by steve | Jun 2, 2010 | IRS Tax Advice
Seizures by the Internal Revenue Service Last Year the IRS seized over 600 Homes, businesses and vehicles
Yes the Internal Revenue Service can seize your Home, Cars , Business and Bank Accounts This is always the last choice of last resort and is not usually not done unless there is a fairly serious problem that has gone unresolved for quite some time. If you owe on a continual basis your odds go up that a seizure may be coming forth. For the most part, the IRS can take any asset it chose too.IRS enforcement actions have increased in the last several years. The IRS has hired more Revenue Officers so expect enforcement action to set up even more in the upcoming season.See the Fresh Start Tax news release on this matter and subject.Go on our site into the press release tab.
Before the IRS conducts a seizure, they will normally perform an investigation to determine the equity in the item to be seized. In almost all cases, the IRS will not seize the asset unless there is sufficient equity in property that would warrant the seizure and be in the best interest of the federal government.
IRS must have sent you a final notice, with appeal rights that warrant a hearing officer for a seizure to take place.
Over the past years, Congress has made it much more difficult for the Internal Revenue Service to seize personal residences. Except in very special cases, it is unlikely that the IRS Collection Division will consider seizing your home. Rental properties or vacation homes, RV or boats are a different story and if there is sufficient equity can be seized without great difficulty.All these cases can usually be resolved with a solid representative working along with you the taxpayer. Most all of these situations can be avoided.
Businesses may be seized as well, but again, it is the exception, not the rule. The IRS must get a writ from a Federal judge. The IRS also must investigate to determine if there are any lien holders,mortgages or UCC’s against property in the business. Then, if the IRS has to go to sale, it must conduct an auction of every item in the business. I have personally seized over 300 businesses or homes as a former Revenue Officer. It is not something I wanted to do but in most cases the taxpayer gave you no choice. In today?s economic environment, it is very rare to see a home or business seized. The IRS may try to force the business owner to shut down by continually levying receivables or seizing bank accounts or making legal threats but a seizure today is pretty unlikely. The Service looks for other solutions first. the key is to stay current so you at least are making a solid effort. If you cannot be current, you should ask yourself, is it time to close the doors.
Cutting to the chase. When you receive certified mail of a Notice of Intent to Levy, you had better react fast by contacting IRS or hiring a LICENSED tax professional like the staff at Fresh Start Tax to represent you or your company and your best interest. Do not wait to the IRS to act first, be pro-active. If you owe delinquent taxes, the IRS is going after your bank accounts, your wages and your assets. They are the worlds most powerful collection agency located in your backyard. . By contacting Fresh Start Tax today we can work out a deal or settlement to fits your needs and your budget needs. If you wait, IRS wins. Make a call to us today so you never have to speak with the IRS ever again. We are former IRS agents that know our way around the block. As a side note, IRS can seize your whole pension plan and IRA as well.
We can set you up with a settlement, business installment agreements, Offer in Compromise, installment agreements, abatement of penalties and interest, or place you in a hardship if you qualify for the programs. We simply are the best.
by steve | Jan 11, 2010 | Tax Help, Uncategorized
The Processing Of Part Pay Agreements For Business Accounts and Application Of The Trust Fund Recovery Penalty.
When a business has an inability to pay delinquent and accrued taxes to the IRS, the following actions are taken by the Internal Revenue Service:
If a businesses has a hard time paying operating expenses and current taxes, then deferring action on delinquent and accrued taxes may serve no useful purpose. Appropriate collection action such as levy, seizure, or a trust fund penalty, will be considered to protect the IRS and the federal government’s best interest. The taxpayers interests must also be considered and the financial statement will be reviewed with the taxpayer to determine if there is a way to reduce expenses in order to make payment on the taxes and avoid enforced collection action.
When it is determined the taxpayer can pay current taxes as well as operating expenses, they will be required to pay the delinquent taxes. The taxpayer can then request an installment agreement.
When taxpayers are in business, are currently pyramiding trust fund taxes and have been repeatedly assigned to the collection field function for outstanding liabilities, then they are considered “repeaters.” These taxpayers may not be granted installment agreements. If, however, after contact, taxpayers originally classified as repeaters do not continue to accrue liabilities and begin making Federal Tax Deposits and file all appropriate returns (so that they are in compliance with all filing requirements); then, they are no longer considered repeaters and may qualify for installment agreements.
In-Business Trust Fund Installment Agreements Requiring Financial Analysis and Determining Ability to Pay
When Notices of Federal Tax Lien were not previously filed, a federal tax lien determination will be made on the taxpayer and or the business.
The IRS will verify current compliance with filing and deposit requirements of all required taxes including your personal income tax.
The IRS has a special procedure that they will consider for special deposits and monthly filings. These are usually on repeat offenders.
IRS will determine the taxpayer’s (business) ability to pay.
The IRS will secure Form 433B, Collection Information Statement for businesses and, if appropriate, Form 433A, for individuals. The IRS wants to determine if these in-business taxpayers can fully pay liabilities from current assets and or income. If they do not qualify for installment agreements full payment will be requested. The IRS will collect the monies from personal funds if available.
If the case is worked by a field agent the case will go through a very thorough review of all financial statements.
Trust Fund Recovery Penalties and Installment Agreements
The trust fund program is a priority for the IRS.
The IRS must ensure consideration is given to securing waivers to extend the statutory period for assessment from each responsible individual or individuals when the delinquent taxes will not be fully paid prior to the original statue.
The IRS will ask for waivers from responsible individuals and notify them of their right to refuse to extend the period of limitations, or to limit such extension to particular issues, or to a particular period of time. The IRS will seek to extend the statute if possible. Taxpayers will be notified of their right of refusal each time they are requested to sign a waiver extending the period for assessment.
The IRS will fully explain to the taxpayers that signature on a waiver, extending the period for assessment, will allow the Service to collect the delinquent and accrued taxes through an installment agreement which extends beyond the original Assessment Statute Expiration Date. This is not what you want at all!
On trust fund recovery penalties, no interest is charged until assessments are made.
Payments on Trust Fund Accounts During Approved In-Business Trust Fund Installment Agreements
Under the Trust Fund Recovery Penalty (TFRP) more than one entity or individual may be liable, or become liable, for the trust fund portion of liabilities. This is the federal governments way to collect the trust fund taxes from responsible individuals. Therefore, when businesses enter into installment agreements with the IRS the entities or individuals liable for the TFRP may prefer (and request that) the business’s payments be applied to the trust fund portion of the balance due accounts. If this occurs, the business should be notified that:
Installment agreement payment application is governed by the IRS and the terms of the agreement.
As stated on the agreement form: “We will apply all payments on this agreement in the best interests of the United States.”
Taxpayers are not permitted to designate installment agreement payments.
Installment agreement payments will be applied in the best interests of the United States, regardless of the policy to apply payments to tax first and then to penalties and interest when dealing with trust fund tax. This will vary from agent to agent. Professional help is needed here.
Individuals who are potentially responsible for the trust fund tax will be asked to make payments from their own resources. These payments are not considered to be installment agreement payments.
The local agent working this case is responsible for all determinations. That person is called a Revenue Officer.The following are possible applications of the trust fund taxes.
Example One
(1) Diaper Corp has not made a request for an installment agreement. Mr. Clinton, officer of Diaper Inc., tells the IRS revenue officer that he will pay $500 per month toward the trust fund portion of a tax liability with personal funds. The trust fund penalty has not been assessed as yet and Mr. Clinton has not yet been determined to be responsible for a trust fund recovery penalty. The balance due period or periods from which the liability was derived have not been specifically identified. Since the liability has not been identified this is not a pending installment agreement. Also, Mr. Clinton must be informed that any payments will be considered “voluntary”, and may be applied according to his instructions. Information regarding the contact must be documented in the case history.
Example Two
The same above scenario exists as above. Mr. Clinton has signed Form 2751 agreeing to the trust fund recovery penalty of Diaper Inc. As long as Mr. Clinton provides a specific payment amount this is a pending installment agreement. Note that the installment agreement is pending for Mr. Clinton’s trust fund recovery penalty, not for Diaper Corporations balances due on the back taxes.
Example Three
Football Inc. enters into an installment agreement requiring payment of $500 per month. The corporation does not make payments from corporate funds. Instead, corporate officers Ben and Jerry take turns designating payments of $500 per month with their personal funds on behalf of Football Inc. Although they write on their checks that the payments should be applied to the trust fund portion of the liabilities, these payments may be applied in the best interest of the government.
Example Four
Same as Example 3, except Football Inc. makes its monthly payment of $500 from corporate funds. In addition to the installment agreement payments made by the corporation, the officers make payments as described above. These payments, made in addition to the payments made by the corporation under the agreement, may be applied according to the officers’ instructions.
