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Taxpayer’s advocate, when you disagree with the IRS

by | Oct 2, 2009 | Tax Help, Uncategorized

The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving problems with the IRS, or who believe that an IRS system or procedure is not working as it should. Here are seven things every taxpayer should know about TAS and it does work, sometimes.

1. TAS is your voice at the IRS.

2. The service is free, confidential, and tailored to meet your need, so says the IRS.

3.  You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn’t working as it should be. Be careful to rile the troops. Make sure you have a case first.

4.  TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals. You need to know what you are doing to have a chance because generally only a professional can help you when you are at this point.

5.  TAS employees know the IRS and how to navigate it. But the employees still work for IRS. That is why an experienced professional is needed to help. They will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved.

6.  TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico.  You can call your local advocate, whose number is in your phone book, in Publication 1546, Taxpayer Advocate Service.

7.  You can learn about your rights and responsibilities as a taxpayer by visiting the online tax toolkit at www.taxtoolkit.irs.gov.

Most of the time, a matter of fact, almost all times, if the case is in the local IRS office and a decision is made prior to going to taxpayer advocate, IRS advocate office will uphold the decision of the local agent.

How does the IRS phone system work?

by | Oct 2, 2009 | Tax Help, Uncategorized

This information is taken directly from the IRS site so you can understand their system.

Predictive Dialing System – Aspect Automated Call Distributor (PDS)

PDS System Overview
Each evening, an extract of the Automated Collection System (ACS) databases is downloaded to the Predictive Dialing System.  The systems administrator generates predefined campaign types (types of cases to be called based on the extract from the ACS system) to be worked that day.  The predictive dialer dials the taxpayers phone number.  If the taxpayer answers the phone, the call is sent to an ACS employee to work that case.  At the same time the call is delivered, the ACS employee is sent a screen with the extract data so that they can identify that the correct individual or business has been contacted.  The predictive dialer marks that record to indicate that the taxpayer has been contacted so the PDS will not call the taxpayer again during that campaign.  The employee works that case in the ACS System real time just as he/she would any other ACS call.
If there is a no answer, or if there is a busy signal, answering machine, bad telephone number/signal, or the taxpayer hangs up, the predictive dialer records that information and schedules the case for a follow-up call.  At the end of the day, the predictive dialer uploads all of these nonproductive calls to ACS.
Section 1.0 Data in the System

I want to file, but do not have the money to pay the IRS. I am afraid.

by | Oct 2, 2009 | Tax Help, Uncategorized

Many people truly want to pay the IRS and get back into the system, but do not know what to do next.
I want to file but I do not have the money to pay IRS, what should I do?
Believe it or not, IRS wants you back into the system. Most of the time, everyone who wants back into the system stays out because they do not have the money. You need to be prepared to get back into the system because at some point in time, they, the IRS will find you. Be prepared to know what action the IRS will take. Most of the time the IRS is very consistent in their behavior and a good plan can be set up to defend what offense they will take. The IRS will accept the last 3 to 6 years of tax returns and want a current financial statement. A good professional firm knows how to handle these situations and  prepares you accordingly. Do not be afraid,  just take the next step. We have done this thousands of times with great success.

Back taxes? This is what you do!

by | Oct 2, 2009 | Tax Help, Uncategorized

What do you do if you have never filed a tax return and owe back taxes?
There are several things to do.  After years of experience working at the Internal Revenue Service I have dealt with this situation thousands of times. First of all, most people want to get back in the system and do not know what to do to get there. Follow this advice.  Get current in the situation you are in. If you are an employer, start making current payroll tax deposits. If you are a sole proprietor, make an estimated tax payment. If you are a wage earner, make sure you have enough withholdings taken out of your check. The next step is to get all your tax returns prepared by a professional company, so you can get the lowest possible tax due to the Internal Revenue Service. It should be noted that a number of our clients we have seen over the years DO NOT owe tax because they have had the proper withholding taken out and simply do not owe any money.
The next and most important step if you owe tax is to find out what your exit strategy will be. You MUST sit down with a professional and find the area that the IRS will attack.  Their mission is for you to liquidate all assets immediately and set up a payment plan. There is room for tax planning so that the IRS will not strip you of all your assets.
Prepare to have a federal tax lien filed and/or your pension plan or 401 hit.
We can really help these situations. The proper planning is necessary to ensure the best results for you to move forward.

The IRS is softening up their approach on collections. Call us now.

by | Oct 2, 2009 | Tax Help, Uncategorized

The IRS has come out with some new softening approaches on dealing with the new hardships that are hitting the taxpayer in the wallet. Here is what you can now expect.
Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. The IRS is just starting the program this year. This includes cases when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer. Documentation is needed to prove these situations.
Added Flexibility for Missed Payments: The IRS is now allowing more flexibility for previously compliant individuals in existing Installment Agreements who have a tough time making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the Installment Agreement. Taxpayers in a difficult financial situation should contact a tax professional to help with their situation.
Additional Review for Offers in Compromise on Home Values: An Offer in Compromise, an agreement between a taxpayer and the IRS that settles the taxpayers tax bill for less than the full amount owed, may be an option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay may not be accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new second review of the information to determine if accepting an offer is appropriate.
Prevention of Offer in Compromise Defaults: Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.
IRS seems to be working hard to help taxpayers but only time will tell.

The Deferred Payment Method, another way to Settle your case.

by | Oct 2, 2009 | Tax Help, Uncategorized

As we have discussed in the past, there are several ways to settle your case. This is the third of the bunch.
The third type of Settlement program which may be right for you in the Offers in Compromise program is the Deferred Periodic Payment. This type of Offer is payable in six or more installments, 25 or more months from the IRS received date, but within the statutory period for IRS to collect the money which is usually 10 years from the date of assessment.  The Offer must be accompanied with the first proposed installment and all additional installments paid in accordance with your purposed terms of the Offer you sent in. These payments are to be continued to be made until the IRS works and closes the Offer.
The pros about this type of Offer is that the IRS is off your back and if you keep the terms of the agreement the case is settled for good.
The con side of this type of case is that you cannot miss a payment and that the lien is not released until all payments are made.  You really need to consult a professional to help make the proper decision on all types of Offers.