Saturday, January 14, 2012

IRS Problems -- The IRS Can and Will Do Bad Things to You

THE IRS

CAN and WILL

DO BAD THINGS TO YOU

The two (2) major problems a taxpayers will encounter is not filing their tax returns and not paying the back tax debt. Each of these actions will result in the IRS doing very bad things to you. It starts this way:

SUBSTITUTE for RETURN - Internal Revenue Code section 6020(b) (1) states that "any taxpayer who fails to file a tax return required by internal revenue law or regulation made there-under at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise."

Now what does all that "legal lingo" mean? It means that the IRS can prepare a return for you based on information it has at its disposal or that the IRS can find otherwise. The IRS will not report deductions, expenses, etc. So a "Substitute for return" will be done as a single person with a standard deduction and its creation will more than likely result in an tax debt that is overstated, sometimes by tens of thousands of dollars.

 WHY DOES THE IRS DO THIS

The IRS will create a Substitute for Return so that it will have the legal authority to seize assets. Without a "Return" there is no tax debt. Do not be fooled into believing that a Substitute for Return is an actual tax return. It isn't. A Substitute for Return is an assessment that creates the tax debt. You will be assessed penalties and interest on those penalties for non-filing. Those IRS penalties are huge. It is possible to have the penalties for non-filing reversed out but it takes skilled tax representation to accomplish this.




AFTER THE SUBSTITUTE for RETURN

EXPECT

An IRS LEVY

An IRS LEVY - You filed your tax returns but were unable to pay. Or, you failed to file your tax returns and the IRS created a Substitute for Return and assessed your tax debt. Now the "fun and games" begin. Not really. The IRS can now start the process of seizing assets. The IRS has the authority to seize your wages, your commissions, federal payments (Federal Payment Levy Program), state tax refunds, bank account / brokerage accounts, as well as monies owed to independent contractors. The IRS can seize your automobile, recreational vehicle, paintings, heirlooms, antiques, etc.

The IRS does not need to bring you to court and obtain a judgment. The IRS only needs an "assessment of the tax debt." That's were the Substitute for Return comes in. The IRS will send out written warnings advising you of the tax debt and their intentions. The IRS can send these notices to any address that they may have for you in their data bank. The IRS may have sent a "Notice of Intent to Levy and Your Right to a Hearing" to an address that you have not lived at for years. So, you may never know that the Levy is coming. The IRS only has to send the Notice of Intent to Levy once for a levy to be effective.

If your wages or federal payments (Social Security or Social Security Disability / SSDI, etc.) are the target of the IRS levy, the levy will be considered to be "continuous." That means that the levy will stick until you either:
  1. Pay your tax debt in full.
  2. Declare Bankruptcy.
  3. Enter into an Installment Agreement with the IRS, or
  4. Engage Flat Fee Tax Service, Inc. which will have your IRS wage levy stopped and released in 1 Day / 24 Hours. After we stop the IRS levy, the tax relief team at Flat Fee Tax Service, Inc. will then look to at how we can reduce your tax debt before negotiating an Installment Agreement.
If the IRS seizes your bank or brokerage account, the funds must be held for 21 days. The 21 day period includes Saturdays, Sundays and holidays, which means that the time available for you to reverse the levy is probably more like 14 or 15. if you have unfiled tax returns, you can just about forget getting the forget about getting the seized money back in the short term. Your delinquent tax returns will need to be filed and you will need to be what the IRS calls "Compliant." Unless you are "Compliant" nothing good will happen for you.





An IRS LIEN - Once the IRS has assessed your tax liability, the IRS can now file an attachment on just about everything that you own. This is called a Lien. The IRS will record with your County Recorder's Office a Federal Tax Lien. This IRS Lien will be a matter of public record for 10 years. All of the credit reporting bureaus will pick up on the IRS Lien and it will affect your credit. You will find it difficult to impossible to purchase on credit or lease a new car. You may have trouble renting an apartment. You will be unable to obtain a mortgage. If you find a car dealer who will finance a used car for you, the interest rate will be very high. 

An IRS Lien attaches to all of your property including property obtained after the Lien has been recorded. An IRS Lien can be removed and/or subordinated. It takes skill and knowledge to do so. An IRS Lien is extremely hard to remove.

ASSET SALE - yes, the IRS can seize and sell your goods and property. There are restrictions and procedures that the IRS must follow, but it really is not very difficult for the IRS to do so. Beacuse the government is broke, running up record deficits, the IRS has become more aggressive regarding the seizure of retirement accounts and homes.

The process to the IRS seizure of property under IRC sections 6335 and 6336 are as follows:

The IRS will post a public notice of sale in a local newspaper and deliver a copy of the notice to you or the IRS could send it certified mail. After placing the Notice of Sale, the IRS must wait ten (10) days before holding the sale, unless the items are perishable.

Before the sale, a minimum bid price is set or created. This is usually 80% of the forced sale value of the property after all liens are taken into account. The value can be appealed but rarely is.

TRUST FUND RECOVERY PENALTY (940/941) - When a business has held employment taxes from employee(s) checks and has not sent that money to the IRS, the IRS can (and the IRS will) assess a penalty against "all responsible parties" called a "trust fund recovery penalty." A "responsible party" could be an officer of the company or it could be anyone who is associated with a companies bank account. If you are an employee of a company, you should think over the idea of being a signatory of any company bank account. 

The IRS takes very seriously all 940/941 problems. The IRS will consider non-payment of payroll taxes as a breach of trust and will make your life miserable.

The trust fund Recovery Penalty consists primarily of the employees portion of the tax withheld and not the matching portion. not only will the company be responsible for this tax debt but it is the responsibility of the individuals involved as well. It is an extremely hard tax debt to deal with and requires experienced IRS representation. 

This penalty is non dis-chargeable in bankruptcy court. The IRS will go after everyone involved, either as an officer of the company or signatory on the bank accounts and the IRS will let the "chips fall wherever the go."

FACING AN IRS LEVY

NEED TO SETTLE WITH THE IRS


CAN YOU AFFORD THE FOLLOWING:
  1. An Initial $300.00 Retainer.
  2. 8 Monthly payments of $200.00
  3. Total of $1900.00
If you can afford to do the above, Flat Fee Tax Service, Inc. will do the work necessary to resolve your IRS problem once and for all.



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. I will walk you through a series of questions which will enable us to put together an action plan that will resolve your IRS problem once and for all. 

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1 comment:

  1. If you have not filed your tax returns or have a lingering IRS liability, bad things will happen to you. You have options. Contact Flat Fee Tax Service, Inc. for your free and confidential consultation. visit our website at: http://www.flatfeetaxservice.com For more information, view our blog at: http://www.affordableirshelp.com and for updates, follow us on twitter: http://www.twitter.com/flatfeetaxsvc

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