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Tax Defense Network, Inc.
Frequently Asked Questions |
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 Help! I filed my tax returns but did not have the
money to pay. Do I have options?
Taking the time to file your tax returns is the
first step in working with the IRS. Since you were
unable to pay the taxes owed, the Internal Revenue
Service will send you a notice stating you owe back
taxes. The amount is usually much higher than what you
thought because they have included penalties and
interest. Since you are unable to pay at this time,
contact one of our Tax Professionals for a free, no
obligation consultation. They will analyze your
situation and work with you to create a solution that
works. For many taxpayers, this typically leads to an
Offer in Compromise, Penalty Abatement, or Installment
Agreement.
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| What is an Offer in Compromise? |
An Offer in Compromise is an out of court agreement
between the IRS and the taxpayer that resolves the
taxpayer's liability. The Internal Revenue Service has
the authority to settle or compromise federal tax
liabilities by accepting less than full payment under
certain circumstances. These circumstances are:
Doubt as to Liability - The IRS may also accept an offer
in compromise when doubt exists that the amount of tax
owed is correct. The taxpayer needs to explain why they
believe that they do not owe the tax that they would
like to compromise. Financial inability to pay will not
be considered under this basis alone.
Doubt as to Collectibility (most common) - Under this
basis, there is doubt that the amount of tax owed can
ever be paid back in full. In order to successfully
negotiate this type of offer in compromise, the taxpayer
must demonstrate through complete and thorough financial
statements and supporting documentation that there are
insufficient assets and income to pay the full amount of
tax owed.
Effective tax administration - Under the third basis for
an offer in compromise, there is no doubt that the tax
owed is correct and there are sufficient assets and
income to pay the entire liability. However, the
taxpayer believes that, due to exceptional
circumstances, it would be unfair and inequitable to
require full payment of the tax.
The primary determinant on “doubt as to collectibility”
is based on a taxpayer’s personal financial profile;
including income, expenses, and assets. The IRS sets
strict guidelines for income, allowable expenses
(categorized as: Living, Housing, Transport), and
available equity in owned assets. An additional benefit
of submitting an OIC is that IRS Restructuring Act
prohibits the IRS from collecting a tax liability by
levy during the period in which the Offer is being
processed, or 30 days following rejection of an offer,
or during the appeal of an OIC. This window of
non-collection is frequently a respite for our clients
to avoid any IRS collection actions, thereby securing
additional time for clients to pay and prevents the IRS
from seizing any assets in the interim.
If the offer in compromise is accepted, payment can be
made via one of three options: 1) cash (within up to 90
days of acceptance); 2) short-term deferred payment plan
(payable within 24 months of acceptance); or 3) a
long-term deferred payment plan (payable over the
remaining time left on the collections statute).
Once the offer in compromise is accepted, the taxpayer
must remain in compliance with all filing and payment
obligations, including staying current with quarterly
estimated tax payments and not incurring any new tax
debt, for five years or until the offer amount is paid,
whichever is longer. Failure to abide by these terms may
result in the default of the offer in compromise and the
reinstatement of the original tax liability. |
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What if I’m making installment payments, can I still do
an Offer in Compromise? |
| Absolutely, and in special
situations the installment agreement can be suspended
while the IRS is evaluating the Offer in Compromise. |
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Ok, what happens when the Internal Revenue Service
accepts my Offer In
Compromise? |
| Typically, the Offer in Compromise
states your intentions as to the amount and payment
structure; therefore, you could have up to ninety days
or 2 years to tender payment to the Internal Revenue
Service of the offered amount. Once the IRS has received
payment, they will release all tax liens and there is no
further liability. |
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How long does it take an Offer in Compromise to be
approved by the IRS? |
| The Internal Revenue Service
typically takes approximately six to twelve months
depending on caseloads. During this time, all further
collection activities are suspended. |
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Does Penalty Abatement get my penalties and interest
waived from my tax account?
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| Penalties can be removed provided you
have a valid reason for falling behind. Interest can be
adjusted in the event of an error in the application of
your debt or if you can demonstrate that an IRS or state
representative provided you with erroneous advice.
Adjustments to your tax account could save you thousands
of dollars. Our experienced staff has drafted hundreds
of abatement arguments, and we can draft your penalty
abatement request for you.
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How do I stop the IRS from
garnishing my wages, levying my bank account, or
seizing my assets? |
| When you become our client the first
step for us is to stop the IRS collection procedures.
This means that all garnishing, levying, or seizures
will be put in a hold status while we negotiate the best
possible outcome on your behalf with the IRS. The
collections hold will remain in affect for the entire
length of the negotiation process which means your
assets will be safe. |
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Will I have to personally
present my case before an Internal Revenue Service agent?
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| Revenue Officers will be contacting
you to obtain full payment of your tax debt. When a
Revenue Officer wants to meet face-to-face they are
going to demand full payment. If full payment cannot be
provided, they will try and force you to liquidate
assets to pay the debt in full. Unless you are meeting
with your Revenue Officer to pay the debt in full, you
will find it beneficial to have our Enrolled Agents,
CPA’s, and Attorney’s on your side to negotiate an
alternative to full payment. Our tax experts can contact
your Revenue Officer to cancel the meeting. From that
point forward, the Revenue Officer will deal directly
with our firm so that you do not have to.
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I have not filed returns for a number of years.
Can I still get an Offer in Compromise
or Penalty Abatement ? |
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The Internal Revenue Service needs completed tax returns
in order to move forward with an Offer in Compromise or
an Installment Agreement. We can assist you in getting
your tax returns up to date and your life back on track. |
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Is an Offer in Compromise or Penalty Abatement
right for me? |
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Every taxpayer has unique circumstances that need
detailed explanations to help the Internal Revenue
Service understand the problem as well as a viable
solution. An Offer in Compromise or Penalty Abatement
might be right for you. That is why we offer a free
consultation to assess your needs and recommend the
right solution. Once the Offer in Compromise or Penalty
Abatement is accepted and paid, all liens are released.
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Can the IRS revoke an approved and paid Offer in
Compromise or Penalty
Abatement? |
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As long as you comply with the requirements relating to
filing returns and paying required taxes for the five
years after the date your Offer is approved by the
Internal Revenue Service your offer will not be revoked. |
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What are your fees? |
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Our fees for an Offer in Compromise or Penalty Abatement
are generally a flat rate and the terms of our
engagement are included with your FREE consultation. |
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What states do you work in? |
| We assist taxpayers in all 50 states. With the power of the Internet, fax machines and our state of the art customer service facility, we are able to assist thousands of taxpayers without compromising service. We are also located within a short distance from one of the Internal Revenue Service major facilities. |
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What are the documents that the IRS will need to
review my case? |
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The Internal Revenue Service in most cases requires
paycheck stubs, bank statements, utility bills, mortgage
or rent payments and investment documents.
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I heard
the Internal Revenue Service can put you
in jail for not filing tax returns, is
that true? |
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Intentionally not filing tax returns is illegal, a
felony and subject to criminal and civil penalties. A
false return detected by the IRS goes to the Criminal
Investigation Division and can result in a punishment of
one year in jail and a $25,000 fine and $100,000 for
corporations. In addition, all tax returns must be
accurate and truthful. |
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Is there a solution that will allow me to sleep
at night worry free? |
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Absolutely, with our help you too can be free of fear from IRS collection actions.
Time is a critical factor in resolving your IRS debt so
contact Tax Defense Network, Inc. now at 888-248-9058
for a free consultation. |
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