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Author: Mike

Tax Debt Reduction – How To Reduce Tax Debt The Right Way

Posted on by Mike

Tax debt reduction is a dream solution for most taxpayers when they are facing back tax problems with the IRS. Usually, tax debt penalties are accruing with interest & penalties over time. For example, what was once a 1500 USD tax debt, can eventually grow to 2500 USD or even more. One fact you should always remember is that the IRS won’t forget the tax you owe. They have sophisticated automated systems that ensure the collection actions are initiated.

Tax collection efforts start with IRS notices before leading to legal action (such as tax liens, bank levies, and wage garnishments, to name a few). In the event that the IRS has initiated legal proceedings against you, you will need to work with a tax lawyer. IRS legal proceedings are always complicated and hiring a tax attorney to navigate for you will ensure you get the best possible outcome.

Many taxpayers who are in tax debt can’t afford to pay the whole sum for their debt because of financial constraints. The most cost-effective way individuals & businesses can resolve the issue of a tax debt is to ensure that they qualify for a tax debt relief program or decide to seek a postponement in the payment of their tax debt. For the best tax debt reduction, taxpayers should work with a tax expert for a solid tax debt relief plan of action. A tax professional will highlight a step by step tax debt reduction plan for affected taxpayers.

Tips To Carryout Tax Debt Reduction

The following steps can make the tax debt reduction process easier:

#1 Try To Verify The Total Sum You Owe The Tax Office

Do not assume that the total sum reflected on the IRS notice issued to you is the amount you actually owe as tax debt. However, the Internal Revenue Service can also make mistakes. So before you decide to do anything, make sure you run through your tax files adequately and compare the numbers indicated against what is shown in the IRS collection notice. Keep in mind that the amounts indicated in each document may differ.

If the tax debt doesn’t make sense to you, take advice from a tax expert, this can greatly increase your chances of reducing your tax debt. They can help make corrections to errors and omissions on your tax returns, which can ultimately result in a tax debt reduction.

#2 Offer In Compromise

It is important to note that, if deciding to pay off your tax debt will directly put you in financial hardship, you may actually qualify for tax reduction through an offer in compromise. An offer in compromise can be defined as a settlement between the IRS and a debtor that settles the taxpayer’s tax debt for less than what is entirely owed.

Evaluating Your Finances for an Offer in Compromise

This simply means evaluating your finances. It is either you have the funds to pay off your tax debt, or you cannot afford it. Before making any move, think about how to pay the tax debt will ultimately going to affect your livelihood. To figure this out, ask yourself if paying the debt in full will cause you financial hardship? You will need to determine this number, before contemplating the tax settlement option to use.

What if You Have The Money To Payoff Your Tax Debt?

Since you have the required amount of money to handle the issue, you can successfully resolve your back tax problems with the IRS. One advice here is to pay off the debt as quickly as possible. The reason for moving swiftly when it comes to paying off your tax debt is because delaying this process will only make you accumulate penalties and interest against your back taxes.

The interest rate of the IRS as of 2017 is 4 percent per year, which doesn’t even include the more significant penalties that can be imposed by the IRS such as the failure to file a penalty or the failure to file a penalty.

The Right Way to Excuse Tax Debt Reduction

Successfully obtaining a tax debt settlement with the IRS is very complicated and can be achieved by hiring a tax expert. If you have a financial hardship, this scenario can be complex and will require vast experience to make sure it is done in the right way. Again, if the total amount you owe in tax debt is more than $10,000, talk to our tax professionals. We can reduce your tax debt call us today.

IRS Debt Relief Advantage and How to Qualify

Posted on by Mike

IRS debt relief can usually be done through an “offer in compromise” or other tax resolution avenues. This is defined as an agreement reached between taxpayers and the IRS which allows taxpayers to settle their debts for less than what is entirely owed.

Every person who owes tax debt can be pre-qualified for the IRS debt relief programs. However, the IRS typically rejects most offers. Here’s are a few quick ways of finding out if you qualify for IRS debt relief.

Forgiven Under Special Financial Crisis

Under some circumstances, a taxpayer can have their debt partially forgiven by the IRS. Note that when the IRS decides to forgive tax debt, the current financial state of the taxpayer is critically considered. Meaning the IRS can’t collect more than what a taxpayer can afford to pay. In the event that a collection action by the IRS will put a tax debtor in the financial crisis, the IRS won’t be able to collect the back taxes.

How Does the IRS Debt Relief Initiative Work?

When you have qualified for the OIC with the IRS, you will be allowed to pay the new total tax debt in either an installment or a lump-sum payment format. The details here will vary based on your monthly income, the kind of solution package you choose and your total tax debt. The process is usually confusing if you are doing it alone. It is recommended that you work with tax attorneys so they can apply the right tax debt relief strategies to your case.

Advantages of the IRS Debt Relief Initiative

There are a few benefits that affected taxpayers can enjoy if they qualify for the tax relief initiative. Some benefits that can be expected when taxpayers’ relief tax debts include:

#1 Avoid Wage Garnishments

Usually, the government can garnish your wages until you pay all your tax debt. However, this is not the case for those who are participating in the IRS debt relief program. Under the program, your wage is safe from garnishments.

#2 Reduce Tax Burden

This is one of the most significant benefits of the program because it allows you to pay less than what you owed. This is usually the ultimate goal for the IRS tax debt relief program.

#3 Avoid Liens

Usually, taxpayers who owe the IRS money and are not taking action receive IRS liens to their property and also on credit reports. The IRS can take possession of these assets until your tax debts are fully paid.

Recommendation from Tax Experts

It typically takes one year to have your case approved by the IRS. In the event that you are approved, you will have the responsibility to pay the original tax debt owed plus an assessment of interests and penalties. Keep in mind that not all taxpayers can qualify for the program. To increase your approval chances, the most important thing to do is to make sure you have a tax attorney or tax debt relief experts working with you so they can navigate you through the tricky application process. By doing this, you will be more likely to be accepted to the program and have a higher tax reduction.

Working with a tax debt relief expert is the best way to reduce tax money to the IRS.

IRS Power of Attorney and Why You Should Use It

Posted on by Mike

Taxpayers have the option to represent themselves or appoint a representative to act on their behalf. The Form 2848, Tax IRS power of attorney, is used to designate an individual as the representative of the taxpayer to the IRS and to allow the representative to provide tax debt relief for taxpayers.

A taxpayer can limit the duties that his representative can do by adding a statement to the power of attorney explaining in detail what will be the responsibilities of his representative. A tax attorney will be able to record interviews, sign agreements that accept the fiscal adjustments and also the receipt of checks for reimbursement without limitations.

If a taxpayer does not wish to give his attorney access to all fiscal years or represent him on his behalf in any fiscal reason with a Tax IRS power of attorney, he must complete the ‘ Third Party Designee ‘ section on his tax return. This will give the tax lawyer permission to ask the IRS about the current fiscal year only.

What, Exactly, Authorizes the Form?

Signing Form 2848 Tax IRS power of attorney  gives your agent, a CPA, tax attorney, or other designated person as your agent, authority to take a certain action on your behalf:

Receive Confidential Tax Information

Signing a tax return in constrained situations: you probably have an ailment, harm or are continuously out of the US for no less than 60 days before the date a return must be filed. In any additional instance (for example, if you are on holiday in the US after preparing your return and it must be filed), you must send a request in writing to the IRS to obtain someone’s permission (for example, the preparer) to sign your return.

Tax Irs Power Of Attorney – Presentation

The module consists of two pages and two parts. The first part is made up of nine sections.

Section 1: Taxpayer Information

You must provide information about yourself, spouse and family members. You will also need to provide your name, mailing address, social security or tax identification number and telephone number.

Section 2: Representatives

This section is to identify the person or persons that are left to represent. You can enter a maximum of three. This section also contains space for a “CAF” number which is assigned to the IRS representative. It identifies them as connected to the file. Therefore, it is not necessary to complete this section.

Section 3: Taxation Issues

Here, the specific problem is designated in which the representative is allowed to work on his behalf. It must indicate its nature, such as the payment of final fees or control, the type of forms related to the subject and the specific periods of time, which gives the authority of the representation. This period can be as long as the problem is solved or for a single month. However, once expired, you must present another form if you wish to extend the powers of the representative.

Section 4: CAF

The IRS registers all powers in a CAF. However, when the power data is no longer a specific tax problem, the IRS does not have to create a CAF. These include a request for advice, the identification number of employee demands and corporate resolutions. More information about these exemptions can be found in the instructions on the form. If you are not sure if you check this box, ask your representative.

Section 5: Authorized Facts

In this section, you expose the specific acts you will allow your representative to perform. You can edit the contents of this section by writing the changes in the lines provided. If you need more space, you can write the rules on a sheet of paper and attach it to the form.

Section 6: Receipt of Checks

The IRS allows tax attorneys to receive but does not back checks, money back. This option is available so that the IRS does not have to send a check for you, but can give it to the representative, if possible. To give the representative of this function, you must enter your initials where indicated and write the name of your representative.

Section 7: Addresses Listings

The IRS documents email and other communications related to your situation for you and your first representative on the list. In this section, indicate if you want any other representatives mentioned in section 2 to also receive alerts.

Section 8: Revocation of Previous Reports

Form 2848 Presentation automatically revokes all previously deposited 2,848 forms. This means that people who are authorized and acts are authorized to do in their previously filed form are no longer possible. If you just added or changed something and do not want to completely invalidate the previous form, you must indicate by checking the box in this section.

Section 9: Your Signature

In this section and all other affected taxpayers must sign and date the form. It is better to do so in blue ink so that the IRS can say that the form is the original.

Signatures of The Representatives

The representatives must sign and date the second part of the module. They should also indicate your professional situation or relationship with you. Tax lawyers and CPAs must provide a form of license that authorizes them to act as representatives in their respective states.

Revocation of a Tax IRS Power of Attorney

If you want to change agent (for example, if you hire a new tax lawyer because you are not satisfied with the representation of the tax lawyer to whom you first gave the authorization), you must complete a new Form 2848. Submitting a form for a new agent is automatically revokes a previous POA whenever the previous agent is in the CAF system (that is why the number is important).

The 2848 Submission Form does not revoke the authorization to view the tax information that you submitted when filing Form 8821.

Get Rid Of Tax Debt by Hiring a Tax Attorney

Posted on by Mike

There are a number of circumstances that can cause people to be in the situation to seek tax debt relief with the goal to get rid of tax debt as quickly and as cheaply as possible.

The Internal Revenue Service does have the advantage. Agents and Revenue Officers that work for the IRS can garnish wages, put liens on homes and businesses, and force people to pay a massive debt for decades.

A tax attorney can negotiate tax debt relief and help a person get rid of tax debt typically much faster than the person can on their own. A trained tax lawyer knows how to deal with the IRS in ways that the average person does not.

The following are a few of the methods that a tax lawyer can use to provide tax debt relief for people who simply want to get rid of tax debt. The skill that a tax attorney employs in fitting the method to a particular individual’s situation is one of your best defenses against the arsenal that the IRS can employ against you.

Wait Them Out

The Internal Revenue Service does not have an unlimited amount of time to attempt to collect a tax debt. The limit is 10 years. The time clock usually starts running when the IRS asses the tax debt. The first indication that a person receives is a notice from the IRS.

It is possible to wait the term out and pay no taxes or any interest. Avoiding any of the other tools that the IRS has to force a person into court or to begin paying requires the services of a tax lawyer. A lengthy series of appeals can prevent the IRS from touching any assets for 10 years.

Declare Bankruptcy

Bankruptcy is often thought of as an extreme calamity. The reality is that bankruptcy is a financial tool. Filing bankruptcy can get rid of tax debt in a very short period of time. This is sometimes referred to as a Band-Aid for tax debt relief because the issue IRS collecting resurfaces after the bankruptcy is discharged.

The tax debt does not disappear. The reasoning is that you have eliminated your means to pay the tax debt by filing bankruptcy. In most instances, you can keep anything that is necessary for you to earn a living or to drive to a job. Getting rid of a business that the IRS is going to seize has the potential of putting some money in your pocket.

Prove you Cannot Pay

It’s possible to stop the IRS from doing all that’s in their power to collect a tax debt. All that a person has to do is to prove to the IRS that they do not have the ability to pay the tax debt. The proof must be beyond doubt.

Tax attorneys can file an appeal that prevents the IRS from taking any action against any of your assets for a year. The case will be reviewed and a person’s ability to pay will be considered again. The tax debt can be put off as long as a person can prove they cannot pay.

Compromise Settlement

The IRS has a program that allows for a compromise settlement to get rid of tax debt. The program is based on three ideas. The IRS knows that a person does not have the money or assets to be able to pay the tax debt in 10 years. The IRS acknowledges that some of the tax debt may not be legitimate. The IRS considers circumstances on an individual case that can prevent a person from paying the tax debt. They will allow a person to pay a lower amount of tax debt to settle. There are some serious constraints involved. You cannot have declared bankruptcy and must make a deposit of 20 percent of the settlement amount before the settlement can proceed. The process can take six months or longer.

Installment plans

The IRS is not a bank or a credit card company. The IRS has created a program for people to get rid of tax debt that is very much like paying off a credit card debt. A person pays a certain amount of their tax debt each month until it is paid off. The debt that a person owes accumulates interest until it is paid off.

The best thing about this program is that the amount to be paid off, the monthly payment, and the interest rates on the balance are all negotiable. A person who owes the IRS tax debt can save thousands of dollars by negotiating the lowest possible amount and interest rate to be paid.

The IRS realizes that people can get into tax trouble if they are victims of scams. The IRS has a tax installment payment plan that lets people who have been taken advantage of using previous tax payments as a way to recover some of the money they lost. This program allows a person to recover money by paying taxes.

Hire a Tax Attorney

Getting rid of a tax debt is complicated. A battle with the IRS over taxes is intimidating. You enter the court expecting to lose unless you have someone on your side. The best time to contact a tax lawyer is when you get the first letter from the IRS that says you owe the government money. A tax attorney can prevent wage garnishment, property liens, and bank account holds.

You’ll need an analysis of your specific situation and to form a game plan that fits your situation once you know where you are. A tax attorney can give you the advice that fits your situation because they have experience with tax debt relief.

Legal Tax Defense has the nation’s top tax attorneys and tax lawyers who can easily accommodate and assist you with any tax issue, call today!

IRS Fresh Start Program

Posted on by Mike

The IRS fresh start program is designed to expand the assistance and benefits offered by the Restructuring and Reform Act of the IRS. This makes it easier for taxpayers to handle excessive back taxes or swiftly get out of debt with the IRS.

The initiative has been fully available since the 2016/2017 tax year, but if you want to take full advantage of this tax debt relief opportunity, you should act now because you cannot predict how long it will last. While the program is a unique opportunity to see off your tax debts, you will need to understand what it is about and how to go about it.

For those who are having trouble paying IRS dues, this content will show you how to achieve a working IRS Tax Resolution. It is a step-by-step guide highlighting the process from initial paperwork to negotiating and reaching an agreement with the IRS as quickly as possible.

What Is The IRS fresh start program All About?

The Fresh Start Program was set up to help taxpayers with IRS back taxes take care of their debt more efficiently. The program has seen the introduction of several significant changes to the IRS tax debt relief laws. Thus, significantly loosening the eligibility restrictions and taking away individual requirements entirely making it a possibility for millions of Americans to get the tax relief benefits they desperately need. The program is applicable not just to individual taxpayers, but also to small business owners who are having issues with outstanding taxes. So whether you owe tax for yourself or your company, you will be able to take advantage of the benefits that the program provides fully.

How Can The IRS Fresh Start Program Help Taxpayers Indebted To The IRS?

It is paramount to indicate that the purpose of the Fresh Start Initiative is to make it much easier for taxpayers to pay all taxes owed to the IRS and avoid liens. Even small businesses may benefit from the Fresh Start Initiative. Discussed below are three primary features of the program:

1. Tax Liens

The program has increased the sum that taxpayers are allowed to owe before the IRS can file a Federal Tax Lien notice against them. When a taxpayer meets some requirements and pays off their debt, the IRS can withdraw the Notice of Federal Lien they initially filed. Taxpayers have to request this in writing with Form 12277 (also known as Application for Withdrawal). Taxpayers may qualify if they want their lien notice to be withdrawn and if they are settling the tax debt via a debit installment agreement. Additionally, taxpayers need to request this with Form 12277. If a taxpayer should default on the debit installment agreement, the tax regulatory body may file a new Federal Tax Lien Notice against them and resume actions for collection.

2. Installment Agreements

The program has broadened routes to streamlined installment agreements. Although the IRS will generally not need a taxpayer to provide their financial statement, they might, however, need some financial data from the debtor. The fastest way to apply for any payment plan is via the Payment Agreement Tool on the IRS site. If you have no access to the Web, you have the option to file Form 9465 to apply.

3. Offer in Compromise

This can be defined as an agreement allowing taxpayers to settle their debt for less than the original amount owed. The Fresh Start Program streamlined and expanded the OIC initiative. The IRS is now more flexible when analyzing the ability of a taxpayer to pay. This option makes the program more readily available to a larger group.

How Can You Be Qualified and Submit an Application for the IRS Fresh Start Program?

The IRS Fresh Start Initiative isn’t just one big program. It’s a collection of tax debt relief options for you to utilize in the event that you owe back your taxes. Note that each alternative that the program offers carries specific requirements.

In other words, there’s no yardstick or standard list of conditions that a debtor must meet to qualify and apply for every program provided by the Fresh Start Initiative. But there are exceptions as is always the case. There are two critical requirements that all applicants must meet before they can qualify and apply for the program. All applicants for the program must:

  • File their tax returns on schedule or promptly.
  • Be current when it comes to their estimated taxes and any taxes that they are required to hold from employees in the current tax period.

The other requirements are unique to each avenue the debtor chooses to use to settle their tax debt. This is why it is best to consult with tax attorneys or tax relief experts so they can help you determine which program is best for you.

How Do You Apply For The IRS Fresh Start Program?

To apply for any payment plan of your choice, use the Online Payment tool on the IRS site. If you don’t want to make use of the online tool, you file Form 9465 instead with the aid of a tax lawyer. Deciding to apply for an installment agreement (especially when you give details of your assets and income sources out), can have dire consequences. Therefore, it’s wise to seek consultation with a tax lawyer or a tax relief agency so that they can hire a tax attorney for you before you reveal financial information that can be used to hurt you in a criminal investigation or an audit.

Tax Audit Defense Help

Posted on by Mike

Tax audit defense is simply a service that allows a tax audit professional to give you full tax audit representation during your tax audit. Of course, you can handle your tax audit yourself or give it to a professional, the choice is completely yours. However, it is often better to let a professional handle your tax audit defense due to the reasons outlined in this article.

Before you understand tax audit defense you should understand what IRS Audit means. It is simply an assessment and examination of both your business and individual financial information to be sure that you have provided accurate information according to the tax laws of your state. However, if you mistakenly inflate your income and you get more tax, IRS agents will see it as a genuine error but if you mistakenly unreported your earnings, no IRS agent will accept it to be a mistake. Unfortunately, it could be a genuine error. This is one of the biggest reasons you should let a professional handle your tax audit defense.

Major Types of Tax Audits: Correspondence Audits, Office Audits, and Field Audits

A correspondence audit is for fixing minor errors on your recent tax returns. It is so named because it can be handled via mail.

An office audit is a little more complex. You will need to visit the IRS office with the required documents. If the IRS feels that your taxes need to be audited, you will get an invitation that includes all the necessary documents that you should bring along. It is at this point that you can hire a tax attorney to represent you.

A field audit is similar to an office audit but it is IRS officials that will visit you. They can choose to visit you at home, in your accountant’s office or in your business premises. If you don’t like a field audit, you can ask for an office audit and give reasonable explanations. However, there is no guarantee that your request will be granted because the IRS believes that the main reason people shy away from the field audit is that they have a lot to hide.

Can A Tax Audit Be Postponed?

You can also apply for a postponement of the audit through the auditor assigned to you. The postponement is also not guaranteed. The IRS auditor reserves the right to grant your request or turn it down for a good reason.

While your letter of invitation will usually include all the documents you should take along, here is a list of what the IRS usually asks for. Bill, receipts, investment statements, business travel logs and tickets, loan agreements, legal papers, proof of income, bank statements, 1099s, and W-2s.

Consult with a Tax Audit Defense Lawyer

Here are the reasons you should let a tax audit professional handle your tax audit defense and represent you.

1.    Tax Audit Defense Lawyers Can Eliminate Errors

Usually, tax returns take about 30 days to effect after filing but it can be delayed when there are mathematical errors in the figures tendered. Missing entries in some sections can also cause delay and most commonly when there are discrepancies between the estimated taxes paid and what is in IRS’ record.

The chances of any of these mistakes occurring will be very high if you handle it yourself. So, it is better for tax defense attorneys to handle your tax debt relief application. You want to make sure you know what to provide the IRS or State, more importantly, what not to provide.

2.    Tax Audit Defense Should Be Done By a Tax Lawyer Because They Understand the Rules

Tax audit defense lawyers understand the rules inside out and they also understand how IRS officials operate. They know that IRS looks for discrepancies. Sometimes, in the course of explaining a situation to IRS officials, you will mistakenly expose yourself more than necessary and IRS officials will capitalize on the area. Again knowing what not to say or provide becomes a key benefit of hiring a Tax Pro.

So, it is better to let professionals handle it. With each question asked by IRS officials, they are aiming at something that is often not obvious initially. So you should allow an expert to handle your tax defense. Besides, IRS officials are always looking for more ways to increase your taxes and they have strategies and collection tactics for that. It is only experienced tax experts that understand these strategies.

Sometimes the mistake may sound like fraud to your IRS auditor and he will not hesitate to refer you to the Criminal Investigation Division (CID). Indeed, truth be told, when it comes to tax issues, some genuine errors sometimes look deliberate. Professionals will help you avoid such.

3.    Professional Tax Audit Defense Gets You Better Result

When IRS officials find out that you are being represented by a professional, they tend to sing a different tune. It often leads to faster turnaround time as well. This is because IRS officials understand that the tax lawyer understands the law and IRS code.

4.    Professional Tax Audit Defense Lower Documents Request

Failing to send the right documents may delay the auditing of your taxes and there are documents you should never send to IRS. Even though they don’t need it, they will scrutinize them in hopes to find additional information exposing you even more. And because they have been trained for such, they often find leads in those additional documents.

So, you should be very careful when sending documents to the IRS. This is why it takes professionals to know the tax law and what needs to be provided. Hiring a tax defense attorney is always a good idea.

Most importantly, hiring a lawyer for tax audit defense means that you don’t have to speak to IRS officials yourself. Finally, it is important that you keep all the records used for preparing your tax returns for at least three years before discarding them.

IRS Abatement Letter – How It Can Help You to Avoid Penalties

Posted on by Mike

Most people haven’t heard of an IRS abatement letter. So let me explain how it can affect taxpayers. Initially, after a number of steps have been taken, the IRS is empowered by the constitution to issue penalties when taxpayers are found to have defaulted on their required payments.

The IRS has about 150 different penalties to hand out to tax defaulters. These penalties differ depending on the case and how much the liability amount.

The worst part is that the IRS charges interest on the original penalty, therefore, it usually needs to be contested. When contested, the penalties can be abated and in a number of cases, completely reduced to zero. Contesting these penalties or requesting for abatement is done with an IRS abatement letter.

What Is An Abatement Letter?

It’s a letter written to the IRS requesting that penalties imposed on back taxes owed be reduced or removed completely, with reasonable cause. The reasons for which the IRS can agree to abate penalties on taxes include the following:

  • Medical grounds: Illness to self or a loved one whose care stood in the way of making tax payments.
  • Lack of proper understanding of the attendant tax laws.
  • Bad accounting: This is usually a fault of the accountant in charge.
  • Military duty
  • Disasters like fires, floods, hurricanes, and the likes.
  • Death
  • Alcoholism and drug abuse problems.
  • Sometimes an abatement can be requested if advice from the IRS led to default.

Things You Need to Do After Writing the Abatement Letter

First and foremost, it’s vital to be sure that the reasonable cause for which the abatement is sought is actually ‘reasonable’.

The IRS defines reasonable cause as a situation that presents itself and by so doing prevents the taxpayer from being able to meet tax obligations despite taking reasonable steps to ensure that they meet it. A cause is not reason enough if the effort has not been made to pay the back taxes in question.

The next thing to do once the letter with a reasonable cause is established and written is to ensure that all necessary documents are prepared and attached to it. These documents include the IRS notice, filing of tax returns and IRS document 834 which is the abatement or refund request document. Any documented evidence of the reasonable cause on which the abatement request is hinged needs to be included as well. The delinquent taxes may also be sent along with the documents but that is not a compulsory requirement. Tax attorneys have however suggested that it may cause the application to be looked upon more favorably.

Once the decision to file for abatement has been made and run through a tax lawyer for advice; also through the accountant(s) for their input and all entities involved in the whole tax filing process, it is ready to be sent.

It’s crucial to remember that an IRS abatement letter should be filed as soon as possible and once it is concluded that everyone is on the same page. Although it can be filed after payment has been made, it is best to file abatement requests before making penalty payments. A refund, however, can be requested after though if deemed necessary.

The most important reason why an abatement letter has to be filed on time is that the penalties already earn interest, as well as attract more penalties. Therefore, filing the abatement letter early reduces substantially the amount that may be potentially owed.

The Importance of Professional Assistance

The average taxpayer may not know his or her rights, it’s important to understand them. Seeking a professional’s assistance will increase the odds of a successful tax resolution. Let our Tax Attorney and Enrolled Agents boost your chances of getting favorable results.

Taxpayers found to have defaulted can earn abatement for other reasons apart from those listed above, for example

  • Defaulting out of not previously had to file a return
  • Not having had a tax penalty for the preceding 3 tax years
  • Having paid or arranged to pay all back taxes just before the penalty landed.
  • Filing required tax returns or having submitted an extension request before the penalty hit.

These reasons just listed are mostly technicalities and needs to be argued or presented by tax lawyers with good knowledge of tax laws and their applications.

File Extension to Avoid Tax Penalties

As a bonus tip, many people do not realize that the tax penalties they end up having to pay are avoidable by doing minor things, most importantly, filing tax returns on time. Even when the tax payments have not been made, filing tax returns on time protects from a fine of up to 25% – which is the requisite penalty for late filing tax returns. Once the books have been done and it is obvious that paying taxes upfront may be hard, it is best to request an extension or conclude on a payment plan with the IRS in good time. It is, therefore, best to try as much as possible, no matter what is going on to file returns on time when possible.

If these and other prevention steps ever fail due to a good enough reason then a tax abatement letter is the way to go. For cases like this or other tax debt relief issues, the lawyers at Legal Tax Defense always come through for just a fraction of the cost owed.

Make that contact today, reduce the burden!

Notice of Intent to Levy – Ways to Resolve the Problem

Posted on by Mike

Notice of intent to levy is a notice issued by the IRS if it intends to seize your assets. This notice will only get issued if you have a seriously delinquent tax debt that hasn’t been resolved. It typically references a tax period for covering the taxes you owe. The IRS will send this notice for every tax you owe, that it intends to take before possessing your property. The IRS usually can’t take control of your property except if it has provided you with notice beforehand.

If the IRS decides to charge you or your business any tax that isn’t fully paid, IRS will ultimately get around to mail you a number of collection notices. IRS will typically issue four collection notices for business entities. You will need the assistance of a tax lawyer to help you handle the issue. Tax lawyers can help you solve the problem by getting you the best tax debt relief options to solve your notice of intent to levy.

Notice of Intent to Levy Process

Under federal law, the IRS is obligated to follow the guidelines before seizing your property.

  • Give you a written or letter notice of intent to levy along with explaining your right to appeal.
  • Deliver the notice in person or via a registered mail to your address.
  • Give an explanation as to why they are issuing the levy (seizure process, and telling you what your options are) is included.

Note, there are several exceptions to the regular 30-day rule regarding notice of intent to levy. With the following exceptions including state tax refunds, disqualified employment tax levies, if the IRS deems the tax collection to be in jeopardy, and national contractor dues.

What Assets Can the IRS Take When They Sent out a Notice of Intent to Levy?

Here is a list of assets that the IRS can levy:

  • Property (vehicles, homes, and personal property)
  • Right to property
  • Money in bank accounts
  • Wages and commission from your employer
  • Social Security benefits
  • Vendor or contractor payments
  • Employee travel advances
  • Retirement benefits
  • Government retirement benefits from the OPM (Office of Personnel Management).

Apart from that, the IRS is also positioned to take nearly anything you own even beyond the bare essentials. The IRS can take everything you own and leave you with almost nothing or very little until all your tax debts are paid off. However, the IRS will let you know how much of your total income can be exempted from the levy. This applies to wages, commissions, salary, and other forms of payment. It considers your pay frequency, filing status, and the number of recent tax return exemptions you took.

What Should You Do If You Receive the Intent to Levy Notice?

The easiest or fastest way to deal with the intent to levy notice is to pay the tax debt. The moment you make the tax payment, the IRS will stop all collection activities. If on the other hand, you don’t have the whole tax balance to pay, there are other options that you can consider.

The IRS is always open to working with you for the most optimal options to resolve your tax debt. In particular, you will be able to apply for an agreement where you can make the payment in installments, or you make an offer in compromise. In most cases, you will find the best option to resolve your tax debt when you work with an Enrolled Agent, tax attorney, or a licensed tax professional.

Common Ways to Resolve an Intent to Levy Notice

#1 Innocent Spouse Relief

In a situation where you believe that your former spouse or spouse is the person who is solely responsible for your tax debt, you have the option to file for ISR (Innocent Spouse Relief) with the IRS. To carry out this option, you will need to meet all the IRS requirements as listed below:

  • You filed a joint return that has an understatement of tax (deficiency) that’s solely attributable to your spouse’s erroneous item. An erroneous item includes income received by your spouse but omitted from the joint return. Deductions, credits, and property basis are also erroneous items if they’re incorrectly reported on the joint return
  • You establish that at the time you signed the joint return you didn’t know, and had no reason to know, that there was an understatement of tax and
  • Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.

#2 Offer in Compromise

In a situation where the IRS chooses to settle your debt for less than what you owe for taxes then an Offer in Compromise will have to be reached. Because of the unique circumstances surrounding this option, the IRS rarely uses this option. They usually only offer this type of arrangement with tax debtors sparingly. In fact, back in 2016, only 43 percent of all Offers in Compromise was accepted by the IRS. Once the IRS decides to approve an offer in compromise, once the taxpayer makes the payment, all kinds of collection activity will stop. However, applying for this option can be a bit complicated so you might want to seek professional help.

#3 Installment Agreement

An AI or installment agreement is when you agree to make monthly payments to cover your debt. An installment agreement typically reduces the penalty for failure-to-pay by at least 50 percent, although the IRS will keep gathering interest. Note that the only way to avoid a situation were the IRS will seize your assets or carry on with other collection actions is if you keep up with your payment as agreed.

#4 CNC Status

Your CNC Status which can also be referred to as (currently not collectible status) hardship status can help you in this situation. With this type of agreement with the IRS, you will have to provide a collection data statement to the IRS as proof that if they (the IRS) forced you into paying the taxes, it would put you in financial hardship.

Still Not Sure What to Do?

Talk to our tax professionals today. We can stop the notice of intent to levy and get you the best option to save your assets.

How to Successfully File Previous Year Taxes – Step By Step Guide

Posted on by Mike

It is an offense under federal law if you fail to pay or file previous year taxes. Most times, you get fined and you could end up in prison. If you owe taxes or skipped filing your taxes, make sure you get this done. To accomplish this you need to gather the relevant information as well as paperwork. Complete the necessary forms and forward them to the IRS. More so, consult with a tax attorney if you need professional advice and help file the previous tax year.

Why Do You Need To File Your Previous Year Taxes?

There are many benefits that come with filing your back taxes. You will reduce charges on interest, penalties, and fees if file your taxes early. The truth is; when you do this you save yourself from the hand of the law. Remember, you could end up owing more if you fail to file your taxes. More so, you save yourself from losing your tax debt relief options.

Step-By-Step Guide on How to File Previous Year Taxes

The first step towards filling your previous unfiled years is to find out what documents are necessary. You can consult with one of our tax lawyers if you don’t know what to do.

1) Find out the exact number of years you are unfiled for.

This is important to avoid over or under filing previous year taxes. Thus, you need to look at your records. Take a look at copies of your previous tax filings, refunds, and receipts. This is one of the best ways to determine the exact number of years you have unfiled. If you cannot determine the exact number of years, contact the IRS for clarification. We offer a Tax Investigation; this will obtain records for 10 years and IRS transcripts. We will then go back through your history to see exactly what needs to be accomplished to get you back on track with IRS.

2) Gather Income documents

To file past year’s taxes, take a look at your old documentation like W-2s, 1099 or 1098. These documents will help you with your income information. If you cannot find them, contact your employer although there is no guarantee they will help.

Usually, when you are employed, you will receive a W-2 form at the end of every working year. This document has information about your wage, salary, and amount paid in tax.

If you have student loans or other loans, you are given form 1098 if you paid school fees and.

If you collect a pension as well as dividend income or have a contract job, you will get 1099 forms.

3) Contact the IRS or Form 4506T for Missing Income Documents

Chances are that you might not find all the necessary documents you need to file the previous year’s taxes. If this happens, call the IRS or use form 4506T. With this form, you can request for relevant information found on the forms in step 3.

Understand that the IRS will not send you duplicated copies of this document. Rather, you will get the necessary information that will help you in filing your back taxes.

We also conduct a service called a Tax Investigation that wills 1. Get you protected and 2. Find out exactly what you owe and for what years. We are also able to obtain IRS transcripts giving our firm detailed information about the last 10 years’ history.

Things You Should Know Before Filing Previous Years Taxes

Once you have all the relevant documents and information, you can start to file your back taxes. Here are a few things you should know before filing your previous year’s taxes.

#1 Understand the Different Methods You Can Use To Prepare Your Previous Year Taxes

To prepare your back taxes, you can either do it by yourself or seek professional help.

If you want to do it yourself, you can pay per year through different internet services or use the previous year tax filing forms on the IRS website, all you need to do is follow the step by step instructions. If you use online services to prepare your previous year taxes, you have the option to e-file them otherwise you will have to mail it to the IRS.

In the case that you mail your tax form to the IRS make sure you mail the forms to the address that the IRS provided. If you are confused go to the IRS website for specific instructions.

In a situation where you cannot do it yourself, call us for professional help. We have tax lawyers, and enrolled agents that can help you file complex previous year taxes.

Benefits of filing previous year taxes with professionals: Usually, preparing your previous year taxes with a professional, he/she will file directly with the IRS and have your tax problem resolve faster.

#2 Decide On  Payment Options and a Plan That Is Precise For You

If you owe taxes that you cannot clear at once, request for a grace period of 60 to 120 days. You will need to call the toll-free number 800-829-1040. If you cannot pay within the grace period, request a payment plan with the IRS. With this plan, you can clear your tax debt with installment payment till you clear your debt with the IRS. You can only do this if you have filed your back taxes. You can work with a tax lawyer to come up with a plan. Your plan should focus on payment by monthly installment.

In the case, when your debt exceeds $50,000, you need to complete and submit forms like the 9465 and 433-F. It’s best to have a tax lawyer help you with this complex process because it requires legal knowledge of tax law. Furthermore, tax lawyers can help you reduce tax debt.

#3 Benefits of paying the principal amount

Paying the principal amount can help to reduce the interest rate. To do this, you can either write a check or do an electronic transfer. More so, you can make payment via your debit or credit card. Doing this will help you reduce your tax penalty and interest on the money you owed.

#4 reduce Your Penalty and Fees by negotiating with the IRS

You can negotiate with the IRS to pay less than you owe. This is known as an Offer in Compromise. To start the process you will need to fill the pre-qualifier form to find out if you qualify for the Offer in Compromise. There are other programs that we exercise for taxpayers like the fresh start program or abating the penalties.

Make sure you list all your expenses for each month such as obligations like insurance, food, gasoline, clothing, rent, mortgage payments, and other expenses. You will also be required to pay an application fee of $168 (price may vary by filing year). The IRS will only review your application if you meet their criteria.

#5 Work with Tax Professionals to File Previous Year Taxes

If you want to successfully file previous year taxes you will need some legal knowledge and legal knowledge in filing back taxes. To file the previous year’s taxes, you will need to use the correct form from the IRS. So, it is best to seek help from a tax relief company that has certified enrolled agents and tax attorneys to help you go through the process quickly so you do not have to pay penalty and interest for owing money to the IRS.

For immediate help in filing previous year taxes, call us now for a free case evaluation.

Get the Best IRS Back Tax Help Today

Posted on by Mike

With the help of a tax attorney that offers IRS back tax help, you can easily resolve your tax problem a lot quicker than trying to tackle the matter on your own.  It can be an awful experience when faced with the adversity of back taxes. The good news is, it’s better late than never to file your IRS back tax returns. Sometimes, you might not notice your back taxes until the IRS levies your bank account or garnishes your paycheck.  No matter the circumstance, there is always the possibility of IRS back tax help through reaching out to a Tax Attorney who understands the tax law. Don’t live in fear of the IRS connect with a tax pro for help.

When faced with the issue of back taxes, it’s essential to take action quickly and efficiently. The consequences of negligence can be severe, so it’s very important to consult with a Tax Lawyer. Tax lawyers understand your situation and can help you. With a tax lawyer’s help, you are guaranteed peace of mind and security in avoiding further consequences that could affect the Tax Debt Relief.

Consequences of Not Filing Your Back Taxes

The consequences for not paying your taxes vary from case to case depending on the amount you owe. One of the immediate consequences of back taxes is that you will be hit with penalties and interest. Importantly, you can lose your Tax Debt Relief options if you fail to file your back taxes.

Failing to file your back taxes will cause you to be hit with the failure-to-file penalty. This penalty involves a penalty of 5% of your total due tax, which can potentially go as high as 25% if you continue failing to file your back taxes. More so, you face the loss of a refund, as well as any other tax benefits. In this situation, it’s your best bet to seek the professional help of a Tax Attorney. This way, you will get exceptional and responsive help.

Usually, the IRS will be open to give taxpayers a second chance to fix their back taxes if they fail to do so. Usually, this condition is unfavorable and looked down upon from the IRS.  It is very important to meet the deadlines in filing your taxes.

IRS Back Tax Help

There are various solutions offered by the IRS to solve your unpaid IRS back taxes. These solutions will help you to avoid the consequences of your unpaid back tax. When in this situation, it’s essential to respond immediately to the IRS. This is necessary whether or not you can make the full payment. The truth is to do the best you can when it comes to payments.  After, you can explore these following tax relief options:

1. The Option of Payment by Installment

This is a payment method that involves paying a certain amount monthly to the IRS. Using the United States Tax Code, victims of Ponzi schemes can recoup 30% – 40% of their losses. So, if you fall into this category, you can involve a Tax Attorney. The attorney will help to navigate you through this complex process. Although this process is very technical, it can reduce the taxes you paid in the past. Thus, this entails that the IRS will refund a certain amount of money to you with interest or Tax Debt Relief. There are different types of installment payments and you can choose the option that best suits your financial status. This is a choice that your Tax Lawyer will help you make with ease.

2. The Option of Provisional Postponement of Action

This is not a payment plan for paying your unpaid back taxes; this is a delay tactic or diversion in paying the immediate amount due for payment to the IRS. In this situation, the IRS hits your account with a ‘not collectible’ tag. You can withhold payment until there are improvements in your financial status. This option does not reduce the amount you owe in unpaid taxes. During the period of delay, it could result in a certain amount of interest payable to the IRS.

3. The Option of an Offer in Compromise

Offer-in-compromise is a payment option that enables you to pay less of what you owe the IRS. In this option, you work hand-in-hand with your tax attorney to propose an offer to the IRS. The IRS forgives your debt once you are able to pay the agreed amount of unpaid taxes. Anyone can apply for the offer in compromise, however, not everyone is eligible. The IRS does not offer this payment option for everyone. To be eligible for an offer in compromise, you must meet the criteria set by the IRS. Once you opt for payment by installment, your eligibility chances are very slim when doing it on your own.

IRS Back Tax Help Attorneys – Free Consultation

Back Tax can be very complex to resolve if you don’t have the experience and legal knowledge in tax law. Our IRS back tax attorneys have helped over thousands of taxpayers to resolve tax issues daily and we can do the same for you. We will guide you step by step and make sure every decision that you made is right.

To speak to a back tax attorney, call us now.

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