01 Nov 2017

Thank Yourself by Sending Tax Intercept Letters to the IRS Early

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Asset cases are certainly something to be thankful for, and a sizeable tax refund can often impact whether you have an Asset or No Asset case. So, send tax intercept letters to the IRS earlier rather than later so you can get what is entitled to the estate before it is all spent. 

Learn more about tax intercept letters and how to generate them in CaseLink below!

  1. When to Send
  2. Generate Tax Intercept Letters in CaseLink²
  3. Generate Tax Intercept Letters in CaseLink Office 

When to Send

It’s never too early in the year to send tax intercept letters, and often it is better to send them earlier rather than later. With electronic tax filing becoming more common, refunds are being distributed faster than ever and thus can be spent by the debtor in a flash before you have a chance to determine if any of the refund belongs to the estate.

When determining if you should send a tax intercept letter for a particular estate, it is helpful to note that the estate portion is only for the part of the year prior to the date of petition. For example, if the petition was filed on October 1st, 2016, taxes withheld from January 1st to October 1st are part of the estate, and all withheld taxes from October 2nd to December 31st belongs to the debtor.

For cases filed in early January, the estate may be entitled to the debtor’s full tax refund for the prior year.

Before sending a tax intercept letter to the IRS, you should always double check the exemptions available to the debtor to determine if there is any remaining value to the estate from the refund. It is also helpful to note that any exemptions are also paid from estate funds – so in addition to the debtor’s portion of the year’s tax refund, additional funds may be taken out for exemptions as well. 

If you determine that even with all of these subtractions, the refund would likely be a sizable sum for the estate, it is well worth sending the intercept letter.

Generate a Tax Intercept Letter in CaseLink²

With CaseLink², skip the complexity and guesswork of filling out a new intercept letter for each client with the IRS Refund Turnover Report. This report adopts the tax intercept letter’s formatting so that after generating it you can send the report directly to the IRS, without any further steps.

To access this report, navigate to the Sidekick and click either “Other” in the Case Reports section of the Reports tab (pre-populated with data from the case you have open) or “Global” in the Global Reports section (blank with the ability to search for open cases). 

Accessing the IRS Refund Turnover Report for an individual case through the Sidekick.

Accessing the IRS Refund Turnover Report for multiple cases using the Global Reports tab within the Sidekick.

 

This will direct you to the IRS Refund Turnover Report window. Once you are finished filling out the form fields on this screen, click “Generate Report” and the report will be downloaded to your computer as a PDF file that you can then send to the IRS.

Generate a Tax Intercept Letter in CaseLink Office

Before sending a tax intercept letter to the IRS, you should always double check the available exemptions to determine if there is any remaining value to the estate from the refund. In CaseLink Office, you can easily calculate this amount with the Tax Refund Calculator.

In addition, you can skip the complexity and guesswork of generating a new intercept letter for each client by using the IRS Turnover Report in CaseLink Office. The report adopts a format similar to the letter so that once you have generated it, you can send the report to the IRS without any further steps.

To access the report, navigate to “Reports” from the Main Menu toolbar, then click on the “Case” tab and select “IRS Refund Turnover Report” from the Print Reports screen. This will open the Parameters for IRS Refund Turnover Report window, shown below.

Once you have finished filling out the form fields, you can click the “View/Edit” button to preview or edit the report before printing. Click the “Merge” button to create the file in the filetype you have selected under “Report File.” To save the report as a PDF, simply click the “To PDF” button. You can also click “Save Defaults” to save your field selections as a default each time the report is accessed.

If you have any questions about generating tax intercept letters through the CaseLink software, please contact the BMS Support Center at support@bmsadvantage.com or 800-634-7734.

 

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