Taxpayers should note that all communications throughout the tax preparation process with an Enrolled Agent are confidential, but not privileged, and may be disclosed if a summons is issued. The working papers for an engagement are the property of the Enrolled Agent and constitute confidential information. Any requests for access to these materials must be discussed with the client before making them available to other parties. more... Limited privilege may be available during the representation process under IRC §7525. Clients may advise an Enrolled Agent to assert this privilege in non-criminal tax matters involving the Internal Revenue Service or federal district courts, but should be aware that disclosure of information considered during the tax preparation process is not covered under the privilege—only tax advice communications are covered. Clients should immediately engage legal counsel if they have any concerns regarding possible criminal matters. less...
An Enrolled Agent does not disclose nonpublic personal information about current or former clients to anyone unless instructed in writing to do so by a client. Access to nonpublic personal information is restricted to those professionals who may assist in the preparation of a client's return or who provide tax advisory and bookkeeping services. Monica Haven, E.A. has instituted all reasonable measures, including physical, electronic, and procedural safeguards to protect her clients' nonpublic personal information. Clients, however, assume the risk of loss of confidentiality and/or tax documents during unencoded electronic transmission via the internet or mailing via U.S. Post Office and third party delivery services.
Use of Information
Unless authorized by law, Monica Haven, E.A. cannot use any tax return information for purposes other than the preparation and filing of her client's return, without express written permission from the client. However, in addition to tax preparation services, Monica Haven also offers year-round financial consultation and tax planning services. These services will be happily provided upon request and with the client's written consent.
Individual and business taxpayers may file requests with federal and state tax authorities to extend the deadline for filing but should note that such extensions merely extend the deadline for submitting tax returns and all associated paperwork. Filing extensions does not extend the time for payment; therefore, interest and penalties will continue to accrue on any unpaid balances. Taxpayers are advised to contact the tax authorities to establish an installment plan or make other acceptable arrangements for payment in the event that any balance due cannot be paid in full in a timely fashion.
Taxpayers are required to maintain the necessary documents and records to support any deductions claimed on their tax returns. Federal and state laws provide for the imposition of penalties in the event of substantial understatement of a tax liability. The tax authorities regularly question whether any cash or bartering transactions have transpired and closely scrutinize expenditures, including but not limited to travel and entertainment expenses, business use of automobile and cell phones, as well as charitable donations. Tax practitioners are required to provide full disclosure to tax authorities should estimates or reconstructed data be entered on the return.
Estimated Tax Payments
Aware of the filing deadlines, most taxpayers comply, but are then occasionally surprised to receive subsequent invoices from various tax authorities for late payment. Separate penalties apply for late filing and late payment. To avoid the latter, the tax liability should be pre-paid by establishing proper wage withholdings or making timely estimated tax payments each quarter. Individual taxpayers may avoid the Late Payment (or underpayment) Penalty under the federal Safe Harbor Rule: more...
States have distinct rules. In California, for example, the Safe Harbor Rule requires that:
NOTE: California's high-income taxpayers with earnings in excess of $1 million must pre-pay at least 90% of their current year liability and may not rely on the prior-year liability to avoid underpayment penalties. Additionally, California now requires taxpayers who owe more that $20,000 per quarter to submit their payments electronically. less...
Taxpayers may be subject to civil and criminal penalties for a variety of transgressions. Below is a partial list of the most commonly encountered federal penalties – Note that state tax authorities may independently assess separate (but similar) penalties as well.
Other Tax Liabilities
Please note that this website addresses primarily federal income tax issues with some reference made to state income tax obligations, but that taxpayers may have many more tax reporting and payment responsibilities. Additional obligations may include but are not limited to local income tax, Business Tax, Property Tax, Sales and Use Tax, Payroll Tax, estate, gift and inheritance taxes, Generation-skipping Tax, Alternative Minimum Tax, excise and transfer taxes, as well as foreign taxes.
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This website contains links to other sites. When you link to another site, you are no longer on our site and are subject to the privacy policies and other practices of the new site. We have no control over and are not responsible for the information, practices or content of these or any other sites and your participation in promotions or services of any kind with any third party found on or though this site, or your correspondence or business dealings of any kind with any third party found on or through this site, including without limitation, payments, warranties, or representations associated with such dealings, are solely between you and that third party.
The information provided by third party calculators linked to this site is for illustrative purposes only. Any default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial or tax professional prior to relying on the results since accuracy is not guaranteed.
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Federal and state tax authorities may also assess interest in addition to penalties. While penalties may–under certain circumstances–be waived for reasonable cause, interest will generally not be abated. The IRS, for instance will eliminate the interest charge only if:
Useful Links are available under Tax Info.
Disclaimer: The information contained herein should not be used in any actual transaction without the advice and guidance of a professional tax advisor who is familiar with all of the relevant facts of your personal situation since the information is general in nature and not intended as legal, tax or investment advice but is merely educational. Furthermore, the information contained herein may not be applicable to or suitable for an individual's specific circumstances or needs and may require consideration of other matters. To ensure compliance with certain U.S. Treasury Regulations note that, unless expressly indicated otherwise, any advice in this website relating to any federal or state tax issue is not intended or written to be used and cannot be used by any person for the purpose of avoiding any federal tax penalties. Monica Haven assumes no obligation to inform any person of any changes in the tax law or other factors that could affect the information contained herein. And Monica Haven does not offer legal advice or services in any jurisdiction in which she is not licensed; nothing herein should be interpreted as the creation of a fiduciary or client/attorney relationship. This website is not intended for use by viewers in any state in which the site may fail to comply with the regulatory and ethical restrictions imposed by that state.