Compromise of Tax and Penalty

Posted on 04/30/2013 by Sandy Suchoff

tax resolution

Lefstein-Suchoff CPA & Associates, LLC has a proven track record of getting our Client’s Offers in Compromise accepted and thereby saving our clients thousands of dollars.

If, on the other hand, we believe that filing an Offer in Compromise will simply waste your time and resources, we will discuss in detail, other resolution strategies to minimize and fully resolve your tax liability. In some instances we may suggest a combination of resolution strategies to resolve the liability in question, so time and energy are not wasted, thereby increasing additional penalties and interest.

Below, we have provided some information regarding the OIC process:

The IRS may compromise the tax liability in most civil or criminal cases before referral to the Department of Justice for prosecution or defense.  The Attorney General or a delegate may compromise any case after the referral.  Interest and penalties, as well as tax, may be compromised.  Offers-in-Compromise are submitted on Form 656 accompanied by a financial statement on Form 433-A for an individual or Form 433-B for business (if economic hardship may also apply to an offer-in-compromise by submitting form 656).  

If the IRS accepts an offer-in-compromise, the payment is allocated among tax and penalties owed; the payments will be applied to tax, penalties, and interest, in that order, beginning with the earliest year.  If the IRS agrees to an amount that does not exceed the combined tax and penalties, and there is no agreement regarding allocation of the payment, no amount will allocated to interest.

 A $150 user fee is required for many offers-in-compromise.  Taxpayers must normally pay the user fee at the time a request to compromise is submitted. No user fee is imposed with respect to offers:  

1.     That are based solely on doubt as to liability, or

2.     That are made by low-income taxpayers (i.e., taxpayers whose total monthly income falls at or below income levels based on the U. S. Department of Health and Human Services poverty guidelines).

Our Bergen County CPA firm has helped many taxpayers file Offers in Compromises, most with successful outcomes.  For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

 

 

 

 

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How to Designate Power of Attorney with the IRS

Posted on 04/29/2013 by Sandy Suchoff

 

power of attorney

You have the right to represent yourself or have someone represent you before the IRS in connection with a federal tax matter.  At Lefstein-Suchoff CPA and Associates we represent many clients who face IRS problems.  Please read below for more information about the process.

A taxpayer generally may choose a person to represent him before the IRS by filing a power of attorney. A power of attorney is a written authorization of an individual to act on behalf of another individual or an entity in tax matters.  Form 2848, Power of Attorney and Declaration of Representative, can be used to grant a power of attorney. 

A taxpayer may change his representative by filing a new power of attorney.  The new power revokes any prior power that the taxpayer granted to someone else concerning the same matter unless the new power contains a clause stating that it does not revoke the prior power.  A taxpayer may also revoke a power of attorney without authorizing a new representative.

A taxpayer who only wants to have someone answer any questions that may arise regarding his income tax return does not have to file a power of attorney.  Instead, the taxpayer can designate anyone to do this, not just a person qualified to practice before the IRS, by checking the appropriate box on his tax return.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

 

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IRS Examination of Return

Posted on 04/26/2013 by Sandy Suchoff

tax exam

Have you been selected for an IRS Examination or Audit? Our blog can provide you with some information that may help in the process.

The IRS examines a taxpayer’s books and records either at the place of business, or where the books and records are maintained (a field examination) or at an IRS office.  The type of examination affects the internal appeals procedure.

The Tax Payer Bill of Rights requires the IRS to provide a written statement detailing the taxpayer’s rights and the IRS’s obligations during the audit, appeals, refund and collection process. The IRS must also explain the audit and collection.

The taxpayer has the right to make an audio recording of any in-person interview conducted by the IRS upon 10 days advance notice.  Moreover, a taxpayer is guaranteed the right to be represented by any individual currently permitted to practice before the IRS, unless the IRS notifies the taxpayer that the representative is responsible for unreasonable delay or hindrance.  Any interview must be suspended when the taxpayer clearly requests the right to consult with a representative.  Further, unless it issues an administrative summons, the IRS cannot require the taxpayer to accompany the representative to the interview.

The IRS may provide administrative relief to taxpayers in hostage situations or in a combat zone, or who are continuously hospitalized as a result of injuries received in a combat zone or who are affected by a federally declared disaster area, by suspending tax examination and collection actions during their detention.  Examination and collection actions that can be precluded or suspended include tax return audits, mailings of notice,  and other actions involving the collection of overdue taxes.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

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IRS Announces Second Quarter Interest Rates

Posted on 04/23/2013 by Sandy Suchoff

 

interest rates

 

 

Interest rates charged by the IRS on underpaid taxes and paid by the IRS on tax over-payments will remain the same for the second quarter of 2013 (April 1 through June 30). Therefore, for the first six months of 2013, the rates will be the following for individuals and corporations:

For individuals:

* 3% charged on underpayments; 3% paid on over-payments.

For corporations:
* 3% charged on underpayments; 2% paid on over-payments.

* 5% charged on large corporate underpayments.

* ½% paid on the portion of a corporate overpayment exceeding $10,000.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

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Federal Tax Lien: What is It?

Posted on 04/18/2013 by Sandy Suchoff

 

tax demand

 

A lien is a legal claim against all your current and future property.  When you don’t pay your first bill for taxes due, a lien is created by law and attaches to your property.  It applies to property (such as your home and car) and to any current and future rights you have to property.

Notice of Federal Tax lien gives public notice to creditors.  The IRS files the Notice of Federal Tax Lien so we can establish the priority of our claim versus the claims of other creditors.  The Notice of Federal Tax Lien is filed with local or state authorities, such as county registers of deeds or the Secretary of State offices.

If a Notice of Federal Tax Lien is filed against you, it’s often reported by consumer credit reporting agencies.  This can have a negative effect on your credit rating and make it difficult for you to receive credit (such as a loan or credit card).  Employers, landlords and others may also use this information and not favorably view the fact that a Notice of Federal Tax Lien has been filed against you.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

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If You Don’t Pay on Time: Understanding Collection Actions

Posted on 04/16/2013 by Sandy Suchoff

 

understanding Irs collection actions

There are several words and phrases particular to the collection process.  Here, we’ve defined some of the most commonly used collection terms:

  • Federal tax lien:  A legal claim against all your current and future property, such as a house or car, and rights to property, such as wages and bank accounts.  The lien automatically comes into existence if you don’t pay your amount due after receiving your first bill.
  • Notice of Federal Tax Lien (NFTL): A public notice to creditors.  It notifies them that there is a federal tax lien that the attached to your current and future property and rights to property.
  • Levy: A legal seizure of property or rights to property to satisfy a tax debt.  When property is seized (levied), it will be sold to help pay your tax debt.  If wages or bank accounts are seized, the money will be applied to your tax debt.
  • Seizure: There is no legal difference between a seizure and a levy.  Both terms are used interchangeably.
  • Notice of Intent to Levy and Notice of Your Right to a Hearing: Generally, before property is seized, the IRS has to send you this notice.  If you don’t pay your overdue taxes, make other arrangements to satisfy the tax debt, or request hearing within 30 days of the date of this notice, we may seize your property.
  • Summons:  A summons legally compels you or a third party to meet with the IRS and provide information, documents, or testimony.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

 

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How Long the IRS Has to Collect Taxes

Posted on 04/11/2013 by Sandy Suchoff

 

1040 picture 3

The IRS can attempt to collect your taxes up to 10 years from the date they were assessed.  However, there are exceptions to this time frame.  For example, by law, the IRS will suspend and extend collection while:

  • The IRS considers your request for and Installment Agreement or Offer in Compromise. If your request is rejected, the IRS will suspend collection for another 30 days, and during any period the Appeals Office is considering your appeal request.
  • You live outside the U.S. continuously for at least 6 months.  Collections is suspended while you’re outside the U.S. and, if at a time of your return the normal collection period would expire before 6 months from the date of your return, the extended period won’t expire before the expiration of the 6 months after your return.
  • The Tax periods the IRS collects on are included in a bankruptcy with an automatic stay.  We’ll suspend collection for the time we can’t collect because of the automatic stay, plus 6 months.
  • You request a Collection Due to Process hearing. Collection will be suspended from the date of your request until a Notice of Determination is issued or the Tax court’s decision is final.
  • The IRS is considering your request for the Innocent Spouse Relief.  Collection will be suspended from the date of your request until 90 days after a notice of Determination is issued, or if you file a timely petition to the Tax Court, until 60 days after the Tax Court’s final decision.  If you appeal the Tax Court’s decision to a U.S. Court of Appeals, the collection period will begin 60 days after the appeal is filed, unless a bond is posed.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

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What the IRS Wants Taxpayers To Know About Identity Theft and Taxes

Posted on 04/09/2013 by Sandy Suchoff

 

Tax-ID-Theft

Protecting taxpayers and their tax refunds from identity theft has become a top priority for the IRS. This year the IRS expanded its efforts to better protect taxpayers and help victims dealing with this difficult issue.

When your personal information is lost or stolen, it can lead to identity theft. Identity thieves sometimes use your personal information to file a tax return to claim a tax refund. Then, when you file your own tax return, the IRS will not accept it and will notify you that a return was already filed using your name and social security number. Often, learning that your return was not accepted or receiving a contact from the IRS about a problem with your tax return is the first time you become aware that you’re a victim of identity theft.

How to avoid becoming an identity theft victim.

  • Guard your personal information. Identity thieves can get your personal information in many ways. This includes stealing your wallet or purse, posing as someone who needs information about you, looking through your trash, or stealing information you provide to an unsecured website or in an unencrypted email.
  • Watch out for IRS impersonators. Be aware that the IRS does not initiate contact with taxpayers by email or social media channels to request personal or financial information or notify people of an audit, refund or investigation. Scammers may also use phone calls, faxes, websites or even in-person contacts. If you’re suspicious that it’s not really the IRS contacting you, don’t respond.
  • Protect information on your computer. Protect it with a strong password.

Your identity may have been stolen if the IRS notifies you that:

  • You filed more than one tax return or someone has already filed using your information;
  • You owe taxes for a year when you were not legally required to file and did not file; or
  • You were paid wages from an employer where you did not work.

You should respond quickly.

The IRS advises us that it takes identity theft-related tax fraud very seriously and realizes that identity theft is a frustrating process for victims. By late 2012, the IRS assigned more than 3,000 employees — more than double from 2011 — to work on identity theft-related issues.

The IRS continues to enhance its screening process to stop fraudulent returns. During 2012, the IRS protected $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

The IRS recently announced that a year-long nationwide focus on tax refund fraud and identity theft has resulted in more than 100 arrests in 32 states and Puerto Rico. In January 2013 alone, the IRS targeted 389 identity theft suspects resulting in 734 enforcement actions.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

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IRS Collections and IRS Installment Agreements

Posted on 04/04/2013 by Sandy Suchoff

 

In 2012, the IRS instituted additional Fresh Start initiatives to help struggling taxpayers pay their taxes. As part of these initiatives, the IRS relaxed streamlined installment agreement rules for individuals by increasing the threshold from $25,000 to $50,000, and the time to pay from 60 months to 72 months. The IRS also increased the qualifying amount for business trust fund express installment agreements from $10,000 to $25,000 to help businesses pay employment taxes and avoid the filing of a federal tax lien.

Many times the IRS is quite intimidating when pursuing collections of past due taxes.  We at Lefstein-Suchoff CPA & Associates have experience dealing with the IRS, know your rights and can speak to the IRS to negotiate an installment agreement that may be more affordable than you can do on your own.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

 

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Offer In Compromise: Review

Posted on 04/02/2013 by Sandy Suchoff


The OIC program allows qualifying taxpayers to settle their tax liability in full for an amount less the full liability owed.  Recently, the IRS has changed some of its computational rules, which may make the program more accessible and attractive.

In particular, the new administrative rules for this program may provide more access to those who did not previously qualify for an OIC due to IRS computations of future income and equity in assets. Potential benefactors of these relaxed rules include:

  • Business clients
  • Clients with state tax liabilities and/or student loan payments
  • Clients who have been rejected for an OIC in the past due to future income calculations or unfavorable dissipated asset determinations

OIC computation is based on the reasonable collection potential of the taxpayer. If the taxpayer can pay before the collection statute of limitation expires, the taxpayer will not qualify for an offer in compromise. Reasonable collection potential is made up of two components:

  • The taxpayer’s monthly disposable future income (computed according to IRS future income rules and allowable living expense limitations) times the number of months remaining in the collection statute of limitations, plus
  • The net equity in assets (including any assets that have been dissipated since the tax liability was incurred and not used to pay necessary living expenses of the taxpayer)

The changes that the IRS recently announced modified the future income multiplier for computing the offer amount, allowed some expenses that were not previously allowed and clarified the rules to provide some relief to business taxpayers.

At Lefstein-Suchoff CPA & Associates, we have an excellent trac record for getting Offer In Compromise engagements accepted.  These discounted tax settlements allow people a second chance, please contact us if you need any help with an Offer In Compromise.

For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us.  If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs.  Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.

 

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