Ask The California Employment Tax And Payroll Tax Attorney – Reaching Out To The Forgotten – Low-To-Moderate-Income Taxpayers
By Robert S. Schriebman
On April 13, 2023, the IRS issued a press release devoted to tax benefits for low to moderate income taxpayers. Traditionally, these are taxpayers who do not file tax returns. These are the populus who are usually not serviced by professional tax preparers. The IRS is reaching out to them to file a tax return even though they may not owe any taxes. They may be entitled to tax credits or refunds. And using direct deposit is the fastest way to get that forgotten refund. The IRS has a free filing system for qualified individuals to file electronically and to get a refund by direct deposit – all for free.
Just Because You Are Not Required – Does Not Mean You Should Not File
Generally, taxpayers with gross income of less than $12,950 for single filers, and $25,900 for married filing jointly, are not required to file a federal income tax return. Does this mean they do not file? Low-income individuals may mistakenly assume that since there is no tax they are not entitled to a refund. In fact, they may get money back if they file a tax return. They may be entitled to Earned Income Tax Credit (ETIC), or if the employer withheld taxes from their paychecks. They may be owed a refund when they file a tax return.
IRS Free File
Only the IRS has a program for low-income individuals and moderate-income individuals to file their taxes for free. This free service is for low-to moderate-income workers and working families who don’t normally file a return. They may miss out on certain credits for individuals, including the EITC, the Child Tax Credit, the Child & Dependent Credit and the Premium Tax Credit if they don’t file. People experiencing homelessness (the address of a friend, relative, or trusted service provider, such as a shelter, drop-in day center or transitional housing program, may be used on the tax return). All eligible parents of qualifying children born or welcomed through adoption or foster care in 2022 may be eligible for the Child Tax Credit.
Filing a tax return electronically and choosing direct deposit is the fastest way to get your refund. While there are many offers for free tax-filing software, the only guaranteed place to find IRS Free File software is IRS.gov. You can use a computer or mobile phone.
Filing Starts the Statute of Limitations for Audits and May Help in a Bankruptcy Proceeding
For those who do not file a tax return, the statute of limitations for examination or audit remains open indefinitely. Filing a return starts the basic 3-year audit period. Low-income returns rarely if ever get audited. For those considering filing a bankruptcy petition, especially under Chapter 7, one cannot discharge any taxes from an unfiled return.
Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Web Site Article 726