and request a corrected form.

If you’re unable to get a corrected version in time, file your return using the correct income amount based on your records.

If you receive a 1099-G but never collected unemployment benefits, this could be a sign of identity theft and should be addressed immediately.

Don’t File an Incomplete Return

Filing without the proper information can lead to rejected returns, delays in processing, or IRS notices. In some cases, missing required forms can prevent your return from being accepted at all.

For example, certain forms—like health insurance marketplace statements—are required to complete your return accurately, and missing them can stop the filing process entirely .

Final Thoughts

Missing tax documents can be stressful, but it doesn’t have to derail your filing process. By taking the right steps—contacting issuers, using IRS tools, and filing carefully—you can still meet deadlines and avoid costly mistakes.

If you’re unsure how to proceed or want to make sure everything is done correctly, contact us at Arch Tax and we can help you avoid errors and give you peace of mind.

Don’t Miss Your Share of $1.2B

Fri, 20 Mar 2026 22:07:53 GMT

The Internal Revenue Service recently announced that over 1.3 million people across the nation have unclaimed refunds for the 2022 tax year. With an estimated $1.2 billion in refunds remaining unclaimed, many taxpayers are leaving money on the table. If you have not filed your Form 1040 Federal income tax return for 2022, time is running out. The deadline to submit your return and claim your refund is rapidly approaching on April 15.

Under current tax law, taxpayers generally have a three-year window to file their returns and claim any tax refunds owed to them. If a return is not filed within this three-year period, the unclaimed funds become the property of the U.S. Treasury. This means that if you are owed a refund for 2022, you must act quickly to ensure you do not lose your money permanently.

What You Stand to Lose

By not filing a tax return for 2022, you stand to lose more than just the refund of taxes withheld or paid during that year. Many low- and moderate-income workers may also be eligible for the Earned Income Tax Credit (EITC). For the 2022 tax year, the EITC was worth a significant amount for taxpayers with qualifying children. The EITC is designed to help individuals and families whose incomes fall below certain thresholds, providing valuable financial support.

It is important to note that the IRS may hold your 2022 tax refund if you have not filed tax returns for subsequent years, such as 2023 and 2024. Additionally, any refund you are owed for 2022 will first be applied to any amounts you still owe to the IRS or a state tax agency. It may also be used to offset unpaid child support or other past-due federal debts, including student loan debts.

How to Get Missing Tax Documents

If you need to file a 2022 tax return but are missing key documents, there are several options available to help you gather the necessary information before the April deadline:

Request Copies from Payers: If you are missing Forms W-2, 1098, 1099, or 5498 for the years 2022, 2023, or 2024, you can request copies directly from your employer, bank, or other relevant payers.
Use Get Transcript Online: For many taxpayers, the quickest and easiest option is to use the Get Transcript Online tool available at IRS.gov. If you cannot get missing forms from your employer or other payers, you can order a free wage and income transcript through this tool.
Request a Transcript via Form 4506-T: Another option is to file Form 4506-T with the IRS to request a "wage and income transcript." This transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498, and IRA contribution information. You can use this information to file your tax return. However, please plan ahead, as written transcript requests using Form 4506-T can take several weeks to process. The IRS strongly urges taxpayers to try other options first.

State-by-State Estimates

The IRS has provided estimates of how many taxpayers in each state may be entitled to a tax refund for 2022. For example, in California, an estimated 143,200 individuals may be due a refund, while in Texas, the estimate is 126,000 individuals. These figures highlight the widespread nature of unclaimed refunds across the country.

Frequently Asked Questions (FAQ)

What happens if I miss the April 15 deadline for my 2022 tax return?

If you miss the three-year deadline to file your 2022 tax return, any refund you are owed will become the property of the U.S. Treasury, and you will no longer be able to claim it.

Can I still claim the Earned Income Tax Credit (EITC) for 2022?

Yes, if you are eligible for the EITC for the 2022 tax year, you can still claim it by filing your 2022 tax return before the deadline.

What if I owe taxes for other years?

If you owe taxes to the IRS or a state tax agency for other years, any refund you are owed for 2022 will be applied to those outstanding balances first.

How can I get my missing tax forms quickly?

The fastest way to get missing tax information is to use the Get Transcript Online tool at IRS.gov to request a free wage and income transcript.

Conclusion

Don't let your hard-earned money become property of the U.S. Treasury. If you haven't filed your 2022 tax return, contact Arch Tax now and we will help you gather your documents and submit your return before the April 15 deadline. By doing so, you can claim your share of the $1.2 billion in unclaimed refunds and potentially benefit from valuable credits like the EITC.

The IRS Dirty Dozen: 12 Tax Scams to Watch Out for This Year

Fri, 13 Mar 2026 17:47:34 GMT

Each year, the Internal Revenue Service (IRS) releases its “Dirty Dozen” list of tax scams to warn taxpayers about the most common schemes criminals use to steal money, personal information, and tax refunds. For 2026, the IRS is highlighting a number of evolving scams targeting individuals, businesses, and tax professionals, especially during tax filing season when people are most vulnerable.

The IRS also promotes awareness through initiatives like National Slam the Scam Day, which reminds taxpayers to stay vigilant against fraud and identity theft.

Below is a breakdown of the 12 tax scams the IRS says taxpayers should watch out for this year.

1. IRS Impersonation Emails and Text Messages (Phishing and Smishing)

One of the most common scams involves criminals sending emails, text messages, or social media messages that appear to come from the IRS.

These messages often:

Use urgent or threatening language
Ask you to verify your identity
Claim you are owed a refund
Include links to fake IRS websites

Clicking these links can install malware or steal your personal information.

Important: The IRS does not contact taxpayers by email or text first.

2. AI-Generated IRS Phone Scams

Technology has made scams more convincing. Criminals are now using AI-generated voices, robocalls, and spoofed caller IDs to pretend they are IRS agents.

Scammers may claim you owe taxes and threaten:

Immediate payment demands
Arrest or legal action
Asset seizure

The IRS reminds taxpayers that they typically initiate contact by mail, not phone calls.

3. Fake Charities

Scammers often take advantage of tragedies, disasters, or humanitarian crises by creating fake charities.

Victims may unknowingly donate money and provide personal information to fraudulent organizations.

Before donating, taxpayers should confirm the charity is a legitimate IRS-recognized tax-exempt organization.

4. Misleading Tax Advice on Social Media

Social media platforms are full of viral “tax hacks” claiming people can get large refunds or special credits.

Many of these posts encourage taxpayers to file false information or claim credits they are not eligible for.

Following this advice can lead to:

IRS audits
Delayed refunds
Civil penalties
Criminal charges

Always verify tax advice with trusted professionals or official IRS resources.

5. Identity Theft and IRS Online Account Fraud

Criminals may attempt to gain access to your IRS online account using stolen personal information.

Some scammers even pose as “helpers” offering assistance setting up IRS accounts, only to steal your data.

Taxpayers should always create their accounts directly through IRS.gov and never share login credentials with unknown third parties.

6. Abusive Long-Term Capital Gains Claims

A new scam highlighted in the 2026 Dirty Dozen list involves fraudulent claims tied to Form 2439, which relates to undistributed long-term capital gains.

Some schemes involve:

Fabricating claims
Overstating credits
Linking claims to fake investment organizations

Improper claims can result in refund delays, audits, penalties, and enforcement action.

7. Fake “Self-Employment Tax Credit” Promotions

Scammers are promoting a nonexistent or misleading self-employment tax credit, encouraging taxpayers to file fraudulent returns to claim refunds.

Many taxpayers do not qualify for the credits being advertised online.

The IRS is closely reviewing claims tied to these promotions.

8. “Ghost” Tax Preparers

A ghost preparer is someone who prepares your tax return but refuses to sign it or provide their Preparer Tax Identification Number (PTIN).

This is a major red flag.

Because taxpayers sign the return, they remain legally responsible for any incorrect information even if someone else prepared the return.

Always choose a reputable tax professional who signs your return.

9. Non-Cash Charitable Contribution Schemes

Some promoters encourage taxpayers to donate items like artwork, land, or property using inflated appraisals to claim large tax deductions.

These schemes can involve:

Syndicated conservation easements
Inflated art valuations
Artificially high property appraisals

The IRS continues to aggressively investigate these types of abusive tax strategies.

10. Overstated Withholding Schemes

In these scams, criminals encourage taxpayers to report false withholding amounts to generate larger refunds.

This may involve falsified information on forms such as:

W-2
1099
Schedule K-1

The IRS compares withholding claims with employer records, and fraudulent filings can lead to penalties and criminal investigations.

11. Phishing Attacks Targeting Tax Professionals

Tax professionals and businesses are frequent targets of spear-phishing attacks.

These scams often involve emails posing as new clients requesting documents or tax help.

The email may contain malicious links or attachments designed to steal sensitive client data or gain access to systems.

12. Misleading Offer in Compromise Marketing

Some companies aggressively market the IRS Offer in Compromise (OIC) program, claiming they can settle tax debts for “pennies on the dollar.”

While the program is legitimate, many taxpayers do not qualify, and some companies charge high fees while overpromising results.

Taxpayers should be cautious of high-pressure sales tactics and unrealistic guarantees.

How to Protect Yourself from Tax Scams

The IRS recommends a few key steps to stay safe:

Never click suspicious links or open unexpected attachments
Do not provide personal information to unsolicited callers or emails
Verify tax advice from trusted sources
Only work with reputable tax professionals
Report suspected scams to the IRS

If you believe your identity has been compromised, visit IRS.gov/idtheft for guidance on protecting your account.

Final Thoughts

Tax scams continue to evolve as criminals find new ways to target taxpayers during filing season. Staying informed about the IRS Dirty Dozen scams can help you recognize warning signs before falling victim to fraud.

If you receive a suspicious call, email, or message claiming to be from the IRS, stop and verify before taking action.

When it comes to taxes, relying on trusted professionals and official IRS resources is the best way to protect your finances and personal information.

IRS Introduces New Tax Breaks for Workers and Seniors

Fri, 06 Mar 2026 20:18:09 GMT

The Internal Revenue Service (IRS) recently announced significant tax changes that could lower the tax burden for millions of Americans. For the 2025 tax year, the IRS has introduced new deductions for tips, overtime pay, car loan interest, and seniors through a newly created tax form called Schedule 1-A.

These changes stem from provisions in the One, Big, Beautiful Bill and represent a major shift in how certain types of income and expenses are treated for federal tax purposes.

Below is a breakdown of what these new tax breaks mean and who may qualify.

What Is the New IRS Schedule 1-A?

To implement these new deductions, the IRS created Schedule 1-A, which will be used alongside Form 1040.

This schedule allows taxpayers to claim deductions related to:

Qualified tips
Overtime income
Passenger vehicle loan interest
Enhanced deductions for seniors

One important aspect of these deductions is that taxpayers may claim them whether they take the standard deduction or itemize, making them accessible to a broader range of taxpayers.

Deduction for Tips

Workers who receive tips may now be able to deduct up to $25,000 in qualified tip income.

This deduction applies to workers in industries where tipping is common, such as:

Restaurant and hospitality workers
Bartenders and servers
Hotel service staff
Personal care professionals

Important Requirements

To qualify:

Tips must be properly reported to the IRS.
Married taxpayers must file jointly to claim the deduction.
The deduction begins to phase out for individuals earning more than $150,000 in modified adjusted gross income (MAGI) or $300,000 for married couples filing jointly.

The IRS instructions also include worksheets and examples to help workers determine the amount of qualified tips they can deduct.

Deduction for Overtime Income

Another major tax break applies to workers who receive overtime compensation.

Taxpayers may deduct:

Up to $12,500 of overtime income
Up to $25,000 for married couples filing jointly

Qualified overtime income must meet the definition under the Fair Labor Standards Act, meaning it must be compensation paid above the regular hourly rate for overtime hours worked.

Income Limits

Similar to the tip deduction:

The deduction phases out when MAGI exceeds $150,000 for individuals.
For married couples filing jointly, the phaseout begins at $300,000.

Deduction for Car Loan Interest

For many taxpayers, purchasing a vehicle requires financing. Under the new rules, taxpayers may be able to deduct interest paid on qualified passenger vehicle loans.

The IRS defines a qualified vehicle loan as financing used to purchase a vehicle that meets specific requirements, including final assembly in the United States.

This deduction may apply when the vehicle is used for personal use, not just business purposes.

As with the other deductions, taxpayers can claim this benefit whether they itemize or take the standard deduction.

Enhanced Deduction for Seniors

The IRS also introduced an enhanced deduction for seniors.

Taxpayers who qualify may receive:

Up to $6,000 per person
Up to $12,000 for married couples filing jointly

Who Qualifies?

To claim the enhanced senior deduction:

The taxpayer must have been born before January 2, 1961.
The taxpayer must have a valid Social Security number.
Married couples must file jointly to claim the deduction.

Income Limits

The deduction begins to phase out when:

MAGI exceeds $75,000 for individuals
MAGI exceeds $150,000 for married couples filing jointly

Why These New Deductions Matter

These new deductions could significantly reduce taxable income for many taxpayers, especially:

Service industry workers
Hourly employees earning overtime
Individuals financing vehicles
Retirees and seniors

Because these deductions can be taken in addition to the standard deduction, many taxpayers who previously received no additional benefit from itemized deductions may now see meaningful tax savings.

File Electronically for Faster Processing

The IRS continues to encourage taxpayers to file their returns electronically and choose direct deposit.

Electronic filing helps:

Reduce calculation errors
Identify missing information
Speed up processing and refunds

Tax software can also guide taxpayers through the new Schedule 1-A calculations.

Need Help Understanding These New Tax Rules?

While these new tax breaks may benefit many taxpayers, the rules, income limits, and phaseouts can become complicated.

If you want to make sure you are claiming every deduction available to you, working with a tax professional can help ensure your return is filed correctly and optimized for the lowest tax liability.

Arch Tax can help review your situation and determine which deductions you qualify for.

 Contact Arch Tax today to discuss your tax situation and maximize your available deductions.

IRS Collection Process 2025

Fri, 27 Feb 2026 22:36:15 GMT

The IRS has officially resumed aggressive collection efforts — and the timeline is now moving much faster than in previous years.

If you owe back taxes, have unfiled returns, or are behind on payments, this change could directly impact you.

In 2025, the IRS is:

Shortening response deadlines
Accelerating levies and garnishments
Updating payment notices
Increasing audits for high-income taxpayers
Resuming in-person field visits

If you have unresolved tax debt, now is not the time to ignore IRS notices.

Let’s break down exactly how the updated IRS collection process works.

How the IRS Collection Process Works

The IRS follows a structured enforcement system. Once a balance is assessed, the clock starts ticking.

The agency generally has 10 years to collect from the date of assessment. This is called the Collection Statute Expiration Date (CSED) .

The process typically unfolds in two major phases:

The Notice Period
The Collection Period

Phase 1: The IRS Notice Period

The collection process begins when the IRS sends a CP14 Notice, informing you of the balance owed (including penalties and interest).

During this phase:

The IRS sends multiple balance-due letters.
Each notice becomes progressively more urgent.
You are given deadlines to respond or pay.

If you ignore these notices, your case transitions into active collection status.

Previously, this entire process could take close to a year.

Now? It can escalate in just a few months.

Phase 2: The IRS Collection Period

Once your account enters collection status, enforcement begins.

You may face:

Federal tax liens
Bank levies
Wage garnishments
Retirement account levies
Property seizure

Collection notices are typically sent every 4 weeks, and many include a 30-day deadline before enforcement action.

If you receive a Notice of Intent to Levy, you have limited time to request a Collection Due Process (CDP) hearing. Missing this deadline removes important appeal rights.

The IRS will continue levying until:

The balance is paid in full, OR
You enter into an approved resolution agreement.

Major IRS Collection Changes in 2025

The biggest shift? Speed.

The IRS has compressed what used to be a slow-moving process into a much faster enforcement cycle.

1. Shorter Timelines

The IRS is accelerating adverse collection actions such as:

Wage garnishments
Bank levies
Asset seizure

Response windows are tighter. Delays are riskier.

2. Payment Plan Notice Redesign

Under the IRS Simple Notice Initiative:

Notices like CP14 and CP161 are redesigned for clarity.
QR codes now link directly to payment plan options.
Deadlines and consequences are more clearly stated.
Online account access is emphasized.

Translation: The IRS expects faster compliance.

3. Resumption of Field Visits

Revenue Officers are back in the field.

After pausing in-person visits in recent years, the IRS has resumed direct contact for delinquent taxpayers.

If your case is assigned to a Revenue Officer:

It is considered more serious.
Enforcement risk increases.
Complex cases receive personal handling.

This is not something you want to navigate alone.

4. Increase in High-Income Audits

Audit rates are rising significantly for:

Individuals earning over $10 million
Corporations with over $250 million in assets

Small businesses and individuals under $400,000 income remain lower audit priority — but collection enforcement applies to everyone with unpaid balances.

5. W-4 Changes Causing More Tax Debt

Revisions to Form W-4 have led to widespread withholding issues.

Millions of taxpayers now owe unexpectedly due to under-withholding.

If your withholding was inaccurate, you may now find yourself:

Receiving a balance due notice
Entering the collection cycle
Facing penalties and interest

What Happens If You Can’t Pay?

The IRS does offer collection alternatives, including:

Installment Agreements
Currently Not Collectible (CNC) Status
Offer in Compromise
Partial Payment Plans

If you qualify for economic hardship status, the IRS may temporarily delay enforcement — but penalties and interest still accrue.

The key is taking action before enforcement escalates.

Why Acting Quickly Matters in 2025

With faster enforcement timelines, waiting is dangerous.

Every week that passes can mean:

Lost appeal rights
Bank levies
Wage garnishments
Increased penalties

The IRS is no longer operating on pandemic-era slowdowns.

They are prioritizing collections again.

How Arch Tax Can Help

At Arch Tax, we help clients:

Understand their exact IRS exposure
Determine their Collection Statute Expiration Date (CSED)
Stop levies and garnishments
Negotiate payment plans
Evaluate Offer in Compromise eligibility
Prevent Revenue Officer escalation

Before you hire anyone, we recommend starting with a proper case review.

The worst thing you can do right now is ignore IRS notices and hope the problem goes away.

It won’t.

How to Avoid Long IRS Hold Times During Tax Season

Fri, 20 Feb 2026 19:00:29 GMT

Trying to call the IRS during tax season can feel like entering a black hole of hold music, transfers, and frustration.

Presidents Day week is historically one of the busiest times of the year for IRS phone lines. Call volumes spike, wait times stretch, and simple questions can take hours to resolve.

The good news?

In many cases, you do not need to call the IRS at all .

This guide will show you how to avoid long IRS hold times by using official IRS online tools — and when it makes sense to hire a professional instead.

Why IRS Hold Times Are So Long During Tax Season

During peak filing season, millions of taxpayers contact the IRS regarding:

Refund status
Missing tax documents
Identity verification notices
Payment plans
Balances owed
Transcript requests

The IRS simply does not have the staffing capacity to handle peak demand efficiently — especially around major filing deadlines and holidays.

That is why using IRS self-service tools is often faster and more effective.

Best Ways to Avoid Calling the IRS

1. Create an IRS Individual Online Account

One of the most powerful ways to skip IRS hold times is by creating an IRS Individual Online Account.

With an online account, you can:

Access wage and income transcripts
View tax return transcripts
Retrieve your adjusted gross income (AGI)
See balances owed
Make payments or schedule future payments
Request or retrieve your Identity Protection PIN (IP PIN)
Approve and sign authorizations for your tax professional

For many taxpayers, this eliminates the need to call the IRS entirely.

Pro Tip: If you plan to work with a tax professional, having your online account set up makes the process much smoother.

2. Check Your Refund Status Online (Instead of Calling)

Do not call the IRS to check your refund.

Use Where’s My Refund? on IRS.gov.

This tool:

Updates once per day (overnight)
Shows refund status within 24 hours of IRS acceptance for e-filed returns
Provides estimated deposit dat es

If you claimed the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), refunds are typically updated by late February.

Calling the IRS will not speed up your refund.

3. File Electronically and Choose Direct Deposit

The fastest way to receive your refund — and avoid IRS issues — is to:

File electronically
Choose direct deposit

Electronic filing reduces errors, speeds processing, and lowers the risk of delayed or lost refunds.

The IRS continues transitioning toward fully electronic processing, making digital filing the most efficient option.

4. Use the IRS Interactive Tax Assistant

If you have general tax questions about:

Filing status
Credit eligibility
Deduction qualifications
Income taxability

The IRS Interactive Tax Assistant can provide answers without waiting on hold.

For simple questions, this tool can save significant time.

When IRS Online Tools Are Not Enough

While IRS self-service tools are helpful, they do not solve everything.\

You should consider professional help if you are dealing with:

IRS notices you do not understand
Wage garnishments
Bank levies
Back taxes owed
Unfiled returns
Identity verification delays
Payment plan complications
Audit correspondence

These situations often require direct communication with the IRS — and mistakes can make matters worse.

Why Hiring a Tax Professional Saves You Time (and Stress)

At Arch Tax, we handle IRS matters for our clients so they do not have to:

Sit on hold for hours
Navigate confusing IRS departments
Say the wrong thing during collection conversations
Miss important deadlines

We work through professional channels and understand how to communicate effectively with the IRS.

Most importantly, we focus on protecting you while working toward a resolution.

Final Thoughts: Skip the Hold Music

Before you call the IRS this tax season, explore IRS.gov’s online tools. Many issues can be resolved faster online.

However, if your situation is complex — or you simply do not want to deal with the IRS yourself — that is where we come in.

Ready to Stop Dealing with the IRS on Your Own?

If you are facing tax problems or IRS notices, schedule a consultation with Arch Tax today.

We will review your situation, explain your options clearly, and help you move forward with confidence.

Contact Arch Tax today and let us handle the IRS for you.

New IRS Tax Deductions for 2026 Filing Season

Thu, 12 Feb 2026 18:48:19 GMT

The IRS has introduced several new tax deductions for the 2026 filing season, creating new opportunities for taxpayers to lower their taxable income and potentially reduce their overall tax bill.

A tax deduction reduces the amount of income that is subject to federal income tax. The lower your taxable income, the lower your tax obligation.

Here’s what’s new for 2026.

New Deductions for the 2026 Filing Season

1. Additional $6,000 Deduction for Seniors (65+)

Taxpayers age 65 and older may now qualify for an additional $6,000 deduction .

This deduction is designed to provide added tax relief to retirees and seniors on fixed incomes. Income phase-outs apply, so eligibility will depend on your total income.

2. Up to $25,000 Deduction for Qualified Tips

Tipped workers may now deduct up to $25,000 in qualified tips .

This is a significant change for workers in industries like hospitality, food service, and personal services. Like other new deductions, this benefit phases out at higher income levels.

3. Overtime Deduction – Up to $12,500 ($25,000 for Joint Filers)

Individuals may be eligible to deduct up to:

$12,500 (single filers)
$25,000 (married filing jointly)

For qualified overtime income.

This deduction may provide substantial tax relief for workers who regularly earn overtime pay.

4. Vehicle Loan Interest Deduction – Up to $10,000

Taxpayers may deduct up to $10,000 in qualified passenger vehicle loan interest .

This deduction could benefit individuals who financed a personal vehicle and meet eligibility requirements.

Available to Both Itemizers and Non-Itemizers

One important feature of these new or enhanced deductions is that they are available to both:

Taxpayers who take the standard deduction
Taxpayers who itemize deductions

Each deduction has income phase-outs and specific eligibility requirements, so careful review is important before claiming them.

Standard Deduction Amounts for Tax Year 2025

For comparison, here are the standard deduction amounts for tax year 2025:

$15,750 – Single or Married Filing Separately
$31,500 – Married Filing Jointly or Qualifying Surviving Spouse
$23,625 – Head of Household

Most taxpayers choose the standard deduction. However, if your deductible expenses exceed these amounts, itemizing may provide greater savings.

Common itemized deductions include:

State and local taxes
Real estate and property taxes
Mortgage interest
Charitable contributions
Medical and dental expenses
Disaster losses
Certain gambling losses

Documentation Is Critical

If you plan to claim deductions, you must maintain proper documentation to support your expenses or income adjustments.

Tax software can calculate deductions automatically, and taxpayers earning less than $89,000 in 2025 may qualify to use IRS Free File guided software at no cost.

The IRS Interactive Tax Assistant can also help determine eligibility for credits and deductions.

Final Thoughts

The 2026 filing season introduces meaningful new deductions that could significantly reduce taxable income for seniors, tipped workers, overtime earners, and vehicle owners.

However, eligibility rules and income phase-outs apply.

If you’re unsure whether you qualify or how these new deductions affect your specific situation, it may be wise to schedule a free consultation with Arch Tax before filing.

Do You Qualify for Penalty Abatement?

Thu, 05 Feb 2026 19:09:16 GMT

Dealing with the IRS can be stressful, and tax penalties can add a significant financial burden to an already challenging situation. If you've received a notice from the IRS with penalties attached, you might feel overwhelmed and unsure of your options. However, the good news is that you may not have to pay these penalties in full. The IRS offers several penalty relief programs, and understanding if you qualify is the first step toward reducing your tax debt.

This article will guide you through the process of IRS penalty abatement, explaining the different types of relief available, the qualifications for each, and how you can request to have your penalties removed. We will explore the most common reasons taxpayers face penalties and provide clear, actionable insights to help you navigate this complex area of tax law.

Understanding IRS Penalties

The IRS assesses penalties for various reasons, and they can accumulate quickly if left unaddressed. The most common penalties taxpayers encounter are for failing to file on time, failing to pay on time, and failing to prepare an accurate return. According to the IRS, approximately 40 million penalties are assessed each year, but only about 10% of those are ever abated. This is often because many taxpayers are simply unaware that penalty relief is an option.

The most frequent penalties include:

Failure to File: This penalty applies when you do not file your tax return by the due date, including extensions.
Failure to Pay: This penalty is assessed when you do not pay the taxes you owe by the original due date, even if you have an extension to file.
Accuracy-Related Penalty: This penalty applies if you underreport your income or claim deductions or credits you are not entitled to.
Failure to Deposit: This penalty is for employers who do not deposit employment taxes correctly and on time.

First-Time Penalty Abatement (FTA)

One of the most accessible forms of penalty relief is the First-Time Penalty Abatement (FTA). This administrative waiver is designed for taxpayers who have a clean compliance history. The success rate for FTA requests is over 70% when properly documented, yet a 2012 report revealed that only 8% of the 1.65 million individual taxpayers who qualified for FTA actually requested it.

Who Qualifies for FTA?

To qualify for FTA, you must meet the following criteria:

Clean Compliance History: You must not have had any penalties in the three years prior to the tax year in which you received the penalty. For example, if you are requesting abatement for a 2025 penalty, you must have a clean record for 2022, 2023, and 2024.
Filing Compliance: You must have filed all required tax returns or filed for an extension.
Payment Compliance: You must have paid or arranged to pay any tax due.

FTA can be used to abate penalties for failure to file, failure to pay, and failure to deposit. There is no dollar limit on the amount of the penalty that can be abated.

The Future of FTA: Automatic Abatement in 2026

Exciting changes are on the horizon for taxpayers. Starting in 2026, the IRS will begin automatically applying FTA for qualifying taxpayers. This change, announced by the National Taxpayer Advocate, is expected to provide relief to approximately 1 million taxpayers annually, many of whom are lower-income individuals who were previously unaware of this option.

Reasonable Cause

If you do not qualify for FTA, you may still be able to have your penalties removed if you can show you had "reasonable cause" for failing to file or pay on time. Unlike FTA, which is based on your compliance history, reasonable cause is determined on a case-by-case basis, considering all the facts and circumstances of your situation.

What is Considered Reasonable Cause?

The IRS may grant penalty relief for reasonable cause if you can demonstrate that you exercised ordinary business care and prudence but were still unable to comply with tax laws. Some examples of valid reasons include:

Unforeseen Events: Fires, natural disasters, or other disturbances.
Inability to Obtain Records: If you were unable to get the necessary documents to file your return.
Death or Serious Illness: The death or serious illness of the taxpayer or an immediate family member.
System Issues: Problems with IRS systems or tax software that prevented you from filing or paying electronically.

It is important to note that certain reasons are generally not considered valid for reasonable cause, such as relying on a tax professional, lack of knowledge of tax law, or lack of funds.

How to Request Penalty Abatement

If you believe you qualify for penalty relief, you can request it from the IRS. The process typically involves the following steps:

Contact the IRS: You can call the toll-free number on your IRS notice to request penalty abatement. Be prepared to explain your situation and provide any supporting documentation.
Write a Letter: You can also send a written request to the IRS. Your letter should clearly explain why you believe you qualify for penalty relief and include any supporting documents.
File Form 843: For a formal request, you can use Form 843, Claim for Refund and Request for Abatement.

If your request is denied, you have the right to appeal the decision. You generally have 30 days from the date of the rejection letter to file an appeal with the IRS Independent Office of Appeals.

Take the Next Step

Navigating IRS penalties can be a daunting task, but you don't have to do it alone. If you are facing tax penalties and believe you may qualify for abatement, the experienced professionals at Arch Tax can help. We understand the complexities of IRS penalty relief and can guide you through the process, from determining your eligibility to preparing and submitting your request.

Crypto, NFTs, and Taxes: What You Need to Know for the 2025 Tax Year

Fri, 30 Jan 2026 19:23:10 GMT

As tax season approaches, many taxpayers are starting to receive their 2025 tax documents, including W-2s and various Forms 1099. If you bought, sold, or otherwise disposed of digital assets during the year, there are a few important IRS reminders you should be aware of before filing your return.

Digital asset reporting is an area the IRS continues to focus on, and misunderstanding the rules can lead to mistakes, delays, or unexpected tax issues.

What Counts as a Digital Asset?

The IRS uses the term digital assets broadly. Common examples include:

Cryptocurrencies such as Bitcoin and Ethereum
Stablecoins
Nonfungible tokens (NFTs)
Other virtual currencies or blockchain-based assets

If you sold, exchanged, or disposed of any of these assets during 2025, there may be tax reporting requirements—even if you didn’t receive a tax form.

The New Form 1099-DA

Taxpayers who used a broker to sell or dispose of digital assets may receive a Form 1099-DA . Brokers are required to send a copy of this form to both the taxpayer and the IRS by February 17, 2026 .

It’s important to understand what this form does—and does not—include:

It reports the gross proceeds of certain digital asset transactions
In many cases, it does not include cost basis
Taxpayers are often responsible for calculating gain or loss themselves

Because of this, the information on a 1099-DA may not be enough on its own to correctly prepare your tax return.

You Must Report Digital Asset Activity—With or Without a 1099

A common misconception is that digital assets only need to be reported if a tax form is received. That is not the case.

The IRS requires taxpayers to report all taxable income, gains, or losses related to digital assets , regardless of whether a Form 1099-DA was issued. This includes transactions conducted on platforms that may not issue reporting forms.

Keeping good records of purchases, sales, transfers, and transaction dates is critical for accurate reporting.

The Digital Asset Question on Your Tax Return

When filing your federal tax return, you will be required to answer a “yes” or “no” question about digital asset activity.

Every taxpayer must answer this question—even if they did not own digital assets.

The IRS provides a questionnaire to help determine how to answer accurately. Answering incorrectly, even unintentionally, can create issues later if the IRS reviews your return.

Why This Matters

Digital asset reporting is an area of increased IRS enforcement and data matching. Errors commonly occur due to:

Missing cost basis information
Incomplete transaction history
Assuming small or infrequent transactions don’t matter
Answering the digital asset question incorrectly

Taking the time to properly report digital asset activity can help avoid notices, audits, or penalties down the road.

Final Thoughts

If you were involved with crypto, NFTs, or other digital assets in 2025, it’s important to understand your reporting obligations before filing your return. Even simple transactions can have tax consequences, and the rules continue to evolve.

If you’re unsure how your digital asset activity should be reported, speaking with a qualified tax professional can help ensure everything is handled correctly the first time.

Social Media Tax Scams, Phishing Texts, and Fake Refunds

Sat, 24 Jan 2026 16:51:41 GMT

When preparing to file taxes, keep an eye out for scams. It's a new year and tax season is around the corner. Tax season is a busy time for criminals too as they ramp up efforts to trick people into sharing sensitive personal information. Identity thieves might use this information to try filing false tax returns and stealing refunds.

The IRS and Security Summit partners want taxpayers, tax professionals and businesses to keep a watchful eye out for the threats listed below.

Common Tax Scams to Watch For

Social Media Scams

Bad tax advice on social media can mislead taxpayers about their credit or refund eligibility. Influencers may convince taxpayers to lie on tax forms or suggest the IRS is keeping a tax credit secret from them. Social media posts may put taxpayers in touch with scammers. Be skeptical of unsolicited tax advice and always verify information directly through official IRS channels.

Phishing and Smishing

The IRS frequently warns against phishing emails and smishing texts, which are common tactics used by criminals to steal personal and financial information. The impersonator wants taxpayers to send them money. Opening links and attachments may harm their computer. Never click on suspicious links or download attachments from unknown sources claiming to be from the IRS.

Protection for Seniors

Scammers target people over age 65 or nearing retirement for personal or financial information or money. Often, once seniors give them money, they ask for more. When scammers trick them to withdraw from their retirement account, it could affect their taxes. Seniors should be extra cautious and verify requests through official channels before sharing any information.

Protections for Businesses and Tax Professionals

The IRS reminds tax professionals of their legal obligation to have a Written Information Security Plan and to use multi-factor authentication. Businesses are also advised to update their security measures and remain vigilant against cyberattacks. Implementing robust security protocols is essential to protecting client and customer data.

Protect Yourself

Steps You Can Take Today

Verify Official Communications: The IRS will never initiate contact via email, text, or social media. Always go directly to IRS.gov or call the IRS at 1-800-829-1040.
Get an Identity Protection PIN: An identity protection PIN is a six-digit number that prevents someone else from filing a tax return using your Social Security number or individual taxpayer identification number. If you don't already have an IP PIN, you may get one as a proactive step to protect yourself from tax-related identity theft. Anyone with an SSN or an ITIN can get an IP PIN, including individuals living abroad.
Use Strong Passwords: Create unique, complex passwords for all financial and tax-related accounts. Use multi-factor authentication whenever available.
Monitor Your Accounts: Regularly check your bank and credit card statements for unauthorized activity. Consider placing a fraud alert or credit freeze with the major credit bureaus.
Report Suspicious Activity: If you receive a suspicious email or text claiming to be from the IRS, forward it to phishing@irs.gov. Report identity theft at IdentityTheft.gov.
Stay Informed: Keep up with the latest scam warnings from the IRS and Security Summit partners. Share this information with family, friends, and colleagues.

Conclusion

Tax season brings increased risk of scams and identity theft. By staying vigilant, verifying official communications, and taking proactive steps like obtaining an Identity Protection PIN, you can significantly reduce your risk. Remember: the IRS will never contact you first via email, text, or social media. When in doubt, reach out directly to the IRS through official channels.

If you have a question about if something is safe our not, reach out to the tax professionals at Arch Tax. Schedule a free call.

Stay safe and protect your personal information this tax season.

Your Rights With the IRS

Fri, 16 Jan 2026 17:00:15 GMT

When most people think about dealing with the IRS, words like stress, confusion, and fear often come to mind. What many taxpayers don’t realize is that you are not powerless when dealing with the IRS. By law, every taxpayer is protected by a set of fundamental rights known as the Taxpayer Bill of Rights.

Understanding these rights can make a significant difference in how confidently and effectively you handle IRS notices, audits, collections, and disputes.

Below is a clear overview of your rights with the IRS, organized into the 10 categories outlined in the Taxpayer Bill of Rights.

What Is the Taxpayer Bill of Rights?

The Taxpayer Bill of Rights (TBOR) is a formal document issued by the IRS that outlines the fundamental protections every taxpayer is entitled to when interacting with the agency. These rights apply to all taxpayers, regardless of income level, filing status, or tax situation.

Knowing these rights helps ensure you are treated fairly and that the IRS follows proper procedures at every stage of the process.

1. The Right to Be Informed

You have the right to know what you need to do to comply with tax laws.

This includes:

Clear explanations of laws and IRS procedures
Notices that explain IRS decisions and actions
Information about your tax obligations and deadlines

The IRS is required to communicate in a way that is understandable and transparent.

2. The Right to Quality Service

You are entitled to prompt, courteous, and professional assistance when dealing with the IRS.

This also includes:

The right to speak with a supervisor if service is inadequate
Accurate responses to your questions
Respectful treatment throughout the process

Poor service is not something taxpayers are required to accept.

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

You have the right to pay only what you legally owe, including interest and penalties — nothing more.

This means:

All payments must be applied correctly
Errors must be corrected when identified
Overpayments should be refunded or credited properly

You are not required to pay amounts that are incorrectly assessed.

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

If you disagree with an IRS action or proposed adjustment, you have the right to object and provide documentation supporting your position.

This includes:

Responding to IRS notices
Submitting additional records
Having your objections considered in a timely manner

The IRS must review your information before making a final decision.

5. The Right to Appeal an IRS Decision in an Independent Forum

You are entitled to a fair and impartial appeal of most IRS decisions.

This includes appeals related to:

Audits
Penalties
Certain collection actions

The IRS Office of Appeals is independent from the rest of the IRS, ensuring decisions are reviewed objectively.

6. The Right to Finality

You have the right to know:

How long the IRS has to audit a tax year
How long the IRS has to collect a tax debt
How much time you have to challenge an IRS action

Tax matters are not meant to remain open indefinitely, and clear time limits apply.

7. The Right to Privacy

The IRS must respect your privacy and conduct any inquiry or enforcement action no more intrusive than necessary.

This means:

Examinations must follow the law
Collection actions must be appropriate to the situation
Personal circumstances should be considered

Not every situation justifies aggressive enforcement.

8. The Right to Confidentiality

Your tax information is protected by law.

You have the right to expect that:

Your information will not be disclosed improperly
IRS employees will safeguard your data
Violations of confidentiality will be addressed

Unauthorized disclosure of tax information carries serious consequences.

9. The Right to Retain Representation

You have the right to be represented by an authorized representative of your choice, such as a tax attorney, CPA, or enrolled agent.

You may also:

Choose not to deal with the IRS directly
Request that the IRS communicate with your representative instead

You are never required to face the IRS alone.

10. The Right to a Fair and Just Tax System

You have the right to expect fairness from the tax system as a whole.

This includes:

Consideration of your ability to pay
Consideration of circumstances that affect compliance
Access to assistance when tax issues create financial hardship

The IRS is required to evaluate the full picture — not just the numbers.

Why Knowing Your Rights Matters

Understanding your rights with the IRS puts you in a stronger position when dealing with:

IRS notices
Audits
Back taxes
Collections
Appeals and disputes

Many problems escalate simply because taxpayers don’t realize the protections already in place for them.

Final Thoughts

The Taxpayer Bill of Rights exists to protect you, but those protections only help if you know and exercise them. Whether you’re dealing with a simple notice or a complex tax issue, understanding your rights can reduce stress, prevent costly mistakes, and lead to better outcomes.

f you’re unsure how your rights apply to your specific situation, speaking with a qualified tax professional such as Arch Tax can help ensure those rights are fully protected. Schedule an appointment to talk to us today.

Preparing to File in 2026: What Taxpayers Should Do Now

Fri, 09 Jan 2026 20:04:50 GMT

The 2026 tax filing season may feel far off, but the IRS is already encouraging taxpayers to take a few simple steps now to avoid delays, missed credits, and unnecessary stress when filing 2025 tax returns.

A little preparation goes a long way. Below are the key updates and practical steps taxpayers should know as they get ready for the 2026 filing season.

Access Your IRS Online Account Early

One of the most important things you can do right now is create or log into your IRS Individual Online Account .

Your online account allows you to:

View balances owed and payment history
Make or schedule payments
Access tax records and notices
Manage communication preferences
Help protect your tax identity

Having access before tax season starts can save time and prevent last-minute scrambling if the IRS needs additional information.

Paper Refund Checks Are Being Phased Out

The IRS is continuing its shift away from paper refund checks as part of a federal initiative to modernize government payments.

Direct deposit is strongly encouraged.
If you don’t currently have a bank account, now is the time to open one so refunds can be deposited electronically. Direct deposit is faster, more secure, and reduces the risk of lost or stolen checks.

Review New 2025 Tax Law Changes

Several tax law changes take effect for 2025 returns, and they may directly impact your refund or tax bill.

Recent legislation includes:

New deductions and credits
Updated eligibility rules for certain dependent credits

Beginning in 2025, taxpayers (and spouses filing jointly) must have a valid Social Security number or ITIN issued on or before the return’s due date (including extensions) to claim certain credits for other dependents.

Missing this requirement could mean losing valuable credits.

New “Trump Accounts” for Eligible Children

A new retirement savings option called Trump Accounts will be available for children under age 18 who have a valid Social Security number.

Key details include:

Accounts can be opened by parents or authorized guardians
Eligible children must be U.S. citizens
Children born between January 1, 2025 and December 31, 2028 may qualify
A $1,000 pilot program contribution is available for qualifying children

This is a new area for many taxpayers, so it’s important to understand how these accounts work and how they may affect long-term financial and tax planning.

Income From Payment Apps and Online Sales Is Taxable

If you earn money through:

Gig work
Side jobs
Online marketplaces
Payment apps

…it is taxable income.

Payment processors and platforms may issue Form 1099-K :

Payment card companies may report any amount
Payment apps and marketplaces will issue forms when payments exceed $20,000 AND 200 transactions in a year

Even if you don’t receive a form, the income is still reportable.

Digital Assets Must Be Reported

Taxpayers who bought, sold, received, or exchanged digital assets must report those transactions.

This includes:

Cryptocurrency
Stablecoins
NFTs

Some taxpayers may receive Form 1099-DA from brokers, but all taxpayers must answer the digital asset question on Form 1040 , regardless of whether a form is issued.

Failure to report digital asset activity properly can lead to penalties or IRS scrutiny.

Get Ready Now for a Smoother Filing Season

Preparing early helps prevent delays, rejected returns, and missed opportunities.

Smart next steps include:

Reviewing tax law changes
Gathering income and expense documents
Confirming access to IRS online tools
Making sure your banking information is up to date

If your tax situation has become more complex — or if you’ve fallen behind on filings or payments — getting guidance early can make a significant difference.

A little preparation now can mean a much smoother, less stressful experience when you file in 2026.

Schedule a free tax consultation with us and we help you through the process.

Got a Tax Refund? Here’s How to Put It to Work

Fri, 02 Jan 2026 15:50:08 GMT

Receiving a tax refund can feel like an unexpected windfall, a bonus from the government that’s all too easy to spend on impulse buys or a fancy dinner out. While there’s nothing wrong with a little celebration, your tax refund presents a golden opportunity to significantly improve your financial health. With a little planning, you can transform that one-time payment into a lasting investment in your future.

This guide offers practical, age-specific tips to help you make the most of your tax refund. Whether you’re just starting your career, juggling the demands of a growing family, or preparing for a comfortable retirement, we’ll show you how to put that money to work in a way that aligns with your life stage and financial goals.

For the Young Professionals (20s and 30s)

In your 20s and 30s, you have the invaluable advantage of time on your side. The financial decisions you make now can have a profound impact on your future. Here’s how to leverage your tax refund to build a strong financial foundation.

Build an Emergency Fund

Life is full of unexpected twists and turns, from a sudden car repair to a temporary job loss. An emergency fund is your financial safety net, a dedicated savings account to cover these unforeseen expenses without derailing your budget or forcing you into high-interest debt. Financial experts generally recommend saving three to six months’ worth of living expenses. If you don’t have an emergency fund, your tax refund is the perfect way to start one. If you already have one, use your refund to bolster it.

Tackle High-Interest Debt

High-interest debt, such as credit card balances and personal loans, can be a major drag on your financial progress. The interest you pay on these debts can quickly snowball, making it difficult to get ahead. Use your tax refund to make a significant payment on your highest-interest debt. This strategy, known as the “debt avalanche” method, can save you a substantial amount of money in interest over time and help you become debt-free faster.

For many young professionals, student loans are a significant financial burden. While federal student loan interest rates are often lower than credit card rates, they can still add up over the life of the loan. Consider using a portion of your refund to make an extra payment on your student loans, which can help you pay them off sooner and reduce the total interest you’ll pay.

Invest in Your Career

Investing in yourself is one of the best investments you can make. Use your tax refund to acquire new skills, earn a professional certification, or attend a conference in your field. These investments can lead to a higher salary, greater job security, and more career opportunities down the road.

For the Established Professionals (40s and 50s)

By your 40s and 50s, you’re likely in your peak earning years, but you’re also juggling more financial responsibilities, such as raising a family, paying a mortgage, and caring for aging parents. Here’s how to use your tax refund to balance your current needs with your long-term goals.

Boost Your Retirement Savings

If you haven’t been saving as diligently for retirement as you would have liked, now is the time to catch up. Your tax refund can provide a significant boost to your retirement nest egg. If your employer offers a 401(k) match, make sure you’re contributing enough to take full advantage of it. If you’ve already maxed out your employer match, consider opening or contributing to a traditional or Roth IRA.

Invest for the Future

If you have a solid emergency fund and are on track with your retirement savings, consider using your tax refund to invest in other long-term goals, such as a child’s education or a down payment on a vacation home. A diversified portfolio of stocks and bonds can help your money grow over time.

Help Your Children (and Yourself)

Many parents want to help their children with the cost of higher education. A 529 plan is a tax-advantaged savings plan designed to help families save for college. Contributions to a 529 plan grow tax-deferred, and withdrawals for qualified education expenses are tax-free. Some states also offer a state tax deduction for contributions to a 529 plan.

For Those Nearing or in Retirement (60s and beyond)

As you approach or enter retirement, your financial priorities shift from wealth accumulation to wealth preservation. Here’s how to use your tax refund to ensure a comfortable and secure retirement.

Fortify Your Retirement Nest Egg

Even if you’re already retired, it’s not too late to strengthen your financial position. If you’re still working, you can continue to contribute to your retirement accounts. If you’re no longer working, you can use your refund to build a cash reserve to cover unexpected expenses without having to sell your investments at an inopportune time.

Pay Down Your Mortgage

Carrying a mortgage into retirement can be a significant financial burden. If you have a mortgage, consider using your tax refund to make an extra principal payment. This can help you pay off your mortgage sooner and free up cash flow in your retirement years.

Plan for Healthcare Costs

Healthcare is one of the largest expenses in retirement. If you’re not yet eligible for Medicare, you can use your tax refund to help pay for health insurance premiums. If you are on Medicare, you can use your refund to pay for supplemental insurance or to build a dedicated savings account for out-of-pocket healthcare costs.

Make a Plan for Your Refund

No matter your age or financial situation, the key to making the most of your tax refund is to have a plan. Before you receive your refund, take some time to think about your financial goals and how your refund can help you achieve them. By being proactive and intentional, you can turn your tax refund into a powerful tool for building a brighter financial future.

IRS Tax Hardship Rules

Fri, 26 Dec 2025 15:52:58 GMT

How Financial Hardship Can Stop IRS Collections

Are you struggling to pay the IRS because your income barely covers basic living expenses?

Many taxpayers don’t realize the IRS offers relief options for people facing genuine financial hardship. Under IRS tax hardship rules, certain taxpayers may qualify for a status known as Currently Not Collectible (CNC)—which temporarily stops IRS collection activity.

If collecting your tax debt would leave you unable to pay for necessities like housing, food, utilities, or healthcare, the IRS may be required to pause enforcement efforts while you get back on your feet.

What Is the IRS Hardship Program?

The IRS Hardship Program is designed for taxpayers who cannot afford to pay their tax debt without creating an unfair financial burden. When the IRS determines that collecting taxes would prevent you from meeting necessary living expenses, your account may be placed into Currently Not Collectible (CNC) status.

The IRS defines hardship as a situation where “collection of the liability would create a hardship for the taxpayer by leaving them unable to meet necessary living expenses.”

Once approved for CNC status:

The IRS pauses wage garnishments
Bank levies are stopped
Property seizures are halted

This doesn’t erase the debt, but it does provide critical breathing room while alternative solutions are evaluated.

What Happens After You’re Declared Currently Not Collectible?

When your account is placed into CNC status, the IRS temporarily stops active collection efforts. With the help of a tax professional, you can then explore next steps such as:

Affordable monthly payment plans
Long-term resolution strategies
Preparing for a potential settlement

For many taxpayers, hardship status is the first step toward stabilizing their finances and addressing back taxes realistically.

IRS Hardship Eligibility Requirements

You may qualify for IRS hardship relief if your income is just enough to cover basic living expenses and little or nothing is left over to pay the IRS.

To apply, the IRS requires detailed financial disclosure using one of the following forms:

Form 433-A or 433-F (individuals and self-employed taxpayers)
Form 433-B (certain businesses)

These Collection Information Statements report:

All assets you own (bank accounts, vehicles, retirement accounts, real estate, etc.)
Estimated market value of those assets
Income for the past three months
Living expenses for the past three months
A calculated monthly average of income and expenses

The IRS uses this information to determine whether you qualify under hardship rules.

IRS Allowable Living Expenses

To qualify, your expenses must fall within IRS Collection Financial Standards, which include four main categories:

Food, clothing, personal care, and household supplies
Out-of-pocket healthcare costs
Housing and utilities
Transportation

Your net disposable income is calculated by subtracting allowable expenses from your monthly income. If little or no income remains, you may qualify for hardship status.

Generally, hardship cases involve taxpayers earning under approximately $84,000 annually, though qualification depends on total financial circumstances—not income alone.

Who Qualifies for IRS Hardship Status?

IRS hardship rules generally apply to:

Individual taxpayers
Joint filers
Self-employed individuals
Sole proprietors
Small business owners where the individual is personally liable

CNC status is not typically intended for large corporations. Businesses unable to pay due to financial distress may need to explore bankruptcy or other legal options.

What IRS Collection Actions Are Stopped?

Once approved for hardship status, the IRS cannot take the following actions:

Tax Liens

A lien is the IRS’s legal claim against your property. While existing liens may remain, new enforcement actions are paused.

Tax Levies

Levies allow the IRS to seize assets or funds. CNC status stops active levies, including bank account seizures.

Wage Garnishment

The IRS must stop garnishing wages while your account remains in hardship status.

How Long Does IRS Hardship Status Last?

The IRS can legally collect taxes for up to 10 years, and hardship status may apply during that timeframe. However:

The IRS reviews hardship cases approximately every two years
If your income increases or expenses decrease, CNC status may be removed

Even while collections are paused, interest and penalties continue to accrue.

Important Rules to Know

CNC status does not forgive tax debt
Penalties for failure to file and failure to pay still apply
Each tax year is evaluated separately
New tax debt does not automatically fall under existing hardship status

It’s critical to continue filing tax returns on time—even if you can’t pay.

Alternative Options to IRS Hardship

In some cases, other solutions may be more effective than hardship status:

IRS Installment Agreements

Monthly payment plans based on what you can afford.

Offer in Compromise (Tax Settlement)

A negotiated settlement where the IRS agrees to accept less than the full amount owed if repayment is unlikely.

Choosing the right option depends on your financial outlook, assets, and long-term ability to pay.

Should You Work With a Tax Advocate?

Applying for IRS hardship requires detailed financial disclosure and careful presentation. A qualified tax professional can:

Ensure forms are completed accurately
Prevent unnecessary disclosure
Negotiate with the IRS on your behalf
Identify the best resolution strategy for your situation

If you’re facing IRS collections and can’t afford to pay, understanding and applying IRS tax hardship rules correctly can make a significant difference. Arch Tax works with tax payers every day. Schedule a free consultation .

Truck Driver Tax Debt: Causes & Fixes

Wed, 17 Dec 2025 13:21:27 GMT

At Arch Tax, we regularly help truck drivers—especially owner-operators—who are dealing with serious IRS tax problems. In fact, truck drivers are one of the most common professions we represent for tax debt relief.

The issues we see range from unfiled tax returns and unpaid back taxes to IRS assessments that are far higher than they should be. The good news? These problems are usually fixable with the right strategy.

Below, we’ll break down why truck drivers often fall behind on taxes and the most effective ways to fix IRS tax debt before it gets worse.

Common Tax Problems Truck Drivers Face

Truck drivers often come to us dealing with one or more of the following:

Unpaid back taxes
Multiple unfiled tax returns
IRS substitute-for-return (SFR) assessments
Missed deductions—sometimes totaling tens or even hundreds of thousands of dollars

One of the biggest issues we see is truck drivers failing to claim depreciation on their truck, even when it’s a $200,000–$300,000 asset. This alone can drastically inflate a driver’s tax bill.

Why the IRS Targets Truck Drivers More Often

Truck drivers appear to be overrepresented in IRS enforcement, but this usually comes down to two main factors:

1. Recordkeeping Challenges

Most owner-operators live a “drive, sleep, repeat” lifestyle. Keeping receipts organized, logging expenses, and tracking income often falls to the bottom of the priority list.

2. Lack of Time

When you’re constantly on the road, finding time to file returns and manage finances is difficult. As a result, returns go unfiled while large 1099s continue to be reported to the IRS.

The IRS SFR Problem (And Why It’s So Dangerous)

When tax returns aren’t filed, the IRS may prepare a Substitute for Return (SFR) on your behalf.

Here’s the issue:

The IRS assumes 100% of your gross income is taxable
No deductions are allowed
Expenses like fuel, maintenance, depreciation, insurance, and per diem are ignored

This often leads to massive and inaccurate tax assessments, followed by liens, levies, and collection notices.

Variable Income: A Major Trap for Owner-Operators

Unlike many businesses, truck driver income can vary dramatically year to year. Repairs, downtime, fuel spikes, and equipment failures can crush cash flow.

Many drivers intend to pay their taxes—but inconsistent income and high operating costs make it difficult. Over time, tax debt quietly builds until the IRS steps in.

Truck Driver Tax Debt Relief Options

The silver lining is that IRS tax debt can usually be resolved with the right approach. At Arch Tax, we focus on solutions that keep drivers in business while addressing the debt.

Offer in Compromise (OIC)

Some truck drivers qualify to settle their tax debt for less than the full amount owed.

To qualify, we must show the IRS that it is unlikely they will ever be able to collect the full balance. When approved, an OIC can permanently eliminate a large portion of the debt.

IRS Hardship Status (Currently Not Collectible)

If a driver cannot afford monthly payments and has no assets to liquidate, they may qualify for Currently Not Collectible (CNC) status.

Benefits include:

No monthly IRS payments
Protection from levies and garnishments
Time for financial recovery

Installment Agreements

When neither OIC nor hardship applies, we negotiate installment agreements that match the driver’s actual cash flow.

In some cases, we can secure a partial-payment installment agreement, where the IRS collects less than the full balance over time.

Fixing Overstated IRS Assessments with SFR Protest Returns

Many drivers come to us after the IRS has already filed SFRs. In these cases, our job is to:

File accurate tax returns that claim every allowable deduction
Reduce inflated IRS assessments
Avoid triggering unnecessary audits

Preparing post-SFR returns correctly is critical—and it’s one of our specialties.

Why Proper Deductions Matter Going Forward

Truck drivers who work with a knowledgeable tax professional often discover they’ve been overpaying for years.

Deductions such as:

Per diem
Fuel
Maintenance
Depreciation
Insurance
Licensing
Dispatch and load board fees

can dramatically reduce taxable income when handled correctly.

Long-Term Tax Planning for Successful Truck Drivers

For higher-earning drivers, tax planning can make a major difference. Strategies may include:

S Corporation elections to reduce self-employment tax
Retirement plans like Solo 401(k)s or SEP IRAs
Equipment purchase and depreciation planning
Health insurance and medical reimbursement strategies
Income shifting with family members
State tax planning and domicile optimization

When done correctly, these strategies can save thousands of dollars every year.

Get Help Before the IRS Forces the Issue

Truck driver tax debt doesn’t fix itself—and waiting usually makes things worse. The sooner the problem is addressed, the more options are available.

At Arch Tax, we specialize in helping truck drivers resolve IRS tax debt, reduce inflated balances, and get back on solid financial ground.

If you’re behind on taxes or facing IRS collection, getting professional guidance early can make all the difference.

Year-End Tax Planning

Wed, 10 Dec 2025 13:43:07 GMT

The passage of the One Big Beautiful Bill Act (OBBBA) has reshaped the tax landscape in a big way. Many tax cuts that were set to expire at the end of 2025 are now permanent, and several new planning opportunities have opened up. With the year quickly coming to a close, now is the ideal time to review your tax situation and see what steps you can take to reduce your 2025 tax bill.

Before making any moves, work with your professional advisors to estimate what you’ll owe this year and identify which strategies best fit your situation. The earlier you begin, the more flexibility you’ll have to put these plans in motion before December 31.

1. Establish Your Tax Baseline

Start by having your tax advisor prepare a pro forma 2025 tax return. This gives you a clear picture of where you stand—your projected income, deductions, and how different decisions may affect your final tax bill.

If you're working with a financial team, request a year-to-date tax summary of your investment accounts. With this snapshot, you’ll have a solid foundation for determining which strategies are worth implementing before year-end.

2. Evaluate These Tax-Smart Strategies

Harvest Tax Losses

Markets have generally performed well this year, so you may be sitting on more taxable gains than expected. Tax-loss harvesting can help offset these gains by selling investments at a loss before year-end.

If you want to repurchase the same investment, be sure to avoid the wash sale rule , which disallows a loss if you buy a substantially identical security within 30 days before or after the sale. One workaround is to double up —buy more now, wait 30+ days, then sell the original losing position.

Important date:

November 28, 2025 (the day after Thanksgiving) is the final day to sell at a loss and have it count for the 2025 tax year.

Loss harvesting isn’t just a year-end task. Even in strong markets, individual positions may decline, creating opportunities throughout the year.

Maximize Charitable Contribution Deductions

If you plan to make charitable gifts, timing matters. Transfers of stock or other assets can take time to complete, so check with your financial institutions to ensure the donation is finalized before December 31.

Because OBBBA imposes new charitable deduction limitations starting in 2026 , it may be advantageous to front-load charitable giving in 2025 . Beginning in 2026:

Itemized charitable deductions are reduced by 0.5% of AGI
Total itemized deductions for taxpayers in the 37% bracket are capped at 35% of AGI

For high-income taxpayers, that may make a 2025 donation more valuable than the same gift in 2026.

If you’re undecided about which charity to support, consider a donor-advised fund (DAF) . You receive the deduction immediately, but you can distribute the funds to charities later.

Optimize Estimated Tax Payments

Many high-income taxpayers must make quarterly estimated tax payments to avoid underpayment penalties. You can meet the requirements using the “lesser of” safe harbor :

110% of your prior year’s tax liability, or
90% of your current year’s projected tax liability

If you expect your 2025 taxes to be significantly higher than in 2024, it may be strategic to base your estimates on 2024’s lower liability and invest the difference in short-term, principal-protected fixed-income investments. This lets you earn some return on money you’ll eventually pay in taxes.

3. Optimize Retirement, Compensation, and Benefits

Max Out Retirement Contributions

For 2025, the contribution limits are:

IRAs: $7,000 (or $8,000 if age 50+)
401(k)/403(b): $23,500
$31,000 for those age 50+
$34,750 for those turning age 60–63 in 2025

If you’re eligible, consider whether a Roth conversion makes sense—especially if you expect higher income tax rates in the future and can pay the conversion tax using funds outside the IRA.

Take Required Minimum Distributions (RMDs)

Anyone age 73 or older generally must take RMDs by December 31 each year.

If charity is part of your plan, a qualified charitable distribution (QCD) from your IRA can satisfy part or all of your RMD. This strategy, however, may not always be the most tax-efficient depending on your broader financial picture.

For inherited IRAs where the owner died after 2019, new regulations beginning in 2025 require many beneficiaries to take annual distributions over a 10-year period , with the remaining balance distributed in year 10. The rules are complex, so work closely with your tax advisor.

Consider Deferring Compensation

If your employer offers a deferred compensation plan, election deadlines typically fall before December 31, 2025 for 2026 income deferrals.

Deferring compensation delays income taxation until you receive the funds, potentially allowing you to take advantage of future lower tax rates. However, deferred compensation is subject to employer credit risk, so weigh the pros and cons carefully.

Review Stock Options

Executives with stock options may want to consider exercising some in 2025. Strong candidates for exercise include options that are:

Deep in the money
On high-dividend stocks
Close to expiration

Your advisory team can prepare an options breakeven analysis to help you decide.

4. Make Tax-Efficient Gifts to Family

Use Lifetime Exclusion While It Lasts

The current gift and estate tax exclusion is:

$13.99 million per individual
$27.98 million per married couple

These increase to $15 million ($30 million for couples) in 2026 under OBBBA.

If you anticipate a taxable estate and have unused exemption, making large gifts now may help lock in additional tax-free transfer capacity.

Take Advantage of the Annual Gift Exclusion

For 2025, you may give:

$19,000 per recipient (individual)
$38,000 per recipient (married couple electing to split gifts)

This exclusion is use-it-or-lose-it —unused amounts cannot be carried over to future years.

Many families use this strategy to fund 529 education plans , where earnings grow tax-free when used for qualified education expenses.

5. Work With Tax Professionals to Finalize Your Plan

Year-end tax planning is full of opportunities—but also details, deadlines, and complex rules. Arch Tax can help determine which actions make the most sense for your personal and financial goals.

Starting now gives you time to implement strategies that may strengthen your financial position and reduce your overall tax liability.

Schedule your free consultation today

The Tax Benefits of Owning a Home

Fri, 05 Dec 2025 17:45:52 GMT

Owning a home doesn’t just build long-term wealth — it can also unlock meaningful tax savings each year. Some benefits reduce the income you’re taxed on (deductions), while others cut your tax bill dollar-for-dollar (credits). Knowing which rules apply to your situation can be worth hundreds or even thousands of dollars at filing time.

Below is a clear, up-to-date breakdown of the most valuable federal homeowner tax perks for the 2025 tax year, plus what to document so you don’t miss a thing.

Key Takeaways

Homeowners may qualify for major tax deductions (mortgage interest, property taxes, points, some home-equity interest) and tax credits (energy-efficiency upgrades, renewable energy systems, Mortgage Credit Certificates). IRS+1
The mortgage interest deduction generally lets itemizers deduct interest on up to $750,000 of qualifying mortgage debt ($375,000 if married filing separately).
The property tax deduction is part of the SALT limit: $10,000 cap through 2024 and $40,000 cap for 2025 (with a phase-out for higher incomes).
Energy credits are a “use-them-now” deal in 2025: §25C and §25D credits remain at 30% but expire after December 31, 2025 under current law.
Qualifying lower- and moderate-income buyers with a Mortgage Credit Certificate (MCC) can claim a mortgage interest credit up to $2,000/year.
When selling a primary residence, eligible homeowners can exclude up to $250,000 of capital gains ($500,000 for joint filers). IRS

Deductions vs. Credits: What’s the Difference?

Before diving into specifics, it helps to know how these two tax breaks work:

Tax deductions reduce your taxable income.
Example: If you earn $80,000 and claim $6,000 in deductions, you’re taxed on $74,000 instead.
Tax credits reduce your tax bill directly.
Example: If you owe $3,000 and claim a $1,000 credit, your final bill drops to $2,000.

Most homeowner benefits are deductions — but a few credits can be even more powerful because they lower taxes dollar-for-dollar.

1. Mortgage Interest Deduction

For many homeowners who itemize, mortgage interest is the biggest tax break available. You can generally deduct interest paid on loans used to buy, build, or substantially improve your main home or one second home. IRS+1

Key Rules

Interest is deductible on up to $750,000 of qualifying mortgage debt for loans originated after December 15, 2017. Nolo+1
If your mortgage is older than that, the limit may be $1 million. IRS
Married filing separately: $375,000 cap for newer loans. Tax Shark
You must itemize deductions on Schedule A to claim it. IRS+1

Example

If you bought a home for $600,000 in 2022 and paid about $35,000 in mortgage interest this year, you could deduct that full amount if you itemize.

Documentation: Your lender sends Form 1098 every January showing your deductible interest.

2. Property Tax Deduction (SALT)

Property taxes can also be deductible if you itemize — but they fall under the State and Local Tax (SALT) cap. IRS+1

What Counts

You can deduct real estate taxes assessed uniformly on your property value and charged yearly by your local tax authority.

Not deductible: utility charges, HOA fees, trash/water fees, or special assessments for improvements like sidewalks unless separately stated as maintenance. IRS

SALT Limits (Big Change in 2025)

2018–2024: SALT deduction capped at $10,000 per return ($5,000 MFS).
2025: cap increases to $40,000 ($20,000 MFS).
Phase-out: the $40,000 cap begins shrinking for taxpayers with MAGI over $500,000 and drops back to $10,000 at about $600,000. Kiplinger+1

Escrow Tip

If you pay taxes via escrow, deduct only what your lender actually paid out during the year — not what you deposited.

3. Mortgage Points Deduction

Mortgage points are upfront fees you may pay to lower your interest rate. In many cases, points count as prepaid interest and are deductible. IRS

When You Can Deduct Points Fully in the Purchase Year

You may deduct all points in the year you buy if:

The loan is for your primary residence,
Paying points is a normal practice in your area, and
You paid them directly at closing (not rolled into the loan). IRS

Otherwise, you usually spread the deduction over the loan life.

Example

You paid $6,000 in points on a $600,000 mortgage. If it meets IRS rules, you may deduct the full $6,000 this year.

4. Home Equity Loan or HELOC Interest

Home-equity interest is deductible only when the funds are used to buy, build, or substantially improve the home that secures the loan. IRS+1

Example

HELOC for a kitchen remodel → interest may be deductible.
HELOC to pay off credit cards or take a vacation → not deductible.

Keep receipts showing how the funds were used.

5. Energy Efficient Home Improvement Credit (IRC §25C)

This credit covers 30% of qualifying energy-efficient upgrades to an existing home — but 2025 is the last year to claim it under current law. IRS+2IRS+2

Eligible Improvements
Exterior windows/skylights
Exterior doors
Insulation and air sealing
Heat pumps and heat-pump water heaters
Certain high-efficiency HVAC and water heaters
Home energy audits IRS

Annual Caps (2025)

$1,200/year for most improvements
Windows/skylights: $600 cap
Doors: $250 per door, $500 total
Energy audits: $150 cap
$2,000/year for heat pumps, heat-pump water heaters, biomass stoves/boilers

Example

You install $5,000 in qualifying windows.
30% credit = $1,500, but window cap = $600 → your credit is $600.

6. Residential Clean Energy Credit

If you install renewable systems like solar, geothermal, wind, or battery storage, you can claim 30% of eligible costs, including labor. Like §25C, it currently expires after Dec 31, 2025. Clean Energy Resource Teams+2IRS+2

What Qualifies

Solar panels and solar water heating
Wind turbines
Geothermal heat pumps
Fuel cells (with special limits)
Battery storage paired with renewables Clean Energy Resource Teams

Example

A $20,000 solar install in 2025 → 30% credit = $6,000.

If the credit is larger than your tax bill, you can carry the extra forward to future years.

Note: IRS guidance in 2025 adds extra reporting for some equipment placed in service in 2025, so keep manufacturer paperwork. IRS

7. Mortgage Interest Credit (Mortgage Credit Certificate / MCC)

This is a lesser-known but valuable benefit for qualifying buyers. If your state or local housing agency issued you an MCC, you may claim a federal credit equal to a percentage of your mortgage interest.

Highlights

Credit rate is set by the certificate (often 10%–50%).
Max credit: $2,000/year.
Claimed on Form 8396 every year you hold the mortgage.

Who Usually Qualifies

Programs vary, but MCCs typically target:

First-time buyers
Buyers in “target areas”
Households under income and purchase-price limits
Owner-occupants with a new mortgage (not most refinances) LegalClarity

Important: If you sell within nine years, you might owe some recapture tax, depending on your gain and income. Accountably

8. Selling Your Home: Capital Gains Exclusion

When you sell a primary residence, you may exclude:

Up to $250,000 of gain (single)
Up to $500,000 of gain (married filing jointly) IRS

Basic Requirements

Owned the home 2 of the last 5 years
Lived in it as your main home 2 of the last 5 years
Generally can use the exclusion once every two years IRS

Example

Buy at $300,000, sell at $550,000 → gain $250,000.
If you meet the rules, you can potentially exclude the entire gain.

Pro move: Keep receipts for major improvements. They raise your “cost basis,” reducing taxable gain if you exceed the exclusion.

State and Local Incentives

Many states stack extra perks on top of federal rules — especially for renewable energy or efficiency upgrades. These can include rebates, property-tax exclusions, or local credits. Check your state energy office or city/county programs for current offerings. IRS

Timing & Compliance Tips

Watch the Calendar

Because §25C and §25D credits expire after December 31, 2025, upgrades need to be placed in service by that date to qualify. If you’re on the fence about energy improvements, 2025 is the “now or never” window.

Keep These Documents

Form 1098 (mortgage interest + escrowed taxes)
Property tax bills + payment proof
Closing disclosures showing deductible points
Receipts/invoices for all improvements
Manufacturer certifications for §25C items
Form 5695 for energy credits
MCC + Form 8396 if applicable

Good records = easier filing and safer audits.

Quick FAQ

What can a homeowner write off on taxes?
Mortgage interest, property taxes (subject to SALT limits), mortgage points, and some home-equity interest if used for home improvements. Credits may apply for energy upgrades or renewables.

Can I deduct home improvements?
Most improvements aren’t deductible right away, but they can increase your basis and lower capital gains later. Certain energy upgrades qualify for credits through 2025.

Are closing costs deductible?
Usually no — except certain items like mortgage points and property taxes paid at closing (if itemizing).

Do I automatically get a refund when I buy a home?
Not automatically. Buying a home can lower taxes, but whether you get a refund depends on your income, withholding, and total deductions/credits.

Bottom Line

Homeownership comes with real tax advantages — especially if you itemize or make qualifying energy upgrades. The biggest wins for most homeowners are mortgage interest and property taxes, while 2025 offers a last-chance opportunity for federal clean-energy credits. Pair that with smart documentation and timing, and your home can pay you back at tax time.

Why Your Amended Tax Return Is Taking So Long

Fri, 28 Nov 2025 16:28:59 GMT

Filing an amended tax return can be a necessary step to correct errors on your original return, but the waiting period for it to be processed can be frustratingly long. If you've filed an amended return and are wondering why it's taking so long to get a response from the IRS, you're not alone. Several factors can contribute to processing delays, from simple errors to systemic issues within the IRS. This article will break down the common reasons why your amended tax return might be taking longer than expected.

The Standard Processing Timeline

First, it's important to understand the standard processing timeline for an amended return. According to the IRS, you should allow up to 16 weeks for your amended return to be processed. It can also take up to three weeks from the date you mailed it for it to even show up in the IRS system. So, if you're checking the "Where's My Amended Return?" tool and don't see your return, it might just be in transit or waiting to be entered into the system.

Common Reasons for Delays

If it has been more than 16 weeks and you still haven't received your refund or an update, one or more of the following reasons could be the cause of the delay:

Errors or Incomplete Information

Any mistakes or missing information on your Form 1040-X can bring the processing of your return to a halt. Common errors include:

* Missing signatures

* Incorrect Social Security numbers

* Incomplete forms

* Mathematical errors

While the IRS can correct simple math errors, other mistakes may require them to send you a notice requesting more information, which adds to the processing time.

Increased IRS Workload

The IRS processes millions of tax returns, and their workload has been particularly heavy in recent years. Backlogs from previous tax seasons, coupled with staffing shortages, can lead to significant delays for all types of returns, including amended ones. During peak tax season, the focus is on processing original returns, which can push amended returns further down the priority list.

Mail and Manual Processing

Until recently, all amended returns had to be filed by mail. While electronic filing is now an option for some, many still file by paper. Mail delivery can be delayed, and once the return arrives at the IRS, it needs to be manually entered into the system. This manual processing is time-consuming and can be a major source of delays.

Need for Additional Review

Some amended returns are more complex than others and require a more thorough review. Your return might be flagged for additional review if:

* You are claiming certain tax credits or deductions.

* The changes on your amended return are significant.

* Your return is selected for a more detailed examination (an audit).

If your return requires this extra level of scrutiny, it will naturally take longer to process.

Identity Theft or Fraud Concerns

Tax-related identity theft is a serious issue, and the IRS has implemented filters to detect fraudulent returns. If your return gets flagged for potential identity theft, the IRS will take extra steps to verify your identity before processing your return. While this is a crucial security measure, it can add a considerable amount of time to the processing of your amended return.

How to Check Your Amended Return Status

You can check the status of your amended return using the IRS's **Where's My Amended Return?** online tool. You will need your Social Security number, date of birth, and ZIP code. The tool will show you the status of your return, which can be one of the following:

* Received : Your return has been received and is being processed.

* Adjusted : An adjustment was made to your account, which will result in a refund, a balance due, or no change.

* Completed : Your return has been processed, and the IRS is mailing you more information.

The tool is updated once a day, usually at night. If it has been more than 16 weeks since you filed your amended return and the tool has not been updated, you can call the IRS at 1-866-464-2050.

What to Do While You Wait

While waiting for your amended return to be processed, the best thing you can do is be patient. Keep a copy of your Form 1040-X and all supporting documents. If the IRS needs more information, they will contact you by mail. Avoid filing a second amended return for the same tax year unless you need to make additional changes.

Conclusion

While the wait for an amended tax return to be processed can be long and stressful, it's often a normal part of the process. By understanding the potential reasons for delays and knowing how to check the status of your return, you can have a clearer picture of what's happening. Filing an accurate and complete return is the best way to ensure a smoother and faster processing experience.

That Scary IRS Letter: The CP14 Notice

Thu, 20 Nov 2025 13:59:02 GMT

A Simple Guide to the CP14 Notice

Receiving a letter from the IRS can be a heart-stopping moment. If a CP14 Notice has landed in your mailbox, you might be staring at it, wondering, "What is this, and why me?" In short, an IRS Notice CP14 is a bill. It means the IRS believes you owe them money, either because of a missed payment or due to interest and penalties on an outstanding tax balance.

This notice can feel like a sudden, unwelcome surprise, especially if you're not financially prepared to pay what's owed. However, there's no need to panic. A CP14 Notice is a common issue, and you have several options for dealing with it. It's also important to remember that you have the right to question the IRS's claims. Their systems aren't perfect, and mistakes can happen. Your first step should always be to carefully review the notice and compare it with your own records.

In this guide, we'll walk you through everything you need to know about the CP14 Notice, why you received it, and exactly how to respond. Read on for a step-by-step plan to tackle this notice and get back on track with the IRS.

What Is an IRS Notice CP14, and Why Did I Get One?

An IRS Notice CP14 is the official way the IRS informs you of a balance due on your taxes. This can happen for a few reasons. You might have made a simple error when filing, miscalculated your tax liability, or forgotten to make a payment. Whatever the reason, it's crucial to address the issue promptly to avoid additional interest and penalties.

When you open your CP14 Notice, take a deep breath and read it carefully. It will detail the amount the IRS believes you owe, the deadline for payment, and how to make a payment. The notice will also include contact information for the IRS, which you can use if you believe there has been a mistake or you want to dispute the amount.

It's also possible that the IRS has made an error. Perhaps you did pay the tax you owed, but your payment wasn't correctly processed or recorded. If you've already paid, you'll need to provide proof of payment. This is why it's so important to keep meticulous records of all your correspondence with the IRS. Whether you're sending a check by certified mail or making a payment online, always keep your receipts and digital documentation.

Your First Move: Review and Compare

Before you do anything else, it's essential to review the CP14 Notice alongside your original tax return. Compare the information on both documents to see if you can spot any discrepancies. Did you miss any deductions or credits? Did you forget to report any income? If you find a mistake on your return, you'll need to file an amended tax return.

If the notice appears to be correct, you have several payment options. You don't necessarily have to pay the full amount upfront. The IRS offers various ways to handle the situation, so don't feel overwhelmed. The most important thing is to not ignore the notice. Failing to respond will only lead to more fees, interest, and potentially serious legal consequences. An unpaid tax debt can escalate, and the IRS has the authority to seize your bank account, property, and even your income.

It may seem daunting, but simply contacting the IRS to explain your situation can make a big difference. Showing that you're aware of the issue and are taking steps to address it can help prevent additional penalties and interest.

How to Pay Your IRS CP14 Notice

If you've reviewed the notice and agree with the amount owed, the quickest and easiest way to resolve the issue is to pay online through the IRS website. However, if you don't have the funds to pay the full amount at once, you can apply for an IRS installment plan to pay the balance over time. If you owe a significant amount, you may also want to consider consulting with a tax professional. They can help you explore options like penalty abatement, which could potentially remove tax penalties and reduce the total amount you owe.

Alternative Payment Options

While paying the balance in full or disputing the notice are the most straightforward options, the IRS does offer other alternatives. It's unlikely that your tax debt will be completely eliminated, but the IRS is often willing to work with you to create a plan that fits your financial situation. Here are some of the payment options available:

What to Do If You Spot a Mistake

If you're certain the IRS has made a mistake, you won't be liable for the amount they claim you owe. You can address this by calling the toll-free number on the notice. However, dealing with the IRS can be complicated, and it's often a good idea to hire a tax professional to help you make your case. In most cases, a mistake on a CP14 Notice is relatively easy to fix. Just be sure to make copies of all your supporting documents and send them to the IRS via certified mail.

The Takeaway: Don't Panic, Take Action

Even if you can't afford to pay your tax bill right away, investing in a tax professional can save you money in the long run. They have experience with CP14 Notices and can help you navigate the process, amend your tax return, and resolve any other tax issues you may be facing.

The bottom line is that there's no need to panic when you receive an IRS CP14 Notice. You have many options, and the IRS is usually willing to work with you to find a reasonable solution. If you've received a CP14 Notice and need help, don't hesitate to reach out to a tax expert. They can help you understand your options, create a plan, and minimize your tax debt.

Arch Tax knows how to handle complex tax issues. Schedule a free consultation today!

The Infamous IRS Scam Call

Fri, 14 Nov 2025 19:10:58 GMT

How to spot them, how they work, and what to do next.

If your phone rings with someone claiming to be “from the IRS,” demanding immediate payment and threatening arrest, wage garnishment, deportation, or license suspension… take a breath. You’re almost certainly dealing with a scammer.

IRS scam calls have become so common that the IRS lists them on its annual “Dirty Dozen” tax scams list. These impersonator calls spike during tax season, but they hit taxpayers year-round — using fear, urgency, and deception to steal money and personal information.

This guide explains how real IRS contact works, the tricks scammers use, and the steps to take to protect yourself.

Does the IRS Actually Call People?

Yes — but not the way scammers do.

The IRS will never:

Demand payment over the phone
Require a specific payment method like gift cards, prepaid cards, wire transfers, or Venmo/Zelle
Threaten arrest, deportation, license revocation, or police action
Ask for your debit or credit card number over the phone

Here’s how legitimate IRS contact works:

Mail first. Always. The IRS sends letters or notices before anything else.
Collections : An IRS employee may visit or call after written notices — but they will never ask for payment to anyone except the U.S. Treasury.
Audits : You may get a phone call to schedule appointments, but only after receiving official mailed notices.
Criminal investigations : Agents may visit without warning, but they never request money.

If you haven’t received IRS mail, the call you’re getting is not the IRS.

How IRS Scam Calls Work

Scammers typically start with an unsolicited call using spoofed caller IDs to appear legitimate — sometimes even showing “IRS” or a Washington, D.C. number.

You’ll often hear:

Accusations of unpaid taxes
Claims you’ve committed fraud
Threats of arrest or legal action within hours
Demands for immediate payment
Instructions not to hang up or call anyone

Their goal is simple: panic you into paying quickly.

These scammers are shockingly successful. TIGTA (the Treasury Inspector General for Tax Administration) reported that thousands of victims paid over $54 million to impersonators in recent years.

Common Red Flags of an IRS Phone Scam

If any of these happen, it’s a scam — hang up immediately.

1. Immediate threats

“Officers are on the way right now…”

“The sheriff will arrest you today…”

“You’ll lose your license or be deported…”

The IRS does not operate like this.

2. Pressure to act right now

Scammers rely on panic. The real IRS allows appeals and due-process rights.

3. Requests for unusual payment methods

Gift cards
Apple Pay
Wire transfers
Cash apps
Prepaid cards

The IRS doesn’t use these. Ever.

4. Caller already knows your personal info

Don’t be fooled. Scammers can easily buy or scrape basic data.

5. Robocall voicemails demanding callback

These are classic IRS impersonation tactics.

6. Refusal to let you verify the caller

A real IRS employee will give you their name and ID — and allow you to hang up and call the official IRS line to confirm.

What To Do If You Get an IRS Scam Call

Hang up immediately.

Don’t argue or engage. Just disconnect.

Don’t share ANY personal information.

Not your name, address, SSN, or financial details.

Report the scam to TIGTA

Online: https://www.treasury.gov/tigta

Phone: 800-366-4484

Report to the FTC

Use the fraud assistant at ReportFraud.ftc.gov.

If you’re unsure whether you owe taxes, call the IRS directly

IRS main line: 800-829-1040

They will tell you your status without threats or pressure.

If you actually owe taxes, the real IRS contact process is predictable and documented — not chaotic or aggressive.

New Variations to Watch Out For

Scammers evolve constantly. Some newer tactics include:

Threatening to suspend your Social Security number
Fake “refund verification” calls
Calls claiming you must verify your identity to release a refund
Fake charities tied to disaster relief
Refund recalculation scams
Fake “IRS case managers” calling from spoofed local numbers

When in doubt, assume it’s a scam and verify independently.

What To Do If You Fell Victim

If you’ve already paid or disclosed personal information:

Report immediately to TIGTA and the FTC
Notify your bank or credit card company
Change passwords and enable 2-factor authentication
Consider placing a fraud alert or credit freeze
Monitor accounts closely

If the scam involved identity theft or IRS-related fraud, a tax professional can help you work with the IRS Identity Protection Specialized Unit to secure your account.

Stay Protected with Arch Tax

IRS scammers thrive on confusion, panic, and misinformation. The best defense is having a real tax professional in your corner.

At Arch Tax , we help taxpayers:

Understand legitimate IRS notices
Avoid scams before they happen
Resolve real IRS liabilities
Secure their IRS accounts
Protect themselves from identity theft
Navigate IRS communications confidently

If you’re worried about a call you received, your tax balance, or an IRS notice — don’t guess.

Reach out to Arch Tax . We’ll tell you exactly what’s real and what’s not.

How Much Do You Owe the IRS? Here’s How to Find Out

Fri, 07 Nov 2025 13:35:42 GMT

It’s a question that can send a shiver down your spine, a classic nail-biter that pops up right around tax season: “How much do I really owe the IRS?” Let’s be honest, navigating the world of taxes can feel like trying to solve a Rubik’s Cube in the dark. Whether you’ve hit a few financial bumps in the road or simply lost track of your tax returns, figuring out your standing with the Internal Revenue Service (IRS) is the first crucial step toward getting your financial house in order.

This guide will walk you through the different ways to uncover that magic number, from sleuthing online to making a good old-fashioned phone call. And once you know what you’re up against, we’ll even explore some expert-backed strategies for settling your score with Uncle Sam.

Cracking the Code: How to Figure Out What You Owe

Finding out your tax liability is easier than you might think. The IRS has several methods available to help you get the information you need. Here’s a breakdown of your options:

Your Online IRS Account

The quickest and most convenient way to get to the bottom of your tax situation is by using the IRS’s online tools. The “View Your Tax Account” feature on the IRS website is your one-stop shop for all things tax-related. To get started, you’ll need to create an account and verify your identity. You’ll need some personal information on hand, like your Social Security number, date of birth, and the filing status and mailing address from your most recent tax return.

Once you’re in, you’ll have access to a wealth of information, including:

Your payment history
Any outstanding balances you owe
Information about your payment plans
Digital copies of certain IRS notices

This is the fastest way to see what you owe and even make payments online. Just be mindful of any potential bank fees associated with online payments.

A Little Help From a Friend: Calling the IRS

If you prefer a more personal touch, you can always give the IRS a call. The general inquiry line is 1-800-829-1040. Before you dial, make sure you have your personal information and a copy of your most recent tax return handy. An IRS representative can help you with a balance inquiry, explain any outstanding balances, and walk you through your payment options. While it might take a bit of patience to get through, speaking with a real person can be incredibly helpful, especially if you have questions about your tax records or payment plans.

The Paper Trail: Reaching Out by Mail

For those who appreciate the tangible nature of snail mail, you can also request your tax information by mail. You’ll need to send a written request to the IRS, and it’s a good idea to use the address listed on the most recent notice you’ve received. If you don’t have a recent notice, you can find the correct address on the IRS website. Keep in mind that this is the slowest method, and with taxes, time is of the essence. Unpaid taxes can quickly accumulate penalties and interest, so it’s best to use a faster method if possible.

You’ve Got the Number, Now What? Strategies for Settling Your Tax Bill

Knowing how much you owe is half the battle. Now it’s time to come up with a plan to pay it off. Here are some effective strategies for settling your tax bill:

File on Time, Every Time: The easiest way to avoid getting into tax trouble is to file your taxes on time, every year. This will help you avoid late filing penalties.
Explore Payment Options: If you can’t pay your entire tax bill at once, don’t panic. The IRS offers several payment options, including installment agreements and offers in compromise. You can apply for these online or with the help of an IRS representative.
Use Your Refund to Your Advantage: If you’re expecting a tax refund, you can have the IRS apply it directly to your outstanding balance.
Look into Penalty Waivers: If you have a good compliance history, you may be eligible for a first-time penalty waiver. It’s worth looking into!
Don’t Be Afraid to Ask for Help: If you’re feeling overwhelmed, consider seeking advice from a tax professional. They can help you navigate the complexities of the tax system and find the best solution for your unique situation.

Frequently Asked Questions

How long does the IRS have to collect unpaid taxes?

The IRS generally has 10 years to collect unpaid taxes from the date they were assessed. This is known as the Collection Statute Expiration Date (CSED). However, certain actions, like entering into an installment agreement or filing for bankruptcy, can extend this period.

Should I take out a loan to pay my taxes?

This is a tricky one. While a loan can provide immediate relief and help you avoid IRS penalties and interest, it’s not without its own risks. You’ll need to be sure you can afford the loan repayments, and you’ll want to compare the interest rate on the loan to the penalties and interest charged by the IRS. It’s always a good idea to consult with a financial advisor before making this decision.

How can I check my IRS balance myself?

As we’ve covered, you have three main options: online through the “View Your Tax Account” feature on the IRS website, by phone at 1-800-829-1040, or by mail. For the fastest and most comprehensive information, the online portal is your best bet.

Dealing with the IRS can be stressful, but it doesn’t have to be a nightmare. By taking a proactive approach and using the resources available to you, you can take control of your tax situation and get back on the path to financial freedom.

You don’t have to face the IRS alone. Contact Arch Tax today and we’ll help you understand your options and take the next step s forward .

How much can you afford to pay the IRS?

Fri, 31 Oct 2025 12:21:12 GMT

Facing a significant tax debt can be one of the most stressful financial situations a person can experience. The arrival of a notice from the Internal Revenue Service (IRS) often brings with it a wave of anxiety and a seemingly impossible question: How can you possibly pay this amount? Many people mistakenly believe they must pay the entire balance immediately, a prospect that can feel overwhelming and hopeless. However, the reality of tax resolution is far more nuanced and, importantly, far more humane. The central principle that governs how the IRS collects outstanding tax debt is not about demanding the impossible, but about determining a taxpayer's actual ability to pay. This article explores how payment plans and other resolutions are structured around what you can genuinely afford, providing a viable path forward for individuals and families who find themselves unable to cover their tax liabilities in full.

Deconstructing the Debt: Beyond the Lump-Sum Myth

The common misconception is that a tax bill is an inflexible, all-or-nothing demand. This belief leads many to ignore the problem, hoping it will disappear, when in fact, proactive engagement is the key to a successful resolution. The IRS has established a comprehensive framework designed to work with taxpayers, not against them. The goal is to bring taxpayers back into compliance in a way that does not cause undue financial hardship. This is achieved through various resolution options, from installment agreements to settlements, all of which begin with a detailed analysis of your unique financial picture.

At the core of this analysis is the Collection Financial Standards program. This is not an arbitrary process but a structured method the IRS uses to determine a taxpayer's ability to pay. It ensures that essential living expenses are accounted for before a monthly payment amount is decided. This prevents a situation where a taxpayer must choose between paying the IRS and paying for basic necessities like housing, food, or healthcare.

The standards are broken down into several key categories, as outlined in the table below, to create a complete and fair assessment of your monthly expenses.

Finding the Right Fit: Payment Solutions Tailored to You

Once your ability to pay has been determined, a tax resolution professional can help you navigate the various options to find the one that best suits your situation.

Installment Agreements (IA)

For those who can pay their full tax debt over time, an Installment Agreement is the most common solution. This allows you to make manageable monthly payments for up to 72 months. The key benefit is that once an IA is in place, more aggressive collection actions, such as bank levies or wage garnishments, are stopped, provided you remain compliant with the terms. For taxpayers with lower incomes, the IRS may even waive or reimburse the setup fee for the agreement.

Offer in Compromise (OIC)

In cases where a taxpayer's debt is so large that they could never realistically pay it off, an Offer in Compromise (OIC) may be a viable option. An OIC allows eligible taxpayers to settle their tax debt with the IRS for a lower amount than what they originally owed. Acceptance is based on your Reasonable Collection Potential (RCP) , which is a formula the IRS uses to calculate the most it can expect to collect from your assets and future income. If your RCP is lower than your total tax debt, an OIC can provide a true fresh start.

Partial Payment Installment Agreement (PPIA)

A Partial Payment Installment Agreement (PPIA) is another solution for those who cannot pay their debt in full. With a PPIA, you make a monthly payment based on what you can afford. The IRS agrees to this arrangement even though the payments will not satisfy the entire tax liability before the collection statute of limitations expires. This provides a predictable payment structure while acknowledging the taxpayer's financial limitations.

Currently Not Collectible (CNC) Status

For individuals facing severe financial hardship with no ability to make any payments, being placed in Currently Not Collectible (CNC) status is a possibility. This essentially pauses collection efforts until your financial situation improves. The debt does not disappear, but the IRS will not actively pursue collection while you are in CNC status, providing critical relief during a difficult time.

Why Affordability-Based Plans Are Crucial

The emphasis on affordability is the most important feature of the U.S. tax resolution system. By structuring payments around your actual financial capacity, the IRS ensures that resolving your tax debt does not lead to devastating financial consequences. This approach provides a realistic and dignified path back to compliance, allowing you to meet your obligations without sacrificing your family's basic needs.

Navigating the complexities of IRS procedures, forms, and financial calculations can be daunting. Working with an experienced tax resolution firm ensures that your financial situation is presented accurately and favorably to the IRS, maximizing your chances of securing a payment plan that you can truly afford. If you are struggling with back taxes, remember that solutions exist. The first step is to understand that the system is designed to work with you, based on one simple question: How much can you afford to pay?

Dealing with the IRS

Dealing with the IRS on your own can be intimidating — and these programs, while designed to help, are filled with fine print and detailed financial calculations that can easily trip up even the most diligent taxpayer. That’s where Arch Tax comes in. Our team understands the nuances of IRS payment plans, Offers in Compromise, and hardship programs, and we know how to present your financial picture in a way that protects your interests. If you’re unsure which option fits your situation or simply want expert guidance to make sure you’re getting the best possible outcome, Arch Tax is here to help you every step of the way.

Schedule your free appointment today

How a Government Shutdown Impacts the IRS

Fri, 24 Oct 2025 15:48:39 GMT

When the federal government shuts down, uncertainty ripples through every part of the system—including the IRS. For taxpayers working through back-tax issues or trying to resolve their debt, a shutdown can make an already stressful process even more complicated.

The truth is, a government shutdown doesn’t stop the IRS entirely. It simply slows the human side of it to a crawl while leaving the automated systems running in the background. That means penalties still accrue, notices still go out, and deadlines don’t stop.

Let’s break down how this affects your IRS resolution process—and how to stay one step ahead.

IRS Operations During a Shutdown

During a shutdown, the IRS operates with a skeleton crew. Most employees are furloughed, phone lines are unanswered, and paper correspondence sits unopened. Walk-in offices are closed, and appeals or audit meetings are typically postponed.

But the IRS’s automated systems keep running. You can still file tax returns electronically, make payments online, and even apply for certain installment agreements. In other words, while communication slows dramatically, the clock doesn’t.

How It Affects Your Resolution Process

1. Offers in Compromise (OIC)

If you’ve submitted an Offer in Compromise, expect delays. The IRS units that review OICs are heavily dependent on staff, and during a shutdown, those cases often sit untouched. However, interest and penalties continue to accrue until your offer is accepted and processed. rd.

2. Installment Agreements

Automated payment systems stay active, so if you’re already on an installment plan, your payments will still process. But new installment agreements that require manual review can get delayed. Setting up a basic online payment plan is still possible, so taxpayers with smaller debts should take advantage of the IRS’s online tools.

3. Audits and Appeals

Shutdowns put most audits and appeals on hold. IRS examiners and appeals officers are furloughed, meaning no meetings, no responses, and no movement until funding resumes. While frustrating, this pause gives taxpayers and their representatives extra time to prepare, organize records, and tighten their arguments before the process resumes.

4. Collections and Enforcement

Most in-person enforcement actions—like field visits, wage garnishments, or bank levies—are paused. However, automated collection notices may still be issued, and interest continues to grow. It’s a temporary slowdown, not a freeze, so it’s important not to ignore these notices even if you can’t reach anyone at the IRS.

5. Penalty Relief and Refund Claims

Requests for penalty abatement or amended returns are generally stalled because they require manual processing. But deadlines for claiming refunds or responding to IRS letters still apply, even if no one is there to read them. Missing a deadline could cost you valuable rights down the line.

Turning Downtime Into Opportunity

A government shutdown can be frustrating—but it can also be used strategically. While the IRS slows down, your tax resolution efforts don’t have to. Here’s how to make the most of it:

File any missing returns: Electronic filing still works and helps prevent further penalties.
Gather financial documentation: Use this downtime to organize income records, bank statements, and proof of expenses or hardships.
Set up online payment arrangements: Many taxpayers can qualify automatically through the IRS’s website.
Work with a tax professional: While the IRS is offline, firms like Arch Tax remain fully operational. We can use this time to prepare your case so you’re first in line when the government reopens.

The Bottom Line

A government shutdown slows the IRS—but it doesn’t stop your tax obligations. Deadlines continue, penalties build, and progress stalls unless you stay proactive.

If you’re in the middle of a resolution process or considering one, don’t wait for the government to reopen. At Arch Tax, we specialize in helping clients keep their momentum, even when Washington grinds to a halt.

Contact us today and let’s prepare your case, protect your rights, and position you for success once the IRS is back at full strength.

Help! The IRS Is Taking My Paycheck

Fri, 17 Oct 2025 12:58:19 GMT

Few things feel more stressful than checking your paystub and realizing a large portion of your wages has disappeared. Unfortunately, this often means the IRS has begun a wage garnishment — one of the most aggressive collection actions the agency can take.

What Is IRS Wage Garnishment?

When you owe back taxes, the IRS has the legal authority to collect directly from your paycheck without going to court. Once your balance goes unpaid long enough, the IRS can issue a “Notice of Intent to Levy” and, after 30 days, order your employer to withhold a portion of your wages each pay period.

The amount they take depends on your income, filing status, and dependents, but in many cases, it can range from 25% to 50% of your take-home pay. Unlike private creditors, the IRS doesn’t need a judge’s approval — meaning garnishment can begin quickly once the notice period ends.

How Long Does It Last?

Wage garnishment continues until your tax debt is paid in full or you make other formal arrangements with the IRS. Each paycheck will continue to be reduced until the balance, including penalties and interest, is resolved.

Can You Stop an IRS Wage Garnishment?

Yes — but you’ll need to act quickly. Once the IRS has started garnishing, it’s much harder to reverse than to prevent. However, there are several ways to stop or reduce a garnishment:

Set up an Installment Agreement. A formal payment plan can pause garnishment and let you pay what you owe over time.
Submit an Offer in Compromise. In some cases, you can settle your debt for less than the full amount owed if you qualify based on income and financial hardship.
Request Currently Not Collectible (CNC) status. If you can prove that paying would cause serious financial hardship, the IRS may temporarily halt collection efforts.
File for Innocent Spouse Relief or other specialized programs if your tax debt isn’t fully your responsibility.

Why Acting Fast Matters

The longer you wait, the more damage wage garnishment can cause — not only to your finances, but also to your credit and your ability to meet basic expenses. Ignoring IRS notices won’t make them go away; in fact, it can make the situation worse.

At Arch Tax , we help clients every day who are dealing with IRS garnishments, bank levies, and liens. Our goal is to stop the bleeding, negotiate directly with the IRS, and help you regain financial control as quickly as possible.

Take the First Step Toward Relief

If your paycheck is being garnished, or if you’ve received a Notice of Intent to Levy , don’t wait. The sooner you act, the more options you’ll have to stop it.

Contact Arch Tax today to review your situation and see which IRS resolution program you qualify for.

Relief is possible — and it starts with taking action.

5 Hidden IRS Traps & How to Protect Yourself This Tax Season

Fri, 10 Oct 2025 21:05:08 GMT

Every year, as tax season begins, millions of Americans diligently gather their documents, determined to file accurately and on time. Yet many unwittingly fall into procedural traps—set not by malice, but by the sheer complexity of the U.S. tax code.

From the perspective of a tax resolution company who’s seen countless taxpayers blindsided by unexpected notices and penalties, it’s clear the IRS has a playbook. Automated systems, targeted audits, and strict procedural rules can catch even the most honest individuals off guard.

This isn’t about scare tactics—it’s about awareness. Understanding where these traps lie is the first step toward navigating tax season with confidence.

Below are five of the most common IRS traps, along with practical steps to help you steer clear.

Trap #1: The Automated Refund Delay Trap

What It Is:
The IRS withholds refunds from millions of taxpayers for “additional review,” a process triggered automatically by sophisticated error-detection algorithms. While most refunds are issued within 21 days, a flagged return can be delayed for months with little communication.

Why It’s a Trap:
Even minor mismatches between your reported income and what the IRS receives from employers (W-2s) or clients (1099s) can freeze your refund. Common triggers include small data entry errors, incorrect Social Security numbers, or deductions that look statistically unusual for your income level.

How to Avoid It:
Cross-check every figure on your return before filing. E-file early—late-season filers face heavier scrutiny—and always use direct deposit. A paper check is over 16 times more likely to be lost or stolen, which can prolong the wait even further.

Trap #2: The High-Stakes Credit Crackdown (EITC & CTC)

What It Is:
The IRS aggressively audits returns claiming the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) . These credits are vital for working families, yet have some of the highest error rates in the system.

Why It’s a Trap:
Because of those error rates, the IRS effectively operates on a “prove you’re right” basis. EITC claims are audited more than four times as often as typical individual returns—and certain demographics face disproportionate scrutiny.

How to Avoid It:

Be audit-ready from day one. Keep:

Proof of income (pay stubs, 1099s, bank statements)
Proof of residency for dependents (school, medical, or official records)

Don’t file until all documentation is organized. If audited, clear proof can quickly resolve the issue in your favor.

Trap #3: The Gig Economy Reporting Trap (1099-K)

What It Is:
Third-party payment apps like PayPal, Venmo, and Cash App now report income for goods and services through Form 1099-K. Though the threshold has changed repeatedly, the reporting system remains firmly in place.

Why It’s a Trap:
Many gig workers and side-hustlers assume small amounts of income “don’t count.” The IRS’s automated matching software disagrees—discrepancies between what platforms report and what you file are automatically flagged.

How to Avoid It:
Report all income, even if you don’t receive a 1099-K. Track deductible business expenses carefully—mileage, phone, supplies, and other legitimate costs—to reduce taxable income. Always keep receipts and logs to substantiate your claims.

Trap #4: The “Voluntary” Disclosure Illusion

What It Is:
Sometimes the IRS sends friendly-sounding letters encouraging taxpayers to “voluntarily” correct past filings or unpaid balances.

Why It’s a Trap:
The IRS generally has 10 years from the date a tax is assessed to collect it—known as the Collection Statute Expiration Date (CSED) . When you respond to these letters, file old returns, or make payments, you can accidentally restart or extend that 10-year clock—giving the IRS more time to pursue you with added penalties and interest.

How to Avoid It:
Never reply to an old-debt notice without professional advice. A tax resolution expert can determine your CSED and guide you on whether to respond strategically—or not at all.

Trap #5: The Resolution Runaround (Offer in Compromise)

What It Is:
The IRS Fresh Start Program , especially the Offer in Compromise (OIC) , is promoted as a chance to settle tax debt for less than you owe.

Why It’s a Trap:
OIC qualification rules are deliberately strict, and only about 20–40% of applications are approved. Many taxpayers apply without understanding the IRS’s complex financial formulas or fail to provide every required document. Rejection not only wastes time and money but also hands the IRS your complete financial profile.

How to Avoid It:
Before applying, get a realistic assessment of your eligibility. Tools like Arch Tax’s Resolution Assistant can show which programs you actually qualify for and save you from unnecessary exposure.

Conclusion: Navigating the Maze with Confidence

The IRS doesn’t have to deceive taxpayers—the system itself is complicated enough to trap the unprepared.
Awareness, documentation, and expert guidance are your strongest defenses.

At Arch Tax , we help taxpayers navigate the complexities before they turn into costly problems.

If you’re facing an IRS issue—or just want peace of mind this tax season—see which programs and protections fit your situation.

Click here to schedule a free consultation

Statute of Limitations & Back Taxes

Fri, 03 Oct 2025 21:26:22 GMT

Most people are surprised to learn that the IRS doesn’t have forever to collect on back taxes. In general, the agency has a 10-year statute of limitations that starts the day your tax debt is officially assessed. Once that clock runs out, the IRS typically loses its ability to collect. Sounds straightforward, right? Not so fast.

There are important exceptions that can pause or even extend that 10-year collection window—and if you’re not aware of them, you might think you’re in the clear when you’re not. At Arch Tax, we believe in helping our clients understand how these rules really work so you can make smart, informed decisions about your situation.

Why the IRS Extends the Statute of Limitations

The IRS can’t always pursue collection activity. There are situations where they’re legally required to put things on hold. When that happens, the clock effectively stops ticking —giving them more time to come after you later.

Some of the most common reasons include:

Bankruptcy filings – If you file for bankruptcy, the IRS is blocked from collection efforts until the court process is resolved.
Pending tax relief requests – If you apply for an installment agreement, offer in compromise, or innocent spouse relief, the IRS pauses collection while reviewing your request (and any appeals).
Living overseas – Spending six months or more outside the U.S. can suspend the statute.
Military service – Certain active-duty military roles, such as serving in a combat zone, can stop the clock.

Other Ways the Statute Gets Extended

Aside from suspensions, there are cases where the statute of limitations lasts longer than the standard 10 years:

Voluntary extensions – If you agree to extend the statute, usually by signing a waiver.
Installment agreements – The IRS may require you to give up part of that 10-year protection in exchange for a payment plan.
Court custody of assets – If your property is tied up in litigation, the IRS can’t collect until the court releases it.
Wrongful liens – If a lien is placed incorrectly, that can also impact the timeframe.

Why This Matters

Knowing the statute of limitations is crucial for any taxpayer with unresolved tax debt. You don’t want to assume you’re “off the hook” only to find out the IRS has more time than you thought.

At Arch Tax, our team digs into the specifics of your case to determine:

When your collection statute actually began
Whether it’s been suspended or extended
How much time the IRS realistically has left to collect from you

Sometimes, this analysis can be the difference between negotiating the right resolution—or avoiding unnecessary stress when your case is already close to expiration.

Next Step: If you’re dealing with back taxes, don’t try to figure this out alone. Contact Arch Tax today , and let us review your situation so you know exactly where you stand.

Bankruptcy & Back Taxes

Fri, 26 Sep 2025 21:06:21 GMT

If you owe back taxes, you may have heard that filing for bankruptcy can sometimes wipe out IRS debt. While that’s technically true, the rules are extremely strict, and in most cases there are better solutions available. At Arch Tax, we work hard to resolve tax issues without pushing you toward bankruptcy — but it’s important to understand how the process works in case it becomes part of the discussion.

What Is an IRS Tax Discharge?

An IRS tax discharge happens when certain qualifying tax debts are eliminated through bankruptcy. However, not all tax debt qualifies, and you must meet several conditions before the IRS will allow it.

The general criteria include:

Tax returns were filed at least two years before the bankruptcy.
The IRS assessed the tax more than 240 days before the filing.
The debt is unsecured (no lien attached).
The debt is not related to trust fund taxes (such as withheld payroll taxes).
The taxpayer did not commit fraud or attempt to evade taxes.
At least three years have passed since the tax return was originally due (including extensions).

If all of these apply, a discharge may be possible.

Chapter 7 vs. Chapter 13 Bankruptcy

There are two main types of bankruptcy that come into play with tax debt:

Chapter 7 Bankruptcy
Often called “liquidation bankruptcy.”
Can eliminate qualifying tax debts.
Typically requires proving you don’t have the income to repay what you owe.
Faster and more straightforward than Chapter 13.
Chapter 13 Bankruptcy
Restructures your debts into a 3–5 year repayment plan .
Allows you to catch up on overdue payments.
Does not discharge IRS debt.

For those strictly looking to wipe out IRS debt, Chapter 7 is more favorable — but qualifying is difficult, and it’s not always the best path forward.

What Tax Liabilities Cannot Be Discharged?

Even in Chapter 7, some types of taxes are never dischargeable. These include:

Federal tax liens already filed.
Recent property taxes.
Certain payroll and employment taxes.
“Trust fund” taxes such as withheld income, Social Security, and Medicare.
Erroneous refunds or credits tied to non-dischargeable taxes.

In these cases, bankruptcy will not erase your obligation.

Why Bankruptcy Should Be a Last Resort

Bankruptcy can feel like a quick fix, but it comes with long-term financial consequences. Your credit, your ability to borrow, and even certain job opportunities can all be affected.

That’s why at Arch Tax , we do everything possible to explore other tax resolution strategies first — like Offers in Compromise, installment agreements, penalty abatements, or the IRS Fresh Start Program. Bankruptcy may help in very specific situations, but we see it as the last option on the list.

Final Thoughts

IRS tax discharge through bankruptcy is possible, but only under narrow circumstances. For most taxpayers, there are far better options that can resolve your IRS debt without the lasting effects of bankruptcy.

At Arch Tax , our mission is simple: help you find the best solution for your tax problem — not just the fastest or easiest. We’ll walk you through your options, explain what you qualify for, and fight to protect your financial future.

�� Call us today to review your case and find out what tax relief options may work for you. Bankruptcy isn’t the only answer — and often, it’s not the best one.

Warning Signs of Tax Relief Scams

Fri, 19 Sep 2025 22:19:13 GMT

When tax debt feels overwhelming, the promise of “fast relief” can be tempting. Unfortunately, not every tax relief company plays by the rules. In recent years, taxpayers have reported an increase in scams where firms use aggressive sales tactics, hidden fees, or false promises to lure in clients—only to leave them worse off than before.

Knowing how to spot the red flags can protect your wallet and give you peace of mind.

Common Warning Signs of a Tax Relief Scam

1. Upfront Payment Demands

Be cautious if a company asks for full payment before they’ve reviewed your situation. Many fraudulent firms collect thousands of dollars upfront and then fail to provide meaningful help.

2. Lack of Transparency

If a company won’t explain its process, fees, or credentials in clear terms, consider it a major red flag. Trustworthy firms are upfront about costs and timelines.

3. Aggressive Marketing Tactics

Scam firms often rely on unsolicited calls, misleading mailers designed to look like IRS notices, or pressure to “sign up now before it’s too late.” Legitimate professionals don’t need scare tactics to earn your trust.

4. No Licensed Professionals on Staff

A reliable tax relief company employs licensed experts—such as CPAs, enrolled agents, or tax attorneys—who can represent you before the IRS. If you can’t verify credentials, walk away.

5. No Money-Back Guarantee

Many reputable companies offer some form of satisfaction guarantee. Scammers often avoid this, knowing their “services” won’t deliver results.

Signs of a Legitimate Tax Relief Firm

Licensed professionals are easy to verify and listed publicly.
Transparent fee structures that don’t hide costs.
Free initial consultations so you can explore your options without financial risk.

Protecting Yourself

Before hiring a tax relief company:

Research reviews and complaints online.
Verify credentials with professional associations.
Ask direct questions about costs, timelines, and services.
Trust your gut —if something feels off, it probably is.

Final Thoughts

Tax relief can be life-changing when handled by the right professionals—but devastating if you fall for a scam. By recognizing these warning signs and doing your due diligence, you can avoid fraudulent companies and focus on solutions that actually work.

If you’re dealing with IRS debt and want clear, honest guidance, consult a licensed tax professional you can trust . You can also schedule a free consultation with us and we'd be happy to answer all of your questions.

Tax Tip: Donating After a Disaster

Fri, 12 Sep 2025 11:21:14 GMT

Disasters can strike anytime and anywhere. Hurricanes, wildfires, floods, earthquakes—you name it. In the aftermath, many people want to help. One of the quickest and most effective ways to provide support is by donating money to a reputable charity.

But here’s the problem: scammers know this too. They often set up fake charities or pretend to be government agencies to take advantage of both disaster survivors and generous people trying to help.

So how can you protect yourself and make sure your donations really reach those in need?

What to Do Before You Donate

Verify the Charity
Use the IRS Tax Exempt Organization Search tool to make sure the organization is legitimate. Donations to qualified charities may be tax deductible.
Watch the Payment Method
Legitimate charities will not ask for donations via gift cards, wire transfers, or cash. Stick with checks or secure online payments.
Get a Receipt
Always ask for and keep a receipt for your donation. This not only protects you but is also necessary if you plan to claim the deduction on your tax return.
Double-Check Your Bank Statement
Review your statements to make sure the correct amount was charged and no extra transactions slipped in.

Red Flags of a Scam

They claim to work for the IRS or another government agency (the IRS never asks for donations).
They pose as a charity representative but push for personal or financial information.
Their caller ID looks legitimate , but the organization isn’t.
They use vague, emotional appeals but can’t explain how your donation will be used.
They set up bogus websites with names similar to real charities.
They falsely claim your donation is tax deductible when it isn’t.

For Disaster Survivors

If you’ve been directly affected by a disaster, you may be entitled to tax relief. You can call the IRS disaster assistance line at 866-562-5227 for questions about disaster-related tax issues.

Donating after a disaster is one of the best ways to support those in need. Just make sure your money goes to the right place. If you ever suspect fraud, report it to the Federal Trade Commission (FTC) .

At Arch Tax, we help our clients navigate tax questions like this every day. Whether it’s making sure your donations are deductible or understanding tax relief after a disaster, we’re here to help. Schedule a free consultation today.

IRS Offer in Compromise: Patience Required

Fri, 05 Sep 2025 21:47:54 GMT

IRS Offer in Compromise Timelines: Patience Required

If you’re drowning in tax debt, the IRS Offer in Compromise (OIC) program can feel like a lifeline. It allows qualified taxpayers to settle their debt for less than the full amount owed. But while the promise of relief is powerful, the timeline for getting an OIC approved isn’t fast — and patience is absolutely required.

In this guide, we’ll walk through the OIC process, average timelines, what slows things down, and how to improve your chances of getting through the IRS waiting game faster.

What Is an Offer in Compromise?

An Offer in Compromise is the IRS’s version of a settlement agreement. If paying your full tax balance would cause financial hardship, you may qualify to settle for a reduced amount.

But here’s the catch: approval isn’t automatic. The IRS reviews your income, expenses, assets, and overall ability to pay before making a decision. In fact, acceptance rates are relatively low, which makes understanding the process — and the timeline — crucial.

The OIC Timeline: Step by Step

1. Pre-Qualification (a few days)

Before you even apply, you’ll want to confirm eligibility. The IRS has a Pre-Qualifier tool that checks basics like:

Are all your tax returns filed?
Are your estimated payments up to date?
Are you free of bankruptcy proceedings?

This quick step can save you months of wasted time later.

2. Filing the Application (2–6 weeks)

Next, you’ll file Form 656 (Offer in Compromise) along with Form 433-A (individuals) or 433-B (businesses). These forms require complete financial disclosure — every bank account, asset, expense, and debt.

You’ll also submit:

A non-refundable application fee
An initial payment (for lump-sum offers)

Gathering documents is often the most time-consuming part for taxpayers. A tax professional can help speed things up, but expect a few weeks to pull everything together.

3. IRS Review (6–12 months or more)

Once submitted, your file heads to an IRS examiner. This is the longest stage of the process. Most cases take 6–12 months to review, but complicated financial situations or IRS backlogs can stretch it to 18 months or longer .

During this time, the IRS may request additional information. Responding quickly is key — delays on your end can push your case back in the line.

4. IRS Decision (weeks to months)

When the review is complete, the IRS will either:

Accept your offer
Reject your offer (you can appeal)
Make a counteroffer for a higher settlement amount

This phase typically takes several weeks, but an appeal can extend the process another 6–12 months.

5. Payment of Accepted Offer (up to 24 months)

If approved, you’ll pay either:

A lump sum within 5 months, or
Monthly installments over a maximum of 24 months

The relief is real, but the payment phase adds time before your tax debt is officially behind you.

Factors That Slow Down the OIC Timeline

Complex finances (multiple assets, businesses, or income sources)
IRS backlog (especially after tax season or during staffing shortages)
Incomplete applications (missing forms or incorrect info)
Requests for more documentation
Appeals (if your offer is rejected and you challenge it)

How to Speed It Up

While you can’t control the IRS’s workload, you can keep things moving by:

Submitting a complete and accurate application the first time
Responding to IRS requests immediately
Working with a tax professional who knows the OIC process inside and out

Alternatives If You Can’t Wait

Not everyone qualifies for an OIC — and not everyone wants to wait a year or more for approval. Other IRS programs include:

Installment Agreement: Pay in manageable monthly payments.
Currently Not Collectible (CNC): Temporarily stop IRS collections if you can’t pay anything right now.

Bottom Line

The IRS Offer in Compromise is one of the most powerful forms of tax relief available — but it’s not quick. Most taxpayers wait 6–12 months , and some wait longer. If you’re considering this route, plan for delays and don’t go it alone.

At Arch Tax , we’ve helped countless clients prepare successful OIC applications and avoid the traps that lead to delays or denials. If you’re ready to explore whether you qualify — and want help navigating the timeline — reach out today.

Escape Your Ex’s IRS Debt

Fri, 29 Aug 2025 19:02:05 GMT

If you’ve ever opened an IRS notice only to find yourself responsible for a tax bill caused by your spouse (or ex-spouse), you know how unfair it feels. The good news? The IRS has a program called Innocent Spouse Relief that may wipe those debts off your plate.

What Is Innocent Spouse Relief?

Innocent Spouse Relief is an IRS program designed to protect people who unknowingly signed a joint tax return that contained errors made by their spouse. If approved, you can be freed from paying the tax, penalties, and interest tied to your spouse’s mistakes.

Do You Qualify?

You might qualify if:

You filed a joint tax return.
Your spouse incorrectly reported (or failed to report) income.
You can show you didn’t know—and had no reason to know—about the errors when you signed.

If the IRS agrees it’s unfair to hold you liable, you could be off the hook.

Three Types of Relief

The IRS offers three different ways to claim relief:

Innocent Spouse Relief – You’re fully released from liability if your spouse made errors you didn’t know about.
Relief by Separation of Liability – The IRS splits the tax bill between you and your spouse/ex-spouse.
Equitable Relief – A fallback option if you don’t qualify for the first two but can show it would be unfair to make you pay (often involving hardship or spousal abuse).

How to Apply

To request Innocent Spouse Relief, you’ll file IRS Form 8857 . You can also include a letter with extra details you want the IRS to consider. Timing matters—apply as soon as you learn about the tax debt.

Why Act Quickly

The IRS won’t wait. Once you receive a notice about a joint tax issue, the clock starts ticking. Filing Form 8857 early gives you the best chance of avoiding unnecessary collections.

Take the Next Step

You don’t have to carry your spouse’s tax mistakes forever. If you qualify for Innocent Spouse Relief, you could finally breathe easier knowing the IRS debt is no longer yours.

At Arch Tax, we’ve helped countless clients file Form 8857, gather the right evidence, and present a strong case to the IRS. If you have questions—or you’re ready to see if you qualify— contact Arch Tax today.

How to talk to the IRS

Wed, 20 Aug 2025 12:03:27 GMT

Most people hope they never have to speak directly with the IRS. But if you do need to talk to the IRS, knowing how to handle the conversation can make the difference between clarity and confusion — or even money saved versus money lost.

Important Note:

It is important to note that the IRS will never call you directly on the phone. If you do receive a call from someone representing the IRS, it is most likely a scam. This article was created to help you talk to the IRS if you need to call them directly.

Here’s a practical guide on how to talk to the IRS the right way:

1. Stay Professional and Polite

It may sound obvious, but tone matters. The IRS representative you’re speaking with has the ability to note your attitude and cooperation in their file. Keeping calm and professional helps the call go smoother and keeps the agent more willing to explain your options.

2. Confirm Who You’re Talking To

Before sharing personal details, always ask for:

Their full name
Their IRS employee ID number
A call reference number, if provided

This ensures you’re really dealing with the IRS and not a scammer. Remember — the IRS won’t ask for payment by gift cards, wire transfer, or peer-to-peer apps like Venmo or CashApp.

3. Have Your Information Ready

The IRS is detail-driven. Before you call, make sure you have:

Your most recent tax return
Any IRS letters or notices you’ve received
Your Social Security number or Tax ID
A notepad to record details

Being organized shows you’re serious and keeps the call focused.

4. Don’t Guess — Ask for Clarification

IRS notices can be full of jargon. If something doesn’t make sense, ask the agent to explain it in plain English. Never guess at what they’re asking for. A wrong answer or assumption could create unnecessary delays or even trigger additional issues.

5. Document Everything

Write down the date, time, the name/ID of the agent, and a summary of what was discussed. If you need to call back, or if the IRS sends something that doesn’t match what was said, having your own record is incredibly valuable.

6. Know Your Rights

You’re not powerless when speaking to the IRS. Taxpayers have the Taxpayer Bill of Rights , which includes the right to representation. You don’t have to figure things out on your own — you can pause, consult a tax professional, and have them speak on your behalf.

7. What to Say (and Not to Say) to the IRS

When you’re on the phone with an IRS agent, your words matter. Stick to facts and keep your answers short. Here are some tips:

What to say:

“Can you explain that to me in simpler terms?”
“What specific documents do you need from me?”
“May I have a deadline extension in writing?”
“I’d like to consult a tax professional before answering further.”

What not to say:

Long explanations or excuses (“I didn’t file because…”).
Promises you can’t keep (“I’ll pay everything by next week” if you can’t).
Emotional outbursts — frustration doesn’t help your case.

Clear, calm, and factual is always best.

8. How a Tax Attorney Can Help

While some IRS conversations are straightforward, many are not. A tax attorney can:

Communicate directly with the IRS on your behalf so you don’t have to handle stressful calls.
Protect your rights by ensuring the IRS follows proper procedure.
Negotiate resolutions like installment agreements, penalty reductions, or even debt forgiveness (if you qualify).
Provide strategy — attorneys understand both the law and IRS procedures, which means they can see solutions most taxpayers miss.

Think of it like going to court without a lawyer — you can do it, but the odds aren’t in your favor. Having a tax attorney gives you someone in your corner who knows the rules of the game as well as the IRS does.

What to Say if You Already Have a Tax Attorney

If you’re working with a tax attorney, you don’t need to get into the details yourself. Instead, you can politely direct the IRS agent to your representative. For example, you might say:

“Thank you for your call. I have legal representation with Arch Tax, and I’d like all communication to go through my attorney.”
“My tax attorney is handling this matter. May I give you their contact information so you can reach out directly?”
“For accuracy, I’ll defer to my attorney on this issue. Please contact them for further details.”

This keeps you from saying anything that could complicate your case and ensures the IRS communicates with someone who knows the law inside and out.

Talking to the IRS doesn’t have to be intimidating if you stay calm, prepare, and know your rights. But for anything beyond a simple question, having a tax attorney in your corner can save you stress — and money.

If you find yourself needing help and need to talk to someone, schedule a free consultation with us and we would be happy to discuss your options.

How Scammers Steal Tax Info from Your Preparer

Fri, 15 Aug 2025 12:15:53 GMT

You trust your tax preparer with some of your most sensitive personal and financial information. But what happens if scammers target them—and end up with your data?

Unfortunately, there’s a real scam going around that does exactly that. Here’s how it works and how you can protect yourself.

The Scam in Action

Criminals send fake emails to tax preparers, pretending to be from the tax software company the preparer uses.

These emails ask the preparer to “verify” their Electronic Filing Identification Number (EFIN) —a number the IRS uses to identify legitimate tax businesses.

The email tells them to send the EFIN information by fax.

If the preparer falls for it, scammers can use that EFIN to file fake tax returns in clients’ names—claiming fraudulent refunds.

Why This Matters to You

If your preparer’s EFIN is stolen, scammers could:

File a fake return using your personal information
Claim your refund before you do
Cause IRS delays and red flags on your account
Make it harder and slower for you to get your real refund

Signs of Trouble

Here are a few warning signs that could mean your personal tax information was compromised:

You try to e-file and the IRS says a return has already been filed under your name
You get a letter from the IRS about a tax return you didn’t file
You receive unexpected tax documents in the mail

What You Can Do

You can’t stop scammers from targeting tax professionals, but you can take steps to protect yourself:

Ask your preparer how they protect client data — A good tax pro will use secure portals and never send sensitive info over unencrypted email.
Consider getting an IRS Identity Protection PIN (IP PIN) — This is a 6-digit number that prevents anyone from filing a return in your name without it.
Act quickly if you suspect fraud — Contact your tax preparer, report it to the IRS, and follow their steps to secure your account.

Bottom Line

The EFIN scam targets tax preparers, but it’s taxpayers who can suffer the consequences. By choosing a preparer who takes security seriously—and staying alert to signs of fraud—you can greatly reduce your risk.

If you think your information may have been compromised or want help setting up extra IRS protections, contact Arch Tax today . We’ll help you secure your account and make sure your tax return is filed safely and accurately.

Extension Filers: Avoid These Tax Preparer Red Flags

Fri, 08 Aug 2025 12:21:39 GMT

If you filed for an extension, your new tax deadline is October 15, 2025 . That gives you a little extra time — but not much — to get everything in order. Many taxpayers in your shoes consider hiring a professional to help finish the return.

But here’s the catch: Not all tax preparers are created equal.

Some are helpful pros. Others? Not so much. Choose the wrong one, and you could risk your refund — or worse, find yourself in a mess with the IRS.

Here are the biggest red flags to watch out for when choosing a tax preparer:

1. They Promise Bigger Refunds Than Everyone Else

If someone claims they can get you a “huge refund” before they’ve even looked at your documents, that’s a giant red flag. A legitimate preparer doesn’t make promises until they’ve seen the facts.

2. They Want Your Refund Deposited into Their Bank Account

Never agree to this. Your refund should be deposited directly into your bank account — not theirs. This is a shady tactic some preparers use to skim fees or delay payments.

3. They Won’t Sign the Return

By law, paid preparers must sign your return and include their Preparer Tax Identification Number (PTIN) . If they refuse? Walk away.

4. They Don’t Ask for Records or Receipts

Good tax pros ask a lot of questions and request documentation. If someone is willing to prepare your return based only on a pay stub or vague guesses, that’s a problem.

5. They Base Their Fee on Your Refund Size

A preparer who charges a percentage of your refund has a financial incentive to fudge the numbers. Reputable pros charge flat or hourly fees — not a cut of your return.

6. They Can’t Be Reached After Tax Season

What happens if the IRS sends you a notice in December? Make sure you’re working with someone who’s available year-round — not just from January to April.

What You Should Look For

A valid PTIN
IRS e-file access
Transparency in pricing
Willingness to review the return with you
Available to answer questions even after October

Final Tip: You Are Still Responsible

No matter who prepares your return, you are legally responsible for what gets filed. Don’t sign a return you haven’t reviewed — and never sign a blank one.

Need Help You Can Trust?

At Arch Tax, we pride ourselves on transparency , ethics , and experience . We’ve helped hundreds of clients meet their tax deadlines — without the red flags.

Let’s make sure your return gets filed right. Schedule a free consultation today!

What Happens If I Get Audited

chad@archtaxco.com (Chad Dickinson) — Thu, 31 Jul 2025 15:39:07 GMT

Just hearing the word “audit” is enough to make most taxpayers break into a cold sweat. But what actually happens if you get audited by the IRS? Is it a nightmare scenario or something manageable with the right help?

At Arch Tax , we help clients navigate audits every day—with clarity, confidence, and a game plan. Here’s what you need to know about what happens if you get audited, and how we can support you through the process.

What Is an IRS Audit?

An IRS audit is a review of your financial information and tax return to verify that everything you reported is accurate. Think of it as the IRS double-checking your math… and your paperwork.

There are three types of audits:

Correspondence Audit – Done entirely by mail. You send in documents to back up something on your return.
Office Audit – You go to an IRS office to answer questions and provide documents.
Field Audit – The IRS comes to you—either your home, business, or your accountant’s office.

Why Did I Get Audited?

Most IRS audits are triggered for a few common reasons:

Reporting unusually high deductions for your income bracket
Failing to report all of your income
Random selection (yes, it happens)
Math errors or discrepancies on your return
Industry red flags (self-employed individuals and cash-heavy businesses get more scrutiny)

What Happens Next?

If you're selected for an audit, here’s what typically happens:

You’ll Receive a Notice
The IRS sends an official letter outlining what they’re auditing and what documents they want.
You’ll Be Asked to Respond
You may need to mail in receipts, bank records, 1099s, or other documents—or attend an in-person interview.
They Review Everything
This can take weeks or even months depending on the complexity.
The IRS Issues a Decision
You’ll either receive a no-change letter (you passed) or a proposed change (you owe more).
You Accept or Appeal
If you disagree, you can appeal or go to tax court. This is where strong representation really matters.

Why This Can Be a Real Headache

Audits are time-consuming, confusing, and stressful. The IRS isn’t exactly known for clear communication, and one small mistake can lead to major tax bills, penalties, or worse. It’s easy to feel overwhelmed and vulnerable—especially if you try to go it alone.

How Arch Tax Helps You Through It

At Arch Tax , we do more than just file paperwork. We fight for you.

Led by licensed tax attorney Chad Dickinson , we specialize in audit defense, tax resolution, and IRS representation. Chad founded Arch Tax after seeing firsthand how big firms mistreat clients—overpromising, underdelivering, and using fear as a sales tactic. We do things differently.

Here’s what you get with us:

A calm, step-by-step game plan so you know exactly what to expect
Help gathering, organizing, and reviewing all documents
Direct communication with the IRS so you don’t have to deal with them alone
A personal advocate who truly understands tax law and negotiation
Transparency, empathy, and no fear-mongering—just solid help

Don’t Face an Audit Alone

If you're wondering what happens if I get audited, remember this: it’s not the end of the world, but it’s not something you should take lightly either.

Arch Tax is here to help.

Whether you’ve already been contacted by the IRS or just want to be proactive, schedule a free consultation today. We’ll talk through your situation and show you what your options are—no pressure, just real help.

Call us or schedule a free consultation

October 15th Deadline for Extension Filers

chad@archtaxco.com (Chad Dickinson) — Fri, 25 Jul 2025 12:47:03 GMT

If you filed for a tax extension earlier this year, your time is almost up. The final deadline to file your extended federal tax return is Wednesday, October 15, 2025 . If you’re one of the millions of Americans who requested more time, here are the important things you need to know before the clock runs out.

1. You Still Have to File — Even If You Can’t Pay

Filing by the October 15 deadline helps you avoid additional penalties and interest . Even if you owe and can’t pay the full amount, the IRS strongly encourages you to file anyway. You’ll reduce your late fees and open up payment plan options.

2. File Electronically and Choose Direct Deposit

Electronic filing is faster, more secure, and more accurate than paper filing. If you're expecting a refund, choosing direct deposit is the quickest way to get your money.

3. Free Filing Options Are Still Available

Don’t forget — the IRS Free File program is open until October 15. It’s a great way for qualifying taxpayers to file electronically for free.
There are also local programs like VITA (Volunteer Income Tax Assistance) and TCE (Tax Counseling for the Elderly) that help people with basic tax filing at no cost.

These programs are especially helpful for:

Individuals with low-to-moderate income
Seniors
People with disabilities
Limited English speakers

4. Live in a Disaster Area? You May Have More Time

If you're in a federally declared disaster zone, you could qualify for automatic extensions beyond October 15 . Check IRS.gov for updated disaster relief guidance.

5. If You Owe, Explore IRS Payment Options

Can’t pay the full amount? Don’t panic. The IRS offers several payment options, including:

Installment plans
Online account management
Short-term extensions to pay

You can apply for a payment plan directly on the IRS website .

6. Owe a Balance? We Can Help You Explore Tax Relief Options

If you're staring down a tax bill you can't afford, you're not alone—and you have options. At Arch Tax, we specialize in helping people just like you negotiate with the IRS.

We’ll help you understand if you qualify for:

Partial Pay Installment Agreements
Currently Not Collectible status
Offers in Compromise
Penalty abatements

Before the IRS ramps up collection efforts, let’s talk about your situation and figure out the best resolution path for you.

Need Help?

We’re here for you. At Arch Tax, we help extension filers every year wrap up their tax returns, minimize penalties, and stay in good standing with the IRS.

If you’re feeling overwhelmed or have a complex tax situation, don’t wait until October 15 to get started. Let’s make sure everything gets filed correctly and on time.

Schedule your free consultation today — and finish your taxes the right way.

The One Big Beautiful Bill Act

chad@archtaxco.com (Chad Dickinson) — Fri, 18 Jul 2025 17:44:42 GMT

New 2025 Tax Deductions for Workers, Drivers, and Retirees

On July 4, 2025, the “One Big Beautiful Bill Act” (Public Law 119-21) was signed into law—and it’s delivering some major tax benefits to everyday Americans. Whether you earn tips, work overtime, just bought a car, or are over 65, this law has something for you. Here’s a breakdown of the four big deductions now available for tax years 2025 through 2028.

1. “No Tax on Tips” Deduction – Up to $25,000

If you work in a tipped profession—like hospitality or personal services—you may now deduct up to $25,000 in qualified tips received each year.

Who qualifies:

Employees and self-employed individuals in industries that regularly receive tips (to be listed by the IRS).
Tips must be reported on a W-2, 1099, or IRS Form 4137 .
Deduction is available even if you don’t itemize.

Key restrictions:

Phase-out begins at $150,000 AGI ($300,000 for joint filers).
SSTB (Specified Service Trade or Business) owners and employees do not qualify .
Must include your SSN and file jointly if married .

IRS will release an official list of qualifying tip-based occupations by October 2, 2025.

2. “No Tax on Overtime” Deduction – Up to $12,500 ($25,000 Joint)

Working overtime just got more rewarding. You can now deduct the “extra pay” portion of your time-and-a-half —the half portion over your regular rate of pay required by the Fair Labor Standards Act (FLSA) .

Who qualifies:

Any worker paid qualified overtime reported on W-2 or 1099 .
Deduction allowed for both itemizing and standard deduction filers.

Key restrictions:

Phase-out starts at $150,000 AGI ($300,000 joint).
Must include SSN and file jointly if married .

Employers must report overtime payments to both the IRS and employees.

3. Car Loan Interest Deduction – Up to $10,000

Bought a car for personal use in 2025? You may be able to deduct up to $10,000 in interest paid on a qualifying auto loan .

What counts:

Loan must be for a brand new vehicle (original use must start with you).
Car must be for personal use only .
Vehicle must be assembled in the U.S. , weigh under 14,000 lbs, and include a VIN on your tax return .
Deduction applies whether or not you itemize.

Key restrictions:

Phase-out starts at $100,000 AGI ($200,000 joint).
Leases do not qualify .
Used cars do not qualify.

4. Senior Deduction – $6,000 per Person

Taxpayers age 65 or older get a brand-new deduction of $6,000 —on top of the standard senior deduction that already exists.

Who qualifies:

Anyone age 65+ by year-end .
Claim up to $12,000 per couple if both spouses qualify.
Available to both itemizers and non-itemizers .

Key restrictions:

Phase-out begins at $75,000 AGI ($150,000 joint).
Must provide SSNs for all qualifying individuals.

Final Thoughts: A Rare Taxpayer Win

The “One Big Beautiful Bill Act” offers real savings to working Americans, service industry professionals, overtime earners, vehicle buyers, and retirees. Whether you itemize or take the standard deduction, these new provisions can lower your taxable income and increase your refund potential.

Be sure to talk to a tax professional and keep good records—employers, lenders, and individuals will all be required to file reports for many of these deductions.

Need help understanding how these changes apply to your tax situation? Contact Arch Tax for personalized guidance.

Inside the IRS: What’s Changing in Tax Administration?

chad@archtaxco.com (Chad Dickinson) — Fri, 11 Jul 2025 19:12:59 GMT

The IRS has just released its 2024 Research Bulletin—Publication 1500—a powerful glimpse into the future of tax administration in the U.S. Compiled from expert research presented at the 14th annual IRS-Tax Policy Center Joint Research Conference, the bulletin focuses on how the IRS is evolving to better serve taxpayers, strengthen compliance, and streamline systems. If you’re a taxpayer, business owner, or tax professional, these insights could impact how you file and plan going forward.

Let’s break down what’s changing—and why it matters.

1. Smarter Use of Tax Data

One of the most compelling topics in this year’s bulletin is how the IRS is using data science to become more efficient and proactive. From predictive analytics to pattern recognition, the agency is leveraging tax return data to identify errors, detect fraud, and personalize taxpayer services.

What it means for you: Expect more accurate notices and fewer delays—but also increased scrutiny if something looks off in your return.

2. A New Era of Tax Audits

The IRS is shifting its audit strategies based on cutting-edge research. Rather than relying on random audits or broad targeting, the agency is moving toward more precise, risk-based approaches using machine learning tools.

What it means for you: While overall audit rates remain low, high-risk returns—like those with large deductions, complex business activity, or signs of evasion—could face more focused attention.

3. Taking on Tax Avoidance

Researchers examined corporate and high-net-worth individual behaviors that legally minimize tax but push the envelope. These studies explore how entities use gray areas in tax law—and how new rules or enforcement strategies might close the gaps.

What it means for you: Expect potential changes in tax code interpretations or new limits on deductions and credits in coming years.

4. Reducing the Filing Burden

The IRS wants to make tax filing easier. The bulletin features research on improving tax form usability, cutting paperwork, and reducing complexity. E-filing, prefilled returns, and integrated digital systems are being actively explored.

What it means for you: Filing could get faster and less stressful in the future. But staying current with new filing tools will be key.

5. Why This Research Matters

Behind every tax reform is a stack of data, and the IRS is clearly listening to researchers. By grounding policy decisions in academic studies and conference insights, the agency hopes to build a more modern, equitable, and efficient system.

What it means for you: Being aware of these developments helps you stay compliant and avoid costly mistakes.

6. Final Thoughts

The 2024 IRS Research Bulletin is more than a dense government report—it’s a signal of change. Whether it’s smarter audits, reduced paperwork, or tightened enforcement, the IRS is actively reshaping how it serves (and scrutinizes) taxpayers.

Want to read the full Publication 1500 yourself?

View the 2024 IRS Research Bulletin (PDF)

Need help navigating tax changes? Contact us at Arch Tax—we’re staying ahead of the curve so you don’t have to.

Inside the IRS: Key Stats and Surprises from 2024

chad@archtaxco.com (Chad Dickinson) — Thu, 03 Jul 2025 18:51:31 GMT

Every year, the IRS publishes a detailed report summarizing its activity—and the 2024 IRS Data Book is full of insights. From record-breaking collections to faster taxpayer service, the agency has been busy. If you want to understand how the IRS is evolving and what it means for taxpayers and professionals alike, here’s what you need to know.

The IRS Collected Over $5 Trillion—A New Record

For the first time in U.S. history, the IRS collected more than $5 trillion in revenue. That’s up nearly 9% from the previous year. In total, the IRS took in $5.1 trillion , which accounts for 96% of all government funding .

That means the IRS is not just collecting taxes—it’s funding the vast majority of the federal government.

Taxpayer Services Got Better

The IRS has long been criticized for slow service, but FY 2024 showed improvement:

62.2 million taxpayer contacts (up 3.2%)
Live telephone assistance to 20 million callers (up 11%)
2 million+ people assisted in person at local offices (up 26%)

If you tried calling the IRS this past year, chances are you noticed the shorter wait times and more available reps.

Digital Tools Are on the Rise

Thanks to the IRS's Digital First initiative, FY 2024 saw more digital tools launched than in the past 20 years combined. The results?

2 billion+ online assistance transactions (up 47%)
382.8 million Where’s My Refund? queries (up 26%)
690 million visits to IRS.gov

The IRS is quickly becoming more accessible online, making it easier for taxpayers to get answers without waiting on hold.

266 Million Returns Processed

That includes individuals, businesses, and nonprofits. Add to that:

4.6 billion information returns received
$553 billion issued in refunds

This gives you a sense of the scale and complexity the IRS deals with annually.

More Audits, More Money

The IRS closed over 505,000 audits in FY 2024, which resulted in $29 billion in recommended additional tax owed.

Translation? Audits still matter—and they’re paying off for the government.

Collections Are Up—Especially with Installment Agreements

The IRS collected nearly $77.6 billion from taxpayers who owed but hadn’t paid yet—a 13.6% increase.

Installment agreements are becoming more popular. The IRS collected $16 billion through these payment plans (up 12%).

If you owe the IRS, a payment plan is still one of the most realistic solutions.

Conclusion: Why This Matters

The IRS is becoming faster, more digital, and more aggressive in collections. Whether you’re a taxpayer, a tax pro, or a small business owner, understanding how the IRS operates can help you avoid surprises and take advantage of helpful tools.

Need help navigating your IRS situation?

Let’s talk. Contact us for a free, no-pressure consultation. Whether you’re behind on taxes or just want to get ahead, we’re here to help.

The S Corp Advantage: A Smart Tax Move For Small Business

chad@archtaxco.com (Chad Dickinson) — Fri, 27 Jun 2025 20:03:45 GMT

If you're self-employed or running your business as a sole proprietor, you might be leaving money on the table—and putting your personal assets at risk. Transitioning to an S Corporation (S Corp) could be a game-changer when it comes to lowering your tax bill and protecting what you've worked so hard to build.

In this post, we’ll explore the core benefits of setting up your business as an S Corp and why thousands of small business owners make the switch each year.

Prefer to watch instead of read? Here’s a short breakdown from Chad Dickinson at Arch Tax:

Why Choose an S Corp?

Here are five key reasons small business owners consider electing S Corp status with the IRS:

1. Tax Savings on Self-Employment Taxes

Unlike sole proprietors who pay self-employment tax on all their net income, S Corp owners can split income between salary and distributions. Only the salary portion is subject to payroll taxes—potentially saving you thousands each year.

2. Retirement and Healthcare Benefits

S Corps allow for retirement plans like a solo 401(k), and you can deduct health insurance premiums and even fund an HSA—all of which reduce your taxable income.

3. Asset Protection

By setting up an S Corp, you separate your personal assets from your business liabilities. That means your home, car, and savings are less exposed in the event of a lawsuit or debt issue.

4. Pass-Through Taxation

S Corps avoid double taxation. Business profits pass through to your personal return via a K-1 form, so you're only taxed once on the income.

5. Salary Strategy

Paying yourself a reasonable salary reduces corporate profit and can still allow you to contribute to Social Security and Medicare.

How to Make the Switch

To elect S Corp status, you must file IRS Form 2553. You’ll also need to stay compliant with payroll filings and corporate tax returns (Form 1120S). It’s not overly complex—but it’s important to get it right.

Is It Right for You?

Not every business benefits equally from becoming an S Corp. The decision depends on your income, goals, and business structure. That’s where we come in.

Have questions? Want to know if an S Corp is the right move for your business?

Inside Our IRS Investigation: The First Step to Tax Relief

chad@archtaxco.com (Chad Dickinson) — Fri, 20 Jun 2025 20:27:56 GMT

Start Smart: Why We Always Begin with an IRS Investigation

Before we ever quote you a price or recommend a tax resolution strategy, we always start with one essential step: an IRS investigation.

Why?

Because just like you wouldn’t bid on a construction project without walking the site, we don’t believe in guessing when it comes to your taxes.

At Arch Tax, we take the time to do our due diligence upfront. That means requesting your IRS account records, speaking directly to the IRS through the Practitioner Priority Unit, and reviewing every detail of your file—so we can build an accurate roadmap for resolution.

What’s Included in Our IRS Investigation?

When you authorize us with IRS Form 8821 , we contact the IRS and gather:

Your current balances owed
A list of unfiled tax returns
Collection expiration dates
Lien filing status
Revenue officer assignments
Any open examinations
Your full filing and income history via IRS transcripts

This information is used to evaluate your eligibility for IRS Fresh Start programs, assess the timeline for resolution, and most importantly, give you clarity and control over your next step.

Know Before You Hire

Most people we talk to have no idea what’s really happening inside their IRS account. That’s not your fault—the IRS isn’t exactly known for clarity.

But if you're going to hire someone to fix a complex tax issue, wouldn't it feel better knowing exactly what you're dealing with first?

That’s why our investigation is always step one.

Want to get started?

We make it easy. Contact us today to begin your IRS investigation and get the information you need to make an informed decision.

Business Setup Made Easy: EIN, Entity Type, and Registration Explained

chad@archtaxco.com (Chad Dickinson) — Fri, 13 Jun 2025 17:30:02 GMT

Thinking of starting a business but feeling overwhelmed by all the paperwork and legal jargon? You’re not alone. At Arch Tax, we help new business owners simplify the process so they can launch with confidence and clarity.

To make things easier, we put together a short video that walks you through the basics of setting up your business — from getting your EIN to registering with the state.

Step 1: Get Your EIN (Employer Identification Number)
Your EIN is essentially your business's Social Security Number. It’s required for taxes, hiring employees, and opening a business bank account. You can apply online directly with the IRS — it takes 10 minutes or less.'

Apply for your EIN online

Step 2: Choose the Right Entity Type
You’ll need to decide what kind of business structure fits your goals:

Single-member LLC – Simple and flexible for solopreneurs
Multi-member LLC or Partnership – Ideal for co-owners
S-Corp – Can save on self-employment tax with the right setup
C-Corp – Great for businesses planning to raise capital or scale big

We recommend speaking with a tax professional before locking in your decision.

Step 3: Register Your Business With the State
Every state has a different registration process, but most can be completed online. Be cautious of third-party sites — always register directly through your state’s official government website.

Step 4: Open a Business Bank Account
Once you’ve secured your EIN and Articles of Organization/Incorporation from the state, you’ll be ready to open your business bank account. This is crucial for keeping personal and business finances separate.

Looking Ahead
As your business grows, consider:

How you’ll handle bookkeeping and finances
Whether you’ll have W-2 employees or contractors
What tax forms you’ll need to file each year

Need Help?
We’re here to answer your questions and guide you through the setup process. Feel free to schedule a free consultation with us if you are ready to start your own business and need help choosing the right entity.

Business Entities Explained: LLC, S-Corp, C-Corp and more!

chad@archtaxco.com (Chad Dickinson) — Fri, 06 Jun 2025 17:50:58 GMT

Starting a business comes with a long list of decisions—and one of the most important is choosing the right business entity. Why? Because your entity type doesn’t just affect how you operate—it determines how you file your taxes with the IRS.

If you’re self-employed, own an LLC, or have formed an S-Corp or C-Corp, this article will help you understand which tax return you’re responsible for and how your business income is reported.

Watch the quick video explanation below:

Sole Proprietor or Single-Member LLC

If you're self-employed and haven’t registered a formal business structure—or if you're the sole owner of an LLC—you're likely considered a sole proprietor . In this case, you’ll file your business income and expenses using Schedule C , which is part of your personal tax return (Form 1040). You may have an EIN, but that doesn’t change your filing method.

Form Used: Schedule C (Form 1040)
When to File: With your individual tax return

Multi-Member LLC

Have a business partner? A multi-member LLC must file a partnership return , using Form 1065 . Once completed, this form generates a K-1 for each partner, showing their share of the profit or loss. That income is then reported on each partner’s personal return.

Form Used: 1065 + K-1
Important Note: You must file this before your personal return

S Corporation (S-Corp)

S-Corps are pass-through entities, meaning the business itself doesn’t pay income taxes—the profit passes through to shareholders via a K-1 .

Form Used: 1120S + K-1
Tax Impact: Shareholders pay tax on their portion of the profit

C Corporation (C-Corp)

Unlike pass-through entities, a C-Corp pays its own corporate income taxes. If you don’t elect S-Corp status when forming a corporation, you’re defaulted to a C-Corp. The business pays tax on its profit, and then shareholders pay tax again if profits are distributed as dividends (known as double taxation ).

Form Used: 1120
Tax Impact: Corporation pays its own tax

Do You Have Employees?

If your business pays employees (not contractors), you’re also responsible for filing:

Form 940 – Annual Federal Unemployment Tax (FUTA)
Form 941 – Quarterly Federal Tax Return (for employee wages and withholdings)

We highly recommend using a payroll service to stay compliant with wage reporting and tax deposits.

Not Sure Which Entity or Form Applies to You?

The wrong filing can delay your return—or lead to costly IRS penalties. If you're unsure how your business is structured or need help getting compliant, our team at Arch Tax is here to guide you. Click here to schedule a free consultation and we can tell you which entity is the best for your business.

You Hired Us—Now What?

chad@archtaxco.com (Chad Dickinson) — Thu, 29 May 2025 16:59:08 GMT

Here’s What to Expect After Your IRS Investigation

So, you’ve gone through the initial IRS investigation with Arch Tax and decided to move forward with our recommended resolution plan. Now you might be wondering: What happens next?

In this blog, we’ll walk you through exactly what to expect so you feel confident and prepared as we move forward with resolving your tax issue.

Watch the Video: What Happens After You Hire Arch Tax

Get a full explanation directly from Chad Dickinson in the video below:

Step 1: Get Compliant with the IRS

Before we can work out any kind of resolution, we need to make sure you’re fully compliant with the IRS . That means filing any missing tax returns.

For most clients, this includes at least four years of back returns. We rely heavily on IRS transcripts to get the data we need, so you’re not digging through years of paperwork. If you have your records—that’s even better. We’ll use everything available to maximize deductions and accuracy.

Step 2: Special Attention for Self-Employed Clients

If you're self-employed, we’ll need to create profit and loss statements for each year we’re filing. While we don’t need a shoebox of receipts, we do ask for things like:

Bank statements
Credit card statements
Any digital records of income and expenses

The quicker you get this to us, the faster we can complete your returns.

Step 3: E-File or Mail Returns

Returns from 2022 through 2024 can be e-filed. Everything else must be mailed, and mailed returns can take 8–12 weeks to process , while e-filed returns usually process in 3–6 weeks .

Step 4: We Start Working with IRS Collections

Once you're compliant, we start engaging with IRS Collections . Your newly filed tax returns help us determine which IRS Fresh Start Program best fits your situation. We'll revisit the plan we originally proposed and make sure it still applies.

This phase can take anywhere from 1 to 6 months , depending on factors like:

Case complexity
Revenue officer assignment
Whether audits or other issues are present
The cooperation level from the IRS side

Need Help or Have Questions?

If you have any concerns about what comes next or if you’re just getting started, feel free to call us at (844) 556-3073. You can also schedule a free consultation if you wish for us to take a look at your specific issue.

Overpaying? TurboTax Might Be Why!

chad@archtaxco.com (Chad Dickinson) — Thu, 22 May 2025 18:24:46 GMT

More Than Just Software—It’s About Strategy

TurboTax and other DIY tax software programs promise convenience, affordability, and control. They’re sleek, simple, and often free—for basic returns. But for anyone with more than a single W-2, the cracks in the system become clear fast. When your financial life gets complex, your taxes do too. That’s where real tax professionals come in—and what they do is fundamentally different.

Why DIY Breaks Down

DIY software is built to file, not to think. It processes what you input, checks the math, and hits submit. But if you misclassify income, miss a deduction, or enter a number wrong, the software won’t stop you. Worse, it won’t tell you what opportunities you’ve left on the table.

You might get your refund—but you may have left thousands behind.

Real Tax Pros: Advisors, Not Just Filers

A real tax professional—whether a CPA, Enrolled Agent, or tax attorney—doesn’t just enter data. They:

Strategically plan your return to minimize taxes now and in the future
Interpret complex laws to find deductions you didn’t know existed
Represent you if the IRS comes knocking
Offer proactive advice tailored to your business, lifestyle, and goals

The Hidden Costs of DIY

That “free” return might cost you in other ways:

Missed deductions : Home office, QBI, depreciation, rental losses—often ignored or misunderstood
No audit defense : Limited or excluded with DIY platforms
Time and stress : 13+ hours is the average for self-filing. A pro gives you your life back.

Professional Planning = Real Money Saved

Pros don’t wait until tax season. They:

Help you form an S-Corp to save on self-employment tax
Maximize retirement contributions for current deductions and future gains
Time capital gains and losses strategically
Structure rental properties to optimize depreciation and passive income treatment

Peace of Mind Is a Premium Worth Paying For

IRS notice? Audit letter? Late penalty? With a pro, you’re not alone. You’ve got a knowledgeable advocate who handles the paperwork, calls, and strategy—so you can focus on what matters.

So, Forget TurboTax? Only If You Want To Win

TurboTax works great—for very basic returns. But once your financial life grows up, it’s time your tax strategy does too. Tax professionals aren’t just for the rich—they’re for the smart.

Ready to Think Bigger About Your Taxes?

At Arch Tax, we do more than file. We plan, optimize, protect, and advocate. Whether you’re self-employed, a small business owner, or just tired of DIY doubt—we’re here to help.

�� Book a Tax Strategy Call or try our Resolution Assistant Tool

Got an IRS Notice? Learn the Top Codes

chad@archtaxco.com (Chad Dickinson) — Thu, 15 May 2025 13:01:27 GMT

Getting a letter from the IRS can be nerve-wracking—especially when it’s packed with confusing codes and no clear explanation. But not all IRS notices are bad news, and understanding what the codes mean can help you act faster (and smarter).

Let’s break down the most common IRS notice codes you’re likely to see—and what they’re really telling you.

Why You Got a Letter from the IRS

The IRS sends letters for a few main reasons:

You owe taxes or missed a payment
You didn’t file a return (or there’s a problem with what you filed)
You’re due a refund or adjustment
They need more information to process your return
There’s a suspected identity issue

Each letter includes a notice number , usually in the upper right-hand corner (example: CP14, LT11, 5071C, etc.). That code tells you what the letter is about.

Top IRS Notice Codes You Should Know

CP14 – Balance Due Notice

This is the most common IRS notice. It means you owe money—whether it’s from an underpayment, late filing, or adjustment. It’s the IRS’s way of saying, “We see a problem. Pay up.”

CP501 or CP503 – Reminder You Still Owe

If you ignore the CP14, you’ll likely get one of these next. They’re follow-up notices reminding you of your unpaid balance and potential penalties.

LT11 or CP504 – Final Notice Before Levy

This is the serious one. It means the IRS is about to take action—like garnishing wages or levying bank accounts—if you don’t respond. Time to get professional help.

5071C – Identity Verification Needed

The IRS needs to confirm you actually filed your return. Until you verify your identity online or by phone, they won’t process your return or issue a refund.

CP2000 – Unreported Income

This notice means the income on your tax return doesn’t match what third parties (like banks or employers) reported to the IRS. It often results in a proposed tax adjustment.

Need More? Here’s the Full List from the IRS

Want to see every IRS notice code and its meaning? Check out the official IRS reference page:
IRS Notices and Letters – What They Mean

What to Do If You Get a Letter

Don’t ignore it. Even if you’re scared or confused.
Read it carefully. Note deadlines, amounts owed, and next steps.
Respond promptly. Many notices can be resolved simply if you act quickly.
Call us if you’re unsure. At Arch Tax, we can decode the letter and help you take the right next step.

Final Thoughts

IRS notices are part of the process—but they don’t have to derail your life. The key is knowing what they mean and how to respond.

Got a letter and not sure what to do?
Schedule a free consultation and we’ll walk you through it—no pressure, no panic.

What Is a Federal Tax Lien?

chad@archtaxco.com (Chad Dickinson) — Thu, 08 May 2025 10:55:59 GMT

If you owe back taxes and haven’t responded to the IRS, you might receive something that sounds serious—and it is:

A Federal Tax Lien.

But what exactly is it?

And what does it mean for your home, your finances, and your future?

Let’s break it down.

What Is a Federal Tax Lien?

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt.

It doesn’t mean the IRS is taking your property—yet. But it does mean they’re securing their interest so that if you sell or refinance, they get paid first.

What Does It Attach To?

Once a lien is filed, it attaches to almost everything you own, including:

Real estate (your home or land)
Personal property (cars, jewelry, collectibles)
Financial assets (bank accounts, business assets)
Future assets (anything you acquire after the lien is in place)

When Does the IRS File a Lien?

The process usually looks like this:

IRS assesses the tax and sends a bill (Notice and Demand for Payment).
You fail to fully pay the debt in time.
The IRS files a public document called a Notice of Federal Tax Lien to alert creditors that the government has a legal right to your property.

Once filed, the lien becomes public record—and can impact your credit, loan approvals, and reputation.

How Does a Tax Lien Affect You?

Credit Score Impact: Tax liens used to appear on credit reports (they no longer do), but lenders still may discover them through public records.
Business Complications: It attaches to business property and accounts receivable.
Refinancing or Selling Property: The lien can block your ability to sell or refinance until resolved.
Stress & Risk: A lien is a warning shot—the IRS could escalate to a levy (actual seizure of assets) if the debt remains unresolved.

How to Remove a Federal Tax Lien

There are a few ways to deal with a lien:

Pay the Tax Debt in Full: Once paid, the IRS releases the lien within 30 days.
Request a Lien Withdrawal: In some cases, even if you haven’t paid in full, the IRS may agree to withdraw the lien to help you recover financially.
Apply for a Discharge: You may be able to remove the lien from a specific property.
Subordination: Allows other creditors to move ahead of the IRS, making it easier to get a mortgage or loan.

Final Thoughts

A federal tax lien doesn’t mean you’re out of options—but it does mean it’s time to act.

At Arch Tax , we help individuals and small business owners resolve tax debt and remove liens legally and efficiently. We’ll explain your options clearly—and fight to protect your property and peace of mind.

Worried about a tax lien or already received a notice?
Contact us at www.archtaxco.com or schedule a free consultation today.

Do I Really Have to File Taxes?

chad@archtaxco.com (Chad Dickinson) — Wed, 30 Apr 2025 19:14:27 GMT

Let’s cut to the chase:

Not everyone has to file a tax return.

But if you get it wrong, the IRS won’t ignore it—and that “no big deal” moment could cost you big later.

So… do you really have to file?

1. How Much Did You Make?

The IRS sets minimum income thresholds for filing. If you made more than the limit, you’re required to file. If not, you might be off the hook—but that’s not the whole story.

As of 2024 (for taxes filed in 2025), here are some quick examples:

(Source: IRS.gov — amounts may change yearly)

2. Did You Get Health Insurance Through the Marketplace?

If you got a Form 1095-A for marketplace coverage, you MUST file a return. Even if you made no money. Otherwise, you’ll get rejected, and your coverage may be affected for next year.

3. Did You Have Taxes Withheld?

If your employer or clients withheld taxes from your pay, you might be due a refund—even if you weren’t required to file.
No return = no refund.

4. Are You Self-Employed or Gig Working?

If you made $400 or more in self-employment income, you’re required to file. This includes:

Rideshare drivers
Freelancers
Etsy shop owners
Delivery drivers

Don’t assume small income = no taxes.

5. Did You Receive IRS Letters?

If you received any notice from the IRS—whether it’s about an old year, a balance due, or identity verification—file a return or contact a pro. Ignoring it doesn’t make it go away.

The Bottom Line

If you're unsure, it’s better to file and be safe than skip it and risk penalties or missed refunds.

At Arch Tax , we help you figure it out—fast. Whether you’re required to file or just want to maximize a refund, we’ll make sure nothing’s missed and no IRS red flags get triggered.

Need help figuring out if you have to fil e?
Book a quick consultati on or call us at (844) 556-3073

What Does the IRS Know About Me?

chad@archtaxco.com (Chad Dickinson) — Thu, 24 Apr 2025 13:15:51 GMT

Most people think of the IRS as a place where tax returns go once a year. You file, you pay (or hope for a refund), and you move on.

But here’s the truth:

The IRS likely knows more about your income, history, and identity than you realize.

And if you're not paying attention to what they know, you could end up facing delays, rejected returns, or even audits—all without realizing what went wrong.

What the IRS Tracks Automatically

Every time you earn money that’s reported to someone else, it’s reported to the IRS too. Here are just a few sources the IRS pulls data from:

W-2s from employers
1099s from freelance gigs, side hustles, and platforms like Uber, DoorDash, and Upwork
1099-INTs and 1099-DIVs from banks or investments
1099-Ks from PayPal, Venmo (business accounts), eBay, and Etsy
Form 1095-A if you received health insurance through the Marketplace
Mortgage interest and student loan interest statements
Unemployment compensation , gambling winnings, and even certain legal settlements

If your tax return doesn’t match what they have on file from all these sources… it's a red flag.

Lesser-Known Data the IRS Also Has

In addition to income tracking, the IRS holds onto other key pieces of your identity and financial history:

Your full address history from previous filings
Any bank account info you've used for direct deposits or payments
Business EINs tied to your SSN
Digital activity logs like login attempts or ID verification failures
Notes on suspected identity theft or security flags

It’s not just about taxes—it’s about your digital tax footprint.

What You Can See Too: IRS Transcripts

Want to see what the IRS has on you? You can. There are four main transcripts you can request:

Wage & Income Transcript – Lists all income statements (W-2, 1099, etc.)
Account Transcript – Shows payments, penalties, interest, and actions taken
Return Transcript – Mirrors what you filed
Record of Account – Combines all data into one complete view

You can access these by setting up a secure ID.me account and logging into the IRS portal. It’s free—and we recommend everyone do it at least once a year.

Why It Matters

Knowing what the IRS knows can:

Help you avoid return rejections from missing or mismatched data
Catch signs of identity theft early
Give you leverage if you're negotiating tax debt or requesting an offer in compromise
Save you weeks of delay during refund season

Take the Smart Next Step

At Arch Tax, we help clients pull and review their IRS transcripts so they know exactly what the IRS is seeing. Whether you're filing, resolving a debt, or just want peace of mind—this is the smart first step.

Ready to find out what the IRS knows about you?
Click here to Schedule a free consultation

Owe the IRS But Can’t Pay? Here’s What Happens Next

chad@archtaxco.com (Chad Dickinson) — Fri, 18 Apr 2025 17:47:00 GMT

If you owe the IRS but can’t afford to pay, you’re far from alone — and more importantly, you’re not out of options. The worst thing you can do is ignore it and hope it goes away. Here’s a clear look at what really happens when you owe the IRS, and what you can do about it.

Step 1: The IRS Notices You Owe

Once your tax return is processed and shows a balance due, the IRS will send you a notice — typically a CP14 . This is your official “you owe us” letter. It will include:

The amount you owe (including any penalties and interest)
Payment due date
Ways to pay or respond

At this point, the IRS assumes you’ll pay in full or reach out to make arrangements.

Step 2: Penalties and Interest Begin to Pile Up

If you don’t pay by the due date, the IRS adds:

Failure to Pay Penalty (0.5% per month, up to 25%)
Interest Charges (adjusted quarterly, based on federal rates)

Even a small balance can grow significantly over time. And if you haven’t filed at all? That triggers a Failure to File Penalty — which grows even faster.

Step 3: The Collection Process Begins

If you still haven’t paid or made arrangements, the IRS starts collection actions:

More notices like CP501, CP503, and CP504 (increasing urgency)
Federal Tax Lien may be filed against you
Wage garnishment or bank levies
Seizure of certain assets (though rare, it’s legal)

These actions can damage your credit, your finances, and your peace of mind.

Step 4: You Still Have Options — Even Now

Here’s the good news: The IRS actually wants to work with you. There are several programs designed for people who can’t pay their full balance:

Installment Agreement : Monthly payments you can afford
Offer in Compromise : Settle for less if you truly can’t pay
Currently Not Collectible : Temporarily pause collections due to hardship
Penalty Abatement : Request removal of certain penalties

Each option has its own qualifications and paperwork — but you don’t have to figure it out alone.

What to Do If You’re Overwhelmed

If the notices are piling up, the balance is growing, or you’re afraid of wage garnishment — don’t panic. Get professional help to:

Understand what you really owe
Explore the best option for your situation
Stop the bleeding and avoid costly mistakes

The Bottom Line

Owing the IRS is serious, but it’s not the end of the road. The sooner you act, the more control you’ll have over the outcome. Whether you need a payment plan or want to explore a settlement, taking action beats waiting for the next letter to hit your mailbox.

Need help figuring out your next move?
Let’s review your situation and find the best path forward — before the IRS makes that decision for you.

Is The IRS Going To Take My Refund?

chad@archtaxco.com (Chad Dickinson) — Thu, 10 Apr 2025 19:39:34 GMT

Expecting a tax refund only to find out it’s been taken can be frustrating — and in some cases, shocking. The IRS does have the authority to withhold your refund under certain circumstances, and it's more common than you might think.

Here’s what you need to know about when and why the IRS might take your refund, and what you can do if it happens.

When can the IRS Can Seize Your Refund?

The IRS can apply your tax refund to certain unpaid debts through the Treasury Offset Program (TOP) . This includes:

Federal income tax debt
State income tax debt
Past-due child support
Defaulted federal student loans
Unpaid unemployment compensation debt
Other federal agency debts

If you owe money to any of these agencies, your refund could be reduced or completely taken to satisfy those debts — even without your immediate knowledge.

How You’ll Be Notified

Typically, you’ll receive a letter from the IRS or the U.S. Department of the Treasury explaining why your refund was offset. The most common notices include:

CP49 – Refund applied to other taxes owed.
CP88 – Refund held because you haven’t filed a return for a previous year.

Sometimes, the letter arrives after the refund has already been redirected. That’s why it’s important to monitor your IRS account and know where you stand.

What If You Think It’s a Mistake?

If your refund was taken and you believe the offset was incorrect:

Contact the agency listed in the notice. For example, if the refund was used to pay back child support, contact the state child support agency.
 For IRS debts , you can call the IRS directly or check your account at irs.gov/account to see what's owed.

Can You Prevent Future Refund Offsets?

Yes — but it requires a bit of planning:

Avoid overpaying throughout the year. Adjust your W-4 to reduce your refund and keep more of your paycheck.
Set up a payment plan if you owe the IRS — this doesn’t automatically stop an offset, but it may help long-term.
Request Currently Not Collectible (CNC) status if you're facing financial hardship.
Submit an Offer in Compromise to settle your debt if you qualify.

The goal is to avoid letting a refund build up if you know you owe — because the IRS will take it.

Take Control Before It Happens Again

If you've already had your refund taken, or you think it might happen this year, now is the time to act. Review your IRS account, understand your outstanding debts, and talk to a professional about resolution options.

Being proactive gives you options. Waiting for a notice in the mail doesn’t.

Tax Scams People Fall For Every Year

chad@archtaxco.com (Chad Dickinson) — Thu, 03 Apr 2025 11:55:23 GMT

Tax season is stressful enough without worrying about scammers. Every year, thousands of people lose money, compromise personal information, or even wind up with IRS trouble because of fraudulent schemes. Below are three of the most common scams, updated with the latest twists and tactics criminals use today.

The Phony IRS Phone Call Scam

One of the biggest scams continues to be unsolicited phone calls from people claiming to be IRS agents. They’ll often use aggressive language, threaten legal action (like arrests or lawsuits), and demand immediate payment—often via wire transfers, prepaid debit cards, gift cards, or cryptocurrency.

Why It Works : Fear is a powerful motivator, and the callers can be very convincing. Some even spoof Caller ID to make it appear as if the IRS is calling.
How to Spot It :
The real IRS typically contacts taxpayers first by mail, not phone.
They will never insist on specific payment methods or demand payment without giving you the chance to question or appeal the amount owed.
What to Do : If you get a suspicious call, hang up and report it to the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484.

The Email & Text “Phishing” Scam

Scammers send official-looking emails or text messages that appear to come from the IRS, tax software companies, or even your bank. They request personal information or ask you to click a link to “verify” your account.

Why It Works : These phishing messages often include the IRS logo, official-looking forms, or even a personal detail of yours they found online—anything to gain credibility.
How to Spot It :
Hover over links without clicking. If the URL looks odd (not ending with “.gov” or a known domain), it’s a scam.
The IRS never initiates contact with taxpayers by email, text, or social media.
What to Do : Forward suspicious emails to phishing@irs.gov , then delete them. Never click on links or open attachments from unknown senders.

The Ghost or Fake Tax Preparer Scam

During tax season, “pop-up preparers” show up online and in person, promising huge refunds or “special programs” only they know about. Often, they prepare your return incorrectly or fraudulently to score a bigger cut for themselves (they might base their fee on a percentage of your refund). When the IRS realizes the return is incorrect or suspicious, you are on the hook for fines and back taxes—while the ghost preparer vanishes.

Why It Works : People trust the “expert,” assume they’ll handle everything, and often don’t realize the preparer is unqualified, unscrupulous, or just plain fake.
How to Spot It :
They refuse to sign the return or provide a Preparer Tax Identification Number (PTIN).
They won’t give you a copy of your own tax return.
They offer to deposit your refund in their bank account first.
What to Do : Use the IRS Directory of Federal Tax Return Preparers to find credentialed professionals, or at least verify your preparer’s PTIN. Make sure the person signs your return.

How to Protect Yourself Year-Round

Guard Your Personal Info

Never share your Social Security number or bank details unless you’re sure who you’re dealing with.

File Early

The earlier you file, the less time a scammer has to file a fake return in your name.

Check Your Mail

The IRS and state tax agencies rely on letters, so open everything addressed to you.

Use Secure Portals

Only submit tax documents through encrypted websites or secure portals provided by trusted tax professionals.

Monitor Your Accounts

Watch for suspicious activity in your bank and credit accounts. If you notice anything off, take immediate action.

When in Doubt, Reach Out

If something doesn’t feel right—whether it’s a phone call, an email, or a new “tax service” offering miracle results—take a pause. You can always contact the IRS directly, or call our team at Arch Tax for guidance. We’re here to ensure you stay protected while getting your taxes done correctly.

Stay safe out there, and as always, if you need help or want to discuss your tax situation, don’t hesitate to reach out.

Schedule a FR EE consulta tion with us today.

How to Avoid Delays from IRS Identity Checks

chad@archtaxco.com (Chad Dickinson) — Thu, 27 Mar 2025 15:57:35 GMT

Identity theft continues to be a major concern during tax season, and the IRS has taken steps to protect taxpayers through increased identity verification procedures. While these efforts help reduce fraud, they can also delay your refund if your return gets flagged.

In this post, we’ll explain what triggers these IRS identity checks, how to respond if it happens to you, and the simple steps you can take now to avoid delays altogether.

Watch the below video for a quick explanation:

Why the IRS Flags Tax Returns for Identity Verification

The IRS may select your tax return for identity verification for several reasons:

Your return has suspicious activity or inconsistencies
It includes new or unusual income or filing details
You’re filing from a new address or using a new bank account
The return was selected randomly as part of their fraud prevention system

If flagged, you’ll receive IRS Notice 5071C in the mail. This letter provides instructions on how to confirm your identity either online or by calling the IRS directly.

What Happens If You Receive IRS Notice 5071C?

Getting flagged doesn't mean you're in trouble — it just means the IRS needs to verify it's really you. Here’s what to do:

Follow the instructions on the notice carefully.
You can verify your identity online or by calling the IRS at 1-800-830-5084 .
Have your tax return info handy.
You’ll be asked to confirm details from your return to complete the verification.
Wait for processing.
Once verified, it may take up to 9 weeks for the IRS to finish processing your return.

How to Avoid IRS Identity Checks in the Future

The best way to prevent delays is by signing up for an IRS Identity Protection PIN (IP PIN) . This is a six-digit code that only you and the IRS know. You enter it when e-filing, which helps confirm your identity instantly.

You can apply for your IP PIN here:

Get an IP PI N f rom the IRS

Final Thoughts

IRS identity verification checks are there to protect you — but they can slow down your refund if you’re not prepared. By understanding the process and taking a few proactive steps, like getting an IP PIN, you can avoid unnecessary delays and file your return with peace of mind.

Unlock Easy Access to the IRS with an ID.me Account

chad@archtaxco.com (Chad Dickinson) — Thu, 20 Mar 2025 15:44:20 GMT

What is an ID.me Account?

ID.me is a secure identity verification service that allows you to access government websites and services with a single login. The IRS, Social Security Administration, Department of Veterans Affairs, and other federal and state agencies use ID.me to ensure that only authorized individuals can access sensitive information.

ID.me uses multi-factor authentication and biometric data (like facial recognition) to verify your identity and prevent fraud. Once you’re verified, you can use your ID.me account to log in to multiple government agencies without needing to create separate logins for each one.

Why You Need an ID.me Account

Having an ID.me account gives you access to a wide range of services and benefits, including:

Access to IRS Account Information
With an ID.me account, you can securely access your IRS account to view balances, payments, and notices. This means you no longer have to wait for mailed statements or call the IRS to check your status.
Retrieve IRS Transcripts
Need a record of your past tax returns? With ID.me, you can quickly download your IRS transcripts directly from the IRS website.
Make IRS Payments
You can securely make payments toward your tax balance through your IRS account with ID.me.
Obtain Your IRS Identity Protection PIN (IP PIN)
An IP PIN helps protect you from identity theft by adding an extra layer of security when filing your tax return. You can request and manage your IP PIN through your ID.me account.
Access to Other Government Services
An ID.me account isn’t just for the IRS. You can use the same login to access your Social Security account, Veterans Affairs benefits, and even some state government services.

How ID.me Protects Your Identity

Identity theft is on the rise, and the IRS has increased its security measures to protect taxpayers. ID.me helps prevent fraud by verifying your identity through strict security protocols, including:

Multi-factor authentication (such as text message verification)
Facial recognition or video verification
Secure document uploads (like your driver’s license or passport)

Once your identity is verified, your account is protected with advanced encryption and security features to prevent unauthorized access.

Watch Our Video on ID.me

For a more detailed overview of how an ID.me account works and why you should consider setting one up, check out our video below:

How to Get Started with ID.me

Setting up an ID.me account is straightforward. You’ll need to provide:

A valid email address
A government-issued ID (such as a passport or driver’s license)
A selfie or video verification
Your Social Security number (for IRS-related services)

Once your identity is verified, you can start using your ID.me account to manage your IRS information and other government services immediately.

Final Thoughts

An ID.me account makes it easier than ever to access your IRS account and protect your identity. If you’re tired of waiting on hold with the IRS or dealing with complicated login systems, setting up an ID.me account is a smart and secure solution.

For more information on ID.me or tax-related questions, feel free to contact us directly. We’re here to help!

Interested in setting up an ID.me account?

Visit https://www.id.me/government for more details.

Can Tragedy Save You From the IRS?

chad@archtaxco.com (Chad Dickinson) — Thu, 13 Mar 2025 18:42:33 GMT

Life has a way of throwing unexpected challenges our way — medical emergencies, divorce, job loss, the death of a loved one, and natural disasters. When you’re facing one of these major life events, the last thing you want to worry about is dealing with the IRS. But here’s the tough truth: personal tragedy doesn’t always help when it comes to your IRS case.

In this video, Chad Dickinson from Arch Tax breaks down how personal hardship affects your ability to work with the IRS — and what you need to prove to actually qualify for hardship relief. Watch the video below to get the full story:

How the IRS Defines Hardship

The IRS does have provisions for financial hardship, but they’re not based on the emotional toll of your life circumstances — they’re based on numbers.

Income-to-Expense Ratio – The IRS will examine whether your income is enough to cover basic living expenses. If your income exceeds what the IRS considers reasonable for necessities, they may not consider you to be in hardship.

Ability to Earn – Even if you’ve experienced a traumatic life event, the IRS will want to know if you’re still capable of working and generating income. If you can still earn a living, you may not qualify for hardship relief.

Assets You Own – The IRS will look at the type and value of your assets. If you have substantial savings, property, or investments, the IRS may expect you to use those resources to settle your tax debt before considering hardship relief.

Why Tragedy Alone Won't Save You

This is the part that can feel cold and unfair. Even if you’ve experienced an unspeakable tragedy — like the loss of a loved one or a severe medical diagnosis — the IRS won’t offer you relief unless you can prove that the situation directly impacts your ability to pay.

Example:

If you lost your job due to a medical issue and your income dropped significantly, you might qualify for hardship relief.
If you lost a loved one but your income remains stable, the IRS will likely expect you to pay your tax debt as usual.

How to Prove Hardship to the IRS

If you believe you qualify for hardship relief, you need to provide clear evidence:

Bank statements showing reduced income
Medical records if your condition prevents you from working
Proof of increased living expenses due to your situation
Asset valuation statements

When to Seek Professional Help

If you’ve experienced a major life event and are struggling to deal with the IRS, you don’t have to go through it alone. At Arch Tax, we specialize in helping clients navigate complex IRS cases — including hardship situations.

Contact us today to schedule a consultation and see how we can help you get the relief you need.

Self-Employed? Avoid a Huge Tax Bill with Estimated Tax Payments!

chad@archtaxco.com (Chad Dickinson) — Thu, 06 Mar 2025 18:52:47 GMT

If you’re self-employed or earning income without tax withholding, you could be in for a big surprise at tax time! Without making Estimated Tax Payments (ETPs) throughout the year, you may owe more than expected—plus potential IRS penalties.

The below video explains what Estimated Tax Payments are:

What Are Estimated Tax Payments?

Estimated Tax Payments (ETPs) are quarterly tax payments made to the IRS and state for income that does not have taxes withheld .

These payments apply to income from:

Self-employment (freelancers, business owners, gig workers, etc.
Rental properties
Dividends & interest income
Side hustles & contract work

If you're self-employed , you're responsible for paying both income tax and self-employment tax , which covers Social Security and Medicare .

When Are Estimated Taxes Due?

The IRS requires quarterly estimated tax payments due on these dates:

April 15 – First quarter payment
June 15 – Second quarter payment
September 15 – Third quarter payment
January 15 (following year) – Fourth quarter payment

You can make off-cycle payments anytime to stay ahead of your tax bill.

How to Calculate Your Estimated Tax Payments

To estimate your tax payments , follow these steps:

Calculate your net income (profit) for the quarter
Determine your tax bracket (check last year's tax return for reference)
Add 15.3% for self-employment tax
Multiply your tax rate by your net income to determine your ETP amount
Pay online using the IRS payment portal (recommended for speed and security)

Staying on top of bookkeeping throughout the year helps ensure accuracy in your estimated payments.

Why Estimated Tax Payments Are Important

Avoid IRS penalties – The IRS may charge penalties and interest if you underpay taxes.
No surprise tax bills – Making payments throughout the year prevents a large lump-sum bill at tax time.
Better cash flow management – Spreading tax payments throughout the year helps with financial planning.

How to Make Estimated Tax Payments

The easiest way to pay is online via the IRS Direct Pay system. You can also mail a check or money order , but online payments are faster and more secure .

Dealing with the IRS can be daunting. You don't have to go it alone. Schedule a FREE consultation with us today and our experts can help.

401(k) Early Withdrawals: How to Avoid IRS Penalties!

chad@archtaxco.com (Chad Dickinson) — Thu, 27 Feb 2025 21:03:22 GMT

If you're considering withdrawing money from your 401(k) retirement account, you may be in for a costly surprise when tax season rolls around. Many people don’t realize that early withdrawals come with penalties and tax consequences that can significantly impact their finances.

Before making a decision, watch this video for a quick breakdown of what you need to know:

The Hidden Costs of a 401(k) Withdrawal

A 401(k) withdrawal might seem like an easy way to get extra cash, but it can result in unexpected tax bills and penalties. Here’s what you need to consider before taking money out of your retirement savings:

1. Early Withdrawal Penalty

If you're under 59½ , the IRS typically imposes a 10% penalty on your withdrawal in addition to regular income tax. That means:

A $20,000 withdrawal could cost you an extra $2,000 in penalties, plus additional taxes!
Certain exceptions apply (such as disability or medical expenses), but most withdrawals are penalized.

2. It Increases Your Taxable Income

Withdrawn funds count as taxable income , which means:

Your income bracket could go up , making you owe more in taxes.
Example: If you’re already earning $60,000 per year and withdraw $20,000 , your taxable income jumps to $80,000 , possibly pushing you into a higher tax bracket.

3. Withholding Taxes Matter

Many people forget to withhold taxes when taking a 401(k) distribution , leading to a surprise tax bill later.

Federal tax withholding: Usually 20% is withheld , but this might not cover everything you owe.
State tax withholding: If your state has income tax, you need to withhold for that too!
No withholding? You may need to make estimated tax payments to avoid IRS penalties.

4. Understanding Your 1099-R Form

After taking a 401(k) withdrawal , your financial institution will send you IRS Form 1099-R , which shows:

Box 1: Total amount withdrawn
Box 2: Taxable portion of the withdrawal
Box 4: Federal tax withheld
Box 7: Distribution code (shows if exceptions apply)
Box 14: State tax withheld

Knowing how to read this form is crucial when preparing your taxes!

Alternatives to Cashing Out Your 401(k)

If possible, avoid withdrawing your 401(k) early. Instead, consider:

401(k) Loans – Borrow from your retirement instead of withdrawing. You repay the loan with interest but avoid penalties.
Hardship Withdrawals – Some circumstances (medical bills, disability) may qualify for penalty-free withdrawals.
Rollover to an IRA – If you need flexibility, consider rolling over your funds into an IRA for tax advantages.

Final Thoughts: Plan Before You Withdraw!

A 401(k) withdrawal may seem like a quick fix, but it can cost you thousands in penalties and taxes if not planned correctly.

Need help with your tax strategy? Contact us today for expert guidance!

Divorced? Here’s How to Handle IRS Joint Tax Debt!

chad@archtaxco.com (Chad Dickinson) — Thu, 20 Feb 2025 17:17:54 GMT

If you’ve gone through a divorce and still have IRS tax debt from a joint return, you might be wondering what happens next. Does your divorce decree protect you? Can the IRS come after you for the full amount? What steps should you take to separate your liability from your ex-spouse?

In this blog, we’ll cover what you need to know about handling joint tax debt after a divorce and how you can protect yourself from unwanted tax liabilities.

Understanding Joint and Several Liability

When you file married filing jointly , the IRS holds both spouses responsible for the entire tax debt. This means:

The IRS can collect 100% of the balance from either spouse
Your divorce decree does NOT override the IRS’s ability to collect from you
The IRS will not automatically split the debt 50/50

This surprises many taxpayers who assume their divorce decree protects them from responsibility. Unfortunately, the IRS does not follow family court orders when it comes to collecting tax debt.

How to Separate Your Tax Debt After Divorce

The best way to handle tax debt after a divorce is through a process called mirroring. This process does not eliminate your liability , but it allows you to address your tax balance individually, without your ex-spouse being involved.

Mirroring takes about 90 days
Once complete, each spouse can negotiate their own resolution with the IRS
This means you can qualify for tax relief based on your financial situation

Mirroring doesn’t mean the IRS splits the balance in half—it simply allows each ex-spouse to handle their portion of the debt independently.

Watch the Full Video Explanation Here:

Need Help Resolving IRS Tax Debt?

At Arch Tax , we help taxpayers navigate complex IRS issues, including joint tax debt, audits, and tax resolution strategies. If you need help separating your liability or negotiating a settlement, click here and contact us today!

Can You Deduct Medical Expenses on Your Taxes?

chad@archtaxco.com (Chad Dickinson) — Wed, 12 Feb 2025 13:48:25 GMT

Here’s What You Need to Know!

Want to save money on your taxes? If you’ve had significant out-of-pocket medical expenses, you may be eligible for a tax deduction—but only if you meet specific IRS requirements.

In this guide, we’ll break down which medical expenses qualify for deductions, what doesn’t, and how to properly claim them on your tax return.

Watch the video below for a quick explanation:

Who Can Deduct Medical Expenses?

The IRS allows you to deduct unreimbursed medical expenses if they exceed 7.5% of your Adjusted Gross Income (AGI) .

For example:

If your AGI is $100,000 , only medical expenses over $7,500 are deductible.

If you don’t reach this threshold , it won’t benefit you to claim medical expenses on your tax return.

What Medical Expenses Are Deductible?

The IRS permits deductions for a wide range of necessary medical expenses, including:

Preventative care, treatments, and surgeries
Prescription medications
Mental health services (therapy, psychiatric care, etc.)
Dental & vision expenses (glasses, contacts, hearing aids, etc.)
Long-term care & caregiving costs
Medical-related travel expenses (mileage, lodging, etc.)

What Medical Expenses Are NOT Deductible?

Some common medical expenses do not qualify , including:

Expenses covered by insurance, FSA, or HSA
Cosmetic procedures (unless medically necessary)
Non-prescription drugs (except insulin)
General health expenses (toothpaste, gym memberships, diet foods)

How to Track Your Medical Expenses for Tax Deductions

Staying organized is key! Follow these steps to maximize your deductions:

Keep a folder for all out-of-pocket medical receipts.
Track your payments throughout the year to monitor your total expenses.
 Review your year-end total to see if you exceed the 7.5% AGI threshold .

Need Help with Your Taxes?

Navigating tax deductions can be complicated , but you don’t have to do it alone! At Arch Tax, we specialize in helping individuals and businesses maximize their tax savings.

Schedule a FREE consultation today!

IRS Standard Deduction Increase for 2024

chad@archtaxco.com (Chad Dickinson) — Thu, 06 Feb 2025 14:04:41 GMT

Tax season is here, and the IRS has increased the standard deduction for 2024! This update means potential tax savings for millions of Americans. Whether you file as single, married, or head of household, understanding these changes can help you maximize your tax benefits.

Check out this quick video from Chad Dickinson at Arch Tax explaining the new 2024 standard deduction amounts:

What Are the New Standard Deduction Amounts for 2024?

For the 2024 tax year , the standard deduction has increased across all filing statuses:

Married Filing Jointly: $29,200 (Increase of $1,500 from 2023)
Single & Married Filing Separately: $14,600 (Increase of $750 from 2023)
Head of Household: $21,900 (Increase of $1,100 from 2023)

These increases mean that more of your income is tax-free , which could lead to lower taxable income and a reduced tax bill when you file.

Why Does the Standard Deduction Matter?

The standard deduction is a set amount you can subtract from your taxable income, reducing the amount of taxes you owe . Instead of itemizing deductions, most taxpayers opt for the standard deduction because it simplifies the filing process and often results in higher tax savings .

For many taxpayers, this increase means keeping more money in their pockets —especially for individuals and families who don’t have enough expenses to justify itemizing deductions.

Maximizing Your Tax Savings in 2024

With tax season approaching, now is the perfect time to review your tax situation and see how this deduction increase can benefit you. Need help preparing your taxes? Arch Tax is here to assist with:

Understanding your deductions
Optimizing your tax filing strategy
Avoiding common tax mistakes

2024 Tax Brackets Explained: What You Really Need to Pay in Taxes

chad@archtaxco.com (Chad Dickinson) — Tue, 28 Jan 2025 12:57:44 GMT

The 2024 tax season is here, and you might be wondering: how much do I have to pay in taxes? Whether you're filing as a single individual or married couple, understanding tax brackets and rates can help you better plan and avoid surprises.

In this article, we’ll break down the 2024 tax brackets, explain the difference between marginal tax rate and effective tax rate, and share tips to help you optimize your tax planning.

Watch Our Video for a Quick Breakdown

Understanding Marginal Tax Rates

Your marginal tax rate is the percentage of tax you pay on your last dollar of income. It’s based on tax brackets , which are ranges of income taxed at different rates. Let’s take a closer look at the 2024 federal tax brackets for single filers and married couples filing jointly:

How Marginal Tax Rates Work

Marginal tax rates are progressive , meaning you don’t pay a flat rate on your entire income. Instead, income is taxed in chunks based on the brackets:

If you’re single and earn $50,000:
The first $11,600 is taxed at 10%.
The next $35,500 (up to $47,100) is taxed at 12%.
The remaining $2,900 is taxed at 22%.

What Is the Effective Tax Rate?

Your effective tax rate is the actual percentage of your total income that you pay in taxes after deductions, credits, and adjustments. It’s usually lower than your marginal tax rate.

For example:

If you earned $50,000 and paid $7,500 in taxes after deductions and credits, your effective tax rate would be 15% , even though your marginal tax rate is 22%.

Tips to Plan for Your Taxes

Here are some ways to stay ahead during tax season:

Track Your Deductions and Credits
Take advantage of deductions (like student loan interest or mortgage interest) and credits (like the Child Tax Credit) to lower your taxable income.
Use Your Effective Tax Rate for Planning
If your financial situation is consistent year over year, focus on your effective tax rate to better estimate your tax payments and avoid over-withholding.
Plan for Higher Brackets
If you anticipate a significant income increase, prepare for the impact of moving into a higher tax bracket. Strategies like contributing to retirement accounts or deferring income can help minimize taxes.

Ready to File Your 2024 Taxes?

Now that you understand how tax brackets and rates work, you’re better equipped to plan for the 2024 tax season. Still feeling unsure? That’s where we come in!

Have questions? Chad is here to help!
�� Contact Chad at chad@archtaxco.com
�� Call 872-267-3727

Filing Taxes with Marketplace Insurance? Don’t Skip Form 1095-A!

chad@archtaxco.com (Chad Dickinson) — Wed, 22 Jan 2025 14:18:02 GMT

If you’ve ever had health insurance through the Health Insurance Marketplace, there’s an important piece of paperwork you can’t overlook when it’s time to file your taxes: IRS Form 1095-A. Let’s dive into what this form is, why it matters, and how to get it, so you can avoid any tax season headaches.

What is IRS Form 1095-A?

IRS Form 1095-A is a document provided by the Health Insurance Marketplace to report information about your enrollment in a qualified health plan. It’s a critical form for individuals who received health coverage through the Marketplace, as it includes key details such as:

Your coverage dates
Premium amounts
Any advance payments of the Premium Tax Credit

This form isn’t something you can complete yourself; it must be issued by the Marketplace. If you file your tax return without this form, your return will likely be rejected, which can delay your refund and cause unnecessary stress.

Why is Form 1095-A Essential for Filing Taxes?

When you’ve had Marketplace insurance, Form 1095-A is used to reconcile the Premium Tax Credit on your tax return. Without it, the IRS can’t verify your eligibility for the credit or ensure that the right amount was applied to your premiums throughout the year. Filing your taxes without including this form means your return will be flagged, and you’ll need to correct and resubmit it—a time-consuming process you’d probably prefer to avoid.

How to Obtain Form 1095-A

If you’re gearing up for tax season, now is the time to ensure you have your Form 1095-A. Here are the steps to get it:

Online Access : Visit healthcare.gov and log into your Marketplace account. Navigate to the section where you can download your 1095-A form.
Call the Marketplace : If you’re unable to retrieve the form online, call the Health Insurance Marketplace directly at 800-318-2596 to request assistance.

You can also click here to find out how to find Form 1095-A online.

Pro Tips for a Smooth Tax Season

Check the Details : Once you receive Form 1095-A, review it carefully to ensure all information is accurate. Discrepancies can lead to delays or complications.
File Early : The sooner you have all your documents, the sooner you can file and avoid last-minute rushes.

If you need assistance with Form 1095-A or any aspect of your taxes, we’re here to help! Reach out to Arch Tax, led by Chad Dickinson. You can email Chad at chad@archtaxco.com or call us at 872-267-3727 for personalized guidance.

Tax Filing 101 for Rideshare & Delivery Drivers

chad@archtaxco.com (Chad Dickinson) — Wed, 15 Jan 2025 14:17:17 GMT

Navigating taxes as a rideshare or delivery driver can feel overwhelming, especially if you're new to the gig economy. Whether you drive for Uber, Lyft, DoorDash, Grubhub, or similar platforms, understanding the tax process is crucial to maximizing your income and avoiding costly mistakes.

In this guide, we'll break down the essentials you need to know for filing your taxes as a rideshare or delivery driver.

Watch Our Video for a Quick Overview

Why Filing Taxes Is Different for Rideshare and Delivery Drivers

As a rideshare or delivery driver, you’re considered self-employed in the eyes of the IRS. This means you're responsible for reporting your income and paying self-employment taxes. It also means you have access to numerous deductions to reduce your taxable income.

Key Documents You’ll Need

Before you start filing your taxes, make sure you gather these essential documents:

Income Summary : Generated by your rideshare/delivery app, showing your earnings, number of trips, and fees deducted.
Mileage Records : Track your mileage for tax deductions. Many apps, like Uber, provide this information, but using a mileage tracking app can help ensure accuracy.
Expense Records : Keep receipts for work-related expenses like phone bills, tolls, parking, supplies, and meals.

Tax Deductions for Rideshare and Delivery Drivers

Understanding what you can deduct is key to saving money on your taxes. Here are some common deductions:

Mileage : Deduct either the standard mileage rate or actual expenses (gas, maintenance, insurance).
Phone and Internet Costs : Deduct a portion of your phone bill and data plan used for work.
Supplies : Includes items like phone mounts, chargers, and delivery bags.
Tolls and Parking : Deduct these if not reimbursed by the platform.

Tips for Simplifying Your Tax Filing

Keep Organized Records : Regularly update your income and expense records to avoid last-minute stress.
Use Tax Software or Hire a Professional : Consider software designed for self-employed individuals or consult a tax professional.
Set Aside Money for Taxes : Remember to save for self-employment taxes (Social Security and Medicare) to avoid surprises.

Ready to File Your Taxes?

Preparing taxes as a rideshare or delivery driver doesn’t have to be daunting. By staying organized and taking advantage of deductions, you can maximize your earnings and minimize your tax bill.

If you have questions or need help filing your taxes, Arch Tax is here for you!

Click here to Schedule a FREE Consultation

Tax Tips for Realtors: Don't Leave Money on the Table

chad@archtaxco.com (Chad Dickinson) — Wed, 08 Jan 2025 16:41:00 GMT

Tax Tips for Realtors: Maximize Deductions and Minimize Stress

Being a realtor can be both rewarding and challenging. From the highs of closing deals to the lows of slow markets, the income fluctuations can make managing your finances tricky. Proper tax planning and expense tracking can make a big difference when it comes to filing your return and keeping more of your hard-earned money. Let’s break it down.

Understanding Realtor Income

For most realtors, income is straightforward—it typically comes from commissions earned on property sales. This is your reportable income and is taxed just like any other form of income. However, what makes taxes tricky for realtors is the wide variety of deductible expenses you can claim to offset that income.

What Expenses Should Realtors Track?

Want a detailed breakdown of these expenses and how to track them effectively? Watch Chad Dickinson explain it in this quick video:

Realtors often incur numerous expenses throughout the year, many of which are deductible. Here are some common categories to consider:

Advertising: Costs for marketing materials, social media ads, and promotional campaigns.
Licensing and Subscriptions: Fees for professional licenses, MLS access, and industry memberships.
Continuing Education: Expenses for real estate courses and certifications.
Commissions to Other Agents: If you share commissions, these payments are deductible.
Travel and Mileage: Track your business-related travel and mileage to deduct vehicle expenses.
Vehicle Expenses: Maintenance, fuel, and depreciation for vehicles used for business purposes.
Photography and Staging: Costs for professional photography, videography, and home staging.
Office Space or Home Office: Rent or a percentage of your home expenses if you have a dedicated office.

The Importance of Year-Round Tracking

Don’t wait until the end of the year to organize your finances. By tracking your income and expenses throughout the year, you’ll not only minimize stress but also maximize your deductions. Keeping accurate records ensures you’re prepared for tax season and helps you avoid leaving money on the table.

Pro Tips for Managing Realtor Taxes

Use Accounting Software: Tools like QuickBooks or Xero can simplify expense tracking and help you categorize deductions.
Keep Detailed Records: Save receipts and document every expense to substantiate your deductions.
Set Aside Taxes: Realtors often pay quarterly estimated taxes. Set aside a percentage of each commission to cover your tax liability.
Work With a Tax Professional: A tax advisor who understands real estate can help you navigate deductions and optimize your return.

Don’t Leave Money on the Table

Proper tax planning is key to financial success as a realtor. By staying organized and proactive, you can reduce your taxable income and keep more money in your pocket. If you have questions or need help managing your taxes, don’t hesitate to reach out.

Schedule a free consultation today

FREE Tool: Find Your IRS Solution

chad@archtaxco.com (Chad Dickinson) — Thu, 02 Jan 2025 12:45:12 GMT

When dealing with tax issues, choosing the right resolution option is critical. Unfortunately, many taxpayers feel overwhelmed and unsure about which IRS Fresh Start program they may qualify for. Worse yet, some tax resolution companies promise results without fully understanding your financial situation. At Arch Tax, we believe in empowering taxpayers with knowledge before they take the next steps.

That’s why we created the Arch Tax Resolution Assistant —a free, user-friendly tool designed to help you understand your IRS resolution options before you hire a tax professional.

Why It Matters to Know Your Options

Navigating the IRS Fresh Start program can be intimidating, especially when companies bombard you with promises that may not apply to your specific case. By understanding which IRS resolution you qualify for beforehand, you’ll gain:

Confidence : Know what to expect and ask the right questions when speaking to tax professionals.
Leverage : Arm yourself with the knowledge to avoid being misled by companies who may promise unrealistic results.
Clarity : Save time and money by focusing on the solutions that align with your situation.

How the Arch Tax Resolution Assistant Works

Our tool is straightforward and hassle-free. In just a few minutes, you can take the first step toward resolving your tax issues:

Click the Big Red Button : It’s located on the top right corner of our homepage.
Answer a Few Questions : Provide basic financial information to help the tool assess your eligibility.
Get Your Results : Receive a clear breakdown of the IRS Fresh Start programs you may qualify for.

Why We Developed This Tool

At Arch Tax, we’ve seen far too many taxpayers fall victim to companies making empty promises. We understand how stressful it is to face tax challenges, and we want to make the process as transparent as possible. Our goal is to give you a head start in finding the right solution so you can approach tax resolution companies with confidence.

Take Control of Your Tax Situation

Don’t let misinformation or high-pressure sales tactics steer you in the wrong direction. Use the Arch Tax Resolution Assistant to uncover your options today. By understanding your eligibility, you’ll be in a stronger position to make an informed decision and resolve your tax issues effectively.

Are Social Security Benefits Taxable?

chad@archtaxco.com (Chad Dickinson) — Mon, 23 Dec 2024 22:07:21 GMT

Social Security benefits provide vital financial support for millions of Americans, especially retirees and those with disabilities. But a common question is: Are Social Security benefits taxable? The answer depends on your overall income and filing status. Let’s break it down.

Are Social Security Benefits Always Taxable?

The good news is that not all Social Security benefits are subject to tax. If Social Security is your only source of income, your benefits are generally not taxable, and you likely won’t need to file a tax return. However, if you receive income from other sources, such as wages, investments, or retirement accounts, you might have to pay taxes on a portion of your benefits.

How Is Taxability Determined?

Whether your Social Security benefits are taxable depends on your combined income , which includes your adjusted gross income (AGI), nontaxable interest, and half of your Social Security benefits. If your combined income exceeds a certain threshold, a portion of your benefits may be taxed.

Key Thresholds to Know

The IRS sets specific thresholds to determine whether your Social Security benefits are taxable:

For Single Filers:
Combined income over $25,000 may result in up to 50% of benefits being taxed.
Combined income over $34,000 may result in up to 85% of benefits being taxed.
For Married Filing Jointly:
Combined income over $32,000 may result in up to 50% of benefits being taxed.
Combined income over $44,000 may result in up to 85% of benefits being taxed.

What Does “Up to 85%” Mean?

This doesn’t mean you’ll lose 85% of your benefits to taxes. Instead, it means that up to 85% of the benefits you receive may be included in your taxable income and taxed at your regular income tax rate.

Watch Chad Explain It All

Want to hear this explained in detail? Watch Chad Dickinson from Arch Tax break it down in this quick video:

Steps to Determine If Your Benefits Are Taxable

If you’re unsure about the taxability of your Social Security benefits, the IRS provides a helpful online tool to guide you. You can access it here: IRS Social Security Taxability Tool .

Tips to Reduce Taxes on Social Security Benefits

Track Your Other Income Sources: The more income you earn outside of Social Security, the more likely your benefits will be taxed. Monitor and manage other income to stay below the thresholds.
Leverage Tax-Advantaged Accounts: Consider using tax-free or tax-deferred accounts to reduce your taxable income.
Work With a Tax Professional: A tax advisor can help you create a plan to minimize taxes on your benefits and optimize your overall financial strategy.

Final Thoughts

Understanding whether your Social Security benefits are taxable is an essential part of retirement planning. Knowing the income thresholds and how combined income is calculated can help you take steps to minimize your tax liability and keep more of your benefits.

Have questions about your Social Security benefits? Contact us at Arch Tax for expert guidance and support. Let’s work together to ensure your retirement is financially secure and stress-free.

Simple Tips for Better Bookkeeping

chad@archtaxco.com (Chad Dickinson) — Thu, 19 Dec 2024 16:22:19 GMT

As a small business owner, you wear many hats, and bookkeeping might be one of the most challenging. Between managing day-to-day operations and serving your customers, staying on top of your finances can easily take a backseat. However, proper bookkeeping is essential to running a successful business—it keeps you organized, helps you plan for taxes, and ultimately saves you time and money.

Here are some simple tips to make bookkeeping easier and more effective for your small business:

1. Find a System That Works for You

Every business is unique, and so is every bookkeeping approach. Some small business owners prefer the simplicity of a customized Excel spreadsheet, while others benefit from accounting software like QuickBooks or Xero. If you’re pressed for time, outsourcing to a professional bookkeeper might be your best option. Whatever method you choose, consistency is key.

2. Allocate Time Each Week

Consistency is critical when it comes to managing your books. Dedicate at least one hour each week to organizing receipts, inputting expenses, and reconciling accounts. This small investment of time will prevent last-minute stress during tax season and ensure you always have a clear financial picture.

3. Set Goals and Deadlines

Establishing clear milestones can help you stay on track. For example, aim to complete your first-quarter bookkeeping by the end of April and have year-to-date records updated by November 1. This proactive approach ensures you’re prepared for important decisions and tax filings.

4. Stay Ahead of Year-End Taxes

Having your bookkeeping up to date before year-end is crucial. Knowing your net income by November allows you to make strategic decisions, such as investing in equipment or other deductible expenses, to minimize your taxable income. This forward-thinking strategy not only reduces stress but can also save you money.

5. Consult a Professional

Sometimes, it’s best to bring in an expert. A tax professional or bookkeeper can provide valuable insights and ensure you’re compliant with regulations. Investing in professional help can save you significant time and money in the long run.

At Arch Tax, we specialize in helping Small Businesses with their Bookkeeping. Contact us today!

For your convenience, we’ve created a video below highlighting the key points of this blog.

Why Choose Arch Tax?

chad@archtaxco.com (Chad Dickinson) — Wed, 11 Dec 2024 17:12:17 GMT

Why Choose Arch Tax for your Tax Resolution needs?

Resolving tax issues can be an overwhelming and stressful process. Many people feel unsure about whom to trust, especially with so many tax companies promising the world but often underdelivering. At Arch Tax, we understand these concerns, and we’re here to change the narrative.

Our Mission

Arch Tax was founded by Chad Dickinson, a licensed tax attorney with over 15 years of experience, to address common frustrations in the tax resolution industry. Chad created Arch Tax in 2022 with a mission to:

Deliver on promises.
Provide excellent customer service by treating every client with respect.
Be transparent and maintain open communication throughout the process.
Offer straightforward solutions without fear-based tactics or price gouging.

Why Clients Choose Arch Tax

At Arch Tax, we believe that every client deserves personalized attention and respect. As a small company, our founder Chad is directly involved in every client case, ensuring that you receive exceptional service and efficient resolutions.

We’ve eliminated common frustrations in the industry, focusing instead on building trust, providing clear communication, and resolving your tax issues as easily as possible.

Contact Us

Have questions or concerns about your tax situation? Chad is accessible and happy to address your concerns before you hire us.

�� Email: chad@archtaxco.com
�� Phone: 872-267-3727

Watch the Video to Learn More

We’ve created a short video to help you better understand our mission and why Arch Tax is the right choice for resolving your tax issues.

Why Wait? Resolve Your Tax Issues with Arch Tax Today!

Let us show you how a better approach to tax resolution can make all the difference. Contact us or watch the video above to learn more about our unique approach to helping clients resolve their tax concerns efficiently and effectively.

Pro Tip: How to Stop Wage Garnishment

chad@archtaxco.com (Chad Dickinson) — Wed, 04 Dec 2024 15:48:14 GMT

Pro Tip: How to Stop Wage Garnishment

When you’re struggling with financial obligations like unpaid taxes, the last thing you need is for the IRS to garnish your wages. Wage garnishment is one of the most severe actions the IRS can take to collect unpaid taxes, but it’s not unstoppable. Here’s a guide on understanding wage garnishment and how to address it effectively.

What Is Wage Garnishment?

Wage garnishment occurs when the IRS seizes a portion of your paycheck to cover unpaid taxes. Unlike most creditors, the IRS doesn’t need a court order to enforce this action. It starts by notifying your employer, who is then legally obligated to redirect a portion of your earnings to the IRS.

Why Would the IRS Garnish My Wages?

The IRS typically resorts to wage garnishment after repeated attempts to collect unpaid taxes. Garnishments don’t happen out of the blue—taxpayers are notified through multiple warnings and collection notices. If ignored, the IRS can place liens on your property and begin the garnishment process.

Ways to Stop Wage Garnishment

Pay Your Tax Balance in Full
The fastest way to stop garnishment is to pay off your tax debt entirely. This option may not be feasible for everyone but eliminates penalties and interest once resolved.
Set Up an Installment Agreement
An installment agreement allows you to pay your debt in manageable monthly payments. While penalties and interest may continue to accrue, this approach halts garnishments and keeps you financially stable.
Negotiate an Offer in Compromise
If you can’t pay the full amount, you may qualify for an Offer in Compromise (OIC), which lets you settle your debt for less than what you owe. This requires thorough financial documentation and IRS approval.
Prove Financial Hardship
Demonstrating that garnishment causes undue financial hardship can put you in a “Currently Not Collectible” (CNC) status, temporarily stopping collection actions. However, interest and penalties continue to accrue.
File for Bankruptcy
In extreme cases, filing for bankruptcy can halt wage garnishment through an automatic stay. However, this is a complex option that requires court approval and doesn’t discharge all tax debts.

Why Professional Help Matters

Dealing with wage garnishment and negotiating with the IRS can be overwhelming. Tax professionals, such as attorneys and enrolled agents, have the expertise to analyze your financial situation, explore all options, and represent you effectively before the IRS.

Take Action Today

If you’re facing wage garnishment, don’t wait. The longer you delay, the harder it becomes to stop IRS actions. Contact our team of tax professionals today to reclaim control of your finances and find the best resolution for your tax situation.

The Value of Proactive IRS Audit Monitoring

chad@archtaxco.com (Chad Dickinson) — Wed, 27 Nov 2024 16:19:01 GMT

While many taxpayers believe audits are rare or only happen to others, the truth is that anyone can be selected. Proactive IRS audit monitoring is a powerful tool to safeguard your financial future and minimize the stress associated with potential IRS scrutiny. Here's why it’s valuable and how it works.

What Is Proactive IRS Audit Monitoring?

Proactive IRS audit monitoring involves regularly reviewing your tax filings, financial activities, and IRS transcripts to identify potential red flags before they escalate into an audit. Think of it as an early warning system that keeps you ahead of the IRS by addressing issues before they demand explanations.

The Benefits of Proactive Monitoring

Identify Early Audit Triggers
Proactive monitoring allows us to detect indicators of potential audits, such as discrepancies between reported income and third-party data (e.g., W-2s or 1099s). By analyzing IRS transcript entries that signal examination activity or review, we can take corrective action, such as filing amendments or gathering documentation, before the IRS escalates the issue.
Detect Pending Collection Actions
Monitoring IRS transcripts helps identify signs of collection activity, such as notices of intent to file liens or levy assets. These indicators, found in transcript updates related to compliance or unpaid balances, enable us to respond promptly, preventing severe enforcement measures like wage garnishments or asset seizures.
Ensure Compliance and Payment Accuracy
By reviewing transcript data for applied payments, penalties, and filing status, we can verify that all taxpayer records align with IRS expectations. This ensures accurate crediting of payments, timely resolution of any compliance gaps, and early intervention if discrepancies or penalties arise. Proactive attention to these details helps maintain financial integrity and prevent unnecessary interest or fees.

How Proactive Audit Monitoring Works

Pulling IRS Transcripts
Accessing and reviewing your IRS transcripts provides detailed insights into your tax account, including filings, payments, and potential issues flagged by the IRS.
Reviewing Key Financial Documents
Examining W-2s, 1099s, and other financial documents ensures consistency between what you report and what the IRS sees.
Analyzing Risk Areas
Identifying trends or patterns that could raise audit concerns, such as excessive deductions or unusual income sources, is critical to staying ahead.
 Continuous Oversight
With ongoing monitoring, you stay aware of any new IRS activities related to your account, such as liens, penalties, or other notices.

What Happens When We See Something

When a potential issue is identified during our proactive audit monitoring—such as discrepancies in your IRS transcripts, inconsistencies in reported income, or indicators of potential audit activity—we act immediately. First, we analyze the flagged item to determine its cause, whether it stems from filing errors, missing documentation, or third-party reporting mismatches. Next, we cross-reference the issue with IRS codes and guidelines to assess its severity and potential consequences. If corrective action is required, we initiate amendments, provide supporting documentation, or communicate directly with the IRS to preempt escalation. This systematic approach minimizes your exposure to penalties, interest, or further audit activity while maintaining compliance.

Why You Should Start Now

Proactive IRS audit monitoring is an investment in your financial health. It protects you from unnecessary stress, financial losses, and legal troubles by ensuring you’re always prepared and compliant. Whether you’re a small business owner, freelancer, or individual taxpayer, staying ahead of the IRS can save you time, money, and peace of mind.

Ready to take control of your tax situation? Contact us today to learn more about our proactive IRS audit monitoring services and how they can work for you!

Myth vs. Reality: Debunking Common Misconceptions About Tax Resolution

chad@archtaxco.com (Chad Dickinson) — Wed, 20 Nov 2024 15:16:13 GMT

Tax debt can be intimidating, and misinformation often makes the process feel even more overwhelming. Let’s tackle some of the most common myths about tax resolution and set the record straight.

Myth 1: Tax Resolution Companies Can Make Your Debt Disappear

Many believe tax resolution companies promise to erase their tax debt entirely. Unfortunately, this unrealistic expectation often leads to disappointment.

Reality: Tax resolution companies work to negotiate with the IRS on your behalf. While programs like Offers in Compromise can reduce your tax debt, they are only approved for taxpayers who meet strict qualifications. A reputable company will help you explore all options, whether it’s a settlement, installment plan, or penalty abatement, but eliminating your debt entirely is unlikely unless you qualify for specific hardship programs.

Myth 2: I Can’t Negotiate with the IRS on My Own

It’s a common belief that the IRS won’t work with individuals, leading many to feel helpless when facing tax debt.

Reality: You can negotiate with the IRS on your own. However, the process can be complex, involving legal terminology, deadlines, and specific documentation. Tax resolution professionals have the expertise to handle these intricacies, often securing better results than individuals. They understand how the IRS operates and can prevent costly mistakes. If you do opt to do it on your own, check out our Do It Yourself program. We will guide you along the process.

Myth 3: All Tax Resolution Companies Are Scams

Horror stories of unscrupulous companies give the industry a bad reputation, leading some to distrust all tax resolution services.

Reality: Not all tax resolution companies are created equal, but many are staffed by licensed professionals like CPAs, enrolled agents, and tax attorneys who adhere to strict ethical standards. To protect yourself, research a company’s credentials, read reviews, and verify their standing with organizations like the Better Business Bureau. Reputable companies provide clear expectations and deliver on their promises.

Myth 4: I’ll Lose My House If I Owe the IRS

Fear of losing one’s home is one of the most common misconceptions surrounding IRS debt.

Reality: While the IRS can place a lien on your property as a way to secure payment, they rarely seize homes. Property seizures are typically a last resort and occur in extreme cases when other collection efforts have failed. Working with a tax resolution company ensures your rights are protected, and your assets are handled carefully during the resolution process.

Myth 5: The IRS Has Unlimited Power to Collect Taxes

The idea that the IRS can take whatever they want, whenever they want, is a common fear among taxpayers.

Reality: The IRS is powerful, but their collection authority is limited by laws and procedures. For instance, the IRS must provide written notice before taking any collection action, and taxpayers have rights to appeals and hearings. Additionally, there is a statute of limitations—typically 10 years—for the IRS to collect on a tax debt. Understanding these limits can ease fears and empower taxpayers.

Myth 6: You Have to Pay Your Full Debt Immediately or Face Jail Time

The threat of jail time is a common misconception that makes tax debt even more frightening.

Reality: Owing taxes is not a crime. Jail time is reserved for serious offenses like tax fraud or evasion, not for unpaid tax bills. The IRS offers multiple payment options, including installment agreements and hardship deferrals, to help taxpayers manage their debt over time. The key is to address the issue promptly rather than ignoring it.

We Are Here To Help?

Facing tax debt can be overwhelming, but you don’t have to go through it alone. Our team of experienced tax professionals is here to guide you every step of the way. We ensure transparency of the entire process and we even wrote the book on Do It Yourself tax resolution .

Schedule your free consultation today

The Basics of Tax Resolution

chad@archtaxco.com (Chad Dickinson) — Tue, 12 Nov 2024 13:23:57 GMT

What is Tax Resolution?

Tax resolution is the structured process of negotiating with the IRS to manage and resolve tax debt issues like unpaid taxes, penalties, or disputes. Through various IRS programs, taxpayers can potentially reduce the amount owed or arrange manageable payment terms. For a comprehensive guide on these solutions, visit the IRS's official Tax Debt Assistance page .

We recommend always using a professional when communicating with the IRS, but this article shows you the process.

Importance of Addressing Tax Debt Early

Avoid Escalating Penalties and Interest – Delaying payment leads to accumulating interest and penalties, significantly increasing the total debt.
Prevent IRS Collection Actions – Addressing tax debt promptly helps avoid aggressive IRS actions, such as wage garnishments, bank levies, and property liens.
Protect Your Credit – Unresolved tax debt can lead to liens, which may negatively impact your credit score and hinder future financial opportunities.
Qualify for Resolution Programs – Early action allows you to explore options like installment agreements, penalty abatement, or an Offer in Compromise, potentially reducing the total debt.
Reduce Financial Stress – Resolving tax debt sooner offers peace of mind, reducing financial uncertainty and preventing stress from prolonged tax issues.

Types of IRS Transcripts and Their Uses

The IRS provides several types of transcripts to assist taxpayers in managing their tax account and reviewing their tax history. This information is used when forming a resolution strategy:

Account Transcript – Displays essential account data, including balance owed, payments, and adjustments after filing. This is helpful for understanding the status of a tax account and is available for the current and nine prior tax years.
Record of Account – Combines both the Account and Tax Return Transcripts, giving a comprehensive view of tax and payment history, along with any adjustments. It’s accessible for the current and three prior tax years.
Tax Return Transcript – Shows most line items from the originally filed tax return, useful for income verification on loan applications. It doesn’t reflect post-filing adjustments and is available for the current and three prior tax years.
Wage & Income Transcript – Summarizes income reported to the IRS, such as Forms W-2, 1099, and 1098. Ideal for reconstructing income if records are missing, and available for the current and nine prior tax years.

These transcripts are essential tools for taxpayers needing to verify income, assess their IRS account status, or provide documentation for financial aid, loans, and other applications. Each type can be requested through the IRS’s Get Transcript service.

Overview of the Six-Year Lookback Rule for Filing

This overview provides the essentials of the Six-Year Lookback Rule and its significance in managing tax compliance.

1. What is the Six-Year Lookback Rule?

The IRS generally requires taxpayers to file returns for only the last six years, even if more years are missing.

2. Purpose of the Rule

This rule aims to streamline the filing process, allowing the IRS to collect necessary filings while avoiding backlogs of very old returns.

3. Exceptions to the Rule

In certain cases, the IRS may request older returns if:
There are outstanding audits.
Significant unreported income from previous years is discovered.
State tax returns may also have different lookback requirements.

4. Benefits of Compliance

Filing the last six years’ returns can bring a taxpayer into "good standing" with the IRS, making it easier to qualify for resolution programs like installment agreements or offers in compromise.

5. Key Takeaway

For taxpayers with missing returns, filing the last six years helps ensure compliance, potentially avoiding further penalties and enforcement actions.

Understanding the Collection Statute Expiration Date (CSED)

1. What is CSED?

CSED stands for Collection Statute Expiration Date, the date by which the IRS must legally stop collection efforts on a tax debt, typically 10 years from the assessment date.

2. How CSED is Calculated

The 10-year collection period starts from the assessment date of the tax debt, generally when the tax return is filed, or the IRS issues a tax assessment.

3. Why CSED Matters

Knowing the CSED helps taxpayers plan, as the IRS cannot pursue collection actions (such as liens or levies) once this date has passed.

4. Events That Can Extend CSED (Tolling Events)

Certain actions can "pause" or extend the CSED, including:
Filing for bankruptcy.
Submitting an Offer in Compromise.
Requesting a Collection Due Process Hearing.
Leaving the U.S. for an extended period.

5. Importance of Tracking CSED

Tracking the CSED ensures taxpayers know when their liability may expire, allowing them to strategically decide on repayment or settlement plans.

Common Tax Resolution Options

1. Installment Agreement

Allows taxpayers to pay their tax debt in monthly installments.
Useful for those who can’t pay the full amount upfront but can make manageable monthly payments.

2. Offer in Compromise (OIC)

A settlement option where the IRS agrees to accept less than the full amount owed.
Taxpayers must demonstrate limited ability to pay to qualify.

3. Currently Not Collectible (CNC) Status

Temporarily halts IRS collection efforts for taxpayers facing severe financial hardship.
Debt remains, but active collections (like liens and levies) are paused until financial circumstances improve.

4. Partial Payment Installment Agreement (PPIA)

A modified installment plan that allows lower monthly payments than a standard installment agreement.
Generally requires a review of the taxpayer’s financial situation and may be reassessed periodically.

5. Streamlined Installment Agreement (SIA)

Offers a quick approval process without extensive financial review, making it easier for eligible taxpayers.
Allows manageable monthly payments for up to 72 months, reducing the stress of immediate full payment.

Each resolution option provides a pathway to manage tax debt based on the taxpayer's specific financial situation, allowing them to resolve or reduce their tax obligations with the IRS.

Steps to Begin the Tax Resolution Process

1. Gather All Tax Documents

Collect recent tax returns, IRS notices, and income statements. Also, request IRS transcripts to understand the full scope of the debt and account activity.

2. Assess Financial Situation

Evaluate current income, expenses, assets, and liabilities to understand financial standing. This assessment is crucial to determine eligibility for various resolution options.

3. Identify Available Resolution Options

Based on your financial review, decide which option (Installment Agreement, Offer in Compromise, etc.) may be most suitable for managing the tax debt.

4. Complete IRS Forms

Fill out necessary forms specific to the resolution option, such as Form 9465 for Installment Agreements or Form 433-A for financial disclosures in an Offer in Compromise.

5. Submit the Proposal to the IRS

Send your completed forms and documents to the IRS and wait for their response. Timely and accurate submissions increase the chances of successful negotiation.

6. Respond to IRS Communications Promptly

Stay responsive to IRS notices or requests for additional information, as delays could result in collection actions or denial of the proposal.

This process can be complicated and you should consult with a professional. Arch Tax has submitted thousands of successful resolutions with the IRS and we are available to give you a free consultation . You can also call us at (844) 556-3073 .