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 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 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, 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, 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

• 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, 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.

IRS issues can compound when dealing with jointly owned property which often occurs with estates, marriage, and family ownership.

When the IRS initiates a federal tax lien against a delinquent taxpayer, the lien covers all rights to current and future properties the delinquent taxpayer has or may have, even if the ownership rights to property are only proportional. For example, in the case of a jointly held property, the IRS can attach lien rights to the delinquent taxpayer’s portion, potentially causing tremendous difficulty to the non-delinquent taxpayer. Even though the IRS’s lien does not encumber the innocent party’s share of the jointly held property; however, the lien becomes a shared burden since either party may be inhibited from borrowing against or selling the lien property. Most financial lenders are highly hesitant to issue credit while in a subordinate creditor position to the IRS.

What Happens if the IRS Forecloses on Jointly Held Property?

Even though the lien is filed against the only tax debtor party of the joint parties, the lien attaches to the debtor’s interest and thus the entire property, which can be sold pursuant to collection action such as a judicial sale under 26 U.S.Code § 7403. If an actual foreclosure of the lien property were to occur, the innocent party non-tax owing party might be entitled to their share of the proceeds.

How Does IRS Address the Death of a Joint Property Owner of the Tax Lien Property?

If one of the joint tenants, whom the tax lien has been filed against, passes away before the other joint tenants, the tax lien will cease to attach to the property held in joint tenancy. When the tax lien individual survives all other joint tenants, the tax lien will attach to the entire property. It is essential to check your applicable state law since there are exceptions to this rule. If one faces this situation getting professional tax advice is needed to ensure all options are available.

How Long Can the IRS Enforce a Tax Lien?

Generally, the IRS can only enforce a tax lien until the Collection Statutute Expiration Date, usually ten years from the tax assessment date. When a tax debt reaches the collection statutory time frame, it expires, as does the associated IRS lien. However, some circumstances may allow the IRS to extend or suspend the ten-year collection period. Under IRC § 6502, IRS tax liens can extend beyond ten years if:

• The Collection Statute of Limitations is extended in connection with the execution of an installment agreement for payment of the tax debt;
• The debtor taxpayer applies for an Offer in Compromise, tolling collection statute while the offer is being considered and could also contain an agreement to extend the statute of limitations for enforcement of a federal tax lien; or
• Within the required refiling period, the IRS refiles the lien.

Are There any Preventative Measures for Dealing with Joint Property Tax Lien Issues?

Transparency is Key. Often individuals unwittingly get married without knowing of the other’s IRS tax issues, only to find the hard way, especially if a jointly owned property is purchased. As a preventative measure, each party should disclose as much personal financial information as possible before marriage. Doing so will allow proper protection planning and bring the tax issue to the surface for quicker resolution.

Awareness of any intended beneficiary’s tax situation could prevent problems with estate planning. For example, suppose a beneficiary has tax debts with the IRS and is to share a property with others. In that case, the other beneficiaries may have to deal with the tax situation as previously discussed. Seeking professional help from a tax attorney may be ideal for planning and for tax resolution of the issue at hand.

What Are the Options When Dealing With Tax Liens on the Jointly Held Property?

There are several ways to alleviate tax liens. Outside of the complete payoff of tax debt, there may be alternative methods to remove the tax lien, depending upon the situation present.

For example, it may be possible to deal with the IRS to receive a lesser amount than owed on the lien while getting the lien removed. It can happen when one establishes that the tax debtor’s portion of the property is less than the total tax debt.

The IRS may allow for a lien release if it could be shown that the lien property has little or no value.

If the tax debtor has no income, assets, or income, the IRS might agree to a lessor payment amount if all its property lien will yield. A skilled tax attorney can assist with getting the discharge of the IRS tax lien from the property, maybe for under the total amount of tax liability. Addressing the tax lien will prevent foreclosure and protect the property of the non-tax-liable party.

The IRS may be willing to release the jointly owned property and pursue other assets of the tax debtor instead; if it could be established, there is enough value to cover the tax debt.

Finally, a situation may occur where neither the IRS nor the property owner cannot get funds from the property unless the lien is removed, therefore enabling a sale to occur. In this situation, the IRS may approve a fair market value escrow agreement, removing the tax lien for selling the property.

Negotiating with the IRS

For joint property lien issues, the most common type of discharge is through an escrow arrangement; however, each tax lien case is unique and often requires a strategy falling under a specific tax code for a successful outcome. The best approach is to have a tax attorney CPA to help make the correct determination, provide proper compliance guidance, and adequately advocate for the best available outcome.

For more information about IRS Tax Liens, please read the following blogs.

• “Information Regarding Appealing an IRS Federal Tax Lien“
• “Tax Lien Withdrawals“
• “How To Deal With IRS Tax Lien“

Get Help with your Joint Property Tax Lien Issues with Skilled, Trusted Representation at your side!

Do you need help getting out from under an IRS tax lien, whether for your tax debt or from someone else who shares property ownership with you? Are you concerned that the IRS may be preparing to impose a lien or levy your property? Tax Lien Relief Plans can be complicated to set up. Harmon Tax Resolution, LLC can assist by having an experienced, skilled tax attorney CPA to address your tax issue with the IRS, so you won’t have to. For a Free Consultation, Call Today @ 772-418-0949 or complete the online inquiry form so that you can sleep well tonight.

Make the Call Today so that you steer your path tomorrow!

When, Why, What & How

The IRS must issue you a “Notice of Federal Tax Lien (“NFTL”) and Your Right to a Collection Due Process (“CDP”) hearing under IRC 6320, or IRS Letter 3172, within five days of filing a lien for any tax and period. This notice is to inform you that a lien has been filed, and you have the right to request a “Collection Due Process” hearing within thirty days from the time frame specified in the notice.

There are two types of IRS appeal options available depending on the circumstances and timeframes surrounding the lien:

Collection Due Process (“CDP”) or Equivalent Hearing (“EH”). This must be requested within thirty days of the NFTL’s date listed. Use IRS form 12153 Collection for a Collection Due Process or Equivalent Hearing, or you could use a written request with the same information and send it to the address shown on your lien notice. The IRS must notify you within five days of filing an NFTL each time the IRS files one. This notice may be mailed, given to you, or left at your home or office. After those five days, you have thirty days to request a hearing with Appeals. The lien notice you receive will indicate the date this 30-day period expires. A CDP hearing will allow you to contest the IRS’s CDP determination in US Tax Court. It may be prudent to speak with a tax attorney-CPA for assistance.

What Happens If I Miss Thirty-Day Period to Request a CDP Hearing?

If you fail to request a CDP hearing by the 30-day time frame, you can request an EH using form 12153 (check the EH box on line 7) or by writing a letter. An EH must be requested on or before the end of a one-year time period plus five business days after the Notice of Federal Tax Lien filing date.

When Should You Consider Appealing an IRS Tax Lien?

The IRS may release a tax lien under several circumstances that may warrant appeal consideration if applicable to your situation:

• The IRS did not allow you to dispute the amount owed.
• The debt was paid in full before IRS filed the lien.
• There has been either a withdrawal, discharge, or subordination of the IRS tax lien (more on this later).
• Bankruptcy filing results in an automatic stay of tax collection activity.
• The Collection Statute Expiration Date had expired before IRS filed the tax lien.
• The IRS performed an improper tax lien filing procedure, such as failing to send you proper notice before filing the lien.
• The IRS incorrectly filed a lien in your name.
• You would like to apply for an available tax debt resolution, such as an Installment Agreement or an Offer In Compromise.
• The tax liability exclusively belongs to your spouse, and you plan to apply for Joint Spouse Liability Relief.

What Happens if I Win a Collection Due Process Appeal?

Upon a successful appeal, the IRS can take the following actions toward your lien:

• Keep the tax lien in place.
• Withdrawal of the tax lien entirely by removing the Notice of Federal Tax Lien from public records.
• Discharge the tax lien from specific property, allowing you to negotiate the property without having an IRS lien attached.
• Subordinate the tax lien, enabling assigned creditors’ liens on the property to have precedence over the IRS’s liens.

These options can be requested on Form 12153; you need to specify if you want a lien subordination, discharge, or withdrawal and explain why the IRS should honor the request.

In addition, on form 12153, you can also request other alternative actions you may be eligible for to remove the tax lien, such as setting up an installment agreement or applying for an Offer in Compromise. You have to meet specific requirements for these. You may also list other reasons why the lien should be released; for example, it was not you but your spouse responsible for the tax liability.

This can be incorporated into a letter if you choose not to use the form. It may be possible to circumvent the appeals process simply by dealing directly with the collection office that sent you the notice. Call the representative’s number listed on the notification to explain your position. If you are successful, you can cancel your request for a hearing. For proper due diligence purposes, you should submit a written request for an appeal hearing. For each NFTL filed, you are entitled to a separate hearing.

What Happens After You Request a CDP or Equivalent Hearing With the Office of Appeals?

The IRS Office of Appeals office will contact you to schedule a meeting once they receive your request. If granted, the initial appeals conference could take place over several mediums, face to face, over the phone, or by correspondence. There could be additional meetings and correspondence with the IRS Office of Appeals.

Upon completing their investigation, the IRS Office of Appeals will issue a determination letter indicating their decision to grant or deny your request.

If your request is denied, you can seek a judicial review from the US Tax Court. You must petition the US Tax Court within thirty days of the date the Office of Appeals issues the determination letter; otherwise, you lose the right to go to tax court.

How and When to Request a Collection Appeals Program

Collection Appeals Program (“CAP’). You may appeal the proposed filing of a Notice of Federal Tax Lien (NFTL) or the actual filing of an NFTL at the first and each subsequent filing of the NFTL. You may also appeal denied requests to withdraw an NFTL and denied discharges, subordinations, and non-attachments of a lien. A proponent for utilizing a CAP hearing is that it generally occurs much quicker than other appeal methods; however, the results are not challengable in a court. In addition, this is not a forum to challenge the amount of the taxes owed.

How Do I Appeal an IRS Tax Lien When No Revenue Officer is Present?

If you have not been assigned a Revenue Officer to your case, you can make a call to the number on the notice and explain your position on why you disagree with the tax lien. It’s helpful and vital to have a solution to present to the IRS representative. If you are unable to come to terms with the representative, you can request an appeal to that individual’s manager. The manager should get back to you on a call within twenty-four hours. If you cannot resolve this with the manager, the manager will submit your case to appeals. This is all done without a written request.

How Do I Appeal an IRS Tax Lien When Dealing With an IRS Revenue Officer?

If you have an IRS Revenue Officer (“RO”) assigned to your case and experience a disagreement with how to proceed, you may seek a conference with the IRS Collection Manager. If you disagree with the Collection Manager’s determination, you have three business days from the conference date to make a CAP appeal by submitting Form 9423, Collection Appeal Request. In addition, within two days of having the manager conference meeting, you will need to inform the RO of the request.

If the Collection Manager does not reach out to you within two days of your original request, you can make another attempt or submit Form 9423, Collection Appeal Request. If you choose to submit the form, you will need to indicate when you made the manager conference request and that they were unresponsive.

For more information regarding IRS Federal Tax Liens, please see the following recent blog articles:

• “Tax Lien Withdrawal“
• “Important Information about IRS Tax Liens“
• “How to Deal with IRS Tax Liens”

Who Can Represent Me in an Appeal for a Federal Tax Lien?

When appealing a tax lien through a CDP Hearing or Equivalent Hearing,

the following people can represent you:

• You, the taxpayer.
• If taxes are business related: Corporate Officers, General Partners, and some full-time employees.
• Licensed tax attorneys, CPAs, and IRS Enrolled Agents.

A seasoned, experienced multi-licensed tax professional addressing your tax lien will significantly increase your chances of success.

Get Help Appealing an IRS Federal Tax Lien with Trusted Representation at your Side!

Federal Tax Lien dealings can be very complex and require professional help. Harmon Tax Resolution, LLC can assist you throughout the process. At Harmon Tax Resolution, LLC, an experienced multi-licensed tax attorney-CPA-IRS EA will ensure that your tax lien situation gets the necessary representation. For a Free Consultation, Call Today @ 772-418-0949 or complete the online inquiry form so that you can sleep well tonight.

Make the Call Today so that You Steer your Path Tomorrow!

When dealing with a tax debt primarily associated with one’s spouse, a taxpayer may qualify for one of these two types of relief. Although these have similar-sounding names, they are entirely different. Innocent Spouse Relief primarily arises when there are erroneous item occurrences on jointly filed return filings. Injured Spouse Relief deals with situations where a tax refund or credit is unfairly applied to the other spouse’s tax obligation. Before we discuss either of these in greater depth, let’s briefly go over how tax liability is assigned during spousal death or divorce.

Are Unpaid Taxes My Responsibility if My Spouse Dies?

Having a spouse pass away is an extreme hardship. Compounding this hardship would be if you were saddled with unpaid back taxes, which now became your responsibility. The burden of responsibility is based on the filing status of the returns where the tax debt arose. In most cases for the death of a spouse, if the filing status were married filed jointly on returns with tax balances still owed, the surviving spouse would be held liable.

Who Is Responsible for IRS Debt in a Divorce?

The filing status determines the outcome in this situation as well. If you and your spouse jointly filed your tax returns when married, both of you will be liable to the IRS. They can collect 100% of the debt (tax, penalties, and interest) from either spouse. Regardless of what custody orders a divorce court may issue, your federal tax status is governed by federal law, which, in this case, will supersede a state or county court order.

There are times when the non-filing spouse does not know what the other’s spouse’s mistakes or omissions were on the jointly filed return or is even aware of the other spouse’s current financial activities. When this occurs, the unknowing spouse may have grounds to seek one of the forms of innocent spouse relief.

What is Innocent Spouse Relief?

Innocent Spouse Relief is one of the three types of Relief from Joint Tax Liability. Equitable Spouse Relief and Separation of Liability Relief are the other two. Innocent Spouse Relief is where the joint return has understated tax liability due to either improperly reported or omitted items attributable to a taxpayer’s spouse or former spouse of which the taxpayer did not know or have reason to know. You can be relieved of responsibility for paying tax, interest, and penalties by requesting innocent spouse relief. If successful, generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse).

How Do I Qualify for Innocent Spouse Relief?

You must meet the following conditions to qualify for innocent spouse relief.

1. You filed a joint return.

2. There is an understated tax on the return due to incorrect items of your spouse (or former spouse).

3. You can show that when you signed the joint return, you did not know and had no reason to know that the understated tax existed (or the extent to which the understated tax existed). You were not aware of any unreported income or incorrect deductions.

4. The tax return had items listed quite differently than in previous years and is not indicative of a pattern.

5. Considering all the facts and circumstances, it would be unfair to hold you liable for the understated tax.

The taxpayer must request relief within two years after the date on which the IRS begins collection activity.

If the IRS determines that you meet these conditions, you will qualify for the release of the entire or portion of the liability. Your spouse then assumes liability for the amount you are released from.

As reflected earlier, Innocent Spouse Relief is one of three forms of Joint Spouse Relief. Let’s go over the two forms: Separation of Liability relief and Equitable Relief.

Separation of Liability Relief:

The requirements are the same: one spouse has to be guilty of doing something the other spouse was unaware of, and to qualify, you must have met one of the following requirements at the time you requested relief.

1. You’re divorced or legally separated from the spouse
2. You’re widowed
3. From the date you’re requesting relief at any time 12 months before that date, you weren’t a member of the same household as the spouse with whom you filed the joint return.

Equitable Relief:

If you cannot qualify for innocent spouse relief or separation of liability relief, you may still file for “equitable relief.” The IRS will review your facts and circumstances and determine whether to hold you liable for any deficit or underpayment of tax. Unlike the other two forms of relief, equitable relief may be provided for an underpaid tax. In addition, in some cases, you may be eligible for relief even if you had known about the understatement or underpaid tax but, due to fear of retaliation by your spouse, elected not to challenge.

Innocent spouse relief or separation of liability must be requested no later than two years after the IRS first set out to collect the tax from you. Equitable relief must be requested when the IRS can collect your tax. Lastly, whenever a spouse requests innocent spouse relief, the IRS will contact the other spouse.

What Is Injured Spouse Relief?

Injured Spouse Relief is a different type of relief sought than the three other types of Joint Return Relief (Innocent Spouse Relief, Separation of Liability Relief, and Equitable Spouse Relief). This relief jointly filed returns where your refund is being offset due to prior activities/debts incurred by your spouse, and you were not responsible for them. Ordinarily, on a jointly filed return, there are joint and several liabilities for any tax, interest, and penalties meaning the IRS can collect these amounts from you or your spouse (or former spouse). However, if you can demonstrate that had it not been your spouse’s prior activities, you would be entitled to a portion of the refund, this relief should most likely be sought.

To be considered an injured spouse, you must meet all the following criteria:

• Have filed a joint return
• Have paid federal income tax or claimed a refundable tax credit
• All or part of the taxpayer’s refund was, or is expected to be, applied to their spouse’s past financial obligations and
• Not being responsible for the debt

If you believe you are entitled to a portion of the refund on a joint return, you can file Form 8379, Injured Spouse Allocation.

How Do I request Innocent Spouse Relief from the IRS?

To request innocent spouse relief from the IRS, you can complete the IRS Form 8857 or prepare a written statement which should contain the same information and detail as that you would disclose in the form 8857, and mail it to one of the following addresses:

Internal Revenue Service

P.O. Box 120053

Covington, KY 41012

Alternatively, you can fax the form and attachments to the IRS at 855-233-8558.

For Additional Information, read the following blog:

• “What is Joint Tax Liability“

Get Help Applying for Joint Liability Relief or Injured Spouse Relief with Trusted Representation at your side!

Joint Spouse Relief and Injured Spouse Relief plans are complicated to set up. Harmon Tax Resolution, LLC can assist you throughout the process. At Harmon Tax Resolution, LLC, an experienced multi-licensed tax attorney-CPA-IRS E.A. will ensure you get the complete representation you deserve. For a Free Consultation, Call Today @ 772-418-0949 or complete the online inquiry form so that you can sleep well tonight.

Let us help you put your tax worries behind you so you can move on to life’s better things! Make the Call Today so that you steer your path tomorrow!

Of the various options for taxpayers dealing with IRS tax liability issues, the IRS Regular Installment Agreement (IA) and the IRS Partial Pay Installment Agreement (PPIA) are the most used. To get a better understanding, let’s go over each plan type and its respective benefits and qualifications.

What is an IRS Installment Agreement?

An IRS Installment Agreement (IA) is a monthly payment plan set up with the IRS to pay your outstanding tax balance. An IA is for use when you have sufficient income or assets to make payments to cover the total amount of the tax balance owed. There are several types of full payment plans, and depending upon your tax situation will determine which payment plan would work best for you. Full payment options include a short-term payment plan (paying in 180 days or less) or a long-term payment plan (installment agreement) (paying monthly) which in some cases could be as long as seven years (84 months). Most are generally setup up for six years (72 months). Let’s start with the long-term payment plan.

Long-term payment plans (Installment Agreement):

have specific tax balance stipulations. When you owe $50,000 or less in combined tax, penalties, and interest and have filed all required returns, you should be to get a full payment IA payment plan for six years (72 months) simply by requesting it. If you owe more than $50,000, the IRS will request that you complete either Form 433-A or B. With either of these forms, you will need to provide a complete financial listing of assets, liabilities, income, and expenses from which the IRS will ascertain what amount of monthly disposable income you have to use for payment.

Short-term payment plan:

You owe less than $100,000 in combined tax, penalties, and interest. A short-term payment plan pays the total balance due in 180 days or less. This plan helps avoid incurring significant interest costs.

What’s the longest time I can request an IRS Installment Plan?

Important to note that when it comes to IA, the IRS generally requires you to pay the entire tax liability within seven years (84 months) or within the Collection Statute Expiration Date (CSED), whichever occurs first. CSED is ten years from the date the IRS assesses your tax amount. Ordinarily, it is only during the CSED period that the IRS can enforce collections on an unpaid tax. When negotiating an IA with the IRS or any other resolution, knowing the CSED for any outstanding tax balance is critical.

How Do I Determine How Much I Should Offer to Pay the IRS on a Monthly Installment Plan?

Ensuring that the monthly payment amount is within your budget is the ideal way to make an IA offer to the IRS versus doing so by coming up with an amount strictly based on getting IRS approval. The latter way could backfire if the plan defaults, making it challenging to negotiate another plan with the IRS favorably. The way to avoid making a mispayment calculation is to complete the applicable 433 forms thoroughly. The form’s function is to obtain an accurate financial determination of your monthly disposable income. It may be beneficial to speak with a tax professional regarding how to maximize the efficiency of this form whenever the IRS needs it for a resolution determination, such as installment plan types, Offers In Compromise, or Currently Not Collectible Status.

How long does it take for IRS to approve an Installment Agreement?

Ordinarily, it can take up to two months to obtain an Installment Agreement approval. It could take longer if your tax bill is more than $100,000.

What do you need to apply for a Payment Plan?

To do it online, you need to create an IRS account with ID.me, and for verification purposes, you will need photo identification.

You will need your bank routing and account numbers if you apply for a direct debit payment plan.

If you recently filed your tax return or your return was examined but have not received a balance notice from the IRS, you will need the balance due shown on your return.

Are there fees to apply for an Installment Agreement?

Yes, you must pay setup fees: The setup fee for an installment agreement with IRS varies depending on your chosen plan. The IRS charges $225.00 for a non-direct debit installment agreement unless set up online through www.irs.gov. The cost is $149.00 for non-direct installment agreements and $107.00 for direct debit agreements applied through phone, mail, or in-person, and $31.00 if applied online. For non-direct debit installment agreements, a reduced $43.00 fee ($0.00 for direct debit agreements) applies if you have income at or below specific government poverty guidelines. If you qualify, you may apply by submitting Form 13844 (Application for Reduced User Fee for Installment Agreements).

What Should I do if the IRS denies my Installment Agreement?

Sometimes the IRS does reject requests for Installment Agreements– if this happens to you, you have the right to appeal. To appeal, you must complete and submit Form 9423, Collection Appeals Request, within thirty days of the rejection notice.

Will the IRS keep my refund if I have an Installment Agreement?

Unfortunately, the IRS will automatically apply any refund or overpayment against your tax balance. This is stipulated within the Installment Agreement. Even though any refunds or overpayments will reduce your balance, you must continue making the agreed-upon monthly payments until fully paid.

What is a Partial Payment Installment Agreement?

When your current level of financial resources enables some payment towards the tax liability but not enough to cover the entire balance by the time the CSED expires, you may qualify for an IRS Partial Payment Installment Agreement (PPIA). When applying for this type of resolution, the IRS requires the completion of forms 433 A or B. From your financial data, the IRS determines your disposable income based on allowable local and national standards for expenses and what is available as equity in your assets. There are some exceptions in which you may qualify based on individual circumstances; therefore, seeking advice from a tax resolution expert may be helpful.

A PPIA is primarily a temporary payment plan that lasts between two and three years before the IRS requires you to provide updated financial information to determine whether to provide for a continuance. The IRS terminates the first agreement and then decides whether to reinstate the PPIA again based on your updated financial position. This process may occur again until the CSED is reached.

Couple of things to bear in mind. First, while in either IA or PPIA, the interest and penalties continue to accrue while a tax balance exists. Second, the IRS has a right to protect its interest by filing a Federal Tax Lien toward the balance owed.

Generally, the IRS will not file a tax lien for amounts under $10,000 unless there is an imminent danger of their inability to collect due to other circumstances like bankruptcy, for example.

If your tax balance is $50,000 or greater, the IRS will automatically issue a Federal Tax Lien to you.

On the positive side, the CSED continues to run. Based on your situation, you may eventually qualify for other resolution options, such as an Offer in Compromise. Important to note that if your financial situation changes to where you do not have disposable income to pay on the tax balance, you may qualify for what is known as Currently Not Collectible status.

For more information, please read the recent blog posts:

• “Will Using a Partial Payment Installment Agreement Help Lower Your Tax Debt?“
• “What Are My Options If I Owe Back Taxes?“
• “The Importance of Investigating IRS Records in Determining Best IRS Issue Resolution to Use“

What Are Streamlined Installment Agreements?

Streamlined Installment Agreements require you to pay the entire balance within six years or before the collection statute of limitations expires, whichever is sooner. You can avoid a tax lien if your balance is less than $50,000 or if you can pay the balance down to less than $50,000 before establishing the streamlined installment agreement.

If your unpaid balance is between $25,000 and $50,000, the IRS won’t file a tax lien if you allow the IRS to take installment agreement payments directly from your bank account or wages.

If your tax balance is $50,000 or greater, the IRS will automatically issue a Federal Tax Lien to you. If your balance is $50,000 or less and your CSED is greater than 84 months, you can still get the streamlined status (more on below) under an 84-month plan if you have an automatic direct debit or payroll deduction setup. If you do not choose either of these automatic payment options, the IRS may set up a federal tax lien against you.

Can the IRS Revoke my Installment Agreement?
The IRS can revoke any installment plan and give you a default status. A default status will put you back to the collection point you may have initially been in or could soon become into, such as tax liens, asset levies, and wage garnishments. You will most likely find yourself in IRS default status when:

• You miss payments.
• You do not file a tax return for the current year.
• You have unpaid taxes due.
• Your provided inaccurate information during the IA process to IRS, or as listed in PPIA, your financial position has changed, allowing the IRS to increase your payment amounts.

To get back in compliance, you must endure the rigorous process of renegotiating your PPIA or IA from a lesser position. In contrast, IRS will renegotiate from a more stringent position due to the default.

Get Help Applying for a Partial Payment Installment Agreement or Regular Installment Agreement with Trusted Representation at your Side!

PPIAs and IAs can be complicated to set up. Harmon Tax Resolution, LLC can assist you throughout the process. At Harmon Tax Resolution, LLC, an experienced multi-licensed tax attorney-CPA-IRS EA will ensure you get the complete representation you deserve. For a Free Consultation, Call Today @ 772-418-0949 or complete the Online Inquiry Form so that you can sleep well tonight.

Let Us Help Put your Tax Worries Behind You So You Can Move on to Life’s Better Things! Make the Call Today, and Steer Your Own Path Tomorrow!

The answer depends on what your specific tax goals and needs are. Both professional tax attorneys and Certified Public Accountants (CPAs) help with many different types of planning and complicated tax situations; however, each is geared more to help you in certain areas than the other. Selecting the correct professional for the engagement is essential to ensure proper coverage and protection. Understanding the differences in capabilities will help make choosing the right professional type much more straightforward. Let’s start with their backgrounds.

Background of CPAs and Tax Attorneys

Licensed in their respective fields requires tax professionals to undergo extensive training and education and pass a comprehensive state examination.

A tax attorney requires at least seven years of schooling (a four-year bachelor’s degree and a three-year Juris Doctorate issued by a law school). In addition, many tax attorneys pursue a Master of Laws (LLM) in taxation program, which is like a master’s in taxation degree, except with more legal focus. To practice tax law in their respective state, attorneys must pass the Bar Exam, a Multi-state Professional Responsibility Exam, and have proper training.

CPAs require a five-year degree in accountancy, which generally comprises a four-year degree and a one-year master’s degree in accounting-related topics such as taxation, accountancy, and finance. Most tax practitioner CPAs have a master’s in taxation. For licensure, the CPA must pass the CPA examination. The
The CPA exams have parts dedicated to tax and audit where as the bar exam does not cover these areas. Some states require the candidate to obtain a certain amount of industry experience, signed off by a licensed CPA.

Although the Lawyer path requires a seven-year scholastic requirement, there is no mandatory bachelor’s degree type obtainment which could result in only having to undergo three years of legal studies. In contrast, the CPA path requires five years of schooling dedicated to accountancy-related courses. As a result of the mandatory five-year focus on accountancy courses, a CPA will likely have a much broader range of business-oriented capabilities than an attorney but will not have the advocation training that a lawyer acquires during law school.

There are continuing education requirements for each license, where a certain number of educational hours must be met. This ensures that the tax practitioner stays abreast of applicable regulations.

What Situations Are Tax Attorneys or CPAs the Best Suited for?

Even though both professionals have some cross-over capabilities and offer tax advice to reduce your overall tax liability; however, some roles are more suited to one over the other. Ultimately, either should be based on which background covers your issue better.

CPAs generally have a strong background in formulating financial records, budgets, and forecasts, performing day-to-day accounting, preparing tax returns, conducting audit-related activities, and offering tax planning advice regarding the impacts of business developments. When delving into an area that requires solid business transactional astuteness, CPAs are often best to use for this.

In contrast, even though tax attorneys can provide tax strategy advice in many situations, a different benefit of using a tax attorney occurs when engaged in dispute resolution with the IRS. A tax attorney is well-trained to research case law and legal formats to advocate for your behalf properly, whether directly with the IRS or in a tax or district court.

In addition, a tax attorney offers attorney-client privileges for your conversations. You can freely discuss your situation without fear of recrimination by the tax attorney. This is particularly helpful if you are dealing with problems with a possible criminal element.

If you are dealing with an IRS situation involving audit assessments, tax preparations, and financial reporting, hiring a CPA would be the ideal choice. Whereas if your IRS situation has legal concerns or contains areas in dispute, having a tax attorney representing you would be best.

For more information, please read the following blogs:

• “When Should You Hire a Tax Lawyer?“
• “When Should I Hire A Tax Professional?“
• “What to Avoid When Selecting an IRS Tax Resolution Firm” VIDEO

How Will I Know Whether My Tax Issue Requires Using a CPA or a Tax Attorney?

A complete understanding of your tax issue is required to answer this question. This need highlights the importance of starting with a thorough investigation to determine all facets of your tax issues, which will determine what resolution processes will be needed and which types of professionals would be best suited. For more information regarding issue investigation, please see the following blog: “The Importance of Investigating IRS Records in Determining Best IRS Issue Resolution to Use.”

Will Hiring a Dually Licensed Tax Attorney-CPA Provide Better Coverage of my IRS Tax Issue?

Having professional relationships with both professional types seems like an ideal solution to be prepared for various situations which could lend themselves to one over the other. However, there are tax issues where successful resolution may require both skillets. Due to time and fiscal restraints, the taxpayer may not have the luxury of having both types of tax professionals address it. However, there may be an option to ensure proper coverage of your tax issue by simply employing a dually licensed Tax Attorney-CPA.

From the outset of your case, a dually licensed Tax Attorney-CPA will be able to investigate through multiple lenses ensuring all angles of your case are being addressed. As a multi-licensed tax attorney, CPA, IRS Enrolled Agent, and MBA, I, Will Harmon, have had to employ skillsets from all disciplines on many occasions to resolve my client’s IRS tax issues correctly. I look at each problem simultaneously through multiple lenses allowing for a complete perspective and determining a solution that addresses all the pertinent issues. I may not have been as successful without the ability to utilize these combined skillsets.

Please see the blog “Tax Attorney vs. CPA vs. IRS EA: Why Not Hire a Three-In-One?“

Since it requires a complete commitment and much dedication for a professional to obtain dual licensing, you can expect the same commitment will be made towards all facets of your case.

Harmon Tax Resolution, LLC Provides Trusted Representation!

We ensure that you will receive the complete representation your important tax matter deserves. Don’t settle for less! Call Harmon Tax Resolution, LLC at 772-418-0949 or complete our online form for a free consultation on how multi-licensed attorney-CPA-IRS EA, Will Harmon, can help you put your tax issue behind you so that you can move on and enjoy life again.

Are you an individual or business needing tax preparation from an established tax professional? Does your tax resolution issue require completing or amending current or prior year returns? At Harmon Tax Resolution, LLC, we not only offer IRS resolution services, but we also offer a full range of tax preparation services through our own robust tax preparation platform:

• Complete planning, preparation, & support
• IRS E-file/ E-Signature
• Refund Options include pay-by-refund and rapid refund capable
• Safe and secure separate client portal file system access
• Onsite or remote tax return preparation
• Competitive Pricing

Get tax preparation services from a tax Attorney-Enrolled Agent-CPA committed to client communications and financial integrity. The IRS considers the Enrolled Agent the gold standard for tax preparers. Why settle for less?

When dealing with IRS compliance issues, we ensure efficiency and cost-effectiveness by avoiding delays and higher costs. In contrast, a non-CPA-EA attorney would likely have to go elsewhere to obtain comparable high-quality tax preparation services to resolve the IRS issue. Most tax attorneys are neither seasoned tax preparers nor have anywhere near the training or expertise that a CPA/Enrolled Agent has. Therefore, they may not get you the best results, or, as mentioned earlier, it will cost you more since they will have to hire tax professionals to prepare the return. In addition, when reviewing prior tax returns for accuracy and completeness, it is best to have a CPA/Enrolled Agent perform this rather than an attorney because most are well-trained in this area. In addition, our fees for tax preparation are done at competitive tax preparer rates and not attorney rates. As a result of offering such robust tax preparation services, Harmon Tax Resolution, LLC is an IRS-designated E-filer.

Therefore, tax preparation services are offered to individuals and small companies whether or not an IRS issue is involved. Using our firm will mitigate the risk of future IRS issues.

We understand the tax code and where you stand to benefit, so reach out to us today for your tax preparation and planning to be taken care of thoroughly and cost-effectively. Using our tax preparation and tax planning services will help significantly avoid any future IRS issues. Being your tax preparer enables effective future estate and tax planning. Our dually licensed and multi-discipline capability provides complete representation for your current and future taxation needs.

Schedule of Returns Prepared (including all relevant applicable schedules)

• 1040 – Individual Tax Return
• 1040 NR – Non-Resident Alien Tax Return
• 1041 – Estate & Trust Tax Return
• 1065 – Partnership Tax Return
• 1120 – Corporation Tax Return
• 1120S – S-Corporation Tax Return
• 706 – Estate Tax Return
• 709 – GiftTax Return
• 990 – Exempt Organization Tax Return (990 EZ, 990, 990PF, & 990T)
• 1099 – All types – Form Preparation

Tax Preparation Services You Can Depend On

Please review our client testimonials regarding the tax preparation services we have provided. Call Today at 772-418-0949 or fill out our online form to find out how seamless and cost-effective it would be to have your tax preparation needs taken care of by our Attorney-Enrolled Agent-CPA.

Let Harmon Tax Resolution, LLC Handle Your Tax Preparation Needs So You Can Get Back To Doing What Is Most Important To You!