Tax Problem Resolution Blog

The Offer in Compromise Program Lives On

2012-01-23T12:30:00.000-08:00

I wanted to remind folks of an index of Offer in Compromise Articles from this blog which might be informative for you.

(click on link for story)

A Short History of the Offer in Compromise Program
How Long Does it Take Offer to Process? Case Example
Salespeople Love to Sell Offers
Do Offers Stop the Collection Process?
Another Kind of Offer: Doubt as to Liability
Offer Accepted: Equity Exceeded Tax Debt!
Qualifying for an Offer
Behind the Scenes: Doing an Offer in Compromise
OIC Staff Confusing Taxpayers? March 2008

And also emphasize a few new points on the Offer in Compromise program as it might suit your situation here in year 2012.

1. Stopping the collection process -- important

Filing the Offer in Compromise paperwork with the IRS will stop all collection activity against you as long no levies have been issued or are in process. (Those levies will have to be dealt with separately). So, if you are certain you are a candidate for the Offer in Compromise process and you are NOT currently being levied, it might be a good idea to get the paperwork into the IRS so you can be assured that the collection process is stopped.

2. Offer in Compromise review -- NOW centralized.

AS I wrote here: The Switcheroo, your Offer cases almost universally will be reviewed in offices in New York and Tennessee and NOT in the field as they were previously.

Think you might be an Offer Candidate to settle your IRS debt? Give myself or my staff a call at 1-866-525-7302. I look forward to hearing from you. Jay Freeborne, Enrolled Agent, Washington Tax Services.

Behind the Story of Deceased Tax Resolution Companies: Poor Customer Service

2012-01-17T13:15:00.000-08:00

If you look at the record of the following tax resolution companies that went out of business in 2011

JK Harris, Charleston, South Carolina, b. 1997 d. 2011
Nationwide Tax Relief, Los Angeles, CA b. 2004 d. 2011
Preferred Tax Relief, San Diego, C, b. 2007 d. 2011
Roni Deutch, Sacramento, CA b. 1998 d. 2011
Professional Tax Care, Los Angeles, CA, b. 2008 d. 2011
Associated Tax Relief, Los Angeles, CA, b. 2006, d. 2011
411 Tax Relief, Culver City/Los Angeles , CA, b. 1998, d. 2011
United Tax Relief, Canoga Park, CA b. 2000 d. 2011

They almost all share one thing in common: NOT providing good customer service to the people with tax problems who hired them. While in the short term -- when their phones were ringing off the hook -- a focus on slick marketing -- TV ads, mailings, etc. -- worked for these companies. In the long term, it is only a focus on good customer service -- creating a system that serves your customers -- that shows that you are interested in being a good tax resolution/representation company.

All of the eight companies above at one time had an F rating at the Better Business Bureau. I am learning now that is the sign of a company that it is eventually going to close. With the amount of competition in the tax resolution industry now, you can't afford to get those kind of ratings and compete anymore.

More deceased tax resolution companies can be found HERE.

If you are an "orphaned" client of one of these companies and/or a person with a tax problem that needs help solving -- give me a call at 1-866-525-7302 to get an honest assessment of whether tax representation will serve you. Jay Freeborne, Enrolled Agent, Washington Tax Services.

What Fees you can expect for Tax Representation: a Review of 2011 cases

2012-01-11T17:06:00.000-08:00

As I review my tax cases from last year, I thought the general reader of the tax resolution blog would be interested in what people paid Washington Tax Services and what they got as a result of their investment with us.

Here are some completed cases with the fee that was paid:

Fee $1250.00 Michigan -- Hired us in March 2011, Uncollectible Status granted in June 2011

Client was successfully placed into uncollectible status on his $50,000 IRS debt. Taxpayer was aided in getting all of their returns done by our staff research team before uncollectible status was achieved. Furthermore, a levy on his bank account was released at the beginning of the case.

Fee $1275.00 Florida - Hired us in March 2011, Offer accepted November 2011

Taxpayer had Offer in Compromise accepted with the IRS on her $30,000 tax debt. Offer was $2808 to settle the debt. Client's record was also researched initially and client was protected collection activity during this time.

Fee $1500.00 Chicago, Illinois - Hired us in January 2011, Offer accepted December 2011

Taxpayer owed $350,000 to the IRS. IRS accepted $1000 Offer to settle this debt. I know this sounds fictitious. But it is really really true. Scout's honor.

Fee $12675.00 Washington State - Hired us in January 2011, still working the case

Taxpayer owed the IRS over one million dollars (!) based on returns that the IRS had prepared for them in the absence of returns they filed their own (Substitute for Returns). We stopped levies against their bank accounts and wages. We filed ten very complex 1040 tax returns. We have successfully removed penalties on the debt, but are still working to get more penalties removed by APPEALING a rejected penalty abatement for a few years. Debt has been reduced to about $50,000 after the returns were filed and client down-paid some of the debt.

Need more examples? You can also refer to our general fee schedule here: Fees for Tax Representation -- Ballpark

Fees seem reasonable? Like the outcomes? Give me a call at 1-866-525-7302 if you have a tax problem and are looking for an experienced staff to handle it for you. Jay Freeborne, Enrolled Agent, Washington Tax Services

Here come the IRS levies and garnishments again ...

2012-01-09T14:19:00.000-08:00

The IRS had a bit of holiday hiatus from levies and garnishments. Now, they are back in business. I am getting quite a few phone calls from folks who have been levied.

If you have been levied or garnishmed, I understand that you might be panicked. But if you can take a deep breath, here's what you need to gather before calling our office:

1. Garnishment Call your payroll and ask for a fax #. This will help facilitate a release of your garnishment.

2. Bank levy Call your bank and ask for a fax # for levy release. Do realize that the bank is required to freeze the money for 21 days. So, we have 21 days to get it released.

Read other articles about IRS collection actions at the following link: Articles on Collections: Lowering the Heat

Please call me at 1-866-525-7302 or my colleague Marty Griffith at 1-866-525-7324 if you need help with your IRS/levy or garnishment. Have your fax #'s ready! Jay Freeborne, Enrolled Agent, Washington Tax Services.

Tax Resolution Blog Posts of 2011: What Might Be Relevant to 2012

2012-01-02T13:46:00.000-08:00

Looking at the posts on the tax problem resolution blog from 2011, here are the most relevant posts for 2012...

Changes in IRS practices and review of tax resolution issues:

If you are in financial hardship: you might want to look at the pros and cons of Offer in Compromise vs. Uncollectible Status: OIC vs. U. Status

There is a big big change in how the IRS handles tax cases for people who owe $$$$ : The Switch: Large Dollar Cases to Field, OIC Cases to Central Offices

Payroll taxes and 941 issues recap:
A Primer for 941 tax cases

Problems of the Tax Resolution industry:

What you should expect from quality tax representation: Goofus and Gallant - Differences in Customer Service AND How Tax Resolution is Done

Problems in The Tax Resolution Industry: Cold Calling Tax Liens
and Tax Resolution Telemarketers will SAY ANYTHING!

Finally an overview of the tax resolution marketplace:
Too Many Players in Tax Resolution Industry?

Happy New Year to all. If you are looking for an honest and inexpensive solution to your tax problem, call me at my desk 1-866-525-7302 or email me at jfreeborne@watax.com, Jay Freeborne, Enrolled Agent, Washington Tax Services.

No Reorganization: JK Harris, One of the Oldest Tax Resolution Companies Files Chapter 7

2011-12-30T00:04:00.000-08:00

JK Harris was one of the first tax resolution companies to advertise on TV. The company also was the only tax resolution company to sell and operate franchises all around the country. While their marketing was excellent and innovative, they never provided a good model for customer service. Hence their F rating at the Better Business Bureau, class action lawsuits and complaints from Attorney Generals around the country. Well, as of December 30, 2011, the company is "going under" according to the Charlestown Courier: http://www.postandcourier.com/news/2011/dec/30/jk-harris-goes-under/

They were trying to get financing and file a Chapter 11. But their largest creditor objected. Farewell JK Harris. I had alluded to JK Harris financial issues in earlier blog posts below as well as their very poor and deceptive customer management:

Chapter 11 for JK Harris?
The JK Harris & Taxmasters Horror Shows...Expensive Admission
Just Got Off the Phone with a JK Harris Client...
More Financial Trouble for JK Harris?
JK Harris: Financial Trouble?

If you were a client of theirs and need some guidance, feel free to call me or my staff at 1-888-282-4697. Jay Freeborne, Enrolled Agent, Washington Tax Services

The Pros and Cons of Resolving IRS debt: Offer in Compromise vs. Uncollectible Status

2011-12-20T09:46:00.000-08:00

If you meet the criteria for "financial hardship," you might just be a candidate for an Offer in Compromise or Currently Not Collectible to resolve your IRS tax issue.

The biggest question, though, IS which one of these two resolutions is better for you and your tax situation?

Offer in Compromise

PROS

Removes the tax lien against you.
The debt goes away - allowing you to earn more money in the future without having to pay the taxes.

CONS

You will have to pay a $150 filing fee to process your Offer.
You will have to pay a certain amount to settle your debt (depending on what you qualify for).
Your Offer might very well be REJECTED.
If your Offer is rejected, you added time to the clock on your debt's expiration date.
You will need to be perfectly tax compliant - filing and paying for FIVE YEARS.

Uncollectible Status (Currently not collectible or Status 53)

PROS

You pay zero.
You are taken out of collections. You do NOT need to fear being levied or garnished anymore.

CONS

You still owe the IRS and a tax lien might be filed against you.
You might be taken out of uncollectible status if you don't file returns.
You could be taken out of uncollectible status if you show a dramatic increase in income.
The IRS re-reviews uncollectible status to see if you still meet the criteria.

You can find more articles on the Offer in Compromise on the blog HERE

Want to discuss these issues in even greater depth? Give me a call at 1-866-525-7302 or send me an email to jfreeborne@watax.com . Jay Freeborne, Enrolled Agent, Washington Tax Services

Cold Calling Tax Liens - 941 -- One of two new companies claims to be the Private Taxpayer's Advocate Service

2011-12-12T10:59:00.000-08:00

Add two new cold callers to the list of people who telemarket to people and businesses who have TAX LIENS against them:

Safe Harbor Financial based out of Chicago https://safeharborfc.com/ according to BBB record started in September 2009: BBB record

and yes another company in Colorado: SLS Financial Solutions: http://www.slsfinancialsolutions.com/ according to BBB starting in July 2009: BBB record

One of my clients was told by Safe Harbor that they are the "private" Taxpayer's Advocate service. And no not the IRS: http://www.irs.gov/advocate/ He was told by the telemarketer: that he "came across his file" and thought he would give him a call about his tax case. I will say this is a really effective and clever sales tactic. But I wonder if he should tone down the "Taxpayer Advocate" part of sales pitch?

Nonetheless, keep your eyes and ears out for telemarketers. While their BBB records are impeccable for now: some important clues are

1. Are they overcharging you?

2. Are licensed tax professionals available? Do you know their names?

3. What role with the telemarketer play in the resolution of the case? Who will be accountable?

I have written about the questionable legality of telemarketing tax liens here: The Legal Case Against Cold Calling Tax Liens and wrote extensively about Colorado's tax lien telemarketing industry here: Mountain Time Phenomenon and here: Tax Liens Incur Mailings and Phone Calls

JK Harris: Bankruptcy Hearings Could Make or Break them

2011-12-05T11:50:00.001-08:00

Kudos to the reporters at Charleston's "The Post and Courier," who have been reporting on the JK Harris bankruptcy: http://www.postandcourier.com/news/2011/nov/30/jk-harris-at-a-crossroads/

The money quote:

If it nails down the new funding, JK Harris plans to resume promoting its tax services on TV stations in the 60 biggest markets. The company has been relying solely on name recognition for new business since July, but with cash running low, it needs to step up its marketing efforts in a hurry, the CEO testified.

"If we don't start advertising by the first week in January, we might as well liquidate," Harris said during Tuesday's three-hour hearing, which was laced with accounting jargon and included tearful pleas from two laid-off employees seeking back wages.

From my vantage point, Harris' comments strike me as pretty cynical. He makes no mention of the fact that his company rates a F rating at the BBB: BBB record Or why Attorney Generals around the country decided to pursue them for poor services. Or why he lost a large class action lawsuit in the first place:

QUALITY CONTROL!

I am biased, of course, but with no improvement in quality control and providing good services to their clientele, I hope the bankruptcy court says unequivocally: NO!

Can you do an Offer in Compromise twice? Customer from the '90's rehires Washington Tax

2011-11-28T10:22:00.001-08:00

If you make a deal with the IRS using the Offer in Compromise program - Offer in Compromise program - history, you are required to be compliant on your taxes for FIVE YEARS. If you pass the five years without any marks, you are free and clear. So does that mean if you owe the IRS again AFTER the five years mark, that you could utilize the program again? Yes it does.

In fact a client of Washington Tax Services from the '90's is rehiring us here in 2011 to address a new tax liability he created and the likely solution is going to be an Offer in Compromise.

Are you a candidate for an Offer in Compromise? I will tell you your chances if you call me at 1-866-525-7302, Jay Freeborne, Enrolled Agent, Washington Tax Services

The Power of Attorney Form: Clues when Companies Misuse it

2011-11-22T10:11:00.001-08:00

If you are going to be represented by a tax professional to solve your tax issue, you will need to sign a form 2848 - Power of Attorney form -- http://www.irs.gov/pub/irs-pdf/f2848.pdf Listed on this form under "Section 2 - Representatives" should be the NAMES of the Enrolled Agents, Attorneys or CPA's that you are appointing to represent you.

What you DO NOT WANT TO SEE IN THIS SECTION is the COMPANY NAME. That is ridiculous and an error. A company CANNOT represent you. A client of mine just sent me a copy of the company's 2848 that he hired from Calabasas, California. Their company NAME was listed on the 2848. Silly. The client was actually locating the 2848 so he could request a refund from them -- using the professional's name as "collateral" in that negotiation. No luck.

On the other hand, a company CAN be listed on the 8821 form -- http://www.irs.gov/pub/irs-pdf/f8821.pdf as several people on staff can be entrusted to research your record with the IRS -- which does NOT require them to be a licensed tax professional.

If a fly-by-night tax resolution outfit is sending you a 2848 WITHOUT NAMES -- that's a very bad sign.

If you want to hire someone WITH ACTUAL NAMES (!) on the 2848, call Jay Freeborne, Washington Tax Services at 1-866-525-7302.

From BBB accredited to F rating to closed: The Sad Cycle of Tax Resolution Companies

2011-11-15T09:41:00.001-08:00

I am an adding another tax resolution company to the deceased list. Apparently Professional Tax Care of Los Angeles which started in 2008 is no longer operating. Phone calls seem to be rerouted to a call center called "The Tax Help Center."

Again sorry to the clients who were abandoned. A poster on the blog did express this warning a few months ago:

I’m writing you because of some disturbing information I read on your blog under the title “Recommended Companies But With Some Reservation.” For the most part, your assessments on the mentioned companies are correct for the exception of # 7 – “Professional Tax Care”. You mentioned they started in 2003. I can only assume you received this info from either the company records or the BBB. Either way, this is untrue. Let me give you a brief synopsis of how “Professional Tax Care” got started and their name… I can say the things I do because I witnessed it all.

Chris Seminatore – President of PTC, got his start in the tax resolution industry through a company in Los Angeles that you may be aware of as… “Tax Care Professionals” back in 2008 after he answered an ad in craigslist. Keep in mind that Chris claims he never did tax relief before and was hired as an opener. Chris had been working for a few months there and for some reason he was doing really good at selling the services and becoming a lead sales rep. However, after about a month it was discovered that he was guaranteeing the services of tax relief to new prospective clients, therefore cranking up his sales. Once the director of PTC heard of this he was immediately fired on the spot and escorted out of the building while he was screaming that “this was all unfair”. Funny thing was, a few months go by and we heard of a new tax relief firm open up in Beverly Hills named “Professional Tax Care.” How ironic the resemblance of the two names… Tax Care Professionals – Professional Tax Care. Later it was discovered that Mr. Seminatore through the help of his girlfriend who had a lot of money, funded his dream of opening a tax firm mainly due to the fast money this type of business represents. You see, Chris was a failed director trying to make it in Hollywood for but for whatever reason could not get latched on to Hollywood. So since he failed in Hollywood, he figured he could play a president of a tax relief firm with only a few months experience under his belt. Now I’m sure he has surrounded himself with people who have done tax relief, but Mr. Seminatore is no one to be trusted. I enjoy the You Tube video showing him sitting very cordial with law books in the back as he spits out the lies he claims his company can do to help the people with tax problems. There’s a reason he has a low rating with the BBB, he has no experience in tax resolution. However, he does deserve an Academy Award for fooling the general public thus far.

What is becoming clear though is a pattern of the fly-by-night tax resolution company:

their record at the BBB FIRST starts as an "A rating" and sometimes with BBB accreditation: Professional Tax Care BBB rating THEN the record plummets to C and then D plus and then finally a F rating. They lose their accreditation with the BBB and then they close their doors and are added to the Deceased List

If you were a client of Professional Tax Care's and need some guidance, give me a call at 1-866-525-7302. Jay Freeborne, Washington Tax Services or email me at jfreeborne@watax.com

How the IRS gets your attention: Summons

2011-11-14T16:22:00.001-08:00

It's one thing to owe money to the IRS. It's another thing to NOT file your tax returns. When you are a serious serious procrastinator: the IRS tries to get your attention by issuing a SUMMONS.

A summons usually requires that you supply to the IRS 1. tax returns 2. a completed collection information statement with documentation of your financial condition. The summons tells you WHEN and WHERE you are supposed to appear at an IRS building with the requested documents.

If you DON'T GO to the summons, the IRS might refer you to the Dept. of Justice which might make your case a criminal one.

It is possible to AVOID the summons if you contact a licensed tax professional like Washington Tax Services. But I would recommend that we are given ample time to postpone. You can also avoid it by sending the material requested well in advance of the Summons date.

Nonetheless, if you have been summonsed it doesn't mean you are a bad person JUST a serious procrastinator. If you need guidance on your Summons or tax issue, call me at 1-866-525-7302, Jay Freeborne, Washington Tax Services

Deciding on Tax Representation: Important clues show legitimacy of company you might hire

2011-11-07T14:40:00.000-08:00

I try to keep people informed on tax resolution and tax representation companies who are trying to reach a national audience thru my list of 138: A List of 138 Tax Resolution Companies. However beyond this list, there are more cues and clues that can tip the hand of a tax resolution company that might not be acting in your best interest.

First, let's be clear -- time spent in the business of tax resolution -- is very important. Any company that has been representing taxpayers for over 10 years has to be doing something right. The tax resolution business is a very delicate - high risk/reward business that has the potential of customer service disasters.

Second, BBB is a good resource. Make sure that a company has a record there. You might want to downgrade companies with A ratings that have been in business less than 2 years.

All of that said, one very big clue is HOW the tax resolution salesperson/consultant follows up for your business after initially speaking to you. Be suspicious of "false" urgency to get them to have you hire them. Furthermore, if you are getting hammered with followup calls: be suspect. One followup call is ENOUGH. Beyond that : I think his/her commission is more important than YOU. I have been working in and am aware of these sales-driven environments enough to know that the SERVICE SHOULD SELL ITSELF. You don't need to be harassed to hire a tax resolution company.

The other clue is the FEE. I have said again and again on this blog: that if you are going to pay someone $3000 or $4000 or more for representation: the company better be ready to give you the red carpet treatment as well as a slew of services for the fee. More on that here: What $4000 should pay for in tax resolution services

If you want an honest analysis of your tax case, call Jay Freeborne or one of my associates at Washington Tax Service 1-866-525-7302 or jfreeborne@watax.com. Thanks, Jay

The Web of Tax Resolution Companies and the IRS: How Tax liens generate mail and phone calls

2011-11-03T11:53:00.000-07:00

We at Washington Tax Services will be the first to admit -- in our inception - year 1989 -- mailing letters to people with Federal tax liens was a core form of marketing for us. In fact, back then, we were one of the few tax resolution companies organized as a national operation and one of the very few that used letters to people with tax liens as our central form of marketing. Well almost 24 years later -- the quantity of new players in the game of tax resolution of varying quality and experience is astounding -- The List of 138
This list was a mere 50 or some companies just over a year ago.

Tax resolution marketing is now a game where a Federal tax lien on yourself or your business prompts an avalanche of phone calls from the following tax resolution companies in Colorado and elsewhere:

Omni Financial
20/20 Financial
Berkshire Capital Partners
The Core Consulting Group
Union Tax Consulting, New Century Tax Consulting, , Taxcut 2010 or Incline Group:
Clear Creek Tax Consulting
Larson Financial
Tax Resolution Center (?)
M & M Financial -- Illinois
OFS Tax Resolution, Colorado

(I have written previously on whether cold calling tax liens is legal or not -- The Legal Case Against Cold Calling )

The cold callers also called "openers" try to get people on the line who are then transferred to a "closer." Neither the "openers" or the "closers" are licensed tax professionals -- Enrolled Agents, CPAS or Attorneys -- but rather commissioned salespeople and telemarketers. Nor in most cases do they play any eventual role in the resolution of your case. But you can be assured: they are often very charming and very good at conveying the utmost URGENCY in handling your tax problem. Check them out on my list The List of 138.

You might also receive a flood of mail from some of these companies including Washington Tax Services.

Community Tax Relief, Chicago, IL
Tax Defenders,Chicago, IL
Advocate Tax Solutions - ATR Tax Lien
American Tax Solutions, Chicago, IL
Tax Network USA
U.S. Tax Resolution, LLC

Many of these companies are totally legit. However, some are very new in this business and so unproven. Others send really potentially fraudulently IRS imitation letters. See here: Misleading Tax Lien Letters Others letters from legitimate companies are just trying to get your attention like us. You would be wise also to check them out on the list here: The List of 138

Based on some comparison interviews I have been doing against some of the companies listed above, I have concluded that the biggest giveaway is how much they charge!? Any one charging you $4000 or more to represent you on a tax problem better have a good justification for it: What if Someone Charges $4000 or More I have seen these companies rarely charge below $2000.00.

If you want an honest analysis of your tax issue and a reasonable quote, please call me at my desk 1-866-525-7302 or email me at jfreeborne@watax.com , Jay Freeborne, Enrolled Agent, Washington Tax Service

How can People live with IRS Garnishments for over a year?!

2011-10-28T14:11:00.000-07:00

We get levy and garnishment releases every day at Washington Tax Services. It's par for the course.

However it's not often that a levy release get's this thank you from a client:

"Thanks, Jay! Got my first regular paycheck in over a year today. " Phil G., Texas

Three Kinds of IRS Audits: Live , Correspondence and Underreporting

2011-10-24T15:27:00.000-07:00

We at Washington Tax Services are seeing more tax representation cases that are "examinations" or audit - oriented rather than collection cases at the moment due to what we think is a reorganization of the collection branch -- as I wrote here: IRS Collection Branch - Regrouping
In a nutshell, there are three different kind of examinations:

1. Live audit -- This is when the IRS has appointed a Revenue Agent to investigate your tax returns. You will receive an IRS letter explaining to call and/or appear at a certain time and date. The audit is often done in-person unless you have a tax professional like myself or my colleagues to represent you over the phone, fax, email, etc. These are pretty intense and usually involve the most complex and in-depth problems with your 1040 returns -- most often for business expenses, i.e., Schedule C.

2. Correspondence audit -- The "correspondence" audit should be done thru the mail usually from Holtsville, NY or Austin, TX. They usually are looking for back up on deductions you made on your Schedule A. You or your tax professional will need to correspond with the IRS to support your deductions and resolve the matter.

3. Underreporting audit -- The under-reporting audit is done for you. You receive a letter that indicates usually income that you overlooked when filing your return. It is very common to get this fixed by amending your return with the 1040x.

What kind of audit or examination do you have? Give me a call to discuss whether tax representation would be worthwhile. 1-866-525-7302 or email me at jfreeborne@watax.com, Jay Freeborne, Enrolled Agent, Washington Tax Services.

Price Comparisons....Big Big Disparities in Shopping for Tax Resolution Services

2011-10-11T12:25:00.000-07:00

Quality is one thing when hiring a tax resolution service to represent you on your tax matter. But price is obviously important too.

In the last week I have offered tax representation to two clients who also checked our Tax Resolution Services in Encino. TRS is a decent company with a solid BBB record on my list here: Recommended Companies with Reservations However, their sales folk charge very very high fees.

Customer #1: Washington Tax Service fee $1500.00, TRS fee $5500.00 That's a $4000 difference.

The lady had defaulted her installment agreement on a $25,000 debt by owing for 2010 and she expected to owe for 2011 as well. Her case is in Automated Collection Systems.

Customer #2: Washington Tax Service fee $2100.00, TRS fee $8000.00 That's a $6000 difference.

This gentleman, a recovering tax protestor (if you will), owed about a half of million to the IRS based on returns the IRS had prepared for him. The IRS was not pursuing him aggressively, though, and the balances due were much much higher than what they would be if he filed the returns.

Want to know what we at Washington Tax Service's charge to represent you on your tax matter, call us at 1-888-282-4697, Jay, Washington Tax

Misleading Lien Letters Abound: here's the latest

2011-10-07T15:25:00.000-07:00

Some company is sending out the following mailer to people/businesses with tax liens: Notice of Federal Lien The company which is reachable at 1-888-552-1902 is making up IRS code #'s as well. The letter states it is Form 778 (Y) (c) Notice of Federal Tax Lien filing. I called the number - it rang and rang -- finally a voice message picked up they are the "Tax Litigation Hotline." I was alerted to this egregiously and erroneously prepared letter from a email alert from National Association of Enrolled Agents (NAEA). The postal address is Santa Ana California: the lion's den of fly by night tax resolution companies.

If you received a misleading letter from a tax resolution company and need some guidance, give me a call at 1-866-525-7302. Jay Freeborne, Enrolled Agent, Washington Tax Services.

JK Harris to File For Bankruptcy

2011-10-06T22:59:00.000-07:00

Well, it happened: our oldest competitor in tax resolution, JK Harris, filed for bankruptcy to avoid being punished for their failure to fully pay a $1.2 million judgement against them to the Texas Attorney General: JK Harris to File for BK. It looks their bankruptcy is going to take the form of an asset purchase. According to the article, Taxmasters might be buying their assets using a code 363 of the bankruptcy law. But I think it is safe to say that this isn't a reorganization. But we'll see.

UPDATED: JK HARRIS DISSOLVED IN CHAPTER 7 : http://taxresolutiontalk.blogspot.com/2011/12/no-reorganization-one-of-oldest-tax.html

I never thought this day would come. They were the first tax resolution company to go big on television marketing. And perhaps the first tax resolution company to bank on a franchise system: with "offices" all around the country while the cases were handled in a central office in South Carolina. A year 2000 article in the Wall Street Journal mentioned an IRS investigation of them while also mentioning Washington Tax Services as their 2nd largest competitor. Boy, times have changed.

The big class action lawsuit and various problems with Attorney Generals really started to gnaw at their profitability. The judgement from the class action lawsuit was pretty heavy although not very generous to their disgruntled clients who received $69 a piece after lawyers were paid. Here's a list of the creditors as per the comment's section below: http://media.charleston.net/2011/pdf/jkharrissmallbizchapter11petition.pdf

As I said before, it was pretty difficult to run the JK Harris high volume model while having an F rating at the BBB and a class action lawsuit against them.

If Taxmasters buys JK Harris, it will be an F rated BBB company BBB record -- buying a F rated BBB company -- BBB record that's not the most attractive bride and groom -- the Addams Family redux?

I alluded to JK's financial trouble in previous blog entries HERE and HERE.

If your are a JK Harris customer and need some guidance, give me a call at 1-866-525-7302. Jay Freeborne, Enrolled Agent, Washington Tax Services.

Impact of Large Dollar Cases Going to the Field: More Scrutiny and Quicker Resolution

2011-10-04T15:22:00.000-07:00

As I reported a few days back: Large Dollar Unit and Offer in Compromise Unit Switcheroo, the IRS Large Dollar Unit cases will be handled in the field by Revenue Officers (RO's)-- in offices near where you actually live -- as opposed to the two offices in New York State which have been working Large Dollar cases to now (the Large Dollar Unit - LDU).

One things for sure, RO's will be handling these cases with more velocity and scrutiny than the LDU. Expect financial statements to be given in a short period of time, quicker lien filings and more turnover of records to determine that a tax bill can be paid or not.

On the other hand, RO's are live bodies with thoughts and feelings of their own and at times: can be great to work with. So, this huge cultural change in the operation of the IRS is going to have pluses and minuses. Ultimately, from the standpoint of IRS efficiency, I think this will be a gain for the service.

Do you have a tax liability in excess of $100,000? Give me a call at 1-866-525-7302 for an analysis of your tax situation or copy my email jfreeborne@watax.com and email me your story. Jay Freeborne, Enrolled Agent, Washington Tax Services

Tax Representation Business almost $1 Billion a Year - More tips for NOT getting ripped off

2011-09-30T12:04:00.001-07:00

I thought the following article by the CEO of Tax Resolution Services in Encino, CA is excellent regarding regulations of the tax representation industry and an overview of the marketplace for tax resolution:

http://www.taxresolution.com/blog/tax-resolution-under-scrutiny/

Breaking News: IRS Large Dollar Unit cases are going out to Field. OIC cases going to Central Units.

2011-09-28T09:56:00.000-07:00

Starting October 1st, the IRS is transferring all cases that were previously handled by the "Large Dollar Unit" to local Revenue Officers out in the field. Large Dollar cases are tax problems with more than $100,000 owed.

In an opposite manner, Offer in Compromise cases which have been handled locally are all going back to the central Offer in Compromise units in Memphis and New York. The agents that did these cases locally will now be assigned to the Large Dollar cases going out to local offices around the country.

Want to hire a tax professional with inside knowledge about the the IRS, contact Jay at Washington Tax at 1-866-525-7302.

Taxmasters of Texas: The Only Publicly Traded Tax Resolution Company DELISTED

2011-09-27T12:04:00.000-07:00

Taxmasters a company that got a lot of airtime on my blog and in the national media for questionable service and practices appears to have been DELISTED from the OTC Bulletin Board and put on the OTC Pinks Exchange for failure to file a 10-Q in a timely manner.

Here's the link to their yahoo finance page: http://finance.yahoo.com/q?s=TAXS.PK

The delisting blurb: Delisted from OTC Kind of reminds of missing a deadline with the IRS for your client. Hmm.

Taxmasters was the only tax resolution company that had their shares traded on a stock exchange (that I am aware of).

Other articles on Taxmasters here: Chilling: The Tapes of the Closers

History and Background of Tax Resolution Industry: An Index of Articles

2011-09-26T15:31:00.000-07:00

Just a little reminder to new or old blog readers to check out my index of articles on the Tax Resolution Industry down below on the right.

Or check out these links to some of my OVERVIEW articles about the Tax Resolution Industry which has grown to at least 122 national companies.

History and Background of Tax Resolution Industry
(click on link for story)

A History of the Tax Resolution Industry
How Tax Resolution Sausage is Made
Three Different Models of Tax Resolution
Good Reasons for Complaints against Tax Resolution Firms
The Legal Case Against Cold Calling Tax Liens
Tax Resolution = Scam , Synonymous?
Making Sure your Tax Professional is Licensed
Examples of Bad Tax Resolution
A Company with Good Intentions Goes Under
Hiring a Salesperson for your Tax problem
Getting Refunds from Tax Resolution Companies
Getting Refunds From Tax Res. - Part II
How Could 3 out of 4 Tax Resolution Salespeople Be Wrong!?
Goofus and Gallant: Two Different Tax Consultants
Is the Market for Tax Resolution: Over Saturated ?
Preventable Disasters: How to Avoid Getting Ripped Off
An Example of a Scandalous Tax Resolution Interview
Tax Resolution Websites: Unoriginal Content
A Test: 5 questions to ask a Tax Resolution Consultant