Former IRS Revenue Officer

Former IRS Revenue Officer

Michael Raanan, EA

Santa Ana, CA

Male, 35

My tenure with the largest and most powerful collection agency in the world, the IRS, began fresh out of college and with much surprise. Following an extensive interview process and a cross-country flight to the West Coast, I found myself in Los Angeles with the unenviable task of getting delinquent taxpayers back into tax compliance. After approximately 8 years of service, I left, and now find myself (very literally) on the other side of the table helping taxpayers resolve their IRS disputes.

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Last Answer on May 16, 2017

Best Rated

is it true that declaring ANY gambling winnings on your return makes your chance of an audit skyrocket? I won $950 on slots last year, but I didn't declare it because it's a relatively small amount. (Yes, I know it's wrong.)

Asked by JessMilano over 4 years ago

While no one knows exactly what flags an IRS audit, gambling income alone shouldn't usually be cause for concern. Out of the 1,481,966 audits conducted by the IRS in 2012, about 1,122,216 (76%) were completed via correspondence (versus field or in-person audits).

In the case of gambling winnings, the casino will file a copy of Form W-2G with the IRS. If IRS records don't reconcile with income reported on a tax return, a systemic (computer-generated) notice is sent to the taxpayer asking for clarification. 

The IRS has provided this online tool to help determine if you need to claim gambling winnings and if you can deduct gambling losses: http://www.irs.gov/uac/Do-I-Need-To-Claim-My-Gambling-Winnings-and-Can-I-Deduct-My-Gambling-Losses%3F

Related:
1) 6 Ways to Reduce Your Chance of an IRS Audit:
http://www.landmarktaxgroup.com/taxes/6-ways-to-reduce-your-chance-of-an-audit

 

IRS Circular 230 Disclaimer: To ensure compliance with requirements imposed by the Internal Revenue Service, you are informed that nothing in this post is intended to be used as or construed as rendering any United States tax advice and is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed on this Website.

 

Politics aside, what did you think of the Paul Ryan tax plan? And on a similar note, has any politician campaigned on a tax plan that made IRS insiders across the board go "Jesus, that guy has no idea what he's talking about"?

Asked by tony v over 4 years ago

I'm not too familiar with Paul Ryan's tax plan, however any "tax plan" that is easy for the average American to understand and treats all taxpayers equally and fairly sounds like a good one to me. I'm a big supporter of the K.I.S. concept - there's almost always a way to keep it simple, even with taxes. 

 

Can you rely on a lawyer or accountant's tax advice to avoid fines and penalties? If my lawyer writes me a comfort letter telling me I don't owe tax on something, can I avoid penalties even if his advice was incompetent and I should've known better?

Asked by Tonia over 4 years ago

In general, taxpayers are required to exercise "ordinary business care and prudence" when complying with their tax obligations - a responsibility that cannot be delegated. Erroneous advice from a third party usually does not meet penalty abatement criteria, however, there may additional reasons for the penalties to be abated based on reasonable cause. See 'What to Know About Penalty and Interest Abatement': http://bit.ly/MSES89

Moreover, the avoidance of penalties is explicitly addressed in the required IRS Circular 230 Disclaimer used by tax professionals below: 

"IRS CIRCULAR 230 DISCLOSURE: To comply with requirements imposed by the Department of the Treasury, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) supporting the promotion or marketing of any transactions or matters addressed herein."

My 81 yr old mom opened a rest 2009 and closed 2010. She was involved with a family friend who didn't pay the taxes . We just received our first irs notice in August. She is below poverty and owes 21500, absolutely no way she can pay this.

Asked by Rose about 4 years ago

The IRS has options for taxpayers that are faced with severe financial and personal hardship, most notably the Currently Not Collectible program. If, after a financial review by the IRS, the agency determines that a taxpayer cannot make any payments towards a tax liability, they will place the account in CNC status and cease all collection efforts. It should be noted that the tax liability will continue to accrue penalties and interest and that the IRS still has the right to resume collection efforts in the future should the facts and circumstances of the taxpayer's case change. 

Related: Getting Help from the IRS Taxpayer Advocate Service: http://bit.ly/1hMZmAi

I was fired out of retaliation for calling osha, I was in a rural area and no other work available. My RVlotspace parart of my employment at no charge. I had OSHA as my mediator and a settlement of $1200.00 and now I get a 1099 to pay taxes

Asked by Gail Wallace almost 4 years ago

Should you have a specific question about the 1099, you are welcome to post it here or contact me directly. 

Related: Taxable vs. Non-Taxable Income: http://bit.ly/1hthb7Q

I entered into an installment agreement in October of 2013. Completed the 433, and have never missed a payment. The IRS is cancelling it due to 2010 not being included. It WAS included and another IRS workers is saying they are wrong. What can I do?

Asked by js almost 4 years ago

In general, if an installment ageement defaults due to an IRS administrative error (i.e. not including all periods in the payment plan) then the agreement can often be reinstated without delay. The speed at which this occurs depends on a few factors including which IRS office set up the initial installment agreement - Service Center vs. Local IRS Office. 

For further assistance with your specific tax matter, you are welcome to contact me anytime. 
T. 1 (714) 382-6780
E. michael (at) landmarktaxgroup.com

What is the % of medical that can be deducted.

Asked by Dixie over 3 years ago

In general, the tax code allows us to deduct medical and dental expenses that are more than 7.5 percent of adjusted gross income. As with all things taxes, there are many nuances and exceptions to this rule, so it is always best to have a qualified tax professional review the specific facts of your tax situation. 

Related:
1) Publication 502 Medical and Dental Expenses
http://www.irs.gov/pub/irs-pdf/p502.pdf

2) Facts About Medical and Dental Expenses
http://www.landmarktaxgroup.com/7-important-tax-facts-about-medical-and-dental-expenses