The New Tax Year Resolution You Must Make Right Now

calculator-1019743_1280Ignoring that past due tax debt will get your new year off to a stressful start

2015 will be history in a matter of days. If looking back on 2015 also includes an outstanding tax debt, addressing that tax debt needs to be at the top of your New Year’s resolutions list.

Penalties and fees

If you have not  yet paid your 2014 taxes, you’ve been racking up penalties and fees for each month of non-payment. The IRS assesses a non-payment penalty of 1/2 of 1 percent of the balance for each month after the initial due date. It may not sound like much, but it can penalties can add up to as much as 25 percent of the balance due.

That’s a lot if you’re on a tight budget, and penalties can add up quickly, not to mention past due notices from the IRS.

Don’t panic, and don’t ignore the IRS

Don’t assume the IRS will forget about those outstanding taxes, because their role is to collect tax payments from citizens. If you’re ignoring their written notices in hopes the IRS will forget and move on, it will never happen.

The IRS will become more aggressive with each passing month of non-payment. Regardless of where you are in this collection cycle, the IRS won’t forget. If you are facing asset seizure for non-payment of past due taxes, you need to take action immediately to protect your bank account and other assets.

Your best defense against the IRS

The bad news is you owe back taxes. The good news is that there are tax professionals who can help you. A qualified tax pro can determine if you’re eligible for an installment agreement, Offer In Compromise or Currently Non-Collectible status. A tax pro such as an Enrolled Agent or tax attorney can represent you in negotiations with the IRS.

One key advantage to hiring a tax pro: they know the complex IRS tax code inside and out, so you won’t have to. A qualified tax pro will also ensure your rights are upheld throughout the collection proceedings. They will also explain each step to you in terms that you can understand.

You won’t hear jargon or “legalese,” but you will hear an honest assessment of your financial circumstances and your options. Your tax pro can work with you in arriving at a payment arrangement you can live with over time.

If you’re facing 2016 with an outstanding tax bill, now is the time to take charge and take back your life. We have qualified tax pros on staff who can help you sort out your options, negotiate on your behalf with the IRS, and advise you every step of the way. Even better, they can translate that complex IRS jargon that might be difficult to interpret and understand.

If you’re ready to face 2016 with a clear plan of action, give us a call today at (888) 224-3004. You can also chat with us by clicking the white “Start Chat” button at the top of our homepage.

Either way, you don’t face to face past due taxes alone. We can help.

 

 

 

Why It Makes Sense To Hire A Tax Pro For Your Tax Defense

No one relishes the thought of dealing with the IRS alone. You have better things to do than to study reams of tax law and tax code. Yet, the IRS expects you to know the ins and outs of tax code any time you have to mount a tax matter defense.

The good news is that you won’t have to be a tax law whiz as  part of your tax defense. Here are some compelling reasons for hiring a tax pro to represent you:

The Know Tax Codes, So You Won’t Have To

A qualified tax pro can serve as the intermediary between you and the IRS. They’ll help you understand your rights and ensure your rights are upheld during IRS interactions and proceedings. Your tax defense team will know IRS code as well as the IRS does, and they will help you negotiate an outcome that will work to your advantage whenever possible.

Filing of Past Returns

You’ll be on the IRS radar until you get your past returns filed. If you’re overwhelmed by years of unfiled returns, a tax pro can help you gather needed documents and determine which tax forms will be needed for a successful and accurate filing.

Protect Your Assets

The IRS can act quickly to seize assets such as your bank account and retirement savings to satisfy a tax debt. Hiring a tax pro will help you protect your valuable assets.

Your tax pro will help you negotiate a payment arrangement you can afford, or make an Offer In Compromise (OIC) on your behalf. You would be able to pay off most or all of your tax debt without having to surrender your income or assets.

Audit Representation

Most of us would consider an IRS audit to be at the very top of our “Do not want to do” list. If your return has been selected for an audit, you can deal with the IRS with confidence by having a competent tax team at your side.

Your tax team will make sure you have the following available for the IRS:

  • Paystubs or self-employment records
  • Bank statements
  • Dividend statements
  • Business or personal expense receipts
  • Copies of current and past tax returns

Additionally, if the audit will involve a face-to-face meeting with an IRS auditor, your tax team can help you prepare for the meeting, speak on your behalf during the audit, and see to it that your rights are upheld. Your tax team can also help you understand your options and the best course of action should the audit not work out in your favor.

Stress Relief

With a solid tax defense team in place, you can go about your business. You won’t have to worry about your pending IRS case; you can continue to focus on what matters most to you. Your tax pros will handle your case as it progresses and they will also

  • Keep you informed every step of the way
  • Notify you when they will need to meet with you regarding your case
  • Work diligently on your behalf to reach a resolution you can live with
  • Apply tax codes as they pertain to your case, ensuring you have all the applicable protections available to you under the law.

Just as you wouldn’t go to court without a lawyer, don’t go it alone when it comes to complex tax matters with the IRS. We have qualified tax pros on staff who can help, whether you’re facing an audit, asset seizure, or past due tax debt.

Get started today by either clicking the white “Start Chat” button at the top of any of our webpages, or by giving us a call. Don’t go it alone. We can help.

What Is The First-time Penalty Abatement?

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If you’re like most taxpayers, you do your best not to run afoul of the IRS. After all, you don’t want to get saddled with penalties for late payment, late returns, or any other offenses, right? However, things happen: you miss a tax filing deadline, or send in your tax payment later than you’d like. The resulting tax penalties aren’t pretty, but you may have some recourse, especially if you haven’t had any prior penalties.

What Is The First-time Penalty Abatement?

The IRS established this penalty relief provision for first-time “offenders” who are otherwise in good standing. Under the First-time Penalty Abatement program, you could get your penalties reduced or eliminated.

While the IRS is strict about imposing penalties, they do offer a break to first-time offenders. If you’ve never incurred a tax penalty before, this program could be your means to a lighter penalty.

What’s the catch? You will need to meet certain guidelines.

Reasonable Cause: Suppose you were ill on tax day and didn’t file your return, or if you were dealing with other circumstances beyond your control. Your penalty abatement request would fall under the Reasonable Cause category.

IRS Error: You’ll need to provide supporting documentation for this claim, but if you can determine that the IRS made an error in calculating your tax liability, you could receive a penalty abatement or reduction.

Administrative Waiver: The majority of first-time penalty abatements fall into this category. If you have no prior penalties with the IRS, and this is your first time you’ve failed to follow IRS regulations, the IRS may be willing to grant you a penalty abatement.

If you’ve run into a tax penalty due to minor oversight or circumstances beyond your control, you may be eligible for the First-time Penalty Abatement program. You have the option of requesting the abatement on your own or consulting with a tax professional if you prefer.

 

Is There Such Thing as IRS Debt Forgiveness?

Chances are, being “one in a million” means that you stand out from the crowd and have something unique to offer. However, being one in a million with respect to the IRS doesn’t have the same meaning. Over 1 million taxpayers owe taxes to the IRS at any one time. If you’re among them, you have plenty of company, and chances are you’re worried about your tax debt.

In order to lighten their workload and to make the best use of existing personnel and resources, the IRS isn’t going to pursue each and every taxpayer. While the IRS does make a good-faith effort to collect taxes that are owed, current staffing and resource levels make collecting from each and every person unrealistic.

In some cases, the IRS is willing to relinquish some of its claim to your tax debt if you owe back taxes. If you’re tight on cash and owe back taxes, there are programs available to you.

Fresh Start

Fresh Start was enacted as a means of clearing tax debt entirely. There are currently two option available to you under this program: Partial Payment Installment Agreement (PPIA) and the Offer In Compromise (OIC).

The PPIA option is the most common under the Fresh Start program. The PPIA allows you to make affordable payments on your IRS account until the debt is cleared entirely or if you have paid the debt for 10 years.

The OIC program allows you to settle your debt with the IRS by paying a mutually-agreed upon amount. You could qualify for OIC if you meet any of these criteria:

  • Have not been turned down for OIC in the past
  • Owe a new debt
  • Are in full compliance with the IRS (no outstanding past debt, or no history of defaulting on prior payment arrangements)
  • Have no plans to file for Chapter 7 bankruptcy or are unable to do so.

You can file for an OIC online or enlist a tax pro to help you file the forms. 

RCP and CNC

Both of these statuses refer to the likelihood of the IRS being able to collect on your tax debt. In doing so, the IRS will asses the Realistic Collection Potential (RCP) of your account. Your tax debt could be designated as RCP if:

  • You’re low-income
  • Have no means to pay the account
  • Have no assets such as bank accounts or real estate the IRS could potentially seize and liquidate in order to satisfy your tax debt.

While your tax debt may not be forgiven altogether, the IRS typically won’t make any collection attempts.

The Currently Not Collectible (CNC) option also prevents the IRS from collecting on your tax debt. This status indicates you also don’t have the means to pay what you owe, and this designation was designed to allow you to slowly increase your income or come up with the means to satisfy your tax debt. Once your account reaches 10 years, the IRS can no longer legally collect from you.

In any case, the IRS cannot legally collect from you if your tax debt is older than 10 years. If you’re facing back taxes, there are program available to you that can take the sting out of owing back taxes.

In any event, you can take the DIY approach or hire a tax pro to walk you through the process and explain your options and rights. It’s always best to check in with a tax pro if this is your first time owing back taxes. Don’t let back taxes get you down. Take charge of your tax debt.

 

 

 

How To Appeal An IRS Wage Garnishment

OIC

Facing IRS wage garnishment is no joke. Unlike credit card companies or banks, the IRS doesn’t need to obtain a court order to garnish your wages. Instead, they send a notice to both you and your employer notifying you of their intent to garnish your wages, usually for non-payment of an outstanding tax debt.

The IRS will typically garnish your wages if all other attempts to collect on your tax debt have failed, especially if you haven’t responded to any of the IRS’s correspondence, or if you haven’t made a good-faith effort to repay your tax debt. Here are some tips on appealing your IRS wage garnishment:

You need to act quickly once you receive the Notice of Intent to Levy from the IRS. You have a 30-day grace period during which you can appeal. Don’t wait until the last minute. Take action the day you receive the notice. Call the IRS at the number shown on the letter. You can request an appeal if any of the following apply to you:

  • You received the IRS notice while you are filing for bankruptcy
  • The legal timeframe (statute of limitations) for the debt has expired
  • You’ve already paid the IRS in full
  • You were never given the chance to appeal the debt
  • You qualify to file for innocent spouse relief

Use The Correct Form

You must use the proper form in order to file your appeal. You can find IRS Form 12153 (Request For A Collection Due Process or Equivalent Hearing) on the IRS website. This form will formally start your appeal process, so be sure to fill it out completely and accurately. It will need to be mailed directly to the division indicated on your Notice of Intent to Levy; you won’t be able to email it or fax it. Be sure to send it via certified mail with a return receipt.

File For Garnishment Exemption

If you feel you can’t afford to have your wages garnished by the IRS, you can file an appeal in court. You must provide documentation that supports your argument. The court will want to know about your total household income, the number of dependents you support, your fixed expenses (rent, mortgage, insurance, car payments, utilities, child/dependent care), any unique circumstances that prevent you from supporting yourself or your family, such as prolonged illness or permanent disability.

Be sure to bring the following to court:

  • Income documentation: paystubs, 1099 forms, disability/public assistance award letters, copy of divorce decree showing or other document verifying child/spousal support income.
  • Expenses: rent/mortgage statements, property tax statement (if you own your home), copies of utility bills, copies of car payment statements, child/dependent care receipts, student loan statements, and statements for any other fixed expenses you have.

If the court rules in your favor, it will order the IRS to release the garnishment order or levy.

If the thought of appealing an IRS wage garnishment is intimidating, you’re not alone. Most people elect to hire a tax professional who can walk them through the process, explain their rights, and represent them before the IRS. Appealing an IRS wage garnishment can be a long, complicated and confusing process. You must be able to follow the IRS’s strict appeals protocol to the letter if you want a favorable outcome. A qualified tax pro can make sure everything is taken care of, down to even the  smallest detail.

Facing an IRS wage garnishment is a stressful experience. While you do have the option to file for an appeal and to seek a court order to release the garnishment(levy), hiring a tax pro is your best defense. A qualified tax advisor can file the appeal on your behalf, walk you through the appeals process and make sure your taxpayer rights are upheld.

If you’re facing an IRS wage garnishment, we can help. Get started today by clicking the white “start chat” button on the top of the page, or by giving us a call. You don’t have to go it alone.

 

 

4 IRS Audit Myths That Won’t Die

Photo: cohdra/morguefile
Photo: cohdra/morguefile

The IRS is a popular target for urban myths that seem to have taken on a life of their own. It would stand to reason that people just want to file their taxes and get on with their lives, content to keep the IRS at bay by doing so. The good news is that IRS audits are less frequent than they used to be, thanks in part to budget cuts, and the staffing reductions that went with them.

The bad news is that almost anyone is at risk of an audit since the IRS randomly selects returns for audit. Even with the budget cuts and staffing reductions at the IRS some audit myths persist. Here’s a look at some of the most popular myths, and the truth behind them.

Myth: You’ll Get Audited If You Claim Multiple Exemptions. If you’re afraid to claim the exemptions to which you’re entitled, you could be cheating yourself out of a refund or tax credit. You could me missing out on a refund or tax credit for any of the following:

Child/dependent care
Home Office
Travel, business, moving, or medical expenses

Fact: The IRS doesn’t audit returns with exemptions any more often than it audits returns without them. By not claiming the above exemptions, you could be denying yourself money to which you’re legally entitled in the form of a tax credit or a larger refund.

Myth: You’ll Get Audited If You’re Wealthy. If you’re a low-to-modest income taxpayer, you may think you’re in the clear. After all, why would the IRS go after someone who earns very little and who has little to no money to hand over to the government, right?

Fact: The IRS screens for false, misleading, or missing information on all returns, regardless of how much the taxpayer earns. The IRS selects returns at random.

Myth: You Won’t Get Audited If A Tax Pro Does Your Return. It’s easy to fall for this myth because tax return pros have extensive training in tax procedures, tax codes, and tax law. If anyone can get you out of an audit, they can, right?

Fact: A professionally-prepared return is no less vulnerable to an audit than a DIY return. Since the IRS selects returns at random, a professionally-prepared return is just as vulnerable to audit as a DIY return. While a tax pro can do a great job of thoroughly and accurately filing a complex tax return, that return is no less vulnerable to an audit.

Myth: Avoid an audit at all costs. Don’t respond to audit notices or any correspondence from the IRS. If you get audited, you’ll end up in jail in some cases.

Fact: Nothing can be further from the truth, especially the myths surrounding jail time. What will happen if you ignore IRS notices, however, is the IRS will be less willing to work with you if they have to hound you into responding.

If you do get an audit letter from the IRS, follow all the instructions on the letter, including instructions for submitting documentation or for reaching the IRS. Chances are, you’ll just be asked to clarify or confirm some of the information on you return, or to provide documentation supporting your claim of an exemption or deduction.

If you do end up owing money to the IRS, you can make payment arrangements if you’re not able to provide payment in the full amount.

Regardless of the outcome, an IRS audit is nothing to fear or avoid. While it’s certainly not anyone’s idea of fun, it’s not the torturous process you hear about in myths and rumors. Whatever you do, don’t duck the IRS.

There are many urban myths and horror stories surrounding an IRS audit. By arming yourself with the facts, you can determine which is truth and which is fiction. While budget cuts and staffing reductions have hit the IRS hard; they are still randomly selecting returns for audit regardless of your income level and whether or not your return was professionally prepared.

Whatever you do, don’t duck the IRS if they should come calling. Enlist a tax pro if you’re unsure of how to respond to an audit notice.

Meet The Revenue Officers

Chances are if you’ve called the IRS with a routine problem or question, you’ve spoken with a telephone agent in their Help Center. They’re trained to handle routine tax matters and to answer your questions. They can direct you to other departments within the IRS if needed.

However, if you’re saddled with an unusually large tax debt, you’ll be interacting with a revenue officer who has the authority to initiate and pursue collection action against you.

Revenue Officer Vs. Revenue Agent

An IRS revenue agent conducts tax  audits and establishes the amount of tax you will owe as a result of that audit. Disregard that tax debt or any other IRS debt or collection action, and chances are you’ll soon be interacting with a revenue officer. While revenue agents don’t have the authority to collect taxes, revenue officers do have that authority.

Who Are These Guys, Anyway?

Generally speaking, a revenue officer is a specially trained revenue agent that has the authority to initiate collection actions against you should you run afoul of the IRS. They have received additional training in the IRS’s power and reach when it comes to collecting back taxes.

Revenue officers have the authority to contact you by any means, including phone calls, home visits, or workplace visits. A revenue officer also has the authority to issue a notice to appear at tax hearings or meetings regarding your delinquent taxes.

When Do They Get Involved?

Revenue officers are considered the “big guns” in terms of IRS enforcement. You generally won’t be interacting with a revenue officer for an “average” past due tax bill. If your tax debt is in the hundreds of thousands of dollars or if you have a track record of non-payment, then chances are you will be dealing with a revenue officer. The same holds true if you’re a habitual non-filer.

How To Interact With a Revenue Officer

Revenue officers have received additional training regarding tax code, tax law, and how to communicate more effectively with taxpayers. They have also received additional training in proper collection procedures, and part of this training involves learning to work with delinquent tax payers.

If an IRS revenue officer ever contacts you regarding your taxes,  don’t panic (as hard as that may be). Remember you have the right to consult a tax attorney to assist you. Keep in mind that an IRS revenue officer does not have the authority to arrest you or audit you. If you are facing IRS collection, it is important to work out a repayment plan with the revenue officer.

Hearing from an IRS revenue officer is never at the top of anyone’s bucket list. If you have a sizable tax debt or a habitual non-filer, chances are you’ll hear from a revenue officer. While they don’t have the authority to make an arrest or to conduct an audit, they do have the power to collect back taxes.

By understanding the scope and limitations of a revenue agent’s role, you’ll be better equipped to respond appropriately if and when you do hear from them.

What You Need to Know When Owing The IRS

If this is your first year with a tax balance, the thought of owing the IRS can be frightening. There’s no doubt you’ve heard everything from true stories to urban myths surrounding the power and the reach of the IRS. Very few entities such as the IRS have the ability to leverage assets and capital in order to recover a debt.

In most cases, however, you can prevent aggressive IRS collection tactics by understanding your role in clearing up a tax debt. By understanding these basics, you’ll be in a better position to formulate a plan for paying your tax debt.

Don’t Ignore IRS Notices

If you owe money for taxes, you’ll receive notices from the IRS via snail mail. Don’t ignore them or toss them in the recycling bin in hopes the IRS will forget. They won’t. Respond to each and every notice, and follow the instructions for payment.

If you can’t make the payment in full, call the IRS at number listed on the notice, and explain your situation. Despite nasty rumors to the contrary, the IRS is eager to work with taxpayers in resolving tax debt. The agent assigned to your case will explain your rights to you, and will make sure you understand them. Be sure to request a list of these rights in writing.

Understand Your Payment Options

If you can’t pay your tax debt in full, the IRS has several options available to you. Some of these options include:

While each of these options have their own qualification criteria, you’ll be able to avoid more aggressive IRS collection activity while paying off your tax debt.

Understand Due Process

Due process is a Constitutional right that guarantees everyone the right to go through an entire legal proceeding with no steps neglected or omitted. The same rule applies to IRS proceedings. If you’re not clear on the due process for your tax case, have the agent explain it to you or seek advice from a qualified tax pro.

Don’t Go It Alone

If the thought of dealing with the IRS leaves you cold, your best course of action is to enlist a qualified tax pro. Tax attorneys and Enrolled Agents have the ability to represent you in dealing with the IRS, and to negotiate with them on your behalf. They will explain your rights, review your case and help you determine which payment options you qualify for.

Your tax pro will also help you understand the complex jargon you might find in some IRS notices. A tax pro’s job is to understand and interpret tax law and tax codes so you won’t have to. That alone may well be worth the cost.

If you’re dealing with a tax balance for the first time, it’s easy to get unnerved at the prospect of dealing with the IRS. By understanding your rights, payment options and representation options, you’ll be able to tackle your tax debt with a solid understanding of the process. By enlisting a tax pro, you’ll have someone who can represent you and negotiate on your behalf.

We have qualified tax pros on staff who can help. Get started today by clicking the white “Start Chat” button at the top of the page, or give us a call. Don’t go it alone. We can help.

 

 

Understanding IRS Collections, Part 2

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Life happens: kids get sick, the car breaks down, work hours get cut. Whatever money you had earmarked for paying your tax debt had to be shifted to cover a financial or medical emergency. If you’ve fallen behind on your taxes, chances are the IRS will come calling.

First and foremost, you have the right to dispute the amount of taxes you owe. You don’t have to blindly accept the amount shown on your IRS notice. You have 30 days to dispute the IRS’s findings and to request a meeting with an IRS agent. If you can prove that you owe a lesser amount (be ready to provide documentation supporting your claim), you may have some recourse.

The key is to not wait until the last minute to begin the dispute process. Initiate your dispute as soon as you receive any correspondence from the IRS. You can either call the number as stated on the notice, or contact the IRS by mail at the address provided on the letter. Follow all the instructions for filing a dispute; the letter will outline the steps you will need to take to initiate a dispute.

First and foremost, you have the right to legal/professional tax counsel. If you are unsure of how to advocate for yourself with the IRS or if you have any questions regarding any IRS correspondence you receive regarding your tax debt, you can hire a tax professional to represent you in negotiations with the IRS.

Tax attorneys and IRS Enrolled Agents have the authority to represent you in IRS negotiations and they can assess your current financial scenario and formulate a course of action. A tax professional can determine whether or not you are eligible for any of the IRS repayment programs such as an installment agreement, Offer In Compromise, or Currently Not Collectible status.

Your tax advisor can also make sure the IRS doesn’t violate your rights or try to intimidate you in any way.

Facing IRS collection action is similar to medical or credit card collections, but with one key difference: the IRS doesn’t need a court order to initiate wage garnishment or asset seizure activities. You will receive a Final Notice of Intent to Levy.

In the event you face IRS collection action, you need to respond quickly to any IRS notices you receive. A qualified tax professional can represent you and negotiate with the IRS on your behalf. If you feel you need a tax pro by your side, don’t put it off.

We have licensed tax attorneys and Enrolled Agents on staff to assist you. Get started today by clicking the white “Start Chat” button in the upper right-hand corner of your screen, or give us a call.

Don’t go it alone. We can help.

True or False? Get The Facts About Wage Garnishment

 

Photo:DodgertonSkillhaus
Photo:DodgertonSkillhaus

We’ve all heard those horror stories about the IRS randomly draining bank accounts, seizing houses and assets, and garnishing wages. Wage garnishment and asset seizure  just don’t happen on a whim; it is usually a measure of last resort for the IRS when all other means have failed. Here’s a look at some of the myths behind wage garnishment in particular.

1. I won’t receive any notice at all. Although the IRS isn’t legally obligated to inform you when they will begin garnishing wages, you will have received several notices from the IRS at this point. A Notice of Intent to Levy is issued beforehand, warning you of intent to levy income and assets if an outstanding tax debt isn’t paid or if payment arrangements haven’t been made.

2. My manager has to tell me if my wages are going to be garnished. Once your employer receives instructions to garnish your wages, they must comply immediately.  Your employer is under no legal obligation to let you know if/when your wages are being garnished.

3. The government has to allow enough room in my paycheck so I can cover my expenses. Unfortunately, the government doesn’t have to take your other expenses into consideration. As a rule of thumb, you can legally be left with $200 on each paycheck if you’re single or $300.00 if you’re married.

4. I can get fired if my wages are garnished. You’re safe if you have just one garnishment. However, if you have two garnishments, your employer can legally terminate you if they choose to.

5. I’m toast. I can’t stop wage garnishment from happening once I get a final notice. Good news. You have up to 30 days to respond to the final notice. If you haven’t done so already, now is the time to line up a qualified tax advisor who can review your case, determine your eligibility for repayment arrangements, and represent you in negotiating with the IRS and state tax boards.

Don’t wait until the last minute to respond. Contacting the IRS or state tax board can be nerve-wracking, but if you demonstrate a good faith effort to take care of your tax debt, that can go in your favor. Be proactive, contact the IRS or state tax board that issued the notice, and begin to put that chapter in your life behind you.

A qualified tax pro can help. Don’t go it alone. We have Enrolled Agents who can help. Get started today by clicking the white “Start Chat” button at the top of your screen.