IRS Tax Solutions
There is usually no one solution to resolving tax problems. Only after a thorough interview and review of your documents (letters and tax transcripts we secure from IRS) can we recommend the fastest and least expensive solution to your tax problems. In 95% of all cases we can determine the best course of action during your initial interview. We encourage all prospective clients to take advantage of our online video consultation service.
Installment AgreementsIf you’re financially unable to pay your tax debt immediately, you can make monthly payments (formally called an “Installment Agreement”). As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement. The IRS has several types of Installment Agreements that require minimal financial reporting on the taxpayers part. They are Guaranteed and Streamlined Installment Agreements for individuals, and In-Business Trust Fund Express Installment Agreements for businesses. Before becoming eligible for an Installment Agreement, you must file all required tax returns.
IRS Fresh Start ProgramThe IRS Fresh Start program makes it easier for taxpayers to qualify for Installment Agreements, qualify for the Offer-In-Compromise program and avoid tax liens. Small businesses can also take advantage of this program. The Fresh Start program provides relief under three areas: Tax Liens: The Fresh Start program increased the amount that taxpayers can owe from $5,000 to $10,000 before the IRS files a Notice of Federal Tax Lien. This does not prohibit the IRS from filing a lien notice on balances less $10,000. We can often reduce this risk. Liens can be withdrawn (complete removal from the public record) when a taxpayer meets certain requirements and satisfies their tax debt. Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a direct debit installment agreement. Installment Agreements: The Fresh Start program expanded access to streamlined installment agreements. Individuals who owe $50,000 or less can pay through monthly direct debit payments for up to 6 years (72 months). While the IRS generally will not request financials from you, they usually request some financial information. Taxpayers in need of installment agreements for tax debts more than $50,000 or longer than six years still need to provide the IRS with a financial statement. Offers in Compromise: An Offer in Compromise is an agreement that allows taxpayers to propose a settlement for less than they owe the IRS. Fresh Start basically gives the IRS more discretion in granting offers based on your ability to pay and easing the standards to allow a larger group of taxpayers to qualify. While the IRS will not accept an offer if it believes the taxpayer can pay the tax in full, or through a Installment Agreement, the IRS looks at several factors. These include the taxpayer’s income and assets, employability, age and health condition.
Levy/GarishmentsAn IRS levy is the legal seizure of your property to satisfy a tax debt. Levies will attach to your wages (a garnishment), freeze and take money from your bank or other financial account, seize and sell your vehicle, homes, real estate and any other personal property you own. The IRS MUST provide you several legal notices before levying any accounts or wages. A series of letters, some regular mail and by some certified mail, have to be delivered to you. Taxpayers have appeal rights and cannot be violated by IRS. Contact us today if you’ve been levied.
Lien RemovalThe federal tax lien is the government’s legal claim against your property when there is an unpaid tax debt. The lien protects the government’s interest against all your property, including real estate, personal property and financial assets in the event they choose to seize your property as a means of collection. A federal tax lien exists after the IRS assesses your liability (processes your tax return and there is a balance), sends you a bill that explains how much you owe (called a Notice and Demand for Payment), and you neglect or refuse to fully pay the debt in time. Paying the debt is the fastest and best way to remove a federal tax lien. You do have other options if this is not immediately possible. Discharge of property: A “discharge” removes the lien from specific property. Subordination: “Subordination” does not remove the lien, but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. Withdrawal: A “withdrawal” removes the public Notice of Federal Tax Lien and ensures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due. Contact us today and allow us to evaluate your options.
Offer-In-CompromiseAn offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be the best option if you can’t pay your full tax liability. In some circumstances if paying your debt in full creates a financial hardship, the IRS may settle for a lesser amount despite your ability to pay the debt in full. Considerations the IRS takes into account when you apply are:
- Your ability to pay
- Current and future income
- Current expenses
- Asset equity (in a home or other asset that can appreciate in value)