IRS SOLUTION SERVICES

IRS Audit Representation

Getting an IRS audit notice often strikes fear in the heart of the recipient.  Thoughts such as did I save all my receipts for that year? or did my preparer just estimate those numbers without any solid basis run through one's mind?  However, the IRS sometimes accepts oral testimony if it makes sense.

I once represented a self-employed Painter who didn't keep good records.  One of the issues was auto expenses.  I simply explained to the auditor that my client had to buy the paint and transport it to his client's homes in order to paint them.  The auditor listened to our common sense explanation and allowed my client a reasonable amount of auto expenses.  My client was very happy with the results of that audit.

Having worked both as an IRS Auditor and having successfully represented many individuals and businesses as a CPA, I have extensive experience in handling both simple and complex audit issues.  This includes experience in difficult situations such as an income probe of a closely held business and going up the chain of command to get someone who is reasonable and more objective.  Thus, I've been in the trenches and know how to get results with the objective of saving my client's time and money.

Back to top

Un-Filed Tax Returns

Partly due to the recession and partly due to fear, once you fall behind on filing your tax returns it becomes a mental block that individuals and businesses put on the back-burner.  Non-Filers often rationalize that since I can't pay my taxes and I know I owe, I better not file them or the IRS will come down hard on me.  What they fail to realize is that filing is the first step since one is not eligible for a payment plan or the opportunity to submit an Offer in Compromise without first filing all of their returns and becoming current.  Coming out of the closet and filing actually shows "Good Faith" and "Compliance" which is exactly what the IRS is looking for.  Thus, it behooves one to file all of their tax returns whether they can pay what they owe in full at that time or not.  

 I've written an article entitled, "How Unfiled Tax Returns Can Hinder Your Chances of Settlement With The IRS," which has appeared on the California Society of CPA's website and The San Fernando Valley Business Journal.  See the articles written section in this website to read the article. 

Back to top

Back Taxes Owed

There is an extensive analysis to be done when either a business or individual owes back taxes.  There are basically four possibilities to resolve your case when a business or individual owes back taxes.

AN INSTALLMENT AGREEMENT

In order to be eligible for an installment agreement, one must have all his/her tax returns filed and be properly withheld or paying one's quarterly estimates.  The amount the IRS requires as a monthly payment depends upon many factors such as how old the tax year's owed are, your monthly income and expenses, if your married, how many dependents you have and if your living expenses are within the IRS guidelines.  This requires some analysis by a professional who knows what is acceptable to the IRS and what isn't. 

NON-COLLECTIBLE HARDSHIP STATUS

Another possibility if one is unemployed or is facing hard times is requesting to be placed in Non-Collectible hardship status.  This doesn't make your tax liabilities disappear or stop the running of interest and is a temporary classification.  The IRS will check with you periodically and inquire as to whether one's financial situation has improved.  If so, the IRS will want payments to begin.

OFFER IN COMPROMISE(OIC)

Acceptance of an OIC is the acceptance by the IRS in settlement of one's tax liability for less than 100% on the dollar.  You've likely seen TV or radio commercials advertising settlement for pennies on the dollar.  However, the process depends on facts and circumstances, the submitting of an extensive financial package to the IRS, and their acceptance of one's Offer.  The IRS looks at one's assets versus liabilities and one's monthly income versus allowable living expenses.  Basically, the IRS only accepts offers if there is doubt as to liability or doubt as to collectibilty i.e., the settlement is as much or more than they would otherwise expect to collect.

I can help guide you through the maze, analyze your situation, and see if you qualify for an OIC.

VOLUNTARY PAYMENTS

The IRS will always accept voluntary payments from a taxpayer.  However, please note that absent a formal installment agreement, the IRS may continue with enforced collection action such as filing a tax lien, wage garnishment or a bank levy.  Thus, an installment agreement is more prudent since the IRS will not continue with enforced collection actions against you. 

Back to top

Payroll Tax Problems

Quite often business owner's finance their businesses wrongfully by becoming delinquent on their payroll taxes.  This has far reaching implications including the potential imposition of a trust fund penalty personally against the owners/officers of the business who were responsible for the payroll taxes.  These cases are a bit more complicated since payroll taxes are a sensitive area in the eyes of the IRS and state agencies because they view it as double-dipping since the exployee's are claiming withholding on their tax returns and the business owner's are not paying in what was deducted from the employee's wages.

The IRS can literally shut down a business that continues to be delinquent on their payroll taxes so this problem must be dealt with directly and promptly.   

Back to top

IRS Levies

An IRS Levy consists of the government taking assets such as the levy of one's bank account.  For example, you go to sleep one night believing you have $2,755 in the bank knowing that you've written $2,425 of checks against it leaving yourself with a little cushion.  Imagine the shock you would be in for the next morning if the IRS were to execute a bank levy for $2,500 against your account for delinquent past taxes.

This is why it is imperative that you don't ignore and deal with any IRS problems that arise besides avoiding unnecessary interest and penalties.  Thus, it behooves one to be on a payment plan so you know where you stand and not be fearful of the IRS seizing any money that you have in the bank.

Back to top

IRS Liens

An IRS Tax Lien is filed with the county recorder's office and is notice to the world that if one acquires any assets, the IRS is first in line to collect (has first rights).  This appears on one's credit report and can only be removed by either full payment or payment via an Offer In Compromise.  You want to avoid this if at all possible.

Back to top

IRS Seizures
 

Penalty Abatement