IRS Tax Problems

IRS Help

noreply@blogger.com (Jeff) — Sat, 27 Jun 2009 00:48:00 +0000

Do you have a tax problem with the IRS and need help? If so then I would recommend calling a tax professional. In my experience in dealing with IRS tax matters most taxpayers who have problems with the IRS seldom know what the issue really is. Furthermore it is very difficult for the taxpayer to retrieve the necessary information from the IRS in order to determine what their problem is and how to fix it.

A tax professional will usually take a taxpayer through a few steps that are required to resolve a taxpayers issue with the IRS. Usually the most complex type of personal income tax problem is when a taxpayer has unfiled tax returns and owes the IRS money. A tax professional can be very helpful here. Step 1 is to retrieve and analyze the taxpayer’s masterfile and income transcripts. Step 2 is to file the unfiled returns using the income information and other relevant information from the taxpayer’s masterfile and income transcripts. Step 3 occurs after the returns have been filed and the total liability is known.

This is the resolution phase. This is when the tax professional begins the process of negotiating directly with the IRS to get the final tax liability resolved. These steps may sound simple whereas in reality they can be quite complex. If you need help and are considering going it alone think again! Taking on the IRS without any knowledge of how the organization operates can be very costly! You would be wise to, at the very least, consult with a tax professional.

IRS Certified Letters

noreply@blogger.com (Jeff) — Sat, 27 Jun 2009 00:29:00 +0000

One of the most common reasons taxpayers call my firm is in response to certified letters from the IRS. Whenever a taxpayer receives mail of this nature it is usually not a good thing. The IRS is attempting to send a taxpayer a serious communication and these letters usually indicate that the IRS is attempting to collect a debt. This mail should be opened immediately, read and responded to as quickly as possible.

If the taxpayer is in collections with the IRS they will receive two certified letters spaced about 30 days apart. The first letter is an initial notice. The second is a final notice. The bottom line is the IRS means serious business and they will take action. The IRS is a priority creditor and needs to be given the full attention of the taxpayer. If you find yourself in this position call someone to represent you before the IRS and do it quick because time is NOT on your side.

IRS Penalty Abatement

noreply@blogger.com (Jeff) — Fri, 19 Jun 2009 23:58:00 +0000

This is what everyone wants when they incur a penalty from the IRS. Sometimes the IRS will grant it, sometimes they won’t. One of the more common penalties is the failure to file penalty. The IRS will assess this penalty against a taxpayer if the taxpayer has not filed their return by the due date or if the taxpayer as not filed an extension by the due date. Getting penalties abated is no easy task. The IRS doesn’t simply remove penalties by someone asking them kindly or by using highly technical language. The IRS will consider penalty abatement only if there is a rock solid reason why they should not charge the penalty.

This is the first step in having a failure to file penalty abated. There has to be some reason the taxpayer did not file their return by the due date. Feeling sick, working too many hours, did not understand the tax changes for the current year and so forth and so on are not reasons the IRS would consider in abating penalties. Generally the event that prevented a taxpayer from filing must be catastrophic in nature such as a severe medical illness, an act of God such as a hurricane, earthquake, fire or landslide or something of the sort. Whatever the event is it must be thoroughly documented and submitted to the IRS. Then and only then will the IRS consider removing the failure to file penalty.

In a prior blog I mentioned the devastating effect of allowing penalties to accumulate. This is something not to be taken lightly. This has the power to cause tremendous financial problems for taxpayers. If you have questions regarding penalty abatement you should consult with a tax professional who can advise you properly.

I Forgot To File My Taxes

noreply@blogger.com (Jeff) — Fri, 19 Jun 2009 23:57:00 +0000

This is going to sound like an advertisement for Ripley’s Believe It Or Not but it’s actually a real thing! Sometimes taxpayers forget to file their taxes. If this has happened to you then the best thing you can do is to correct the problem as soon as feasibly possible to prevent the build up of penalties and interest. A tax professional can help greatly with this.

A problem for some people is that they do not have their W-2s or 1099s for the unfiled years. This can cause problems if not addressed correctly due to the fact that when tax returns are filed with the IRS they go through a “matching” process where they match the income listed on the tax return to the income contained in the IRS records. Where I work, our approach is to retrieve this information directly from the IRS and use their income information to prepare the returns. This ensures accuracy.
The benefit to working with a tax professional to resolve an outstanding issue of this sort is that first of all it will get you compliant with the IRS which means it eliminates the chance of you going to jail! Currently there are quite a few taxpayers who have not filed their returns. If you are one of them I would like to highly encourage you to take action and get this situation resolved immediately! You will not regret it!

It’s Expired - IRS Collection Statutes

noreply@blogger.com (Jeff) — Sat, 13 Jun 2009 00:59:00 +0000

Cottage cheese has it. Coke products have it. Lunch meats in your local grocery store have it. And your IRS tax debt has it! Can you guess what I’m talking about? I’m talking about expiration dates! Now the expiration dates on an IRS tax debt are not quite as short as the expiration dates on perishables items you will find in a grocery store. They last a little bit longer. Try 10 years for example! Yes, 10 years!

When the IRS records in their computer system a tax debt that a taxpayer owes the IRS generally has 10 years to collect the liability provided nothing has occurred to extend the collection statute. This is very important information to know! I will provide one example of how information like this can be very helpful to a taxpayer. Our firm had a client who owed a large sum of money to the IRS from where the IRS filed a return for the taxpayer. This is known as an SFR, the industry terminology for “substitute for return.” This is when the IRS takes the income that has been reported to them that a taxpayer has earned and they file a return as a substitute for the taxpayer’s original return.

Often times and SFR does not take into account all of the deductions a taxpayer may have. If the taxpayer had substantial write-offs or deductions then it may be wise to file a tax return “over” the SFR the IRS filed for the taxpayer in order to lower the liability. Taxpayers need to exercise caution when considering such an action and should consider the expiration date of the SFR. If the SFR will be expiring soon then the taxpayer may not want to file over the SFR because by so doing the newly filed return will “reset” the clock and give the IRS a full 10 years to collect on the liability established by the newly filed return.

I heard of the client who took independent action and filed over the old return and lowered their liability but could have waited just a few short months to when the liability would have been no longer collectible. The moral of this story is KNOW YOUR COLLECTION EXPIRATION DATES! Our firm offers a service to taxpayers to help them find out what their collection expiration dates are. When in doubt, check it out!

IRS Secrets

noreply@blogger.com (Jeff) — Fri, 12 Jun 2009 23:29:00 +0000

This may be the single most important blog you will ever read if you have issues with the IRS. Before you read this blog I want to provide the reader with four definitions Merriam-Webster gives for the word “secret.” Merriam-Webster writes that a secret is something that is “kept from knowledge or view” “working with hidden aims or methods” “not acknowledged” and “designed to elude observation or detection.” As you read this blog I want you to keep these definitions in mind.

The IRS maintains a file on each and every taxpayer. This file is “kept from knowledge or view” due to the fact that the IRS is highly reluctant to grant individual taxpayers access to their IRS file. Information contained in this “secret file” can be invaluable to anyone who has issues with the IRS. The information contained in the file can be used to help the taxpayer understand where they are in the collection process, how much they owe, how penalties have accrued, when the liabilities expire and much more.

The firm I work for has very recently introduced a revolutionary service to taxpayers which will allow taxpayers to obtain full information from their “secret” IRS file! Any reader desiring to know the contents of their IRS “secret file” should contact me at the toll-free number listed on my blog. One last note…obtaining a copy of the file will not bring attention to the one requesting the file. Don’t wait! Find out today!

IRS Penalties – A Financial Nightmare

noreply@blogger.com (Jeff) — Sat, 30 May 2009 01:38:00 +0000

IRS penalties can be a nightmare! Most people probably do not understand just how devastating penalties imposed by the IRS can be. For individuals the IRS applies two types of penalties. One is the failure to file penalty and the other is the failure to pay penalty. The failure to file penalty is 5% of the balance due as of April 15th and continues for 4½ months. The failure to pay penalty is approximately ½ of 1% per month and is applied to any unpaid balance until the total interest charge reached 25%. The failure to pay penalty can not exceed 25%. Now let’s see how this works out.

Suppose a taxpayer did not file a tax return for 2002, 2003 and 2004. Let’s further assume that the taxpayer owed approximately $5,000 for each of those years. The IRS will apply 5% per month for approximately 4½ months to each balance. So now each balance is approximately $6,125. Next they will apply approximately ½ of 1% per month to each balance. Seeing as how the returns are fairly old the total interest rate applied will be 25%. So now each balance would be $7,375. So this taxpayer would owe $22,125 instead of $15,000 that was originally owed. This taxpayer needs help and needs help quickly! This does not take into consideration the fact that interest is continuing to accumulate. A tax professional can offer good advice on how to handle this.

IRS – Removal of Penalties

noreply@blogger.com (Jeff) — Sat, 30 May 2009 01:21:00 +0000

The law permits the IRS to remove or reduce the penalties applied to a taxpayer's account if the taxpayer can submit a written explanation with an acceptable reason as to why the IRS should remove or reduce the penalties. Once submitted the IRS will review the documentation and will contact the taxpayer to notify them of their decision. It is important to note that the law does not permit the IRS to remove or reduce penalties. There may be instances where the IRS will require the taxpayer to pay the tax in full before removing or reducing the penalties.

IRS notice 746 contains a wealth of information regarding your notice, penalties and interest. The reduction or removal of penalties can be a difficult task to get the IRS to agree to due to the way the IRS rules are written. First the taxpayer has to submit to an IRS interview called the Penalty Abatement Reasonable Cause interview. The questions are detailed and they are tough, but if enough documentation can be provided to convince the IRS drop the penalties then it is well worth it. A great place to start would be with Notice 746 which gives an excellent explanation of things. This can help a taxpayer decide whether or not they need to involve the services of a tax professional to help with penalties (but not interest).

Underreporting Income

noreply@blogger.com (Jeff) — Sat, 23 May 2009 04:03:00 +0000

I wonder how many people know what happens when they under report their income to the IRS. When this happens it can cause a rather serious situation to arise. When a taxpayer sends a tax return to the IRS the first thing the IRS does is perform a computerized “tax match.” This is an automated system that matches the income reported on a tax return to the report the IRS maintains on each and every taxpayer of what has been reported that the taxpayer has earned.

If the income does not match the system will flag the return for further review. If the taxpayer has overstated their income then the IRS will issue a refund. If the income has been under reported then the taxpayer will receive a notice called a CP 2000. This requires the taxpayer to respond accordingly. There are many things that can cause a taxpayer to under report their income mistakenly, usually a simple oversight.
Then again there are other times that the under reporting is not due to an oversight but just blatant negligence. The IRS takes under reporting serious. If you have received a CP 2000 you have got some explaining to do. You may need the assistance of a tax professional to keep you out of trouble.

IRS Tax Problems

noreply@blogger.com (Jeff) — Sat, 23 May 2009 03:52:00 +0000

IRS tax problems can happen at any time throughout the year. The problems can stem from many different issues such as under withholding, under reporting of income or sometimes more serious violations such as unfiled returns. Any time you have a problem with the IRS it is a serious and most always requires attention.
The best advise to give when dealing with the IRS over a tax related problem would be to communicate with them! A lack of communication with the IRS is almost always guaranteed to get them a little hot under the collar and could jeopardize the final outcome of things. Some people are comfortable with speaking with the IRS and others are not. If you fall into the latter category and you have a tax problem I would encourage you to see professional tax advice. Don’t let silence be your downfall!

IRS Certified Mail – Your Last Chance

noreply@blogger.com (Jeff) — Sat, 16 May 2009 00:42:00 +0000

In my previous blog I compared certified mail from the IRS to a rattlesnake getting ready to bite. The IRS is getting ready to “bite” you when they send you a CP 504 letter. If you receive another piece of certified mail with “L1058” written on it then you know this is your last chance. If you do not respond to this letter you will get bit! Lions, snakes, dogs or anything with fangs are usually considered dangerous because of the damage a bite can do. The IRS is no different.

Their “bite” will not draw blood nor force you to seek immediate medical attention, but it will cause you equivalent pain financially. If this L1058 letter is not addressed immediately and effectively the financial effects can be dramatic. The IRS can attack all of the taxpayer’s sources of income, bank accounts as well as file a notice of federal tax lien against the taxpayer’s social security number thus laying claim to all property the taxpayer owns currently and any property the taxpayer may own in the future, not to mention the devastating effect the tax lien will have on the taxpayer’s credit score and subsequent ability to borrow money.

After income has been reduced and the ability borrow cut off this usually produces excruciating financial pain and can very difficult to correct. The best bet is to address the situation quickly before it becomes a problem. Lions, snakes, dogs or anything with fangs are best kept at a safe distance and preferably in a cage or somewhere else that would prevent a bite. Responding quickly to an L1058 letter from the IRS is the best way to avoid getting bitten by the razor sharp fangs of the IRS. Certified mail of this nature is best handled by a tax professional. Protect yourself! If you have received a letter like this call someone now and do not delay!

IRS Certified Mail - It's Serious!

noreply@blogger.com (Jeff) — Sat, 16 May 2009 00:18:00 +0000

Certified mail from the Internal Revenue Service is serious and should be treated the same way you would treat a rattlesnake that’s about ready to strike. The IRS is issuing the taxpayer a warning that they are going to strike. Coming from the IRS the threat is real and it must be addressed quickly. Usually the first certified letter a taxpayer will receive from the IRS will be a CP 504. This is an initial notice the IRS will send out notifying a taxpayer they are intending to take action to collect on an outstanding tax account.

In many instances when a taxpayer owes a tax debt and it has progressed to the point where the IRS is sending this type of notification the taxpayer usually does not have the funds necessary to pay the tax debt in full. It is for this very reason that the taxpayer must take immediate action on the letter and get help because the IRS is getting ready to strike. The first place the IRS strikes is the taxpayer’s rear end, specifically their wallet. The IRS will issue a wage levy against the taxpayer’s paycheck taking up to 85% of the taxpayer’s salary!

Most taxpayers, not all, financial affairs are much like dominos delicately arranged on a table. If one domino falls it could cause some of the others to fall. When the IRS issues a wage levy it is just like knocking over the very first domino in a string of dominos causing all the others to fall, one right after the other. When a taxpayer’s income is drastically reduced it usually causes other financial problems to occur immediately. If you have received a CP 504 take action! Get help immediately! A tax professional can be an invaluable resource when dealing with this type of situation.

Mortgage Debt Forgiveness

noreply@blogger.com (Jeff) — Sat, 09 May 2009 00:44:00 +0000

Under the current tax law a taxpayer can exclude from gross income any discharge of qualified principal residence indebtedness (see page 104 of IRS Publication 17). The exclusion applies to discharges after 2006 and before 2013. One stipulation is that the basis of the principal residence (the main home) must be reduced (but not below zero) by the amount excluded from gross income.

This represents a significant degree of help for someone who has lost their home due to the recent and ongoing economic turmoil in our country. Prior to the introduction of this law a lender who discharged a mortgage debt would send the homeowner a 1099-C, Cancellation of Debt form, in the amount of debt charged off. The taxpayer would then have to claim this as income and would have to pay taxes on it!

The law is very tricky however. There are many instances where a discharged mortgage debt can be charged to the homeowner as income, such as a second home, investment property, etc. Therefore if confronted with a 1099-C, Cancellation of Debt notice it would be wise to have this reviewed by a tax professional.

Reporting Income

noreply@blogger.com (Jeff) — Sat, 09 May 2009 00:16:00 +0000

When preparing income tax returns, reporting income is very important. One reason is that the IRS will perform a “tax match” once they receive your return. The IRS will “match” the income listed on the return to the income they have on file that has been reported that you have earned.

Reporting income falls under the category of Accounting Methods and can be read in detail in IRS Publication 17. There are two methods of accounting, cash and accrual. Constructive receipt, garnisheed wages, debts paid for you, payment to a third party payment to an agent and checks received or available to you are cash methods of accounting. Income paid in advance would fall under the accrual method.

Knowing and understanding what constitutes “income” for reporting purposes is very important. Mistakes in this areas can be costly. If, when the IRS performs their tax match, they determine a taxpayer has underreported their income this triggers an investigation and the IRS will send the taxpayer a CP 2000, underreporting of income letter. If a taxpayer is sent this letter it would be wise to get a tax professional involved. The tax return must be amended and re-submitted to the IRS and then managed thru the process to avoid having the return rejected.

Why Do I Owe Taxes To The IRS?

noreply@blogger.com (Jeff) — Sat, 02 May 2009 01:54:00 +0000

At times I have had to be the bearer of bad news. I have had situations where a spouse will call and tell me they have received notification from the IRS stating they owe a large sum of money and they ask the question, “Why do I owe taxes to the IRS?” The question this because they are being charged with a tax liability for years they didn’t even work.

Often times this is a situation where one spouse has worked for several years and has not filed income tax returns for several of those years. The other spouse, the one calling me, has not worked at all and has somehow been kept in the dark about their tax filings. What happens usually happens is that something prompts them to file their returns. Once the returns are filed, and here’s the important part, Married Filing Jointly, the total liability is automatically assigned to each spouse equally.

Unfortunately this tax filing sleight of hand occurs just before the unscrupulous files for divorce leaving the other spouse equally liable. Once the returns are filed and the liability is assessed the trap door slams shut and the collection process begins. This is one way a taxpayer may wind up owing taxes and not fully understand why they owe. Taxpayers in this situation can benefit from professional tax resolution.

Self Employment Taxes

noreply@blogger.com (Jeff) — Sat, 02 May 2009 01:53:00 +0000

Seldom a week goes by where I don’t speak with someone who is self employed, is great at doing what they do, but have a tax problem that is putting the business in serious jeopardy. As the conversation unfolds it becomes clear that the lack of knowledge of how to pay taxes as a self employed person as well as a proper record keeping system lies at the root of the problem.

In its most simplified for the self employed person is the only person working for the business. In the more complicated situations the self employed person has or did have employees who were paid in cash and were not issued 1099s. Sometimes the tax liability comes about as a matter of improper withholding. Other situations are due to simply not filing the tax returns.

In either event as time rolls on the IRS eventually catches up with them and the day of reckoning arrives like a very unwelcome guest that is here to stay and is not going away. Once this happens the self employed person is forced to deal with the issue head on. Sometimes things can be worked out with the IRS and the business can continue operations. There are also times when this is not possible and the business is forced to close. Every case is unique. My strong recommendation to anyone facing such a situation would be to get a professional involved. This can and usually does make a world of difference for the better.

Currently Non Collectible

noreply@blogger.com (Jeff) — Sat, 18 Apr 2009 02:02:00 +0000

In the 1819 Supreme Court case of McCullock versus Maryland, the Court's ruling upheld the constitutionality of the creation of the Bank of the United States and denied to the states the power to tax such an institution because, as Justice John Marshall put it, "the power to tax is the power to destroy." The United States congress grants the IRS the power to tax. Therefore the IRS has considerable power to tax and subsequently the considerable power to destroy.

There is, however, a provision in the tax code to help those who are unable to pay the IRS. The program is called Currently Non Collectible or CNC. When a taxpayer owes the IRS and simply cannot pay then CNC is a definite option that can save the taxpayer from getting “destroyed.” As a tax professional I have witnessed situations where the IRS is levying individuals whose only source of income is social security. After conducting a financial analysis of the taxpayer’s situation it becomes blatantly obvious that the taxpayer simply does not have the ability to pay.

This is a perfect case for CNC. Many times hardworking, honest taxpayers, loyal to their country, struggle financially unnecessarily because they don’t realize they don’t have to pay what the IRS is demanding. This program does not make the tax debt go away. It simply frees the taxpayer from the destructive power of taxation. If you or anyone you know is struggling financially with a tax burden I would strongly suggest calling a tax professional to see if CNC is an option.

IRS Tax Penalties

noreply@blogger.com (Jeff) — Sat, 18 Apr 2009 01:44:00 +0000

Any way you dice it a penalty is not a good thing. Webster’s dictionary defines a penalty as a “disadvantage, loss, or hardship due to some action.” This definition is completely accurate when it comes to IRS tax penalties. The IRS can and will impose two types of penalties on taxpayers all depending on the taxpayer’s situation.

If a taxpayer files so much as one day after April 15th without filing an extension to file the IRS will penalize the taxpayer 5% of the amount of tax owed per month for 4 ½ months if the tax is not paid within that time period. That adds up to 22.5%! This is the dreaded Failure To File penalty.

If a taxpayer owes taxes and does not pay what they owe by April 15th the IRS will charge ½ of 1% of the amount of the taxes owed per month. This amount will increase to a full 1% if the taxpayer is in collections, but will be reduced to ¼ of 1% if the taxpayer gets into an installment agreement with the IRS. This penalty is known as the Failure To Pay penalty.

The penalties on back taxes can be devastating and needs to be addressed as quickly as possible to prevent the taxpayer from suffering loss or causing some other type of financial hardship. The key is to take action. Call a tax professional immediately and stop the pain!

IRS Withholding Allowances

noreply@blogger.com (Jeff) — Sat, 11 Apr 2009 02:33:00 +0000

From time to time an interesting argument will surface regarding IRS withholding allowances. Some taxpayers like to get money back after filing their federal income tax returns. Others like to manipulate their withholding through their employer in an attempt to “break even” come tax time. Sometimes employees get this equation so out of balance they wind up under-withholding for years and over time end up owing the IRS a large sum of money.

In either case the most important thing for the taxpayer to understand is that the IRS debt must be paid. To get a very good understanding of how this works a taxpayer would do well to read and understand the Employee’s Withholding Allowance Certificate policy on withholding. As a tax professional I see this as one area that gets taxpayers into big trouble. The trouble starts when a taxpayer is told by a co-worker or someone else that they can increase their take home pay by reducing the amount of taxes withheld. This sets the stage for the classic problem of under withholding that ultimately gets the taxpayer in big trouble with the IRS.

Time after time I have taxpayers calling me about their tax problem only to discover that their problem stems from under withholding. With a good understanding of how this program works hopefully taxpayers can avoid getting into trouble. If you are in trouble and owe the IRS due to under withholding then please call a tax professional and get the professional care available to you.

Can The IRS Levy My Social Security Benefits?

noreply@blogger.com (Jeff) — Sat, 11 Apr 2009 01:22:00 +0000

For whatever reason many taxpayers are asking the question, “Can the IRS levy my Social Security benefits?” At the risk of sounding like an attorney the answer to the question is this, it depends. Your Social Security benefit can be levied depending on how your Social Security benefit is defined as per Title II of the Social Security Act.

Social Security benefits fall under the Federal Payment Levy Program (FPLP) which subjects certain recipients of Social Security benefits to a 15-percent levy to pay a delinquent tax debt. This rule is not to be confused with the 1996 Debt Collection Improvement Act which protects the first $750 of monthly Social Security benefits from being garnished for non-tax debts.

If you receive Social Security benefits and have received a Notice of Intent to Levy it is very important that you take immediate action. In the vast majority of instances a taxpayer receiving Social Security benefits can be protected from a levy. The key is to act quickly. Call a tax professional!

Unfiled Tax Returns

noreply@blogger.com (Jeff) — Sat, 04 Apr 2009 01:34:00 +0000

Do you have unfiled tax returns? If so then you need to get them filed for several reasons. One of the biggest reasons is because it is a criminal offense to not file. One of the other reasons is that the IRS may file a tax return for you if you don’t file. On this blog you will find out what will happen if the IRS files a return for you.

So you have not filed a return in several years and then all of a sudden you get a bill in the mail from the IRS for $47,835.14! After you recover from passing out you scramble to find out what has happened and what to do. Here’s what has happened. The IRS has a record of all the income you have received for each year you have received it. They have now taken this income from a few, not all, but a few years and listed it on an income tax return. The IRS has given you the minimum deductions, zero exemptions and has filed you as single which translates to the highest amount of tax.

Then they add penalties and interest and calculate the total amount due based on when the tax return was due then they send you a bill. If the bill is not paid then they seek to collect. If no action is taken on your behalf they go after your income by sending a letter to your employer and to your bank demanding money. At this point you are in very serious trouble.

But wait, there is help! If this happens the best thing to do is file all returns immediately! Get the returns filed the way they should have been filed initially. This should cause the amount you owe to go down. Once all of your returns are filed you’re good to go! If you owe money to the IRS after filing the returns then you need to work out a plan of resolution. A tax professional can help you with this. Whatever you do take action and don’t get behind the eight ball! Be proactive!

Tax Negotiator

noreply@blogger.com (Jeff) — Sat, 04 Apr 2009 01:15:00 +0000

Samuel L Jackson and Kevin Spacey both starred in the 1998 movie The Negotiator. Samuel L Jackson plays the part of a highly skilled Chicago police hostage negotiator who is framed for murder. To clear his name he takes a group of people hostage in an attempt to clear his name. With the stakes high, the drama builds to a point where Samuel L Jackson tells the hostage negotiator who is trying to negotiate with Samuel L Jackson that Kevin Spacey is the only person he will deal with. This is because Kevin Spacey himself is a world-class hostage negotiator who knows all the tricks of the trade. After lots more high drama, the problem is eventually solved and Samuel L Jackson is cleared of all wrongdoing. It is a movie well worth viewing.

With Hollywood the outcome can be whatever the film writer wants it to be, but this is not always the case in real life. The point was made and well taken in the movie that it pays big dividends to have a skilled negotiator who knows all the tricks when the stakes are high. In my roll as a tax consultant I definitely find this to be true when it comes to negotiating with the IRS. In the movie, which we all know is make believe, Samuel L Jackson was an intelligent, skilled negotiator yet he needed another negotiator to get him out of the jam he was in.

In real life when it comes to negotiating with the IRS it pays big rewards to have a skilled negotiator looking out for you if your are in a situation where the stakes are high and the wrong moves could negatively impact your life both immediately and futuristically. There are many different ways an IRS debt can be negotiated that most tax payers have no idea exists nor how to negotiate them therefore they come out on the very short end of the stick. The best wisdom in situations like these would be to consult with a true tax professional that can prevent you from suffering a greater loss by attempting to negotiate directly with the IRS.

Can I Get My IRS Penalties Abated?

noreply@blogger.com (Jeff) — Sat, 28 Mar 2009 00:38:00 +0000

As a professional tax resolution specialist a very frequent question I hear is, “Can I get my IRS penalties abated?” And the answer is always the same which is, “It depends.” It depends on the individual circumstances of each person who owes taxes and also owes penalties. In order for the IRS to remove penalties they have to have a very good reason. The IRS applies penalties to give taxpayers an incentive to pay their taxes on time.

There are instances where taxpayers truly have very good reasons to have their penalties abated. The key to getting the penalties is to 1) know what the rules are regarding penalty abatement, 2) properly documenting the reasons that lead to the penalties and finally 3) presenting your case to the IRS and requesting they abate (remove) the penalties. Often times a tax professional is the most qualified person to handle this procedure and a taxpayer would do well to consider this option.

The qualifications for penalty abatement are stringent and can be hard to document but can be well worth the effort. Recently the IRS implemented a first time penalty abatement program to help taxpayers who have gotten into trouble with the IRS for the first time. Again a tax professional can be very helpful in this area.

I Have A Federal Tax Lien

noreply@blogger.com (Jeff) — Sat, 28 Mar 2009 00:12:00 +0000

You have just come home from a hard day of work and you see that the mailman has left a yellow slip of paper in your mailbox. You look at it and notice the IRS is trying to notify you about something. You go to your local post office and pick up a certified letter from the IRS and open it. As you read thru the letter you discover to your horror that the IRS has filed a federal tax lien against you! What do you do?

If you’re like most people you feel a shock wave of fear and confusion shoot thru your body and your anxiety level goes way up and all for good reason because this is a very serious matter. A federal tax lien will have a serious affect on your credit as well as your ability to obtain any type of loan or other financing. It may hinder your ability to get hired. You need this corrected and you need it corrected now! What should you do?

Perhaps the best course of action would be to contact a professional tax resolution firm and interview them as to what can be done to resolve a federal tax lien. If you have received a federal tax lien then the chances are very good that there’s more going on with your IRS file than meets the eye. In most cases what is needed is a thorough review of your IRS file to find out what’s going on and why. The possibilities are many and it does require the services of a tax professional.

In the vast majority of instances a federal tax lien can be removed only when the tax liability is paid in full. The most important thing however is to obtain professional help due to the fact that if the IRS has filed a federal tax lien against you then the possibility exists that you are subject to further IRS collection proceedings which could include the IRS levying your bank accounts and/or your wages. If you have a federal tax lien take action immediately.

How Far Back Can The IRS Collect?

noreply@blogger.com (Jeff) — Sat, 21 Mar 2009 00:07:00 +0000

You did not file a tax return many years ago and you’re wondering how far back the IRS can go to collect. If you have filed all of your returns then usually the IRS will only look back 7 years. If you do not file a return then the IRS can go as far back as when the return was initially due. The important issue here is to make sure you file your returns. It is the IRS non-filer who has the most to fear.

Whenever a taxpayer has outstanding returns (unfiled returns) there is no limit to when the IRS can come after you. What will happen is that the IRS will file a few returns for the taxpayer, add interest and penalties and will then bill the taxpayer for the full amount. This will get the taxpayer’s attention. If this happens and you feel you are getting squeezed by the IRS your best bet is to call for professional tax help. This can save you a lot of money and heartache.