by Fresh Start Tax | Mar 10, 2017 | Tax Help
We are former AFFORDABLE IRS agents and managers who know the system. Since 1982, Local Tax Firm in South Florida.
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We are an IRS problems service business that can help you in any facet of an IRS or state tax problem. We are experts in all IRS tax matters. Our 95 years of direct IRS work experience puts us in a category all by ourself.
Being former IRS agents we are experts in the settlement, immediate IRS levy releases, IRS payment plans, IRS tax defense for audits and any back payroll tax debt. We are some of the most experienced IRS experts in the industry and our practice is located right here in South Florida.
If you have received an IRS levy or wage garnishment within 24 hours of receiving your current financial statement we can get a full release, we can represent you during an IRS tax audit, if you owe back taxes we can settle your tax debt get you in a hardship or set up a payment plan depending on your current financial statement.
We will explain to you all your options and remedies on your initial call.
We have over 95 years of working directly for the local self for IRS offices. We have worked to supervisors, managers and teaching instructors. there is no firm in South Florida with more direct experience working for IRS.
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Call us today and find out all your options on how to get immediate and permanent IRS tax relief.
You can speak to a former IRS agent or manager who has worked this system for years. You will not find more experience IRS tax experience for IRS tax problems.
Every tax matter and problem has a resolution strategy. Generally there is a short-term strategy in a long-term strategy.
There are various options you have for IRS tax relief:
The basic options include:
1. trust fund appeals, the possibility of an offer in compromise, doubt to liability,
2.hardships, or currently not collectible,
3. payments plan, and
4. the offer in compromise, if you are a qualified and suitable candidate.
5. bankruptcy is another option.
How the Internal Revenue Service will work your case if you owe the IRS tax debt.
IRS will require a 433A or 433F, an individual financial statement.
You can find that form directly on our website.
Many times the IRS uses 433F, depending were the cases in the system. Cases worked in the ACS system uses shorter version of the financial statement.
If the case is worked in the local office the revenue officer will use form 433.A
That financial statement will need to be fully documented along with bank statements, copies of checks and monthly expenses.
We will walk you through the process of how the IRS will work your case in the collection action that can possibly taken.
Will also review with you the IRS national standards program on all cases for those who owe back taxes.
Once IRS reviews your current financial statement they will make a determination and generally put you in one of two categories with the option of filing an offer in compromise.
IRS has the option to:
1.IRS determines on 40% of the cases that taxpayers are put into hardship which means they can’t pay the tax at this time. Sometimes it is called currently not collectible. Cases that are placed at currently not collectible or hardship stay in there for a period of 2 to 3 years and come back out to the field at a later time.
2. 6.5 million people enter monthly payment plans and pay a certain amount based on their current documented financial statement.
Other taxpayers file an offer in compromise to settle their case for pennies on the dollar. The offer in compromise requires a lot of skill and expertise to have accepted by the Internal Revenue Service.
What is an offer in compromise?
It is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed.
Taxpayers who can fully pay the liabilities through an installment agreement or other means, will not be eligible for a OIC in most cases.
In order to be eligible for a OIC, the taxpayer must have filed all tax returns, made all required estimated tax payments for the current year and made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
In most cases, the IRS will not accept a OIC unless the amount offered by a taxpayer is equal to or greater than the reasonable collection potential (the RCP).
The RCP is how the IRS measures the taxpayer’s ability to pay.
The RCP includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property.
In addition to property, the RCP also includes anticipated future income less certain amounts allowed for basic living expenses.
The IRS may accept a OIC based on three grounds:
• First, the IRS can accept a compromise if there is doubt as to liability. A compromise meets this only when there is a genuine dispute as to the existence or amount of the correct tax debt under the law.
• Second, the IRS can accept a compromise if there is doubt that the amount owed is fully collectible.
Doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
• Third, the IRS can accept a compromise based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.
When submitting a OIC based on doubt as to collectibility or based on effective tax administration, taxpayers must use the most current version of:
1. Form 656, Offer in Compromise, and also submit Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or,
2. Form 433-B (OIC), Collection Information Statement for Businesses. A taxpayer submitting a OIC based on doubt as to liability must file a Form 656-L (PDF), Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433-A (OIC) and/or Form 433-B (OIC).
Form 656 and referenced collection information statements are available in the Offer in Compromise Booklet, Form 656-B (PDF).
In general, a taxpayer must submit a $186 application fee with the Form 656. Do not combine this fee with any other tax payments.
However, there are two exceptions to this requirement:
• First, no application fee is required if the OIC is based on doubt as to liability.
• Second, the fee is not required if the taxpayer is an individual (not a corporation, partnership, or other entity) who qualifies for the low-income exception.
This exception applies if the taxpayer’s total monthly income falls at or below 250 percent of the poverty guidelines published by the Department of Health and Human Services. Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception.
A taxpayer who claims the low-income exception must complete section 4 of Form 656 and check the certification box.
Options: Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A “lump sum cash offer” is defined as an offer payable in 5 or fewer installments within 5 or fewer months after the offer is accepted. If a taxpayer submits a lump sum cash offer, the taxpayer must include with the Form 656 a nonrefundable payment equal to 20 percent of the offer amount.
This payment is required in addition to the $186 application fee.
The 20 percent payment is “nonrefundable” meaning it will not be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance.
Instead, the 20 percent payment will be applied to the taxpayer’s tax liability. The taxpayer has a right to specify the particular tax liability to which the IRS will apply the 20 percent payment.
An offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more monthly installments and within 24 months after the offer is accepted.
When submitting a periodic payment offer, the taxpayer must include the first proposed installment payment along with the Form 656.
This payment is required in addition to the $186 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum cash offer. Also, while the IRS is evaluating a periodic payment offer, the taxpayer must continue to make the installment payments provided for under the terms of the offer.
These amounts are also nonrefundable.
These amounts are applied to the tax liabilities and the taxpayer has a right to specify the particular tax liabilities to which the periodic payments will be applied.
Upon acceptance of a OIC, the taxpayer may no longer designate offer payments to any specific tax liability covered in the offer agreement.
Ordinarily, the statutory time within which the IRS may engage in collection activities is suspended during the period that the OIC is under consideration, and is further suspended if the OIC is rejected by the IRS and where the taxpayer appeals the rejection to the IRS Office of Appeals within 30 days from the date of the notice of rejection.
If the IRS accepts the taxpayer’s offer, the IRS expects that the taxpayer will have no further delinquencies and will fully comply with the tax laws.
The offer in compromise requires a lot of skill because reviewed by several layers of Internal Revenue Service. I should know, I am former IRS agent and teaching instructor of the offer in compromise.
Call us today for a free initial tax consultation.
When you call our office you will speak to true IRS tax experts. We are the fast, friendly, and affordable professional tax firm.
by Fresh Start Tax | Mar 10, 2017 | Tax Help
As a former IRS agent and teaching instructor there were occasions that taxpayers transfer assets beyond the reach of the Internal Revenue Service.
The IRS has ways of reaching those assets that were transferred and claiming them back through various methods.
1. There are a variety of situations where a third party can be held liable for the tax liability of another. This IRM discusses the different legal theories for third party liability.
A. Transferee liability
B. Fiduciary liability
C. Successor liability
D. Nominee or alter ego
3. Although these theories require the application of different laws and different methods for collection, common elements exist in any analysis of third party liability. The legal theory that is pursued by the Service will ultimately depend on the specific facts of a case.
4. Because the legal theory applied depends on the specific facts, Field Collection will want to fully develop the factual background for each case. This includes, but is not limited to, any information or facts regarding the transfer and the relationship between the parties.
5. Many of the legal theories for third party liability also involve the assertion of fraud by the Service and, therefore, any evidence or facts suggestive of fraud should also be included when developing the factual background.
6. This IRM section also discusses the different methods available to the Service for collecting tax liability from a third party. See IRM 5.17.14.4, Methods of Collecting from a Transferee or Fiduciary.
A. The Service can use administrative remedies where a Notice of Federal Tax Lien was properly filed before a transfer to the third party. In these cases, the federal tax lien can be enforced by lien or levy without first making an assessment against the transferee under IRC § 6901 or filing suit in district court.
B. The Service can also use administrative collection procedures to collect from a taxpayer’s property that is held by a nominee or alter ego.
C. Where no federal tax lien attaches to the property before it is transferred to a third party, the Service must generally make an assessment against the transferee using the IRC § 6901 procedures before pursuing administrative collection procedures. In these situations, the Service can also file suit in district court to seek to set aside the fraudulent conveyance.
8. These methods of collection are all discussed in greater detail in the provisions that follow. A determination of the best approach to take will depend upon the particular facts of the case.
After the factual background of a case has been fully developed, Area Counsel is available to assist Field Collection in determining such matters as the applicable state law, or the best legal theory to proceed under given the specific facts. See IRM 25.3.2.2.1, Area Counsel Assistance.
Nominee or Alter Ego.
The government may collect a taxpayer’s liability from the assets of a third party if the third party is holding assets as the taxpayer’s nominee or alter ego.
A. The nominee theory is based on the premise that the taxpayer ultimately retains the benefit, use, or control over property that was allegedly transferred to a third party.
Thus, the nominee theory focuses on the relationship between the taxpayer and the transferred property. A transfer of legal title may or may not have occurred, but the government does not believe a substantive transfer of control over the property in fact occurred.
B. The alter ego theory allows collection from the taxpayer’s alter ego when the taxpayer and the alter ego are so intermixed that their affairs are not readily separable.
Thus, the alter ego theory focuses on the relationship between the taxpayer and the alter ego.
Note:
As explained in IRM 5.17.14.6, Nominees and Alter Ego Doctrines, the nominee and alter ego doctrines are separate theories.
by Fresh Start Tax | Mar 10, 2017 | Tax Help
As a former IRS agent and teaching instructor there were occasions that taxpayers transfer assets beyond the reach of the Internal Revenue Service.
The IRS has ways of reaching those assets that were transferred and claiming them back through various methods.
1. There are a variety of situations where a third party can be held liable for the tax liability of another. This IRM discusses the different legal theories for third party liability.
A. Transferee liability
B. Fiduciary liability
C. Successor liability
D. Nominee or alter ego
3. Although these theories require the application of different laws and different methods for collection, common elements exist in any analysis of third party liability. The legal theory that is pursued by the Service will ultimately depend on the specific facts of a case.
4. Because the legal theory applied depends on the specific facts, Field Collection will want to fully develop the factual background for each case. This includes, but is not limited to, any information or facts regarding the transfer and the relationship between the parties.
5. Many of the legal theories for third party liability also involve the assertion of fraud by the Service and, therefore, any evidence or facts suggestive of fraud should also be included when developing the factual background.
6. This IRM section also discusses the different methods available to the Service for collecting tax liability from a third party. See IRM 5.17.14.4, Methods of Collecting from a Transferee or Fiduciary.
A. The Service can use administrative remedies where a Notice of Federal Tax Lien was properly filed before a transfer to the third party. In these cases, the federal tax lien can be enforced by lien or levy without first making an assessment against the transferee under IRC § 6901 or filing suit in district court.
B. The Service can also use administrative collection procedures to collect from a taxpayer’s property that is held by a nominee or alter ego.
C. Where no federal tax lien attaches to the property before it is transferred to a third party, the Service must generally make an assessment against the transferee using the IRC § 6901 procedures before pursuing administrative collection procedures. In these situations, the Service can also file suit in district court to seek to set aside the fraudulent conveyance.
8. These methods of collection are all discussed in greater detail in the provisions that follow. A determination of the best approach to take will depend upon the particular facts of the case.
After the factual background of a case has been fully developed, Area Counsel is available to assist Field Collection in determining such matters as the applicable state law, or the best legal theory to proceed under given the specific facts. See IRM 25.3.2.2.1, Area Counsel Assistance.
Fiduciary Liability
1. A representative of a person or an estate (except a trustee acting under the Bankruptcy Code of Title 11) paying any part of a debt of the person or estate before paying a debt due to the United States is personally liable to the extent of the payment for unpaid claims of the United States.
2. A fiduciary is not liable unless the fiduciary knows of the debt or had information that would put the fiduciary on notice that an obligation was owed to the United States.
3. Fiduciary liability is discussed more fully in IRM 5.17.13.8, Personal Liability of the Fiduciary.
by Fresh Start Tax | Mar 10, 2017 | Tax Help
As a former IRS agent and teaching instructor there were occasions that taxpayers transfer assets beyond the reach of the Internal Revenue Service. The IRS has ways of reaching those assets that were transferred and claiming them back through various methods.
1. There are a variety of situations where a third party can be held liable for the tax liability of another. This IRM discusses the different legal theories for third party liability.
A. Transferee liability
B. Fiduciary liability
C. Successor liability
D. Nominee or alter ego
3. Although these theories require the application of different laws and different methods for collection, common elements exist in any analysis of third party liability. The legal theory that is pursued by the Service will ultimately depend on the specific facts of a case.
4. Because the legal theory applied depends on the specific facts, Field Collection will want to fully develop the factual background for each case. This includes, but is not limited to, any information or facts regarding the transfer and the relationship between the parties.
5. Many of the legal theories for third party liability also involve the assertion of fraud by the Service and, therefore, any evidence or facts suggestive of fraud should also be included when developing the factual background.
6. This IRM section also discusses the different methods available to the Service for collecting tax liability from a third party.
A. The Service can use administrative remedies where a Notice of Federal Tax Lien was properly filed before a transfer to the third party. In these cases, the federal tax lien can be enforced by lien or levy without first making an assessment against the transferee under IRC § 6901 or filing suit in district court.
B. The Service can also use administrative collection procedures to collect from a taxpayer’s property that is held by a nominee or alter ego.
C. Where no federal tax lien attaches to the property before it is transferred to a third party, the Service must generally make an assessment against the transferee using the IRC § 6901 procedures before pursuing administrative collection procedures. In these situations, the Service can also file suit in district court to seek to set aside the fraudulent conveyance.
8. These methods of collection are all discussed in greater detail in the provisions that follow. A determination of the best approach to take will depend upon the particular facts of the case.
After the factual background of a case has been fully developed, Area Counsel is available to assist Field Collection in determining such matters as the applicable state law, or the best legal theory to proceed under given the specific facts. See IRM 25.3.2.2.1, Area Counsel Assistance.
Ssuccessor liability doctrine
1. Under the successor liability doctrine, the government seeks to impose liability because the taxpayer sold or transferred assets to or merged with another corporation and the recipient or surviving corporation is liable under state law for the debts of the predecessor corporation.
2. The successor corporation may be liable as a transferee, as more fully discussed in IRM 5.17.14.2.3.4, or the successor corporation may be primarily liable, as more fully explained in IRM 5.17.14.5, Successor Liability as Primary Liability.
5.17.14.1.4 (01-24-2012)
by Fresh Start Tax | Mar 10, 2017 | Tax Help
As a former IRS agent and teaching instructor there were occasions that taxpayers transfer assets beyond the reach of the Internal Revenue Service. The IRS has ways of reaching those assets that were transferred and claiming them back through various methods.
This article will talk about the IRS transferee liability and what you need to know.
Below you will find the different situations were third-party can be held liable for the tax liability and the theories that apply.
Third Party Liability Overview
1. There are a variety of situations where a third party can be held liable for the tax liability of another. This IRM discusses the different legal theories for third party liability.
A. Transferee liability
B. Fiduciary liability
C. Successor liability
D. Nominee or alter ego
3. Although these theories require the application of different laws and different methods for collection, common elements exist in any analysis of third party liability.
The legal theory that is pursued by the Service will ultimately depend on the specific facts of a case.
4. Because the legal theory applied depends on the specific facts, Field Collection will want to fully develop the factual background for each case. This includes, but is not limited to, any information or facts regarding the transfer and the relationship between the parties.
5. Many of the legal theories for third party liability also involve the assertion of fraud by the Service and, therefore, any evidence or facts suggestive of fraud should also be included when developing the factual background.
6. This IRM section also discusses the different methods available to the Service for collecting tax liability from a third party. See IRM 5.17.14.4, Methods of Collecting from a Transferee or Fiduciary.
A. The Service can use administrative remedies where a Notice of Federal Tax Lien was properly filed before a transfer to the third party. In these cases, the federal tax lien can be enforced by lien or levy without first making an assessment against the transferee under IRC § 6901 or filing suit in district court.
B. The Service can also use administrative collection procedures to collect from a taxpayer’s property that is held by a nominee or alter ego.
C. Where no federal tax lien attaches to the property before it is transferred to a third party, the Service must generally make an assessment against the transferee using the IRC § 6901 procedures before pursuing administrative collection procedures. In these situations, the Service can also file suit in district court to seek to set aside the fraudulent conveyance.
8. These methods of collection are all discussed in greater detail in the provisions that follow. A determination of the best approach to take will depend upon the particular facts of the case.
After the factual background of a case has been fully developed, Area Counsel is available to assist Field Collection in determining such matters as the applicable state law, or the best legal theory to proceed under given the specific facts. See IRM 25.3.2.2.1, Area Counsel Assistance.
Transferee Liability
1. The government may seek to collect a taxpayer’s unpaid tax, penalty or interest by asserting transferee liability when a taxpayer (transferor) has transferred property to another person or entity (transferee) and a substantive provision of the law provides the ability to assert liability against the recipient based on the transfer.
2. The liability of the transferee is secondary to that of the transferor, meaning it is derived from the transferor’s liability. Transferee liability does not create a new liability. Instead, it provides a secondary method to collect the transferor’s tax liability.
3. Frequently, collection of the tax is based on a finding that the transfer was fraudulent. An actual transfer occurred but there is a legal basis for collecting the tax liability from the transferee.
4. Transferee liability may also arise under a contract, under federal statutes, or under state law.
by Fresh Start Tax | Feb 28, 2017 | Tax Help
IRS Can Help Taxpayers Get Form W-2. When employers go out of business it becomes more difficult.
Most taxpayers got their W-2 Forms by the end of January. Form W-2, Wage and Tax Statement, shows the income and taxes withheld from an employee’s pay for the year. Taxpayers need it to file an accurate tax return.
If a taxpayer hasn’t received their form by mid-February, here’s what they should do:
• Contact their Employer.
Taxpayers should ask their employer (or former employer) for a copy of their W-2. Be sure the employer has the correct address.
• Call the IRS.
If a taxpayer is unable to get a copy from their employer, they may call the IRS after Feb. 27. The IRS will send a letter to the employer on the taxpayer’s behalf.
The taxpayer will need the following when they call:
◦ Their name, address, Social Security number and phone number;
◦ Their employer’s name, address and phone number;
◦ The dates they worked for the employer; and
◦ An estimate of their wages and federal income tax withheld in 2016. Use a final pay stub for these amounts.
• File on Time.
Taxpayers should file their tax return by April 18, 2017. If they still haven’t received their W-2, they should use Form 4852, Substitute for Form W-2, Wage and Tax Statement.
They should estimate their wages and taxes withheld as best as possible.
To request more time to file, use Form 4868, Application for Automatic Extension of Time to File.
Taxpayers can also e-file a request for more time. Do it for free using IRS Free File. However, remember, an extension of time to file your return is not an extension of time to pay taxes owed.
• Correct a Tax Return if Necessary.
Taxpayers may need to correct their tax return if they get a missing W-2 after they file. If the tax information on the W-2 is different from what they originally reported, they may need to file an amended tax return.
Use Form 1040X, Amended U.S. Individual Income Tax Return, to make the change.
All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.
Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.
