Understanding the right IRS Offer in Compromise strategy can mean the difference between continued IRS pressure and finally resolving your tax debt the right way.

Most people don’t come to me when things are calm.

They come when the notices have piled up, the pressure is building, and they’re not sure what the IRS is going to do next.

If that sounds familiar, you’re not alone—and more importantly, you’re not out of options. If you’re reading this, there’s a good chance you’re trying to figure out what your next move should be before the IRS makes one for you.

There is a moment in almost every initial conversation where a taxpayer will say something like:

“I heard I can settle this for pennies on the dollar… do I qualify?”

It’s an understandable question.

But it usually comes from a place of urgency, stress, and incomplete information about how the IRS actually operates.

Because an Offer in Compromise is not a program you simply apply for.

It is not a discount the IRS offers because a situation feels difficult or overwhelming.

And it is certainly not something that can be accurately determined from a short conversation based on rough income and expense estimates.

An Offer in Compromise is a legal resolution mechanism under Internal Revenue Code §7122, and in real-world application, it is governed by the IRS’s internal framework—primarily Internal Revenue Manual (IRM 5.8)—which dictates how offers are reviewed, challenged, and ultimately accepted or rejected. The difference between acceptance and rejection often comes down to how well the case is developed, documented, and presented within those rules.

👉 The IRS is not negotiating based on sympathy
👉 The IRS is calculating based on collectibility

They are asking one central question:

👉 “What is the most we can reasonably collect from this taxpayer over time?”

What Is an IRS Offer in Compromise Strategy

An IRS Offer in Compromise strategy is not simply submitting a form to reduce tax debt. It is a structured, multi-layered approach that evaluates your financial condition, IRS collection posture, and legal positioning before any resolution is pursued.

A proper strategy looks at:

• Your ability to pay based on real financial data, not assumptions
• IRS enforcement risk, including levies and garnishments
• The timing of your case within the IRS collection process
• Whether alternative solutions like IRS installment agreement options may actually produce a better outcome

👉 Without strategy, an Offer is just a guess. And guessing is exactly what leads to rejected offers, wasted time, and continued IRS pressure.

🔍 Before There Is an Offer, There Is an Investigation

When I take on a case, I am not thinking about forms.

I am not thinking about submission timelines.

I am thinking:

👉 What is actually happening here, and how will the IRS interpret it?

Because until that is fully understood, any attempt at resolution is premature.

How IRS Offer in Compromise Strategy Actually Works

Where the Taxpayer Sits in the IRS Collection Process

A taxpayer’s position within the IRS collection system directly impacts available options, urgency levels, and overall strategic approach, especially when determining whether immediate action or structured planning is required.

A newly assessed liability generally allows more flexibility, planning time, and opportunity to develop a favorable financial position before IRS scrutiny intensifies and enforcement risk escalates significantly.

A case that has progressed into active collections introduces pressure, tighter timelines, and increased likelihood of enforced collection actions such as levies or wage garnishments being initiated by the IRS.

A taxpayer who has received a Final Notice of Intent to Levy (LT11) is now facing imminent enforcement, requiring immediate intervention to prevent wage garnishment, bank levies, or seizure of assets.

A liability approaching the Collection Statute Expiration Date under IRC §6502 may shift strategy entirely toward preserving time and avoiding actions that unnecessarily extend the collection period.

👉 This positioning determines whether you act immediately, strategically delay, or build before presenting.

Whether Enforcement Action Is Imminent or Already Underway

The presence or absence of enforcement activity significantly changes how a case must be handled from the outset and what tools must be deployed to protect the taxpayer.

If the IRS is preparing to levy wages or bank accounts, the situation requires immediate defensive action to prevent financial disruption, protect income streams, and maintain control over daily financial obligations.

If enforcement has not yet begun, there may be an opportunity to proactively structure the case, strengthen financial positioning, and prepare a defensible resolution before the IRS escalates collection efforts.

A Final Notice of Intent to Levy triggers rights under IRC §6330, allowing the taxpayer to request a Collection Due Process hearing within strict time limits.

A properly filed CDP hearing halts enforcement activity, transfers the case to Appeals, preserves the taxpayer’s right to petition Tax Court, and creates time to properly evaluate and build a resolution strategy.

👉 If you are facing enforcement, understanding how to stop an IRS levy becomes critical before submitting any resolution.

How the Liability Is Structured Across Tax Years

Each tax year carries its own legal status, assessment timeline, and collection characteristics that must be evaluated independently rather than treated as a single combined liability.

Some tax years may be nearing expiration under the collection statute, making aggressive resolution unnecessary or even harmful if it extends the statute unnecessarily.

Other years may be recently assessed, fully collectible, and subject to immediate enforcement if not addressed properly.

Certain liabilities may contain errors, misapplied payments, or incorrect assessments that could significantly alter the overall case outcome if identified and corrected early.

👉 A proper strategy isolates each year and applies the correct resolution logic individually.

What the Actual Collection Statutes Are—and Whether They Are Correct

The IRS operates under a general 10-year collection statute under IRC §6502, but that timeline is frequently altered by tolling events and administrative actions that extend or suspend the period.

It is not uncommon for IRS records to reflect statute dates that require independent verification, especially in cases involving prior installment agreements, bankruptcy filings, offers in compromise, or CDP hearings.

Failure to verify these dates independently can result in pursuing unnecessary resolution options, extending collection periods, or missing opportunities where the liability may already be unenforceable.

👉 Verifying the statute is not optional—it is a critical component of strategy.

How Income Flows in Reality—Not Just on a Tax Return

The IRS evaluates income based on actual financial activity, not solely what is reported on filed tax returns or what the taxpayer believes represents their income.

Bank deposits, inter-account transfers, third-party reporting documents, and overall cash flow patterns are used by the IRS to reconstruct income where discrepancies exist.

If reported income does not align with actual deposits or lifestyle indicators, the IRS will adjust income figures during the review process to reflect what they determine to be accurate.

👉 If the financial picture is unclear, the IRS will create one that is not in your favor.

👉 Struggling with IRS debt or facing a levy? You may qualify for relief—but only with the right IRS Offer in Compromise strategy. Schedule a consultation today and take control before the IRS does.

🔥 What’s Really Involved in an Offer in Compromise

🔥 Real Case Studies: How This Works in Practice

Now that you understand how an IRS Offer in Compromise strategy actually works on paper, let’s look at what happens in real life—because this is where most of the real work takes place.

This is how real cases unfold.

And what most people never see is this:

👉 The result is the smallest part of the story
👉 The real work is everything that leads up to it

These are not “submit and hope” cases.

They are built, tested, adjusted, defended, and carried across the finish line.

💥 Case Study #1: The Man Who Went Dark — And Had to Be Brought Back the Right Way

When my client first came to me, this was not a typical tax case.

This was a situation where someone had effectively stepped outside the system for over a decade.

No filed returns.
No accounts in his name.
No assets in his name.

Everything—income, expenses, and financial activity—ran through his wife.

😰 What It Felt Like to Be Him

He wasn’t ignoring the problem because he didn’t care.

He was stuck because he didn’t know:

👉 How far this had gone
👉 What the IRS could actually do
👉 Whether stepping forward would make things worse

That uncertainty builds over time.

And when you’ve been out of the system that long, the fear isn’t just the debt…

👉 it’s the unknown consequences of stepping back into the system

🔍 What I Saw Immediately (Applying IRS Reality — Not Assumptions)

This wasn’t a “no asset” case.

This was a financial reconstruction case under IRM 5.8.5 (Financial Analysis).

Because under IRS rules:

👉 The IRS does NOT care whose name the account is in
👉 They care where the money flows and who benefits

And if that is not clearly explained and documented, the IRS will make its own determination—and it is almost never in the taxpayer’s favor.

So immediately I identified:

• Exposure to bank deposit analysis (indirect income method)
• Need to establish economic reality vs legal title
• Risk of IRS attributing 100% of deposits to taxpayer if not clarified

🧠 Phase 1 — Compliance (Required Under OIC Rules)

Before an Offer is even considered under IRC §7122 and IRM 5.8.3, the taxpayer must be compliant.

That meant:

• Filing the last six years of returns (IRM compliance requirement – IRM 1.2.1.6.18 – Policy Statement 5-133)
• Accurately reconstructing income (not estimates)
• Establishing current compliance with estimated tax payments
• Monitoring transcripts to confirm assessments and balances

👉 If this step is wrong, the IRS rejects the Offer before review

This is where my background matters:

👉 This wasn’t just tax prep — this was building a defensible position the IRS would accept

🔬 Phase 2 — Financial Investigation (IRM 5.8.5 Applied Line-by-Line)

This is where most “mills” fail.

We didn’t just fill out a 433-A (OIC).

We:

• Traced deposits into spouse’s accounts
• Built allocation schedules to separate income streams
• Identified what was actually his vs household
• Reconstructed cash flow based on bank reality, not assumptions
• Removed items that would be disallowed under IRS allowable expense rules (IRM 5.15)

👉 Example:

The vehicle had to be removed because:

• It was not in his name
• He could not substantiate ownership or payment responsibility
• IRS would disallow under asset/expense verification rules

🔁 Iteration Process (Critical Under IRS Scrutiny)

This did NOT happen in one pass.

We:

• Built the financials
• Challenged them
• Asked follow-up questions
• Rebuilt them again

👉 Multiple times

Why?

Because under IRM review:

👉 Inconsistency = rejection risk

We made sure:

• Income matched deposits
• Expenses matched documentation
• Allocations made sense logically

⚖️ Phase 3 — Strategic Evaluation (Not Just “Do an OIC”)

We evaluated ALL options:

• CNC (IRC §6343) → hardship positioning
• PPIA (IRC §6159) → partial pay over time
• CSED strategy (IRC §6502) → timing analysis

There were real scenarios where:

👉 letting the statute run could have worked

But that lacked:

• certainty
• closure
• control

So we moved forward with strategy — not default

🔧 Phase 4 — Positioning the Offer (THIS is where the case was won)

We didn’t just submit numbers.

We engineered the outcome within IRS rules:

• Identified allowable expenses not being used
• Introduced legitimate expenses (life insurance — allowable under IRM when justified)
• Structured financials to reduce disposable income under RCP calculation rules

👉 RCP = Assets + Future Income (IRM 5.8.5)

We controlled BOTH sides.

🏛 Phase 5 — IRS Interaction (Speaking Their Language)

This is where most cases fall apart.

But I understand:

👉 how examiners evaluate
👉 what triggers pushback
👉 how to respond within IRM framework

We:

• Responded with documentation — not argument
• Maintained consistency across all filings
• Framed everything within IRS evaluation logic

👉 No contradictions = smoother approval path

📊 Final Outcome

• IRS Debt: ~$140,000
• Settlement: ~$4,000

😌 What Changed

• Full compliance restored
• No more uncertainty
• No more fear of the unknown

👉 He sleeps at night

💬 “He was thorough… patient… worth every dollar… and then some.”

💥 Case Study #2: When the IRS Was Already Moving — And We Took Control

This case didn’t start early.

It started under pressure.

The IRS had already issued:

👉 LT11 (Letter 1058) — Final Notice of Intent to Levy

😰 What That Feels Like

At this point, it’s no longer theoretical.

It’s immediate.

👉 wages can be garnished
👉 bank accounts can be levied
👉 assets can be seized

For many taxpayers, this is where panic sets in. If you’ve received a letter like this, you already know—it doesn’t feel like a warning. It feels like a countdown.

🛑 Phase 1 — Immediate Control (IRC §6330 CDP Strategy)

We filed a Collection Due Process Hearing

This was not just procedural — it was strategic.

Under IRC §6330 and §6331(k):

• Levy action is STOPPED
• Case moves to Appeals (independent review)
• Tax Court rights are preserved
• Collection activity is suspended

👉 This gave us TIME
👉 And more importantly — LEVERAGE

It also allowed me to move the case out of the collection division and into Appeals, where resolution is evaluated independently and more strategically.

🔬 Phase 2 — Investigation While Protected

With enforcement paused, we didn’t rush.

We:

• Reviewed detailed bank activity
• Identified income inconsistencies
• Built financials under IRM 5.8.5 standards
• Reworked data multiple times to ensure accuracy

At one point:

👉 CNC was viable

But again — we didn’t settle for first option

⚖️ Phase 3 — Strategic Decision (Government Interest Analysis)

We evaluated:

• IRS reasonable collection potential
• Long-term recovery vs settlement
• Whether OIC was in the government’s best interest

👉 That is the actual legal standard under IRC §7122

We determined:

👉 OIC provided the best structured outcome

🏛 Phase 4 — Negotiation (Where Experience Shows)

This is where the case was truly won.

The IRS examiner:

• Questioned financial items
• Requested adjustments
• Reviewed medical expenses
• Evaluated offer structure

I:

• Communicated directly using IRS terminology
• Justified adjustments under IRM provisions
• Negotiated allowable expenses
• Requested structural changes to the offer

👉 Including switching to lump sum vs periodic (strategic move under RCP rules)

🔁 Revision Phase (Critical — Most Fail Here)

We didn’t resist the IRS.

We worked WITH the framework.

We:

• Submitted revised Form 656
• Adjusted financials strategically
• Maintained full consistency

👉 Stayed ahead of review instead of reacting

📊 Final Outcome

• IRS Debt: ~$185,000
• Settlement: Under $1,000

😌 What Changed

• Levy avoided
• No garnishments
• No enforcement pressure

👉 No more sleepless nights
👉 Financial life stabilized

💥 What These Cases Prove

Different facts.
Different strategies.
Same foundation:

👉 Investigation
👉 Strategy
👉 Execution

💥 Final Thought

An Offer in Compromise is not a shortcut.

It is not a guess.

It is not a form.

👉 It is something that must be built correctly

A successful IRS Offer in Compromise strategy starts with understanding your full financial picture and evaluating all available resolution options—not just submitting a form.

👉 Not every taxpayer qualifies for an Offer in Compromise—and that’s exactly why strategy matters.

📞 Take Control of Your IRS Situation

Learn more about Harmon Tax Resolution, LLC and how we approach IRS cases differently.

Harmon Tax Resolution, LLC
Will Harmon, Attorney, CPA, EA, MBA, CTRS

📧 will@harmonassociates.net

📍 Jacksonville, Florida (by appointment only) – 904-616-8256
📍 Port Saint Lucie Office – 772-418-0949
📍 Clearwater (satellite office) – 813-325-6009

🌐 www.harmontaxresolution.com

Whether you are in Jacksonville, Port Saint Lucie, Clearwater, or anywhere in Florida, having the right IRS strategy in place can make all the difference in resolving your tax situation.

If you’re dealing with IRS debt, uncertainty, or enforcement pressure, the worst thing you can do is wait and hope it resolves itself.

The right IRS Offer in Compromise strategy can stop collections, protect your assets, and give you a clear path forward—but it has to be done correctly.

👉 Schedule a consultation today and take control of your situation before the IRS takes control for you.

❓ Frequently Asked Questions

What is an IRS Offer in Compromise strategy?
An IRS Offer in Compromise strategy is a structured approach to settling tax debt based on financial analysis, IRS rules, and the taxpayer’s ability to pay.

Who qualifies for an Offer in Compromise?
Taxpayers who cannot fully pay their tax debt or meet hardship or fairness criteria may qualify depending on their financial situation.

Can an Offer in Compromise stop IRS collections?
Yes, when properly timed, an Offer in Compromise may pause IRS collection activity and help prevent levies or garnishments.

Is an Offer in Compromise always the best option?
No, in some cases installment agreements or currently not collectible status may be better solutions depending on the facts.

If you are searching for Jacksonville IRS installment agreement help, there is a good chance you are dealing with an IRS balance due, collection notices, wage garnishments, bank levies, or increasing pressure from the IRS collection division.

Many taxpayers view an IRS installment agreement as nothing more than a payment plan. While that description is technically correct, it often misses the bigger picture.

An effective IRS Installment Agreement Strategy is not simply about obtaining approval from the IRS. It is about determining whether an installment agreement is the right solution, structuring the agreement in a sustainable manner, protecting your financial position, and integrating the agreement into an overall tax resolution strategy.

In many cases, the installment agreement itself is not the final objective. Instead, it may serve as a tool to stop aggressive IRS collection activity, preserve assets, maintain financial stability, or create time to pursue a more favorable long-term resolution.

Every taxpayer’s situation is different. A payment arrangement that makes sense for one taxpayer may be completely inappropriate for another. That is why I begin every case with an investigation rather than a predetermined solution. Providing correct resolution support to Jacksonville area taxpayers is the core mission of Harmon Tax Resolution.

Why My Background as a Tax Attorney, CPA, and Enrolled Agent Matters

IRS installment agreements sit at the intersection of tax law, financial analysis, and IRS procedure.

Many professionals approach IRS problems from only one perspective. Some focus primarily on legal issues. Others focus on accounting and financial analysis. Still others focus on navigating IRS procedures. Developing an effective IRS Installment Agreement Strategy often requires legal analysis, financial analysis, and a practical understanding of IRS procedures.

My background as a Tax Attorney, Certified Public Accountant (CPA), and IRS Enrolled Agent allows me to evaluate all three.

As a Tax Attorney, I analyze collection statutes, appeal rights, liens, levies, procedural issues, and the legal authority governing IRS collection actions. I am often looking beyond the immediate collection problem to understand how today’s decisions may affect the taxpayer years from now.

As a CPA, I analyze financial information. Installment agreements frequently rise or fall based upon income, expenses, asset equity, cash flow, future earning capacity, and the tax consequences associated with various financial decisions.

As an Enrolled Agent, I bring practical experience working within the IRS administrative system. This includes transcript analysis, Revenue Officer procedures, collection operations, and an understanding of how IRS personnel evaluate financial information.

Together, these perspectives allow me to evaluate the legal issues, financial issues, and procedural issues before recommending a resolution strategy. The goal is not simply obtaining an installment agreement. The goal is identifying the strategy that produces the best overall outcome for the taxpayer.

It is important to make sure to partner with a trustworthy, capable and reputable tax resolution firm who will ensure the best strategy is put forward.

What Most Taxpayers Get Wrong About IRS Installment Agreements

One of the most common misconceptions I encounter is the belief that every taxpayer who cannot immediately pay their tax debt should simply request a payment plan.

While installment agreements are often an excellent tool, that assumption can lead taxpayers down the wrong path.

I routinely encounter taxpayers who enter the wrong type of installment agreement, agree to unnecessarily high monthly payments, trigger avoidable financial disclosure requirements, overlook collection statute issues, and fail to consider other available resolution options.

The issue is not whether the IRS will approve an installment agreement.

The issue is whether the installment agreement makes sense when viewed in the context of the taxpayer’s entire financial and legal situation.

How an IRS Installment Agreement Strategy Begins With Investigation

Before recommending any installment agreement, I conduct a thorough investigation. Every IRS Installment Agreement Strategy should begin with a thorough investigation of the taxpayer’s facts and circumstances.

When evaluating an IRS collection case, I want to understand what the IRS believes is owed, how the liability arose, how long the IRS has to collect the debt, whether liens or levies exist, whether prior agreements have been established, whether compliance concerns exist, and whether other resolution options may produce a better overall result.

This process often begins with a review of IRS transcripts.

Transcripts can reveal information that taxpayers frequently do not realize exists, including prior collection actions, assessment dates, collection statute information, lien filings, installment agreement history, and pending collection activity.

I also review the taxpayer’s compliance history. A taxpayer who has previously defaulted an installment agreement may face different challenges than a taxpayer requesting a payment arrangement for the first time.

Most importantly, I am looking for opportunities.

I evaluate whether all allowable expenses have been properly considered, whether collection statutes have been correctly calculated, whether appeal rights remain available, and whether another resolution option may produce a more favorable result.

The investigation is not about forcing a particular solution. It is about identifying the best available solution.

IRS Financial Analysis: More Than Income and Expenses

The IRS generally evaluates a taxpayer’s ability to pay using standards found throughout IRM 5.14 (Installment Agreements) and IRM 5.15 (Financial Analysis Handbook).

The Internal Revenue Manual (IRM) is the primary operating manual used by IRS employees. While it is not the Internal Revenue Code, it provides important guidance regarding how IRS personnel evaluate collection cases.

The IRS frequently relies on National Standards and Local Standards when evaluating allowable living expenses. These standards establish guideline amounts for categories such as food, housing, transportation, and other necessary expenses.

However, these standards do not always tell the entire story.

In certain situations, taxpayers may have legitimate expenses that exceed standard allowances. The IRS may allow certain expenses above the National and Local Standards when the taxpayer can demonstrate that the expenses are necessary and reasonable under the circumstances. Examples may include:

• Extraordinary medical expenses
• Disability-related expenses
• Court-ordered obligations
• Special educational needs
• Other necessary expenses supported by documentation

Part of my analysis involves determining whether deviations from standard allowances are appropriate and whether sufficient documentation exists to support those deviations.

The difference between a sustainable installment agreement and an unsustainable installment agreement is often not income. It is whether the financial analysis was performed correctly.

Evaluating Assets, Equity, and Borrowing Potential

Another important part of the analysis involves taxpayer assets and available equity.

Many taxpayers assume that simply because they own a home, retirement account, business interest, or investment asset, the IRS will automatically require liquidation before considering an installment agreement.

Conversely, some taxpayers assume that the IRS will ignore those assets entirely.

Neither assumption is always correct.

As part of its financial analysis, the IRS may evaluate whether equity exists in certain assets and whether that equity is reasonably available to satisfy the liability. The IRS may also consider whether borrowing against assets is possible.

However, the existence of equity does not automatically mean liquidation is the appropriate solution.

Factors such as age, health, retirement status, marketability, borrowing ability, cash flow, tax consequences, and overall economic reality may all affect the analysis.

The IRS may also evaluate whether a taxpayer has the ability to borrow against assets rather than liquidate them outright.

For example, the IRS may consider whether equity exists in a personal residence, retirement account, investment account, business asset, or other property that could potentially be used to satisfy the tax liability.

However, the existence of equity does not automatically mean borrowing is realistic, available, or appropriate.

In evaluating borrowing potential, I frequently examine factors such as:

• The taxpayer’s age and retirement status
• Existing debt obligations
• Creditworthiness
• Debt-to-income ratios
• Health concerns
• Lending restrictions
• Tax consequences associated with liquidation or borrowing
• Overall economic reality

In some cases, borrowing against an asset may be a reasonable solution. In other cases, forcing a taxpayer to borrow or liquidate assets may create more financial harm than benefit. A proper analysis requires far more than simply identifying available equity.

This is another reason why a complete investigation should occur before selecting a resolution strategy.

Real-World Example: Why Investigation Matters

One recent matter illustrates why a thorough investigation is critical before recommending an installment agreement.

The taxpayer owed approximately $180,000 to the IRS and earned a substantial annual income. At first glance, many practitioners would have assumed the taxpayer should liquidate assets or borrow against available resources to pay the liability.

However, a deeper investigation revealed a more complicated picture.

The taxpayer’s financial condition included retirement assets, ongoing financial obligations, future retirement concerns, and collection statute considerations that significantly impacted the analysis. Simply looking at the balance due and asset values did not tell the entire story.

After reviewing IRS transcripts, analyzing the Collection Statute Expiration Dates, evaluating the taxpayer’s cash flow, and examining the practical realities of the taxpayer’s financial situation, a structured installment agreement strategy was developed that protected the taxpayer’s long-term financial interests while resolving the IRS collection problem.

The lesson is simple. Effective IRS representation is rarely about finding the quickest solution. It is about finding the solution that produces the best overall outcome after considering all relevant facts and circumstances.

Types of IRS Installment Agreements

Streamlined Installment Agreements

Streamlined Installment Agreements are generally available for qualifying taxpayers with balances within IRS thresholds and typically do not require extensive financial disclosure.

These agreements are often the simplest option but are not always the best option.

Non-Streamlined Installment Agreements

When larger balances exist, the IRS may require detailed financial disclosures before approving a payment arrangement.

These cases often involve more extensive financial analysis and negotiation.

Partial Pay Installment Agreements

A Partial Pay Installment Agreement (PPIA) allows taxpayers to make monthly payments that may not fully satisfy the liability before the collection statute expires.

PPIAs are frequently overlooked but can be powerful tools when supported by the facts and circumstances of the case.

Understanding the Collection Statute Expiration Date (CSED)

The Collection Statute Expiration Date is often one of the most important factors when developing an IRS Installment Agreement Strategy.

Under IRC §6502, the IRS generally has ten years from assessment to collect a tax liability.

However, determining the actual expiration date is not always straightforward.

Certain events may suspend or extend the collection period, including:

• Bankruptcy proceedings
• Collection Due Process hearings
• Pending Offers in Compromise
• Certain military service periods
• Other statutory tolling events

This is one reason I never assume a collection statute calculation is correct without verification.

I have encountered situations where transcript analysis revealed issues that materially changed the strategy and outcome of a case.

When substantial time remains on the collection statute, one strategy may be appropriate. When only a limited amount of time remains, an entirely different strategy may produce a better result.

Collection Statute Expiration Date analysis can significantly impact installment agreement strategy and other IRS resolution options.

How an IRS Installment Agreement Strategy Can Stop IRS Collections

Internal Revenue Code §6159 authorizes the IRS to enter into installment agreements when doing so facilitates collection of a tax liability.

One of the most important benefits of a properly structured installment agreement is the protection it may provide against aggressive collection activity.

Depending on the status of the case, installment agreements may help prevent:

• Bank levies
• Wage garnishments
• Continued collection enforcement
• Additional collection pressure

Timing matters. The stage of the collection case matters. Whether a Revenue Officer has been assigned matters.

However, a properly structured installment agreement can often provide the breathing room necessary to stabilize a taxpayer’s financial situation and pursue a longer-term strategy.

Revenue Officer Cases Often Require a Different Strategy

Not all IRS collection cases are handled the same way.

Some cases remain within the IRS Automated Collection System (ACS), while others are assigned to a local Revenue Officer.

When a Revenue Officer becomes involved, the stakes often increase significantly.

Revenue Officers typically conduct more detailed investigations, request additional financial information, evaluate asset equity more aggressively, and have greater flexibility in pursuing enforced collection actions.

A Revenue Officer may request:

• Financial statements
• Bank records
• Proof of expenses
• Asset documentation
• Borrowing information
• Business records

The timing of collection actions may also accelerate.

Because Revenue Officers have greater discretion and direct involvement in the case, installment agreement strategy often becomes even more important. Financial disclosures must be carefully reviewed, collection statutes must be evaluated, and all available resolution options should be considered before submitting information to the IRS.

The approach that works in an Automated Collection System case may not be sufficient in a Revenue Officer case.

Understanding the difference can have a substantial impact on the outcome.

Compliance: The Foundation of Every Successful Installment Agreement

Obtaining approval is often the easy part.

Maintaining the agreement is where many taxpayers encounter problems.

The IRS generally requires taxpayers to remain compliant throughout the duration of the agreement.

This means:

• Filing future tax returns on time
• Paying future taxes as they become due
• Maintaining adequate withholding
• Making required estimated tax payments

One of the most common reasons installment agreements fail is pyramiding tax debt.

Pyramiding occurs when a taxpayer enters an agreement to resolve old tax liabilities while simultaneously creating new tax liabilities.

Before recommending an installment agreement, I evaluate whether the taxpayer can realistically remain compliant moving forward.

A payment arrangement that resolves prior tax debt but creates future tax problems is rarely a successful outcome.

Sometimes an Installment Agreement Is the Wrong Answer

Not every taxpayer should enter into an installment agreement.

Sometimes another resolution option may produce a better result.

Depending upon the circumstances, alternatives may include:

• Offer in Compromise
• Currently Not Collectible Status
• Innocent Spouse Relief
• Appeals
• Audit Reconsideration

The key is understanding the taxpayer’s complete financial and procedural situation before selecting a strategy.

An Installment Agreement Can Be a Bridge to a Better Resolution

Many taxpayers assume an installment agreement is the final resolution of their IRS problem.

In some cases, that is true.

In other cases, the installment agreement serves as a bridge to a more favorable long-term resolution.

For example, a taxpayer may need time for:

• Retirement
• Income changes
• Business restructuring
• Medical developments
• Expiration of collection statutes
• Additional documentation development

A properly structured installment agreement can provide stability and protection while those opportunities develop.

Frequently Asked Questions About IRS Installment Agreements

How Long Can an IRS Installment Agreement Last?

The answer depends on the type of installment agreement, the amount owed, and the taxpayer’s financial circumstances.

Many taxpayers are familiar with Streamlined Installment Agreements, which often allow qualifying taxpayers to spread payments over as many as 72 months. However, that is not the only type of agreement available.

In some situations, the IRS may require a shorter repayment period based upon the taxpayer’s ability to pay. In other situations, a Partial Pay Installment Agreement may be appropriate when the taxpayer is unlikely to fully satisfy the liability before the Collection Statute Expiration Date (CSED).

The length of an installment agreement should not be determined solely by what produces the lowest payment. The agreement should be evaluated in light of the taxpayer’s financial condition, collection exposure, compliance requirements, and long-term resolution strategy.

Can the IRS Reject an Installment Agreement?

Yes.

Many taxpayers assume that if they offer a monthly payment, the IRS must accept it. That is not always the case.

The IRS evaluates installment agreement requests based upon the taxpayer’s compliance history, financial condition, ability to pay, and the specific type of agreement being requested.

For example, a taxpayer who has unfiled tax returns will generally need to become compliant before an agreement can be approved. Likewise, taxpayers who have defaulted previous agreements may face additional scrutiny.

The IRS may also reject a proposal if it determines the taxpayer has the ability to make larger payments or if required financial information is incomplete.

This is one reason I conduct a detailed investigation before submitting a proposal. Understanding how the IRS is likely to evaluate the case often allows problems to be addressed before they become obstacles.

Does an IRS Installment Agreement Stop Wage Garnishment?

In many situations, yes.

One of the primary benefits of a properly structured installment agreement is the protection it may provide from aggressive collection activity.

Depending upon the stage of the collection process, an approved installment agreement may prevent wage garnishments, bank levies, and other enforced collection actions.

In many cases, collection protections begin once a qualifying installment agreement request becomes pending. However, the exact impact depends upon the facts of the case, the status of the collection action, and whether a Revenue Officer has been assigned.

Because timing can be critical, taxpayers facing wage garnishment or levy action should generally seek assistance before collection activity progresses further.

What Is a Partial Pay Installment Agreement?

A Partial Pay Installment Agreement, commonly referred to as a PPIA, is a type of installment agreement in which the taxpayer makes monthly payments even though the liability may not be fully paid before the collection statute expires.

Unlike traditional installment agreements, the objective is not necessarily to pay the entire balance. Instead, the IRS evaluates the taxpayer’s ability to pay and may accept payments based upon current financial circumstances.

PPIAs can be particularly valuable when a taxpayer has limited disposable income and relatively little time remaining on the Collection Statute Expiration Date.

However, they are not appropriate in every situation. Careful financial analysis and statute review are critical before pursuing this strategy.

Can the IRS File a Tax Lien While I Am on a Payment Plan?

Possibly.

Many taxpayers incorrectly believe that entering into an installment agreement automatically prevents the IRS from filing a Notice of Federal Tax Lien.

The reality is more complicated.

Whether the IRS files a lien may depend on factors such as the amount owed, the type of installment agreement, the taxpayer’s collection history, and current IRS policies.

In some situations, strategic planning before entering into an agreement may reduce lien exposure. In other situations, a lien may be unavoidable regardless of the payment arrangement selected.

Because liens can affect financing opportunities, credit relationships, and asset transactions, this issue should be evaluated as part of the overall resolution strategy.

What Happens If I Miss a Payment?

Missing a payment does not always result in immediate termination of the agreement, but it can create significant problems.

Installment agreements generally require taxpayers to make all payments on time and remain compliant with future tax obligations.

If a taxpayer falls behind, the IRS may issue default notices and provide an opportunity to correct the problem. However, continued noncompliance may result in termination of the agreement and renewed collection activity.

In addition to missed payments, installment agreements frequently default because taxpayers fail to file future tax returns or incur additional tax liabilities.

For that reason, maintaining compliance is just as important as obtaining the agreement in the first place. If you miss a payment, make sure to make the next payment on time.

How Does the IRS Determine Monthly Installment Agreement Payments?

The IRS generally begins by evaluating the taxpayer’s financial condition.

This analysis often includes income, living expenses, assets, liabilities, and future earning potential.

IRS personnel frequently rely on financial guidelines found in the Internal Revenue Manual, including National Standards and Local Standards for certain categories of living expenses.

However, many taxpayers are surprised to learn that those standards do not always represent the final answer.

In appropriate circumstances, taxpayers may be able to justify expenses that exceed standard allowances. Medical conditions, disability-related costs, court-ordered obligations, and other documented circumstances may affect the analysis.

This is one reason detailed financial investigation can have a substantial impact on the outcome of a case.

Should I Choose an Installment Agreement or an Offer in Compromise?

There is no universal answer.

An Offer in Compromise and an Installment Agreement are different tools designed for different situations.

Some taxpayers are strong Offer in Compromise candidates because their assets and future income indicate that the IRS is unlikely to collect the full liability.

Others may not qualify for an Offer in Compromise but may still obtain an affordable installment agreement that achieves a favorable outcome.

There are also situations where a taxpayer may begin with an installment agreement and later pursue a different resolution strategy as circumstances change.

The correct choice depends upon the taxpayer’s income, assets, collection statute considerations, compliance history, and overall financial condition.

That is why I evaluate all available options before recommending a particular course of action.

Why Should I Hire a Tax Attorney, CPA, and Enrolled Agent for an IRS Installment Agreement?

Many installment agreement cases involve more than simply completing IRS forms.

A successful resolution often requires legal analysis, financial analysis, transcript review, collection statute evaluation, and a practical understanding of IRS procedures.

As a Tax Attorney, CPA, and Enrolled Agent, I evaluate each case from multiple perspectives. This allows me to analyze legal issues, financial issues, and procedural issues before recommending a strategy.

Rather than focusing solely on obtaining approval, my objective is to identify the resolution option that produces the best overall outcome based upon the taxpayer’s specific facts and circumstances.

Final Thoughts

A properly developed IRS Installment Agreement Strategy can be one of the most effective tools available to taxpayers facing IRS collections.

However, an installment agreement should never be viewed as merely a payment plan.

The IRS is not simply evaluating whether a taxpayer can make a monthly payment. The IRS is evaluating the taxpayer’s overall financial condition, ability to pay, asset equity, compliance history, and future collection potential.

A successful strategy requires more than completing forms and requesting approval.

It requires investigation.

It requires transcript analysis.

It requires financial analysis.

It requires an understanding of IRS procedures, collection statutes, and available resolution alternatives.

Most importantly, it requires selecting the solution that best fits the taxpayer’s unique facts and circumstances.

In some cases, that solution will be a streamlined installment agreement. In other cases, it may be a Partial Pay Installment Agreement, an Offer in Compromise, Currently Not Collectible status, or another resolution path entirely.

The objective is not simply obtaining an installment agreement.

The objective is achieving the best overall outcome.

Every IRS installment agreement strategy should begin with transcript analysis, financial review, and evaluation of all available resolution options.

Take Back Control of Your IRS Situation

If you are dealing with IRS debt, the worst thing you can do is wait or approach the IRS without a clear strategy.

An installment agreement, when structured properly, can:

• Stop IRS collections
• Protect your assets
• Give you a clear path forward
• Help you regain peace of mind

At Harmon Tax Resolution, LLC, we take a strategic approach to every case—because no two IRS situations are the same.

You may qualify for a solution that reduces your financial burden and helps you move forward with confidence. Contact Harmon Tax Resolution.

📞 Harmon Tax Resolution, LLC
Jacksonville: 904-616-8256
Port Saint Lucie: 772-418-0949
Clearwater: 813-325-6009
🌐 www.harmontaxresolution.com

If You Need Jacksonville IRS Levy Help, Here’s What You’re Facing

If you need Jacksonville IRS levy help, you may already be dealing with a frozen bank account, wage garnishment, or aggressive IRS collection action.

An IRS levy is one of the most serious enforcement tools the IRS uses—and understanding how and why it happens is critical to protecting your assets.

At this stage, the IRS is no longer sending reminders or requests for payment.

👉 They are actively enforcing collection.

For many taxpayers, this is the first time the situation feels urgent. Access to money is restricted, paychecks are reduced, and uncertainty sets in quickly.

What Is an IRS Levy (And Why It Happens)

An IRS levy is the legal seizure of property or rights to property to satisfy a tax debt.

This means the IRS can take:

• Money from your bank account
• A portion of your wages
• Business income or receivables
• In certain cases, physical assets

It is important to distinguish this from a tax lien.

• A tax lien is the government’s legal claim against your property
• A levy is the actual act of taking that property

The authority for this comes from Internal Revenue Code § 6331, which allows the IRS to collect unpaid taxes through enforced seizure when voluntary payment is not made.

Why Levies Happen

Levies typically occur when:

• Taxes have been assessed and remain unpaid
• Required tax returns have been filed (or filed by the IRS on your behalf)
• The IRS has sent multiple notices
• The taxpayer has not responded or resolved the balance

The IRS follows a structured system of notices and deadlines. Each notice outlines the issue, what is required, and the consequences of inaction .

👉 By the time a levy occurs, the IRS considers prior attempts to resolve the matter unsuccessful.

How Jacksonville IRS Levy Help Stops Bank Levies and Asset Seizures

Understanding the levy process is one part of the equation.

Stopping it requires:

• Proper communication with the IRS
• Accurate financial disclosure
• A clear and realistic resolution strategy

Without these elements, simply contacting the IRS rarely produces results.

Types of IRS Levies You May Face

Bank Levy (Most Immediate and Disruptive)

A bank levy occurs when the IRS issues Form 668-A to your financial institution.

Once received:

• The bank must freeze the funds in your account
• You lose access to that money immediately
• The bank is required to hold the funds for 21 days

During this 21-day period:

• The IRS has not yet received the funds
• The funds are essentially “on hold”
• You still have an opportunity to act

👉 This is a critical window.

Many taxpayers assume the money is already gone—it is not.

However, if no action is taken within that period, the funds are sent to the IRS and recovery becomes significantly more difficult.

Wage Garnishment (Continuous Levy on Income)

A wage levy is issued through Form 668-W and sent to your employer.

This results in:

• A portion of each paycheck being withheld
• Only a minimal exempt amount being left to the taxpayer
• Ongoing collection until the debt is resolved

Unlike a bank levy, this is not a one-time event.

👉 It continues every pay cycle.

If you are experiencing this, you may also benefit from reviewing our
Jacksonville IRS wage garnishment help resource.

Business or Receivables Levy

For business owners, levies can extend to:

• Accounts receivable
• Merchant accounts
• Ongoing business income

This type of levy can:

• Interrupt cash flow
• Impact payroll
• Disrupt operations quickly

In some cases, it can effectively shut down a business if not addressed promptly.

How an IRS Levy Actually Happens (The Real Timeline)

Understanding the sequence is critical because each stage provides opportunities to act.

1. Tax Assessment

The IRS records the tax liability based on:

• A filed return
• An audit adjustment
• A substitute return prepared by the IRS

2. Notice and Demand for Payment

Required under IRC § 6303, this formally notifies the taxpayer of the balance due.

3. Collection Notices Issued

The IRS sends a progression of notices:

• CP14 (initial balance due)
• CP501 / CP503 (follow-ups)
• CP504 (intent to levy state refund / escalation)

Each notice includes:

• Amount owed
• Deadlines
• Instructions for response

Failure to respond to these notices is a primary reason accounts move into enforcement .

4. Final Notice of Intent to Levy (Critical Stage)

This is typically:

• Letter 1058
• LT11

This notice:

• Provides 30 days to respond
• Grants the right to request a Collection Due Process (CDP) hearing
• Represents the last formal warning before enforcement

5. Levy Issued

If no action is taken, the IRS proceeds with enforcement under IRC § 6331(d).

Required Notices Before the IRS Can Levy

Before issuing a levy, the IRS must:

• Send Notice and Demand for Payment
• Issue a Final Notice of Intent to Levy
• Provide an opportunity for a hearing
• Send notices to the taxpayer’s last known address

Failure to meet these requirements may create procedural defenses.

Who Is Handling Your Case Matters

Automated Collection System (ACS)

• Centralized IRS call centers
• Handles large volumes of cases
• More standardized processes

Revenue Officer (Field Agent)

• Assigned to higher-risk or higher-balance cases
• Works cases individually
• Has broader enforcement authority

👉 The approach taken depends heavily on which system or agent is involved.

How I Handle IRS Levy Cases

When a levy occurs, the situation has already escalated.

This requires a structured and informed response.

Step 1: Case Analysis

This includes:

• Reviewing IRS transcripts
• Confirming assessments
• Verifying notices were issued properly
• Identifying exposure and risk

Step 2: IRS Contact

The goal is to:

• Identify who is handling the case
• Determine current enforcement status
• Open communication to discuss resolution

Step 3: Compliance

The IRS requires:

• All tax returns to be filed
• Financial information to be current

Step 4: Resolution Strategy

This may include:

• Installment agreements
• Offers in compromise
• Hardship status
• Other resolution options

👉 This is where Jacksonville IRS levy help becomes critical, because the strategy must align with IRS requirements.

How to Stop an IRS Levy

Stopping a levy requires fitting into a recognized resolution category.

Collection Due Process (CDP)

• Must be requested within 30 days
• Stops levy action
• Moves case to Appeals

Currently Not Collectible (CNC)

• Based on inability to pay
• Stops collection activity

Installment Agreement

• Structured payment plan
• May stop enforcement

Offer in Compromise

• Potential settlement option
• Requires financial qualification

Hardship Release (IRC § 6343)

If the levy prevents payment of necessary living expenses, the IRS may be required to release it.

However:

👉 This must be properly documented and supported.

What Must Be Proven to Stop a Levy

To obtain relief, the IRS typically requires:

• Filing compliance
• Financial disclosure (Forms 433-A or 433-B)
• Accurate income and expense information
• A viable resolution plan

Using the IRS’s Own Rules

The IRS operates under the Internal Revenue Manual (IRM), which guides how agents must act .

Understanding these procedures can help identify:

• Errors
• Improper actions
• Opportunities to challenge decisions

Common Mistakes That Make Levies Worse

• Ignoring IRS correspondence
• Delaying action after a levy occurs
• Providing incomplete or inaccurate information
• Failing to meet deadlines

Why IRS Levy Cases Escalate

The IRS is tasked with collecting tax revenue efficiently.

Their systems are designed to move accounts forward when no action is taken, often based on available financial data .

Without proper representation:

• The process continues forward
• Enforcement actions increase
• Options become more limited

Why Work With Harmon Tax Resolution, LLC

You are working with a professional who combines:

• Legal training (Attorney)
• Financial expertise (CPA)
• IRS representation authority (Enrolled Agent)

This allows for a comprehensive approach to IRS levy cases.

If You Are Facing an IRS Levy in Jacksonville

• Bank levy → limited time to act
• Wage levy → ongoing impact
• Business levy → operational risk

👉 Acting early provides more options.

Take Action Today

If you need Jacksonville IRS levy help, do not wait.

📞 Harmon Tax Resolution, LLC
772-418-0949 | 813-325-6009
www.harmontaxresolution.com

💥 You may qualify for relief that can stop collections and protect your assets.

Frequently Asked Questions About IRS Levies

What is the difference between an IRS levy and a lien?

An IRS lien is a legal claim against your property due to unpaid taxes, while an IRS levy is the actual seizure of that property.

A lien protects the government’s interest in your assets, whereas a levy allows the IRS to take funds from your bank account, wages, or other assets to satisfy the debt.

How long does an IRS bank levy last?

A bank levy is a one-time event, but it has a critical timeline.

Once the IRS issues the levy:

• Your bank freezes the funds immediately
• The funds are held for 21 days
• After 21 days, the funds are sent to the IRS

👉 During that 21-day period, there is still an opportunity to have the levy released.

Can the IRS take all the money in my bank account?

The IRS can levy the available balance in your account at the time the levy is received.

However:

• They cannot take funds deposited after the levy (for that specific levy)
• Certain funds may be partially protected depending on the source

👉 Acting quickly during the holding period is critical to protecting those funds.

How do I stop an IRS levy once it has started?

Stopping an IRS levy requires entering into an approved resolution with the IRS.

This may include:

• Requesting a Collection Due Process (CDP) hearing
• Establishing financial hardship (Currently Not Collectible)
• Setting up an installment agreement
• Submitting an Offer in Compromise

👉 The IRS will not release a levy without a valid reason supported by documentation.

What is a Final Notice of Intent to Levy?

This is one of the most important notices the IRS sends.

Typically issued as Letter 1058 or LT11, it:

• Notifies you that the IRS intends to levy
• Provides 30 days to respond
• Gives you the right to request a hearing

👉 If you respond within that window, you may be able to stop the levy before it happens.

Can the IRS garnish my wages without warning?

No. The IRS is required to send multiple notices before issuing a wage garnishment.

These include:

• Balance due notices
• Follow-up collection notices
• A Final Notice of Intent to Levy

👉 If these notices are ignored, the IRS can proceed with garnishment.

Will the IRS release a levy if I am experiencing financial hardship?

In some cases, yes.

Under IRC § 6343, the IRS may be required to release a levy if it is causing economic hardship, meaning you are unable to meet basic living expenses.

However:

👉 This must be properly documented and demonstrated to the IRS.

What happens if I ignore an IRS levy?

Ignoring a levy can lead to:

• Permanent loss of bank funds
• Ongoing wage garnishment
• Additional enforcement actions
• Increased financial pressure

👉 The situation typically becomes more difficult to resolve the longer it goes unaddressed.

Can I negotiate with the IRS after a levy has started?

Yes, but the situation is more time-sensitive.

Once a levy is in place:

• The IRS expects immediate action
• Financial documentation will likely be required
• A resolution must be proposed quickly

👉 This is where experienced Jacksonville IRS levy help can make a significant difference.

How quickly should I act if I receive a levy notice or bank freeze?

Immediately.

• Bank levy → you may have days
• Wage levy → ongoing impact each pay period
• Final notice → strict 30-day deadline

👉 Acting early provides more options and increases the likelihood of stopping enforcement.

Jacksonville IRS Audit Help

If you need Jacksonville IRS audit help, you are already in a position where the IRS is actively reviewing your financial life.

However, a Jacksonville IRS audit is not simply a request for documents—it is a structured examination process where the IRS evaluates your income, deductions, financial records, and overall compliance to determine whether additional tax is owed.

How the audit is handled from that point forward often determines:

• Whether the audit stays limited
• Whether it expands into multiple issues or years
• Whether it results in additional tax, penalties, or referral to collections

What You Are Likely Experiencing Right Now

If you are dealing with a Jacksonville IRS audit, you are likely:

• Receiving formal IRS notices requesting documentation
• Facing deadlines that are not entirely clear
• Unsure how much information should be provided
• Concerned that the audit may expand beyond the original issue

👉 In many cases, by the time the IRS initiates contact, they have already reviewed your return and identified areas of concern.

What a Jacksonville IRS Audit Really Is

A Jacksonville IRS audit is an investigative process—not a casual review.

The IRS is attempting to determine whether your tax return is substantially correct, and if not, how much additional tax can be assessed.

This includes:

• Verifying income through third-party reporting and financial tracing
• Evaluating whether deductions meet IRS standards of being ordinary and necessary
• Reviewing accounting records for consistency and accuracy
• Identifying patterns that suggest underreporting or misclassification

👉 More importantly, the audit is not just about what you filed—it is about whether your entire financial picture supports it.

How the IRS Builds an Audit Case

During a Jacksonville IRS audit, the IRS develops its position using a structured methodology.

Revenue agents:

• Analyze multiple years of tax returns for consistency
• Compare reported income against financial activity
• Evaluate internal controls and recordkeeping practices
• Identify areas where additional tax is most likely to be assessed

This aligns with IRS internal procedures, where examiners evaluate whether expanding the audit will produce additional tax using risk-based analysis

👉 In other words, the IRS is constantly asking:

“Is there more here?”

This is where professional Jacksonville IRS audit help becomes critical.

Understanding IRS Audit Procedures (IRM-Based Approach)

IRS audits are not random—they are governed by the Internal Revenue Manual (IRM), which outlines how examiners conduct audits.

This includes:

• Determining the scope of the audit
• Evaluating the taxpayer’s books and records
• Applying the 80/20 rule (focusing on areas likely to produce adjustments)
• Expanding or limiting the audit based on findings

As noted in IRS procedures, examiners must evaluate whether additional audit work will likely result in additional tax before expanding scope

👉 Understanding how the IRS is trained to conduct audits is critical to controlling the process.

Jacksonville IRS Audit Process – Step-by-Step Overview

Understanding how an IRS audit progresses is critical to protecting your position and limiting exposure

Information Document Requests (IDRs) – Where Audits Are Won or Lost

A Jacksonville IRS audit is largely driven by Information Document Requests (IDRs).

In many cases, responding to IRS document requests requires more than gathering records—it requires a structured strategy to protect your position and avoid expanding the audit.

An IDR is issued on IRS Form 4564 and can request an incredibly broad range of materials. Because Internal Revenue Code Section 7602 allows the IRS to review anything that may be relevant. Typically, these requests require you to provide documentation such as:

• Bank statements
• General ledgers
• Receipts and invoices
• Financial statements

But the key issue is not just responding—it is responding strategically.

Each IDR must be evaluated for:

• Scope relevance
• Legal authority
• Potential to expand the audit

👉 As a result, overproducing or responding without structure can give the IRS exactly what it needs to expand the case.

Controlling a Jacksonville IRS Audit

While the IRS controls the audit framework, how the audit progresses is heavily influenced by how information is presented and how responses are structured.

Key considerations include:

• Limiting responses to what is relevant and necessary
• Ensuring documentation aligns with positions taken on the return
• Managing communication with the IRS to avoid unnecessary expansion

👉 A reactive approach often leads to broader scrutiny, while a structured approach helps contain the audit.

Audit Interviews and IRS Information Gathering

IRS audit interviews are not casual conversations.

They are designed to:

• Clarify inconsistencies
• Establish facts for the record
• Identify additional areas of inquiry

In addition, questions often focus on:

• Business operations
• Sources of income
• Financial habits and lifestyle
• Recordkeeping practices

👉 Statements made during these interviews can directly influence the outcome of the audit.

Advanced IRS Audit Techniques

When documentation is insufficient or questionable, the IRS may use indirect methods such as:

• Bank deposit analysis
• Cash-T analysis
• Lifestyle analysis
• Reconstruction of income

These methods allow the IRS to estimate income based on financial behavior rather than reported figures.

👉 Once the IRS moves into indirect methods, the audit becomes significantly more complex.

What Happens After the Audit

At the conclusion of a Jacksonville IRS audit, the IRS may:

• Accept the return as filed
• Propose adjustments
• Assess penalties and interest

At that point, if audit issues are not resolved properly, the case may transition into IRS collections, where enforcement actions such as liens, levies, and wage garnishments may be initiated.

At that point, resolution options may include:

• Installment Agreements
• Offer in Compromise
• Currently Not Collectible status

👉 Learn more:
Jacksonville IRS Tax Attorney
https://www.harmonassociates.net/about-harmon-tax-resolution-llc/jacksonville-irs-tax-attorney-cpa/

Most taxpayers are not prepared for how detailed and procedural an IRS audit can become once it begins.

💥 WHY EXPERIENCE MATTERS IN IRS AUDITS

Effective IRS audit representation requires experience across tax, accounting, and legal disciplines to properly evaluate and defend your position.

A Background Built for IRS Audit Representation

Handling a Jacksonville IRS audit effectively requires more than understanding tax law.

It requires understanding:

• How businesses actually operate
• How financial records are created and maintained
• How audits are conducted from the examiner’s perspective
• How to defend a position using both financial and legal analysis

Will Harmon brings a multifaceted background that directly aligns with these needs.

Real-World Audit and Financial Experience

Before focusing on IRS tax resolution, Will Harmon:

• Worked as an auditor, performing financial reviews and analyses
• Served in senior accounting and CFO roles, overseeing multi-entity financial reporting
• Managed internal and external audits, including coordination with outside auditors
• Designed and implemented internal control systems and financial reporting processes

This includes experience:

• Overseeing financial reporting across multiple entities
• Acting as a point of contact for audits, tax, and legal matters
• Developing internal controls and audit-ready systems

👉 This is not theoretical knowledge—it is practical, hands-on experience from the inside.

Legal, Tax, and Financial Integration

As a:

• Florida Attorney
• Certified Public Accountant (CPA)
• IRS Enrolled Agent (EA)
• MBA (Finance)

Will Harmon evaluates IRS audits from multiple perspectives:

✔ Legal strategy and procedural rights
✔ Tax law application and compliance
✔ Financial accuracy and documentation
✔ Business operations and internal controls

👉 This allows for identifying issues, defending positions, and developing strategies that a single-discipline professional may miss.

Attorney-Client Privilege and Representation

As an attorney, representation may include:

• Attorney-client privilege protections
• Direct representation before the IRS
• Strategic communication with IRS agents and Appeals

👉 This adds a layer of protection and control not available in all audit situations.

How We Help You Through a Jacksonville IRS Audit

At Harmon Tax Resolution, LLC, the approach is structured, strategic, and based on real-world experience.

1. Case Analysis

We evaluate the audit scope, risks, and potential exposure.

2. Information Strategy

We determine what should be provided, how, and when.

3. Audit Defense

We support your position with proper documentation and analysis.

4. IRS Interaction

We communicate directly with the IRS to control the process.

5. Resolution Planning

If necessary, we transition the case into the best available resolution option.

🚀 Get Experienced Jacksonville IRS Audit Help

If you are facing a Jacksonville IRS audit, the process is already underway.

The key is not simply responding—it is responding with a clear, informed strategy.

With the right approach, you may be able to:

• Limit the scope of the audit
• Reduce potential tax liability
• Avoid unnecessary penalties
• Protect your financial position
• Prevent escalation into collections

Contact Harmon Tax Resolution, LLC

📞 772-418-0949 (Port Saint Lucie Office)
📞 904-616-8256 (Jacksonville Office)
📞 813-325-6009 (Clearwater Office)

📧 will@harmonassociates.net
🌐 www.harmontaxresolution.com

Harmon Tax Resolution, LLC
Will Harmon, Attorney, CPA, EA, MBA, CTRS

👉 If you need Jacksonville IRS audit help, contact us today to take control of the audit process, protect your position, and move forward with confidence.

If you need Jacksonville IRS wage garnishment help, you are already experiencing the financial impact of the IRS taking your paycheck.

By the time a wage garnishment begins, the IRS is no longer requesting payment—they are enforcing collection. At this stage, the priority is not awareness—it is taking action to stop the garnishment and resolve the underlying tax issue efficiently.

Working with a Jacksonville IRS wage garnishment attorney and CPA allows you to evaluate your options and take immediate steps to protect your income.

How Jacksonville IRS Wage Garnishment Help Can Stop IRS Levies

An IRS wage garnishment is a continuous levy, not a one-time event.

Under federal law, the IRS can require your employer to send a significant portion of your paycheck directly to the government each pay period.

• Only a minimal exempt amount is left to you
• The levy continues until released
• Future paychecks are automatically affected

Once in place, a wage levy remains active unless you take affirmative steps to stop it.

Understanding the IRS Notice Process Before Garnishment

A Jacksonville IRS wage garnishment does not happen without warning. Carefully reviewing each IRS notice is critical, as timing and response options are often limited!

The IRS follows a structured and legally required notice process before issuing a levy.

Preliminary Warning Notices

These notices indicate a balance due and warn of enforcement but do not yet provide formal appeal rights:

• CP504 – Notice of Intent to Levy
• CP523 – Defaulted Installment Agreement

Final Notices of Intent to Levy (Critical Stage)

Under IRC § 6330, the IRS must issue a final notice giving you the right to request a hearing.

These include:

• LT11 / Letter 1058 (ACS and Revenue Officers)
• CP90 / Letter 11
• CP91 / CP298 (Social Security levies)
• CP297 / CP297A (business and employment tax cases)

👉 You have 30 days to request a Collection Due Process (CDP) hearing.

Failing to act during this window allows the IRS to proceed with garnishment.

Enforcement Actions (When Garnishment Begins)

After the notice period expires:

• Form 668-W is sent to your employer (wage garnishment begins)
• Form 668-A may be sent to your bank (account levy)
• Letter 1697 may apply in multiple income situations

No additional warning is required at this stage.

Why Delays Make IRS Wage Garnishment Worse

Once a Jacksonville IRS wage garnishment begins, timing becomes critical.

• Each pay cycle is affected. See IRS Pub1494
• The levy continues forward indefinitely
• The IRS may expand enforcement actions

Delays often result in:

• Additional levies (bank accounts, receivables, assets)
• Increased financial pressure
• Reduced flexibility in resolution strategies

Legal Authority for IRS Wage Garnishment

The IRS derives its enforcement power from federal law:

• IRC § 6331 – Authorizes levy and wage garnishment
• IRC § 6330 – Establishes notice and appeal rights
• IRC § 6334 – Defines limited exemptions
• IRC § 6343 – Governs release of levy

These provisions give the IRS broad authority to pursue continuous wage levies and other collection actions.

Stopping the Garnishment Is Only the First Step

Stopping a Jacksonville IRS wage garnishment is critical—but it is only part of the solution.

Without addressing the underlying tax issue, the IRS can resume enforcement at a later time.

A Multifaceted Approach to Stopping Garnishments and Resolving Tax Debt

At Harmon Tax Resolution, LLC, we routinely work with clients already facing active IRS enforcement, including wage garnishments.

What sets our approach apart is the ability to work across all levels of the IRS, including:

• Automated Collection System (ACS)
• Revenue Officers
• IRS Appeals

As a Florida Attorney, Certified Public Accountant, and IRS Enrolled Agent, Will Harmon brings a multifaceted perspective to each case—combining legal, financial, and procedural strategy.

Understanding how the IRS enforces wage garnishments is critical to stopping the levy and protecting your income.

How We Help Clients Stop IRS Wage Garnishment

Our process is designed to move quickly and efficiently:

Immediate IRS Intervention

We engage directly with the IRS to pursue release or modification of the wage levy.

Comprehensive Financial Analysis

We evaluate your financial position to determine the most effective path to resolution. For immediate Hardship Release, this needs to be done right away!

Strategic Use of All Available Options

Depending on your situation, this may include:

• Installment Agreements
• Offer in Compromise
• Currently Not Collectible status
• Appeals and procedural challenges
  • Collection Due Process Hearing
  • Collection Appeals Program
  • Taxpayer Advocate Services
  • Immediate Economic Hardship – IRC § 6343(a)(1)(D)

Efficient Resolution Strategy

Our goal is to determine and implement the most effective solution within the shortest practical timeframe, while minimizing ongoing financial impact.

👉 This is where professional Jacksonville IRS wage garnishment help becomes critical to stopping the levy quickly.

Experience Matters in IRS Garnishment Cases

We have successfully helped many clients:

✔ Stop IRS wage garnishments
✔ Prevent additional levies and seizures
✔ Navigate complex IRS procedures
✔ Resolve tax liabilities through structured strategies

Each case requires a tailored approach—there is no one-size-fits-all solution. However, having a three-in-one Jacksonville Tax Attorney-CPA-IRS Enrolled Agent will ensure the best fitting solution is presented.

Jacksonville IRS Wage Garnishment Help

If you are dealing with a Jacksonville IRS wage garnishment, taking action within the IRS framework is critical.

👉 Learn more here: Jacksonville IRS Tax Attorney

Take Action Before the Next Pay Cycle

A wage levy continues forward until it is addressed.

Taking action now may help you:

• Stop or reduce garnishment
• Protect your income
• Improve your resolution options
• Regain financial stability and peace of mind

👉 Working with experienced IRS wage garnishment help in Jacksonville can significantly improve your ability to stop the garnishment and resolve the underlying tax issue.

Contact Harmon Tax Resolution, LLC

📞 772-418-0949 (Port Saint Lucie Office)
📞 904-616-8256 (Jacksonville Office)
📞 813-325-6009 (Clearwater Office)

📧 will@harmonassociates.net
🌐 www.harmontaxresolution.com

Harmon Tax Resolution, LLC
Will Harmon, Attorney, CPA, EA, CTRS

👉 If your wages are currently being garnished, taking action before your next pay cycle can make a meaningful difference. Call now to discuss your options and begin the process of stopping the garnishment and resolving your tax matter.

If you are dealing with IRS issues in Jacksonville, Florida, you are not alone.

If you are dealing with IRS issues in Jacksonville, working with a Jacksonville IRS tax attorney can help you understand your options and take the right course of action. Visit our Jacksonville IRS Tax Attorney page to learn more about how we assist clients locally.

At Harmon Tax Resolution, LLC, we work with clients across Florida to resolve complex IRS matters. Our firm is led by a Florida Attorney, Certified Public Accountant, and IRS Enrolled Agent — a rare combination that allows for comprehensive representation at every stage of the process. Whether you are dealing with back taxes, an audit, or aggressive collection actions, having the right representation can help you navigate the system more effectively.

Many individuals and business owners find themselves facing tax problems ranging from unfiled returns to audits, liens, and wage garnishments. Left unaddressed, these issues can quickly escalate and create unnecessary financial and personal stress.

Common IRS Issues We See in the Jacksonville Area

Many of the cases we handle involve:

• Unfiled tax returns
• IRS audits and examinations
• Wage garnishments and bank levies
• Tax liens and collection notices
• Installment agreements and resolution planning
• Offer in Compromise
• Appeals and Collection Due Process Hearings
• IRS Notices and Letters
• Penalty Relief
• Joint Liability Relief
• Currently Not Collectible status

Each situation is different, and the IRS does not take a one-size-fits-all approach. That is why it is important to evaluate your specific facts and determine what resolution options may be available.

Why Early Action Matters

One of the biggest mistakes taxpayers make is waiting too long to address IRS problems. Penalties and interest continue to grow, and collection actions can become more aggressive over time. In many cases, proactive steps can help reduce the overall burden and prevent further enforcement.

A Statewide Practice Now Expanding Into Jacksonville

Harmon Tax Resolution, LLC has earned the trust of clients across Florida, with over 78 five-star reviews across Florida showing we help individuals and businesses resolve their tax issues.

As part of our continued growth, we are expanding our services into the Jacksonville area and are available for consultations by appointment.

If you are dealing with an IRS issue and are unsure of your next step, it may be beneficial to explore your options sooner rather than later.

Take the First Step Toward Resolution

IRS problems can feel overwhelming, but you do not have to navigate them alone. With the right guidance, many taxpayers are able to find a path forward and regain control of their financial situation.

To discuss your situation and explore potential resolution options, contact Harmon Tax Resolution, LLC today. Put this behind you so that you can rest well at night again.

If you are dealing with IRS issues in Jacksonville, working with a Jacksonville IRS tax attorney can help you understand your options and take the right course of action. Visit our Jacksonville IRS Tax Attorney page to learn more about how we assist clients locally.

Harmon Tax Resolution, LLC
Will Harmon, Attorney, CPA, EA, MBA, CTRS
will@harmonassociates.net
904-616-8256 (Jacksonville Office)
772-418-0949 (Port Saint Lucie Office)
813-325-6009 (Clearwater Office)

www.harmontaxresolution.com

Yes, the IRS Trust Fund Recovery Penalty (TFRT) is often called the “100% penalty” because the penalty equals the amount of the payroll trust fund taxes owed, making this one of the most significant and most impactful penalties in the IRS arsenal. Internal Revenue Code section 6672(a) allows the IRS to hold an owner or employee at a company personally responsible for the tax debt.

Most other IRS penalties are pale compared to the TFRT penalty; therefore, it is not wise to take it lightly. Getting professional advice may be prudent if the IRS charges you or other members of your organization with this penalty.

How Does the IRS Trust Fund Penalty Come About?

If an entity does not timely deposit its trust fund taxes, the IRS may assess TFRP against those deemed responsible within that entity. More on responsible parties later.

What Do Trust Fund Taxes Consist of?

When something is put into a trust, it is done for a beneficiary. W2 Employees have payroll taxes withheld from their pay by their employer, which they entrust to remit these funds to the IRS; hence the concept of payroll trust funds arises. Payroll trust funds consist of your employment taxes such as FICA taxes (employee portion of Medicare and Social Security taxes), federal income withholding taxes, and any excise taxes which are withheld. Once these are collected, the employer is responsible for remitting them in full to the IRS by a specified period.

For example, let’s say you have an employee who earned $2,000 before taxes. You will withhold total trust fund taxes of $ 353.00, consisting of:

• Employee Federal Income withholding tax of $200.00,
• Employee FICA taxes of $153.00
  • Medicare premiums of $29.00
  • Social Security contributions of $124.00

Employers must also match employees’ Social Security and Medicare withholdings and remit to the IRS along with the Payroll Trust Fund taxes withheld. Since employer matching is not being withheld from employees, it is not considered part of the Payroll Trust Fund, therefore, not included in that type of IRS penalty. However, failing to remit the employer FICA portion will enact penalties and interest to occur.

How Much Will the IRS Charge for Payroll Trust Fund Recovery Penalty?

As mentioned earlier, the IRS Payroll Trust Fund Penalty is known as the “100% Penalty”, as your tax burden has just doubled! Like in the previous example, if you owed the IRS $353.00 in trust fund taxes, you would now owe the IRS $706.00. Because the trust fund balance represents other taxpayers’ payroll tax withholdings, the IRS comes down extremely hard on violators.

To compound this issue, the IRS not only seeks retribution from businesses but also may go after anyone in a joint and several liability fashion it deems to be held responsible for the infraction. Understanding how the IRS determines individual liability for this penalty is essential.

Who Can Be Held Liable for Paying the Payroll Trust Recovery Fund?

For the IRS to pursue the Payroll Trust Fund Recovery penalty, it must establish that willful misconduct existed to prevent the payroll taxes from being timely paid. Therefore, the IRS can only go after individuals who could remit the payroll tax trust funds but reneged on doing so. Based on a company’s makeup and structure, there could be varying responsible parties to whom the IRS could go after. The parties responsible could include:

• A Director, officer of a corporation, shareholder, or employee,
• Partner of a partnership or employee of a partnership,
• A trustee or board member of a Nonprofit organization,
• Third-party payer or another corporation,
• Another person with control and authority over payroll tax funds to oversee their disbursement, or
• Payroll service provider or professional employer organization.

The IRS needs to assess if the failure to remit the payroll trust fund taxes was willful. To establish if the action(s) were willful, the IRS must prove that the responsible person should have been mindful of the delinquent payroll taxes and intentionally ignored the tax or was uncaring about the tax remittance requirements.

An excellent example of someone who had both the authority and acted willfully would be someone in charge of finances in an organization who decided to use the employee trust fund taxes to pay something else rather than remitting the funds to the IRS. Conversely, the IRS most likely would not hold an employee responsible if they were following payment disbursement directions of a superior and did not have autonomy over that decision.

How Does the IRS Respond to Entities Who Have Unpaid Trust Fund Taxes?

Once the IRS determines that an entity has not paid its payroll trust fund taxes, it will typically have a revenue officer open a case and start research to determine the relevant parties and obtain facts surrounding the circumstances. The IRS may request financial documents to acquire information from the entity, such as bank statements, payroll records, canceled checks, agreements, contracts, articles of incorporation documents, and other 3^rd party information.

How Does the IRS Inform Those Responsible for Payroll Trust Fund-Related Infractions?

The IRS will send Letter 1153 (Trust Fund Recovery Penalty Proposed) to those it deems potentially responsible for payroll trust fund violations. If you receive this letter,

you have ten days from the letter date to file an informal protest and 60 days (75 days if the letter was addressed outside of the United States) to file an appeal with the IRS Office of Appeals. In either case, if mailing in the response, use certified or registered mail to prove the mailing date if needed.

If you agree with the notice assessment, you can sign off on Form 2751 Proposed Assessment of Trust Fund Recovery Penalty, provided with the 1153 letter. Within 14 days of receiving form 2751, the IRS will send you Letter 1155, Notice of Agreed Trust Fund Recovery Penalty.

It may be ideal to consult with a tax attorney-CPA before signing off on this letter. A tax attorney-CPA can adequately assess your situation to ensure you are on the correct path to obtain the best possible outcome.

How Does the IRS Obtain Information Relating to Payroll Trust Fund Violations?

The IRS uses what is known as a Trust Fund Recovery Interview. The IRS Form 4180 to obtain information to help it determine responsibility. One of the main issues the IRS factors when deciding whether or not the entity could have paid the payroll trust fund depends on whether or not other liabilities were being paid. Therefore, some questions will be geared to establish whether the company was paying other expenses instead of remitting payroll taxes withheld. The IRS can summon anyone it deems could be a responsible party involving payroll trust fund tax violations. Here are some of the questions asked during the interview:

• Are you an authorizer for payroll payments?
• Are you a financial policymaker for the company?
• Do you pay other bills for the company?
• Were you aware other expenses were being paid? Who authorized?
• Were you aware payroll taxes were not being paid?
• Do you make payroll tax payments?
• Are you a signor or submitter of payroll tax returns (Quarterly 941 and Annual 940)
• Who is in charge of handling IRS responses in your company?
• What is your role with the company’s electronic banking?
• When did you hear about the payroll tax issue?
• What did you do after you heard about the payroll tax issue?

The main gist of the questions is to assist the IRS in determining whether you were responsible for paying the payroll taxes.

To avoid the IRS Form 4180 interview, you can either pay the payroll trust fund taxes and associated penalties or sign off on Form 2751 to admit responsibility.

Consulting with a tax attorney-CPA would be beneficial, especially if you believe you are not responsible for the payroll trust fund taxes.

What If I am Not Able to Pay the Trust Fund Recovery Penalty?

There may be some IRS tax resolution options if you cannot afford to pay the IRS Trust Fund Recovery Penalty. You may qualify for:

• Installment Agreement (IA)– full pay on balance (tax and penalties) over time
• Partial Pay Installment Agreement (PPIA)– pay you can set up an installment agreement to pay the tax and penalty in monthly payments.
• Currently Not Collectible (CNC) status – If you cannot pay anything. IRS will require a complete financial report to establish your inability to pay. This will be reviewed every two years to determine if your financial situation has changed.
• Offer in Compromise (OIC). A full financial determination is made to see if you qualify for settling the payroll tax debt for less than the full amount owed.

It’s essential to fully understand your rights and options when dealing with the IRS regarding Trust Fund Recovery Penalty issues.

Get Trusted Professional Tax Help with IRS Trust Fund Recovery Penalty– Make the Call

To ensure you get the best possible IRS Trust Fund Recovery Penalty outcome, have an experienced tax attorney-CPA expert make it happen. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Trust Fund Recovery Penalty Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your IRS issue so you can return to doing what matters most.

For additional information, please see the following blog articles:

• “What Are IRS Tax Resolution Services?“
• “When Should You Hire a Tax Lawyer?“

Make the Call Today So That You Steer Your Path Tomorrow!

• Failure to Pay (FTP) penalty. FTP arises from not paying the taxes owed when due. The penalty accrues at 0.5% per month of the tax balance due and maxes out once 25% is reached.
• Failure to File (FTF) penalty: FTF starts once the tax return has not been filed by the due date and accrues 5% per month on the balance due, maxes out once 25% is reached. This penalty accrues tens quicker than FTP. Even if you cannot pay the tax due, filing the return on time will avoid this penalty.
• Failure to make Estimated Tax Payment penalty: If you didn’t pay enough taxes during the year by withholding taxes from your paycheck or by making estimated tax payments, the IRS may assign you an estimated tax penalty equal to 0.5% balance due for each partial or full month you don’t pay the tax in full and maxes out at 25%.

On average, over 90% of the annual penalties issued by the IRS come from these three penalties. Fortunately, the Internal Revenue Service does provide a process for penalty reduction requests called penalty abatement. The IRS generally does not remove penalties without some formal request made by the taxpayer. As a result, many taxpayers could have gotten some form of penalty abatement but never applied for it and ended up unnecessarily paying them.

Depending upon the type of penalty and the surrounding situation will determine what courses of action are appropriate to apply for some form of penalty abatement. The IRS often will remove penalties if you have reasonable cause for incurring the penalties, if you are a first-time offender, or if your penalty resulted from taking incorrect advice from an IRS representative.

Penalty abatement only occurs after you persuade the IRS to do so. Many taxpayers are not aware of this. Therefore, understanding the rules surrounding penalty abatement eligibility and the application procedures is essential. Obtaining professional tax help from someone with extensive experience helping others with penalty abatement requests may be prudent. For this help, contact Harmon Tax Resolution, LLC for a free consultation today. In the interim, please read on for more information regarding penalty abatement and how to address IRS penalties.

What Is an IRS Penalty Abatement?

IRS penalty abatement occurs when the IRS concurs with your request to have penalties removed. Most IRS penalties assessed can be abated, provided specific criteria have been met. How to pursue abatement varies based on the penalty type and reason it incurred. IRS abatements are also called IRS penalty relief or IRS penalty waiver.

Which IRS Penalties Are Eligible for Abatement?

The IRS offers abatement opportunities for many of its penalties. Fortunately, this includes the most frequently IRS-issued penalty types previously listed, such as the Failure to File penalty and the Failure to Pay penalty. In addition, the Failure to Deposit (FTD) penalty, which occurs when employers don’t deposit their payroll taxes on time, is also included. The FTD penalty accrues faster: 2% of the unpaid deposit for payments 1 to 5 days late. 5% for tax payments that are 6-15 days late. 10% for deposits over 15 days late or made within ten days of receiving the first IRS notice requesting a tax payment.

For these three types of penalties, you can request penalty relief no matter how much the penalty is for. Your ability to request penalty relief is very limited for other tax evasion or fraud penalties. In addition, Trust Fund Recovery Penalties are not abatable; however, if you can establish that you are not a responsible party for this, you may be able to appeal it.

How Are IRS Penalty Amounts Determined?

IRS penalties are solely based on the amount of your tax liability. The penalty amount is computed by applying a particular penalty’s statutory percentage rate to the amount of the tax that you didn’t pay, report, or deposit. For example, if you late filed your tax return where you had a tax balance due of $1,000.00 on May 20^th of the same year, which was due on April 15^th, you would have a Failure to File penalty totaling 10% of the amount due totaling $100.00.

Does the IRS Apply Interest on Tax Penalties?

IRS charges interest on the amount of the tax balance owed, which includes penalties incurred. The IRS charges interest from the date the balance becomes due. A penalty occurrence will add to the balance due, and interest in that increase begins at the time of inclusion. In addition, the IRS compounds interest, meaning the additional interest will then be subject to having interest computed. Tax debts can get out of hand quickly if action is not taken, especially considering the recent interest rate increases. Under the Internal Revenue Code, the interest rate is determined every quarter. For individuals, the IRS interest rate is determined by the Federal short-term rate plus 3%.

However, if successfully abate a penalty, the IRS will also remove the interest affiliated with that penalty. Getting a penalty abated has added benefits. However, this type of interest removal does not ordinarily apply to other components of your tax debt unless there are changes in your tax assessments or errant interest calculations.

An IRS Tax Attorney-CPA-EA can assist in determining the specific documentation required to abate tax penalties entirely or partially.

What Is the IRS First-Time Penalty Abatement?

The IRS First-Time Penalty Abatement is where the IRS waives a specific penalty because it is the first time you have had such an infraction. In this instance, no explanation is required; you only must inform the IRS that this is your first penalty. If you meet some IRS compliance requirements, the IRS will abate the penalty under this position. The IRS classifies this type of abatement as an administrative penalty waiver.

What Are the IRS Compliance Reporting Requirements and Payment Obligations Needed for First-Time Penalty Abatement?

To be considered for IRS First Time Penalty Abatement, you must be compliant with IRS reporting and payment obligations, which are:

• TIMELY FILING FOR PRIOR 3 YEARS: For the last three years, you have timely filed the type of return the penalty stems from.
  • For example, if you seek penalty relief from a recently filed 2022 income tax return, you must have timely filed your 2019, 2020, and 2021 tax returns.
  • If this pertains to a payroll return, but you were not in business during the last three years before the return on which the abatement request is being made, if you have maintained timely filings for the available time leading up to this, you will be okay since you were not required to file during the time your business did not exist.
• NO PENALTIES INCURRED FOR THREE YEARS PRIOR. You did not incur any penalties for the three years before the year the penalty was incurred. There is an exception to this rule: if you had a different type of penalty removed, you would still be eligible.

• CURRENT ON ALL TAX FILINGS. You have made all required current tax return filings or are currently on an extension to file.
  • For example, suppose you are seeking a First Time Abatement relief from a penalty relating to a 2020 tax return. In that case, you must make sure that the current year’s tax return has been timely filed or, if not filed yet, you have filed for an extension, and the extension time has not expired.
• PAID PRIOR TAXES DUE OR ARE CURRENT ON IRS PAYMENT PLAN. If you have a prior tax balance owed, you may still obtain a penalty abatement if you either pay the taxes due or have made a payment arrangement with the IRS.

You may be able to obtain an IRS abatement while still owing the underlying tax; however, it may be prudent to pay the balance owed to avoid having additional penalties tacked on.

How Do You Request IRS First-Time Penalty Abatement Relief?

There are several ways you can request IRS First-Time Penalty Abatement Relief:

• Call the number listed on your IRS notice. State you are seeking First-Time Penalty Abatement Relief
• Complete and submit IRS form 843 – Claim for Refund and Request for First-Time Abatement. You must list the tax period, type of return, and type of tax. You will also provide information about the penalties you are requesting abatement towards. You can note you are requesting an abatement because this was the first time you incurred these penalties.

IRS Penalty Relief Based on Reasonable Cause

The IRS only grants penalty relief under Reasonable Cause when you have established that you had had a plausible reason for either late paying the tax or late filing the tax return. Typically, the IRS may consider granting relief if it could be shown that the delay of late filing or late payment resulted from events impacting you which were beyond your control, all the while you used prudence and ordinary care to address either the filing or paying your taxes. Negligence or recklessness are not valid reasons for this type of relief.

Reasonable Cause tax abatement can be applied for:

• Late Filing Penalties
• Late Payment Penalties
• Late Deposit Penalties
• Accuracy-related Penalties – in some cases

Below is a non-inclusive list of some potentially plausible reasons the IRS may accept for penalty abatement under the basis of Reasonable Cause:

• You could not pay or file timely because of an act of nature such as wildfires, earthquakes, floods, hurricanes, tornados, or federally declared disasters. There could be other reasons that fall in line with this.
• You were prevented from acquiring the necessary records for proper tax return preparation for reasons beyond your control.
• You could not make timely deposits, or processing failed due to systems being down.
• You were impeded from being unable to timely file tax returns, pay taxes, or make deposits due death of an immediate family member, or you or your family were impaired due to a severe illness.
• You encounter other legitimate reasons that were out of your control, resulting in you missing timely tax filing or paying taxes owed.

To correctly complete your Reasonable Cause request, you must write your reasoning precisely and concisely on the application. Obtaining tax professional help may be prudent.

Typically, the IRS will not approve a Reasonable Cause request due to one of these situations:

• Since you are ultimately responsible for your tax filings and payments, missing filings or payments due to tax preparers will not be accepted.
• Misinterpreting tax laws is not a valid reason for lack of payment or late filing.
• You made a mistake. You may be able to use this reason if you can establish that you tried to comply with the tax law, but in general, you’re expected to review your return for mistakes.
• You could not afford to pay the taxes due. While this may not be valid for Reasonable Cause, you may be eligible for other IRS debt resolutions, such as Payment Plans, Currently Not Collectible status, or even Offer in Compromise.

It may be prudent to discuss your situation with a professional tax attorney-CPA who can help establish whether you have a good reasonable cause to present to the IRS for penalty abatement consideration or whether another option should be considered.

How to Make an IRS Reasonable Cause Penalty Abatement Request

You request by filing Form 843 – Claim for Refund and Request for Abatement. Make sure to check the appropriate listing under section 5a on the form. Section 7 provides a space to list the facts and surrounding circumstances. You can attach additional sheets if more space is needed for your narrative and provide other supporting documentation. For narrative purposes, concisely and briefly describe all pertinent information to support your reasonable cause position. The IRS representative needs to understand your position well and clearly. Establishing Reasonable Cause is an area a tax attorney-CPA could provide proper guidance on.

Here are some of the factors the IRS considers to establish whether reasonable exists:

• When and what occurred.
• What facts and circumstances prevented you from paying the tax or filing the return on time.
• How the circumstances influenced your ability to pay or file your tax return.
• What was your response to the situation, along with how long it took you to respond once you became aware of it.
• When dealing with a corporation, trust, or estate, the IRS also looks to establish who had the authority to make the tax deposits or carry out the tax return.

It’s imperative to provide as much 3^rd party documentary evidence as possible to establish proof of your Reasonable Cause contention. Here are some examples of 3^rd party documentary evidence:

• Hospital Records
• Police Records
• Court Records
• National Disaster Documentation
• Physician documentation of the illness, how it impacted you, and the timeframe.
• Death Certificate
• Insurance records

Whether you are faxing or mailing in your Form 843 application, be sure to include any documentary evidence with it.

Must I Use IRS Form 843 to Apply for Either Reasonable Cause or First Time Penalty Abatement Requests?

You can write an abatement request letter instead of filing form 843. Sometimes, a letter may be easier to frame your position than using a form. If you elect to use a letter, be sure to include the following:

• Your name, as listed on the tax return, and tax Identification number.
• The tax form is associated with the penalty and applicable tax period.
• The IRS Notice Number and date if you’ve received a notice.
• What relief type you are seeking (Reasonable Cause or First-Time Penalty Abatement).

This information must be put near the top of the letter immediately, followed by listing your penalty abatement requests sought. You have supporting information listed for each request. Although not required, it’s even helpful if you list the applicable IRS Tax Code or Statute relevant to each relief compliance requirement. Finally, be sure to sign your name on the request letter.

Hiring a tax attorney-CPA may help ensure you have included the correct details and proper support for your request.

How Do You Address Penalties Incurred Due to Incorrect IRS Direction?

Even though this occurs infrequently, you are still entitled to IRS penalty relief through what is known as Statutory Exceptions. A Statutory Exception can be sought when the IRS provides the taxpayer with some written advice to follow, which results in a penalty to incur. To be successful with this type of request, you must adequately document the incorrect advice and show how this caused the consequences. An example would be if an IRS representative instructed you to file a return later than it was due, which caused you to incur a late filing penalty.

To resolve this situation, you can go directly to the IRS and provide them with a trail of the IRS communications which caused you to act incorrectly. You can use Form 843 or draft a letter. You must make sure to:

• Provide proof that you sought advice from the IRS.
• Submit a copy of the actual written errant advice by the IRS.
• Provide support showing how the tax adjustments/directives caused the penalties or increases in tax.

Anytime you have correspondence with the IRS, record and save it for future use, if needed.

Get Trusted Professional Tax Help with IRS Penalty Abatement – Make the Call

To ensure you get the best possible IRS penalty relief outcome, have an experienced tax attorney-CPA expert make it happen. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Penalty Abatement Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your IRS Penalty issue so you can return to doing what matters most.

For additional information, please see the following blog articles:

• “ What is an IRS Penalty Abatement?”
• “What Are IRS Tax Resolution Services?“
• “When Should You Hire a Tax Lawyer?“

Make the Call Today So That You Steer Your Path Tomorrow!

Make the Call Today So That You Steer Your Path Tomorrow!

The IRS Fresh Start is a tax relief program designed to help struggling taxpayers regain financial footing. A struggling taxpayer is someone experiencing financial difficulty while paying their IRS tax liabilities and basic living expenses. The
Fresh State Program provides several tax relief options to taxpayers who qualify, such as halting tax collection activities, providing penalty relief waivers, installing workable payment plans, and settling the tax balance for less than owed.

What Are the IRS Fresh Start Qualifications?

To qualify for the IRS Fresh Start Program, one must meet the following criteria:

• If filing single, your yearly income must be under $100,000.
• If filing married, your annual income must be under$200,000.
• If you are a sole proprietor, you must have experienced a drop in income of at least 25%.
• Your tax debt must be less than $50,000.
• You have not missed any payments with the IRS, and you have a clean history with the IRS.

What Does the IRS Fresh Start Program Consist of?

The IRS Fresh Start Program consists of these four types of tax relief initiatives:

• Currently Not Collectible Status
• Offer in Compromise – Doubt to Collectability
• Installment Agreements – Full and Partial Pay Plans
• Penalty Abatement – First-Time Abatement and Reasonable Cause

Each of these programs provides a unique form of IRS relief and has separate criteria for enrollment. Here is a breakdown of each program:

Program 1- Currently Not Collectible Status

Current Not Collectible Status falls under the Internal Revenue Code (Part 5. Chapter 16. Section 1), which indicates that eligibility may be met if the taxpayer cannot meet the required daily living expenses due to the collection of the liability. The IRS considers these situations in which one cannot make an entire tax payment without falling behind on one’s required living expenses, such as:

• Mortgage or rent.
• Utility bills
• Food
• And other required living costs

The tax liability is not disputed, and it’s just that; clearly, you cannot pay it along with covering your basic living needs; the IRS will deem your situation as “Currently Not Collectible,” or CNC status.

If a taxpayer is placed in a CNC status, the IRS agrees that the taxpayer cannot make any payment on their back owed debt. Being granted this status does not forgive the tax debt but delays collection while in financial hardship. The IRS will have to release any current levies in place and cannot enact them while under this status.

In addition, while in CNC status, IRS Collection Statute Expiration Date (CSED) is not tolled, which means the time the IRS must collect the assessed tax continues to run. However, penalties and interest will continue to accrue while in CNC. Being in CNC does not stop existing tax lien from remaining in place, nor does it prevent the IRS from initiating a tax lien.

However, if the taxpayer’s financial status does improve substantially, the IRS can remove the CNC status and request additional financial information.

How Does One Apply for Currently Not Collectible Status?

The IRS provides Collection Information Forms 433A, 433B, and 433F to establish your financial position for consideration. You will use the one that applies to your situation. In addition, you may be asked to provide support for data listed on the forms. It is suggested to seek professional tax help for this.

Program 2 – IRS Offer in Compromise

Another IRS Fresh Start option is an Offer-in-Compromise (OIC), a negotiated agreement between the IRS and the taxpayer intended to help taxpayers who do not have the resources to pay the tax debt. If you qualify, you may be able to settle your entire tax bill for significantly less than what you owe. You must establish that you genuinely can’t afford to pay back taxes or that doing so would cause extreme financial hardship. This can apply, for example, if you have become disabled.

You must be current on all legally required income tax returns and any estimated tax payments if you are self-employed and cannot file for bankruptcy.

The IRS would instead take an Offer-in-Compromise than send you to collections and potentially get less money. Taking an offer in compromise will not affect/impact your credit score. Accepting your Offer-in-Compromise could be a far better financial decision in the long run.

Is an Offer in Compromise Easy to Apply For?

Working out what offer to make and learning the process can be challenging. That’s like representing yourself in a court of law without a lawyer. Not ideal.

The overall taxpayer approval rate for OICs is slightly above 30%. The IRS accepted only 15,154 offers out of 49,285 in 2021. Some of the reasons for such a low overall approval rate include the following:

• applications are not correctly completed,
• the proper application of the rules of the program is not being utilized to the taxpayer’s advantage,
• taxpayers’ positions are not adequately advocated for,
• and the IRS finds that the taxpayer can pay the total liability.

Often individual taxpayers attempt the application without seeking professional tax help or relying on the IRS to help them. The IRS’s goal is to collect as much tax as possible, so there will be limitations with the help of the IRS.

A better answer is to find a tax resolution specialist that can help you with the process to see if you qualify and determine what you will have to pay. For a tax resolution specialist to represent you, they must be a licensed CPA, an Enrolled Agent, or Attorney. Each professional type provides unique professional skill sets. Will Harmon happens to be all three, which ensures you complete coverage of your tax issue.

Program 3 – IRS Installment Agreements

Another Fresh Start option is entering into one of the IRS’s various installment agreements. An IRS Installment agreement is a payment plan where you agree to pay the taxes you owe within a specified timeframe. This Fresh Start option allows you to pay off your taxes affordably. Depending upon your situation, you will choose from one of these four types of installment arrangements:

Each plan has specific criteria for approval, and speaking to a tax professional would be beneficial if you are unsure.

By requesting a payment plan, the IRS will generally be prohibited from levying, and the time it must collect will be suspended or prolonged while your installment agreement (IA) is pending. An IA request will remain pending until it can be reviewed and established, or it may be withdrawn or rejected.

Nonetheless, if your request for an IA is rejected, the collection period will remain suspended for 30 days. You have the right to appeal a rejection of your request, during which the running of the collection period will be suspended by the time the appeal is pending to the date the appealed decision becomes final.

Program 4 – IRS Penalty Abatement

The final IRS Fresh Start relief program consists of penalty abatement. Those who accumulated IRS penalties from late filing or payment may be eligible for penalty relief of up to $100, provided they meet some stringent requirements.

How Does One Apply For The IRS Fresh Start Program?

Since the IRS Fresh Start program is for financially burdened taxpayers, one must provide evidence to establish that they cannot afford to pay their tax debt by gathering specific supporting documentation to verify their dire financial situation.

For example, the IRS may request supporting documentation such as:

• Birth and death records of dependents or immediate family members.
• Student Loan Statements or other loan records
• Physician statements and medical records
• A personal statement, written under Oath, explaining your situation.

In addition, the IRS Fresh Start Program will only take applicants who are current with their tax filings and current tax payments. To get into the IRS Fresh Start program, complete any unfiled tax returns, ensure adequate tax withholding, and make correct estimated payments, if applicable.

For additional information, please see the following blogs:

• “What Are IRS Tax Resolution Services”
• “What to Know about IRS Regular Installment Agreements vs. IRS Partial Pay Installment Agreements”
• “IRS Offer in Compromise May Benefit You”

Get Trusted Professional Help with Applying for IRS Fresh Start Programs

​IRS collection activities could cause you financial hardship if you cannot pay the taxes owed. You may have the option to have collections halted if you are eligible to apply for IRS Fresh Start Programs or other IRS programs. To learn which IRS tax relief program would work best for your relief from unpaid IRS taxes, contact tax attorney CPA EA Will Harmon Today by calling 772-418-0949 or completing the online contact form.

Tax Attorney-CPA-IRS EA Will Harmon has extensive experience helping taxpayers who, unfortunately, cannot afford to pay their IRS tax debt to negotiate optimal tax relief plans with the IRS. He can help you get the best outcome possible for your situation. Call Today; sleep well tonight.

Although it’s not the end of the world, being subject to an IRS audit can seem burdensome. To increase the probability of a better outcome and surely acquire peace of mind, you can have a tax attorney-CPA-IRS EA, Will Harmon, represent you throughout the Audit. In addition to being a tax expert, Will has an audit background. Call him today at 772-418-0949 or complete the online inquiry form.

Being selected for an IRS audit can often leave one guessing about the outcome and what may have caused it. To help relieve the stress of the Audit, it’s a good idea to take the perspective that the IRS is impersonal with its audit selection and that the IRS’s sole mission is to collect money. If you follow the process, it will go much smoother. It often helps if you obtain help from a tax professional used to dealing with IRS and has a good understanding of tax audits.

What Is an IRS Audit?

The primary purpose of an IRS audit is to ensure that you have correctly filed your tax return and remitted the correct tax payment for a particular year. The IRS facilitates an audit by having its auditors perform an investigative analysis of your financial records to determine whether the tax laws have been appropriately followed on your tax returns. Again, cooperation with the auditor’s information request should help the audit process go smoothly.

Being selected for an IRS audit is not a guaranteed indictment indicating that you broke the law. It is essential to determine the reasons for the Audit to plan for it properly. Here are some typical reasons why the IRS may pull a tax return for Audit:

• File a return with math errors
• Randomly selected from the general tax return population.
• Home Office deductions taken
• Run a cash-heavy business
• Make significant earnings
• Rounding numbers on expense listings
• Have substantial changes in income or expenses
• Taken certain credits which are more heavily audited, such as EIC.
• Use of personal vehicle for business

Provided there was no intentional significant omission, flagrant gross understatement, or overstatement of items listed on the return, most IRS audits often turn out well. You may owe some tax if you inadvertently omitted something from the tax return, but this does not mean it was intentional, and you will get into legal trouble.

How Does the IRS Notify of an Audit?

The IRS will notify you by mail. The IRS will not initiate an audit by telephone.

How Far Back Does the IRS Go to Audit Tax Returns?

Typically, the IRS only audits tax returns filed within the last three years. However, if a substantial error indicates an omission of 25% or more of gross income on the tax return, the IRS may go back six years. If the IRS has determined that a false or fraudulent return with the intent to evade tax has taken place, the IRS has unlimited time to go back and audit a return.

Generally, the IRS seeks to audit tax returns as close to the filing date as possible. Audits of returns filed within the last two years are the norm.

What Happens During An IRS Audit?

An IRS audit begins with a mailed notice of the pending Audit. They may be conducted either in person or by mail correspondence. An in-person audit will occur at your home, business, or IRS field office. Whereas an IRS mail correspondence audit strictly relies on your sending in the requested IRS documents by mail, fax, and in some cases, by email. You may request an in-person audit if you believe there is too much information to send in by mail.

The information generally sought during an IRS audit are documents that could substantiate your income and expense claims or support credits sought.

How Can a Tax Attorney-CPA-EA Help You with an IRS Audit?

Your tax attorney-CPA-EA will provide proper guidance in gathering and presenting information to auditors and ensure you completely understand the Audit. They will deal directly with the IRS. More vitally, the tax attorney-CPA-EA can ensure your taxpayer rights are not disregarded.

Here are your taxpayer rights to bear in mind during an IRS audit:

• The Right to Be Informed
  • Clear explanations of outcomes and how to comply
• The Right to Quality Service
  • Treated professionally and could speak to a supervisor if needed
• The Right to Pay No More than the Correct Amount of Tax
  • Only pay the amount legally due along with proper payment allocation
• The Right to Challenge the IRS’s Position and Be Heard
  • Raise objections and provide additional information.
• The Right To Appeal an IRS Decision in an Independent Forum
  • Either within the IRS’s system of appeals or through the courts
• The Right to Finality
  • Know the maximum time to challenge IRS and the time IRS has to audit a particular tax year.
• The Right to Privacy
  • IRS will be no more intrusive than necessary and abide by due process, and search and seizure protections apply.
• The Right to Confidentiality
  • Disclosures only authorized by the taxpayer or by law
• The Right to Retain Representation
  • Retain authorized representatives of their choice
• The Right to a Fair and Just Tax System
  • Expect facts and circumstances to be considered in their situation. Right to Taxpayer Advocate service to resolve difficulties.

Contact us today if your rights are disregarded or require IRS audit help.

What If I End Owing Taxes from the Audit and Cannot Pay them Immediately?

If it turns out that the audit results indicate that you end up owing the IRS and cannot make full payment on the debt, there may be some payment options available for you. The IRS has a Fresh Start Initiative, which began in 2011 and provides various tax debt resolutions. Depending upon your circumstances, you may be eligible for one of the following:

• Installment agreement plans
• Partial Pay Installment Agreement
• Offer In Compromise
• Currently Not Collectible Status
• Innocent Spouse Relief
• Penalty Abatement

It may be prudent to seek help from a tax attorney-CPA to see if you qualify for any tax debt resolution options.

Can I Appeal the Audit Findings?

Yes, the IRS auditor’s decisions are not unchangeable; you can appeal the decision if it is incorrect or unjustifiable.

Sadly, taxpayers’ right to appeal adverse decisions is not always readily known. IRS is not in the habit of promoting this because it could inhibit their ability to collect as much money as possible. In addition, if you are not aware of your appeal rights early on, it can be challenging to engage in an appeal. If you are going alone at this without a seasoned tax professional, it can become pretty convoluted since you are dealing with timing issues along with multiple form preparations. In addition, without a strong tax background, you may miss incorrect audit findings altogether. There have been many instances where incorrect audit findings go unchallenged, resulting in the taxpayer footing a large wrong tax debt causing significant harm to themselves and their families.

In addition, you also have the option to seek audit reconsideration if new information becomes available or a ruling has an incorrect application.

Trusted tax resolution professionals have gone through the IRS audit and appeals process many times, therefore, can do so for you efficiently and effectively. Working with them, they will address many of the nuances involved, so you don’t have to.

Contact a Tax Attorney-CPA-EA for IRS Audit Help

Being selected for an IRS audit can be a stressful experience, but it is essential to remain relaxed and take prudent steps to address the situation before it is too late. Employing a professional tax expert to review your tax returns to ensure they are in good order, to help you gather all necessary records, to provide the correct trail for IRS auditors to follow, and to ensure your taxpayer rights are protected.

You are not alone if you still feel nervous about taking on the IRS since this is a typical reaction of most taxpayers going through a similar experience. Employing tax attorney-CPA-EA, Will Harmon, can help alleviate your audit discomfort because not only will he look out for your best interest, but due to his multifaceted background and experience, all audit elements are assured to be fully addressed. As a CPA, Will Harmon is an experienced auditor who will ensure proper audit guidance and reporting. As an Enrolled Agent – the IRS gold standard for tax knowledge, he will properly review and analyze the merits of your tax position to ensure appropriate action occurs. As a tax attorney, Will will protect your rights and provide proper advocacy. He understands the fears you may be experiencing, and with his vast skillsets at your disposal, you are assured he will do everything possible to alleviate them.

To avoid overpaying the IRS and getting your control back, contact tax attorney CPA EA Will Harmon for a free consultation by calling him today at 772-418-0949 or completing the online questionnaire. Let him get you back on track to tax compliance!

Trusted, Dependable, Knowledgable, and Affordable Representation!

For additional information, please see the following blog articles:

• “Help with Your IRS Tax Audit“
• “The Ins and Outs About IRS Audit Reconsideration“
• “When Should I Call A Tax Resolution Firm?“
• “You Have Been Selected for an IRS Audit. Now What?”

Make the Call Today So That Your IRS Audit Is Smooth Sailing!

When the IRS sends you a CP14 Notice in the mail, it is because you have a current IRS tax balance owed. This notice informs you of the amount owed, including tax, interest, and any applicable penalties, and demands payment.

The CP14 notice is a progression notice in the IRS collection scheme. This notice gets generated after a tax balance has already been assessed. Typically, the tax balance stems from a recent tax return filing. The IRS is now initiating its collection actions by sending you a payment reminder. If no response is made, the IRS will begin further escalated collection activities such as initiating tax liens, securing wage garnishments, making financial account levies, requesting passport revocation from US State Department, and obtaining property foreclosure judgments. Consider the CP14 Notice as an IRS kickoff point for future collection activities to commence.

The best way to avoid any IRS escalated collection activities is to respond to the CP14 Notice as soon as possible. Talking to a tax professional is a good idea to assess your situation and properly determine the best resolution action.

Why Does the IRS Send Out CP14 Notices?

The IRS mainly sends a CP14 Notice to inform you that an outstanding tax balance is due. Here are some of the typical reasons for this :

• Non-payment or Underpayment of tax balance: The IRS will generate CP14 Notice if you did not fully pay the balance owed a balance from your recent tax return.
• Lack of response to prior IRS notification: You may have a current tax balance resolution in place with the IRS, and they remind you of this. Or you have not responded to prior notices, and this is just a reminder notice of your tax balance due.
• Tax Return Mistakes or Discrepancies: If your tax return contains errors or discrepancies which result in taxes due, the IRS will issue a CP14 notice. However, in most cases, before the IRS issues the CP14, they will have sent you a notice of the changes made, followed by a notice of the respective tax assessment. The IRS must always assess a tax before any collections can be pursued.

The IRS usually does not begin to send out CP14 notices for a significant amount of time after a tax return has been filed, provided the tax balance is owed. If you have not paid your taxes, the IRS will eventually come around to you. This CP14 indicates that you are now on notice with the IRS, requiring immediate action, or elevated collection actions will soon commence.

What Is Listed Within an IRS CP14 Notice?

To respond appropriately, fully understanding what the CP14 Notice contains is essential. CP14 Notices include the following:

• The Individual Notice number: The IRS assigns a unique number for reference. When responding to IRS about the notice, you will want to reference it.
• Specific Tax Year(s)/Periods: – the time frame the notice covers.
• Balance Due: The notice provides a total amount along with a breakout of this amount for tax, interest, and penalties.
• Payment Options: The IRS will provide information on making payments and even mention potential payment options, such as setting up and installing a plan.
• Balance Due Date: There will be a date listed by which you must either pay the amount owed or take some action regarding addressing the balance due. Regardless of the notice type, dates are essential to adhere to avoid escalation or to be able to seek specific date-sensitive remedies.

By timely and diligently going through the notice, you will be able to determine the correctness of the information, properly assess your situation, allow enough time for professional tax help, and fully understand your options. In addition, timely responding to this notice enables you to halt the IRS from taking further collection activities. In contrast, not responding to this notice will only make the situation take a turn for the worse.

Can I Ignore a CP14 Notice?

The CP14 Notice has several purposes: to inform you of an IRS tax balance due and to provide information on how to pay it off. Getting an IRS CP14 Notice means you are now on the IRS radar, and your tax debt situation requires resolution. Ignoring it is not a viable option. You should take it seriously and address your tax debt promptly to avoid the potential consequences. No response to this notice will only trigger the future collection activities:

• Interest and Penalties: By not addressing the tax debt, interest and penalties will continue accumulating, which could significantly increase the tax debt balance.
• Property Liens: The IRS can place a lien against current and future ownership rights in a property, which could impair your ability to sell or leverage the property until the tax debt is satisfied.
• Wage garnishments: Your wages or earnings could be garnished.
• Bank Levies: Your accounts held in financial institutions could be levied.
• Passport revocation: Depending on your tax balance amount, the IRS may petition the State Department to revoke your US passport.
• Refund Denials: Future tax refunds will be withheld and applied toward the balance due.
• Property Foreclosures: IRS could seek a judgment to have your property foreclosed on.

It may be that the IRS has a mistake listed with the notice, which, had you taken timely action, could have resolved the issue in your favor. Taking proactive steps to resolve the issue can mitigate the negative impact on your finances and maintain good standing with the IRS.

How Do I Respond to an IRS CP14 Notice?

The first thing to do upon receipt of the CP14 Notice is take a step back and read it thoroughly to ensure you understand what’s in the notice, what actions are available to take, and when you must respond. You will then want to confirm the accuracy of the amounts listed within the notice. You want to ensure you understand any differences.

How Do I Contest an IRS CP14 Notification?

If often wise to have a tax attorney-CPA to provide strong guidance here. If you disagree with IRS CP14 Notification, depending upon your situation, you can contest several ways:

• Requesting an appeal or review of your information.
• Submitting an Offer in Compromise based on Doubt to Liability.
• Paying the taxes under protest and then applying for a refund.
• Filing for Innocent Spouse Relief.

What Should I Do if the IRS CP14 Notice Is Correct?

If the amount tax balance due is correct, the focus should then shift to which of these payment options would best fit your situation:

• Paying the balance in full
• Applying for a monthly installment payment program, of which there are several types.
• Seeking a Partial Pay Installment Program
• Establishing Currently Not Collectible Status
• Requesting an Offer in Compromise – Doubt to Collectability

Whether you are seeking to contest or affirm what’s listed within your CP14 Notice, time is always of the essence when responding. Late responses or lack of responses could be very costly. If you are unsure of how to respond or how to do so in the best way reflective of your situation, consult with a tax professional to properly guide you.

What Are the Best Ways to Avoid Getting an IRS CP14 Notice?

The best way to avoid getting CP14 Notices is by doing the following:

• Full pay your taxes or plan with IRS to pay them. There are several payment options for possible consideration. Ensuring working with the IRS is best practice if you need payment considerations.
• Make sure all income is completely reported on tax returns. This will prevent the IRS from assessing additional taxes, therefore not having to send you notices of increased taxes owed. They will still send a CP14 for the balance due if no arrangements have been made.
• Have good recording-keeping processes in place to ensure accuracy on your tax filings.
• Make sure to double-check items entered onto returns. Doing this will help avoid unnecessary discrepancies, which could lead to tax increases resulting in CP14 Notice issuance.

Does Getting an IRS CP14 Notice Mean I am Getting Audited?

The CP14 notice pertains to money you owe, whereas an audit notice is for verifying a position taken on your tax return.

The CP14 notice is a widespread notice issued to everyone who owes back taxes. Audits are not as prevalent since they only occur if you are chosen because of the IRS’s specific concerns with your filed tax return or if you have been randomly selected.

The CP14 notice pertains to money you owe, whereas an audit notice is for verifying a position taken on your tax return.

Take Immediate Action When You Receive an IRS CP14

Responding immediately, or at least by the date listed within the CP14 Notice, is the best way to avoid dealing with further enhanced IRS collection actions. The notice provides instructions on how to make the tax payment, set up an installment payment plan, or how to dispute the findings. Other options may also be considered, such as seeking penalty abatement.

Having an experienced and knowledgeable tax attorney-CPA to provide tailored guidance to your situation will ensure that your resolution path is correct. If you have received an IRS CP14 Notice, please get in touch with multi-licensed tax attorney-CPA-IRS Enrolled Agent Will Harmon of Harmon Tax Resolution, LLC, for a free consultation on how he may provide the best tax solution for your situation. Please call 772-418-0949 or complete the Online Inquiry Form. You don’t have to face this alone.

Get Trusted Professional Tax Help with IRS Tax Notifications – Make the Call

Additional helpful information:

• “What Should I Do If I Receive an IRS Notice?“
• “What to Do If You Receive an IRS Statutory Deficiency Notice“
• “What Are IRS Tax Resolution Services?“
• “When Should You Hire a Tax Lawyer?“

Unfiled Tax Returns and the IRS Statute of Limitations

Life activities can cause filing your tax returns to become a lesser priority resulting in non-filings to occur. If you are in this situation, please note that if you meet filing requirements, you must still file your tax returns.

The filing requirements are based on your age, filing status type, and respective amounts of income. The IRS provides an active interview format on its website to help you determine if you need to file.

What Happens to My Tax Refund If I Do Not File Tax Returns?

To get a refund, you must file your tax returns. In addition, you must file the tax return within three years of the filing deadline to get the refund.

For example, if you have six years of unfiled taxes returns due, you may get refunds on the most recent three years and not for any of the others from years four through six. In contrast, if you only had the most recent two years on unfiled returns, you would be eligible for both years’ refunds.

Unfortunately, if you owe back taxes, the IRS is not limited to going back three years.

Non-Tax Return Filing Consequences

The only consequence you will suffer if you fail to file returns where refunds were due is to miss out on the refunds. Not to suggest taking this lightly since it could cause a significant loss. In contrast, if you owe a tax liability and do not file, you could now be subjected to IRS collection procedures, leading to severe consequences. This generally happens when you owe taxes and have not filed a tax return.

Income Tax Penalties and Interest – Late Filed Returns

Late Filing Penalty

The IRS typically charges penalties and interest when returns are filed late. The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The Penalty won’t exceed 25% of your unpaid taxes. For instance, if you owe $2,000, the failure to file Penalty is $100 monthly, which can get up to $500. The Failure to File Penalty applies the first day you are late, along with interest starting to accrue. Even if you cannot pay the taxes owed, filing your tax return is usually the best option since late paying penalties accrue at a much lesser rate.

Late Payment Penalty

The Failure to Pay Penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid, which accrues at 1/10^th the rate of the late filing penalty. The Penalty has the same cap of 25% as the late filing penalty; however, it will take significantly longer to accrue to this amount. Like in the last example of a $2,000 tax debt, that’s $10 per month versus $100. In addition, If you filed your tax return on time as an individual and you have an approved payment plan, the Failure to Pay Penalty is reduced to 0.25% per month (or partial month) during your approved payment plan.

Interest

The IRS charges underpayment interest when you don’t pay your tax, penalties, additions to tax, or interest by the due date. IRS will continue to charge interest until you pay off the balance.

Substitute for Return (SFR)

When you file a tax return, the IRS often has third-party reported information to cross reference your return. Because of this, even though you don’t submit a tax return, the IRS may use what data it has to prepare a return for you. IRS relies on IRC § 6020(b) to file tax returns for delinquent taxpayers as part of the SFR program. Third-party information consists of:

• Employer W2s or 1099s
• Banking interest income
• Financial Brokerage Firm – Trading information – dividends, capital gains
• Equity Ownership K-1s
• Unemployment WG2
• Gambling Winnings W2c

If what is reflected shows you have tax filing requirements, the IRS may prepare a tax return on your behalf, which usually overstates the taxes you may owe. The IRS will not consider any credits or allowable expense deductions you may be entitled to, resulting in your owning significantly more in taxes or not receiving the refund you may be entitled to have if you had completed your tax return.

The SFR processing begins with the IRS sending out an information letter stating that they have not received tax returns for a particular year(s). The IRS will then propose a tax liability consisting of the SFR return’s tax assessment, associated penalties, and interest. The information will indicate that you have thirty days to respond by doing one of the following:

• Complete and send the applicable 1040 tax return and any other required forms.
• Sign off on the consent form in agreement with the terms.
• Provide a response indicating why you meet non-filing requirements or any other unique circumstances the IRS should consider on your case.

You have thirty days from the date in the Information Letter to respond. If you fail to respond within that timeline, the IRS will send a Statutory Notice of Deficiency, a 90-Day Letter. The purpose of this letter is to inform you that the IRS will assess the tax amount along with associated interest and penalties at the end of the 90 days from the notice’s date. You are also informed of your right to petition the US Tax Court during the 90 days. If there is no response during the 90 days, the IRS can now assess the tax amounts and engage its full-scale collection efforts for these due taxes. IRS collection efforts may include attaching liens and rights to your property. Eventually, the IRS may escalate collection efforts by placing levies on your bank accounts or garnishing your wages. The IRS could even seek to foreclose on your home. Calling a tax attorney may help alleviate the IRS collection efforts before they get out of hand.

Taxpayer Identity Theft Exposure from Not Filing Tax Returns

Unfortunately, more and more taxpayers are being exposed to identity theft. With this scam, someone uses your social security number, files a fake return, and has the refund sent to their bank account. Not filing your taxes increases your risk of this happening because you will quickly become aware that something has occurred when you file. The IRS will immediately reject a tax return if someone else has already filed under your social security number or has used one of your dependent’s social security numbers on their return, which you have attempted to use on your return.

Also, the IRS sends correspondence to the last known address on file, which usually comes from your most recently filed tax return. If you have moved and have not filed since, the IRS may be trying to reach you and cannot. It is up to you to notify the IRS of any address changes. Filing your taxes as soon as possible help minimize the risk of someone else being able to file on your behalf falsely.

When Should I File Back Taxes?

The IRS has specific rules on who must file taxes every year. As of 2022, you must file a tax return if you meet any of the following criteria:

• Your income is over $27,700, and you’re filing as married filing jointly or as a qualifying widower.
• Your income is over $20,800, and you’re filing as head of household.
• Your income is over $13,850, and you’re filing as single. If over the age of 65, the income threshold is $15,350.
• Your income is over $5, and you’re filing as married filing separately.
• You had self-employment net earnings of at least $400.
• You made more than $108.28 from a church or church organization.
• You owe the alternative minimum tax.
• You owe an early withdrawal penalty from an IRA or 401(k).
• You owe household employment taxes.
• You owe Social Security or Medicare tax on tips you didn’t report to your employer or that your employer didn’t already take out of your pay.
• You received distributions from a health savings account, Archer Medical Savings Account, or Medicare Advantage MSA.
• You owe taxes on an IRA, health savings account, or other tax-favored account.
• You owe recapture taxes.
• Advance payments of the premium tax credit were made for you, your spouse, or a dependent who got health coverage through the insurance marketplace.
• You owe uncollected Social Security, Medicare, or railroad retirement tax on tips you reported to your employer or group-term life insurance and additional taxes on health savings accounts.

The rules are different if you are being claimed to be dependent on someone else’s return.

In addition, the income filing thresholds change every year. You must look at the filing requirement for the year you are filing for.

Even If I Am Not Required to File, Should I Still File?

Before you decide not to, you will want to consider whether, by filing a return, you could be getting money back from:

• You had federal income withheld from your pay.
• You made estimated tax payments.
• You may qualify to claim tax credits like

Do All Missing Tax Returns Have to Be Filed?

Suppose you have some years of unfiled returns and want to get your account caught up with the IRS. It may be that you do not need to file for some of the years in which you missed a return. For example, let’s say your filing status is single, and you have not had any tax returns over the last six years.

In 2017, your income was $30,000. In 2018, your income was $3,000. In 2019, your income was $32,000. In 2020, your income was $6,500. In 2021, your income was $27000. In 2022 your income was 8,500. You did not have any special taxes that could trigger a reporting requirement, and you did not have any self-employment income.

For 2017, 2019 & 2021, your income exceeded the filing threshold; therefore, returns for each year must be filed. However, in 2018, 2020, and 2022, your income was under the threshold resulting in not having to file returns for those years. However, before not filing for those years, you want to ensure you are not missing out on some benefit from doing so.

Even If I Am Not Required to File, Should I Still File?

Before you decide not to, you will want to consider whether, by filing a return, you could be getting money back from:

• You had federal income withheld from your pay.
• You made estimated tax payments.
• You may qualify to claim tax credits like:

It may be prudent to at least go through the mechanics of preparing a return to see if you are eligible for any of these credits.

Does the IRS Have a Statute of Limitations on Unfiled Tax Returns?

The IRS has no statute of limitations on an unfiled return. The IRS is not limited to when they can go back and prepare Substitute for Returns. Even if you had not filed in the last 25 years, the IRS could go back and make tax assessments on any years in which taxes could be due. However, several separate statutes involving assessment, refunds, and collections can be confusing. To help better understand these types of statutes, here is a breakdown of them.

IRS Assessment Statute Limitation

Assessment Statutes of limitations generally limit the time the IRS must make tax assessments within three years after a return is due or filed, whichever is later. That date is also called the Assessment Statute Expiration Date (ASED).

However, the ASED can be extended under the following circumstances:

• Failing to file your tax return. IRS can assess tax under the Substitute for Return (SFR) program. If you voluntarily fail to file your tax and the IRS has enough information to file one for you, it may elect to proceed with the filing. The standard three-year ASED does not adhere to SFRs allowing the IRS to assess tax and additional tax at any time. Subsequently, if you elect to file your tax return, the normal ASED three-year time limitation is now in place.
• Sign a statutory waiver to extend ASED. You can agree to allow the IRS to extend the assessment time by signing a statutory waiver or extension agreement. If the IRS proposes a waiver to extend the ASED, you can negotiate the proposed time limitation to assess or refuse to sign the waiver. It may be prudent to speak to a tax professional before doing so.
• Tax Omissions of more than 25% of your gross income from a tax return. If you have such an omission, the IRS can assess additional tax increases from three to six years from the date your tax return was filed.
• If you file a false or fraudulent return intending to evade tax, the IRS has unlimited time to assess tax.

The IRS cannot assess tax after the time limitation period for assessment has expired.

IRS Tax Collection Statute Expiration Date – Statute of Limitations

The Collection Statute Expiration Date (CSED) provides that the IRS has ten years from the tax assessment date to collect to collect or else it becomes unenforceable. Some occurrences can toll the statute, such as applying for specific tax resolution plans or appealing assessments. The CSED plays a vital role how determining how to deal with the IRS. Often it can be beneficial to inquire with a tax attorney on how the CSED impacts any potential IRS negotiations.

IRS Tax Refunds Statute of Limitations

The refund statute of limitations for claiming a refund is three years after the filing deadline.

The IRS Regulations Sec. 6511(a) and Regs. Sec. 301.6511(a)-1(a) provides that you are eligible to claim a refund or credit if requested within three years from the date of filing the tax return or two years from the date the tax was paid, whichever is later. Please note that a tax return paid or filed paid before the last day allotted for its filing or payment (not regarding extensions filed) is considered paid or filed on that last day.

For example, let’s say that you file a tax return on April 15, 2020, and you owe taxes. You pay the tax bill on August 23, 2020. Eventually, you realize you made a mistake and plan to amend your tax return to claim a refund. Three years from the filing date is April 15, 2023, and two years from the payment date is August 23, 2020. You can claim a refund up to the latter date.

When you did not file a return, and there were tax payments made, you must file for a credit or refund of an overpayment within two years from when the tax was paid. Typically, this could occur for w2 income tax withholdings from employers or self-employed individuals who made larger than the required estimated payments. In the absence of a tax return being filed, one would take two years from the time the taxes were paid to file a claim for a refund.

How Do I Handle My Unfiled Tax Returns?

Getting professional tax help with your unfiled returns may be the best way to properly get through them as soon as possible in the most efficient manner. Tax professionals already have the right tax programs, understand the appropriate filing rules, and can help you avert unpleasant IRS repercussions.

On the other hand, if you choose to file your back taxes on your own, here are some procedures you may want to consider:

• Reach out to the IRS to determine your status with them to see if an SFR has been filed and if your case has been assigned to IRS personnel.
• Go online and set up an account with IRS to pull your wage and income reports and confirm any taxes paid. An IRS representative can also retrieve this for you. In addition, seeing what the IRS has listed may help get year-end information from sources and confirm.
• Pull all applicable year-end tax documents such as investment information, W2s, 1099s, and bank statements.
• Research each year in question to ensure you obtain available credits and allowable deductions you may be entitled to.
• Because the tax code changes frequently, use the appropriate year’s tax form to ensure correct deductions and credits are applied.

How Many Years of Back Taxes Do I Need to File?

The IRS generally follows its policy 5-133, which provides a general rule that taxpayers must file six years of back tax returns to be in good standing with the IRS. Even so, the IRS can go back more than six years in certain instances. For example, you must complete all four years’ worth if you have four years of unfiled tax returns. If you have nine years of unfiled tax returns, you must complete the most recent six years of returns.

There is no statute of limitations on unfiled returns, so the IRS can differ from the six-year rule if large tax amounts are owed beyond this time frame or if they believe you may have committed tax fraud.

This is why working with someone with experience dealing with unfiled returns is essential. To protect yourself, ensure you or your tax preparer understands IRS policy 5-133 dealing with delinquent returns. This rule maintains that, in general, a taxpayer must only file six years of back tax returns to be in good standing with the IRS.

How to Address Past Due Taxes from Filed Returns

Getting your past tax returns filed may leave you with a large tax debt you cannot afford to pay. Depending upon your circumstances, there are a variety of IRS tax resolution options you may qualify for, such as:

• The installment plan allows you to make monthly payments on your tax debt until wholly paid off before the Collection Statute runs out.
• A Partial Payment Installment Agreement (PPIA) is a monthly payment plan option for those who cannot pay the total balance due by the end of the Collection Statute. Financial determination is completed for eligibility. A PPIA can prevent the IRS from taking further collection action, such as levies and seizures. PPIA does not prevent IRS from initiating liens.
• Offer in Compromise allows you to settle your tax debt for less than the total amount you owe. It may be a legitimate option if you can’t pay your entire tax liability or if doing so creates a financial hardship.
• Penalty Abatement. There may be some penalties eligible for abatement.
• Currently Not Collectible status: If you can establish that you can’t pay your taxes and basic living expenses, the IRS may place your account in Currently Not Collectible (CNC) status. Under CNC, you will not have to make tax payments; however, interest and penalties could continue to accrue. You will remain in this status until your situation improves or you have reached the CSED and your tax liability is cleared.

When you hire a multi-licensed tax attorney CPA EA, you are getting expert tax return preparation capabilities sets and equipping yourself with the best possible means of optimally dealing with any surrounding tax issues. Dealing independently with the IRS can often be a very stressful experience resulting in an unfavorable outcome. A tax attorney CPA alleviates this burden from you. They understand how to navigate the complexities of the IRS tax code, deal directly with the IRS, and can determine the best resolution options for your case. They can get the best results for you. This is where Harmon Tax Resolution, LLC – the tax law firm dedicated to helping you with your IRS issues.

Get Trusted Professional Tax Help with Unfiled Tax Returns and IRS Tax Debt Resolution

To ensure that you align yourself with the best possible tax resolution outcome, have an experienced tax professional provide expert guidance to get you there. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Resolution Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your IRS tax issue so you can put this behind you and do what matters most.

For additional information, please see the following blog articles:

• “The IRS May Prepare A Substitute for Return in Place of an Unfiled Tax Return“
• “How to Deal with Back Taxes and What to Do About Unfiled Tax Returns“
• “Optimal Tax Return Preparation Services“

Tax Attorney-CPA-IRS EA Will Harmon of Harmon Tax Resolution, LLC is here, so you don’t have to face the IRS alone. He will help you fix, submit, and correct your unfiled returns. You will be assured of getting the absolute best resolution for your situation. To learn more, contact us today for your free consultation.

​If paying both basic living expenses and IRS tax liability is causing you economic hardship, you may qualify for being granted tax relief from IRS by obtaining Currently Not Collectible Status.

What is Currently Not Collectible Status?

If the IRS places your tax account into Currently Not Collectible status, the IRS will no longer be able to enforce collection activities against you while under this status. You will not receive threatening collection notices regarding your taxes, nor will your case escalate to other enhanced collection activities such as bank levies, wage garnishments, or property foreclosures. You will be able to regroup!

How Do You Obtain IRS Currently Not Collectible Status?

To obtain IRS Currently Not Collectible status, you need to demonstrate to the IRS that you cannot simultaneously pay your tax debt and living expenses without causing severe economic hardship. You must follow an IRS criterion to prove this, and if successful, the IRS will give you a reprieve from having to pay your tax bill.

The IRS generally requires you to complete IRS Form 433-F – Collection Information Statement to establish your financial hardship position. The form requires listing your income, expenses, assets, and liabilities. Depending on your situation, the IRS may require a more in-depth listing of your financial information and direct you to complete Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals). Additional support documentation must be turned in with either form used for IRS verification purposes.

How Will the IRS Determine If I am Eligible for Currently Not Collectible (CNC) Status?

While you must demonstrate that you are unable to afford to pay both living expenses and taxes, you must also do so within specific IRS standards. The IRS has a National Standards criterion of amounts, established for five necessary expenses: food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous and a Local Standards housing and utilities, which is based on which locality you reside in. The IRS combines these amounts to determine the amount of allowable living expenses. If your expenses exceed the IRS allowable amounts, typically, the excess is not counted for CNC purposes.

For example, let’s say your location standard for housing and utilities is $2,050, and your actual expenditures are $2,450; the additional $400 over the allowable amount would generally not be considered by the IRS when determining your total monthly living expenses.

However, there may be exceptional circumstances, such as specific healthcare expenditures, that the IRS may consider an allowable expense over the standard amount. You will need to provide adequate documentation to substantiate your position. In situations like this, getting IRS representation from a tax lawyer-CPA who thoroughly understands the IRS allowable living expense standards and has experience advocating similar cases with the IRS may be prudent. Professional tax help could help you afford the highest allowable expense amounts or even help you qualify.

The IRS Requires Compliance When Considering Currently Non-Collectible Status Eligibility

Before the IRS places your account in CNC status, it may ask you to file any past-due tax returns.

The IRS may also review your tax withholding to ensure you have enough withheld from your employer to cover current and future taxes due. If not deemed enough, the IRS may make you change your withholding amounts accordingly to approve you for CNC.

If you have self-employment income, the IRS will want to ensure you make correct estimated payments and could even make you submit additional amounts before granting CNC approval.

What Happens While I Am in CNC Status?

While your account is in CNC status, the IRS generally won’t try to collect from you. Once the IRS places your tax debt into CNC status:

• CNC Status does not prevent the IRS from assessing interest and penalties to your account.
• The IRS may withhold and apply your tax refunds to your tax balance.
• The IRS may file a Notice of Federal Tax Lien (NFTL) when your account is placed in CNC status. Filing an NFTL can inhibit your ability to sell or borrow property or other assets.
• The IRS will not place a levy on your assets or garnish your income.
• The IRS can contact the State Department to revoke your passport if the balance is over $52,000.
• You can make voluntary tax payments on your account.

Typically, the IRS will review your financial situation annually. If your financial situation improves, the IRS may take you out of CNC status. You may be eligible for other IRS tax debt relief options if that happens. It may be prudent to have a tax attorney-CPA assist in ensuring all options are considered.

What Should I Do If the IRS Rejects My CNC Application?

If your CNC Status request is denied, you have the right to:

• Request a meeting with the IRS Collection Manager
• File an appeal:

If you are considering appealing your decision, hiring a tax attorney-CPA who could help you present the best case and ensure all of your options are considered while making the best case on your behalf would be prudent.

Does Being in CNC Status Halt the Collection Statute Expiration Date?

In addition to not having to pay a tax debt while your account is in CNC status, the Collection Statue Expiration Date (CSED) continues to toll during this period. The CSED is where the IRS has ten years to collect a tax from either the later of the tax assessment date or the filing due date. Once this date comes about, the IRS can no longer collect the tax. The tax is no longer due if your tax account is placed in the CNC status and the CSED occurs during this period.

Other tax relief options such as Installment Plans, Offer in Compromise, and Bankruptcy all have tolling periods, resulting in the CSED being extended for additional time.

If the IRS ever requests for you to sign a waiver to extend the CSED, you may want to consult with a tax professional first.

Seek Help Applying for IRS Currently Not Collectible Status

IRS collection activities could cause you financial hardship if you cannot pay the taxes owed. You may have the option to have collections halted if you are eligible to apply for IRS CNC status. To learn whether CNC or another tax relief option would work best for your relief from unpaid IRS taxes, contact tax attorney CPA EA Will Harmon today by calling 772-418-0949 or completing the online contact form.

Tax Attorney-CPA-IRS EA Will Harmon has extensive experience helping taxpayers who, unfortunately, cannot afford to pay their IRS tax debt to negotiate optimal tax relief plans with the IRS. He can help you get the best outcome possible for your situation.

When Do I Need To Seek IRS Tax Resolution?

This is one of those questions you hope you never have to ask. However, since taxes are an unavoidable part of life and, at some point, most of us will have to deal with the IRS in some capacity, it may be prudent to understand when it would be ideal to seek tax resolution assistance. Typically, here are the situations where IRS tax resolution relief is needed:

• The IRS is acting toward you for taxes they have assessed against you.
• You have unfiled returns on where you would owe taxes on. Failing to file taxes can be classified as a federal crime punishable as a misdemeanor or felony (26 U.S. Code § 7203 – Willful failure to file a return, supply information, or pay tax).
• The IRS has just assessed taxes on you.
• You owe back taxes, and the IRS has not come after you yet. In time they will.

If you are dealing with any of these scenarios without having a tax resolution plan affording you the best course of action based on your circumstances, you could, unfortunately, make a bad situation worse.

Why Should I Use a Tax Resolution Firm?

Once your taxes have been assessed, and if left unpaid, the IRS will enforce collections which involve charging you at a high monthly interest rate, assigning the highest allowable penalties and fees, and could aim to go after equity you have in assets, garnish wages, levy bank accounts, deny the use of passport, and even seek a judgment to foreclose on your property. You can avert such actions by enlisting professional tax help to employ various alternative tax resolution options. Tax resolution professionals deal directly with the IRS to obtain a workable solution to your situation. Tax resolution is a very specialized field requiring unique training and skill sets.

Introducing Harmon Tax Resolution, LLC – a professional, trusted, experienced BBB A+ rated IRS Tax Resolution Firm geared for only one thing – solving IRS tax problems. Here a multi-licensed tax attorney-CPA-IRS Enrolled Agent will thoroughly review what the IRS alleges you owe, establish the merits of the IRS’s position, and analyze your situation to determine which of the many IRS programs you may be eligible for. There is a solution to every IRS tax problem. Call today at 772-418-0949 or complete an online inquiry for a free consultation on how your tax situation can be addressed best.

Will the IRS Provide Help with My Outstanding Taxes?

The IRS’s mission is to collect from you as much as possible. Therefore, you cannot depend on the IRS for your best interest. Even if the IRS mentions any of its tax relief programs, you cannot rely on them to help select the most optimal one for your situation or provide guidance on navigating within a plan to obtain the best results fully. Dealing only with the IRS may result in you paying significantly more taxes, penalties, and interest. You may even inadvertently provide additional information to the IRS, worsening your situation. In addition, the IRS will not try to abate or lessen any penalties associated with your account. To the IRS, tax collection and enforcement are its primary functions, whereas getting you to arrive at the best outcome is not part of their protocol.

What are the Risks of Resolving My IRS Tax Problem on My Own?

Unless you thoroughly understand tax law and deal with the IRS, gaining experience in this realm by going alone could be a very costly and aggravating experience. A good question is whether your approach is the best one available. Would an IRS tax resolution expert come to the same conclusion you have? If you are getting some tax advice from someone, does that person have a strong background in dealing with the IRS? Many tax professionals can help prevent you from having to deal with the IRS by ensuring your tax returns are prepared correctly and offering tax advice; however, unless they have specific experience dealing with the IRS directly, they may not be able to guide you accurately as a tax resolution expert would when it comes to resolving an IRS tax controversy.

Speaking of IRS tax resolution experts, with Harmon Tax Resolution, LLC, you will deal directly with an IRS battle-tested tax resolution expert, Will Harmon, who happens to be a multi-licensed Fl tax attorney-CPA-IRS Enrolled Agent, ensuring complete representation. He will thoroughly review your situation, represent your rights to IRS, and establish a resolution plan enabling you to pay the least amount available within the optimal terms allowed under IRS administrative law. Call him for a free consultation at 772-418-0949 or complete the online inquiry form.

His goal is simple: providing a way to hold on to more of your resources instead of handing them over to the IRS. Investing in a trusted tax professional who knows the ins and outs of the IRS is the best way for you to hold onto your hard-earned resources. Unless you fully understand the IRS tax provisions of the Internal Revenue Code and the Internal Revenue Manual, know how to protect your taxpayer legal rights properly, and have experience advocating within the various levels of IRS bureaucracy, your chances of getting the best outcome are not very good.

To help provide a better understanding of the magnitude of the IRS’s overall tax processes, below is a depiction of the inner workings of the IRS. As you can see, navigating the IRS is not a simple walk in the park. Mistakes can be costly. Having skilled tax representation will help ensure you properly navigate the IRS system.

Every IRS Tax Problem Has a Solution

Every situation is unique and requires a detailed analysis and investigation to determine the correct action. Regardless of your situation, your resolution starting point will be within the taxpayer roadmap. Most IRS tax problems fall under these scenarios:

• There are ongoing collection efforts by the IRS for back taxes to which you have not responded, and now the IRS is possibly taking enhanced collection efforts against you such as enacting liens, performing bank account levies, making wage garnishments, revoking US passports, and even foreclosing on properties.
• You have unfiled returns or owe back taxes, and IRS may not have contacted you yet.
• The IRS has audited prior tax returns resulting in additional taxes and penalties.

Each one of these situations will place you in a spot within the IRS road map. Knowing where you are starting from is essential; however, that’s only one part of the solution because many other factors are needed to determine the best resolution outcome for your situation. A thorough investigation will need to be done to obtain the information required for the best resolution determination.

Harmon Tax Resolution, LLC Can Defend You Against IRS Aggressive Collections by Creating a Tailored Resolution Plan to Produce the Most Optimal Results Possible.

Can you imagine the futility of giving someone directions without knowing where they currently are, what got them there, and what resources they have to proceed forward? Accepting a tax resolution plan where no thorough investigation has been done could be an act of futility. Unfortunately, there are many tax mill firms out there who, without taking these investigative steps, will immediately assign a “cookie cutter” resolution option, which may not be best for your situation and up costing you considerably. To help you properly navigate the complex IRS road map, the tax resolution professional must obtain complete information about your case by thoroughly investigating your and IRS records.

Even though there are many IRS options to consider, the goal should always be to find the ideal one for your situation. Ideally, it would be best if you were afforded explanations of why one plan is better for your situation than another. This involves thoroughly analyzing the facts and circumstances surrounding your case BEFORE any resolution plans are compared and presented. At Harmon Tax Resolution, LLC, a thorough analysis of the facts and circumstances of your case will enable you to thoroughly explain why a resolution plan should be selected from other options.

There is a solution to every IRS tax problem. Getting to the right solution is what counts. By having multi-licensed tax professional research your case from all angles, you can ensure not to have items overlooked because many tax resolution cases often require expert knowledge across various disciplines in realms of law, tax expertise, accounting, and auditing to arrive at the best outcome. At Harmon Tax Resolution, LLC, you are afforded this to have a sense of security and peace of mind. As we have done for others, we can do the same for you!

Benefits of Working with the Harmon Tax Resolution, LLC

• Have resolved many IRS tax cases.
• Have saved our clients significantly in back taxes.
• From start to finish, you will have a dedicated multi-licensed tax attorney-CPA- IRS Enrolled Agent working on your case to ensure your case gets complete representation available and nothing gets overlooked.
• The fee structure is transparently based on flat fees, so no surprises and payment plans are available.
• Client Attorney Privileged communications along with professional respect and empathy.
• BBB A+ Rated.
• Have many five-star customer reviews.
• Licensed to work in all fifty states of the USA.
• Our initial consultation is always 100% free.

Get Trusted Legal Representation for Dealing with IRS Tax Problems

To ensure that you align yourself with the best possible tax resolution outcome, have an experienced tax professional provide expert guidance to get you there. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Resolution Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your IRS tax issue so you can put this behind you and do the things that matter most.

For additional information, please see the following blog articles:

• “Tax Attorney vs. CPA vs. IRS EA: Why Not Hire a Three-In-One?”
• “What Should I Do If I Receive and IRS Notice?“
• “When Should I Call a Tax Resolution Firm?“

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Opening your mail only to discover you are on receiving end of an IRS Audit is a daunting experience; however, if you keep your wits about yourself and follow specific steps, the immensity of the ordeal will lessen significantly. Invariably, we all must deal with the IRS at some point.

Here are some steps to follow to help get through an IRS audit engagement.

Step 1: Determine The Reasons for The Audit

The first step is to get an understanding as to why the IRS is auditing you. The IRS audit letter typically details the periods being audited and the type of audit to be performed. There are many reasons the IRS may select a specific tax return for audit; for example, third-party reporting does not match data reported on tax returns or data within the tax returns, such as amounts listed for various income or expense items falling outside the typical industry average. You could have the unfortunate luck of being randomly selected out of the general tax return populous. Although not an all-inclusive list, there is a greater chance of being audited if you find yourself in any of these situations.

1. Make Significant Earnings
   1. Once you cross the $200,000 earnings threshold, your chances of audit increase. Around 50% of the tax returns audited by the IRS have annual earnings of over a million dollars.
2. Run a Cash Heavy Business
   1. IRS targets these types of businesses because, within these types of businesses, there has been a greater propensity for not reporting or under-reporting income to occur.
3. Taking Home Office Deduction
   1. You can take certain deductions if you work exclusively from home and have an area dedicated to your business. Since this can be manipulated, the IRS tends to request verification.
4. Claiming Earned Income Credit (EIC)
   1. EIC reporting has had significant fraudulent reporting; therefore IRS scrutinizes this heavily.
5. Rounding Numbers on Expense Listings
   1. IRS may consider this an indication that actual data is not being used to support the expense.
6. Have Significant Changes in Income or Expenses
   1. IRS may want to understand why and how these changes occurred.
7. Use of Personal Vehicle for Business
   1. Reported vehicle expenses are an area where many discrepancies occur. Be sure to keep records such as mileage logs can calendar entries that indicate the business purpose of the trip.
8. File a Return with Math Errors
   1. These errors generally get caught, flagging your return for audit.
9. Crypto Currency Transactions
   1. There is still considerable standardization needed here, resulting in the IRS making an enhanced effort to get more verification.

Having any of these occurrences does not guarantee that an IRS audit will occur, except the likelihood of one increases. Taking expense deductions and credits you are entitled to and can substantiate with proper record keeping will help reduce the chances of being selected. However, sometimes IRS audits are random, so even with a correctly prepared return that does not contain typical audit flags, you may still receive an IRS notice “requesting” you to explain some items on your tax return. In either case, having detailed records will help tremendously if an audit occurs.

Step 2: Do a Thorough Review of Your Tax Return

Before meeting with your trusted tax professional or an IRS agent, it’s imperative to thoroughly review the tax return being audited and the last several years of prior tax returns to ensure completeness and accuracy. With all the many inputs required to complete a tax return, unintentional mistakes can easily happen, whether during the preparation or e-filing process. Doing a thorough review will help catch any of these mistakes, and you will be better prepared to plan and discuss. The better prepared you become, the less anxiety you will experience during the audit. To help better prepare for the audit, gather proper support for items listed on the tax return, such as bank and credit card statements, receipts, invoices, and 3rd party annual reporting documents such as 1099s. By being prepared in this fashion, the audit will move quicker and with fewer challenges.

Getting Trusted Professional Help

Since dealing with an IRS audit can be extremely stressful and frustrating, it may be highly advantageous to consult with a tax professional, such as a dually licensed Tax Attorney-CPA, who can represent you in front of the IRS while providing the correct course of action. The benefits of employing such a tax professional allow one to leverage the tax professional’s years of experience and expertise in dealing with sophisticated tax situations that the typical taxpayer would not possess.

An experienced tax resolution attorney-CPA will provide, from start to finish, all tax law expertise and proper advocation, along with expert CPA audit guidance, which helps ensure that you will not end up paying more than you must.

What is a Tax Resolution Attorney-CPA-EA?

A tax resolution attorney-CPA-EA is a combined legal, tax, and accounting professional helping individuals and businesses resolve their IRS tax-related issues. Because a tax resolution attorney-CPA-EA has gone through extensive multi-licensing, cross-training, and continued education, tax resolution attorney-CPA-EAs have a more in-depth knowledge of tax law than anyone in the business. Plus, dealing with IRS on a day-to-day basis enables the tax resolution attorney-CPA-EA to properly assess and appropriately address each tax situation, regardless of complexity, with IRS representatives ensuring the engagement proceeds in the best manner possible.

A multi-licensed tax attorney-CPA-EA thoroughly understands tax regulations, laws, accounting, and audit procedures and is there to provide acute guidance and complete representation to taxpayers across the spectrum of varying IRS issues. A tax resolution could include preparing unfiled returns, finding the best resolution for back tax debt, addressing an IRS audit, properly dealing with an IRS tax lien or levy, and appealing an IRS position. Tax resolution attorney-CPA-EAs work on your behalf to negotiate IRS settlements or payment plans. They can also provide expert tax planning strategies to help you prevent future IRS tax issues. Often tax resolution cases involve various disciplines to address the problem adequately. By having a three-in-one tax professional work on your case, you are ensuring nothing gets overlooked.

Step 3: Immediately Respond to the Audit Notice

Response timing to an IRS audit notice is critical. The IRS generally gives you thirty days to respond but verify by locating the “Respond by Date” listed within the notice. The timely response sets a good tone with the IRS and avoids additional interest and penalties getting tacked on. Untimely responses can also trigger a more aggressive approach from the IRS. IRS audits tend to go much smoother when timeliness occurs.

Step 4: Show Up at the IRS Audit Appointment

If attendance is mandatory for your audit appointment, whether in person or via video conference, it is essential to your case to show up on time and well prepared. Proper time scheduling will help alleviate significant stress and enhance your ability to field questions. The whole process goes much smoother this way and helps avoid additional escalation.

Just like prompt attendance facilitates a better speedier audit, so would ensuring you have acquired all necessary documents. Starting on this as early as possible is the best way to handle this. In addition, if more time is needed to acquire documents, you can request additional time by calling the number listed on your audit notice. Waiting until the last minute to make such a request could result in it getting denied. Importantly, giving yourself enough time to review your data may prove your position was correct and the IRS was wrong. The last thing anyone wants to pay is a tax they should not owe.

Be Straight Forward with the IRS Auditor

Transparency goes a long way when working with your IRS agent. Like other government enforcement agencies, the IRS agent’s primary focus is maintaining guidelines, regulations, and laws. Mistruths will often cause additional audit requirements added to the audit, delays, and combativeness from IRS agents. Providing mistruths could lead to a criminal investigation. Being transparent is a best practice and will make the audit much smoother than being untruthful or evasive.

Maintain Good Financial Records

Good financial record-keeping is an excellent way to avert many tax problems. However, even with proper financial records, you can still incur an IRS audit due to many factors previously listed. Incorporating solid financial recordings, especially ensuring banking records match reports correctly, will help establish your position well and provide significant evidence to counter underreporting or misappropriation of funds.

The greater your personal or business income, the greater the possibility of being audited by the IRS. A higher income often involves more transactions, resulting in complex tracking challenges, hence the need for solid financial reporting. If you are self-employed or own a business with inherent IRS audit risk factors, keeping good business records can alleviate audit headaches and could even prevent an audit from occurring. When it comes to financial record keeping, it’s essential to ensure you are employing enough resources for this task, just like hiring a multi-licensed tax attorney will provide adequate coverage in all facets of an IRS audit. There is nothing like having a knowledgeable legal tax professional who also happens to have the audit and financial reporting background of a CPA.

Make Sure to Know Your Rights!

If you are being audited, know your rights throughout the audit, including the right to appeal the auditor’s findings and the right to representation. Employing your legal rights can significantly determine the outcome.

Unfortunately, unless you are dealing with the IRS regularly, along with having years of schooling and specific training, you most likely will not have a sufficient understanding of your rights and responsibilities relating to IRS actions, such as an audit. It may be prudent to employ an experienced tax professional capable of navigating the extreme complexities of dealing with the IRS. Dually licensed Tax attorneys-CPAs have significant experience and the ability to see your situation from every angle to ensure the best solution will be employed to protect your and your family’s rights. IRS Taxpayer Rights and IRS Publication.

Can I Appeal the Audit Findings?

Yes, the IRS auditor’s decisions are not unchangeable; you can appeal the decision if it is incorrect or unjustifiable.

Sadly, taxpayers’ right to appeal adverse decisions is not always readily known. IRS is not in the habit of promoting this because it could inhibit their ability to collect as much money as possible. In addition, if you are not aware of your appeal rights early on, it can be challenging to engage in an appeal. If you are going alone at this without a seasoned tax professional, it can become pretty convoluted since you are dealing with timing issues along with multiple form preparations. In addition, without a strong tax background, you may miss incorrect audit findings altogether. There have been many instances where incorrect audit findings go unchallenged, resulting in the taxpayer footing a large wrong tax debt causing significant harm to themselves and their families.

In addition, you also have the option to seek audit reconsideration if new information becomes available or a ruling has an incorrect application.

Trusted tax resolution professionals have gone through the IRS audit and appeals process many times, therefore, can do so for you efficiently and effectively. Working with them, they will address many of the nuances involved, so you don’t have to.

Step 5: Get Trusted Representation by Calling Will Harmon Now! 772-418-0949

​Being selected for an IRS audit can be a stressful experience, but it is essential to remain relaxed and take prudent steps to address the situation before it is too late. Employing professional tax advice to solidify and enact correct application audit rules and procedures and keeping meticulous records will provide the best path for the most successful audit outcome.

You are not alone if you still feel nervous about taking on the IRS since this is a typical reaction of most taxpayers going through a similar experience. Employing a trusted attorney-CPA-EA to help you in your IRS tax audit case can significantly increase your chances of success. Will Harmon, one of the best tax resolution attorneys-CPA-EAs in the business, can help you with your IRS issue. If you want to be sure of not overpaying the IRS and getting control back, give tax attorney CPA EA Will Harmon a free consultation call today or complete the online questionnaire and let him get you back on track to tax compliance!

For additional information, please see the following blog articles:

• “Help with Your IRS Tax Audit“

• “The Ins and Outs About IRS Audit Reconsideration“

• “When Should I Call A Tax Resolution Firm?“

The IRS cannot engage in collections activities against you without an assessed tax in place first. Before an IRS tax assessment occurs, you, the taxpayer, have a right to be informed of any pending assessment. To facilitate your awareness of a pending IRS tax assessment, the IRS has a statutory system that issues you a Notice of Deficiency delivered by certified or registered mail. The Statutory Notice of Deficiency details what is being assessed and how it was calculated.

The IRS Statutory Notice of Deficiency is a vital due process function that plays a critical role in many IRS activities, such as appeals and tax litigation, and is a significant catalyst for enabling IRS collection activities to engage. If you receive an IRS Statutory Notice of Deficiency, it is critical to immediately assess and take action, especially while all appeal and rebuttal venues remain at your disposal. Getting a tax professional to help you initially may be your best option.

What is an IRS Statutory Notice of Deficiency?

A Statutory Notice of Deficiency is a legal determination by the IRS of a taxpayer’s tax deficiency. It is an official written claim that a taxpayer owes additional income tax (and additional penalties and interest). It is issued when the IRS proposes a change to a tax return because they found that the information reported on a return does not match their records. The IRS’s requirement to issue a notice of deficiency is stated in Internal Revenue Sections 6212 and 6213. These sections promulgate the rule that unless the IRS sends out a timely and valid notice of deficiency, any tax liability assessed by the IRS is invalid.

What Triggers the IRS to Issue a Notice of Deficiency?

External parties, such as employers, financial institutions, and brokers, report taxable transitions to the IRS. For example, when an employer issues a 1099-NEC form to a contractor, the employer also issues this information to the IRS. The same generally holds for when a broker issues you a 1099-B which reflects investment activities, it also has issued this information to the IRS. When these records are either missing or do not match what has been reported in your tax return, IRS will initiate a correction and or addition, which gets listed within the deficiency notice. To help avoid having the IRS make adjustments to your tax return, it’s crucial to double-check for any 3^rd party omissions or misreporting of your tax return before filing.

The IRS Statutory Notice of Deficiency Comes in What Forms?

The official name for a Statutory Notice of Deficiency is the IRS Notice CP2319A (or CP2319N): Notice of Deficiency and Increase in Tax. A Statutory Notice of Deficiency is often called an IRS 90-Day Letter, a Notice of Deficiency, or a Statutory Notice.

Depending up how the IRS determines the tax deficiency will determine whether a CP3219A Notice or a CP3291N Notice is used. Here are some clarifications the IRS uses to determine which form is applicable to use:

• CP3291N If the IRS did not receive your tax return and then prepared your return based on wages (W2s) and other income (1099s) reported by third parties, the IRS will issue the CP3291N. When the IRS prepares your tax return, this is referred to as a Substitute For Return (SFR). Although it may seem convenient that the IRS would do this for you, the outcome will not be in your favor since the IRS will not include any allowable credits or deductions during the processing of your return resulting in a higher tax than if you had it prepared. There are additional drawbacks to taxpayers when SFR returns are prepared. Also, the IRS will not prepare an SFR if you are due a refund. For more information, please see this blog, “The IRS May Prepare a Substitute for Return in Place of an Unfiled Tax Return“
• CP3219A If the IRS receives information that is different from what you reported on your tax return, the IRS will issue this notice. The change may result in an increase or decrease in tax. An omission of a form listed on your tax return will trigger this notice type.

What Information Is Provided within an IRS Statutory Notice of Deficiency?

The notice will provide the applicable tax year in question and the amounts of the proposed adjustments. There will be a listing portraying how the amounts were calculated. It is essential to verify the accuracy and validity of any proposed adjustments. It often comes down to providing missing information that could clear everything up. For example, if you were to receive a notice that states you owed taxes from a capital gain from the sale of your home, which was not reported on your tax return. The IRS had a 1099S which lists the amount of the proceeds from the home sale, as reported by the broker; however, it did not either list the basis of the property or any potential capital gain exclusion amounts you may be entitled to. Now, you are faced with a tax debt, penalties, and interest, none of which you would owe if correct information were provided.

In addition, there may be an accompanying IRS Form 5564, Notice of Deficiency Waiver. If you agree with the tax amounts listed within the deficiency notice, IRS provides this form for you to sign off on and send to IRS. Both spouses must sign if the deficiency notice is for a jointly filed return. Most importantly, do not sign this form if you disagree with the Notice of Deficiency! Make sure to understand what is being assessed. Just like in the example mentioned, there could be a solution to alter the outcome significantly. You have options to appeal! More on that later in this article.

When Is the IRS Not Required to Issue a Statutory Notice of Deficiency?

The IRS is not required to issue a Statutory Notice of Deficiencies under the following circumstances:

• When you file your tax return, the amount listed on the tax return is assessed by you; therefore, the IRS does not have to issue a Notice of Deficiency.
• When the IRS issues specific reportable transactional penalties such as Failure to File Penalty, Failure to Pay Penalty, and Trust Fund Recovery Penalty, among others.
• An IRS correction of a math error is where the IRS determines a tax deficiency resulting from a clear mathematical or clerical error reported on your tax return and then makes the correction without sending a deficiency notice. The IRS still has to notify you of the mathematical or clerical changes. If a taxpayer contests a math error notice within 60 days, IRC § 6213(b)(2)(A) provides that the IRS must abate the assessment. If the IRS abates the assessment, it must follow deficiency procedures before reassessing the tax. Taxpayers who do not contest a math error notice within 60 days lose the right to do so in court before paying. The IRS can use a Notice of Deficiency route for clerical and mathematical errors if it chooses to.

How Long Can the IRS Take to Issue a Statutory Notice of Deficiency?

The IRS can typically only issue a Statutory Notice of Deficiency during a tax assessment period for a particular tax. The tax assessment period the IRS uses is based of the Assessment Statute Expiration Date (ASED). The ASED occurs at the end of the period when the IRS can assess tax concerning a particular tax year. The ASED is calculated on the basis that an assessment of tax must be made within three years from the received date of an original tax return or three years from the due date of the original return, whichever is later. However, there is no assessment period if no tax return was filed or a fraudulent tax return was filed.

The three-year assessment period can be extended by:

• You request a Collection Due Process Hearing.
• You file a Bankruptcy Petition.
• You have applied for an Offer in Compromise.
• If you sign a waiver and consent to extend the assessment period (by signing Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overpayment) (this is called a “Notice of Deficiency Waiver “).

If you have significantly understated the tax on a return, the assessment period can be extended from three to six years.

How Should I Respond to an IRS Notice of Deficiency?

You have several options for responding to an IRS Notice of Deficiency. These options include:

1. Pay the tax in the notice and close the matter.
2. Pay the tax in the notice and submit a refund claim.
3. File an offer in compromise.
4. Submit a petition with the U.S. Tax Court.
5. Petition the IRS to withdraw or rescind the notice of deficiency.

The IRS Statutory Notice of Deficiency, also known as the 90-Day Letter, gives you 90 days from the date listed on the notice to file a petition with the U.S. Tax Court.

It’s important to note that the 90 days begins as of the date listed on the notice, which represents when it was mailed and not the day you received it in your mailbox. If you petition for tax court, you must do so within 90 days of the notice date.

The 90 days are extended to 150 days if your address is outside the United States.

What Happens If I Did Not Receive My IRS Notice of Deficiency?

The IRS must send a statutory notice of deficiency to a taxpayer’s last known address by certified or registered mail. The last known address is generally the address that appears on your most recently filed and properly processed tax return unless the IRS is given clear and concise notification of a different

The courts will invalidate the notice if the IRS does not properly Notice of Deficiency.

For my IRS Deficiency Notice, Who Can File a Petition to Go to Tax Court?

You can file the tax court petition if you are listed on the Deficiency Notice.

What Happens When I File a Tax Court Petition?

Once the U.S. Tax Court receives your court petition, they will notify the IRS of your response to the IRS Notice of Deficiency. The IRS will place a hold on the assessment case and is prevented from issuing additional assessments for the same tax and period.

The IRS counsel will then file an Answer to your petition with the U.S. Tax Court. Often your case will get forwarded to the IRS Office of Appeals. If the case can be solved without going to tax court, the IRS will review the case and schedule a conference with you. The conferences are informal and are conducted by correspondence, telephone, video, or in-person conference.

On average, the IRS settles 70% of cases that go to appeals. Filing for U.S. Tax Court can have significant advantages. Knowing your taxpayer rights and the relative’s time frames to enact these rights is imperative. Do not let your rights expire do to non-action!

There may be some other settlement options available.

For additional information, please refer to the following blogs:

• “The Ins & Outs of Audit Reconsideration“
• “When You Can Pursue a Collection Due Process Hearing“
• “Appealing IRS Tax Determinations“
• “What Should I Do If I Receive an IRS Notice“

Get Trusted Representation For Your IRS Notice of Deficiency

To ensure that you align yourself with the best possible outcome, whether dealing with a challenging IRS Statutory Notice of Deficiency situation or seeking other forms tax debt relief, have an experienced tax attorney-CPA-EA provide the expert guidance to get you there. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Notice of Deficiency Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your IRS Notice of Deficiency and any other IRS issue so that you can put this behind you and get on to doing the things that matter most.

Going through an IRS audit can be exhausting, especially if you receive an unfavorable outcome resulting in a tax balance due to the IRS. Before capitulating and forking over the money to the IRS, you may have the option to challenge some or all of the audit findings using an IRS Audit Reconsideration. An Audit Reconsideration is a process the IRS uses to reevaluate the results of a prior audit when specific criteria have been met.

When Can I Use An IRS Audit Reconsideration?

The IRS offers an Audit Reconsideration process if you disagree with the audit results of your tax return. The Audit Reconsideration allows you to provide your explanation as to why you feel it should be overturned. Here are some of the reasons you could request an audit reconsideration:

• You disagree with the audit assessment findings and can provide a reasonable basis for the dispute. You must clearly state which part of the audit you are disputing and why. For example, the audit incorrectly classified income or expense characterizations.
• You have additional pertinent information not presented during the audit. You have new information to show the IRS about the audit of your income or expenses. For example, an audit denied an expense due to lacking supporting documents; you acquired them after the audit.
• You didn’t appear for your audit due to a legitimate reason.
• You relocated and never got the IRS’s audit report.

When Am I Not Able To Use An IRS Audit Reconsideration Process?

• You’ve already paid the full amount you owe. In that case, you must file a formal claim for a refund with an IRS Form 1040X, Amended U.S. Individual Income Tax Return.
• You previously agreed to pay the amount you owe by signing an agreement such as an IRS Form 906, Closing Agreement; an offer in compromise agreement; or an agreement on IRS Form 870-AD, Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment, with the Office of Appeals.
• The United States Tax Court or another court has entered a final determination that you owe the taxes.

How Do I Apply For An IRS Audit Reconsideration?

An Audit Reconsideration is done by making a written request to the appropriate IRS office listed on your audit report. If you are unsure where to send it, please refer to IRS publication 3598, which lists the addresses and phone numbers of all IRS offices dealing with audit reconsiderations. The publication also provides information about materials you must submit with your request.

Steps For Submitting An IRS Audit Reconsideration Request

Step 1: Acquire Appropriate Documentation

Analyze your audit report to determine the disagreeable items you are contending. You will then need to obtain new information not already previously provided to IRS, which supports your position. Ensure this information is relevant to the tax year listed in the audit report. Please present a clear audit trail of source documents to each audit report listing you are disputing.

Step 2: Submit Your Documentation

You will need to submit to the IRS the following items:

• A copy of your audit report (IRS Form 4549).
• Copies of information that support your position (typically, these are payment receipts, canceled checks, bank and credit card statements, invoices, contracts, loan documents, and 1099 Forms).
• Copies of materials you previously gave to the IRS – usually listed within Information Document Request 4797 sent to you.
• A letter clearly stating your reason for reconsideration; the IRS suggests using IRS Form 12661, Disputed Issue Verification.
• Include daytime and evening phone numbers and the best time for IRS to call you.

Remember to make photocopies of all documents you are sending. Please do not send the originals since the IRS will not accept them and may reject your request for audit reconsideration if you attach them.

How to Write an Audit Reconsideration Letter

You can write a letter to request an IRS Audit Reconsideration rather than completing IRS Form 12661. Sometimes this is chosen if it makes it easier to state one’s position in this fashion over using the IRS form 12661. The letter must provide the reason for requesting the audit reconsideration and an overview of the additional information explaining how the audit findings are inaccurate.

Because IRS Audit reconsiderations are relatively complex, having a tax attorney with an audit background would be ideal for assisting you with the best way to handle your appeal. Tax Attorney, Will Harmon of Harmon Tax Resolution, LLC, is also a CPA with significant audit experience and can adequately address this for you.

What Is The Time Frame For An IRS Audit Reconsideration Completion?

Typically, the IRS will contact you within thirty days of receiving the Audit Reconsideration request; however, it’s unsurprising if it took up a couple of months before they do. During this period, penalties and interest and penalties continue to accrue on unpaid tax balances. The IRS may delay collection activity during their investigation based on your request, but this is not guaranteed. If you are under an installment plan, you will want to continue making payments. If you are experiencing financial difficulties with paying your IRS debts, there may be some tax relief programs you possibly qualify for. Seeking a tax attorney-CPA to assist would be helpful for your situation.

If the IRS needs additional information to assist with their determination, they will contact you via mail. Bear in mind that if you were able to have collections halted during the reconsideration process and the IRS finds that if you don’t respond to additional information requests within thirty days or have submitted insufficient information, the IRS may resume its collection activities.

To help move your case forward, you can also contact the Taxpayer Advocate’s Office and ask them to expedite your audit reconsideration case. This can be done by completing Form 911, Request for Taxpayer Advocate Assistance.

What Happens Upon The Completion Of An Audit Reconsideration?

Shortly after the IRS completes its review of your audit reconsideration, you will be contacted with their decision which could result in a complete or partial reduction of the contested items’ original tax. If the IRS makes no adjustments, the original balance will remain due.

Do I Have Any Options To Challenge The Audit Reconsideration Ruling?

If you disagree with the results of the reconsideration, there are several options:

• Request an Appeals Conference,
• Pay the amount due in full and file a formal claim, or
• Do nothing. IRS will send you a bill for the amount due.

Some tax relief options may be available if you have problems paying the IRS tax debt.

Get Trusted Legal Representation for Dealing with IRS Audit Reconsideration

To ensure that you align yourself with the best possible outcome, whether dealing with a challenging IRS audit/assessment or seeking tax debt relief, have an experienced tax attorney-CPA-EA provide the expert guidance to get you there. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Audit Reconsideration Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your audit reconsideration and any other IRS issue so that you can put this behind you and get on to doing the things that matter most.

For additional information, please see the following blog articles:

• “Help with Your IRS Tax Audit“

• “When You Can Pursue a Collection Due Process Hearing“

• “When Should I Call A Tax Resolution Firm?“

If you received an IRS CP2000 Notice, the IRS reports indicate that you did not report all your income on your IRS individual 1040 Tax return for a particular year. Whenever a third-party issues tax records to you, they must submit a copy of what was sent to the IRS. The IRS will cross-reference your tax information to third-party information reports.

This often happens when:

• You have performed independent contract work, were issued a 1099-NEC or 1099-MISC, and did not report this. The issuers of the 1099s must also send a copy of that 1099 to the IRS.
• You pulled out retirement funds from a 401K but did not report the 1099R information on your return.
• You did not report the sale of your home. The broker sent the IRS a 1099S which provides this information. What compounds it is that the 1099-S often only reports the sales price without considering the basis, which often leads to an incorrect higher capital gain tax. In addition, you may qualify for the IRS Section 121 Exclusion of the Gain, which could significantly lower or eliminate any of the capital gains.
• You receive payments through payment cards, payment apps, or online marketplaces. You may get a Form 1099-K if you. You could also get a 1099-K if you received payments as a gig worker, freelancer, or other independent contractor (self-employed). This may also include payments you received from selling items as a hobby.
• You had crypto currency coins sales such as Bitcoin, and these were not reported.

What Information Does a CP2000 Notice Provide?

The CP2000 notice provides the following:

• The amounts you reported on your original or processed amended return.
• The amounts reported to the IRS by the payer.
• The payer’s name, ID number, the type of document issued (W-2, 1098, 1099), and the taxpayer identification number of the person to whom the document was issued.
• The proposed changes to your income, tax, credits, or payments.
• A Response form, payment voucher, and an envelope.

Should I be worried about a CP2000?

Yes, because ignoring it could lead to unfavorable events to follow. The CP2000 is not an actual tax bill. It primarily lists corrections on your tax return. However, if left unchallenged, the amounts reflected will become assessed, and then, if a balance results, it will become collectible by the IRS. A Notice of Deficiency will then be issued, which is often the starting point for collection activities to commence.

What Should I Do If I Receive a CP2000 Notice?

• Read your notice carefully. It explains the information the IRS received and how it affects your tax return.
• Provide a timely response. If you need additional time to respond, you can request an extension by mailing or faxing in the request or by calling the toll-free number shown on the notice.
• Complete the notice response form and state whether you agree or disagree with the notice. The response form explains what actions to take. (Your specific notice may not have a response form. In that case, the notice will have instructions on what to do). You can submit your response by:

• Mail using the return address on the enclosed envelope, or
• Fax your documents to the fax number in the notice using either a fax machine or an online fax service.

• If you agree with the proposed changes, follow the instructions to sign the response form. The IRS requires both spouses’ signatures if you filed married filing jointly.
• If you disagree, complete and return the response form. Provide a signed statement explaining why you disagree and supply any documentation, such as a corrected W-2, 1099, or missing forms, to support your statement.
• If the information reported to IRS is incorrect, contact the business or person who reported the information. Ask them for a corrected document or a statement supporting why it is in error, then send the IRS a copy with your response.

Again, it’s important to respond by the IRS deadline fully. You have the right to contest penalties and appeal a CP2000 determination. You generally are given a 30-day deadline to appeal the tax increase. If you don’t respond, the IRS will send you a Statutory Notice of Deficiency, which in 90 days from the date of this letter, will be followed by a bill for the proposed amount due.

Regardless of what triggered the IRS to process a CP2000 letter, to avoid taxes, penalties, and interest, it is essential for either you or a tax professional to address it.

Get Trusted Representation for Dealing with IRS CP2000 Notices

Obtaining professional advice from a dedicated tax resolution professional may be ideal if you are unsure how to address an IRS CP2000 Notice. It would be best if you had professional answers you could count on. Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC, has years of experience assisting taxpayers with resolving issues regarding unreported income. If you need help, please call  (772-418-0949), or complete an online inquiry form for a free consultation with experienced Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will provide trusted representation so that you can put this behind you and get on to doing the things that matter most.

For additional information, please see the following blog articles:

• “What Should I Do If I Receive an IRS Notice.”
• ”Received an IRS Notice CP2000”
• “When Should I Call A Tax Resolution Firm?”

Make the Call Today so that You Steer Your Path Tomorrow!

One of the harshest activities the IRS can do is to enforce a levy against you.

If you do not pay your taxes (or make arrangements to settle your debt), and the IRS determines that a levy is the next appropriate action, the IRS may levy any property or right to property you own or have an interest in. For instance, the IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions). Or, the IRS could seize and sell the property you hold (such as your car, boat, or house).

How Does The IRS Notify You of a Levy? Can I Appeal?

When the IRS is going to levy your bank account or garnish your wages, they will send a Notice of Intent to Levy (IRS Letter 1058 or LT11) in the mail. IRS is required to do so under Internal Revenue Code Section 6331(d). The Notice will list your right to appeal the levy within 30 days of the date of this Notice.

What Are Some of the Reasons To Appeal an IRS Tax Levy?

Here are some reasons to consider appealing a tax levy:

• You want to dispute the tax liability for a legitimate reason, provided you have not forgone the opportunity to do so.
• You are no longer liable for the tax because the Collection Statute Expiration Date time frame has expired.
• You will suffer financial hardship if the levy is enforced.
• You want to pursue a form of innocent spouse relief.
• You will submit an Offer in Compromise seeking to negotiate for a lesser tax amount than you owe.
• You have automatic stay protection from bankruptcy.

Usually, when you timely file for a CDP Hearing, the IRS is statutorily required to abstain from levying your property during the hearing process. Utilizing this time may allow for arriving at an optimal tax resolution.

What are the Options to Use for Appealing an IRS Levy?

There are three ways to appeal an IRS Levy. These are the Collection Due Process Hearing, Equivalency Hearing, and Collection Appeals Program. Each should be used based on specific circumstances.

Collection Due Process (CDP) Hearing

The process for requesting an appeal is by submitting in writing for a Collection Due Process (“CDP”) hearing within the 30-day deadline listed on the Intent To Levy Notice. If you miss the deadline, you can still request an appeal through other procedures; however, you will not have all the options and advantages available under a CDP hearing, such as going to a tax court to dispute the decision. Once you request a CDP hearing, the IRS will stop collection action on your account. The clock will also stop ticking on the collection statute of limitations. The IRS generally doesn’t levy assets during the CDP hearing process unless the tax collection is in jeopardy.

You may dispute the tax liability at a CDP hearing unless you were already given this opportunity from receiving a Notice of Deficiency, which would have provided such an opportunity.

Which Notices Provide for Collection Due Process (CDP) Hearing?

Collection Due Process (CDP) is available if you receive one of the following notices:

• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320
• Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing
• Notice of Jeopardy Levy and Right of Appeal
• Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
• Post Levy Collection Due Process (CDP) Notice

How to Request a CDP Hearing to Appeal a Levy

It may be prudent to call the number on your levy notice to negotiate a possible resolution to your tax situation before requesting a CDP hearing. Making such a request to the IRS does not toll the 30-day requirement to submit a written request to a CDP hearing.

To request a CDP hearing, complete and submit IRS Form 12153 – Request for a Collection Due Process or Equivalent Hearing or submit a written request containing the items reflected on Form 12153.

The CDP Hearing request must be postmarked within 30 days after the IRS Notice of Intent to Levy date. If you cannot make the 30-day CDP deadline, you can still request an Equivalency Hearing by using the same form and checking off box seven on the form. Be sure to mail the request to the address listed on the Notice of Intent to Levy. To fax this, you must call the number listed on the Notice to get the correct fax number to send it to.

Equivalency Hearing (EH)

As mentioned, an Equivalency Hearing (E) might be an appeal option if you missed timely submitting for a CPD hearing. You have one year from the CDP notice date to file. At this hearing, you will have the opportunity to appeal the levy; however, you will not have the chance to go to tax court if you disagree with the Appeal’s decision. In addition, the IRS can still pursue collection activities during this process, whereas this usually is not the case when getting a CDP Hearing. So it’s essential to be aware of the dates of the notices.

Collection Appeals Program (CAP)

The Collection Appeals Program (CAP) is another option to appeal an IRS tax levy. The CAP process has some additional variations over a CDP Hearing but does not contain some of the advantages of using a CDP Hearing. You can elect for a CAP hearing before the IRS provides a Notice of Intent to Levy. When a notice is issued, you can appeal by the deadline on your Notice, which is typically 30 days.

Under the CAP procedure, you cannot dispute the amount of your tax liability.

When Should You Use a Collection Appeals Program (CAP)?

You should use CAP if you are unable to use a CDP. Although you can request the CAP procedure before the Notice of Intent to Levy is sent, bear in mind that any issues decided using the CAP may not be appealed at a later CDP hearing. Before doing so, you must understand all the impacts of electing a CAP over a CDP.

A CAP also provides the opportunity to use after the IRS has levied the property; usually, you must do so within two years from the levy date. Although the CAP procedure can provide quicker determination than a CPD hearing, the CAP appeal determination can not be challenged in Tax Court. In addition, the CAP is used by third parties where the IRS has wrongfully levied their property.

If you are unsure which appeals method fits your situation, talk to a tax professional who can help you.

Which Actions Are Collection Appeals Program (CAP) Available for?

Collection Appeals Program (CAP) is available for the following actions:

• Before or after the IRS files a Notice of Federal Tax Lien
• Before or after the IRS levies or seizes your property
• Termination, or proposed termination, of an installment agreement
• Rejection of an installment agreement
• Modification, or proposed modification, of an installment agreement

The Process for Requesting an Appeal Using the Collection Appeals Program (CAP)

The CAP levy appeal process can be done in two ways, depending on your collection contact with the IRS. The contact could be where you are dealing with an IRS Revenue Officer (RO) or have just received an IRS Notification or phone call (no RO).

If the IRS Notification or phone call is your only source of contact with the IRS, you should call the number listed on the IRS Notification or provided to you from your IRS call. It may be possible to avoid an IRS levy by trying to negotiate a solution to your tax issue.

If you cannot agree, you can then ask to appeal the decision by speaking directly to their manager. Within twenty-four hours of making this request, a manager should contact you. If you cannot then agree with the manager, your case will be forwarded to an IRS Appeals Office. You will not have to submit a written appeals request.

When dealing with an IRS Revenue Officer, the attempt to appeal is initially made by requesting a conference with their Collection Manager/Supervisor. If this conference does not resolve the issue, inform them that you will be submitting IRS Form 9423 – Collection Appeal Request. The completed form gets set to the IRS Collection Office you are dealing with.

What Happens After Requesting an Appeal of a Levy

A timely request generally prevents the IRS from commencing levy activity while an appeals process occurs. Even once you have filed for an appeal, you still may have the option of discussing your case for a resolution with an IRS Revenue Officer. You can withdraw your case anytime, especially if you find a solution. Once you submit the Appeal, someone from IRS Appeals will reach out to set up the time and date for your appeals conference.

The Appeals Office will issue a determination letter upon the conclusion of your conference. Provide you requested a timely CDP request, you will have the opportunity to appeal the decision in Tax Court. For Eqivalent Hearing or CAP request, you will not be allowed to contest in Tax Court.

Who Can Represent You During an Appeal of a Tax Levy

You have the option of representing yourself during the appeals process. If you want assistance, the following individuals can represent you:

• Licensed Tax Attorneys
• Certified Public Accountants
• Enrolled Agents
• Members of your immediate family
• For a business, a corporate officer, general partner, or regular full-time employee

Get Trusted Representation for Dealing with IRS Levy Appeals

Obtaining professional advice from a dedicated tax resolution professional may be ideal if you’re considering appealing a tax levy. It would be best if you had professional answers you could count on. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will provide trusted representation so that you can put this behind you and get on to doing the things that matter most.

For additional information, please see the following blog articles:

• “Appealing IRS Tax Determinations: When and How to Appeal IRS Collection Actions and Tax Assessments”

• ”Important Information About IRS Tax Levies”

It is essential to understand that the IRS audit and collection processes are about the IRS getting as much money as possible. In contrast, the IRS Tax Appeal process is about finding a settlement.

If you disagree with the outcome of an IRS audit or other collection process, you can appeal an IRS decision, typically if the determination letter provides appeal rights. Read on for more information about when filing an appeal should be considered.

What are the Benefits of Appealing an IRS Decision?

Many people do not appeal against an IRS decision because they do not think they will get a favorable outcome. Surprisingly, the actual odds of getting a favorable appeal are very promising since the tax reductions made by the IRS through appeals are approximately forty percent. Some of the benefits of getting an appeal include:

• Very minimal cost to request.
• Tax liabilities can be reduced or eliminated.

The appeals process may also extend the time frame for your taxes’ due date, thus providing more time to acquire the needed funds.

What are the Some Disadvantages of Appealing an IRS Decision?

There are a few disadvantages to initiating an appeal. One downside is the risk of an appeals officer uncovering previously missed tax liabilities, increasing the amount you owe. The other drawback is that penalties and interest on your balance continue to accrue during an appeal. If you do not win the case, you may owe more than you did before you appealed.

Employing an experienced tax attorney-CPA-EA who completely understands IRS appeals regulations and federal tax law will significantly enhance your ability to obtain a favorable outcome.

When Is It Ideal to File an Appeal With the IRS?

There are various reasons to file an IRS appeal. Although not an all-inclusive list, here are some of the common reasons for Appeal:

• Disagree with the penalty amount being assessed.
• Disagree with the IRS’s collection action, such as liens, levies, seizures, and installment agreement terminations.
• Disagree with rejection offers in compromise.
• Disagree with the findings of an IRS audit.
• Disagree with the amount of taxes the IRS claims you owe.

If you are experiencing any of these situations, raising an appeal may be an excellent option to pursue. You do not have to perform an appeal by yourself, especially since the process can be somewhat arduous and confusing. Hiring a tax attorney is an excellent way to address the matter, and if one does decide to go at it alone, one can solicit information from an IRS representative.

When Is It Not Appropriate to File an IRS Appeal?

It is not appropriate to file an IRS appeal in certain situations, such as:

• You have already signed a payment plan agreement with the IRS.
• If the issue stems from an IRS audit and you did not provide the requested information for the audit to the examiner.
• You filed an appeal after the allowable timeframe for that situation. The permissible time frame for appeals is listed within the IRS response. Typically, you are given 30 days from the date of the IRS correspondence.
• There was not an attempt made to work out the issue with the IRS revenue agent assigned to handle your case. The goal for IRS is to work it out first with the agent before an appeal is warranted.
• Your only concern is that you cannot pay the amount you owe. In this case, you could have other resolution options to consider.
• The last written correspondence from the IRS does not inform you of your right to an appeal. An example would be the correspondence you received from the IRS: a bill and no mention of appeals.

If you are unsure whether your situation allows for appeals or would be in your best interest to do so, consulting with a tax attorney may be the best way to obtain clarity for the best course of action to follow.

How Do I Appeal an IRS Collection Decision?

As mentioned, the IRS directs you to attempt to resolve the issue with the IRS office that initiated the collection action before going to the IRS Independent Office of Appeals. For example, if you want to appeal a collection decision result sent to you from an IRS unit, you must submit a written IRS Protest of the decision to that unit. If your issue is unresolved, your case will be sent to the IRS Independent Office of Appeals. As of this point, you can present your position and explain why you ascertain why the IRS has made an incorrect collection decision.

Instructions for requesting a conference with an appeals officer are provided in the letter of proposed tax adjustment. IRS uses Letter 950 – 30 Day Letter-Straight Deficiency to propose adjustments to employment taxes. It states that to request a conference with an appeals officer, the taxpayer must file either a small case request or a formal written protest with the contact person named in the letter. Whether you file a small case request or a formal written protest depends on several factors.

How Do I Make an IRS Protest?

The process begins by sending a written protest to the IRS; the address to do so will be provided on the determination letter. Typically, the protestor must be the taxpayer or the business from which the challengeable IRS determination was made. A qualified tax professional who has obtained power of attorney for that tax matter can also prepare and submit on behalf of the taxpayer.

What are the Types Of IRS Protest Available to Use?

There are two types of protest: Small Case Protest or Formal Protest. Either type will require you to provide detailed information to establish your position explaining why you disagree with the IRS determination. It is vital to draft carefully and decisively. This information will also become the basis for the IRS to establish your appeals case if you cannot resolve it at the IRS initial determination level. Ordinarily, you must send this letter to the IRS within 30 days of receiving your IRS decision notice. This date will be reflected in the notification letter.

Making a Small Case Request

A small case request is appropriate if the total tax, penalties, and interest for each tax period involved is $25,000 or less. If more than one tax period is involved and any tax period exceeds the $25,000 threshold, a formal written protest for all periods involved must be filed. The total amount includes the proposed increase or decrease in tax and penalties or claimed refund. Please note, S-Corps, Partnerships, Exempt organizations, and cases involving employee plans must always file a formal written protest, regardless of the tax debt.

To make a small case request, the instructions in the letter of proposed tax adjustment provide that the taxpayer should send a brief written statement requesting an appeals conference and indicate the changes with which it does not agree and the reasons it does not agree with them.

Be sure to send the protest within the time limit specified in the letter you received, generally 30 days.

Filing a Formal Protest

When a formal protest is required, it should be sent within the time limit specified in the letter. The following should be provided in the protest:

• Your name and address and a daytime telephone number.
• A statement that you want to appeal the IRS findings to the Appeals Office.
• A copy of the letter proposed tax adjustment.
• The tax periods or years involved.
• A list of the changes you disagree with and the reason for disagreement.
• The facts supporting your position on any issue that you disagree with.
• The law or authority, if any, on which you are relying.
• You must sign the written protest, stating that it is true, under the penalties of perjury as follows:
  “Under the penalties of perjury, I declare that I examined the facts stated in this protest, including any accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.”

What IRS Appeal Types are Available, and When Should I Use Them?

Collection Due Process (CDP) Hearings

The IRS Collection Due Process (CDP) is a process that allows taxpayers to dispute IRS collection actions. CDP includes IRS determinations about tax liens, levies, and asset seizures. The IRS will send you a notice outlining your rights if you have a right to request a CDP Hearing.

You can present your case at a CDP hearing and explain why you believe the IRS’s collection action is incorrect. The IRS official will then determine your case.

You have 30 days to request a CDP hearing from receipt of the notice. Filing a timely CDP hearing request will stem any levy action until the process is completed. You can request a judicial review from the Tax Court if you disagree with the results of the CPD hearing.

If you miss the 30-day deadline, you have a year to request a CDP Equivalent Hearing. If you request within this time frame, the IRS won’t halt the levy action, and you will forgo the right to request a judicial review. You can request a CPD hearing by filing Form 12153 (Request for a Collection Due Process or Equivalent Hearing).

Collection Appeals Program

The Collection Appeals Program (CAP) can be used to appeal various types of IRS collection actions, including the following:

• Installment Agreement rejections, terminations, and modifications.
• Levies.
• Federal Tax Liens.
• Rejection of requests to return levied property.
• Asset and account seizures.

To initiate this appeal type, call the number listed on your notice or contact the IRS Revenue Officer dedicated to your case. You must also talk with an IRS collection manager and submit IRS Form 9423 – Collection Appeals Request. Before the call, ensure you have pertinent documents and details supporting your position.

How Do I Appeal a Tax Lien?

You can appeal the lien if you have received a notice of a Federal Tax Lien filed on your property. Depending upon your situation, several appeal options exist: Collection Due Process or Equivalent Hearing (use IRS Form 12153) or the Collection Appeals Program.

How Do I Appeal a Tax Levy?

You can appeal an IRS levy against your property. Depending upon your situation, there are several appeals options: Collection Due Process or Equivalent Hearing (use IRS Form 12153) or the Collection Appeals Program.

Once your form is received, it will be assigned to an IRS appeals officer. You can then present your case and explain why the IRS should not issue a levy. The appeals officer will determine your case. If unsatisfied with their decision, you can usually request a review.

How to Appeal a Rejected Offer in Compromise

You can appeal the decision if your submitted Offer In Compromise has been rejected. To initiate the appeals process, you must file Form 13711 (Request for Appeal of Offer in Compromise). You have 30 days from receiving the IRS rejection notice to file the form.

How to Appeal a Trust Fund Recovery Penalty

The IRS Trust Fund Recovery Penalty (TFRP) is a penalty that can be assessed against business owners or other individuals responsible for paying payroll taxes on behalf of a business. If you’ve been assessed the TFRP, you can appeal the decision.

To appeal, you must send a written protest to the address on Letter 1153 (Proposed Trust Fund Recovery Penalty Notification) along with a copy of the letter. You must explain why you are not responsible for the TFRP or why you disagree with the amount of the TFRP.

May I Go To Tax Court If I lose my Appeal?

If you lose your Appeal, you may be eligible to go to tax court. However, you may only file certain cases in Tax Court and at certain times.

Two of the most common Tax Court cases are appeals from increases in tax following an audit (known as a deficiency proceeding) and appeals from Collection Due Process hearings:

Deficiency proceeding. The IRS usually sends you a Notice of Deficiency (90-day letter) for additional tax assessed after the audit. That letter is often referred to as the ticket to Tax Court. You are entitled to appeal against the assessment to Tax Court and must do so within 90 days, or you lose the right (subject to some exceptions) to challenge a deficiency in Tax Court. Such appeals cannot be brought to Tax Court any time you desire, only within 90 days of mailing the Notice of Deficiency.

Collections Due Process appeal. For Collections Due Process proceedings that have first been appealed to the IRS Independent Office of Appeals, you may appeal those determinations to Tax Court after Appeals has issued a Notice of Determination. If you do not timely appeal the Notice of Determination to the Tax Court within 30 days of the Notice of Determination, you lose the right to appeal those issues at Tax Court.

Get Professional Tax Help with IRS Appeals

Remember, it could take several months for the entire IRS appeals process to be completed. Be prepared to engage in a lengthy process. In addition, the whole appeals process can be challenging and stressful to navigate alone. A knowledgeable and experienced tax attorney can help you decide which path will result in the best outcome for your situation. In any interaction with an appeals officer or tax court, presenting your records and documentation in the most organized fashion can significantly impact the ultimate resolution of the dispute. A knowledgeable tax attorney CPA understands the process of appealing an audit or taking a case to tax court and can employ the necessary strategy to obtain a favorable result.

Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC, can help you file an appeal and negotiate with the IRS. You don’t have to deal with the IRS on your own. He can help you get relief from your tax issues. For a free consultation, call 772-418-0949 or fill out the online inquiry.

IRS Tax Appeals Tax Attorney-CPA-EA Serving Port Saint Lucie, Fort Peirce, and Stuart.