IF YOU OWE THE IRS
THE IRS WILL COME AFTER YOU
YOU CAN STOP AN
IRS WAGE LEVY
SETTLE WITH THE IRS
If you did not pay the IRS when you filed your tax return, the IRS will send you a past due bill. This past due billing is the beginning of the IRS Collection process against you, which will continue until your back tax debt is paid and satisfied or until the IRS may no longer legally collect your tax debt; for example when the collection period has expired (Statute of Limitations).
IRS FIRST NOTICE
|IRS Past Due Notices|
The first notice from the IRS will be a demand letter that explains the balance due and will demand immediate payment of the back tax due. This notice will include the amount of your back tax as well as the penalties and interest that have been added to your tax debt. Depending on the kinds of penalties that the IRS has applied to your tax debt, your debt owed to the IRS will double in 3 to 5 years.
IRS PENALTY ABATEMENT
You can have have the penalties and interest removed from your tax debt for what is called "reasonable cause." There are many reasons for the penalties imposed to be eliminated for "reasonable cause." You can go to our Website at: http://www.flatfeetaxservice.us for more information on this matter or read our other blogs for even more information on IRS penalty abatement.
YOUR IRS BACK TAX DEBT
If you cannot pay the entire tax debt to the IRS, you could send as much as you can to the IRS. The unpaid tax debt is subject to interest compounded daily and a monthly late payment penalty. If you have the ability to pay your back tax debt, it is in your interest to pay the IRS as quickly as possible.
YOU COULD ENTER INTO AN
IRS INSTALLMENT AGREEMENT
If you are unable to pay the IRS your entire back tax debt, you could enter into a payment plan with the IRS. This is called an IRS Installment Agreement or IA. Several important factors, that you need to be aware of, are involved when entering into an Installment Agreement with the IRS.
- If you owe less than $25,000, you will not be required to show financial information such as pay stubs or bank statements. This is called a "Streamlined Installment Agreement" and can be agreed upon over the phone. This is called "streamlined" because it is easy for the IRS (the IRS is unconcerned about your convenience) to close files and move on to the next case(s). Just because it is "streamlined" and easy to obtain, doesn't mean it is the best deal that you can obtain.
- If you owe more than $25,000, you will have to fill out 433 Forms and provide financial information about yourself. The financial information required of you will include pay stubs, bank statements, rental agreements, etc. If you concerned about letting the IRS know about your financial affairs, you may want to pay down your back tax debt so that it is below the $25,000 figure before you talk about an Installment Agreement.
- The IRS, more than likely, will file an IRS Federal Tax Lien when you enter into an Installment Agreement. Why would the IRS do that when you have volunteered to pay your back tax debt? Because the IRS can and they feel they are "protecting their debt."
IF YOU RECEIVE
|IRS Final Notice|
AND CANNOT PAY THE FULL AMOUNT DUE
If you are unable to pay the IRS anything due to financial hardship, the IRS can temporarily suspend all collection activity against you. You could be declared to be Currently not Collectible. The IRS will cease all collection activity such as issuing a levy against you. The IRS may, however, file a Federal Tax Lien against you while you are Currently not Collectible. The penalties and Interest will continue to be added to your tax debt, but, no one will be requiring you to pay your back tax debt. The Statute of Limitations will continue to run and it is possible that you may never pay 1 dime to the IRS. The IRS could require information at anytime, but, generally, the IRS will review you every 18 to 24 months.
It is a complicated process to have you declared Currently not Collectible and you should have an experienced IRS tax professional handle this negotiation for you.
If you are a member of the Armed Forces, you may be able to defer payment of your back tax debt.
BEFORE YOU ENTER INTO AN
IRS INSTALLMENT AGREEMENT
YOU NEED TO LOOK AT:
- Amending your tax returns. We, at Flat Fee tax Service, Inc., have found many of our clients have had poorly prepared tax returns that have missed legitimate deductions. Do not agree to pay the IRS anything until you are sure that you are paying the lowest amount possible.
- Penalty Abatement. What happened in your life that caused your present situation to spiral out of control? Did you experience a divorce? Did you have a failed business? Did you have medical issues that caused you to be behind? Did a relative require your attention due to medical reasons? Did you receive bad tax advice? These are only a small sampling of what is called "reasonable cause" that can be the basis of eliminating the penalties and interest on those penalties that have been added to your back tax debt.
- Offer in Compromise. An IRS settlement of your back tax debt is called an Offer in Compromise. The IRS has broadened it's eligibility requirements this year for eligibility into the Offer in Compromise program. More taxpayers are eligible and qualified for an IRS settlement than ever before. Many of the same criteria for being declared Currently not Collectible is evident in the Offer in Compromise program except in the Offer program, the taxpayer has the ability to "pay something." What that "something is" will be unknown until Flat Fee Tax Service, Inc. can put together your Offer in Compromise package.
- We, at Flat Fee Tax Service, Inc., feel that anyone who should be or has been declared Currently not Collectible should go the extra step and file for an Offer in Compromise.
Some actions that the IRS may take to collect your tax liability are:
- Filing a Notice of Federal Tax Lien. This will be on your credit report. A Federal Tax Lien could affect your Security Clearance. A Federal Tax Lien may affect your ability to rent an apartment. A Federal Tax Lien may affect your ability to get a car loan. It may even affect your ability to get a job.
- Serving a Notice of Levy. Once the IRS has assessed your tax liability, the IRS can seize your assets in order to satisfy their collection of your tax debt. Seizure can be garnishing (levy) your paycheck, your wages, your Social Security, your Social Security Disability (SSDI), your bank account(s) or your brokerage account(s). The IRS could seize your vehicle or other assets such as paintings, boats, real estate or collectibles. The IRS will seize both Federal and state tax refunds. The IRS will take your state payments/refunds such as the payments received by the citizens of Alaska.
WHAT IS A
FEDERAL TAX LIEN
A Federal Tax Lien is a legal claim to your property, including property that you acquire after the lien arises. A Federal Tax Lien arises automatically when you fail to pay the taxes owed within 10 days after the IRS sends their 1st Notice of Taxes Owed and Demand for Payment. The IRS may also file a Notice of Federal Tax Lien in the public records. The Notice of Federal Tax Lien publicly notifies your creditors that the IRS has a claim against all your property, including all property acquired after the Federal Tax Lien has been filed.
The Notice of Federal Tax Lien will, most likely, appear on your credit report and may harm your credit. Make no mistake about it, a Federal Tax Lien is meant to harm you and bring you to your knees. Think of the Federal tax lien as the IRS "insurance policy" that your tax liability will be paid.
Once a Federal Tax Lien has been filed, the IRS, generally, cannot (or will not) release the lien until the taxes, penalties, interest and recording fees have been paid in full or the IRS may no longer legally collect your tax liability.
YOU CAN GO IT ALONE
YOU CAN BE SMART
I am Dave Rosa, the V.P. of Client Relations at Flat Fee Tax Service, Inc. I will be conducting your free and confidential consultation. It is my duty and responsibility to you, as well as Flat Fee Tax Service, Inc., to provide you with an honest and straightforward evaluation of your IRS problem. If it is determined that we, at Flat Fee Tax Service, Inc., can benefit you and resolve your your IRS problem, a preliminary action plan in place put be outlined to you. The Tax Attorney assigned to your case will call the IRS as well as file the 2848 Form (IRS Power of Attorney) immediately. The IRS will be informed that you have proper representation and we will proceed to pull your file so that we know exactly what needs to be accomplished in order to resolve your IRS problem properly and as quickly as possible.
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