Author Archives: compacct

IRS Penalty Abatements

Ask Your Tax Advisor First!

There is a lot of talk about settling with the IRS for pennies on the dollar and making penalties go away these days.  You hear a lot of ads on the radio for companies that will handle this for you, normally at a very steep price.   You may have even had these companies calling you if you owe money because at some point the IRS will put a lien against your assets to protect the government’s interest.

What should you do if you are unfortunate enough to be in this position?  First of all, don’t speak to a representative of one of these companies until you talk to your tax advisor.  If you use a tax preparer and not a licensed tax professional they may not be able to help you.  Speak with your advisor and see what they have to say about your issue to see if they can help you out first.  There will be a fee for their help but they may better be able to serve you and give you a more realistic hope for an outcome without the promise of you only paying pennies on the dollar so they can hit you with a large fee.

How IRS Collections Work

First, you should understand how the IRS works as far as collections go.  If you owe taxes and have the ability to pay it, now, or over time, they expect full payment.  They also expect to be paid interest on the late payment.  They will also apply a penalty to the late payment.  If you realistically have the ability to pay then you should look at trying to have the penalty abated because an Offer in Compromise more than likely isn’t for you but more about that later.  In order for the IRS to abate your penalty, you need to establish reasonable cause for why your taxes were underpaid or paid late.  Reasonable causes are just that, “Reasonable.” It could be you were in the hospital at the time a payment needed to be made and couldn’t do it, an emergency out of town could suffice,  you made your best effort to pay what you owed but an event occurred that you couldn’t plan for that caused you to be late or underpaid.  Based on the fact that it is termed “Reasonable Cause”, I think most prudent taxpayers would know when their situation fell under that umbrella.  If you aren’t sure but think you have reasonable cause, you should still try to get your penalties abated.  The worst that could happen is the IRS says “No.”

Don’t bother trying to make an offer, not an Offer in Compromise but an offer.  People think that if they go to the IRS and tell them they will write them a check for $10,000 on the spot to cover their $18,000 bill including penalty and interest, that the collection agent would have the authority to make that deal.  With the IRS it doesn’t work that way.  If they did that, there would be a line a mile long with people wanting in on that deal.  The IRS can’t set a precedent of wiping out someone’s taxes because they “like” them or they gave them a deal they couldn’t pass up.   Once they do that for one person that is in play for anybody.  The IRS needs your “Reasonable Cause” spelled out in writing so they have something to hang their hat on as to why they allowed the abatement for you and at the same time they have spelled out in writing why they may have disallowed a request from someone else.

Request of Penalty Abatement

Send the IRS a letter in response to their notice detailing the penalties.  If you can pay the tax and interest, send a check for that along with the letter.  Identify yourself in the heading of the letter along with the tax form and period in question and in the subject matter put “Request of Penalty Abatement”.   Then, explain what happened.  Let them know this was a one-time occurrence and that you have taken steps, along with explaining those steps, to ensure that this situation never happens again.  At the end, it helps if you attest that “under penalties of perjury, I declare that I examined the facts stated in this letter and, to the best of my knowledge and belief, they are true, correct and complete” and be sure that they are.

Setup IRS Payment Plan

If you have a track record of this happening again and again,  the IRS is just going to look at you like a repeat offender and your chances of qualifying under Reasonable Cause will be slim.   Your best bet in this situation, if you can’t pay your debt in full, would be to log into the IRS website and set up a payment plan.  To do this go to and you can set up a monthly payment online.  You don’t even have to speak with an agent.

You can put this letter together on your own or consult with a tax pro  who can guide you in the right direction.  Most tax professionals have dealt with these types of situations and know what to say that works and what doesn’t work.

I’ll talk about Offers in Compromise in my next post.

Have more questions? Please contact us to set up a personal consultation.

Michigan Tax Filing Deadlines

Did you miss the Tax Deadline April 2016?

Although midnight on April 18th is the day you or your accountant should have submitted your 2015 Tax returns into the government, you still have options.

If you missed the date to file by April 18th the government allowed you to file an extension.  The state extension had to be filed by April 18, 2016 giving you until October 17, 2016 to file your returns.  This means you MUST have your 2015 taxes filed by October 17, 2016.

If you missed the April 18th deadline to file your extension you can still file your tax return past the deadline. After your tax return is accepted by the IRS you can file a tax amendment to make changes, there is no deadline for this but there is a three year limit to claim any refunds.

If you missed the deadline and taxes are owed it can be costly, resulting in penalties and interest charges.  If you filed an extension, the IRS reduces the penalty on any unpaid balance due from 5% down to ½% per month through October 17th.   Unfortunately Michigan does not do this, there penalty stays at 5% per month whether you file an extension or not.  So why file a Michigan extension?  They are essentially just to send a payment in if you feel you are going to owe money when your return is completed.

If you expect a refund and do not file on time, there is no tax penalty but it could result in you losing your refund.  Your federal tax return must be filed within three years of the due date and the Michigan return must be filed within four years of the due date.

Here are the main points to remember and to get more information on your personal taxes or business specifically contact us

  • There is no deadline for past due previous year tax returns
  • In order to claim a tax refund, you must file a tax return within 3 years of the original due date
  • If you wait past 3 years your tax refund is forfeited
  • If your taxes are past due and you owe for previous tax years you will be charged late filing fees and late payment penalties, plus interest

If you have more questions about Tax Deadlines please Contact our Accounting and Tax Experts at Comprehensive Accounting at 248-476-7447, located at 33930W. 8 Mile Rd. Suite 1B Farmington Hills, MI 48335.

Personal Property Tax Exemption Eligibility

Tax Exemption of Personal Property Taxes for Small Businesses

Your company could be eligible for an exemption of personal property tax for 2015. Because of the legislation for personal property tax, there may be changes in the way you file your annual personal property taxes this year.

For your business to be eligible and qualify for the exemption of personal property tax you must meet these following conditions;

  • True cash threshold is less than $80,000. This includes industrial and commercial personal property that is;
    • owned or leased by the entity claiming the exemption
    • possesses the owner or related entity claiming exemption – includes the value of leased equipment.
  • The Personal Property Tax Affidavit to Claim Small Business Tax Exemption form must be filled out.
  • Personal Property has to be classified as industrial or commercial as in MCL 211.34c
  • The personal property is not leased or used by the person who it was previously owned by or a person who controls it or is controlled by.

For your business to be able to claim the exemption, the owner must file the affidavit annually NO LATER THAN FEBRUARY 10TH each year.

The affidavit must be filed every year or you get a tax assessed and if they are filed a day late you get the full tax assessed. If the affidavit is filed the owner does not have to file the personal property tax statement in that tax year. Contact your Tax Filing Experts at Comprehensive for more information on this tax exempt affidavit.


4 Things You Need To Know About ACA in 2015

The end of the year is quickly approaching and bringing with it the end of the Affordable Care Act’s grace period for businesses. The Affordable Care Act or Obamacare will be implemented for businesses in stages over the course of the next two years based on the size of the business.

1) Businesses with 100 or more Employees

After the beginning of 2015, businesses that have 100 or more employees will be required by law to offer health insurance to at least 70% of their employees. In 2016, businesses must cover 95% percent of their workforce.

2) Medium Sized Companies

According to the Affordable Care Act, companies with 50 to 99 full-time employees must offer insurance in 2016 to 95% of their employees.

3) Smaller Businesses

Smaller companies with under 50 employees are exempt from coverage requirements.

4) Penalties for non-compliance 

The company will be fined $2,000 dollars for each employee after the first 80 employees for the first year. For the second year in 2016, the company will be fined $2,000 dollars for each employee after the first 30 employees.

Comprehensive Accounting Services has been servicing the Metro Detroit for over 38 years providing tax assistance to businesses.

Affordable Care Act Deadline To Notify Your Employees: October 1st 2013


Also called Obamacare, the Affordable Care is in effect and will have a different impact on employers and individuals. It is extremely important for employers to be aware of what their choices are and what they need to do legally. As an employer you should ask yourself;

  1.  Should I offer healthcare coverage?
  2. How much can I afford to Spend?
  3. What strategy will I choose?
  4. Will the law change before I have to take action?

The employer mandate has been delayed until 2015, but the individual mandate is still in full effect for January 1st, 2014. Employers must still deliver notices to their employees by October 1st, 2013, you can find forms outlined for you by the government to give your employees, there are two forms for companies that Will offer a health plan and Will NOT offer a health plan.

This notice cannot be e-mail or delivered electronically. It is highly suggested you have your employees sign saying they received the notice and if sent through mail, send with signature required, due to facing fines if an employee is not informed and/or not being honest about being notified. Comprehensive Accounting is here to help you with these notices for your employees or you as an individual, please Contact Us so we can guide you in the right direction.