What the IRS can do to you if you ignore their notices and/or contact?

1. The IRS has the right to contact your employer and garnish your wages up to 50% to satisfied the tax liability they claim you owe until paid, including penalties and interest.

2. The IRS can appear at the door of your home and step foot on your personal residential property with or without notifying to you.

3. The IRS can notify your bank that within 21 days the bank is required to send the IRS the balance in your bank account and freeze the funds in your account to satisfy a specified amount of taxes the IRS has determined you owe including interest and penalties.

4. The IRS can contact your clients and require that the money they owe you be sent directly to the IRS.

5. The IRS can file a tax lien against any real estate you own so that you cannot sell it without the proceeds your outstanding debt liability established by the IRS including interest and penalties.

6. The IRS can file your tax return for you and establish a tax liability for you without considering any tax deductible items. They base the tax liability solely on the gross income reported to them by third-parties that paid you.

7. If you fail to keep up your tax requirements, the IRS can require people that pay you as contract labor to withhold on your income and send up to 28% of the gross income as federal withholdings.

8. IRS tax liability can only be adjusted through Offers in Compromise. This requires a formal professional filing of complex financial computations in order to reach a compromise to the tax you owe. When the IRS agrees to an Offer in Compromise this settles your tax liability as paid in full. Not even filing bankruptcy will change your total tax liability.

9. A taxpayer must demonstrate they are actively working to resolve their outstanding tax debt before the IRS will consider an Offer in Compromise, a Payment Arrangement or Abatement of Penalties. One simple way to demonstrate this to the IRS is when a taxpayer engages a professional to help them resolve a tax liability. This is done by a taxpayer signing a power of attorney to have a tax professional act on their behalf.

10. The IRS can physically come to your place of business and literally shut it down, pad lock it and take position of your inventory and/or business equipment/property to sell it to satisfy your tax liability.

What is the difference in an Offer in Compromise and an Installment Agreement?

OIC is a one time payment to the IRS to satisfy the total outstanding tax debt you owe to the IRS (this is a good option if you do not have cash flow to support a systematic monthly payment and have some value in an asset you can borrow against as well as offering a lump sum to settle the total debt for much less than the tax due). An Installment Agreement is an agreed to monthly payments to the IRS to satisfy the outstanding tax debt usually if it can be paid within a 60 month period.

What is a levy?

A levy is a notice sent to someone who holds your money like a bank, a client who owes you a fee or payment for a product, or credit union. The IRS can freeze your bank account and require the bank to send the funds in your bank account directly to the IRS. The IRS can also notify your client that owes you money to send the money directly to the IRS rather than to your account.

What does it mean to have your wages garnished?

The IRS can require your employer to withhold a certain amount from your pay check each pay period up to 50% of your pay check and send it directly to the IRS to pay your debt.

What is a lien?

The IRS can put a tax lien on your property so that when and if it is sold the tax due must be paid to the IRS first and before you can sell the property or use it as collateral for a loan. The IRS, by putting a lien on your real estate, is using your real estate as collateral to secure the debt you owe the IRS. 

How long does it take the IRS to respond to:

1. Release of Lien – it depends on why the lien has been filed. It can be very complicated to get the release of the lien, but under certain conditions it can be released. This process could take several weeks.

2. Release of a Levy – this can been done in most cases within 24 to 48 hours after you demonstrate to the IRS that you are acting to resolve your tax debt.

3. Abate of Penalty – this usually takes 6 to 10 weeks to get a notice from IRS that a penalty has been agree to be abated by the IRS.

4. Accept an Offer in Compromise – this can take from 8 to 12 months after you submit the paper work to the IRS for them to agree to a settlement of what you owe in taxes. 

5. Accept an Installment Agreement – this usually takes 6 to 8 weeks for the IRS to accept once you submit your financial information to them.

If the IRS does not accept your Offer in Compromise or Installment Agreement you have the right to appeal their decision. This can take another 8 to 12 weeks before an agreement can be reached with the IRS. 

What is a Power of Attorney?

This is a Form 2848 that gives the professional you designate the authority to act on your behalf before the IRS. It is limited to the years and tax forms that you designate on the form. Normally, the IRS will communicate with the one who holds the Power of Attorney from you and it will not be necessary for you to communicate with the IRS directly. 

Who is responsible for financial information submitted to the IRS in regards to Offers in Compromise and Installment Agreements?

YOU are solely responsible for all financial and tax information submitted to the IRS on the forms that state your financial income and expenses. You sign the form under penalties of perjury that the statements of income and expenses are true to the best of your knowledge.

Can My Tax Repair Guarantee that the IRS will accept your Offer in Compromise or Installment Agreement?

No, no one can control or guarantee what the IRS will do. However, we can guarantee that you will need professional help when you submit a petition for relief. Also, you can be assured the IRS will not do it for you. The worse thing you can do is ignore any IRS notice. Remember, there is no time limitation on collection of back taxes.

If I don't agree with the IRS Tax Assesment can I amend my return?

YES, unless you have signed an agreement or statement with the IRS that you will not pursue your appeal rights as well as accept the tax liability the IRS has assessed against you. Normally, you would have the right to amend the return you filed originally if done within the regulations of the IRS.

How long do I have to amend my tax return?

You usually have 3 years to amend your tax return.

How many years is my tax return open for audit?

Under normal circumstances your return will be open for audit by the IRS for 3 years. If you have under reported your income or you are charged with fraud, the IRS can extend the time period for audit.

How long should I keep the records I used to file my tax return?

A good rule of thumb is to keep the detailed records you used to prepare your return for approximately 5 years. You should also keep copies of your original filed tax returns, amendments and IRS notices. You should also keep all records pertaining to any property you own for at least 4 years after the disposing of such property.

Can the IRS invade my privacy?

YES, the IRS has the authority to show up unannounced on your door step. This usually occurs when you totally ignore their demand for tax payments or if IRS has you under audit.

Remember, the IRS can attach any and everything that can be identified with your social security number.

What does suspend collection mean?

When you have financial hardship and do not have excess cash to meet a minimum payment to the IRS, the IRS can suspend the collection of your taxes for a period of time.