| The Federal budget deficit is big and getting bigger. As | | | | requirements to pay off the debt in less than 60 |
| you may be aware, our political leadership in both | | | | months. |
| parties is not fond of cutting spending despite what | | | | Don't ignore any letters you get from IRS! Wishing the |
| they may say to voters from time to time. Since | | | | IRS will go away won't make it so. The good news is |
| raising taxes is not popular, a decision has been made | | | | that IRS is still allowing folks a 120 day grace period to |
| to get tough on the taxes that are owed to Uncle | | | | full pay. You must ask for it and all delinquent tax |
| Sam. The IRS is now getting very tough on collecting | | | | returns must be filed. In addition, no enforcement action |
| tax debts. Enforcement Action is up and | | | | can be in place at the time you make the request. |
| Offer-in-Compromise settlements are way down over | | | | Ignoring the IRS or missing an IRS deadline will likely |
| the last few years. | | | | result in enforcement action. If the IRS garnishes your |
| If you or a client of yours owes delinquent Federal | | | | wages, the levy will likely not be released until a full |
| taxes, be prepared for a financial proctology if you | | | | financial statement is given, all delinquent returns are |
| want to set up a payment plan or settle with IRS for | | | | filed, and a resolution is agreed to by the RO or ACS. |
| less than what is owed. An IRS Form 433A or 433F | | | | If your bank account is seized: barring an extreme |
| may be required for individuals and a 433B for | | | | hardship that can be proven...kiss the money good bye. |
| business taxpayers. Many expenses claimed are | | | | If you owe a large tax debt, get professional help. Hire |
| subject to limits known as the "IRS National Standards." | | | | a Certified Public Accountant (CPA), Enrolled Agent |
| Get the current IRS standards from their website. | | | | (EA), or a Tax Attorney who is familiar with collection |
| If more than $25K is due, the following documented | | | | cases. Don't hire some company that promises you |
| proof may be required by IRS to set up a payment | | | | that they can "wipe out" all your taxes, penalty, and |
| plan: | | | | interest just by signing their Power-of-Attorney. Make |
| 1. Three months of all bank account statements the | | | | sure whomever you hire takes a complete financial |
| taxpayer has in their name; | | | | statement from you. Without it, promises of what kind |
| 2. 401k Statements; | | | | of IRS deal they can get you are probably bogus. |
| 3. Three months of pay stubs or proof of year-to-date | | | | The IRS has a program to settle tax debts for less |
| earnings and deductions; | | | | than what is owed, but only for those people who |
| 4. Proof of monthly bills (rent, mortgage, utilities, | | | | qualify. It is called the Offer-in-Compromise. Very few |
| childcare, etc.); | | | | will ever qualify for an OIC. IRS is currently rejecting |
| 5. Paid medical bills and prescription drugs; and | | | | over 80% of the OICs it is getting. |
| 6. Car note, car valuation, mortgage balance, insurance | | | | Even getting a payment plan is difficult if you have a |
| costs. | | | | large tax debt. |
| If you own property, IRS may require that you apply | | | | If you are dealing with a serious IRS problem, stay |
| for a loan before they will grant you an Installment | | | | focused and don't get depressed. If you let a tax |
| Agreement or Temporary Hardship. A loan denial letter | | | | problem overwhelm you, then you are doing a |
| might be required to be submitted to the Revenue | | | | disservice to yourself and your family. After all, it is only |
| Officer (RO) or to the Automated Collection System | | | | money. Before you call IRS: get your documentation |
| (ACS) representative working the case. | | | | together; prepare an IRS Form 433A, 433B or 433F |
| The best thing that you can do if you want to avoid | | | | and double check your figures. When dealing with IRS |
| being put through the ringer on providing financial data | | | | employees, stay calm and polite no matter how cold |
| is to pay your balance in full or get it below $25,000 | | | | they might be to you. They have a tough job to do |
| before it gets to an IRS collector. If you can get it | | | | and have to follow the procedures they are given by |
| below $25K, chances are you can get a "streamlined" | | | | IRS management. They are not bad people and |
| installment agreement and only have to meet | | | | neither are you. Good luck! |