5 Tax Programs to Resolve IRS Problems

Transcription

1 5 Tax Programs to Resolve IRS Problems

2 Table of Contents I. Introduction II. Installment Agreements i. Standard Installment Agreement ii. Under $25K Streamline Agreement iii. Over $25K Streamline Agreement/Fresh Start iv. Partial Pay Installment Agreement III. Settlement Agreements i. Non Collectible Status ii. Offer in Compromise IV. A Letter from Tax Defense Network 2

3 Introduction Although it is ideal for taxpayers to file and pay taxes in their entirety by the tax filing deadline, for some this simply does not happen. After April 15 th, the IRS begins to add penalties and interest to any unpaid tax amount monthly. This can substantially increase a tax debt, making the problem even more unaffordable and devastating to your finances. However, with our services, there are various IRS programs available to pay off your debt as efficiently and affordably as possible. These tax resolutions described in this report are to ensure that you aware of your options when facing a large tax debt. After reading this report, you should have a clear understanding of the types of IRS programs available, including their requirements, standard terms and conditions, and the application process, as well as how a tax resolution company like Tax Defense Network can help you achieve the resolution to fit your needs and budget. At the conclusion of FY 2012, The Collection Queue contained approximately $63 billion in delinquent accounts, an increase of 132 percent since FY P.368 Full 2012 Annual Report to Congress 3

4 Installment Agreements While you may see a plethora of advertisements from tax companies claiming to be able to settle your debt for significantly less than the original amount, the truth is those programs require a specific set of circumstances that most taxpayers will not qualify for. Installment Agreements are a payment plan that the IRS offers to satisfy a tax debt. There are several types of payment plans to suit various situations, financial circumstances, and types of tax debt. In this report, we highlight a few of the most common Installment Agreements, along with their qualifications and benefits. in FY 2012, the IRS collected approximately $10.7 billion through IAs well in excess of what it collected through all other delinquent account treatments combined. 2 2 P. 353 Full 2012 Annual Report to Congress 4

5 Standard Installment Agreement If you cannot pay off your debt immediately, this option is the easiest to get approved. For more extreme debt and financial situations, the previous resolutions are types of installment agreements that would best suit you. However, as long as you owe under $25K and can afford to pay the monthly payments, this standard installment agreement will most likely be approved. It is an affordable resolution because you are paying your debt off over a period of time, through monthly payments. The standard monthly payment is $105, although it can vary depending on your financial situation. Another benefit of this agreement is you do not have to give a financial statement, since it is under $25K. This option allows you to pay off your debt is quickly as you can afford to, while still being able to save up money in order to avoid future tax debt. Under $25K Streamline Agreement Under this resolution, you can have a lien release, which means 30 days after your debt is paid in full, the IRS will no longer have a legal claim against you or your assets on your credit report. Additionally, you must enroll in a Direct Debit Installment Agreement (DDIA). Under a DDIA, funds are automatically withdrawn from your checking account. With the elimination of paper checks, there is no risk of the payment being lost or mishandled, and there is less room for you to forget to make your payment. Your debt must be paid off within 60 months or before the Collection Statute Expiration Date, whichever is earlier. However, as of March 2012, an expansion to streamline agreements, referred to as the Fresh Start Initiative, allows the debt to be paid within 72 months or less. "I didn't file my taxes for 2004, and needed help. Tax Defense Network filed my missing return and handled the IRS on my behalf. They put me in a monthly plan for only $100 per month, which helps my family in these tough economic times." J. Gardner Pennsylvania 5

6 Over $25K Streamline Agreement/Fresh Start Under this resolution, Fresh Start agreements have more regulations than the Under $25K Streamline Agreement. To qualify, you must owe between $25,001 and $50,000. Like before, you must enroll in a DDIA and pay the debt off within 72 months or before the Collection Statute Expiration Date. However, you may also be required to give a limited amount of financial information during the application process. Additionally, the Fresh Start program increases the IRS Notice of Federal Lien filing threshold from $5,000 to $10,000, making it more difficult to release a lien. The Fresh Start program widens the payment options for other agreements because it adjusts to the larger amount of money you owe. Partial Pay Installment Agreement This resolution is an option if you owe more than you can pay before your Stature of Limitations expires. You will need to provide documented proof of your inability to pay and a thorough explanation of your current financial situation; this is assessed using a Collection Information Statement. After that the IRS will determine your monthly payment amounts in accordance with a Partial Payment Agreement; usually the IRS prefers the monthly payments to be the maximum amount you can possibly pay, while still understanding you are unable to pay off the debt in full. Once the agreement is fulfilled, the remainder of your tax debt is forgiven. "I was hit with tax debt from '07 and '08. Tax Defense Network stepped in and stopped the wage levy and got me in an Installment Agreement with the IRS. Tax Defense Network is quick, accurate and they stand by their word. I can believe in that." K. Jones Louisiana 6

7 Settlement Agreements Many times taxpayers will call asking about a settlement, or more commonly known as an Offer in Compromise. This program, while available and beneficial, is tailored to a specific type of situation, and most likely taxpayers will not meet the requirements for this highly restrictive IRS program. However, depending on the circumstances of your situation, you may qualify for a reduction in the tax amount, followed by a settlement to resolve the issue, or a postponement of the tax debt obligations, successfully avoiding any collection actions while the issue is ongoing in the resolution. The IRS will analyze your ability to pay the tax debt amount before they accept you into an IRS program, and will apply a penalty to any applications they deem frivolous, so it is important that you only apply for IRS programs that you qualify for. At the In FY 2012, the offer acceptance rate of 38 percent was the highest in many years. During FY 2012, the IRS accepted in compromise $195.7 million, a 27 percent increase over the prior year. 3 3 P.352 Full 2012 Annual Report to Congress 7

8 Non-Collectible Status Currently Not Collectible (CNC) is a program that is especially for those experiencing economic hardship and are unable to pay anything at all. If you are part of this program, the IRS will temporarily stop any collection action until your economic situation improves. However, while in the CNC program your liens and tax debt remain, while interest and late fees continue increase. Because this is only a temporary solution, it is suited for you only if meeting basic living expenses are a struggle. CNC might be the right option for you if you are: Out of a job Too sick to work Incapable of meeting your current necessary monthly expenses Lacking asses or equity that could assist you in paying off tax debt As stated earlier, this is only a temporary solution. This means if any of the above circumstances improve, your CNC status may be revoked. "I owed over $100,000 in back taxes to the IRS. Tax Defense Network negotiated with the IRS to reduce my overall debt and monthly payments. If you aren't a tax expert you really need tax professionals on your side, like Tax Defense Network." D. Garcia - California 8

9 Offer in Compromise The keyword here is settlement. An Offer in Compromise (OIC) allows you to settle your tax debt for less than the amount you owe, if you cannot repay for full amount. This can provide you with up to 90% savings on your tax debt; however it is very rare that your economic situation is dire enough for this to occur. An OIC seems the most desirable for taxpayers, but it is important to keep in mind that other solutions exist and are likely better options for you. Firms that have solely focused on settling with the IRS are the firms that have run into legal troubles and gone under. But, an OIC might be the solution for you if the following apply to you: Doubt as to Collectability: The IRS might be unable to collect within the Statute of Limitations Doubt as to Liability: It is possible you might not even owe debt to the IRS Effective Tax Administration: Although you have the assets to pay in full, an unusual situation has created a condition that would create economic hardship if you were to pay the full amount. If your settlement offer is accepted by the IRS, there are two payment options: Lump Sum Cash or Periodic Payment. The first requires an initial payment of 20 percent with the remaining paid off in five or fewer payments. The latter is similar to an installment agreement, with monthly payments until the agreed upon amount is paid in full. "They lowered my monthly payment about almost 75%. And, when it's paid off, it's actually lower than what the total amount due was. The services rendered were the best I've ever had." D. Rose Arizona 9

10 A Letter from Tax Defense Network Dear Taxpayer, When it comes to the IRS, taxpayers often find themselves helpless against their confusing rules and drawn out procedures, and many times give up hope that there will ever be an end to their tax issues. That is why many have turned to the expertise of tax professionals to assist them in resolving their IRS problems. Taxpayers have rights that they can use in order to ensure they are being treated fairly and in accordance with the law when dealing with the IRS. It is the tax resolution company's job to know these rights and exercise them to the fullest, as well as negotiate with the IRS to reach a favorable resolution for the taxpayer. Tax Defense Network has a team of experts who have over 35 years of experience with IRS debt cases. If you are facing a tax debt, Tax Defense Network will make it their priority to help you pay it off in the way that best suits your needs. After reading this report, it is clear to see that resolving a tax debt can be a complicated process, with many different paths to take but the professionals at Tax Defense Network are trained to quickly recognize the program that fits your situation and budget. Consistently maintaining an A rating or higher with the Better Business Bureau, resolving over $120 million in client tax debts, and saving a town named Lynch, Kentucky are all accolades that our company is proud of but our true passion is helping the small-business owner keep his livelihood, or the middleclass family keep their home and savings. As a business run like a family, we know how important family is, and what people will do for them. We go the extra mile to keep our clients up-to-date on their case through the process so they can focus on what's important; their family or business, and we can handle their tax problem. Sincerely, Tax Defense Network Call (855) for your free consultation, so we can help you tackle your tax debt as soon as possible. Full 2012 Annual Report to Congress: 10