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Johnny and Service Tax Refund [Series- II] Part 4: ?Conditions relating to Claim of Rs. 500/-’

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Johnny and Service Tax Refund [Series- II]

Part 4: ‘Conditions relating to Claim of Rs. 500/-’

 

By: –

CA. Pradeep Jain

Mayank Palgauta

 

Visit us at: www.capradeepjain.com

 

To prolong the series of the articles on Refund claims to exporters we here under this article are expressing the miserable situation of exporters claiming refund claims for service tax paid on services used in export of goods. This is the fourth article in a row of this series of articles. In the previous three articles we had elaborated the difficulties faced by the assessees in getting the refund claim under Invoice, CHA services and Port services.

 

In this fourth article we are attempting to present the grounds on which departmental authorities are disallowing the refund claims relating to “Amount of 500/-” against the services on which refund has been claimed. This complete state of affairs is humorously picturized by the way of poems and conversation between Johnny (an assessee) and his father. This Endeavour is just to bring out the problems faced by exporters.

Johnny and Jill went up the hill, to get the refund order
Johnny came back with a lack
And Jill came hopeless after.

Presently, assesses are claiming refund orders on the various services which are specified in the Notification No. 17/2009-ST dated 07/07/2009. The refunds claimed by the assessees as against their exports are their constitutional rights but are being declined by the departmental authorities alleging that the assessee has filed the claims in which the service tax paid amount is less than Rs. 500/- which is highlighted as under: -

Johnny-Johnny!  Yes papa!

Got the refund?

No Papa,

Telling lies?

No Papa,

What’s the reason?

This papa: -

Johnny says:  I went to the department to get the refund for various specified services but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following Flay: -

The claims of refund made in respect of Various Specified Services are not admissible to us as “we have claimed refund of service tax paid in respect of services (for example CHA services, Cleaning Services, Courier Services, Transportation Charges etc.) where service tax paid is less than Rs. 500/- as such, the said claims are not admissible for refund in view of the provisions of said notification.”

 

Johnny’s Submission: -

In respect to the above allegation, we submit that this is a totally wrong allegation raised by the learned adjudicating authority because it is mentioned in the notification 17/2009-ST that-

 

(h) no refund claim shall be allowed if the same is for an amount less than rupees five hundred;.

Here the refund claim means a total of all the invoices filed for the refund claim. The clause specifies that when any refund claim for the services utilized in the course of export to be filed, the total claim should not be below Rs. 500/-. Our refund claim, for the services used in the course of export of goods, is also more than Rs. 500/-. Therefore refund cannot be denied to us taking such contentions.

 

Further the Notification’s point No. 2 clause (b) says that service tax exemption will be claimed by the manufacturer- exporter on the services availed during the course of export in “Form A-1″. The Form A-1 also starts with the-

 

I/We claim refund of Rs……….. (Rupees in words) under Notification No.17/2009-ST. Dated 07.07.2009 in respect of service tax paid on services used for export of goods

 

The starting para of the Form A-1 clarifies the intention of the Government that the refund has to be seen “in total”. If the same was not the intention of the Government there was no need to start the form like this.

 

Further the format that is prescribed in the Form A-1, annexure to the Notification also give the columns as S. No. Details of the goods exported on which refund of the service tax has to be claimed etc. There are a number of details require in the table which shows that the refund will claimed in total only.

 

 

Johnny says:  I went to the department next day again with the above submission but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following more flay: -

 

In next time the Learned Adjudicating Authority came with a new and unlike approach saying that the instead of seeing all the invoices as a total claim, individual invoice of the service provider forms a single claim of refund in terms of notification no. 17/2009-ST and so the limit of Rs. 500/- shall be seen per invoice rather than per shipping bill or per claim.

 

Johnny’s Submission: -

 

In this respect it is submitted that the lower limit of Rs. 500/- as prescribed in the notification should be of the total claim as reflected by the language of notification. The notification no. 17/2009 uses the word “refund claim” or the “claim of refund” at various places. There is no doubt that all the conditions prescribed in the notification applies to this claim of refund. If the contention of the Learned Authority is accepted that the claim of refund should be seen per invoice of service provider, it would exclude the small/emerging exporters who has individual invoice with less than Rs. 500/- but if this is seen in total then constitute the higher amount from aforesaid limit. Further, the refund claim means the total claim filed by the exporter in respect of each invoice / shipping bill. This is clear from the language of the notification also which says as follows:-

“(f) the claim for refund shall be filed within one year from the date of export of the said goods.”

The above condition mentioned in the notification says that the refund is required to be filed within one year from the date of EXPORT of the SAID GOODS. Thus, the refund has been linked to the goods exported, so the limit is to be seen with respect to the said goods/said consignment. Thus, the refund is to be linked to the shipping bill.  If the intention of the government was to link the refund claim to the availment of a particular service, the language of the notification should have said something like “refund shall be filed within one year from the date of availment of the service”. Therefore, looking to the intention of the government, the lower limit of Rs. 500/- should be seen in reference of atleast one shipping bill instead of one invoice of service provider and as such the contention of the Learned Authority is not tenable and is not acceptable.

 

Johnny says:  I went to the department next day again with the above intent submission but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following more flay: -

Further distinct accusation is being raised via order of Learned Authority which is passed saying that Proviso (b) to Paragraph 1 of the Notification provides that the exemption claimed by the exporter shall be provided by way of refund of service tax paid on the specified service tax paid on the “specified service” used for export of goods. Here in the provision, the word “service” is being used which is a singular form and therefore more than one service are not eligible for refund claim. Each service is to be claimed individually by the exporter.

 

Johnny’s Submission: -

We submit that the above allegation is totally wrong as the proviso (b) to the first paragraph says-

 

“the exemption claimed by the exporter shall be provided by way of refund of service tax paid on the specified service used for export of the said goods”;

The word specified service used here is for the services that are mentioned in column (4) of the said Table. Nowhere in the table there is a condition for each service that are specified there that the refund claim should be not less than Rs. 500/-. Therefore the condition is not prescribed for any specified service but is for the whole of the refund claim. Whenever the amount of Rs. 500/- is to be considered it is considered per shipping bill.  The shipping bill under which the export is made and refund claim is filed, the total refund claim of such shipping bill should not be less than Rs. 500/-. All the services that are charged separately will not be considered separate for the refund claim but the total will be taken according to the claim per shipping bill.

Further the starting para of the Notification says that the refund claim will include the services prescribed in the column 4 of the table mentioned in the Notification. So the individual service taken does not make a refund claim. Therefore the order passed by the learning Adjudicating Authority saying that the individual invoice of the service provider forms a single claim of refund is totally erroneous.

 

Even if the contention of the Learned Authority, that the refund should be per service, is accepted for the sake of argument only, then also a refund claim will be meant as all taxable services. As in the latest decision of Tribunal in case of M/s Sri Venkateshwara Precision Components Vs CCE, Chennai (Dated: August 9, 2010) it is held that-

 

Central Excise – CENVAT credit on goods procured from 100% EOUs – CVD referred under Rule 3(7) of the CENVAT Credit Rule 2004 includes not only additional duty under Section 3(1) of the Customs tariff Act, 1975, but also the 4% Additional duty levied under Section 3(5) – As per the General Clause Act, when the context requires the word used in singular can mean in plural and, therefore, the term CVD can mean the two CVDs. : CHENNAI CESTAT;

 

In the above mentioned case it is decided that if the governing body is not clear for the meaning of a term than the term used in a singular form can be used in plural form as according to the General Clause Act. Therefore it is clear that in case where the word used in singular term than it can mean in plural. The ratio of this decision is applicable in our case also and the word service will be reckoned as all taxable services as in the plural form. In light of the above decision the refund should be allowed to us.

 

But at the end the outcome was the same as always comes out which can be shown by the following lines: -

 

Fruitless again & again;

Johnny now in grief and pain!

Refund orders now a dream;

His efforts have downstream!

Although the article is ornamented with humorous poems but the key motive is to bring into light the intricacies involved in the refund orders. With this entertaining and rhythmical article we summarize that the present situation and mental state of assesses alleging refunds against export of goods is alike to the situation of Johnny as pointed out in the poem.

 

Still numbers of conditions are remaining to be decorated subject to which the refund is allowed. The assessee is facing difficulty in almost all of those conditions. Due to the large number of conditions we were not able to cover all the remaining conditions in this article and hence we will be bringing further articles on the different conditions covered therein.

 

Keep visiting for the next article……..

 


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Tax Masters Customer Service Representative Position in Houston, TX

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TaxMasters, Inc., the only publicly traded tax representation firm in the U.S. focused on helping people regain compliance with the IRS and pay their outstanding tax debt, is looking for compassionate, empathetic Customer Service Representatives in Houston, TX. Tax Masters leads the industry in level of service and has evolved over the past several years as one of the most consumer-oriented firms in the tax relief field.

Tax Masters recently took a huge step toward ensuring the highest level of customer service by updating its business model to separate tax services from tax debt negotiation services. By IRS rules, every taxpayer who wants to try and settle an outstanding tax debt must fully regain IRS compliance first, which typically involves filing all delinquent tax returns and paying any currently-due quarterly taxes. To make the process more transparent and more affordable to new customers, Tax Masters separated its service offerings. No new Tax Masters customer may sign up for settlement services or assistance with an Offer in Compromise or other repayment plan until Tax Masters has completed all tax services and the client is back in compliance. The best part? After completing the compliance package, TaxMasters delivers a settlement recommendation to the customer. The customer is free to attempt the settlement herself, hire someone else to do it, or rehire Tax Masters for settlement services.

Even with all this transparency, Tax Masters customers face incredible hardship and difficulty brought on by months and years of not facing their tax problem. It is absolutely necessary for Tax Masters Customer Service Representatives to be polished, friendly, helpful, and to act as an advocate for every client.

The Position

The Customer Service Representative provides outstanding service to clients by answering inbound and making outbound calls quickly and accurately. The Customer Service Representative provides a single point of contact for responding to case inquiries related to status, selected data changes, required forms, information and documenting all inquires and any corresponding action taken. The Customer Service Representative is TaxMasters’ face to the customer. The role requires a customer-centric attitude and excellent communication skills.

Primary Responsibilities

•Exercise patience in dealing with customers who are under duress and who face consequences from the IRS
•Answer inbound and make outbound calls
•Conduct case analysis with assigned clients in a timely manner
•Alert clients of issues with account and educate clients on IRS concerns
•Set up appointments for conference calls, meetings and financial interviews for other staff members and clients
•Review notices and letters from the IRS
•Send direct reminder emails to staff regarding scheduled appointments
•Review payment status of an assigned load of cases
•Initiate phone calls to clients to obtain information or documents requested by other departments and advise clients of account status
•Closeout accounts when all services are rendered and forward file to appropriate department
•Document and update system with all conversations and actions taken on the case

Knowledge and Skill Requirements

•One or more years of customer service, call center, collections or related experience.
•Excellent communication, customer service, follow-up and people skills
•Computer and administrative skills required including faxing, copying, emailing and data entry
•Previous IRS experience is a plus
•Ability to work in a fast-paced environment
•High school diploma or equivalent required, some college preferred

Do you think you have what it takes to help people facing incredible pressure from the IRS? If you live in the Houston area and have a genuine desire to help people in financial crisis, you may just be the next Customer Service Representative Tax Masters hires. But you’ll never know if you don’t apply.

 

 

Houston based Tax Masters has served tens of thousands of clients and had incredible success with assisting taxpayers with regaining IRS compliance. Tax Masters your tax problems.

 


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Hard Nut To Crack -Service Tax Refund Claim

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Hard nut to crack -Service tax refund claim

Prepared By:
CA Pradeep Jain
Anjali Bihani

Visit us www.capradeepjain.com

Introduction:-

The recent circular no. 120/01/2010-ST dated January 19, 2010 has been issued by the Board for claiming the refund of unutilized Cenvat credit under Rule 5 of Cenvat credit Rules by the service exporters. The above circular has tried to address all the problems faced by the service tax exporters in claiming such exemption. They have tried to give clarification on all the issues. But the famous Hindi proverb “lohe ke chane chabana” (Hard nut to crack) is apt for refund claim for the exporters under Notification 41/2007 or refund under Rule 5. This is also applicable even after this circular. Even we have written a Series of articles on such refund scheme titled as “Johnny and Service Tax refund” for the refund of service tax under notification 41/2007. This can be viewed from our website www.capradeepjain.com. We are discussing the aforesaid circular in this article in length.
Rule 5 of Cenvat Credit Rules, 2004 provides that accumulated credit of inputs and input services which are used for providing output services or output goods, can be refunded to the exporter subject to stipulated conditions. Notification No. 5/2006-CE (NT) dated 14.03.2006 provides the conditions, safeguards and limitations for obtaining refund of such credit. The Rule 5 of CENVAT Credit Rules, 2004 is produced as under for your ready reference:
 Rule 5: Refund of CENVAT credit
“Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or
used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of,
i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or
ii) service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification:
Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax.
Provided further that no credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act shall be utilized for payment of service tax on any output service.
Explanation: For the purposes of this rule, the words ‘output service which is exported’ means the output service exported in accordance with the Export of Services Rules, 2005.”
Notification No. 5/2006 is produced as under for your ready reference:
 Notification No. 5/2006-CE (NT)
G.S.R. (E) In exercise of the powers conferred by rule 5 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the „said rules‟), and in supercession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.11/2002 – Central Excise (NT), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R. 150(E), dated 1st March, 2002, the Central Government hereby directs that refund of CENVAT credit shall be allowed in respect of :
(a) input or input service used in the manufacture of final product which is cleared for export under bond or letter of undertaking;
(b) input or input service used in providing output service which has been exported without payment of service tax, subject to safeguards, conditions and limitations, set out in the Appendix to this notification.
Appendix
1. The final product or the output service is exported in accordance with the procedure laid down in the Central Excise Rules, 2002, or the Export of Services Rules, 2005, as the case may be.
2. The claims for such refund are submitted not more than once for any quarter in a calendar year
Provided that where,-
(a) the average export clearances of final products or the output services in value terms is fifty percent or more of the total clearances of final products or output services, as the case may be, in the preceding quarter; or
(b) the claim is filed by Export Oriented Unit, the claim for such refund may be submitted for each calendar month.
3. The manufacturer or provider of output service, as the case may be, submits an application in Form A annexed to this notification to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, in whose jurisdiction,-
(a) the factory from which the final products are exported is situated, along with the Shipping Bill or Bill of Export, duly certified by the officer of customs to the effect that goods have in fact been exported; or
(b) the registered premises of the service provider from which output services are exported is situated, along with a copy of the invoice and a certificate from the bank certifying realization of export proceeds
4. The refund is allowed only in those circumstances where a manufacturer or provider of output service is not in a position to utilize the input credit or input service credit allowed under rule 3 of the said rules against goods exported during the quarter or month to which the claim relates (hereinafter referred to as „the given period‟).
5. The refund of unutilized input service credit will be restricted to the extent of the ratio of export turnover to the total turnover for the given period to which the claim relates i.e.
Maximum refund = Total CENVAT taken on input services during the given period × export turnover ÷ Total turnover
Illustration:
If total credit taken on input services for a quarter = Rs. 100
Export turnover during the quarter = Rs 250
Total Turnover during the quarter = Rs 500
Refund of input service credit under Rule 5 of the CENVAT Credit Rule, during the quarter = 100*250/500 i.e. Rs 50
Explanation: For the purposes of condition no.5,-
1. “Export turnover” shall mean the sum total of the value of final products and output services exported during the given period in respect of which the exporter claims the facility of refund under this rule.
2. “Total turnover” means the sum total of the value of,-
(a) all output services and exempted services provided, including value of services exported;
(b) all excisable and non excisable goods cleared, including the value of goods exported;
(c) The value of bought out goods sold, during the given period.
6. The application in Form A, along with the prescribed enclosures and the relevant extracts of the records maintained under the Central Excise Rules, 2002, CENVAT Credit Rules, 2004, or the Service Tax Rules, 1994,in original, are filed with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in section
11B of the Central Excise Act, 1944(1 of 1944).
7. the refund of excise duty or service tax is allowed by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be.”

Difficulties pointed out in the circular: -
The service tax exporters are facing difficulties in getting refund from the department. Similar difficulties are also faced by the goods exporters are and many matters are pending in the tribunal.
The circular says that the call centers or the BPOs are sailing in the same boat. The main problems faced by service tax exporters and as clarified in this circular are summarized as under:-
a. Language of the notification vis-à-vis input service definition.
b. Nexus between input or input services and final services exported
c. Verification of the documents.
d. Refund of Cenvat credit accumulated during the quarter or earlier quarter.
e. Incomplete invoices.
Underneath we have discussed these problems and solutions offered by the circular in a detailed view as follows: -

1) Language of the notification:
The Board circular no. 120/01/2010 ST, Dt 19 January, 2010 says that the language of the notification 5/2006 provides that:-
“Refund is permitted of duties and taxes paid on inputs or input services USED in the manufacture of export goods or USED in providing the output services exported”.
However, “Input services” definition under Rule 2(l) of Cenvat credit Rules reads as follows:-
“(i) used by a provider of taxable service for providing an output service;or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, (This clause has been amended vide Notification 10/2008 C.E. (N.T.) – dated 01-03-2008) and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;”
The field formalities says that the CENVAT Credit Rules allowed the credit on input services used “whether directly or indirectly, in or in relation to the manufacture of final product or for providing the output service”. But the Rule 5 says that it should be directly used in the manufacture of export goods.
On the basis of wordings, departmental authorities are focusing on nexus theory. For refund, the inputs/ input services should be directly related to the goods / services exported. The department states that the goods or services covered under a particular invoice which are not able to establish a connection with a specific consignment of export goods or specific instance of export of service, are not eligible for refund.
The board has maintained that the Harmonious reading of both the rules should take place. The real intention of the rule is to provide the refund claim to exporters. Even if different words have been used in both the rules then also they should be read in Harmonious manner. It is very welcome step on the part of the Board. Thus, by reading these lines, one can say that refund of all Cenvat credit taken will be allowed to the exporters.
But the Board goes further and says that to prove the nexus it is to be seen that whether the quality and efficiency of services exported is increased. This was not there in Rules also but the Board has inserted the new provision and field formalities will use this weapon to say that the all input services credit taken by the exporters does not increase the efficiency and quality and as such refund is to be denied. Else the exporter has to prove that the quality and efficiency has increased. The circular has given examples also in respect of the call centres or the BPOs. The services which are directly correlate with the export of services are renting of premises, right to use software, rent a cab, maintenance & repair of equipment, telecommunication facilities, etc. are eligible for granting of refund.
The activities which are recreational in nature or used in beautification of premises are apparently not able to correlate with the export of services, hence not eligible for refund. The activities which are recreational in nature like event management, company-sponsored dinners/picnics/ tours, flower arrangements, mandap keepers, hydrant sprinkler systems, rest houses, etc. can establish nexus with the export of services indirectly. The call centres or BPO will get atleast get refund on such services. But the poor other service providers has to face the music from the department.
However, recreational activities also increase the efficiency of the employees. The expansion of office building etc. also increases the export of services. As such the refund should be allowed on such services also.
The nexus will be said to exist if it is essential for the quality and efficiency of provision of service exported. The departmental authorities considered that the recreational activities are not related to export of services or does not impact the efficiency, but they are meant for the improvement of efficiency only. The recreational activities provided to employees are to ensure that output service is provided efficiently.

2) Voluminous record to grant refund as well as one to one co-relation:
The board circular has mixed up both these problems and given solution in single para. The exporters has to submit many documents like input service invoices, export invoices, bank certificates etc, in order to get refund. This was also the situation for the goods exporters who have to get the refund under notification 41/2007. But afterwards self certification model was introduced in budget 2009 by notification 17/2009. A declaration certified by the CA was to be submitted to help in faster disposal of the refund claims. The circular says that the same procedure should be followed in such type of refunds.
A CA certificate should be provided along with the refund claim about the co-relation and nexus. But there is legal provision for the same under notification 17/2009 but no such legal backing for the same for the refund claim under Rule 5. The circular can prescribe the conditions which are not there in Rule and notification.
As a member of ICAI, we welcome these provisions but the language of circular says that after the certificate, it will be verified by the AC/DC. If this is situation, then why this circular is increasing the problems of the poor exporters who is already not getting the refund claim. One more step of certificate of CA is added. It has prescribed one more declaration along with the refund claim.

3) Quarterly filing of refund claims:
There was a dispute between the serviced tax exporter and the department that the service tax refund is to be granted for the quarter where the export has taken place. If the Cenvat is accumulated in the earlier quarter and there was no export but the export has taken place in next quarter then the refund will not be granted of cenvat credit accumulated for the earlier quarter.
This is a good clarification from the Board. The refund will be granted even for the earlier quarter also. But the notification does not suggest the same. It allows the refund on proportionate basis. If the real intention of the Board was to give the refund then they have to amend the notification. It is settled position that the board circular which are against the law are not binding on the departmental officers. As such they can
very well challenge the same. Hence, the overall position is not alerted and the exporter will not get relief on this count also.

4) Non compliance of Rule 4A
The department rejects refund claim because invoices submitted are not complete in all respects as per Rule 4A of Service tax Rules. In invoices, either description of the service or the classification is not mentioned. The exporters submits that refund should be allowed if it appears on invoice the nature of service received, tax paid, details required under Rule 4A, & the input service has link with the service/goods exported. The board has accepted this position and granted the refund claim even if there is minor variation. It has instructed the field formalities to take broader view based on judicial pronouncements.

A Quick Wrap before we wind up:-
We have seen that the board has tried to resolve the problems of the exporters but it has not finished yet. The rule should be amended in such a manner that it provides that complete unutilized credit lying with the exporter should be refunded irrespective of the nexus theory. Ultimately, the aim is to provide the refund of unutilized credit to the exporter. Till then it does not seem that the problems will be resolved for the exporters. And the most important thing is that a positive attitude is required for grass root level to says, it will be hard nut to crack.
Goods Exporter can also claim the rebate claim on finished goods under Rule 18 rather than to claim the refund of unutilized credit under Rule 5. This is very easy and total unutilized credit can be claimed as rebate. We have always suggested to exporters that they should claim the same. The refund of unutilized credit should be opted when no other option is available with the exporter, like in case, when the exporter is supplying goods to 100%EOU or else the 100% EOU is having unutilized Cenvat credit. In such cases rebate route is not available. We suggest that the same route is available for the service tax exporters. They can also pay the service tax on their output services under Rule 5 of Export of services rules and get the refund from the department. This is a simple solution. As per our opinion, the same should be preferred.


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IRS TAX SETTLEMENT OFFERS – BE VERY CAREFUL IN SELECTING AN IRS TAX SOLUTIONS SERVICE

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In 2009, the IRS accepted only 11,000 “Offers In Compromise”. That’s less than 1% of the 15 million delinquent taxpayers.

So why were these 2009 acceptance rates by the IRS so low on submitted Offers?

And why should you be very careful in selecting an IRS Tax Solutions Service who advertises to settle your tax debt for “pennies on the dollar”?

Every taxpayer does have options, including an “Offer In Compromise”, but first you must qualify and very few do. In an article entitled “Beware of offers to reduce tax debt” inthe Apr 5, 2010 addition of MSN Money, Jeff Schnepper wrote “(the) IRS will accept ‘pennies on the dollar’ only if you meet certain criteria. But (tax solutions) companies will take your money even when you don’t. We’ve all seen the ads. They promise to settle your tax debt for pennies on the dollar. They don’t tell you how many pennies (one hundred, more than likely). And, they all want their fees up front.”

“These companies are playing the Offer in Compromise (OIC) game. Yes, it’s true that you can settle your tax debt for less than full value. But, there are hoops that you have to jump through that keep getting smaller, and not everybody qualifies.

The IRS will accept an Offer in Compromise only if you meet one of the following requirements:

There is doubt as to liability.
There is doubt as to collectability.
There are equity and hardship factors and the offer would promote effective tax administration.

The IRS is going to look at your assets and cash flow. If you have enough assets or cash flow to settle the debt within 10 years (the normal statute of limitations to collect a tax debt), any compromise offer will be rejected.”

Joe Hill, President of Tax SolutionsTM has been a well known expert in the field of taxation for the last 27 years. His company was the first and is the oldest Tax Solutions Service in the US. Being a field collection officer assigned to the IRS Collection Division in a past life, Hill’s job was to meet with delinquent taxpayers on a face-to-face basis and collect tax for the IRS. And he was very good at his job. Hill worked the cases no one else could close. For many years he led his region in field enforcement actions; enforcement actions that included seizing homes, businesses, autos, equipment, airplanes, boats and any other asset a taxpayer may own to satisfy unpaid taxes.

During his years with the IRS, Hill met with many CPAs and Attorneys who represented taxpayers who owed the IRS. Hill said, “In the vast majority of these cases, the taxpayer’s representative had no idea how to effectively represent and protect their clients. Although the CPA or Attorney may have been excellent in their field, accounting, tax return preparation or income tax law, they had absolutely no idea how to protect their clients when dealing with me and the IRS Collection Division.”

A tax resolution service should offer free consultations to potential clients. Most of the “pennies on the dollar” firms do this. But, According to the BBB, “some (tax services) companies claim they can help consumers reduce the amount of money they owe in taxes or fines to the government. These claims often sound too good to be true and TV ads might include endorsements from customers who state the company worked with the IRS on their behalf and was able to reduce the amount owed to pennies on the dollar. Unfortunately, BBB has heard from consumers who paid thousands of dollars to such companies and were devastated to learn that the company didn’t keep its promise to reduce the amount owed and, in some cases, never even contacted the IRS…If a taxpayer does decide to enlist outside help when dealing with the IRS, he or she should be wary of exaggerated claims… and always check out the business’s report with BBB.”

Hill added, “Taxpayers who submit their own Offer in Compromise (Tax settlement) or their representatives who submit Offers do not have the knowledge and experience to deal with the issues involved in an Offer. Most representatives deal with issues involving the IRS Collection Division once every few years. Our Associates deal with the IRS Collection Division on a daily basis.” 

A competent tax resolution firm will review a client’s particular situation and then provide the client with all possible options to deal with their IRS problems. They will explain these options to them, while advising them of the consequences of each option, both good and bad, so they will know the truth on their chance of a successful tax resolution. And they will know if they “qualify” for submission of an “Offer In Compromise” before they pay “thousands of dollars” to unscrupulous companies.

Any type of tax owed to the IRS is eligible for compromise. Personal, corporate or trust income tax, individual or corporate payroll tax, excise tax, estate tax and any type of penalty, including the Trust Fund Recovery Penalty, can all be compromised. But no one should go toe-to-toe with the IRS Collection Division without representation by a knowledgeable, experienced and aggressive tax professional who knows the IRS Collection Division techniques and procedures inside and out, to advice them, protect their rights and represent them. This is paramount to any chance of success with an Offer in Compromise or Installment Agreement (Payment plan).

Correct procedures for submission, prior planning for the Offer before submission, IRS rules, IRS allowances and deviations from the allowances, state law, federal law and even the IRS employees’ personalities all play an equally important part in a successful Offer in Compromise.

After graduating from Maryland University, I worked for the J. Walter Thompson Company on Ford Motor Company, Ford Dealer Advertising Fund, Holiday Inns, Pan Am and Lark Cigarettes from June 1966 to June 1972.

I left JWT to open Michael Sherman Advertising. Clients included Hotel Chains, Airlines, Travel Industry Suppliers, Banks, Oldsmobile Dealer Associations and dozens of retail businesses.

In April 1982, I joined Campbell-Ewald Advertising as Senior V.P., Managing Director. Accounts included Howard Johnson Hotels and Plaza Hotels, Eastern Airlines and Traveldisc.

I re-entered the private sector in May 1986 as Owner of Travel Industry Marketing Enterprises. Clients included Flyfaire, Eastern Airlines, Econo Lodges, Omni Hotels and Vacation Network.

Next I was President of World ComNet and then opened Michael Sherman Marketing Services (August 1999 to Present) Recent clients include Winegard Company, Antennas Direct, Commdeck, ComponexX, Antenna Products and Tax Solutions.


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How To Spot an Illegitmate IRS Help Service

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When you find yourself in need of IRS help, you need expert advice.  In life problems arise for everyone. The key is how people respond to problems. Seeking expert IRS help is a sign of great maturity. Many people choose to be inactive. Doing nothing is just as it sounds. It does nothing to solve the problems. Expert services can provide IRS help, by developing a plan of attack. Experts who provide IRS help are experts, because they know that no two IRS problems are the same. Every case should be dealt with in a unique fashion.

Owing debt to the IRS is a serious problem. Seeking IRS help is the only viable option, but determining the best IRS help service is critical. The best way to find a reliable source for IRS help is to spot the red flags, which signify a faulty IRS help service. For example, when you call an IRS help provider, you will speak to a customer service team. If they shower you with information on how easy, you will erase your IRS debt. They are not a reliable team. A credible IRS help service will simply point you in the direction of a certified attorney, who will research your individual case. They will then lay out the best possible path, for IRS help.

The best source for IRS help cannot give you a price quote for their services until they meet with you. As discussed earlier in the article, no two IRS help cases are the same. You should get what you pay for, not an estimate based on a different case.  If an IRS help company promises you a settlement, they are illegitimate. Although, quality companies will do their best to attain a settlement, they are extremely rare. A settlement isn’t something, which can be relied upon.

The best IRS help services are real. In other words, they will give you real responses and work towards real results. The IRS is very real, and the company you trust, for IRS help, should be just as legitimate. With a real IRS help team on your side, you can rest assure that the proper steps are being taken on the path to financial freedom.

I enjoy writing informative articles.


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IRS Debt: Tips for Working with the Internal Revenue Service

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IRS debt can present serious financial consequences. The Internal Revenue Service charges taxpayers penalties, interest and late fees which can more than double the amount owned. People who neglect submitting annual tax returns or fail to pay outstanding taxes can be charged with tax evasion. Anyone who owes money to the government should become proactive to rectify the situation.

Solutions exist to clear IRS debt. The Internal Revenue Service will usually work with taxpayers who seek help to develop a payment plan. In some instances, the IRS will discharge a percentage of back taxes. Taxpayers who ignore IRS tax collection letters are setting their self up for unnecessary financial hardship.

The first step to resolving tax problems involves contacting the IRS taxpayer assistance center. Offices are open between the hours of 7 a.m. to 10 p.m., Monday through Friday. Individual taxpayers should call 1.800.829.1040, while business owners and self-employed taxpayers should call 1.800.829.4933.

The Internal Revenue Service allows taxpayers owing less than ,000 to establish an IRS tax payment plan online. Taxpayers must first submit Form 9465 taxpayer installment agreement request to obtain approval.

Once IRS approval is obtained, taxpayers elect their payment option. Options include: paying taxes in full, via monthly installments, or establishing a short term extension which allows tax debt to be paid in full within 90 days.

Currently, a 5 user fee is assessed to establish tax payment plans. The IRS reduces this fee to when taxpayers setup a direct deposit account.

The IRS does not grant tax payment plans until all past due tax returns have been presented. The Internal Revenue Service charges taxpayers a failure-to-file penalty of 5-percent for every month tax returns are delinquent. Maximum penalties are limited to 25-percent.

When taxpayers file returns but fail to pay taxes, the IRS charges a monthly failure-to-pay penalty of 1/2-percent. This penalty is from the original filing date and is assessed until taxes are fully paid.

Taxpayers with IRS debt of ,000 or more should consult with a tax attorney to determine if they qualify for a partial payment installment agreement. Taxpayers must submit all past due returns prior to requesting an installment plan. The IRS requires taxpayers to submit monthly installments until the agreed upon tax amount is paid. Once the agreement is fulfilled, the IRS forgives remaining back taxes.

When taxpayers are financially incapable of repaying tax debt in full, they can request an Offer in Compromise agreement. Using this tax relief option, the IRS accepts less than the full amount of taxes owed.

Offer in compromise is usually the last option available to distressed taxpayers. The Internal Revenue Service only enters into compromise offers when there is little change of collecting the full amount owed. Taxpayers who obtain offers in compromise submit monthly payments until the contractual agreement is fulfilled and agree to let the IRS keep future tax refunds which are credited to back taxes.

Borrowers who fell prey to foreclosure might qualify for tax relief under the Mortgage Forgiveness Debt Relief Act. Taxpayers can only claim debt forgiven through foreclosure or mortgage refinance of their principal residence.

Taxpayers who filed personal or business bankruptcy may qualify for tax relief under IRS 908 bankruptcy tax codes. Debt cancelled through bankruptcy is a complex matter which should be handled by a tax lawyer or CPA.

While IRS debt can be overwhelming, solutions exist to solve the problem. Taxpayers can locate payment options and review frequently asked tax questions at IRS.gov.

Author and real estate investor, Simon Volkov, has published numerous IRS debt strategies, foreclosure prevention, personal bankruptcy and personal finance articles. He strives to provide current information and resources to help taxpayers make informed financial decisions. If you are facing foreclosure, bankruptcy or tax problems visit www.SimonVolkov.com to learn about available options.


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Welcome to the Tax Relief Center Many people experience tax problems for a variety of reasons, often beyond their control. The good news is, the Tax Relief Center makes it easy for you to be connected to tax relief professionals serving your area of need. Whether you are dealing with unpaid back taxes, wage garnishments, bank levies, tax liens, or more – we are ready to connect you to much needed tax relief. Know Your Legal Rights and Options You don’t have to face the IRS alone. We believe you deserve to know your legal rights and the tax relief options available to you! Experienced and successful tax relief professionals are ready to help you successfully resolve your tax debt with the IRS in a stress-free way that allows you to stop worrying – and possibly save tens of thousands of dollars or more. Get Tax Relief Now To see what tax relief can do for you, take a moment to answer a few simple questions, and you’ll be provided with a free tax relief consultation at absolutely no obligation.
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Tax Help, Tax Relief, The best Tax Service in Pleasant Hill CA

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Title: Easy Tax Prep for Small Businesses

Tax Help and Tax Relief are not as hard to find as you thing. Finding a reputable tax service is key to a stress free tax filing!

Does the thought of preparing a tax return for your small business make you nervous? Does inspiration fail you while you wait until the last minute? This small business guide to tax help deductions can help prevent procrastination until the last minute.

Clear Your Calendar: We see people postpone things because they do not have sufficient time. They do not make a schedule and follow it. It may be the preparing of tax filing papers or searching for tax help or tax relief.
Get tax help by using a tax services preparer. If the work involved in filing your taxes seems overwhelming, you may want to consider hiring a tax help preparer. They can assist you in organizing your specific business concerns, making April taxes seems less daunting.

Rewards can be a great motivator for a job well done. Choose something such as a family getaway or a day at the spa to increase your motivation to start on your tax filing.

Use tax help software. Computer software helps automate some of the more routine and tedious aspects of tax help preparation. There is a variety of programs available, most of which would have all the forms available that you need to prepare your tax relief returns.

Locate a tax services professional. Use a tax relief accountant to help combat the frustration you may feel as your business grows. A growing business has increased revenue which results in more complex accounting practices.Sometimes expensive mistakes are made. A tax relief service can help you avoid these costly errors. They can also give you tips on managing cash and valuable tax filing tips.

Pay Yourself First: How valuable are YOU to the company? To determine your hourly pay, add your profits for the fiscal year and divide by hours you worked. Your tax help preparer can help you there. Next, calculate your tax refund divided by the hours required to complete the return. If your hourly pay matches or is greater than this amount, then you should have plenty of motivation to begin tax return preparations.

Seek an Extension: The majority of small business owners have little free time. Procrastinating on your taxes may result in feeling more pressured and add no overall time for the business. Evaluate the benefit of a tax filing time extension request with the IRS.

Enroll in a tax relief preparation course. If you don’t know precisely what to do, you may put off filing. You can gain the necessary information and bolster your self-confidence by taking a one-day preparation class designed for small business owners. Such tax help classes or tax services workshops, given via the internet, are provided at no charge by the Internal Revenue Service and certain affiliated organizations. They cover such areas as revenues, expenses, e-filing, record keeping, employment taxes and tax relief.

Is this the time to take on a Chief Financial Officer? It could be, if your firm needs more than an accountant’s expertise to cope with its financial matters. How do you really know if you need someone to fill this position? Consider whether you are always convening the management team whenever there are financial decisions to be made. You certainly could need a CFO, on either a part-time or full-time basis, if you are planning to launch an IPO or if you need to obtain a significant infusion of capital.

Progress Gradually: Think back on when you first created the business. You might never have gone through with this enterprise if you had known then how much you had to do to get underway. Take baby steps. Open with a simple chore like making a useful set of rolodex cards and go on from there.
Nobody really enjoys doing taxes, but it’s much more daunting when you put it off rather than simply getting it out of the way. Avoid the guilt, get going, and see a tax services professional then see how much better you feel when the deadline rolls around.

Ron has been in public accounting since 1984 and helped establish Low Accountancy Corporation in 1988. He specializes in business, personal and tax planning. Ron leverages tax strategies to promote business and personal tax planning to help his clients achieve their goals. Ron graduated from Chico State University in 1980 with a degree in Accounting and received an MBA in Taxation from Golden Gate University in 1981.
For more information you can call Ron directly at 925-283-0281

The full report can be seen at: http://www.siteproweb.com/_u/document/35646_4_how_to_interview_an_accountant.pdf

Or you can check out our short video at:
http://taxpreparerpleasanthill.com/


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Debt Settlement Service of Tax Settlement Net Branch ? Why More Feasible Than Bankruptcy?

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Tax settlement net branch is an online shop providing twenty four hours services in the present economic arena of taxation. Tax settlement net branch have many positives like no start up fees, long term bond, mutual trust and helps customer to open an online communication in the present cut throat market competition enabling the businessman to apply skills and get success by searching and enrolling suitable clients into the services of tax settlement affiliates.

Tax settlement net branch offers various services like debt management, debt settlement, bankruptcy etc. and provide desired services of his needs. When the client’s debt rises more than the value of his property then tax settlement net branch services steps into the absolute need. Therefore, the debt settlement services represented by the tax settlement net branch have become the most viable, least precarious and catching hold the market.

Debt settlement is preferable over bankruptcy because it has become time savy, relatively fast method with guaranteed results for releasing the liability. A few years back the situation was more favorable for bankruptcy because debtor had no money to pay off the liability. It shifted on the financial institutions and the debtor was no more liable to pay anything and the time used in the process was very less. But, after the recent amendments, this procedure has become bit rigid and several tests are being conducted to get through the huge wall of processes in short span of time. This change has been taken place due to less availability of the frequent cases of bankruptcy. Therefore, financial institutions are making their own policies for the payment of credit due to huge losses. Due to this, the uncertainty of bankruptcy service has been properly taken up by the debt settlement service of tax settlement net branch.

So, for availing better services, it is appropriate for the customer to contact a suitable tax settlement net branch and soon after that, the liability of the client is shifted on the shoulders of tax settlement affiliates which in turn provide a definite and quick result.

If you are interested to know something more on Tax Settlement Affiliate and other details, you are welcome to the Tax Settlement net branch site.


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Flahive Law Corporation Launches Nationwide Irs Tax Relief Assistance Service

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The prestigious law firm of Flahive Law Corporation has expanded its services to help the millions of taxpayers that owe money to the IRS.

Flahive Law Corporation has helped thousands of people over the years with various debt related matters. It has began offering its services to the millions of Americans that are struggling with owing money the IRS.

Its attorneys have over 35 years of experience in helping taxpayers that may have wage garnishments or bank levies. The firm can also help taxpayers file Offers in Compromise and establish Installment Agreements.

Most of the large tax preparation companies such as HR Block, Jackson Hewitt, and Liberty Tax Services do not help taxpayers when they owe money to the IRS. This is where Flahive Law Corporation can help.

Flahive Law Corporation has discounted it’s legal fees substantially for IRS tax relief help through January 2010.

Greg Flahive states, “The American taxpayer is facing a difficult time right now by the collection efforts of the IRS. That is why we have discounted our fees so everyone can afford to hire us.”

The firm offers IRS tax relief such as offer In compromise, wage garnishment release help, and installment agreement assistance. So if you have visited IRS.gov and cannot seem to find a solution visit http://www.Flahivelawcorporation.com for help.

They can help to substantially reduce a taxpayers IRS back tax debt.
The firm offers a free and confidential tax debt analysis. The firm can be contacted at 877-FLAHIVE. For more information, you can visit http://www.FlahiveLawCorporation.com.

Greg Flahive

Flahive Law Corporation

FlahiveLawCorporation.com

877-FLAHIVE


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Tax Debt Relief Specialist – Specialized Service For You

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The state of owing money to the IRS is one of the toughest financial issues around.

Unlike owing a debt to another citizen, failure to repay tax debt on time or blatant disregard for tax debt payments can lead to actual imprisonment.

Aurora Lillo Editor of the “Best Debt Relief Programs” website — http://www.BestDebtReliefPrograms.net — pointed out;

 

“…It is talked about on the news all the time. Generally, you only hear about celebrities going to jail for tax dodging but average citizens are charged with failure to pay taxes as well. However, there are options available for an individual with a lot of tax debt…”

The best of these debt relief options will involve contacting a tax debt relief specialist. These individuals or companies provide specialized service for you. This service can vary wildly. However, it generally includes negotiation with the IRS in regards to the debt, settlement, and repayment plans. Sometimes these tax relief specialists will council an individual to take out a debt consolidation loan or a similar financial move in order to pay off extensive tax debts. This will remove the yoke of possible jail time from the individual in its entirety and allow them some breathing room to discuss and act upon further options.

“…Being indebted to the IRS is not a laughing matter. Even civilian debts are a cause for concerns. However, the fact that the US government has its eye on the individual for a time is a cause for stress and worry. The longer tax debts go unpaid or need to be paid upon the more likely the IRS agents involved might be to actually look into that individual’s records and find something else to try and make them pay…” added A. Lillo.

Further Information about the best debt relief programs and debt settlement services available By Visiting; http://www.BestDebtReliefPrograms.net

Aurora Lillo runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.


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