If a person is the subject of a tax audit or has a delinquency with the IRS, they may still file a tax debt with H&R Block to save money on their taxes. Because the IRS is the taxing authority, H&R Block can determine what a debt or penalty is owed, if it is over a certain dollar amount. Depending on the IRS response, H&R Block will charge the customer either a flat rate fee for each debt, a one-time processing fee, or an hourly fee. In most cases, it is more cost-effective to pay H&R Block directly for each debt the IRS is assessing rather than directly with the IRS. However, if the customer has other questions and/or the customer has already filed an appeal with the IRS and the debt is owed to the IRS from the original filing, then the customer may need to file a second appeal.
H&R Block may also process delinquent income taxes, sales taxes, and Medicare taxes and file an account with the appropriate taxing authority, and process any resulting appeals. They may even help prepare a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
In 2006, H&R Block filed a claim for $2.7 billion in federal income tax refunds, the most ever claimed by the company, and the largest refund check given by the IRS in that year. The income tax refund had been due to the company’s customers, but had never been claimed, so the IRS paid it. A total of $1.4 billion was given out to 1.8 million customers, with the most significant recipients being from California and New York.
In 2012, H&R Block filed claims for $9.3 billion in federal income tax refunds, making it the fourth largest tax refund claimant. Its customers owed back taxes totaling $3.7 billion.
H&R Block also offers debt settlement to those with consumer debt problems. They will negotiate with a consumer’s creditors on the consumer’s behalf and in certain cases will help them write a personal plan. The debt settlement program is usually used to help consumers to reduce their debt loads and make them more manageable.
Tax return preparation software
In 2002, H&R Block was the developer of TaxSlayer’s Complete Software Kit for small business taxes, developed with the help of tax expert Dave Thomas. At the time, only a handful of H&R Block customers used their online e-filing service, as it had only been offered in limited markets for a few years. However, the program was met with much success, and in 2004 it was introduced for use in all H&R Block stores.
Since then, the company’s TaxSlayer brand has become widely used throughout the United States. In 2008, the company introduced TaxSlayer Tax Software, which it claims is “the only online tax software in the industry that’s been tested and approved by the IRS.” In 2009, the company launched a redesigned version of the software for Windows users called the TaxSlayer Personal Version, or T-PV. H&R Block claims that “T-PV allows users to complete their taxes easily and quickly, using an electronic filing system for faster service,” as compared to other tax preparation software.
In 2010, the TaxSlayer brand was introduced as the developer of the tax software for the iPad and iPhone. The free application was created to provide users with access to tax preparation and e-filing services.
In November 2014, the TaxSlayer brand launched an e-filing service that allows users to electronically file and e-file taxes to the IRS in the United States. The service is also available in Canada, Australia, China and New Zealand.
On 7 November 2017 it was announced that the tax department will begin working with a local law firm to provide debt-settlement services to business facing back-tax debts.
On 20 January 2018, the Australian Government announced a debt-to-tax ratio target of 4:1. This ratio target is based on the Australian Tax Office (ATO) reporting their business taxes as revenue and not as a liability, so that they can focus on their primary objective of raising income-tax revenue. If the ATO were to only report their tax liabilities to the Australian Government, this ratio would be 15:1. This means the ratio of federal government debt to tax revenue (tax liability) is to be reduced from the current ratio of around 2.5:1 to around 4:1.
The target will be reached in 2018.
The Australian Taxation Office (ATO) started working with tax practitioners to assess the compliance of tax payers in regard to their taxable income.
The ATO is undertaking research to identify which categories of taxpayers will benefit most from its new debt-settlement scheme.
Some of these categories of taxpayers are expected to benefit from the scheme include:
Individuals who have failed to meet their tax obligations through non-compliance.
Businesses who have failed to meet their tax obligations as a result of being audited.
Small business owners who have defaulted on their tax liabilities.
Individual taxpayers who have defaulted on their tax liabilities.
Individual taxpayers whose tax affairs are in dispute.
Individual taxpayers who are not able to submit their return on time.
Individual taxpayers who were self-employed during a period when the ATO’s business-tax returns records were not completed.
The current tax debt settlement procedure
The current tax debt settlement procedure is a two-step process:
The first step is collection and the second step is settlement.
The ATO considers all cases, including individual and corporate tax cases, to have two priorities:
First, collection as a priority.
Second, minimise penalties as a priority.
The ATO also considers collection and settlement to be equally important.
In its settlement strategy, the ATO places the greatest weight on settling cases of lower complexity and higher potential revenue.
In the second step of the process, cases are first prioritised according to five areas of need:
Non-compliance cases and cases where taxpayers are under-reporting their taxable income.
Disputes with the ATO, where taxpayers are disputing the ATO’s business-tax return.
For more details about preparing for an IRS audit, call (888)489-4889 for a free consultation.