Victory Tax Solutions answers your tax relief questions.
HOW DO I KNOW IF MY TAX PROBLEM REQUIRES TAX REPRESENTATION?
If you have received a notice from the IRS about back taxes, balances due, unfilled returns, or an upcoming audit, you should strongly consider tax representation. Unless you are an attorney or have a deep understanding of tax law and are familiar with revenue agent tactics and strategies, you should seek qualified assistance.
If you have received a Final Notice of Intent to Levy and Notice of Right to a Hearing from the IRS, you need to call us immediately. Failing to get representation quickly can lead to levies, liens, and invasive collections actions.
I HAVEN'T FILED MY TAX RETURNS AND THE IRS HAS CONTACTED ME. WHAT DO I DO?
For various reasons, you may not have filed your federal income tax return for this year or previous years. You may not have known whether you were required to file. You may not have filed because you owe additional tax that you cannot afford to pay in full. You may not have filed because you expect a refund and just have not taken the time to complete the return.
Regardless of your reason for not filing, you should file your tax return as soon as possible. If you cannot pay all of the tax due on your return, you may be able to arrange payments, an Offer in Compromise, or a Currently Non Collectible, depending on your situation.
Failure to file your return on or before the due date may result in penalties and interest. However, if you filed on time but did not pay in full, you will be subject only to the failure to pay penalty. Interest is charged on taxes not paid by the due date, even if you have an extension of time to file. Interest is also charged on penalties.
You may be surprised to learn that filing your tax returns can be the quickest way out of tax trouble.
- Prepare the tax returns or hire a tax professional. We suggest you hire a tax pro if you need advice on how to handle incomplete tax documentation, or an advocate who will negotiate with the IRS on your behalf.
- You should create a plan for how you will pay off your tax debts. You may need to consider an Offer in Compromise (OIC). You also need to plan on how to protect yourself from an IRS investigation, assessment, levy, or lien. It requires patience, good judgment, the ability to talk courteously with the IRS, and the advice of a competent, experienced tax professional.
- Late tax returns must be filed on paper, and mailed or walked into your local IRS Service Center. They can not be filed electronically.
- Mail your tax returns in separate envelopes, and send them by Certified Mail. You will have proof each return was received by the IRS. Mailing them in separate envelopes will help prevent the IRS from making any clerical errors in processing your returns.
THE IRS HAS A LEVY AND IS ABOUT TO SEIZE MY ASSETS.
A levy is a legal seizure of your property to satisfy tax debt(s). Levies are different from liens. A lien is an instrument used as security for the tax debt, while a levy actually takes or seizes the property to satisfy the tax debt.
If you do not pay your tax debt (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in.
IRS could seize and sell property that you hold (such as your car, boat, or house).
IRS could seize property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, rental income, accounts receivables, the cash value of your life insurance, or commissions).
CAN THE IRS GARNISH MY WAGES WITHOUT GIVING ME PRIOR NOTICE?
Yes. The IRS has the ability to take extreme actions to collect past due back taxes. This authority includes the ability to garnish the wages of taxpayers. Many taxpayers are taken by surprise when they are suddenly garnished after months or years of hearing nothing from the IRS. Also, some taxpayers never receive the Final Notice because the IRS sent it to an old address. Unfortunately, this is completely legal.
CAN THE IRS GARNISH ALL OF MY WAGES?
The IRS can and will garnish or levy wages, bank accounts, and property to pay back taxes owed to them. How much of your wages that can be garnished depends on certain factors like your income, if you have dependents, and the frequency with which you are paid. The IRS generally garnishes between 30 percent to 80 percent of your wages if you owe back taxes that have not been paid. The bottom line is the IRS can and will garnish the majority of your wages. And, it does not stop there. They can levy your bank account and seize additional assets for additional funds to pay your back taxes.
HOW MUCH CAN I SAVE BY USING A TAX ATTORNEY TO HELP RESOLVE MY TAX DEBTS?
There is no simple answer to this question. Just as everyone’s tax debt is unique, so is their resolution. Our tax lawyers, CPA’s and Enrolled Agents will work diligently to help ensure you get the best tax debt solution available for your particular circumstances. Our goal is always to reduce the amount you owe and to achieve that as quickly as possible. Many of our clients are only required to pay pennies on the dollar! To learn more about your potential tax resolution outcomes, we invite you to speak with one of our qualified tax attorneys, or CPA’s today. Let Victory Tax Solutions prove to you why we have become Americas Trusted Tax Team.
I CAN'T PAY WHAT I OWE. WHAT SHOULD I DO?
Many taxpayers find themselves in a position where they can never pay off the IRS. It’s mathematically impossible with all the penalties and interest the IRS continues to add everyday.
What many taxpayers don’t realize is just about everything is negotiable with the IRS – if you know how. The amount you owe may be reduced to an amount you can afford to pay with the help of the Victory Tax Solutions team.
If you qualify (see below), the IRS Program called Offer in Compromise (OIC) is an agreement between the taxpayer and the government that settles a tax liability (including all penalties and interest) for payment of less than the full amount owed. When the IRS accepts your Offer and you pay it, then all federal tax liens are removed. You must remain compliant by filing and paying your tax returns for the next five consecutive years, or the liability will be re-assessed and all penalties and interest will be assessed as well. If you do comply, though, you will be able to solve this problem and get peace of mind again.
The IRS will generally accept an Offer in Compromise when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential. An Offer in Compromise is a legitimate alternative to declaring a case currently not collectible or to a “protracted installment agreement.” The IRS goal of an Offer in Compromise is to achieve collection of what is potentially collectible at the earliest possible time and at the least cost to government.
Preparing and successfully negotiating on Offer in Compromise is very complicated and time consuming. It can take between 6 and 18 months to complete. Once your offer has been submitted to the IRS all collection activities against you stop.
An Offer in Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer’s tax debt. The IRS has the authority to settle, or “compromise,” federal tax liabilities by accepting less than full payment under certain circumstances.
HOW LONG DOES THE IRS HAVE TO COLLECT BACK TAXES FROM ME?
The IRS generally has 10 years to collect back taxes. The Statute of Limitations on Collections is the amount of time that the Internal Revenue Service (IRS) has to collect a tax liability. According to the Internal Revenue Code, Section 6502, the IRS generally must collect the tax owed, “within 10 years after the assessment of the tax.” Depending on your situation, the assessment of tax may be the date you filed the tax return, or the date that the IRS filed the tax return for you. Thus, the Statute of Limitations will begin once the tax has been “assessed” by the IRS.
Although the IRS generally has just 10 years to collect on an outstanding tax liability, there are certain events or transactions that may extend or suspend the statute from expiring. For example, if you file bankruptcy or file an Offer in Compromise, the statute of limitations is generally suspended during the time the bankruptcy or Offer in Compromise is under review. Also, additional assessments of tax owing may extend the amount of time that the IRS is allowed to collect. Generally, an additional assessment occurs after the IRS completes a tax audit. Therefore, if the IRS is going to collect taxes owed, they must do so within the time frame permitted by law.
HOW SOON CAN TAX REPRESENTATION FROM VICTORY TAX SOLUTIONS HELP RESOLVE MY TAX TROUBLES?
Our tax resolution team can go to work for you right away and we’ll work to take care of your tax troubles as efficiently and effectively as possible. It’s always a good idea to seek help from experienced professionals the moment you know you’re in trouble with the IRS. Also, it is almost never too late to get help. Although there will be additional legal obstacles if your finances have already been levied or there is a lien on your property, the experienced Victory tax team is here to help. We’ve been able to reach agreements in some cases in as little as 24 hours. Call now to learn more.
WHAT IS THE COLLECTION INFORMATION STATEMENT(CIS)?
The Collection Information Statement (CIS) is commonly used by the IRS to gather the necessary information to determine the taxpayer’s ability to pay – the CIS is the taxpayer’s financial statement. The forms used are Form 433-A for wage earners and self-employed individuals and Form 433-B for businesses. The IRS has established standards for allowable and necessary monthly living expenses.
WHO IS THE AUTOMATED COLLECTION SERVICE (ACS) OF THE INTERNAL REVENUE SERVICE (IRS)?
The Automated Collection System (ACS) is a division within the IRS that focuses on “balance due” accounts and “non-filer cases.” Specifically, it is designed to work with those taxpayers that owe the IRS money and/or have not filed tax returns. ACS generates wage and bank levies and garnishments and sends out collection notices. Based on our experience, the ACS can be very aggressive with their collection efforts.