IRS Problems

IRS Problems

Can I really make a deal with the IRS?

If you owe back taxes, or have unfiled returns, your life can be a nightmare. The extensive powers granted by Congress to the IRS allows that agency to reach into every corner of your life: your income, your bank account, your assets, your credit, and your peace of mind.

IRS agents speak their own language, and play by rules that you don’t know or understand. Don’t take on this fight by yourself.

There are numerous options to resolve your tax debt, depending on your situation. Let an Enrolled Agent shoulder the burden for you. We know the options, the IRS rules, and the best ways to handle your tax problem. Solutions range from:

  • Installment agreements
  • Tax relief
  • Tax penalty abatement
  • The release of IRS bank levies and wage garnishments.

Helpful Articles

How to Negotiate Back Taxes from Investopedia

Tips for Getting out of Tax Debt


Audits

Heard from the IRS lately?

Received correspondence?

Had your bank account levied?

Even had assets repossessed or your wages garnished?

You may be on the receiving end of the IRS’s stepped up efforts to increase what it terms ” under-reporting” via aggressive auditing practices.

Whether or not the IRS has begun collection proceedings, don’t delay in getting the proper representation. First and foremost, interests and penalties continue to accrue while you wait. Second, there are programs and laws that can work to help resolve your problem, provided you start working with your Enrolled Agent to get started as soon as possible.

IRS problems left unresolved can escalate into an adversarial situation simply because you don’t understand exactly how to proceed. The IRS is not obligated to make sure you understand their communications, and it rarely admits to mistakes it may have made.

Enrolled Agents provides the level of representation you need to resolve problems ranging from paperwork disputes through to negotiating resolutions to large tax liabilities. As Enrolled Agents, we are licensed to work in any state and at the federal level. We have years of experience dealing with IRS problems. Plus, our experience with business accounting and tax preparation allows us to analyze and present all aspects of your financial situation.

The IRS tends to win most of it’s audits because the typical taxpayer doesn’t provide the proper documentation. Using an Enrolled Agent to represent you increases your odds of a successful outcome, because we know how to gather and present the right information to the IRS in one of these audit scenarios:

  • Correspondence Audits: Usually triggered by a question about third-party documentation or a requirement to document or clarify your income or deduction. This type of audit is done by mail.
  • Office and Field Audits: This is a more serious level of audit. You will be asked to produce specific documentation. Your Enrolled Agent will likely recommends that you let them attend in your place and advise you as to what documentation to provide, and in what way. We will make sure that the scope of the audit does not expand, and that your rights in an audit are protected.
  • Line By Line Audits: The IRS selects random tax returns for this extensive type of audit. You will need professional representation because any errors may lead to penalties. This audit is highly detailed; don’t go in to this process without an IRS expert on your side.

Innocent or Injured Spouse Relief

Is your “Ex” in trouble with the IRS?

Make sure you get the right expertise to protect yourself

Innocent Spouse Appeal is intended to shield you from tax errors or fraud committed by a current or ex- spouse without your knowledge. But less than half of the appeals filed with the IRS are granted. Common reasons are procedural errors,  and the failure to make a complete and compelling case why you should not have been expected to know of your spouses’ errors or fraud.

You will need an experienced tax professional to help you tell your story, focusing on the circumstances that bolster your case, such as domestic abuse, or lack of access to the financial information used to complete the tax return that you signed.

Here are some helpful links:

IRS Questions and Answers

Forbes Article about Changes to the Innocent Spouse Provision


Dealing with the IRS

Can the IRS be scary?  Yes, but not if you have an Enrolled Agent on your team!

Preparation of Unfiled Tax Returns:

Since there are both civil and possible criminal penalties possible with unfiled taxes, you will need both a tax attorney and a tax professional to help you. In most cases, individuals with unfiled taxes will face civil penalties and will be expected to pay 25% of the taxes due. You may find that the IRS has prepared a return in lieu of the one you should have filed, called a Substitute for Return. With our assistance, you file your won return for this period.

Dealing with the IRS

If you have a problem with the IRS, you either:

  • owe them money
  • have unfiled tax returns
  • don’t owe the IRS the amount it is claiming
  • are facing an audit, or all of the above.
  • Unpaid taxes include back income taxes, unpaid payroll taxes, or taxes due from an inheritance.

You may have received correspondence, had your bank account levied or even had assets repossessed or your wages garnished.
You may be on the receiving end of the IRS’s stepped up efforts to increase what it terms ” under-reporting” via aggressive auditing practices.

Whether or not the IRS has begun collection proceedings, don’t delay in getting the proper representation.  First and foremost, interests and penalties continue to accrue while you wait. Second, there are programs and laws that can work to help resolve your problem, provided we get started as soon as possible.  IRS problems left unresolved can escalate into an adversarial situation simply because you don’t understand exactly how to proceed. The IRS is not obligated to make sure you understand their communications, and it rarely admits to mistakes it may have made.


Payment Plans

Get a payment plan from the IRS?

Yes, you can…but make sure you get the help you need!

Lien Subordination

Lien Subordination allows you to proceed with a real estate transaction even if the IRS has a lien on your property. You will have to pay the tax once the property is sold. There are a number of documents that need to be prepared and filed to allow your transaction to proceed:
“You must request the IRS subordinate its lien and provide information as of the value of the property, existing debt, and the new lender and loan. To apply for the subordination you must provide the following information:

  • The legal description of the property.
  • A copy of the contract for sale of the property.
  • A copy of the tax lien.
  • Information regarding the priority lien holder (your current lender), including name, recording information and date of the deed of trust, monthly payment, interest rate, original loan balance and current loan balance.
  • A draft closing statement showing the costs, commissions and expenses in connection with the same, and amount that would otherwise be paid to you and your wife from the refinancing of the property.
  • Two appraisals of the property, one of which would be the lender’s appraisal for obtaining the loan, and the second could be a letter of appraisal from a realtor familiar with property in the area setting forth their estimate of the appropriate sales price of the
    property.
  • The closing date and location for the sale of the property.”

(Source: http://www.carnahanlaw.com/IRS/subordination.html)

Setting up Installment Agreements:

This is a fairly straightforward procedure-you can even do it yourself by going to www.irs.gov and from the pull down menu, select “I need to set up a payment plan.” But be aware that missing payments means potential fees, the possibility of losing your plan or even having money taken from your bank account. If you owe less than $25,000 for your current year, you can pay over 120 days without setting up a payment plan. For liabilities in excess of $25,000, talk to your Enrolled Agent to come up with the best plan available to you.

Offer in Compromise:

The purpose of this program has been to allow the IRS to collect some amount of back taxes from those with limited ability or resources. It has been extremely difficult to work out reasonable offers because of how the IRS calculated their formulas. Recently, the IRS loosened the criteria, taking into account, “Consideration should be given to the taxpayer’s overall general situation including such facts as age, health, marital status, number and age of dependents, level of education or occupational training, and work experience.” (Source: IRS). Agreements have even been made with currently operating businesses, although this is rare. Payment plans in excess of 24 months have not been granted.