What if I Get a Levy/Garnishment Against One of My Employees, Vendors, Customers, or Other Third Parties?
If you get a levy against one of your employees, vendors, customers, or other third party, you must turn over to the IRS any property you have that belongs to the person levied against. The IRS uses the levy forms described below.
Regardless of the IRS form used, a levy attaches to property or rights to property you hold that belongs to the person levied against. In general, the IRS uses the levy form that contains the most appropriate instructions about how to comply with the levy.
Please read the instructions on the levy carefully.
• The IRS generally uses Form 668–W(ICS) or 668-W(C)DO to levy an individual’s wages, salary (including fees, bonuses, commissions, and similar items) or other income. Form 668-W(ICS) and/or 668-W(C)(DO) also provides notice of levy on a taxpayer’s benefit or retirement income.
• The IRS generally uses Form 668–A(C)DO to levy other property that a third party is holding. For example, this form is used to levy bank accounts and business receivables.
Employers generally have at least one full pay period after receiving a Form 668-W(ICS) or 668-W(C)DO, Notice of Levy on Wages, Salary and Other Income (or other levy form) before they are required to send any funds from their employee’s wages to the IRS.
Encourage your employees that have a levy placed on their wages to contact the IRS as soon as possible to discuss a release of levy and resolution of their tax liability.
This is the IRS link to the above site. https://www.irs.gov/businesses/small-businesses-self-employed/what-if-i-get-a-levy-against-one-of-my-employees-vendors-customers-or-other-third-parties
When a tax return’s information does not match data reported to the Internal Revenue Service by employers, banks and other third parties, the IRS will send a letter to the taxpayer.
The letter is called an IRS Notice CP2000, and it gives detailed information about issues the IRS identified and provides steps taxpayers should take to resolve those issues.
This is not formal audit notification.
This CP 2000 notice is to see if the taxpayer agrees or disagrees with the proposed tax changes.
Taxpayers should respond to the CP2000, usually within 30 days from the date printed on the notice.
If a timely response can’t be made, taxpayers need to call the toll-free number shown on the notice and request additional time to respond.
IRS matching program is a computer program that the IRS developed to catch taxpayers who did not report all 1099’s and other taxable related documents listed below.
The IRS matching program is a process that selects many tax returns to perform IRS audits.It picks up billons of dollars for IRS.
The IRS reviews each tax return information to make sure all income is reported. Once the return is filed, it compares the tax return information on these tax returns to the tax return the tax payer have submitted, linking them via social security numbers.
The IRS receives tax information from the following sources among many others:
Employers, wages (Form w2), Gambling from casinos (Form w2G), Pensions and annuities (Form 1099-R), Over $600 from services (Form 1099-MISC), Banks interest (Form 1099-INT), Mutual funds from stockbrokers (Form 1099-DIV, or 1099-B), State unemployment (Form 1099-G), State income tax refunds (Form 1099-G), Real estate agents (Form 1099-S), Corporations , dividends (Form 1099-DIV), Mortgage interest (Form 1098), Miscellaneous income (Form 1099-MISC), Business (schedule K-1).
Keep in mind, this does not mean the IRS is correct.Challenge it if possible.
You need to check your tax returns and the information that IRS is giving you to make sure the IRS adjustment is accurate.
Many times you have expenses against this additional income and if that’s the case you need to file an amended tax return to capture the expense and thus reduce your tax liability.
When I was employed at the Internal Revenue Service I was a revenue officer who both accepted and denied the offer in compromise.
I was proficient at my job and became a teaching instructor of the offer instructing those what to look for and what not to look for to accept or deny offers in compromise.
The offer program had an auspicious start in 1930 when the government decided to accept Joe Lewis’s offer in compromise.
How did the Offer in Compromise program at the IRS come into being?
Legend has it, the Offer in compromise program started with the heavy weight champ boxer Joe Louis, who, like most boxers, won lots of prize money in spurts, and who became dramatically delinquent on his back taxes back in the 1930’s
In sympathy to Mr. Louis (one of the most popular figures of his day), the IRS decided to come up with a plan for him to settle his taxes.
First know OIC, round one, to Joe Lewis
It was in the early 70’s when the Offer in Compromise program was officially made a part of law. Then, the bi-partisan Tax Reform of 1986 also gave the OIC program some final structure.
The marketing program as settle your case for pennies on the dollar came to light and the offer in compromise become an every day word.
While IRS accepts OIC, I want to share with you the current 2019 statistics about offers in compromise.
Keep in mind the statistics fluctuate through the years. In the years 15 and 16 and 17 fewer offers were accepted in the average settlement rate was about $7000 per case.
The new data shows the latest figures on the acceptance of offers in compromise.
Data recently on the Offer in Compromise acceptance rate for 2019.
The OIC 2019 acceptance rate decreased by 7.5% when compared to 2018.
The dollar amount for all accepted OICs increased by 10.75% or about $28.1 million.
That represents an average of $16,ooo. per offer in compromise accepted. Remember, this is just an average and has nothing to do with your case.
The number of offers submitted decreased by 4,900 or 8.25 when compared to 2018. Hard to believe why the decrease.
The Acceptance Rate Decreased by 7.5% for tax year 2018
The 2019 IRS Offer in Compromise acceptance rate dropped to 33% for 2019 from 40% in 2018.
This represented a decrease in the OIC acceptance rate of 7.5 %.
Please keep in mind these are just national statistics and averages they have absolutely nothing to do with your case whether IRS is going to accept or deny your offer in compromise.
We suggest that every taxpayer walk through the IRS prequalified tool or talk to somebody proficient in the offer in compromise program.
These numbers through the years are going to go up and down depending on income, assets, and expenses. IRS has set benchmarks as far as what the national standards will be on the expenses that they will accept.
Before giving your money to anybody make sure you are a qualified candidate for the offer in compromise program. All these statistics are available on the IRS data site. There’s a wealth of information on the sites and you can pull all this information up yourself.
What is the tax audit from hell, its called the “Taxpayer Compliance Measurement Program” (TCMP)
This is a four letter word tax audit.
Taxpayer Compliance Measurement Program (TCMP) Audit.
The primary purpose of this type audit is to update the data for the IRS’ DIF scores.
The DIF score is the major tool IRS uses to score tax returns for IRS tax audits. of the over 350,000 tax audits that IRS conducts every year this tool is used to score thousands and thousands of tax returns.
DIF scores are developed from analyzing a large group (involving up to 10,000 – 50,000 randomly selected returns) of intensive audits, conducted every few years.
In a TCMP audit, the IRS will analyze every item on the tax return and every part of the return must be substantiated by documentation. A standard audit is time consuming in that a taxpayer must find checks, invoices, contracts, bank statements, etc. for the items selected for audit.
That’s right IRS goes through any number that’s put down on a tax return must be substantiated including birth certificates for children.If you have a simple tax return you’re not going to have a problem but if you have a business, corporation or partnership they are going to be your worst nightmare.
Remember TCMP is a four letter word so be prepared.
Fresh Start Tax LLC is pleased to announce the hire of Herbert Cantor CPA.
His Education: Certified Public Accountant (CPA) Chartered Global Management Accountant (CGMA) Bachelor’s Degree in Accounting- University of Miami Masters Degree in Taxation (MST)
Herb Cantor was Former Appeals Officer, IRS Revenue Agent, worked in the large dollar group, the large dollar audit group, well, one of his cases was an audit with a company with $20 billion in sales.
Born in Coral Gables, Florida, Herb’s career started with 2 years in public accounting at the international CPA firm Harris, Kerr Forster.
After 2 years, he was hired by the IRS and started in the Small Business Division as a Revenue Agent. He primarily audited “C” and “S” corporations and Schedule-C’s. He also acted as a acting group manager.
After 6 years, he was recommended to join the Appeals Division as an Appeals Officer.
He worked on hundreds of cases such as those involving individual income taxes, “S” and “C” corporation tax issues, whether the trust fund recovery penalty applied to various individuals, claims for refunds, whether a civil fraud or accuracy penalty applied to a tax understatement, unreasonable compensation from a corporation, whether a preparer penalty should be applied against a tax return preparer, under-reported income, whether a sale of an asset should be classified as a capital gain versus ordinary income, charitable contribution valuations, distributions exceeding basis in an “S” corporation.
Herb also worked Offers in Compromise, Doubts as to Liability and Collectibility and cases scheduled for trial before the United States Tax Court.
He also lectured before various professional groups such as the Greater Fort Lauderdale Tax Council, the Florida Institute of CPA’s and several radio talk shows.
Herb has received numerous commendation letters from taxpayers and their CPAs on cases he resolved While at the IRS, Herb even resolved cases with Mike Sullivan and Steve Jacob of this firm.
Herb’s areas of expertise are examinations of individuals, corporations, Appeals and negotiating with the IRS.
Herb was also a lay member of the Fee Arbitration Committee of the Broward County Bar Association.
After working in Appeals for 18 years, Herb moved to the Large Case Division of the IRS. He examined financial records of large corporations and proposed various tax issues.
He was also a consultant to the IRS Criminal Investigations Division to determine if their tax cases warranted a criminal or civil investigation.
Is IRS Causing You a Hardship By Some Action, File a Form 911 It can Stop IRS Tax Levies and Wage Garnishments, NOW
Michael Sullivan Fresh Start Tax Expert & Former IRS Agent
This Form 911 can STOP IRS in there tracks.Get immediate tax help relief.
What is the Form 911 Filing Requirements???
A 911 form get filed through the taxpayers advocate Service) who is a is an independent organization within the IRS that helps taxpayers and protects taxpayer rights.
The 911 form helps you resolve problems you can’t resolve with the IRS.
It happens all the time. do not let the IRS bully you,
The 911 can work cases that involve the following:
a. Your problem is causing financial difficulty for you, your family, or your business,
b. You face (or your business is facing) an immediate threat of adverse action,
c. You’ve tried repeatedly to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised, how many times does this happen.
The Taxpayers Service will generally ask the IRS to stop certain activities while your request for assistance is pending , as an example:
a. Federal Tax Lien Filings,
b. bank levies, wage garnishments and seizures,
c. Other enforcement tools used by IRS.
Where does The Form 911 get sent too :
The quickest method is Fax the form to the TSA is your state.
This request to the TAS office MUST be file in your state or city.
Look up on the web the office in your state.
How to find this relative information:
Go to this website at www.taxpayeradvocate.irs.gov, or in Publication 1546, Taxpayer Advocate Service –
You also can mail in the form.
You can find the mailing address and phone number of your local Taxpayer Advocate office on the website, and in Pub. 1546, or get this information by calling our toll-free number: 1-877-777-4778 or call us to offer tax relief.
What Happens after the form 911 is sent? Very important info
If you don’t hear from us within one week of submitting Form 911, please call the TAS office where you sent your request. You can find the number at www.taxpayeradvocate.irs.gov.
Important Notes:
Please be aware that by submitting the form 911, you are authorizing TAS to contact third parties as necessary to respond to your request, and you may not receive further notice about these contacts.
For more information see IRC 7602(c).
Beware & Caution: TAS will not consider frivolous arguments raised on this form.
If you use this form to raise frivolous arguments, you may be subject to a penalty of $5,000.
911 is a great form to STOP IRS as long as you are having a true hardship.
Need true expert tax help, call a former IRS agent, hear the truth.
