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Written by: Rita W. Green, University of Memphis

Published: 09 June 2021

 

Tax Day has come and gone, and you think you filed your return in the nick of time. But several weeks later you receive that dreaded letter in the mail from the Internal Revenue Service informing you of missing the deadline and failing to pay your tax bill on time. Your assessed tax penalty, based on what you owe, is $450.

This type of scenario is quite common, since penalties are assessed for over 40 million taxpayers each year, according to the Taxpayer Advocacy Panel’s 2020 report. There are numerous IRS penalties, but the three most common ones are failure to file a return on time, failure to pay the estimated amount owed from the past year and failure to pay after filing.

What many people don’t know is that the IRS offers several ways to reduce late fees and other penalties. Yet only a fraction of those who are eligible take advantage of them.

As a professor of accounting and a consumer advocate, I tend to be concerned when I identify a benefit that has been underutilized. I also serve as a volunteer on the Taxpayer Advocacy Panel, an independent body that aims to help the IRS improve based on outreach and feedback from the general public.

We recently discussed the low utilization of a key penalty relief program, which prompted me to write this article.

Applying for penalty relief

The main form of relief the IRS offers to taxpayers is the first-time penalty abatement policy, which was introduced about two decades ago. It covers penalties related to a failure to file, a failure to pay or a failure to deposit the estimated taxes owed.

This program can lead to a reduction or even removal of a taxpayer’s penalty – though not the tax liability – if you meet certain conditions:

• You didn’t previously have to file a return – because you earned too little money, for example – or you’ve had no penalties for the previous three years.

• You filed all required returns or extensions.

• You paid or arranged to pay any tax due.

It’s also available to taxpayers who live in areas affected by specific disasters for whom the tax deadline has been extended.

If you currently meet the first two requirements, you can still make arrangements to pay the tax you owe and then request the abatement.

In 2019, only 12% of the penalties for failure to file and failure to pay were abated.

The most common reason for the low number of abatements appears to be that many taxpayers who would otherwise qualify for relief aren’t aware this program even exists. Requesting relief is as simple as phoning the IRS and requesting it, or you may ask for it in writing.

Other resources available

In addition to penalty prevention and penalty relief, other resources are available to taxpayers who need help after Tax Day.

The taxpayer advocate service is an independent organization within the IRS, and its local taxpayer advocates provide free help to any taxpayer to provide guidance through the process of resolving tax problems. There’s at least one in every state.

The IRS also supports Low-Income Tax Clinics, which are staffed with attorneys and other professionals to help low-income filers with tax disputes that may require legal intervention. While it can be difficult to reverse penalties or challenge other IRS decisions, taxpayers with legal help stand a much better chance of succeeding with their claims.

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An ounce of penalty prevention

Many people may be familiar with Benjamin Franklin’s assertion that “an ounce of prevention is worth a pound of cure.”

No one enjoys paying taxes, but additional penalties can make a bad situation even worse. The good news is most penalties can be avoided by filing taxes on time and paying any taxes due. If you are unable to pay all of the taxes due right away, you can always establish a payment plan.

So next year, remember there are many resources available to you to make it easier to file on time – free, in most cases – and to avoid penalties. And taxpayer advocates are available to answer any tricky questions.

Rita W. Green, Instructor of Accountancy, University of Memphis

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Written by: Lake County News reports

Published: 08 June 2021

MIDDLETOWN, Calif. — The organizers of Middletown Days have selected an organization that has played an important role in rebuilding the south county in the wake of the Valley fire to be the Middletown Days grand marshal for the 60th annual Middletown Days Parade.

On Friday, May 28, Hope City — a ministry of the faith-based Hope Crisis Response Network — officially finished its work rebuilding homes for Valley fire survivors and hosted an open house to celebrate the occasion.

It’s for all of the work they’ve done for Lake County residents that the group has received the Middletown Days grand marshal honor.

Community members can show their appreciation as Hope City heads up the parade, which begins at 10 a.m. Saturday, June 19.

At the celebration that immediately follows at the Middletown Central Park stage, Hope City members will be presented with a commemorative plaque.

Kevin Cox, chief executive officer and founder of Hope City, got started in disaster recovery with crisis counseling. He quickly realized there were other needs that were not being met.

Cox decided to jump in where they were most needed, rebuilding, and Hope City immediately became a model program with the Federal Emergency Management Agency. Cox also ended up writing many of the disaster materials that FEMA uses today.

To date, Hope City has assisted 26,000 families in getting back into their homes. The organization seeks out grants wherever possible to fund their work.

One of the largest single donations to Hope City for the Valley fire rebuild, $1 million, came from Guenoc developer Yiming Xu in 2017. That donation and the donations from Lake County Rising helped to ensure there were no costs to the homeowners for the work done by Hope City.

Hope City has been working in Paradise, Butte, Mendocino, Sonoma and Shasta, and also helping out in Napa. Currently it is opening a Hope City in Siskiyou County. With 52 wildfires in the last five years it’s becoming harder and harder to find new donors.

Hope City makes it a point to circulate the donations in the same communities in which they are building. It does this by purchasing lumber and building materials locally. The organization also feeds volunteers by shopping locally for groceries.

Hope City has just 12 employees. Cox’s wife, Valarie, is the administrative assistant, handling community outreach, media and grant writing, and is also a disaster case manager.

The organization relies heavily on volunteers from faith based organizations all over North America. The volunteers donate their time, one week at a time, to come and help people “rebuild their homes and their lives.”

Cox makes sure the volunteers have beds, not cots. They make sure to provide good meals and entertainment when the volunteers aren’t working. They have all the materials they need and all the tools are in great working condition.

“The focus is on the families and restoration,” Kevin Cox said.

And, when they take care of the volunteers, productivity goes up in the field.

Before the Valley fire, Cox had been trying to get his wife to move to California, but she didn’t really want to go. She told him, “If God calls, we’ll go.”

Meanwhile, Cox was going through a lot of health problems and thought perhaps he was done in the disaster field. Six weeks later they got the Valley fire call.

Hope City was contacted by churches in Santa Rosa and Cox arrived in Middletown a few days after the Valley fire started.

He eventually worked out a deal with the Middletown Central Park Association. In exchange for allowing the volunteers to utilize the property during the yearslong rebuild, their building (also the site of the old Middletown Senior Center) was torn down and a home base dormitory was built by Hope City.

On Friday, May 28, Hope City turned over the keys just in time for the 60th annual Middletown Days celebration.

While Cox, who grew up in Sonoma, is finding it hard to say goodbye, he is looking forward to getting back to Indiana to see his granddaughter, with whom he and his wife FaceTime daily.

Middletown Central Park Association offered its thanks to Hope City for the difference they’ve made in the lives of Lake County residents over the past five and a half years.

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Written by: Lake County News reports

Published: 08 June 2021

LAKE COUNTY, Calif. — Rep. Mike Thompson (CA-05) announced Monday that his request for $2.28 million for Lake County’s chip seal project to address county roads in Lakeport, Kelseyville, Cobb Mountain and Hidden Valley was included in the infrastructure package that will be marked up later this week by the House Transportation and Infrastructure Committee.

Thompson said this is an important step before a vote on the House floor.

“Lake County roads are a critical part of keeping this rural area connected, yet far too many of them have received a poor rating,” Thompson said Monday. “That’s why I supported a more than $2.28 million request for federal funding for the county’s chip seal project to improve 55 miles of county roads in the Fifth Congressional District. I am glad to see this funding included in the bill today and will work to ensure it’s included in the final legislation.”

Thompson was able to secure $19.03 million in federal funding as part of the Member Designated Project program that was started this Congress.

This includes $742,000 for the San Pablo Avenue Rehabilitation in Pinole in Contra Costa County, $2.28 million for the chip seal program in Lake County, $3 million for the Napa Valley Vine Trail in Napa County, $4 million for the State Route 37/Fairgrounds Drive Interchange project in Solano County, $2 million for the Highway 116/West Cotati Intersection Safety Improvement project in Sonoma County and $7 million for the State Route 37 Corridor Enhancement Program in Sonoma County.

This legislation is being considered in the House Transportation and Infrastructure Committee this week and still needs to be approved by the full House and Senate and signed into law by President Joe Biden.

Thompson’s office said congressional leadership made important changes that allow members of Congress to provide greater input on how funding will be directed to specific state or local governments or eligible nonprofit recipients for Fiscal Year 2022.

Members of Congress are now allowed to submit 10 community funded project requests to the Appropriations Committee.

There are no guarantees that these community funded projects will all be funded, and the projects will be competitively evaluated by the Committee on Appropriations, Thompson’s office reported.

Thompson represents California’s Fifth Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma counties.