There are many options when it comes to addressing your tax problems.
Call our tax professionals today for a personal and confidential review of your particular situation. We do not want you to have unrealistic expectations of a certain outcome. Each case is unique and while we work tirelessly to represent you before the IRS, we can not guarantee that you will qualify for a particular program or realize a specific reduction in your tax liability.
IRS Offer in Compromise
AmeriStar Tax Centers' CPAs and Enrolled Agents have extensive expertise with planning, preparing, and negotiating Offers in Compromise (OIC). If you qualify, an Offer in Compromise is frequently the ideal solution for resolving your delinquent tax liability. In the last published IRS statistics, the IRS reports that the average discount on accepted Offers was 88% (only 12 cents on the dollar was paid by Americans with accepted OICs). Very few taxpayers qualify for an OIC, but given the savings possibilities on accepted OICs, the experienced team of CPAs and Enrolled Agents at AmeriStar work very hard to see if our clients qualify for an OIC.
The OIC is an important tool to help taxpayers in limited circumstances; taxpayers are eligible only after other payment options have been exhausted and their ability to pay has been reviewed by the IRS.
The two primary grounds under which an OIC can be successfully negotiated with the IRS are: 'doubt as to collectibility' (e.g. the taxpayer is unable to pay the full burden), or "doubt as to liability" (e.g. the taxpayer contends that they owe the debt). There is a more recent third ground for acceptance, "effective tax administration" (e.g. the IRS wants to get as much as they can, and they may potentially determine that a percentage of the total liability owed is as good as they can do on a taxpayer). For an Offer in Compromise to be accepted, however, the taxpayer has the burden of proof that they either have no possible means of paying the tax or that they do not actually owe the tax.
The primary determinant on "doubt as to collectibility" is based on a taxpayer's personal financial profile; including income, expenses, and assets. The IRS sets strict guidelines for income, allowable expenses (categorized as: Living, Housing, Transport), and available equity in owned assets. Taxpayer's future earnings potential and equity holdings factor into a taxpayer's eligibility for the OIC program and could discount the likelihood that certain taxpayers will qualify for an OIC.
An additional benefit of submitting an OIC is that IRS Restructuring Act prohibits the IRS from collecting a tax liability by levy during the period in which the Offer is being processed, or 30 days following rejection of an offer, or during the appeal of an OIC. This window of non-collection is frequently a respite for our clients to avoid any IRS collection actions, thereby securing additional time for clients to pay and prevents the IRS from seizing any assets in the interim.
IRS tax settlements are subject to certain terms and conditions. If the Offer in Compromise is accepted the offer amount is paid and the back taxes are resolved. In addition, the taxpayer must file all future IRS tax returns and make all necessary payments on time and in full. An IRS Offer in Compromise it is an excellent way to resolve back taxes and to get a fresh start with the IRS.
IRS Tax Levy and Garnishment Release
A wage garnishment can result from a delinquent tax liability. Garnishment rules vary, but essentially the IRS takes a portion of your paycheck each pay period, and contributes the amount garnished toward paying off your tax debt. The Garnishment will remain in place until the tax is paid in full or until a Garnishment release has been processed.
Having your wages garnished is frequently a stressful and financially debilitating experience for consumers calling for tax relief. Once your power of attorney is filed, our tax attorneys, CPAs and Enrolled Agents will immediately contact the IRS to attempt to release your wages from garnishment, and then structure a solution to resolve the underlying tax liability, whether that is an Offer in Compromise, Non Collectable Status, or an Installment Agreement. In order for the IRS to consider a petition for relief, you must be "tax compliant". We will work with you to file all unfiled tax years and submit upto date financial information to the IRS.
IRS Installment Agreement
Many taxpayers cannot qualify for an Offer in Compromise, Statute of Limitations expiration, or bankruptcy relief but still seek resolution for their IRS assessed liability. In these cases, we will work with our client's budget and financial profile to negotiate long term IRS payment arrangements. The IRS allows "structuring" five primary types of payment plans, or Installment Agreements: Guaranteed Installment Agreements, Streamlined Installment Agreements, In-Business Trust Fund Agreements, Long-Term Installment Agreements, and Installment Agreements on Specified Balance Due Accounts.
Currently Not Collectible (CNC)
If a taxpayer does not qualify for an offer in compromise and cannot afford to pay an Installment Agreement, Currently not Collectible (CNC) status may be an option. If a client is placed in CNC status, the statute of limitations continues to run and the IRS will not pursue collection actions. However, If a taxpayer's financial status improves, the IRS can remove the file from CNC status and return to active collection status.
Reasons for attempting CNC status:
1. Taxpayer has income below allowable expenses and there is no indication that the financial situation will improve in the future;
2. Due to high equity, the taxpayer does not qualify for an OIC and has more allowable expenses than income so an Installment Agreement is not an option; and,
3. Taxpayer has more allowable expenses than income and the statute of limitations is getting close to expiring.
Innocent Spouse Relief
There are many basis for abating taxes and assessed tax penalties, including 'Innocent Spouse' determination. Typically, adjustment/abatement is a means for reducing or deferring a liability which is used in conjunction with another tax relief method to resolve the delinquent taxes owed. There are three types of Innocent Spouse relief: traditional Innocent Spouse relief, separation of liability, and equitable relief. Traditional Innocent Spouse relief is granted to joint-filers (typically married couples) when one spouse was unaware of the erroneous item which created a tax liability; Separation of liability is primarily for joint-filers who are currently separated, and equitable relief is for a spouse who should not be held liable and who fails to meet the two preceding determinations.
In all of the Innocent Spouse adjustments, the IRS's goal is to provide relief to the spouse who was unaware or not at fault for the creation of an assessed tax liability, hence the IRS rules that it would be inequitable to hold the innocent spouse liable for any tax deficiencies.
IRS Payroll Tax Debt
Employers are required to withhold employment taxes from their employees' payroll and pay over to the IRS this owed "Trust Fund Tax." When small business owners are unable to meet the IRS obligations, a Trust Fund Tax liability is created. The IRS is aggressive in enforcement of Trust Fund Taxes, and does not allow Trust Fund Tax to be discharged in a bankruptcy, no matter how old the tax liability is. This means that if you owe delinquent Payroll Tax, you must address the liability and find a solution. Given the complicated nature of Payroll Tax/Trust Fund Tax, call our tax professionals to discuss your options and find the best course of action to resolve the tax liability.
The IRS is increasing its enforcement actions, so the probability of facing a lien, levy or other action may be increasing. To determine if you may have a Trust Fund Tax Liability, there are two primary determinant tests: (1) whether you are "responsible" for collecting or paying withheld income and employment taxes, or for paying collected excise taxes; and (2) whether you "willfully failed" to collect or perform your obligations.
Typically, the IRS has the right to take enforcement action against anyone who meets these determinant tests, even if they were not an officer or employee of the corporation which originally collected the payroll taxes.