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CP 12 Frequently Asked Questions Why did you receive this notice CP 12 sent from the IRS?
IRS issued Notice CP 12 when IRS corrected one or more mistakes on your tax return, and
1 the overpayment is different from the one you expected, or
2. you have an overpayment when you thought you either owed money or had an even balance. The first page of the notice shows you the figures on your return and the figures after our corrections. The second page tells you what items IRS corrected.
It also explains any penalty and interest charges. Is that all there is to it? Should I write back?
Sometimes, yes. If you agree with the correction IRS made, you don’t need to reply to the notice. Just make sure you note the correction on your return for future reference. We’ll issue a refund in six to eight weeks, unless you owe other amounts we’re required to collect, such as unpaid tax, penalty, or interest on another tax account.
If you don’t agree with the correction IRS made:
1. Show IRS you’re entitled to a larger refund, you can go ahead and cash the check. IRS will issue another check for the additional overpayment six to eight weeks after we correct your account.
2. Show IRS you’re entitled to a smaller refund (or no refund at all), there are two things you need to do:
DON’T CASH THE REFUND CHECK. Yes, do not cash the refund check:
Write VOID on the back of the check and return it to IRS so they can credit your account. If you’re entitled to a smaller refund, IRS will issue another check for the correct amount six to eight weeks after the IRS make the correction. If you already cashed the check, send us your repayment immediately. Since IRS made the mistake, they will make sure they don’t charge you any interest, but only if you send the repayment.
Second, call or write to explain why your figures were correct when you filed the return.
If the correction is simple, such as removing an additional exemption we gave you by mistake, just call IRS at the number printed at the top of the notice with your explanation and IRS make the correction on the spot. We’ll also make sure we give you enough time to send the refund back before we send any notices asking for payment.
If the correction is more complicated, such as an error in our calculation of your capital gains tax, it’s best to send us an explanation along with a copy of your Schedule D, capital gains worksheet, etc. How much time do I have to respond if I don’t agree with the IRS changes?
It’s important that your account reflects accurate information, so check your figures against ours to determine whose figures are correct. Like we mentioned before, there’s no need to respond if you agree with the correction. If you don’t agree, though, please call or write to us as soon as possible so we can make any necessary corrections.
It is always best when you are calling IRS to keep a record of everyone you have spoken with including their name and their ID number. This will be needed in case the situation becomes more difficult to deal with down the road.
Fresh Start Tax client education per IRS Missing Signature on your tax return?
It is required by the IRS to have a valid tax return.
A taxpayer is not considered to have filed a tax return which begins the period of limitations on assessment until the taxpayer files a valid tax return. An unsigned return is not considered a valid tax return. A faxed signature is acceptable.
Fresh Start Tax is comprised of Former IRS Agents, Managers and Instructors. The staff also includes CPA’S, tax attorneys and former Managers with the Department of Revenue. Our company are experts in the field of tax and tax resolution. We are licensed to practice in all 50 States. We are fast, affordable and put a premium on communication with our client. Our firm has the highest rating given out by the Better Business Bureau. We have a combined 140 years Federal and State experience.
If you have lost your income tax records and need to file back tax returns call Fresh Start Tax today. 1-866-700-1040 . Fresh Start can:
get you back in the tax system worry free.
file the last three to six years worth of tax returns and get you back in compliance with the IRS.
get all tax records from the IRS to prepare your tax return.
contact IRS and work out a deal to settle your tax situation with a payment plan, a hardship or an offer in compromise.
you will never have to speak to IRS on this issue, ever.
We have a special telephone number given to licensed tax professionals to make this happen for you so you remain worry free. IRS will be happy to have you back into the system. We can also make sure you stay out of a tax audit situation. We take care of the entire tax representation process. Fresh Start Tax is one of the premier tax resolutions firms in the country. We deal with all types of civil cases including individuals, businesses, corporate and defunct corporations. We have staff that specializes in every facet of the Internal Revenue Service. We know all the IRS strategies. Some of our many specialties include the following:
Immediate Tax Representation
Offers in Compromise/Settlements
Back Tax Relief
Bank Garnishments or Tax Levies
Wages Garnishments or Levies
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Innocent Spouse
Abatement of Penalties and Interest
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Our staff has over 110 years of professional tax representation experience
On staff, Board Certified Tax Attorney’s, Certified Public Accounts, Enrolled Agents, Former IRS Manager, Instructor and Trainers
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Do you need tax relief from penalties and interest stemming from failure to file tax form 990? Call the professionals at Fresh Start Tax. 1-866-700-1040. We are former IRS Agents, Managers, and Instructors. We are tax experts in the field of tax penalty abatements. Can penalties for filing Form 990 late be abated? Failure to timely file the information return, absent reasonable cause, can give rise to a penalty under section 6652 of the Code. Whether an organization qualifies for the reasonable cause exception to the penalty will be determined on a case-by-case basis taking into account all relevant facts and circumstances.
The regulations provide that a request for abatement of penalties based on reasonable cause must be made in the form of a written statement, containing a declaration by the appropriate person that the statement is made under penalties of perjury, setting forth all the facts alleged as reasonable cause. This statement should be made as an attachment to the Form 990. When requesting abatement of penalties for reasonable cause, your statement should include supporting documentation and address the following items:
1. The reason the penalty was charged. The daily delinquency penalty may be charged for either a late filed return, an incomplete return, or both.
2 .Explain what prevented the organization from complying with the law, including:
3. What prevented the organization from requesting an extension of time to file its return, if the organization did not request such an extension;
4. How the organization was not neglectful or careless, but exercised ordinary business care and prudence; and
5. What steps have been taken to prevent the same situation from occurring in the future.
Fresh Start Tax is one of the premier tax resolution firms in the country. We deal with all types of cases, individuals, businesses and high dollar corporate entities. We have a staff that specializes in every type of case. Some of our specialties include the following:
Immediate Tax Resolution and Representation
Offers in Compromise and Settlement
Back Taxes/ Unfiled or Never filed tax returns
Bank or Wage Levy Garnishments
Letters of Intent of Notice to Levy
IRS Tax Audits
Hardship, part pay agreements
State Sales Tax problems and Resolution
Our company resume:
Our staff has over 140 years of professional tax representation experience
On staff are Board Certified Tax Attorneys, CPA’s, former IRS Agents, Managers and Instructors
Former State Department of Revenue Manager and Instructor
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We have the highest rating by the Better Business Bureau
Have Former IRS Agents who worked the Offer in Compromise Program settle your tax debt.
I am a Former IRS Agent who worked the Offer in Compromise Program at the IRS and Settled Cases.I worked on the local South Florida offices and am an expert in the offering compromise program. Call me to find out whether you can settle your case by using the offer in compromise. Having worked at IRS, I understand all the protocols, settlement theories and can find you the lowest dollar amount to settle your case if possible
We are composed of tax attorneys, certified public accountants, former IRS agents and managers.
We have over 60 years of working in the local, the district, and regional tax offices of the Internal Revenue Service.
We are A+ rated by the Better Business Bureau and been in private practice right here in South Florida since 1982.
Before you submit an offer in compromise to the Internal Revenue Service make sure you fill out the pre-qualifier tools on our website to make sure that you are an eligible candidate for an offer in compromise.
Do not be ripped off by Internet site promising pennies on a dollar. While pennies on the dollar is true make sure you are a suitable candidate.
We will review your financial statement and let you know which offer in compromise you may be eligible for.
After 60 years of working for the Internal Revenue Service and the local South Florida IRS office, we know every available tax solution that will fit your current needs and your current financial statement.
Three Types of Offers in Compromise that will satisfy the demands of the Internal Revenue Service.
With all the misconceptions of the pennies on the dollar settlement, the average taxpayer is unaware of the different types of solutions available to them from the IRS. Hiring a good tax professional can steer you in the right direction and get your offer in compromise settled.
The IRS may accept an offer in compromise based on three grounds: 1. Doubt as to Collectibility – Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection. The statute period is generally 10 years from the original date of assessment. A taxpayer should check the remaining time left on their statute to get a better handle on the settlement formulas. Examples of Doubt as to Collectibility:
A taxpayer owes $40,000 for unpaid tax liabilities and agrees that the tax she owes is correct. The taxpayer’s monthly income does not meet her necessary living expenses. She does not own any real property and does not have the ability to fully pay the liability now or through monthly installment payments.
2. Doubt as to Liability – A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include:
(1) the examiner made a mistake interpreting the law,
(2) the examiner failed to consider the taxpayer’s evidence or
(3) the taxpayer has new evidence.
The taxpayer was a president of a corporation from 2004-2005. In 2006, the corporation accrued unpaid payroll taxes and the taxpayer was assessed a trust fund recovery penalty as a responsible party of the corporation. The taxpayer was no longer a corporate officer and had resigned from the corporation on 12/31/2005. Since the taxpayer had resigned prior to the payroll taxes accruing and was not contacted prior to the assessment, there is legitimate doubt that the assessed tax liability is correct.
3. Effective Tax Administration – There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.Examples are:
Mr. & Mrs. Smith have assets sufficient to satisfy the tax liability and provide full time care and assistance to a dependent child, who has a serious long-term illness. It is expected that Mr. and Mrs. Smith will need to use the equity in assets to provide for adequate basic living expenses and medical care for the child. There is no doubt that the tax is correct.
OIC Payment Options In general, a taxpayer must submit a $150 application fee and initial payment along with the Form 656, Offer in Compromise. Taxpayers may choose to pay their offer in compromise in one of three payment options: 1. Lump Sum Cash Offer – Payable in non-refundable installments, the offer amount must be paid in five or fewer installments upon written notice of acceptance. A non-refundable payment of 20 percent of the offer amount along with the $150 application fee is due upon filing the Form 656.
If the offer will be paid in 5 or fewer installments in 5 months or less, the offer amount must include the realizable value of assets plus the amount that could be collected over 48 months of payments or the time remaining on the statute, whichever is less.
If the offer will be paid in 5 or fewer installments in more than 5 months and within 24 months, the offer amount must include the realizable value of assets plus the amount that could be collected over 60 months of payments, or the time remaining on the statute, whichever is less.
If the offer will be paid in 5 or fewer installments in more than 24 months, the offer amount must include the realizable value of assets plus the amount that could be collected over the time remaining on the statute. 2. Short Term Periodic Payment Offer – Payable in non-refundable installments; the offer amount must be paid within 24 months of the date the IRS received the offer. The first payment and the $150 application fee are due upon filing the Form 656. Regular payments must be made during the offer investigation.
The offer amount must include the realizable value of assets plus the total amount the IRS could collect over 60 months of payments or the remainder of the statutory period for collection, whichever is less. 3. Deferred Periodic Payment Offer – Payable in non-refundable installments; the offer amount must be paid over the remaining statutory period for collecting the tax. The first payment and the $150 application fee are due upon filing the Form 656. Regular payments must be made during the investigation.
The offer amount must include the realizable value of assets plus the total amount the IRS could collect through monthly payments during the remaining life of the statutory period for collection.
The IRS is not bound by either the offer amount or the terms proposed by the taxpayer. The OIC investigator may negotiate a different offer amount and terms, when appropriate. The investigator may determine that the proposed offer amount is too low or the payment terms are too protracted to recommend acceptance. In this situation, the OIC investigator may advise the taxpayer as to what larger amount or different terms would likely be recommended for acceptance.
Fresh Start Tax is one of the industry leaders when its comes to Offers in Compromise. We are former IRS Agents who worked and taught the offer program while employed by the IRS. We have the highest rating given by the BBB. General Information
An Offer in Compromise, 656L is a completely different offer in compromise than most of the other offers we hear about, see on television or advertised all over the place. These offers in compromise are based strictly as to the taxpayers position that the tax Liability is incorrect. Definition of the Offer in Compromise 656 L
Doubt as to liability exists where there is a genuine dispute as to the existence or amount of the correct tax liability under the law. Doubt as to liability does not exist where the liability has been established by a final court decision or judgment concerning the existence or amount of the tax liability.
Grounds for compromise may exist when there is legitimate doubt from both the viewpoint of the taxpayer and the IRS. The taxpayer is required to submit documentation and/or other evidence to support his/her information for the OIC. The evidence available for both parties must be weighed in order to determine the extent of any “doubt. ” What makes this Offer in Compromise Different The taxpayer cannot be required to submit a financial statement for a doubt as to liability offer. Also, there is no application fee for a doubt as to liability offer.
Who works the offers in compromise, the 656L?
The Tax Examination Division has jurisdiction over DATL- OIC. Examination employees are responsible for preparation of the necessary documents and letters to effect the disposition of the DATL-OIC file by the taxpayer. One exception
The Collection Division has jurisdiction of doubt as to liability offers involving the Trust Fund Recovery Penalty and Personal Liability for Excise Tax. Liability offers concerning assessments made during bankruptcy proceedings may also fall under the jurisdiction of the Collection Division.
One of the most important requirements about this offer in compromise is to make sure the offer is submitted with full documentation . The taxpayer should include copies of documents supporting their claim.
