Resources

Are You Being Audited by the IRS?

Have you received a letter or notice from a tax agency and don’t know what to do next?  The response you need to provide might be simple, or it might be very complex. I can help you interpret what the IRS is asking for so you can respond to the letter appropriately and put this behind you.

An IRS letter can be triggered in several situations:

  • The agency notices a discrepancy on any of your tax returns and needs an explanation.
  • An amount paid is short or over what the IRS or another tax agency calculates as due.
  • You have been selected for an audit.
  • You miss a payment deadline for taxes due.
  • You miss a deadline for filing tax returns.
  • You fail to respond to previous correspondence.

Please note: The IRS will never send you an email about any of the above situations. They always send physical letters.  If you get an email, it’s a scam.

If it’s a discrepancy letter or balance due, the response can be fairly simple to craft and send. It’s always a good idea to get a tax professional to review or develop any response you need to send to the IRS.

If you are being audited, you should prepare for your meeting. The IRS examiner has probably requested certain records.  A tax professional can help you get ready and can guide you as to what you should provide to the IRS and what you should not.

An audit can be extremely nerve-wracking.  You can get relief by having a tax professional on your side, walking you through the entire process.

Getting Help

I worked for the IRS as an examiner and as an attorney. I can help you. I can:

  • Respond professionally to any IRS correspondence you receive
  • Contact the IRS on your behalf so that you don’t have to face them directly
  • Represent your case before the IRS
  • Fight for you on issues that come up, such as positions taken on tax returns
  • Escalate your issue to other remedies if the solution feels unfair or extreme
  • Represent you before the IRS Independent Office of Appeals
  • Represent you before the U.S. Tax Court

 

Do You Owe the IRS Money That You Cannot Pay? 

It can happen by accident. You may not have withheld enough from your paycheck in the past year and wind up with a whopper of a tax bill in April. It could be you came into some money, spent it, and didn’t realize that a big chunk of it was owed to the IRS in taxes.

If your debt has been piling up for a while, it can be overwhelming and extremely stressful. You might feel stuck or frozen, not knowing what you should do or how you are going to get out of your situation. But the worst thing you can do is nothing. The penalties and interest just keep adding up, sinking you further and further into trouble.

The IRS will seek every legal way to collect the money they are owed. They can seize your assets, freeze your bank account, garnish your paycheck, and even restrict your passport.  They can file levies and liens on your property. I hope this hasn’t happened to you yet, but it will if you don’t act fast enough.

Failure to Pay Taxes

If you owe money to the IRS but can’t pay, there are several options available to you depending on your circumstances. One of the most important things is to start paying you current taxes first. You must be all caught up with filing your income tax returns and paying your current taxes before most of these remedies are available to you to resolve your old tax years.

Here are some of the options the IRS provides to taxpayers who owe money.  Whether these are applicable to you depends on your circumstances.

  1. Installment plan - This is where you work out a payment arrangement with the IRS.  There are several forms of agreements, including regular, partial-pay, and streamlined.  Which one you should use is highly dependent upon your current financial situation and the amount you owe.
  1. Offer in compromise - An offer in compromise is where the IRS agrees to accept less than the full amount owed.  The IRS does not have to accept an Offer, but if the Offer is presented so that it meets the IRS guidelines, it increases the chance that the IRS accepts the Offer to resolve the outstanding balance. The IRS charges an application fee to those who submit an Offer in Compromise. Despite the ads you see on television, you can not settle your tax debt for pennies on the dollar if you can pay it in full.
  2. “Currently Not Collectible” status - This status allows you to defer your debt.  The debt does not go away; you still owe the IRS money. But you’ll stop the process of getting your bank accounts levied or other collection efforts if you are granted this status.  This often happens when you don’t have enough income to cover your current living expenses. Once your income rises, the IRS will re-evaluate your situation. Typically a lien is still filed on your property.
  1. Bankruptcy - Bankruptcy can be extremely useful to stop IRS collection efforts, potentially discharge eligible income taxes that are old enough, and force repayment plans on an otherwise unwilling IRS.  Tax penalties may also be discharged through the bankruptcy.  Since this is such a complex area, your best bet is to consult with several professionals – an accountant, a tax resolution professional, and an attorney that is expert at bankruptcy issues.

Getting Help

As a tax resolution professional, I can help you:

  • Respond professionally to any IRS correspondence you receive
  • Contact the IRS on your behalf so that you don’t have to face them directly
  • Represent your case before the IRS
  • Get you caught up on filing back tax returns that are late
  • Understand the IRS Collections process and your rights
  • Negotiate penalties and taxes due to lower your debt
  • Work out a payment plan on any money you owe to the IRS
  • Fight for you on issues that come up, such as innocent spouse situations or positions taken on tax returns
  • Help you get levies and liens removed from your assets.
  • Represent you before the IRS Independent Office of Appeals
  • Represent you before the U.S. Tax Court

 

Helpful links:

  1. Sign up for my mailing list for more helpful information. Go to Home page and scroll down to the ABCD section then click the box under Blog.
  2. The IRS publishes Audit Technique Guides for certain industries. This is a guide for revenue agents to explain how to audit your business. These guides are available on IRS.gov.
  3. www.USTaxcourt.org for Tax Court Rules of Practice and Procedure
  4. List of Low Income Taxpayer Clinics throughout the United States. Clinics
  5. Georgia Unclaimed Property site.
  6. North Carolina Unclaimed Property site.
  7. IRS issues warning on new email tax scam. Article here.  IRS Announcement here.