IRS Tax Problem Help - Frequently Asked Questions

Q: What is an "Offer in Compromise"?

• A: When the amount you owe exceeds your ability to realistically pay off the debt within the next five years, the IRS may be willing to settle your debt for a considerably reduced amount. Depending on your situation, this could literally mean "pennies on the dollar." If applied for correctly, this program can save the average taxpayer thousands of dollars off their tax debt and bring an end to the anxiety associated with IRS collections.
   
  This program, however, is very specific.  Any miscalculation and the Offer will likely be rejected and, even worse, the IRS will then have all the details of your financial life at their disposal. Because we know the formulas and guidelines that the IRS uses, we are able to assess the lowest possible amount the IRS will accept before your Offer is ever submitted, eliminating the guesswork and worry. When you call, your tax specialist will walk you through the procedure, answering any questions you may have and providing a free, accurate evaluation of your case.

Q: What is a "Penalty Abatement"? 

• A: If there were circumstances beyond your control that prevented you from paying your tax debt and led to delinquency, we can challenge those penalties and negotiate them down, possibly even eliminate them altogether. There are many valid reasons for which the IRS might forgive this additional debt: divorce, theft, illness, prolonged unemployment, fire, and bad accounting advice are just a few. If applied for correctly, Penalty Abatement could mean a savings of thousands of dollars on your tax debt.  This program involves a great deal of skill to successfully navigate the IRS protocol and bring resolution. Our staff of tax professionals has years of experience and knows the secrets. When you call, your personal tax specialist will cover the intricate details of a penalty abatement, accurately explaining why you would or wouldn't be a candidate for this relief.

Q: What is a "Wage or Bank Levy?"

• A: When the IRS or State has been repeatedly unable to collect back taxes from someone, they begin to seize assets. This process is called a levy and is generally intended as motivation for the taxpayer to come clean. They will garnish wages, seize bank accounts, demand payment from your business’s accounts receivable, take control of property for auction, and demand title on vehicles. Virtually anything of value can be seized to satisfy the outstanding debt. 
  
  Levies are the most crippling and humiliating of all collection tactics. They’re designed to force taxpayers into compliance. Thankfully, our staff has years of experience lifting levies quickly and painlessly. Depending on the type and severity of the levy, it usually takes only 2-10 business days for us to successfully get a levy released.

Q: What is a "Lien Subordination"? 

• A: If there is a tax lien on your home or property, we can petition the IRS to make the lien secondary to another obligation in order to obtain some form of financing.  This solution is especially useful when using equity in a property to pay off a negotiated settlement, and can also be a smart option to take advantage of favorable interest rates and market conditions.

Q: What is a "Payment Plan"? 

• A: When a person has a large tax debt but they can’t afford to pay it off in a single lump sum, then it is often possible to set up a “Payment Plan” that allows the debt to be paid off in monthly installments. The most important factor in such a situation is determining a monthly amount that will be acceptable to the IRS and also reasonable enough that the taxpayer will be able to maintain the payments without defaulting.  The Taxpayer Advocate can help you determine this amount and submit a proper proposal to the IRS so that you can pay off your debt without incurring a hardship due to unreasonably high payments.

Q: What is "Payroll Tax?"

• A: When a person owns a business which employs others, the IRS assesses to that business what it calls 941 taxes (also referred to as employee withholding taxes.) This tax is due quarterly, and if left unpaid, penalties and interest begin to accrue, considerably increasing the size of the debt.  If these taxes are neglected long enough, the business can be closed and all assets seized to satisfy the debt. 
  
  This is widely regarded as the worst form of tax debt as the IRS considers it “stealing” directly from them. Depending on the variables of the case, the taxes themselves can usually be negotiated down to a settlement, and the associated penalties and interest abated.  As these cases vary substantially in intricacy, your tax specialist will provide a detailed assessment of your situation and show you the most affordable solution possible.  

Other Frequently Asked Questions

Q: Who qualifies for a relief program? 

• A: Whether an individual taxpayer or a small business, almost everyone will qualify for some form of relief. The IRS has certain rights and resources available to it, and it happily utilizes all of them in order to collect past due tax debts. Taxpayers have rights as well, but the problem is that they are buried deep within the IRS code and so few people are really aware of them.  Our tax specialists know these rights and understand the relief you are entitled to. From quickly releasing a wage garnishment to writing an air-tight Offer in Compromise proposal, they will provide a fast, accurate solution to your tax issue and will protect your rights as they were originally intended by law.

Q: How long does it take?

• A: Because the specifics of each case are so different, resolution can range from one week to six months. If you have time sensitive issues, make sure and tell your tax specialist as they can tailor a program to specifically suit your needs.

Q: Will the IRS continue collecting once I'm represented?

• A: If you decide to take advantage of our representation services, all collection activity will stop. That means no more harassing phone calls or threatening letters. All correspondence is directed through our office so that you can handle your own affairs while we resolve your tax issue. Once your case is accepted and settled, tax liens, IRS debt and collection action will be out of your life..

Q: Is it "Guaranteed"? 

• A: The IRS uses specific formulas to evaluate relief based on a national cost of living index. When applied for following their guidelines, resolution is quick and efficient. Since The Taxpayer Advocate uses individual analysis of each case relying on the information our clients provide to us and taking into consideration this cost of living index, we are able to accurately assess the best solution available. In the event that your offer is refused, it is our policy to appeal it at no additional cost!  We aim to have your case resolved the first time through, but we will continue to fight for you until you get the relief you deserve.

Q: What options are available?

• A: Many of our clients will qualify for a relief program called an Offer in Compromise. Depending on the circumstances, this option may settle a taxpayer’s debt for literally pennies on the dollar!  If a person does not qualify for the OIC, there are still many other options which could mean huge savings, including: eliminating penalties and interest, removing liens from property, stopping wage garnishments and releasing bank levies. We can also negotiate affordable payment plans to prevent financial hardship.  No matter what your particular difficulty, odds are there’s a program that will help you.