Past Due & Un-filed Returns
Delinquent tax returns – Bringing a taxpayer into current compliance is a task that requires skill and a whole different set of IRS knowledge
than preparing current period returns. There are many elections that are available for a currently filed return that are not available for a delinquent return. Knowledge of the long term impacts of various positions on a delinquent return can have major impact on the ultimate
tax owed. What positions will have the returns accepted as filed, and what positions will guarantee examination? What about Fifth Amendment issues? What do you do when you just don’t have any records?
I’ve successfully faced the unique issues facing a taxpayer with past due returns many times.
Substitute for Return
If you have ever encountered a Substitute For Return (SFR), you’re not likely to forget anytime soon. If you don’t file a return, the Service is authorized to file one for you. They prepare the return with all of your income, but no deductions. If you do not respond, tax liens can and will be enforced against you for the overstated taxes!
Unraveling an SFR is a project that requires experience and knowledge. First you have to get the Service to remove the SFR and accept a proper return, which they really don’t want to do.
Penalties and Collection Problems
The “new” IRS uses a penalty handbook, and unless a penalty reduction request is addressed to the specific requirements that allow IRS personnel to waive or reduce a penalty, the request will be denied. I understand the process, and I have been successful at getting results where others have failed, simply because I understand I have to do all the work to allow and IRS examiner to waive a penalty.
The IRS seems to be inventing new, confusing and overlapping collection procedures and equally confusing taxpayer protection procedures. Knowing what payment methods are available to a taxpayer can make a huge difference in how much tax is paid and when. While only an Offer In Compromise can reduce the total tax, there are many ways to pay taxes, including automatic installment plans and negotiated payment plans. Collection issues require communication above all else, and I understand the IRS procedures and policies.
Tax Liens and Levies
The world of tax liens and levies is a whole different place. It is complex and specialized. There are different and very particular Statutes
of Limitations that apply, and they differ depending on filed on unfiled returns, taxes due or refunds to be claimed.
It is a cliché to say it, but every case is different, and requires a unique approach to how the problems can best be solved.
Offers in Compromise (OIC)
The OIC programs have received lots of press, not all of it good, and some of it the equivalent of late night TV ads – “settle IRS debts for pennies on the dollar”. This sleazy type of promotion is unfortunate, because Offers in Compromise are an important and valuable tool to help taxpayers return to tax compliance with the tax laws. An OIC is not a means to escape your tax burden.
The OIC is a great program. It allows a taxpayer to return to current status with the IRS, settle their debts and resolve the collections efforts and anxiety associated with potentially having the IRS seize assets or levy on your bank account or wages.
I can assist the taxpayer in evaluating whether an OIC is the best payment program, and in compiling and submitting a successful Offer In
Compromise. Only 14 % of all Offers are accepted by the Service. An OIC is only beneficial if it is accepted.
The keys to a successful IOC are documentation and knowledge of the methods the Collection Division uses in evaluating against their standards, and fashioning an offer that meets their expectations. The financial information collected will indicate an appropriate offer and greatly reduce the
frustration and anxiety over a long pending resolution.