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FREE IRS Tax Analysis and Diagnosis! 

Tax Solutions

If you owe back taxes or disagree with an IRS or state tax assessment we can guide and represent you towards an acceptable resolution.

Offer in Compromise

 

The IRS may accept an Offer in Compromise to settle unpaid tax accounts for less than the full amount of the balance due.  The Offer in Compromise program is an option for those taxpayers who are unable to pay their tax accounts in a lump sum or through an installment agreement.  The IRS may legally compromise a tax liability for any of the following reasons:

  • Doubt as to liability – There is a doubt as to whether or not the assessed tax is correct.
  • Doubt as to collectability – There is a doubt that the taxpayer could ever pay the full amount of the tax owed.
  • Promote effective tax administration – There is no doubt that the assessed tax is correct and no doubt that the amount owed could be collected, but the taxpayer has an economic hardship or other special circumstances that may allow the IRS to accept less than the total balance due.

Installment Agreement

 

A taxpayer may request a monthly installment plan if they are unable to pay the full amount of tax owed.  An installment agreement generally requires equal monthly payments, and the taxpayer must fully pay all of the tax owed within the time agreed upon.  A taxpayer may submit a request to modify or terminate the installment agreement.  While the IRS considers a request to modify or terminate the installment agreement, the taxpayer must comply with the existing agreement.

Streamlined Installment Agreements

 

The new IRS Fresh Start provisions also mean that more taxpayers will have the ability to use streamlined installment agreements to catch up on back taxes. Under the Fresh Start initiative, the maximum dollar criteria for streamlined installment agreements has been raised from $25,000 to $50,000 and the maximum term has been raised from 60 months to 72 months.

These installment agreements generally do not require a financial statement, but a limited amount of financial information may be required in the application process.

The Streamlined Installment Agreement criteria is divided into two categories, balance due of $25,000 or less, and balance due $25,001 to $50,000.

The criteria to qualify for streamlined installment agreements with a balance due of $25,000 or less are:

  • You owe $25,000 or less, at the time the agreement is established. If you owe more than $25,000, you may pay down the liability before entering into the agreement in order to qualify.

  • The debt must be full paid within 72-months or prior to the Collection Statute Expiration Date, whichever is earlier.

  • You must be compliant with all filing and payment requirements.

  • Individuals who owe any type of tax (Form 1040, Trust Fund Recovery Penalty, etc.).

  • Defunct businesses, including any type of entity and any type tax (Form 940, 941, 943, etc.).

  • Operating businesses are limited to income tax liabilities only (Form 1120).

 

The criteria to qualify for streamlined installment agreements with a balance due of $25,001 to $50,000 are:

  • You owe $25,001 to $50,000, at the time the agreement is established. If you owe more than $50,000, you may pay down the liability before entering into the agreement in order to qualify.

  • The debt must be full paid within 72-months or prior to the Collection Statute Expiration Date, whichever is earlier.

  • You must be compliant with all filing and payment requirements.

  • Individuals who owe any type of tax (Form 1040, Trust Fund Recovery Penalty, etc.).

  • Businesses are limited to defunct sole proprietors who owe any type of tax (Form 940, 941, 943, etc.).

  • You must enroll in a Direct Debit Installment Agreement or Payroll Deduction Installment Agreement.

  • A limited amount of financial information may be required during the application process.

Appealing a lien or levy

 

A taxpayer may request a Collection Due Process (CDP) hearing with the IRS Office of Appeals usually within 30 days of the date on the notice.  At the conclusion of the hearing, the IRS Office of Appeals will issue a determination.  The taxpayer will have 30 days after the date of the determination to seek review of the determination in the U.S. Tax Court.

Filing a wrongful levy claim

 

If the IRS has levied a taxpayer’s property to collect tax for which the taxpayer is not liable, the taxpayer may be entitled to the return of the wrongfully levied property.  For example, a taxpayer may file an administrative wrongful levy claim for the return of wrongly levied property if the taxpayer is a non-liable spouse and the IRS levees a state income tax refund or bank account belonging to the non-liable spouse.

Releasing a levy

 

The IRS must release the levy if:

  • The IRS did not follow proper procedures

  • An automatic stay during bankruptcy is in effect

  • The levy is on property that the IRS is not allowed to levy.

  • The levy occurred accepting (or while the IRS considers) an OIC or installment request

  • The levy occurred while the IRS Office of Appeals considers certain appeals or requests for innocent spouse relief or during review by the Tax Court (unless the court permits)

  • The IRS generally may not levy against property

  • While a request for an installment agreement is being considered

  • While an installment agreement is in effect

Injured Spouse Relief

 

Sometimes a liability belongs only to one spouse.  A taxpayer is an “injured spouse” if he/she files a joint return and all or part of his share of the refund was, or will be, applied against the separate past-due tax of his/her spouse with whom he/she filed the joint return.  An injured spouse may be entitled to recoup their share of the refund.

Innocent Spouse Relief

 

A taxpayer may be relieved of responsibility for paying tax, interest and penalties because a spouse or former spouse failed to report income, reported income improperly, or claimed improper deductions or credits.  The injured spouse must meet all of the following conditions to qualify:

  •  The spouses must have filed a joint return with an understatement of tax directly related to the spouse’s erroneous items.

  • The innocent spouse can establish that at the time he/she signed the joint return, he/she did not know, and had no reason to know, that there was an understatement of tax.

  • Taking into account all the facts and circumstances, it would be unfair to hold taxpayer liable for the understatement of tax.

Penalty Abatement

 

Under certain situations, a taxpayer may appeal penalties assessed against him by the IRS.  This involves the use of the reasonable cause criteria.  Reasonable cause involves situations that are beyond one’s control after exercising normal care and prudence.

 

Currently Not Collectible (CNC)

 

If you are found to be unable to pay your tax debt the IRS can grant you CNC (Currently Not Collectible) Status.  The IRS must stop all collection efforts, including wage garnishments and property seizures if the taxpayer is granted CNC status.  The taxpayer will need to continue to submit proof of their “financial hardship” to the IRS.  If the taxpayer’s financial situation improves to the point that they can pay the tax owed – they will be taken off the CNC status and will then be required to make payments to the IRS.