by Fresh Start Tax | Aug 5, 2013 | Tax Help
If you owe tax to the Internal Revenue Service here are some different ways to take care of the problem
Tips for Taxpayers Who Owe Taxes
1. Tax bill payments.
If you get a bill from the IRS , you should pay it as soon as possible to save money. You can pay by check, money order, cashier’s check or cash. If you cannot pay it all, consider getting a loan to pay the bill in full. The interest rate for a loan may be less than the interest and penalties the IRS must charge by law.
2. Electronic Funds Transfer.
It is easy to pay your tax bill by electronic funds transfer. Just visit IRS.gov and use the Electronic Federal Tax Payment System.
You may also use EFTPS to pay your taxes by phone at 800-555-4477.
3. Credit or debit card payments.Yes, you can pay by credit card.
You can also pay your tax bill with a credit or debit card. Even though the card company may charge an extra fee for a tax payment, the costs of using a credit or debit card may be less than the cost of an IRS payment plan.
To pay the IRS by credit or debit card, contact one of the processing companies listed at IRS.gov.
4. More time to pay.
You may qualify for a short-term agreement to pay your taxes. This may apply if you can fully pay your taxes in 120 days or less. Call us today to work out a payment solution.
5. Installment Agreement.
If you can’t pay in full at one time and can’t get a loan, you may want to apply for a monthly payment plan. If you owe $50,000 or less, we can apply using the IRS Online software Payment Agreement application.
It’s quick and easy. If approved, we will notify you immediately.
We can arrange to make your payments by direct debit.
This type of payment plan helps avoid missed payments and may help avoid a tax lien that would damage your credit.
Taxpayers may also apply using IRS Form 9465, Installment Agreement Request. If you owe more than $50,000, you must also complete Form 433F, Collection Information Statement. For approved payment plans the one-time user fee is $105 for standard and payroll deduction agreements. The direct debit agreement fee is $52. The fee is $43 if your income is below a certain level.
6. Offer in Compromise.
The IRS Offer-in-Compromise program allows you to settle your tax debt for less than the full amount you owe. An OIC may be an option if you can’t fully pay your taxes through an installment agreement or other payment alternative.
The IRS may accept an OIC if the amount offered represents the most IRS can expect to collect within a reasonable time. Use the OIC Pre-Qualifier tool to see if you may be eligible before you apply.
The tool will also direct you to other options if an OIC is not right for you.
7. The new Fresh Start program.
If you’re struggling to pay your taxes, the IRS Fresh Start initiative may help you. Fresh Start makes it easier for individual and small business taxpayers to pay back taxes and avoid tax liens.
8. Check withholding.
You may be able to avoid owing taxes in future years by increasing the taxes your employer withholds from your pay. To do this, file a revised Form W-4, Employee’s Withholding Allowance Certificate, with your employer. The IRS Withholding Calculator tool at IRS.gov can help you fill out a new W-4.
9. If you cannot pay the Internal Revenue Service.
If you cannot pay the Internal Revenue Service it is possible for your tax case to be put into an economic tax hardship. The Internal Revenue Service will need a current financial statement and they will make a determination based on your ability to pay.
Contact us today and we can fully review your individual circumstance and recommend to you a solution or resolution to immediately resolve your tax situation.
Owe IRS Tax – Different ways to take care of Owing the IRS
by Fresh Start Tax | Jul 26, 2013 | Tax Help
Appeal System of the Internal Revenue Service.
People sometimes disagree on tax matters, the IRS has an appeal system. However reasons for disagreeing must come within the scope of tax laws. The IRS process of appeals must be followed to the letter of the law or they will be completely denied by the Internal Revenue Service.
The Appeal IRS Decision
The tax decision reached by the examiner may be appealed to a local appeals office, which is separate and independent of the IRS Office that conducted the examination.
An appeals office is the only level of appeal within the IRS.
IRS Conferences with the appeals division office personnel may be conducted in person, through correspondence, or by telephone with the taxpayer or its authorized representative.
Instructions for requesting a conference with an appeals officer are always provided in the letter of proposed tax adjustment. It is the job of each unit to make sure each taxpayer, business or corporate entity receives specific instructions regarding the appeals process.
In FSLG, the Letter 950 is generally used to propose adjustments to employment taxes.
It states that to request a conference with an appeals officer, the taxpayer will need to file either a small case request or a formal written protest with the contact person named in the letter.
Whether you file a small case request or a formal written protest depends on several factors.
Small Case Appeals
If a conference is requested the examiner will send the conference request letter to the appeals office to arrange for a conference at a convenient time and place. The taxpayer or its qualified representative should be prepared to discuss all disputed issues at the conference. Most differences are settled at this level.
To go further passes process involves going to tax court so it is critical that cases are settled at this level. Needless to say Tax Court can run thousands and thousands of dollars.
Only attorneys, certified public accountants or enrolled agents are allowed to represent a taxpayer before Appeals.
Making a Small Case Request $25,000 or less
A small case request is appropriate if the total amount of tax, penalties, and interest for each tax period involved is $25,000 or less.
If more than one tax period is involved and any tax period exceeds the $25,000 threshold, a formal written protest for all periods involved must be filed.
The total amount includes the proposed increase or decrease in tax and penalties or claimed refund.
To make a small case request, the instructions in the letter of proposed tax adjustment provide that the taxpayer should send a brief written statement requesting an appeals conference and indicate the changes with which it does not agree with and the reasons it does not agree with them.
Be sure to send the protest within the time limit specified in the letter you received, which is generally 30 days. If you are sending this request in by mail make sure you send it certified. If it is not received on a timely basis IRS will deny your request.
Filing a Formal IRS Protest or Appeals with the IRS
When a formal protest is required, it should be sent within the time limit specified in the letter. The following should be provided in the protest:
1. Taxpayer’s name and address, and a daytime telephone number.
2. A statement that taxpayer wants to appeal the IRS findings to the Appeals Office.
3. A copy of the letter proposed tax adjustment.
4. The tax periods or years involved.
5. A list of the changes that the taxpayer does not agree with, and reason for disagreement.
6. The facts supporting the taxpayer’s position on any issue that it does not agree with.
7. The law or authority, if any, on which the taxpayer is relying.
Important note
All taxpayers must sign the written protest, stating that it is true, under the penalties of perjury as follows:
“Under the penalties of perjury, I declare that I examined the facts stated in this protest, including any accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.”
If the taxpayer’s representative prepares and signs the protest for the taxpayer, he or she must substitute a declaration stating:
That he or she submitted the protest and accompanying documents and;.
Whether he or she knows personally that the facts stated in the protest and accompanying documents are true and correct.
You can hire Former IRS Appeal Agents for Nationwide appeals
If you need to hire professional tax help to appeal or resolve your IRS dispute contact us today a you can speak directly to former IRS agents, managers and tax instructor.
Also on staff at Fresh Start Tax is a former IRS appeals agent who worked in the Appeal division for over 25 years. We are a nationwide company.
You can contact us today for a free initial tax consultation.
Appeal IRS Problem with Former IRS Appeals Agents – The Appeals Process
by Fresh Start Tax | Jul 26, 2013 | Tax Help
The Appeal System of the Internal Revenue Service.
Because people sometimes disagree on tax matters, the IRS has an appeal system. Most differences can be settled within this system without going to court and not only that is a much cheaper way to go ahead and resolve your IRS dispute.
Reasons for disagreeing must come within the scope of tax laws.
A case may be taken directly to tax court if the taxpayer does not want to appeal within the IRS.
Appeal or Resolution Within the IRS
The tax decision reached by the examiner may be appealed to a local appeals office, which is separate and independent of the IRS Office that conducted the examination. An appeals office is the only level of appeal within the IRS.
IRS Conferences with appeals office personnel may be conducted in person, through correspondence, or by telephone with the taxpayer or its authorized representative
Instructions for requesting a conference with an appeals officer are provided in the letter of proposed tax adjustment.
In FSLG, the Letter 950 is generally used to propose adjustments to employment taxes. It states that to request a conference with an appeals officer, the taxpayer will need to file either a small case request or a formal written protest with the contact person named in the letter.
Whether you file a small case request or a formal written protest depends on several factors.
If a conference is requested the examiner will send the conference request letter to the appeals office to arrange for a conference at a convenient time and place. The taxpayer or its qualified representative should be prepared to discuss all disputed issues at the conference. Most differences are settled at this level.
Only attorneys, certified public accountants or enrolled agents are allowed to represent a taxpayer before Appeals.
Making a Small Case Request
A small case request is appropriate if the total amount of tax, penalties, and interest for each tax period involved is $25,000 or less.
If more than one tax period is involved and any tax period exceeds the $25,000 threshold, a formal written protest for all periods involved must be filed. The total amount includes the proposed increase or decrease in tax and penalties or claimed refund.
To make a small case request, the instructions in the letter of proposed tax adjustment provide that the taxpayer should send a brief written statement requesting an appeals conference and indicate the changes with which it does not agree with and the reasons it does not agree with them.
Be sure to send the protest within the time limit specified in the letter you received, which is generally 30 days.
Filing a Formal IRS Protest or Appeals with the IRS
When a formal protest is required, it should be sent within the time limit specified in the letter. The following should be provided in the protest:
- Taxpayer’s name and address, and a daytime telephone number.
- A statement that taxpayer wants to appeal the IRS findings to the Appeals Office.
- A copy of the letter proposed tax adjustment.
- The tax periods or years involved.
- A list of the changes that the taxpayer does not agree with, and reason for disagreement.
- The facts supporting the taxpayer’s position on any issue that it does not agree with.
- The law or authority, if any, on which the taxpayer is relying.
The taxpayer must sign the written protest, stating that it is true, under the penalties of perjury as follows:
“Under the penalties of perjury, I declare that I examined the facts stated in this protest, including any accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.”
If the taxpayer’s representative prepares and signs the protest for the taxpayer, he or she must substitute a declaration stating:
- That he or she submitted the protest and accompanying documents and;.
- Whether he or she knows personally that the facts stated in the protest and accompanying documents are true and correct.
If you need to hire professional tax help to appeal or resolve your IRS dispute contact us today a you can speak directly to former IRS agents, managers and tax instructor.
Also on staff at Fresh Start Tax is a former IRS appeals agent who worked on the South Florida IRS appeals offices for over 25 years.
We also have on staff tax attorneys and CPAs for more complicated tax issues and cases involving tax court.
You can contact us today for a free initial tax consultation.
Appeal Resolve IRS Dispute – Former IRS Appeals Agents – Ft.Lauderdale, Miami, Palm Beaches – Florida
by Fresh Start Tax | Jul 26, 2013 | Back Taxes
If you owe back taxes contact us today to hear about the various tax solutions to immediately and permanently help reduce your tax debt on your back taxes.
The new IRS fresh start program or fast start tax initiative that IRS is offering is a series of various programs to help taxpayers who owe back tax debt deal with back tax problems. While everybody has their own individual situation by speaking to us we could put together an individual plan that will help you move forward so you can stop the anxiety and worry that dealing with these back tax issues cause.
The Process of Back Taxes Help – How the government deals with back taxes
There’s a very particular format the Internal Revenue Service exercises in dealing with tax payers that owe back taxes.
You should know that the Internal Revenue Service is going to make sure that all your prior tax returns are filed and you are current in the present tax year of all withholding requirements.
This process is used by the Internal Revenue Service is called a full compliance check and is necessary on each case that is worked by the service center or by an IRS agent. It is critical before contacting the Internal Revenue Service you start the process of filing back tax returns if they are not currently filed.
IRS will want a current Financial Statement, Form 433-F.
IRS is then going to want to secure a current financial statement from you that reflects income and your current living expenses.
Internal Revenue Service will expect this financial statement to be fully verified proving all income and all necessary living expenses.
Internal Revenue Service will ask you to fill out a form 433F and either send or fax it to them along with all current documentation. You need to make sure the Internal Revenue Service receives this information before your last IRS bill or IRS notice L-1058.
If you do not contact the IRS prior to the expiration date of this letter you can expect the IRS to send out a bank levy, wage garnishment and possibly file the federal tax lien.
The Internal Revenue Service will also ask for your last pay stub, the last 3 to 6 months worth of bank statements and a complete explanation of all expenses taken on your financial statement.
You should be aware that the Internal Revenue Service has a national, regional and geographical expenses standards.
It is critical you familiarize yourself with this program or you will be in for a complete shock when IRS only allows you certain necessary living expenses.
After IRS fully reviewed your current financial statement they will make a determination on how they will deal with your case and as a general rule they fall into three categories.
Based on your financial statement the Internal Revenue Service may determine:
- that you are currently going through an economic tax hardship and they will place your case into a currently noncollectable file.
- The Internal Revenue Service may determine that you can make monthly or current installment payments, or
- the Internal Revenue Service may tell you that you are a suitable candidate for the offer in compromise or the settlement program on back taxes.
Some of the the new programs offer by the IRS and back taxes to help you the taxpayer.
The goal of the IRS is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers.
Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.
The changes include:
- Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
- Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
- Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
- Creating easier access to Installment Agreements for more struggling small businesses.
- Expanding a streamlined Offer in Compromise program to cover more taxpayers.
The New Tax Lien Thresholds
The IRS will significantly increase the dollar thresholds when liens are generally filed.
The new dollar amount is in keeping with inflationary changes since the number was last revised.
Currently, liens are automatically filed at certain dollar levels for people with past-due balances. We understand that that new balance limitation is $10,000 total.
A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors.
Usually the government is not the only creditor to whom the taxpayer owes money.
A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter.
A lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.
Tax Lien Withdrawals
The IRS will also modify procedures that will make it easier for taxpayers to obtain lien withdrawals.
Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government.
In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the liens.
Direct Debit Installment Agreements and Liens
The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:
Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
The IRS will also withdraw liens on existing Direct Debit Installment agreements upon taxpayer request.
Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored.
In addition, this lowers user fees and saves the government money from mailing monthly payment notices. Taxpayers can use the Online Payment Agreement application on IRS.gov to set-up with Direct Debit Installment Agreements.
Installment Agreements and Small Businesses
The IRS will also make streamlined Installment Agreements available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate.
Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.
The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.
Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.
Offers in Compromise or Tax Debt Settlements on Back Taxes
The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.
This streamlined OIC is being expanded to allow taxpayers with annual incomes up to $100,000 to participate. In addition, participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less.
OICs are subject to acceptance based on legal requirements.
An offer-in-compromise is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed.
Generally, an offer in compromise will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement.
The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.
Back Taxes Help – Miami, Ft.Lauderdale, Palm Beaches – Affordable Tax Representation – South Florida
by Fresh Start Tax | Jul 26, 2013 | Tax Help
There is a new an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.
If taxpayers are looking to refinance or sell a home and there is a federal tax lien filed, there are options.
Taxpayers or their representatives, such as their lenders, may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan.
Taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.
The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.
Filing a Notice of Federal Tax Lien is a formal process
Filing a Notice of Federal Tax Lien is a formal process by which the government makes a legal claim to property as security or payment for a tax debt.
It serves as a public notice to other creditors that the government has a claim on the property and is extremely damaging to taxpayers credit.
In some cases, a federal tax lien can be made secondary to another lien, such as a lending institution’s, if the IRS determines that taking a secondary position ultimately will help with collection of the tax debt.
That process is called subordination.
Taxpayers or their representatives may apply for a subordination of a federal tax lien if they are refinancing or restructuring their mortgage. Without lien subordination, taxpayers may be unable to borrow funds or reduce their payments. Lending institutions generally want their lien to have priority on the home being used as collateral.
To apply for a certificate of lien subordination, people must follow directions in Publication 784, How to Prepare an Application for a Certificate of Subordination of a Federal Tax Lien.
Again, there is no form but there must be a typed letter of request and certain documentation.
The request should be mailed to one of 40 Collection Advisory Groups nationwide. See Publication 4235, Collection Advisory Group Addresses, for address information.
Taxpayers or their representatives may apply for a certificate of discharge of a tax lien if they are giving up ownership of the property, such as selling the property, at an amount less than the mortgage lien if the mortgage lien is senior to the tax lien.
The IRS may also issue a certificate of discharge in other circumstances if the taxpayer has sufficient equity in other assets, can substitute other assets, or is able to pay the IRS its equity in the property.
Without a tax lien discharge, the taxpayer may be unable to complete the home ownership change and the ownership title will remain clouded.
To apply for a tax lien discharge
To apply for a tax lien discharge, applicants must follow directions in Publication 783, Instructions on How to Apply for a Certificate of Discharge of a Federal Tax Lien. There is no form but there must be a typed letter of request and certain documentation.
The request should be mailed to one of 40 Collection Advisory Groups nationwide. See Publication 4235 for address information.
The IRS also urges people to contact the agency’s Collection Advisory Group early in the home sale or refinancing process so that it can begin work on their requests. People sometimes delay informing lenders of the tax liens, which only serves to delay the transaction.
Currently, there are more than 1 million federal tax liens outstanding tied to both real and personal property. The IRS issues more than 950,000 federal tax lien notices annually.
Federal Tax Lien Releases – Selling home, Fast Tax Lien Relief
