We are a team of tax attorneys, CPAs and former IRS agents. Are you if you are having any problem with the Internal Revenue Service because of tax debt problems or threat of losing your passport call us today for a free initial tax consultation.
If you have seriously delinquent tax debt, the law authorizes the IRS to certify that debt to the State Department for action.
The State Department generally will not issue a passport to you after receiving certification from the IRS.
The State Department may deny your passport application or revoke your current passport.
If you’re overseas, the State Department may issue you a limited validity passport good for direct return to the United States.
What tax debt does the IRS certify to the State Department?
The IRS certifies seriously delinquent tax debt to the State Department.
Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt (including interest and penalties) totaling more than $53,000 (adjusted yearly for inflation) for which a:
Very Important aspect
• Notice of federal tax lien has been filed and all administrative remedies under the law have lapsed or have been exhausted, or
• Levy has been issued.
What tax debt does the IRS not certify to the State Department?
Some tax debt isn’t included in seriously delinquent tax debt such as the Report of Foreign Bank and Financial Account (FBAR) penalty and child support. Also not included are tax debt: • Being paid timely with an IRS-approved installment agreement, • Being paid timely with an Offer in Compromise accepted by the IRS or a settlement agreement entered with the Justice Department, • For which a collection due process hearing is timely requested regarding a levy to collect the debt, and • For which collection has been suspended because a request for innocent spouse relief has been made.
Also, the IRS will not certify anyone as owing a seriously delinquent tax debt:
• Who’s in bankruptcy, • Who’s identified by the IRS as a victim of tax-related identity theft, • Whose account the IRS has determined is currently not collectible due to hardship, • Who’s located within a federally declared disaster area, • Who has a request pending with the IRS for an installment agreement, • Who has a pending Offer in Compromise with the IRS, and • Who has an IRS accepted adjustment that will satisfy the debt in full.
The IRS will postpone certification while an individual is serving in a designated combat zone or participating in a contingency operation.
How it works
Certification to the State.
The IRS will send you Notice CP508C at the time the IRS certifies seriously delinquent tax debt to the State Department. The IRS will send the notice by regular mail to your last known address. Your power of attorney will not receive a copy of the notice.
Before denying a passport, the State Department will hold your application for 90 days to allow you to:
• Resolve any erroneous certification issues • Make full payment of the tax debt • Enter a satisfactory payment arrangement with the IRS
Reversal of certification.
The IRS will send you Notice CP508R at the time it reverses certification. The IRS will reverse a certification when: • The tax debt is fully satisfied or becomes legally unenforceable, • The tax debt is no longer seriously delinquent, or • The certification is erroneous. The IRS will make this reversal within 30 days and provide notification to the State Department as soon as practicable.
The IRS will not reverse certification if your request for a collection due process hearing or innocent spouse relief is on a debt that’s not certified. Also, the IRS will not reverse the certification because you pay the debt below the threshold.
Referral to revoke passport.
The IRS may ask the State Department to exercise its authority to revoke your passport. For example, the IRS may recommend revocation if the IRS had reversed your certification because of your promise to pay, and you failed to pay. The IRS may also ask the State Department to revoke your passport if you could use offshore activities or interests to resolve your debt but choose not to.
Before the IRS sends a revocation referral to the State Department, the IRS will send you Letter 6152 asking you to call the IRS within 30 days to resolve your account to prevent this action.
Judicial review of certification.
The State Department is held harmless in these matters and cannot be sued for any erroneous notification or failed decertification under the law. If the IRS certified your debt to the State Department, you can file suit in the U.S. Tax Court or a U.S. District Court to have the court determine whether the certification is erroneous, or whether the IRS failed to reverse the certification when it was required to do so.
If the court determines the certification is erroneous or should be reversed, it can order the IRS to notify the State Department that the certification was in error.
The law doesn’t give the court authority to release a lien or levy or award money damages in a suit to determine whether a certification is erroneous.
You’re not required to file an administrative claim or otherwise contact the IRS to resolve the erroneous certification issue before filing suit in the U.S. Tax Court or a U.S. District Court.
What to do
Payment of taxes.
If you can’t pay the full amount you owe, you can make alternative payment arrangements such as a payment plan or an Offer in Compromise to have your certification reversed.
If you disagree with the tax amount or the certification was made in error, you should contact the phone number on Notice CP508C: 855-519-4965; 267-941-1004 (international callers). If you’ve already paid the tax debt, please send proof of that payment to the address on Notice CP508C.
If you recently filed your tax return for the current year and expect a refund, the IRS will apply the refund to the debt. If the refund is enough to satisfy your seriously delinquent tax debt, the IRS considers the account fully paid.
Your Passport Status.
The State Department will notify you in writing, if the State Department denies your U.S. passport application or revokes your U.S. passport.
If you need your U.S. passport to keep your job, once the IRS certifies your seriously delinquent tax debt to the State Department, you must fully pay the balance or make an alternative payment arrangement to have your certification reversed.
Imminent Travel Plans.
If you’re leaving soon for international travel, need to resolve passport issues and have a pending application for a U.S. passport or a passport renewal, you should contact the IRS promptly.
The IRS can help you resolve your tax issues and expedite reversal of your certification to the State Department. When expedited, the IRS can generally shorten the 30 days processing time by 14 to 21 days.
You’ll need to inform the IRS that you have travel scheduled within 45 days or that you live abroad. And, you must provide the following documents to the IRS:
Proof of Travel.
This can be a flight itinerary, hotel reservation, cruise ticket, international car insurance or other document showing location and approximate date of travel or time-sensitive need for a passport. • Copy of letter from State denying your passport application or revoking your passport. State has sole authority to issue, limit, deny or revoke a passport.
Call us today and we will let you know all you could completely resolve this issue so you never have to worry about losing your passport.
I am a Sebring resident and a Former IRS Agent & Teaching Instructor. Contact me if you have an IRS problems or troubles Ask for Michael Sullivan, Former Fox and ABC tax commentator. Free Consults, hear the truth. Since 1982.
No matter what your tax troubles are, whether you owe back tax debt, haven’t filed back taxes, have payroll tax problems, going through an IRS tax audit, dealing with IRS notices letters, wage garnishments levies, and tax liens, call me today and hear your truth about your current situation. He can get IRS tax relief fast!
Owe IRS Tax Debt
There are different Ways to Solve Owing Back IRS Debt Problems to get tax relief for back taxes. We will also walk through all the IRS programs to see what you can qualify for.
If you have balance due on back taxes and are looking to set up a payment agreement, file firm offer in compromise to settle your back tax debt or you need to file back tax returns, call us today for a free initial tax consultation.
As a Former IRS Agent, I worked and taught the settlement programs at IRS.
How does IRS dispose of Tax Debt Cases?
The 5 ways or programs for IRS Tax Debt Relief are the following:
1. By Payment in full,
2. By monthly installment payments,
3. By the Acceptance of an offer in compromise, (this is how your completely eliminate the tax debt)
4. By statue expiration. (this is how your completely eliminate the tax debt)
5. For those who cannot pay their debt IRS has a non-collectible or hardship program.
Upon your initial free tax consultation we will walk through the various programs and let you know the easiest way to resolve your back tax debt.
The most important aspect of working tax debt cases is completely dependent on the individual or business financial statements. It is the most important factor.
Your current documented financial statement determines all.either the 433F or the 433A.
IRS uses a very simple formula to determine their settlement process.
It is all about your assets and your income and your current necessary living expenses. There is a very specific formula.
IRS only allows certain expenses that are considered necessary living expenses.
There are charts available on what IRS allows. Anything not on those charts are disallowed and this is what trips out most taxpayers.
A simple review of your current financial statement and we can let you know the different programs you may be eligible for.
You will need to complete form 433F or form 433A for us to make a current determination. IRS will only use their financial statements.
It is critically important to know that you cannot pay less taxes unless you qualify for the offer in compromise program.
IRS has a very specific formula that they use to compute the offer in compromise.
The only way you can pay less tax is through the offer in compromise program. There is also an IRS pre-qualifier form.
I have over 40 years in this industry and it is critical if you want to settle your tax debt for the lowest possible amount you should go to true tax professionals.
Very Important:
All your tax returns will have to be filed before IRS will work your offer in compromise.
If you need help with your tax preparation call us and we can have a staff of Experts accountants and tax preparers complete all returns with or without records.
If you are a non-filer, no worries, we can fix that immediately
Also beware that many times the Internal Revenue Service want to make sure you are current in your withholding tax or your estimate tax payments are they will not close your work your case until you become fully compliant.
Beware of most IRS tax settlement services companies.
We have been in this industry a long time there are many good companies in as many bad tax settlement service companies. For you to evaluate in IRS tax settlement service company you must ask to speak directly to the person who will be working your case.
Generally, when you call a tax services company, you are speaking to what is called a closer. That person is a salesman and will actually bill you and charge you for the services then your case gets passed down the line.
When you call fresh start tax, you will speak directly to the person who works your case and that person can give you a true evaluation on how and if IRS will accept an IRS tax settlement .
Check out the BBB rating and make sure you have a true tax professional working your case.
I suggest you always hire someone who’s worked at the IRS because they are aware of the methodologies required to get your offer in compromise through the system.
Different ways to Solve Back IRS Tax Debt and get IRS Tax Debt Relief.
As a general rule, you may apply for hardships, payment agreements or settle for an offer in compromise to settle your debt for pennies on the dollar.
We will review with you your financial statement and let you know what the lowest possible settlement IRS will accept. 40% of all persons that owe back taxes are issue into a hardship or are currently not collectible status and 6.5 million taxpayers enter into annual payment agreements.
The other way to pay less tax is for the ten-year statute of limitation to run out and your debt will be written off by the Internal Revenue Service.
If you want to file an offer in compromise I thought you’d like to know what the statistics are.
Last year over 78,000 offers in compromise/IRS tax debt settlements were filed by taxpayers and over 38% of those were accepted for average of $6500 per case. Approximately 40,000 taxpayers last year paid less tax.
At the current time there are 7500 cases in the offer queue. The average wait time is nine months. There are not enough IRS employees to work the current inventory.
Keep in mind this is a national average in your case is completely dependent on your individual financial statement.
We will not file for an offer in compromise unless you are a true candidate for the program. You must qualify.
There is a pre qualifier tool to find out if you are a settlement candidate for income or business tax debt.
Upon your initial tax consultation we’ll let you know if you are eligible to have an accepted offer in compromise by the Internal Revenue Service.
Due to the new fresh start tax initiative Internal Revenue Service had made it easier to file for the program. However this program is not for everybody.
Everyone wants to settle with IRS but there is a very specific format and methodology that must be followed.
There are many myths about the pennies on the dollar program so you need to hear the truth before spending any money.
There are many firms that take your money and then let you know after the fact you are not qualified. you need to know before hand whether you have a fighting chance. Being a former IRS agent employee gives you a huge advantage of having the review your offer in compromise to settle your tax debt.
At our firm we will take no clients money until we are no they are a true candidate for the settlement program.
If you are looking for IRS tax relief, look for local tax experts.Covering Lake Placid, Sebring, Avon Park and highlands county
Many people going out of business have no idea what to do. There are very simple steps to take if you have had the unfortunate measures of having to go out of business.
Many people believe it or not feel they have to file bankruptcy but the reality is you just need to close the door and notify those people that you have responsibility to.
The following are the tax steps you have to take if you are going out of business.
Small businesses and self-employed taxpayers will find a variety of information on the page including:
Follow these steps:
• File a final tax return and related forms. The type of return to file and related forms depends on the type of business.
• Take care of employees. Business owners with one or more employees must pay any final wages or compensation, make final federal tax deposits and report employment taxes.
• Pay taxes owed. Even if the business closes now, tax payments may be due next filing season.
• Report payments to contract workers. Businesses that pay contractors at least $600 for services including parts and materials during the calendar year in which they go out of business, must report those payments.
• Cancel EIN and close IRS business account. Business owners should notify the IRS so they can to close the IRS business account.
• Keep business records. How long a business needs to keep records depends on what’s recorded in each document.
If you have any questions please feel free to call us for a free consultation.
Your DIF score was probably causes your IRS Tax Audit.
While there are variety of reasons the IRS audit tax returns, the chief reason is because of the DIF score.
That stands for, Discriminate Index Function. Yep, that’s the trouble maker
Every return filed goes through an numerical DIF audit and every return is rated/ranked/scored by the Internal Revenue Service.
But the DIF process is responsible for more IRS tax audits than any other of the IRS processes.
So what is the” DIF ? “
It is a mathematical technique used to classify income and expenses on tax returns as to successful IRS tax audit potential.
Under this concept, formulas are developed based on available data and are programmed into the computer to classify returns by assigning weights to certain basic return characteristics.
These weights are added together to obtain a composite score for each return processed. This score is used to rank the returns in numerical sequence (highest to lowest).
The higher the score, the higher the probability of significant tax change.
The highest scored returns are made available to IRS audit agent and eyeballed so see what tax returns have the greatest audit potential and bring to the field.
IRS has mandates on how many tax returns they audit based on examinations guidelines from the National office and expected revenue, so it only make sense the IRS plans to attack the low-hanging fruit.
The Discriminant Function System (DIF) score rates the potential for change, based on past IRS experience with similar returns.
The Unreported Income DIF (UIDIF) score rates the return for the potential of unreported income.
IRS personnel screen the highest-scoring returns, selecting some for audit and identifying the items on these returns that are most likely to need review.
The program takes into consideration your:
1.income,
2.the size of your family,
3.where you live, zip code,
4.how your money is earned,
5. expenses taken,
6. tax credit,
7, business income compered to business losses,
8.and key line items on your tax return.
There are about 22 filters IRS uses.
IRS has an algorithm it runs all returns through to see if a tax return has audit potential.
If you know that your return has what we refer to as “red flags,” you need to be extraordinarily careful to keep accurate records and receipts.
Another interest of note, just because your tax return has a high DIF score does not necessarily mean that your tax return will be audited.
A human auditor will look at the return to confirm that this tax return has audit the potential.
Tax Help If Your Tax Return if Being Audited By Mail
The Internal Revenue Service accepts most federal tax returns as filed.
However, and a BIG however, the IRS examines/ some returns to determine if income, expenses, and credits are being reported accurately.
If not, the nasty gram from the IRS.
It is in the form or letter/notice 566.
If your return is selected for examination, it does not suggest that you made an error or are dishonest. Returns are chosen by computerized screening, by random sample, or by an income document matching program. This is called the DIF process.
What You Should Do If You have Received IRS Notice or Letter 566
The Internal Revenue Service may be looking for documentation such as confirming interest expenses, childcare, credits and exemptions, any deductions, office in the home, travel and entertainment, in any expense item found on the tax return that seems out of the normal range.
You will be given a 30 day period of time to send the information back to the Internal Revenue Service.
IMPORTANT + Make sure it is received by IRS by the due date on the correspondence from the Internal Revenue Service and it is sent by certified mail.
The burden of proof is on you.
If the Internal Revenue Service is not contacted you back within a reasonable period of time, make sure you follow up that letter or IRS can assess the tax liability against you and start collections.
