Friday, July 28, 2017

How Your IRS Allowable Expenses Can Sink an IRS Offer in Compromise - Flat Fee Tax Service IRS Tax Attorney

FLAT FEE TAX SERVICE, INC.

IRS TAX ATTORNEY TELLS 

OFFER IN COMPROMISE SECRETS

Do you want to the get the IRS off your back? Do you want to settle with the IRS? Are thinking about and considering an Offer in Compromise?

THE IRS HAS WHAT THEY CALL

"ALLOWABLE EXPENSES"

After all, at the end of each month, after you pay your bills, you have little money left to pay the IRS for your delinquent income tax.

IRS Settlement should seem logical, right?

HOLD ON! NOT SO FAST!

ESPECIALLY IF YOU DO NOT HAVE AN

IRS TAX ATTORNEY



The IRS may not give you full credit for all of your living expenses, and calculate that you can pay them more than you actually can. This is because the IRS limits living expenses as part of their offer in compromise analysis.

The IRS will put you on their budget, and will disregard yours.

If your living expense are greater than the IRS’s budget, you will have expenses ignored by the IRS in calculating your ability to pay them back. This has the effect of increasing your cash flow. Fewer living expenses and more cash flow result in the IRS calculating an ability to pay which is greater than your reality. This, in turn, raises the value of an offer in compromise.

The IRS living expense guidelines are known as Collection Financial Standards.

FLAT FEE TAX SERVICE, INC. CLIENTS

HAVE A 95% OFFER IN COMPROMISE

SUCCESS RATE

Let’s do an example, highlighting three areas where IRS will use their collection financial standards to chop up your budget, attack your living expenses, and increase your settlement:
1. Credit card payments. The IRS will not allow you the expense of monthly payments on credit cards in calculating your ability to repay them. This means if you have $500/month in credit card payments, you actually have $500/month to pay the IRS. The IRS will disregard this expense, calculate it going to them, and use it to increase the value of your compromise.
2. Your Car payment. The IRS collection financial standards currently allow a car payment of up to $485/month. If your car payment is less than that, then the IRS will give you full credit for it in your budget. But if your payment is, say, $585/month, the IRS will give your credit for $485 and not give you credit for the $100 difference, thus increasing your settlement.
3. Housing and utility payments. Let’s say, as an example, you live in Dallas County, Texas, you own your house, have a family of four, and your mortgage payment is $2,500/month. Your gas, electric, water, and trash totals another $500/month, bringing your total mortgage and utility expense to $3,000. IRS collection financial standards allow $2,016 in total housing and utility payments for you and your family. That means the difference – $984/month – will be disallowed by the IRS, and added back to increase your cash flow and the amount of settlement.

On these three items alone – your credit cards ($500/month), car payment ($100/month excess) and housing/utilities ($984/month excess) – the IRS will flip your budget by $1,584/month. In other words, if you are offering them a cash flow position of zero, they will counter-offer at $1,584/month.

YOU DO NOT WANT TO DO AN

OFFER IN COMPROMISE

ON YOUR OWN

Let’s look at how the IRS will factor your living expenses and cash flow into their offer in compromise valuation:

If you are able to pay the IRS the settlement amount within five months after acceptance, the IRS will take your cash flow and multiply it by a factor of 12. Your financial reality has you ending each month at a zero budget, with no money left over. Based on that, it would not be out of the question for you to offer the IRS as little as $100 in the compromise. You have no cash flow to apply to the 12 multiplier, equaling a very low offer on this basis.

However, the IRS is going to put your living expenses on the cutting board, apply their collection financial standard test, and come out with $1,584/month. This will increase the value of your settlement from your cash flow to $19,008 ($1,584 by the 12 month multiplier). But you don’t have $19,008 laying around, and can’t afford to pay the IRS the settlement as their numbers are different from your reality. The IRS collection financial standards are rearing their ugly head on your settlement hopes, and appear to be dooming it.

As you don’t have $19,008 right now, the IRS will give you another option: more time to pay to the settlement, up to 24 months. The IRS will also penalize you for taking more time and change the way they calculate the settlement. Rather than multiply your cash flow by 12, they will use a multiplier of 24. This now results in an offer in compromise of $38,016 ($1,584 x 24).

The IRS will allow you to pay the $38,016 at $1,584/month over 24 months. And this brings about another glitch: You do not have $1,584/month to pay the IRS over the next 24 months because you are spending that on the living expenses cut out of your budget by the IRS collection financial standards.

Clearly, when you attempt to settle with the IRS, it is important to understand that it is their reality that counts, not yours. This may seem illogical, unfair, or even oppressive. 

The important point is to understand that the IRS has guidelines – a budget – which they will impose on you to limit your living expenses, increase cash flow, and possibly overwhelm you with the settlement terms.

The IRS is looking to eliminate excessive lifestyles (as they define it), and living expenses that they believe should be paid after them (like credit cards) in computing the value of your Offer in Compromise.

THE IRS OFFER IN COMPROMISE PROGRAM IS REAL

NATIONWIDE THE IRS APPROVAL IS 42%

FLAT FEE TAX SERVICE, INC. HAS A

95% CLIENT OFFER IN COMPROMISE

APPROVAL RATE

You must be "eligible and qualified" for a successful Offer in Compromise. You simply have to fit within the IRS settlement guidelines. The takeaway is to know how the IRS works ahead of time, sparing yourself time spent in a compromise that will not work, or will be in amount more than you expect.

CALL THE FLAT FEE TAX SERVICE, INC.

IRS TAX HELP PHONE:

1-800-589-3078

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Thursday, July 27, 2017

Statutes of limitations and the IRS - Flat Fee Tax Service IRS Tax Attorney

IRS STATUTE OF LIMITATIONS

Have you heard the expression: "the statute of limitations has expired"?

We all think we know the definition, but how does it apply to IRS regulations? First of all, the term "Statute of Limitations"means there is a time limit where some sort of IRS enforcement action can be brought against a taxpayer who owes an income tax debt.

In the case of a tax return being filed, generally there is a three-year statute of limitations wherein the IRS can audit your return. This time begins with the date the return was filed.



If your income tax return was on extension, the statute of limitation would begin on the appropriate date when received by the IRS.

Under the same set of IRS regulations, unless your income tax is assessed within the three-year time frame, collections cannot be instituted by the IRS.

What happens if you never filed an income tax return even though it was due?

The IRS would prepare what is known as a Substitute for Return (SFR) and there is no statute to consider as this is not a taxpayer-filed return.

A SUBSTITUTE FOR RETURN WILL GIVE YOU NO DEDUCTIONS AND PILE ON PENALTIES FOR NON-FILING AND ADD INTEREST. 

THE IRS TAX ATTORNEYS AT FLAT FEE TAX SERVICE, INC. CAN CHALLENGE THE SUBSTITUTE FOR RETURN AND THEN FILE A REAL INCOME TAX RETURN. 

DOING SO WILL REMOVE THE PENALTIES FOR NON-FILING AND REDUCE YOUR INCOME TAX DEBT. 

A Substitute for Return will allow an IRS assessment to be made and collection activities will begin against this balance that will allow the IRS 10 years to collect the amount due.

Everyone makes mistakes and the IRS is no exception. The amount charged should be checked for accuracy before acceptance of the liability.

IF YOU HAVE FAILED TO FILE YOUR INCOME TAX RETURNS, GET YOURSELF AN IRS TAX ATTORNEY. BE PROTECTED.

Obviously the IRS wants to collect these funds and will exhaust all possible means to secure the money before the tax deadline. They may use all legal means to enforce collection, including IRS levy / garnishment of wages and levying financial accounts and other assets such as bank accounts.

In the event the taxpayer then files a return for that year, the IRS will process it as an original return, restore the correct tax and reset the statute from that day forward.

As can be expected, penalties and interest will begin to be assessed beginning with the original date the return should have been filed.

IRS penalties can consist of late filing, late paying of the tax, nonpayment of estimated tax and perhaps an accuracy-related or negligence penalty.

TWO WAYS TO LOWER YOUR TAX DEBT

1. CHALLENGE THE SUBSTITUTE FOR RETURN

2. DO AN OFFER IN COMPROMISE AND SETTLE

In addition, this will allow the three-year audit window to be extended to verify deductions in the event it was to be questioned.

In the event of a substantial omission of more than 25 percent of gross income on the return, the statute is extended to six years.

The IRS penalties that result from this type of omission include the others named above, but may include a fraud penalty instead of the negligence penalty, which can be as high as 70 percent of the tax.

On the other side of the coin, a taxpayer has the right to file a claim for refund within the same three-year period beginning with the filing date.

The regulations also state that the taxpayer has the right to file a claim within seven years if the tax refund would be a result of either a bad debt or a loss suffered from a worthless security.

The 10-year collection statute can be extended based on filing an offer in compromise or by filing for bankruptcy.

The statute is put on hold and is not running for an additional six months following the discharge or dismissal of the bankruptcy.

The filing of an appeal against the IRS or the offer in compromise also stops the running of the time period until those issues are resolved and prevents the IRS from pursuing any collection activity, even though the tax is still pending.

The interest, however, will continue to run and be added to the corrected tax amount upon settlement of these two plans.

The IRS will not notify you once the debt has expired.

Dealing with the IRS is extremely complicated. Have an IRS Tax Attorney represent you. Get protection. Sure there will be a fee to have representation but you will end up saving yourself money and anxiety.

THE FLAT FEE TAX SERVICE, INC.

IRS TAX HELP PHONE:

1-800-589-3078

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Tuesday, July 25, 2017

When to Use the IRS Collection Appeals Program - Flat Fee Tax Service IRS Tax Attorney

FLAT FEE TAX SERVICE, INC.

STOPS AN IRS LEVY IN ONE DAY

THAT'S THE BEST "IRS PROCEDURE"

The Collection Appeals Program (CAP) is an IRS procedure available to appeal a broad range of enforcement collection actions. It does have some pitfalls when compared to a Collection Due Process (CDP) hearing, so consider consulting with an experienced IRS tax attorney if you are not sure which procedure to use.



The Collection Appeals Program (CAP) procedure can be used to dispute the following collection actions:

1. Before or after the IRS files a Notice of Federal Tax Lien
2. Before or after the IRS levies or seizes your property
3. Termination, or proposed termination, of an installment agreement
4. Rejection of an installment agreement
5. Modification, or proposed modification, of an installment agreement

Some of these IRS enforcement actions may also be appealed during a Collection Due Process (CDP) hearing, so you may be unsure, due to your inexperience, which method is preferable for appealing an IRS tax lien or an IRS bank account levy. 

Your correct answer depends on your unique financial situation, but two important distinctions between a Collection Due Process (CDP) hearing and the Collection Appeals Program (CAP) procedure are that the decision from a CAP conference cannot be appealed in Tax Court, and you cannot dispute the amount or existence of the underlying income tax liability in a Collection Appeals Program (CAP) procedure, which you may be able to do at a Collection Due Process (CDP) hearing if you have not already been given to chance to do so.

If you, the financially struggling taxpayer, have a situation where you can use an IRS Collection Appeals Program (CAP) procedure before aan IRS Collection Due Process (CDP) notice is issued, you have to be very careful because an issue that is raised and decided in an IRS Collection Appeals Program ( CAP) hearing cannot be appealed during an IRS Collection Due Process (CDP) hearing, unless new information is presented. This could also prevent you from raising the issue in Tax Court, so do not pursue the CAP hearing prematurely.

BE SMART  -  GET SMART

HAVE AN EXPERIENCED

IRS TAX ATTORNEY 

REPRESENT YOU

The IRS Collection Appeals Program (CAP) can be valuable for appealing actions related to installment agreements, which cannot be appealed during a CDP hearing. If the IRS terminates an existing installment agreement, perhaps because you missed a payment or you failed to file a tax return, the IRS may initiate enforcement collection actions such as wage garnishments and/or bank account levies. 

YOU HAVE RIGHTS

FLAT FEE TAX SERVICE, INC.

WILL PROTECT YOU

However, the IRS cannot levy until 30 days after the levy or termination of your installment agreement, and if you appeal, they will not appeal during the appeals process unless they believe the collection is in jeopardy.

Third parties also have the right to use the CAP procedure to contest the filing of federal tax liens against alter ego or nominee property. Persons alleged to be alter egos or nominees do not have the right to an IRS Collection Due Process (CDP) hearing.

FLAT FEE TAX SERVICE, INC.

IRS TAX HELP PHONE:

1-800-589-3078

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Friday, July 21, 2017

IRS Notice CP90 - Notice Of Intent To Levy - Flat Fee Tax Service IRS Tax Attorney

NOTICE OF INTENT TO LEVY

IRS NOTICE CP90


If you have received a CP90 Notice from the IRS, it means the IRS is putting you, the taxpayer, on notice of their intent to levy (garnish) certain assets (paycheck, wages, Social Security, Social Security Disability (SSDI), Veterans Pension and/or bank accounts) for unpaid income taxes. This is generally what most people refer to as garnishments or levies of wages and bank accounts. You have the right to a Collection Due Process hearing.

What can you do if you disagree and want to fight the CP90 notice?

YOU CALL THE BEST IRS HELP TEAM AT FLAT FEE TAX SERVICE, INC. THAT'S WHAT YOU CAN DO.

Within 30 days from the date of the CP90 Notice, a request for Collection Due Process hearing on Form 12153, "Request for a Collection Due Process or Equivalent Hearing".

The IRS Tax Attorney at Flat Fee Tax Service, Inc. can appeal the intent to levy and other disagreements you have at a Collection Due Process hearing. To put it more clearly, our IRS help team can dispute your ability to pay the debt, and/or dispute the validity of the debt.



At the IRS hearing, our IRS Tax Attorney can present, on your behalf, something called a "proposed collection alternative". Flat Fee Tax Service, Inc. can also raise issues why you don't owe the tax; that is, claim innocent spouse relief, or an audit reconsideration.


IRS appeals officers are experts at tax collection and research and will work methodically against you. Because of the IRS' high level of competence, taxpayers have the right to have (you should have) an experienced tax attorney or other tax professional represent them at the hearing. 

A NOVICE TAXPAYER IS NOT GOING TO BEAT THE IRS

It is important that the collection due process hearing be treated as a legal proceeding. The reason is that if you cannot find a reasonable solution at the hearing, you have a right to take the case to tax court.

FLAT FEE TAX SERVICE, INC. WILL HAVE AN IRS LEVY STOPPED AND RELEASED IN ONE DAY

Income Tax Negotiation Options

Interest and applicable penalties will continue to accrue until your balance is paid in full or resolved. Below are the most common tools used to negotiate an income tax debt or repay it over time. A legal opinion may be helpful to find and implement the best course of action for you.

1. An Installment Agreement is a monthly payment program. This may seem simple, but, the IRS has different payment rules for a host of different circumstances. The amount of income tax debt is a factor. There are different rules for different amounts of income tax debt. Will a Federal Tax Lien be filed against you after you agree to a payment plan? This could easily happen to you if you do not know the IRS Code or what you are doing.

2. An Offer in Compromise is a IRS settlement of your income tax debt. An Offer in Compromise is a one time lump sum payment, negotiated down from the current amount of tax debt you owe Not everyone is qualified and eligible but many of taxpayers are. Find out if you can settle with the IRS and if you can get the IRS "off your back".


3. Currently not Collectible will put the IRS at bay for a while. If you cannot pay the IRS and owe less than $10,000 then being Currently not Collectible would be the "way to go" for you. If you cannot pay the IRS and owe more that $10,000, then an Offer in Compromise is the right option.

4. First time IRS penalty abatement can lower the amount you owe. A taxpayer has one opportunity to have IRS penalties abated (waived). You must show that your IRS problems has not been "habitual".

5. There is only a certain amount of time that the IRS has to collect on the tax debt. This is called a CSED (Collection Statute Expiration Date). Our team, led by the IRS Tax Attorney handling your IRS tax problem, will find out how much time the IRS has to collect on your debt by clicking here. The Statute of Limitations is not necessarily based on the year of your tax filing. to hold off the IRS on your own.

It is possible for our team to play a "cat and mouse" game with the IRS so that your income tax debt falls off due to the Statute of Limitations. Do not attempt

What if you missed the 30 day deadline?

If you miss the 30-day deadline to file a Collection Due Process hearing, you have a year from the date of the Final Notice of Intent to Levy to file something called an "Equivalency Hearing." An Equivalency Hearing is just like a Collection Due Process hearing, with one major difference: there is no right to tax court.

If an Equivalency Hearing is requested, typically the IRS will not levy or garnish you, but they are allowed to do so. So, once again, you should have an IRS Tax Attorney represent you.

CALL THE FLAT FEE TAX SERVICE, INC.

IRS TAX HELP PHONE:

1-800-589-3078

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