Tax Relief Blog

IRS Announces Qualified Disaster Treatment for Haiti

The Internal Revenue Service today issued guidance that designates the earthquake in Haiti in January 2010 as a qualified disaster for federal tax purposes. The guidance allows recipients of qualified disaster relief payments to exclude those payments from income on their tax returns. Also, the guidance allows employer-sponsored private foundations to assist victims in areas affected by the January 2010 earthquake in Haiti without affecting their tax-exempt status.

Charities usually fall into one of two categories — public charities or private foundations. Under the tax law, a private foundation that is employer-sponsored may make qualified disaster relief payments to employees affected by a qualified disaster. These payments generally include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.

Qualified disasters include Presidentially declared disasters and any other event that the Secretary of the Treasury determines to be catastrophic. The IRS has determined that the earthquake in Haiti that occurred this month is an event of catastrophic nature for purposes of the federal tax law.

The IRS will presume that qualified disaster relief payments made by a private foundation to employees and their family members in areas affected by the earthquake in Haiti to be consistent with the foundation’s charitable purposes.

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About Mike Habib, EA

Mike Habib is an IRS licensed Enrolled Agent who concentrates his tax practice on helping individuals and businesses solve their IRS & State tax problems. Mike has over 20 years experience in taxation and financial advisory to individuals, small businesses and fortune 500 companies.

Tax problems do not go away unless you take some action! Get Tax Relief today by calling me at 1-877-78-TAXES You can reach me from 8:00 am to 8:00 pm, 7 days a week.

Also online at http://www.MyIRSTaxRelief.com

Southern California Tax Relief Services

IRS tax Relief, FTB tax Relief, BOE tax Relief, EDD tax relief

At Mike Habib, EA, a SoCal tax firm, we understand that being notified that your tax return is being challenged by the IRS or the FTB can be scary. When you are faced with an audit, or a collection action, by the IRS, or the FTB, you may not know where to turn or what to do. We have the skill set and representation expertise to deal with the IRS and the FTB on your behalf. We understand their rules and are experienced in negotiating the lowest possible tax debt settlement allowed by law.

Tax Relief Services offered:

If you’ve received a notice from the IRS, FTB, BOE or EDD, or if you have any unpaid taxes or unpaid back taxes contact our office immediately at 1-877-788-2937 so we can jump start your case as soon as possible. Ignoring tax problems won’t help, don’t compromise on your representation.

IRS Tax Help, IRS Tax Audit / Examination, Tax Problems & Tax Relief LOS ANGELES COUNTY:

Acton – Agoura Hills – Alhambra – Altadena – Arcadia – Artesia – Avalon – Azusa – Baldwin Park – Bell – Bellflower – Beverly Hills – Burbank – Calabasas – Canoga Park – Canyon Country – Carson – Castaic – Cerritos – Chatsworth – City of Industry -Claremont – Compton – Covina – Culver City – Diamond Bar – Downey – Duarte – El Monte – South, – El Segundo – Encino – Gardena – Glendale – Granada Hills – Hacienda Heights – Harbor City – Hawaiian Gardens – Hawthorne – Hermosa Beach – Huntington Park – Inglewood – LA Los Angeles – La Canada Flintridge – La Crescenta – La Habra Heights – La Mirada – La Puente – La Verne – Lawndale – Long Beach – Lynwood – Malibu – Manhattan Beach – Marina del Rey – Maywood – Mission Hills – Monrovia – Montebello – Monterey Park – Montrose – Newhall – North Hills – North Hollywood – Northridge – Norwalk – Pacific Palisades – Pacoima – Palmdale – Palos Verdes – Panorama City – Paramount – Pasadena – Pearblossom – Pico Rivera – Playa del Rey – Playa Vista – Pomona – Rancho P.V. – Redondo Beach – Reseda – Rosemead – Rowland Heights – San Dimas – San Fernando – San Gabriel – San Marino – San Pedro – Santa Clarita – Santa Fe Springs – Santa Monica – Sherman Oaks – Sierra Madre – Signal Hill – South Gate – South Pasadena – Stevenson Ranch – Studio City – Sun Valley – Sunland – Sylmar – Tarzana – Temple City – Topanga – Torrance – Valencia – Valley Village – Van Nuys – Venice – Walnut – West Covina – West Hills – West Hollywood/LA Los Angeles – Westlake Village – Whittier – Wilmington – Winnetka – Woodland Hills .

IRS Tax Help, IRS Tax Audit / Examination, Tax Problems & Tax Relief ORANGE COUNTY:

Aliso Viejo – Anaheim – Anaheim Hills – Balboa Island – Brea – Buena Park – Capistrano Beach – Corona del Mar – Costa Mesa – Cypress – Dana Point – Foothill Ranch – Fountain Valley – Fullerton – Garden Grove – Huntington Beach – Irvine – La Habra – La Palma – Ladera Ranch – Laguna Beach – Laguna Hills – Laguna Niguel – Laguna Woods – Lake Forest – Los Alamitos – Midway City – Mission Viejo – Newport Beach – Newport Coast – Orange – Placentia – Rancho St. Margarita – San Clemente – San Juan Capistrano – Santa Ana – Seal Beach – Silverado – Stanton – Sunset Beach – Surfside – Trabuco Canyon – Tustin – Villa Park – Westminster – Yorba Linda .

IRS Tax Help, IRS Tax Audit / Examination, Tax Problems & Tax Relief RIVERSIDE COUNTY :

Aguanga – Anza – Banning – Beaumont – Blythe – Cabazon – Calimesa – Canyon Lake – Cathedral City – Coachella – Corona – Desert Center – Desert Hot Springs – Hemet – Homeland – Idyllwild, Indian Wells – Indio – La Quinta – Lake Elsinore – Mecca – Menifee – Mira Loma – Moreno Valley, Mountain Center – Murrieta – Norco – North Palm Springs – Nuevo, Palm Desert – Palm Springs, Perris – Rancho Mirage – Riverside – San Jacinto – Sun City – Temecula – Thermal – Thousand Palms – White Water – Wildomar – Winchester .

IRS Tax Help, IRS Tax Audit / Examination, Tax Problems & Tax Relief SAN BERNARDINO COUNTY :

Adelanto – Angeles Oaks – Apple Valley – Barstow – Big Bear City – Big Bear Lake – Bloomington, Blue Jay – Cedar Glen – Cedarpines Park – Chino – Chino Hills – Colton – Crest Park – Crestline, Daggett – Fawnskin – Fontana – Forest Falls – Grand Terrace – Green Valley Lake – Helendale – Hesperia – Highlands – Hinkley – Joshua Tree – Lake Arrowhead – Landers – Loma Linda – Lucerne Valley – Lytle Creek – Mentone – Montclair – Morongo Valley – Needles – Newberry Springs – Ontario – Oro Grande – Phelan – Pinon Hills – Pioneertown – Rancho Cucamonga – Redlands – Redlands – Rialto – Rim Forest – Running Springs – San Bernardino – Sky Forest – Sugarloaf – Trona – Twentynine Palms – Twin Peaks – Upland, Victorville – Wrightwood – Yermo – Yucaipa – Yucca Valley .

IRS Tax Help, IRS Tax Audit / Examination, Tax Problems & Tax Relief SAN DIEGO COUNTY :

Alpine – Bay Park – Bonita – Bonsall – Borrego Springs – Boulevard – Campo – Carlsbad – Chula Vista – Clairemont – College Grove – Coronado – Del Mar – Descanso – Downtown – Dulzura, East San Diego – El Cajon – Encanto – Encinitas – Escondido – Fallbrook – Grantville – Hillcrest, Imperial Beach – Jacumba – Jamul – Julian – La Jolla – La Mesa – Lakeside – Lemon Grove – Linda Vista – Logan Heights – Mission Village – National City – Normal Heights – North City West, North Park – Ocean Beach – Oceanside – Pacific Beach – Palomar Mtn – Paradise Hills – Pauma Valley – Pine Valley – Point Loma – Potrero – Poway – Ramona – Ranchita – Rancho Bernardo – Rancho Penasquitos – Rancho Santa Fe – San Carlos – San Diego – San Marcos – San Ysidro – Santa Ysabel – Santee – Scripps Ranch – Solana Beach – South San Diego – Spring Valley – Spring Valley – Tierrasanta – University City – Valley Center, Vista – Warner Springs .

IRS Tax Help, IRS Tax Audit / Examination, Tax Problems & Tax Relief VENTURA COUNTY :

Bell Canyon – Camarillo – Fillmore – Moorpark – Newbury Park – Oak Park – Oak View – Ojai Oxnard – Piru – Port Hueneme – Santa Paula – Simi Valley – Somis – Thousand Oaks – Ventura Westlake Village .

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National Taxpayer Advocate Annual Report

National Taxpayer Advocate Nina E. Olson today released her annual report to Congress, warning that increased demands on the IRS have eroded the agency’s ability to meet taxpayer service needs and expressing concern that IRS collection practices are harming financially struggling taxpayers without producing significant revenue gains.

In the preface to the report, Olson noted that she is required by statute to identify taxpayer problems, but she wrote that “the IRS in many respects has had an extremely successful year.” She cited, in particular, the IRS’s success in implementing significant legislative changes designed to stimulate the economy in the midst of the filing season.
Among the key issues and themes identified in this year’s report:

Telephone Service. The report designates the IRS’s declining ability to answer telephone calls as the most serious problem facing taxpayers. Olson notes that the IRS has set a target for FY 2010 of answering only 71 percent of calls from taxpayers seeking to speak with a customer service representative about account questions, down from 83 percent in FY 2007.

“In other words, the IRS is planning to be unable to answer about three of every 10 calls it receives,” Olson said, adding that the IRS expects those who get through will have to wait an average of 12 minutes. The report states that this projected level of service is barely above the level of 69 percent notched in 1998, when Congress passed the landmark IRS Restructuring and Reform Act due in large part to concerns about inadequate taxpayer service. “This level of service is unacceptable,” Olson wrote.

Examination and Collection Issues. The report contains a detailed assessment of IRS examination and collection practices, concluding that many practices have been developed piecemeal and that the IRS lacks an effective overarching strategy to maximize voluntary compliance. The report also concludes that IRS collection practices often harm taxpayers without producing revenue.

In particular, the report cites IRS lien filing policies as the second most serious problem facing taxpayers. The IRS uses automated systems to file liens against taxpayers in a variety of situations, even when the taxpayer possesses minimal or no property and the lien will do little more than damage the taxpayer’s financial viability and access to credit. A study conducted by Olson’s office found no obvious causal relationship between the number of lien notices filed and the amount of overall revenue collected. Over the past decade, the IRS increased its lien filings by nearly 475 percent – from about 168,000 in FY 1999 to nearly 966,000 in FY 2009, yet overall inflation-adjusted collection revenue declined by 7.4 percent during this period.

A second study found that IRS procedures for determining a taxpayer’s ability to pay outstanding tax liabilities may be driving some taxpayers into long-term noncompliance because the IRS fails to consider other debts such as credit card balances, school loans, and actual hospital or medical bills. Other tax systems, including Sweden’s, consider the taxpayer’s overall financial picture.

“Any taxpayer with these debts will tell you that these creditors don’t go away,” Olson said. “Taxpayers are placed in the intolerable position of agreeing to pay the IRS more than they can actually afford (given their other debts) and then defaulting on the IRS payment arrangements when they channel payments to unsecured creditors in order to get some peace. Thus, the IRS itself fosters noncompliance by its failure to take a holistic approach to the taxpayer’s debt situation.”

The National Taxpayer Advocate recommends that Congress require the IRS, before imposing a lien, to make a determination that the benefits of filing the lien outweigh the harm to the taxpayer and will not jeopardize the taxpayer’s ability to comply with future tax obligations.

Data Concerns. The report expresses concern that the IRS does not maintain sufficient reliable data to assess the effectiveness of its collection practices in several respects. First, the IRS theoretically tracks the specific source of all payments received on delinquent accounts, but a TAS study found the majority of payments received either were not coded or were coded as coming from “miscellaneous” sources. The absence of this information makes a thorough assessment of the effectiveness of IRS collection practices impossible. Second, the amount of revenue the IRS collects is difficult to parse because the IRS itself uses multiple measures of what it calls “collection yield” or “enforcement revenue.”

Third, the report states that the quality of IRS’s data reporting is uneven. Olson’s office found that the official IRS Data Book for FY 2008 revised collection revenue totals downward by $32 billion, or 27 percent, for FY 2005, FY 2006, and FY 2007 combined, without explanation. “There is an astonishing lack of transparency as to what is included in these revenue figures and how they are computed,” Olson said. “The failure to highlight and explain revisions of such magnitude erodes confidence in IRS’s data reporting,” she added.

Preparer Regulation. The report praises the IRS for moving ahead with plans to regulate federal income tax preparers. Olson called the plan, which the IRS issued earlier this week, a “significant, far-reaching initiative.”

However, Olson expressed concern that one aspect of the plan may create a significant gap in the new rules that may be widely and increasingly exploited. Under current law, anyone may prepare a tax return for compensation, with no training, licensing, or oversight required. While attorneys, CPAs, and Enrolled Agents must pass difficult examinations to practice, others (known as “unenrolled preparers”) are not required to do so. To protect taxpayers and improve tax compliance, Olson has proposed since 2002 that unenrolled preparers be required to register with the IRS, pass an examination, and complete periodic continuing education courses.

The IRS plan announced this week would impose these requirements on return preparers who sign tax returns but not on preparers who meet with taxpayers and prepare their returns if someone else signs them. To minimize cost and burden, a return preparation business may decide to employ one “signing” preparer who is certified under the new IRS rules and an unlimited number of “nonsigning” preparers. The nonsigning preparers would not have to register, pass an exam, or take continuing education courses, and the signing preparer would be unable to thoroughly review every return he signs (in part because the interview with the taxpayer is central to accurate preparation of the return).

Olson noted that the burden of the new rules themselves may cause more return preparation businesses to employ nonsigning preparers. “We are concerned that excluding nonsigning preparers could create an exception that swallows the rule,” the report states. The report notes that not all nonsigning preparers need to be covered to protect taxpayers and recommends that the IRS consider extending the new rules to apply to all unenrolled nonsigning preparers.

Rethinking the “Pay Refunds First, Verify Eligibility Later” Approach to Tax Returns Processing. Under current procedures, the IRS processes income tax returns before it processes most information returns, including Forms W-2, Wage and Tax Statement, and Forms 1099, which report interest, dividends, and other payments. “This sequence makes little logical sense,” the report states. From a taxpayer perspective, the sequence leads to millions of cases where taxpayers inadvertently make overclaims that the IRS does not identify until months later, exposing the taxpayer not only to a tax liability but to penalties and interest charges as well. From the government’s perspective, this sequence creates opportunities for fraud and requires the IRS to devote resources to recovering refunds that should not have been paid and that it often cannot recover. This sequence also prevents the IRS from making pre-populated returns available as an option to taxpayers.

The report recommends that Congress direct the Treasury Department to prepare a report identifying the administrative and legislative steps required to allow the IRS to receive and process information reporting documents before it processes tax returns. It recommends setting a goal of making these changes within six years.

Running Social Programs through the Tax System. Volume 2 of the report contains an analysis of social benefits provided through the tax code, with an emphasis on refundable credits. Refundable credits have been associated with high overclaim rates. However, the report states that where noncompliance involving refundable credits exists, the refundable nature of the credit is not the primary driver of the noncompliance.

The report notes that some provisions of the tax code not involving refundable credits also are associated with high overclaim rates and concludes that the manner in which a provision is designed is a larger determinant of compliance rates than refundability. In particular, the IRS can more precisely administer tax benefits when the eligibility criteria reflect data that the IRS can verify through automation. The report proposes certain design elements to assist policymakers in enacting programs that maximize both participation and compliance.

The second volume of this year’s report also presents in-depth studies on the IRS’s use of notices of federal tax liens, the subsequent compliance behavior of delinquent taxpayers, and tax administration aspects of a consumption tax such as a value-added tax as well as an assessment of ombudsman offices across the Federal government.

Assessing tax administration today, Olson concludes that the IRS “is subject to three diverging forces – increased responsibility for non-core tax administration duties, increasing demand for taxpayer service (including telephone assistance) and declining resources to meet that demand, and collection policies that mask a laissez faire attitude toward taxpayer harm under the guise of ‘efficiency.'”
“The taxpayer is wedged in the middle of these forces, being pulled in all directions, but never the right one,” Olson writes.

Federal law requires the National Taxpayer Advocate to submit an Annual Report to Congress each year identifying at least 20 of the most serious problems encountered by taxpayers and to make administrative and legislative recommendations to mitigate those problems. Overall, this year’s report identifies 21 problems, provides updates on two previously identified issues, makes dozens of recommendations for administrative change, proposes 11 recommendations for legislative change, and analyzes the 10 tax issues most frequently litigated in the federal courts during the past fiscal year.

About the Taxpayer Advocate Service
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels or who believe that an IRS system or procedure is not working as it should.

Get IRS tax help and tax relief from back taxes by calling the tax firm of Mike Habib, EA at 1-877-788-2937 or online at myirstaxrelief.com

Tax Relief – Short List

Tax relief is a term that refers to providing tax problem resolution and relief from the fear and burden of the mounting tax liability. Tax relief is provided on a federal and state level.

Want tax relief?

There are several reasons on why you may need tax relief. The main reason is usually you’re unable to pay all your back taxes owed with interest and penalties.

Here is what you need to do:

  1. You need to team up with a tax relief expert, someone who is licensed to represent you before the IRS and or the State you owe taxes to,
  2. The tax relief expert or specialist must specialize in representation and be licensed by the federal government or the State that you reside in,
  3. Never hire a vague company that keeps pushing “pennies on the dollar” tax relief, they are usually unlicensed and have terrible BBB, better business bureau ratings, and a lot of complaints for non performance, most of these vague tax relief companies do not list a physical address, they do not include the bios of the leadership behind them, they advertise a lot on TV and the internet, and they just want your name, telephone number, email and your credit card number,
  4. DO NOT consult your tax case with a sales representative, they’re given an alias name, they’re given odd titles like Tax Consultant, etc. Check the bios of these tax relief companies and see who is behind the firm, many of these companies are not tax firms nor are they law firms.

Tax Relief Options

There are currently a few tax relief programs available to you, but you need to comply with the financial and other requirements. First, you must be compliant with all your tax return filings, if you have unfiled returns, they need to get filed right away, secondly you need to understand the scope of your tax liability, and lastly the strategy to get tax relief based on your financial ability or inability to pay the taxes owed.

Various tax settlement options

You have options, and rights to resolve your tax mess and getting tax relief, here are the 2 main tax settlements:

  1. Offer in compromise: this is the best option if you do not have any assets, very limited income, and large amount of back taxes. With an offer in compromise, you can settle your tax debt for less than you owe based on your financial condition,
  2. Installment agreement: this is a payment plan, also based on your ability to pay, it could be as little as $25 per month and usually it’s a partial payment plan, thus paying a partial amount of your taxes, interest and penalties based on your financial ability or inability to pay.

Start here

Get tax relief with the help of Mike Habib, an Enrolled Agent who is an expert in helping businesses and individuals solve their tax problems with the IRS. Let him represent you before the IRS so he can negotiate the best option for your owed back taxes. Contact him by calling 1-877-788-2937 where you can also benefit from a free consultation. Otherwise, you can fill out a form on this website with your contact information and he will get back at you ASAP. Learn more about Mike Habib and his services by exploring this site.

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Tax Problems – Tax Problem Resolution

When tax problems occur, it can be difficult to hide from the IRS. Being familiar with these tax problems allow you to recognize them as soon as they occur. Whether you are an individual or a business entity, make sure that you are aware of these common problems regarding taxes.

Payroll taxes – 941 tax

One of the tax problems that you can encounter has something to do with the payroll system in your place of employment or company. They can vary with different underlying issues that may have caused them. Still, remember that the IRS ensures that they can collect your past due payroll tax or other taxes that you owe. Therefore, make sure that yours is filed and that you have the correct tax information.

IRS tax liens

The tax lien demonstrates that you have existing back taxes with the IRS. This is one of the tax problems that can involve your personal property like real estate. When that happens, you cannot sell or transfer its ownership if you are unable to pay all your back taxes so the tax lien can be removed. However, it can be difficult to do so because once you get a tax lien on your property, it is difficult to apply for a loan that can help you pay off your taxes.

The IRS levy

Next in the list of tax problems is the IRS levy, a drastic attempt by the IRS to get you to pay your tax debt. This is particularly difficult to handle because levies hinder you from getting the money that you usually get from various sources. Basically, having an IRS levy gives the IRS the authority to take your money from your savings or checking account if you have one. Still, the levy is only effective for a certain day and it is the bank’s job to withdraw the money required by the IRS and send it to them. The IRS levy is also bothersome because it can take money from your hard earned wages, which puts your entire paycheck at risk for going to the IRS as a wage garnishment.

More tax problems

IRS seizures, unfiled tax returns, IRS tax audits, and wage garnishments are the other tax problems that you can encounter. Together with other tax-related issues, they can place great burden on your finances and your life in general. Therefore, it is important for you to keep all your tax-related documents just in case you are audited by the IRS. That way, you can give them all the information they need and prevent them from taking any action against you. Still, if you find yourself in a tight and risky situation with the IRS, you should seek professional help.

What you can do

There are things that you can do to spare yourself from being contacted by the IRS, facing legal action, or having to deal with those tax problems. For starters, consult with an EA -Enrolled Agent, an EA is a person who is authorized by the US Department of Treasury to provide help to individuals and businesses in dealing with their tax-related issues.

Start here – call Mike Habib, EA at 1-877-788-2937

Let Mike Habib deal with your tax problems. As an Enrolled Agent, you can count on him to help you solve your tax-related problems. His 20 years of experience in financial advisory and taxation allows him to work well with you and find a possible solution for your problems. All you have to do is call us here at 1-877-78-TAXES for a free consultation. You can also learn more about Mike Habib’s services by exploring this website myirstaxrelief.com.

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Tax problem resolution, IRS levy release, stopping wage garnishments in all of the following states, counties, and metro cities, Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Guam Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington D.C.. West Virginia Wisconsin Wyoming. AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY New York, Los Angeles, Orange County, Riverside, San Bernardino, San Francisco, Ventura, Lancaster, Palmdale, Santa Barbara, Chicago, Washington D. C., Silicon Valley, Philadelphia, Boston, Detroit, Dallas, Houston, Atlanta, Miami, Seattle, Phoenix, Minneapolis, Cleveland, San Diego, St Louis, Denver, San Juan, Tampa, Pittsburgh, Portland, Cincinnati, Sacramento, Kansas City, Milwaukee, Orlando, Indianapolis, San Antonio, Norfolk & VB, Las Vegas, Columbus, Charlotte, New Orleans, Salt Lake City, Greensboro, Austin, Nashville, Providence, Raleigh, Hartford, Buffalo, Memphis, West Palm Beach, Jacksonville, Rochester, Grand Rapids, Reno, Oklahoma City, Louisville, Richmond, Greenville, Dayton, Fresno, Birmingham, Honolulu, Albany, Tucson, Tulsa, Tempe, Syracuse, Omaha, Albuquerque, Knoxville, El Paso, Bakersfield, Allentown, Harrisburg, Scranton, Toledo, Baton Rouge, Youngstown, Springfield, Sarasota, Little Rock, Orlando, McAllen, Stockton, Charleston, Wichita, Mobile, Columbia, Colorado Springs, Fort Wayne, Daytona Beach, Lakeland, Johnson City, Lexington, Augusta, Melbourne, Lancaster, Chattanooga, Des Moines, Kalamazoo, Lansing, Modesto, Fort Myers, Jackson, Boise, Billings, Madison, Spokane, Montgomery, and Pensacola

IRS Tax Lien – How to release federal tax liens and levies

Taxpayers have the right to appeal the IRS’ filing of a notice of a tax lien in the public record and petition for release. If filed in error, the IRS must release the lien and state that the lien was erroneous. The request for tax relief must be based on one of the following grounds: (1) the tax liability had been satisfied before the lien was filed; (2) the assessing of the tax liability violated either the notice of deficiency procedures or the Bankruptcy Code; or (3) the limitations period for collecting the liability had expired prior to the filing of the lien.

The IRS may withdraw a tax lien before payment in full if:

(1) the filing of the lien notice was premature or not in accord with administrative procedures;
(2) the taxpayer has entered into an agreement to satisfy the tax liability;
(3) withdrawal of the lien notice would facilitate the collection of the tax liability; or
(4) the withdrawal of the lien notice would be in the best interest of the taxpayer and the government.

The withdrawal of a notice of tax lien does not affect the underlying tax lien; rather, the withdrawal simply relinquishes any lien priority the IRS had obtained when the tax lien notice was filed.

The IRS is required to release a levy if:

(1) the underlying tax liability is satisfied or becomes unenforceable due to lapse of time;
(2) the IRS determines that the release of the tax levy will facilitate the collection of the tax debt;
(3) a satisfactory installment payment agreement has been executed by the taxpayer with respect to the tax liability;
(4) the IRS agrees that the levy is creating a financial hardship; or
(5) the fair market value of the property exceeds the tax liability, and the partial release of the IRS levy would not hinder the collection of tax.

In addition, a taxpayer may request that the IRS sell the levied property.

The IRS has been given authority to return property that has been levied upon if:

(1) the tax levy was premature or not in accordance with the IRS administrative procedure;
(2) the taxpayer has entered into an installment agreement to satisfy the tax liability, unless the agreement provides otherwise;
(3) the return of the property will facilitate collection of the tax liability; or
(4) with the consent of the taxpayer, the return of the property would be in the best interests of the taxpayer and the government.

Property is returned in the same manner as if the property had been wrongfully levied upon, except that the taxpayer is not entitled to interest.

A taxpayer may bring a suit in federal district court if an IRS employee knowingly or negligently fails to release a tax lien on the taxpayer’s property after receiving written notice from the taxpayer of the IRS’s failure to release the lien. The taxpayer may recover actual economic damages plus the costs of the action. Injuries such as inconvenience, emotional distress, and loss of reputation are not compensable damages unless they result in actual economic harm. Costs of the action that may be recovered are limited generally to certain court costs and do not include administrative costs or attorney’s fees, although attorney’s fees may be recoverable under Code Sec. 7430. A two-year statute of limitations, measured from the date on which the cause of action accrued, applies.

Third-Party Owners. A third-party owner of property against which a federal tax lien has been filed may obtain a certificate of discharge with respect to the lien on such property. The certificate is issued if (1) the third-party owner deposits with the IRS an amount of money equal to the value of the government’s interest in the property as determined by the IRS or (2) the third-party owner posts a bond covering the government’s interest in the property in a form acceptable by the IRS.

A third-party owner who is a co-owner of property with the taxpayer against whom the underlying tax was assessed may no longer be automatically barred from obtaining a certificate of discharge with respect to a lien on the property. Applicable to requests to obtain a discharge after January 31, 2008, third-party owners may request the discharge of a tax lien on property that they own with the person whose tax liability gave rise to the tax lien.

If the IRS determines that (1) the liability to which the tax lien relates can be satisfied from other sources or (2) the value of the government’s interest in the property is less than the IRS’s prior determination of the government’s interest in the property, then the IRS will refund (with interest) the amount deposited and release the bond applicable to such property. Within 120 days after a certificate of discharge is issued, the third-party owner may file a civil action against the United States in a federal district court for a determination of whether the government’s interest in the property (if any) has less value than that determined by the IRS.

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Stop wage garnishment, IRS Tax Levy, release IRS levies and release federal tax liens in the following states, counties, and metro cities, Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Guam Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington D.C.. West Virginia Wisconsin Wyoming. AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY New York, Los Angeles, Orange County, Riverside, San Bernardino, San Francisco, Ventura, Lancaster, Palmdale, Santa Barbara, Chicago, Washington D. C., Silicon Valley, Philadelphia, Boston, Detroit, Dallas, Houston, Atlanta, Miami, Seattle, Phoenix, Minneapolis, Cleveland, San Diego, St Louis, Denver, San Juan, Tampa, Pittsburgh, Portland, Cincinnati, Sacramento, Kansas City, Milwaukee, Orlando, Indianapolis, San Antonio, Norfolk & VB, Las Vegas, Columbus, Charlotte, New Orleans, Salt Lake City, Greensboro, Austin, Nashville, Providence, Raleigh, Hartford, Buffalo, Memphis, West Palm Beach, Jacksonville, Rochester, Grand Rapids, Reno, Oklahoma City, Louisville, Richmond, Greenville, Dayton, Fresno, Birmingham, Honolulu, Albany, Tucson, Tulsa, Tempe, Syracuse, Omaha, Albuquerque, Knoxville, El Paso, Bakersfield, Allentown, Harrisburg, Scranton, Toledo, Baton Rouge, Youngstown, Springfield, Sarasota, Little Rock, Orlando, McAllen, Stockton, Charleston, Wichita, Mobile, Columbia, Colorado Springs, Fort Wayne, Daytona Beach, Lakeland, Johnson City, Lexington, Augusta, Melbourne, Lancaster, Chattanooga, Des Moines, Kalamazoo, Lansing, Modesto, Fort Myers, Jackson, Boise, Billings, Madison, Spokane, Montgomery, and Pensacola

Table 16. Delinquent Collection Activities, Fiscal Years 2005-2008

[Money amounts are in thousands of dollars.]

Activity

2005

2006

2007

2008

(1)

(2)

(3)

(4)

Returns filed with additional tax due:

Total amount collected [1]

[r] 27,615,348

[r] 29,172,915

[r] 31,952,399

28,465,648

Taxpayer delinquent accounts (thousands):

Number in beginning inventory

5,981

6,478

7,074

8,240

Number of new accounts

5,870

6,100

7,146

7,099

Number of accounts closed

5,373

5,504

5,980

6,107

Ending inventory:

Number

6,478

7,074

8,240

9,232

Balance of assessed tax, penalties, and interest [2]

57,594,901

69,555,590

83,488,988

94,357,717

Returns not filed timely:

Delinquent return activity:

Net amount assessed [3]

22,765,462

23,305,535

30,287,802

24,888,918

Amount collected with delinquent returns

3,584,255

3,905,764

3,968,163

3,773,528

Taxpayer delinquency investigations (thousands) [4]:

Number in beginning inventory

3,022

3,658

3,874

3,732

Number of new investigations

2,558

2,373

2,587

1,972

Number of investigations closed

1,922

2,157

2,729

2,271

Number in ending inventory

3,658

3,874

3,732

3,433

Offers in compromise (thousands) [5]:

Number of offers received

74

59

46

44

Number of offers accepted

19

15

12

11

Amount of offers accepted

325,640

283,746

228,975

200,103

Enforcement activity:

Number of notices of Federal tax liens filed

522,887

629,813

683,659

768,168

Number of notices of levy served on third parties

2,743,577

3,742,276

3,757,190

2,631,038

Number of seizures

512

590

676

610

[r]–Revised.

[1] Includes previously unpaid taxes on returns filed plus assessed and accrued penalties and interest. For Fiscal Year 2008, includes a total of $37,254,116 (dollars) collected by private debt collection agencies.

[2] Includes assessed penalties and interest but excludes any accrued penalties and interest. Assessed penalties and interestusually determined simultaneously with the unpaid balance of taxare computed on the unpaid balance of tax from the due date of the return to the date of assessment. Penalties and interest continue to accrue (accrued penalties and interest) after the date of assessment until the taxpayer’s balance is paid in full.

[3] Net assessment of tax, penalty, and interest amounts (less prepaid credits, withholding, and estimated tax payments) on delinquent tax returns secured by Collection activity.

[4] A delinquency investigation is opened when a taxpayer does not respond to an IRS notice of a delinquent return.

[5] An offer in compromise (OIC) is a binding agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. An OIC will not be accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement.

NOTES: Detail may not add to totals because of rounding. All amounts are in current dollars.

SOURCE: Small Business/Self-Employed, Collection Planning and Analysis, Collection National Reports SE:S:C:PA:CNR

IRS has filed $79,000 lien against Gov. Schwarzenegger, records show

SOURCE: Los Angeles Times

A spokesman for the governor says the matter is related to a paperwork discrepancy and has nothing to do with the payment of taxes.

By Michael Rothfeld
Reporting from Sacramento
The Internal Revenue Service has filed a federal tax lien against Gov. Arnold Schwarzenegger for nearly $80,000, public records show.

The lien was filed May 11 at the Los Angeles County recorder’s office for $79,064, according to a record in an electronic database that includes lien filings. The record lists the debtor as Arnold Schwarzenegger and the address as the governor’s home address in Brentwood.

The matter apparently is related to “a minor paperwork tracking discrepancy,” Schwarzenegger spokesman Aaron McLear said in a statement released Friday afternoon. He said Schwarzenegger is resubmitting information to the IRS and expects the lien to be expunged without penalty.

The lien was first reported Friday by TMZ.com, which posted a copy of a lien document that says it is from the county recorder’s office. That document shows that Schwarzenegger owes $39,047.20 from 2004 and $40,016.80 from 2005.

The document also lists a section of the IRS code that suggests the debt may be penalties for a failure to report certain business transactions.

McLear said the matter had not been brought to Schwarzenegger’s attention until Friday. “The issue is completely unrelated to the payment of taxes, which the governor has paid in full and on time,” the spokesman said.

IRS spokesman Victor Omelczenko said he could not discuss the agency’s dealings with individual taxpayers.

michael.rothfeld@latimes.com

IRS Issues Final Regulations Governing Installment Agreements

The IRS has issued final regulations relating to the payment of tax liabilities through installment agreements. The regulations reflect changes to the law made by the Taxpayer Bill of Rights II (P.L. 104-168), the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206) and the American Jobs Creation Act of 2004 (P.L. 108-357). The final regulations generally adopt proposed regulations issued in March 2007 (NPRM REG-100841-97), with revisions to two provisions made in response to comments received by the IRS. The regulations are effective November 25, 2009.

The final regulations adopt without change procedures set forth in the proposed regulations regarding submission and consideration by the IRS of proposed installment agreements, and acceptance, form and terms of installment agreements. The regulations provide that a proposed installment agreement must be submitted according to the procedures prescribed by the IRS, and becomes pending when it is accepted for processing. An installment agreement request is not accepted until the IRS notifies the taxpayer or the taxpayer’s representative of the acceptance.

The final regulations clarify that partial payment agreements do not reduce the amount of taxes, interest or penalties owed. They also clarify that the IRS may enter into agreements that end before the expiration of the period of limitations on collection. Thus, a partial payment installment agreement ending before the expiration of the collection period of limitations would allow the IRS to collect the balance of the tax liability after the agreement expired. However, the preamble to the final regulations notes that the IRS does not currently enter into partial payment installment agreements that expire before the end of the collection statute and has no plans to do so routinely in the future. The final regulations also require the IRS to review partial payment agreements every two years to determine whether the financial condition of the taxpayer has significantly changed. Further, the regulations provide that, while an installment agreement is in effect, the IRS may require the taxpayer to provide updated financial information at any time.

In addition, the final regulations provide that the IRS may not notify a taxpayer of the rejection of an installment agreement until an independent review of the proposed rejection is completed. The final regulations also allow taxpayers to appeal a rejection of an installment agreement to the IRS Office of Appeals within 30 days of being notified of the rejection.

The IRS may modify or terminate an installment agreement if it determines that the taxpayer’s financial condition has significantly changed or if the taxpayer fails to meet certain requirements. The proposed regulations provided that the IRS may modify or terminate an installment agreement if the taxpayer fails to provide a financial condition update requested by the Service. The final regulations clarify that the IRS may terminate an installment agreement only if the taxpayer provides materially inaccurate or incomplete information in connection with a requested financial update. Further, the final regulations modify the rule provided in the proposed regulations to explicitly allow taxpayers to request a modification or termination of an existing installment agreement. Additionally, the final regulations clarify that a taxpayer must comply with the terms of an existing installment agreement while a request for modification is being considered, and that a proposed modification will not result in a suspension of the statute of limitations on collection.

The final regulations generally prohibit the IRS from taking any collection activity while a proposed installment agreement is pending, while an installment agreement is in effect, or during the 30-day period following the rejection of a proposed installment agreement or the termination of an installment agreement. Further, the final regulations provide that the statute of limitations on collection under Code Sec. 6502 is suspended while a proposed installment agreement is pending, plus 30 days following a rejection of a proposed installment agreement, and during any appeal. The final regulations also provide that each taxpayer with an installment agreement must also be provided with an annual statement showing the balance due at the beginning of the year, the payments made during the year, and the remaining balance due at the end of the year.

To secure and negotiate an affordable installment agreement for back taxes, contact Mike Habib, EA at 1-877-788-2937

Treasury / SBA Highlight Role of Tax Cuts During Small Business Financing Forum

US Treasury Secretary Timothy F. Geithner presided over the Small Business Financing Forum presented by the Treasury Department and the Small Business Administration (SBA) on November 18 in Washington, D.C. While the program was aimed at exploring financing issues, recent tax cuts were highlighted as a potential method by which the government could help small businesses increase their cash flow during the current tough economic environment.

Economic Stimulus Effort

The forum was part of the administration’s push to brainstorm ways in which the government could help ease access to credit for small businesses. “Without increased access to credit for American families and small businesses, growth will be weaker, companies will defer long term investments and we will not be able to create a recovery that is self-sustaining and led by private demand,” Geithner explained.

NOL Relief

In his opening remarks, Geithner highlighted the enhanced net operating loss (NOL) carryback rules under the American Recovery and Reinvestment Act of 2009 (the 2009 Recovery Act) (P.L. 111-5) for small businesses. These were recently extended to the 2009 tax year by the Worker, Homeownership, and Business Assistance Act of 2009 (P.L. 111-92). “We need to provide direct help to small businesses,” Geithner stated in his prepared opening remarks. “We’ve done that through the Recovery Act by establishing targeted tax relief to small businesses, allowing them to write off more of their expenses and to earn an instant refund on their taxes by “carrying back” their losses five years instead of two.”

New Markets Tax Credit

Additionally, Geithner pointed out that the 2009 Recovery Act enhanced the New Markets Tax Credit. Code Sec. 45D allows the tax credit for taxpayers investing in entities whose primary mission is to provide investment capital for low-income communities or persons. “The Recovery Act provided…an additional $3 billion in New Market Tax Credit investments to support small businesses as they spur growth in those struggling communities,” Geithner stated.

Continued Efforts

Despite some economists’ reports that the country’s recession may already be at, or will soon come to, an end, Geithner indicated that the Treasury will continue to prompt tax cuts that make small businesses more liquid. Nevertheless, the main focus of the forum was financing opportunities and Geithner stayed on message in that regard in his closing remarks: “No jobs without growth. No growth without credit.” He stated that President Obama would soon receive a conference report on the results of the forum, which would be publicly available for review.

Tax relief and tax controversy services by the tax firm of Mike Habib, EA at myirstaxrelief.com or at 1-877-788-2937