As NY Tax Attorneys we specialize in tax negotiation and working with taxpayers to resolve there IRS tax problems, whether it is back taxes or dealing with an audit. With the proper tax relief methods applied and using IRS doctrines, we provide our clients with a compromise between what the IRS wants and what the taxpayer can comfortably deliver, promoting compromise and compliance is the hallmark of what we do. In addition to executing offer in compromises, we resolve IRS back taxes, provide back tax settlements, handle NYS and IRS audits, late filings, unfiled returns, wage garnishments, bank levies, tax liens and much more so that taxpayers nationwide can receive professional tax help and take advantage of tax relief.
Whether your looking for tax help, tax relief or back taxes help, citizens across the country require IRS back tax relief on numerous dilemmas, whether it stems from business back taxes to unpaid stock transactions to levied wage garnishments, we as NY Tax Attorney’s know how to provide tax relief for our clients with the proper tools to satisfy most IRS demands.
The mere mention of IRS back tax liabilities spark stress and tension. The IRS has developed a reputation of foiling all would be back tax evaders. The trick is not to try to outsmart the IRS, but work within there guidelines to deliver a tax relief agreement between what the IRS wants and what the taxpayer can deliver. This is the area in which we specialize, promoting compliance, tax relief and compromise is the hallmark of what we do.
The Internal Revenue Service has been perfecting there method of tax collection since the IRS restructuring act of 1998. This initiative was one of the most encompassing modernization and restructuring of any organization in modern time. The IRS utilizing advanced software applications have impeded the progress of rogue taxpayers, unfiled and fraudulent returns and wayward business. Now more than ever, taxpayers need to maintain IRS compliance or face the downside and require our expertise in tax relief. IRS Penalties and Interest are nothing to laugh at; Penalties on unreported income are 75% of the total amount of unreported Income.
The IRS does not need a court order to file a notice of intent to levy your wages. Better known as an IRS wage Garnishment this action has serious implications. The IRS has the right to garnish up to 80% of your total paycheck and any other source of income that they are aware of. The only way to stop an IRS wage garnishment is to come into full compliance by having all of your back taxes filed and filing a 433-F with the IRS and possibly a CAP Appeal to stop any further actions by the IRS. Once these measures have been executed the next step is to determine if you can be declared “Currently non Collectible” or agree to a repayment plan with the IRS
OFFER IN COMPROMISE
The Offer in Compromise engagement is a contract between a person or entity and the Treasury Dept or more commonly the IRS. This contract will negate the person or entities tax liabilities to the IRS for alot less then what is owed. If the IRS believes that an alternative form of payment can be obtained they will exhaust all options before engaging the Offer In Compromise for the taxpayer or entity.
In most engagements of Offer In Compromise, the IRS will reject the Offer In Compromise if the cash amount offered by the person or entity is equivalent to or greater then the reasonable amount the IRS could collect through normal IRS collection procedures. The reasonable amount of collection is the crucible that the IRS measures that a person or entity can repay through normal channels through liquidation, of homes, cars, and on hand bank accounts. The Reasonable Amount of Collection also includes future capitalization’s by the person or entity as to their ability to repay there total tax debt in a 5 year period. These considerations must be calculated before attempting to file for an Offer In Compromise with a potential collateral agreement.
From our, NY Tax Attorney’s there are three types of Offer In Compromise engagements when dealing with IRS back taxes.
Doubt as to Liability
When and if there is a dispute in regards to engaging your Offer In Compromise in regards to the amount, computer error or even possible identity fraud Doubt as to Liability can be invoked. Doubt as to Liability can be invoked to negate and wipe out any and all back tax debts, and bring the taxpayer or entity into IRS compliance, this is an option that must be reviewed when submitting your Offer In Compromise.
Doubt as to Collectibility
In reference to Filing an Offer In Compromise is determined by the IRS counselor assigned to your case. To reinforce this doubt as to collectibilty the taxpayer or entity must submit there tax documents and all relevant evidence, to back up any claim so there is no doubt that the tax liability will never be repaid and the submission of the Offer In Compromise agreement is the formal document to convey this fact and acceptance by the IRS of this fact will actually negate the total tax liability, no matter how much is owed.
Effective Tax Administration
When exercising this option in the offer In compromise agreement there is no contest as to the amount owed and the IRS would have no problem in collecting the full amount, but a serious circumstance or series of circumstances has and will prevent you form making the full tax liability payment to the IRS . For this stipulation to work, the taxpayer or entity must demonstrate that undue and unfair economic hardship would result from the IRS pursuing repayment options.
An Offer in Compromise when engaged correctly is the taxpayers magic wand in making all of there tax liabilities disappear. The only catch is knowing if you qualify for this program. Most taxpayers do not. If you have the ability to pay, then you probably do not qualify for this option.
Options with simple cases
When taxpayers owe the Internal Revenue Service, it is very helpful to understand what options they have about their back taxes before trying to resolve the issue with the IRS.
Below are five insights I have learned over my years of dealing with the IRS where a taxpayer owes back taxes.
1. If you think you can pay your back taxes in 120 days, and you never asked for an extension of time before from the IRS, asking now for a 120 extension of time to pay makes sense for your situation. Sometimes it is also useful to ask for an extension of time even if you do not think you can pay in full since you may be able to get the balance down to a lower level and avoid federal tax liens.
2. The IRS accepts debit card payments, and the debit card fees are low. This is useful if you have the money and need to show a quick payment to stop a levy or avoid a federal tax lien. The IRS also takes credit card payments for back taxes, but the fees are high so beware of this option unless the cost is worth it for your situation and you can pay the balance of the credit card without an interest charge.
3. Controlling to which years the payments you are making can have a significant effect on the overall cost of resolving the tax issue of back taxes. Under tax payment plans, the IRS will apply the tax payments you make to the oldest years since the statute of limitations on collection (of 10 years) will expire first on the oldest years. If you are making a voluntary payment, it is usually best to pay an earlier year since it will reduce the penalties charged.
4. The IRS is more worried about your current year taxes being paid to date, then the older balances. Therefore, check your withholdings on your payroll and make all estimated tax payments before calling the IRS to discuss with them the back tax issue.
5. The main forms to resolve past due tax debts are the forms 9465, 433-F, 433A and 433B.
Frequently taxpayers are unable to pay taxes due and then have a legal issue of back taxes and the IRS to deal with. This can happen on their Form 1040 U.S. Individual Income Tax Return, their State Income Tax Return, or both. Though it is suggested and encouraged that taxpayers pay as much as possible to avoid penalties and interest, this is not always possible for all taxpayers.
If a taxpayer is unable to pay the liability owed, they should contact an experienced tax lawyer. When you begin to correspond with the IRS, they will ask for documentation and forms to be filled out, and will try to negotiate payment plans with the taxpayer. The process is difficult, especially since IRS Agents are experts in the Tax Code. By working with an experienced tax lawyer, you can have your own agent who works with the IRS on your behalf and explain your situation. An experienced tax lawyer can negotiate with the IRS and may serve to reduce the amount owed.
After working with the IRS through a tax lawyer, the taxpayer could qualify for a payment option. Based on the individual circumstances for each taxpayer, an agreement can be made for the taxpayer to pay in full within 60 or 120 days. The IRS offers these agreements to help tax payers pay tax debt in full. A taxpayer can request an agreement length of either of these amounts. It is advised to try to enter into this payment option because penalties and interest incurred will be less than if a taxpayer entered into an installment agreement.
Back Taxes and the IRS
If a taxpayer is unable to make a payment in full within the 60 or 120 day periods, the IRS will still want to collect on the tax debt owed. That is where a back tax settlement is useful. The IRS will most likely request Form 433-A or Form 433-F, Collection Information Statement. Dealing with IRS back taxes requires full disclosure by the taxpayer of all checking accounts, savings accounts, investment accounts, retirement accounts, safe deposit boxes, vehicles owned, valuable personal property, land owned, monthly expenses and monthly income. If the taxpayer is a business owner with business tax debt, the agreement requires bank accounts, tools, machines, equipment, business vehicles, business property, and monthly business expenses. By collecting the appropriate data, your tax lawyer will be able to find the amount you will be able to afford to pay the IRS monthly, while still being able to maintain your life.
If taxpayers are unwilling to prepare the documentation for Form 433-A, they could repay a tax debt through bank loans, borrowing from family, liquidating assets, or equity in assets, and paying in full. However, they will end up paying in full, and not enjoy the financial benefits of a back taxes settlement.
The main job of the IRS is to collect money owed by taxpayers. The agency is reasonable and understands that not all tax debts are easily paid off. Working with the IRS can be challenging, especially if you are not knowledgeable of the Tax Code and all of your payment options. By contacting an experienced tax lawyer, the pressures of negotiating and working with the IRS for the best payment option are greatly reduced.
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