Solutions for Back Taxs Liabilities Due
Don’t despair! We’re very familiar with all of the strategies that we can use to resolve you back tax problem. For your reference, the following are the options available to you, we can assist in negotiating the option that fits your situation.
- Currently Not Collectible (CNC)
Being declared non-collectible is a procedure that we have used for many years now. If you’re declared non-collectible, the IRS will immediately stop hounding you for back taxes.
National Standards will again be considered and if you have no disposable income, the IRS must declare you as non-collectible, and will stop any further collections for approximately 1-2 years. The IRS will review your subsequent tax returns to determine if your income has increased, and if so, the IRS will consider resuming collection actions. Being declared non-collectible allows you the ability to get back on your feet financially.
- Installment Agreement (IA)
A Installment Agreement is an agreed upon monthly settlement between you and the IRS. The amount you pay to the IRS monthly is determined greatly by incorporating the National Standards allowances for food, housing, clothing, medical & transportation expenses into a complicated mathematical formula to come up with the “appropriate” monthly payment. From our experience, we know that, in most cases, the National Standards don’t have to be used for the first year, allowing us to use your actual expenses to come up with a lower monthly payment amount. Again, this is not something that the IRS will inform you of or assist you with. This is another reason why it’s essential that you obtain professional help.
- Offer in Compromise (OIC)
An offer in compromise is an offer to settle your debt to the IRS for less than what you owe. This doesn’t mean you can simply offer the IRS 10 cents on the dollar. We use a mathematical formula to determine your net monthly income and equity in assets to come up with the minimum acceptable offer amount. The Offer in Compromise Program is very complicated and cumbersome. After all, the IRS would rather collect all of the taxes you owe rather than agree to take a lesser amount. Knowing this, we spend considerable time and effort reviewing your unique financial situation when we analyse whether or not an Offer in Compromise is the right solution for you.
- Penalty Abatement
Requesting an Abatement of Penalties is a method we use to reduce the amount you owe to the IRS. In many cases 30-40% of the taxes you owe to the IRS consist of penalties and interest compounded on top of the penalties.
IRS Employee Titles
Positions Within The Internal Revenue Service
If you receive a notice from the IRS, and there is an IRS employee involved specifically on the Notice, it is important to know what that employee is capable of and what they may be looking for. Their title will be given with any correspondence sent to you. You may read on below for a brief description of the different IRS employees you may encounter.
A Revenue Officer is an employee of the IRS that works solely in the Collections Division. They may either work in a field office or a campus, which is an automated collections site. Their assigned task is to collect the taxes owed by tax payers and little more. They generally have little to no formal accounting education, and may secure tax returns from taxpayers but not audit them. They are capable of filing liens, levies and wage garnishments, along with the ability of seizing a taxpayer’s property in order to collect taxes owed to the IRS
A Revenue Agent works within in the Compliance/Examination Division. They may work in either a field office, or a campus, which is an automated collections site. Their primary task is to audit tax returns (such as a form 1040, 1120, 1065, etc.), and are capable of auditing anything on a tax return that they feel is necessary to review. They generally like to audit taxpayers in person, but can also audit through correspondence. These agents are considered the accountants of the IRS, and generally have at least a college level of education in accounting and/or tax training. They will ask for all owed taxes to be paid when they complete their audits, but cannot collect the taxes if a taxpayer is unable to pay. They will then forward the case on to a Revenue Officer.
Tax Compliance Officer and Tax Examiner
A Tax Compliance Officer or a Tax Examiner will workwithin the Compliance/Examination Division of the IRS, and as with the above will be found in either a field office or a campus (automated collections site). Their primary task is to audit less complex tax returns, and generally conduct their audits through correspondence. The Tax Compliance Officer and Tax Examiner will have a limited formal education in accounting and/or tax training.
A Special Agent is a very serious agent to be involved with. This type of agent works within the Criminal Investigation Division (or CID). They are responsible for enforcing the criminal laws for the IRS. They sometimes have a formal education in accounting and/or tax training. These agents work with Revenue Agents to audit suspected taxpayers to develop a criminal fraud or tax evasion case. If a Special Agent is involved, and you are convicted of tax evasion or criminal fraud, you could go to prison.