by Fresh Start Tax | Aug 19, 2013 | Tax Help
What are the chances or odds that the Internal Revenue Service will audit your income-tax return?
For inquiring minds that want to know what your chances for an IRS audit you can read below and find out what your chances are of an IRS tax audit.
Please note that these figures change from year to year but by very miniscule amounts.
Average yearly statistic
IRS audits 1.1% of all personal income tax returns. That is it!
What are your odds/chances of a IRS Tax Audit by Income
No adjusted gross income 3.43%
$1- $25,000 1.22
$25,000-$50,000 .73%
$50,000-$75,000 .83%
$75,000-$100,000 .82%
$100,000-$200,000 1.1%
$200,000-$500,000 2.67%
$500,000-$1,000,000 5.32%
1,000,000-$5,000,000 5.38%
$5,000,000-$10,000,000 20.95%
over $10,000,000
Total IRS Collections for the year
The IRS collected $2.5 trillion in total tax dollars in 2012, broken down as follows:
- From individuals: $2.1 trillion.
- From businesses: $285 billion.
- From other sources: $115 billion.
It is important to remember that IRS audits tax returns keeping in mind their budget for the current year and their available personnel to actually audit a tax return.
If you have any questions regarding IRS tax audits call us today and you’ll speak to experienced IRS tax professionals to answer all your questions.
Why you may have been selected for a IRS Tax Audit
The Internal Revenue Service loves large corporations, partnerships and self-employed taxpayers.
Also, IRS officials are keenly interested in taxpayers who own their own businesses, file what is known as “Schedule D,” and deal in large amounts of cash.
Another reason, a big reason, the DIF score.
To help in the selection process, the IRS assigns a score to each return based on a secret formula designed to pick those returns where “the potential is high that an examination of your return will result in a change to your income tax liability.” Its computer program is known as the Discriminant Inventory Function system, or DIF.
Document matching
Then there is “document matching.” The IRS matches what taxpayers have reported on their returns against what was reported separately to the government by employers, investment firms and other sources. If there is a mismatch, be prepared to explain the difference. If you do get audited, don’t panic. Over 1.4 million tax returns are audited by correspondence mail.
Tips from informants or ex- spouses
Some people are selected because of tips the IRS has received from would-be informants or an ex spouse so be careful who you make mad.
Random Sample
Or perhaps you were unlucky enough to have your return selected at random. From time to time IRS uses random sampling to keep a heartbeat on all tax returns filed to find new areas were taxpayers may be cheating. As a general rule IRS random samples 5000 tax returns across the United States each and every year.
If you do get audited, don’t panic. Over 1.4 million tax returns are audited by correspondence mail.
Cash businesses
IRS is keenly aware of all industries such as laundromats, restaurants, bars and hair salons that deal in cash. IRS has specifically targeted program to hit industries of widespread abuse. You can make sure IRS will audit their fair share of cash businesses.
You may be audited because of another tax on it that’s going on
As a former IRS agent I can tell you that many audits take place because during an investigation of the business company or individual tax return and agent got suspicious.
They have the latitude and flexibility to pick up other tax returns as a result of their suspicion. Usually when this happens, this is very low hanging fruit and results in revenue back to the IRS.
Save your tax records
While you don’t want to turn into a hoarder, err on the side of saving tax-related records just in case your return gets picked. Should you have won the IRS audit lottery you should never go into IRS unrepresented for an IRS audit.
As a former IRS agent seeking good professional tax will in the long run save you aggravation, grief, stress and keep money in your pocket in the long run.
If you have received an IRS letter or notice that you are going to undergo an IRS tax audit is in your best interest to call former IRS agents and managers who know all of the protocols, techniques and tax defenses to best defend your tax return that is undergoing an IRS tax audit.
Chances/Odds of a IRS Tax Audit, Former IRS Agents Disclose
Chances/Odds of a IRS Tax Audit, Former IRS Agents will tell you
by Fresh Start Tax | Aug 19, 2013 | Florida Sales Tax, Tax Help
Sales Tax Audit Defense – Former Florida Sales Tax Auditor, Tax Tips
These are Questions the Florida Sales Tax Auditor will probably ask and procedures the auditor will use to conduct the sales and use tax audit.
In addition to knowing why your company was selected for audit, it is also helpful to know in advance what type of questions the auditor will ask, how the auditor will conduct the audit, what the auditor will focus on and what types of documentation will be examined.
The Florida Sales Tax Auditors job
Remember that the auditor’s job is to find unreported or under reported revenue and use tax from purchases that did not have the proper sales tax paid and therefore the questions will be focused in the areas of high dollar recovery.
On the sales tax side expect the auditor to perform a high-level review of items such as:
• sales on the books as compared to sales per state sales tax return
• sales per federal income tax returns compared to sales per state sales tax returns
• deposits per bank statements compared to sales per sales tax returns
• an analysis of the sales tax payable account to the sales tax actually remitted
• verify that tax being collected is at the correct rate for location(s)
• verify that discretionary taxes are being properly calculated and remitted
• review internal controls for a recorded/undocumented sales
• review a representative test of each revenue account
On the use tax side, look for the auditor to focus on such items as:
• purchases from out-of-state vendors of items that were not resold to consumers
• Review depreciation schedules and/or check register for assets purchased during the audit.
• Review County tangible personal property tax returns for asset acquisitions
• purchases of fixed assets and fixed asset additions
• Internet purchases
• verify and trace accruals from source documents to general ledgers and sales tax reports
• analyze consumables pulled from inventory
• analyze leases of tangible personal property for compliance
For commercial rent expect the auditor to focus on:
• rental income – ensure tax was collected on all components of rent
• rental expense – ensure tax was paid on all components of rent
• on rent paid – ensure that the landlord is properly registered with the state of Florida
Expect the auditor to perform detailed tests
Expect the auditor to perform detailed tests such as tracing individual transactions involving sales and use taxes to the company’s accounting system, validating that tax rates billed on transactions are correct at the time of the billing, and verifying that current resale certificates are on hand for the customers claiming exempt status.
Electronic auditing, or e-Auditing,
Electronic auditing, or e-Auditing, is computer-assisted auditing using electronic records to complete all or part of the audit. If you use a computer to record your business activity and keep this data electronically, you are a candidate for an electronic audit.
Electronic records are preferred because it is the most accurate and efficient method of conducting an audit.
Documentation to conduct the audit
From the documentation standpoint, the auditor will likely start with a questionnaire to obtain general information about the business, ownership structure, and the market it serves.
The auditor is likely to request access to and inspect documents such as:
• the companies federal income tax returns for the period under audit
• chart of accounts
• trial balances and general ledgers
• sales journals
• invoices, receipts and credit memos supporting sales transactions
• exemption certificates for customers
• purchase journals and records
• cash disbursement journals
• bank statements
• fixed asset registers and depreciation schedules
How a Florida Department of Revenue may conduct a Sales and Use Tax Audit
Whereas when the company being audited and the Florida Department of revenue agree that the records are so voluminous in nature and substance that sampling is an effective, expedient, and adequate method to facilitate the audit.
The process of Selecting the Sample:
The first step in selecting the sample is to identify the sampling frame. The sampling frame is a group of items from which the sample is drawn or a listing of sampling units. In a homogeneous sampling frame, any item in the frame is representative of any other item; therefore, a random selection of all items in the frame will be representative.
The auditor determines how the accounting records are physically stored and available in order to identify the sampling frame.
Typically, accounting records have numbered sampling frames or non-numbered sampling frames, or they may have a combination of both. Both numbered and non-numbered sampling frames can be randomly sampled using WinSample.
WinSample is a software program developed by the Department of Revenue’s General Tax Administration’s Statistics Team and Applied Technology.
WinSample randomly selects sample points from many possible sampling frames using a seed number.
WinSample may be used when taxpayer records are not available in an electronic format suitable for stratified statistical sampling or e-Auditing. Numbered sampling frames include source documents that are consecutively numbered.
Some examples are:
• Invoice numbers
• Voucher numbers
• Check numbers Non-numbered sampling frames include source documents that have no natural numbering system.
Although not consecutively numbered, a random sample of the transactions may still be identified.
Some examples of non-numbered sampling frames supported in WinSample are:
• Time periods (days, weeks, months, quarters)
• Journals (with page numbers and multiple lines on each page)
• Imaged documents
• Microfiche
After the sampling frame is identified, data integrity tests for each sampling frame will be performed.
Data integrity tests will be performed on both numbered and non-numbered populations.
We are a full-service tax firm that specializes in federal state tax representation and are one of Florida’s most experienced for sales tax audit defense.
Our staff consists of tax attorneys, certified public accountants, former IRS agents in a former sales tax agent with over 16 years of direct work experience with the Florida Department of revenue.
Feel free to contact us for initial tax consulting for Florida sales tax audit defense.
We will completely review your case and give you a full assessment of your audit status so you can make an informed and confident decision how to fully resolve your sales tax audit case.
We are a full-service tax firm that specializes in federal state tax representation and are one of Florida’s most experienced for sales tax audit defense.
Our staff consists of tax attorneys, certified public accountants, former IRS agents in a former sales tax agent with over 16 years of direct work experience with the Florida Department of revenue.
Florida Sales Tax Audits – Questions you will be Asked by the Auditor – Insider Tips
by Fresh Start Tax | Aug 15, 2013 | Tax Help
As former IRS agents, managers and tax instructors we know the exact way to get you back into the system safely without worry or anxiety.
Stop the worry today.
Being a former IRS agent I found that once taxpayers did not file multiple back tax returns fear set in and they would just stop filing.
However, that is all a myth!
The truth is, IRS is just happy to have your back tax returns filed and most of the time they could care less whether they received one or 20 back tax returns.
IRS is just happy to have you back in the system. Believe it or not many of these taxpayers who haven’t filed multiple back tax returns have lost large amounts of tax refunds unless they were self-employed for all the years.
IRS knows that fear and anxiety cause taxpayers not to file back tax returns.
Once a taxpayer does not file the first tax return as a general rule the snowball effect continues. Taxpayers stay in that mode and every time April 15 comes along they start to shutter but then that April 15 passes and they pause a sigh of relief.
At some point you MUST decide to File Back Multiple Tax Returns
At some point in time there is a triggering mechanism that causes that taxpayer to realize they have to file their back tax returns.
Sometimes they need him to qualify for a mortgage or loan or maybe guilt starts eating away.
For some fear the element of going to jail and the possibility of a large criminal investigation drives taxpayers to file.
Whatever the reason at some point you must decide to file back multiple tax returns.
Advice from a Former IRS Agent
As a former IRS agent and teaching instructor I can tell you have no fear whatsoever to file your back tax returns. After they are prepared you can send them in all at one time.
Believe it or not, the IRS will not pull the returns for audit unless you way are out of line for the normal tax filing norms.
Of all the back tax returns at our firm has filed I can only remember in one case in which a taxpayer was ever audited and that’s after 38 years private and public practice.
So do not be afraid to file back income tax returns.
If you are going to owe money as a results of filing Multiple Back Tax Returns
If you owe money as a result of filing back multiple tax returns IRS will simply take a financial statement and determine the place you in one of three categories.
Your current financial statement will either play shoe into a current tax hardship, have you eligible for an installment monthly payment plan or the filing of an offer in compromise to settle your tax debt as a result of the money you owe on your back tax returns
How many back years worth of tax return should I file.
That is a question I am asked quite frequently by taxpayers who have not filed for the last 6 to 20 years and some have never filed.
As a general rule I tell taxpayers to file the last six tax returns.
Once those tax returns are processed on the system the Internal Revenue Service will let you know whether they want back tax returns are not. For the general taxpayer, filing 6 back tax returns will will satisfy the thirst of the Internal Revenue Service
However if there are large dollars involved and possible criminal intent or criminal fraud it is always best to seek the advice of a tax attorney, CPA or former IRS agent to help you make decisions on the best course of action to take.
If this is going to be a criminal case you should only seek a qualified tax attorney for help.
So if you have to file back tax returns don’t be afraid just go for it.
Contact us today to learn more about the filing of back tax returns and settling your tax debt with the Internal Revenue Service.
We are comprised of tax attorneys, tax lawyers, certified public accountants, and former IRS agents, managers and tax instructors.
We are nationwide tax experts for the filing of back or multiple tax returns. You will never have to speak to the Internal Revenue Service.
Tax Returns – Safest way to file MULTIPLE BACK TAX RETURNS
by Fresh Start Tax | Aug 13, 2013 | Tax Help
If you’re dealing with back tax debt from the Internal Revenue Service is always in your best interest to hire local South Florida tax professionals.
We are a local South Florida professional tax firm staffed with tax debt attorneys, certified public accountants, former IRS agents, managers and tax instructors.
We have over 206 years of professional tax experience and over 60 years directly with the Internal Revenue Service.
Free Professional Tax Advice from Tax Debt Attorneys and Professionals
There are different ways to deal with the Internal Revenue Service to settle a tax debt.
One of the critical aspects in settling with the Internal Revenue Service is to make sure that your case is permanently resolved.
Many taxpayers are fooled by thinking because their case is in a non-collectible status or part pay status that their case is primarily result but those cases are only held in all abeyance for a period of 2 to 3 years. All these type cases wind up coming back to the main IRS enforcement computer.
Ways of permanent tax resolution
The ways of permanently resolving your debt are either through a:
1.bankruptcy proceeding,
2. the statute of limitations expiring or
3. the settling of your case through an offer in compromise or a tax debt settlement.
Hiring a local solid tax debt attorney firm can assure that you can resolve your case for the lowest amount of money in the least amount of pain to the client.
This article will only deal with the offer in compromise to relieve yourself of the IRS tax debt.
Tax Debt Settlements
Experienced tax attorneys and tax firms can help assure that you will settle your tax debt with the Internal Revenue Service for the lowest dollar allowed by law. It also should be known that there are specific formulas that dictate the IRS tax settlement policy.
It is in your best interest to be very truthful before submitting a tax debt settlement called and offer in compromise.
IRS will require a detailed financial statement with all supporting documentation including all bank records and verification of all income and expenses for the last year.
The normal IRS investigation of a offer in compromise can take any place between 15 and 40 hours.
The Internal Revenue Service conducts a thorough search which will include searches of Google, credit reports, and all licenses to confirm the thoroughness of your financial statement. IRS has their own internal search engines to conduct asset searches on all taxpayers that owe back taxes debt.
Tax Debt Attorney Facts
1. The Internal Revenue Service receives about 60,000 offers in compromise each year.
2. About 38% of those offers are accepted by the Internal Revenue Service.
3. The average settlement on a dollar is $.14.
4. If you are going to file for tax debt relief with the Internal Revenue Service you need to be patient. The average wait time to settle your case with the IRS is between six months to a year.
The Offer in Compromise, the IRS Settlement process
Within the last two years the Internal Revenue Service has come out with a new program or initiative called the fresh start. And in case you’re thinking it is not named after our tax firm.
It has allowed taxpayers struggling with old tax debt to permanently deal with the Internal Revenue Service and completely eliminate their tax debt for pennies on the dollar.
Before taxpayers goes running off to settle their IRS debt the taxpayer must make sure that they are a suitable and qualified candidate for the offer in compromise program.
Warning to taxpayers
As a warning to taxpayers, searching the Internet for tax companies to do this work I would caution you to make sure you are giving your work to a professional tax company. Most Internet sites that you see do not use qualified tax professionals to deal with your IRS tax debt. As a matter of fact, many sites that you see on the Internet are lead generation sites and literally sell your information to third-party buyers.
They use semi-qualified people were more interested in generating fees in settling your tax debt.
Before hiring a tax that firm check on the qualifications of the professional that we will be working your particular case.
Ask that person many questions.
You will get a good solid gut feeling on whether you should hire that person or that firm. You should also check on the BBB rating as well as asking for similar results on a case that is similar to yours.
Pre-Qualifer Tool for Tax Debt
To make sure that you do not fall victim for some of these companies, the Internal Revenue Service has now a pre-qualifier tool that you can use before you submit your offer in compromise to settle your tax debt with the IRS.
You will find that pre-qualifier tool right on our website.
I would urge all taxpayers before paying a dime to any tax firm to walk themselves through this very simple process to make sure they are qualified for an IRS tax debt settlement called the offer in compromise.
What dollar amount is IRS looking for to settle, there is a very specific formula
The Internal Revenue Service is interested in two main things things, your assets in your income.The basic settlement formula is this: IRS wants the sum total of the liquidation value of your assets plus a times 12 value of your monthly income over and above the monthly allowable expenses. By calling us directly we can figure out the amount required to satisfy the Internal Revenue Service.
IRS has specific formulas to deal with the taxpayer’s income and the liquidation of certain assets to come up with a fair settlement amount for the offer in compromise to settle a tax that.
We at Fresh Start Tax llc will pre-qualify your offer in compromise and make sure that you are a quality candidate for the tax debt settlement call the offer of compromise.
Contact us today for free initial tax consultation and we walk you through this program. Yes we will give you free tax advice to make sure you’re qualified for the program.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.
IRS mainly consider your unique set of facts and circumstances:
1. Ability to pay;
2. Income;
3. Expenses; and
4. Asset equity.
The IRS generally approves an offer in compromise when the amount offered represents the most the IRS can expect to collect within a reasonable period of time.
Explore all other payment options before submitting an offer in compromise.
The Offer in Compromise program is not for everyone.
If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.
Make sure you are eligible for a Tax Debt Reduction
Before the IRS can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier on the fresh start tax llc to confirm your eligibility and prepare a preliminary proposal.
Submitting your offer to the IRS
Your completed offer package will include:
1. Form 433-A (OIC) (individuals) or
2. 433-B (OIC) (businesses) and all required documentation as specified on the forms;
Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate
3. Form 656;
4. $150 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Select a payment option for the Tax Debt for the OIC
If you owe the money there are basically two choices.
Your initial payment will vary based on your offer and the payment option you choose:
1. Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
2. Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full .
Understanding the Tax Debt process with the IRS
While your offer is being evaluated:
1. Your non-refundable payments and fees will be applied to the tax liability ,y ou may designate payments to a specific tax year and tax debt;
2. A Notice of Federal Tax Lien may be filed; Do everything in your power to make sure the federal tax lien is not filed,
3. Other collection activities such as tax levies and wage levies may be suspended;
4. The legal assessment and collection period is extended from the normal 10 years;
5. Make sure you make all required payments associated with your offer in compromise;
6. You are not required to make payments on an existing installment agreement or payment agreement program; and
7. Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date. If this happens by a lottery ticket.
As a former IRS agent and teaching instructor I cannot tell you how important it is to make sure you get competent tax help in dealing with your back tax debt.
We at Fresh Start Tax are comprised of tax debt attorneys, certified public accountants, former IRS agents, managers and tax instructors.
We have worked out of the local South Florida IRS offices for over 60 years.
We are some of South Florida, Fort Lauderdale, and Miami top experts for tax debt attorney help.
Ft.Lauderdale, Miami – Tax Debt Attorney Help
by Fresh Start Tax | Aug 12, 2013 | Tax Help
IRS Final Notice Tax Help –Tax Help How to STOP the IRS
We are a local South Florida professional tax firm that specializes in IRS representation. We have practiced in South Florida since 1982 and are A+ rated by the Better Business Bureau.
Please feel free to call us today for an initial tax consultation
Do not be bullied by the IRS. As former IRS agents there are many remedies available and it is always best to seek professional tax help.
Please note there are several ways to stop the IRS final notice however the most common way is simply by filing a timely collection due process.
Please read below about the process.
Received a IRS Notice or Bill ? Final Notice ?
If you have received an IRS final notice there are tax remedies put in place by the Internal Revenue Service to stop any enforcement action that may be taking place in the very near future.
Taxpayers can file this procedure by themselves or in fairness to hire a professional tax firm to walk them through the process.
To stop the IRS immediately taxpayers can file a collection due process that few taxpayers know about.
It is critical when they file a collection due process to do so within the time frames prescribed within the procedures. If not taxpayers will lose there right to a hearing and there is no other process left.
The Collection Due Process: IRS Final Notice, Stop the IRS with a CDP
The CDP procedures are available to you if you’ve received any one of the following notices:
- Notice of Federal Tax Lien
You can get the tax help you need through this one simple procedure.
The CDP Procedure by the IRS to Stop the IRS with a Final Notice
You have 30 days to request a hearing to preserve your right to go to Court.
You must Complete Form 12153, Request for a Collection Due Process or Equivalent Hearing.
It is important you identify all your reasons for your disagreements. If you need tax help filling out the form you can contact us and we will give you a free initial tax consultation so you can send in the form.
Where to file the CDP to STOP the IRS ?
The completed Form 12153 should be sent to the same address that is shown on your Federal Tax Lien or IRS Levy Notice.
If your request is not received within 30 days, you are still entitled to an Appeals hearing.
However, if you still disagree with the Appeals determination you cannot go to Court.
Common Questions and Answers to the IRS Final Notice
Q. I just got a Notice Number CP504. It says – “Urgent!! We intend to levy Certain Assets.” I don’t agree that I owe this amount. Question – How can I appeal? Will that stop the levy action?
- A. The IRS cannot levy with just this notice.
They must first issue a formal Notice of Intent to Levy,( this is the IRS Final notice ) and that is the next step after this notice.
Your case is closed as far as any determination about how much you owe, so there is nothing for you to appeal at this point.
However, you do have three options to get your case re-opened so the IRS can consider whether you owe any additional amounts:
1. Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to appeal at that time.
2. Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
3. Follow the instructions in Form 656 and file an Offer in Compromise, Doubt as to liability.
Q. The IRS Collection function says they are going to file a lien or levy my assets. What can I do?
- A. Be sure to contact the Collection function to discuss your situation and your payment options. Refer to Publication 1660, Collection Appeal Rights to review your appeal rights. Some Collection actions qualify for appeal under the Collection Appeals Program (CAP) and some qualify under the Collection Due Process (CDP) appeal.
These two programs offer different advantages depending on the facts of your case. Publication 1660 will help you decide which is best for you.
- Q. I just received a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, Letter 3172. I don’t believe I owe this amount. What can I do?
A. Refer to Publication 1660. The Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing to discuss the lien filing. You should request a CDP hearing if you feel the lien is inappropriate.
However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances.
If IRS Appeals cannot consider the underlying liability, you have three options to re-open that issue:
1. Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to Appeal at that time.
2. Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
3. Follow the instruction in Form 656 and file an Offer in Compromise, Doubt as to Liability.
- Q. I just received a Letter L-1058 or LT11 FINAL NOTICE OF INTENT TO LEVY AND NOTICE OF YOUR RIGHT TO A HEARING. I don’t believe I owe this amount. What can I do?
A. Refer to Publication 1660. The Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing. You should request a CDP hearing if you feel the levy is inappropriate.
However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances.
If Appeals cannot consider the underlying liability, you have three options to re-open that issue:
1. Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to Appeals at that time.
2. Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
3. Follow the instructions in Form 656 and file an Offer in Compromise, Doubt as to Liability.
If you have any questions regarding an IRS final notice and need professional tax help call us today we can explain to you the different ways on how to stop the IRS.
IRS Final Notice – Tax Help – How to STOP the IRS
by Fresh Start Tax | Aug 12, 2013 | Tax Help
IRS Final Notice Tax Help – How to STOP the IRS
If you have received an IRS final notice there are tax remedies put in place by the Internal Revenue Service to stop any enforcement action that may be taking place in the very near future.
Taxpayers can file this procedure by themselves or in fairness to hire a professional tax firm to walk them through the process.
To stop the IRS immediately taxpayers can file a collection due process.
It is critical when they file a collection due process to do so within the time frames prescribed within the procedures.
If not taxpayers will lose there right to a hearing. That’s it game over for the CDP.
The Collection Due Process: IRS Final Notice, stop the IRS with a CDP
The CDP procedures are available to you if you’ve received any one of the following notices:
- Notice of Federal Tax Lien
The CDP Procedure by the IRS to Stop the IRS with a final Notice
You have 30 days to request a hearing to preserve your right to go to Court.
You must Complete Form 12153, Request for a Collection Due Process or Equivalent Hearing.
It is important you identify all your reasons for your disagreements.
Where to file the CDP to STOP the IRS ?
The completed Form 12153 should be sent to the same address that is shown on your Federal Tax Lien or IRS Levy Notice.
If your request is not received within 30 days, you are still entitled to an Appeals hearing.
However, if you still disagree with the Appeals determination you cannot go to Court.
Common Questions and Answers
- Q. I just got a Notice Number CP504. It says – “Urgent!! We intend to levy Certain Assets.” I don’t agree that I owe this amount.
- Question – How can I appeal? Will that stop the levy action?
A. The IRS cannot levy with just this notice.
They must first issue a formal Notice of Intent to Levy,( this is the IRS Final notice ) and that is the next step after this notice.
Your case is closed as far as any determination about how much you owe, so there is nothing for you to appeal at this point.
However, you do have three options to get your case re-opened so the IRS can consider whether you owe any additional amounts:
1. Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to appeal at that time.
2. Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
3. Follow the instructions in Form 656 and file an Offer in Compromise, Doubt as to liability.
- Q. The IRS Collection function says they are going to file a lien or levy my assets. What can I do?
A. Be sure to contact the Collection function to discuss your situation and your payment options. Refer to Publication 1660, Collection Appeal Rights to review your appeal rights. Some Collection actions qualify for appeal under the Collection Appeals Program (CAP) and some qualify under the Collection Due Process (CDP) appeal.
These two programs offer different advantages depending on the facts of your case. Publication 1660 will help you decide which is best for you.
- Q. I just received a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, Letter 3172. I don’t believe I owe this amount. What can I do?
A. Refer to Publication 1660. The Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing to discuss the lien filing. You should request a CDP hearing if you feel the lien is inappropriate.
However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances.
If IRS Appeals cannot consider the underlying liability, you have three options to re-open that issue:
1. Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to Appeal at that time.
2. Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
3. Follow the instruction in Form 656 and file an Offer in Compromise, Doubt as to Liability.
- Q. I just received a Letter L-1058 or LT11 FINAL NOTICE OF INTENT TO LEVY AND NOTICE OF YOUR RIGHT TO A HEARING. I don’t believe I owe this amount. What can I do?
A. Refer to Publication 1660. The Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing. You should request a CDP hearing if you feel the levy is inappropriate.
However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances.
If Appeals cannot consider the underlying liability, you have three options to re-open that issue:
1. Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to Appeals at that time.
2. Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
3. Follow the instructions in Form 656 and file an Offer in Compromise, Doubt as to Liability.
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