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IRS Installment Agreement
Many taxpayers cannot qualify for an Offer in Compromise but still seek resolution for their IRS liability. In these cases, we will work with our client’s budget and financial profile to negotiate the lowest possible long term IRS payment arrangements. The IRS allows "structuring" five primary types of payment plans, or Installment Agreements: Guaranteed Installment Agreements, Streamlined Installment Agreements, In-Business Trust Fund Agreements, Long-Term Installment Agreements, and Installment Agreements on Specified Balance Due Accounts.
Oftentimes our experts will be successful in renegotiating a lower monthlty payment than the existing one which is muchmore in line with the taxpayers ability to pay.
Lastly, when a monthly payment has been established, we will then start the process of eliminating your tax penalties and interest, which on average accounts for 30-40% of tax debt.
Currently Not Collectable (CNC)
If a taxpayer does not qualify for an offer in compromise and cannot afford to pay an Installment Agreement, Currently Not Collectible (CNC) status may be an option. If a client is placed in CNC status, the statute of limitations continues to run and the IRS will not pursue collection actions. However, If a taxpayer’s financial status improves, the IRS can remove the file from CNC status and return to active collection status.
Reasons for attempting CNC status are sevarel, most notably: Taxpayer has income below allowable expenses and there is no indication that the financial situation will improve in the future. Also, due to high home equity the taxpayer does not qualify for an OIC and has more allowable expenses than income so an installment agreement is not an option. Lastly, the taxpayer has more allowable expenses than income and the statute of limitations is getting close to expiring.
IRS Tax Levy and Wage Garnishment Release
A wage garnishment can result from an IRS levy resulting from delinquent tax liability. Garnishment rules vary, but essentially the IRS takes a portion of your paycheck each pay period, and contributes the amount garnished toward paying off your tax debt. Garnishments wremain in place until the tax is paid in full or until a Garnishment release has been processed.
How We Stop the Aggressive Collections of the IRS
The first thing our tax resolution firms do on your behalf is to contact the IRS within 24 hours of any new client to determine what stage of collection the IRS is in. We then ask for an immediate hold of any further collection action until we can get the proper documentation or resolve your IRS situation. If the IRS agent in charge of your case , being a field agent or automation collections agent is not willing to give us an extension, we immediately file an appeal that may be a CDP or CAP Appeal. Either of these IRS appeals stops all collection actions against the tax payer for a period no less than 30 days, and up to 6 - 7 months. This gives our clients the ability to begin negotiations.
There are two main methods used to appeal IRS collection actions. The first is a CDP appeal and the second is a CAP appeal. A CDP Appeal must be filed within 30 days of a final notice of intent to levy. This allows a senior technical advisor within the IRS to review the case. This means it is being taken from the collection division of the IRS, who are far more aggressive concerning these matters. In most instances, you will receive much better results filing a CDP Appeal.
If perhaps you have failed to file in a timely manner, you always have the right to file a CAP appeal, which is very rarely used in the IRS. Most IRS agents do not know what a CAP appeal actually is. Our tax specialists apply this tactic to the IRS a great deal.
Filing Prior Years IRS Tax Returns
Our tax resolution firms believe that it is in the best interest of the consumer to file all of their past due tax returns, regardless of ability to pay. The economic consequences of unfiled tax returns are severe – there is a maximum 25% late filing penalty that can be applied to the tax. Combined with accruing interest, this late filing penalty can add up to almost 50% of the original liability in many cases.
Our tax specialists will work with you to prepare and file all of your unfiled returns, even if you no longer have the original records from the filing years.
True Tax Returns Filed Over IRS Substitute Returns
Most people do not know that if you do not file a tax return the IRS will file it for you. When the IRS files the tax return for you they do not take into account any of your standard deductions such as mortgage interest, spouse, children etc..
When our clients see this huge tax bill most of them just freeze not knowing that there are options. If it your right as a citizen to file a true tax return over the substitute return the IRS did for you.
Once the IRS receives your true returns they will void the ones they did for you. The IRS will zero out the debt and recalculate the debt and penalties and interest based on your true debt.
Abatement of IRS Tax Penalties and Interest
Abatementof a tax liability means to reduce or change a tax, penalty, or interest. Most frequently, abatement refers to eliminating an assessed tax liability and adjustment references reducing or altering an assessed tax liability.
Penalties and interest average 30-40% of the overall tax debt so successful elimination of these is a high priority with your personal tax resolution plan. If there is a reasonable cause for abatement or adjustment, the IRS may be willing to review the penalties which created a tax liability.
Our tax resolution firms pursue IRS tax abatement on penalties and interest for you, after all of your tax returns from all years have been filed and a monthly IRS payment has been established or renegotiated for you.
IRS Payroll Tax Debt
When business owners are unable to meet their IRS payroll tax obligations, a trust fund tax liability is created. The IRS is aggressive in enforcement of trust fund taxes, and does not allow trust fund tax to be discharged in a bankruptcy, no matter how old the tax liability. This means that if you owe delinquent payroll tax, you must address the liability and let our tax experts find a solution for you.
The IRS reports that approximately 2 million businesses owe almost $50 billion in payroll tax. The IRS is increasing its enforcement actions, so the probability of facing a lien, levy or other action is increasing very significantly. To determine if you may have a trust fund tax liability there are two primary determinations:
1.) Whether you are responsible for collecting or paying withheld income and employment taxes
2.) Whether you "willfully failed" to collect or perform your obligations.
Typically, the IRS has the right to take enforcement action against anyone who meets these determinant tests, even if they were not an officer or employee of the corporation which originally collected the payroll taxes.
Innocent Spouse Relief
There are three types of Innocent Spouse relief: traditional Innocent Spouse relief, separation of liability, and equitable relief. Traditional Innocent Spouse relief is granted to join-filers (typically married couples) when one spouse was unaware of the erroneous item which created a tax liability; Separation of liability is primarily for join-filers who are currently separated, and equitable relief is for a spouse who should not be held liable and who fails to meet the two preceding determinations. In each Innocent Spouse determination, the non-electing spouse/partner will be notified and may participate in the proceedings.
In all of the Innocent Spouse adjustments, the IRS’ goal is to provide relief to the spouse who was unaware or not at fault for the creation of a tax liability, hence the IRS rules that it would be inequitable to hold the innocent spouse liable for any tax
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