1. Solving a tax problem Presenter Date
Today we are going to talk about a topic that has been listed as “one of the most stressful situations that you can encounter”: having a tax problem.
Tax problems are frustrating and can be expensive, but with an expert, you can solve them and put them behind you.

2. About me Name Years experience Certifications
H&R Block tax professionals complete extensive training and have systems to address taxpayer problems with the IRS and State Department’s of Revenue.
My name is ________.
I have experience in helping clients with tax problems for __ years.
Many of my colleagues at HRB do also; our company has been committed not just to the preparation of tax returns, but to making sure our clients are in good standing with the IRS and State Departments of Revenue.

3. Did you know…? “We look at your life through tax…
H&R Block has served more than 400 million clients since 1955.
H&R Block is the world’s largest consumer tax service provider.
Tax services are provided by over 80,000 tax professionals in over 13,000 offices.
We have over 8,000 enrolled agents, CPAs, and attorneys who are enrolled to practice before the IRS to solve tax problems.
We are open year-round to help with tax problems.
In our network, we have thousands of tax professionals who are experts in dealing with tax problems. We also have over 8,000 tax professionals who are enrolled to practice before the IRS, that is, to act as you to solve your tax problem with the IRS and States.
This is a year-round service that we offer here in _____[city]_____.
“We look at your life through tax…
and find ways to help.”

4. What we’ll discuss today
The increase in IRS and State audits and notices
Common tax problems
Potential impacts of a tax problem
The steps to solving a tax problem
Next steps
I’m going to dive deeper into solving tax problems.
First, I want to show you how common tax problems or issues with the IRS or State are…
I also want to address what types of problems commonly seen, and what their impact is.
But most importantly, I’m going to cover what can you do solve these problems.
And finally, I want to give you, or maybe someone you know, an actionable next step to get started.

5. Interacting with the IRS “after you file”
Tax problems are more common than you think…
43% of taxpayers have to interact with the IRS outside of filing a tax return.
1 out of 8 taxpayers has a current tax problem.
Many taxpayers see a notice/letter from the IRS that require help.
You may not currently have a tax problem, which is great news! But you may know someone who does because tax problems are more common than you know.
Almost half of us have to deal with the IRS each year outside of filing. About 10% get an IRS notice. When you add State problems into the mix, about 1 in 8 taxpayers have a tax problem. That’s about 20 million taxpayers a year!
Now many of you do not speak “IRS”; it is a special language and only a few of us have bothered to take the “Rosetta Stone” training, so many of you need to get help from someone who can navigate the IRS, explain options for you, and ensure you get the best outcome.

6. Today’s reality: The IRS is asking more questions…
In 2001, the IRS sent 30 million notices.
By 2016, the IRS sent
178 million notices annually.
Due to facing budget cuts, the IRS now has to do more with less so they have improved their technology to enable them to question the accuracy of many more returns.
As a result, we have seen the number of IRS notices increase six-fold in the last 15 years while the number of taxpayers has only increased by 15%.
This IRS strategy is creating an environment where many people now have a tax issue. When you add situations like complying with the Affordable Care Act and problems with tax identity theft, it shows you why 43% of taxpayers have to deal with the IRS outside of filing a return.
2016: Better systems and technology at the IRS.

7. Common tax problems you may find yourself in…
“I got a letter or phone call from the IRS – do I have a problem?”
“I am being audited.”
“I received a notice saying my return was not correct.”
“I think someone filed a tax return under my SSN.”
“I owe taxes to the IRS and cannot pay immediately.”
“I did not file a tax return a few years ago.”
“I got a penalty from the IRS.”
There are some very typical situations we may all find ourselves in:
Receiving a tax notice and asking “do I have a tax problem?”
Getting an audit notice; about 1.4 million people a year get these.
Getting your return questioned by the IRS outside of an audit. About 5-6 million taxpayers have this predicament each year and have to sort it out with the IRS.
Tax identity theft: having your refund stolen or your SSN used by someone else to gain employment. Over 3 million people have experienced this issue with the IRS and even more with States.
19 million taxpayers owe the IRS and cannot pay, mostly due to hardship situations. How to they get in good standing with the IRS?
Maybe you didn’t file one of the 7.5 million and growing tax returns each year the IRS is looking for. How do you handle that and get back in good standing with the IRS?
Or the most common situation: an IRS penalty. Penalties affect 27 million taxpayers each year, and you should ask do you owe it? Is there any relief you can get? Don’t ask the IRS, because generally they will say you owe it. So how do you deal with this issue?

8. Three areas of tax problems
Description
IRS interaction
Underreporting your taxes
Tax return understates income or overstates deductions or credits
Audit or underreporter notice
Underpayment of taxes owed
Not paying all required taxes, interest, and penalties owed
Collection notice, notice of federal tax lien, levy, late payment penalty notices
Nonfiling
Failing to file a required tax return
Delinquent return inquiry, late filing penalty notices
Basically, most major tax problems can be summarized into three categories:
Underreporting your taxes: This is the IRS challenge to your tax return; either an audit or “CP2000” notice where the IRS states you did not report all of your income. Did you know that 26 million taxpayers each year do not report all of their W-2s and 1099s?! I can check if you did report all of your income, and help you avoid some expensive IRS penalties by filing an amended return for you before the IRS selects you for audit or CP2000.
Underpayment is the second category. As mentioned, 19 million taxpayers cannot pay the amount they owe and need an alternative for the IRS. The good news is the IRS has many alternatives to full payment. The bad news is that not getting into the arrangement will eventually trigger the IRS to file liens and issue garnishments to collect the tax.
Nonfiling is a serious issue, and filing back-returns is a forensic art. It’s necessary to gather past information statements and documents to file a correct return. And how many back returns are needed? Many times, we get clients that try to file many years of back returns when the IRS usually only requires the past six years. The rules for back filing can get complicated.

9. There are answers and solutions to your problem
Problem area
Answers and solutions
Underreporting
Contesting additional taxes and penalties
Underpayment
Evaluating and securing a payment alternative and seeking penalty relief
Nonfiling
Prepare accurate back tax returns and seeking penalty relief
The good news is that there are options to address each of these categories, and ultimately almost every dispute with the IRS comes with appeal rights. But the answer does not come without action.
You would be surprised with how many people just pay the notice, including the proposed penalties proposed. For matching notices, that is the CP2000s, 37% of taxpayers don’t even address the notice. That’s alarming as most CP2000s are not the correct amount owed by the taxpayer.
So ultimately, these taxpayers pay more taxes and penalties, which they don’t owe.
Answers and solutions start with taking action.
37% of underreporting notices are not responded to by taxpayers.
The result? Payment of additional tax and penalties.

10. Five steps to solving a tax problem
Find an expert in tax problem solving.
Get all the facts and understand your options.
Set out a plan to address the problem.
Follow the advice outlined by the tax pro.
Stay in compliance to avoid future problems.
So if you or someone you know has a tax problem, let me give you five simple steps to solve it tax problem.
Let’s go back to the IRS language: do you speak it? Do you know how to navigate the IRS and understand the options and best practices? Probably not. But that’s why we spend significant time each year training and interacting with the IRS to help taxpayers with problems.
So, the first step may be for you to engage a local tax professional who has expertise in tax problem solving.
The next step is to get all of the relevant facts to understand your options. A tax expert can help you sift through what is important and what’s not, and explain your options and how they work.
Next you can work out a plan to put the problem behind you while working with the tax pro to advise you along the way.
The final step is to make sure the problem stays behind you. The tax expert can help you here. One example is tax identity theft. After you solve your tax IDT, you will want to make sure that it never happens again—trust me. Your tax pro can help you register your identity with the IRS and create a special filing process that will prevent tax IDT in the future.

11. Potential impacts of a tax problem
An audit is not only costly, but it can disrupt your life and be very stressful.
Tax issues can put a burden on your business.
A lien can affect borrowing capability and job qualification.
IRS garnishments and bank levies can reduce your cash flow.
Tax return disputes with the IRS can get worse when not corrected quickly.
Nonfiling can result in serious penalties, and even criminal prosecution.
Penalties can be expensive.
H&R Block tax pros are here and available to help you.
There are many potential negative effects of having a tax problem. Tax problems can be costly, put a burden on you, subject you to harmful liens and levies, and—although rare—can even result in criminal prosecution – especially for nonfiling issues.
But no matter how bad it gets, H&R Block tax professionals are available to help you.
That leaves me with the best advice I can give you…

12. Take the first step… Take action immediately!
Tax problems do not go away; they only get worse.
IRS takes further enforcement actions.
Penalties accrue.
Appeal rights expire.
The best piece of advice I can give you is to not hide under your desk; you need to take action. Delaying or not responding is the worst thing you can do because you will incur the wrath of the IRS and lose many rights as a taxpayer. If you delay or not respond, the IRS will take action to “protect their interest” – that is IRS speak for “you will owe more money.”
At H&R Block, our local tax professionals can provide a free initial look into your situation and provide you options to correct the problem. If you simply have a question outside of filing a return and do not know if you have a problem, we can help there too. If you end up needing services from us, we will let you know exactly how much it costs up-front, and we offer very reasonable pricing to help you with tax problems. We want you to get this behind you and are prepared to help you year-round.

13. Why risk a mistake on your taxes?
Why seek a tax expert…
Between 2001 and 2013, IRS compliance activity increased significantly:
Face-to-face audits by 66%.
Mail audits by 103%.
Unpaid balance investigations by 79%.
Automated underreporter investigations by 272%.
Lien filing and levies issues by 127%.
Taxpayers' appeals cases by 81%.
Accordingly, from 2001 to 2014, the IRS increased the number of notices it sent annually by 570%.
Why risk a mistake on your taxes?

14. Taxes are complicated…
Taxes are complicated and the tax code even more so! Ask yourself:
Are you keeping up with the latest tax law changes?
Are you applying new tax laws correctly and to your advantage?
Are you sure you are getting the most refund possible?
If the IRS calls are you prepared to answer?
If you answered NO to any of these questions,
schedule an appointment TODAY with a tax expert at H&R Block.

15. Questions?
Any questions?

16. Thank you. It may not be you who has the problem; maybe it is a friend, family member, or colleague, but please feel free to send them. I can help. My contact information is…