Insurance World

The Internal Revenue Service continues to ramp up the number of tax liens and levies it files against taxpayers, despite a high number of Americans who are unable to pay their taxes. The government agency filed liens against 1.1 million taxpayers last year, up from 168,000 in 1999, according to the IRS website. In the past seven years, it has filed more than 5 million tax liens.

"The IRS is going after ANYONE who owes money, not just the wealthy", according to National Taxpayer Advocate Nina E. Olson, who works for an independent arm of the IRS. "By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer by making it harder for him to get back on his feet when he does get a job".

IRS Recognizes the Need to Address a Struggling Economy

"Tax collection requires a delicate balancing of the government's interest in collecting revenue and ensuring that all taxpayers pay their fair share of tax... and protecting financially struggling taxpayers from unnecessary harm," Olson testified.

The IRS recognizes that many taxpayers are struggling financially and is taking positive steps to settling tax debt through collection delays, payment plans and tax settlements. The IRS has recently indicated plans to implement new procedures of the availability of payment programs to those taxpayers who may not have previously qualified, the availability of tax settlement programs to those taxpayers who may not have previously qualified, a more expeditious withdrawal of tax liens - just to name a few.

Demand for Tax Services

The demand for tax relief services has reached an all time high. Business owners whose Companies are struggling have lost their houses and savings. They can't pay their employment taxes and they still owe money. Taxpayers may owe taxes on debt that was forgiven. Taxpayers may have lost their job or withdrawn money from their retirement accounts and owe early withdrawal penalties in addition to their regular taxes. The IRS sends a series of notices, each getting more urgent. When the taxpayer is unresponsive, its easier to push the lien or levy buttons that trying to work with someone to set up a payment plan or debt reduction.

Taxpayers often believe they cannot afford tax relief services and try to resolve the problems themselves.

The layperson is at a significant disadvantage dealing with the IRS. Taxpayers are not familiar with debt relief programs and ultimately do not know their options or rights in dealing with the IRS. Too often, this results in paying more than you may actually owe, not applying for penalty relief, not qualifying for payment plans and not exploring settling tax debt or incorrectly applying for settling tax debt for a reduced amount.

Hiring a highly-trained, experienced, certified public accounting, who deals with IRS problems on a daily basis offers taxpayers a distinct advantage over national, debt relief companies, where your case is assigned to a lower-level marketing specialist; unfamiliar with tax law, IRS policy and procedure, IRS negotiations and taxpayer rights.

In many cases you can reduce your tax debt significantly - whether this is the reduction of the penalties and interest that may have been assessed, a correction of errors or underreporting of deduction that may be available or a negotiated settlement amount of the overall tax debt. The key is to have the "right" person on your side; handling your account.

Mitch Helfer is the managing partner of CPAMiami; a full service public accounting firm providing guidance with federal and state tax matters, tax preparation and strategic consulting, IRS representation and problem resolution. Visit our website at http://www.cpamiami.com/ for more helpful information and get your tax problems resolved today!

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I am a former IRS Agent and Revenue Officer. I have also taught Tax Law at the IRS Regional Training Center. I am still an IRS Insider, and I still have solid insider sources.
When a taxpayer is faced with an IRS Tax Levy, whether it's a bank levy or a wage garnishment, immediate panic sets in, and generally the taxpayer hasten to take care of the problem as quickly as possible. If they do not have a CPA or Tax Attorney, the taxpayer starts hitting the internet to find out which company is the most credible, who they can afford, who they can afford, and most importantly who they can trust, and who can resolve their tax situation in the most expedient manner.

You can get immediate tax relief from Bank Levies or Wage Garnishments, but you have to call the right Professional Tax Firm.

Here are some very general rules to follow:

1. IRS does not want to levy! They must send out the tax levy because prior notices sent to the taxpayer went unnoticed or were not responded to. Sadly many notices were sent to the wrong addresses.

2. IRS sends out the wage garnishments and or bank levies to get your attention so they can close their case and remove you off the IRS Receivable Computer. This also takes you off the IRS enforcement computer called CADE.

3. In order for the case to be closed, all tax returns have to be filed and a completed and documented Form 433F financial statement has to be submitted to the IRS for review. The IRS will then release the levy and close your case with a payment agreement or hardship status.

4. You should hire a true professional tax firm to handle your tax situation; it will make a huge difference. You will get the results you need from a professional tax firm.

5. Beware of tax mills who promise you pennies on a dollar. The IRS only accepted approximate 12,000 settlements a year. Most companies promising you the sky, actually knows the case will never be settled.

6. Ask to speak directly to a Tax Attorney, CPA, Former IRS Agent, or an Enrolled Agent on their staff. If you cannot speak directly to this type of tax professional, seek another professional firm.

7. Beware, most of the people you speak to off the Internet are sales people selling your lead information to the highest bidder.

8. Check the firm's BBB rating to ensure the trustworthiness of the firm you are dealing with.

Michael D. Sullivan is a seasoned IRS tax expert. Learn more about Michael and the services he provides at http://www.freshstarttax.com/.

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If you are on top of your tax debt situation, diligently review letters from the IRS when they arrive, and maintain good communication with your Revenue Officer or ACS, you have a huge advantage over people that don't. In short, you know what's coming.

One of things that any good tax representative does for clients, obviously, is to monitor these communications and stay on top of them. Properly timing deadlines and staying slightly ahead of the IRS is one of the attention to detail things that we do in order to get as much of a leg up as possible.

If you are doing this sort of monitoring yourself, chances are you will know when a bank account levy is coming. A bank account levy by the IRS requires your bank to take any and all funds in your account at the time the levy is processed, and hold them for 21 days. After that 21 days, the bank must forward these funds to the IRS. Deposits you make on the business day AFTER the levy is processed are not subject to the levy, only the funds in the account on the date that it hits are subject to the levy.

You can take advantage of this fact, coupled with how one bank in particular processes levies. I am by no means endorsing this particular bank and have no affiliation with them myself. However, Wells Fargo accounts have a benefit when it comes to being levied by the IRS. Wells Fargo receives all levy notices for all of their operations nationwide at a central office in Phoenix, AZ, which is where their legal processing team is. Due to the volume of incoming levies, it takes Wells Fargo 2 to 3 business days to process the levy and issue a copy to your local bank branch.

You can take advantage of this fact if, as previously mentioned, you are maintaining good communication with the IRS and diligently reviewing notices. Your mileage may vary, of course, but in my experience with clients it is not uncommon for the taxpayer to receive their copy of the levy notice BEFORE the Wells Fargo legal team has actually processed it.

What does this mean to you? If you know the levy is coming, it provides you an opportunity to make sure that no checks are going to bounce and to pull money out of the account before the levy actually hits.

You can use this strategy to protect yourself if you have cash flow, but are not financially able to become current with Federal tax deposits or estimated tax payments. While the IRS obviously frowns on this sort of action, for many people it may be their only choice to avoid losing their home or being unable to feed their families.

Jassen Bowman is an IRS-licensed Enrolled Agent, and assists small businesses and individuals with resolving IRS tax debts, creating tax-advantaged business processes, establishing systems and procedures for more efficient business operations, and implementing results-oriented lead generation campaigns to fuel revenue growth. For free tax and business operations consultations, call 970-930-1040.

In his free time, Jassen enjoys geocaching, ice dancing, and is a figure skating test judge.

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Being a Former IRS Agent Revenue Officer I know how to get levies released quickly. The following is the information you need to know about the process. You should always work with a tax professional to get the best possible deal with the IRS. Experience pays off.

You can get Immediate Releases of IRS Tax Levies as long as the IRS criterion is met. The two basic criterion are, all tax returns filed and up to date and a documented financial statement, 433F.

It is much easier than people think to get IRS Releases of both Bank Levies and Wage Garnishments, as long as you know what you are doing. The average professional tax firm will charge between $2,500 - $3,500 to get your bank or wage garnishment released as well as get your case closed and off of the IRS enforcement computer.

Here are some things to consider.

IRS does not want to levy. The IRS sends out series of four notices to the taxpayers letting them know of their intentions to levy. However most taxpayers to do respond. There are many cases where the taxpayers moved or never got the IRS notices. After IRS sends out the fourth notice, IRS sends out levy notices to a levy source they have on record. Those sources are usually a bank account or wage information. The IRS gets their levy information from the taxpayers themselves. You give them the levy information on your tax return, interest income from a bank source or your W-2. The IRS very rarely dragnets the banks in your living area.

The two most common levies:

An IRS Bank Levy, 668A is sent to at Bank or Financial Institution. The Bank will hold the funds for a period of 21 days. Your money sits in your account frozen and not yet turned over to the Internal Revenue Service. The IRS gives you a 21-day period to rectify the problem so you get to keep your money.

An IRS Wage Garnishment 668W is sent to your employer. Your next paycheck goes to the IRS minus some basis exempt money. Your wages continues to be garnished until the levy is released.

How the release process works:

IRS will require that all your tax returns are filed and up to date. You will have made sure you can fax and send to IRS any tax returns not filed. IRS will not usually release the levy until this happens. This is their leverage to make you file.

IRS will want a documented 433F financial statement. Once IRS reviews the financial statement, 433F, they will decide on how your case will be closed.

How cases are closed:

Settlement agreements can be in different forms:

a. Hardship Settlements. Cases usually go into a 3 year suspended status because of an inability to pay. This is also called currently noncollectable. Your case will go into a hardship status because you do not have the income coming in to meet your current expenses. The IRS will use the National Standards Program to assess hardship.

b. Payment Agreements. Cases can be closed with agreed upon monthly installment payments to the IRS.

c. Offer in Compromise. There are three types of OIC's:

The IRS may accept an Offer in Compromise based on the following:

1. Doubt as to Collectability - Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.

2. Doubt as to Liability - A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include:

(1) The examiner made a mistake interpreting the law,

(2) The examiner failed to consider the taxpayer's evidence or

(3) The taxpayer has new evidence.

3. Effective Tax Administration / Exceptional Circumstances - There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.

Michael D. Sullivan is a seasoned IRS tax expert. Learn more about Michael and the services he provides at http://www.freshstarttax.com/.

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