Archive for August, 2011

Tax Lien Tips

Tax lien is often placed on taxpayer’s property for the amount of debt as a security when the tax payer ignores the notice of payment due and doesn’t make payments on back taxes. Tax lien can be placed on debtor’s house, cars, and accounts receivable. Tax lien becomes a public document that may affect the taxpayer’s credit score. Before placing a tax lien, IRS sends a Notice and Demand for Payment, that if ignored is followed up with a Notice of Federal Tax Lien. IRS agents may also call the taxpayer in order to attempt to collect the outstanding debt. Tax lien is not same as Tax Levy as tax levy allows the government collects the property to pay the debt. Tax Lien allows the IRS to secure the debt against property. This means that when the property is sold, the proceeds go to the IRS first to pay off the debt, and then what is left goes to the property owner.In order to remove a tax lien, tax payer must either pay off the tax debt in lump sum or file Offer in Compromise that gets accepted by the IRS. If the taxpayer entersDirect Debit Installment Agreements and LiensThe IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:

  • Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
  • The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
  • The IRS will also withdraw liens on existing Direct Debit Installment agreements upon taxpayer request.

Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored. Installment Agreement the tax lien will be lifted after the debt has been completely paid off. Once the statue of limitations on the tax debt expires, the tax lien will be removed. The best way to prevent and avoid a tax lien is to file accurate tax returns. But as soon as tax problems occur it is vital to not ignore them and contact a tax attorney right away. Tax attorney can help find the best solutions to settle the tax debt within taxpayer’s means.


2011-08-22 11:00

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What is a Federal Tax Levy?

Most Tax Payers wait to receive a threat of Federal Tax Levy, before consulting Tax Professionals. Federal Tax Levies are often utilized by the IRS to collect back taxes that are owed or believed to be owed by the taxpayers. The two most common forms of tax levy are IRS Bank Levy and IRS Wage Levy (a wage garnishment sent to payroll departments). The IRS can not only seize and sell property, but also take money from the bank account and take funds straight from the a paycheck to settle the debt. Federal tax levy is often initiated when taxpayers owe back taxes, failed to pay or file taxes, and refuse to make arrangements to satisfy the outstanding tax debt. When a taxpayer receives the tax levy notice, it is important to act right away before the tax levy is implements. In order to stop or prevent a tax levy it is crucial to act right away. There are several things taxpayer can do in such situation to negotiate with the IRS. The taxpayer can arrange IRS Installment Agreement that will allow the taxpayer to pay of tax debt in monthly payments based on current financial situation. If the taxpayer is in financial bind and cannot afford to pay back taxes, they may arrange the IRS Currently Non Collectible agreement. It gives the taxpayers a temporary break from paying back taxes allowing them time to get their financial standing back in order. Another option to avoid a tax levy is to file an offer in compromise which may decrease the owed amount making it easier and more manageable paying off back taxes.It is important to contact an experienced tax attorney with expertise in managing IRS tax collections. The tax attorney can not only help negotiate and advise, but also find the best solution for situation at hand.

2011-08-19 11:00

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What is an Offer in Compromise?

Individuals who owe back taxes to the IRS and do not have the money to pay the total amount due may qualify for an Offer in Compromise. An Offer in Compromise is an agreement between the IRS and a taxpayer to settle back taxes for less than the full amount that is owed. An offer is generally accepted by the IRS when the taxpayer in debt has special circumstances and the amount offered is the reasonable collection potential. In other words, the IRS agrees that based on taxpayer’s circumstances, the amount offered is the most the taxpayer can be expected to have the ability to pay within a reasonable period of time. When calculating the reasonable collection potential, it is best to work with an experienced tax professional that knows all the procedures and details pertaining to any tax situation. For example, the calculation will include expected living expenses, and the amount the government allows for food expenditures may be increased for people that have special diets. Similar concepts apply to many other areas that could have major impact on the outcome of a case. A professional tax attorney, who is emerged in the field with extensive knowledge of all the requirements, can significantly increase the acceptance rate for Offers in Compromise.The Offer in Compromise is an extensive process that can take anywhere from six months to a year. An experienced tax professional can usually determine during the first consultation whether or not a taxpayer might qualify for an Offer in Compromise. Taxpayers who use tax professionals during this process highly increase their success rate and potentially save thousands of dollars in taxes, penalties and interest.

2011-08-17 11:00

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Why and When to Use a Tax Professional

Most people do not require assistance from a tax professional, but those that owe back taxes should not procrastinate. It is important to choose the right professional – an attorney, CPA or Enrolled Agent – for the problem at hand. If it is important to keep information confidential, it is best to consult a tax attorney. In most cases, when working with a tax attorney, information shared is protected by the attorney-client privilege.

IRS (and state tax agencies) can audit a person when they detect a discrepancy in their income tax returns, or unreported income. Whether tax returns were prepared at home or by a tax preparer, it is best to consult a tax professional if problems arise. Tax professionals experienced in tax resolution problems, can help navigate through the collection process, represent clients and negotiate with the tax agencies. Qualified tax resolution professionals are well versed in collection procedures, tax laws, and the fastest way to get results. They are able to use their knowledge and experience to the client’s advantage. Tax professionals can protect the client from missing deadlines and from the bullying and tactics often used by the IRS and state tax agencies. Tax professionals can also handle and manage all communications and deadlines with the IRS and states, relieving much stress for the clients.

For those who owe past due taxes, or have not even filed returns, it is vital to find a tax professional to help deal with these serious problems. Those who rely on self help may not succeed in getting the best possible resolution, and could even make their situation worse.

Dealing with the IRS and state tax agencies can be a lengthy, complicated, and stressful process. Having a tax professional by your side can simplify the process, and result in faster and better settlement results.




2011-08-15 11:00

11:00 am

Who to Ask for Help when Dealing with Tax Problems

Today, in a tough economy many Americans are facing problems with back taxes and other tax issues. Facing the IRS (or state tax agencies) alone can be a long and frustrating process. Laws are constantly changing, there are mountains of endless paperwork, and taxpayers often find themselves running in circles. Having a tax professional by your side can ease your stress, and result in a faster and more favorable resolution of the problem. There are three types of tax professionals permitted to resolve tax problems with the IRS on behalf of taxpayers – tax attorneys, Enrolled Agents and Certified Public Accountants. They can all help with tax problems but each profession has its own specialty and training.   When finding the right professional to turn to with tax problems, it’s very important to consider their experience and qualifications. Many professionals – even tax attorneys and CPA’s, do not have proper training in resolving problems with back-taxes and may not understand the complexities of the IRS and state tax collection systems. It is always best to talk to tax professionals that are currently practicing in the field with a proven record of success.   It is crucial to address problems with the IRS and state tax agencies as soon as they arise. Delaying, or even ignoring them completely, will only result in substantial penalties and interest. When getting help, it’s possible to ask a tax professional for a free consultation. They will explain the problem with possible solutions and expected results. There are different methods in dealing with tax problems, and tax professionals can help find the optimal solution for each situation.

2011-08-11 11:00

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