Offers in Compromise

            The IRS is authorized by federal law to accept an offer from you to satisfy your tax debt (including penalties and interest), however, you must be qualified to make an offer and the IRS must determine that acceptance of your offer is in the best interest of the government.  Arthur Weiss has developed software which will determine quickly and accurately whether an offer in compromise is right for you. 

            You should be aware that an offer in compromise is more than a phone call or filling in a single form and mailing it to the IRS.  The offer will consist of dozens of documents and must be well organized.  To give you some idea, we use a 1.5” three ring binder to organize each offer.

            The IRS response to an offer will likely take several months, so be prepared to wait.  Unfortunately penalties and interest will accrue during this time so it is very important that you do not submit an offer unless you have confidence that the IRS will accept it.

            If you are interested in exploring whether an offer in compromise will work for you, please call today to make an appointment.    Together we will evaluate your situation, the character of the tax debt, your financial position and determine whether an offer is right for you.  This appointment takes about 1-2 hours and costs $250.00.  The professional fees for compiling and sending an offer vary depending upon the complexity, but will range from $1,500 to $2,500.

            Cost of making an offer:  The IRS has a filing fee of $150.00 for each offer.  This can be eliminated when the taxpayer falls below certain income guidelines.  In addition to the filing fee you will have to send another check to the IRS for 20% of your lump sum offer.  If your offer will be paid in monthly payments you will need to make the first payment with your offer and keep making the monthly payments throughout the time the IRS is considering your offer.  For example, if you offer $20,000 to be paid at one time, you will have to send a check for $4,000 with the offer.  If you offer $20,000 to be paid over 20 months you will have to send a check for $1,000 with the offer and $1,000 each month while the IRS considers the offer. 

Federal Tax Liens

            If you owe the IRS a past due tax liability, it is possible that a federal tax lien has been filed in your county records affecting your present and future property.  The IRS is required to let you know that it has filed a lien against you.  According to federal law, it must notify you within five days of filing by letter to your last known address.   Despite their notification, most people do not know that a lien has been filed and find out only when they apply for a loan or try to sell their house. 

            If a federal tax lien has been filed there are some steps you can take to remove the lien, however, the IRS will not remove a tax lien unless it is required by law or it is in the best interest of the government to do so. 

            If you receive a notice of filing of a tax lien, (NFTL), you will have an opportunity to dispute the validity of the filing, however, your window of time to dispute the lien is narrow and you must take advantage of it soon.  If you have questions regarding the lien and how it could be removed or reduced please call to set up an appointment with a tax attorney to discuss your tax situation.
Wage Garnishments

            Garnishing your wages and levying your bank accounts is one of the best ways the IRS has to get your attention.  If they are taking your stuff, from either a bank account, your salary or from your living room, it is because you have too long ignored their requests for payment or communication. 

            Prior to taking your stuff, the IRS must comply with provisions of the U.S. Constitution, provisions which protect you from arbitrary government decisions.  Once again, these protections do not last very long and must be exercised within very strict time limits.  However, if you miss these time limits, there are still measures that can be taken to either limit or eliminate a wage garnishment or levy.

            Unlike the spokesmen in television commercials, we do not guarantee that we can eliminate every garnishment or stop every levy.  We believe such empty promises are deceptive.  Instead we work with IRS collections officers to resolve the matter, preferably without resort to involuntary seizure of your property.

Prior Year Tax Returns

            This is a problem for many people – they have not filed returns for two, three or four years and now are scared to do so for fear of “waking up” the IRS.  This is foolish. The IRS already knows you have not filed and does not need to be awakened.  They will eventually discover that you have not filed and will then file a return for you, known as a “Substitute for Return”.  Their substitute return will be the most unfavorable to you and most favorable to them. 

            To solve this situation you should make sure that you take all steps necessary to get past returns filed as soon as possible.  This will reduce the penalties and interest on any taxes owed and will start you on the road to tax recovery.  At the Law Office of Arthur L. Weiss, P.C. we specialize in reconstructing prior year returns, getting them filed and then working with the IRS on a plan that is suitable for your income and debt.  If you have not filed past year returns now is the time to do so. 

Audits and Appeals

            A tax audit is not pleasant, especially considering that ninety percent of audits result in the taxpayer owing money.    Being represented by a tax attorney at the audit will not guarantee that you will not owe money at the end of the process.  The attorney will try to limit the scope of the audit, and will insure that the information presented is well organized and will limit the response of the taxpayer to meet the concerns of the auditor.  An experienced attorney can establish the facts of reasonable cause to eliminate penalties, which can be significant.  At the Law Office of Arthur Weiss, we appear for you (you may be present but it is generally not required) at the audit, indeed, in many cases the audit is performed in our offices.    

Notice of Intent to Levy

            A Notice of Intent to Levy does not mean that the IRS is coming to your house this afternoon to start loading your furniture into the back of a government tractor trailer.   In fact, the IRS may never, ever take anything at all.  The Notice of Intent to Levy is just that – “we intend to levy and may do so at some time in the future.”  Or not. 

            Should you ignore a notice of intent to levy?  No.  But you should not panic either.  These things can be worked out and in most cases, they are.  If you have received this notice it is because you have ignored the four previous notices you received asking you to pay your past due tax debt. 

Penalty Abatement

            If you fail to file your returns on time or if you file them but do not pay any taxes owed, you will be subject to penalties allowed by federal law.   You will also have to pay penalties if you are required to make quarterly estimated payments and do not do so.  This is just a small sample of the dozens of penalties that the IRS can demand from you if you do not comply with the tax law.

            Luckily, most statutes that address penalties also provide for some relief from the penalty when the taxpayer can demonstrate that he or she did his best to comply with the tax law, but for a reasonable cause could not do so.  What constitutes reasonable cause would fill a book.  Tax lawyers and tax court judges grapple with this concept regularly.  What is reasonable cause to one is unreasonable to another.

            We stay current on recent case law and tax court decisions addressing this important issue.  In many cases, a court decision will hold that someone with similar facts to yours was entitled to have their penalties wiped out.   Since penalties constitute such a large component of your tax liability, it is important to know whether it would be possible to eliminate them.  Many tax relief firms give the impression that removing penalties is as simple as a stroke of the pen.  It is not.  We do not guarantee that we can get penalties removed and you should take a second look at anyone who does. 

Employment Tax Liability

            No one can dispute that running a business is tough work.  You are the first one there in the morning and the last to leave.  Customers and suppliers make daily demands for your time, your money, your attention.  Add to that the mountain of paperwork required by the federal, state and municipal taxing authorities and you have a pretty full day. The IRS understands this and is trying to reduce the amount of paperwork you need to file for your employees and for your income reporting.  However, despite their best efforts, the mountain gets bigger every year and the employment taxes you need to pay are a burden, no matter how well your business is doing. 

            Many businesses, though, feel that when times get rough, the employment tax bill is the last one to pay.  The IRS can wait, the suppliers cannot.  After a few quarters or years of this, the IRS will eventually send you a bill, and it will be large.  What is worse, if you are a corporation the IRS can pursue your personal assets if you failed to send to them the amounts that you withheld from your employee’s paychecks.  This is referred to as the Trust Fund Penalty.  Imagine - several years after your unsuccessful business has shut down getting a bill for employment taxes that you should have paid five years ago. 

            We can quickly assess your liability for past due employment taxes, seek penalty abatement when appropriate and work with the IRS on a plan that you can live with. 

Statutes of Limitations

            Good news – the IRS cannot chase you forever for your unpaid taxes but only if you filed an “honest” tax return.  Federal law limits the time they can pursue you to ten years after the date of assessment, unless you have filed for bankruptcy or have submitted an offer in compromise.

            More good news – the IRS has three years from April 15th to examine your return and determine whether you owe more money.  The precise rules involved can get complicated and are beyond the scope of this short treatment of the statutes of limitations.  Once the three years have expired, they cannot assess a deficiency against you.  There are several exceptions to this rule so if you feel they have violated the time limitation seek professional counsel before you assert this defense.