What software does Taxfirm.com use?

We use a variety of accounting software, which is based upon our client’s needs. These include UltraTax, Creative Solutions Accounting and QuickBooks. Creative Solutions Accounting is a superior software preferred by accountants, bookkeepers and CPAs.

How secure will my records be?

All accounting files and information is kept highly confidential. Records are stored as high security files and no information is ever shared with outside parties for any reason.

Do you offer weekend or night hours?

Yes. We work with our clients to schedule meetings during times that work for them. This means that nights and weekends are always available for meeting to discuss tax return preparation, bookkeeping and other accounting services. In addition, we offer virtual meeting options to avoid having to meet in person.

What happens when you have a Lien?

Liens filed against you by the IRS also show up on your credit report and often prevent you from opening a checking account or borrowing against any assets, like your home. The lien can be against you, your spouse, or your company. A lien filed against your company means that the IRS can seize your accounts receivables. Unfortunately everything you own is just one step away from becoming seized by the US Government. Taxfirm.com has helped hundreds of clients in the same situation. Contact us for a free consultation today.

What if I miss paying Payroll tax?

If you are behind on paying payroll taxes for your company, call Taxfirm.com immediately! The IRS is extremely aggressive in collecting this form of tax. They’d rather seize your business bank account, close your doors, sell your assets at auction, and put you out of business than to allow you to continue accumulating additional payroll tax liabilities.

Can I file for Bankruptcy protection?

If you qualify, your interest and penalties on you back taxes can be wiped out by filing bankruptcy. Unfortunately, not everyone qualifies to erase their tax debt in bankruptcy. You must meet certain requirements. If you file bankruptcy and don’t meet the requirements, the IRS will still be breathing down your neck, to collect back taxes and penalties, after your bankruptcy is over. Taxfirm.com can help you determine if Bankruptcy is right for you. Call 1-800-777-3800 for a free consultation today!

Do I have to pay for my Ex-spouse taxes?

You don’t have to pay tax obligations brought on by the misdeeds or fraud perpetrated by your spouse? Innocent Spouse Relief is designed to alleviate unjustified situations when one spouse was the victim of fraud perpetrated by their spouse or ex-spouse. Call 1-800-777-3800 to find out if you qualify for Innocent Spouse Relief today!

Does the IRS offer payment plans?

Yes. By setting up a payment plan through the IRS will give you more time to pay off your tax debt. Unfortunately, penalties and interest will continue to accrue on any outstanding balance while you pay the debt off. By law, you are required to pay any interest on your tax debt. The good news is a Payment Plan may be the best way to solve your tax problem.

What does Offer in Compromise mean?

The term “Offer in Compromise” means that you can settle with the IRS for pennies on the dollar. The program allows you to settle your tax debt with the IRS that’s been assessed incorrectly or for taxes that you cannot afford to pay. Call 1-800-777-3800 today for a free consultation!

Can the IRS garnish my wages?

Yes and you may be in big financial trouble. You may not be able to put food on the table and or make your car or mortgage payment. If you’ve received a “Notice of Intent to Levy” from the IRS do not ignored it. You have 30 days to reply and then it becomes a huge financial problem. Don’t bother going to HR to have them stop taking money out of your paycheck. Once a wage garnishment is filed by the IRS with your employer, your employer is required by law to garnish a huge percentage of your paycheck. Taxfirm.com can help, call immediately for a free consultation.

Why did the IRS file a federal tax lien on my account?

If you owe more than a certain amount and are not on a payment plan, the IRS will file a federal tax lien to protect the government’s interest in your assets.  For example, if you go to sell real estate, the equity may be distributed to the government to the extent it is protected by the federal tax lien.

What is the effect of a federal tax lien on my account?

A federal tax lien will hurt your credit rating as it is publicly filed at the county clerk’s office where you reside and/or where you have assets. Not only does it place creditors and future lenders on notice that you have a tax lien filed on your account, but it also makes it difficult to sell property.  Since the lien will appear during a title search, you will have to contact the centralized lien release unit at the Internal Revenue Service to receive authorization to proceed with the sale of your property.  At TaxFirm.com, we handle many requests of this nature.

How can I avoid the federal tax lien?

If the lien has not been filed, then the only way to avoid it is to ensure that your total assessed tax liability is less than $50,000 and that your proposed payment plan is sufficient to eliminate the debt within 72 months.  If your total tax debt is between $25,000 and $50,000, then you will have to be on a direct debit installment agreement where your payments are directly debited from your bank account.

If the IRS filed a tax lien, is there any way to remove it?

Once the IRS files a federal tax lien, it is very difficult for the lien to be removed.  However, if your total tax debt is below $25,000, and you make three consecutive payments on a direct debit installment agreement, then the lien can be released. You must continue with the direct debit installment agreement and if you default, the lien will be re-filed and not released until the liability is paid in full.

 

If your tax debt exceeds $25,000, then it is very difficult to obtain a lien release.  Though the Internal Revenue Code requires the IRS to weigh the interests of the taxpayer and the government when deciding whether to file the lien, IRS employees will routinely file liens based on the size of the tax debt and not give proper consideration to the effect it may have on the taxpayer.

 

Can I establish an installment agreement on my tax debt?

Yes.  The IRS will allow you to submit monthly payments to pay off your tax debt. However, you must establish an approved installment agreement to avoid enforced collection action, such as liens or levies. Depending on the size of your tax debt, you may qualify for a streamlined installment agreement where they do not ask for you to provide financial information.

However, if you do not qualify for a streamlined installment agreement or you cannot pay the amount required under this agreement, then you must provide financial information.  After conducting a financial analysis, we can determine the amount the IRS will require you to pay and then thoroughly discuss all your tax options.  If you are not a good candidate for the Offer in Compromise process, then you may just want to establish a partial payment installment agreement or be classified as currently not collectible.

What is a partial payment installment agreement?

A partial payment installment agreement is an agreement where you pay a monthly amount based on your disposable income; however, the monthly amount will not pay the liability off in full during the duration of the collection statute.  (The IRS typically has 10 years to collect on the tax that they owe.) The IRS typically follows up on these payment plans every two to three years to see if the taxpayer can pay more since they know they will not collect the full amount owed on the current plan.  Therefore, if you establish a partial payment installment agreement, then you should anticipate a follow-up and request for updated financial information by the IRS about every two years.

What is a streamlined installment agreement?

A streamlined installment agreement is an agreement where you pay off your tax debt within 72 months if your debt is less than $50,000.  If you are self-employed, then you must pay off your debt within 84 months and your total assessed balance must be less than $100,000.  This installment agreement does not require financials and the filing of the lien is only avoided if the total assessed balance is below $50,000.

Do interest and penalties continue to accrue if an installment agreement is established?

Yes.  Interest will typically always accrue, and penalties (late payment penalties) will accrue as well.  However, if you are on an installment agreement, then the late payment penalty will accrue at a lower rate (half the rate it will accrue at if you are not in an installment agreement). Therefore, it is best to establish an official installment agreement to not only avoid collection action but to decrease the amount of penalties that will accrue.

I believe I have merit for penalty abatement. Can I request the removal of penalties while I’m on an installment agreement?

It depends. Penalties will continue to accrue until your balance is paid off in full or until they reach the maximum amount imposed, which is approximately 25% of the balance for each year.  If you submit a penalty abatement request, the IRS will only remove the penalties that have been assessed up to that point.  Therefore, sometimes it is better to wait until you are approaching the end of your installment agreement to request for penalty abatement.  That being said, you may want to request for penalty abatement on some years earlier than others.  You only have a limited time to claim for refund (the later of three years from the filing of the return or two years from the time the tax is paid).  If you are approaching the end of your statute to claim for refund, then it is better to submit the penalty abatement request at that time.

Does the IRS charge a fee to establish an installment agreement?

Yes, depending on how the installment agreement is established, fees up to $225 can be applied to your tax balance by the IRS to set up a payment plan.

What information does the IRS require for the Offer in Compromise process?

The IRS typically requires substantial information (such as three months of bank statements, mortgage statements, financial asset statements, etc.) to verify your collection potential.  As compared to the establish of an installment agreement, they are permanently settling tax debt and they do not do it haphazardly.

How long does it take for my Offer in Compromise to be reviewed?

Though some cases are longer or shorter than others, it typically takes about 9 months for an Offer Specialist to be assigned to your case.  The review process may take another 2-3 months. If a decision is not made within 2 years, then your offer is automatically accepted.

What happens to the collection statute while I’m in an Offer in Compromise?

The Offer in Compromise suspends the 10-year collection statute.  The IRS typically does not engage in collection action during this time period though they may file a tax lien to protect their interest in any assets you may own.  Consequently, they suspend the collection statute until a decision is made on your offer in compromise.

If my Offer in Compromise is accepted, is it final or can it ever be reversed?

Once an Offer in Compromise is accepted, there is a five-year probationary period where the taxpayer cannot accrue any additional tax that is not paid.  If a taxpayer does not pay their tax in full in any of the five years following the acceptance of the offer, then the offer in compromise can be reversed as if it did not exist in the first place.  If this occurs, then the tax debt will continue to remain on the taxpayer’s account.

What happens to future tax refunds once my Offer in Compromise is accepted?

The IRS will take the refunds up to the last tax year where the Offer in Compromise was officially accepted.  For example, if your offer was accepted in 2016, then they will take your 2016 tax refund.  However, they will not be able to take your 2017 and future tax refunds.

What is innocent spouse relief and who is eligible for it?

Once you file a joint return with your spouse, you become jointly and severally liable for any tax debt that is shown on the return or assessed at a later date regardless of whether it was incurred by you or your spouse.  Since the IRS realizes this may be unfair for a variety of reasons (the spouse did not know the other spouse did not pay taxes or report income, or the couple is now divorced and the spouse is in a hardship situation and cannot afford to pay the tax owed), the IRS allows the taxpayer to request relief under innocent spouse relief.  There are several factors and provisions apply to this request, and it can be quite complex.   However, if you meet the requirements, this is a great way to obtain relief from your tax debt.

Will all my tax debt be removed if I am eligible for innocent spouse relief?

Not necessarily.  The IRS will only remove the tax debt incurred by your ex-spouse.  Therefore, if you have incurred tax debt, then you may still owe after being granted innocent spouse relief.  Sometimes, an offer in compromise may be a better solution than innocent spouse relief if a portion of the tax debt was also incurred by you and you cannot afford to pay it in full.

I was under duress when my ex-spouse forced me to sign our tax return. Would I be eligible for innocent spouse relief?

No.  If you can show that you were in duress when you signed the tax return, then the IRS will treat the tax return as if you never signed it and it will not be a valid joint tax return.

Is it worth it to take my case to appeals to contest an audit or collection alternative?

Yes.  Appeals is the best place to obtain a settlement with the IRS.  Appeals will weigh the hazards of litigation and is most likely to settle or agree with you if you have merit.

I never filed my return, but I have an assessment on my account, which the IRS is trying to collect. Can I still file a return?

Yes.  The IRS prepares substitute for returns based on your wage and income transcripts, which include income information reported to the IRS by your employer or payers.  These returns typically show higher amounts than what you actually owe.  Therefore, it is important to file a return in order to obtain the deductions and credits that you are entitled to.

Questions on Installment Agreements

Can I establish an installment agreement on my tax debt?

Yes.  The IRS will allow you to submit monthly payments to pay off your tax debt. However, you must establish an approved installment agreement to avoid enforced collection action, such as liens or levies. Depending on the size of your tax debt, you may qualify for a streamlined installment agreement where they do not ask for you to provide financial information.

However, if you do not qualify for a streamlined installment agreement or you cannot pay the amount required under this agreement, then you must provide financial information.  After conducting a financial analysis, we can determine the amount the IRS will require you to pay and then thoroughly discuss all your tax options.  If you are not a good candidate for the Offer in Compromise process, then you may just want to establish a partial payment installment agreement or be classified as currently not collectible.

 

 

 

What is a partial payment installment agreement?

A partial payment installment agreement is an agreement where you pay a monthly amount based on your disposable income; however, the monthly amount will not pay the liability off in full during the duration of the collection statute.  (The IRS typically has 10 years to collect on the tax that they owe.) The IRS typically follows up on these payment plans every two to three years to see if the taxpayer can pay more since they know they will not collect the full amount owed on the current plan.  Therefore, if you establish a partial payment installment agreement, then you should anticipate a follow-up and request for updated financial information by the IRS about every two years.

 

 

 

What is a streamlined installment agreement?

 A streamlined installment agreement is an agreement where you pay off your tax debt within 72 months if your debt is less than $50,000.  If you are self-employed, then you must pay off your debt within 84 months and your total assessed balance must be less than $100,000.  This installment agreement does not require financials and the filing of the lien is only avoided if the total assessed balance is below $50,000.

 

 

 

 

 

Do interest and penalties continue to accrue if an installment agreement is established?

 Yes.  Interest will typically always accrue, and penalties (late payment penalties) will accrue as well.  However, if you are on an installment agreement, then the late payment penalty will accrue at a lower rate (half the rate it will accrue at if you are not in an installment agreement). Therefore, it is best to establish an official installment agreement to not only avoid collection action but to decrease the amount of penalties that will accrue.

 

 

 

I believe I have merit for penalty abatement. Can I request the removal of penalties while I’m on an installment agreement?

 It depends, penalties will continue to accrue until your balance is paid off in full or until they reach the maximum amount imposed, which is approximately 25% of the balance for each year.  If you submit a penalty abatement request, the IRS will only remove the penalties that have been assessed up to that point.  Therefore, sometimes it is better to wait until you are approaching the end of your installment agreement to request for penalty abatement.  That being said, you may want to request for penalty abatement on some years earlier than others.  You only have a limited time to claim for refund (the later of three years from the filing of the return or two years from the time the tax is paid).  If you are approaching the end of your statute to claim for refund, then it is better to submit the penalty abatement request at that time.

 

 

 

Does the IRS charge a fee to establish an installment agreement?

Yes, depending on how the installment agreement is established, fees up to $225 can be applied to your tax balance by the IRS to set up a payment plan.

Questions on Federal Tax Liens

Why did the IRS file a federal tax lien on my account?

 If you owe more than a certain amount and are not on a payment plan, the IRS will file a federal tax lien to protect the government’s interest in your assets.  For example, if you go to sell real estate, the equity may be distributed to the government to the extent it is protected by the federal tax lien.

 

 

What is the effect of a federal tax lien on my account?

 A federal tax lien will hurt your credit rating as it is publicly filed at the county clerk’s office where you reside and/or where you have assets. Not only does it place creditors and future lenders on notice that you have a tax lien filed on your account, but it also makes it difficult to sell property.  Since the lien will appear during a title search, you will have to contact the centralized lien release unit at the Internal Revenue Service to receive authorization to proceed with the sale of your property.  At TaxFirm.com, we handle many requests of this nature.

 

 

How can I avoid the federal tax lien?

If the lien has not been filed, then the only way to avoid it is to ensure that your total assessed tax liability is less than $50,000 and that your proposed payment plan is sufficient to eliminate the debt within 72 months.  If your total tax debt is between $25,000 and $50,000, then you will have to be on a direct debit installment agreement where your payments are directly debited from your bank account.

 

 

 

If the IRS filed a tax lien, is there any way to remove it?

 

Once the IRS files a federal tax lien, it is very difficult for the lien to be removed.  However, if your total tax debt is below $25,000, and you make three consecutive payments on a direct debit installment agreement, then the lien can be released. You must continue with the direct debit installment agreement and if you default, the lien will be re-filed and not released until the liability is paid in full.

If your tax debt exceeds $25,000, then it is very difficult to obtain a lien release.  Though the Internal Revenue Code requires the IRS to weigh the interests of the taxpayer and the government when deciding whether to file the lien, IRS employees will routinely file liens based on the size of the tax debt and not give proper consideration to the effect it may have on the taxpayer.

Questions on Offer in Compromise Process

What information does the IRS require for the Offer in Compromise process?

The IRS typically requires substantial information (such as three months of bank statements, mortgage statements, financial asset statements, etc.) to verify your collection potential.  As compared to the establish of an installment agreement, they are permanently settling tax debt and they do not do it haphazardly.

How long does it take for my Offer in Compromise to be reviewed?

Though some cases are longer or shorter than others, it typically takes about 9 months for an Offer Specialist to be assigned to your case.  The review process may take another 2-3 months. If a decision is not made within 2 years, then your offer is automatically accepted.

 

 

What happens to the collection statute while I’m in an Offer in Compromise?

 The Offer in Compromise suspends the 10-year collection statute.  The IRS typically does not engage in collection action during this time period though they may file a tax lien to protect their interest in any assets you may own.  Consequently, they suspend the collection statute until a decision is made on your offer in compromise.

 

If my Offer in Compromise is accepted, is it final or can it ever be reversed?

 Once an Offer in Compromise is accepted, there is a five-year probationary period where the taxpayer cannot accrue any additional tax that is not paid.  If a taxpayer does not pay their tax in full in any of the five years following the acceptance of the offer, then the offer in compromise can be reversed as if it did not exist in the first place.  If this occurs, then the tax debt will continue to remain on the taxpayer’s account.

 

 

What happens to future tax refunds once my Offer in Compromise is accepted?

 The IRS will take the refunds up to the last tax year where the Offer in Compromise was officially accepted.  For example, if your offer was accepted in 2016, then they will take your 2016 tax refund.  However, they will not be able to take your 2017 and future tax refunds.

 

 

Questions on Innocent Spouse Relief

What is innocent spouse relief and who is eligible for it?

 Once you file a joint return with your spouse, you become jointly and severally liable for any tax debt that is shown on the return or assessed at a later date regardless of whether it was incurred by you or your spouse.  Since the IRS realizes this may be unfair for a variety of reasons (the spouse did not know the other spouse did not pay taxes or report income, or the couple is now divorced and the spouse is in a hardship situation and cannot afford to pay the tax owed), the IRS allows the taxpayer to request relief under innocent spouse relief.  There are several factors and provisions apply to this request, and it can be quite complex.   However, if you meet the requirements, this is a great way to obtain relief from your tax debt.

 

 

 

 

Will all my tax debt be removed if I am eligible for innocent spouse relief?

 Not necessarily.  The IRS will only remove the tax debt incurred by your ex-spouse.  Therefore, if you have incurred tax debt, then you may still owe after being granted innocent spouse relief.  Sometimes, an offer in compromise may be a better solution than innocent spouse relief if a portion of the tax debt was also incurred by you and you cannot afford to pay it in full.

 

 

 

 

I was under duress when my ex-spouse forced me to sign our tax return.  Would I be eligible for innocent spouse relief?

No.  If you can show that you were in duress when you signed the tax return, then the IRS will treat the tax return as if you never signed it and it will not be a valid joint tax return.

Questions on Bankruptcy Tax Relief

I have a lot of debt and I am thinking of filing for bankruptcy.  Can my tax debt be discharged?

Yes, your tax debt may be eligible to be discharged in bankruptcy depending on the type of tax debt and how old it may be.  At TaxFirm.com, we can review your transcripts and list all the details that are important to determine whether your taxes are eligible to be discharged.  You can provide this report to your bankruptcy attorney so that they can include the taxes on the bankruptcy petition.

Questions on Appeals Process

Is it worth it to take my case to appeals to contest an audit or collection alternative?

Yes.  Appeals is the best place to obtain a settlement with the IRS.  Appeals will weigh the hazards of litigation and is most likely to settle or agree with you if you have merit.

Questions on Past Due Tax Returns and Substitute for Returns

I never filed my return, but I have an assessment on my account, which the IRS is trying to collect.  Can I still file a return?

 Yes, the IRS prepares substitute for returns based on your wage and income transcripts, which include income information reported to the IRS by your employer or payers.  These returns typically show higher amounts than what you actually owe.  Therefore, it is important to file a return in order to obtain the deductions and credits that you are entitled to.

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