Tax Law FAQ
What do I do if I have I have not filled my tax returns in a long time?
First of all don't panic. This is solvable! The first step to solving your IRS Tax Problem is preparing and filing your returns! The best thing is to prepare and file them all at once. Then, while the dust is clearing, we can determine the best plan for repayment or settlement of any taxes you may owe. If you have not filed federal tax returns contact tax attorney’s at Huntsman | Lofgran for your free consultation.
Is it possible to pay less than I owe?
Yes! Obviously the IRS has a goal to collect as much as possible of the amount you owe including interest and penalties. However, even Big Brother will sometimes settle for less. Regardless, the first step in resolving this IRS tax problem is to contact experienced IRS tax attorney. There are a lot of different options! Some of the tools we will use to solve our clients' tax problems include:
- Offer in Compromise
- Currently Not Collectible Status
- Innocent Spouse Relief
- Penalty Abatement
- Installment Agreement
- Statute Of Limitations
Can individuals negotiate with the IRS?
Yes. However, we do not recommend it lightly! When speaking to the IRS, you will be talking with trained professionals who are focused only on getting the maximum collections in the shortest amount of time. As an individual taxpayer unfamiliar with the maze of complicated federal tax laws be careful if you attempt to negotiate directly with the IRS.
What is a lien? What is a levy? Can the IRS take money from my bank account?
A lien is when the IRS secures its right to collect from you. A levy is when the IRS takes actual property. The IRS has the right to levy up to 100% of any asset you (or your company!) owns as a method of collection on tax debts they feel you owe. A levy can be a financial nightmare for anyone who is unlucky enough to be at the receiving end. Unlike any other creditor, the IRS is not required first to go to court in order to seize your property or to file a lien. A lien is filed by the IRS in order to protect the government’s interest in an unpaid tax debt.
Three requirements must be met before a valid tax lien occurs:
- A valid tax assessment must be made;
- The taxpayer must be given notice and demand for payment within 60 days of the assessment; and
- The taxpayer must fail to pay the amount assessed. Notice of the recording of the lien is not one of the requirements.
Is there any way to reduce or eliminate interest and penalties?
In some cases an IRS tax attorney can negotiate with the IRS to reduce or eliminate a taxpayer’s penalties on their debt, through a process called penalty abatement. Pursuant to Federal Law, the taxpayer must be able to show “reasonable cause” before the IRS will agree to penalty abatement. Reasonable Cause means regardless of the taxpayer’s “exercise of ordinary care and prudence,” he was unable to file his tax return or pay his taxes on a timely basis. Generally, the success of penalty abatement depends on the taxpayer’s past history of filing their tax returns and paying their taxes.
I didn't pay my company payroll taxes, what should I do?
When payroll taxes are not paid, the IRS gets aggressive and is relentless until the problem is solved. The argument that shutting down your business will put people out of a job quite honestly falls on deaf ears with the government. The IRS would rather shut down your business and liquidate your assets then give you the opportunity to not pay even more payroll taxes.
- Without a court order, the IRS can chain or lock your doors;
- Payroll taxes are not discharged in bankruptcy; and
- Corporate officers, owners and partners are personally held liable for unpaid payroll taxes
If you want to keep your business open, you need a professional third party speaking on your behalf with the IRS to convince them you should be allowed to remain in business and that you have the best interest of the government to pay the unpaid taxes.
Will Bankruptcy Resolve My IRS Debt Problem?
Depending on your situation, your income tax debts may be eligible for discharge under Chapter 7 or Chapter 13 of the Bankruptcy Code. Filing for bankruptcy can be an excellent way to resolve your tax debt, but you should consider bankruptcy only if you meet the requirements for discharging your taxes.
Chapter 7 provides for full and immediate discharge of allowable debts. Chapter 13 provides a payment plan to repay some debts, with the remainder of debts discharged. Under the new bankruptcy laws, tax debts are treated the same way in both Chapter 7 and Chapter 13 petitions. If the income tax debt in question meets all five of these rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions.
- The due date for filing a tax return is at least three years ago;
- The tax return was filed at least two years ago;
- The tax assessment is at least 240 days old;
- The tax return was not fraudulent; and
- The taxpayer is not guilty of tax evasion.
If you think bankruptcy might be an option for you, we can discuss that further in a free consultation to discuss that option.
Do I have to pay my spouse’s unpaid taxes?
Taxpayers with jointly-filed tax returns as married couples that have a tax debt dispute may qualify for innocent spouse relief.
As a general rule, when one spouse signs a tax return prepared by the other spouse, he/she is swearing under oath to the correctness of the return. Additionally by signing a joint return, they are obligating themselves to pay the entire balance owed regardless of which spouse earned more. If the return was filed late, this includes interest and penalties.
Congress then passed a law designed to protect ex-spouses who find themselves liable for the other spouse’s tax debt. There are three types of innocent spouse relief: basic innocent spouse relief; separate liability election; and equitable relief.
Call Utah tax attorney, Michael Lofgran for a free IRS tax help consultation or fill out this contact form. It is the first step you need to take to resolve your tax issues. Get your free consultation at 801.838.8900 or email Salt Lake IRS Tax attorney Michael Lofgran for your free IRS Tax help consultation.