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.
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:
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Table 16. Delinquent Collection Activities, Fiscal Years 2005-2008 |
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[Money amounts are in thousands of dollars.] |
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Activity |
2005 |
2006 |
2007 |
2008 |
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(1) |
(2) |
(3) |
(4) |
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Returns filed with additional tax due: |
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Total amount collected [1] |
[r] 27,615,348 |
[r] 29,172,915 |
[r] 31,952,399 |
28,465,648 |
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Taxpayer delinquent accounts (thousands): |
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Number in beginning inventory |
5,981 |
6,478 |
7,074 |
8,240 |
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Number of new accounts |
5,870 |
6,100 |
7,146 |
7,099 |
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Number of accounts closed |
5,373 |
5,504 |
5,980 |
6,107 |
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Ending inventory: |
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Number |
6,478 |
7,074 |
8,240 |
9,232 |
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Balance of assessed tax, penalties, and interest [2] |
57,594,901 |
69,555,590 |
83,488,988 |
94,357,717 |
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Returns not filed timely: |
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Delinquent return activity: |
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22,765,462 |
23,305,535 |
30,287,802 |
24,888,918 |
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Amount collected with delinquent returns |
3,584,255 |
3,905,764 |
3,968,163 |
3,773,528 |
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Taxpayer delinquency investigations (thousands) [4]: |
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Number in beginning inventory |
3,022 |
3,658 |
3,874 |
3,732 |
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Number of new investigations |
2,558 |
2,373 |
2,587 |
1,972 |
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Number of investigations closed |
1,922 |
2,157 |
2,729 |
2,271 |
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Number in ending inventory |
3,658 |
3,874 |
3,732 |
3,433 |
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Offers in compromise (thousands) [5]: |
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Number of offers received |
74 |
59 |
46 |
44 |
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Number of offers accepted |
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15 |
12 |
11 |
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Amount of offers accepted |
325,640 |
283,746 |
228,975 |
200,103 |
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Enforcement activity: |
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Number of notices of Federal tax liens filed |
522,887 |
629,813 |
683,659 |
768,168 |
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Number of notices of levy served on third parties |
2,743,577 |
3,742,276 |
3,757,190 |
2,631,038 |
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Number of seizures |
512 |
590 |
676 |
610 |
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[r]–Revised. |
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[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. |
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[2] Includes assessed penalties and interest but excludes any accrued penalties and interest. Assessed penalties and interest—usually determined simultaneously with the unpaid balance of tax—are 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. |
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[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. |
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[4] A delinquency investigation is opened when a taxpayer does not respond to an IRS notice of a delinquent return. |
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[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. |
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NOTES: Detail may not add to totals because of rounding. All amounts are in current dollars. |
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SOURCE: Small Business/Self-Employed, Collection Planning and Analysis, Collection National Reports SE:S:C:PA:CNR |
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IRS Commissioner Doug Shulman addressed the National Association of Corporate Directors Governance Conference
WASHINGTON — I realize that the IRS Commissioner has not customarily addressed the NACD’s corporate governance conference…but what I want to discuss with you this afternoon is the important role that boards of directors can play in overseeing tax risk and tax strategies of corporations. After all, taxes are one of the biggest expenses of a corporation, so how they are managed is very important to most corporations.
Clearly, corporate boards of directors play an incredibly important role in the vibrancy of businesses and our economy. Boards are a source of creative ideas, strategic thinking, and, importantly, governance and oversight. Boards hold management accountable, and in that role, understanding the risk posture of the company is critically important.
Closely held C corporations are more likely to accumulate earnings and profits beyond the reasonable needs of the business in order to avoid income taxes on its shareholders than are large C corporations. Each accumulated earnings case is unique. No pro forma guide for calculating a taxpayer’s reasonable needs can be prepared. Reasonable needs that would usually be considered in any accumulated earnings case are the need for sufficient net liquid assets to pay reasonably anticipated, normal operating costs through one business cycle and sufficient net liquid assets to pay reasonably anticipated, extraordinary expenses and capital improvement financing.
In addition, the following represents a non-exclusive list of specific items that should be considered for construction contractors:
Enrolled Agent vs. Tax Attorney / Tax Lawyer
Dealing with tax problems entails a good amount of hard work and stress, which is why it is not advisable to deal with such problems on your own. It requires that you have a fair understanding not only of the taxation process but also of how the IRS operates. Trying to gain such understanding is quite stressful in itself; much more is attempting to apply it to resolve your tax issues with the Internal Revenue Service and get tax relief. The sheer complexity involved in taxation and tax problems is what drives a lot of individual taxpayers and businessmen to approach a tax lawyer for assistance. While it is commendable that these people accept the need to seek assistance with their tax problems, they don’t always ask for help from the right tax relief professional. A tax attorney is not always the best person to seek assistance from when it comes to tax problems. Since it’s not a legal problem, but a tax problem, the IRS and State simply wants to know when your delinquent tax returns are going to be filed and when & how your taxes are going to be paid. What you need is a professional advocate who has the knowledge of the enforcement and collection procedures of the IRS, the State Franchise Tax Board and who has the specialized experience to effectively resolve these tax issues in your best interest.
Profile of the tax attorney
In face of tighter enforcement measures that the IRS is expected to use to strengthen its tax collection and monitoring policies, tax problems have become, if possibly, more stressful to deal with. Among truck drivers, in particular, the need to immediately address tax problems such as back taxes, unfiled delinquent tax returns, is more pressing than it has been in previous years. However, given the present economic climate, dealing with tax problems can prove hard for truckers, truck drivers. This is where tax relief for truck drivers plays an integral role. The IRS provides tax relief for truckers, provided that they certain law mandated qualifications and criteria.
It is very important for real estate professionals to act on tax problems like excessive tax debt, unfiled returns, back taxes, and self employment tax before these aggravate into expensive and potentially damaging problems. Tax problems the likes of those enumerated above can seriously hurt an individual or a company’s reputation and record, especially with the Internal Revenue Service or IRS. So before these tax problems turn to costly taxing nightmares, it is essential that you seek tax relief allotted for realtors, real estate professionals, mortgage brokers, and loan officers.
The real estate industry and the IRS
Do not lose sleep over your mounting tax debt – Internal Revenue Service () has designed a program to enable willing taxpayers to get some relief from the amount of tax owed by accepting less than their tax debt liabilities or allowing them installment payments or a holiday period from tax. This is known as the tax relief program and is implemented by offer in compromise / tax settlement with the individual who owes large sum of tax and is willing to pay.
If you qualify to pay less than the mounting tax debt you owe, you can settle your outstanding tax debt dues, the best way out for you is to hire a qualified and licensed tax professional who have experience in effectuating tax relief, IRS tax audit representation and or State tax audit representation. With the help of highly specialized and trained tax relief expert who will represent your case, you have a very good chance to get IRS tax relief and or State Tax relief.
Have you ever heard of a wage garnishment? If you haven’t, and you are responsible for paying the IRS what you owe them, then you should read on! If you’re in a position where you owe the IRS money already, then you shouldn’t just read on, but take note because wage garnishment is something that could very easily be in your future!
Every taxpayer knows that Uncle Sam needs his pound of flesh (or at least roll of dollars), regardless how many mouths you have to feed, and how high your mortgage payments are now that the financial world is in crisis, or how your income has changed. Uncle Sam doesn’t care if you’ve lost your job, or had to take unpaid leave because of health reasons. If you owe Uncle Sam money, he wants it; and in the form of wage garnishments, he’s going to make sure that he gets it.
There are strict procedural guidelines that the IRS must adhere to before they can attach a wage garnishment to your salary, and the first of these is to warn you that it’s about to happen. If you haven’t defaulted on your tax payments, then you need to immediately contact them because they need you in default in order to proceed! If you’re not in default, then they can’t put a wage garnishment onto your salary. You should get about 30 days warning of the wage garnishment going into effect so check the date that it is due to begin and use your time wisely.
Tax Relief Blog