Monday, September 26, 2016

Stop irs Wage Garnishments

If you have received an IRS wage levy / wage garnishment notice that the IRS is going to apply a levy and seize your paycheck, it means that the IRS will be notifying your employer that you have a back income tax debt. Your employer is required by law to send a significant portion of each of your paychecks (possibly all of your check) directly to the IRS to offset the tax debt until your entire income tax debt is paid in full.




FLAT FEE TAX SERVICE, INC.

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With this Flat Fee Tax Service, Inc., you do not need to take on the IRS by yourself. Our team of IRS tax relief specialists, led by an IRS Tax Attorney, will work with the IRS to negotiate the full release of your IRS wage garnishment. 

Depending upon your individual circumstances, we may be able to:

1. Have you declared Currently not Collectible.
2. Arrange an installment agreement so you can pay the IRS a specified dollar amount every month until the debt is paid.  
3. Prepare your Offer in Compromise that will settle your income tax debt.

Please call for your free consultation. We will review your options and take the stress out of dealing with an IRS wage garnishment notice. 

We do not have salesman at Flat Fee Tax Service, Inc., so no one will "bug you" or try and get you to "sign up" for tax services that you may not need.

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Thursday, September 22, 2016

How an Income Tax Levy (garnishment) Will Cripple You And Your Finances

If you owe back taxes to the IRS, you may eventually receive an income tax levy (wage garnishment). An income tax levy is where the “rubber meets the road.” A tax levy on your wages or bank account can and will cripple your finances.

Here is the usual scenario: You just got a dreadful call from your boss or human resources person that they received a tax levy and they are legally required to garnish your paycheck.

Perhaps you just wrote a check and it bounced. You call your bank and that notice from the IRS that you ignored was really important!



This article from the IRS tax relief team at Flat Fee Tax Service, Inc., outlines what a notice of tax levy is; the 5 most common ways that the IRS can and will levy your assets and income; and how to go about stopping a tax levy.

What is a Notice of Tax Levy

A notice of tax levy is written legal notice to your employer or financial institution that you owe monies to the IRS and that it their legal obligation to forward that money to the IRS to satisfy your income tax debt obligation.

The Internal Revenue Service (IRS), unlike any other collection agency, does not have to go to Court to get a judgment so that it can issue a levy. Section 6330 of the Internal Revenue Code governs the tax levy process.

The IRS will begin the process by sending you a series of notices. The goal of each IRS notice is to get your attention. If the federal government is sending you notices about an income tax debt, that means the IRS wants you to communicate with them.

The IRS typically sends notices approximately 30 days apart until such time that you receive a Demand for Payment and then a Final Notice of Intent to Levy.

Two Important Tax Levy Notices

Although you will receive a number of notices from the IRS about your back tax liability, there are two notices that should take priority:​ CP 504 Letter​

The first letter will be titled Notice of Intent to Levy. It will have CP504 in the upper right hand corner. The letter will state that the IRS has the intent to seize your state tax refund as well as other property. It will also state the amount due and for what years you owe back taxes.

The Notice of Intent to Levy (CP 504) will also tell you to call the IRS immediately as wages, commissions, bank accounts, and personal assets (car and home ) are subject to a wage and/or bank levy.​

LT 11 or LT 1058 Letter​

If this letter does not get you to call the IRS, the second and more important letter that you will receive is usually a letter that has LT11 or LT 1058 in the upper right hand corner. This letter will also state the intent of the IRS to levy your bank accounts, income, and assets.

The reason why this letter is more important is that it affords you Collection Due Process Appeal rights, that if properly exercised in a timely manner, can stop the tax levy.

The hearing is called a Collection Due Process Hearing and it must be requested within 30 days from receipt of the levy notice. A hearing will be held with the IRS Office of Appeals. Evidence must be presented that justifies a remedy to your tax debt.

Often, at the Collection Due Process Hearing, we are able to work out a reasonable payment plan or if you qualify, we can submit an Offer in Compromise (settlement).

You should act quickly and seek counsel from an experienced Tax Attorney once you receive this letter (if you have not already done so).

Always open your mail, especially mail from the IRS as soon as you receive it. Don't be afraid. You have rights and remedies.

5 IRS Tax Levy Tactics

Here are the most common ways the IRS can get to your money through a tax levy:

IRS Wage Garnishment (wage levy)

When the IRS issues a tax levy on your wages, also known as a wage garnishment, a substantial portion of your wages will be sent to the IRS each pay period until such time that:

1. A resolution of your tax liability is formally established,
2. You paid the taxes due, or
3. The garnishment is released by the IRS​

A wage levy or garnishment is sent to your employer or if you are commission based, the company that issues you IRS Form 1099. Your employer has a legal obligation to follow the directives of the wage garnishment and will be subject to penalties for disobeying the IRS.

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Why Did the IRS Levy My Paycheck?

The short answer is that the IRS is looking for the easiest way to collect the tax debt and the information about your source of wages is easily accessible to the IRS. Here’s how:

Your employer is legally obligated under IRS tax law to send a W2 to the IRS for each employee. If you are self employed or work in sales, you are likely issued a Form 1099- MISC from the company that pays your commission.

These forms are sent to the IRS every year so that the IRS can cross check that the income that you report on your income tax returns is accurate. As such, the IRS knows where you work and it is the low hanging fruit to collect the tax debt.​

How much of my wages can the IRS levy?

If you want to know how much of your wages your employer will be legally obligated to send to the IRS, Publication 1494 will explain how much of your wages are exempt from the tax levy.

The IRS can actually take all of your paycheck by use of a Manual Levy. A Manual Levy must be signed off by a Revenue Officer.

Upon receipt of the wage garnishment notice, your employer will give a Statement of Exemption and Filing Status, which will have to be completed and returned to your employer within 3 days.

If you fail to return the statement to your employer within 3 days, your amount exempt from the tax levy will be determined as if you are married filing separately with one exemption.

An experienced Tax Lawyer can help you determine your options and will review your financials to see if the wage levy can be released. In particular, if we can show to the Internal Revenue Service that the wage garnishment is creating an immediate economic hardship, then the wage levy can be released.

Bank Levy

A notice to take money from your bank account as a result of a tax liability is called a bank levy. This type of tax levy must be re-issued to the bank or financial institution every time the IRS wants to take money from your bank account.

The IRS will commonly send a levy notice to your bank by mail. The IRS provides your bank a 21 waiting period before it sends the IRS the money in your bank account. The money in your bank account will be frozen during those 21 days.

During that twenty one day time period, it is essential that the best strategy to resolve your tax liability is determined and implemented or else the IRS will be entitled to the funds in your bank account.

Be warned that if you have a joint bank account with someone with a tax liability, your bank account will be subject to the IRS levy. You will then have to prove to the IRS that the monies in the bank account did not belong to the joint account holder.

This is not an easy task as the IRS may not be willing to release the bank funds. You will likely have to seek counsel as the tax levy will have to be appealed administratively or you may need to seek relief in Tax Court.

How Did the IRS Find My Bank Account?

If you receive interest from a bank account, the bank is required to file IRS Form 1099- INT with the IRS under the tax law. Once again, this allows the IRS to cross check the income that you are reporting on your income tax returns with its internal records.

As well as keeping you honest on your income tax returns, it also serves as a point of “ data collection” for IRS collection personnel.
Retirement Savings

Retirement savings plans are governed by Section 5.11.62 of the Internal Revenue Manual. The following retirement assets are subject to a tax levy:

1. Qualified Pension, Profit Sharing, and Stock Bonus Plans under ERISA
2. IRAs
3. Self Employed Retirement Plans


You have worked hard and have contributed to your 401(k), IRAs, as well as Social Security. You may have been looking forward to enjoying your retirement but if you have an IRS tax debt, there is a wrinkle to the comfortable golden years that you may expect.

Once you are vested in your retirement vehicles, it is possible that the IRS can levy theses accounts to satisfy any tax debt you accrued, plus penalties and interest.

Generally, the IRS cannot levy your retirement account until you are vested. In fact, the Internal Revenue Service would rather levy another asset or enter into a payment arrangement with a taxpayer.

The IRS has set forth a 2 part threshold test before issuing a tax levy on a retirement asset:


1st : Is there an asset other than retirement assets that can be used to collect the tax debt liability? If there is an asset other than a retirement asset to levy or a payment arrangement that can be established, the IRS will want the Revenue Officer to investigate those alternatives first.
2nd: Has your conduct been flagrant ? If your conduct was not flagrant, it will not levy your retirement asset.

When the IRS looks at flagrant conduct, it is looking at how you accrued the tax liability and it is done on a case by case basis.

Common example of flagrant conduct are tax evasion, a tax liability based upon illegal income, and pyramiding unpaid trust fund taxes. A tax attorney can analyze whether your conduct rises to the level of flagrant activity under the tax law.

The above two part tax levy test refers to the retirement asset itself. However, with regard to your retirement income, the IRS will look to see if you are obtaining income from the particular retirement account or whether you are able to borrow from the retirement account.

Generally, the IRS cannot require that you borrow money from your 401(k) if you are either still employed or you are not age 59 ½ . In other words, if you cannot access the money, neither can the Internal Revenue Service with a tax levy.

Social Security

If you are at the age where you are receiving Social Security and you owe back taxes, the IRS can levy up to 15% of your monthly social security benefits until such time that the income tax liability is paid off.

In order to have the IRS stop the tax levy on your social security, you will have to show that the tax levy is creating a hardship. You will have to show documentation of income and expenses in order to prove the hardship. A tax attorney can help you present your case in the most favorable light.

If successful, the Internal Revenue Service will likely place your tax debt matter in what is called currently uncollectible status and stop the tax levy. You may also be a candidate for a reduction of the overall liability if warranted by your assets, income, and expenses.
Asset Seizure or Levy

Although it does happen in extreme circumstances, the seizure of assets like a home or car is not high up on the “IRS tax levy priority list”. The IRS will first attempt to obtain back taxes owed through such means as garnishments and bank levies as detailed above.

With regard to looking to obtain assets, the IRS will look to see if there is equity in the asset and your ability to borrow from the asset as a means to obtain back taxes.

Stopping a Tax Levy

There are various strategies to stop a tax levy. The notices that you have received from the Internal Revenue Service have deadlines that will permit you appeal rights if they are properly exercised in a timely manner.

Here are the steps that your tax attorney at Flat Fee Tax Service, Inc. will take to determine the best strategy to stop your tax levy.

When you become our client, we will want the fax number and name of your human resources person so that we can provide that information to the IRS personnel that we speak to. We want to make sure that your IRS wage levy release is sent to the right person.

Our team will review when you received your Final Notice of Intent to Levy so that we can see if you have certain appeal rights. If you do not have that notice or don’t know where it is, we will request your account transcript from the IRS to determine the date when it was issued.

If you have unfiled tax returns, our team will work as quickly as possible to get them filed. The IRS is going to request that if you are not in compliance (tax returns not filed), that we file all your past due tax returns as quickly as possible,

We will analyze your financial data to determine your income and expenses so that we can present the best possible resolution option to the IRS on your behalf.

We will work with the Internal Revenue Service (IRS) to resolve your tax levy under the best possible terms, taking over all communication with the IRS throughout the process.

The IRS will submit the tax levy release to your employer. These are the steps to stop your tax levy. If this makes sense to you or you have questions about your tax levy, they are there to help. Take action to stop the IRS from ruining your financial and personal life.
What if the time to appeal has expired ?

A timely and properly filed appeal can possibly stop your tax levy. If you are beyond the required deadline to appeal your tax levy, there are other remedies available to resolve your tax debt problem under the best possible terms.

An experienced tax attorney can guide you through the maze of stopping your tax levy as well as resolving the underlying tax debt problem.

Based upon a detailed review of your financials, your options may include reducing your overall tax liability through an offer in compromise, partial pay installment agreement, or penalty abatement.

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Monday, July 11, 2016

IRS Payment Plans - Missing Tax Returns - IRS Settlements - One Low Flat Fee

Here we are in the middle of July and, by now, most people have filed their income tax returns. The summer heat is here as well and I bet many of you are feeling a little hot under the collar as you had a large income tax debt with your 2015 tax return. You may also owe for previous tax years.

I am hoping you have dealt with it and paid the balance in full. If so, then you are in the clear until next year.

If you have not dealt with it by either not paying the bill in full (or at all) or you just simply haven’t filed your return yet for fear that you will owe a large amount of money that you don’t have, NO NEED TO PANIC. There are ways to deal with this.





Our IRS tax relief team speaks with people every day in this type of situation. Many of them are people that you would think could not possibly be in that position, but they are. Our job and purpose is to help you, the taxpayer, get the problem dealt with as soon as possible. Our mission statement is “We work hard to protect you from the IRS so you can sleep better at night!” We enjoy succeeding and helping people to sleep better, take control of their life and help keep cash in their pocket.

There are three primary categories for people to fit into when dealing with their IRS debt. Let’s discuss some of the requirements of all of the IRS payment options. You must be current and compliant. What does that mean? You must have all of your income tax returns filed (at least for the last six years) and you must be making payments toward the current year through federal withholding or estimated tax payments. The goal for the IRS is to get you back into the system (if you have outstanding tax returns) and getting you to pay the current year taxes.

In addition, depending on the payment option you fit into, you must file your returns timely and pay any tax due in full each year. This means that you cannot have any unpaid outstanding tax liabilities.

You might ask yourself  "what are the payment options I have to choose from"? Well, your options will depend on your particular facts and circumstances, but here they are: You can enter into an Installment Agreement (monthly payment plan), be put into Currently Not Collectible (CNC) status, or submit an Offer-in-Compromise settlement(OIC).


1. Installment Agreement: You will make monthly payments toward your income tax debt. Penalties and interest will continue to accumulate as you pay. A Federal Tax Lien may be filed against you even though you are making payments.

2. Currently not Collectible: You will not make payments on your unpaid income tax debt. The IRS will file a Federal Tax Lien against you. The IRS will confiscate your tax return. Penalties and interest will continue to accumulate. The Statute of Limitations will continue to run out.

3. Offer in Compromise: This is a settlement of your income tax debt based on a taxpayers ability to pay their debt. It takes approximately 10 to 12 months to complete. The IRS must leave you alone during the process. When your settlement is approved and paid, the Federal Tax Lien will go away.

There are many options for the IA depending on the amount you owe, how much you can pay each month and how much time is remaining on collection statute of limitations. The Statute of Limitations is a 10-year clock that starts running when the tax liability is first established. This can be by your filing an original return (even if it is filed late), the IRS files a substitute for return (SFR) because you have not filed and they believe you should, or even by owing additional money after an IRS audit.

This clock will generally run whether you are making payments or not. Please be aware that there are some times when this period is suspended (i.e. clock temporarily stops).

In general, if you owe less than $50,000 (including tax, penalties and interest ... this amount is $25,000 for businesses), and can pay the balance in 72 months or less, then you should be able to easily enter into an Installment Agreement without much great effort. If you owe over that amount, you have to jump through a few more hoops, which include submitting financial data on your assets, liabilities, income and expenses.

To be put in Currently not Collectible status, you need to submit financial information along with the appropriate documentation that shows you basically have no equity in any assets or have any leftover income after paying your necessary living expenses. Of course, the IRS determines what is necessary. But once you get put into Currently not Collectible status, all collection activity stops, the Statute of Limitations continues to run, but the IRS can review your case every year.

To file an Offer in Compromise settlement, this is where you get to pay an amount that is substantially less than what you currently owe. You still have to submit full financial information along with documentation. The process generally takes one to two years to complete. The "not so good" part is the Statute of Limitations clock stops while you are in the process, but, if your settlement is approved, "who cares" about the Statute of Limitations..

You also must file all tax returns timely and not owe even a dollar when you file and settle the bill and continue to do so for the next five years. But once you have met these requirements, you are in the clear and you will never owe these taxes again.

In some small tax due cases (generally under $10,000), you can handle it yourself, but I recommend you seek a professional in dealing with the IRS. the IRS is not your friend and they will not tell you what your best options are.

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Tuesday, March 15, 2016

What to Do If the IRS Garnishes Your Wages

When it comes to notifying taxpayers that they have an outstanding balance, the IRS will always inform you by mail. So it is important to not disregard any mail addressed to you from the IRS. So the first thing you must do when it comes to wage garnishment is stay alert for any letters from the IRS! By doing this, you might be able to prevent IRS garnishments altogether.



Don't Be Surprised By An IRS Wage Levy

Most people who get their wages garnished don’t understand how or why it even happened in the first place. Chances are, if you owe the Internal Revenue Service (IRS) tax money, they’ll find a way to let you know. The primary source the IRS uses to communicate is by letter. They do not correspond by email, and the only time they will communicate by phone is if you call a representative.

Whatever You Do, Don’t Ignore the IRS!

Ignoring notices from the IRS is what many taxpayers do, and then wonder why their wages are being levied and garnished. Although the IRS will not garnish a taxpayer’s wages without notifying them first which gives them a chance to resolve the issue, the IRS can send their notice to any address that is on file for you. So, you may never receive the IRS notice.

Wage garnishment is the IRS last resort to collect what is owed to them. When it gets to this point, the IRS has the right to withdrawal the maximum amount that the government will allow. 

What to Do If You Receive an IRS Letter

Have you received an IRS notice titled “Final Notice of Intent to Levy and Notice of Your Right to a Hearing?” If you have, you need IRS professional representation immediately. 

YOU NEED YOUR RIGHTS PROTECTED

In the unfortunate event that your wages are currently being seized and garnished by the IRS, there is a way for you to alleviate such a big chunk of money being taken from your check. The qualified team at Flat Fee Tax Service, Inc. can have an IRS Wage Levy stopped and released in 1 day. 

Prevent IRS tax problems. Don't feel like you are in over your head with income tax debt, Flat Fee Tax Service, Inc. has successfully managed and resolved unique tax cases of all kinds, whether it was personal or business-related.

If you have received a letter from the IRS and need to become informed, call us. Our team of IRS tax relief expert will help prevent or reduce your wage garnishment. 

Call us today at 800-589-3078

STOP AN IRS WAGE GARNISHMENT

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Friday, March 11, 2016

IRS Tax Settlement - The Offer in Compromise - Can You Settle?


Using Offers in Compromise to Settle A Tax Debt

The Offer in Compromise (OIC) program is an IRS settlement program which allows any qualified individual or business with an unpaid income tax liability to negotiate a settlement for an amount that is less that the total owed to clear the debt. It is in the best interest of the individual or business and the IRS to compromise and come up with a voluntary agreement and future payment plan rather than the possibility of the debt not being paid and settled.

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There are conditions that have to be met in order to be eligible and qualified to settle with the IRS. When you talk to the IRS income tax relief experts at Flat Fee Tax Service, Inc., we will ask you specific questions to help identify as to whether you will meet the qualifying conditions for an IRS settlement.

Conditions for Filing An Offer in Compromise

There are three conditions that exist before an installment agreement will be accepted. First and foremost, the doubt as to liability, which refers to a person who owes, should show some reasons that the income tax assessed might not be correct. Second, the effective administration of tax, which can reduce the debt of an individual if there’s an explanatory circumstance, mostly being applied to the disabled and elderly taxpayers. The one settlement condition that you need to be concerned with is: the doubt as to collectibility, which means that the financially struggling taxpayer will show that IRS will unlikely never receive payment of the overdue income tax. It is a matter of knowing the IRS settlement rules, preparing the IRS documents correctly and presenting to the IRS our clients need for a settlement.

"Doubt as to Collectibility" means that a taxpayer cannot afford to pay the income tax owed.



The doubt as to collectibility (DATC) is the usual condition that is being accepted. In kind of case the amount to be settled is generally in 60 months of income disposable plus any assets equity that you own. This calculation will be done using the formula provided by the IRS, and once we determine how much disposable income based on allowed monthly expenses and your current income. A complete financial statement will have to be presented and many other documents in order for the IRS to consider you as a possible candidate for the Offer in Compromise Fresh Start program.

If you owe less than $10,000, you’re not eligible for the program offer in compromise. However, the Offer in Compromise (Fresh Start Initiative) can be a super great deal for people who owe a huge sum (more than $10,000) of income tax debt. 

ARE YOU ELIGIBLE TO SETTLE?

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Monday, February 22, 2016

IRS Wage Garnishment - Stop and Release In One Day


The IRS Levy Release Team at Flat Fee Tax Service, Inc. has an IRS levy release record second to none. 95% of our IRS wage garnishment clients have had their garnishments lifted in 1 business day. Often times, our clients have their IRS wage levies (garnishments) stopped and released in a matter of a few hours. We don't send mail to resolve your problem. Our IRS Tax Attorney assigned to resolve your income tax problem will pick up the phone and handle it immediately with the IRS.



We have multiple years of successful experience. We can do this because our IRS tax relief team specializes in understanding exactly how the IRS works and what documentation is needed. Our team of income tax professionals don't waste time.

IRS wage garnishments and IRS Levies can be stopped in one (1) business day, if done properly. One has to realize that the last resort the IRS utilizes is a wage garnishment or levy. This is one of the most lethal enforcement tools available to the IRS. There are several ways to have an IRS levy or garnishment released.

Our team, at Flat Fee Tax Service, Inc., has had great success in having a wage lifted and released prior to having all tax returns prepared and filed. The IRS Tax Attorney assigned to you will call the IRS and verify that you, the taxpayer, is in compliance with the IRS. Being in compliance means that all outstanding income tax returns for every year has been filed with the IRS. Those income tax returns include 1040's, 1099's, quarterly estimated tax payments, 941's or 940's, depending on the particular situation of the taxpayer.

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If you decide to handle your IRS income tax levy yourself, be advised that you need to be very cautious when contacting the IRS in regards to this. Before the IRS will give you any information of your compliance, they will immediately interrogate you, trying to find out what bank accounts you have, what other incomes you have and the assets you own. This is all in an effort to begin to levy, garnish or seize any assets the taxpayer may have. This is one of the main reasons why an IRS Tax Attorney should contact the IRS on the taxpayers' behalf. An IRS Tax Attorney does not have to release your personal information to the IRS. Your IRS Tax Attorney's goal at this point is to only determine if the taxpayer is in compliance with the IRS.

Everything is determined by the IRS computers and the automated collections division. The only way to be brought into compliance is by filing all years that were not filed. Depending on what the computer states, you may have to file 6 year's worth of IRS tax returns or they may even go back to 15 year's worth of taxes. This is why the IRS must be contacted immediately to figure out what needs to be done to bring the taxpayer back into compliance.

If there are compliance issues, the IRS will inform the tax professional or the taxpayer what taxes must be filed. It is important to prepare these taxes, but not to mail them in. They need to be faxed to the IRS so they are acknowledged in the IRS computers immediately and the processing of these returns can start within hours, not weeks or months; the IRS may not release the wage garnishment until the tax returns are at least submitted for processing to the IRS.

The IRS Tax Relief Team at Flat Fee Tax Service, Inc. can prepare your missing income tax returns in as little as a few days.

Once it is determined that a taxpayer is in compliance, the next thing the IRS is looking for is a resolution to the outstanding taxes owed to the IRS. This may be in the form of a payment plan, a partial payment plan, having the taxpayer declared non-collectible or an offer in compromise.

In most cases, the IRS will request your financial information through certain IRS forms in order to determine how much, if anything, you can afford to pay towards your total tax liability. If your file is being handled in the automated collections division, a 433F form (a simplified Collection Information Statement) has to be prepared and submitted along with supporting documentations. If the file is with a field agent, a 433A form (a detailed Collection Information Statement) has to be prepared and filed with the field agent, also along with the supporting documentation. The IRS knows that in 90% of the cases, the wage garnishment or IRS levy is a hardship on the taxpayer, and the proper procedure is that after submitting these financials, the IRS should release the wage garnishment within hours. 

Unfortunately, taxpayers try to perform this procedure by themselves; without a tax professional involved, the IRS WILL simply drags their feet and prolong the situation because it is the IRS's position to take this drastic action due to the fact that the taxpayer did not comply with any of their prior requests. The tax professional you chose to represent you should force the IRS to comply with the rules and regulations to have these matters expedited within hours and not weeks or months.

There is a second method of having a wage garnishment or levy released; this procedure consists of proving to the IRS that this wage garnishment is a true and immediate hardship to the taxpayer. A hardship to the taxpayer is that housing, transportation or food expenses are at an immediate risk; i.e. if your electricity is about to be disconnected, and you can provide a statement from your service provider showing that your electricity is being shut off due to non-payment or if you are able to provide an eviction notice or foreclosure notice due to non-payment the same method applies. 

Asking the IRS to release the wage garnishment based on these facts is a very difficult task because the IRS is receiving nothing in return providing a solution to the outstanding taxes. This is an up-hill fight with the IRS but the IRS is supposed to follow procedures and in most situations the taxpayer is unable to resolve this issue without a tax professional.

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Monday, February 8, 2016

File Missing Income Tax Returns - Get Straight With The IRS

Many clients that come to Flat Fee Tax Service, Inc. for IRS income tax help, haven't filed income tax returns that are now past due. We have even had clients approach us who haven't filed a tax return in 20 years or more and now want to get back into compliance and get right with the IRS.
Fortunately for you, preparing past due tax returns by our tax professionals is easier than you think and you have a few things working in your favor. First, the IRS will not require you to file tax returns that are more than 7 years past due. More than likely, you don't have the records that you would need to prepare a tax return from further back than that, and neither does the IRS. So, even if you have not filed a tax return in 50 years our team of tax professionals won't need to do 50 years of tax returns.
For the years that we do need to prepare an income tax return, we can start by obtaining Wage and Income transcripts from the IRS. These transcripts show us all of the income that was reported to the IRS under your social security number, and will include W-2's, Interest Income, 1099's, and other relevant documents.
These transcripts are usually sufficient to give us a very good start on your tax returns. Once we have a first draft done based upon these records, our IRS Tax Attorneys will work with you to determine what other deductions, expenses, and credits can be added to the return to improve your bottom line.
Flat Fee Tax Service, Inc. has software archives that allow us to quickly prepare tax returns from as far back as 1998, and our tax experts can prepare tax returns from further back than that by hand if needed.

What happens if I don’t file my tax returns?

If the IRS and state do not receive a tax return for you their most likely response will be to file one for you.  For the IRS this process is called filing a Substitute For Return (this is NOT A TAX RETURN) or a 6020(b) return. Some people may refer to these as "Arbitrary Assessments". 
The IRS has a lot of information reported to them by your employer, your bank, and your customers.  They will use this information to determine your gross income and file a substitute for return for you.  Since they are not aware of your filing status or any business or personal deductions you can take they will not give you credit for any of these. They essentially use the same Wage and Income transcripts that we would use, but they then assume you were single, had no deductions or expenses, and wanted to be taxed at the highest tax rate.
This will usually result in a return with a balance due substantially higher than what you actually owe (unless you really were single, had no deductions, and no business expenses -- in that case, sometimes their numbers are spot on). Whatever number the IRS comes up with will usually be shared with the State that you resided in, and the State will then prepare a return for you as well, setting off a chain reaction.
Similar processes are used for business returns including wage withholding and sales tax, although the government typically has far less information available to them. In the case of payroll taxes, the IRS and States will typically use records of W-2's that you filed or unemployment information you reported to reconstruct a tax return.
If none of these records are available, sometimes they'll just take their best guess at it using your prior history to estimate what you owed. Once they do that, it's up to you to correct their figures.

What can you do if the IRS or state has filed a Substitute or Estimated Tax Return for me?

In most cases you can override the numbers that the government has come up with by requesting a reconsideration and providing a copy of the tax return with the figures that you believe are accurate. Generally, the IRS will allow you to do so, but a lot of states have time limits for filing the original return so you might be stuck with the figures they used. It is generally in your benefit to act quickly to correct their mistake rather than letter their assessment linger.
Due to the difficulty in filing old returns accurately and convincing the IRS/State to accept them, professional assistance is always recommended. At Flat Fee Tax Service, Inc., we have the team and the tax software to prepare tax returns from as far back as 1998 and can prepare tax returns from earlier than that by hand.
We are experts in recreating these older returns using wage and income information provided to us directly by the IRS and then conducting an in-depth interview to ensure that every deduction is found and every tax advantage is taken.
If you need past-due tax returns prepared, call us today for a free consultation. Our consultations are free and confidential. Our Tax Attorneys will make a call to the IRS to review the status of your account. During that call we can determine which returns actually need to be filed, and we will order the transcripts needed to prepare those returns.

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