Tax Relief from the Nation's Leading Tax Resolution Firm: What the IRS Doesn't Want You to Know

TOLL FREE: 1-866-IRS-PROBLEMS www.taxresolution.com ESSENTIAL INFORMATION TO HAVE IF THE IRS IS AFTER YOU June 5, 2010

THE NATION’S LEADING EXPERTS IN TAX NEGOTIATION AND MEDIATION Since 1998 10 things the IRS Doesn’t want you to know! 866-IRS-PROBLEMS OR 866-477-7762 www.taxresolution.com

WHY THE IRS IS UNRELENTING !
The amount of back taxes owed to the U.S. government is sizable and it is expected that the U.S. government will step up its collection efforts. In 2001, the IRS estimated that the amount of taxes still owed to the U.S. government by individual and corporate taxpayers was about $345 billion . The IRS has stated publicly in 2008 that it believes that the $345 billion in back taxes is a “low ball estimate”. A 2006 IRS study on the back taxes owed to the U.S. government showed the approximately $197 billion came from individuals who underreported their taxes on their individual returns, $80 billion came from corporations that underreported their taxes and the remainder, $60 billion, came from persons who did not, (but should have), file any tax returns (non-filers).
Since 2000, the IRS has taken various steps to increase the collection of uncollected taxes, penalties and interest. According to the 2008 report of the National Taxpayer Advocate, the number of levies or seizures (including wage garnishments) issued by the IRS has increased 1,608% since 2000 (from 220,000 levies to 3.76 million levies issued in 2008)
It is anticipated there will be an increase in the number of Americans who are unable to pay the taxes they owe or pay outstanding tax liabilities as a result of the current recession. Recent IRS statistics show that the number of individuals with tax debt problems is at a 10-year high. This year alone (2009) more than 4 million individuals will not be able to pay their 2009 tax liability by 4/15/2010. There are currently more than 26 million individuals with some kind of IRS problem.

WHY THE IRS IS UNRELENTING!
IRS Enforcement- Delinquent Collection Activities – 2009
IRS enforcement activity is at a 10-year high. There were 965,618 notices of Federal Tax Liens filed, as well as 3,478,181 notices of levy served on third parties. There were 581 real property seizures, up from just 74 in 2000, but below pre-7/22/1998 levels. There were some 12,000 real property seizures in 1997.
Enforcement revenue collected was $48.9 billion in 2009 as compared to $33.8 billion in 2000. Enforcement revenue reached an all time high of $59.2 billion in 2007, was nearly constant in 2008, and has dipped somewhat in 2009 due to the IRS pulling revenue officers out of the field and placing them behind phones as customer service representatives to handle taxpayer’s questions in regard to the two tax stimulus programs enacted in 2009 . However, with the additional new hires in Collections and Audit, enforcement revenue is expected to climb well over $60 billion plus in 2010 and beyond.
The IRS had an annual operating budget of more than $11.7 billion in FY 2009, which represented an increase in funding over the previous year. Much of this increase was used in an initiative to hire additional Revenue Agents (Audit), and Revenue Offices (Collection), in support of the Service’s efforts to improve taxpayer compliance and reduce the $345 billion+ tax gap. Areas of particular strategic importance benefitting from these new hires include worker reclassification audits (employee vs. independent contractor status) and offshore banking activities. In FY 2009 the IRS collected over $2.3 trillion and employed 106,000 employees. The average cost of collecting $100 was 50 cents. It was 39 cents in 2000.

DELINQUENT TAX RETURNS
Regardless of what you’ve heard, you have the right to file your original tax return, no matter how late it is.
The act of not filing can lead to more significant problems with the passing of time such as income tax returns prepared by IRS (SFR), Civil Fraud Penalties, Criminal Investigation, fines, restitution and even imprisonment.
The IRS will NOT entertain any type of settlement (payment plan, OIC, etc.) until ALL legally required tax returns are filed by you.

WAGE GARNISHMENTS
Ignoring IRS’s collection notices will result in you wages being attached and your bank account being drained.
When the IRS levies your wages, salary, federal payments (SSI), the levy will not stop until it is released/modified, your tax debt has been fully paid off, or the time expires for legally collecting the tax.
If you cannot afford to pay your taxes in full upon demand, arrangements must be made to settle your debt to release or modify the garnishment

IRS BANK LEVIES
The IRS will issue a bank levy to take your cash in savings and checking accounts, accounts receivable (1099), brokerage stock accounts, cash value of life insurance, etc., to collect back taxes.
When the IRS levies a bank account, the bank is required to remove whatever amount is available in your account the day the bank physically receives the notice (not the date of the notice), up to the amount of the IRS levy, and send it to the IRS in 21 calendar days unless the IRS notifies the bank otherwise.
A major part of the process of resolving your IRS debt is to obtain a release of the levy from the IRS.

IRS PAYMENT PLANS/INSTALLMENT AGREEMENTS
An installment agreement, AKA an IRS payment plan is an arrangement whereby the government allows a taxpayer to pay liabilities over time.
$10,000 under, $10,001 to $25,000, $25,000 to $99,999 and over $100,000
PPIA (partial pay installment plan)
Penalties lowered by 50%
Properly structured, can generally maintain current life style, stepped-up plan

OFFER IN COMPROMISE
An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed. Absent special circumstances, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement .
In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (RCP). The RCP is how the IRS measures the taxpayer’s ability to pay and includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. The RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.

OFFER IN COMPROMISE-CONT’D
1. Doubt as to Collectibility - Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.
Example: A taxpayer owes $20,000 for unpaid tax liabilities and agrees that the tax she owes is correct. The taxpayer’s monthly income does not meet her necessary living expenses. She does not own any real property and does not have the ability to fully pay the liability now or through monthly installment payments.
2. Doubt as to Liability - A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include: (1) the examiner made a mistake interpreting the law, (2) the examiner failed to consider the taxpayer’s evidence or (3) the taxpayer has new evidence.
Example: The taxpayer was vice president of a corporation from 2004-2005. In 2006, the corporation accrued unpaid payroll taxes and the taxpayer was assessed a trust fund recovery penalty as a responsible party of the corporation. The taxpayer was no longer a corporate officer and had resigned from the corporation on 12/31/2005. Since the taxpayer had resigned prior to the payroll taxes accruing and was not contacted prior to the assessment, there is legitimate doubt that the assessed tax liability is correct.
3. Effective Tax Administration - There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.
Example: Mr. & Mrs. Taxpayer have assets sufficient to satisfy the tax liability and provide full time care and assistance to a dependent child, who has a serious long-term illness. It is expected that Mr. and Mrs. Taxpayer will need to use the equity in assets to provide for adequate basic living expenses and medical care for the child. There is no doubt that the tax is correct.

PAYROLL TAX PROBLEMS (941 )
If you owe payroll taxes, it is important to know that the IRS assigns a much higher priority to collecting employment taxes than income taxes. WHY?!
Delinquent payroll taxes will not only generate huge IRS penalties and debt, but may also be considered a federal crime.
It is of the utmost importance to resolve payroll tax debt problems swiftly to protect the future of your company and your personal livlihood.

PENALTY ABATEMENT/REMOVAL
Abatement of IRS penalties results in a partial or complete cancellation of the penalties AND the associated interest that has accrued on these penalties.
The IRS accepts “reasonable cause” scenarios provided by the taxpayer to remove penalties.
In many cases where a taxpayer requests abatement, the IRS removes 100% of the penalty.
The best thing that you can do to ensure as much success as possible is get expert tax help to request that the IRS abate your penalties by providing circumstances surrounding your position.

PENALTY ABATEMENT – CONT’D
What the IRS Considers Reasonable Cause?
Reasonable cause really is any excuse that you can prove to the prove to the IRS is a completely legitimate excuse for not being able to pay your taxes on time or file. This reason typically is something that is beyond the control of the taxpayer. The IRS also requires that the taxpayer would have taken steps to counter the events that cause them to not file, but there really was no way for them to do so. Below are some common examples that the IRS provides for considering individuals for penalty abatement.
Death ( typically a family member or someone very close to the taxpayer)
Unavoidable absence of the taxpayer (e.g: in rehab, in prison, held hostage in another country)
Destruction of the taxpayer's place of records (e.g: fire, flood or any other casualty)
Taxpayer's ability to make deposits or payment had been materially impaired by civil disturbances
Taxpayer's was unable to determine amount of deposit of tax for reasons beyond their control (unable to gather records for some reason)
Incorrect advice from a tax professional (need to be able to show they are considered competent and trusted and that you provided correct information)
Bad advice received directly from the IRS (over the phone, in writing or in person)
An error was made but you are able to show it occurred when acting with "ordinary business care and prudence"
Other (reasons are not limited, needs to be proven the taxpayer "exercised ordinary business care and prudence" and was still not able to pay or file taxes on time

IRS TAX LIENS
A tax lien arises very early when you owe taxes, receive a notice from the IRS demanding payment for those taxes and the debt goes unsatisfied for 10 days or more. This is called the “secret” lien or statutory lien.
When the IRS physically issues their Notice of Federal Tax lien this is giving notice to the world (other creditors) that the IRS in first in line to seize assets or income to satisfy the tax debt. A lien is merely a statement alleging that you owe a tax debt.
A tax lien will devastate your ability to procure credit of any kind. You will be hard pressed to buy anything on credit (car, appliances, house, etc) with a lien filed against you.
A lien will show up on your credit report, and if the IRS locates property you own, the lien attaches to ALL personal and real property you currently have and acquire in the future as long as the lien is still in effect.

EXPIRATION OF STATUTES OF LIMITATIONS
The IRS has 3 years to audit you from the date you file a return. For example, if you a filed your 2007 income tax return on June 1, 2010, the IRS has until June 1, 2013 to audit this return.
The IRS has 10 years from date of assessment (usually the file date) to collect t all taxes, penalties and interest from the taxpayer.
An expert Tax Problem Resolution Specialist can help resolve your back tax problems by just advising and strategizing with you to wait out the 10 years or suggest other options as mentioned in this presentation.

AUDITS
An audit is an examination of the tax return you filed with the IRS. The IRS has 3 years, from the assessment date (generally the filing date) to examine a taxpayers return. If the IRS determines that you had a 25% or more underreporting of income, they can now go back six years. If the IRS determines that there is fraud/evasion involved, they can go back as many years as they like. There is no limitation.
Going to an audit on your own is akin to going to trial in a court of law without an attorney.
The IRS selects returns for audit that have the greatest potential for additional tax to be collected, which can cost you thousands, tens of thousands, even hundreds of thousands of dollars.

OTHER REMEDIES AVAIALBLE
Investment Fraud Representation (using IRC Section 165)
Identity Theft Representation
Offshore Bank Accounts/FBAR
Innocent Spouse Relief
Bankruptcy
Collection & Audit Appeals
USTC Petition
Form 843 – Claim for Refund
FOIA Requests and Interpretation

Advantages of Using Tax Resolution Services, Co
99.7% client satisfaction rate (No. of BBB complaints divided by clients served in the preceding 36 months) – highest in the industry.
The only national firm comprised of Certified Tax Resolution Specialists (designation earned through the American Society of Tax Problem Solvers – www.astps.org )
Our average Offer in Compromise settlement, to those who qualify, is eleven cents ($0.11) on the dollar.
90% of all our Offers in Compromise submitted are accepted. That is about 5 times the national average and the highest in the industry. 90% of all other cases are successfully resolved.
Industry leading ratio (6:1) of highest number of tax professionals (attorney, CPA, EA, & Others) to clients.
Obtaining the most expeditious settlements for the lowest amount allowed under the law on behalf of our clients. Highly ethical.
We are dedicated to providing exceptional quality, client care and consistent tax representation services designed to bring clients back into compliance with the IRS, fight IRS collection and audit findings or appeal collection and audit findings, assure that our clients are treated fairly, making sure their rights are not trampled and, when appropriate, to allow us to negotiate with the IRS (or state) the lowest possible payment options allowed under the law.

More Advantages of Using the Most Credible Tax Problem Resolution in the Country
Owned and Managed by Two “ACTIVE” Licensed CPA’s
Staff of 80 professionals including Tax Attorney’s, CPA’s and E.A.’s and other tax professionals
MR voted top 40 in nation out of 652,000 CPAs
13 years in Business
Highly Rated by the BBB (Highest rating in industry)
Representing Taxpayers in all 50 States
Experts in State tax matters, BOE, FTB, EDD and all other states in the union.

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Tax Relief from the Nation's Leading Tax Resolution Firm: What the IRS Doesn't Want You to Know

by Michael Rozbruch on Jun 07, 2010

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Tax Relief from the Nation’s Leading Tax Resolution Firm: What the IRS Doesn’t Want You to Know — Presentation Transcript