Wednesday, April 26, 2017

Got Unpaid IRS Income Tax Debt? Collectors Can Now Contact You - IRS Tax Attorney




The tax deadline for April has officially passed, but what if you have an income tax debt lingering from a few years back?

If you do, you might hear about it from an unlikely source.

The Internal Revenue Service (IRS) recently announced they’ll be using private debt collectors (again) to collect on IRS debt more than two years old. Here’s what this means for you and how to spot potential scammers taking advantage of this new development.
IRS debt collection now enforced by private companies

In an effort to collect on unpaid taxes that have been delinquent for at least two years, the IRS is now using debt collection companies to help.

A new law surrounding IRS income tax debt, enacted by Congress in December 2015, is now taking effect. It “requires the IRS to use private collection agencies for the collection of outstanding inactive tax receivables.”

Essentially, if you owe any IRS income tax debt from two or more years ago, don’t be surprised if you are contacted by a debt collection company. If your unpaid income taxes are sent to collections, you’ll receive a letter from the IRS, followed by a letter from the collection company the IRS assigned to collect on your unpaid taxes. For this reason, it’s important to know the difference between legitimate IRS debt collection and a predatory tax season scam.

What you need to know if you are contacted

by IRS debt collectors

One of the most alarming things about this development is that many previous debt collection scams revolved around tax debt. Therefore, it’s important now more than ever to be vigilant if you’re being contacted by debt collectors.




Luckily, there is a set of rules debt collectors have to play by. 

Here’s how you can tell if the agency contacting you about unpaid taxes is legitimate:
(1) The IRS debt must be at least two years old.
(2) You’ll receive a letter about the unpaid taxes first – not a cold call.
(3) You will not be asked to pay via a prepaid debit, iTunes, or gift card; you will be informed about electronic payment options via
(4) Your unpaid taxes will only be sent to one debt collection company.

(5) The collection agency must abide by the IRS code. 
(6) You have rights.
(7) You can settle through the Offer in Compromise program.

There are currently four companies working on behalf of IRS debt collection:
CBE Group. Address: PO Box 2217, Waterloo, IA, 50704. Phone number: 1-800-910-5837
ConServe. Address: PO Box 307, Fairport, NY, 14450. Phone number: 1-844-853-4875
Performant. Address: PO Box 9045, Pleasanton, CA, 94566. Phone number: 1-844-807-9367
Pioneer. Address: PO Box 500, Horseheads, NY, 14845. Phone number: 1-800-448-3531

There are also a variety of accounts for which affected taxpayers are not subject to this collection, as outlined by the IRS:
Taxpayers who are deceased
Anyone under the age of 18
Those in designated combat zones
Victims of tax-related identity theft
Taxpayers currently under examination, litigation, criminal investigation, or levy
Accounts subject to pending or active offers in compromise
An account subject to an installment agreement
Accounts subject to a right of appeal
Those classified as innocent spouse cases
Taxpayers in presidential declared disaster areas and requesting relief from collection
How to pay back your unpaid taxes and IRS debt

Wondering how to repay your IRS debt?

Before you agree to pay,

Find out if you can settle for less.

Regardless of which of the four designated collection agencies contacts you about unpaid IRS debt, the only entity you should be paying is the IRS.

You can do this electronically on the IRS website or by check. Make all checks payable to the U.S. Treasury and send them directly to the IRS. Do not send a check or electronic payment to any entity other than the IRS.




Also, just because you owe unpaid taxes doesn’t mean you don’t have rights. Here are a few taxpayers’ rights outlined in Time:

Debt collectors can’t call before 8 a.m. or after 9 p.m. unless you tell them they can.
A debt collection company can’t threaten to arrest you.
If you want to be sure you owe the money, you can ask for a validation notice.
You can also double-check any balance you owe the IRS.

If any collections agency breaks these rules, file a complaint with the Treasury Inspector General for Tax Administration. Even if you owe the money, you are not allowed to be harassed.


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Tuesday, April 25, 2017

The IRS Hires Private Debt Collectors - Get IRS Protection - IRS Tax Attorney

In 2009, the Internal Revenue Service (IRS) decided to end a three-year program that used private debt collectors to chase down delinquent taxpayers after an internal report found that it was actually losing the government money and that government employees were much more efficient at collecting debt than their private sector counterparts. This was the agency’s second attempt at using such a program.

Despite both failures, Congress passed the “Fixing America’s Surface Transportation Act” (FAST) in 2015, which requires the IRS to employ private debt collection agencies as a means of helping fund road improvement projects.



In apparent reluctance, the IRS waited until earlier this month to make it official, announcing on April 4 that it “will begin sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies.” According to NBC News, the IRS has hired four collection agencies – CBE, ConServe, Performant and Pioneer Credit – to collect outstanding tax debts from taxpayers who have been contacted several times by the IRS but still have not paid.

The U.S. Treasury plans to assign up to 1,000 delinquent accounts to each of the four companies on a monthly basis, who have been offered the incentive of retaining 25 percent of the tax bills they collect.

One of the agencies hired by the IRS – Pioneer Credit – had its contract with the Department of Education terminated in 2015 after it was found to have made “materially inaccurate representations” to struggling borrowers “at unacceptably high rates” in its attempts to collect on defaulted federal student loans. Pioneer Credit’s parent company, Navient, was also fined $97 million by the federal government in 2014 for overcharging military service members and misrepresenting late fees on student loans.

In addition to the troubling history of some of the collection agencies that have been hired, consumer advocates have expressed concern over the IRS’ third attempt to use private debt collection to claim unpaid taxes, arguing that the move is likely to cause a host of problems, such as the mistreatment of borrowers and an increase in tax fraud.

Chi Chi Wu, a staff attorney with the National Consumer Law Center, told NBC News:

“There are so many reasons why it’s a bad idea that the IRS has been forced to use private debt collectors. They’re the most complained-about industry to the Federal Trade Commission [FTC] and the Consumer Financial Protection Bureau. All too often, consumers are being mistreated by debt collectors and now taxpayers are at risk of that in the collection of tax debt.”

Wu added that most of the people who will be targeted are likely to be struggling financially, making them eligible for certain compromise programs or non-collectible status – information that private debt collectors are likely to withhold from borrowers, as it benefits those companies financially. “The collectors don’t have any incentive to do that because they get paid a commission for every dollar they bring in. Their main incentive is to collect money, come hell or high water,” Wu said.



Furthermore, as tax professor Adam Chodorow noted in an article for Slate, the use of private collection agencies to obtain unpaid taxes increases the likelihood of tax fraud, as private entities impersonating the IRS may harass innocent taxpayers and pressure them into paying debts that don’t actually exist.

Susan Grant, director of consumer protection at the Consumer Federation of America, echoed Chodorow’s concerns, telling NBC News: “We’ve always warned not to believe anybody who calls you claiming to be from the IRS because the IRS doesn’t call trying to collect delinquent taxes. And now, people will be calling.”

While the Federal Trade Commission and the IRS both plan to issue updated warnings about imposter scams, the potential for abuse from both scammers and the officially-hired private collection agencies remains high.


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Friday, April 21, 2017

IRS To Use Private Collection Agencies - IRS Tax Attorney

Private Collection of Some Overdue Taxes

The IRS Will Be Using Private Collection Agencies

Starting this month, the IRS will begin sending letters to a select group of taxpayers whose overdue federal tax accounts / income taxes are being assigned to one of four private-sector collection agencies.

We all know how abusive over zealous collection agencies can and will be. Imagine a collection agency employee feeling he/she has the power of the Federal Government to use against you. It's a recipe for disaster. 

You have rights. Don't be abused and bullied. You need an IRS Tax Attorney.

This is a new program that was authorized under a federal law enacted by Congress in December 2015 which enables these designated contractors to collect, on the government’s behalf, unpaid income tax debts. Taxpayers being assigned to a private collection agency would have had multiple contacts from the IRS in previous years and still have an unpaid tax bill.


John Koskinen, the IRS Commissioner stated, “The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights. The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people. In reality, those taxpayers whose accounts are assigned as part of the private collection effort know they have an income tax debt.”

How Does the New Program Work?

The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA). First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account is being assigned to a PCA and giving the name and contact information for the PCA.

Only four private collection agencies are participating in this program: CBE Group of Cedar Falls, IA; Conserve of Fairport, NY; Performant of Livermore, CA; and Pioneer of Horseheads, NY. The taxpayer’s account will only be assigned to one of these agencies, never to all four. No other private collection agencies are authorized to represent the IRS.


Once the IRS letter is sent, the designated Private Collection Agency (PCA) will send its own letter to the taxpayer and their representative confirming the account transfer. 

To protect the taxpayer’s privacy and security, both the IRS letter and the PCA’s letter will contain information that will help taxpayers identify the tax amount owed and assure taxpayers that future collection agency calls they may receive are legitimate.



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Tuesday, April 18, 2017

IRS Penalties and Interest - IRS Tax Attorney - IRS Penalty Abatement



It seems like the Internal Revenue Service (IRS) loves punishing taxpayers with penalties and interest. Income Tax penalties began as a way to encourage prompt payment for income taxes owed to the IRS. These IRS penalties are added so often now that the extra charges have become a primary money-maker for the Internal Revenue Service. According to the Internal Revenue Service Data Book, 2014 $25.5 billion dollars of civil penalties were assessed.

The best IRS help team at Flat Fee Tax Service, Inc. will work to help you, the taxpayer, who may qualify for removal of IRS penalties or penalty abatement.

What is an IRS Penalty Abatement?

An IRS penalty abatement is defined as removal of certain penalties assessed by the IRS.
Two common penalties that can meet criteria for possible abatement are:
1. Failure-to-File: “A failure to file penalty may apply if you did not file by the tax filing deadline”. (IRS Tax Tip 2013-58, April 18, 2013)
2. Failure-to-Pay: “A failure to pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline”. . (IRS Tax Tip 2013-58, April 18, 2013)

Each of these income tax penalties are calculated a bit differently. Although both IRS penalties are capped at a maximum of 25% of your unpaid tax. The Failure-to-File penalty is generally 5% of your unpaid tax for each month the return is late. The Failure-to-Pay penalty is generally .5% of the unpaid tax for each month it is late. The IRS will assess penalties for partial months.

As an example: If you owed $100,00.00 on your individual income tax return and filed an extension, but paid the total when the extension is due on October 15, your penalty would be approximately $3,000. If in the same situation you do not file an extension, your failure-to-file penalty may be capped, resulting in a much higher total IRS liability.

Interest generally accrues on unpaid tax in addition to penalties until the debt is paid in full. According to, topic 653, “The interest rate is determined quarterly and is the federal short-term rate plus 3%”, and is compounded daily. The complexity of the calculation can cause taxpayers to owes thousands of dollars in addition to the original income tax liability.

Unlike income tax penalties, interest continues to accrue until it is paid in full. If the IRS penalty abatement is granted the calculation for interest is adjusted accordingly.



Call the best IRS help team at Flat Fee Tax Service, Inc. for your FREE and confidential consultation. You won't be sorry that you called.


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Monday, April 17, 2017

The Fresh Start Initiative - IRS Offer in Compromise - IRS Tax Attorney



The IRS, in 2012, expanded its Offer in Compromise program with what is known as the Fresh Start Initiative. The Fresh Start Initiative continues to help taxpayers who are unable to pay their taxes due to financial difficulties. The Fresh Start Initiative, in addition to providing relief to American taxpayers, also helps the IRS keep a check on the number of tax default cases, as it encourages more taxpayers to pay an IRS settlement and "start over fresh".

What Income Tax Relief Will The IRS provide?

The IRS, under the Fresh Start Initiative, provides a number of relief options to financially-distressed taxpayers.

1. IRS Penalty Relief

The initiative allows eligible taxpayers up to a 6-month extension to pay their taxes. The penalties for not paying income tax by April 15 is waived off until October 15. If, however, the taxpayer fails to pay the taxes beyond the revised date, a penalty is charged.

The penalty relief is available to two categories of taxpayers
Wages earning individuals who have been unemployed for a minimum of 30 consecutive days.
Individuals who experienced a dip of 25 percent or more in their income due to a slowdown.

How Do You Qualify

If you are married and filing jointly, your adjusted gross income must not exceed $200,000. If your filing status is single, qualifying widower, head of household, or married filing separately, the adjusted gross income must not exceed $100,000. In addition, if you have an outstanding of more than $50,000, you will bot be qualified to receive a waiver.

2. IRS Installment Payment Plan

The IRS Installment Agreement provision allows taxpayers to pay their taxes, in installments, in a scenario wherein they are unable to pay in full. It also gives taxpayers more time to pay. The threshold for the maximum amount of debt against which an installment plan can be prepared has now gone up from $25,000 to $50,000, with the maximum term for the repayment of installments being 6 years. Though you need to pay less in penalties, the interest will continue to accrue on your outstanding dues.

Taxpayers can set up an installment agreement using the Online Payment Agreement without any intervention of an IRS assistor. It is, however, essential that they agree to pay the installments through a direct debit mode.

3. Offer in Compromise (OIC) - IRS Settlement

The Offer in Compromise program allows taxpayers to settle their outstanding income taxes for less than what they actually owe to the IRS. After the expansion of “Fresh Start” initiative, it has become easier for taxpayers to qualify for an Offer in Compromise, as the IRS has relaxed the qualification standards, and therefore, more people are now eligible for an IRS settlement.


To apply for an Offer in Compromise (OIC), the taxpayer needs to file Form 433-A (OIC) or Form 433-B (OIC), and deposit a non-refundable application fee of $186. If, however, the taxpayer qualifies under the Low Income Certification guidelines, they would not have to pay the application fee. In addition to the form and application fee, the taxpayer may also be asked to pay the first month’s installment or 20 percent of the settlement amount, at the time of filing.

If you are eligible to settle your income tax debt through the Offer in Compromise program, you would be silly not to take advantage of your opportunity to get a "Fresh Start".



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Thursday, April 13, 2017

IRS Wage Levy - IRS Bank Levy - IRS Seizure - IRS Tax Attorney


An IRS Levy is among the most destructive tools the Internal Revenue Service (IRS) will use to collect the income tax debt you owe them. An IRS bank levy effectively freezes the available funds in your bank account. The IRS freezes the funds in your bank account often leaving you with no money. Your assets are then used to pay toward your outstanding tax debt. Any resulting unpaid checks or bank fees only add to your financial problems. Any account with your name on it may be at risk of a bank levy – even if the money isn’t yours. Financial institutions must comply with IRS requests or face severe penalties. Even if your paycheck is directly deposited into your account(s), you may not be able to access the funds. You have 21 days, including weekend and holidays, to get your money back.


An IRS wage levy also known as a wage garnishment, presents similar challenges. In these situations, the Internal Revenue Service (IRS) sends your employer a written notice requesting a major portion of your pay as payment for your outstanding tax bill. Like an IRS bank levy, your employer must obey the IRS’s request or face legal punishment.

The IRS can exercise complete control of your existing and future assets. You need to know that if you are self-employed, your clients or customers will receive a demand for collection in what’s known as a “payor” levy. The payments they owe you are then sent to Internal Revenue Service. Bank and wage levies may allow the IRS to control every decision and financial move you make.

The IRS can also seize your Social Security, your Social Security Disabilty (SSDI) and your Veteran's Pension. The IRS can seize a minimum of 15% from these checks under the Federal Payment levy Program (FPLP).

Your IRS wage garnishment remains in place until you pay your entire income tax liability or until a levy release is negotiated.

Receiving a notice from the IRS of Intent to levy requires immediate attention. The best IRS help team at Flat Fee Tax Service, Inc. can help release a levy within twenty-four (24) hours. In most cases our IRS Tax Attorney can resolve your IRS problems before a bank or wage levy begins.

Call Flat Fee Tax Service, Inc. for your 
FREE confidential consultation.

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Wednesday, April 12, 2017

IRS Revenue Officer Help - IRS Tax Attorney



An IRS Revenue Officer is one of the last people you want appearing on your doorstep. Armed with an extensive arsenal of collection weapons, such as liens, levies, garnishments, and seizures, IRS Revenue Officers have all the means to make you pay unpaid taxes. Financial stress, however, is not the only problem at hand, as the IRS Revenue Officer can also contact your neighbors, relatives and colleagues, causing public humiliation.

How Flat Fee Tax Service, Inc. Can Help

The best IRS help team at Flat Fee Tax Service, Inc. understand that every taxpayer’s issue is unique. Our IRS help team will follow a collaborative approach to create a customized plan of action for every client. Our IRS help team, led by an IRS Tax Attorney, has in depth discussions with clients to understand your unique issues, and the dynamics at play, such as your income, financial obligations, pending liabilities, and other such factors. Based on the information gathered, we create a holistic plan to help you get your IRS problem addressed.

Why Choose Flat Fee Tax Service, Inc.?

Flat Fee Tax Service, Inc. has a team of widely experienced associates. We are the go-to destination for IRS Revenue Officer assistance. Our IRS Tax Attorney(s) have successfully handled exceedingly diverse and complex cases of unpaid taxes, negotiating favorable resolutions with IRS Revenue Officers on behalf of our clients. Our goal is to always secure the best IRS resolution that suits our clients’ prerequisites and complies with the Internal Revenue Code. 

Other attributes that set Flat Fee Tax Service, Inc. apart include:
Comprehensive Expertise
Streak of Successful Representations
No-obligation Free Consultation
Affordable Fees
Undivided Focus
Better Business Bureau Accredited
A Plus Better Business Bureau Rating
No Client Complaints

Do You Need IRS Revenue Officer Help?

Do You Need To Be Protected From The IRS?

If an IRS Revenue Officer has come to your home or business, you need immediate help. Do not waste any time because you have no time to waste. 


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Tuesday, April 11, 2017

Offer in Compromise or Currently not Collectible - What Is Your Best IRS Solution

Failure to meet your annual income tax obligation is an invitation to severe financial and legal consequences. The IRS can and will impose legal penalties, delay reimbursement, and in worst-cases, seize your possessions and can put you behind bars. There is no escape from filing and paying your taxes, but the IRS provides a few avenues to help those who are unable to make payments due to financial difficulties. 

An Offer In Compromise and Non-Collectible status are two solutions available to help taxpayers who meet the IRS’s financial hardship criteria. Both options, however, have their pros and cons, which you need to be aware of to make an informed decision on which avenue to pursue to resolve your tax issues. To help you decide, we discuss the details in the blog post.

Offer in Compromise

An IRS Settlement through the Offer In Compromise program allows the taxpayer to settle their entire income tax debt by paying an amount that is far less than what is actually owed to the IRS. 

Certain criteria must be met, then if the IRS agrees to your Offer in Compromise, the taxpayer must file income tax returns on time and pay the tax in full for the next five years.

Offer in Compromise Advantages

(a) An Offer in Compromise (OIC) removes a Federal tax lien against the taxpayer.
(b) As your income tax debt goes away, you earn more money by not having to pay back taxes.
(c) Your Offer in Compromise settlement can be paid over many months.



Offer in Compromise Disadvantages (Minimal)

(a) You have to pay $186 as a filing fee to process the request.
(b) There is a possibility of the IRS rejecting the request.
(c) You have to be perfectly tax compliant for five years, once your Offer in Compromise settlement request is accepted

Currently not Collectible Status

If you are unable to pay your tax debt, the IRS may consider your eligibility for Currently not Collectible Status (CNC). The IRS will cease all collection activities, which includes levies and garnishments, until the IRS notices an improvement in your financial condition. 

The IRS will send a statement that includes detailed information of the income tax debt to the taxpayer every year the account is in Currently not Collectible (CNC) status. If the taxpayer is not able to pay the amount, the IRS will keep postponing the collection.

Currently not Collectible Advantages

(a) You don’t have to pay any amount to the IRS.
(b) You don’t have to worry about tax levies and garnishments.
(c) The Statute of Limitations continues to run out on your income tax debt.

Currently not Collectible Disadvantages

(a) Despite the CNC status, you still owe the IRS and a Federal tax lien will more than likely be filed against you.
(b) If you do not file a return, there is a probability of cancellation of the uncollectible status
(c) Dramatic increase in income can also lead to cancellation of the status.
(d) At any time, the IRS could rescind your protected status.

Making a Decision

The best IRS help team at Flat Fee Tax Service, Inc., use this analogy to explain the difference between doing an Offer in Compromise settlement and being declared Currently not Collectible.

Imagine that you are a marathon runner. You run a marathon and when you are 200 yards away from the finish line, you decide to stop running. Well the difference between an Offer in Compromise and Currently not Collectible is a lot like that.

If the IRS has declared you to be Currently not Collectible and the IRS has declared you cannot pay your past due income tax debt, why don't you finish the race and do an Offer in Compromise settlement?

Although, the Currently not Collectible status saves you from paying anything for a specific amount of time, the Offer In Compromise settlement is a better tax resolution avenue as you do not have to worry about the future. 


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