At least once a week someone will call our tax professionals and ask us how to avoid or stop or prevent an IRS levy. There are different ways to stop a tax levy, but one very effective way is to file an Offer in Compromise (tax settlement), and I’m going to discuss that.
Remember, an IRS levy is different than a tax lien. An IRS levy is when the IRS actually takes action against you to take your money. Yes, the IRS will seize your wages, your paycheck and/or bank account(s). A tax levy is usually a wage garnishment or a bank levy. The key difference between an IRS garnishment that seizes your wages and a bank levy is that the wage garnishment is continuous, and by that we mean that the IRS files the paperwork one time, sends it to your employer, and then they get a piece of your paycheck every time you get paid until they are paid in full.
A bank levy is just what you would expect; they take the money out of your bank account. This is often referred to as a one-time levy, which is a little misleading because they can file the paperwork over and over, but the fact is that it is not continuous meaning that when the levy hits your bank account, the IRS will seize the money in the bank account on the day the levy hits. It is not continuous, meaning if you put more money in there after the levy hits they do not get that money. You have 21 days from the dat the IRS levy hits your bank to get the money released back to you. Needless to say, you have “zero” time to lose.
THE TAX PROFESSIONALS AT FLAT FEE TAX SERVICE ROUTINELY HAVE AN IRS GARNISHMENT STOPPED AND RELEASED IN ONE DAY.
The best way to avoid an IRS levy is to get compliant and come up with a plan to solve your tax problem once and for all. However, in the real world, of course, a tax levy happens all the time and people come call our tax professionals when they are missing their paycheck.
One way to stop an IRS levy is to submit an Offer in Compromise. An Offer in Compromise is a legitimate offer to settle with the IRS. Conceptually, the idea of an Offer in Compromise is very simple, but in reality, folks need help doing it because there is an awful lot of detail involved and if you don’t do it just right, the Internal Revenue Service will reject or return the Offer in Compromise submission and you will need to re-do it or give up. The IRS hopes that you get discouraged and give up.
Here’s what the IRS Code says:
Suspension of the Tax Levy While the Offer in Compromise is Pending
1. IRC 6331(k) provides that no tax levy may be made:
• During the period that the settlement offer is pending • For an additional 30 days after the offered settlement is rejected, and • During the time any appeal of the rejection is pending.
2. Treasury Regulation 301.7122-1(d)(2) states that an Offer in Compromise becomes pending once it is accepted for processing. This is the date the IRS official signs the Form 656.
A couple of items to sick in your bonnet: Using an Offer in Compromise to stop a tax levy has the potential to be a real home run for you. In the short term, it can and will stop the IRS levy. And in the long term, it can actually settle your entire tax debt for less than what you owe. In other words, it can solve the bigger problem, your unpaid tax bill.
Keep in mind that it does take time to put together an Offer in Compromise. On average, it will take 10 to 12 months to complete. Some folks are impatient but “it is what it is.” When our tax professionals receive a call because of an IRS levy, it’s often an emergency-type situation. People need the tax levy lifted (stopped and released) quickly because they cannot pay their bills without their paycheck.
OUR TAX PROFESSIONALS HAVE SOME “TRICKS UP OUR SLEEVE” THAT WILL STOP THE IRS LEVY PRIOR TO THE OFFER IN COMPROMISE SUBMISSION. THIS WILL PROVIDE THE NECESSARY “STRESS FREE” TIME TO PUT TOGETHER YOUR OFFER IN COMPROMISE.
Our team doesn’t rely on on the Offer in Compromise to stop the tax levy. We have other procedures to accomplish that. Once the Offer in Compromise is submitted, the levy release will stay in place. The tax levy is stopped once the settlement offer is “accepted for processing.” Technically, the settlement offer is “accepted for processing” when the proper IRS official signs Form 656 (the Offer in Compromise form). In our experience, offers are usually processed in about two weeks after they are filed.
OFFER IN COMPROMISE – TAX DEBT HELP – LOS ANGELES – TAX SETTLEMENT
Settling your tax debt is absolutely possible! It doesn’t take an expensive lawyer or years of painful payouts to do it either. In 2012, the IRS instituted the Fresh Start Initiative that made an Offer in Compromise accessible to thousands and thousands of tax debtors who didn’t qualify before. A well documented Offer in Compromise is your opportunity to settle your tax debt once and for all, so you shouldn’t wait another minute!
If you need tax debt help getting out from your tax debt, Flat Fee Tax Relief is here to help you arrange and submit an Offer in Compromise (OIC) that will allow you to pay for your tax debt “for pennies on the dollar!”
FLAT FEE TAX RELIEF HAS A 96% OFFER IN COMPROMISE SUCCESS RATE.
How Can an Offer in Compromise Help You?
If you are struggling with a tax debt, you may be eligible and qualified to apply for an Offer in Compromise (tax settlement), which allows you to settle your debt for less than the full amount, in return for complying with current and future tax terms.
Since the 2012 Fresh Start Initiative, the IRS has significantly increased the allowable expenses, flexibility and relaxed the terms for Offer in Compromise (OIC) applications. Some of the changes include:
• Expanded living expense categories/amounts • Exclusion of income-producing assets for businesses in an OIP calculation • Reduction of Cash-in-Bank considered for an OIP calculation by $1,000 + one month’s allowable living expenses • Exclusion of up to $3,450 in equity per car in a household; additional $200 for older cars • Release of tax liens once the tax debt has been paid
Never before has the IRS made it so easy and affordable to find tax relief in Los Angeles. We don’t know how long this offer will last, so act today!
What is Non-Collectible Status? Currently not Collectible Status
Having a taxpayer declared to be Currently not Collectible can have many positive outcomes. Being placed into Currently not Collectible status is a situation where the taxpayer can demonstrate that paying the IRS constitutes an “economic hardship.” To be placed in non-collectible status the monthly “IRS allowable expenses” must exceed monthly income on Form 433-A or 433-F.
It is important to understand and know what the IRS allows as an expense and how much the IRS allows for each expense. It is also important to understand that this is usually just a temporary solution. By “temporary” we mean that usually Currently not Collectible status runs for 18 to 24 months. The IRS can reassess the individual’s ability to pay at that time.
While in Currently not Collectible status, the time that the IRS has to collect continues to run. What does that mean? As an example, if someone owes a $60,000 tax debt and the IRS has 5 years left to collect the tax debt and furthermore you have been in Currently not Collectible status for 24 months, then only 36 months remains to collect. So, it is possible to run out the clock (Statute of Limitations) on the tax debt. This strategy can be very tricky to maneuver and it would be best to have an experienced tax professional handle this. Be aware, the IRS can take away Currently not Collectible status whenever they wish.
If the IRS has declared a taxpayer to be Currently not Collectible and you owe $10,000 or more, your best bet may be to submit a tax settlement. An Offer in Compromise (also referred to as the ‘Fresh Start Program) are the most advertised and least accepted IRS solution.
It is possible that our tax professionals have you placed into Currently not Collectible status while we put together your Offer in Compromise submission.
Think about it. The IRS has declared that you cannot pay your tax debt. By being Currently not Collectible, the IRS keeps your tax debt alive. An Offer in Compromise settles your tax debt altogether.
I am Dave Rosa. It is my duty and responsibility to prove you with an honest and comprehensive evaluation of your IRS problem. Our conversation will take 20 to 30 minutes to complete. I have been providing evaluations for more than 15 years. You will know if the best way to go is to place you in Currently not Collectible status or not.
The tax professionals and IRS Tax Pros at Flat Fee Tax Service have years of experience in negotiating Offer in Compromise settlements. We provide tax debt help throughout the United States. Working with our tax professionals substantially improves your Offer in Compromise process. Eliminate stress and uncertainty while getting the lowest settlement amount possible by working with Flat Fee Tax Service.
THE CLIENTS OF FLAT FEE TAX SERVICE HAVE A 96% OFFER IN COMPROMISE SUCCESS RATE. ON AVERAGE, OUR CLIENTS SAVE 95% OF THEIR TAX DEBT.
If you are struggling to pay your back taxes, you may qualify for an Offer in Compromise. This program may allow you to settle back taxes or IRS liability at a substantial discount on the basis of doubt of liability, collect-ability or effective tax administration.
Nearly all successful tax settlements through an Offer in Compromise are due to the inability of the taxpayer to pay their tax debt after paying their daily allowable expenses.
Established by the Internal Revenue Service, the Offer in Compromise Program is a formal application to the IRS requesting that it accept less than full payment for what you owe in taxes, interest, and penalties. This out of court agreement negotiates your back taxes and places collection efforts on hold and prohibits the IRS from instituting a tax levy of your assets and wages.
While it is possible to submit an application yourself, many people complete the forms incorrectly, overstate their assets and income, and offer too much. IRS figures show that 75% of offers are returned immediately due to incorrect forms. Of the 25% that are processed, approximately 50% are rejected. This is why it’s important to work with an experienced tax consultant throughout your Offer in Compromise process.
I am Dave Rosa. It is my pleasure and duty to provide you with a comprehensive evaluation of your IRS problems. Our conversation will take 20 to 30 minutes of your time. By the time our consultation ends, you will know if an Offer in Compromise will solve your tax debt problem.
IRS Problem – IRS Tax Settlement – Los Angeles – California
The tax professionals at Flat Fee Tax Service specializes in IRS tax problem resolution for businesses and individuals. If you have received a notice please call us today at 866-747-7435. We understand tax laws, tax rules and are experts at representing taxpayers before the IRS. We can also help with IRS problems.
Flat Fee Tax Service provides valuable IRS tax debt help and is committed to helping you find a fair solution to your tax debt issue. We will work with you to file back taxes, end an IRS garnishment, avoid property seizure, stop a tax levy and tax liens. An IRS Tax Attorney will resolve your IRS problem. When you work with our IRS tax problem specialists we will, during our consultation, analyze your situation and outline your tax relief options for you. We can help solve your IRS problems and end the harassing phone calls.
IRS PROBLEM – IRS TAX DEBT HELP include:
Failure to File – UNFILED TAX RETURNS
(Filing Back Taxes)
Not filing your taxes can happen for many reasons. The most important first step is to get up to date (IRS compliant) and file your back returns. The tax professionals at Flat fee Tax Service will work with the IRS on your behalf to resolve any past tax return issues, file your back taxes and do all we can to minimize your back tax debt and any penalties associated with your failure to file.
The IRS will not allow you to use other tax debt relief options like an Offer in Compromise or Installment Agreement until your back taxes are filed. Once the back tax returns are filed we can work with the IRS to arrange tax settlement methods if you are unable to pay the balance due.
IRS TAX LIENS – IRS LEVY – TAX GARNISHMENT
Never ignore a notice from the IRS, especially a “Notice of Intent to Levy” – it can have very serious consequences. The IRS can place a tax lien on your property, house, car or wages or even go as far as seizing your property in order to collect the back taxes. Contact our tax professionals immediately so we can stop a tax levy and begin to negotiate a tax settlement on your behalf. When you work through the tax professionals at Flat Fee Tax Service, we can show the IRS that you are trying to resolve the issue quickly.
IRS Garnishment – Wage Garnishment
An IRS Garnishment – Wage Garnishment is one of the ways the IRS uses to collect the taxes you owe. If they contact your employer they will demand that your employer send at least part of your wages (maybe all of it) to the IRS to cover your tax debt. If your wages and paycheck have been garnished, contact our tax professionals immediately if you want to save your paycheck in one day. We will contact the IRS to stop te IRS Garnishment and work out an arrangement to settle your tax debt.
THE TAX PROFESSIONALS AT FLAT FEE TAX SERVICE ROUTINELY HAVE AN IRS GARNISHMENT STOPPED AND RELEASED IN ONE DAY.
Not everyone will qualify for an Offer in Compromise (OIC), an IRS settlement agreement, A successful Offer in Compromise can help you settle your tax debt for less than what you owe. We are experienced tax professionals who have experience negotiating Offers in Compromise with the IRS. Contact us today so we can determine if your situation qualifies for this special program.
THE CLIENTS OF FLAT FEE TAX SERVICE HAVE A 96% OFFER IN COMPROMISE SUCCESS RATE.
When you cannot afford to pay your tax debt immediately, tax professionals can help you negotiate lowest possible Installment Agreement with the IRS. This type of payment plan option is good for those who cannot afford a lump sum payment to cover their tax debt but have to many assets to settle.
When your account is placed into a Currently Not Collectible status, that means that your tax debt is removed from the IRS’ active collection status. You may owe less than $10,000 (the minimum for an Offer in Compromise) or you have some assets that may not be accessible to you. The Statute of Limitations will continue to run out on the collectibilty of your tax debt. Contact us today so we can help you determine if you qualify.
I am Dave Rosa. It is my pleasure and duty to provide all who call for their free consultation a complete and thorough evaluation. Our conversation will take 20 to 30 minutes to complete. When we finish, you will know what all of your tax relief options.
Our team of tax professionals not only have a stellar record of success, but we provide our clients with very affordable tax debt help.
Offer in Compromise – Tax Settlement – Settle with the IRS for Less
The IRS has a tax settlement program known as an Offer in Compromise (OIC) which provides financially distressed taxpayers an opportunity to settle their tax debts, including interest and penalties, for a lump sum which is less than the total amount of your tax debt. Some tax debt companies advertise (usually on late night cable tv) this as if it is a brand new or limited time program. In fact an Offer in Compromise has been around since the 1954 version of the Internal Revenue Code. It is true, however, that over the years the IRS has, at least based upon its official guidelines, become more lenient. Nevertheless, except for cases where the taxpayer is truly and irreparably broke, it will require expertise and hard work to convince the IRS that an Offer in Compromise is the appropriate tax settlement solution.
The amount of the Offer in Compromise will vary depending upon your income, assets, liabilities, and future income prospects. Current IRS guidelines allow for the tax settlement to be paid in several installments over a period as long as two years, however, the total payments are higher for a lump sum Offer in Compromise. Many Flat Fee Tax Service clients have paid $100 to $500 to settle with the IRS.
A TAXPAYER DOES NOT NEED TO BE “DESTITUTE” TO QUALIFY TO ACHIEVE A SUCCESSFUL OFFER IN COMPROMISE.
One fact which some tax resolution companies fail to properly explain to new clients it that if the entire amount of the tax, plus accrued interest and penalties can be paid over the remaining life of the collection statute of limitations, the IRS will not consider accepting the Offer in Compromise. This results in a very strange phenomenon. In some situations, the more you owe, the more likely it is that the IRS will accept an Offer in Compromise.
CURRENTLY THE IRS HAS BEEN APPROVING APPROXIMATELY 42% OF THE
Our tax lawyers have found that the negotiation of an Offer in Compromise (OIC) is a lengthy process usually takes 10 to 12 month to complete. While the IRS is processing the Offer in Compromise submission, the IRS must leave you alone. If the IRS fails to reject or accept the Offer in Compromise during a two-year period, the tax settlement will be deemed to be accepted. During the time the OIC is pending, the IRS will not require any payments on old taxes. However, during the time an OIC is pending, you must pay all of your current taxes as they become due, including any quarterly estimated income tax payments and federal payroll tax deposits. If you fail to do so, the IRS will immediately reject your OIC and you will not be entitled to any appeal rights. Furthermore, your deposit, discussed below, will be applied to your taxes and if you wish to make a new Offer in Compromise, you will need to make an additional deposit.
At the time the Offer in Compromise is filed, a deposit must be submitted. The amount of the deposit is 20% of the amount offered for a “lump sum” Offer in Compromise. For a “periodic payment” Offer in Compromise, you must include the first proposed installment with the IRS settlement offer. While a periodic payment OIC is being evaluated by the agency, you must make subsequent proposed installment payments as they become due. If the OIC is rejected, withdrawn, or returned, the IRS keeps any deposits made and applies them to the back taxes you owe. There is also a filing fee for an Offer in Compromise. As of 2016, the filing fee was $186.
If the Offer in Compromise is accepted, you must file and pay all taxes (including any estimated taxes and federal tax deposits) for a period of five years following the acceptance of the OIC. You are going to be required to “be good” for five (5) straight years. If you fail to file your If you breach this or any other term of the OIC, the IRS may immediately proceed against you to collect the entire amount of the original tax liability including interest and penalties, less any payments already received under the terms of the Offer in Compromise, with interest on the unpaid balance accruing from the date of default. An accepted IRS settlement may also be revoked if the IRS determines that there has been a falsification of concealment of assets, or a mutual mistake of a material fact sufficient to cause a contract to be reformed or set aside. In the event your OIC is accepted, a record of the amount of the taxes due and the amount accepted will be available for public inspection for a period of one year at the local IRS office.
The mere act of submitting the Offer in Compromise will extend the time the IRS has to collect the overdue taxes from you for a period of one year, plus the time that the IRS is considering your OIC. This means that if your Offer in Compromise is rejected, the time it took from beginning to to rejection will be added to the Statute of Limitations. Submitting the offer may also delay the earliest time in which you could discharge your taxes bankruptcy. Until the OIC is accepted, interest and penalties continue to accrue on the outstanding balance due. Any refunds owed to you by the Internal Revenue Service for tax years before the end of the calendar year during which the OIC is accepted will be kept by the IRS. Upon acceptance of the OIC, you will give up all rights to dispute the correctness of the tax for any of the years compromised.
THE IRS WANTS TO ACCOMPLISH TWO (2) THINGS: COLLECT MONEY AND CLOSE FILES. AN OFFER IN COMPROMISE ACCOMPLISHES BOTH OF THESE GOALS. THE IRS WILL HAVE COLLECTED “SOMETHING” AND THE FILE IS CLOSED. SO, IF IT CAN BE SHOWN THAT YOU CANNOT PAY YOUR TAX DEBT WITHIN THE STATUTE OF LIMITATIONS, THE IRS HAS AN INCENTIVE TO APPROVE THE TAX SETTLEMENT.
I am Dave Rosa. It is my duty and pleasure to provide you with a comprehensive and free consultation. my conversation with you will take 20 to 30 minutes. You can be assured that at the end of our conversation, you will know if you should do an Offer in Compromise or not.
We have have been doing successful Offer in Compromise submissions for the past twenty years. Our tax professionals will get you through this settlement process successfully.
FLAT FEE TAX SERVICE – 1-866-747-7435
GOOD PEOPLE – DOING GREAT WORK – HONEST TAX RELIEF
An Offer in Compromise is an option that you have with the IRS to settle your back income taxes. If you owe a substantial amount of money in federal taxes ($10,000 or more), you can submit an IRS settlement agreement through the Offer in Compromise program for less than your total outstanding balance and see if the IRS accepts it. Generally considered the “nuclear option” if you have a tax bill you doubt you’ll ever be able to pay off, filing an offer in compromise is a long and daunting process (an Offered settlement can take 12 months) with many confusing and seemingly contradictory requirements.
Even though the Offer in Compromise program was simplified through the Fresh Start Initiative, gathering all the necessary paperwork for an offer in compromise is incredibly time to consume as is staying on top of communications from the IRS regarding your settlement offer. However, if your income tax debt is significant and/or you are in poor shape financially, it may be worth it to take the time to submit an Offer in Compromise.
Offer in Compromise Types
First, you, the financially struggling taxpayer, need to know what type of offer in compromise you should file. There are two chief types of offers: doubt as to collectibility and doubt as to liability. Doubt of collectibility offers are made if it doesn’t look like the IRS will have any chance of collecting all or most of your outstanding balance right now or in the near future because your assets and income are outweighed by your outstanding balance. If you are filing a doubt as to liability offer in compromise, the premise for settling your back taxes is that there have been tax administration errors, and you don’t actually owe as much as the IRS says you do. Your liability isn’t supposed to exist under the current tax law, or ministerial errors were made.
An Offer in Compromise can also be made in the name of effective tax administration, where you are not arguing that tax law was correctly applied (and your balance is collectible to an extent) but that paying your outstanding taxes would cause a significant financial hardship, and the IRS isn’t going to get any money out of you as a result. For example, the value of your home could determine that your tax liability is collectible but losing your home would result in hardship.
THE ONLY TYPE OF OFFER IN COMPROMISE THAT YOU NEED TO BE CONCERNED WITH IS: DOUBT AS TO COLLECTIBILITY
Fees and Low-Income Certification
Generally, there is a $186 nonrefundable application fee when you apply for an offer in compromise. It is totally separate from any tax payments and doesn’t count toward your outstanding balance. The only exception to this is if you are submitting an offer based on doubt as to liability. The fee is also waived if you qualify for the low-income exception. If your monthly income falls at or below 250% of the poverty guidelines set by the Department of Health and Human Services, you can check off the low-income certification section of the offer in compromise form (Form 656).
FLAT FEE TAX SERVICE HAS A 95% IRS SETTLEMENT AGREEMENT SUCCESS RATE.
Eligibility and Taking Care of Unfiled Tax Returns
The IRS Tax Lawyer at Flat Fee Tax Service who is handling your IRS tax problem, will ensure that you’re eligible for an offer in compromise. If you are in open bankruptcy proceedings, you can’t make an offer.
Next, you need to make sure that you’ve filed all outstanding tax returns. The alternative is to wait for the IRS to file substitute returns on your behalf, but this frequently doesn’t have the best outcome. Substitute returns only account for the bare minimum of tax benefits and rely on data already in the system, such as W-2 and 1099’s on file, opposed to what your actual tax situation could look like. Because of this, your total outstanding tax debt could look a lot larger than it really is and make it harder for your offer to be accepted as a result.
HAVE AN EXPERIENCED IRS TAX LAWYER REPRESENT YOU.
Compiling a Personal Financial Statement
You need to prove that your income and assets are insufficient to pay your entire outstanding tax balance. IRS Form 656 has two different financial statement forms, one for individuals and businesses, with an extra section for self-employed taxpayers. This statement is incredibly exhaustive as you must provide information about your and your spouse’s employment, whether your dependents and other people living in your household contribute to the household income, household expenses, vehicles and other assets, and virtually anything else related to your ability to pay down your tax debt. You must include copies of documents such as pay stubs, car notes, student loan payments, and other proof of your expenses, income, assets, and debts to substantiate what you entered on the financial statement. If you are self-employed, you need to provide an extensive breakdown of assets used in your business as well as where your income comes from and the type of expenses you have.
The purpose of collecting so much financial information is so that the IRS can determine if you can pay your balance in a reasonably short time frame and that it doesn’t merit the other resolution options available to you such as going on a payment plan or making your account temporarily uncollectible.
Making the Offer in Compromise and Choosing a Payment Plan
Once you’ve compiled your financial statement, which should support your Offer in Compromise amount and how much you are able to pay, you then make the actual offer. The offer price should be as close to the original tax liability as possible, within reason.
You also will specify if you will make the offer in five payments or less with a lump-sum payment plan or periodic plan (typically monthly). If you are opting for the lump-sum option, your package must include a payment for 20% of the total offer amount. For periodic plans, including the first period’s payment in your package. You then need to stay current on these payment plans while waiting for the IRS to make a decision.
Waiting for the IRS to Respond
Once you submit the settlement offer and your initial payment, you must honor the payment arrangement proposed in your offer even though it will take time for you to get a response. While the IRS is processing your offer, you need to keep making these payments or else your offer will be voided. The only exception to this rule is if you meet the low-income certification guidelines.
Another important factor to consider is that while you wait for the IRS to accept or reject your offer in compromise, penalties and interest will still mount on your outstanding balance. Collection actions will be suspended, but you may still receive a federal tax lien that won’t be released until the terms of the offer have been satisfied. Because of this, if you have any outstanding installment agreements, then you don’t need to make payments on them.
If you received a notice that your offer was accepted, or two years passed from the date that the IRS received your offer, and they still didn’t respond with a decision, then your offer has been deemed acceptable. You still must keep up with the payments that you were making while waiting for a response, except that now your outstanding balance has been reduced to your offer amount. If you have any federal tax refunds for future tax years, they will also be applied to your outstanding balance.
A Returned Offer in Compromise and Rejections
A common mistake people make when submitting an offer in compromise that comes back to them is confusing it for a rejection. The IRS will sometimes send back an offer in compromise package if the information is missing. Other reasons for returning the offer package include failure to enclose the application fee or make the first payment, didn’t file the required tax returns, or didn’t pay current tax liabilities while the offer was being considered. While being in open bankruptcy proceedings generally deems you ineligible, you can still try to submit an offer in compromise, and it will just get returned instead of outright rejected.
This distinction is important because having an offer package returned to you doesn’t give you a right to an appeal. Your submission date completely resets once you’ve gathered all the missing information and/or payments and can resend your offer, starting the entire process all over again. This means that you will need to update your financial statement as well as provide new and current supporting documents.
If your Offer in Compromise is rejected, however, you will receive a formal rejection notice in the mail with detailed instructions on how to elevate your case to the IRS Office of Appeals. Your request for an appeal has to be made within 30 days from the date on this letter, or else you’ll have to start an entirely new offer from scratch. You will usually be given reasons for rejection and have the opportunity to dispute them as well as make a counteroffer for the amount you will pay over time.
Potential Consequences of Submitting an Offer in Compromise
If the IRS accepts your Offer in Compromise, you will never be able to dispute the amount in court or anywhere else. If you wind up having to file for bankruptcy after the offer has been accepted, the amount of federal taxes you owe now can’t be disputed.
If you suspect that you are going to default on a payment plan once they IRS has accepted an offer in compromise, you should contact the IRS immediately so your offer isn’t voided in the event of an emergency such as job loss, domestic violence, or health problems.
FLAT FEE TAX SERVICE – 95% OFFER IN COMPROMISE SUCCESS RATE
The IRS current effort to help struggling taxpayers, the Internal Revenue Service announced in 2011 a series of new steps to help taxpayers can get a fresh start with their overdue income tax liabilities. In fact, the IRS program is called “the Fresh Start Initiative.”
The goal of the IRS is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.
The IRS Fresh Start Initiative centers on the IRS making important changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include:
Significantly increasing the dollar threshold when federal income tax liens are generally issued, resulting in fewer tax liens.
Making it easier for taxpayers to obtain tax lien withdrawals after paying a tax debt.
Withdrawing federal income tax liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
“These steps are in the best interest of both taxpayers and the tax system,” Shulman (former IRS Commissioner) said. “People will have a better chance to stay current on their taxes and keep their financial house in order. We all benefit if that happens.”
This is another in a series of steps to help struggling taxpayers. In 2008, the IRS announced federal income tax lien relief for people trying to refinance or sell a home. In 2009, the IRS added new flexibility for taxpayers facing payment or collection problems.
TAKE ADVANTAGE OF CURRENT IRS POLICY BEFORE IT CHANGES
The IRS will significantly increase the dollar thresholds when federal income tax liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, federal income tax liens are automatically filed at certain dollar levels for people with past-due balances.
The IRS plans to review the results and impact of the federal income tax lien threshold change in about a year.
A federal income tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually, the government is not the only creditor to whom the taxpayer owes money.
A federal income tax lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.
“Raising the lien threshold keeps pace with inflation and makes sense for the tax system,” Shulman said. “These changes mean tens of thousands of people won’t be burdened by liens, and this step will take place without significantly increasing the financial risk to the government.”
Federal Income Tax Lien Withdrawals
The IRS will also modify procedures that will make it easier for taxpayers to obtain lien withdrawals.
Federal Income tax liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government.
In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the federal income tax lien.
Direct Debit Installment Agreements and Federal Income Tax Liens
The 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:
Federal income tax lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
The IRS will withdraw a federal income tax lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
The IRS will also withdraw federal income tax liens on existing Direct Debit Installment agreements upon a taxpayer request.
Federal Income tax liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored. The probationary period is usually three (3) months.
In addition, this lowers user fees and saves the government money by mailing monthly payment notices. Taxpayers can use the Online Payment Agreement application on IRS.gov to set-up with Direct Debit Installment Agreements.
“We are trying to minimize the burden on taxpayers while collecting the proper amount of tax,” Shulman said. “We believe taking away taxpayer burden makes sense when a taxpayer has taken the proactive step of entering a direct debit agreement.”
IRS Installment Agreements and Small Businesses
The IRS will also make streamlined Installment Agreements available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate.
Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.
The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.
Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.
“Small businesses are an important part of the nation’s economy, and the IRS should help them when we can,” Shulman said. “By expanding payment options, we can help small businesses pay their tax bill while freeing up cash flow to keep funding their operations.”
The IRS Settlement – Offer in Compromise
The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.
This streamlined Offer in Compromise (OIC) is being expanded to allow taxpayers with annual incomes up to $100,000 to participate.
The Offer in Compromise (OIC) is subject to acceptance based on a complicated financial formula. An offer in compromise is a settlement agreement between a financially struggling taxpayer and the IRS that settles the taxpayer’s income tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the income tax liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.
The tax professionals at Flat Fee Tax Service have helped countless taxpayers who have had their Social Security and Social Security Disability (SSDI) benefits seized by the IRS. The IRS, through the Federal Payment Levy Program (FPLP), can seize as little as 15% of your benefit check.
A taxpayer may have retired and now draws on their Social Security or may be unable to work due to disability and now receives Social Security Disability (SSDI). The IRS may have previously placed a financially struggling taxpayer in currently not collectible status (CNC) because they did not have enough income to pay an overdue income tax debt. Now that a taxpayer is drawing money from Social Security, do not be surprised to receive a notice from the IRS that the Internal Revenue Service is going to be taking part of the taxpayer’s check each month.
A taxpayer may have thought they were in Currently not Collectible status only to find out that their check is 15% short of the full benefit. Can the IRS really seize social security? Yes, the IRS can and will take at the minimum 15% unless steps are taken to stop, remove and release the IRS levy.
What is Currently not Collectible?
Currently not Collectible status (CNC) simply means that the IRS won’t try to collect taxes at the current time. Should a taxpayer be placed in Currently not Collectible status (CNC), a Federal Tax Lien will be filed. If your credit is important to you, this will be an issue. The income tax debt owed will continue to accrue penalties and interest. The IRS can rescind the taxpayer’s Currently not Collectible anytime that they choose without warning. To be placed in Currently not Collectible status, a taxpayer will have to show the IRS there is not enough income to pay the IRS and meet the taxpayer’s basic necessities. Most often, Currently not Collectible (CNC) will necessitate filling out a Form 433-F (Financial Asset Form). This IRS form requires a taxpayer to list all of their income, assets, and expenses. Use the IRS National Standards for personal/ food expenses and medical expenses without having to prove your actual expenses. A taxpayer will be limited to claiming the national standards on all expenses unless it is proven that a taxpayer has a special circumstance that makes their expenses higher. A taxpayer can find the National Standards on the IRS.gov website.
How does Currently not Collectible status effect how much income tax is owed?
The interest and penalties on your account continue to increase.
Can the IRS change a taxpayer’s status?
Yes, the IRS can change the taxpayer’s status at any time. The IRS will take a look at your status every twelve (12) to twenty-four (24) months or so. The IRS will also look at any change in income.
Can the IRS really take my social security or Social Security Disability (SSDI)?
The IRS can and will take a taxpayer’s social security retirement benefit or social security disability benefits once the IRS computer discovers that a taxpayer is receiving a government check. As a general rule, the IRS will limit what they take to 15% per the Federal Payment Levy Program (FPLP). The IRS should not take Supplemental Security Income (SSI) benefits. These benefits are considered public benefits and are usually assumed to be only enough to provide for basic necessities. Please note, the IRS can take more than 15% should a Revenue Officer issue a Manuel Levy.
Although the IRS is supposed to prevent certain very low-income social security retirement and social security disability recipients from being placed in the federal payment levy program, we all know that is a rule that is often broken. This screening program is not full proof so taxpayers still may have to submit a 433-F to be put into currently not collectible status.
What if a taxpayer does not believe they owe the IRS the past due income taxes?
If a taxpayer has never received a notice of levy before, a request for a Collection Due Process hearing (CDP) is an option. A Collection Due Process (CDP) hearing will allow a financially struggling taxpayer to present evidence that the IRS should not levy on Social Security benefits. A taxpayer could also challenge the income tax debt if the taxpayer has not had a chance to challenge it before. A taxpayer might not have been able to challenge the income tax debt if the IRS did not issue the right notice or mailed the notice to the wrong place.
If a taxpayer received the notice but decided not to respond, the taxpayer cannot challenge the income tax debt in a CDP hearing. A taxpayer might be able to ask for an audit reconsideration. In an audit reconsideration, the taxpayer will tell the IRS why their decision was wrong and provide them with any evidence that will help the IRS change their mind.
If the taxpayer is Currently not Collectible should they do an Offer in Compromise?
Now we are talking about an actual permanent solution to the financially struggling taxpayer’s income tax problem. If the IRS has already declared the taxpayer to be unable to pay the overdue income tax debt, why not take the extra step and retire the income tax debt altogether through an IRS settlement? If a taxpayer has no assets and is relying on Social Security benefits to live on, it would behoove the taxpayer to get rid of the tax debt. Many of the same IRS rules that govern being Currently not Collectible work for the Offer in Compromise program.
During the Offer in Compromise process, the IRS must leave the taxpayer alone. That means no levies. No enforcement actions. If you have no assets and only have your Social Security, your IRS settlement should be very, very small. At the end of the Offer in Compromise process, the taxpayer will have no IRS income tax liens.
YOU WILL RECEIVE THE FRESH START THAT YOU NEED
When we receive a call from a taxpayer who is or was declared to be Currently not Collectible, we explain the settlement program this way: If you were running a marathon, would you stop running when you were 200 yards from the finish line? Of course not. Finish the race. Settle with the IRS for less.
Where can a taxpayer get IRS help if they need it?
You can receive expert IRS tax representation at Flat Fee Tax Service We are “America’s Best & Most Affordable IRS Tax Relief Team.”
FLAT FEE TAX SERVICE:
1. Guided by our Christian Values is one reason why we do not have client complaints.
2. Accredited by the Better Business Bureau. A Plus Rating. Read our BBB testimonials for yourself.
3. Experienced IRS Tax Attorneys work directly with the troubled taxpayer.
Every IRS tax resolution company wants to pretend to be Flat Fee Tax Service. Our IRS tax relief team (tax professionals) invented the “one vert affordable fee” so that financially struggling, distressed taxpayers can afford the IRS tax debt help that they need and deserve.
Years ago, we decided to post our fees on our websites for all of the world to see and view. Of course, our competitors took notice. They didn’t like the fact that Flat Fee Tax Service has been providing low affordable fees that taxpayers can afford. If a taxpayer called both our tax professionals and other tax resolution companies they came away with two findings. One, we provided a complete, understandable consultation and, second, we have the most services at the lowest fee.
Our team of IRS tax professionals will evaluate your situation during our free and confidential consultation. Our IRS tax relief team will tirelessly work to achieve the best possible outcome for your case. We will custom build an IRS tax resolution strategy that will best fit your needs. If you are qualified eligible, our team will prepare, submit and negotiate an Offer in Compromise with the IRS, and work to get the best settlement available to save your hard-earned dollars. We will pretty much know if you qualify for an IRS settlement through the IRS Offer in Compromise program after we have our consultation with you.
For most of our clients, they come to us in need of some serious help because they are experiencing an IRS levy. Our clients need the IRS levy stopped and avoided as well need to get their lives and their businesses back on track. Flat Fee Tax Service, Inc. specializes in stopping and avoiding an IRS Levy. Our team of IRS tax professionals also prepare to miss, unfiled tax returns as well as Penalty Abatement’s, Installment Agreements and placing taxpayers into Currently Uncollectable status.
Flat Fee Tax Service guarantees to stop an IRS levy on your wages in one day. Our IRS tax resolution team will evaluate and put a plan in place and execute on our plan so that you can be free of IRS interference. Our team of IRS tax professionals has seen every conceivable IRS problem. Most of our clients have come close to losing everything from their life savings to their families. We’re here to help you get your life back on the right tax track quickly and efficiently.