Tax Controversy

Stop IRS Wage Garnishment: Stop IRS Tax Levy: 877-788-2937

October 13, 2010 | Mike Habib, EA

If you have received a wage garnishment notice (IRS Levy) that the IRS is instructing your employer to deduct a big chunk of your paycheck, it clearly means that you have an unpaid back tax debt. And what’s worse is, your employer is required by law to remit a significant portion of each paycheck directly to the IRS to satisfy the garnishment order to pay off your unpaid tax debt.

What amazes me as a tax professional, is that most taxpayers continue ignoring the IRS by not responding to the tax levy, not knowing that the IRS will continue garnishing their paychecks until their tax debt is paid in full with a lot of penalties and interest too.

If you have a tax levy then you need to know that with our firm, you do not have to take on the IRS by yourself, we actually do not recommend self-representation as you do not know the tax laws, your options nor do you know your rights as a taxpayer. We specialize in tax representation and will work with the IRS to negotiate the full or partial release of the wage garnishment, tax levy, if you qualify for tax relief, resulting in saving your paycheck! Depending upon your particular circumstance, we may be able to negotiate an installment agreement so you can pay the IRS a specified dollar amount every month until the tax debt is paid. Once the installment agreement is in force, an offer-in-compromise may be negotiated to settle your entire tax debt, including penalties and interest, for less than the entire tax liability, depending on your individual financial circumstances, each case is different.

IRS Tax Levy On IRA Account

September 15, 2010 | Mike Habib, EA

Can the IRS levy an IRA for Back Taxes? Yes the IRS can levy your IRA for unpaid back taxes.

Mr. Wayne Smith did not pay his back taxes after filing 3 years of tax returns. He owed the IRS around $36,000 of back taxes. He went to tax court, and the court ruled for the IRS and its $36,000 levy on Mr. Smith. Mr. Smith had a personal hardship, he was spending more than $800,000 plus his IRA income on his gambling addiction and not paying his back taxes.

Ordinary creditors are prevented from levying pension and IRA accounts due to anti-alienation provisions, the IRS does not conform to these anti-alienation provisions as many taxpayers think, the IRS can and will levy IRA and other retirement accounts to collect on any unpaid back taxes. In other words, the IRS is pretty much free to levy IRA accounts at its own will specially in cases of flagrant taxpayers abuse. Learn more by reading Internal Revenue Manual Section 5.11.6.2(5).

Tax Representative: Why Representation Is A Powerful Tool

September 1, 2010 | Mike Habib, EA

Skills of a Tax Representative

Tax representative is a person who is a licensed tax professional representing individual or business taxpayers regarding their tax issues before the IRS or state taxing agency. Only Enrolled Agents, Tax Attorneys and CPAs are authorized by the IRS to represent taxpayers.

Companies and individual taxpayers with complex tax matters should consider hiring a professional tax representative who would work on resolving your tax controversy problems.

AVOIDING IRS TAX PENALTIES: TAXPAYERS BEWARE Part 2

August 10, 2010 | Mike Habib, EA

Part 2 of 2

• Dishonored Check – A penalty is charged if a taxpayer’s check is returned because of insufficient funds. For checks of $1,250 or more, the penalty is 2% of the check amount. For checks less than $1,250, the penalty is the lesser of $25 or the amount of the check.

• Paying Late – The penalty is ½% of the unpaid tax for each month or part of a month the tax is unpaid. If the IRS issues a Notice of Intent to Levy and the taxpayer does not pay the balance within 10 days, the penalty increases to 1% per month. The penalty cannot be more than 25% of the tax paid late. The late payment penalty is reduced to ¼% per month for those paying in installments.

AVOIDING IRS TAX PENALTIES: TAXPAYERS BEWARE Part 1

August 5, 2010 | Mike Habib, EA

Most tax penalties are substantial, punitive and can dramatically increase the overall tax bill. Penalties are assessed for a many reasons. Some tax penalties are due to a taxpayer’s carelessness or inattention to tax details. Other penalties are incurred due to the overstatement of deductions, the failure to report income, missing documentation, negligence, fraud or procrastination.

Recently, Congress added additional penalties for making excessive claims or filing frivolous tax returns. The following is an overview of the IRS penalties that can be imposed on a taxpayer.

The IRS assessed taxpayers over $29,000,000,000.00 (that’s 29 Billion Dollars) in penalties during 2009.

Tax Help

July 26, 2010 | Mike Habib, EA

Tax Help

Debt in taxes is a serious matter that should not be ignored. Compared to other debts, tax debts do not easily go away unless you find a viable solution to the problem. This is where tax help from the experts plays an important role in making sure that you do not get into further trouble with the IRS when it comes to dealing with your taxes.

Ask for help

Taxpayer Advocate Report

July 10, 2010 | Mike Habib, EA

National Taxpayer Advocate Submits Mid-Year Report to Congress; Identifies Priority Challenges and Issues for Upcoming Year

WASHINGTON — National Taxpayer Advocate Nina E. Olson today released a report to Congress that identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the coming fiscal year. The report expresses concern about the adequacy of IRS taxpayer service, particularly as the IRS begins to implement health care reform, about new information reporting burdens facing small businesses and others, and about certain IRS collection practices.Among the areas the report identifies for particular emphasis in FY 2011 are the following:1. Taxpayer Services.

Spending for IRS taxpayer service programs has been declining in recent years. At the same time, more taxpayers have been contacting the IRS for assistance as the IRS has been tasked with administering an increasing number of social benefit programs, including Economic Stimulus Payments, Making Work Pay credits, and First-Time Homebuyer credits. The report says that as a result of the imbalance between taxpayer demand and IRS resources, the IRS has fallen short of providing adequate taxpayer service in important areas. Most notably, after answering a high of 87 percent of its calls from taxpayers seeking to reach a telephone assistor in FY 2004, the IRS answered only 53 percent of its calls in FY 2008 and has set of goal of answering only 71 percent in the current fiscal year.

Tax Relief – Get tax debt relief today

June 19, 2010 | Mike Habib, EA

Tax Relief – Get tax debt relief today

Reasonable Cause/Good Faith Defense: Even if the taxpayer did not have substantial authority for a position and failed to make adequate disclosure, the substantial understatement penalty does not apply if the taxpayer had reasonable cause for the tax underpayment and acted in good faith [IRC Sec. 6664(c); Reg. 1.6664-4]. This defense is applied on a “facts and circumstances” basis [Reg. 1.6664-4(b)]. However, the key factor seems to be whether the taxpayer made a reasonably energetic attempt to determine the correct tax liability. For example, an honest misunderstanding of fact or law, an isolated computational error, reliance on professional tax advice, or reliance on information returns all indicate reasonable cause/good faith. However, if the taxpayer should have known better, the defense will not apply.

Observation: According to IRM 20.1.5.6, the most important factor in determining whether the taxpayer has reasonable cause and acted in good faith is the extent of the taxpayer’s effort to report the proper tax liability. For example, reliance on erroneous information reported on an information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. Similarly, an isolated computational or transcription error may indicate reasonable cause and good faith. Other factors to consider are the taxpayer’s experience, knowledge, sophistication, education, mental and physical condition, and reliance on the advice of a tax advisor.

Having Unfiled Tax Returns and need Help?

June 8, 2010 | Mike Habib, EA

Having Unfiled Tax Returns and need Help?

Taxpayers with unfiled tax returns can invite a lot of problems. The famous IRS has coined ten years for the collection of taxes that are owed. If the return for owed taxes was filed ten years ago, the IRS will probably use the last address known to them. The government will not be able to maintain any contact if you have already left the country. But if by any chance, you return back within the ten years limit, this can be a big problem. If you start earning or start with any job, it will be very easy for the IRS to contact you and then you are in big trouble. They not only claim the unfiled tax returns but all of the fines interest and penalties that have accrued over the original payment are also asked for. If you have somehow not at all bothered to file the tax returns, it is very important for you to have all the documents necessary to file your tax returns. Having lower income or lots of medical bills will not make any difference. It could simply lead to the conclusion that you probably are left with no money at all to pay for the mortgages or even the regular bills.

If anyone finds himself stuck in such serious circumstances it is strongly suggested that services of an experienced tax relief professional be asked. Only they will be able to guide you properly as to what is required to be done. They will be able to sort through all of the back taxes of past years and negotiate with the IRS to make some reasonable solution. The help of tax relief expert can invite many days of annoyance, severe deadlines or some difficult and confusing forms to be handled on your own. The tax relief specialist, as a professional will do his best to help you deal with the situation and come out of it successfully. He will be spending most of his time to sort out the best interest of the client and find a solution.

Back Tax Help

April 23, 2010 | Mike Habib, EA

IRS Examples of Tax Nonfiler Investigations – Fiscal Year 2010

Mike Habib, EA 877-788-2937

The following examples of Nonfiler investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.