Written by Scott Allen

stopirsaction.com – IRS TAX LIENS

How do Tax Liens Affect Real Estate I own? 

You’ve heard with real estate the phrase, location, location, location.  Well that is certainly true when it comes to your real estate and IRS tax liens.  Here is a typical question I get asked regarding IRS tax liens.  The IRS filed a tax lien against me here in Maricopa County where I live but I own land in North Dakota where no lien has been filed?  For the lien to be in force does it have to be filed where I live or in North Dakota?  

The answer is that an IRS tax lien is only in force against your property if it is filed in the county where the property is located.  If the IRS only files a lien in the county you live in it will have no effect real estate you own in another county.  In this situation, if the IRS only filed a lien in Maricopa County, you can refinance or sell the property without interference of the lien.  The IRS has not secured it’s interest in your real estate if it is filed in the wrong county. 

However, once you are contacted by the IRS regarding a tax debt, they will ask you to disclose all property owned.  Failure to make full and accurate disclosure can result in serious legal issues.  Some clients think that they can simply change title in a property the own to another family member or friend to avoid making full disclosure.  However, the IRS will ask under penalties of perjury if any assets have been transferred out of your name for less than full value in the last ten years.  

If property has been sold, the IRS will want to know what was done with any equity that you received.  If it was used for normal living expenses, the IRS will consider that reasonable but it will likely affect the amount that would be acceptable in an Offer in Compromise if it was recent.  

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

info@taxdebtadvisors.com

Written by Scott Allen

stopirsaction.com — What are the IRS Collection Priorities for 2010?

1)      The IRS is filing IRS tax liens on all tax debts.  Revenue Officers are now required to file Federal Tax Liens as soon as they know there are taxes owed.  The number of tax liens has risen from a low of 167,000 in 1999 to 867,000 in 2008.  The IRS is making sure that they secure the tax debt before taxpayers can sell assets and use the money for other purposes. 

2)      The Automated collection Service (ACS) has started issuing levies against wages and bank accounts immediately after the mandatory 30 day waiting period.  Normally the IRS would take months before issuing levies.  In the past ACS has given taxpayers 30 days to file any unfiled tax returns and another 30 days to propose a settlement.  We are now seeing ACS give as little as 3 days to file returns or make a settlement proposal. 

3)      The IRS is taking more aggressive action on collecting on the trust fund recovery penalty.  Between 2002 and 2007 less than 14% of  assessments were collected.  Manny trust fund assessment penalties went several years before the IRS would try to collect.  By that time the taxpayer was less able to pay the IRS.  If you are behind on your payroll taxes, expect Revenue Officers to start immediate collection action after they assess it. 

4)      If you are a nonfiler or continue to owe year after year, the IRS has targeted you as a high priority.  The IRS knows that they may not be able to collect on past taxes but they will only accept this if you are staying current on this year’s tax liability.  

With the huge budget deficits mounting each year and our national debt growing to dangerous proportions, congress has asked the IRS commissioner to step the timing of collection actions.  If you are struggling with any of the high priority items mentioned, contact me to discuss how you can settle your IRS matter before it reaches a point of crisis. 

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

info@taxdebtadvisors.com

Written by Scott Allen

Stop IRS Action — My word against the IRS—Who loses?—You

You know you filed the return, your remember putting it in the mail slot.  But the IRS claims they never got it.  The same might be true with your Collection Due Process Appeal, Innocent Spouse claim, offer in compromise or your Collection Information Statement—Form 433A.  

This doesn’t happen that often but when it does, it can be devastating.  So how do your protect your self from a disaster. 

1)      File your return at the IRS office nearest you.  When you give the person at the counter your return, ask them to date stamp a copy of the return that you brought with you.  If the IRS loses your return, you now have proof that you filed it and the date it was filed. 

2)      Avoid putting more than one return in an envelope if you have to mail a return.  Putting more than one return in an envelope increases the likelihood that one will be misplaced or ignored.  Sounds silly but it works.  My father learned this 34 years ago when did a tax return for a retired janitor from the Ogden, Utah IRS office.  He explained how things were being processed and handled by IRS employees.  His suggestion has proved very valuable over the years. 

3)      If you must mail something, send it certified mail return receipt requested.  When you get the signed proof of delivery, staple it to a copy of what was sent.  This is not proof that you sent it, it is only proof you sent something,  but the IRS Appeals office will accept it as proof even if  a Revenue Officer does not. 

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopirsaction.com

info@taxdebtadvisors.com

Written by Scott Allen

STOP IRS ACTION – Substitute For Return

If you don’t file your tax returns, eventually the IRS will, based upon information about your gross income reported on a 1099, W-2’s, stock sales, sale of home and reported interest and dividends.  These returns are referred to as SFR’s for substitute for return by the IRS.  These returns are almost always incorrect and usually grossly overstate the true amount of taxes owed.  

Many clients come to us with large SFR balances due that turn into refunds.  Remember that a refund that is older than three years is permanently lost and cannot be apply towards a balance due.  SFR balances cannot be discharged in a chapter 7 bankruptcy.  Only a return filed by a taxpayer can be included in a tax motivated bankruptcy.  There is a waiting period for this to happen.  The return must be filed for two years and it be three years from the due date and no IRS adjustments in the last 240 days.  

If you have filed previously a joint return, the IRS will file an SFR using the married filing separate status which eliminate lots of tax advantages and has a higher tax bracket than married filing jointly.  The IRS gives not credit on SFR’s for dependents, mortgage interest, property taxes, charitable donations, auto license fees and deductible medical expenses to name just a few. 

If you know that the IRS has filed SFR’s against you but you haven’t been contacted by them, consider yourself lucky and get your returns filed as soon as possible.  It can take several months for the SFR unit to adjust your assessed taxes down to its correct balance and the IRS will take collection action on the higher balance until this occurs. 

Scott Allen E. A.

Tax Debt Advisors, Inc

www.taxdebtadvisors.com

info@taxdebtadvisors.com

Written by Scott Allen

STOP IRS ACTION – “My spouse forged my signature on a tax return—What now?”

On occasion a client comes in who has been a victim of signature fraud.  This usually occurs when one spouse has all or a majority of the income and the other spouse has no income or very little.  The spouse with the income is the one signing for the one with little or no income.   

The IRS has taken the position that if the spouse has given “tacit consent” then it doesn’t matter if their signature is not theirs.  For example, if previously filed joint returns were signed by just one spouse for both, then it is implied that consent was given and in this case, the IRS would not consider this fraud.  The determination of a jointly filed return is based on the intent of the parties, not the presence or absence of their signatures.  

If there has been a history of separate filings and if one year is filed jointly with a forged signature, it is easier to show that there was no tacit consent and the IRS will usually side with the offended spouse. 

There is one other hook to consider if you live in a community property state like Arizona.  Technically, both spouses are considered liable for one half of the combined income.  The Arizona Department of Revenue has taken this position in recent years and the IRS can also make this claim if it is to their advantage.  If this is the case then filing married filing separate would still include one half of both spouse’s income and filing jointly may still be the best way to file.  

Before any decision is made it, is best to consult with an IRS representative experienced in these matters.  If the marriage is intact, then filing jointly is probably still the best way to file.  If there has been a divorce, filing separately can be a better option even if you have to claim one half of the offending spouse’s income.  At least you have limited your exposure to one half instead of all of the taxes due on a jointly filed return, if you spouse is unable to pay his or her share. 

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

info@taxdebtadvisors.com

Written by Scott Allen

STOP IRS ACTION – Can the IRS take my social security check?

Many retired people in recent years have called my office to ask if the IRS could levy their social security check?  The answer is yes; up to 15%.  Before this occurs the IRS will send you a CP 91 letter—Final Notice Before Levy on Social Security Benefits.  You have 30 days from the date of the notice to reach a settlement with the IRS or the levy will begin.  

If we can show the IRS that the garnishment creates a hardship, your account will be considered not collectible as long as you file and full pay any taxes due in the future.   The IRS allows you a reasonable amount for rent, food, utilities medical care and automobile expenses.  

Once a levy on social security has started, it can take a month or two to get it stopped.  If you receive a CP 91 letter in the mail, call my office immediately to see what can be done before the levy begins. 

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

info@taxdebtadvisors.com

Written by Scott Allen

STOPIRSACTION.COM – DISCHARGING TAXES IN A BANKRUPTCY

Discharging taxes in a Chapter 7 bankruptcy is one option available to settle your IRS debt.  But you have to have all of your ducks lined up ahead of time.  Here is a summary of your ducks.

1)      Make sure you have filed all of your past tax returns.  A return filed by the IRS called a substitute for return (SFR) is not considered a filed return.

2)      If all your returns have been filed, they must be filed for at least two years and it must be three years from the due date of the return before a tax year can be discharged.

3)      If you have been audited or the IRS has made some adjustment to your return or you have amended the return, it must be at least 240 after the adjustment before that tax year can be included in a bankruptcy.

4)      Income taxes are dischargeable but payroll taxes are not.

5)      You income must be below a certain amount which depends on your family situation and the year you are filing the bankruptcy.  If you have the ability to pay your taxes off by making monthly payments, the bankruptcy option is out.

6)      If you have significant equity in assets like a business, home or investment property, those assets will prevent you from filing a bankruptcy to discharge your taxes.

If you are considering filing a bankruptcy, I offer a free consultation to evaluate all of your settlement options.  I will refer you to a bankruptcy attorney who is the only one qualified to determine if you can file a bankruptcy.  I can determine what taxes will be dischargeable in the bankruptcy and get written proof from the IRS.

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopirsaction.com

 

Written by Scott Allen

stopIRSaction.com – Can the IRS Show Up One Day and Take My Property?

The Fourth Amendment protects you against unreasonable search and seizure.  Before the IRS can invade your private space they must either have your permission or a writ of entry from a federal judge.

The IRS could seize your vehicle from your place of employment or your driveway, but not if your car was parked in your garage, without your permission or a writ of entry from a federal judge.

If you have a “reasonable expectation of privacy”, your consent or a court order is required before the IRS can enter and seize your personal property.   You are not required to let the IRS take your property if it is not in your best interest without your permission or a court order.

Even though I am frequently asked this question, I don’t know of a single instance this has occurred against a client.  The IRS is not interested in taking your possessions.  They want you to file and pay your taxes currently and if you have liquid assets available to pay towards your back taxes, a settlement can be reached that will allow you to make payments and still maintain a reasonably comfortable life style.

Scott Allen E.A.

Tax Debt Advisors, Inc.

www.stopIRSaction.com

 

Written by Scott Allen

scottallenea.com – AUDIT RECONSIDERATION

If the outcome of your audit was a negative surprise, you still have an opportunity to appeal the audit results.  Relatively few people actually appeal their audit out of fear that the appeals process might result in a higher amount owed.  Audit reconsideration can cut out a significant portion of the tax, interest and penalties originally assessed by the Auditor.  It amazes me how many times the client has the documentation to support their deductions and expenses but it is in such a disorganized fashion that the auditor simply denies giving credit for anything.  Clients come back and say, “I showed them support for every item but they denied everything.”  The form of the documentation is as important as the substance when it comes to audits.  

The Freedom of Information Act (FOIA) allows you to review the auditor’s notes and that is vital to preparing the case you want to present to the Appeals office.   IRS Auditors have less latitude to compromise on issues that are not black and white.  Appeals Officers are given more discretion than auditors.  They want to settle the case as quickly and painlessly as possible.  They do not want the matter to go tax court.  

Appeals Officers usually meet with the tax payer’s representative who are more knowledgeable about tax law than the client who usually met with the Auditor without any representation.  Audit reconsideration allows negotiation and compromise whereas the audit dealt in terms that were black and white.  Anything of a grey nature is considered black to an auditor.  If you are dissatisfied with the results of your audit, bring in the audit report and your documentation for a review and an opinion how what would be the benefit of Audit Reconsideration at the IRS Appeals Office. 

Scott Allen E. A. 

Tax Debt Advisors, Inc.

www.scottallenea.com

info@taxdebtadvisors.com

Written by Scott Allen

TAX DEBT ADVISORS

What should you expect in your first meeting with an IRS Relief company?

First, you should not expect to pay for your initial consultation.

Second, make sure that the person you are talking to will be the one that will represent you before the IRS should you decide to retain their services.  If you are talking with a sales person who will send your information and money to a central office outside of the state, you are working with the wrong firm.

Third, telephone interviews with companies outside of your local may sound good but you will have a very hard time getting someone to call you back except to ask you for more money.

Fourth, see if they have testimonials that are real.  The only ones that cannot be disputed are letters from the IRS to clients and their Power of Attorney representative.  You can see in black and white what was accomplished for the client.  Most if not all testimonials on Web sites were written by the company.

Fifth, after explaining your problem, you should have a good idea of the steps that your representative will take to correct your problem.

Six, only pay the cost of the next step.  If you need investigative work, pay for just the Power of Attorney work.  If you need tax returns, pay for them one at a time as they are completed.  By this time, you will know if your representative knows what they are doing and has a track record of following through.

Finally, get all of the settlement options in front of you at one time and understand the pros and cons of each one.  There is something good about each option and something not so good.  However, one option is much better than all the others.  Once your settlement agreement has been decided on and agreed to by the IRS, know what you need to do to keep that settlement valid.

Scott Allen E. A.

Tax Debt Advisors, Inc

www.taxdebtadvisors.com

 

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