Back Taxes Owed
Have you filed your tax returns every year, but not paid all the tax you owe? Maybe you just didn’t have enough money at the time and planned to pay more later. Unfortunately, the penalties and interest that are added to back taxes greatly increase how much you will ultimately owe the government. If you are delinquent on your taxes and haven’t yet heard from the IRS, you soon will. The potential damage from unpaid back taxes can be financially ruinous, but it is often avoidable.
Currently Not Collectible/Hardship Status
If paying your tax debt would cause you undue financial hardship, you may qualify for the Currently Not Collectible (CNC) status. If the IRS decides your case is legitimate, they will halt collection for the duration of your CNC status, although you may still be subjected to a lien. Generally, to be accepted as Currently Not Collectible you must demonstrate to the IRS that you cannot pay your tax debt after meeting monthly living expenses or by liquidating certain assets. I am very familiar with IRS rules and regulations. If can determine if you have a good chance to qualify for (CNC/hardship) status, I will submit the correct paperwork on your behalf and emphasize your suitability to the IRS. Currently Not Collectible is best thought of as a reprieve from collection enforcement that is subject to review. Once your status is confirmed, however, I can recommend options that will bring your tax controversy to a permanent close.
Injured Spouse Relief
You may qualify for Injured Spouse Relief if the IRS uses the refund from your joint return to offset certain past-due debts that are the sole responsibility of your spouse or former spouse, such as taxes, child support, or student loans. Injured Spouse Relief should not be confused with Innocent Spouse Relief.
You may be classified as an Injured Spouse if you do not receive your portion of a refund because of your spouse’s debt, whereas Innocent Spouse Relief applies to debt for which you are technically co-responsible, but not liable because of circumstances. Whatever the cause, I can help you rectify an unfair tax liability and get you your money. I will closely examine your case to see if you qualify for Injured Spouse Relief and/or any other IRS Relief programs.
Innocent Spouse Relief
If you filed a joint return with your spouse or former spouse, you may be held liable for the taxes, interest, and penalties–even if it was your spouse who earned the income and/or claimed improper deductions or credits. You can also be relieved of responsibility for paying tax, interest, and penalties if your spouse did something wrong on your tax return. If the IRS is holding you responsible for your spouse’s or former spouse’s fraud or negligence, I can help and will quickly determine if you qualify for tax relief and then negotiate with the IRS for the outcome most favorable to you.
Under the Innocent Spouse relief, there are two other types of relief available.
- Separation of Liability Relief Under this type of relief, you divide the additional tax owed from your joint return, plus penalties and interest, between you and your spouse (or former spouse).
- Equitable Relief If you do not qualify for innocent spouse relief or separation of liability, you may still be relieved of responsibility for tax, interest, and penalties through equitable relief.
Don’t be the victim of someone else’s mistakes or dishonesty. Contact me today to see if you qualify for Innocent Spouse Relief or other IRS tax relief programs.
Offer in Compromise
The Offer in Compromise is very difficult to obtain and is not for everyone, but if you qualify, it allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or if doing so would create a financial hardship. The IRS will generally approve an offer in compromise when the amount offered represents the most it can expect to collect within a reasonable period of time. I will analyze your financial situation to see if you are eligible. If you do not qualify for an offer in compromise, we can recommend other payment options that will resolve your tax debt.
Seizures
A seizure allows the IRS to legally take your assets. The money from your assets will be used to pay off your past-due federal tax liability. The IRS can take your car, boat, jewelry, etc.–sometimes even your home–and then auction off your possessions to pay your taxes, interest, and penalties. If the IRS has notified you that they are going to seize your assets, you still have some legal rights concerning your property. I will walk you through all the available options. If the IRS has already taken your property, we can request an Asset Levy Release–it may be possible to get your possessions back. Please contact me today for more information.
Balances Owed
The penalties and interest that are added to back taxes and unfiled greatly increase how much you will ultimately owe the government. If you are delinquent on your taxes and haven’t yet heard from the IRS, you soon will. A payment plan is an agreement with the IRS to pay the taxes you owe within an extended timeframe. You should request a payment plan if you believe you will be able to pay your taxes in full within the extended time frame, we will analyze your situation and determine an option that will fit (e.g. you may qualify for a streamlined installment agreement or a non-disclosure installment agreement)
Statute of Limitations
The Statute of Limitations dictates the amount of time allocated for certain tax-related actions. The IRS has ten years to collect after a tax has been assessed. There are some exceptions to the ten-year collection rule. Applying for certain payment arrangements will suspend the ten-year time frame while those arrangements are pending but add extra time to the statute of limitations for your case once the suspension period is over. Everyone’s tax debt issues are different, and it is critical that all factors be considered. We will find out how the Statute of Limitations applies to your circumstances and then advise you as to the best course of action to take.
Penalty/Interest Abatement
One of the worst things about IRS tax controversies are the penalties and interest tacked on to your original bill. There are penalties for late filing, late payment, and negligence, to name but a few–and the interest on unpaid taxes can rapidly increase your total tax liability. The IRS may abate certain penalties if there is reasonable cause, and the failure was not due to willful neglect. Many taxpayers who have not previously had major issues with the IRS can qualify for a first-time penalty waiver. Generally, the IRS does not revoke interest charges, but some established interest suspension provisions do apply–especially where the IRS has made an error. I will scrutinize your tax situation to see where penalties and/or interest may be waived.
Levies and Liens
Levies and liens are often confused, but they are quite different. A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax liability, the IRS can levy, (or seize) and sell any type of personal property that you own or have an interest in, even your retirement accounts and home are fair game. If you have received a Notice of Intent to Levy (NITL) please contact us immediately. There is a brief period where we may be able to appeal the process and negotiate a workable payment plan before the levy even begins. Levies are best understood by examining their primary asset targets.
Bank Levy
A bank levy freezes your bank accounts. Any checks you have written will bounce. You will not be able to withdraw any funds or pay any bills. Generally, you have 21 days to respond to the IRS after your financial institution receives a Notice of Levy for your accounts. After that, your accounts are drained, and the money is sent to the IRS. If you act immediately, we may be able to get the levy revoked. Together, we can compile and forward the IRS the information they require to release the levy. I will also negotiate the best possible payment arrangement the law and your finances allow.
Wage Levy (Wage Garnishment)
A Wage Levy occurs when the IRS sends a Notice of Levy to your employer demanding that they send a portion of your paycheck to the IRS. A wage levy is extremely unpleasant. The IRS usually gets the bulk of your paycheck until your taxes are paid off and your relationship with your employer is put under a great deal of stress. If your wages are being garnished, you need help now. We will work with you to arrange a payment plan with the IRS that is far more tolerable than having your regular paycheck docked.
Unfiled Taxes
Taxpayers that fail to file their tax return for one or more years for various reasons can become overwhelmed later down the road when attempting to file all their missing tax years at once. Missing all or a portion of their records, personal hardship and/or neglect are some of many reasons people fall behind in filing their taxes. Remember, the IRS requires you to file your taxes by April 15th. If you don’t file your tax return you may incur late penalties, and your refund could be delayed, held or even forfeited if filed late enough. Also, it should be noted that if returns have not been filed for the three most recent tax years, those returns should be prepared immediately to claim any refunds that may be due. We can get these returns filed for you and if you need to file for an extension on your taxes to avoid these penalties, we can do that as well.