Getting a letter in the mail or a phone call from the IRS can be intimidating. Nevertheless, these matters should not be ignored. Unopened letters may contain important information that could be helpful in resolving the tax issues, advice about appeal rights, or deadlines that should not be missed. Not responding to the IRS could magnify problems, not make them disappear. It is far better to seek assistance from a professional and face the issues as you work together to reach a resolution.
Our team is here to analyze your federal tax matter and suggest possible courses of action given the rights and remedies available to you. Our goal is to achieve the most favorable result possible while minimizing the amount of stress ordinarily associated with tax problems. Some of our services include:
• Individual & Business Tax Audits
• Penalty Abatement Requests
• Assistance for Non-Filers
• Federal Tax Liens
• Levies & Wage Garnishments
• Collection Due Process Hearings
• Installment Agreements
• Offers in Compromise
• Trust Fund Recovery Penalties
• Offshore Voluntary Disclosures
• Innocent Spouse Relief Claims
We understand that an audit can be a stressful experience, especially if a taxpayer’s return has omissions or mistakes. We represent individuals and businesses under audit with respect to all types of taxes, including income tax, withholding tax, and more. We advocate for our clients to minimize or eliminate any possible liability and reach a resolution quickly and efficiently.
Do not hesitate to call us to discuss your audit.
The IRS imposes penalties in order to encourage voluntary compliance with the tax law. Penalties may be based on the failure to pay tax when due, failure to timely file a tax return, substantial inaccuracies, or some other noncompliance with the tax law.
The IRS occasionally grants relief from penalties upon request. One ground for relief is reasonable cause. Reasonable cause is based on all the facts and circumstances, including the taxpayer’s general history of compliance and whether the taxpayer exercised ordinary business care and prudence but nevertheless failed to comply with tax obligations.
If you have been assessed significant penalties, we can evaluate whether a penalty abatement request is appropriate for you, and craft a persuasive submission.
Taxpayers who fail to timely file tax returns face the risk of criminal investigation and prosecution. They also face the risk of the IRS preparing a tax return for them, known as a “substitute for return.” A substitute for return is generated by information reported to the IRS from third parties, such as a Form W-2, Form 1099-B, or Form 1099-MISC. If a substitute for return is generated, a taxpayer may not obtain the benefit of available deductions and credits, or basis in the sale of securities, and thus could owe balances that far exceed the proper tax due, if any. Furthermore, if a liability is owed from a substitute for return, the IRS may commence collection action.
We assist taxpayers with delinquent tax returns from years past in an effort to clear up their tax problems. Under most circumstances, it is more favorable to come forward voluntarily than to be discovered by the tax authorities.
Contact us to discuss options on how non-filers can become current with the IRS, and lessen the risk of criminal investigation and collection action from substitute for returns.
The IRS can file a Federal Tax Lien (FTL) if tax remains unpaid after a demand for payment. The FTL provides notice to the world of the IRS’s interest in the taxpayer’s property.
FTLs can complicate disposition of property or negatively impact a taxpayer’s credit score. Under certain circumstances, the IRS may discharge, subordinate, or otherwise resolve the FTL.
If you would like assistance on addressing a Federal Tax Lien, do not hesitate to reach out to us.
After establishing a taxpayer has a balance due, the IRS begins to take steps in order to collect on the liability. One method of collection is a levy.
A levy enables the IRS to seize a taxpayer’s property. For example, the IRS may issue a levy to a taxpayer’s bank that requires the bank to send funds from the taxpayer’s bank account to the IRS. The IRS may issue levies to other third-parties holding the taxpayer’s property or owing the taxpayer money, such as the taxpayer’s employer or customers.
After obtaining funds via levy, the IRS applies the monies in the best interests of the federal government. Voluntary payments to the IRS, on the other hand, may be designated by the taxpayer’s direction.
Certain properties and income sources are exempt from levy. Sometimes, however, the IRS will issue levies on exempt property, and the taxpayer must then establish that such properties are exempt.
Levies can be debilitating for some taxpayers. In most situations, the IRS must take several steps to inform the taxpayer of its intent to levy before issuance. A taxpayer may exercise statutory rights to challenge the appropriateness of a levy.
We assist taxpayers who are either about to face levies or are already facing levies. Contact us to discuss your options.
Taxpayers are afforded an opportunity to request a hearing when they receive one of several collection notices, such as a Notice of Federal Tax Lien Filing or a Final Notice of Intent to Levy.
In general, a taxpayer has thirty (30) days to file a request for a Collection Due Process (CDP) hearing protesting the IRS’s collection action. The CDP hearing provides an opportunity to discuss the appropriateness of the lien or levy and whether alternative collection methods are available. A timely filed request for a CDP Hearing provides temporary relief from the IRS collection efforts in most cases, allowing the taxpayer time to resolve the matter voluntarily.
If the thirty-day deadline to file a CDP hearing request is missed, other alternatives may be available to protest IRS collection action, such as an Equivalent Hearing.
We routinely represent taxpayers for Collection Due Process Hearings, and often obtain a resolution to their matter through this process. Contact us to discuss whether you may be able to take advantage of CDP rights or an Equivalent Hearing.
When a taxpayer owes money to the IRS, there are several options for a taxpayer to address the outstanding balance. In many instances, it is not possible or feasible to pay the balance due all at once. An Installment Agreement permits payment over time. Interest and penalties continue to accrue and it is often in the best interest of the taxpayer to consider loans from other sources before pursuing an Installment Agreement. An Installment Agreement is useful for taxpayers who have adequate income, but who do not have sufficient equity to support a loan.
A Partial Pay Installment Agreement is an Installment Agreement that will satisfy only a portion of the total balance due because of expiration of the ten-year statute of limitations on collection. Unlike a regular Installment Agreement, a PPIA is subject to IRS review every two years. The IRS may change the terms of the PPIA based upon the taxpayer’s updated financial information.
We assist taxpayers seeking to address their outstanding liabilities by evaluating their financial information and negotiating a payment plan that the taxpayer can afford and the IRS will accept. Do not hesitate to contact us to discuss the feasibility of an Installment Agreement.
An Offer in Compromise is a binding agreement between a taxpayer and the IRS that resolves the taxpayer’s outstanding liabilities. Sometimes an Offer results in a taxpayer paying less than the full amount due. By comparison, under the usual Installment Agreement, full payment is made of the tax liability, over time with interest and penalties continuing to accrue.
The IRS may accept an Offer in Compromise for “Doubt as to Collectibility” when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential. The IRS usually conducts an intensive review of a taxpayer’s financial information before considering accepting an Offer.
We submit Offers for taxpayers when their financial information appears to support an Offer. We do not waste a taxpayer’s time and money if we believe an Offer will not be accepted.
If you would like for us to review the feasibility of an Offer, do not hesitate to contact us.
Attention business owners: An individual can be held personally responsible for a business’s outstanding IRS liabilities by assessing a Trust Fund Recovery Penalty against the individual.
When a business or employer fails to pay over to the IRS the income taxes and other employment taxes withheld from employee paychecks, the IRS can collect a portion of the taxes from any person who had a duty to collect and who willfully fails to pay these trust fund taxes. The Trust Fund Recovery Penalty is also nondischargeable in the bankruptcy of the responsible person.
If a taxpayer is held personally responsible, the IRS could pursue the individual’s personal assets to collect, including liens and levies. A responsible person can be an officer, employee, director, shareholder of the corporation, member or an employee of a partnership.
The Internal Revenue Code sets forth two major tests to determine if a person is subject to the Trust Fund Recovery Penalty. These two tests are: (i) whether the party against whom the penalty is proposed had the duty to collect, truthfully account for, and pay over trust fund taxes; and (ii) whether he or she willfully failed to perform the duty.
To be subject to the Trust Fund Recovery Penalty, a person must have acted willfully and also have the duties of a responsible person.
An act is willful if it is voluntary, conscious and intentional. A responsible person acted willfully if he knowingly and intentionally disregarded the duty to pay the trust fund taxes. It has been held that a person will be found willful if he acted with a reckless disregard of a known or obvious risk that the taxes might not be paid; for example, if he knew of tax mismanagement but did not correct or look into it.
We represent taxpayers who face a proposed Fund Recovery Penalty or have been assessed the penalty, and can seek to have the penalties reduced or eliminated. If you are or may be facing a Trust Fund Recovery Penalty, contact us to see if we could be of assistance.
The IRS has been devoting significant resources to stop offshore tax evasion. In general, U.S. citizens have an obligation to disclose most assets owned in a foreign country (such as foreign bank accounts) and to pay the appropriate tax on foreign source income. We assist taxpayers who may have failed to adequately disclose their assets to minimize their financial and in some cases criminal exposure.
U.S. citizens must annually report their financial interest in a financial account that is maintained with a financial institution located in a foreign country if, for any calendar year, the aggregate value of all foreign accounts exceeded $10,000 at any time during the year. A taxpayer discloses the financial interest by filing a Report of Foreign Bank and Financial Accounts (“FBAR”), no later than June 30 of the following tax year. The IRS could impose significant penalties for failure to timely file the FBAR.
Currently, the IRS is offering taxpayers with undisclosed accounts and unreported associated tax the opportunity to come into compliance via participation in the Offshore Voluntary Disclosure Program (“OVDP”). An advantage to disclosure via OVDP is that if the taxpayer truthfully, timely, and completely complies with all program provisions, then the IRS will not recommend criminal prosecution to the Department of Justice. Those who do not come forward through OVDP have a risk of being examined and potentially criminally prosecuted for all applicable years, particularly if the taxpayer fails to fully disclose all foreign financial interests and associated taxes.
If you maintain undisclosed offshore assets, feel free to contact us for advice on minimizing any tax liability or penalties.
Taxpayers who file joint tax returns are jointly and severally liable for any liability arising from that tax year. This means each spouse is 100% personally liable for any tax, interest, and penalties owed.
The tax law allows innocent spouse relief for qualifying joint filers. A qualifying spouse would owe no tax, interest, or penalties, while the other spouse remains 100% personally liable.
There is a limited timeframe to submit innocent spouse claims, so taxpayers who may qualify should seek their options sooner rather than later. Our team represents taxpayers who request innocent spouse relief.